CAVCO INDUSTRIES, INC.

FORM 10-Q

December 30, ~~2017~~2023

TABLE OF CONTENTS



	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of December 30, ~~2017~~2023 (unaudited) and April 1, ~~2017~~2023		1
Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended December 30, ~~2017~~2023 and December 31, ~~2016~~2022		2
Consolidated Statements of Cash Flows (unaudited) for the nine months ended December 30, ~~2017~~2023 and December 31, ~~2016~~2022		3
Notes to Consolidated Financial Statements (unaudited)		4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		3121
Item 3. Quantitative and Qualitative Disclosures About Market Risk		4828
Item 4. Controls and Procedures		4929
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		4930
Item 1A. Risk Factors		5030
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 3. Not applicable
Item 4. Not applicable
Item 5. Other Information		31
Item 6. Exhibits		5032
SIGNATURES		5133

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

CAVCO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

December 30,
2017 April 1,
2017
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 138,974
$ 132,542
Restricted cash, current 9,993
11,573
Accounts receivable, net 41,501
31,221
Short-term investments 14,502
11,289
Current portion of consumer loans receivable, net 32,186
31,115
Current portion of commercial loans receivable, net 6,823
7,932
Inventories 105,872
93,855
Prepaid expenses and other current assets 34,112
28,033
Deferred income taxes, current —
9,204
Total current assets 383,963
356,764
Restricted cash 728
724
Investments 34,631
30,256
Consumer loans receivable, net 62,806
64,686
Commercial loans receivable, net 20,031
17,901
Property, plant and equipment, net 58,969
56,964
Goodwill and other intangibles, net 83,025
80,021
Total assets $ 644,153
$ 607,316
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,835
$ 24,010
Accrued liabilities 123,661
109,789
Current portion of securitized financings and other 5,761
6,417
Total current liabilities 149,257
140,216
Securitized financings and other 51,530
51,574
Deferred income taxes 7,794
21,118

Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized; No shares issued or outstanding —
—
Common stock, $.01 par value; 40,000,000 shares authorized; Outstanding 9,035,294 and 8,994,968 shares, respectively 90
90
Additional paid-in capital 245,605
244,791
Retained earnings 187,572
148,141
Accumulated other comprehensive income 2,305
1,386
Total stockholders' equity 435,572
394,408
Total liabilities and stockholders' equity $ 644,153
$ 607,316


	December 30, 2023		April 1, 2023
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	352,808	$	271,427
Restricted cash, current	13,215		11,728
Accounts receivable, net	70,501		89,347
Short-term investments	16,819		14,978
Current portion of consumer loans receivable, net	11,855		17,019
Current portion of commercial loans receivable, net	48,817		43,414
Current portion of commercial loans receivable from affiliates, net	2,135		640
Inventories	236,649		263,150
Prepaid expenses and other current assets	80,248		92,876
Total current assets	833,047		804,579
Restricted cash	585		335
Investments	16,099		18,639
Consumer loans receivable, net	24,279		27,129
Commercial loans receivable, net	38,836		53,890
Commercial loans receivable from affiliates, net	2,784		4,033
Property, plant and equipment, net	224,216		228,278
Goodwill	120,744		114,547
Other intangibles, net	28,613		29,790
Operating lease right-of-use assets	37,393		26,755
Total assets	$	1,326,596	$	1,307,975
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	23,928	$	30,730
Accrued expenses and other current liabilities	247,244		262,661
Total current liabilities	271,172		293,391
Operating lease liabilities	33,285		21,678
Other liabilities	7,651		7,820
Deferred income taxes	5,788		7,581
Redeemable noncontrolling interest	—		1,219
Stockholders' equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding	—		—
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,381,147 and 9,337,125 shares, respectively; Outstanding 8,345,812 and 8,665,324 shares, respectively	94		93
Treasury stock, at cost; 1,035,335 and 671,801 shares, respectively	(262,072)		(164,452)
Additional paid-in capital	277,847		271,950
Retained earnings	993,193		869,310
Accumulated other comprehensive loss	(362)		(615)
Total stockholders' equity	1,008,700		976,286
Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,326,596	$	1,307,975

See accompanying Notes to Consolidated Financial Statements

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CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Net revenue	$	446,769	$	500,603	$	1,374,674	$	1,666,333
Cost of sales	343,718		368,635		1,046,787		1,232,042
Gross profit	103,051		131,968		327,887		434,291
Selling, general and administrative expenses	63,312		58,904		186,498		191,934
Income from operations	39,739		73,064		141,389		242,357
Interest income	5,234		3,581		15,664		6,746
Interest expense	(842)		(216)		(1,365)		(610)
Other (expense) income, net	(224)		(348)		557		(291)
Income before income taxes	43,907		76,081		156,245		248,202
Income tax expense	(7,920)		(16,492)		(32,274)		(54,721)
Net income	35,987		59,589		123,971		193,481
Less: net income attributable to redeemable noncontrolling interest	—		65		88		239
Net income attributable to Cavco common stockholders	$	35,987	$	59,524	$	123,883	$	193,242

Comprehensive income
Net income	$	35,987	$	59,589	$	123,971	$	193,481
Reclassification adjustment for securities sold	293		(13)		299		(19)
Applicable income tax (expense) benefit	(62)		3		(63)		4
Net change in unrealized position of investments held	13		107		22		(412)
Applicable income tax (expense) benefit	(3)		(23)		(5)		86
Comprehensive income	36,228		59,663		124,224		193,140
Less: comprehensive income attributable to redeemable noncontrolling interest	—		65		88		239
Comprehensive income attributable to Cavco common stockholders	$	36,228	$	59,598	$	124,136	$	192,901

Net income per share attributable to Cavco common stockholders
Basic	$	4.31	$	6.71	$	14.47	$	21.72
Diluted	$	4.27	$	6.66	$	14.34	$	21.55
Weighted average shares outstanding
Basic	8,358,389		8,870,565		8,561,209		8,897,405
Diluted	8,432,471		8,936,075		8,640,288		8,969,104

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Net revenue $ 221,383
$ 202,310
$ 628,706
$ 575,799
Cost of sales 171,527
158,766
502,330
459,896
Gross profit 49,856
43,544
126,376
115,903
Selling, general and administrative expenses 26,045
26,003
78,503
76,119
Income from operations 23,811
17,541
47,873
39,784
Interest expense (1,236 ) (1,091 ) (3,305 ) (3,384 )
Other income, net 1,094
829
3,251
2,407
Income before income taxes 23,669
17,279
47,819
38,807
Income tax expense (2,242 ) (4,996 ) (8,457 ) (11,740 )
Net income $ 21,427
$ 12,283
$ 39,362
$ 27,067

Comprehensive income:
Net income $ 21,427
$ 12,283
$ 39,362
$ 27,067
Unrealized gain on available-for-sale securities, net of tax 315
253
919
1,077
Comprehensive income $ 21,742
$ 12,536
$ 40,281
$ 28,144

Net income per share:
Basic $ 2.37
$ 1.37
$ 4.36
$ 3.02
Diluted $ 2.33
$ 1.35
$ 4.28
$ 2.98
Weighted average shares outstanding:
Basic 9,030,100
8,992,456
9,019,311
8,970,008
Diluted 9,214,898
9,102,562
9,186,042
9,096,442

See accompanying Notes to Consolidated Financial Statements

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CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

Nine Months Ended
December 30,
2017 December 31,
2016
OPERATING ACTIVITIES
Net income $ 39,362
$ 27,067
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 2,975
2,762
Provision for credit losses 484
441
Deferred income taxes (4,617 ) (1,001 )
Stock-based compensation expense 1,918
1,743
Non-cash interest income, net (693 ) (926 )
Incremental tax benefits from option exercises —
(2,349 )
Gain on sale of property, plant and equipment, net (55 ) (256 )
Gain on sale of loans and investments, net (7,335 ) (5,832 )
Changes in operating assets and liabilities:
Restricted cash 1,143
905
Accounts receivable (8,914 ) (6,627 )
Consumer loans receivable originated (96,766 ) (86,838 )
Proceeds from sales of consumer loans 91,157
77,260
Principal payments on consumer loans receivable 10,615
8,786
Inventories (10,090 ) 8,169
Prepaid expenses and other current assets (3,191 ) 29
Commercial loans receivable (964 ) 2,134
Accounts payable and accrued liabilities 355
3,332
Net cash provided by operating activities 15,384
28,799
INVESTING ACTIVITIES
Purchases of property, plant and equipment (3,025 ) (4,343 )
Payments for Lexington Homes, net (1,638 ) —
Proceeds from sale of property, plant and equipment 436
296
Purchases of investments (9,736 ) (7,625 )
Proceeds from sale of investments 7,401
8,011
Net cash used in investing activities (6,562 ) (3,661 )
FINANCING ACTIVITIES
Payments from exercise of stock options (1,104 ) (1,483 )
Incremental tax benefits from exercise of stock options —
2,349
Proceeds from secured financings and other 5,103
2,269
Payments on securitized financings (6,389 ) (6,294 )
Net cash used in financing activities (2,390 ) (3,159 )
Net increase in cash and cash equivalents 6,432
21,979
Cash and cash equivalents at beginning of the period 132,542
97,766
Cash and cash equivalents at end of the period $ 138,974
$ 119,745
Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes $ 12,195
$ 11,595
Cash paid during the year for interest $ 2,221
$ 2,605


	Nine Months Ended
	December 30, 2023		December 31, 2022
OPERATING ACTIVITIES
Net income	$	123,971	$	193,481
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	13,854		12,174
Provision for credit losses	(121)		(659)
Deferred income taxes	(1,861)		3,225
Stock-based compensation expense	4,698		4,855
Non-cash interest income, net	(1,230)		(527)
Loss (gain) on sale or retirement of property, plant and equipment, net	186		(116)
Gain on investments and sale of loans, net	(5,958)		(6,647)
Distributions of earnings from equity method investments	—		4,306
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable	18,161		15,988
Consumer loans receivable originated	(74,306)		(135,552)
Proceeds from sales of consumer loans receivable	81,752		146,050
Principal payments received on consumer loans receivable	5,480		7,206
Inventories	51,182		28,513
Prepaid expenses and other current assets	9,909		(16,525)
Commercial loans receivable originated	(83,509)		(71,183)
Principal payments received on commercial loans receivable	87,591		61,605
Accounts payable, accrued expenses and other liabilities	(23,695)		(16,075)
Net cash provided by operating activities	206,104		230,119
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(13,237)		(40,850)
Payments for acquisitions, net	(19,702)		—
Proceeds from sale of property, plant and equipment	4,514		406
Purchases of investments	(7,408)		(10,198)
Proceeds from sale of investments	9,290		9,230
Return of invested capital from equity method investments	—		12,213
Net cash used in investing activities	(26,543)		(29,199)
FINANCING ACTIVITIES
Payments for taxes on stock option exercises and releases of equity awards	(1,898)		(1,072)
Proceeds from exercise of stock options	3,098		1,591

Payments on finance leases and other secured financings	(442)		(549)
Payments for common stock repurchases	(96,781)		(73,230)
Distributions to noncontrolling interest	(420)		(600)
Net cash used in financing activities	(96,443)		(73,860)
Net increase in cash, cash equivalents and restricted cash	83,118		127,060
Cash, cash equivalents and restricted cash at beginning of the fiscal year	283,490		259,334
Cash, cash equivalents and restricted cash at end of the period	$	366,608	$	386,394
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	28,776	$	71,137
Cash paid for interest	$	612	$	430
Supplemental disclosures of noncash activity
Change in GNMA loans eligible for repurchase	$	(3,812)	$	(2,914)
Right-of-use assets recognized and operating lease obligations incurred	$	14,743	$	3,535
Non-cash consideration for acquisitions	$	5,430	$	—

See accompanying Notes to Consolidated Financial Statements

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CAVCO INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Cavco Industries, Inc., and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco"), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ~~("SEC"~~(the "SEC") for Quarterly Reports on Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In addition, references throughout to numbered "Notes" refer to these Notes to Consolidated Financial Statements (Unaudited), unless otherwise stated.

In the opinion of management, these financial statements include all ~~of the~~adjustments, including normal recurring adjustments, which are necessary to fairly state the ~~Company's Consolidated Financial Statements.~~results for the periods presented. Certain prior period amounts have been reclassified including from Other (expense) income, net to Interest income to conform to current period classification. ~~The Company has~~We have evaluated subsequent events after the balance sheet date through the date of the filing of this report with the ~~SEC;~~SEC, and there were no disclosable subsequent events. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in ~~the Company's~~our 2023 Annual Report on Form 10-K for the year ended April 1, ~~2017~~,2023, filed with the SEC ~~on June 13, 2017.~~("Form 10-K").

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and ~~the~~ accompanying Notes. ~~Actual~~Due to uncertainties, actual results could differ from ~~those estimates.~~the estimates and assumptions used in preparation of the Consolidated Financial Statements. The Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for the interim periods are not necessarily indicative of the results or cash flows for the full year. The Company operates on a 52-53 week fiscal year ending on the Saturday nearest to March 31st of each year. Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to March ~~31.~~31st. The ~~Company's~~ current fiscal year will end on March ~~31, 2018~~.30, 2024 and will include 52 weeks.

~~The Company operates principally~~We operate in two segments: (1) factory-built housing, which includes wholesale and retail ~~systems-built~~factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance. ~~The Company designs~~We design and ~~builds~~build a wide variety of affordable manufactured homes, modular homes and park model RVs ~~in 20 factories~~through 29 homebuilding production lines located throughout the United States ~~which are sold to~~and two production lines in Mexico. We distribute our homes through a large network of independent ~~retailers, through the Company's~~ 41distribution points in 48 states and Canada as well as 73 Company-owned U.S. retail stores, ~~and to community owners and developers. Our~~of which 43 are located in Texas. The financial services ~~group~~segment is comprised of a ~~mortgage~~finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), and an insurance subsidiary, Standard Casualty ~~Co.~~Company ("Standard Casualty"). CountryPlace is an approved Federal National Mortgage Association ~~("FNMA" or "Fannie Mae")~~ and Federal Home Loan Mortgage Corporation ~~("FHLMC" or "Freddie Mac")~~ seller/servicer and a Government National Mortgage Association ("GNMA" ~~or "Ginnie Mae"~~) mortgage-backed securities issuer ~~which~~that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Standard Casualty provides property and casualty insurance primarily to owners of manufactured homes.

~~On April 3, 2017,~~

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During fiscal 2023, we completed the ~~Company acquired Lexington Homes,~~acquisition of Solitaire Inc. ~~("Lexington"~~and other related entities (collectively "Solitaire Homes"), ~~which produces manufactured homes distributed in~~including their four manufacturing facilities and twenty-two retail locations by acquiring 100% of the Southeastern United States. This operation, with one manufactured housing production facility in Lexington, Mississippi, provides for further operating capacity, increased home production capabilities and further distribution into certain markets.outstanding stock of Solitaire Homes. The ~~acquisition was accounted for as a business combination and the~~ results of operations ~~have been~~are included ~~since~~in our Consolidated Financial Statements from the date of acquisition. ~~Our purchase price allocation~~See Note 21, Acquisition.

At December 30, 2023 we have a 70% interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively "Craftsman"). On September 28, 2023, we executed an amendment to the Membership Interest Purchase Agreement (the "Agreement") for Craftsman to acquire the remaining 30% interest in Craftsman for cash on December 31, 2023. An additional amendment was signed in December 2023 to move the acquisition date to January 1, 2024. As the entire 30% is ~~preliminary~~mandatorily redeemable, the value attributed to this noncontrolling interest at December 30, 2023 is included in Accrued expenses and ~~subject to revision as more detailed analyses are completed and additional information about~~other current liabilities on the Consolidated Balance Sheets at fair ~~value of~~value. On January 1, 2024 we acquired the remaining 30% interest in Craftsman for cash.

On November 15, 2023, the Company acquired certain assets and liabilities ~~becomes available, including additional information relating to tax matters~~of Kentucky Dream Homes, LLC, a manufactured home retailer with locations in Kentucky and ~~finalization of our valuation of identified intangible assets. Pro forma~~Florida. The results of operations ~~for the acquisition have not been presented because the effects of the business combination were not material to~~are included in our ~~consolidated results of operations.~~

~~Recent Accounting Pronouncements.~~ ~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes~~ ("ASU 2015-17"). ASU 2015-17 became effective in the current fiscal year. Therefore, we now present all deferred tax liabilities and assets as noncurrent on the balance sheet instead of separating these items into current and noncurrent amounts. The prior period was not retrospectively adjusted. In addition, in March 2016, the FASB issued ASU 2016-09, ~~Compensation- Stock Compensation (Topic 718)~~ ("ASU 2016-09"), which also became effective in the current fiscal year. As a result of this required implementation, excess tax benefits are recorded on exercises of stock options as a reduction of income tax expense in the consolidated statement of comprehensive income, whereas they were previously recognized in equity.

~~In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~ ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements intended to provide users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a company's contracts with customers. In August 2015, the FASB issued ASU 2015-14, ~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date~~, which deferred the effective date of the new revenue standard. Accordingly, the updated standard is effective for us beginning with the first quarter of the Company's fiscal year 2019. Our implementation approach has included performing a detailed study of the various types of agreements that we have with our customers and assessing conformity of our current accounting practices with the new standard. We are making progress in determining the impact of this guidance; however, we are still evaluating the full effects ASU 2014-09 will have on the Company's Consolidated Financial Statements ~~and disclosures. We expect to adopt this guidance using the modified retrospective transition method.~~

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2016-01"). ASU 2016-01 will be effective beginning with the first quarter of the Company's fiscal year 2019. Upon adoption, we will be required to reclassify the gain (loss) related to our equity investment securities classified as available-for-sale from accumulated other comprehensive income ("AOCI") to retained earnings as a cumulative-effect adjustment and begin recording future changes in fair value through earnings. As of December 30, 2017, we had a gain of $2.3 million recorded in AOCI for our available-for-sale equity investments. The impact on the Company's Consolidated Financial Statements at adoption will depend on the net unrealized gains (losses) recorded in AOCI for these equity investments as of the date of ~~adoption.~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases(Topic 842)~~ ("ASU 2016-02"). ASU 2016-02 will be effective beginning with the first quarter of the Company's fiscal year 2020, with early adoption permitted. The amendments require the recognition of leased assets and the related liabilities on the balance sheet for most leases, and recognition of expenses in the income statement in a manner similar to current accounting treatment. In addition, disclosures of key information about leasing arrangements will be required. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the effect this ASU will have on the Company's Consolidated Financial Statements and disclosures.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments to base measurement on expected losses through a forward-looking model rather than a model based on incurred losses. The guidance also requires increased disclosures. ASU 2016-01 will be effective beginning with the first quarter of the Company's fiscal year 2021. The Company is currently evaluating the effect ASU 2016-13 will have on the Company's Consolidated Financial Statements and disclosures.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force~~ ("ASU 2016-18"), which provides guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows. ASU 2016-18 will be effective beginning with the first quarter of the Company's fiscal year 2019. The adoption of ASU 2016-18 will only change the presentation of the Consolidated Statement of Cash Flows and is not expected to have a material impact on the consolidated financial statements.

~~In March 2017, the FASB issued ASU 2017-08,~~ ~~Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities~~ ("ASU 2017-08"), which requires the premium on callable debt securities to be amortized to the earliest call date as opposed to the contractual life of the security. ASU 2017-08 will be effective beginning with the first quarter of the Company's fiscal year 2020. The Company is currently evaluating the effect ASU 2017-08 will have on the Company's Consolidated Financial Statements and disclosures.

From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's Consolidated Financial Statements upon adoption.acquisition. See Note 21, Acquisition

For a description of ~~other~~ significant accounting policies we used ~~by the Company~~ in the preparation of ~~its~~our Consolidated Financial Statements, please refer to Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K.

