Forward-Looking Statements Statements in this Report on Form 10-Q include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," or "anticipates," or by discussions of strategy, plans or intentions. Forward-looking statements are typically included, for example, in discussions regarding the manufactured housing and site-built housing industries; the Company's financial performance and operating results; the expected effect of certain risks and uncertainties on the Company's business, financial condition and results of operations; economic conditions and consumer confidence; operational and legal risks; how the Company may be affected by the novel coronavirus COVID-19 ("COVID-19") pandemic; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; market interest rates and Company investments and the ultimate outcome of the Company's commitments and contingencies. Forward-looking statements contained in this Report on Form 10-Q speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. The Company does not intend to publicly update or revise any forward-looking statement contained in this Report on Form 10-Q or in any document incorporated herein by reference to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. Forward-looking statements involve risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, many of which are beyond our control. To the extent that the Company's assumptions and expectations differ from actual results, the Company's ability to meet such forward-looking statements, including the ability to generate positive cash flow from operations, may be significantly hindered. Factors that could affect the Company's results and cause them to materially differ from those contained in the forward-looking statements include, without limitation, those discussed in Risk Factors in Part I, Item 1A of the Company's 2020 Annual Report on Form 10-K ("Form 10-K"), which Risk Factors are incorporated herein. Introduction The following should be read in conjunction withCavco Industries, Inc. and its subsidiaries' (collectively, the "Company" or "Cavco") Consolidated Financial Statements and the related Notes that appear in Item 1 of this Report. References to "Note" or "Notes" pertain to the Notes to the Company's Consolidated Financial Statements. Company Overview Headquartered inPhoenix, Arizona , the Company designs and produces factory-built homes primarily distributed through a network of independent and Company-owned retailers, planned community operators and residential developers. The Company is one of the largest producers of manufactured homes inthe United States , based on reported wholesale shipments, marketed under a variety of brand names including Cavco, Fleetwood,Palm Harbor , Fairmont, Friendship, Chariot Eagle and Destiny. The Company is also one of the leading producers of park model RVs, vacation cabins and systems-built commercial structures, as well as modular homes built primarily under the Nationwide Homes brand. Cavco's finance subsidiary,CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer and aGovernment National Mortgage Association ("Ginnie Mae") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Cavco's insurance subsidiary,Standard Casualty Co. , provides property and casualty insurance to owners of manufactured homes. 24 -------------------------------------------------------------------------------- Table of Contents The Company operates 20 homebuilding production lines located inMillersburg andWoodburn, Oregon ;Nampa, Idaho ;Riverside, California ;Phoenix andGoodyear, Arizona ;Austin ,Fort Worth ,Seguin andWaco, Texas ;Montevideo, Minnesota ;Nappanee, Indiana ;Lafayette, Tennessee ;Martinsville andRocky Mount, Virginia ;Douglas andMoultrie, Georgia ; andOcala andPlant City, Florida . The majority of the homes produced are sold to, and distributed by, independently owned and controlled retail operations located throughoutthe United States andCanada . In addition, the Company's homes are sold through 40 Company-ownedU.S. retail locations. InApril 2020 , the Company shut down production and closed itsLexington, Mississippi manufacturing facility, finalizing production inJune 2020 . However, the Company remains available to serve wholesale customers previously served by theLexington facility from its other production lines in the southeast. The production facility has been placed on the market for sale. Company and Industry Outlook According to data reported by theManufactured Housing Institute , industry home shipments decreased 1.4% for the first 8 months of calendar year 2020 compared to the same period in the prior year. The industry offers solutions to the affordable housing crisis. The average price per square foot for a manufactured home is lower than a site-built home. Also, based on the relatively low cost associated with manufactured home ownership, the Company's products have traditionally competed with rental housing's monthly payment affordability. With respect to the general rise in demand for rental housing, during fiscal year 2020, the