Cavco Industries, Inc. (Nasdaq:CVCO) today announced financial
results for the second quarter and first six months ended September
28, 2013 of fiscal year 2014.
Net revenue for the second quarter of fiscal 2014 totaled $129.8
million, up 17.9% from $110.1 million for the second quarter of
fiscal year 2013. Net income for the fiscal 2014 second quarter was
$4.7 million compared to $2.7 million reported in the same quarter
one year ago.
Net income attributable to Cavco stockholders for the fiscal
2014 second quarter was $4.3 million, compared to net income of
$1.3 million reported in the same quarter of the prior year. Net
income per share based on basic and diluted weighted average shares
outstanding for the quarter ended September 28, 2013 was $0.51 and
$0.50, respectively, versus $0.18 for the quarter ended September
30, 2012. The effective income tax rate for the second fiscal
quarter was approximately 30% compared to approximately 39% during
the same quarter last year. The lower income tax rate this quarter
resulted primarily from recording the expected net deferred income
tax benefits from the noncontrolling interest buyout transaction
completed during the second quarter, as further described below,
and certain income tax credits.
For the first six months of fiscal 2014, net sales totaled
$263.8 million, up 15.3% from $228.9 million for the comparable
prior year period. Net income attributable to Cavco stockholders
for the first half of fiscal 2014 was $6.1 million, compared to
$2.1 million last year. For the six months ended September 28,
2013, net income per share based on basic and diluted weighted
average shares outstanding was $0.80 and $0.79, respectively,
versus basic and diluted net income per share of $0.30 for the
prior year period.
During the second fiscal 2014 quarter and as previously
disclosed, Cavco completed the purchase of all noncontrolling
interests in Fleetwood Homes, Inc., a jointly-owned corporation
formed in 2009 by Cavco and Third Avenue Value Fund. Fleetwood
Homes, Inc., a Cavco subsidiary, owns Fleetwood Homes, Palm Harbor
Homes, CountryPlace Mortgage and Standard Casualty Company. As
consideration for the 50% interest that it did not already own,
Cavco paid $91.4 million in its common stock. The resulting
issuance of 1,867,370 shares increased the total number of common
shares outstanding to 8,837,324. Historically, 50% of the financial
results of these businesses have been recorded as attributable to
Cavco's common stockholders in the consolidated financial
statements. As of July 22, 2013, Cavco owns 100% of these
businesses and is therefore entitled to all of the associated
earnings from that date forward.
Commenting on the quarterly financial statements, Joseph
Stegmayer, Chairman, President and Chief Executive Officer said,
"The improved earnings per share results were positively influenced
by Cavco's buyout of all noncontrolling interests, which occurred
early in the quarter. In addition, our stockholders' equity balance
increased 58% from the March 30, 2013 balance to approximately $279
million, primarily resulting from the transaction. We expect the
Company's improved financial statement condition will support
further growth in all facets of our business: home building, retail
sales of homes, mortgage lending, and insurance services."
"Revenue growth from higher home sales volume continued during
Cavco's second fiscal quarter. The overall response from
manufactured home retailers, developers, and homeowners to our
blend of product offerings has been positive. We are now entering
the seasonally slower winter months and the health of the general
economy remains fragile; still, we believe that we are in position
to generate improved results compared to last year's third
quarter," Mr. Stegmayer concluded.
Cavco's management will hold a conference call to review these
results tomorrow, November 1, 2013, 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. The Company is one of the largest producers of
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. Its
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. Its insurance
subsidiary, Standard Casualty, 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; increased costs of healthcare
benefits to employees; our ability to successfully integrate
Fleetwood Homes, Palm Harbor, CountryPlace, Standard Casualty and
any future acquisition or attain the anticipated benefits of such
acquisition; the risk that the acquisition of Fleetwood Homes, Palm
Harbor, CountryPlace, Standard Casualty 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; our
participation in certain wholesale and retail financing programs
for the purchase of our products by industry retailers and
consumers may expose us to additional risk of credit loss;
governmental and regulatory disruption; information technology