2. Revenue from Contracts with Customers

The following table summarizes Net revenue disaggregated by reportable segment and source (in thousands):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Factory-built housing
Home sales	$	400,633	$	455,459	$	1,250,417	$	1,555,236
Delivery, setup and other revenues	26,306		25,734		67,697		58,156
	426,939		481,193		1,318,114		1,613,392
Financial services
Insurance agency commissions received from third-party insurance companies	1,229		887		3,145		3,313
All other sources	18,601		18,523		53,415		49,628
	19,830		19,410		56,560		52,941
	$	446,769	$	500,603	$	1,374,674	$	1,666,333

3. Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of Cash and cash equivalents and Restricted cash ~~consists~~reported within the Consolidated Balance Sheets to the combined amounts shown in the Consolidated Statements of Cash Flows (in thousands):


	December 30, 2023		April 1, 2023
Cash and cash equivalents	$	352,808	$	271,427
Restricted cash, current	13,215		11,728
Restricted cash	585		335
	$	366,608	$	283,490

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4. Investments

Investments consisted of the following (in thousands):

December 30,
2017 April 1,
2017
Cash related to CountryPlace customer payments to be remitted to third parties $ 8,399
$ 9,998
Cash related to CountryPlace customer payments on securitized loans to be remitted to bondholders 958
1,391
Cash related to workers' compensation insurance held in trust 355
354
Other restricted cash 1,009
554
$ 10,721
$ 12,297

~~Corresponding amounts are recorded in accounts payable and accrued liabilities for customer payments, deposits and other restricted cash.~~

~~3. Investments~~


	December 30, 2023		April 1, 2023
Available-for-sale debt securities	$	19,207	$	18,555
Marketable equity securities	8,788		9,989
Non-marketable equity investments	4,923		5,073
	32,918		33,617
Less short-term investments	(16,819)		(14,978)
	$	16,099	$	18,639

Investments ~~consist of the following (in thousands):~~

December 30,
2017 April 1,
2017
Available-for-sale investment securities $ 30,487
$ 24,162
Non-marketable equity investments 18,646
17,383
$ 49,133
$ 41,545

~~The following tables summarize the Company's available-for-sale investment securities, gross unrealized gains and losses and fair value, aggregated by investment category (in thousands):~~

December 30, 2017

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value
U.S. Treasury and government debt securities $ 300
$ —
$ (4 ) $ 296
Residential mortgage-backed securities 7,510
1
(104 ) 7,407
State and political subdivision debt securities 6,924
142
(142 ) 6,924
Corporate debt securities 1,658
2
(23 ) 1,637
Marketable equity securities 7,627
3,947
(113 ) 11,461
Certificates of deposit 2,762
—
—
2,762
$ 26,781
$ 4,092
$ (386 ) $ 30,487

April 1, 2017

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value
U.S. Treasury and government debt securities $ 650
$ —
$ (1 ) $ 649
Residential mortgage-backed securities 5,646
3
(90 ) 5,559
State and political subdivision debt securities 7,195
145
(117 ) 7,223
Corporate debt securities 1,698
4
(23 ) 1,679
Marketable equity securities 5,752
2,430
(130 ) 8,052
Certificates of deposit 1,000
—
—
1,000
$ 21,941
$ 2,582
$ (361 ) $ 24,162

The following tables show the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

December 30, 2017
Less than 12 Months 12 Months or Longer Total

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses
U.S. Treasury and government debt securities $ 296
$ (4 ) $ —
$ —
$ 296
$ (4 )
Residential mortgage-backed securities 3,308
(32 ) 3,860
(72 ) 7,168
(104 )
State and political subdivision debt securities 2,649
(22 ) 2,309
(120 ) 4,958
(142 )
Corporate debt securities 1,012
(8 ) 372
(15 ) 1,384
(23 )
Marketable equity securities 1,032
(91 ) 104
(22 ) 1,136
(113 )
$ 8,297
$ (157 ) $ 6,645
$ (229 ) $ 14,942
$ (386 )

April 1, 2017
Less than 12 Months 12 Months or Longer Total

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses
U.S. Treasury and government debt securities $ 349
$ (1 ) $ —
$ —
$ 349
$ (1 )
Residential mortgage-backed securities 3,449
(38 ) 1,962
(52 ) 5,411
(90 )
State and political subdivision debt securities 1,948
(36 ) 2,084
(81 ) 4,032
(117 )
Corporate debt securities 1,424
(23 ) —
—
1,424
(23 )
Marketable equity securities 1,393
(90 ) 157
(40 ) 1,550
(130 )
$ 8,563
$ (188 ) $ 4,203
$ (173 ) $ 12,766
$ (361 )

Based on the Company's ability and intent to hold the investments for a reasonable period of time sufficient for a forecasted recovery of fair value, the Company does not consider any investments to be other-than-temporarily impaired at ~~December 30, 2017~~.

~~As of~~ ~~December 30, 2017~~ ~~and April 1, 2017, the Company's investments~~ in marketable equity securities consist of investments in the common stock of industrial and other companies.

Our non-marketable equity investments include investments in other retail distribution operations and community-based initiatives.

The amortized cost and fair value of ~~the Company's~~our investments in available-for-sale debt securities, by security type are shown in the table below (in thousands):


	December 30, 2023				April 1, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Residential mortgage-backed securities	$	1,888	$	1,836	$	2,567	$	2,488
State and political subdivision debt securities	5,652		5,515		6,023		5,769
Corporate debt securities	12,124		11,856		10,745		10,298
	$	19,664	$	19,207	$	19,335	$	18,555

The amortized cost and fair value of our investments in available-for-sale debt securities, by contractual maturity, are shown in the table below (in thousands). Expected maturities differ from contractual maturities as borrowers may have the right to call or prepay obligations, with or without ~~call or prepayment~~ penalties.


	December 30, 2023
	Amortized Cost		Fair Value
Due in less than one year	$	7,585	$	7,453
Due after one year through five years	9,804		9,532
Due after five years through ten years	—		—
Due after ten years	387		386
Mortgage-backed securities	1,888		1,836
	$	19,664	$	19,207

Table of Contents

December 30, 2017

Amortized
Cost

Fair
Value
Due in less than one year $ 280
$ 279
Due after one year through five years 4,223
4,157
Due after five years through ten years 2,602
2,536
Due after ten years 9,287
9,292
$ 16,392
$ 16,264

~~Realized~~Net investment gains and losses ~~from the sale of~~on marketable equity securities ~~are determined using the specific identification method. Gross gains realized on the sales of investment securities for the three and nine months ended December 30, 2017~~ were ~~approximately $147,000 and $882,000, respectively. Gross losses realized were approximately $41,000~~ ~~and~~ $163,000 for the three and nine months ended December 30, 2017, respectively. Gross gains realized on the sales of investment securities for the three and nine months ended December 31, 2016 were approximately $386,000 ~~and~~ ~~$1.0 million, respectively. Gross losses realized were approximately $46,000~~ ~~and~~ ~~$303,000 for the three and nine months ended December 31, 2016, respectively.~~as follows (in thousands):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Marketable equity securities
Net gain (loss) recognized during the period	$	776	$	707	$	1,051	$	(1,868)
Less: Net (gain) loss recognized on securities sold during the period	(235)		(107)		(365)		183
Unrealized gain (loss) recognized during the period on securities still held	$	541	$	600	$	686	$	(1,685)

5. Inventories

Inventories ~~consist~~consisted of the following (in thousands):


	December 30, 2023		April 1, 2023
Raw materials	$	80,630	$	92,045
Work in process	25,969		29,022
Finished goods	130,050		142,083
	$	236,649	$	263,150

December 30,
2017 April 1,
2017
Raw materials $ 37,934
$ 31,506
Work in process 11,671
11,768
Finished goods and other 56,267
50,581
$ 105,872
$ 93,855

5.6. Consumer Loans Receivable

The Company acquired consumer loans receivable during the first quarter of fiscal 2012 as part of the Palm Harbor transaction. Acquired consumer loans receivable held for investment were acquired at fair value and subsequently are accounted for in accordance with Accounting Standards Codification ("ASC") 310-30, ~~Loans and Debt Securities Acquired with Deteriorated Credit Quality~~ ~~("ASC 310-30"). Consumer loans receivable held for sale are carried at the lower of cost or market and construction advances are carried at the amount advanced less a valuation allowance.~~ The following table summarizes consumer loans receivable (in thousands):

December 30,
2017 April 1,
2017
Loans held for investment (acquired on Palm Harbor Acquisition Date) $ 54,013
$ 60,513
Loans held for investment (originated after Palm Harbor Acquisition Date) 17,956
11,108
Loans held for sale 12,361
18,570
Construction advances 12,407
6,957
Consumer loans receivable 96,737
97,148
Deferred financing fees and other, net (1,370 ) (1,095 )
Allowance for loan losses (375 ) (252 )
Consumer loans receivable, net $ 94,992
$ 95,801

The allowance for loan losses is developed at the loan level and allocated to specific individual loans or to impaired loans. A range of probable losses is calculated after giving consideration to, among other things, the loan characteristics, and historical loss experience. The Company then makes a determination of the best estimate within the range of loan losses. The allowance for loan losses reflects the Company’s judgment of the probable loss exposure on its loans held for investment portfolio.

As of the date of the Palm Harbor acquisition, management evaluated consumer loans receivable held for investment by CountryPlace to determine whether there was evidence of deterioration of credit quality and if it was probable that CountryPlace would be unable to collect all amounts due according to the loans' contractual terms. The Company also considered expected prepayments and estimated the amount and timing of undiscounted expected principal, interest and other cash flows. The Company determined the excess of the loan pool's scheduled contractual principal and contractual interest payments over all cash flows expected as of the date of the Palm Harbor transaction as an amount that includes interest that cannot be accreted into interest income (the non-accretable difference). The cash flow expected to be collected in excess of the carrying value of the acquired loans includes interest that is accreted into interest income over the remaining life of the loans (referred to as accretable yield). Interest income on consumer loans receivable is recognized as net revenue.

December 30,
2017 April 1,
2017
(in thousands)
Consumer loans receivable held for investment – contractual amount $ 125,307
$ 142,391
Purchase discount
Accretable (48,268 ) (56,686 )
Non-accretable (22,922 ) (25,032 )
Less consumer loans receivable reclassified as other assets (104 ) (160 )
Total acquired consumer loans receivable held for investment, net $ 54,013
$ 60,513

The Company continues to estimate cash flows expected to be collected over the life of the acquired loans. As of the balance sheet date, the Company evaluates whether the present value of expected cash flows, determined using the effective interest rate, has decreased from the value at acquisition and, if so, recognizes an allowance for loan loss. The present value of any subsequent increase in the loan pool's actual cash flows expected to be collected is used first to reverse any existing allowance for loan loss. Any remaining increase in cash flows expected to be collected adjusts the amount of accretable yield recognized on a prospective basis over the loan pool's remaining life. The weighted averages of assumptions used in the calculation of expected cash flows to be collected are as follows:

December 30,
2017 April 1,
2017
Prepayment rate 14.0 % 13.8 %
Default rate 1.2 % 1.1 %

Assuming there was a 1% unfavorable variation from the expected level, for each key assumption, the expected cash flows for the life of the portfolio, as of December 30, 2017, would decrease by approximately $1.4 million and $4.0 million for the expected prepayment rate and expected default rate, respectively.

~~The changes in accretable yield on acquired consumer loans receivable held for investment were as follows (in thousands):~~

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Balance at the beginning of the period $ 51,180
$ 62,209
$ 56,686
$ 69,053
Accretion (2,068 ) (2,399 ) (6,441 ) (7,363 )
Reclassifications to non-accretable discount (844 ) (872 ) (1,977 ) (2,752 )
Balance at the end of the period $ 48,268
$ 58,938
$ 48,268
$ 58,938


	December 30, 2023		April 1, 2023
Loans held for investment, previously securitized	$	18,001	$	21,000
Loans held for investment	12,901		13,117
Loans held for sale	6,236		10,846
Construction advances	464		706
	37,602		45,669
Deferred financing fees and other, net	(362)		(368)
Allowance for loan losses	(1,106)		(1,153)
	36,134		44,148
Less current portion	(11,855)		(17,019)
	$	24,279	$	27,129

The consumer loans held for investment ~~have~~had the following characteristics:


	December 30, 2023		April 1, 2023
Weighted average contractual interest rate	8.0	%	8.2	%
Weighted average effective interest rate	8.6	%	8.8	%
Weighted average months to maturity	173		150

December 30,
2017 April 1,
2017
Weighted average contractual interest rate 8.67 % 8.87 %
Weighted average effective interest rate 9.51 % 9.35 %
Weighted average months to maturity 166
165

Table of Contents

The Company's consumer loans receivable balance consists of fixed-rate, fixed-term and fully-amortizing single-family home loans. These loans are either secured by a manufactured home, excluding the land upon which the home is located (chattel personal property loans), or by a combination of the home and the land upon which the home is located (real property mortgage loans). The real property mortgage loans are primarily for manufactured homes. Combined land and home loans are further disaggregated by the type of loan documentation: those conforming to the requirements of Government-Sponsored Enterprises ("GSEs"), and those that are non-conforming. In most instances, CountryPlace's loans are secured by a first-lien position and are provided for the consumer purchase of a home. Unsecuritized consumer loans held for investment include chattel personal property loans originated under the Company's chattel lending programs. Accordingly, CountryPlace classifies its loans receivable as follows: chattel loans, conforming mortgages, non-conforming mortgages and other loans.

In measuring credit quality within each segment and class, CountryPlace uses commercially available credit scores (such as FICO®). At the time of each loan's origination, CountryPlace obtains credit scores from each of the ~~three~~ primary credit bureaus, if available. To evaluate credit quality of individual loans, CountryPlace uses the mid-point of the available credit scores or, if only two scores are available, the Company uses the lower of the two. CountryPlace does not update credit bureau scores after the time of origination.

The following table ~~disaggregates CountryPlace's gross consumer loans receivable for each class by portfolio segment and credit quality indicator as~~is a consolidated summary of the ~~time of origination (in thousands):~~

December 30, 2017
Consumer Loans Held for Investment

Securitized
2005

Securitized
2007
Unsecuritized
Construction
Advances

Consumer Loans Held
For Sale
Total
Asset Class
Credit Quality Indicator (FICO® score)
Chattel loans
0-619 $ 502
$ 366
$ 352
$ —
$ —
$ 1,220
620-719 10,548
7,312
7,652
—
383
25,895
720+ 11,104
6,792
9,286
—
1,743
28,925
Other 50
—
368
—
—
418
Subtotal 22,204
14,470
17,658
—
2,126
56,458
Conforming mortgages
0-619 —
—
158
41
—
199
620-719 —
—
1,891
6,396
7,192
15,479
720+ —
—
327
5,970
2,927
9,224
Other —
—
—
—
116
116
Subtotal —
—
2,376
12,407
10,235
25,018
Non-conforming mortgages
0-619 83
413
1,066
—
—
1,562
620-719 1,180
4,608
3,178
—
—
8,966
720+ 1,475
2,562
399
—
—
4,436
Other —
—
286
—
—
286
Subtotal 2,738
7,583
4,929
—
—
15,250
Other loans
Subtotal —
—
11
—
—
11
$ 24,942
$ 22,053
$ 24,974
$ 12,407
$ 12,361
$ 96,737

April 1, 2017
Consumer Loans Held for Investment

Securitized
2005

Securitized
2007
Unsecuritized
Construction
Advances

Consumer Loans Held
For Sale
Total
Asset Class
Credit Quality Indicator (FICO® score)
Chattel loans
0-619 $ 705
$ 411
$ 393
$ —
$ —
$ 1,509
620-719 11,681
8,072
5,406
—
697
25,856
720+ 12,748
7,800
5,081
—
3,097
28,726
Other 51
—
433
—
—
484
Subtotal 25,185
16,283
11,313
—
3,794
56,575
Conforming mortgages
0-619 —
—
161
261
99
521
620-719 —
—
1,792
4,231
10,553
16,576
720+ —
—
247
2,465
4,124
6,836
Subtotal —
—
2,200
6,957
14,776
23,933
Non-conforming mortgages
0-619 86
435
1,327
—
—
1,848
620-719 1,242
4,947
3,372
—
—
9,561
720+ 1,527
2,909
484
—
—
4,920
Other —
—
299
—
—
299
Subtotal 2,855
8,291
5,482
—
—
16,628
Other loans
Subtotal —
—
12
—
—
12
$ 28,040
$ 24,574
$ 19,007
$ 6,957
$ 18,570
$ 97,148

Loan contracts secured by collateral that is geographically concentrated could experience higher rates of delinquencies, default and foreclosure losses than loan contracts secured by collateral that is more geographically dispersed. Forty-three percentdelinquency status of the outstanding principal balance of consumer loans receivable (in thousands):


	December 30, 2023		April 1, 2023
Current	$	35,403	$	43,252
31 to 60 days	951		1,247
61 to 90 days	311		213
91+ days	937		957
	$	37,602	$	45,669

The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):


	December 30, 2023
	2024		2023		2022		2021		2020		Prior		Total
Prime- FICO score 680 and greater	$	5,628	$	329	$	97	$	985	$	1,914	$	15,413	$	24,366
Near Prime- FICO score 620-679	744		—		—		1,208		949		9,146		12,047
Sub-Prime- FICO score less than 620	—		—		—		18		49		803		870
No FICO score	—		—		—		—		—		319		319
	$	6,372	$	329	$	97	$	2,211	$	2,912	$	25,681	$	37,602


	April 1, 2023
	2023		2022		2021		2020		2019		Prior		Total
Prime- FICO score 680 and greater	$	9,471	$	185	$	1,051	$	1,982	$	1,191	$	16,601	$	30,481
Near Prime- FICO score 620-679	1,695		—		1,012		1,131		1,550		8,244		13,632
Sub-Prime- FICO score less than 620	84		—		19		51		—		1,033		1,187
No FICO score	—		—		—		—		24		345		369
	$	11,250	$	185	$	2,082	$	3,164	$	2,765	$	26,223	$	45,669

As of December 30, 2023, 42% of the outstanding principal balance of the consumer loans receivable portfolio iswas concentrated in Texas and ~~10% is~~14% was concentrated in Florida. As of April 1, 2023, 44% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 13% was concentrated in Florida. Other than Texas and Florida, no ~~other state~~state had concentrations in excess of 10% of the outstanding principal balance of the consumer loans receivable as of December 30, ~~2017~~.2023 or April 1, 2023.

Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. At repossession, the fair value of the collateral is computed based on the historical recovery rates of previously charged-off loans; the loan is charged off and the loss is charged to the allowance for loan losses. On a monthly basis, the fair value of the collateral is adjusted to the lower of the amount recorded at repossession or the estimated sales price less estimated costs to sell, based on current information. Repossessed homes totaled approximately ~~$1.5~~$0.8 million and ~~$1.2~~$1.1 million as of December 30, ~~2017~~2023 and April 1, ~~2017,~~2023, respectively, and are included in ~~prepaid~~Prepaid expenses and other current assets in the ~~consolidated balance sheet. Foreclosure~~Consolidated Balance Sheets. Homes undergoing foreclosure or similar proceedings in progress totaled approximately ~~$1.2~~$0.4 million and ~~$694,000~~$0.5 million as of December 30, ~~2017~~2023 and April 1, ~~2017,~~2023, respectively.

6.7. Commercial Loans Receivable ~~and Allowance for Loan Loss~~

The ~~Company's~~ commercial loans receivable balance consists of ~~two classes: (i)~~ direct financing arrangements for the home product needs of our independent ~~retailers, communities~~distributors, community owners and ~~developers; and (ii) amounts loaned by the Company under participation financing programs.~~developers.

~~Under the terms~~

Table of the direct programs, the Company provides funds for the independent retailers, communities and developers' financed home purchases. The notes are secured by the homes as collateral and, in some instances, other security depending on the circumstances. The other terms of direct arrangements vary depending on the needs of the borrower and the opportunity for the Company.Contents

Under the terms of the participation programs, the Company provides loans to independent floor plan lenders, representing a significant portion of the funds that such financiers then lend to retailers to finance their inventory purchases. The participation commercial loan receivables are unsecured general obligations of the independent floor plan lenders.

Commercial loans ~~receivables,~~receivable, net ~~consist~~consisted of the following ~~by class of financing notes receivable~~ (in thousands):

December 30,
2017 April 1,
2017
Direct loans receivable $ 25,801
$ 24,959
Participation loans receivable 1,206
1,084
Allowance for loan loss (153 ) (210 )
$ 26,854
$ 25,833


	December 30, 2023		April 1, 2023
Loans receivable	$	94,178	$	103,726
Allowance for loan losses	(1,423)		(1,586)
Deferred financing fees, net	(183)		(163)
	92,572		101,977
Less current portion of commercial loans receivable (including from affiliates), net	(50,952)		(44,054)
	$	41,620	$	57,923

The commercial loans receivable balance ~~has~~had the following characteristics:


	December 30, 2023		April 1, 2023
Weighted average contractual interest rate	6.5	%	7.6	%
Weighted average months outstanding	11		9

December 30,
2017 April 1,
2017
Weighted average contractual interest rate 6.0 % 5.6 %
Weighted average months to maturity 7
6

The Company evaluates the potential for loss from its participation loan programs based on each independent lender's overall financial stability, as well as historical experience, and has determined that an applicable allowance for loan loss was not needed at either ~~December 30, 2017~~ or ~~April 1, 2017~~.

With respect to direct programs with communities and developers, borrower activity is monitored on a regular basis and contractual arrangements are in place to provide adequate loss mitigation in the event of a default. For direct programs with independent retailers, the risk of loss is spread over numerous borrowers. Borrower activity is monitored in conjunction with third-party service providers, where applicable, to estimate the potential for loss on the related notes receivable, considering potential exposures, including repossession costs, remarketing expenses, impairment of value and the risk of collateral loss. The Company has historically been able to resell repossessed unused homes, thereby mitigating loss experience. If a default occurs and collateral is lost, the Company is exposed to loss of the full value of the home loan. If the Company determines that it is probable that a borrower will default, a specific reserve is determined and recorded within the estimated allowance for loan loss. The Company recorded an allowance for loan loss of $153,000 and $130,000 at December 30, 2017 and December 31, 2016, respectively.

The following table represents changes in the estimated allowance for loan losses, including related additions and deductions to the allowance for loan loss applicable to the direct programs (in thousands):

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Balance at beginning of period $ 242
$ 126
$ 210
$ 128
Provision for inventory finance credit losses (89 ) 4
(57 ) 2
Loans charged off, net of recoveries —
—
—
—
Balance at end of period $ 153
$ 130
$ 153
$ 130

~~The following table disaggregates commercial loans receivable and the estimated allowance for loan loss for each class of financing receivable by evaluation methodology (in thousands):~~

Direct Commercial Loans Participation Commercial Loans
December 30,
2017 April 1,
2017 December 30,
2017 April 1,
2017
Inventory finance notes receivable:
Collectively evaluated for impairment $ 15,253
$ 13,688
$ —
$ —
Individually evaluated for impairment 10,548
11,271
1,206
1,084
$ 25,801
$ 24,959
$ 1,206
$ 1,084
Allowance for loan loss:
Collectively evaluated for impairment $ (153 ) $ (137 ) $ —
$ —
Individually evaluated for impairment —
(73 ) —
—
$ (153 ) $ (210 ) $ —
$ —

Loans are subject to regular review and are given management's attention whenever a problem situation appears to be developing. Loans with indicators of potential performance problems are placed on watch list status and are subject to additional monitoring and scrutiny. Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with principal payments ~~past due~~ 90 days or more~~. The Company's policy is to place loans on nonaccrual status when interest is~~ past ~~due and remains unpaid~~ ~~90 days or more~~ ~~or when there is a clear indication that the borrower has the inability or unwillingness to meet payments as they become~~ due. ~~The Company will resume accrual~~As of ~~interest once these factors have been remedied. At~~ December 30, ~~2017,~~2023 and April 1, 2023, there ~~are~~were no commercial loans ~~that are~~considered nonperforming. The following table disaggregates the outstanding principal balance of our commercial loans receivable by fiscal year of origination (in thousands):


	December 30, 2023
	2024		2023		2022		2021		2020		Prior		Total
Performing	$	48,598	$	34,344	$	6,522	$	2,462	$	1,478	$	774	$	94,178


	April 1, 2023
	2023		2022		2021		2020		2019		Prior		Total
Performing	$	80,193	$	16,028	$	4,071	$	2,203	$	1,231	$	—	$	103,726

As of December 30, 2023 and April 1, 2023, there were no commercial loans 90 days or more past due that ~~are~~were still accruing ~~interest. Payments received on nonaccrual loans are recorded on a cash basis, first to~~ interest, and ~~then to principal. At~~ ~~December 30, 2017, the Company was~~we were not aware of any potential problem loans that would have a material effect on the commercial ~~receivables~~loans receivable balance. ~~Charge-offs occur when it becomes probable that outstanding amounts will not be recovered.~~

~~The following table disaggregates the Company's inventory finance receivables by class and credit quality indicator (in thousands):~~

Direct Commercial Loans Participation Commercial Loans
December 30,
2017 April 1,
2017 December 30,
2017 April 1,
2017
Risk profile based on payment activity:
Performing $ 25,801
$ 24,886
$ 1,206
$ 1,084
Watch list —
—
—
—
Nonperforming —
73
—
—
$ 25,801
$ 24,959
$ 1,206
$ 1,084

~~The Company has~~As of December 30, 2023, we had concentrations of our outstanding principal balance of the commercial loans receivable ~~related to factory-built homes~~balance in ~~excess~~New York of ~~10% located in~~15% and California of 16%. As of April 1, 2023, 18% of our outstanding principal balance of the ~~following states, measured as a percentage of~~ commercial loans ~~receivables principal~~receivable balance ~~outstanding:~~

December 30,
2017 April 1,
2017
Arizona 15.7 % 21.3 %
Oregon 13.8 % 15.7 %
Texas 13.1 % 11.0 %
Washington 10.7 % 6.0 %

~~The risks created by these concentrations have been considered~~was in ~~the determination of the adequacy of the allowance for loan losses. The Company did not have~~New York. No other state had concentrations in excess of 10% of the outstanding principal balance of the commercial loans ~~receivables in any other states~~receivable as of December 30, ~~2017. As of~~2023 or April 1, ~~2017, the Company also had additional concentrations in excess of 10% of the principal balance of commercial loans receivables, with 11.0% in California and 10.7% in Indiana.~~2023.