Company realized a larger proportion of orders and interest from developers and community owners for new manufactured homes intended for use as rental homes, alternative dwelling units and seasonal living. The two largest manufactured housing consumer demographics, young adults and thosewho are age 55 and older, are both growing. First-time and "move-up" buyers of affordable homes are historically among the largest segments of new manufactured home purchasers. Included in this group are lower-income households that may be limited in their ability to qualify for a new home loan by their particular employment status and down payment capability. Consumer confidence, as an indicator of retirement security, is especially important among manufactured home buyers interested in our products for seasonal or retirement living. The Company seeks out niche market opportunities where its diverse product lines and custom building capabilities provide a competitive advantage. Our green building initiatives involve the creation of an energy efficient envelope and higher utilization of renewable materials. These homes provide environmentally-friendly maintenance requirements, typically lower utility costs and sustainability. The Company maintains a conservative cost structure in an effort to build added value into its homes and has worked diligently to maintain a solid financial position. The balance sheet strength, including the position in cash and cash equivalents, helps avoid liquidity problems and enable the Company to act effectively as market opportunities or challenges present themselves. The Company continues to make certain commercial loan programs available to members of the Company's independent wholesale distribution chain. Under these programs, the Company provides a significant amount of the funds that independent financiers then lend to distributors to finance retail inventories of its products. In addition, the Company has entered into direct commercial loan arrangements with distributors, communities and developers under which the Company provides funds for financing homes (see Note 7 to the Consolidated Financial Statements). The Company's involvement in commercial loans helps to increase the availability of manufactured home financing to distributors, communities and developers. Participation in wholesale financing is helpful to these customers and provides additional opportunity for product exposure to potential home buyers. These initiatives support the Company's ongoing efforts to expand product distribution. However, these initiatives do expose the Company to risks associated with the creditworthiness of this customer base and the Company's inventory financing partners. The Company has included considerations related to the COVID-19 pandemic when assessing its risks of loan loss and setting reserve amounts for its commercial finance portfolio. 25 -------------------------------------------------------------------------------- Table of Contents The lack of an efficient secondary market for manufactured home-only loans and the limited number of institutions providing such loans results in higher borrowing costs for home-only loans and continues to constrain industry growth. The Company is working directly with other industry participants to develop secondary market opportunities for manufactured home-only loan portfolios and expand lending availability in the industry. Additionally, the Company continues to invest in community-based lending initiatives that provide home-only financing to new residents of certain manufactured home communities. Our mortgage subsidiary also develops and invests in home-only lending programs to grow sales of homes through traditional distribution points. The Company believes that growing its investment and participation in home-only lending may provide additional sales growth opportunities for the financial services segment, as well as provide a means that could lead to increased home sales for its factory-built housing operations. COVID-19 Impact and Strategy InMarch 2020 , theWorld Health Organization declared COVID-19 a global pandemic. As the business was considered essential, the Company continued to operate substantially all of its homebuilding and retail sales facilities while working to follow COVID-19 health guidelines. The Company has worked to minimize exposure and transmission risks by implementing enhanced facility cleaning, social distancing and related protocols while continuing to serve its customers. Operational efficiencies declined from adjusting home production processes to comply with health guidelines, managing higher factory employee absenteeism, limited new-hire availability and certain building material supply shortages. Accordingly, the Company's total average plant capacity utilization rate was approximately 65% during the second fiscal quarter of 2021, ending the quarter at approximately 70%. This is lower than pre-pandemic levels of more than 80%. Sales order activity has continued to improve during the second fiscal