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Oct 01, 2022
Cavco Q2 2023 Earnings Report
Cavco's financial performance significantly improved in the second quarter of fiscal year 2023, driven by increased net revenue and a higher gross profit margin.
Key Takeaways
Cavco Industries reported a strong second quarter in fiscal year 2023, with net revenue increasing by 60.6% to $577 million and net income attributable to Cavco common stockholders increasing by 97.1% to $74 million. The company's gross profit margin also improved, and it commenced operations at a new park model manufacturing facility. The company also signed a binding agreement to acquire Solitaire Homes, Inc.
Net revenue increased to $577 million, a 60.6% increase compared to the prior year.
Net income attributable to Cavco common stockholders rose to $74 million, a 97.1% increase year-over-year.
Earnings per diluted share reached $8.25, compared to $4.06 in the prior year quarter.
Backlogs decreased to $651 million, a $347 million decrease from the previous quarter.
Cavco
Cavco
Forward Guidance
Cavco anticipates near-term demand to be impacted by rising interest rates, inflation, and other economic drivers. However, the company believes there are still opportunities for manufactured housing and remains focused on the long-term need for affordable housing.
Positive Outlook
- Strategic acquisitions like Solitaire Homes will strengthen their position in the Southwest.
- Recent start-ups of the Hamlet and Glendale plants are in line with their strategy to grow their impact on the affordable housing problem.
- Committed $244 million to strategic acquisitions since the beginning of fiscal 2022.
- Committed $52 million to internal capital projects including Hamlet and Glendale since the beginning of fiscal 2022.
- Committed $99 million to share repurchases since the beginning of fiscal 2022.
Challenges Ahead
- Near-term demand is being impacted by rising interest rates.
- Near-term demand is being impacted by inflation.
- Near-term demand is being impacted by other economic drivers.
- Lower home order rates, net of cancellations, which are down from the extreme highs we saw during the summer of 2020 to the summer of 2021.
- Compared to the sequential quarter, the lower utilization is due to market and weather driven downtime.