Loading...
•
Mar 28, 2020
Cavco Q4 2020 Earnings Report
Cavco Industries' financial performance decreased in Q4 2020 due to COVID-19 pandemic impacts and financial services losses.
Key Takeaways
Cavco Industries reported a 5.9% increase in net revenue for Q4 2020, reaching $255.3 million. However, net income decreased by 40.0% to $12.0 million, with diluted net income per share at $1.29. The results were impacted by COVID-19 challenges and losses in the financial services segment.
Net revenue increased by 5.9% to $255.3 million, driven by improved home sales volume and higher selling prices.
Net income decreased by 40.0% to $12.0 million, with diluted EPS at $1.29, impacted by COVID-19 and financial services losses.
The factory-built housing segment faced challenges due to COVID-19, leading to decreased production volume and operational efficiencies.
The financial services segment recorded losses due to increased loan allowances and unrealized losses on equity investments.
Cavco
Cavco
Forward Guidance
Cavco is in a strong financial position with a healthy balance sheet and continued cash generation. While the timing and pace of future business is impossible to predict, the deficit of affordable housing has not gone away and we remain very positive about the future of the Company and the industry.
Positive Outlook
- Company continues to operate substantially all of its homebuilding and retail sales facilities while working to follow COVID-19 health guidelines.
- Company adjusted its operations to minimize exposure and transmission risks by implementing enhanced facility cleaning, social distancing and related protocols while continuing to serve its customers.
- Cavco's employees have stepped up to the challenge with a great deal of creativity, commitment and resilience.
- Company continue to be in a very strong position with a healthy balance sheet
- Company has ability to adjust costs to current market conditions.
Challenges Ahead
- Operational efficiencies declined from adjusting home production processes to comply with health guidelines and managing higher factory employee absenteeism and building material supply shortages.
- Customer traffic has declined since the onset of the pandemic.
- Company received fewer home orders from its distribution channels than would be typical during the spring selling season.
- Home sales order volumes dropped approximately 40% in mid-April 2020, but improved somewhat to approximately 20% lower than pre-pandemic levels by mid-May 2020.
- The Company has decided to shut down production and close its Lexington, Mississippi plant.