UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~January 1,~~July 2, 2022


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

For the transition period from to

Commission File Number 000-08822

CAVCO INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Delaware

56-2405642

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3636 North Central Ave, Ste 1200

Phoenix

Arizona

85012

(Address of principal executive offices, including zip code)

(602) 256-6263

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading ~~Symbol~~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)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~February 4,~~July 29, 2022, ~~9,163,589~~8,894,547 shares of the registrant's Common Stock, $.01 par value, were outstanding.

CAVCO INDUSTRIES, INC.

FORM 10-Q

~~January 1,~~July 2, 2022

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of ~~January~~ 1 ~~, 202~~July 2, 2022 (unaudited) and April ~~3, 2021~~2, 2022			1
Consolidated Statements of Comprehensive Income (unaudited) for the three ~~and~~ ~~nine~~months ended ~~January~~1 ~~, 202~~July 2, 2022 and ~~December~~ ~~26, 2020~~July 3, 2021			2
Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~three months ended ~~January~~1 ~~, 202~~July 2, 2022 and ~~December~~ ~~26, 2020~~July 3, 2021			3
Notes to Consolidated Financial Statements			4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2418
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3325
Item 4. Controls and Procedures			3325
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3426
Item 1A. Risk Factors			3426
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3426
Item 3. Not applicable
Item 4. Not applicable
Item 5. Other Information			3426
Item 6. Exhibits			3527
SIGNATURES			3628

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

CAVCO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
ASSETS	ASSETS	(Unaudited)				ASSETS	(Unaudited)
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	267,265	$	322,279	Cash and cash equivalents	$	238,072	$	244,150
Restricted cash, current	Restricted cash, current	15,542		16,693		Restricted cash, current	14,555		14,849
Accounts receivable, net	Accounts receivable, net	64,536		47,396		Accounts receivable, net	108,128		96,052
Short-term investments	Short-term investments	21,116		19,496		Short-term investments	15,864		20,086
Current portion of consumer loans receivable, net	Current portion of consumer loans receivable, net	25,397		37,690		Current portion of consumer loans receivable, net	20,888		20,639
Current portion of commercial loans receivable, net	Current portion of commercial loans receivable, net	29,308		14,568		Current portion of commercial loans receivable, net	33,710		32,272
Current portion of commercial loans receivable from affiliates, net	Current portion of commercial loans receivable from affiliates, net	217		4,664		Current portion of commercial loans receivable from affiliates, net	145		372
Inventories	Inventories	200,313		131,234		Inventories	254,722		243,971
Prepaid expenses and other current assets	Prepaid expenses and other current assets	79,855		57,779		Prepaid expenses and other current assets	61,941		71,726
Total current assets	Total current assets	703,549		651,799		Total current assets	748,025		744,117
Restricted cash	Restricted cash	335		335		Restricted cash	335		335
Investments	Investments	35,377		35,010		Investments	36,815		34,933
Consumer loans receivable, net	Consumer loans receivable, net	30,632		37,108		Consumer loans receivable, net	28,699		29,245
Commercial loans receivable, net	Commercial loans receivable, net	35,056		20,281		Commercial loans receivable, net	36,811		33,708
Commercial loans receivable from affiliates, net	Commercial loans receivable from affiliates, net	2,391		4,801		Commercial loans receivable from affiliates, net	1,652		2,214
Property, plant and equipment, net	Property, plant and equipment, net	157,990		96,794		Property, plant and equipment, net	185,534		164,016
Goodwill	Goodwill	101,945		75,090		Goodwill	100,993		100,993
Other intangibles, net	Other intangibles, net	28,982		14,363		Other intangibles, net	27,951		28,459
Operating lease right-of-use assets	Operating lease right-of-use assets	15,974		16,252		Operating lease right-of-use assets	16,985		16,952
Total assets	Total assets	$	1,112,231	$	951,833	Total assets	$	1,183,800	$	1,154,972
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	33,756	$	32,120	Accounts payable	$	44,897	$	43,082
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	238,208		203,133		Accrued expenses and other current liabilities	259,778		251,088
Current portion of secured financings and other		798		1,851
Total current liabilities	Total current liabilities	272,762		237,104		Total current liabilities	304,675		294,170
Operating lease liabilities	Operating lease liabilities	12,482		13,361		Operating lease liabilities	13,135		13,158
Secured financings and other		11,030		10,335
Other liabilities						Other liabilities	10,695		10,836
Deferred income taxes	Deferred income taxes	8,541		7,393		Deferred income taxes	3,056		5,528
Redeemable noncontrolling interest	Redeemable noncontrolling interest	1,204		—		Redeemable noncontrolling interest	677		825
Stockholders' equity	Stockholders' equity					Stockholders' equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding	Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding	—		—		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 9,289,608 and 9,241,256 shares, respectively		93		92
Treasury stock, at cost; 126,573 and 6,600 shares, respectively		(30,567)		(1,441)
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,298,235 and 9,292,278 shares, respectively						Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,298,235 and 9,292,278 shares, respectively	93		93
Treasury stock, at cost; 404,813 and 241,773 shares, respectively						Treasury stock, at cost; 404,813 and 241,773 shares, respectively	(100,000)		(61,040)
Additional paid-in capital	Additional paid-in capital	261,596		253,835		Additional paid-in capital	263,626		263,049
Retained earnings	Retained earnings	575,132		431,057		Retained earnings	688,358		628,756
Accumulated other comprehensive (loss) income		(42)		97
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(515)		(403)
Total stockholders' equity	Total stockholders' equity	806,212		683,640		Total stockholders' equity	851,562		830,455
Total liabilities, redeemable noncontrolling interest and stockholders' equity	Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,112,231	$	951,833	Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,183,800	$	1,154,972

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020				July 2, 2022		July 3, 2021
Net revenue	Net revenue	$	431,714	$	288,772	$	1,121,679	$	801,549	Net revenue		$	588,338	$	330,422
Cost of sales	Cost of sales	316,506		229,534		842,530		633,447		Cost of sales		443,614		256,409
Gross profit	Gross profit	115,208		59,238		279,149		168,102		Gross profit		144,724		74,013
Selling, general and administrative expenses	Selling, general and administrative expenses	60,322		35,414		146,526		106,190		Selling, general and administrative expenses		66,136		40,832
Income from operations	Income from operations	54,886		23,824		132,623		61,912		Income from operations		78,588		33,181
Interest expense	Interest expense	(209)		(177)		(576)		(567)		Interest expense		(161)		(164)
Other income, net	Other income, net	4,258		2,243		11,387		5,821		Other income, net		883		2,461
Income before income taxes	Income before income taxes	58,935		25,890		143,434		67,166		Income before income taxes		79,310		35,478
Income tax benefit (expense)		20,680		(6,189)		910		(15,742)
Income tax expense										Income tax expense		(19,616)		(8,432)
Net income	Net income	79,615		19,701		144,344		51,424		Net income		59,694		27,046
Less: net income attributable to redeemable noncontrolling interest	Less: net income attributable to redeemable noncontrolling interest	196		—		269		—		Less: net income attributable to redeemable noncontrolling interest		92		—
Net income attributable to Cavco common stockholders	Net income attributable to Cavco common stockholders	$	79,419	$	19,701	$	144,075	$	51,424	Net income attributable to Cavco common stockholders		$	59,602	$	27,046

Comprehensive income	Comprehensive income									Comprehensive income
Net income	Net income	$	79,615	$	19,701	$	144,344	$	51,424	Net income		$	59,694	$	27,046
Reclassification adjustment for securities sold	Reclassification adjustment for securities sold	(16)		(13)		(15)		20		Reclassification adjustment for securities sold		—		1
Applicable income taxes	Applicable income taxes	3		3		3		(4)		Applicable income taxes		—		—
Net change in unrealized position of investments held	Net change in unrealized position of investments held	(127)		(6)		(161)		56		Net change in unrealized position of investments held		(142)		(18)
Applicable income taxes	Applicable income taxes	27		1		34		(12)		Applicable income taxes		30		4
Comprehensive income	Comprehensive income	79,502		19,686		144,205		51,484		Comprehensive income		59,582		27,033
Less: comprehensive income attributable to redeemable noncontrolling interest	Less: comprehensive income attributable to redeemable noncontrolling interest	196		—		269		—		Less: comprehensive income attributable to redeemable noncontrolling interest		92		—
Comprehensive income attributable to Cavco common stockholders	Comprehensive income attributable to Cavco common stockholders	$	79,306	$	19,686	$	143,936	$	51,484	Comprehensive income attributable to Cavco common stockholders		$	59,490	$	27,033

Net income per share attributable to Cavco common stockholders	Net income per share attributable to Cavco common stockholders									Net income per share attributable to Cavco common stockholders
Basic	Basic	$	8.66	$	2.14	$	15.68	$	5.60	Basic		$	6.68	$	2.94
Diluted	Diluted	$	8.57	$	2.12	$	15.54	$	5.54	Diluted		$	6.63	$	2.92
Weighted average shares outstanding	Weighted average shares outstanding									Weighted average shares outstanding
Basic	Basic	9,174,224		9,190,254		9,187,828		9,182,491		Basic		8,918,280		9,198,229
Diluted	Diluted	9,270,438		9,295,553		9,270,855		9,285,238		Diluted		8,988,929		9,276,529

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


		Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020			July 2, 2022		July 3, 2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	144,344	$	51,424	Net income	$	59,694	$	27,046
Adjustments to reconcile net income to net cash provided by operating activities	Adjustments to reconcile net income to net cash provided by operating activities					Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	6,750		4,735		Depreciation and amortization	3,946		1,576
Provision for credit losses	Provision for credit losses	(220)		(1,082)		Provision for credit losses	(167)		(239)
Deferred income taxes	Deferred income taxes	1,186		(272)		Deferred income taxes	(2,442)		(783)
Stock-based compensation expense	Stock-based compensation expense	3,460		2,935		Stock-based compensation expense	1,425		1,100
Non-cash interest income, net	Non-cash interest income, net	(1,115)		(2,984)		Non-cash interest income, net	(257)		(394)
(Gain) loss on sale or retirement of property, plant and equipment, net		(307)		220
Gain on sale or retirement of property, plant and equipment, net						Gain on sale or retirement of property, plant and equipment, net	(232)		(35)
Gain on investments and sale of loans, net	Gain on investments and sale of loans, net	(18,379)		(14,964)		Gain on investments and sale of loans, net	(288)		(5,579)
Changes in operating assets and liabilities, net of acquisitions	Changes in operating assets and liabilities, net of acquisitions					Changes in operating assets and liabilities, net of acquisitions
Accounts receivable	Accounts receivable	4,366		1,868		Accounts receivable	(12,076)		(3,659)
Consumer loans receivable originated	Consumer loans receivable originated	(122,872)		(124,058)		Consumer loans receivable originated	(47,467)		(42,706)
Proceeds from sales of consumer loans	Proceeds from sales of consumer loans	142,445		122,597		Proceeds from sales of consumer loans	47,881		49,631
Principal payments received on consumer loans receivable	Principal payments received on consumer loans receivable	8,861		10,720		Principal payments received on consumer loans receivable	2,421		3,929
Inventories	Inventories	(29,899)		2,911		Inventories	(10,751)		(19,683)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(33,746)		10,913		Prepaid expenses and other current assets	7,359		2,801
Commercial loans receivable	Commercial loans receivable	8,080		6,444		Commercial loans receivable	(3,795)		(243)
Accounts payable and accrued expenses and other current liabilities	Accounts payable and accrued expenses and other current liabilities	13,013		20,159		Accounts payable and accrued expenses and other current liabilities	12,989		11,513
Net cash provided by operating activities	Net cash provided by operating activities	125,967		91,566		Net cash provided by operating activities	58,240		24,275
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(8,938)		(5,816)		Purchases of property, plant and equipment	(25,007)		(2,593)
Payments for acquisitions, net		(141,428)		—

Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	1,291		118		Proceeds from sale of property, plant and equipment	283		38
Purchases of investments	Purchases of investments	(8,224)		(14,056)		Purchases of investments	(4,228)		(4,429)
Proceeds from sale of investments	Proceeds from sale of investments	9,457		14,656		Proceeds from sale of investments	4,553		3,368
Net cash used in investing activities	Net cash used in investing activities	(147,842)		(5,098)		Net cash used in investing activities	(24,399)		(3,616)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Payments for taxes on exercises and releases of equity awards						Payments for taxes on exercises and releases of equity awards	(848)		—
Proceeds from exercise of stock options	Proceeds from exercise of stock options	4,302		469		Proceeds from exercise of stock options	—		136
Proceeds from secured financings and other		47		64
Payments on secured financings and other		(9,213)		(1,984)
Payments on finance leases and other secured financings						Payments on finance leases and other secured financings	(165)		(444)
Payments for common stock repurchases	Payments for common stock repurchases	(29,126)		—		Payments for common stock repurchases	(38,960)		(12,842)
Distributions to noncontrolling interest	Distributions to noncontrolling interest	(300)		—		Distributions to noncontrolling interest	(240)		—
Net cash used in financing activities	Net cash used in financing activities	(34,290)		(1,451)		Net cash used in financing activities	(40,213)		(13,150)
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	(56,165)		85,017		Net (decrease) increase in cash, cash equivalents and restricted cash	(6,372)		7,509
Cash, cash equivalents and restricted cash at beginning of the fiscal year	Cash, cash equivalents and restricted cash at beginning of the fiscal year	339,307		255,607		Cash, cash equivalents and restricted cash at beginning of the fiscal year	259,334		339,307
Cash, cash equivalents and restricted cash at end of the period	Cash, cash equivalents and restricted cash at end of the period	$	283,142	$	340,624	Cash, cash equivalents and restricted cash at end of the period	$	252,962	$	346,816
Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information					Supplemental disclosures of cash flow information
Cash paid for income taxes	Cash paid for income taxes	$	21,573	$	13,111	Cash paid for income taxes	$	18,486	$	4,774
Cash paid for interest	Cash paid for interest	$	302	$	371	Cash paid for interest	$	71	$	100
Supplemental disclosures of noncash activity	Supplemental disclosures of noncash activity					Supplemental disclosures of noncash activity
Change in GNMA loans eligible for repurchase	Change in GNMA loans eligible for repurchase	$	(13,185)	$	21,366	Change in GNMA loans eligible for repurchase	$	(2,620)	$	(6,607)
Right-of-use assets recognized and operating lease obligations incurred	Right-of-use assets recognized and operating lease obligations incurred	$	2,455	$	5,692	Right-of-use assets recognized and operating lease obligations incurred	$	1,159	$	708
Fair value of assets acquired under finance leases		$	7,158	$	—
Finance lease obligations incurred		$	6,351	$	—

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 (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, unless otherwise stated.

