Cavco Reports Improving Financial Results
Cavco Industries Inc. today (May 29) announced financial results for the fourth quarter and fiscal year ended March 31, 2012.
Net sales for the fourth quarter of fiscal 2012 totaled $99,513,000, up 156 percent from $38,822,000 for the fourth quarter of fiscal year 2011, according to a news release.
As previously reported, Fleetwood Homes Inc., a subsidiary owned 50 percent by Cavco and 50 percent 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. The results of these new operations have been included in Cavco’s Consolidated Financial Statements since acquisition. Palm Harbor Homes Inc. 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.
Net income for the fiscal 2012 fourth quarter was $2,888,000, compared to $1,733,000 reported in the same quarter one year ago. Net income attributable to Cavco stockholders for the fiscal 2012 fourth quarter was $1,653,000 compared to $1,609,000 reported in the same quarter one year ago.
During the fiscal 2012 fourth quarter, the company made an election pursuant to section 338(h)(10) of the Internal Revenue Code, allowing the company to step up the tax basis of the Palm Harbor insurance group’s assets to fair value. This election offset income tax expense by $1,241,000, resulting in a net tax benefit of $502,000 for the company in the quarter. Net income per share attributable to Cavco stockholders based on basic and diluted weighted average shares outstanding was $0.24 for the fiscal 2012 fourth quarter, versus basic and diluted net income per share of $0.24 and $0.23 in last year’s fourth quarter, respectively. Net income attributable to Cavco stockholders for the quarter ended March 31, 2012, includes one half of the $1,241,000 tax benefit from this election, consistent with Cavco’s ownership percentage of Fleetwood Homes.
For the fiscal year ended March 31, 2012, net sales increased 158 percent to $443,066,000 from $171,827,000 for fiscal year 2011. Net income for fiscal year 2012 was $29,728,000 compared to $4,072,000 for the prior year. Included in net income for fiscal 2012 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 fiscal 2012 was $15,237,000 compared to $2,831,000 last year. For the fiscal year ended March 31, 2012, net income per share based on basic and diluted weighted average shares outstanding was $2.22 and $2.19, respectively, versus $0.43 and $0.41 for the prior year, respectively. Net income attributable to Cavco stockholders for the fiscal year ended March 31, 2012, includes one half of the bargain purchase gain recognized, consistent with Cavco’s ownership percentage of Fleetwood Homes.
Commenting on the final quarter of fiscal year 2012, Joseph Stegmayer, chairman, president and CEO, said, “The company’s fourth quarter financial results were positive in light of the ongoing economic challenges affecting the homebuilding industry. Home sales were adversely impacted this quarter by seasonally slow winter home buying activity; however, we began to see some modest improvement in consumer interest and traffic levels at the end of the quarter. The financial services segment continued to provide sound mortgage and insurance products while being a strong contributor to our fourth quarter profitability during these difficult times.”
Stegmayer continued, “Current economic and market headwinds including low consumer confidence levels, high unemployment rates, significant underemployment, and strict mortgage underwriting standards have not changed our optimistic long-term perspective. Cavco has accomplished a strategically eventful fiscal year in which the company grew considerably in size as well as in capability. The Palm Harbor transaction this year expanded the geographic reach of the company as well as the diversity of our home products and provided the introduction of related mortgage and insurance business lines. With the fiscal 2012 Palm Harbor and fiscal 2010 Fleetwood Homes asset purchases, our company is better situated to operate in the current environment and well positioned to benefit as the economy begins to improve.”
Cavco’s management will hold a conference call to review these results on Wednesday at noon (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of the webcast and presentation will be available for 90 days at www.cavco.com under the Investor Relations link.