'Apples and Oranges' in Cavco's Q1 Report
Cavco Industries Inc. today (Aug. 2) announced financial results for the first quarter ended June 30, 2012, of its fiscal year 2013.
Net sales for the first quarter of fiscal 2013 totaled $118,781,000, up 20.0 percent from $98,981,000 for the first quarter of fiscal year 2012. This quarter's results are compared to the prior year quarter, which included only 68 days of post-Palm Harbor acquisition activity, as that transaction closed on April 23, 2011, according to a news release.
Net income for the fiscal 2013 first quarter was $1,618,000, compared to $20,688,000 reported in the same quarter one year ago. As previously reported, included in net income for the first quarter of fiscal 2012 was a gain on bargain purchase of $22,009,000, as adjusted, resulting from the Palm Harbor transaction, calculated in accordance with the accounting standards for business combinations.
Net income attributable to Cavco stockholders for the fiscal 2013 first quarter was $860,000 compared to net income of $10,222,000 reported in the same quarter one year ago. Net income attributable to Cavco stockholders for the quarter ended June 30, 2011, includes one half of the bargain purchase gain recognized, consistent with Cavco's ownership percentage of Palm Harbor. Net income per share based on basic and diluted weighted average shares outstanding for the quarter ended June 30, 2012, was $0.12, versus basic and diluted net income per share for the quarter ended June 30, 2011, including the effect of the bargain purchase gain, of $1.49 and $1.48, respectively.
Referring to the quarter results, Dan Urness, vice president and CFO, said, "Gross profit as a percentage of net sales increased 4.0 percent to 20.3 percent for the first quarter of fiscal 2013 versus 16.3 percent for the same quarter in the prior year. The increase is primarily attributable to having the full quarter benefit of the generally higher margin Palm Harbor retail and finance businesses versus a partial quarter last year, given the transaction closing date of April 23, 2011. We also benefited from production overhead leverage on higher revenue. The margin improvement was partially offset by a larger mix of lower price-point homes."
Commenting on the first quarter of fiscal year 2013, Joseph Stegmayer, chairman, president and CEO, said, "Manufactured home industry unit shipments increased 24.8 percent during the period from January to May 2012 compared to the same period in the prior year. While welcomed, the percent improvement is calculated from historically low industry shipment levels. Intense competition for home sales within our underutilized industry and ongoing economic turmoil continue to be challenging. In order to succeed in this difficult market environment, our homebuilding activities remain focused on producing high quality homes that incorporate flexible housing designs to fit homebuyer interests, establishing and maintaining strengths in niche market areas and striving to provide excellent service after the sale of each home."