As of December 30, ~~2017~~2023 and April 1, ~~2017, the Company had concentrations with~~2023, one independent third-party ~~that equaled 19%~~ and ~~23%~~its affiliates comprised 14% and 12%, respectively, of the net commercial loans receivable principal balance outstanding, ~~respectively,~~ all of which was secured.

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8. Property, Plant and Equipment, net

Property, plant and equipment, are carried at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of each asset. Estimated useful lives for significant classes of assets are as follows: (i) buildings and improvements, 10 to 39 ~~years, and (ii) machinery and equipment,~~ 3 to 25 ~~years. Repairs and maintenance charges are expensed as incurred. Property, plant and equipment consist of the following (in thousands):~~

December 30,
2017 April 1,
2017
Property, plant and equipment, at cost:
Land $ 23,276
$ 22,897
Buildings and improvements 36,705
34,180
Machinery and equipment 22,953
21,618
82,934
78,695
Accumulated depreciation (23,965 ) (21,731 )
Property, plant and equipment, net $ 58,969
$ 56,964

~~Included in the amounts above are certain assets under a capital lease. See Note 8 for additional information.~~

~~8. Capital Lease~~

On April 3, 2017, in connection with the purchase of Lexington Homes, the Company recorded capital leases covering the manufacturing facilities and land in Lexington, Mississippi. The following amounts were recorded for the leased assets as of December 30, 2017 (in thousands):

December 30,
2017
Land $ 698
Buildings and improvements 1,050
1,748
Accumulated amortization (26 )
Leased assets, net $ 1,722

~~The future minimum payments under the leases as of December 30, 2017 are as follows (in thousands):~~

FY 2018 $ 34
FY 2019 709
FY 2020 459
FY 2021 —
FY 2022 —
Thereafter —
Total remaining lease payments $ 1,202
Less: Amount representing interest (61 )
Present value of future minimum lease payments $ 1,141

~~9. Goodwill and Other Intangibles~~

Intangible assets principally consist of goodwill, trademarks and trade names, state insurance licenses, customer relationships, and other, which includes technology, insurance policies and renewal rights and other. Goodwill, trademarks and trade names and state insurance licenses are indefinite-lived intangible assets and are evaluated for impairment annually and whenever events or circumstances indicate that more likely than not impairment has occurred. During the nine months ended ~~December 30, 2017~~ ~~and~~ ~~December 31, 2016~~, no impairment expense was recorded. Finite-lived intangibles are amortized over their estimated useful lives on a straight-line basis and are reviewed for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. The value of customer relationships is amortized over 4 ~~to 15 years and other intangibles over~~ 7 to 15 ~~years.~~

~~Goodwill and other intangibles consist~~net, consisted of the following (in thousands):


	December 30, 2023		April 1, 2023
Property, plant and equipment, at cost
Buildings and improvements	$	170,423	$	167,291
Machinery and equipment	78,496		76,826
Land	39,822		39,822
Construction in progress	7,913		5,472
	296,654		289,411
Accumulated depreciation	(72,438)		(61,133)
	$	224,216	$	228,278

December 30, 2017 April 1, 2017
Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Indefinite lived:
Goodwill $ 72,833
$ —
$ 72,833
$ 69,753
$ —
$ 69,753
Trademarks and trade names 7,200
—
7,200
7,000
—
7,000
State insurance licenses 1,100
—
1,100
1,100
—
1,100
Total indefinite-lived intangible assets 81,133
—
81,133
77,853
—
77,853
Finite lived:
Customer relationships 7,100
(5,703 ) 1,397
7,100
(5,543 ) 1,557
Other 1,384
(889 ) 495
1,384
(773 ) 611
Total goodwill and other intangible assets $ 89,617
$ (6,592 ) $ 83,025
$ 86,337
$ (6,316 ) $ 80,021

~~The Company recognized amortization~~Depreciation expense ~~on intangible assets of $92,000during~~for the three and nine months ended December 30, ~~2017~~2023 was $4.2 million and $12.7 million, respectively. Depreciation expense for the three and nine months ended December 31, ~~2016,~~2022 was $3.4 million and $10.7 million, respectively. ~~Amortization expense~~

9. Leases

We lease certain production and retail locations, office space and equipment. The following table provides information about the financial statement classification of ~~$276,000~~our lease balances reported within the Consolidated Balance Sheets as of December 30, 2023 and April 1, 2023 (in thousands):


	Classification	December 30, 2023		April 1, 2023
ROU assets
Operating lease assets	Operating lease right-of-use ("ROU") assets	$	37,393	$	26,755
Finance lease assets	Property, plant and equipment, net (1)	6,351		6,088
Total lease assets		$	43,744	$	32,843

Lease Liabilities
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	5,305	$	6,262
Finance lease liabilities	Accrued expenses and other current liabilities	79		347
Non-current:
Operating lease liabilities	Operating lease liabilities	33,285		21,678
Finance lease liabilities	Other liabilities	6,107		5,896
Total lease liabilities		$	44,776	$	34,183

(1) Recorded net of accumulated amortization of $0.4 million and $0.3 million as of December 30, 2023 and April 1, 2023, respectively.

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The present value of future minimum payments under non-cancelable leases as of December 30,
2023 was ~~recognized during~~as follows (in thousands):


	Operating Leases		Finance Leases		Total
Remainder of fiscal 2024	$	1,688	$	89	$	1,777
Fiscal 2025	7,035		356		7,391
Fiscal 2026	6,980		356		7,336
Fiscal 2027	4,545		356		4,901
Fiscal 2028	3,649		356		4,005
Fiscal 2029	3,456		356		3,812
Thereafter	20,276		10,230		30,506
	47,629		12,099		59,728
Less: Amount representing interest	(9,039)		(5,913)		(14,952)
	$	38,590	$	6,186	$	44,776

10. Goodwill and Other Intangibles, net

Goodwill and other intangibles, net, consisted of the following (in thousands):


	December 30, 2023						April 1, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived
Goodwill	$	120,744	$	—	$	120,744	$	114,547	$	—	$	114,547
Trademarks and trade names	16,980		—		16,980		16,980		—		16,980
State insurance licenses	1,100		—		1,100		1,100		—		1,100
	138,824		—		138,824		132,627		—		132,627
Finite-lived
Customer relationships	15,000		(4,965)		10,035		16,900		(5,818)		11,082
Other	1,114		(616)		498		1,114		(486)		628
	$	154,938	$	(5,581)	$	149,357	$	150,641	$	(6,304)	$	144,337

Changes to Goodwill for the nine months ended December 30, ~~2017~~2023 were as follows (in thousands):


Goodwill beginning of the period	$	114,547
Solitaire Goodwill adjustments (1)	1,137
Kentucky Dream Homes (1)	4,591
Other immaterial acquisition	469
	$	120,744

(1) See Note 21, Acquisitions

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Amortization expense recognized on intangible assets for the three and nine months ended December 30, 2023 was $0.4 million and $1.2 million, respectively. Amortization expense recognized on intangible assets for the three and nine months ended December 31, ~~2016,~~2022 was $0.5 million and $1.5 million, respectively. Customer relationships have a weighted average remaining life of 7.1 years and other finite lived intangibles have a weighted average remaining life of 2.8 years.

Expected future amortization is as follows (in thousands):


Remainder of fiscal year 2024	$	392
Fiscal 2025	1,530
Fiscal 2026	1,488
Fiscal 2027	1,415
Fiscal 2028	1,299
Fiscal 2029	1,265
Thereafter	3,144
	$	10,533

~~10.~~

11. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities ~~consist~~consisted of the following (in thousands):


	December 30, 2023		April 1, 2023
Salaries, wages and benefits	$	41,023	$	47,100
Customer deposits	40,698		45,193
Estimated warranties	32,822		31,368
Unearned insurance premiums	30,192		27,901
Accrued volume rebates	25,086		22,858

Accrued self-insurance	13,671		11,467




Other	63,752		76,774
	$	247,244	$	262,661

December 30,
2017 April 1,
2017
Customer deposits $ 22,492
$ 15,986
Salaries, wages and benefits 20,314
22,029
Unearned insurance premiums 16,083
17,488
Estimated warranties 16,040
15,479
Accrued volume rebates 9,715
5,686
Company repurchase option on certain loans sold 6,516
5,858
Insurance loss reserves 4,956
5,239
Accrued insurance 4,358
4,113
Deferred margin 2,906
2,906
Reserve for repurchase commitments 1,634
1,749
Accrued taxes 1,174
1,682
Capital lease obligation 1,141
—
Other 16,332
11,574
$ 123,661
$ 109,789

~~11.~~12. Warranties

~~Homes are generally warranted against manufacturing defects for a period of~~ ~~one year~~ commencing at the time of sale to the retail customer. Estimated costs relating to home warranties are recorded at the date of sale. The Company has recorded a liability for estimated future warranty costs relating to homes sold based upon management's assessment of historical experience factors, an estimate of the amount of homes in the distribution channel and current industry trends. Activity in the liability for estimated warranties was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Balance at beginning of period	$	33,015	$	30,841	$	31,368	$	26,250

Charged to costs and expenses	11,341		12,036		36,956		40,663
Payments and deductions	(11,534)		(11,931)		(35,502)		(35,967)
Balance at end of period	$	32,822	$	30,946	$	32,822	$	30,946

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Balance at beginning of period $ 16,470
$ 14,046
$ 15,479
$ 13,371
Purchase accounting additions —
—
838
—
Charged to costs and expenses 5,907
6,030
18,529
18,310
Payments and deductions (6,337 ) (4,675 ) (18,806 ) (16,280 )
Balance at end of period $ 16,040
$ 15,401
$ 16,040
$ 15,401

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~~12. Debt Obligations~~

~~Debt obligations consist of amounts related to loans sold that did not qualify for loan sale accounting treatment.~~ 13. Other Liabilities

The following table summarizes ~~debt~~secured financings and other obligations (in thousands):


	December 30, 2023		April 1, 2023
Finance lease liabilities	$	6,186	$	6,243
Mandatorily redeemable noncontrolling interest	2,796		2,268
Other secured financing	1,942		2,379
	10,924		10,890
Less current portion included in Accrued expenses and other current liabilities	(3,273)		(3,070)
	$	7,651	$	7,820

14. Debt

December 30,
2017 April 1,
2017
Acquired securitized financings (acquired as part of the Palm Harbor transaction)
Securitized financing 2005-1 $ 21,236
$ 23,756
Securitized financing 2007-1 23,140
25,728
Other secured financings 5,007
4,987
Secured Term Loans 7,908
3,520
Total securitized financings and other, net $ 57,291
$ 57,991

~~The Company acquired CountryPlace's securitized financings during the first quarter~~We are party to a Credit Agreement (the "Credit Agreement") that expires in 2027 with Bank of ~~fiscal year 2012 as~~America, N.A., providing for a ~~part of the Palm Harbor acquisition. Acquired securitized financings were recorded at fair value at the time of acquisition,~~$50 million revolving credit facility (the "Revolving Credit Facility"), which ~~resulted in a discount, and subsequently are accounted for in a manner similar~~may be increased up to ~~ASC 310-30 to accrete the discount.~~

The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for securitized consumer loans receivable held for investment to determine the expected cash flows on securitized financings and the contractual payments. Thean aggregate amount of contractual principal and contractual interest payments due on the securitized financings in excess of all cash flows expected as of the date of the Palm Harbor acquisition include interest that cannot be accreted into interest expense (the non-accretable difference). The remaining amount is accreted into interest expense over the remaining life of the obligation (referred to as accretable yield). The following table summarizes acquired securitized financings (in thousands):$100 million.

December 30,
2017 April 1,
2017
Securitized financings – contractual amount $ 49,155
$ 57,120
Purchase discount
Accretable (4,779 ) (7,636 )
Non-accretable (1) —
—
Total acquired securitized financings, net $ 44,376
$ 49,484

~~(1) There is no non-accretable difference, as the contractual payments on acquired securitized financing are determined by the cash collections from the underlying loans.~~

Over the life of the loans, the Company continues to estimate cash flows expected to be paid on securitized financings. The Company evaluates at the balance sheet date whether the present value of its securitized financings, determined using the effective interest rate, has increased or decreased. The present value of any subsequent change in cash flows expected to be paid adjusts the amount of accretable yield recognized on a prospective basis over the securitized financing's remaining life.

~~The changes in accretable yield on securitized financings were as follows (in thousands):~~

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Balance at the beginning of the period $ 5,709
$ 9,790
$ 7,636
$ 12,333
Accretion (820 ) (923 ) (2,536 ) (2,829 )
Adjustment to cash flows (110 ) (111 ) (321 ) (748 )
Balance at the end of the period $ 4,779
$ 8,756
$ 4,779
$ 8,756

On ~~July 12, 2005, prior to the Company's acquisition of Palm Harbor and CountryPlace, CountryPlace completed its initial securitization (2005-1) for approximately~~ ~~$141.0 million~~ ~~of loans, which was funded by issuing bonds totaling approximately~~ ~~$118.4 million. The bonds were issued in four different classes: Class A-1 totaling~~ ~~$36.3 million~~ ~~with a coupon rate of~~ ~~4.23%; Class A-2 totaling~~ ~~$27.4 million~~ ~~with a coupon rate of~~ ~~4.42%; Class A-3 totaling~~ ~~$27.3 million~~ ~~with a coupon rate of~~ ~~4.80%; and Class A-4 totaling~~ ~~$27.4 million~~ ~~with a coupon rate of~~ ~~5.20%. The bonds mature at varying dates and at issuance had an expected weighted average maturity of~~ ~~4.66 years. For accounting purposes, this transaction was structured as a securitized borrowing. As of~~ ~~December 30, 2017, the Class A-1, Class A-2, and Class A-3 bonds have been retired.~~

On ~~March 22, 2007, prior to the Company's acquisition of Palm Harbor and CountryPlace, CountryPlace completed its second securitization (2007-1) for approximately~~ ~~$116.5 million~~ ~~of loans, which was funded by issuing bonds totaling approximately~~ ~~$101.9 million. The bonds were issued in four classes: Class A-1 totaling~~ ~~$28.9 million~~ ~~with a coupon rate of~~ ~~5.484%; Class A-2 totaling~~ ~~$23.4 million~~ ~~with a coupon rate of~~ ~~5.232%; Class A-3 totaling~~ ~~$24.5 million~~ ~~with a coupon rate of~~ ~~5.593%; and Class A-4 totaling~~ ~~$25.1 million~~ ~~with a coupon rate of~~ ~~5.846%. The bonds mature at varying dates and at issuance had an expected weighted average maturity of~~ ~~4.86 years. For accounting purposes, this transaction was also structured as a securitized borrowing. As of~~ ~~December 30, 2017, the Class A-1, Class A-2 and Class A-3 bonds have been retired.~~

CountryPlace's securitized debt is subject to provisions that require certain levels of overcollateralization. Overcollateralization is equal to CountryPlace's equity in the bonds. Failure to satisfy these provisions could cause cash, which would normally be distributed to CountryPlace, to be used for repayment of the principal of the related Class A bonds until the required overcollateralization level is reached. During periods when the overcollateralization is below the specified level, cash collections from the securitized loans in excess of servicing fees payable to CountryPlace and amounts owed to the Class A bondholders, trustee and surety, are applied to reduce the Class A debt until such time the overcollateralization level reaches the specified level. Therefore, failure to meet the overcollateralization requirement could adversely affect the timing of cash flows received by CountryPlace. However, principal payments of the securitized debt, including accelerated amounts, is payable only from cash collections from the securitized loans and no additional sources of repayment are required or permitted. As of December 30, ~~2017,~~2023 and April 1, 2023, there were no borrowings outstanding under the ~~2005-1~~Revolving Credit Facility and ~~2007-1 securitized portfolios~~we were ~~within the required overcollateralization level.~~in compliance with all covenants.

~~The Company has entered into secured credit facilities with independent third party banks totaling $15.0 million~~

15. Reinsurance and maturity dates of ten years. The proceeds are used by the Company to originate and hold consumer chattel personal property loans secured by manufactured homes, which are pledged as collateral to the facility. The maximum advance for loans under these programs is 80% of the outstanding collateral principal balance, with the Company providing the remaining funds. One of the facilities has a floating interest rate during a one year warehouse period in which the Company has the option to convert all or a portion of the loan to a fixed rate. During the warehouse period, this facility bears interest at an annual rate of the average one month LIBOR rate plus 3.50%. Upon conversion, converted balances bear interest at the 10 year US Treasury bond rate plus 2.75% with the rate fixed at time of conversion. The other facility has a fixed interest rate of 4.75%. Payments are based on 20 year amortization schedules with balloon payments due upon maturity.Insurance Loss Reserves

~~13. Reinsurance~~

~~Standard Casualty is primarily a specialty writer of manufactured home physical damage insurance.~~ Certain of Standard Casualty's premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. ~~The ceded reinsurance agreements provide Standard Casualty with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. Standard Casualty remains~~We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations. ~~Substantially all of Standard Casualty's assumed reinsurance is with one entity.~~

The effects of reinsurance on premiums written and earned ~~are~~were as follows (in thousands):


	Three Months Ended
	December 30, 2023				December 31, 2022
	Written		Earned		Written		Earned
Direct premiums	$	11,135	$	10,693	$	7,454	$	7,529
Assumed premiums—nonaffiliated	8,430		8,459		7,709		8,358
Ceded premiums—nonaffiliated	(6,406)		(6,406)		(4,413)		(4,413)
	$	13,159	$	12,746	$	10,750	$	11,474

	Nine Months Ended
	December 30, 2023				December 31, 2022
	Written		Earned		Written		Earned
Direct premiums	$	31,581	$	28,740	$	22,350	$	21,917
Assumed premiums—nonaffiliated	27,735		25,880		25,555		24,526
Ceded premiums—nonaffiliated	(18,971)		(18,971)		(13,056)		(13,056)
	$	40,345	$	35,649	$	34,849	$	33,387

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Three Months Ended
December 30, 2017 December 31, 2016
Written Earned Written Earned
Direct premiums $ 3,796
$ 4,120
$ 3,735
$ 4,008
Assumed premiums—nonaffiliate 5,428
6,296
5,504
6,146
Ceded premiums—nonaffiliate (2,816 ) (2,816 ) (3,063 ) (3,063 )
Net premiums $ 6,408
$ 7,600
$ 6,176
$ 7,091

Nine Months Ended
December 30, 2017 December 31, 2016
Written Earned Written Earned
Direct premiums $ 11,790
$ 12,407
$ 11,870
$ 11,926
Assumed premiums—nonaffiliate 17,898
18,889
18,603
17,719
Ceded premiums—nonaffiliate (10,073 ) (10,073 ) (9,360 ) (9,360 )
Net premiums $ 19,615
$ 21,223
$ 21,113
$ 20,285

Typical insurance policies written or assumed ~~by Standard Casualty~~ have a maximum coverage of ~~$300,000~~$0.4 million per claim, of which ~~Standard cedes~~ ~~$175,000~~we cede $0.2 million of the risk of loss per reinsurance. Therefore, ~~Standard Casualty maintains~~our risk of loss is limited to ~~$125,000~~$0.2 million per claim on typical ~~policies.~~policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable ~~by Standard Casualty~~ through reinsurance for catastrophic losses in excess of ~~$1.5~~$3.0 million per occurrence, up to a maximum of ~~$43.5~~$100 million in the ~~aggregate.~~aggregate for that occurrence.

~~Purchasing reinsurance contracts protects~~ Standard Casualty ~~from frequency and/or severity~~establishes reserves for claims and claims expense on reported and incurred but not reported ("IBNR") claims of ~~losses incurred on insurance policies issued, such as~~non-reinsured losses. The following details the activity in the ~~case of a catastrophe that generates a large number of serious claims on multiple policies at the same time.~~

~~14. Income Taxes~~

The Company's deferred tax assets primarily result from financial statement accruals not currently deductible for tax purposes and differences in the acquired basis of certain assets, and its deferred tax liabilities primarily result from tax amortization of goodwill and other intangible assets.