In the opinion of management, these financial statements include all adjustments, including normal recurring adjustments, that are necessary to fairly state the results for the periods presented. Certain prior period amounts have been reclassified to conform to current period classification. We have evaluated subsequent events after the balance sheet date through the date of the filing of this report with the 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 our ~~2021~~2022 Annual Report on Form 10-K for the year ended April ~~3, 2021,~~2, 2022, filed with the SEC ("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~~consolidated financial statements and ~~the~~ accompanying ~~Notes. The uncertainty created by the novel coronavirus COVID-19 pandemic has made such estimates more difficult and subjective.~~notes. Due to ~~that and other~~ 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 31st. The current fiscal year will end on April ~~2, 2022~~1, 2023 and will include 52 weeks.

We operate in 2 segments: (1) factory-built housing, which includes wholesale and retail factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance. We design and build a wide variety of affordable manufactured homes, modular homes and park model RVs through 26 homebuilding production lines located throughout the United States, which are sold to a network of independent distributors, community owners and developers and through our 45 Company-owned retail stores. The financial services segment is comprised of a finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), and an insurance subsidiary, Standard Casualty Company ("Standard Casualty"). CountryPlace is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer and a Government National Mortgage Association ("GNMA") mortgage-backed securities issuer 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 September 24, 2021, we acquired the business and certain assets and liabilities of The Commodore Corporation ("Commodore"), including its six manufacturing facilities and two wholly-owned retail locations. The results of operations are included in our Consolidated Financial Statements from the date of acquisition. See Note 22.19.

In addition to the below, for a description of significant accounting policies we used in the preparation of our Consolidated Financial Statements, please refer to Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K.

~~Redeemable Noncontrolling Interest.~~ In fiscal year 2017, we purchased a 50% interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively known as "Craftsman" or the "Entities") from a third-party ("Seller"). Craftsman is a manufactured home retailer in Nevada with four locations selling Company and other manufacturer branded homes. They also provide general construction to setup the home property and assist with multi-home developments and multi-family dwellings.

Table of Contents

On July 4, 2021, we entered into an agreement (the "Craftsman Purchase Agreement") with the Seller to obtain the remaining 50% ownership in Craftsman, owned by the Seller, to be purchased over time. As provided in the Craftsman Purchase Agreement, 20% of the equity of Craftsman owned by the Seller was obtained as of July 4, 2021 by us for cash and, as a result, we obtained a controlling ownership interest. We accounted for this transaction as a business combination achieved in stages (see Note 22) and consolidated the Entities while recognizing a noncontrolling interest for the remaining Seller ownership, as discussed below.

The Craftsman Purchase Agreement calls for an additional 20% of the equity of Craftsman owned by the Seller to be purchased on December 31, 2023 by us for cash. As mandatory redemption of this ownership interest is required, $2.5 million for the fair value of this portion of the noncontrolling interest is recorded in the long-term liabilities section of the Consolidated Balance Sheet within Secured financings and other. In each reporting period hereafter, until purchased by the Company, the mandatorily redeemable noncontrolling interest is adjusted to its current redemption value, based on a predetermined formula. Adjustments in the redemption value to the mandatorily redeemable noncontrolling interest are recorded to Interest expense.

After December 31, 2023, the Seller has the right to require Cavco to purchase all of Seller's remaining 10% ownership ("Put Right") for an amount specified in the Craftsman Purchase Agreement that is designed to approximate fair value. Likewise, Cavco has the right to require Seller to sell their remaining 10% ownership ("Call Right") based on the same timing as described above for the Put Right. The purchase price to be payable by the Company for the purchase of Seller's remaining ownership pursuant to the exercise of the Put Right or the Call Right will be settled in cash. As redemption of this remaining ownership is not a current obligation, $1.2 million for the initial fair value of this portion of the noncontrolling interest is classified as a temporary equity mezzanine item between liabilities and stockholders' equity on the Consolidated Balance Sheet under the Redeemable noncontrolling interest caption. The amount of income attributable to this noncontrolling interest is included on the face of the Consolidated Statements of Comprehensive Income.

2. Revenue from Contracts with Customers

The following table summarizes customer contract revenues disaggregated by reportable segment and source (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020				July 2, 2022		July 3, 2021
Factory-built housing	Factory-built housing									Factory-built housing
U.S. Housing and Urban Development code homes	U.S. Housing and Urban Development code homes	$	357,453	$	222,684	$	905,790	$	609,853	U.S. Housing and Urban Development code homes		$	507,183	$	262,390
Modular homes	Modular homes	30,451		26,059		88,454		67,325		Modular homes		34,338		26,617
Park model RVs	Park model RVs	10,709		8,296		30,108		31,045		Park model RVs		13,755		9,671
Other	Other	14,977		13,783		43,615		41,656		Other		17,321		13,605
		413,590		270,822		1,067,967		749,879				572,597		312,283
Financial services	Financial services									Financial services
Insurance agency commissions received from third-party insurance companies	Insurance agency commissions received from third-party insurance companies	1,304		840		3,027		2,387		Insurance agency commissions received from third-party insurance companies		1,397		873
All other sources	All other sources	16,820		17,110		50,685		49,283		All other sources		14,344		17,266
		18,124		17,950		53,712		51,670				15,741		18,139
		$	431,714	$	288,772	$	1,121,679	$	801,549			$	588,338	$	330,422

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3. Restricted Cash

Restricted cash consisted of the following (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Cash related to CountryPlace customer payments to be remitted to third parties	Cash related to CountryPlace customer payments to be remitted to third parties	$	14,567	$	16,049	Cash related to CountryPlace customer payments to be remitted to third parties	$	13,562	$	13,857
Other restricted cash	Other restricted cash	1,310		979		Other restricted cash	1,328		1,327
		15,877		17,028			14,890		15,184
Less current portion		(15,542)		(16,693)
Current portion						Current portion	(14,555)		(14,849)
		$	335	$	335		$	335	$	335

Corresponding amounts for customer payments to be remitted to third parties are recorded in Accounts payable.

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


		January 1, 2022		December 26, 2020			July 2, 2022		July 3, 2021
Cash and cash equivalents	Cash and cash equivalents	$	267,265	$	327,487	Cash and cash equivalents	$	238,072	$	329,753
Restricted cash	Restricted cash	15,877		13,137		Restricted cash	14,890		17,063
		$	283,142	$	340,624		$	252,962	$	346,816

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4. Investments

Investments consisted of the following (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Available-for-sale debt securities	Available-for-sale debt securities	$	17,101	$	14,946	Available-for-sale debt securities	$	17,278	$	17,760
Marketable equity securities	Marketable equity securities	19,100		17,600		Marketable equity securities	14,583		16,780
Non-marketable equity investments	Non-marketable equity investments	20,292		21,960		Non-marketable equity investments	20,818		20,479
		56,493		54,506			52,679		55,019
Less short-term investments	Less short-term investments	(21,116)		(19,496)		Less short-term investments	(15,864)		(20,086)
		$	35,377	$	35,010		$	36,815	$	34,933

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 community-based initiatives that buy and sell our homes and provide home-only financing to residents of certain manufactured home communities and other distribution operations.

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

January 1, 2022 April 3, 2021
Amortized
Cost Fair
Value Amortized Cost Fair
Value
Residential mortgage-backed securities $ 2,165 $ 2,157 $ 2,787 $ 2,804
State and political subdivision debt securities 7,521 7,538 7,239 7,345
Corporate debt securities 7,469 7,406 4,797 4,797
$ 17,155 $ 17,101 $ 14,823 $ 14,946

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	July 2, 2022				April 2, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Residential mortgage-backed securities	$	1,574	$	1,504	$	1,668	$	1,613
State and political subdivision debt securities	7,480		7,232		10,100		9,906
Corporate debt securities	8,876		8,542		6,502		6,241
	$	17,930	$	17,278	$	18,270	$	17,760

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 penalties.


		January 1, 2022					July 2, 2022
		Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due in less than one year	Due in less than one year	$	1,604	$	1,608	Due in less than one year	$	1,295	$	1,281
Due after one year through five years	Due after one year through five years	11,473		11,353		Due after one year through five years	13,158		12,566
Due after five years through ten years	Due after five years through ten years	1,264		1,307		Due after five years through ten years	1,258		1,269
Due after ten years	Due after ten years	649		676		Due after ten years	645		658
Mortgage-backed securities	Mortgage-backed securities	2,165		2,157		Mortgage-backed securities	1,574		1,504
		$	17,155	$	17,101		$	17,930	$	17,278

~~Gross~~There were no gross gains or losses realized on the sale of available-for-sale debt securities during the three ~~and nine~~ months ended ~~January 1,~~July 2, 2022 ~~were $2,000, and there were no gross losses. For the three and nine months ended December 26, 2020, there were no gross gains realized on the sale~~or July 3, 2021.

Table of ~~available-for-sale debt securities and gross losses realized were $1,000 and $6,000 respectively.~~Contents

Net investment gains and losses on marketable equity securities were as follows (in thousands):

Three Months Ended Nine Months Ended
January 1,
2022 December 26,
2020 January 1,
2022 December 26,
2020
Marketable equity securities
Net gain recognized during the period $ 2,967 $ 2,008 $ 4,906 $ 5,289
Less: Net gains recognized on securities sold during the period (257) (151) (536) (157)
Unrealized gains recognized during the period on securities still held $ 2,710 $ 1,857 $ 4,370 $ 5,132


	Three Months Ended
		July 2, 2022		July 3, 2021
Marketable equity securities
Net (loss) gain recognized during the period		$	(2,342)	$	1,696
Less: Net loss (gain) recognized on securities sold during the period		74		(136)
Unrealized (loss) gain recognized during the period on securities still held		$	(2,268)	$	1,560

5. Inventories

Inventories consisted of the following (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Raw materials	Raw materials	$	84,963	$	54,336	Raw materials	$	97,935	$	95,929
Work in process	Work in process	27,357		19,149		Work in process	30,549		30,638
Finished goods	Finished goods	87,993		57,749		Finished goods	126,238		117,404
		$	200,313	$	131,234		$	254,722	$	243,971

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6. Consumer Loans Receivable

The following table summarizes consumer loans receivable (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Loans held for investment, previously securitized	Loans held for investment, previously securitized	$	27,332	$	31,949	Loans held for investment, previously securitized	$	24,732	$	26,014
Loans held for investment	Loans held for investment	14,835		18,690		Loans held for investment	14,670		14,771
Loans held for sale	Loans held for sale	11,746		15,587		Loans held for sale	10,909		8,500
Construction advances	Construction advances	5,377		13,801		Construction advances	1,908		3,547
		59,290		80,027			52,219		52,832
Deferred financing fees and other, net	Deferred financing fees and other, net	(874)		(2,041)		Deferred financing fees and other, net	(727)		(833)
Allowance for loan losses	Allowance for loan losses	(2,387)		(3,188)		Allowance for loan losses	(1,905)		(2,115)
		56,029		74,798			49,587		49,884
Less current portion	Less current portion	(25,397)		(37,690)		Less current portion	(20,888)		(20,639)
		$	30,632	$	37,108		$	28,699	$	29,245