quarter of 2021 to the point where home sales order rates were nearly 65% higher than the comparable prior year quarter. Increased order volume is the result of a higher number of well-qualified home buyers making purchase decisions, supported by reduced home loan interest rates. Increased orders outpaced the challenging production environment during the quarter, raising order backlogs 134% to$321 million atSeptember 26, 2020 , compared to$137 million atSeptember 28, 2019 and$157 million atJune 27, 2020 . The backlog of home orders excludes orders that have been paused or canceled at the request of the customer. Distributors may cancel orders prior to production without penalty. After production of a particular home has commenced, the order becomes non-cancelable and the distributor is obligated to take delivery of the home. Accordingly, until production of a particular home has commenced, we do not consider order backlog to be firm orders. The financial services segment has also maintained operations since the onset of the COVID-19 pandemic, largely through the implementation of work-from-home solutions. In addition to accepting and processing new applications for home loans and insurance policies, the financial services operations continue to assist customers in need and service existing loans and insurance policies while complying with state and federal regulations regarding loan forbearance, home foreclosures and policy cancellations. Because of these economic conditions, loan loss reserves were increased at the end of fiscal year 2020 and continue to be adjusted as considered appropriate. Certain loans serviced by CountryPlace for investors expose the Company to cash flow decreases if customers do not make contractual monthly payments of principal and interest in a timely manner. Our primary investor,Ginnie Mae , permits cash obligations on loans in forbearance from COVID-19 to be offset by other incoming cash flows from loans such as loan pre-payments. While monthly collections of principal and interest from borrowers has normally exceeded scheduled principal and interest payments owed to investors, this could be negatively impacted given various state and local emergency orders in light of COVID-19. 26 -------------------------------------------------------------------------------- Table of Contents It is difficult to predict the future impacts of the COVID-19 pandemic on housing demand, employee availability, supply chain and Company performance and operations. The Company continues to focus on developing order volume growth opportunities by working to improve its production capabilities and adjusting product offerings. The Company strives to balance the production levels and workforce size with the demand for its product offerings to maximize efficiencies. The Company continually reviews wage rates of its production employees and has established other monetary incentive programs to ensure competitive compensation. The Company is also working to more extensively use on-line recruiting tools, update recruitment brochures and improve the appearance and appeal of its manufacturing facilities in order to improve the recruitment and retention of qualified production employees and reduce annualized turnover rates. Maintaining an appropriately sized and well-trained workforce is key to increasing production to meet increased demand. The Company faces a major challenge in overcoming labor-related difficulties in the COVID-19 environment to increase home production. Results of OperationsNet Revenue . Three Months
Ended
($ in thousands, except homes sold and
2020 2019 Change % Change Net revenue: Factory-built housing$ 240,967 $ 252,690 $ (11,723) (4.6) % Financial services 17,009 15,985 1,024 6.4 %$ 257,976 $ 268,675 $ (10,699) (4.0) % Total homes sold 3,427 3,781 (354) (9.4) % Net factory-built housing revenue per home sold$ 70,314 $ 66,832 $ 3,482 5.2 % Six Months Ended
($ in thousands, except homes sold and
2020 2019 Change % Change Net revenue: Factory-built housing$ 479,057 $ 501,458 $ (22,401) (4.5) % Financial services 33,720 31,259 2,461 7.9 %$ 512,777 $ 532,717 $ (19,940) (3.7) % Total homes sold 6,776 7,588 (812) (10.7) % Net factory-built housing revenue per home sold$ 70,699 $ 66,086 $ 4,613 7.0 % In the factory-built housing segment, the decrease in Net revenue was primarily due to 9% and 11% lower home sales volume during the three and six months endedSeptember 26, 2020 , respectively. These declines were partially offset by higher home selling prices compared to the same periods last year. Note thatDestiny Homes was purchased inAugust 2019 andLexington Homes was closed inJune 2020 . Net factory-built housing revenue per home sold is a volatile metric dependent upon several factors. A primary factor is the price disparity between sales of homes to independent distributors, builders, communities and developers ("Wholesale") and sales of homes to consumers by Company-owned retail centers ("Retail"). Wholesale sales prices are primarily comprised of the home and the cost