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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to

Commission File Number: 000-08822
CAVCO INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware56-2405642
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
3636 North Central Ave, Ste 1200
PhoenixArizona85012
(Address of principal executive offices, including zip code)
(602) 256-6263
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01CVCOThe Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated Filer☐
Non-accelerated Filer☐Smaller Reporting Company☐
Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No ☒
As of October 24, 2024, 8,106,672 shares of the registrant's Common Stock, $0.01 par value, were outstanding.


CAVCO INDUSTRIES, INC.
FORM 10-Q
September 28, 2024
TABLE OF CONTENTS
Page
Item 3. Not applicable
Item 4. Not applicable

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
September 28,
2024		March 30,
2024
ASSETS(Unaudited)
Current assets
Cash and cash equivalents$364,113 $352,687 
Restricted cash, current21,519 15,481 
Accounts receivable, net94,296 77,123 
Short-term investments24,574 18,270 
Current portion of consumer loans receivable, net30,899 20,713 
Current portion of commercial loans receivable, net36,887 40,787 
Current portion of commercial loans receivable from affiliates, net2,894 2,529 
Inventories244,025 241,339 
Prepaid expenses and other current assets82,758 82,870 
Total current assets901,965 851,799 
Restricted cash585 585 
Investments12,845 17,316 
Consumer loans receivable, net20,770 23,354 
Commercial loans receivable, net47,192 45,660 
Commercial loans receivable from affiliates, net3,933 2,065 
Property, plant and equipment, net225,121 224,199 
Goodwill121,969 121,934 
Other intangibles, net27,445 28,221 
Operating lease right-of-use assets36,378 39,027 
Total assets$1,398,203 $1,354,160 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable$39,252 $33,531 
Accrued expenses and other current liabilities272,228 239,736 
Total current liabilities311,480 273,267 
Operating lease liabilities32,485 35,148 
Other liabilities7,529 7,759 
Deferred income taxes4,732 4,575 
Stockholders' equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding
— — 
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,417,332 and 9,389,953 shares, respectively; Outstanding 8,158,996 and 8,320,718 shares, respectively
94 94 
Treasury stock, at cost; 1,258,336 and 1,069,235 shares, respectively
(348,406)(274,693)
Additional paid-in capital284,995 281,216 
Retained earnings1,105,371 1,027,127 
Accumulated other comprehensive loss(77)(333)
Total stockholders' equity1,041,977 1,033,411 
Total liabilities and stockholders' equity$1,398,203 $1,354,160 
See accompanying Notes to Consolidated Financial Statements
1
CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Net revenue
$507,461 $452,030 $985,060 $927,905 
Cost of sales
391,339 345,073 765,536 703,069 
Gross profit
116,122 106,957 219,524 224,836 
Selling, general and administrative expenses
66,997 61,506 131,848 123,186 
Income from operations49,125 45,451 87,676 101,650 
Interest income5,692 5,812 11,203 10,430 
Interest expense(125)(257)(215)(523)
Other income, net258 655 147 781 
Income before income taxes54,950 51,661 98,811 112,338 
Income tax expense(11,135)(10,088)(20,567)(24,354)
Net income
43,815 41,573 78,244 87,984 
Less: net income attributable to redeemable noncontrolling interest— 34 — 88 
Net income attributable to Cavco common stockholders$43,815 $41,539 $78,244 $87,896 
Comprehensive income
Net income$43,815 $41,573 $78,244 $87,984 
Reclassification adjustment for securities sold 262 3 271 6 
Applicable income tax (expense)(55)— (57)(1)
Net change in unrealized position of investments held
(11)65 54 9 
Applicable income tax (expense) 3 (14)(11)(2)
Comprehensive income44,014 41,627 78,501 87,996 
Less: comprehensive income attributable to redeemable noncontrolling interest— 34 — 88 
Comprehensive income attributable to Cavco common stockholders$44,014 $41,593 $78,501 $87,908 
Net income per share attributable to Cavco common stockholders
Basic
$5.33 $4.80 $9.48 $10.15 
Diluted
$5.28 $4.76 $9.38 $10.05 
Weighted average shares outstanding
Basic
8,226,298 8,656,537 8,256,664 8,663,430 
Diluted
8,305,326 8,731,419 8,337,671 8,742,734 

