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 ~~December 31, 2022~~September 30, 2023


☐			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(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 ~~January~~October 27, 2023, ~~8,693,699~~8,325,363 shares of the registrant's Common Stock, ~~$.01~~$0.01 par value, were outstanding.

CAVCO INDUSTRIES, INC.

FORM 10-Q

~~December 31, 2022~~September 30, 2023

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of ~~December 31, 2022~~September 30 , 2023 (unaudited) and April ~~2, 2022~~1, 2023			1
Consolidated Statements of Comprehensive Income (unaudited) for the three and ~~nine~~ six months ended ~~December 31, 2022~~September 30, 2023 and ~~January~~October 1, 2022			2
Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~six months ended ~~December 31, 2022~~September 30 , 2023 and ~~January~~ October 1 , 2022			3
Notes to Consolidated Financial Statements (unaudited)			4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3029
Item 4. Controls and Procedures			3129
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3230
Item 1A. Risk Factors			3230
Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Purchases of Equity Securities			3330
Item 3. Not applicable
Item 4. Not applicable
Item 5. Other Information			3330
Item 6. Exhibits			3431
SIGNATURES			3532

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

CAVCO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
ASSETS	ASSETS	(Unaudited)				ASSETS	(Unaudited)
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	376,148	$	244,150	Cash and cash equivalents	$	377,264	$	271,427
Restricted cash, current	Restricted cash, current	9,911		14,849		Restricted cash, current	17,180		11,728
Accounts receivable, net	Accounts receivable, net	80,062		96,052		Accounts receivable, net	88,560		89,347
Short-term investments	Short-term investments	16,607		20,086		Short-term investments	14,358		14,978
Current portion of consumer loans receivable, net	Current portion of consumer loans receivable, net	13,763		20,639		Current portion of consumer loans receivable, net	10,503		17,019
Current portion of commercial loans receivable, net	Current portion of commercial loans receivable, net	33,899		32,272		Current portion of commercial loans receivable, net	48,583		43,414
Current portion of commercial loans receivable from affiliates, net	Current portion of commercial loans receivable from affiliates, net	298		372		Current portion of commercial loans receivable from affiliates, net	1,959		640
Inventories	Inventories	215,458		243,971		Inventories	244,476		263,150
Prepaid expenses and other current assets	Prepaid expenses and other current assets	86,408		71,726		Prepaid expenses and other current assets	72,560		92,876
Total current assets	Total current assets	832,554		744,117		Total current assets	875,443		804,579
Restricted cash	Restricted cash	335		335		Restricted cash	585		335
Investments	Investments	21,822		34,933		Investments	20,507		18,639
Consumer loans receivable, net	Consumer loans receivable, net	26,903		29,245		Consumer loans receivable, net	25,233		27,129
Commercial loans receivable, net	Commercial loans receivable, net	40,727		33,708		Commercial loans receivable, net	40,998		53,890
Commercial loans receivable from affiliates, net	Commercial loans receivable from affiliates, net	3,049		2,214		Commercial loans receivable from affiliates, net	2,928		4,033
Property, plant and equipment, net	Property, plant and equipment, net	194,329		164,016		Property, plant and equipment, net	223,664		228,278
Goodwill	Goodwill	100,577		100,993		Goodwill	116,015		114,547
Other intangibles, net	Other intangibles, net	26,948		28,459		Other intangibles, net	29,005		29,790
Operating lease right-of-use assets	Operating lease right-of-use assets	17,230		16,952		Operating lease right-of-use assets	34,413		26,755
Total assets	Total assets	$	1,264,474	$	1,154,972	Total assets	$	1,368,791	$	1,307,975
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	$	26,788	$	43,082	Accounts payable	$	41,095	$	30,730
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	251,635		251,088		Accrued expenses and other current liabilities	264,380		262,661
Total current liabilities	Total current liabilities	278,423		294,170		Total current liabilities	305,475		293,391
Operating lease liabilities	Operating lease liabilities	13,058		13,158		Operating lease liabilities	30,529		21,678
Other liabilities	Other liabilities	7,898		10,836		Other liabilities	7,792		7,820
Deferred income taxes	Deferred income taxes	8,663		5,528		Deferred income taxes	5,740		7,581
Redeemable noncontrolling interest	Redeemable noncontrolling interest	932		825		Redeemable noncontrolling interest	—		1,219
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 9,319,700 and 9,292,278 shares, respectively		93		93
Treasury stock, at cost; 556,344 and 241,773 shares, respectively		(134,270)		(61,040)
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,356,421 and 9,337,125 shares, respectively						Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,356,421 and 9,337,125 shares, respectively	94		93
Treasury stock, at cost; 844,742 and 671,801 shares, respectively						Treasury stock, at cost; 844,742 and 671,801 shares, respectively	(211,646)		(164,452)
Additional paid-in capital	Additional paid-in capital	268,423		263,049		Additional paid-in capital	274,204		271,950
Retained earnings	Retained earnings	821,998		628,756		Retained earnings	957,206		869,310
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(744)		(403)		Accumulated other comprehensive loss	(603)		(615)
Total stockholders' equity	Total stockholders' equity	955,500		830,455		Total stockholders' equity	1,019,255		976,286
Total liabilities, redeemable noncontrolling interest and stockholders' equity	Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,264,474	$	1,154,972	Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,368,791	$	1,307,975