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

Three Months Ended Nine Months Ended
January 1,
2022 December 26,
2020 January 1,
2022 December 26,
2020
Allowance for loan losses at beginning of period $ 2,799 $ 3,910 $ 3,188 $ 1,767
Impact of adoption of Financial Accounting Standards Board's Accounting Standards Update 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13")
— — — 2,276
Change in estimated loan losses, net (327) (491) (384) (424)
Charge-offs (85) — (417) (200)
Allowance for loan losses at end of period $ 2,387 $ 3,419 $ 2,387 $ 3,419

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

January 1,
2022 April 3,
2021
Weighted average contractual interest rate 8.4 % 8.3 %
Weighted average effective interest rate 8.9 % 9.3 %
Weighted average months to maturity 151 162


	Three Months Ended
		July 2, 2022		July 3, 2021
Allowance for loan losses at beginning of period		$	2,115	$	3,188
Change in estimated loan losses, net		(210)		(267)
Charge-offs		(19)		(3)
Recoveries		19		—
Allowance for loan losses at end of period		$	1,905	$	2,918

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The consumer loans held for investment had the following characteristics:


	July 2, 2022		April 2, 2022
Weighted average contractual interest rate	8.3	%	8.3	%
Weighted average effective interest rate	9.3	%	9.2	%
Weighted average months to maturity	151		151

The following table is a consolidated summary of the delinquency status of the outstanding ~~amortized cost of~~ consumer loans receivable (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Current	Current	$	56,141	$	76,378	Current	$	50,382	$	49,546
31 to 60 days	31 to 60 days	413		508		31 to 60 days	192		1,202
61 to 90 days	61 to 90 days	1,964		21		61 to 90 days	348		41
91+ days	91+ days	772		3,120		91+ days	1,297		2,043
		$	59,290	$	80,027		$	52,219	$	52,832

The following tables disaggregate ~~gross~~the principal value of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):


		January 1, 2022															July 2, 2022
		2022		2021		2020		2019		2018		Prior		Total			2023		2022		2021		2020		2019		Prior		Total
Prime- FICO score 680 and greater	Prime- FICO score 680 and greater	$	10,825	$	2,023	$	2,604	$	1,348	$	759	$	21,683	$	39,242	Prime- FICO score 680 and greater	$	7,796	$	3,095	$	1,092	$	2,300	$	1,330	$	19,940	$	35,553
Near Prime- FICO score 620-679	Near Prime- FICO score 620-679	1,973		2,138		1,275		1,846		1,229		9,734		18,195		Near Prime- FICO score 620-679	335		727		1,389		1,240		1,962		9,304		14,957
Sub-Prime- FICO score less than 620	Sub-Prime- FICO score less than 620	23		21		52		—		—		1,363		1,459		Sub-Prime- FICO score less than 620	—		—		20		52		—		1,257		1,329
No FICO score	No FICO score	—		—		—		27		—		367		394		No FICO score	—		—		—		—		26		354		380
		$	12,821	$	4,182	$	3,931	$	3,221	$	1,988	$	33,147	$	59,290		$	8,131	$	3,822	$	2,501	$	3,592	$	3,318	$	30,855	$	52,219


		April 3, 2021															April 2, 2022
		2021		2020		2019		2018		2017		Prior		Total			2022		2021		2020		2019		2018		Prior		Total
Prime- FICO score 680 and greater	Prime- FICO score 680 and greater	$	18,250	$	3,575	$	1,718	$	971	$	1,959	$	23,375	$	49,848	Prime- FICO score 680 and greater	$	8,155	$	1,615	$	2,371	$	1,339	$	853	$	20,485	$	34,818
Near Prime- FICO score 620-679	Near Prime- FICO score 620-679	10,227		2,744		1,794		1,364		500		10,401		27,030		Near Prime- FICO score 620-679	1,661		1,274		1,413		1,976		617		9,266		16,207
Sub-Prime- FICO score less than 620	Sub-Prime- FICO score less than 620	348		53		—		—		84		1,579		2,064		Sub-Prime- FICO score less than 620	45		20		52		—		—		1,318		1,435
No FICO score	No FICO score	576		—		28		—		—		481		1,085		No FICO score	—		—		—		26		—		346		372
		$	29,401	$	6,372	$	3,540	$	2,335	$	2,543	$	35,836	$	80,027		$	9,861	$	2,909	$	3,836	$	3,341	$	1,470	$	31,415	$	52,832

As of ~~January 1,~~July 2, 2022 and April ~~3, 2021, 41%~~2, 2022, 40% and ~~35%~~39% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas, respectively, and ~~16% and 20%~~17% was concentrated in Florida ~~respectively.~~in both periods. Other than Texas and Florida, no state had concentrations in excess of 10% of the principal balance of the consumer loans receivable as of ~~January 1,~~July 2, 2022 or April ~~3, 2021.~~2, 2022.

Repossessed homes totaled approximately ~~$404,000~~$78,000 and ~~$518,000~~$499,000 as of ~~January 1,~~July 2, 2022 and April ~~3, 2021,~~2, 2022, respectively, and are included in Prepaid expenses and other current assets on the Consolidated Balance Sheets. Foreclosure or similar proceedings in progress totaled approximately ~~$813,000~~$611,000 and $1.1 million as of ~~January 1,~~July 2, 2022 and April ~~3, 2021,~~2, 2022, respectively.

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7. Commercial Loans Receivable

The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community owners and ~~developers and amounts loaned by us under participation financing programs.~~

~~Table of Contents~~

developers.

Commercial loans receivable (including from affiliates), net consisted of the following (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Loans receivable	Loans receivable	$	68,218	$	45,377	Loans receivable	$	73,489	$	69,693
Allowance for loan losses	Allowance for loan losses	(1,130)		(816)		Allowance for loan losses	(1,054)		(1,011)
Deferred financing fees, net	Deferred financing fees, net	(116)		(247)		Deferred financing fees, net	(117)		(116)
		66,972		44,314			72,318		68,566
Less current portion of commercial loans receivable (including from affiliates), net		(29,525)		(19,232)
Less current portion						Less current portion	(33,855)		(32,644)
		$	37,447	$	25,082		$	38,463	$	35,922

The commercial loans receivable balance had the following characteristics:


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Weighted average contractual interest rate	Weighted average contractual interest rate	6.3	%	6.4	%	Weighted average contractual interest rate	5.9	%	6.4	%
Weighted average months outstanding	Weighted average months outstanding	9		11		Weighted average months outstanding	9		9

The following table represents changes in the estimated allowance for loan losses ~~including related additions and deductions to the allowance for loan losses~~ (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020				July 2, 2022		July 3, 2021
Balance at beginning of period	Balance at beginning of period	$	826	$	789	$	816	$	393	Balance at beginning of period		$	1,011	$	816
Impact of adoption of ASU 2016-13		—		—		—		435
Change in estimated loan losses, net	Change in estimated loan losses, net	304		(24)		314		(63)		Change in estimated loan losses, net		43		(31)
Balance at end of period	Balance at end of period	$	1,130	$	765	$	1,130	$	765	Balance at end of period		$	1,054	$	785

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 90 days or more past due. As of ~~January 1,~~July 2, 2022 and April ~~3, 2021,~~2, 2022, there were no commercial loans considered watch list or nonperforming. The following table disaggregates the principal value of our commercial loans receivable by fiscal year of origination (in thousands):

January 1, 2022
2022 2021 2020 2019 2018 Prior Total
Performing $ 46,755 $ 13,529 $ 4,818 $ 2,050 $ 605 $ 461 $ 68,218


	July 2, 2022
	2023		2022		2021		2020		2019		Prior		Total
Performing	$	26,909	$	32,564	$	8,326	$	3,165	$	1,371	$	1,154	$	73,489

April 3, 2021
2021 2020 2019 2018 2017 Prior Total
Performing $ 30,627 $ 8,677 $ 3,206 $ 1,864 $ 1,003 $ — $ 45,377


	April 2, 2022
	2022		2021		2020		2019		2018		Prior		Total
Performing	$	52,592	$	10,181	$	4,031	$	1,391	$	1,498	$	—	$	69,693

~~At January 1,~~As of July 2, 2022, there were no commercial loans 90 days or more past due that were still accruing interest and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance.

As of ~~January 1,~~July 2, 2022 ~~20%~~and April 2, 2022, we had concentrations of our outstanding commercial loans receivable ~~principal~~ balance ~~was concentrated in Pennsylvania and 13% was concentrated~~ in New ~~York. As~~York of ~~April 3, 2021, 13% of our outstanding commercial loans receivable principal balance was concentrated in Arizona.~~20% and 25%, respectively. No other state had concentrations in excess of 10% of the principal balance of the commercial loans receivable as of ~~January 1,~~July 2, 2022 or April ~~3, 2021.~~2, 2022.

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~~We had concentrations with one~~One independent third-party and its affiliates ~~that equaled 12% and 18%~~comprised 14% of the net commercial loans receivable principal balance outstanding, all of which was secured, as of ~~January 1,~~both July 2, 2022 and April ~~3, 2021, respectively.~~2, 2022.

8. Property, Plant and Equipment, net

Property, plant and equipment, net, consisted of the following (in thousands):


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Property, plant and equipment, at cost	Property, plant and equipment, at cost					Property, plant and equipment, at cost
Land	Land	$	32,767	$	28,314	Land	$	36,096	$	32,154
Buildings and improvements	Buildings and improvements	119,078		71,827		Buildings and improvements	115,708		100,775
Machinery and equipment	Machinery and equipment	49,176		34,146		Machinery and equipment	49,911		48,638
Construction in progress						Construction in progress	37,010		29,281
		201,021		134,287			238,725		210,848
Accumulated depreciation	Accumulated depreciation	(43,031)		(37,493)		Accumulated depreciation	(53,191)		(46,832)
		$	157,990	$	96,794		$	185,534	$	164,016

Depreciation expense for the three months ended ~~January 1,~~July 2, 2022 and ~~December 26, 2020~~July 3, 2021 was ~~$3.0~~$3.4 million and $1.4 million, respectively. Depreciation expense for the nine months ended January 1, 2022 and December 26, 2020 was $5.9 million and $4.2 million, respectively. Included in the balances above are certain assets under finance leases. See Note 9 for further information.

9. ~~Leases~~

~~We lease~~ ~~certain production and retail locations, office space and equipment. During the period ended January 1, 2022, we executed various lease renewals and acquired certain assets under finance leases.~~

~~The following table provides information about the financial statement classification of our lease balances reported on the Consolidated Balance Sheets as of~~ ~~January 1, 2022~~ ~~and April 3, 2021 (in thousands):~~

Classification January 1,
2022 April 3,
2021
ROU assets
Operating lease assets Operating lease right-of-use assets $ 15,974 $ 16,252
Finance lease assets
Property, plant and equipment, net (1)
7,114 986
Total lease assets $ 23,088 $ 17,238
Lease Liabilities
Current:
   Operating lease liabilities Accrued expenses and other current liabilities $ 4,773 $ 4,184
   Finance lease liabilities Current portion of secured financings and other 347 71
Non-current:
   Operating lease liabilities Operating lease liabilities 12,482 13,361
   Finance lease liabilities Secured financings and other 5,986 233
Total lease liabilities $ 23,588 $ 17,849

~~(1) Recorded net of accumulated amortization of $44,000 and $143,000 as of~~ ~~January 1, 2022~~ ~~and April 3, 2021, respectively.~~

~~Table of Contents~~

~~The present value of minimum payments for future fiscal years under non-cancelable leases as of~~ ~~January 1, 2022~~ ~~was as follows (in thousands):~~
Operating Leases Finance Leases Total
Remainder of 2022 $ 1,225 $ 89 $ 1,314
2023 4,748 356 5,104
2024 4,210 356 4,566
2025 3,188 356 3,544
2026 3,133 356 3,489
2027 1,086 356 1,442
Thereafter 1,439 10,941 12,380
19,029 12,810 31,839
Less amount representing interest (1,774) (6,477) (8,251)
17,255 6,333 23,588
Less current portion (4,773) (347) (5,120)
$ 12,482 $ 5,986 $ 18,468

~~The following table provides information about the weighted average remaining lease terms and weighted average discount rates as of~~ ~~January 1, 2022~~:
Remaining Lease Term (Years) Discount Rate
Operating leases 4.6 4.5 %
Finance leases 35.9 4.5 %

~~10.~~ Goodwill and Other Intangibles

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


		January 1, 2022						April 3, 2021							July 2, 2022						April 2, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived	Indefinite-lived													Indefinite-lived
Goodwill	Goodwill	$	101,945	$	—	$	101,945	$	75,090	$	—	$	75,090	Goodwill	$	100,993	$	—	$	100,993	$	100,993	$	—	$	100,993
Trademarks and trade names	Trademarks and trade names	15,680		—		15,680		8,900		—		8,900		Trademarks and trade names	15,680		—		15,680		15,680		—		15,680
State insurance licenses	State insurance licenses	1,100		—		1,100		1,100		—		1,100		State insurance licenses	1,100		—		1,100		1,100		—		1,100
		118,725		—		118,725		85,090		—		85,090			117,773		—		117,773		117,773		—		117,773
Finite-lived	Finite-lived													Finite-lived
Customer relationships	Customer relationships	19,500		(7,902)		11,598		11,300		(7,097)		4,203		Customer relationships	19,500		(8,866)		10,634		19,500		(8,392)		11,108
Other	Other	1,924		(1,320)		604		1,424		(1,264)		160		Other	1,924		(1,387)		537		1,924		(1,353)		571
		$	140,149	$	(9,222)	$	130,927	$	97,814	$	(8,361)	$	89,453		$	139,197	$	(10,253)	$	128,944	$	139,197	$	(9,745)	$	129,452

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~~Changes in the carrying amount of Goodwill were as follows for the nine months ended January 1, 2022 (in thousands). See Note 22 for further information.~~


~~Balance at beginning of period~~	$	~~75,090~~
~~Goodwill recognized on Craftsman acquisition~~	~~4,363~~
~~Goodwill recognized on Commodore acquisition~~	~~22,492~~
~~Balance at end of period~~	$	~~101,945~~

Amortization expense recognized on intangible assets was ~~$523,000~~$508,000 and ~~$186,000~~$173,000 for the three months ended ~~January 1,~~July 2, 2022 and ~~December 26, 2020, respectively. Amortization expense recognized on intangible assets was $862,000 and $560,000 for the nine months ended January 1, 2022 and December 26, 2020,~~July 3, 2021, respectively.