See accompanying Notes to Consolidated Financial Statements
2
CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended
September 28,
2024		September 30,
2023
OPERATING ACTIVITIES
Net income$78,244 $87,984 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization9,520 9,234 
Provision for credit losses(260)(204)
Deferred income taxes88 (1,845)
Stock-based compensation expense4,907 2,989 
Non-cash interest income, net(527)(1,413)
Loss on sale or retirement of property, plant and equipment, net26 40 
Gain on investments and sale of loans, net(1,694)(4,278)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable(17,261)144 
Consumer loans receivable originated(39,914)(56,158)
Proceeds from sales of consumer loans receivable30,899 65,113 
Principal payments received on consumer loans receivable3,146 3,567 
Inventories(2,686)19,683 
Prepaid expenses and other current assets1,017 17,823 
Commercial loans receivable originated(54,724)(51,768)
Principal payments received on commercial loans receivable55,147 59,378 
Accounts payable, accrued expenses and other liabilities36,146 9,911 
Net cash provided by operating activities102,074 160,200 
INVESTING ACTIVITIES
Purchases of property, plant and equipment(9,854)(8,470)
Payments for acquisitions, net— (1,298)
Proceeds from sale of property, plant and equipment127 4,490 
Purchases of investments(12,433)(6,499)
Proceeds from sale of investments11,131 5,356 
Net cash used in by investing activities(11,029)(6,421)
FINANCING ACTIVITIES
Payments for taxes on stock option exercises and releases of equity awards(2,921)(1,643)
Proceeds from exercise of stock options1,793 909 
Payments on finance leases and other secured financings(177)(295)
Payments for common stock repurchases(72,276)(40,911)
Distributions to noncontrolling interest— (300)
Net cash used in financing activities(73,581)(42,240)
Net increase in cash, cash equivalents and restricted cash17,464 111,539 
Cash, cash equivalents and restricted cash at beginning of the fiscal year368,753 283,490 
Cash, cash equivalents and restricted cash at end of the period$386,217 $395,029 
Supplemental disclosures of cash flow information
Cash paid for income taxes$18,825 $18,641 
Cash paid for interest$30 $368 
Supplemental disclosures of noncash activity
Change in GNMA loans eligible for repurchase$496 $(3,250)
See accompanying Notes to Consolidated Financial Statements
3
CAVCO INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The accompanying unaudited Consolidated Financial Statements of Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for Quarterly Reports on Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In addition, references throughout to numbered "Notes" refer to these Notes to Consolidated Financial Statements (Unaudited), unless otherwise stated.
In the opinion of management, these financial statements include all adjustments, including normal recurring adjustments, which are necessary to fairly state the interim results for the periods presented. We have evaluated subsequent events after the balance sheet date through the date of the filing of this report with the SEC, and there were no disclosable subsequent events. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K for the year ended March 30, 2024, filed with the SEC ("Form 10-K").
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. Due to uncertainties, actual results could differ from the estimates and assumptions used in preparation of the Consolidated Financial Statements. The Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for the interim periods are not necessarily indicative of the results or cash flows for the full year. The Company operates on a 52-53 week fiscal year ending on the Saturday nearest to March 31st of each year. Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to March 31st. The current fiscal year will end on March 29, 2025 and will include 52 weeks.
For a description of significant accounting policies we used in the preparation of our Consolidated Financial Statements, please refer to Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K.
2. Recent Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB"). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's Consolidated Financial Statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker ("CODM"), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.