~~The Company complies with the provisions of ASC 740,~~ ~~Income Taxes~~ ("ASC 740"), which clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognizing, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The amount of unrecognized tax benefits recorded by the Company is insignificant and the impact on the effective tax rate if all unrecognized tax benefits were recognized would be insignificant. The Company classifies interest and penalties related to unrecognized tax benefits in tax expense.

~~Income tax returns are filed in the U.S. federal jurisdiction and in several state jurisdictions. In August 2017, the Company received a notice of examination from the Internal Revenue Service ("IRS")~~ reserve for the ~~Company’s federal income tax return for the fiscal year ended April 2, 2016. In general, the Company is no longer subject to examination by the IRS for years before fiscal year 2015 or state~~three and local income tax examinations by tax authorities for years before fiscal year 2013. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to the Company's financial position. The total amount of unrecognized tax benefit related to any particular tax position is not anticipated to change significantly within the next 12 months. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"), which made broad and complex changes to the U.S. tax code. In connection with lower federal income tax liability related to the Tax Act and revaluation of the net deferred income tax balance, the Company has recorded a net tax benefit of $5.6 million~~in the third quarter~~nine months ended December 30, ~~2017.~~2023 and December 31, 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Balance at beginning of period	$	9,154	$	7,790	$	10,939	$	8,149
Net incurred losses during the period	9,489		8,464		29,152		25,050
Net claim payments during the period	(9,189)		(7,163)		(30,637)		(24,108)
Balance at end of period	$	9,454	$	9,091	$	9,454	$	9,091

~~15.~~16. Commitments and Contingencies

Repurchase Contingencies. The maximum amount for which the Company ~~is contingently~~was liable under the terms of repurchase agreements with financial institutions ~~providing~~that provide inventory financing ~~for~~to independent ~~retailers~~distributors of ~~its products. These arrangements, which are customary in the industry, provide for the repurchase of~~our products sold to retailers in the event of default by the retailer. The risk of loss under these agreements is spread over numerous retailers. The price the Company is obligated to pay generally declines over the period of the agreement (generally 18 to ~~36 months, calculated from the date of sale to the retailer)~~approximated $116 million and ~~the risk of loss is further reduced by the resale value of the repurchased homes. The maximum amount for which the Company was contingently liable under such agreements approximated $45.0~~$178 million at December 30, ~~2017~~,2023 and April 1, 2023, respectively, without reduction for the estimated resale value of the homes. ~~The Company applies ASC 460,~~ ~~Guarantees~~ ~~("ASC 460"), and ASC 450-20,~~ ~~Loss Contingencies~~ ~~("ASC 450-20"), to account~~During the third quarter of fiscal 2024, we received one repurchase demand notice for ~~its liability~~three homes. During the nine months ended December 30, 2023, we received three repurchase demand notices covering nine homes, of which six homes had been repurchased by period end. In all cases, the estimated fair value exceeded the repurchase price so no loss reserve was deemed necessary. Our reserve for repurchase commitments. Under the provisions of ASC 460, the Company records the greater of the estimated value of the non-contingent obligation or a contingent liability for each repurchase arrangement under the provisions of ASC 450-20. The Companycommitments, recorded ~~an estimated liability of $1.6 million~~in Accrued expenses and ~~$1.7~~other current liabilities, was $2.7 million at December 30, ~~2017~~2023 and $5.2 million at April 1, ~~2017, respectively, related to the commitments pertaining to these agreements.~~2023.

~~Letters of Credit.~~ ~~To secure certain reinsurance contracts, Standard Casualty maintains an irrevocable letter of credit of~~ ~~$7.0 million~~ ~~to provide assurance that Standard Casualty will fulfill its reinsurance obligations. This letter of credit is secured by certain of the Company's investments.~~

Construction-Period Mortgages. CountryPlace funds construction-period mortgages through periodic advances during the period of home construction. At the time of initial funding, CountryPlace commits to fully fund the loan contract in accordance with a predetermined schedule. Subsequent advances are contingent upon the performance of contractual obligations by the seller of the home and the borrower. Cumulative advances on construction-period mortgages are carried in the consolidated balance sheet at the amount advanced less a valuation allowance, which are included in consumer loans receivable. The total loan contract amount, less cumulative advances, represents an off-balance sheet contingent commitment of CountryPlace to fund future advances.

Loan contracts with off-balance sheet commitments are summarized below (in thousands):


	December 30, 2023		April 1, 2023
Construction loan contract amount	$	1,361	$	2,214
Cumulative advances	(464)		(706)
	$	897	$	1,508

December 30,
2017 April 1,
2017
Construction loan contract amount $ 26,647
$ 18,031
Cumulative advances (12,407 ) (6,957 )
Remaining construction contingent commitment $ 14,240
$ 11,074

Representations and Warranties of Mortgages Sold. ~~CountryPlace sells loans to GSEs~~ The reserve for contingent repurchases and ~~whole-loan purchasers~~indemnification obligations was $0.6 million as of December 30, 2023 and ~~finances certain loans with long-term credit facilities secured by~~$0.7 million as of April 1, 2023, included in Accrued expenses and other current liabilities on the respective loans. In connection with these activities, CountryPlace provides to the GSEs, whole-loan purchasers and lenders, representations and warranties related to the loans sold or financed. These representations and warranties generally relate to the ownership of the loan, the validity of the lien securing the loan, the loan's compliance with the criteria for inclusionConsolidated Balance Sheets. There were no claim requests that resulted in the ~~sale transactions, including compliance with underwriting standards or loan criteria established by~~repurchase of any loans during the buyer, and CountryPlace's ability to deliver documentation in compliance with applicable laws. Generally, representations and warranties may be enforced at any time over the life of the loan. Upon a breach of a representation, CountryPlace may be required to repurchase the loan or to indemnify a party for incurred losses. Repurchase demands and claims for indemnification payments are reviewed on a loan-by-loan basis to validate if there has been a breach requiring repurchase. CountryPlace manages the risk of repurchase through underwriting and quality assurance practices and by servicing the mortgage loans to investor standards. CountryPlace maintains a reserve for these contingent repurchase and indemnification obligations. This reserve of $1.0 million and $885,000 as of nine months ended December 30, ~~2017~~ ~~and~~ ~~April 1, 2017~~, respectively, included in accrued liabilities, reflects management's estimate of probable loss. CountryPlace considers a variety of assumptions, including borrower performance (both actual and estimated future defaults), historical repurchase demands and loan defect rates to estimate the liability for loan repurchases and indemnifications.2023 or December 31, 2022.

Interest Rate Lock Commitments~~. In originating loans for sale, CountryPlace issues interest rate lock commitments~~ ("IRLCs") to prospective borrowers and third-party originators. These IRLCs represent an agreement to extend credit to a loan applicant, or an agreement to purchase a loan from a third-party originator, whereby the interest rate on the loan is set prior to loan closing or sale. These IRLCs bind CountryPlace to fund the approved loan at the specified rate regardless of whether interest rates or market prices for similar loans have changed between the commitment date and the closing date. As such, outstanding IRLCs are subject to interest rate risk and related loan sale price risk during the period from the date of the IRLC through the earlier of the loan sale date or IRLC expiration date. The loan commitments generally range between 30 ~~and~~ ~~180~~ days; however, borrowers are not obligated to close the related loans. As a result, CountryPlace is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs unless the commitment is successfully paired with another loan that may mitigate losses from fallout.

. As of December 30, ~~2017, CountryPlace~~2023 and April 1, 2023, we had outstanding IRLCs with a notional amount of $~~10.5~~$24.1 million and ~~are recorded at fair value~~$64.9 million, respectively. For the three and nine months ended December 30, 2023, we recognized insignificant non-cash gains and losses, respectively, on outstanding IRLCs. For the three and nine months ended December 31, 2022, we recognized insignificant non-cash gains on outstanding IRLCs.

Forward Sales Commitments. As of December 30, 2023 and April 1, 2023, we had $0.8 million and $1.6 million in ~~accordance with ASC 815,~~ ~~Derivatives and Hedging~~outstanding forward sales commitments ("~~ASC 815"~~Commitments"). ASC 815 clarifies that the expected net future cash flows related to the associated servicing of a loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. The estimated fair values of IRLCs are recorded in other assets in the consolidated balance sheets. The fair value of IRLCs is based on the value of the underlying mortgage loan adjusted for: (i) estimated cost to complete and originate the loan and (ii) the estimated percentage of IRLCs that will result in closed mortgage loans. The initial and subsequent changes in the value of IRLCs are a component of gain (loss) on mortgage loans held for sale., respectively. During the three and nine months ended December 30, ~~2017, CountryPlace~~2023, we recognized ~~lossesof $31,000 and $46,000 on the outstanding IRLCs, respectively.~~insignificant non-cash losses. During the three and nine months ended December 31, ~~2016, CountryPlace~~2022, we recognized non-cash lossesof ~~$17,000~~$0.2 million and ~~$7,000,~~$0.3 million, respectively, ~~on the outstanding IRLCs.~~relating to our Commitments.

~~Forward Sales Commitments. CountryPlace manages the risk profiles~~

Table of a portion of its outstanding IRLCs and mortgage loans held for sale by entering into forward sales of mortgage-backed securities ("MBS") and whole loan sale commitments. As of December 30, 2017, CountryPlace had $38.8 million in outstanding notional forward sales of MBSs and forward sales commitments. Commitments to forward sales of whole loans are typically in an amount proportionate with the amount of IRLCs expected to close in particular time frames, assuming no change in mortgage interest rates, for the respective loan products intended for whole loan sale.Contents

The estimated fair values of forward sales of MBS and forward sale commitments are based on quoted market values and are recorded within other current assets in the consolidated balance sheets. During the three and nine months ended December 30, 2017, CountryPlace recognized gains of $384,000 and $312,000, respectively, on forward sales and whole loan sale commitments. CountryPlace recognized gains of $150,000 and $139,000 on forward sales and whole loan sale commitments during the three and nine months ended December 31, 2016, respectively.

Legal Matters. ~~The Company is~~We are party to certain ~~legal proceedings that arise~~lawsuits in the ordinary course ~~and are incidental to its~~of business. ~~Certain~~Based on management's present knowledge of the ~~claims pending against the Company in these proceedings allege, among other things, breach~~facts and (in certain cases) advice of ~~contract and warranty, product liability and personal injury. Although litigation is inherently uncertain, based on past experience and the information currently available,~~outside counsel, management does not believe that ~~the currently~~loss contingencies arising from pending ~~and threatened litigation or claims will~~matters are likely to have a material adverse effect on ~~the Company's~~our consolidated financial position, liquidity or results of ~~operations.~~operations after taking into account any existing reserves, which reserves are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. However, future events or circumstances that may currently be unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on ~~the Company's~~our consolidated financial position, liquidity or results of operations in any future reporting periods.

~~16.~~

Table of Contents

17. Stockholders' Equity and Redeemable Noncontrolling Interest

The following table represents changes in stockholders' equity ~~for~~attributable to Cavco's stockholders and redeemable noncontrolling interest during the~~nine months~~ ~~ended~~ ~~December 30, 2017~~ ~~(dollars in thousands):~~

Additional paid-in capital Retained earnings Accumulated other comprehensive income Total
Common Stock
Shares Amount
Balance, April 1, 2017 8,994,968
$ 90
$ 244,791
$ 148,141
$ 1,386
$ 394,408
Cumulative effect of implementing ASU 2016-09 —
—
—
69
—
69
Stock option exercises, including incremental tax benefits 40,326
—
(1,104 )

—
(1,104 )
Share-based compensation —
—
1,918
—
—
1,918
Net income —
—
—
39,362
—
39,362
Unrealized gain on available-for-sale securities —
—
—
—
919
919
Balance, December 30, 2017 9,035,294
$ 90
$ 245,605
$ 187,572
$ 2,305
$ 435,572


~~(1)~~	~~Other comprehensive income is comprised of unrealized gains and losses on available-for-sale investments. Unrealized gains before tax effect on available-for-sale securities were~~ ~~$1.5 million~~ ~~for the~~ ~~nine months~~ ~~ended~~ ~~December 30, 2017~~.

~~17. Stock-Based Compensation~~

The Company maintains stock incentive plans whereby stock option grants or awards of restricted stock may be made to certain officers, directors and key employees. As of December 30, 2017, the plans, which are shareholder approved, permit the award of up to ~~1,650,000~~ ~~shares of the Company's common stock, of which~~ ~~339,251~~ ~~shares were still available for grant. When options are exercised, new shares of the Company's common stock are issued. Stock options may not be granted below~~ ~~100%~~ ~~of the fair market value of the Company's common stock at the date of grant and generally expire~~ ~~seven years~~ ~~from the date of grant. Stock options and awards of restricted stock typically vest over a one to~~ ~~five~~ year period as determined by the plan administrator (the Compensation Committee of the Board of Directors, which consists of independent directors). The stock incentive plans provide for accelerated vesting of stock options upon a change in control (as defined in the plans).

~~Stock-based compensation cost charged against income for the three and~~ nine months ended December 30, ~~2017 was $398,000~~2023 (dollars in thousands):


	Equity Attributable to Cavco Stockholders
				Treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Total		Redeemable noncontrolling interest
	Common Stock
	Shares	Amount
Balance, April 1, 2023	9,337,125	$	93	$	(164,452)	$	271,950	$	869,310	$	(615)	$	976,286	$	1,219
Net income	—	—		—		—		46,357		—		46,357		54
Other comprehensive loss, net	—	—		—		—		—		(42)		(42)		—
Issuance of common stock under stock incentive plans, net	10,095	—		—		(1,213)		—		—		(1,213)		—
Stock-based compensation	—	—		—		1,438		—		—		1,438		—
Distributions	—	—		—		—		—		—		—		(120)
Valuation adjustment	—	—		—		—		—		—		—		(33)
Balance, July 1, 2023	9,347,220	93		(164,452)		272,175		915,667		(657)		1,022,826		1,120
Net income	—	—		—		—		41,539		—		41,539		34
Other comprehensive income, net	—	—		—		—		—		54		54		—
Issuance of common stock under stock incentive plans, net	9,201	1		—		478		—		—		479		—
Stock-based compensation	—	—		—		1,551		—		—		1,551		—
Common stock repurchases	—	—		(47,194)		—		—		—		(47,194)		—
Distributions	—	—		—		—		—		—		—		(180)
Conversion to mandatorily redeemable noncontrolling interest	—	—		—		—		—		—		—		(974)
Balance, September 30, 2023	9,356,421	94		(211,646)		274,204		957,206		(603)		1,019,255		—
Net income	—	—		—		—		35,987		—		35,987		—
Other comprehensive income, net	—	—		—		—		—		241		241		—
Issuance of common stock under stock incentive plans, net	24,726	—		—		1,934		—		—		1,934		—
Stock-based compensation	—	—		—		1,709		—		—		1,709		—
Common stock repurchases	—	—		(50,426)		—		—		—		(50,426)		—
Balance, December 30, 2023	9,381,147	$	94	$	(262,072)	$	277,847	$	993,193	$	(362)	$	1,008,700	$	—

Table of Contents

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and ~~$1.9 million, respectively. The Company recorded stock-based compensation expense of $386,000 and $1.7 million for three and~~redeemable noncontrolling interest during the nine months ended December 31, ~~2016, respectively.~~2022 (dollars in thousands):

~~As of~~ ~~December 30, 2017, total unrecognized compensation cost related to stock options was approximately~~ ~~$3.8 million~~ ~~and the related weighted-average period over which the expense is expected to be recognized is approximately~~ ~~3.17 years~~.

~~The following table summarizes the option activity within the Company's stock-based compensation plans for the nine months ended~~ ~~December 30, 2017~~:


	Equity Attributable to Cavco Stockholders
				Treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Total		Redeemable noncontrolling interest
	Common Stock
	Shares	Amount
Balance, April 2, 2022	9,292,278	$	93	$	(61,040)	$	263,049	$	628,756	$	(403)	$	830,455	$	825
Net income	—	—		—		—		59,602		—		59,602		92
Other comprehensive loss, net	—	—		—		—		—		(112)		(112)		—
Issuance of common stock under stock incentive plans, net	5,957	—		—		(848)		—		—		(848)		—
Stock-based compensation	—	—		—		1,425		—		—		1,425		—
Common stock repurchases	—	—		(38,960)		—		—		—		(38,960)		—
Distributions	—	—		—		—		—		—		—		(240)
Balance, July 2, 2022	9,298,235	93		(100,000)		263,626		688,358		(515)		851,562		677
Net income	—	—		—		—		74,116		—		74,116		82
Other comprehensive loss, net	—	—		—		—		—		(303)		(303)		—
Issuance of common stock under stock incentive plans, net	15,917	—		—		1,457		—		—		1,457		—
Stock-based compensation	—	—		—		2,100		—		—		2,100		—
Distributions	—	—		—		—		—		—		—		(240)
Valuation adjustment	—	—		—		—		—		—		—		407
Balance, October 1, 2022	9,314,152	93		(100,000)		267,183		762,474		(818)		928,932		926
Net income	—	—		—		—		59,524		—		59,524		65
Other comprehensive income, net	—	—		—		—		—		74		74		—
Issuance of common stock under stock incentive plans, net	5,548	—		—		(90)		—		—		(90)		—
Stock-based compensation	—	—		—		1,330		—		—		1,330		—
Common stock repurchases	—	—		(34,270)		—		—		—		(34,270)		—
Distributions	—	—		—		—		—		—		—		(120)
Valuation adjustment	—	—		—		—		—		—		—		61
Balance, December 31, 2022	9,319,700	$	93	$	(134,270)	$	268,423	$	821,998	$	(744)	$	955,500	$	932



	~~Number~~ ~~of Shares~~
~~Outstanding at April 1, 2017~~	~~464,930~~
~~Granted~~	~~42,000~~
~~Exercised~~	~~(74,575~~	)
~~Canceled or expired~~	~~(800~~	)
~~Outstanding at December 30, 2017~~	~~431,555~~
~~Exercisable at December 30, 2017~~	~~217,071~~

Table of Contents

18. Earnings Per Share

Basic earnings per common share is computed based on the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share is computed based on the combination of dilutive common share equivalents, comprised of shares issuable under the Company's stock-based compensation plans and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money options to purchase shares, which is calculated based on the average share price for each period using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except per share amounts):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Net income attributable to Cavco common stockholders	$	35,987	$	59,524	$	123,883	$	193,242
Weighted average shares outstanding
Basic	8,358,389		8,870,565		8,561,209		8,897,405
Effect of dilutive securities	74,082		65,510		79,079		71,699
Diluted	8,432,471		8,936,075		8,640,288		8,969,104
Net income per share attributable to Cavco common stockholders
Basic	$	4.31	$	6.71	$	14.47	$	21.72
Diluted	$	4.27	$	6.66	$	14.34	$	21.55

Anti-dilutive common stock equivalents excluded	—		930		316		776

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Net income $ 21,427
$ 12,283
$ 39,362
$ 27,067
Weighted average shares outstanding:
Basic 9,030,100
8,992,456
9,019,311
8,970,008
Common stock equivalents—treasury stock method 184,798
110,106
166,731
126,434
Diluted 9,214,898
9,102,562
9,186,042
9,096,442
Net income per share:
Basic $ 2.37
$ 1.37
$ 4.36
$ 3.02
Diluted $ 2.33
$ 1.35
$ 4.28
$ 2.98

~~Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share for the three and nine months ended December 30, 2017were 4,941 and 5,549, respectively. There were 18,455 and 9,385 anti-dilutive common stock equivalents excluded for the three and nine months ended December 31, 2016, respectively.~~

19. Fair Value Measurements

The book value and estimated fair value of ~~the Company's~~our financial instruments ~~are~~were as follows (in thousands):


	December 30, 2023				April 1, 2023
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
Available-for-sale debt securities	$	19,207	$	19,207	$	18,555	$	18,555
Marketable equity securities	8,788		8,788		9,989		9,989
Non-marketable equity investments	4,923		4,923		5,073		5,073
Consumer loans receivable	36,134		41,661		44,148		50,686
Commercial loans receivable	92,572		78,191		101,977		97,106
Other secured financing	(1,942)		(1,894)		(2,379)		(2,332)

December 30, 2017 April 1, 2017

Book
Value

Estimated
Fair Value

Book
Value

Estimated
Fair Value
Available-for-sale securities (1) $ 30,487
$ 30,487
$ 24,162
$ 24,162
Non-marketable equity investments (2) 18,646
18,646
17,383
17,383
Consumer loans receivable (3) 94,992
116,895
95,801
121,021
Interest rate lock commitment derivatives (4) (10 ) (10 ) 35
35
Forward loan sale commitment derivatives (4) 226
226
(86 ) (86 )
Commercial loans receivable (5) 26,854
26,872
25,833
25,841
Securitized financings and other (6) (57,291 ) (61,612 ) (57,991 ) (61,270 )
Mortgage servicing rights (7) 1,312
1,312
1,110
1,110


~~(1)~~	~~For Level 1 classified securities, the fair value is based on quoted market prices. The fair value of Level 2 securities is based on other inputs, as further described below.~~


~~(2)~~	~~The fair value approximates book value based on the non-marketable nature of the investments.~~

~~(3)~~

Includes consumer loans receivable held for investment, held for sale and construction advances. The fair value of the loans held for investment is based on the discounted value of the remaining principal and interest cash flows. The fair value of the loans held for sale are estimated based on recent GSE mortgage-backed bond prices. The fair value of the construction advances approximates book value and the sales price of these loans is estimated based on construction completed.


