On August 1, 2024, Cavco Industries Inc (CVCO, Financial) released its 8-K filing detailing the financial results for the first fiscal quarter ended June 29, 2024. Cavco Industries Inc designs and produces factory-built homes under the Cavco Homes, Fleetwood Homes, and Palm Harbor Homes brands. It also produces modular homes, park model homes, and vacation cabins, as well as commercial structures. The company operates principally in two segments: Factory-built housing and Financial services.
Quarterly Highlights
Cavco Industries Inc (CVCO, Financial) reported net revenue of $478 million for the first quarter of fiscal 2025, a slight increase of 0.4% compared to $476 million in the same quarter of the previous year. This figure surpassed the analyst estimate of $462.32 million. However, the company reported a diluted net income per share of $4.11, falling short of the analyst estimate of $4.70 and down from $5.29 in the prior year quarter.
Performance and Challenges
The company's factory-built housing segment saw a 20% sequential increase in home sales volume and a rise in capacity utilization to approximately 65% from 60%. Despite these improvements, the gross profit margin for this segment decreased to 22.6% from 24.8% in the prior year, primarily due to lower average selling prices. The financial services segment faced significant challenges, reporting a gross loss of 0.6% of net revenue compared to a gross profit of 24.0% in the previous year. This was largely due to unusually high insurance claims from multiple weather events in Texas and wildfires in New Mexico, resulting in a pretax net loss of $5.2 million for the segment.
Financial Achievements
Despite the challenges, Cavco Industries Inc (CVCO, Financial) achieved several financial milestones. The company reported a backlog of $232 million at the end of the quarter, up 21.4% from $191 million three months ago. Additionally, the company repurchased approximately $29 million worth of stock during the quarter.
Income Statement and Key Metrics
| Metric | Q1 FY2025 | Q1 FY2024 | Change |
|---|---|---|---|
| Net Revenue | $478 million | $476 million | 0.4% |
| Net Income per Diluted Share | $4.11 | $5.29 | -22.3% |
| Gross Profit Margin | 22.6% | 24.8% | -2.2% |
| Backlog | $232 million | $191 million | 21.4% |
Commentary
"The momentum we experienced exiting the fourth quarter carried through the first quarter. Orders continued to increase, resulting in production increases and a growing backlog," said President and Chief Executive Officer Bill Boor. "While our factory-built housing results showed continuing improvement, our consolidated results were negatively impacted by very high claims costs in our insurance operations. Those claims were driven by unusually high storm activity in Texas and the Ruidoso fires in New Mexico."
Analysis
Cavco Industries Inc (CVCO, Financial) demonstrated resilience in its core factory-built housing segment, with increased sales volume and improved capacity utilization. However, the financial services segment faced significant headwinds due to high insurance claims, which negatively impacted overall profitability. The company's ability to manage these challenges while maintaining a strong backlog and engaging in stock repurchases indicates a balanced approach to growth and shareholder value.
For more detailed financial information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Cavco Industries Inc for further details.