4
3. Revenue from Contracts with Customers
The following table summarizes Net revenue disaggregated by reportable segment and source (in thousands):
Three Months EndedSix Months Ended
 September 28, 2024September 30, 2023September 28,
2024		September 30,
2023
Factory-built housing
     Home sales$469,676 $410,040 $906,105 $849,784 
     Delivery, setup and other revenues16,667 24,026 38,286 41,391 
486,343 434,066 944,391 891,175 
Financial services
     Insurance agency commissions received from third-party insurance companies
1,268 1,017 2,674 1,916 
     All other sources19,850 16,947 37,995 34,814 
21,118 17,964 40,669 36,730 
$507,461 $452,030 $985,060 $927,905 
4. Investments
Investments consisted of the following (in thousands):
September 28,
2024		March 30,
2024
Available-for-sale debt securities$20,482 $18,669 
Marketable equity securities
11,827 11,961 
Non-marketable equity investments
5,110 4,956 
37,419 35,586 
Less short-term investments(24,574)(18,270)
$12,845 $17,316 
The amortized cost and fair value of our investments in available-for-sale debt securities, by security type, are shown in the table below (in thousands):
September 28, 2024March 30, 2024
Amortized
Cost		Fair
Value		Amortized CostFair
Value
Residential mortgage-backed securities
$8,248 $8,246 $2,933 $2,865 
State and political subdivision debt securities
3,575 3,558 5,041 4,930 
Corporate debt securities
8,757 8,678 11,117 10,874 
$20,580 $20,482 $19,091 $18,669 
5
The amortized cost and fair value of our investments in available-for-sale debt securities, by contractual maturity, are shown in the table below (in thousands). Expected maturities may differ from contractual maturities as borrowers at times have the right to call or prepay obligations, with or without penalties.
September 28, 2024
Amortized
Cost		Fair
Value
Due in less than one year$7,534 $7,475 
Due after one year through five years4,573 4,536 
Due after five years through ten years225 225 
Mortgage-backed securities8,248 8,246 
$20,580 $20,482 
Net investment gains and losses on marketable equity securities were as follows (in thousands):
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Marketable equity securities
Net gain (loss) recognized during the period$514 $(185)$60 $275 
Less: Net loss (gain) recognized on securities sold during the period88 (110)(464)(130)
Unrealized gain (loss) recognized during the period on securities still held$602 $(295)$(404)$145 
5. Inventories
Inventories consisted of the following (in thousands):
September 28,
2024		March 30,
2024
Raw materials$76,120 $78,241 
Work in process31,247 27,977 
Finished goods136,658 135,121 
$244,025 $241,339 
6
6. Consumer Loans Receivable
The following table summarizes consumer loans receivable (in thousands):
September 28,
2024		March 30,
2024
Loans held for investment, previously securitized$15,162 $16,968 
Loans held for investment12,230 12,826 
Loans held for sale23,708 15,140 
Construction advances2,409 722 
53,509 45,656 
Deferred financing fees and other, net(834)(523)
Allowance for loan losses(1,006)(1,066)
51,669 44,067 
Less current portion(30,899)(20,713)
$20,770 $23,354 
The consumer loans held for investment had the following characteristics:
September 28,
2024		March 30,
2024
Weighted average contractual interest rate8.1 %8.1 %
Weighted average effective interest rate7.8 %10.4 %
Weighted average months to maturity211196
The following table is a consolidated summary of the delinquency status of the outstanding principal balance of consumer loans receivable (in thousands):
September 28,
2024		March 30,
2024
Current$52,074 $43,810 
31 to 60 days261 1,063 
61 to 90 days119 131 
91+ days1,055 652 
$53,509 $45,656 
7
The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):
September 28, 2024
20252024202320222021PriorTotal
Prime- FICO score 680 and greater
$12,692 $9,455 $325 $94 $874 $14,477 $37,917 
Near Prime- FICO score 620-679
2,056 1,557 — — 1,038 9,235 13,886 
Sub-Prime- FICO score less than 620
26 — — — 17 718 761 
No FICO score
211 444 — — — 290 945 
$14,985 $11,456 $325 $94 $1,929 $24,720 $53,509 
March 30, 2024
20242023202220212020PriorTotal
Prime- FICO score 680 and greater
$14,107 $328 $96 $885 $1,808 $14,425 $31,649 
Near Prime- FICO score 620-679
1,633 — — 1,202 942 8,684 12,461 
Sub-Prime- FICO score less than 620
— — — 18 49 723 790 
No FICO score
447 — — — — 309 756 
$16,187 $328 $96 $2,105 $2,799 $24,141 $45,656 
As of September 28, 2024, 53% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas. As of March 30, 2024, 46% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 10% was concentrated in Florida. Other than Texas and Florida, no state had concentrations in excess of 10% of the outstanding principal balance of the consumer loans receivable as of September 28, 2024 or March 30, 2024.
7. Commercial Loans Receivable
The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community owners and developers.