~~(4)~~	~~The fair values are based on changes in GSE mortgage-backed bond prices and, additionally for IRLCs, pull through rates.~~


~~(5)~~	~~The fair value is estimated using market interest rates of comparable loans.~~


~~(6)~~	~~The fair value is estimated using recent public transactions of similar asset-backed securities.~~


~~(7)~~	~~The fair value of the mortgage servicing rights is based on the present value of expected net cash flows related to servicing these loans.~~

~~In accordance with ASC 820,~~ See Note 20, Fair Value Measurements, and ~~Disclosures~~ ~~("ASC 820"), fair value is defined as~~ the ~~exchange price that would be received for an asset or paid to transfer a liability (an exit price)~~Fair Value of Financial Instruments caption in Note 1, Summary of Significant Accounting Policies, in the ~~principal or most advantageous market~~Form 10-K for ~~the asset or liability in an orderly transaction between market participants~~more information on the ~~measurement date. ASC 820 also establishes a~~methodologies we use in determining fair ~~value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair~~ value. ~~The standard describes three levels of inputs that may be used to measure fair value:~~



~~Level 1 –~~	~~Quoted prices in active markets for identical assets or liabilities.~~
~~Level 2 –~~	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
~~Level 3 –~~	~~Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

When the Company uses observable market prices for identical securities that are traded in less active markets, it classifies such securities as Level 2. When observable market prices for identical securities are not available, the Company prices its marketable debt instruments using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on the proprietary valuation models of pricing providers or brokers. These valuation models incorporate a number of inputs, including non-binding and binding broker quotes; observable market prices for identical or similar securities; and the internal assumptions of pricing providers or brokers that use observable market inputs and, to a lesser degree, unobservable market inputs.

~~Financial instruments measured at fair value on a recurring basis are summarized below (in thousands):~~

December 30, 2017
Total Level 1 Level 2 Level 3
Securities issued by the U.S Treasury and Government (1) $ 296
$ —
$ 296
$ —
Mortgage-backed securities (1) 7,407
—
7,407
—
Securities issued by states and political subdivisions (1) 6,924
—
6,924
—
Corporate debt securities (1) 1,637
—
1,637
—
Marketable equity securities (1) 11,461
11,461
—
—
Interest rate lock commitment derivatives (2) (10 ) —
—
(10 )
Forward loan sale commitment derivatives (2) 226
—
—
226
Mortgage servicing rights (3) 1,312
—
—
1,312


~~(1)~~	~~Unrealized gains or losses on investments are recorded in accumulated other comprehensive income (loss) at each measurement date.~~


~~(2)~~	~~Gains or losses on derivatives are recognized in current period earnings through cost of sales.~~


~~(3)~~	~~Changes in the fair value of mortgage servicing rights are recognized in the current period earnings through net revenue.~~

No ~~transfers between Level 1, Level 2 or Level 3 occurred during the~~ ~~nine months~~ ~~ended~~ ~~December 30, 2017. The Company's policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.~~

~~Financial instruments for which fair value is disclosed but not required to be recognized in the balance sheet on a recurring basis are summarized below (in thousands):~~

December 30, 2017
Total Level 1 Level 2 Level 3
Loans held for investment $ 91,627
$ —
$ —
$ 91,627
Loans held for sale 12,861
—
—
12,861
Loans held—construction advances 12,407
—
—
12,407
Commercial loans receivable 26,872
—
—
26,872
Securitized financings and other (61,612 ) —
(61,612 ) —
Non-marketable equity investments 18,646
—
—
18,646

No recent sales have been executed in an orderly market of manufactured home loan portfolios with comparable product features, credit characteristics or performance. Therefore, loans held for investment are measured using Level 3 inputs that are calculated using estimated discounted future cash flows from the evaluation of loan credit quality and performance history to determine expected prepayments and defaults on the portfolio, discounted with rates considered to reflect current market conditions. Loans held for sale are measured at the lower of cost or fair value using inputs that consist quoted market prices for mortgage-backed securities or investor purchase commitments for similar types of loan commitments on hand from investors. These loans are held for relatively short periods, typically no more than ~~45 days~~. As a result, changes in loan-specific credit risk are not a significant component of the change in fair value and changes are largely driven by changes in interest rates or investor yield requirements. The cost of loans held for sale is lower than the fair value as of ~~December 30, 2017~~. As noted above, activity in the manufactured housing asset-backed securities market is infrequent with no reliable market price information. As such, to determine the fair value of securitized financings, management evaluates the credit quality and performance history of the underlying loan assets to estimate the expected prepayment of the debt and credit spreads, based on market activity for similar rated bonds from other asset classes with similar durations.

~~ASC 825,~~ ~~Financial Instruments~~ ("ASC 825"), requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments and the relevant market information. Where available, quoted market prices are used. In other cases, fair values are based on estimates using other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and the judgments made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows, future expected loss experience and other factors. Changes in assumptions could significantly affect these estimates and the resulting fair values. Derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate sale of the instrument. Also, because of differences in methodologies and assumptions used to estimate fair values, the Company's fair values should not be compared to those of other companies.

Under ASC 825, fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying market value of the Company.

The Company records impairment losses on long-lived assets held for sale when the fair value of such long-lived assets is below their carrying values. The Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. No impairment charges were recorded during the ~~nine months~~ ~~ended December 30, 2017.~~

Mortgage Servicing. Mortgage Servicing Rights ("MSRs") are the rights to receive a portion of the interest coupon and fees collected from the mortgagors for performing specified mortgage servicing activities, which consist of collecting loan payments, remitting principal and interest payments to investors, managing escrow accounts, performing loss mitigation activities on behalf of investors and otherwise administering the loan servicing portfolio. MSRs are initially recorded at fair ~~value. Changes~~value in Prepaid expenses and other current assets on the Consolidated Balance Sheets.


	December 30, 2023			April 1, 2023
Number of loans serviced with MSRs	3,894			4,070
Weighted average servicing fee (basis points)	34.79			34.71
Capitalized servicing multiple	187.1		%	98.99		%
Capitalized servicing rate (basis points)	65.10			34.36
Serviced portfolio with MSRs (in thousands)	$	491,887		$	520,458
MSRs (in thousands)	$	3,202		$	1,788

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20. Related Party Transactions

We have non-marketable equity investments in other distribution operations outside of Company-owned retail stores. In the ordinary course of business, we sell homes and lend to certain of these operations through our commercial lending programs. For the three and nine months ended December 30, 2023, the total amount of sales to related parties was $11.6 million and $42.6 million, respectively. For the three and nine months ended December 31, 2022, the total amount of sales to related parties was $18.7 million and $56.0 million, respectively. As of December 30, 2023, receivables from related parties included $6.5 million of accounts receivable and $4.9 million of commercial loans outstanding. As of April 1, 2023, receivables from related parties included $5.7 million of accounts receivable and $4.7 million of commercial loans outstanding.

21. Acquisitions

Solitaire Acquisition

On January 3, 2023 (the "Acquisition Date"), we completed the acquisition of Solitaire Homes, including their four manufacturing facilities and 22 retail locations, by acquiring 100% of the outstanding stock of Solitaire Homes for $110.8 million.

Our estimates of the fair ~~value subsequent~~values of the assets that we acquired and the liabilities that we assumed were based on the information that was available as of the Acquisition Date. During the nine months ended December 30, 2023, we made certain adjustments to the ~~initial capitalization are recorded~~assets and liabilities based on information that became available.

The following table presents the fair values of the assets that we acquired and the liabilities that we assumed on the Acquisition Date as of December 30, 2023 (in thousands):


	January 3, 2023		Adjustments		January 3, 2023 (as Adjusted at December 30, 2023)
Cash	$	5,119	$	(79)	$	5,040
Investments	334		—		334
Accounts receivable	3,536		(787)		2,749
Inventories	58,045		(143)		57,902
Property, plant and equipment	36,109		(103)		36,006
Other current assets	1,519		59		1,578
Intangible assets	3,400		—		3,400
Total identifiable assets acquired	108,062		(1,053)		107,009
Accounts payable and accrued liabilities	11,251		84		11,335
Net identifiable assets acquired	96,811		(1,137)		95,674
Goodwill	13,970		1,137		15,107
Net assets acquired	$	110,781	$	—	$	110,781

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Pro Forma Impact of Solitaire Acquisition (Unaudited). The following table presents supplemental pro forma information as if the above acquisition had occurred on April 3, 2022 (in thousands, except per share data):


	December 31, 2022
	Three Months Ended		Nine Months Ended
Net revenue	$	536,776	$	1,774,853
Net income attributable to Cavco common stockholders	61,567		199,371
Diluted net income per share	6.89		22.23

Kentucky Dream Homes Acquisition

On November 15, 2023, the Company acquired certain assets and assumed certain liabilities of Kentucky Dream Homes, LLC ("KDH"), a manufactured home retailer with locations in Kentucky and Florida for total consideration of $23.8 million, which includes $5.4 million non-cash commercial loan forgiveness. The remaining $18.4 million was paid with cash on hand. The final purchase price is subject to customary adjustments. The business is included in the ~~Company's results of operations. The Company recognizes MSRs on all loans sold to investors that meet the requirements for sale accounting and for which servicing rights are retained.~~

~~The Company applies fair value accounting to MSRs, with all changes in fair value recorded to net revenue in accordance with ASC 860-50,~~ ~~Servicing Assets and Liabilities~~.Factory-built housing reportable business segment. The fair value of ~~MSRs~~the assets acquired and liabilities assumed are included in the Consolidated Balance Sheet as of December 30, 2023, including $4.6 million allocated to goodwill. The purchase accounting is ~~based on~~subject to final adjustment, primarily for the ~~present value~~working capital and amounts allocated to goodwill. We have included the financial results in our unaudited Consolidated Financial Statements from the date of ~~the expected future cash flows~~acquisition. Pro forma historical results of operations related to ~~servicing these loans. The revenue components of~~this acquisition have not been presented because they are not significant to our unaudited Consolidated Financial Statements for the cash flows are servicing fees, interest earned on custodial accounts and other ancillary income. The expense components include operating costs related to servicing the loans (including delinquency and foreclosure costs) and interest expenses on servicer advances that the Company believes are consistent with the assumptions major market participants use in valuing MSRs. The expected cash flows are primarily impacted by prepayment estimates, delinquencies and market discounts. Generally, the value of MSRs is expected to increase when interest rates rise and decrease when interest rates decline, due to the effect those changes in interest rates have on prepayment estimates. Other factors noted above as well as the overall market demand for MSRs may also affect the valuation.periods presented.

December 30,
2017 April 1,
2017
Number of loans serviced with MSRs 4,274
4,041
Weighted average servicing fee (basis points) 32.00
31.42
Capitalized servicing multiple 80.81 % 74.79 %
Capitalized servicing rate (basis points) 25.86
23.50
Serviced portfolio with MSRs (in thousands) $ 507,530
$ 472,492
Mortgage servicing rights (in thousands) $ 1,312
$ 1,110

~~20.~~22. Business Segment Information

~~The Company operates~~We operate principally in two segments: (1) factory-built housing, which includes wholesale and retail ~~systems-built~~factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance. The following table ~~details net revenue and income before income taxes~~provides selected financial data by segment (in thousands):


	Three Months Ended				Nine Months Ended
	December 30, 2023		December 31, 2022		December 30, 2023		December 31, 2022
Net revenue:
Factory-built housing	$	426,939	$	481,193	$	1,318,114	$	1,613,392
Financial services	19,830		19,410		56,560		52,941
	$	446,769	$	500,603	$	1,374,674	$	1,666,333

Income before income taxes:
Factory-built housing	$	42,070	$	71,813	$	154,121	$	241,959
Financial services	1,837		4,268		2,124		6,243
	$	43,907	$	76,081	$	156,245	$	248,202


	December 30, 2023		April 1, 2023
Total assets:
Factory-built housing	$	1,125,581	$	1,107,555
Financial services	201,015		200,420
	$	1,326,596	$	1,307,975

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Net revenue:
Factory-built housing $ 207,183
$ 188,546
$ 587,445
$ 536,513
Financial services 14,200
13,764
41,261
39,286
$ 221,383
$ 202,310
$ 628,706
$ 575,799

Income before income taxes:
Factory-built housing $ 18,393
$ 12,370
$ 40,147
$ 33,437
Financial services 5,276
4,909
7,672
5,370
$ 23,669
$ 17,279
$ 47,819
$ 38,807

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Statements in this Report on Form 10-Q (the "Report") 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 (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 include, for example, discussions regarding the manufactured housing and site-built housing industries; discussions regarding our efforts and the efforts of other industry participants to develop the home-only loan secondary market; our financial performance and operating results; our strategy; our liquidity and financial resources; our outlook with respect to Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") and the manufactured housing business in general; the expected effect of certain risks and uncertainties on our business, financial condition and results of operations; economic conditions, including concerns of a possible recession, and consumer confidence; trends in interest rates and inflation; potential acquisitions, strategic investments and other expansions; the sufficiency of our liquidity; that we may seek alternative sources of financing in the future; operational and legal risks; how we may be affected by any pandemic or outbreak; geopolitical conditions; the cost and availability of labor and raw materials; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; and the ultimate outcome of our commitments and contingencies. Forward-looking statements contained in this Report speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document. We do not intend to publicly update or revise any forward-looking statement contained in this Report 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, except as required by law.

Forward-looking statements involve risks, uncertainties and other factors that may cause our 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 our assumptions and expectations differ from actual results, our ability to meet such forward-looking statements may be significantly hindered. Factors that could affect our results and cause them to materially differ from those contained in the forward-looking statements include, without limitation, those discussed under Risk Factors in Part I, Item 1A of our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "Form 10-K").

Introduction

The following should be read in conjunction with ~~Cavco Industries, Inc. and its subsidiaries' (collectively,~~ the ~~"Company" or "Cavco")~~Company's unaudited Consolidated Financial Statements and the related Notes that appear in Part I, Item 1 of this Report. References to "Note" or "Notes" pertain to the Notes to ~~the Company's~~our unaudited Consolidated Financial Statements.

Company Overview

Headquartered in Phoenix, Arizona, ~~the Company designs~~we design and ~~produces~~produce factory-built homes primarily distributed through a network of independent and Company-owned ~~retailers.~~retailers, planned community operators and residential developers. We are one of the ~~second~~ largest ~~producer~~producers of manufactured homes in the United States, based on reported wholesale ~~shipments,~~shipments. Our products are marketed under a variety of brand names including Cavco, ~~Homes,~~ Fleetwood, ~~Homes,~~ Palm Harbor, ~~Homes,~~Nationwide, Fairmont, ~~Homes,~~ Friendship, ~~Homes,~~ Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and ~~Lexington Homes. The Company is~~Solitaire. We are also a leading ~~builder~~producer of park model RVs, vacation cabins and ~~systems-built~~factory-built commercial ~~structures, as well as modular homes built primarily under the Nationwide Homes brand. Cavco's mortgage~~structures. Our finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association ~~("FNMA" or "Fannie Mae")~~ and Federal Home Loan Mortgage Corporation ~~("FHLMC" or "Freddie Mac")~~ seller/servicer, and a Government National Mortgage Association ("GNMA" ~~or "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 ~~Co.~~Company ("Standard Casualty"), provides property and casualty insurance primarily to owners of manufactured homes.

~~Company Growth~~

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From its inception in 1965, Cavco traditionally served affordable housing markets in the southwestern United States principally through manufactured home production. During the period from 1997 to 2000, Cavco was purchased by and became

We operate a ~~wholly-owned subsidiary~~total of ~~Centex Corporation, which operated the Company until 2003, when Cavco became a stand-alone publicly-held Company traded on the NASDAQ Global Select Market under the ticker symbol CVCO.~~

Beginning in 2007, the overall housing industry experienced a multi-year decline, which included the manufactured housing industry. Since this downturn, Cavco strategically expanded its factory operations and related business initiatives primarily through the acquisition of industry competitor operations. This development has enabled the Company to more broadly participate in the overall housing industry recovery.

~~In 2009, the Company acquired certain manufactured housing assets and liabilities of Fleetwood Enterprises, Inc. ("Fleetwood"). The assets purchased included seven operating~~31 homebuilding production facilities as well as idle factories. During fiscal year 2011, the Company acquired certain manufactured housing assets and liabilities of Palm Harbor Homes, Inc., a Florida corporation. The assets purchased included five operating production facilities as well as idle factories, 49 operating retaillines with domestic locations ~~a manufactured housing finance company and a homeowners insurance company. These acquisitions expanded the Company’s presence across the United States.~~

In 2015, the Company purchased the business and operating assets of Chariot Eagle, a Florida-based manufacturer of park model RVs and manufactured homes, as well as certain assets and liabilities of Fairmont Homes. These transactions provided additional home production capabilities, grew the Company's offering of park model RV product lines and further strengthened our market position in the Southeast, Midwest, the western Great Plains states and several provinces in Canada.

On April 3, 2017, the Company purchased Lexington Homes, which operates one manufacturing facility in Lexington, Mississippi. This transaction was accounted for as a business combination and provides additional home production capabilities and increased distribution into new markets in the Southeast.

~~The Company operates 20 homebuilding facilities located~~ in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; ~~Riverside, California;~~ Phoenix, Glendale and Goodyear, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; ~~Lexington, Mississippi;~~Douglas and Moultrie, Georgia; Shippenville (two lines) and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; ~~Douglas, Georgia;~~Crouse and Hamlet, North Carolina; Ocala and Plant City, ~~Florida. The majority of the homes produced are sold to~~Florida; and ~~distributed by independently owned retailers located primarily throughout the United States and Canada. In addition,~~two international lines in Ojinaga, Mexico. We distribute our homes ~~are sold~~ through 41a large network of independent distribution points in 48 states and Canada and 73 Company-owned U.S. retail ~~locations.~~stores, of which 43 are located in Texas.

~~We continually review our product offerings throughout the combined organization~~Company and strive to improve product designs, production methods and marketing strategies. The supportive market response to our acquisitions has been encouraging and we believe that these expansions provide positive long-term strategic benefits for the Company. We plan to focus on developing synergies among all operations, which continue to have significant organic growth potential.

Industry ~~and Company~~ Outlook

According to data reported by the Manufactured Housing Institute, ~~("MHI"),~~ industry home shipments ~~continue to improve, increasing 15.5%~~ for the ~~first 11 months~~calendar year through November 2023 were 82,784, a decrease of ~~calendar 2017~~22.2% compared to 106,454 shipments in the same calendar period inlast year. Higher interest rates and continued inflationary pressures have tempered industry demand. However, the ~~prior year. During calendar year 2016 our~~manufactured housing industry ~~shipped approximately 81,000 HUD code manufactured homes, an increase of 14.1% over~~offers solutions to the ~~approximately 71,000 homes shipped in 2015. Shipments were 64,000 in 2014, 60,000 in 2013~~housing crisis with lower average price per square foot than a site-built home and ~~55,000 in calendar year 2012, among~~ the lowest levels since industry shipment statistics began to be recorded in 1959. Annual home shipments from 2009 to 2016 were less than the annual home shipments for each of the 40 years from 1969 to 2008. While industry HUD codecomparatively lower cost associated with manufactured home ~~shipments have improved modestly in recent years, the~~ownership, which remains competitive with rental housing.

The two largest manufactured housing ~~industry continues to operate at relatively low levels compared to historical shipment statistics.~~

~~We believe that employment rates~~consumer demographics, young adults and ~~underemployment among potential home buyers~~those who ~~favor affordable housing as well as consumer confidence levels~~ are ~~improving from low levels reported in recent years. "First-time"~~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 ~~were~~are particularly affected by ~~an extended period~~periods of ~~persistently~~ low employment rates and underemployment. ~~The process of repairing damaged credit among consumers and efforts to save for a home loan down-payment often require substantial time; however, improving consumer~~Consumer confidence ~~in the U.S. economy~~ is ~~evident~~especially important among manufactured home buyers interested in our products for seasonal or retirement living that have been concerned about financial stability, and now appear to be less hesitant to commit to a new home purchase. We believe sales of our products may continue to increase as employment and consumer confidence levels continue to recover.

The two largest manufactured housing consumer demographics, young adults and those who are 55+ years old, are both growing. The U.S. adult population is estimated to expand by approximately 12.1 million between 2017 and 2022. Young adults born from 1976 to 1995, sometimes referred to as Gen Y, represent a large segment of the population. Late-stage Gen Y is approximately 2 million people larger than the next age category born from 1966 to 1975, Gen X, and is considered to be in the peak home-buying years. Gen Y represents prime first-time home buyers who may be attracted by the affordability, diversity of style choices and location flexibility of factory-built homes. The age 55 and older category is reported to be the fastest growing segment of the U.S. population. This group is similarly interested in the value proposition; however, they are also motivated by the energy efficiency and low maintenance requirements of systems-built homes, and by the lifestyle offered by planned communities that are specifically designed for homeowners that fall into this age group.

The housing industry is subject to seasonal fluctuations based on new home buyer purchasing patterns. Cavco’s Company-owned retail stores experience decreased home buyer traffic during holidays and popular vacation periods. Still, diversification among Cavco’s product lines and operations have served to partially offset the extent of seasonal fluctuations. Demand for our core single-family new home products typically peaks each spring and summer before declining in the winter, consistent with the overall housing industry, although this pattern was partially interrupted during the winter of fiscal years 2018 and 2017, as the Company has produced a limited number of disaster-relief homes for the Federal Emergency Management Agency ("FEMA"). Demand patterns for park model and cabin RVs and homes used primarily for retirement seasonal living partially offset the general housing seasonality.

The Company's mortgage subsidiary experiences minimal seasonal fluctuation in its mortgage origination activities as a result of the time needed for loan application approval processes and subsequent home loan closing activities. The mortgage subsidiary realizes no seasonal impacts from its mortgage servicing operations. Revenue for the home insurance subsidiary is not substantially impacted by seasonality as it recognizes revenue from policy sales ratably over each policy’s term year. However, the insurance subsidiary is subject to adverse effects from excessive policy claims that may occur during periods of inclement weather, including seasonal spring storms or fall hurricane activity in Texas where most of its policies are underwritten.

In August 2017, Hurricane Harvey produced the largest recorded rain volume for a single weather event in U.S. history, resulting in historic flooding and widespread property damage, primarily in southeast Texas. Although our insurance subsidiary does not write policies for manufactured home residents in gulf coast counties or in flood plains, the enormity of this event caused high homeowners' insurance claim volume inland and in non-flood plain areas. The insurance subsidiary’s catastrophic reinsurance contracts serve to limit financial exposure to a pre-established retention amount of $1.5 million; however, these contracts also carry the requirement for the Company to pay additional premiums in order to reinstate reinsurance coverage for the remainder of 2017, further adding to costs incurred as a result of the hurricane.

