CAVCO INDUSTRIES, INC. annual
R E P O R T
cavco industries, inc.
2023
INVESTOR RELATIONS
investor_relations@cavco.com
The Company's filings with the Securities and Exchange Commission can be found in the SEC EDGAR database at www.sec.gov
Transfer Agent &
Registrar Computershare
Investor Services
250 Royall Street
Canton, MA 02021 Telephone: (888) 525-8755www.computershare.com
STOCK TRADING
The Company's common stock is listed on the Nasdaq Global Select Market and is traded under the Symbol CVCO.
3636 North Central Avenue Phoenix, AZ 85012-1998 602.256.6263 / cavcohomes.com
ABOUT CAVCO
Cavco Industries, Inc., Headquartered in Phoenix, Arizona, designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. We are one of the largest producers of manufactured and modular homes in the United States, based on reported wholesale shipments.
Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and Solitaire. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures.
Cavco's finance subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/ servicer and a Ginnie Mae mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.
BOARD OF DIRECTORS
Steven G. Bunger,
Chairman
President & Chief
Executive Officer,
Pro Box Storage, Inc.
William C. Boor
President & Chief
Executive Officer,
Cavco Industries, Inc.
Susan L. Blount
Retired Executive
Vice President &
General Counsel,
Prudential Financial Inc.
Julia W. Sze
Impact Investment Strategy Julia W. Sze Consulting
OFFICERS
William C. Boor
President & Chief
Executive Officer
Allison K. Aden
Executive VP,
Chief Financial
Officer & Treasurer
Mickey R. Dragash
Executive VP, General
Counsel, Corporate
Secretary & Chief
Compliance Officer
Steven K. Like
Senior VP, Corporate
Development
Paul W. Bigbee
Chief Accounting Officer
David A. Greenblatt
Retired Senior Vice
President & Deputy
General Counsel,
Eagle Materials Inc.
Richard A. Kerley
Retired Senior Vice
President & Chief
Financial Officer,
Peter Piper, Inc.
Steven W. Moster
President & Chief
Executive Officer,
Viad Corp
Anthony R. Crutcher
Chief Information Officer
Colleen J. Rogers
Senior VP, Marketing & Communications
Brian R. Cira
President, Manufactured Housing
Matthew A. Niño
President - Retail
Gavin M. Ryan
President, Standard
Casualty Company
Lyle D. Zeller
President, CountryPlace
Mortgage
Dear Fellow Shareholders,
FY 2023 demonstrated that the near-term cyclic nature of our industry remains and requires effective management. We entered the year with historically high backlogs and demand that significantly outpaced the industry's ability to produce. As interest rates and inflation spiked and general economic uncertainty increased, demand receded, resulting in shrinking backlogs and reduced production schedules. We reacted quickly and decisively to these changing market conditions and finished with our thirteenth consecutive year of growth in revenue and earnings. We increased net revenues by 32% and pre-tax income by 45%. Over the past 5 years, we have grown net revenue and pre-tax income at annualized rates of 20% and 31% respectively.
At Cavco, we understand these cycles and stay prepared to manage them while at the same time keeping our eyes on the larger opportunity to provide desperately needed affordable housing solutions. Operating with an intense focus on our cost structure and maintaining a conservative balance sheet support our ability to manage for the long term with strategic consistency. Our country continues to face a critical deficit of affordable housing resulting from under producing since 2008. Housing supply issues are particularly severe for lower cost homes, as site-builders are increasingly unable to supply first time and retirement buyers. Our confidence in the large, fundamental need for our homes underpins our growth and investment strategies.
Cavco's progress in FY 2023 demonstrates our ability to manage the near-term while investing for the future.
- Our new climate-controlled facility in Glendale, Arizona, which opened last summer, increases our capacity and capability to grow the Park Model market, where Cavco has long been an industry leader. Notably, solar energy provides 60% of the plant's electricity requirements.
- Last fall we opened our new Hamlet, North Carolina facility and transitioned the plant to single-familyfactory-built homes. Working closely with the previous site owner, we were able to provide continued employment throughout the change, benefiting both the employees and Cavco with a strong, in-place team ready to rapidly start-up the new operation.
- In the 4th quarter, we completed the purchase of Solitaire Homes, bringing 4 additional production lines into the Cavco network. Solitaire's well-established Mexico operation has two low-cost production lines that receive materials from the US and ship completed homes back to our domestic market. Additionally, the Solitaire Homes acquisition brings 22 retail stores that bolster our distribution channels in Oklahoma, New Mexico and Texas.
- This year, we also launched cavcohomes.com, our new home digital marketplace. For prospective homebuyers, the site provides a seamless shopping experience with access to products from across our family of brands. For our independent retailers, it provides customizable micro-sites they can easily manage directly, generating targeted sales leads and strengthening their relationship with Cavco.
In addition to these major investment milestones, we continued our fundamental work to provide a safe and respectful workplace where our co-workers can achieve success. Several years ago, we placed our people at the core of our overall strategy based on our commitment to the idea that we do our best for all our stakeholders when we invest in the success of our associates. This year we continued to enhance benefits, improve our impactful learning and development programs and expand career progression processes. We also initiated Homes for Our Own, an educational and financial assistance initiative to assist our associates in preparing for and achieving home ownership for themselves and their families. You can learn more about these efforts and others by visiting our new ESG website at cavcohomes.com/esg and in our upcoming third Corporate Responsibility Report.
As I mentioned earlier, our focus on long-term value creation and our conservative balance sheet support a strategic consistency while we manage ever-shiftingnear-term industry dynamics. The last two fiscal years demonstrate our commitment to that consistent execution. Over that period, we have invested $247 million in acquisitions and $58 million in internal capital projects, including the new Glendale and Hamlet plants. We also returned $103 million to our shareholders through share repurchases. All this while remaining corporate debt-free with a $271 million cash balance.
The factory-built housing industry has exciting opportunities ahead. We represent the most economical, unsubsidized form of home ownership. Our quality products compare favorably with similar site-built homes. In fact, site builders are increasingly unable to compete with us at low to moderate price points. And factory-built housing is considerably more environmentally friendly with lower waste and more efficient use of resources, including labor. Outdated zoning barriers are also being challenged and addressed at all levels of government, opening new markets for factory-built solutions.
At Cavco, we are working hard to build a better company that is ready to continue taking advantage of these opportunities and expand our impact by providing more deserving families with the wealth-building and security advantages of home ownership. All 7,000 Cavco team members contribute to that objective every day we build, sell, fund and insure a family's new home.
On behalf of everyone at Cavco, we want to thank you, our owners, for your continued confidence and support. We consider you our partners in our important work, and we look forward to updating you on our progress in FY 2024.
June 15, 2023
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Cavco Industries Inc. published this content on 15 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 June 2023 23:47:10 UTC.