Commercial loans receivable, net consisted of the following (in thousands):
September 28,
2024		March 30,
2024
Loans receivable$91,588 $91,938 
Allowance for loan losses (484)(781)
Deferred financing fees, net(198)(116)
90,906 91,041 
Less current portion of commercial loans receivable (including from affiliates), net(39,781)(43,316)
$51,125 $47,725 
The commercial loans receivable balance had the following characteristics:
September 28,
2024		March 30,
2024
Weighted average contractual interest rate7.3 %7.4 %
Weighted average months outstanding1012
8
Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with principal payments 90 days or more past due. As of September 28, 2024 and March 30, 2024, there were no commercial loans considered nonperforming. The following table disaggregates the outstanding principal balance of our commercial loans receivable by fiscal year of origination (in thousands):
September 28, 2024
20252024202320222021Total
Performing
$40,830 $34,916 $11,789 $1,886 $2,167 $91,588 
March 30, 2024
20242023202220212020Total
Performing
$57,691 $25,066 $4,823 $2,144 $2,214 $91,938 
As of September 28, 2024 and March 30, 2024, there were no commercial loans 90 days or more past due that were still accruing interest, and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance.
As of September 28, 2024, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 18% and California of 16%. As of March 30, 2024, 18% of our outstanding principal balance of the commercial loans receivable balance was in New York. No other state had concentrations in excess of 10% of the outstanding principal balance of the commercial loans receivable as of September 28, 2024 or March 30, 2024.
As of September 28, 2024 and March 30, 2024, one independent third-party and its affiliates comprised 12% and 13%, respectively, of the net commercial loans receivable principal balance outstanding, all of which are secured.
8. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
September 28,
2024		March 30,
2024
Customer deposits$46,712 $40,856 
Salaries, wages and benefits43,673 38,125 
Unearned insurance premiums35,490 33,449 
Estimated warranties33,081 31,718 
Accrued volume rebates29,208 21,167 
Insurance loss reserves14,620 10,540 
Accrued insurance14,194 14,124 
Other55,250 49,757 
$272,228 $239,736 
9
9. Warranties
Activity in the liability for estimated warranties was as follows (in thousands):
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Balance at beginning of period$31,815 $32,401 $31,718 $31,368 
Charged to costs and expenses13,990 12,206 26,081 25,615 
Payments and deductions(12,724)(11,592)(24,718)(23,968)
Balance at end of period$33,081 $33,015 $33,081 $33,015 
10. Other Liabilities
The following table summarizes secured financings and other obligations (in thousands):
September 28,
2024		March 30,
2024
Finance lease liabilities$6,127 $6,166 
Other secured financing1,726 1,916 
7,853 8,082 
Less current portion included in Accrued expenses and other current liabilities(324)(323)
$7,529 $7,759 
11. Debt
As of September 28, 2024, we are party to a Credit Agreement (the "Credit Agreement") that matures in November 2027 with Bank of America, N.A., providing for a $50 million revolving credit facility (the "Revolving Credit Facility") which may be increased up to an aggregate amount of $100 million.
As of September 28, 2024 and March 30, 2024, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants.
12. Reinsurance and Insurance Loss Reserves
Certain of Standard Casualty Company's ("Standard Casualty") premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations.
10
The effects of reinsurance on premiums written and earned were as follows (in thousands):

Three Months Ended
September 28, 2024September 30, 2023
WrittenEarnedWrittenEarned
Direct premiums
$9,380 $12,177 $10,067 $9,371 
Assumed premiums—nonaffiliated
11,303 10,095 9,505 8,851 
Ceded premiums—nonaffiliated
(8,880)(8,880)(6,438)(6,438)

$11,803 $13,392 $13,134 $11,784 
Six Months Ended
September 28, 2024September 30, 2023
WrittenEarnedWrittenEarned
Direct premiums
$22,883 $24,479 $20,446 $18,047 
Assumed premiums—nonaffiliated
23,038 19,599 19,305 17,421 
Ceded premiums—nonaffiliated
(17,065)(17,065)(12,565)(12,565)

$28,856 $27,013 $27,186 $22,903 
Typical insurance policies written or assumed have a maximum coverage of $0.4 million per claim, of which we cede $0.15 million of the risk of loss per reinsurance. Therefore, our risk of loss is limited to $0.25 million per claim on typical policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $4.0 million per occurrence, up to a maximum of $110 million in the aggregate for that occurrence.