~~In September 2017, Hurricane Irma caused significant property damage in Florida. The insurance subsidiary conducts no operations in Florida and was not adversely affected by this storm.~~

These storms also impacted the factory-built housing segment during the second quarter of fiscal year 2018. The flooding from Hurricane Harvey caused substantial new home inventory damage at certain Company-owned retail centers. In addition, both storms caused a limited number of lost production days at manufacturing facilities in the affected areas, resulting in lower sales volume in the quarter. Additionally, as consumer home-site damage and economic disruption in Texas and Florida delayed several home sales in process that would have otherwise been recorded during that quarter.

It has been widely reported that the overall economic toll in the affected market areas is substantial. There has been somewhat increased consumer demand for replacement of homes lost as a result of these events, which we expect to continue for several quarters. This may include demand for additional disaster-relief manufactured home orders from federal and state agencies. The Company has been initially participating by producing a limited number of disaster-relief homes already ordered by FEMA. These homes are being built in factories located in unaffected regions of the country, primarily during the winter months to lessen disruptions to existing order demand from our core customer base.

While there has been modest growth in our industry, consumer financing for retail purchases of manufactured homes needs to become more available before marked emergence from historically lower home shipment levels can occur. Restrictive underwriting guidelines, irregular appraisal processes, higher interest rates compared to site-built homes, regulatory burdens, a limited number of institutions lending to manufactured home buyers and limited secondary market availability for manufactured home loans are significant constraints to industry growth. We are working directly with other industry participants to develop manufactured home consumer financing loan portfolios to attract industry financiers interested in furthering or expanding lending opportunities in the industry. Additionally, we continue to invest in community-based lending initiatives that provide home-only financing to new residents of certain manufactured home communities. Our mortgage subsidiary has invested in and developed home-only lending programs to grow sales of homes through traditional distribution points as well. We believe that growing our participation in home-only lending may provide additional sales growth opportunities for our factory-built housing operations.

We are also working through industry trade associations to encourage favorable legislative and GSE action to address the mortgage financing needs of potential buyers of affordable homes. Federal law requires the GSEs to issue a regulation to implement the "Duty to Serve" requirements specified in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. On December 18, 2017, FNMA and FHLMC released their final Underserved Markets Plan that describes, with specificity, the actions they will take over a three-year period to fulfill the "Duty to Serve" obligation. The focus of each of the three-year plans is to establish steps to ensure chattel loans can be purchased in bulk prior to proceeding with a chattel loan pilot. Expansion of the secondary market for chattel lending through the GSEs could provide further demand for housing, as lending options would likely become more available to home buyers. Although some limited progress has been made in the area, meaningful positive impact in the form of increased home orders has yet to be realized. See "Regulatory Developments" below.

Based on the relatively low cost associated with manufactured home ownership, our products have traditionally competed with rental housing's monthly payment affordability. Rental housing activity is reported to have continued to increase in recent years. As a result, tenant housing vacancy rates appear to have declined, causing a corresponding rise in associated rental rates. These rental market factors may cause some renters to become interested buyers of affordable housing alternatives including manufactured homes.

Further, with respect to the general rise in demand for rental housing, we have realized a larger proportion of orders from developers and community owners for new manufactured homes intended for use as rental housing. The Company is responsive to the unique product and related requirements of these home buyers and values the opportunity to provide homes that are well suited for these purposes.

The backlog of sales orders at December 30, 2017 varied among our 20 factories and in total was approximately $207 million compared to $91 million at December 31, 2016. Retailers may cancel orders prior to production without penalty. Accordingly, until the production of a particular home has commenced, we do not consider our backlog to be firm orders. In response to this accelerating demand, we have raised production levels by increasing our workforce size and capabilities. However, the constrained labor market is a key challenge to further increasing production to keep pace with increased order rates. In addition, we have implemented higher product pricing to offset rising input costs, including labor and material price increases, although large backlogs may cause deferred realization of the full benefits.

The Company participates in certain commercial loan programs with 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 our 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 6 to the Consolidated Financial Statements). The Company's involvement in commercial loans has increased the availability of manufactured home financing to distributors and users of our products. We believe that our participation in wholesale financing is helpful to retailers, communities and developers and allows our homes additional opportunities for exposure to potential home buyers. These initiatives support the Company's ongoing efforts to expand our distribution base in all of our markets with existing and new customers. However, the initiatives expose the Company to risks associated with the creditworthiness of certain customers and business partners, including independent retailers, developers, communities and inventory financing partners.

With manufacturing facilities strategically positioned across the United States, we utilize local market research to design homes to meet the demands of our customers. We have the ability to customize floor plans and designs to fulfill specific needs and interests. By offering a full range of homes from entry-level models to large custom homes with the ability to engineer designs in-house, we can accommodate virtually any customer request. In addition to homes built to the federal HUD code, we construct modular homes that conform to state and local codes, park model RVs and cabins and light commercial buildings at many of our manufacturing facilities.living.

We employ a concerted effort to identify niche market opportunities where our diverse product lines and ~~custom~~flexible building capabilities provide us with a competitive advantage. We are focused on building quality, energy efficient homes for the modern home buyer. Our green building initiatives involve the creation of an energy efficient envelope ~~and~~resulting in lower utility costs, as well as the higher utilization of renewable ~~materials. These homes provide environmentally-friendly maintenance requirements, typically lower utility costs, specially designed ventilation systems and sustainability. Cavco~~materials in our manufacturing process. We also ~~builds~~build homes designed to use alternative energy sources, such as solar and wind. From bamboo flooring and tankless water heaters to solar-powered homes, our products are diverse and tailored to a wide range of consumer interests. Innovation in housing design is a forte of the Company and we continue to introduce new models at competitive price points with expressive interiors and exteriors that complement home styles in the areas in which they are located.solar.

We maintain a conservative cost structure in an effort to build added value into our ~~homes. We have placed a consistent focus on developing synergies among all operations. In addition, the Company has worked~~homes and we work diligently to maintain a solid financial position. Our balance sheet strength, ~~and~~including the position in cash and cash equivalents, ~~should help~~helps avoid liquidity problems and ~~enable~~enables us to act effectively as market opportunities or challenges present themselves.

In 2008, we announced a stock repurchase program, under which a total of $10.0 million may be used to repurchase our outstanding common stock. The repurchases may be made in the open market or in privately negotiated transactions in compliance with applicable state and federal securities laws and other legal requirements. The level of repurchase activity is subject to market conditions and other investment opportunities. The plan does not obligate us to acquire any particular amount of common stock and may be suspended or discontinued at any time. The repurchase program will be funded using our available cash. No repurchases have been made under this program to date.

~~Regulatory Developments~~

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act" or the "Act") was passed into law. The Dodd-Frank Act is a sweeping piece of legislation and the financial services industry continues to implement necessary changes in procedures and business practices. The Act established the Consumer Financial Protection Bureau ("CFPB") to regulate consumer financial products and services. Although many rules have been implemented, the full impact will not be known for years as rule revisions and the enforcement of rules continue to evolve, as the courts consider limits of CFPB's authority. Enforcement actions are in the early stages and the effects of possible litigation related to the regulations remains unknown.

In 2014, certain CFPB mortgage finance rules required under the Dodd-Frank Act became effective. The rules apply to consumer credit transactions secured by a dwelling, which include real property mortgages and chattel loans (financed without land) secured by manufactured homes. The rules defined standards for origination of "Qualified Mortgages," established specific requirements for lenders to prove borrowers' ability to repay loans, and outlined the conditions under which Qualified Mortgages are subject to safe harbor limitations on liability to borrowers. The rules also established interest rates and other cost parameters for determining which Qualified Mortgages fall under safe harbor protection. Among other issues, Qualified Mortgages with interest rates and other costs outside the limits are deemed "rebuttable" by borrowers and expose the lender and its assignees (including investors in loans, pools of loans and instruments secured by loans or loan pools) to possible litigation and penalties.

While many manufactured homes are currently financed with agency-conforming mortgages in which the ability to repay is verified, and interest rates and other costs are within the safe harbor limits established under the CFPB mortgage finance rules, certain loans to finance the purchase of manufactured homes, especially chattel loans and non-conforming land-home loans, may fall outside the safe harbor limits. The rules have caused some lenders to curtail underwriting such loans, and some investors are reluctant to own or participate in owning such loans because of the uncertainty of potential litigation and other costs. As a result, some prospective buyers of manufactured homes may be unable to secure the financing necessary to complete purchases. In addition, compliance with the law and ongoing rule implementation has caused lenders to incur additional costs to implement new processes, procedures, controls and infrastructure required to comply with the regulations. Compliance may constrain lenders' ability to profitably price certain loans. Failure to comply with these regulations, changes in these or other regulations, or the imposition of additional regulations, could affect our earnings, limit our access to capital and have a material adverse effect on our business and results of operations.

The CFPB rules amending the Truth in Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA") expanded the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 ("HOEPA"), revised and expanded the tests for coverage under HOEPA, and imposed additional restrictions on mortgages that are covered by HOEPA. As a result, certain manufactured home loans are subject to HOEPA limits on interest rates and fees. Loans with rates or fees in excess of the limits are deemed High Cost Mortgages and provide additional protections for borrowers, including with respect to determining the value of the home. Most loans for the purchase of manufactured homes have been written at rates and fees that would not appear to be considered High Cost Mortgages under the new rule. Although some lenders may continue to offer loans that are now deemed High Cost Mortgages, the rate and fee limits appear to have deterred some lenders from offering loans to certain borrowers and mayWe continue to make ~~them reluctant~~certain commercial loan programs available to ~~enter into loans subject~~members of our wholesale distribution chain. Under direct commercial loan arrangements, we provide funds for financed home purchases by distributors, community operators and residential developers (see Note 7, Commercial Loans Receivable to the ~~provisions of HOEPA. As a result, some prospective buyers~~unaudited Consolidated Financial Statements). Our involvement in commercial lending helps to increase the availability of manufactured ~~homes may be unable~~home financing to ~~secure~~distributors, community operators and residential developers and provides additional opportunities for product exposure to potential home buyers. While these initiatives support our ongoing efforts to expand product distribution, they also expose us to risks associated with the creditworthiness of this customer base and our inventory financing ~~necessary to complete manufactured home purchases.~~partners.

The Dodd-Frank Act amended provisions of TILA to require rules for appraisals on principal residences securing higher-priced mortgage loans ("HPML"). Certain loans secured by manufactured homes, primarily chattel loans, could be considered HPMLs. Among other things, the rule requires creditors to provide copies of appraisal reports to borrowers prior to loan closing. To implement these amendments, the CFPB adopted the HPML Appraisal Rule effective December 30, 2014 and loans secured by new manufactured homes were exempt from the rule until July 18, 2015. While effects of these requirements are not fully known, some prospective home buyers may be deterred from completing a manufactured home purchase as a result of appraised values.

The Dodd-Frank Act also required integrating disclosures provided by lenders to borrowers under TILA and RESPA. The final rule became effective October 3, 2015. The TILA-RESPA Integrated Disclosure ("TRID") mandated extensive changes to the mortgage loan closing process and necessitated significant changes to mortgage origination systems. Since its implementation, technical ambiguities in the rule have resulted in lender and investor uncertainty regarding acceptable cures and tolerances for disclosure and estimate errors. It is not yet fully known how the GSEs and HUD will view TRID compliance, how they will apply their own interpretations of TRID to their repurchase and claims review processes, or how the market for private-label securitizations may be impacted.

Regulation C of the Home Mortgage Disclosure Act ("HMDA") enacted in 1975 requires certain financial institutions, including non-depository institutions, to collect, record, report and disclose information about their mortgage lending activity. The data-related requirements in the HMDA and Regulation C are used to identify potential discriminatory lending patterns and enforce anti-discrimination statutes. The Dodd-Frank Act transferred rulemaking authority for HMDA to the CFPB, effective in 2011. It also amended the HMDA to require financial institutions to report additional data points and to collect, record and report additional information. The CFPB issued a final rule amending Regulation C, which became effective on January 1, 2018. Regulation C generally applies to consumer-purpose, closed-end loans and open-end lines of credit that are secured by a dwelling. Non-depository financial institutions are subject to Regulation C if they originate at least 25 covered closed-end mortgage loans or at least 100 covered open-end lines of credit in each of the two preceding calendar years. Violations of Regulation C, including incomplete, inaccurate, or omitted data are subject to administrative sanctions, including civil money penalties and compliance can be enforced by the Federal Reserve Board, Federal Deposit Insurance Corporation, the Office of the Comptroller of Currency, the National Credit Union Administration, HUD, or the CFPB.

New Federal Housing Administration ("FHA") Title I program guidelines became effective on June 1, 2010 and provide Ginnie Mae the ability to securitize manufactured home FHA Title I loans. These guidelines were intended to allow lenders to obtain new capital, which can then be used to fund new loans for our customers. Chattel loans have languished for several years and these changes were meant to broaden chattel financing availability for prospective homeowners. However, we are aware of only a small number of loans currently being securitized under the Ginnie Mae program.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ("SAFE Act") established requirements for the licensing and registration of all individuals that are Mortgage Loan Originators ("MLOs"). MLOs must be registered or licensed by the states. Traditionally, manufactured housing retailers have assisted home buyers with securing financing for the purchase of homes. This assistance may have included assisting with loan applications and presenting terms of loans. Under the SAFE Act, these activities are prohibited unless performed by a registered or licensed MLO. Although the definitionlack of an MLO contains exemptions for administrative and other specific functions and industries, manufactured housing retailers are no longer able to negotiate rates and terms for loans unless they are licensed as MLOs. Compliance may require manufactured housing retailers to become licensed lenders and employ MLOs, or alter business practices related to assisting home buyers in securing financing. This may result in increased costs for retailers who elect to employ MLOs, penalties assessed against or litigation costs incurred by retailers found to be in violation, reduced home sales from home buyers' inability to secure financing without retailer assistance, or increased costs to home buyers or reduced transaction profitability for retailers as a result of the additional cost of mandatory MLO involvement.

The U.S. House of Representatives passed the Preserving Access to Manufactured Housing Act of 2017 (House of Representatives Bill 1699) on December 1, 2017 to amend some SAFE Act and TILA provisions that affect manufactured housing financing. Additionally, on June 8, 2017, the U.S. House of Representatives passed the Financial CHOICE Act (House of Representatives Bill 10), which included the legislative language of House of Representatives Bill 1699. On August 3, 2017, the U.S. Senate introduced Senate Bill 1751, companion legislation to House of Representatives Bill 1699. If signed into law, these bills would revise the triggers by which small-sized manufactured home loans are considered "High-Cost" under HOEPA and change the definition of an MLO to exclude retailers of manufactured or modular homes or their employees under certain circumstances.

~~The Housing and Economic Recovery Act of 2008 requires the GSEs to facilitate a~~efficient secondary market for ~~mortgages~~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. We work independently and with other industry participants to develop secondary market opportunities for manufactured home-only loan and non-conforming mortgage portfolios and expand lending availability in the industry. We also develop and invest in home-only lending programs to grow sales of homes through traditional distribution points. We believe that growing our investment and participation in home-only lending may provide additional sales growth opportunities for our factory-built housing operations and reduce our customers' dependence on independent lenders for this source of financing.

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Key housing ~~for very low, low~~building materials include wood, wood products, steel, gypsum wallboard, windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances and ~~moderate-income families~~electrical items. Fluctuations in ~~under-served markets, including manufactured housing. On January 30, 2017,~~ the ~~Federal Housing Finance Agency issued a final rule specifying the scope~~cost of GSE activities that are eligible to receive credit for compliance with the "Duty to Serve" rule after January 2018. On December 18, 2017, both GSEs published their final Underserved Markets Plans for activities for the years beginning January 1, 2018,materials and continuing through 2020. Both GSE plans include small-scale pilot programs for chattel loans secured by manufactured housing beginning in 2019, as well as initiatives to facilitate increased purchases of real property mortgages with manufactured homes under their existing single-family programs beginning in 2018.

Our sale of insurance products is subject to various state insurance laws and regulations which govern allowable charges and other insurance practices. Standard Casualty's insurance operations are regulated by the state insurance boards where it underwrites its policies. Underwriting, premiums, investments and capital reserves (including dividend payments to stockholders) are subjectlabor may affect gross margins from home sales to the ~~rules~~extent that costs cannot be efficiently matched to the home sales price. Pricing and ~~regulations~~availability of certain raw materials have been volatile due to a number of factors in the current environment. We continue to monitor and react to inflation in the cost of these ~~state agencies.~~

~~In 2010,~~materials by maintaining a focus on our product pricing in response to higher materials costs, but such product pricing increases may lag behind the ~~Patient Protection~~escalation of such costs. From time to time and ~~Affordable Care Act,~~to varying degrees, we may experience shortages in the availability of materials and/or labor in the markets served. Availability of these inputs has not caused significant production halts in the current period, but we have experienced periodic shutdowns in other periods and shortages of primary building materials have caused production inefficiencies as amended by the Health Care and Education Reconciliation Act ("Health Reform Law"), was passed into law. As enacted, the Health Reform Law reforms, among other things, certain aspects of health insurance. The Health Reform Law could continuewe have needed to ~~increase our healthcare costs, adversely impacting the Company's earnings.~~

~~On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes~~change processes in response to the U.S. tax code that affect the Company include, but are not limited to, (1) reducing the U.S. federal corporate tax rate, (2) allowing bonus depreciation for full expensing of qualified property and (3) eliminating the manufacturing deduction. The Tax Act reduces the federal corporate tax rate to 21 percentdelay in materials. These shortages may also result in extended order backlogs, delays in the ~~fiscal year ending March~~delivery of homes and reduced gross margins from home sales.

Our backlog at December 30, ~~2019. As~~2023 was $160 million compared to $170 million at September 30, 2023, a ~~result~~ decrease of ~~these changes, our fiscal year ending March~~$10 million and down $267 million compared to $427 million at December 31, ~~2018, will have a blended statutory corporate tax rate of 31.5 percent, which~~2022.

While it is ~~based on the applicable tax rates before and after the Tax Act and the number of days in the fiscal year. It is uncertain how future legislation would impact our operations.~~

On January 25, 2018, the U.S. Department of Housing and Urban Development ("HUD") announced a top-to-bottom review of its manufactured housing rules as part of a broader effort to identify regulations that may be ineffective, overly burdensome, or excessively costly given the critical need for affordable housing. If certain changes are made, the Company may be able to more effectively service our customers.

Governmental authorities have the power to enforce compliance with applicable regulations, and violations may result in the payment of fines, the entry of injunctions or both. Although we believe that our operations are in substantial compliance with the requirements of all applicable laws and regulations, these requirements have generally become more strict in recent years. Accordingly, we are unabledifficult to predict the ~~ultimate cost~~future of ~~compliance~~housing demand, employee availability, supply chain and Company performance and operations, maintaining an appropriately sized and well-trained workforce is key to meeting demand. We continually review the wage rates of our production employees and have established other monetary incentive and benefit programs, with ~~all applicable laws~~a goal of providing competitive compensation. We are also working to more extensively use web-based recruiting tools, update our recruitment brochures and ~~enforcement policies.~~improve the appearance and appeal of our manufacturing facilities to improve the recruitment and retention of qualified production employees and reduce annualized turnover rates.

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Results of Operations

~~Three and nine months ended December 30, 2017compared to~~ ~~December 31, 2016~~Net Revenue


	Three Months Ended
($ in thousands, except revenue per home sold)	December 30, 2023		December 31, 2022		Change
Factory-built housing	$	426,939	$	481,193	$	(54,254)	(11.3)	%
Financial services	19,830		19,410		420		2.2	%
	$	446,769	$	500,603	$	(53,834)	(10.8)	%
Factory-built homes sold
by Company-owned retail sales centers	1,026		748		278		37.2	%
to independent retailers, builders, communities and developers	3,134		3,694		(560)		(15.2)	%
	4,160		4,442		(282)		(6.3)	%
Net factory-built housing revenue per home sold	$	102,630	$	108,328	$	(5,698)	(5.3)	%

	Nine Months Ended
($ in thousands, except revenue per home sold)	December 30, 2023		December 31, 2022		Change
Factory-built housing	$	1,318,114	$	1,613,392	$	(295,278)	(18.3)	%
Financial services	56,560		52,941		3,619		6.8	%
	$	1,374,674	$	1,666,333	$	(291,659)	(17.5)	%
Factory-built homes sold
by Company-owned retail sales centers	2,999		2,481		518		20.9	%
to independent retailers, builders, communities and developers	9,991		12,418		(2,427)		(19.5)	%
	12,990		14,899		(1,909)		(12.8)	%
Net factory-built housing revenue per home sold	$	101,471	$	108,289	$	(6,818)	(6.3)	%

Factory-built housing Net ~~Revenue.The following tables summarize net~~ revenue decreased for the three and nine months ended December 30, ~~2017 and December 31, 2016.~~

Three Months Ended
December 30,
2017 December 31,
2016 Change % Change
(Dollars in thousands)
Net revenue:
Factory-built housing $ 207,183
$ 188,546
$ 18,637
9.9 %
Financial services 14,200
13,764
436
3.2 %
$ 221,383
$ 202,310
$ 19,073
9.4 %

Total homes sold 3,701
3,486
215
6.2 %

Net factory-built housing revenue per home sold $ 55,980
$ 54,087
$ 1,893
3.5 %

Nine Months Ended
December 30,
2017 December 31,
2016 Change % Change
(Dollars in thousands)
Net revenue:
Factory-built housing $ 587,445
$ 536,513
$ 50,932
9.5 %
Financial services 41,261
39,286
1,975
5.0 %
$ 628,706
$ 575,799
$ 52,907
9.2 %

Total homes sold 10,474
10,123
351
3.5 %

Net factory-built housing revenue per home sold $ 56,086
$ 52,999
$ 3,087
5.8 %

~~The increase in net revenue from the factory-built housing segment for the three and nine months ended December 30, 2017 compared~~2023 due to ~~the same periods last year was from improved~~lower home sales volume and ~~a larger proportion~~lower home selling prices, partially offset by the addition of ~~higher priced homes sold.~~Solitaire Homes.

