EX-99.1 2 p73020exv99w1.htm EX-99.1 PRESS RELEASE exv99w1
 

Exhibit 99.1

(CAVCO LOGO)
N e w s R e l e a s e
     
 
  For additional information, contact:
 
    
 
  Joseph Stegmayer
 
  Chairman and CEO
 
  Phone: 602-256-6263
 
  joes@cavco.com
 
    
 
  On the Internet:
 
  www.cavco.com


FOR IMMEDIATE RELEASE
CAVCO INDUSTRIES REPORTS SECOND QUARTER RESULTS
Sales decline 8.6% to $43.1 million
Net income 8.5% lower to $3.2 million
PHOENIX, AZ — (October 19, 2006) – Cavco Industries, Inc. (NASDAQ: CVCO) today announced financial results for the second quarter and first six months of its fiscal year 2007 ended September 30, 2006.
     Net sales for the second quarter of fiscal 2007 declined 8.6% to $43,063,000, down from $47,091,000 for the second quarter of fiscal year 2006.
     Net income for the second quarter was $3,217,000 compared with $3,517,000 in the same quarter one year ago. For the second quarter of fiscal 2007, net income per share based on basic weighted average shares outstanding was $0.51 versus $0.56 for the same period last year, and net income per share based on diluted weighted average shares outstanding was $0.49 versus $0.52 last year.
     For the first six months of fiscal 2007, net sales increased 4.5% to $97,113,000 from $92,967,000 for the same period last year. Net income for the first six months of this year was up 7.0% to $7,551,000 versus $7,059,000 for the comparable prior year period. For the first six months of fiscal 2007, net income per share based on basic weighted average shares outstanding was $1.19 versus $1.12 for the same period last year, and net income per share based on diluted weighted average shares outstanding was $1.14 versus $1.06 last year.
     Joseph Stegmayer, Chairman, President and Chief Executive Officer, said, “The second quarter of fiscal year 2007 has proven to be challenging, as anticipated. Order rates declined significantly during the quarter and our backlog has consequently been reduced to a low level. Manufactured home sales activity in our region, particularly in California, continues to be soft. In response to overall industry conditions, we have reduced our rate of production and have adjusted our workforce to match current market demand.”
     Mr. Stegmayer added, “We continue to enhance our product offering with new home designs, sizes and features in order to capture the existing demand for attractive, affordable housing in our market areas. We began to pursue various niche markets prior to the current sales decline, which has kept us moving forward during these difficult times. The start-up of the Texas plant is progressing slower than anticipated as it develops the people needed to improve production efficiency and expand its product line.” Mr. Stegmayer continued, “The strong environment last year versus the weak market conditions we now face will make comparisons challenging for the balance of this fiscal year. However, we intend to maximize the opportunities afforded us through the commendable efforts of our people and our distributors, and we are confident in our ability to successfully compete in these turbulent market conditions.”
     Cavco’s senior management will hold a conference call to review these results tomorrow, October 20, 2006, at 1:00 p.m. (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link, or the web site www.earnings.com. An archive of the webcast and presentation will be available for 90 days at these website addresses.
     Cavco Industries, Inc., headquartered in Phoenix, is the largest producer of manufactured homes in Arizona, based on wholesale shipments. The Company is also a leading producer of park model homes and vacation cabins in the United States.

 

 

     Certain statements contained in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. In general, all statements that are not historical in nature are forward-looking. Forward-looking statements are typically included, for example, in discussions regarding the manufactured housing industry; our financial performance and operating results; and the expected effect of certain risks and uncertainties on our business, financial condition and results of operations. All forward-looking statements are subject to risks and uncertainties, many of which are beyond our control. As a result, our actual results or performance may differ materially from anticipated results or performance. Factors that could cause such differences to occur include, but are not limited to, adverse industry conditions, the cyclical and seasonal nature of our business, limitations on our ability to raise capital, curtailment of available financing in the manufactured housing industry, our contingent repurchase obligations related to wholesale financing, competition, our ability to maintain relationships with retailers, labor shortages, pricing and availability of raw materials, unfavorable zoning ordinances and our lack of recent operating history as an independent public company, together with all of the other risks described in our filings with the Securities and Exchange Commission. Readers are specifically referred to the Risk Factors described in Item 1A of the 2006 Form 10-K, as may be amended from time to time, which identify important risks that could cause actual results to differ from those contained in the forward-looking statements. Cavco expressly disclaims any obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise. Investors should not place any reliance on any such forward-looking statements.
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CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
                 