The following details the activity in the incurred but not reported ("IBNR") reserve for the three and six months ended September 28, 2024 and September 30, 2023 (in thousands):
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Balance at beginning of period$18,927 $13,001 $10,540 $10,939 
Net incurred losses during the period14,128 8,586 32,091 19,663 
Net claim payments during the period(18,435)(12,433)(28,011)(21,448)
Balance at end of period$14,620 $9,154 $14,620 $9,154 
13. Commitments and Contingencies
Repurchase Contingencies. The maximum amount for which the Company was liable under the terms of repurchase agreements with financial institutions that provide inventory financing to independent distributors of our products approximated $126 million and $121 million at September 28, 2024 and March 30, 2024, respectively, without reduction for the estimated resale value of the homes. During the three and six months ended September 28, 2024 we did not receive any demand notices. In all cases, the estimated fair value exceeded the repurchase price so no loss reserve was deemed necessary. Our reserve for repurchase commitments, recorded in Accrued expenses and other current liabilities, was $3.1 million at September 28, 2024 and $2.9 million at March 30, 2024.
Construction-Period Mortgages. Loan contracts with off-balance sheet commitments are summarized below (in thousands):
11
September 28,
2024		March 30,
2024
Construction loan contract amount$7,787 $1,960 
Cumulative advances(2,409)(722)
$5,378 $1,238 
Representations and Warranties of Mortgages Sold. The reserve for contingent repurchases and indemnification obligations was $0.6 million as of both September 28, 2024 and March 30, 2024, included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. There were no claim requests that resulted in the repurchase of any loans during the six months ended September 28, 2024 or September 30, 2023.
Interest Rate Lock Commitments ("IRLCs"). As of September 28, 2024 and March 30, 2024, we had outstanding IRLCs with a notional amount of $14.7 million and $39.0 million, respectively. For the three and six months ended September 28, 2024, we recognized insignificant non-cash gains on outstanding IRLCs. For the three and six months ended September 30, 2023, we recognized insignificant non-cash losses on outstanding IRLCs.
Forward Sales Commitments. As of September 28, 2024 and March 30, 2024, we had $7.1 million and $2.8 million in outstanding forward sales commitments for sales of mortgage backed securities and whole loan commitments (collectively, the "Commitments"), respectively. During the three and six months ended September 28, 2024, we recognized insignificant non-cash losses. During the three months ended September 30, 2023, we recognized insignificant non-cash gains.
Legal Matters. We are party to certain lawsuits in the ordinary course of business. Based on management's present knowledge of the facts and (in certain cases) advice of outside counsel, management does not believe that loss contingencies arising from pending matters are likely to have a material adverse effect on our consolidated financial position, liquidity or results of operations after taking into account any existing reserves, which reserves are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. However, future events or circumstances that may currently be unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods.
12
14. Stockholders' Equity and Redeemable Noncontrolling Interest
The following tables represent changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the six months ended September 28, 2024 and September 30, 2023, respectively (dollars in thousands):
Equity Attributable to Cavco Stockholders
Treasury stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive (loss) income Total
Common Stock
SharesAmount
Balance, March 30, 20249,389,953 $94 $(274,693)$281,216 $1,027,127 $(333)$1,033,411 
Net income— — — — 34,429 — 34,429 
Other comprehensive income, net— — — — — 58 58 
Net issuance of common stock under stock incentive plans11,104 — — (2,348)— — (2,348)
Stock-based compensation— — — 2,194 — — 2,194 
Common stock repurchases(29,204)(29,204)
Balance, June 29, 20249,401,057 $94 $(303,897)$281,062 $1,061,556 $(275)$1,038,540 
Net income— — — — 43,815 — 43,815 
Other comprehensive income, net— — — — — 198 198 
Net issuance of common stock under stock incentive plans16,275 — 1,220 — — 1,220 
Stock-based compensation— — — 2,713 — — 2,713 
Common stock repurchases— — (44,509)— — — (44,509)
Balance, September 28, 20249,417,332 $94 $(348,406)$284,995 $1,105,371 $(77)$1,041,977 
13
Equity Attributable to Cavco Stockholders
Treasury stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive (loss) incomeTotalRedeemable noncontrolling interest
Common Stock
SharesAmount
Balance, April 1, 20239,337,125 $93 $(164,452)$271,950 $869,310 $(615)$976,286 $1,219 
Net income— — — — 46,357 — 46,357 54 
Other comprehensive loss, net— — — — — (42)(42)— 
Net issuance of common stock under stock incentive plans10,095 — — (1,213)— — (1,213)— 
Stock-based compensation— — — 1,438 — — 1,438 — 