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 ~~retailers,~~distributors, builders, communities and developers ~~("Wholesale")~~ and sales of homes to consumers by Company-owned retail ~~centers ("Retail").~~stores. Wholesale sales prices are primarily comprised of the home and the cost to ship the home from a homebuilding facility to the home-site. Retail home prices include these items and retail markup, as well as items that are largely subject to home buyer discretion, including, but not limited to, installation, ~~utilities,~~utility connections, site improvements, landscaping and additional services. Our homes are constructed in one or more floor sections ("modules") which are then installed on the customer's site. Changes toin the ~~proportion~~number of ~~home sales among these distribution channels between reporting periods impacts the overall net revenue~~modules per home, ~~sold. For~~ the ~~nine months ended December 30, 2017, the Company sold 8,646 homes Wholesale~~selection of different home types/models and ~~1,828 Retail versus 8,141 homes Wholesale and 1,982 homes Retail in the comparable prior year period. Fluctuations in net factory-built housing revenue per~~optional home ~~sold are the result of~~upgrades create changes in product mix, which results from home buyer tastes and preferences as they select home types/models, as well as optional home upgrades when purchasing the home. These selections vary regularly based on consumer interests, local housing preferences and economic circumstances. Our product prices are also ~~periodically adjusted for the cost and availability of raw materials and labor used to produce each home. For these reasons, we have experienced, and expect to continue to experience, volatility~~causing fluctuations in ~~overall net factory-built housing revenue per home sold.~~this metric.

Financial services segment revenue increased, resulting from more insurance policies in force in the current year compared to the prior year as well as an increase of 18.0% in home loan sales year over year. Financial services segment revenue is partially offset by lower interest income earned on securitized loan portfolios that continue to amortize. In addition, for the nine months ended December 30, 2017, increases in revenues were partially offset by $1.4 million in additional premiums paid to reinstate reinsurance coverage that was utilized to mitigate losses incident to Texas hurricane activity that occurred during the second three months of the period.

~~Gross Profit.~~ ~~The following tables summarize gross profit for~~For the three and nine months ended December 30, ~~2017 and December 31, 2016.~~2023, Financial services Net revenue increased primarily due to more insurance policies in force, partially offset by reduced revenue from loan sales.

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Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Gross profit:
Factory-built housing $ 39,599
$ 33,680
$ 5,919
17.6 %
Financial services 10,257
9,864
393
4.0 %
$ 49,856
$ 43,544
$ 6,312
14.5 %

Gross profit as % of Net revenue: 22.5 % 21.5 % N/A
1.0 %
Gross Profit


	Three Months Ended
($ in thousands)	December 30, 2023			December 31, 2022			Change
Factory-built housing	$	95,756		$	122,923		$	(27,167)	(22.1)	%
Financial services	7,295			9,045			(1,750)		(19.3)	%
	$	103,051		$	131,968		$	(28,917)	(21.9)	%

Gross profit as % of Net revenue
Consolidated	23.1		%	26.4		%	N/A		(3.3)	%
Factory-built housing	22.4		%	25.5		%	N/A		(3.1)	%
Financial services	36.8		%	46.6		%	N/A		(9.8)	%

	Nine Months Ended
($ in thousands)	December 30, 2023			December 31, 2022			Change
Factory-built housing	$	309,631		$	412,174		$	(102,543)	(24.9)	%
Financial services	18,256			22,117			(3,861)		(17.5)	%
	$	327,887		$	434,291		$	(106,404)	(24.5)	%

Gross profit as % of Net revenue
Consolidated	23.9		%	26.1		%	N/A		(2.2)	%
Factory-built housing	23.5		%	25.5		%	N/A		(2.0)	%
Financial services	32.3		%	41.8		%	N/A		(9.5)	%

Nine Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Gross profit:
Factory-built housing $ 104,018
$ 95,792
$ 8,226
8.6 %
Financial services 22,358
20,111
2,247
11.2 %
$ 126,376
$ 115,903
$ 10,473
9.0 %

Gross profit as % of Net revenue: 20.1 % 20.1 % N/A
— %

Factory-built housing ~~gross~~Gross profit and Gross profit percentage decreased primarily due to lower average selling price, partially offset by lower input costs.

Financial services Gross profit and Gross profit percentage for the three months ~~ended December 30, 2017 was up from higher home~~decreased primarily due to fewer loan sales. ~~In addition, the Company received a benefit of $3.4 million related to a favorable dispute settlement resolution, which was offset against cost of sales.~~

~~Financial services gross profit for the three and~~The nine months ~~ended December 30, 2017 increased from~~were negatively affected by lower ~~weather-related insurance claim costs compared to the prior year period~~loan sales and higher ~~home loan sales volume. These increases were partially offset by lower interest income earned on securitized loan portfolios that continue to amortize.~~insurance claims from weather related events.

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Selling, General and Administrative ~~Expenses.~~ ~~The following tables summarize selling, general and administrative expenses for the three and nine months ended December 30, 2017 and December 31, 2016.~~Expenses

Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Selling, general and administrative expenses:
Factory-built housing $ 22,226
$ 22,079
$ 147
0.7 %
Financial services 3,819
3,924
(105 ) (2.7 )%
$ 26,045
$ 26,003
$ 42
0.2 %

Selling, general and administrative expenses as % of Net revenue: 11.8 % 12.9 % N/A
(1.1 )%


	Three Months Ended
($ in thousands)
($ in thousands)
($ in thousands)												December 30, 2023					December 31, 2022						Change
Factory-built housing											Factory-built housing	$	57,854				$	54,127					$	3,727					6.9		%
Financial services											Financial services	5,458					4,777						681						14.3		%
	$														$	63,312				$	58,904					$	4,408					7.5	%
Selling, general and administrative expenses as % of Net revenue											Selling, general and administrative expenses as % of Net revenue	14.2		%			11.8		%				N/A						2.4		%

	Nine Months Ended
	December 30, 2017			December 31, 2016			$ Change		% Change
	(Dollars in thousands)
Selling, general and administrative expenses:
($ in thousands)
($ in thousands)
($ in thousands)												December 30, 2023					December 31, 2022						Change
Factory-built housing	$	66,909		$	64,551		$	2,358	3.7	%	Factory-built housing	$	170,330			$	$	176,690			$		$	(6,360)			(3.6)			(3.6)		%
Financial services	11,594			11,568			26		0.2	%	Financial services	16,168				15,244		15,244				924			924			6.1				6.1	%
	$	78,503		$	76,119		$	2,384	3.1	%

Selling, general and administrative expenses as % of Net revenue:	12.5		%	13.2		%	N/A		(0.7	)%
	$														$	186,498				$	191,934					$	(5,436)					(2.8)	%
Selling, general and administrative expenses as % of Net revenue											Selling, general and administrative expenses as % of Net revenue	13.6		%			11.5		%				N/A						2.1		%

Selling, general and administrative expenses increased for the three months primarily as a result of higher legal expenses, including SEC inquiry related expenses for the indemnification of a former officer, and the added cost of the Solitaire operations, partially offset by lower incentive compensation on reduced sales. For the nine months, Selling, general and administrative expenses decreased primarily as a result of lower incentive compensation on reduced sales, partially offset by the addition of Solitaire.

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Other Components of Net Income


	Three Months Ended
($ in thousands)	December 30, 2023			December 31, 2022			Change
Interest income	$	5,234		$	3,581		$	1,653	46.2	%
Interest expense	(842)			(216)			626		289.8	%
Other (expense) income, net	(224)			(348)			N/M		N/M
Income tax expense	(7,920)			(16,492)			(8,572)		(52.0)	%
Effective tax rate	18.0		%	21.7		%	N/A		(3.70)	%

	Nine Months Ended
($ in thousands)	December 30, 2023			December 31, 2022			Change
Interest income	$	15,664		$	6,746		$	8,918	132.2	%
Interest expense	(1,365)			(610)			755		123.8	%
Other (expense) income, net	557			(291)			N/M		N/M
Income tax expense	(32,274)			(54,721)			(22,447)		(41.0)	%
Effective tax rate	20.7		%	22.0		%	N/A		(1.30)	%

Interest income consists primarily of interest earned on cash balances held in money market accounts, and interest earned on commercial floorplan lending. Interest expense consists primarily of interest related to ~~factory-built housing~~finance leases. Interest income increased for the three and nine months ended December 30, ~~2017~~2023 primarily due to higher interest rates.

Other income, net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from ~~higher salary~~the sale of property, plant and ~~incentive compensation~~equipment.

Income tax expense ~~from improved home sales and the acquisition of Lexington Homes.~~

~~Interest Expense.~~ ~~The following tables summarize interest expense~~decreased for the three and nine months ended December 30, ~~2017 and December 31, 2016.~~

Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Interest expense $ 1,236
$ 1,091
$ 145
13.3 %

Nine Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Interest expense $ 3,305
$ 3,384
$ (79 ) (2.3 )%

The increase for the three months ended December 30, 2017 compared to the same period in the prior year is attributable to interest expense from secured credit facilities. These increases were partially offset by lower bond interest expense on securitized portfolios that continue to amortize. The decrease for the nine months ended December 30, 2017 compared to the same period in the prior year is attributable2023 due to lower ~~bond interest expense on these same securitized portfolios, which was partially offset by increased interest from secured credit facilities.~~

~~Other Income, net. The following tables summarize other income, net for the three and nine months ended December 30, 2017 and December 31, 2016.~~

Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Other income, net $ 1,094
$ 829
$ 265
32.0 %

Nine Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Other income, net $ 3,251
$ 2,407
$ 844
35.1 %

The increase in other income, net, is attributable to higher interest income earned on increased balances related to commercial loans receivable in the factory-built housing segment, as well as gains from corporate investments.

~~Income Before Income Taxes.~~ ~~The following tables summarize~~ income before ~~income taxes for the three and nine months ended December 30, 2017 and December 31, 2016.~~

Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Income before income taxes:
Factory-built housing $ 18,393
$ 12,370
$ 6,023
48.7 %
Financial services 5,276
4,909
367
7.5 %
$ 23,669
$ 17,279
$ 6,390
37.0 %

Nine Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Income before income taxes:
Factory-built housing $ 40,147
$ 33,437
$ 6,710
20.1 %
Financial services 7,672
5,370
2,302
42.9 %
$ 47,819
$ 38,807
$ 9,012
23.2 %

~~Income taxes. The following tables summarize Income taxes for the three and nine months ended December 30, 2017 and December 31, 2016.~~

Three Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Income taxes $ 2,242
$ 4,996
$ (2,754 ) (55.1 )%

Nine Months Ended
December 30,
2017 December 31,
2016 $ Change % Change
(Dollars in thousands)
Income taxes $ 8,457
$ 11,740
$ (3,283 ) (28.0 )%

The effective income tax rate for the third fiscal quarter was 9.5% compared to an effective tax rate of 28.9% for the same period last year. In connection with lower federal income tax liability related to the Tax Act and revaluation of the net deferred income tax balance, the Company has recorded a net tax benefit of $5.6 million~~in the third quarter ended December 30, 2017.~~

For the nine months ended December 30, 2017 and December 31, 2016, the effective income tax rate was 17.7% and 30.3%, respectively. In addition to the impact of the Tax Act discussed above, income tax expense for the nine months ended December 30, 2017 includes a benefit of $1.7 million related to excess tax benefits on exercises of stock options in accordance with ASU 2016-09 which was adopted in the current fiscal year.taxes.

Liquidity and Capital Resources

We believe that cash and cash equivalents at December 30, ~~2017,~~2023, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in ~~various deposit accounts, the balances~~U.S. Treasury and other money market funds, some of which ~~are~~is in excess of federally insured ~~limits.~~limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to ~~our Company.~~the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on ~~the Company's~~our liquidity and capital resources. We believe we have sufficient liquid resources ~~in the event~~including our $50.0 million Revolving Credit Facility, of such a transaction. Because of the Company’s sufficient cash position, the Company has not sought external sources of liquidity, with the exception of certain credit facilities for our home-only lending programs. However,which no amounts were outstanding at December 30, 2023. Regardless, depending on our operating results and strategic opportunities, we may ~~need~~choose to seek additional or alternative sources of ~~financing.~~financing in the future. 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 us to reevaluate our long-term operating plans to make more efficient use of our existing capital ~~resources.~~resources at such time. The exact nature of any changes to our plans that would be considered depends on various factors, such as conditions in the factory-built housing industry and general economic conditions outside of our 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 our insurance subsidiary are generally not available to satisfy the claims of Cavco or its other subsidiaries. We believe that stockholders' equity at the insurance subsidiary remains sufficient and do not believe that the ability to pay ordinary dividends to Cavco at anticipated levels will be restricted per state regulations.

~~Projected~~

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The following is a summary of the Company's cash ~~provided by operations in the coming year is largely dependent on sales volume and other activities. Operating activities provided $15.4 million of cash during~~flows for the nine months ended December 30, ~~2017, compared to $28.8 million during the same period last year. Cash~~2023 and December 31, 2022, respectively:


	Nine Months Ended
(in thousands)	December 30, 2023		December 31, 2022		$ Change
Cash, cash equivalents and restricted cash at beginning of the fiscal year	$	283,490	$	259,334	$	24,156
Net cash provided by operating activities	206,104		230,119		(24,015)
Net cash used in investing activities	(26,543)		(29,199)		2,656
Net cash used in financing activities	(96,443)		(73,860)		(22,583)
Cash, cash equivalents and restricted cash at end of the period	$	366,608	$	386,394	$	(19,786)

Net cash provided by operating activities ~~during the current period was~~decreased primarily ~~the result of cash generated~~from lower Net income, partially offset by ~~operating income before non-cash charges~~changes in working capital, and higher principal payments received on consumer loans receivable in the ordinary course of business. These are partially offset by: 1) loan origination activity in excess of proceeds from the sale of loans and expansion of home-only lending programs; 2) increased accounts receivable resulting from higher home sales; and 3) larger raw material levels to feed increased home sales volume and increased finished home inventory levels from timing of home sales completion. Cash provided by operating activities during the prior period was primarily the result of cash generated by operating income before non-cash charges, principal payments received on consumer loans receivable in the ordinary course of business, and lower home inventory levels from timing of home sales completions. These increases were partially offset by consumercommercial loans.

Consumer loan originations ~~in excess of proceeds from the sale of these loans as a result of improved loan origination activity and increases~~decreased $61.3 million to ~~accounts receivable resulting from higher home sales.~~

~~Consumer loans receivable originated increased to $96.8 million from $86.8~~$74.3 million for the nine months ended December 30, ~~2017 and~~2023 from $135.6 million for the nine months ended December 31, ~~2016, respectively. Proceeds~~2022, and proceeds from sales of consumer loans decreased $64.3 million to $81.8 million for the nine months ended December 30, 2023 from $146.1 million for the nine months ended December 31, 2022.

Commercial loan originations increased $12.3 million to $83.5 million for the nine months ended December 30, 2023 from $71.2 million for the nine months ended December 31, 2022. Proceeds from the collection on commercial loans provided ~~$91.2~~$87.6 million ~~in cash,~~this year, compared to ~~$77.3~~$61.6 million in the ~~previous~~prior year, a net increase of ~~$13.9 million, which relates to higher loan originations~~$26.0 million.

Net cash for investing activities consists of buying and selling debt and marketable equity securities in our Financial Services segment; purchases of property, plant and equipment; and funding strategic growth acquisitions in our Factory-built Housing segment. Cash used in the ~~timing of loan sales.~~

~~With respect to consumer lending for~~prior year period reflects the purchase of ~~manufactured housing, states may classify manufactured homes~~our plant facilities in Hamlet, North Carolina and cash used in the current year was primarily used for ~~both legal and tax purposes as personal property rather than real estate. As a result,~~acquisitions.

Net cash used in financing activities was primarily for the ~~purchase~~repurchase of ~~manufactured homes is characterized by shorter loan maturities~~common stock.

Obligations and ~~higher interest rates. Unfavorable~~Commitments. There were no material changes ~~in these factors~~to the obligations and ~~the current lack of availability of financing~~commitments as set forth in the ~~industry may~~Form 10-K.

Critical Accounting Estimates

There have ~~material negative effects on liquidity. See Item IA, "Risk Factors."~~

~~Cavco has entered into programs~~been no significant changes to provide some of the capital used by inventory lenders to finance wholesale home purchases by retailers. The Company has also entered into direct commercial loan arrangements with distributors, communities and developers under which the Company provides funds for financing homes and has invested in community-based lending initiatives that provide home-only financing to new residents of certain manufactured home communities (see Note 6 to the Consolidated Financial Statements). In addition, the Company has invested in and developed home-only loan pools and lending programs to attract third-party financier interest and to grow sales of new homes through traditional distribution points as well.

~~Investing activities used $6.6 million of cash~~our critical accounting estimates during the nine months ended December 30, ~~2017,~~2023, as compared to $3.7 million during the same period last year. In the current year, cash was used for the purchase of Lexington Homes and other property, plant and equipment as well as investments, partially offset by investment sales. In the prior period, cash was used for the purchases of property, plant and equipment as well as investments by our insurance subsidiary for its investment portfolio, offset by investment sales.

~~Financing activities used $2.4 million~~those disclosed in cash during the nine months ended December 30, 2017 primarily from payments on securitized financings and payments on stock option exercises, offset by loans accounted for as other secured financings. Financing activities used $3.2 million in cash during the nine months ended December 31, 2016, largely from payments on securitized financings, offset by loan sales accounted for as other secured financings and net cash from stock option exercises.

CountryPlace's securitized debt is subject to provisions that require certain levels of overcollateralization. Overcollateralization is equal to CountryPlace's equity in the bonds. Failure to satisfy these provisions could cause cash, which would normally be distributed to CountryPlace, to be used for repayment of the principal of the related Class A bonds until the required overcollateralization level is reached. During periods when the overcollateralization is below the specified level, cash collections from the securitized loans in excess of servicing fees payable to CountryPlace and amounts owed to the Class A bondholders, trustee and surety, are applied to reduce the Class A debt until such time the overcollateralization level reaches the specified level. Therefore, failure to meet the overcollateralization requirement could adversely affect the timing of cash flows received by CountryPlace. However, principal payments of the securitized debt, including accelerated amounts, is payable only from cash collections from the securitized loans and no additional sources of repayment are required or permitted. As of December 30, 2017, the 2005-1 and 2007-1 securitized portfolios were within the required overcollateralization level.

~~Critical Accounting Policies~~

In Part II, Item 7 of ~~our~~the Form 10-K, under the heading "Critical Accounting ~~Policies,~~Estimates," ~~we have provided~~which provides a discussion of the critical accounting ~~policies~~estimates that management believes are critical to the Company's operating results or may affect ~~its more~~ significant judgments and estimates used in the preparation of ~~our~~the Company's Consolidated Financial Statements.

~~Recent Accounting Pronouncements~~

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes~~ ("ASU 2015-17"). ASU 2015-17 became effective in the current fiscal year. Therefore, we now present all deferred tax liabilities and assets as noncurrent on the balance sheet instead of separating these items into current and noncurrent amounts. The prior period was not retrospectively adjusted. In addition, in March 2016, the FASB issued ASU 2016-09, ~~Compensation- Stock Compensation (Topic 718)~~ ("ASU 2016-09"), which also became effective in fiscal year 2018. As a result of this required implementation, excess tax benefits are recorded on exercises of stock options as a reduction of income tax expense in the consolidated statement of comprehensive income, whereas they were previously recognized in equity.

~~In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~ ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements intended to provide users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a company's contracts with customers. In August 2015, the FASB issued ASU 2015-14, ~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date~~, which deferred the effective date of the new revenue standard. Accordingly, the updated standard is effective for us beginning with the first quarter of the Company's fiscal year 2019. Our implementation approach has included performing a detailed study of the various types of agreements that we have with our customers and assessing conformity of our current accounting practices with the new standard. We are making progress in determining the impact of this guidance; however, we are still evaluating the full effects ASU 2014-09 will have on the Company's Consolidated Financial Statements and disclosures. We expect to adopt this guidance using the modified retrospective transition method.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments to base measurement on expected losses through a forward-looking model based on incurred losses. The guidance also requires increased disclosures. ASU 2016-01 will be effective beginning with the first quarter of the Company's fiscal year 2021. The Company is currently evaluating the effect ASU 2016-13 will have on the Company's Consolidated Financial Statements and disclosures.

~~Forward-looking Statements~~

Statements in this Report on Form 10-Q, including those set forth in this section, may be considered "forward looking statements" within the meaning of Section 21E of the Securities Act of 1934. These forward-looking statements are often identified by words such as "estimate," "predict," "hope," "may," "believe," "anticipate," "plan," "expect," "require," "intend," "assume," and similar words. 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. We do 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, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. In addition to the Risk Factors described in Part I, Item 1A. Risk Factors in our Form 10-K, factors that could affect our results and cause them to materially differ from those contained in the forward-looking statements include, but are not limited to:

~~We operate in an industry that is currently experiencing a prolonged and significant downturn;~~

We may not be able to successfully integrate past acquisitions, including the recent acquisition of Lexington Homes, or any future acquisitions to attain the anticipated benefits. Past acquisitions may adversely impact the Company's liquidity;

~~Our involvement in vertically integrated lines of business, including manufactured housing consumer finance, commercial finance and insurance, exposes the Company to certain risks;~~

~~Tightened credit standards, curtailed lending activity by home-only lenders and increased government lending regulations have contributed to a constrained consumer financing market;~~

~~The availability of wholesale financing for industry retailers is limited due to a reduced number of floor plan lenders and reduced lending limits;~~

Our participation in certain financing programs for the purchase of our products by industry distributors and consumers may expose us to additional risk of credit loss, which could adversely impact the Company's liquidity and results of operations;

~~Our results of operations could be adversely affected by significant warranty and construction defect claims on factory-built housing;~~

~~We have contingent repurchase obligations related to wholesale financing provided to industry retailers;~~

~~Our operating results could be affected by market forces and declining housing demand;~~

~~We have incurred net losses in certain prior periods and there can be no assurance that we will generate income in the future;~~

~~A write-off of all or part of our goodwill could adversely affect our operating results and net worth;~~

~~The cyclical and seasonal nature of the manufactured housing industry causes our revenues and operating results to fluctuate, and we expect this cyclicality and seasonality to continue in the future;~~

~~Our liquidity and ability to raise capital may be limited;~~

~~The manufactured housing industry is highly competitive, and increased competition may result in lower revenue;~~

~~If we are unable to establish or maintain relationships with independent distributors who sell our homes, our revenue could decline;~~

~~Our business and operations are concentrated in certain geographic regions, which could be impacted by market declines;~~

~~Our results of operations can be adversely affected by labor shortages and the pricing and availability of raw materials;~~

~~If the manufactured housing industry is not able to secure favorable local zoning ordinances, our revenue could decline and our business could be adversely affected;~~

~~The loss of any of our executive officers could reduce our ability to execute our business strategy and could have a material adverse effect on our business and results of operations;~~

~~Certain provisions of our organizational documents could delay or make more difficult a change in control of our Company;~~

~~Volatility of stock price;~~

~~Deterioration in economic conditions and turmoil in financial markets could reduce our earnings and financial condition;~~

~~The cost of operations could be adversely impacted by increased costs of healthcare benefits provided to employees;~~

A prolonged delay by Congress and the President to approve budgets or continuing appropriation resolutions to facilitate the operations of the federal government could delay the completion of home sales and/or cause cancellations, and thereby negatively impact our deliveries and revenues;

~~Information technology failures or data security breaches could harm our business; and~~

~~We are subject to extensive regulation affecting the production and sale of manufactured housing, which could adversely affect our profitability.~~

We may make additional written or oral forward-looking statements from time to time in filings with the SEC or in public news releases or statements. Such additional statements may include, but are not limited to, projections of revenues, income or loss, capital expenditures, acquisitions, plans for future operations, financing needs or plans, the impact of inflation and plans relating to our products or services, as well as assumptions relating to the foregoing.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Market risk is~~There have been no material changes from the ~~risk of loss arising from adverse changes in market prices~~quantitative and interest rates. We may from time to time be exposed to interest rate risk inherent in our financial instruments, but are not currently subject to foreign currency or commodity price risk. We manage our exposure to these market risks through our regular operating and financing activities.