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				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net revenue	Net revenue	$	500,603	$	431,714	$	1,666,333	$	1,121,679	Net revenue	$	452,030	$	577,392	$	927,905	$	1,165,730
Cost of sales	Cost of sales	368,635		316,506		1,232,042		842,530		Cost of sales	345,073		419,793		703,069		863,407
Gross profit	Gross profit	131,968		115,208		434,291		279,149		Gross profit	106,957		157,599		224,836		302,323
Selling, general and administrative expenses	Selling, general and administrative expenses	58,904		60,322		191,934		146,526		Selling, general and administrative expenses	61,506		66,894		123,186		133,030
Income from operations	Income from operations	73,064		54,886		242,357		132,623		Income from operations	45,451		90,705		101,650		169,293
Interest income										Interest income	5,812		1,851		10,430		3,165
Interest expense	Interest expense	(216)		(209)		(610)		(576)		Interest expense	(257)		(233)		(523)		(394)
Other income, net	Other income, net	3,233		4,258		6,455		11,387		Other income, net	655		488		781		57
Income before income taxes	Income before income taxes	76,081		58,935		248,202		143,434		Income before income taxes	51,661		92,811		112,338		172,121
Income tax (expense) benefit		(16,492)		20,680		(54,721)		910
Income tax expense										Income tax expense	(10,088)		(18,613)		(24,354)		(38,229)
Net income	Net income	59,589		79,615		193,481		144,344		Net income	41,573		74,198		87,984		133,892
Less: net income attributable to redeemable noncontrolling interest	Less: net income attributable to redeemable noncontrolling interest	65		196		239		269		Less: net income attributable to redeemable noncontrolling interest	34		82		88		174
Net income attributable to Cavco common stockholders	Net income attributable to Cavco common stockholders	$	59,524	$	79,419	$	193,242	$	144,075	Net income attributable to Cavco common stockholders	$	41,539	$	74,116	$	87,896	$	133,718

Comprehensive income	Comprehensive income									Comprehensive income
Net income	Net income	$	59,589	$	79,615	$	193,481	$	144,344	Net income	$	41,573	$	74,198	$	87,984	$	133,892
Reclassification adjustment for securities sold	Reclassification adjustment for securities sold	(13)		(16)		(19)		(15)		Reclassification adjustment for securities sold	3		(6)		6		(6)
Applicable income taxes	Applicable income taxes	3		3		4		3		Applicable income taxes	—		1		(1)		1
Net change in unrealized position of investments held	Net change in unrealized position of investments held	107		(127)		(412)		(161)		Net change in unrealized position of investments held	65		(377)		9		(519)
Applicable income taxes	Applicable income taxes	(23)		27		86		34		Applicable income taxes	(14)		79		(2)		109
Comprehensive income	Comprehensive income	59,663		79,502		193,140		144,205		Comprehensive income	41,627		73,895		87,996		133,477
Less: comprehensive income attributable to redeemable noncontrolling interest	Less: comprehensive income attributable to redeemable noncontrolling interest	65		196		239		269		Less: comprehensive income attributable to redeemable noncontrolling interest	34		82		88		174
Comprehensive income attributable to Cavco common stockholders	Comprehensive income attributable to Cavco common stockholders	$	59,598	$	79,306	$	192,901	$	143,936	Comprehensive income attributable to Cavco common stockholders	$	41,593	$	73,813	$	87,908	$	133,303