Expected amortization for future fiscal years is as follows (in thousands):


Remainder of fiscal year	Remainder of fiscal year	$	1,233	Remainder of fiscal year	$	1,504
2023		1,679
2024	2024	1,339		2024	1,339
2025	2025	1,300		2025	1,300
2026	2026	1,258		2026	1,258
2027	2027	1,135		2027	1,185
2028				2028	1,079
Thereafter	Thereafter	4,258		Thereafter	3,506

~~11.~~10. Accrued Expenses and Other Current Liabilities

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


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Customer deposits	Customer deposits	$	55,408	$	41,835	Customer deposits	$	54,161	$	56,318
Salaries, wages and benefits	Salaries, wages and benefits	46,237		37,737		Salaries, wages and benefits	52,899		54,172
Estimated warranties	Estimated warranties	26,234		18,032		Estimated warranties	28,802		26,250
Unearned insurance premiums	Unearned insurance premiums	23,562		22,643		Unearned insurance premiums	26,207		24,917
Accrued volume rebates	Accrued volume rebates	20,978		12,132		Accrued volume rebates	22,532		18,641
Company repurchase options on certain loans sold		12,731		25,938

Other	Other	53,058		44,816		Other	75,177		70,790
		$	238,208	$	203,133		$	259,778	$	251,088

~~12.~~11. Warranties

Activity in the liability for estimated warranties was as follows (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020				July 2, 2022		July 3, 2021
Balance at beginning of period	Balance at beginning of period	$	25,745	$	17,805	$	18,032	$	18,678	Balance at beginning of period		$	26,250	$	18,032
Purchase accounting additions		—		—		6,928		—
Charged to costs and expenses	Charged to costs and expenses	10,883		7,724		28,002		20,303		Charged to costs and expenses		15,004		9,125
Payments and deductions	Payments and deductions	(10,394)		(7,533)		(26,728)		(20,985)		Payments and deductions		(12,452)		(7,813)
Balance at end of period	Balance at end of period	$	26,234	$	17,996	$	26,234	$	17,996	Balance at end of period		$	28,802	$	19,344

12. Other Liabilities

The following table summarizes the non-current portion of our other liabilities (in thousands):


	July 2, 2022		April 2, 2022
Finance lease payables	$	6,298	$	6,316
Other secured financing	2,791		2,933
Mandatorily redeemable noncontrolling interest	2,371		2,371
	11,460		11,620
Less current portion included in Accrued expenses and other current liabilities	(765)		(784)
	$	10,695	$	10,836

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13. ~~Debt, Finance Lease and Mandatorily Redeemable Noncontrolling Interest Obligations~~

~~The following table summarizes debt, finance lease and mandatorily redeemable noncontrolling interest obligations (in thousands):~~

January 1,
2022 April 3,
2021
Finance lease obligations $ 6,333 $ 304
Other secured financings 3,024 3,672
Mandatorily redeemable noncontrolling interest 2,471 —
Secured term loans — 8,210
11,828 12,186
Less current portion (798) (1,851)
$ 11,030 $ 10,335

We previously entered into secured credit facilities with independent third-party banks to originate and hold consumer home-only loans secured by manufactured homes. Those facilities were then converted into amortizing loans, which were paid in full as of January 1, 2022.

~~14.~~ Reinsurance and Insurance Loss Reserves

Certain of Standard Casualty's premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

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

Three Months Ended
January 1, 2022 December 26, 2020
Written Earned Written Earned
Direct premiums $ 6,380 $ 6,557 $ 5,420 $ 5,429
Assumed premiums—nonaffiliated 7,023 7,822 6,541 7,195
Ceded premiums—nonaffiliated (3,866) (3,866) (3,146) (3,146)

$ 9,537 $ 10,513 $ 8,815 $ 9,478
Nine Months Ended
January 1, 2022 December 26, 2020
Written Earned Written Earned
Direct premiums $ 19,529 $ 18,876 $ 16,100 $ 15,759
Assumed premiums—nonaffiliated 23,837 22,830 21,787 21,028
Ceded premiums—nonaffiliated (11,227) (11,227) (9,201) (9,201)

$ 32,139 $ 30,479 $ 28,686 $ 27,586

~~Table of Contents~~










	Three Months Ended
	July 2, 2022				July 3, 2021
	Written		Earned		Written		Earned
Direct premiums	$	7,728	$	7,050	$	6,839	$	5,996
Assumed premiums—nonaffiliated	9,028		7,957		8,574		7,378
Ceded premiums—nonaffiliated	(4,229)		(4,229)		(3,647)		(3,647)
	$	12,527	$	10,778	$	11,766	$	9,727

Typical insurance policies written or assumed have a maximum coverage of $300,000 per claim, of which we cede $125,000 of the risk of loss per reinsurance. Therefore, our risk of loss is limited to ~~the first~~ $175,000 per claim on typical policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $2 million per occurrence, up to a maximum of $70 million in the aggregate for that occurrence.

Standard Casualty establishes reserves for claims and ~~related expenses~~claims expense on reported and ~~unreported~~incurred but not reported ("IBNR") claims of non-reinsured losses. Reserves for claims are included in the Accrued expenses and other current liabilities line item on the Consolidated Balance ~~Sheet~~Sheets and claims expenses isare recorded in Cost of sales on the Consolidated ~~Statement~~Statements of Comprehensive Income. The following details the activity in the reserve for the ~~nine~~three months ended ~~January 1,~~July 2, 2022 and ~~December 26, 2020~~July 3, 2021 (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020				July 2, 2022		July 3, 2021
Balance at beginning of period	Balance at beginning of period	$	7,350	$	6,887	$	7,451	$	5,582	Balance at beginning of period		$	8,149	$	7,451
Net incurred losses during the year	Net incurred losses during the year	5,046		4,070		20,303		17,529		Net incurred losses during the year		8,777		7,975
Net claim payments during the year	Net claim payments during the year	(4,916)		(5,606)		(20,274)		(17,760)		Net claim payments during the year		(8,352)		(7,078)
Balance at end of period	Balance at end of period	$	7,480	$	5,351	$	7,480	$	5,351	Balance at end of period		$	8,574	$	8,348

~~15. Income Taxes~~

For the three and nine months ended January 1, 2022, income taxes resulted in a benefit of $20.7 million and $0.9 million, respectively. This is due to $34.4 million of estimated non-recurring net tax credits related to the sale of energy efficient homes between fiscal year 2018 and fiscal third quarter 2022 available under the Internal Revenue Code §45L. Of this amount, $4.0 million is related to fiscal year 2022. A ~~receivable for the refunds related to the~~ net tax credits is recorded in Prepaid expenses and other current assets. This credit was initially established under the Federal Energy Policy Act of 2005 and most recently extended in the Consolidated Appropriations Act, 2021. The credit expired in its current format as of December 31, 2021. The Company determined eligibility for the program in consultation with third-party qualified experts and recognized the benefit for the five eligible years in the fiscal third quarter of 2022. Excluding these credits, the effective income tax rate was consistent between periods.

~~16.~~14. Commitments and Contingencies

Repurchase Contingencies. We are contingently liable under terms of repurchase agreements with financial institutions providing inventory financing to independent distributors of our products. These arrangements, which are customary in the industry, provide for the repurchase of products sold to distributors in the event of default by the distributor.

The maximum amount for which ~~we were~~the Company was liable under such agreements approximated ~~$117.3~~$167.2 million and ~~$74.2~~$141.0 million at ~~January 1,~~July 2, 2022 and April ~~3, 2021,~~2, 2022, respectively, without reduction for the resale value of the ~~homes that are repurchased.~~homes. We had a reserve for repurchase commitments of ~~$3.2~~$4.4 million at ~~January 1,~~July 2, 2022 and ~~$2.3~~$3.6 million at April ~~3, 2021.~~2, 2022, and there were no repurchases during either period.

Construction-Period Mortgages. We fund construction-period mortgages through periodic advances during home construction. At the time of initial funding, we commit to fully fund the loan contract in accordance with a predetermined schedule. The total loan contract amount, less cumulative advances, represents an off-balance sheet contingent commitment to fund future advances.

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


		January 1, 2022		April 3, 2021			July 2, 2022		April 2, 2022
Construction loan contract amount	Construction loan contract amount	$	14,271	$	37,628	Construction loan contract amount	$	5,447	$	9,330
Cumulative advances	Cumulative advances	(5,377)		(13,801)		Cumulative advances	(1,908)		(3,547)
		$	8,894	$	23,827		$	3,539	$	5,783

Representations and Warranties of Mortgages Sold. We sell loans to Government-Sponsored Enterprises ("GSEs") and whole-loan purchasers and finance certain loans with long-term credit facilities secured by the respective loans. In connection with these activities, we provide to GSEs and whole-loan purchasers and lenders representations and warranties related to the loans sold or financed. Upon a breach of a representation, we may be required to repurchase the loan or to indemnify a party for incurred losses. We maintain a reserve for these contingent repurchase and indemnification obligations. This reserve of ~~$1.2~~$1.0 million as of ~~January 1,~~July 2, 2022 and $866,000 as of April ~~3, 2021,~~2, 2022, included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets, reflects management's estimate of probable loss. There were no claim requests that resulted in the ~~execution of an indemnification agreement or in the~~ repurchase of a loan during the ~~nine~~three months ended ~~January 1,~~July 2, 2022.

Interest Rate Lock Commitments. In originating loans for sale, we issue interest rate lock commitments ("IRLCs") to prospective borrowers. These IRLCs bind us 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 of ~~January 1,~~July 2, 2022, we had outstanding IRLCs with a notional amount of ~~$29.7 million. During~~$49.9 million and recognized a gain of $40,000 in the ~~three months ended January 1, 2022, there were~~fiscal 2023 first quarter and a no ~~gains or~~ ~~losseson outstanding IRLCs, and we recognized non-cash gains~~gain of $~~57,000~~47,000 ~~during~~in the ~~three months~~fiscal 2022 ~~ended December 26, 2020. For the~~ ~~nine months ended January 1, 2022 and December 26, 2020, we recognized gains of~~ ~~$42,000 and losses of $87,000, respectively.~~first quarter.

Forward Sales Commitments. We manage the risk profiles of a portion of the outstanding IRLCs and mortgage loans held for sale by entering into forward sales of mortgage-backed securities ("MBS") and whole loan sale commitments (collectively "Commitments"). As of ~~January 1,~~July 2, 2022, we had ~~$21.5~~$10.2 million in outstanding ~~Commitments. We~~Commitments and recognized a non-cash ~~losses~~loss of ~~$61,000~~$262,000 in the fiscal 2023 first quarter and ~~$318,000 for the~~ ~~three months ended January 1, 2022 and December 26, 2020, respectively.During the nine months ended January 1, 2022 and December 26, 2020, we recognized losses~~a non-cash loss of $~~329,000~~347,000 in the fiscal 2022 ~~and gains of~~ first quarter.~~$816,000, respectively.~~

Legal Matters. On September 2, 2021, the SEC filed a civil complaint in the United States District Court, District of Arizona, naming the Company along with the Company's former Chairman, President & Chief Executive Officer ("CEO") and the Company's former Chief Financial Officer, alleging violations of the antifraud and internal accounting control provisions of the Securities Exchange Act of 1934 based on trading in the shares of another company directed by the former CEO that resulted in an unrealized gain of approximately $260,000. In the prior year, the Company recorded an accrual relating to this loss contingency. The Company has reached a settlement in principle with the SEC ~~action follows an investigation~~staff regarding the pending litigation. The settlement is subject to SEC approval that ~~began~~is expected within the next 60 days. A related notice has been filed with the Court in 2018. On November 2, 2021, the Company filed a motion to dismiss the claim. On January 25, 2022, the court denied the motion to dismiss and the matter is now proceeding to discovery. While the Company cannot predict with certainty the resolution of this matter, wethat action. We do not believe that ~~this proceeding~~the settlement will have a material ~~adverse effect~~impact on ~~the Company's Consolidated Financial Statements.~~our results of operations or financial position.

