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Cavco Industries Inc. Reports Q3 Results

February 2, 2012 by   - () Leave a Comment

Cavco Industries Inc. today (Feb. 2) announced financial results for the third quarter and first nine months of its fiscal year 2012 ended Dec. 31.

Net sales for the third quarter of fiscal 2012 totaled $114,564,000, up 189% from $39,612,000 for the third quarter of fiscal year 2011, according to a news release.

As previously reported, Fleetwood Homes Inc., a subsidiary owned 50% by Cavco and 50% by Third Avenue Value Fund, completed the acquisition of substantially all of the assets and assumption of certain liabilities of Palm Harbor Homes, Inc. during the quarter ended June 30, 2011. Palm Harbor had been in the business of manufacturing and marketing factory-built housing and providing related consumer financing and insurance products. The aggregate gross purchase price, exclusive of transaction costs, specified liabilities assumed and post-closing adjustments, was $83,900,000. The results of the Palm Harbor operations have been included in Cavco’s Consolidated Financial Statements since acquisition.

Net income for the fiscal 2012 third quarter was $2,980,000, compared to $290,000 reported in the same quarter one year ago. Net income attributable to Cavco stockholders for the fiscal 2012 third quarter was $1,677,000 compared to $24,000 reported in the same quarter one year ago. Net income per share based on basic and diluted weighted average shares outstanding was $0.24, versus basic and diluted net income of four-tenths of one cent per share last year.

For the first nine months of fiscal 2012, net sales increased 158% to $343,553,000 from $133,005,000 for the comparable prior year period. Net income for the first nine months of fiscal 2012 was $26,840,000 compared to $2,339,000 for the prior year period. Included in net income for the nine months ended Dec. 31, 2011, was a gain on bargain purchase of $22,009,000 resulting from the Palm Harbor transaction, calculated in accordance with the accounting standards for business combinations.

Net income attributable to Cavco stockholders for the first nine months of fiscal 2012 was $13,584,000 compared to $1,222,000 last year. For the nine months ended Dec. 31, 2011, net income per share based on basic and diluted weighted average shares outstanding was $1.98 and $1.96, respectively, versus $0.19 and $0.18 for the prior year period, respectively. Net income attributable to Cavco stockholders for the nine months ended Dec. 31, 2011, includes one half of the bargain purchase gain recognized, consistent with Cavco’s ownership percentage of Fleetwood Homes.

Referring to the fiscal third quarter financial results, Joseph Stegmayer, chairman, president and CEO, said, “The substantial increase in net sales compared to the same quarter in the prior year was primarily from this fiscal year’s addition of the Palm Harbor businesses, partially offset by seasonally slow home sales as we entered the winter months. Although backlogs were low at the end of the quarter, we look forward to the prospect of improvement in the latter part of the fourth quarter as the spring selling season begins. However, economic and housing headlines highlighting the state of consumer confidence, unemployment, and housing finance issues serve as reminders that the ongoing challenges to our industry persist.”

“During the quarter, our people remained focused on the execution of strategic objectives intended to strengthen the Company’s competitive positions and our capabilities to pursue an increasing variety of sales opportunities. We were particularly pleased with the ongoing business integration process since the Palm Harbor transaction earlier in the fiscal year. The Company began to realize some benefits from the collaboration of our manufacturing and retail business units. The financial services segment also continued to assimilate with the larger organization as well as develop business growth opportunities in diverse markets with niche products and services,” Mr. Stegmayer concluded.

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