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	$	6.71	$	8.66	$	21.72	$	15.68	Basic	$	4.80	$	8.32	$	10.15	$	15.01
Diluted	Diluted	$	6.66	$	8.57	$	21.55	$	15.54	Diluted	$	4.76	$	8.25	$	10.05	$	14.88
Weighted average shares outstanding	Weighted average shares outstanding									Weighted average shares outstanding
Basic	Basic	8,870,565		9,174,224		8,897,405		9,187,828		Basic	8,656,537		8,903,703		8,663,430		8,910,933
Diluted	Diluted	8,936,075		9,270,438		8,969,104		9,270,855		Diluted	8,731,419		8,978,997		8,742,734		8,983,425

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					Six Months Ended
		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	193,481	$	144,344	Net income	$	87,984	$	133,892
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	12,174		6,750		Depreciation and amortization	9,234		8,284
Provision for credit losses	Provision for credit losses	(585)		(220)		Provision for credit losses	(204)		(263)
Deferred income taxes	Deferred income taxes	3,225		1,186		Deferred income taxes	(1,845)		630
Stock-based compensation expense	Stock-based compensation expense	4,855		3,460		Stock-based compensation expense	2,989		3,525
Non-cash interest income, net	Non-cash interest income, net	(527)		(1,115)		Non-cash interest income, net	(1,413)		(280)
Gain on sale or retirement of property, plant and equipment, net		(116)		(307)
Loss (gain) on sale or retirement of property, plant and equipment, net						Loss (gain) on sale or retirement of property, plant and equipment, net	40		(25)
Gain on investments and sale of loans, net	Gain on investments and sale of loans, net	(6,647)		(18,379)		Gain on investments and sale of loans, net	(4,278)		(3,303)
Distributions of earnings from equity method investments		4,306		—

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	15,988		4,366		Accounts receivable	144		(562)
Consumer loans receivable originated	Consumer loans receivable originated	(135,552)		(122,872)		Consumer loans receivable originated	(56,158)		(97,155)
Proceeds from sales of consumer loans		146,050		142,445
Proceeds from sales of consumer loans receivable						Proceeds from sales of consumer loans receivable	65,113		100,537
Principal payments received on consumer loans receivable	Principal payments received on consumer loans receivable	7,206		8,861		Principal payments received on consumer loans receivable	3,567		4,961
Inventories	Inventories	28,513		(29,899)		Inventories	19,683		10,006
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(16,525)		(33,746)		Prepaid expenses and other current assets	17,823		(4,832)
Commercial loans receivable		(9,652)		8,080
Accounts payable and accrued expenses and other current liabilities		(16,075)		13,013
Commercial loans receivable originated						Commercial loans receivable originated	(51,768)		(49,491)
Principal payments received on commercial loans receivable						Principal payments received on commercial loans receivable	59,378		41,839
Accounts payable, accrued expenses and other liabilities						Accounts payable, accrued expenses and other liabilities	9,911		15,179
Net cash provided by operating activities	Net cash provided by operating activities	230,119		125,967		Net cash provided by operating activities	160,200		162,942
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(40,850)		(8,938)		Purchases of property, plant and equipment	(8,470)		(33,188)
Payments for acquisitions, net	Payments for acquisitions, net	—		(141,428)		Payments for acquisitions, net	(1,298)		—
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	406		1,291		Proceeds from sale of property, plant and equipment	4,490		402
Purchases of investments	Purchases of investments	(10,198)		(8,224)		Purchases of investments	(6,499)		(9,742)
Proceeds from sale of investments	Proceeds from sale of investments	9,230		9,457		Proceeds from sale of investments	5,356		7,595
Return of invested capital from equity method investments		12,213		—

Net cash used in investing activities	Net cash used in investing activities	(29,199)		(147,842)		Net cash used in investing activities	(6,421)		(34,933)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Payments for taxes on stock option exercises and releases of equity awards	Payments for taxes on stock option exercises and releases of equity awards	(1,072)		(26)		Payments for taxes on stock option exercises and releases of equity awards	(1,643)		(982)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	1,591		4,328		Proceeds from exercise of stock options	909		1,591
Proceeds from secured financings and other		—		47