We are party to certain other lawsuits in the ordinary course of business. Based on management's present knowledge of the facts and in(in certain ~~cases,~~cases) advice of outside counsel, management does not believe that loss contingencies arising from pending matters are likely to have a material adverse effect on our consolidated financial position, liquidity or results of 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 our consolidated financial position, liquidity or results of operations in any future reporting periods.

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~~17.~~15. Stockholders' Equity and Redeemable Noncontrolling Interest

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest ~~for each quarterly period~~ during the ~~nine~~three months ended ~~January 1,~~July 2, 2022 (dollars in thousands):


		Equity Attributable to Cavco Stockholders																											Equity Attributable to Cavco Stockholders
					Treasury Stock				Additional paid-in capital		Retained earnings				Accumulated other comprehensive income (loss)					Total					Redeemable Noncontrolling Interest											Treasury Stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total		Redeemable Noncontrolling Interest
		Common Stock																	Common Stock
		Shares	Amount																Shares				Amount
Balance, April 3, 2021		9,241,256	$	92			$	(1,441)					$	253,835			$	431,057					$	97						$	683,640			$	—
Net income		—	—				—						—				27,046					—					27,046					—
Other comprehensive loss, net		—	—		—				—		—				(13)					(13)					—
Issuance of common stock under stock incentive plans		4,465	—		—				136		—				—					136					—
Stock-based compensation		—	—		—				1,100		—				—					1,100					—
Common stock repurchases		—	—		(12,842)				—		—				—					(12,842)					—
Balance, July 3, 2021		9,245,721	$	92	$	(14,283)			$	255,071	$	458,103			$	84				$	699,067				$	—
Initial value of noncontrolling interest upon transaction		—	—		—				—		—				—					—					1,235
Balance, April 2, 2022																												Balance, April 2, 2022	9,292,278			$	93			$	(61,040)	$	263,049	$	628,756	$	(403)	$	830,455	$	825
Net income	Net income	—	—		—				—		37,610				—					37,610					73			Net income	—			—				—		—		59,602		—		59,602		92
Other comprehensive loss, net	Other comprehensive loss, net	—	—		—				—		—				(13)					(13)					—			Other comprehensive loss, net	—			—				—		—		—		(112)		(112)		—
Issuance of common stock under stock incentive plans	Issuance of common stock under stock incentive plans	29,295	1		—				2,728		—				—					2,729					—			Issuance of common stock under stock incentive plans	5,957			—				—		(848)		—		—		(848)		—
Stock-based compensation	Stock-based compensation	—	—		—				1,317		—				—					1,317					—			Stock-based compensation	—			—				—		1,425		—		—		1,425		—
Common stock repurchases	Common stock repurchases	—	—		(7,594)				—		—				—					(7,594)					—			Common stock repurchases	—			—				(38,960)		—		—		—		(38,960)		—
Distributions	Distributions	—	—		—				—		—				—					—					(180)			Distributions	—			—				—		—		—		—		—		(240)
Balance, October 2, 2021		9,275,016	$	93	$	(21,877)			$	259,116	$	495,713			$	71				$	733,116				$	1,128
Net income		—	—		—				—		79,419				—					79,419					196
Other comprehensive loss, net		—	—		—				—		—				(113)					(113)					—
Issuance of common stock under stock incentive plans		14,592	—		—				1,437		—				—					1,437					—
Stock-based compensation		—	—		—				1,043		—				—					1,043					—
Common stock repurchases		—	—		(8,690)				—		—				—					(8,690)					—
Distributions		—	—		—				—		—				—					—					(120)
Balance, January 1, 2022		9,289,608	$	93	$	(30,567)			$	261,596	$	575,132			$	(42)				$	806,212				$	1,204
Balance, July 2, 2022																												Balance, July 2, 2022	9,298,235			$	93			$	(100,000)	$	263,626	$	688,358	$	(515)	$	851,562	$	677

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the three months ended July 3, 2021 (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 3, 2021	9,241,256	$	92	$	(1,441)	$	253,835	$	431,057	$	97	$	683,640	$	—
Net income	—	—		—		—		27,046		—		27,046		—
Other comprehensive loss, net	—	—		—		—		—		(13)		(13)		—
Issuance of common stock under stock incentive plans	4,465	—		—		136		—		—		136		—
Stock-based compensation	—	—		—		1,100		—		—		1,100		—
Common stock repurchases	—	—		(12,842)		—		—		—		(12,842)		—
Balance, July 3, 2021	9,245,721	$	92	$	(14,283)	$	255,071	$	458,103	$	84	$	699,067	$	—

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~~The following table represents changes in stockholders' equity attributable to Cavco's stockholders for each quarterly period during the nine months ended December 26, 2020 (dollars in thousands):~~

Equity Attributable to Cavco Stockholders
Treasury Stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total
Common Stock
Shares Amount
Balance, March 28, 2020 9,173,242 $ 92 $ — $ 252,260 $ 355,144 $ 90 $ 607,586
Cumulative effect of implementing ASU 2016-13, net — — — — (733) — (733)
Net income — — — — 16,674 — 16,674
Other comprehensive income, net — — — — — 68 68
Issuance of common stock under stock incentive plans 3,822 — — (533) — — (533)
Stock-based compensation — — — 945 — — 945
Balance, June 27, 2020 9,177,064 $ 92 $ — $ 252,672 $ 371,085 $ 158 $ 624,007
Net income — — — — 15,049 — 15,049
Other comprehensive income, net — — — — — 7 7
Issuance of common stock under stock incentive plans 11,098 — — 522 — — 522
Stock-based compensation — — — 1,103 — — 1,103
Balance, September 26, 2020 9,188,162 $ 92 $ — $ 254,297 $ 386,134 $ 165 $ 640,688
Net income — — — — 19,701 — 19,701
Other comprehensive loss, net — — — — — (15) (15)
Issuance of common stock under stock incentive plans 4,075 — — 480 — — 480
Stock-based compensation — — — 887 — — 887
Balance, December 26, 2020 9,192,237 $ 92 $ — $ 255,664 $ 405,835 $ 150 $ 661,741

~~18.~~16. Earnings Per Share

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
January 1,
2022 December 26,
2020 January 1,
2022 December 26,
2020
Net income attributable to Cavco common stockholders $ 79,419 $ 19,701 $ 144,075 $ 51,424
Weighted average shares outstanding
Basic 9,174,224 9,190,254 9,187,828 9,182,491
Effect of dilutive securities 96,214 105,299 83,027 102,747
Diluted 9,270,438 9,295,553 9,270,855 9,285,238
Net income per share attributable to Cavco common stockholders
Basic $ 8.66 $ 2.14 $ 15.68 $ 5.60
Diluted $ 8.57 $ 2.12 $ 15.54 $ 5.54

Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share for the three months ended January 1, 2022 and December 26, 2020 were 1,640 and 26,601, respectively. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share for the nine months ended January 1, 2022 and December 26, 2020 were 2,449 and 26,357, respectively.

~~Table of Contents~~


	Three Months Ended
		July 2, 2022		July 3, 2021
Net income attributable to Cavco common stockholders		$	59,602	$	27,046
Weighted average shares outstanding
Basic		8,918,280		9,198,229
Effect of dilutive securities		70,649		78,300
Diluted		8,988,929		9,276,529
Net income per share attributable to Cavco common stockholders
Basic		$	6.68	$	2.94
Diluted		$	6.63	$	2.92

Anti-dilutive common stock equivalents excluded		1,617		8,366

~~19.~~17. Fair Value Measurements

The book value and estimated fair value of our financial instruments were as follows (in thousands):


		January 1, 2022				April 3, 2021					July 2, 2022				April 2, 2022
		Book Value		Estimated Fair Value		Book Value		Estimated Fair Value			Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
Available-for-sale debt securities	Available-for-sale debt securities	$	17,101	$	17,101	$	14,946	$	14,946	Available-for-sale debt securities	$	17,278	$	17,278	$	17,760	$	17,760
Marketable equity securities	Marketable equity securities	19,100		19,100		17,600		17,600		Marketable equity securities	14,583		14,583		16,780		16,780
Non-marketable equity investments	Non-marketable equity investments	20,292		20,292		21,960		21,960		Non-marketable equity investments	20,818		20,818		20,479		20,479
Consumer loans receivable	Consumer loans receivable	56,029		60,301		74,798		86,209		Consumer loans receivable	49,587		52,208		49,884		53,354

Commercial loans receivable	Commercial loans receivable	66,972		65,347		44,314		42,379		Commercial loans receivable	72,318		69,509		68,566		65,942
Secured financings and other		(11,828)		(12,019)		(12,186)		(12,340)
Other secured financing										Other secured financing	(2,791)		(2,781)		(2,933)		(3,119)

See Note 19, Fair Value Measurements, and the Fair Value of Financial Instruments caption in Note 1, Summary of Significant Accounting Policies, in the Form 10-K for more information on the methodologies we use in determining fair value.

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. MSRs are ~~initially~~ recorded at fair ~~value.~~
January 1,
2022 April 3,
2021
Number of loans serviced with MSRs 4,407 4,647
Weighted average servicing fee (basis points) 34.76 33.57
Capitalized servicing multiple 72.9 % 45.9 %
Capitalized servicing rate (basis points) 25.33 15.42
Serviced portfolio with MSRs (in thousands) $ 570,639 $ 593,939
MSRs (in thousands) $ 1,446 $ 916

~~20. Employee Benefit Plans~~

As part of the Commodore acquisition, we entered into a Transition Services Agreement ("TSA") with the seller whereby we lease Commodore employees from the seller while we transition them to our payroll systems. Expenses related to the TSA totaled $15.3 millionvalue in Prepaid expenses and ~~$16.7 million for the three and nine months ended January 1, 2022, respectively.~~

Commodore participates in the IAM National Pension Fund, a multiemployer defined benefit plan. Participation in this plan is available to all hourly employees who are members of the participating collective bargaining unit. Once the TSA ends, we will contribute to the plan a specified amount per hour worked for each eligible employee. Benefits under this plan are based on a fixed monthly benefit rate per year of credited service. The risks of participating in this multiemployer plan differ from single-employer plans. The potential risks include, but are not limited to, the use of the Company's contributions to provide benefits to employees of other participating employers, the Company becoming obligated for other participating employers' unfunded obligations and, upon the Company's withdrawal from the plan, the Company being required to pay the plan an amount basedcurrent assets on the ~~underfunded status of the plan, referred to as a withdrawal liability.~~Consolidated Balance Sheets.


	July 2, 2022			April 2, 2022
Number of loans serviced with MSRs	4,216			4,346
Weighted average servicing fee (basis points)	34.70			34.76
Capitalized servicing multiple	101.5		%	85.07		%
Capitalized servicing rate (basis points)	35.22			29.57
Serviced portfolio with MSRs (in thousands)	$	543,871		$	560,178
MSRs (in thousands)	$	1,915		$	1,656

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~~21.~~18. 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 ~~January 1,~~July 2, 2022 and July 3, 2021, the total amount of sales to ~~non-consolidated~~ related parties was ~~$15.8~~$17.2 million and ~~$44.6 million, respectively. For the three and nine months ended December 26, 2020, the total amount of sales to non-consolidated related parties was$11.2 million and $34.2~~$14.8 million, respectively. As of ~~January 1,~~July 2, 2022, receivables from ~~non-consolidated~~related parties included $5.3 million of accounts receivable and $1.8 million of commercial loans outstanding. As of April 2, 2022, receivables from related parties included $3.3 million of accounts receivable and $2.6 million of commercial loans outstanding. ~~As of April 3, 2021, receivables from non-consolidated related parties included $4.7 million of accounts receivable and $9.5 million of commercial loans outstanding.~~

~~22.~~19. Acquisitions

~~Craftsman Homes, LLC and Craftsman Development, LLC Acquisition~~

In fiscal year 2017, we purchased a 50% ownership interest in Craftsman for $1.3 million to expand our retail presence in Nevada. At the time of the acquisition of that ownership, we concluded that we were not considered to be the primary beneficiary and therefore did not consolidate the Entities. Since the date of acquisition, we have recorded a non-marketable equity investment for the ownership, with changes to that investment for earnings and distributions from the Entities.

