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Dec 28, 2019
Cavco Q3 2020 Earnings Report
Cavco's financial performance increased in Q3 2020, driven by revenue growth and improved profitability.
Key Takeaways
Cavco Industries reported a strong third quarter for fiscal year 2020, with a 17.1% increase in net revenue to $273.7 million and a 56.0% increase in net income to $20.9 million. The company benefited from improved home sales volume, the acquisition of Destiny Homes, and strong consumer demand.
Net revenue increased by 17.1% to $273.7 million, driven by improved home sales volume and the Destiny Homes acquisition.
Income from operations rose by 26.4% to $23.0 million, due to sales increases in factory-built housing and decreased weather-related claims in financial services.
Net income increased significantly by 56.0% to $20.9 million, further benefited by unrealized gains on corporate equity investments and lower effective income tax rates.
Factory-built housing shipments increased, reducing sales order backlogs to approximately 6 weeks of production, or $115 million.
Cavco
Cavco
Cavco Revenue by Segment
Revenue by Segment
Factory-Built Housing Revenue
CapyFin.comFinancial Services Revenue
CapyFin.com Forward Guidance
Cavco expects strong margins and growth in factory-built home shipments to continue, supported by strong consumer demand.
Positive Outlook
- Strong margins in factory-built home shipments are expected to continue.
- Growth in factory-built home shipments is expected to continue.
- Consumer demand is strong.
- High employment levels support consumer demand.
- Growing household incomes support consumer demand.
Challenges Ahead
- The company faces risks related to integrating acquisitions.
- Involvement in vertically integrated lines of business poses risks.
- Information technology failures or cyber incidents could negatively impact operations.
- Curtailment of available financing from home-only lenders could affect sales.
- The company faces risks from participation in wholesale and retail financing programs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income