Payments on finance leases and other secured financings	Payments on finance leases and other secured financings	(549)		(9,213)		Payments on finance leases and other secured financings	(295)		(393)
Payments for common stock repurchases	Payments for common stock repurchases	(73,230)		(29,126)		Payments for common stock repurchases	(40,911)		(38,960)
Distributions to noncontrolling interest	Distributions to noncontrolling interest	(600)		(300)		Distributions to noncontrolling interest	(300)		(480)
Net cash used in financing activities	Net cash used in financing activities	(73,860)		(34,290)		Net cash used in financing activities	(42,240)		(39,224)
Net increase (decrease) in cash, cash equivalents and restricted cash		127,060		(56,165)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	111,539		88,785
Cash, cash equivalents and restricted cash at beginning of the fiscal year	Cash, cash equivalents and restricted cash at beginning of the fiscal year	259,334		339,307		Cash, cash equivalents and restricted cash at beginning of the fiscal year	283,490		259,334
Cash, cash equivalents and restricted cash at end of the period	Cash, cash equivalents and restricted cash at end of the period	$	386,394	$	283,142	Cash, cash equivalents and restricted cash at end of the period	$	395,029	$	348,119
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	$	71,137	$	21,573	Cash paid for income taxes	$	18,641	$	48,027
Cash paid for interest	Cash paid for interest	$	430	$	302	Cash paid for interest	$	368	$	142
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	$	(2,914)	$	(13,185)	Change in GNMA loans eligible for repurchase	$	(3,250)	$	(3,286)
Right-of-use assets recognized and operating lease obligations incurred	Right-of-use assets recognized and operating lease obligations incurred	$	3,535	$	2,455	Right-of-use assets recognized and operating lease obligations incurred	$	10,490	$	1,445
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 (UNAUDITED)

1. Basis of Presentation

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

In the opinion of management, these financial statements include all adjustments, including normal recurring adjustments, ~~that~~which are necessary to fairly state the results for the periods presented. Certain prior period amounts have been reclassified including from ~~secured financings~~Other income, net to ~~Accrued expenses and other current liabilities~~Interest income 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;~~SEC, and ~~except for the events set forth in Note 23,~~ there were no disclosable subsequent ~~events requiring disclosure.~~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 ~~2022~~2023 Annual Report on Form 10-K for the year ended April ~~2, 2022,~~1, 2023, 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 and accompanying ~~notes.~~Notes. Due to uncertainties, actual results could differ from 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 1, 2023~~March 30, 2024 and will include 52 weeks.

We operate in two 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 2729 homebuilding production lines located throughout the United States ~~which are sold to~~and two production lines in Mexico. We distribute our homes through a large network of independent ~~distributors, community operators and residential developers and through our 42~~distribution points as well as 68 Company-owned U.S. retail ~~stores.~~stores, of which 41 are located in Texas. 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 ~~("Fannie Mae")~~ and Federal Home Loan Mortgage Corporation ~~("Freddie Mac")~~ seller/servicer and a Government National Mortgage Association ("~~Ginnie Mae"~~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.

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During fiscal ~~2022,~~2023, we ~~acquired an additional 20% ownership~~completed the acquisition of Solitaire Inc. and other related entities (collectively "Solitaire Homes"), including their four manufacturing facilities and twenty-two retail locations by acquiring 100% of the outstanding stock of Solitaire Homes. The results of operations are included in our Consolidated Financial Statements from the date of acquisition. See Note 21.

We have a 70% interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively ~~known~~"Craftsman"). On September 28, 2023, we executed an amendment to the Membership Interest Purchase Agreement for Craftsman to acquire the remaining 30% ownership for cash on December 31, 2023. Under the original agreement, we were obligated to purchase 20% on December 31, 2023, and the remaining 10% was under a put/call arrangement with no specified timetable. As the remaining 10% was not mandatorily redeemable, it was classified as ~~"Craftsman"), which gave us~~ a ~~70% majority controlling ownership~~temporary equity mezzanine item between liabilities and ~~therefore became a consolidated entity. We also purchased certain manufactured housing assets and assumed certain liabilities of The Commodore Corporation ("Commodore"). Craftsman~~stockholders' equity in the Consolidated Balance Sheets as Redeemable noncontrolling interest. As the remaining 10% is ~~a manufactured home retailer with four locations~~now mandatorily redeemable, the value attributed to this noncontrolling interest is included in ~~Nevada selling Company~~Accrued expenses and other ~~manufacturer branded homes. Commodore added six manufacturing facilities and two wholly-owned retail locations, and also participates in commercial lending operations with its dealers.~~current liabilities on the Consolidated Balance Sheets at fair value.

