Cavco Industries (CVCO) investor relations material

Executive summary

• Net revenue for the quarter rose 11.3% year-over-year to $581 million, driven by higher home sales, increased average selling prices, and a $42 million contribution from the American Homestar acquisition, which added two manufacturing facilities, 19 retail locations, and financial services.

• Net income for the quarter was $44.1 million, down from $56.5 million, with diluted EPS at $5.58 versus $6.90, mainly due to higher tax rates, acquisition-related costs, and increased SG&A.

• The American Homestar integration is progressing ahead of plan, with synergy estimates now above $10 million annually and about half expected to be realized by Q4.

• Backlogs at quarter-end totaled $160 million, representing 4-6 weeks of production, positioning the company for a potential spring uptick.

• Industry shipments slowed in October and November, with company volume down 4% year-over-year and 6% sequentially, excluding Homestar.

Financial highlights

• Net revenue for Q3 FY26 was $581 million, up 11.3% year-over-year, with factory-built housing segment revenue at $558.5 million (up 11.5%) and financial services revenue at $22.5 million (up 6.2%).

• Consolidated gross margin fell to 23.4% from 24.9% year-over-year; factory-built housing gross margin dropped to 21.7%, while financial services gross margin improved to 65.2%.

• Net income was $44.1 million, down from $56.5 million; diluted EPS was $5.58 versus $6.90 last year.

• Pre-tax profit declined 16.9% to $57.6 million; operating income was $54.6 million, down from $64 million.

• Cash and cash equivalents at quarter-end were $224.6 million, down from $356.2 million at the start of the fiscal year, mainly due to the Homestar acquisition and share repurchases.

Outlook and guidance

• Management is optimistic for the spring selling season, citing healthy leading indicators such as quotes and retail traffic, and expects continued growth opportunities from the Homestar acquisition.

• Integration costs from the Homestar deal are expected to decline, with positive synergy impacts increasing in Q4.

• The company remains focused on expanding home-only lending programs and monitoring market conditions for further strategic investments.

• Tariffs and rising input costs, especially for lumber and steel, are expected to pressure margins in coming quarters.