Cavco Industries Reports Lower Q2 Results
Cavco Industries Inc. today (Nov. 1) announced financial results for the second quarter and first six months ended Sept. 30, 2012, of its fiscal year 2013.
Net sales for the second quarter of fiscal 2013 totaled $110,084,000, down 15.3% from $130,008,000 for the second quarter of fiscal year 2012. Net income for the fiscal 2013 second quarter was $2,681,000, compared to $3,172,000 reported in the same quarter one year ago.
Net income attributable to Cavco stockholders for the fiscal 2013 second quarter was $1,254,000 compared to net income of $1,685,000 reported in the same quarter one year ago. Net income per share based on basic and diluted weighted average shares outstanding for the quarter was $0.18, versus basic and diluted net income per share for the quarter ended Sept. 30, 2011, of $0.24.
For the first six months of fiscal 2013, net sales totaled $228,865,000, versus $228,989,000 for the comparable prior year period. Net income attributable to Cavco stockholders for the first half of fiscal 2013 was $2,114,000 compared to $11,907,000 last year. Net income attributable to Cavco stockholders for the six months ended Sept. 30, 2011, included one-half (or approximately $11,005,000) of the bargain purchase gain recognized from the Palm Harbor transaction, which closed on April 23, 2011. This bargain purchase gain allocation was consistent with Cavco's ownership percentage of Palm Harbor.
For the six months ended Sept. 30, 2012, net income per share based on basic and diluted weighted average shares outstanding was $0.30 versus basic and diluted net income per share of $1.73 and $1.72, respectively, for the prior year period.
Referring to the fiscal 2013 second quarter results, Joseph Stegmayer, chairman, president and CEO, said, "Net sales were lower for the second quarter of fiscal year 2013 compared to the same quarter in the prior year for various reasons. These include fewer homes sold this quarter, lower average sales prices from a product mix skewed toward lower price-point homes, and competitive pricing pressures. Adversely impacting the number of homes sold was a larger proportion of internally financed wholesale sales, up 49.8% this quarter versus the second quarter last year, resulting in delayed recognition of the related revenue, consistent with applicable accounting principles. The company also modestly grew the proportion of factory sales to company-owned stores, which defers revenue recognition until the home sale process to the consumer is complete."
"Although revenue was lower, gross margins improved to 23.4% of net sales during the second quarter of fiscal 2013 compared to 21.7% in the second quarter of fiscal 2012. Improved production planning and operating efficiency made possible by more consistency in order backlogs during the quarter, helped drive the margin increase as a percentage of net sales," Stegmayer continued.
"While we are pleased to report another profitable quarter for the company, we continue to operate in a challenging market environment where buyers of manufactured homes remain quite cautious in their purchasing decisions, and elevated unemployment and underemployment rates prevent access to financing for a significant number of potential homebuyers.
"To counteract these challenges, we have continued to expand our sales in niche market areas including, among others: workforce housing, homes for rental use in planned communities, multi-family developments, and camping cabins. The company's acquisitions in recent years have helped successfully expand our competencies on numerous homebuilding platforms. As a result, Cavco is better prepared to take advantage of market opportunities as they develop. In addition, our financial services operations continued to be meaningful contributors to second quarter results," Stegmayer concluded.