to ship the home from a manufacturing facility to the home-site. Retail home prices include these items plus retail markup, as well as items that are largely subject to home buyer discretion, including, but not limited to, installation, utility connections, site improvements, landscaping and additional services. Other factors include fluctuations in product mix, the result of home buyer tastes and preferences as they select home types/models, as well as optional home upgrades when purchasing the home. 27 -------------------------------------------------------------------------------- Table of Contents As discussed above, changes to the proportion of home sales among the distribution channels between reporting periods impact the overall net revenue per home sold. For the three and six months endedSeptember 26, 2020 , the Company sold 2,664 and 5,261 homes Wholesale, respectively, and 763 and 1,515 homes Retail, respectively. For the three and six months endedSeptember 28, 2019 , the Company sold 3,006 and 6,064 homes Wholesale, respectively, and 775 and 1,524 homes Retail, respectively. Financial services segment revenue increased due to higher volume in home loan sales and more insurance policies in force in the current year compared to the prior year. Also, the three and six months endedSeptember 26, 2020 include$0.7 million and$1.7 million , respectively, of unrealized gains on marketable equity securities in the insurance subsidiary's portfolio, compared to$0.2 million in unrealized gains in each of the prior year periods. These overall increases were partially offset by lower interest income earned on the acquired consumer loan portfolios that continue to amortize. Gross Profit. Three Months Ended September 26, September 28, ($ in thousands) 2020 2019 $ Change % Change Gross profit: Factory-built housing$ 46,155 $ 48,639 $ (2,484) (5.1) % Financial services 7,386 9,828 (2,442) (24.8) %$ 53,541 $ 58,467 $ (4,926) (8.4) %
Gross profit as % of Net revenue:
Consolidated 20.8 % 21.8 % N/A (1.0) % Factory-built housing 19.2 % 19.2 % N/A - % Financial services 43.4 % 61.5 % N/A (18.1) % Six Months Ended September 26, September 28, ($ in thousands) 2020 2019 $ Change % Change Gross profit: Factory-built housing$ 93,147 $ 100,774 $ (7,627) (7.6) % Financial services 15,717 17,991 (2,274) (12.6) %$ 108,864 $ 118,765 $ (9,901) (8.3) %
Gross profit as % of Net revenue:
Consolidated 21.2 % 22.3 % N/A (1.1) % Factory-built housing 19.4 % 20.1 % N/A (0.7) % Financial services 46.6 % 57.6 % N/A (11.0) % Factory-built housing Gross profit as a percentage of Net revenue for the three month period was flat as compared to the same period last year, and decreased for the six months endedSeptember 26, 2020 , primarily due to lower sales volume and production inefficiencies caused by the COVID-19 pandemic. In the financial services segment, Gross profit as a percentage of Net revenue decreased as a result of higher weather-related claims volume at our insurance subsidiary and lower interest income earned on the acquired consumer loan portfolios that continue to amortize. 28 -------------------------------------------------------------------------------- Table of Contents Selling, General and Administrative Expenses. Three Months Ended September 26, September 28, ($ in thousands) 2020 2019 $ Change % Change Selling, general and administrative expenses: Factory-built housing$ 30,725 $ 31,580 $ (855) (2.7) % Financial services 4,728 4,503 225 5.0 %$ 35,453 $ 36,083 $ (630) (1.7) % Selling, general and administrative expenses as % of Net revenue: 13.7 % 13.4 % N/A 0.3 % Six Months Ended September 26, September 28, ($ in thousands) 2020 2019 $ Change % Change Selling, general and administrative expenses: Factory-built housing$ 61,462 $ 62,331 $ (869) (1.4) % Financial services 9,314 9,016 298 3.3 %$ 70,776 $ 71,347 $ (571) (0.8) % Selling, general and administrative expenses as % of Net revenue: 13.8 % 13.4 % N/A 0.4 % Selling, general and administrative expenses related to factory-built housing decreased between periods primarily from a reduction in legal expenses, partially offset by increased corporate-related expenses. During the three months endedSeptember 26, 2020 , the Company incurred$0.5 million in expenses related to theSEC inquiry. However, the Company also received a$0.8 million insurance recovery of prior expenses, resulting in a net benefit of$0.3 million during the period compared to$0.8 million in expense in the second quarter of fiscal year 2020. For the six months endedSeptember 26, 2020 , the Company recorded a net benefit of$0.2 million forSEC inquiry related expenses compared to$1.6 million in expense in the comparable prior year period. Selling, general and administrative expenses related to financial services increased due to increases in salaries and employee related expenses. Interest Expense. Interest expense was$0.2 million and$0.3 million for the three months endedSeptember 26, 2020 andSeptember 28, 2019 , respectively. For the six months endedSeptember 26, 2020 andSeptember 28, 