Distributions— — — — — — — (120)
Valuation adjustment— — — — — — — (33)
Balance, July 1, 20239,347,220 $93 $(164,452)$272,175 $915,667 $(657)$1,022,826 $1,120 
Net income— — — — 41,539 — 41,539 34 
Other comprehensive income, net— — — — — 54 54 — 
Net issuance of common stock under stock incentive plans9,201 1 — 478 — — 479 — 
Stock-based compensation— — — 1,551 — — 1,551 — 
Common stock repurchases— — (47,194)— — — (47,194)— 
Distributions— — — — — — — (180)
Conversion to mandatorily redeemable noncontrolling interest— — — — — — — (974)
Balance, September 30, 20239,356,421 $94 $(211,646)$274,204 $957,206 $(603)$1,019,255 $— 
14
15. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except per share amounts):
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Net income attributable to Cavco common stockholders$43,815 $41,539 $78,244 $87,896 
Weighted average shares outstanding
Basic8,226,298 8,656,537 8,256,664 8,663,430 
Effect of dilutive securities79,028 74,882 81,007 79,304 
Diluted8,305,326 8,731,419 8,337,671 8,742,734 
Net income per share attributable to Cavco common stockholders
Basic$5.33 $4.80 $9.48 $10.15 
Diluted$5.28 $4.76 $9.38 $10.05 
Anti-dilutive common stock equivalents excluded257 335 428 320 
16. Fair Value Measurements
The book value and estimated fair value of our financial instruments were as follows (in thousands):
September 28, 2024March 30, 2024
Book
Value		Estimated
Fair Value		Book
Value		Estimated
Fair Value
Available-for-sale debt securities
$20,482 $20,482 $18,669 $18,669 
Marketable equity securities
11,827 11,827 11,961 11,961 
Non-marketable equity investments
5,110 5,110 4,956 4,956 
Consumer loans receivable51,669 55,914 44,067 49,105 
Commercial loans receivable
90,906 81,030 91,041 80,764 
Other secured financing(1,726)(1,721)(1,916)(1,841)
See Note 20, Fair Value Measurements, and the Fair Value of Financial Instruments caption in Note 1, Summary of Significant Accounting Policies, in the Form 10-K for more information on the methodologies we use in determining fair value.
Mortgage Servicing. Mortgage Servicing Rights ("MSRs") are recorded at fair value in Prepaid expenses and other current assets on the Consolidated Balance Sheets.
September 28,
2024		March 30,
2024
Number of loans serviced with MSRs3,734 3,842 
Weighted average servicing fee (basis points)34.80 34.79 
Capitalized servicing multiple179.9 %188.59 %
Capitalized servicing rate (basis points)62.60 65.61 
Serviced portfolio with MSRs (in thousands)$465,622 $482,898 
MSRs (in thousands)$2,915 $3,168 
15
17. Business Segment Information
We operate principally in two segments: (1) factory-built housing, which includes wholesale and retail factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance. The following table provides selected financial data by segment (in thousands):
Three Months EndedSix Months Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Net revenue:
Factory-built housing$486,343 $434,066 $944,391 $891,175 
Financial services21,118 17,964 40,669 36,730 
$507,461 $452,030 $985,060 $927,905 
Income (loss) before income taxes:
Factory-built housing$55,905 $50,226 $105,005 $112,051 
Financial services(955)1,435 (6,194)287 
$54,950 $51,661 $98,811 $112,338 
 September 28,
2024		March 30,
2024
Total assets:
Factory-built housing
$1,169,496 $1,141,237 
Financial services
228,707 212,923 
$1,398,203 $1,354,160 
16
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q (the "Report") include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," or "anticipates," or by discussions of strategy, plans or intentions. Forward-looking statements include, for example, discussions regarding the manufactured housing and site-built housing industries; discussions regarding our efforts and the efforts of other industry participants to develop the home-only loan secondary market; our financial performance and operating results; our strategy; our liquidity and financial resources; our outlook with respect to Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") and the manufactured housing business in general; the expected effect of certain risks and uncertainties on our business, financial condition and results of operations; economic conditions, including concerns of a possible recession, and consumer confidence; trends in interest rates and inflation; potential acquisitions, strategic investments and other expansions; the sufficiency of our liquidity; that we may seek alternative sources of financing in the future; operational and legal risks; how we may be affected by any pandemic or outbreak; geopolitical conditions; the cost and availability of labor and raw materials; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; and the ultimate outcome of our commitments and contingencies. Forward-looking statements contained in this Report speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document. We do not intend to publicly update or revise any forward-looking statement contained in this Report or in any document incorporated herein by reference to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by law.
Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, many of which are beyond our control. To the extent that our assumptions and expectations differ from actual results, our ability to meet such forward-looking statements may be significantly hindered. Factors that could affect our results and cause them to materially differ from those contained in the forward-looking statements include, without limitation, those discussed under Risk Factors in Part I, Item 1A of our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "Form 10-K").
Introduction
The following should be read in conjunction with the Company's unaudited Consolidated Financial Statements and the related Notes that appear in Part I, Item 1 of this Report. References to "Note" or "Notes" pertain to the Notes to our unaudited Consolidated Financial Statements.
Company Overview
Headquartered in Phoenix, Arizona, we design and produce factory-built homes primarily distributed through a network of independent and Company-owned retailers, planned community operators and residential developers. We are one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments. Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and Solitaire. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures. Our finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer, and a Government National Mortgage Association ("GNMA") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance primarily to owners of manufactured homes.
17
We operate a total of 31 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix, Glendale and Goodyear, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville (two lines) and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; Crouse and Hamlet, North Carolina; Ocala and Plant City, Florida; and two international lines in Ojinaga, Mexico. We distribute our homes through a large network of independent distribution points in 48 states and Canada and 79 Company-owned U.S. retail stores, of which 47 are located in Texas.
Company and Industry Outlook
According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through August 2024 were 68,550, an increase of 16.8% compared to 58,698 shipments in the same calendar period last year. Higher interest rates and continued inflationary pressures have tempered industry demand. However, the manufactured housing industry offers solutions to the housing crisis with lower average price per square foot than a site-built home and the comparatively lower cost associated with manufactured home ownership, which remains competitive with rental housing.
The two largest manufactured housing consumer demographics, young adults and those who are age 55 and older, are both growing. "First-time" and "move-up" buyers of affordable homes are historically among the largest segments of new manufactured home purchasers. Included in this group are lower-income households that are particularly affected by periods of low employment rates and underemployment. Consumer confidence is especially important among manufactured home buyers interested in our products for seasonal or retirement living.
We employ a concerted effort to identify niche market opportunities where our diverse product lines and custom building capabilities provide us with a competitive advantage. We are focused on building quality, energy efficient homes for the modern home buyer. Our green building initiatives involve the creation of an energy efficient envelope, including higher utilization of renewable materials and provide lower utility costs. We also build homes designed to use alternative energy sources, such as solar.
We maintain a conservative cost structure in an effort to build added value into our homes and we work diligently to maintain a solid financial position. Our balance sheet strength, including the position in cash and cash equivalents, helps avoid liquidity problems and enables us to act effectively as market opportunities or challenges present themselves.
We continue to make certain commercial loan programs available to members of our wholesale distribution chain. Under direct commercial loan arrangements, we provide funds for financed home purchases by distributors, community operators and residential developers (see Note 7, Commercial Loans Receivable to the unaudited Consolidated Financial Statements). Our involvement in commercial lending helps to increase the availability of manufactured home financing to distributors, community operators and residential developers and provides additional opportunities for product exposure to potential home buyers. While these initiatives support our ongoing efforts to expand product distribution, they also expose us to risks associated with the creditworthiness of this customer base and our inventory financing partners.
The lack of an efficient secondary market for manufactured home-only loans and the limited number of institutions providing such loans results in higher borrowing costs for home-only loans and continues to constrain industry growth. We work independently and with other industry participants to develop secondary market opportunities for manufactured home-only loan and non-conforming mortgage portfolios and expand lending availability in the industry. We also develop and invest in home-only lending programs to grow sales of homes through traditional distribution points. We believe that growing our investment and participation in home-only lending may provide additional sales growth opportunities for our factory-built housing operations and reduce our customers' dependence on independent lenders for this source of financing.
