Cavco Industries, Inc. (Nasdaq:CVCO) today announced financial
results for the second quarter and first six months of its fiscal
year 2012 ended September 30, 2011.
Net sales for the second quarter of fiscal 2012 totaled
$130,008,000, up 183% from $45,888,000 for the second quarter of
fiscal year 2011.
As previously reported, Fleetwood Homes, Inc., a subsidiary
owned 50% by Cavco and 50% by Third Avenue Value Fund (TAVFX),
completed the acquisition of substantially all of the assets and
assumption of certain liabilities of Palm Harbor Homes, Inc. during
the quarter ended June 30, 2011. Palm Harbor had been in the
business of manufacturing and marketing factory-built housing and
providing related consumer financing and insurance products. The
aggregate gross purchase price, exclusive of transaction costs,
specified liabilities assumed and post-closing adjustments, was
$83,900,000. The results of the Palm Harbor operations have been
included in the Consolidated Financial Statements since
acquisition.
Net income for the fiscal 2012 second quarter was $3,172,000,
compared to $1,199,000 reported in the same quarter one year ago.
During the quarter, we incurred $120,000 in acquisition-related
costs for the purchase of the Palm Harbor Homes assets and we
expect to have additional transaction-related expenses during the
remainder of fiscal year 2012. Interest expense of $1,916,000 was
recognized during the second quarter of fiscal 2012, primarily
related to securitized financings and a mortgage construction
lending facility of the finance subsidiaries acquired.
Net income attributable to Cavco stockholders for the fiscal
2012 second quarter was $1,685,000 compared to $680,000 reported in
the same quarter one year ago. Net income per share based on
basic and diluted weighted average shares outstanding was $0.24
versus basic and diluted net income per share of $0.10 last
year.
For the first six months of fiscal 2012, net sales increased
145% to $228,989,000 from $93,393,000 for the comparable prior year
period. Net income for the first half of fiscal 2012 was
$23,860,000 compared to $2,049,000 last year. Included in net
income for the six months ended September 30, 2011 was a gain on
bargain purchase of $22,009,000 resulting from the acquisition of
Palm Harbor, as adjusted during the fiscal 2012 second quarter and
calculated in accordance with the accounting standards for business
combinations. Net income attributable to Cavco stockholders
for the first half of fiscal 2012 was $11,907,000 compared to
$1,198,000 last year. For the six months ended September 30,
2011, net income per share based on basic and diluted weighted
average shares outstanding was $1.73 and $1.72, respectively,
versus $0.18 for the prior year period.
"We are glad to report positive earnings for the second quarter
of fiscal year 2012. Cavco benefited from higher order rates
during the quarter, which translated into improved results compared
to recent quarters and demonstrates the operating leverage we
believe exists in the Cavco group of companies," said Joseph
Stegmayer, Chairman, President and Chief Executive Officer, while
commenting on the quarter. Mr. Stegmayer continued, "This is
our first full quarter operating the newly expanded enterprise
since the Palm Harbor transaction closed during last
quarter. While the work of transitioning the newly acquired
operations into the Cavco fold is ongoing, we are pleased with the
initial contributions of the Palm Harbor businesses and
people. This quarter also marks the second anniversary of the
Fleetwood Homes transaction. The Fleetwood Homes operations
have continued to develop and grow in their respective
markets. We believe the expanded and more diverse operations
have improved Cavco's position in the industry, allowing us to more
fully take advantage of market opportunities and pursue operating
efficiencies available to a larger organization."
"We remain cautious about the near term outlook. High
unemployment rates, significant under employment and low consumer
confidence levels combine to create a very challenging
environment for the sale of consumer durables, particularly
housing. In addition, home sales activity typically
experiences seasonal declines during winter months. Still we
feel that Cavco is very well positioned as an industry leader and
from a financial strength standpoint to cope with the
largely unprecedented economic conditions the nation
faces. We build high quality, affordable homes that
target a wide range of consumer needs and interests.
Eventually, we believe the growing population of potential
homebuyers will begin to shop for a home and expect that many
people will consider systems built homes such as ours for their
affordability, energy efficiency, flexible
design possibilities and environment friendly
characteristics," Mr. Stegmayer concluded.
Cavco's senior management will hold a conference call to review
these results tomorrow, November 4, 2011, at 12:00 noon (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. An archive of the webcast and presentation
will be available for 90 days at www.cavco.com under the Investor
Relations link.
Cavco Industries, Inc., headquartered in Phoenix, Arizona,
designs and produces factory-built housing products primarily
distributed through a network of independent and company-owned
retailers. We are the second largest producer of HUD code
manufactured homes in the United States, based on reported
wholesale shipments, marketed under a variety of brand names
including Cavco Homes, Fleetwood Homes and Palm Harbor Homes. The
Company is also a leading producer of park model homes, vacation
cabins, and systems-built commercial structures; as well as modular
homes built primarily under the Nationwide Homes brand. Our
mortgage subsidiary, CountryPlace, is an approved Fannie Mae and
Ginnie Mae seller/servicer and offers conforming mortgages to
purchasers of factory-built and site-built homes. Our insurance
subsidiary, Standard, provides property and casualty insurance to
owners of manufactured homes.
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 and site-built housing industries; 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; general deterioration in
economic conditions and continued turmoil in the credit markets; a
write-off of all or part of our goodwill, which could adversely
affect operating results and net worth; 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; our
ability to successfully integrate Fleetwood Homes, Palm Harbor, and
any future acquisition or attain the anticipated benefits of such
acquisition; the risk that the acquisition of Fleetwood Homes, Palm
Harbor, and any future acquisition may adversely impact our
liquidity; expansion of retail and manufacturing businesses and
entry into new lines of business, namely manufactured housing
consumer finance and insurance, through the Palm Harbor
transaction; our participation in certain wholesale financing
programs for the purchase of our products by industry retailers may
expose us to additional risk of credit loss; 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 2011 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.