2019 , Interest expense was$0.4 million and$0.8 million , respectively. Interest expense consists primarily of debt service on the CountryPlace financings of manufactured home-only loans and interest related to finance leases. The decrease is primarily the result of a reduction in securitized bond interest expense, as the Company exercised its right to repurchase the 2007-1 securitized loan portfolio inAugust 2019 , thereby eliminating the related interest expense. This decrease is partially offset by increases in interest expense from secured credit facilities at CountryPlace. Other Income, net. Other income, net was$1.7 million and$5.2 million for the three months endedSeptember 26, 2020 andSeptember 28, 2019 , respectively. For the six months endedSeptember 26, 2020 andSeptember 28, 2019 , Other income, net was$3.6 million and$8.0 million , respectively. Other income primarily consists of realized and unrealized gains and losses on corporate marketable equity investments, interest income related to commercial loans receivable balances, interest income earned on cash balances and gains and losses from the sale of property, plant and equipment. 29 -------------------------------------------------------------------------------- Table of Contents Other income, net, declined primarily due to a$3.4 million net gain on the sale of idle land that was recorded in the prior year period, as well as a reduction in interest earned in the current periods on cash and commercial loan receivables, given the lower interest rate environment. These declines were partially offset by increases in unrealized gains on corporate marketable equity securities. Income tax expense. Income tax expense was$4.5 million and$6.4 million for the three months endedSeptember 26, 2020 andSeptember 28, 2019 , respectively, for an effective income tax rate of 23.2% and 23.4%, respectively. Income tax expense for the six months endedSeptember 26, 2020 andSeptember 28, 2019 was$9.6 million and$12.5 million , respectively, for an effective income tax rate of 23.1% compared to an effective tax rate of 22.8% for the same period last year. The higher effective tax rate for the six month period was primarily due to lower tax benefits from the exercise of stock options, which provided a benefit of$0.7 million compared to the$0.9 million in the same period last year. Liquidity and Capital Resources The Company believes that cash and cash equivalents atSeptember 26, 2020 , together with cash flow from operations, will be sufficient to fund its operations and provide for growth for the next 12 months and into the foreseeable future. The Company maintains cash inU.S. Treasury and other money market funds, some of which are in excess of federally insured limits. The Company expects to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on the Company's liquidity and capital resources. Because of the Company's sufficient cash position, the Company has not historically sought external sources of liquidity, with the exception of certain credit facilities for its home-only lending programs. However, depending on the Company's operating results and strategic opportunities, it may need to seek additional or alternative sources of financing. There can be no assurance that such financing would be available on satisfactory terms, if at all. If this financing were not available, it could be necessary for the Company to reevaluate its long-term operating plans to make more efficient use of its existing capital resources. The exact nature of any changes to the Company's plans that would be considered depends on various factors, such as conditions in the factory-built housing industry and general economic conditions outside of the Company's control. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, the assets owned by the Company's insurance subsidiary are generally not available to satisfy the claims of Cavco or its legal subsidiaries. The Company believes that stockholders' equity at its insurance subsidiary remains sufficient and does not believe that its ability to pay ordinary dividends to Cavco will be restricted per state regulations. The following is a summary of the Company's cash flows for the six months endedSeptember 26, 2020 andSeptember 28, 2019 , respectively: Six Months Ended September 26, September 28, ($ in thousands) 2020 2019 $ Change Cash, cash equivalents and restricted cash at beginning of the fiscal year$ 255,607 $ 199,869 $ 55,738 Net cash provided by operating activities 74,609 43,593 31,016 Net cash used in investing activities (82) (18,308) 18,226 Net cash used in financing activities (865) (19,345) 18,480 Cash, cash equivalents and restricted cash at end of the period$ 329,269 $ 205,809 $ 123,460 30