    September 30,     March 31,  
    2006     2006  
    (Unaudited)          
ASSETS
                
Current assets
                
Cash and cash equivalents
   $ 11,288     $ 15,122  
Short-term investments
     49,900       42,900  
Restricted cash
     537       1,223  
Accounts receivable
     8,569       11,568  
Inventories
     14,015       12,733  
Prepaid expenses and other current assets
     2,128       1,446  
Deferred income taxes
     4,110       4,040  
 
            
Total current assets
     90,547       89,032  
 
            
 
                
Property, plant and equipment, at cost:
                
Land
     6,050       6,050  
Buildings and improvements
     6,764       6,744  
Machinery and equipment
     7,446       6,752  
 
            
 
     20,260       19,546  
Accumulated depreciation
     (7,574 )     (7,202 )
 
            
 
     12,686       12,344  
 
            
Goodwill
     67,346       67,346  
 
            
 
                
Total assets
   $ 170,579     $ 168,722  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
Accounts payable
   $ 4,501     $ 6,269  
Accrued liabilities
     20,903       26,384  
 
            
Total current liabilities
     25,404       32,653  
 
            
 
                
Deferred income taxes
     11,910       11,040  
 
                
Commitments and contingencies
                
 
                
Stockholders’ equity
                
Preferred Stock, $.01 par value; 1,000,000 shares authorized;
                
No shares issued or outstanding
     —       —  
Common Stock, $.01 par value; 20,000,000 shares authorized;
                
Outstanding 6,358,980 and 6,352,980 shares, respectively
     64       64  
Additional paid-in capital
     122,039       121,354  
Retained earnings
     11,162       3,611  
 
            
Total stockholders’ equity
     133,265       125,029  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 170,579     $ 168,722  
 
            
(more)

 

 

CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2006     2005     2006     2005  
Net sales
   $ 43,063     $ 47,091     $ 97,113     $ 92,967  
Cost of sales
     35,014       37,482       78,445       73,721  
 
                        
Gross profit
     8,049       9,609       18,668       19,246  
Selling, general and administrative expenses
     3,718       4,207       8,139       8,319  
 
                        
Income from operations
     4,331       5,402       10,529       10,927  
Interest income
     619       364       1,193       646  
 
                        
Income before income taxes
     4,950       5,766       11,722       11,573  
Income tax expense
     1,733       2,249       4,171       4,514  
 
                        
 
                                
Net income
   $ 3,217     $ 3,517     $ 7,551     $ 7,059  
 
                        
 
                                
Net income per share:
                                
Basic
   $ 0.51     $ 0.56     $ 1.19     $ 1.12  
 
                        
Diluted
   $ 0.49     $ 0.52     $ 1.14     $ 1.06  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     6,358,980       6,302,386       6,357,399       6,295,558  
 
                        
Diluted
     6,602,291       6,720,397       6,623,719       6,685,694  
 
                        
(more)

 

 

CAVCO INDUSTRIES, INC.
Other Operating Data – Continuing Operations
(Dollars in thousands, except average sales price amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2006     2005     2006     2005  
Net sales
                                
Manufacturing
   $ 41,376     $ 45,122     $ 92,944     $ 89,910  
Retail
     3,477       3,309       7,796       6,347  
Less: Intercompany
     (1,790 )     (1,340 )     (3,627 )     (3,290 )
 
                        
Net sales
   $ 43,063     $ 47,091     $ 97,113     $ 92,967  
 
                        
 
                                
Floor shipments — manufacturing
     1,494       1,825       3,350       3,637  
 
                        
Average sales price per floor — manufacturing
   $ 27,695     $ 24,724     $ 27,744     $ 24,721  
 
                        
 
                                
Home shipments — manufacturing
     905       1,051       1,968       2,119  
 
                        
Average sales price per home — manufacturing
   $ 45,719     $ 42,932     $ 47,228     $ 42,430  
 
                        
 
                                
Home shipments — retail
     33       40       76       81  
 
                        
 
                                
Capital expenditures
   $ 214     $ 4,878     $ 714     $ 5,077  
 
                        
Depreciation
   $ 140     $ 228     $ 372     $ 461  
 
                        
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