On July 4, 2021, we obtained an additional 20% ownership interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (“the ~~Entities utilizing the same pre-tax income multiple as the 2017 purchase. As~~Entities”) which gave us a controlling interest. Accordingly, we now ~~have a controlling interest, we have consolidated~~consolidate the Entities and ~~remeasured~~ the ~~Entities' assets and liabilities to fair value, including our previous equity investment~~results of ~~$2.9 million~~operations have been included in the ~~Entities. As a result of the remeasurement, we recorded a gain of~~ ~~$3.3 million in~~ ~~Other income, net on the~~accompanying Consolidated Financial Statements ~~of Comprehensive Income.~~

The purchase price on July 4, 2021 for 20% ownership was $2.5 million, valuing the Entities at $12.4 million. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands). Certain estimated values are not yet finalized and are subject to change, which could be significant. The allocation of the purchase price is still preliminary due to the short duration since the ~~acquisition~~ date ~~and will be finalized upon completion~~ of ~~the analysis of the fair values of Craftsman's assets and specified liabilities. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date.~~


	July 4, 2021
~~Cash~~	$	~~6,466~~
~~Accounts receivable~~	~~577~~
~~Inventories~~	~~7,393~~
~~Property, plant and equipment~~	~~189~~
~~Other current assets~~	~~416~~
~~Intangible assets(1)~~	~~2,980~~
~~Total identifiable assets acquired~~	~~18,021~~
~~Accounts payable and accrued liabilities~~	~~10,028~~
~~Net identifiable assets acquired~~	~~7,993~~
~~Goodwill(2)~~	~~4,363~~
~~Net assets acquired~~	$	~~12,356~~

~~(1) Includes $3.0 million assigned to trademarks and trade names, which are considered indefinite lived intangible assets and are not subject to amortization.~~

~~(2) Attributable to the Factory-built housing segment, all of which will be deductible for income tax purposes.~~

~~Table of Contents~~

We recorded a Redeemable noncontrolling interest for the remaining 30% ownership. As 20% of this is considered mandatorily redeemable per the Craftsman Purchase Agreement, $2.5 million for the fair value of this portion of the noncontrolling interest is recorded in the long-term liabilities section of the Consolidated Balance Sheet within Secured financings and other. As we are not currently obligated for the redemption of the remaining 10% ownership, $1.2 million for the initial fair value of this portion of the noncontrolling interest is classified as a temporary equity mezzanine item between liabilities and stockholders' equity on the Consolidated Balance Sheet as Redeemable noncontrolling interest.

Since the acquisition date, Craftsman contributed Net revenue of $4.5 million and $9.0 million for the three and nine months ended January 1, 2022, respectively. Craftsman contributed Net income of $654,000 and $897,000 for the three and nine months ended January 1, 2022, respectively. Cost of sales from the Craftsman acquisition included required purchase accounting adjustments whereby home product inventory is recorded at fair value upon acquisition.

~~Commodore Homes Acquisition~~

On September 24, 2021, we purchased certain manufactured housing assets and assumed certain liabilities of Commodore, including its six manufacturing facilities and two wholly-owned retail locations. In addition to manufacturing, Commodore also participates in commercial lending operations with its dealers. The transaction was accounted for as a business combination and the results of operations have been included in the accompanying Consolidated Financial Statements since the date of acquisition.

The acquisition of Commodore brings beneficial geographic addition to our footprint with strong operations in the Northeast/Midwest/Mid-Atlantic markets and provides a platform for future growth, with the potential for cost and revenue synergies.

The acquisition-date fair value of the total consideration was $146.2 million, which was paid in cash and is subject to future adjustments upon the finalization of closing financial statements. During the third quarter certain adjustments were made to these closing financial statements, which resulted in changes to the purchase price allocation and impacted the amount of goodwill recognized. We have expensed $2.7 million in acquisition related deal costs in Selling, general and administrative expenses o~~n the Consolidated Statements of Comprehensive Income, and have not incurred debt in connection with the purchase or subsequent operations.~~

~~Table of Contents~~

~~The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the~~

acquisition date (in thousands). Certain estimated values are not yet finalized and are subject to change, which could be significant. The allocation of the purchase price is still preliminary due to the time between the acquisition date and reporting date and will be finalized upon completion of the analysis of the fair values of Commodore's acquired assets, liabilities and intangible assets. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date.


	September 24, 2021
~~Cash~~	$	~~619~~
~~Accounts receivable~~	~~20,930~~
~~Commercial loans~~	~~30,922~~
~~Inventories~~	~~31,787~~
~~Property, plant and equipment(1)~~	~~58,942~~
~~Other current assets~~	~~534~~
~~Intangible assets(2)~~	~~12,500~~
~~Total identifiable assets acquired~~	~~156,234~~
~~Accounts payable and accrued liabilities~~	~~32,556~~
~~Net identifiable assets acquired~~	~~123,678~~
~~Goodwill(3)~~	~~22,492~~
~~Net assets acquired~~	$	~~146,170~~

~~(1) Includes assets acquired under finance leases. See Note 9 for additional information.~~

(2) Includes $7.2 million assigned to customer-related intangibles, subject to a useful life of 11 years amortized on a straight-line basis; $3.8 million assigned to trademarks and trade names, which are considered indefinite lived intangible assets and are not subject to amortization; $1.0 million for acquired sales order backlogs that will be amortized over the period to produce the associated backlog; and $0.5 million for a covenant not to compete from the sellers, amortized on a straight-line basis over the term of 5 years.

~~(3) Attributable to the Factory-built housing segment, all of which will be deductible for income tax purposes.~~

Since the acquisition date, Commodore contributed Net revenue of $73.1 million and $77.5 million for the three and nine months ended January 1, 2022, respectively. Commodore contributed Net income of $2.5 million and $1.8 million for the three and nine months ended January 1, 2022, respectively. Cost of sales from the Commodore acquisition included required purchase accounting adjustments whereby home product inventory is recorded at fair value upon acquisition.

Pro Forma Impact of Acquisitions (unaudited). The following table presents supplemental pro forma information as if the ~~above~~ acquisitions occurred on ~~March 29, 2020~~April 4, 2021 (in thousands, except per share data):

Three Months Ended Nine Months Ended
January 1,
2022 December 26,
2020 January 1,
2022 December 26,
2020
Net revenue $ 431,714 $ 355,844 $ 1,287,768 $ 990,906
Net income attributable to Cavco common stockholders 79,419 20,440 146,828 57,973
Diluted net income per share 8.57 2.20 15.84 6.24


	Three Months Ended
		July 3, 2021
Net revenue		$	411,752
Net income attributable to Cavco common stockholders		28,022
Diluted net income per share		3.02

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~~23.~~20. Business Segment Information

We operate principally in 2 segments: (1) factory-built housing, which includes wholesale and retail factory-built housing operations and (2) financial services, which includes manufactured housing consumer finance and insurance. The following table provides selected financial data by segment (in thousands):

Three Months Ended Nine Months Ended
January 1,
2022 December 26,
2020 January 1,
2022 December 26,
2020
Net revenue
Factory-built housing $ 413,590 $ 270,822 $ 1,067,967 $ 749,879
Financial services 18,124 17,950 53,712 51,670
$ 431,714 $ 288,772 $ 1,121,679 $ 801,549
Income before income taxes
Factory-built housing $ 52,905 $ 18,752 $ 133,357 $ 54,654
Financial services 6,030 7,138 10,077 12,512
$ 58,935 $ 25,890 $ 143,434 $ 67,166


		January 1, 2022		April 3, 2021			Three Months Ended
Total assets:
								July 2, 2022		July 3, 2021
Net revenue						Net revenue
Factory-built housing	Factory-built housing	$	887,553	$	711,579	Factory-built housing		$	572,597	$	312,283
Financial services	Financial services	224,678		240,254		Financial services		15,741		18,139
		$	1,112,231	$	951,833			$	588,338	$	330,422

Income (loss) before income taxes						Income (loss) before income taxes
Factory-built housing						Factory-built housing		$	79,772	$	33,559
Financial services						Financial services		(462)		1,919
								$	79,310	$	35,478

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	July 2, 2022		April 2, 2022
Total assets:
Factory-built housing	$	962,704	$	929,535
Financial services	221,096		225,437
	$	1,183,800	$	1,154,972

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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 include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 ~~as amended~~ (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," or "anticipates," or by discussions of strategy, plans or intentions. Forward-looking statements are typically included, for example, in discussions regarding the manufactured housing and site-built housing industries; our financial performance and operating results; our liquidity and financial resources; our outlook with respect to the Company 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 and consumer confidence; increasing interest rates; inflation; potential acquisitions, strategic investments and other expansions; the sufficiency of our liquidity; operational and legal risks; how ~~the Company~~we may be affected by the ~~novel coronavirus~~ COVID-19 pandemic ("COVID-19") or any other pandemic or outbreak; labor shortages and the pricing and availability of raw materials; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; ~~market interest rates and Company investments~~ and the ultimate outcome of our commitments and contingencies. Forward-looking statements contained in this Report on Form 10-Q ("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, including the ability to generate positive cash flow from operations, 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 inunder Risk Factors in Part I, Item 1A of our ~~2021~~2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission ("Form 10-K").

Introduction

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

Company Overview

Headquartered in Phoenix, Arizona, we design and produce factory-built housing products primarily distributed through a network of independent and Company-owned retailers, planned community operators and residential developers. We are one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments. Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood and MidCountry. We are also ~~one of the~~a leading ~~producers~~producer of park model RVs, vacation cabins and factory-built commercial structures. Our finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac") seller/servicer and a Government National Mortgage Association ("Ginnie Mae") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty Company ("Standard Casualty"), provides property and casualty insurance to owners of manufactured homes.

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We operate 26 homebuilding production lines ~~located~~ in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix and Goodyear, Arizona; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; Cherryville, North Carolina; and Ocala and Plant City, Florida. The majority of the homes produced are sold to, and distributed by, independently owned and controlled retail operations located throughout the United States and Canada. In addition, our homes are sold through 45 Company-owned U.S. retail locations.

Included in the above figures are two recent acquisitions. On July 4, 2021, we purchased an additional 20% ownership in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively known as ~~“Craftsman"~~"Craftsman") in addition to our existing 50% ownership, making us controlling owner. Craftsman is a manufactured home retailer with four locations in Nevada selling Company and other manufacturer branded homes. They also provide general construction to setup the customer's property and assist with multi-home developments and multi-family dwellings. The transaction was accounted for as a business combination achieved in stages and the results of operations have been included in the accompanying Consolidated Financial Statements since the date of the acquisition of the additional 20% interest, with a reduction for the earnings attributable to the noncontrolling shareholder.

On September 24, 2021, we purchased certain manufactured housing assets and assumed certain liabilities of The Commodore Corporation ("Commodore"), including its six manufacturing facilities and two wholly-owned retail locations. In addition to manufacturing, Commodore also participates in commercial lending operations with its dealers. The transaction was accounted for as a business combination and the results of operations have been included in the accompanying Consolidated Financial Statements since the date of acquisition.

Company and Industry Outlook

According to data reported by the Manufactured Housing Institute, industry home shipments increased ~~12.0% in~~13.4% for the first 5 months of calendar year ~~2021~~2022 compared to the ~~prior year, which was impacted by shutdowns related to COVID-19. We~~ same period last year.~~did not experience any significant factory shutdowns in the prior year period, in contrast to certain other industry participants.~~

The industry offers solutions to the affordable housing crisis and these ~~industry~~ shipment numbers ~~do not represent demand; instead, they represent~~reflect the industry's ability to produce in the current environment. The average price per square foot for a manufactured home is usually lower than a site-built home. Also, based on the ~~relatively~~comparatively low cost associated with manufactured home ownership, our products have traditionally competed with rental housing's monthly payment affordability.

The two largest manufactured housing consumer demographics, young adults and those who are age 55 and older, are both growing. "First-time" and "move-up" buyers of affordable homes are historically among the largest segments of new manufactured home purchasers. Included in this group are lower-income households that are particularly affected by periods of low employment rates and underemployment. Consumer confidence is especially important among manufactured home buyers interested in our products for seasonal or retirement living.

We ~~seek out~~employ a concerted effort to identify niche market opportunities where our diverse product lines and custom 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~~including higher utilization of renewable ~~materials. These homes~~materials and provide ~~environmentally-friendly maintenance requirements, typically~~ lower utility ~~costs and sustainability.~~costs. We also build homes designed to use alternative energy sources, such as solar.

We maintain a conservative cost structure in an effort to build added value into our homes and we work diligently to maintain a solid financial position. Our balance sheet strength, including the position in cash and cash equivalents, helps avoid liquidity problems and enables us to act effectively as market opportunities or challenges present themselves.

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We continue to make certain commercial loan programs available to members of our wholesale distribution chain. Under direct commercial loan arrangements, we provide funds for financed home purchases by distributors, community owners and developers (see Note 7 to the Consolidated Financial Statements). Our involvement in commercial loans helps to increase the availability of manufactured home financing to distributors, community owners and developers and provides additional ~~opportunity~~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 partners.

The lack of an efficient secondary market for manufactured home-only loans and the limited number of institutions providing such loans results in higher borrowing costs for home-only loans and continues to constrain industry growth. We work ~~directly~~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. Additionally, we continue to invest in community-based lending initiatives that provide home-only financing to ~~new~~ residents of certain manufactured home communities. 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 ~~financial services segment, as well as provide a means that could lead to increased home sales for our~~ factory-built housing ~~operations.~~operations and reduce our exposure to the actions of independent lenders.