failures and data security breaches; 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 2013 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, except
per share amounts) |
|
|
September 28, 2013 |
March 30, 2013 |
|
(Unaudited) |
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 61,671 |
$ 47,823 |
Restricted cash, current |
8,091 |
6,773 |
Accounts receivable, net |
21,720 |
18,710 |
Short-term investments |
5,702 |
6,929 |
Current portion of consumer
loans receivable, net |
20,376 |
20,188 |
Current portion of inventory
finance notes receivable, net |
4,123 |
3,983 |
Inventories |
69,278 |
68,805 |
Assets held for sale |
3,889 |
4,180 |
Prepaid expenses and other
current assets |
9,047 |
10,267 |
Deferred income taxes,
current |
12,009 |
6,724 |
Total current assets |
215,906 |
194,382 |
Restricted cash |
1,179 |
1,179 |
Investments |
13,107 |
10,769 |
Consumer loans receivable, net |
83,950 |
90,802 |
Inventory finance notes receivable, net |
19,990 |
18,967 |
Property, plant and equipment, net |
45,752 |
46,223 |
Goodwill and other intangibles, net |
78,745 |
79,435 |
Deferred income taxes |
— |
2,742 |
Total assets |
$ 458,629 |
$ 444,499 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 17,694 |
$ 14,118 |
Accrued liabilities |
68,004 |
62,718 |
Current portion of securitized
financings |
9,962 |
10,169 |
Total current liabilities |
95,660 |
87,005 |
Securitized financings |
65,541 |
72,118 |
Deferred income taxes |
18,140 |
16,492 |
Redeemable noncontrolling interest |
— |
91,994 |
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 8,837,324 and 6,967,954
shares, respectively |
88 |
70 |
Additional paid-in capital |
231,307 |
135,053 |
Retained earnings |
47,726 |
41,590 |
Accumulated other comprehensive
income |
167 |
177 |
Total stockholders' equity |
279,288 |
176,890 |
Total liabilities, redeemable noncontrolling
interest and stockholders' equity |
$ 458,629 |
$ 444,499 |
|
|
CAVCO INDUSTRIES,
INC. |
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME |
(Dollars in thousands, except
per share amounts) |
(Unaudited) |
|
|
Three Months Ended |
Six Months Ended |
|
September 28, 2013 |
September 30, 2012 |
September 28, 2013 |
September 30, 2012 |
Net revenue |
$ 129,826 |
$ 110,084 |
$ 263,813 |
$ 228,865 |
Cost of sales |
99,942 |
84,377 |
204,531 |
179,103 |
Gross profit |
29,884 |
25,707 |
59,282 |
49,762 |
Selling, general and administrative
expenses |
22,082 |
20,118 |
44,562 |
40,093 |
Income from operations |
7,802 |
5,589 |
14,720 |
9,669 |
Interest expense |
(1,198) |
(1,570) |
(2,452) |
(3,253) |
Other income |
125 |
388 |
500 |
783 |
Income before income taxes |
6,729 |
4,407 |
12,768 |
7,199 |
Income tax expense |
(1,986) |
(1,726) |
(4,164) |
(2,900) |
Net income |
4,743 |
2,681 |
8,604 |
4,299 |
Less: net income attributable to redeemable
noncontrolling interest |
433 |
1,427 |
2,468 |
2,185 |
Net income attributable to Cavco common
stockholders |
$ 4,310 |
$ 1,254 |
$ 6,136 |
$ 2,114 |
|
|
|
|
|
Comprehensive income: |
|
|
|
|
Net income |
$ 4,743 |
$ 2,681 |
$ 8,604 |
$ 4,299 |
Unrealized (loss) gain on
available-for-sale securities, net of tax |
(44) |
88 |
(186) |
62 |
Comprehensive income |
4,699 |
2,769 |
8,418 |
4,361 |
Comprehensive income
attributable to redeemable noncontrolling interest |
428 |
1,471 |
2,392 |
2,216 |
Comprehensive income
attributable to Cavco common stockholders |
$ 4,271 |
$ 1,298 |
$ 6,026 |
$ 2,145 |
|
|
|
|
|
Net income per share attributable to Cavco
common stockholders: |
|
|
|
|
Basic |
$ 0.51 |
$ 0.18 |
$ 0.80 |
$ 0.30 |
Diluted |
$ 0.50 |
$ 0.18 |
$ 0.79 |
$ 0.30 |
Weighted average shares outstanding: |
|
|
|
|
Basic |
8,422,353 |
6,967,954 |
7,689,538 |
6,945,815 |
Diluted |
8,547,026 |
7,041,755 |
7,787,866 |
7,006,322 |
|
|
CAVCO INDUSTRIES,
INC. |
OTHER OPERATING
DATA |
(Dollars in thousands) |
(Unaudited) |
|
|
Three Months Ended |
Six Months Ended |
|
September 28, 2013 |
September 30, 2012 |
September 28, 2013 |
September 30, 2012 |
Net revenue: |
|
|
|
|
Factory-built housing |
$ 117,803 |
$ 98,903 |
$ 240,055 |
$ 207,350 |
Financial services |
12,023 |
11,181 |
23,758 |
21,515 |
Total net revenue |
$ 129,826 |
$ 110,084 |
$ 263,813 |
$ 228,865 |
|
|
|
|
|
Capital expenditures |
$ 446 |
$ 165 |
$ 832 |
$ 386 |
Depreciation |
$ 672 |
$ 622 |
$ 1,288 |
$ 1,267 |
Amortization of other intangibles |
$ 345 |
$ 345 |
$ 690 |
$ 791 |
|
|
|
|
|
Factory-built homes sold: |
|
|
|
|
by Company owned stores |
555 |
503 |
1,108 |
978 |
to independent dealers,
builders & developers |
1,925 |
1,415 |
3,730 |
3,179 |
Total factory-built homes sold |
2,480 |
1,918 |
4,838 |
4,157 |
CONTACT: Joseph Stegmayer
Chairman and CEO
joes@cavco.com
Daniel Urness
CFO and Treasurer
danu@cavco.com
Phone: 602-256-6263
On the Internet: www.cavco.com
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