18
Key housing building materials include wood, wood products, steel, gypsum wallboard, windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances and electrical items. Fluctuations in the cost of materials and labor may affect gross margins from home sales to the extent that costs cannot be efficiently matched to the home sales price. Pricing and availability of certain raw materials have been volatile due to a number of factors in the current environment. We continue to monitor and react to inflation in the cost of these materials by maintaining a focus on our product pricing in response to higher materials costs, but such product pricing increases may lag behind the escalation of such costs. From time to time and to varying degrees, we may experience shortages in the availability of materials and/or labor in the markets served. Availability of these inputs has not caused significant production halts in the current period, but we have experienced periodic shutdowns in other periods and shortages of primary building materials have caused production inefficiencies as we have needed to change processes in response to the delay in materials. These shortages may also result in extended order backlogs, delays in the delivery of homes and reduced gross margins from home sales.
Our backlog at September 28, 2024 was $276 million compared to $232 million at June 29, 2024, an increase of $44 million and up $106 million compared to $170 million at September 30, 2023.
While it is difficult to predict the future of housing demand, employee availability, supply chain and Company performance and operations, maintaining an appropriately sized and well-trained workforce is key to meeting demand. We continually review the wage rates of our production employees and have established other monetary incentive and benefit programs, with a goal of providing competitive compensation. We are also working to more extensively use web-based recruiting tools, update our recruitment brochures and improve the appearance and appeal of our manufacturing facilities to improve the recruitment and retention of qualified production employees and reduce annualized turnover rates.
19
Results of Operations
Net Revenue
Three Months Ended
($ in thousands, except revenue per home sold)September 28,
2024		September 30,
2023		Change
Factory-built housing$486,343 $434,066 $52,277 12.0 %
Financial services21,118 17,964 3,154 17.6 %
$507,461 $452,030 $55,431 12.3 %
Factory-built homes sold
by Company-owned retail sales centers1,032 1,014 181.8 %
to independent retailers, builders, communities and developers3,881 3,234 647 20.0 %
4,913 4,248 665 15.7 %
Net factory-built housing revenue per home sold$98,991 $102,181 $(3,190)(3.1)%
 Six Months Ended
 ($ in thousands, except revenue per home sold)September 28,
2024		September 30,
2023		Change
Factory-built housing$944,391 $891,175 $53,216 6.0 %
Financial services40,669 36,730 3,939 10.7 %
$985,060 $927,905 $57,155 6.2 %
Factory-built homes sold
by Company-owned retail sales centers2,045 1,973 723.6 %
to independent retailers, builders, communities and developers7,589 6,857 732 10.7 %
9,634 8,830 804 9.1 %
Net factory-built housing revenue per home sold$98,027 $100,926 $(2,899)(2.9)%

Factory-built housing Net revenue increased for the three and six months ended September 28, 2024 due to higher home sales volume, partially offset by a decrease in revenue per home sold. The decrease in revenue per home sold was attributed to a lower proportion of homes sold through our Company-owned stores and, to a lesser extent, product pricing decreases.
Net factory-built housing revenue per home sold is a volatile metric dependent upon several factors. A primary factor is the price disparity between sales of homes to independent distributors, builders, communities and developers and sales of homes to consumers by Company-owned retail stores. Wholesale sales prices are primarily comprised of the home and the cost to ship the home from a homebuilding facility to the home-site. Retail home prices include these items and retail markup, as well as items that are largely subject to home buyer discretion, including, but not limited to, installation, utility connections, site improvements, landscaping and additional services. Our homes are constructed in one or more floor sections ("modules") which are then installed on the customer's site. Changes in the number of modules per home, the selection of different home types/models and optional home upgrades create changes in product mix, also causing fluctuations in this metric.
For the three and six months ended September 28, 2024, Financial services Net revenue increased primarily due to higher insurance premiums.
20
Gross Profit
Three Months Ended
($ in thousands)September 28,
2024		September 30,
2023		Change
Factory-built housing$111,520 $100,507 $11,013 11.0 %
Financial services4,602 6,450 (1,848)(28.7)%
$116,122 $106,957 $9,165 8.6 %
Gross profit as % of Net revenue
Consolidated22.9 %23.7 %N/A(0.8)%
Factory-built housing22.9 %23.2 %N/A