While home production continues to experience hiring challenges, unpredictable factory employee absenteeism and building material supply disruptions, our factory utilization for the third fiscal quarter of ~~2022~~ ~~was back to pre-pandemic levels of approximately 80%, up from a rate of 75% the past four quarters. This is the result of an increase in production headcount and less production hours per module.~~

~~Housing demand remains strong, as qualified individuals continue pursuing affordable home-ownership.~~ Home order rates have moderated from the extreme highs we saw during the ~~past few quarters, but still remain above pre-COVID rates, which we considered~~summer of 2020 to ~~be strong.~~

the summer of 2021. However, o~~Our~~ur backlogs at ~~January 1,~~July 2, 2022 were ~~$1.1~~$1.0 billion, consistent with ~~second fiscal~~the sequential prior quarter of ~~2022~~ $1.1 billionand up ~~$633~~$206 million, or ~~134.1%~~26.3%, compared to $~~472~~792 million at ~~December 26, 2020.~~July 3, 2021. The year over year increase includes ~~$277~~$231 million attributable to Commodore. Backlogs exclude home orders that have been paused or canceled at the request of the customer.

Key housing building materials include wood, ~~and~~ wood products, steel, gypsum wallboard, ~~steel,~~ windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances ~~insulation~~ and ~~other petroleum-based produ~~electrical items~~cts.~~. Fluctuations in the cost of materials and labor may affect gross margins from home sales to the extent that costs cannot be efficiently matched to the home sales price. Pricing and availability of certain raw materials have recently been volatile due to a number of factors in thethe current environment. We continue to monitor and react to inflation in these materials by maintaining a focus on our product pricing in response to higher materials costs, but such product pricing increases may lag behind the escalation of such costs. From time to time and to varying degrees, we may experience shortages in the availability of materials and/or labor in the markets served. Availability of these ~~products~~inputs has not caused asignificant production ~~halt~~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 we have needed to change processes in response to the delay in materials. These shortages may also result in extended order backlogs, delays in the delivery of homes and reduced gross margins from home sales.

While it is difficult to predict the future of housing demand, employee availability, supply chain and Company performance and operations, maintaining an appropriately sized and well-trained workforce is key to increasing production to meet increased demand, and we face challenges in overcoming labor-related difficulties in the current environment to increase home production. We continually review the wage rates of our production employees and have established other monetary incentive and benefit programs, with a goal of providing competitive compensation. We are also ~~provide leadership training~~working to ~~new managers and other employees in supervisory roles to enhance communication and improve the oversight and motivation of other employees,~~ more extensively use ~~online~~web-based recruiting tools, update our recruitment brochures and improve the appearance and appeal of our manufacturing facilities to improve the recruitment and retention of qualified production employees and reduce annualized turnover rates. ~~Regardless, we~~We believe our ability to recruit the workforce we need to help meet the overall need for affordable housing continues to improve.

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In the financial services segment, we continue to assist customers in need by servicing existing loans and insurance policies and complying with state and federal regulations regarding loan forbearance, home foreclosures and policy cancellations. Certain loans serviced for investors expose us to cash flow deficits if customers do not make contractual monthly payments of principal and interest in a timely manner. For certain loans serviced for Ginnie Mae and Freddie Mac, and home-only loans serviced for certain other investors, we must remit scheduled monthly principal and/or interest payments and principal curtailments regardless of whether monthly mortgage payments are collected from borrowers. Ginnie Mae permits cash obligations on loans in forbearance from COVID-19 to be offset by other incoming cash flows from loans such as loan pre-payments. ~~Although monthly~~Monthly collections of principal and interest from borrowers have exceeded scheduled principal and interest payments owed to ~~investors,~~investors; however, mandatory extended forbearance under the Coronavirus Aid, Relief and Economic Security Act and certain other regulations related to COVID-19 could negatively impact cash obligations in the future.

Results of Operations

Net Revenue


		Three Months Ended
($ in thousands, except revenue per home sold)		January 1, 2022		December 26, 2020		Change
Factory-built housing		$	413,590	$	270,822	$	142,768	52.7	%
Financial services		18,124		17,950		174		1.0	%
		$	431,714	$	288,772	$	142,942	49.5	%
Factory-built homes sold
by Company-owned retail sales centers		658		768		(110)		(14.3)	%
to independent retailers, builders, communities and developers		3,766		2,835		931		32.8	%
		4,424		3,603		821		22.8	%
Net factory-built housing revenue per home sold		$	93,488	$	75,166	$	18,322	24.4	%

		Nine Months Ended									Three Months Ended
($ in thousands, except revenue per home sold)	($ in thousands, except revenue per home sold)	January 1, 2022		December 26, 2020		Change				($ in thousands, except revenue per home sold)	July 2, 2022		July 3, 2021		Change
Factory-built housing	Factory-built housing	$	1,067,967	$	749,879	$	318,088	42.4	%	Factory-built housing	$	572,597	$	312,283	$	260,314	83.4	%
Financial services	Financial services	53,712		51,670		2,042		4.0	%	Financial services	15,741		18,139		(2,398)		(13.2)	%
		$	1,121,679	$	801,549	$	320,130	39.9	%		$	588,338	$	330,422	$	257,916	78.1	%

Factory-built homes sold	Factory-built homes sold									Factory-built homes sold
by Company-owned retail sales centers	by Company-owned retail sales centers	2,091		2,283		(192)		(8.4)	%	by Company-owned retail sales centers	873		723		150		20.7	%
to independent retailers, builders, communities and developers	to independent retailers, builders, communities and developers	9,630		8,096		1,534		18.9	%	to independent retailers, builders, communities and developers	4,473		2,977		1,496		50.3	%
		11,721		10,379		1,342		12.9	%		5,346		3,700		1,646		44.5	%
Net factory-built housing revenue per home sold	Net factory-built housing revenue per home sold	$	91,116	$	72,250	$	18,866	26.1	%	Net factory-built housing revenue per home sold	$	107,108	$	84,401	$	22,707	26.9	%

In the factory-built housing segment, the increase in Net ~~revenues~~revenue was primarily due to an increase in the average sales price and the number of units sold. The higher home prices were driven by product price ~~increases and a shift toward more multi-module homes.~~increases. Home sales volume increased from the addition of Commodore, which provided $101 million in Net revenue for the three months ended July 2, 2022, and higher factory capacity ~~utilization, partially offset by lower retail sales.~~utilization.

~~Table of Contents~~

Net factory-built housing revenue per home sold is a volatile metric dependent upon several factors. A primary factor is the price disparity between sales of homes to independent distributors, builders, communities and developers and sales of homes to consumers by Company-owned 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, 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 in the number of modules per home, the selection of different home types/models and optional home upgrades create changes in product mix, also causing fluctuations in this metric. The table below presents the mix of modules and homes sold for the three ~~and nine~~ months ended ~~January 1,~~July 2, 2022 and ~~December 26, 2020:~~July 3, 2021:

Three Months Ended
January 1,
2022 December 26,
2020 Change
Modules Homes Modules Homes Modules Homes
U.S. Housing and Urban Development ("HUD") code homes 6,166 3,583 5,427 3,186 13.6 % 12.5 %
Modular homes 1,270 632 533 255 138.3 % 147.8 %
Park model RVs 209 209 162 162 29.0 % 29.0 %
7,645 4,424 6,122 3,603 24.9 % 22.8 %
Nine Months Ended
January 1,
2022 December 26,
2020 Change
Modules Homes Modules Homes Modules Homes
HUD code homes 17,366 10,013 15,338 9,030 13.2 % 10.9 %
Modular homes 2,257 1,112 1,483 693 52.2 % 60.5 %
Park model RVs 596 596 656 656 (9.1) % (9.1) %
20,219 11,721 17,477 10,379 15.7 % 12.9 %

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	Three Months Ended
	July 2, 2022		July 3, 2021		Change
	Modules	Homes	Modules	Homes	Modules		Homes
HUD code homes	8,515	4,854	5,652	3,276	50.7	%	48.2	%
Modular homes	486	251	468	226	3.8	%	11.1	%
Park model RVs	241	241	198	198	21.7	%	21.7	%
	9,242	5,346	6,318	3,700	46.3	%	44.5	%

Financial services segment revenue ~~increased~~decreased primarily due to ~~higher volume in home loan sales and more insurance policies in force in the current year compared to the prior year, partially offset by~~ lower interest income earned on the acquired consumer loan portfolios that continue to amortize, ~~and lower~~ unrealized ~~gains~~losses on marketable equity securities in the insurance subsidiary's ~~portfolio.~~portfolio and lower volume of home loan sales, partially offset by more insurance policies in force. For the three ~~and nine~~ months ended ~~January 1,~~July 2, 2022 and July 3, 2021, we recognized unrealized ~~gains~~losses on marketable equity securities of ~~$0.5~~$1.2 million and ~~$0.4 million, respectively. For the three and nine months ended December 26, 2020, we recognized~~ unrealized gains of ~~$1.0~~$0.4 million, ~~and $2.7 million,~~ respectively.

~~Table of Contents~~

Gross Profit


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	January 1, 2022			December 26, 2020			Change				($ in thousands)	July 2, 2022			July 3, 2021			Change
Factory-built housing	Factory-built housing	$	104,119		$	47,031		$	57,088	121.4	%	Factory-built housing	$	139,586		$	66,273		$	73,313	110.6	%
Financial services	Financial services	11,089			12,207			(1,118)		(9.2)	%	Financial services	5,138			7,740			(2,602)		(33.6)	%
		$	115,208		$	59,238		$	55,970	94.5	%		$	144,724		$	74,013		$	70,711	95.5	%

Gross profit as % of Net revenue	Gross profit as % of Net revenue											Gross profit as % of Net revenue
Consolidated	Consolidated	26.7		%	20.5		%	N/A		6.2	%	Consolidated	24.6		%	22.4		%	N/A		2.2	%
Factory-built housing	Factory-built housing	25.2		%	17.4		%	N/A		7.8	%	Factory-built housing	24.4		%	21.2		%	N/A		3.2	%
Financial services	Financial services	61.2		%	68.0		%	N/A		(6.8)	%	Financial services	32.6		%	42.7		%	N/A		(10.1)	%

		Nine Months Ended
($ in thousands)		January 1, 2022			December 26, 2020			Change
Factory-built housing		$	252,691		$	140,178		$	112,513	80.3	%
Financial services		26,458			27,924			(1,466)		(5.2)	%
		$	279,149		$	168,102		$	111,047	66.1	%

Gross profit as % of Net revenue
Consolidated		24.9		%	21.0		%	N/A		3.9	%
Factory-built housing		23.7		%	18.7		%	N/A		5.0	%
Financial services		49.3		%	54.0		%	N/A		(4.7)	%

Factory-built housing gross profit increased for the three ~~and nine~~ months ended ~~January 1,~~July 2, 2022 primarily due to higher average sales prices, ~~and~~ increased home sales volume and streamlining of our HUD code product offering across our network, partially offset by higher ~~material~~materials costs per ~~unit and purchase accounting related items at Commodore.~~unit. We continue to monitor and react to inflation in building material prices by maintaining a focus on our product pricing; however, product price increases may lag behind the escalation of building material costs. While lower lumber product market price benefits are being realized in cost of sales for the three and nine months ended January 1, 2022, we have seen most other product prices increase, offsetting those lumber declines. In addition to lumber price benefits, Gross profit as a percentage of Net revenue also increased from a shift toward more multi-module homes and from streamlining our HUD code product offering across our network.

For the three ~~and nine~~ months ended ~~January 1,~~July 2, 2022, Financial services gross profit decreased primarily due to higher weather related claims and ~~lower~~ unrealized ~~gains~~losses on marketable equity securities compared to unrealized gains in the prior year period.

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Selling, General and Administrative Expenses


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	January 1, 2022			December 26, 2020			Change				($ in thousands)	July 2, 2022			July 3, 2021			Change
Factory-built housing	Factory-built housing	$	55,735		$	30,575		$	25,160	82.3	%	Factory-built housing	$	60,923		$	35,497		$	25,426	71.6	%
Financial services	Financial services	4,587			4,839			(252)		(5.2)	%	Financial services	5,213			5,335			(122)		(2.3)	%
		$	60,322		$	35,414		$	24,908	70.3	%		$	66,136		$	40,832		$	25,304	62.0	%
Selling, general and administrative expenses as % of Net revenue	Selling, general and administrative expenses as % of Net revenue	14.0		%	12.3		%	N/A		1.7	%	Selling, general and administrative expenses as % of Net revenue	11.2		%	12.4		%	N/A		(1.2)	%

		Nine Months Ended
($ in thousands)		January 1, 2022			December 26, 2020			Change
Factory-built housing		$	131,579		$	92,037		$	39,542	43.0	%
Financial services		14,947			14,153			794		5.6	%
		$	146,526		$	106,190		$	40,336	38.0	%
Selling, general and administrative expenses as % of Net revenue		13.1		%	13.2		%	N/A		(0.1)	%

For the three months ended ~~January 1,~~July 2, 2022, Selling, general and administrative expenses related to factory-built housing increased between periods primarily from the addition of Commodore, higher salary and incentive-based compensation expense and expenses incurred in engaging third-party consultants in relation to ~~pursuing the availability of~~claiming the non-recurring energy efficient home net tax credits. The nine month period also includes $2.4 million in deal costs related to the Commodore acquisition and $1.2 million in expenses related to the SEC inquiry. This was partially offset by a reductioncredits which were recognized in the ~~amortization of the additional Director and Officer insurance premium, added in the third quarter~~second half of fiscal ~~year 2019, which was $4.2 million for the nine months ended December 26, 2020, with no expense in the current year.~~2022.