Our operations are interest rate sensitive. As overall manufactured housing demand can be adversely affected by increases in interest rates, a significant increase in wholesale or mortgage interest rates may negatively affect the ability of retailers and home buyers to secure financing. Higher interest rates could unfavorably impact our revenues, gross margins and net earnings. Our business is also sensitive to the effects of inflation, particularly with respect to raw material and transportation costs. We may not be able to offset inflation through increased selling prices.

~~CountryPlace is exposed to~~qualitative disclosures about market risk related to the accessibility and terms of long-term financing of its loans. In the past, CountryPlace accessed the asset-backed securities market to provide term financing of its chattel and non-conforming mortgage originations. At present, independent asset-backed and mortgage-backed securitization markets are not readily accessible to CountryPlace and other manufactured housing lenders. Accordingly, CountryPlace has not continued to securitize its loan originations as a means to obtain long-term funding.

We are also exposed to market risks related to our fixed rate consumer and commercial loan notes receivables, as well as our securitized financings balances. For fixed rate instruments, changes in interest rates do not change future earnings and cash flows. However, changes in interest rates could affect the fair value of these instruments. Assuming the level of these instruments as of December 30, 2017, is held constant, a 1% unfavorable change in average interest rates would adversely impact the fair value of these instruments, as follows (in thousands):

Change in Fair Value
Consumer loans receivable $ 3,707
Commercial loans receivable $ 172
Securitized financings $ 1,213

In originating loans for sale, CountryPlace issues IRLCs to prospective borrowers and third-party originators. These IRLCs represent an agreement to extend credit to a loan applicant, or an agreement to purchase a loan from a third-party originator, whereby the interest rate on the loan is set prior to loan closing or sale. These IRLCs bind CountryPlace to fund the approved loan at the specified rate regardless of whether interest rates or market prices for similar loans have changed between the commitment date and the closing date. As such, outstanding IRLCs are subject to interest rate risk and related loan sale price risk during the period from the date of the IRLC through the earlier of the loan sale date or IRLC expiration date. The loan commitments generally range between 30 and 180 days; however, borrowers are not obligated to close the related loans. As a result, CountryPlace is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. As of ~~December 30, 2017, CountryPlace had outstanding IRLCs with a notional amount of~~ ~~$10.5 million~~ ~~and are recorded at fair value in accordance with ASC 815. The estimated fair values of IRLCs are based on quoted market values and are recorded in other assets~~previously disclosed in the ~~consolidated balance sheets. The fair value~~Form 10-K.

Table of IRLCs is based on the value of the underlying mortgage loan adjusted for: (i) estimated cost to complete and originate the loan and (ii) the estimated percentage for IRLCs that will result in closed mortgage loans. The initial and subsequent changes in the value of IRLCs are a component of current income. Assuming CountryPlace's level of IRLCs as of December 30, 2017 is held constant, a 1% increase in average interest rates would decrease the fair value of CountryPlace's obligations by approximately $120,000.Contents

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

WeThe Company carried out an evaluation, under the supervision and with the participation of ~~our~~the Company's management, including ~~our~~its President and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of ~~the design and operation of our~~its disclosure controls and procedures (as defined in ~~the~~ Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, ~~our~~the Company's President and Chief Executive Officer and its Chief Financial Officer concluded that, as of ~~the end of the period covered in this report, our~~December 30, 2023, its disclosure controls and procedures were effective.

(b) Changes in Internal Control ~~over~~Over Financial Reporting

There ~~have~~has been no ~~changes~~change in ~~our~~the Company's internal ~~controls~~control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended December 30, ~~2017, which have~~2023 that has materially affected, or ~~are~~is reasonably likely to materially affect, ~~our~~the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~Information regarding reportable legal proceedings is contained in Part I, Item 3,~~ ~~Legal Proceedings, in our Form 10-K. The following describes legal proceedings, if any, that became reportable during the period ended~~ ~~December 30, 2017, and, if applicable, amends and restates descriptions of previously reported legal proceedings in which there have been material developments during such quarter.~~

We are party to certain legal proceedings that arise in the ordinary course and are incidental to our business. Certain of the claims pending against us in these proceedings allege, among other things, breach of contract, breach of express and implied warranties, construction defect, deceptive trade practices, unfair insurance practices, product liability and personal injury. Although litigation is inherently uncertain, based on past experience andSee the information ~~currently available, management does not believe that~~under the ~~currently pending~~"Legal Matters" caption in Note 16, Commitments and ~~threatened litigation or claims will have a material adverse effect on~~Contingencies to the Company's consolidated financial position, liquidity or results of operations. However, future events or circumstances currently unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods.unaudited Consolidated Financial Statements, which is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, Item 1A, Risk Factors,, in ~~our~~the Form 10-K, which could materially affect our business, financial condition or future results. The risks described in this Report and in ~~our~~the Form 10-K are not the only risks facing ~~our~~the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

As announced on May 26, 2022 in a current report on Form 8-K, the Company's Board of Directors approved a $100 million stock repurchase program with the same terms and conditions as the previous plan. As announced on August 3, 2023, the Company's Board of Directors approved another $100 million stock repurchase program. The repurchase program is funded using our available cash. The repurchases may be made in the open market or in privately negotiated transactions in compliance with applicable state and federal securities laws and other legal requirements. While there is no expiration date, the level of repurchase activity is subject to market conditions and other investment opportunities. The repurchase program does not obligate us to acquire any particular amount of common stock and may be suspended or discontinued at any time. The following table sets forth repurchases of our common stock during the third quarter of fiscal year 2024:


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (in thousands)
October 1, 2023 to November 4, 2023	190,593	$	262.34	190,593	$	38,964
November 5, 2023 to December 2, 2023	—	—		—	38,964
December 3, 2023 to December 30, 2023	—	—		—	38,964
	190,593			190,593

In the press release dated February 1, 2024, the Company announced that the Company's Board of Directors approved another $100 million stock repurchase program with the same terms and conditions as the previous plan. There have been no repurchases made under this new program.

The payment of dividends to Company stockholders is subject to the discretion of the Board of Directors, and various factors may prevent us from paying dividends. Such factors include Company cash requirements, covenants of our Credit Agreement and liquidity or other requirements of state, corporate and other laws.

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Item 5. Other Information

Rule 10b5-1 Plan Adoptions and Modifications

No officers or directors adopted or terminated any 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined under Item 408 of Regulation S-K) during the three months ended December 30, 2023.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On January 30, 2024, Mickey R. Dragash, Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer, provided notice of his resignation effective February 12, 2024. Under the terms of his Employment Agreement, dated April 1, 2019, in connection with a termination for good reason (as defined in the Employment Agreement), Mr. Dragash will receive a cash payment equal to his base salary as currently in effect, the average of the cash incentive bonuses received by Mr. Dragash in each of the preceding three calendar years, and COBRA premium reimbursement for a period of twelve months following termination. In addition, 50% of Mr. Dragash’s outstanding stock options and stock awards will vest immediately and Mr. Dragash will receive a pro rata portion of his currently existing unvested performance share awards with the amount ultimately vested determined based on the Company’s actual performance at the end of the applicable performance period. Mr. Dragash’s receipt of the above benefits is subject to his execution, delivery, and non-revocation of a customary release.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On January 30, 2024, the Board approved the adoption of the Fourth Amended and Restated Bylaws of the Company (the “Amended Bylaws”). The amendments that will be effected by the Amended Bylaws include, among other things, the following:

•revising certain provisions relating to the list of stockholders entitled to vote at stockholder meetings in order to conform with recent amendments to the General Corporation Law of the State of Delaware (the “General Corporation Law”);

•clarifying, without making substantive changes, that stockholders may authorize another person to act for such stockholder by proxy and that such authorization of a person to act by proxy must comply with Section 116 of the General Corporation Law;

•clarifying, without making substantive changes, the voting standards and quorum requirement language in the bylaws;

•updating the procedural mechanics and disclosure requirements for stockholders to submit director nominations and business proposals for consideration at stockholder meetings, including, without limitation, to (i) limit the number of nominees a stockholder may nominate to the number of directors to be elected at the meeting, (ii) require a stockholder’s notice to include additional information, disclosures and representations regarding any stockholder nominee for director (including submission of a questionnaire and certain representations by such nominee), any business the stockholder proposes to be brought before the meeting and any substantial interest the stockholder has in the business, and the stockholder making such nomination or proposal of business (iii) require the stockholder to update and supplement their notice as of the record date for the meeting and a date prior to the meeting, (iv) clarify that the requirements in Section 10 of the Amended Bylaws apply to stockholder nominations for special meetings, and (v) reflect the universal proxy rules as set forth in Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by requiring the stockholders making a nomination to represent whether it will comply with the universal proxy rules and providing that the nomination will be disregarded if the stockholder does not comply with the universal proxy rules;

•adding a new Article II, Section 11 which clarifies and confirms the ability to adjourn meetings of stockholders, in accordance with recent amendments to the General Corporation Law;

•clarifying that committees of the Board may recommend to the stockholders the election or removal of directors;

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•clarifying that any Indemnitee (as defined in the Amended Bylaws) shall be obligated to reimburse the Company for all expenses advanced by the Company to the Indemnitee or a third-party engaged for the benefit of Indemnitee in the event that such Indemnitee is determined not to be entitled to indemnification under the Amended Bylaws;

•increasing the number of days the Company has to pay an Indemnitee on an indemnification claim before the Indemnitee is entitled to adjudication of his or her entitlement to indemnification from five (5) days to thirty (30) days; and

•providing that the federal district courts of the United States shall be the exclusive forum for any lawsuits arising under the Securities Act of 1933, as amended, unless a majority of the Board of Directors, acting on behalf of the Company, consents to or approves the selection of an alternative forum.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended Bylaws, a copy of which is attached to this Form 10-Q as Exhibit 3.1 and is incorporated herein by reference.

Item 6. Exhibits


Exhibit No.		Exhibit
3.1	(1)	Fourth Amended and Restated Bylaws of Cavco Industries, Inc. dated January 30, 2024
10.1*	(1)	Form of Indemnification Agreement
31.1	(1)	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Rule 13a-14(a)/15d-14(a)
31.2	(1)	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Rule 13a-14(a)/15d-14(a)
32	(2)	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)



~~Exhibit No.~~	~~Exhibit~~
~~31.1~~	~~Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Rule 13a-14(a)/15d-14(a)~~
~~31.2~~	~~Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Rule 13a-14(a)/15d-14(a)~~
32	~~Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
~~101~~	The following materials contained in this Quarterly Report on Form 10-Q for the period ended December 30, 2017 were formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements

*Management Contract or Compensatory Plan, Contract or Arrangement

(1) Filed herewith.

(2) Furnished herewith.

All other items required under Part II are omitted because they are not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Cavco Industries, Inc.
Registrant

Signature				Title		Date
~~Registrant~~

~~Signature~~	~~Title~~	~~Date~~

/s/ ~~Joseph H. Stegmayer~~William C. Boor			~~Chairman,~~Director, President and		~~February 7, 2018~~
~~Joseph H. Stegmayer~~	Chief Executive Officer	February 2, 2024
William C. Boor				(Principal Executive Officer)

/s/ ~~Daniel L. Urness~~Allison K. Aden				Executive Vice President, ~~Treasurer and~~		~~February 7, 2018~~
~~Daniel L. Urness~~	Chief Financial Officer & Treasurer	February 2, 2024
Allison K. Aden				(Principal Financial ~~and Accounting~~ Officer)

5133


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	CVCO	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)


Large Accelerated Filer			☒		Accelerated Filer	☐
Non-accelerated Filer			☐		Smaller Reporting Company	☐
~~Large accelerated filer~~			¨		~~Accelerated filer~~	ý
~~Non-accelerated filer~~	¨ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	¨
Emerging Growth Company	¨			☐


☒
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	December 30, 2017		April 1, 2017
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	138,974	$	132,542
Restricted cash, current	9,993		11,573
Accounts receivable, net	41,501		31,221
Short-term investments	14,502		11,289
Current portion of consumer loans receivable, net	32,186		31,115
Current portion of commercial loans receivable, net	6,823		7,932
Inventories	105,872		93,855
Prepaid expenses and other current assets	34,112		28,033
Deferred income taxes, current	—		9,204
Total current assets	383,963		356,764
Restricted cash	728		724
Investments	34,631		30,256
Consumer loans receivable, net	62,806		64,686
Commercial loans receivable, net	20,031		17,901
Property, plant and equipment, net	58,969		56,964
Goodwill and other intangibles, net	83,025		80,021
Total assets	$	644,153	$	607,316
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	19,835	$	24,010
Accrued liabilities	123,661		109,789
Current portion of securitized financings and other	5,761		6,417
Total current liabilities	149,257		140,216
Securitized financings and other	51,530		51,574
Deferred income taxes	7,794		21,118

Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized; No shares issued or outstanding	—		—
Common stock, $.01 par value; 40,000,000 shares authorized; Outstanding 9,035,294 and 8,994,968 shares, respectively	90		90
Additional paid-in capital	245,605		244,791
Retained earnings	187,572		148,141
Accumulated other comprehensive income	2,305		1,386
Total stockholders' equity	435,572		394,408
Total liabilities and stockholders' equity	$	644,153	$	607,316



	December 30, 2017		April 1, 2017
Cash related to CountryPlace customer payments to be remitted to third parties	$	8,399	$	9,998
Cash related to CountryPlace customer payments on securitized loans to be remitted to bondholders	958		1,391
Cash related to workers' compensation insurance held in trust	355		354
Other restricted cash	1,009		554
	$	10,721	$	12,297



	December 30, 2017		April 1, 2017
Available-for-sale investment securities	$	30,487	$	24,162
Non-marketable equity investments	18,646		17,383
	$	49,133	$	41,545



	December 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government debt securities	$	300	$	—	$	(4	)	$	296
Residential mortgage-backed securities	7,510		1		(104		)	7,407
State and political subdivision debt securities	6,924		142		(142		)	6,924
Corporate debt securities	1,658		2		(23		)	1,637
Marketable equity securities	7,627		3,947		(113		)	11,461
Certificates of deposit	2,762		—		—			2,762
	$	26,781	$	4,092	$	(386	)	$	30,487



	April 1, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury and government debt securities	$	650	$	—	$	(1	)	$	649
Residential mortgage-backed securities	5,646		3		(90		)	5,559
State and political subdivision debt securities	7,195		145		(117		)	7,223
Corporate debt securities	1,698		4		(23		)	1,679
Marketable equity securities	5,752		2,430		(130		)	8,052
Certificates of deposit	1,000		—		—			1,000
	$	21,941	$	2,582	$	(361	)	$	24,162



	December 30, 2017
	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and government debt securities	$	296	$	(4	)	$	—	$	—		$	296	$	(4	)
Residential mortgage-backed securities	3,308		(32		)	3,860		(72		)	7,168		(104		)
State and political subdivision debt securities	2,649		(22		)	2,309		(120		)	4,958		(142		)
Corporate debt securities	1,012		(8		)	372		(15		)	1,384		(23		)
Marketable equity securities	1,032		(91		)	104		(22		)	1,136		(113		)
	$	8,297	$	(157	)	$	6,645	$	(229	)	$	14,942	$	(386	)



	December 30, 2017			April 1, 2017
Loans held for investment (acquired on Palm Harbor Acquisition Date)	$	54,013		$	60,513
Loans held for investment (originated after Palm Harbor Acquisition Date)	17,956			11,108
Loans held for sale	12,361			18,570
Construction advances	12,407			6,957
Consumer loans receivable	96,737			97,148
Deferred financing fees and other, net	(1,370		)	(1,095		)
Allowance for loan losses	(375		)	(252		)
Consumer loans receivable, net	$	94,992		$	95,801



	December 30, 2017		April 1, 2017
Prepayment rate	14.0	%	13.8	%
Default rate	1.2	%	1.1	%



	December 30, 2017
	Consumer Loans Held for Investment
	Securitized 2005		Securitized 2007		Unsecuritized		Construction Advances		Consumer Loans Held For Sale		Total
Asset Class
Credit Quality Indicator (FICO® score)
Chattel loans
0-619	$	502	$	366	$	352	$	—	$	—	$	1,220
620-719	10,548		7,312		7,652		—		383		25,895
720+	11,104		6,792		9,286		—		1,743		28,925
Other	50		—		368		—		—		418
Subtotal	22,204		14,470		17,658		—		2,126		56,458
Conforming mortgages
0-619	—		—		158		41		—		199
620-719	—		—		1,891		6,396		7,192		15,479
720+	—		—		327		5,970		2,927		9,224
Other	—		—		—		—		116		116
Subtotal	—		—		2,376		12,407		10,235		25,018
Non-conforming mortgages
0-619	83		413		1,066		—		—		1,562
620-719	1,180		4,608		3,178		—		—		8,966
720+	1,475		2,562		399		—		—		4,436
Other	—		—		286		—		—		286
Subtotal	2,738		7,583		4,929		—		—		15,250
Other loans
Subtotal	—		—		11		—		—		11
	$	24,942	$	22,053	$	24,974	$	12,407	$	12,361	$	96,737



	December 30, 2017			April 1, 2017
Direct loans receivable	$	25,801		$	24,959
Participation loans receivable	1,206			1,084
Allowance for loan loss	(153		)	(210		)
	$	26,854		$	25,833



	Direct Commercial Loans						Participation Commercial Loans
	December 30, 2017			April 1, 2017			December 30, 2017		April 1, 2017
Inventory finance notes receivable:
Collectively evaluated for impairment	$	15,253		$	13,688		$	—	$	—
Individually evaluated for impairment	10,548			11,271			1,206		1,084
	$	25,801		$	24,959		$	1,206	$	1,084
Allowance for loan loss:
Collectively evaluated for impairment	$	(153	)	$	(137	)	$	—	$	—
Individually evaluated for impairment	—			(73		)	—		—
	$	(153	)	$	(210	)	$	—	$	—



	December 30, 2017		April 1, 2017
Arizona	15.7	%	21.3	%
Oregon	13.8	%	15.7	%
Texas	13.1	%	11.0	%
Washington	10.7	%	6.0	%



	December 30, 2017			April 1, 2017
Property, plant and equipment, at cost:
Land	$	23,276		$	22,897
Buildings and improvements	36,705			34,180
Machinery and equipment	22,953			21,618
	82,934			78,695
Accumulated depreciation	(23,965		)	(21,731		)
Property, plant and equipment, net	$	58,969		$	56,964



FY 2018	$	34
FY 2019	709
FY 2020	459
FY 2021	—
FY 2022	—
Thereafter	—
Total remaining lease payments	$	1,202
Less: Amount representing interest	(61		)
Present value of future minimum lease payments	$	1,141



	December 30, 2017		April 1, 2017
Acquired securitized financings (acquired as part of the Palm Harbor transaction)
Securitized financing 2005-1	$	21,236	$	23,756
Securitized financing 2007-1	23,140		25,728
Other secured financings	5,007		4,987
Secured Term Loans	7,908		3,520
Total securitized financings and other, net	$	57,291	$	57,991



	December 30, 2017			April 1, 2017
Securitized financings – contractual amount	$	49,155		$	57,120
Purchase discount
Accretable	(4,779		)	(7,636		)
Non-accretable (1)	—			—
Total acquired securitized financings, net	$	44,376		$	49,484



	Three Months Ended
	December 30, 2017						December 31, 2016
	Written			Earned			Written			Earned
Direct premiums	$	3,796		$	4,120		$	3,735		$	4,008
Assumed premiums—nonaffiliate	5,428			6,296			5,504			6,146
Ceded premiums—nonaffiliate	(2,816		)	(2,816		)	(3,063		)	(3,063		)
Net premiums	$	6,408		$	7,600		$	6,176		$	7,091



	December 30, 2017
	Total			Level 1		Level 2		Level 3
Securities issued by the U.S Treasury and Government (1)	$	296		$	—	$	296	$	—
Mortgage-backed securities (1)	7,407			—		7,407		—
Securities issued by states and political subdivisions (1)	6,924			—		6,924		—
Corporate debt securities (1)	1,637			—		1,637		—
Marketable equity securities (1)	11,461			11,461		—		—
Interest rate lock commitment derivatives (2)	(10		)	—		—		(10		)
Forward loan sale commitment derivatives (2)	226			—		—		226
Mortgage servicing rights (3)	1,312			—		—		1,312



	Change in Fair Value
Consumer loans receivable	$	3,707
Commercial loans receivable	$	172
Securitized financings	$	1,213