CAVCO INDUSTRIES,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(Dollars in thousands) |
|
|
|
|
September 30, |
March 31, |
|
2011 |
2011 |
|
(Unaudited) |
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 35,219 |
$ 76,513 |
Restricted cash,
current |
7,067 |
436 |
Accounts receivable,
net |
13,236 |
6,571 |
Short-term
investments |
5,608 |
-- |
Current portion of
consumer loans receivable, net |
20,260 |
-- |
Inventories |
63,848 |
16,036 |
Assets held for sale |
8,326 |
-- |
Prepaid expenses and
other current assets |
6,582 |
2,495 |
Debtor-in-possession note
receivable |
-- |
40,060 |
Deferred income
taxes |
5,479 |
4,720 |
Total current assets |
165,625 |
146,831 |
|
|
|
Restricted cash |
453 |
-- |
Investments |
10,834 |
-- |
Consumer loans receivable, net |
103,531 |
-- |
Inventory finance notes receivable, net |
19,468 |
17,759 |
Property, plant and equipment, net |
50,510 |
35,993 |
Goodwill and other intangibles, net |
82,467 |
68,859 |
|
|
|
Total assets |
$ 432,888 |
$ 269,442 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 10,802 |
$ 3,495 |
Accrued liabilities |
61,505 |
26,245 |
Construction lending
line |
4,528 |
-- |
Current portion of
securitized financings |
11,539 |
-- |
Noncontrolling interest
note payable |
-- |
36,000 |
Total current liabilities |
88,374 |
65,740 |
|
|
|
Securitized financings |
84,599 |
-- |
Deferred income taxes |
11,772 |
17,214 |
|
|
|
Redeemable noncontrolling interest |
83,804 |
35,819 |
|
|
|
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 6,890,196 and
6,817,606 shares, respectively |
69 |
68 |
Additional paid-in
capital |
131,114 |
129,211 |
Retained earnings |
33,297 |
21,390 |
Accumulated other
comprehensive loss |
(141) |
-- |
Total stockholders' equity |
164,339 |
150,669 |
|
|
|
Total liabilities, redeemable noncontrolling
interest and |
|
|
stockholders' equity |
$ 432,888 |
$ 269,442 |
|
|
|
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, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Net sales |
$ 130,008 |
$ 45,888 |
$ 228,989 |
$ 93,393 |
Cost of sales |
101,780 |
38,709 |
184,601 |
79,773 |
Gross profit |
28,228 |
7,179 |
44,388 |
13,620 |
Selling, general and administrative
expenses |
21,588 |
5,489 |
38,578 |
10,725 |
Income from operations |
6,640 |
1,690 |
5,810 |
2,895 |
Interest expense |
(1,916) |
-- |
(3,377) |
-- |
Other income |
255 |
266 |
615 |
446 |
Gain on bargain purchase |
-- |
-- |
22,009 |
-- |
Income before income taxes |
4,979 |
1,956 |
25,057 |
3,341 |
Income tax expense |
(1,807) |
(757) |
(1,197) |
(1,292) |
Net income |
3,172 |
1,199 |
23,860 |
2,049 |
Less: net income attributable
to noncontrolling interest |
1,487 |
519 |
11,953 |
851 |
Net income attributable to
Cavco common stockholders |
$ 1,685 |
$ 680 |
$ 11,907 |
$ 1,198 |
|
|
|
|
|
Net income per share attributable to
Cavco common stockholders: |
|
|
|
|
Basic |
$ 0.24 |
$ 0.10 |
$ 1.73 |
$ 0.18 |
Diluted |
$ 0.24 |
$ 0.10 |
$ 1.72 |
$ 0.18 |
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
Basic |
6,890,122 |
6,541,951 |
6,864,427 |
6,541,846 |
Diluted |
6,937,807 |
6,747,116 |
6,921,458 |
6,763,020 |
|
|
|
|
|
CAVCO INDUSTRIES,
INC. |
OTHER OPERATING
DATA |
(Dollars in thousands) |
(Unaudited) |
|
|
Three Months
Ended |
Six Months
Ended |
|
September
30, |
September
30, |
|
2011 |
2010 |
2011 |
2010 |
Net sales: |
|
|
|
|
Factory-built
housing |
$ 119,686 |
$ 45,888 |
$ 212,526 |
$ 93,393 |
Financial
services |
10,322 |
-- |
16,463 |
-- |
Total net sales |
$ 130,008 |
$ 45,888 |
$ 228,989 |
$ 93,393 |
|
|
|
|
|
Capital expenditures |
$ 810 |
$ 220 |
$ 1,839 |
$ 459 |
Depreciation |
$ 605 |
$ 328 |
$ 1,065 |
$ 653 |
Amortization of other
intangibles |
$ 1,279 |
$ 13 |
$ 1,686 |
$ 26 |
|
|
|
|
|
Factory-built homes sold: |
|
|
|
|
by Company owned stores |
503 |
37 |
920 |
67 |
to independent dealers, builders
& developers |
1,644 |
1,199 |
3,078 |
2,485 |
Total factory-built homes
sold |
2,147 |
1,236 |
3,998 |
2,552 |
CONTACT: Joseph Stegmayer
Chairman and CEO
Phone: 602-256-6263
joes@cavco.com
On the Internet:
www.cavco.com
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