~~In Financial services,~~As a percentage of Net revenue, Selling, general and administrative expenses ~~increased primarily~~improved 120 basis points from ~~greater recognition~~better utilization of ~~deferred origination~~fixed costs on higher ~~loan~~ sales.

~~Table of Contents~~

Other Components of Net Income


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	January 1, 2022			December 26, 2020			Change				($ in thousands)	July 2, 2022			July 3, 2021			Change
Interest expense	Interest expense	$	209		$	177		$	32	18.1	%	Interest expense	$	161		$	164		$	(3)	(1.8)	%
Other income, net	Other income, net	4,258			2,243			2,015		89.8	%	Other income, net	883			2,461			(1,578)		(64.1)	%
Income tax (benefit) expense		(20,680)			6,189			(26,869)		(434.1)	%
Income tax expense												Income tax expense	19,616			8,432			11,184		132.6	%
Effective tax rate	Effective tax rate	(35.1)		%	23.9		%	N/A		(59.0)	%	Effective tax rate	24.7		%	23.8		%	N/A		0.9	%

		Nine Months Ended
($ in thousands)		January 1, 2022			December 26, 2020			Change
Interest expense		$	576		$	567		$	9	1.6	%
Other income, net		11,387			5,821			5,566		95.6	%
Income tax (benefit) expense		(910)			15,742			(16,652)		(105.8)	%
Effective tax rate		(0.6)		%	23.4		%	N/A		(24.0)	%

Interest expense consists primarily of ~~debt service on the financings of manufactured home-only loans and~~ interest related to finance leases.

Other income, net primarily consists of realized and unrealized gains and losses on corporate investments, interest income related to commercial loan receivable balances, ~~(which increased with the addition of Commodore),~~ interest income earned on cash balances and gains and losses from the sale of property, plant and equipment. ~~During the year, we also recognized~~Other income, net declined from a ~~non-cash gain of $3.3~~$1.1 million unrealized loss on ~~the remeasurement of the assets~~corporate marketable investments and ~~liabilities of Craftsman. See Note 22 to the Consolidated Financial Statements for further information~~.

~~The effective~~lower interest income tax rate was a benefit for the three and nine months ended January 1, 2022. This is due to $34.4 million of estimated non-recurring net tax credits related to the sale of energy efficient homes between fiscal year 2018 and fiscal third quarter 2022 available under the Internal Revenue Code §45L. This credit was initially established under the Federal Energy Policy Act of 2005 and most recently extended in the Consolidated Appropriations Act, 2021. It allows for eligible manufacturer to claim a tax credit for each qualifying newly constructed and sold residence. Excluding ~~these credits, the effective income tax rate was consistent between periods.~~on reduced cash balances.

Liquidity and Capital Resources

We believe that cash and cash equivalents at ~~January 1,~~July 2, 2022, 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 U.S. Treasury and other money market funds, some of which are in excess of federally insured limits. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on our liquidity and capital resources. Because of our sufficient cash position, we have not historically sought external sources of liquidity, with the exception of certain credit facilities for ~~the~~our home-only lending programs. Regardless, depending on our operating results and strategic opportunities, we may choose to seek additional or alternative sources of 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 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.

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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 legal 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.

The following is a summary of the Company's cash flows for the ~~nine~~three months ended ~~January 1,~~July 2, 2022 and ~~December 26, 2020,~~July 3, 2021, respectively:


		Nine Months Ended							Three Months Ended
(in thousands)	(in thousands)	January 1, 2022		December 26, 2020		$ Change		(in thousands)	July 2, 2022		July 3, 2021		$ Change
Cash, cash equivalents and restricted cash at beginning of the fiscal year	Cash, cash equivalents and restricted cash at beginning of the fiscal year	$	339,307	$	255,607	$	83,700	Cash, cash equivalents and restricted cash at beginning of the fiscal year	$	259,334	$	339,307	$	(79,973)
Net cash provided by operating activities	Net cash provided by operating activities	125,967		91,566		34,401		Net cash provided by operating activities	58,240		24,275		33,965
Net cash used in investing activities	Net cash used in investing activities	(147,842)		(5,098)		(142,744)		Net cash used in investing activities	(24,399)		(3,616)		(20,783)
Net cash used in financing activities	Net cash used in financing activities	(34,290)		(1,451)		(32,839)		Net cash used in financing activities	(40,213)		(13,150)		(27,063)
Cash, cash equivalents and restricted cash at end of the period	Cash, cash equivalents and restricted cash at end of the period	$	283,142	$	340,624	$	(57,482)	Cash, cash equivalents and restricted cash at end of the period	$	252,962	$	346,816	$	(93,854)

Net cash provided by operating activities increased primarily from higher net income ~~and proceeds from consumer loan sales, which were $142.4 million this year compared to $122.6 million in the previous year.~~adjusted for non-cash items. This increase was partially offset by ~~the refunds related to the estimated~~ increased lending in our Financial Services segment, as well as under our commercial loan programs~~net tax credits under the Internal Revenue Code §45L which had not been received as of January 1, 2022,~~ ~~rising costs of our raw materials and higher purchases of such materials and payments on Accounts payable and Accrued expenses and other current liabilities.~~

. Consumer loan originations ~~decreased $1.2~~increased $4.8 million to ~~$122.9~~$47.5 million for the ~~nine~~three months ended ~~January 1,~~July 2, 2022 from ~~$124.1~~$42.7 million for the ~~nine~~three months ended ~~December 26, 2020.~~

We enter into commercial loan arrangements with distributors, communities and developers under which we provide funds for financing homes. In addition, we enter into commercial loan arrangements with certain distributors of our products under which we provide funds for wholesale purchases. We have also invested in community-based lending initiatives that provide home-only financing to new residents of certain manufactured home communities. For additional information regarding our commercial loans receivable, ~~see Note 7 to the Consolidated Financial Statements.~~ Further, we invest in and develop home-only loan pools and lending programs to attract third party financier interest in order to grow sales of new homes through traditional distribution points. Cash receipts, net of amounts loaned, increased cash by ~~$8.1 million~~ ~~while the prior period net activity provided an additional~~ ~~$6.4 million in cash.~~July 3, 2021.

Net cash used in 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. Greater cash ~~was~~ used in the current period ~~for~~reflects the purchase of ~~Craftsman and Commodore.~~plant facilities in Hamlet, North Carolina.

Net cash used in financing activities for the current period was primarily for the repurchase of common stock ~~and the payments of the~~ ~~secured term loans, which have been paid in full as of January 1, 2022.~~.

~~Contractual Commitments~~See Note 14 to the Consolidated Financial Statements for a discussion of our off-balance sheet commitments, which discussion is incorporated herein by reference.

Obligations and ~~Contingencies.~~Commitments. There were no material changes to the ~~contractual~~ obligations and commitments as set forth in our Annual Report on Form 10-K.

Critical Accounting ~~Policies~~Estimates

Except as described in Note 1 to the Consolidated Financial Statements, there have been no other significant changes to our critical accounting ~~policies~~estimates during the ~~nine~~three months ended ~~January 1,~~July 2, 2022, as compared to those disclosed in Part II, Item 7 of our Form 10-K, under the heading "Critical Accounting ~~Policies,~~Estimates," which provides a discussion of the critical accounting ~~policies~~estimates that management believes affect its more significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.

Other Matters

Impact of Inflation. At the end of the period, inflation was the highest in the U.S. in over 30 years. Our ability to maintain certain levels of gross margin can be adversely impacted by sudden increases in specific costs, such as the increases in materials and labor. In addition, measures used by the Federal Reserve to combat inflation, such as increases in interest rates, could also have an impact on the ability of home buyers to obtain affordable financing. We can give no assurance that inflation will not affect our future profitability and financial position.

Table of Contents

~~Other Matters~~

~~Related Party Transactions.~~ ~~See Note 21 to the Consolidated Financial Statements~~ ~~for a discussion~~ ~~of our related party transactions.~~

~~Off Balance Sheet Arrangements~~

~~See Note 16 to the Consolidated Financial Statements~~ ~~for a discussion~~ ~~of our off-balance sheet commitments, which discussion is incorporated herein by reference.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk previously disclosed in the Form 10-K.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its President and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, the Company's President and Chief Executive Officer and its Chief Financial Officer concluded that, as of ~~January 1,~~July 2, 2022, its disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

There ~~have~~has been no ~~changes~~change in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended ~~January 1,~~July 2, 2022 which ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See the information under the "Legal Matters" caption in Note 1614 to the 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 the Form 10-K, which could materially affect our business, financial condition or future results. The risks described in this Report and in the Form 10-K are not the only risks facing 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

OnAs announced on October ~~27,~~29, 2020 in a current report on Form 8-K, the Company's Board of Directors approved a $100 million stock repurchase program ~~which was announced on a Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2020, and that we may use~~ to purchase ~~our~~its outstanding common stock. The ~~repurchases may be made in~~program was completed during the ~~open market or in privately negotiated transactions in compliance with applicable state and federal securities laws and other legal requirements. The level~~first quarter of ~~repurchase activity is subject to market conditions and other investment opportunities.~~fiscal year 2023. 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 repurchase program is~~was funded using our available cash. The following table sets forth repurchases of our common stock during the ~~third quarter~~current quarter:


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 Program (in thousands)
April 3, 2022 to May 7, 2022	163,040	$	238.96	163,040	$	—
May 8, 2022 to June 4, 2022	—	—		—	—
June 5, 2022 to July 2, 2022	—	—		—	—
	163,040	$	238.96	163,040	$	—

As announced on May 26, 2022 in a current report on Form 8-K, the Company's Board of ~~fiscal year 2022:~~

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 Program (in thousands)
October 3, 2021 to
      November 6, 2021
— $ — — $ 78,123
November 7, 2021 to
      December 4, 2021
26,672 305.58 26,672 69,972
December 5, 2021 to
      January 1, 2022
1,700 316.83 1,700 69,433
28,372 28,372
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 program.

Item 5. Other Information

There is no other information required to be disclosed under this item which was not previously disclosed.

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Item 6. Exhibits

Exhibit No.

Exhibit

Exhibit No.

Exhibit

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)

31.1

(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)

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)

(2)

Certification Pursuant to 18 U.S.C. 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(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.INS

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101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation 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)

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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

(1) Filed herewith.

(2) Furnished herewith.

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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

/s/ William C. Boor	Director, President and Chief Executive Officer	~~February 7,~~August 5, 2022
William C. Boor	(Principal Executive Officer)

/s/ Allison K. Aden	Executive Vice President, Chief Financial Officer & Treasurer	~~February 7,~~August 5, 2022
Allison K. Aden	(Principal Financial Officer)

3628


	Classification	January 1, 2022		April 3, 2021
ROU assets
Operating lease assets	Operating lease right-of-use assets	$	15,974	$	16,252
Finance lease assets	Property, plant and equipment, net (1)	7,114		986
Total lease assets		$	23,088	$	17,238

Lease Liabilities
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	4,773	$	4,184
Finance lease liabilities	Current portion of secured financings and other	347		71
Non-current:
Operating lease liabilities	Operating lease liabilities	12,482		13,361
Finance lease liabilities	Secured financings and other	5,986		233
Total lease liabilities		$	23,588	$	17,849


	Operating Leases		Finance Leases		Total
Remainder of 2022	$	1,225	$	89	$	1,314
2023	4,748		356		5,104
2024	4,210		356		4,566
2025	3,188		356		3,544
2026	3,133		356		3,489
2027	1,086		356		1,442
Thereafter	1,439		10,941		12,380
	19,029		12,810		31,839
Less amount representing interest	(1,774)		(6,477)		(8,251)
	17,255		6,333		23,588
Less current portion	(4,773)		(347)		(5,120)
	$	12,482	$	5,986	$	18,468


	Remaining Lease Term (Years)	Discount Rate
Operating leases	4.6	4.5	%
Finance leases	35.9	4.5	%


	January 1, 2022		April 3, 2021
Finance lease obligations	$	6,333	$	304
Other secured financings	3,024		3,672
Mandatorily redeemable noncontrolling interest	2,471		—
Secured term loans	—		8,210
	11,828		12,186
Less current portion	(798)		(1,851)
	$	11,030	$	10,335