-------------------------------------------------------------------------------- Table of Contents Net cash provided by operating activities increased during the six months endedSeptember 26, 2020 compared to the six months endedSeptember 28, 2019 primarily due to more customer deposits received as a result of higher order rates, higher collections on accounts receivables and commercial loans receivables and the timing of payments on Accounts payable and Accrued expenses and other current liabilities. Consumer loan originations increased by$2.1 million to$82.4 million for the six months endedSeptember 26, 2020 from$80.3 million for the six months endedSeptember 28, 2019 . Proceeds from sales of consumer loans provided$80.6 million in cash, compared to$77.2 million in the previous year. Cavco has entered into commercial loan arrangements with certain distributors of its products under which the Company provides funds for Wholesale purchases. In addition, the Company has entered into direct commercial loan arrangements with distributors, communities and developers under which the Company provides funds for financing homes. The Company has also invested in community-based lending initiatives that provide home-only financing to new residents of certain manufactured home communities. For additional information regarding our commercial loans receivable, see Note 7 to the Consolidated Financial Statements. Further, the Company has invested in and developed home-only loan pools and lending programs to attract third party financier interest in order to grow sales of new homes through traditional distribution points. Investing activities consist of buying and selling bonds and marketable equity securities in our Financial Services segment and funding strategic growth acquisitions. The Company received$2.1 million more in net proceeds from investments for the six months endedSeptember 26, 2020 compared to the same period last year, and Net cash for investing activities in the prior year was primarily used to fund the acquisition ofDestiny Homes . Financing activities used$18.5 million less cash during the period compared to the same period last year as the Company repurchased the 2007-1 securitized loan portfolio inAugust 2019 . The Company's finance subsidiary entered into secured credit facilities with independent third-party banks. The proceeds were used to facilitate the origination of consumer home-only loans to be held for investment, secured by the manufactured homes which were subsequently pledged as collateral to the facilities. Upon completion of the draw down periods, these facilities were converted into an amortizing loan based on a 20-year amortization period with a balloon payment due upon maturity. As ofSeptember 26, 2020 , the outstanding balance of the converted loans was$9.8 million at a weighted average interest rate of 4.91%. Contractual Commitments and Contingencies. There were no material changes to the contractual obligations as set forth in the Company's Annual Report on Form 10-K. Critical Accounting Policies OnMarch 29, 2020 , the Company adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. The Company adopted the standard by recognizing the cumulative effect of initially applying the new credit loss standard as an adjustment to the opening balance of Retained earnings. Refer to Note 1 to the Consolidated Financial Statements for additional discussion. There have been no other significant changes to the Company's critical accounting policies during the six months endedSeptember 26, 2020 , as compared to those disclosed in Part II, Item 7 of the Company's Form 10-K, under the heading "Critical Accounting Policies," which provides a discussion of the critical accounting policies that management believes affect its more significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements. Recent Accounting Pronouncements See Note 1 to the Consolidated Financial Statements for a discussion of recently issued and adopted accounting pronouncements. 31 -------------------------------------------------------------------------------- Table of Contents Other Matters Related Party Transactions. See Note 19 to the Consolidated Financial Statements for a discussion of the Company's related party transactions. Off Balance Sheet Arrangements See Note 15 to the Consolidated Financial Statements for a discussion of the Company's off-balance sheet commitments, which discussion is incorporated herein by reference. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes from the quantitative and qualitative disclosures about market risk previously disclosed in the Form 10-K. Item 4. Controls and Procedures (a) Disclosure Controls and Procedures The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its President and Chief Executive Officer and its Principal Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, the Company's President and Chief Executive Officer and its Principal Financial Officer concluded that, as ofSeptember 26, 2020 , its disclosure controls and procedures were effective. (b) Changes in Internal Control over Financial Reporting There have been no changes in the Company's internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter endedSeptember 26, 2020 , which have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 32
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