~~In addition to the below, for~~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.

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2. Revenue from Contracts with Customers

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Factory-built housing	Factory-built housing									Factory-built housing
U.S. Housing and Urban Development code homes		$	398,859	$	357,453	$	1,402,805	$	905,790
Modular homes		36,498		30,451		108,072		88,454
Park model RVs		20,102		10,709		44,359		30,108
Other		25,734		14,977		58,156		43,615
Home sales										Home sales	$	410,040	$	544,501	$	849,784	$	1,099,777
Delivery, setup and other revenues										Delivery, setup and other revenues	24,026		15,101		41,391		32,422
		481,193		413,590		1,613,392		1,067,967			434,066		559,602		891,175		1,132,199
Financial services	Financial services									Financial services
Insurance agency commissions received from third-party insurance companies	Insurance agency commissions received from third-party insurance companies	887		1,304		3,313		3,027		Insurance agency commissions received from third-party insurance companies	1,017		1,029		1,916		2,426
All other sources	All other sources	18,523		16,820		49,628		50,685		All other sources	16,947		16,761		34,814		31,105
		19,410		18,124		52,941		53,712			17,964		17,790		36,730		33,531
		$	500,603	$	431,714	$	1,666,333	$	1,121,679		$	452,030	$	577,392	$	927,905	$	1,165,730

3. Restricted Cash

Restricted cash consisted of the following (in thousands):


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Cash related to CountryPlace customer payments to be remitted to third parties	Cash related to CountryPlace customer payments to be remitted to third parties	$	9,309	$	13,857	Cash related to CountryPlace customer payments to be remitted to third parties	$	15,567	$	11,123
Other restricted cash	Other restricted cash	937		1,327		Other restricted cash	2,198		940
		10,246		15,184			17,765		12,063
Current portion		(9,911)		(14,849)
Less current portion						Less current portion	(17,180)		(11,728)
		$	335	$	335		$	585	$	335

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

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


		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022
Cash and cash equivalents	Cash and cash equivalents	$	376,148	$	267,265	Cash and cash equivalents	$	377,264	$	333,249
Restricted cash	Restricted cash	10,246		15,877		Restricted cash	17,765		14,870
		$	386,394	$	283,142		$	395,029	$	348,119

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4. Investments

Investments consisted of the following (in thousands):


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Available-for-sale debt securities	Available-for-sale debt securities	$	19,036	$	17,760	Available-for-sale debt securities	$	19,821	$	18,555
Marketable equity securities	Marketable equity securities	14,103		16,780		Marketable equity securities	10,121		9,989
Non-marketable equity investments	Non-marketable equity investments	5,290		20,479		Non-marketable equity investments	4,923		5,073
		38,429		55,019			34,865		33,617
Less short-term investments	Less short-term investments	(16,607)		(20,086)		Less short-term investments	(14,358)		(14,978)
		$	21,822	$	34,933		$	20,507	$	18,639

Investments in marketable equity securities consist of investments in the common stock of industrial and other companies.

Our non-marketable equity investments include investments in other retail distribution operations and community-based ~~initiatives that buy and sell our homes and provide home-only financing to residents of certain manufactured home communities and other~~initiatives.

We record investments in ~~manufactured housing distributors.~~fixed maturity securities classified as available-for-sale at fair value and record the difference between fair value and cost in Accumulated other comprehensive loss in the Consolidated Balance Sheets.

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):


		December 31, 2022				April 2, 2022					September 30, 2023				April 1, 2023
		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost		Fair Value
Residential mortgage-backed securities	Residential mortgage-backed securities	$	2,670	$	2,572	$	1,668	$	1,613	Residential mortgage-backed securities	$	2,254	$	2,168	$	2,567	$	2,488
State and political subdivision debt securities	State and political subdivision debt securities	6,542		6,228		10,100		9,906		State and political subdivision debt securities	5,911		5,687		6,023		5,769
Corporate debt securities	Corporate debt securities	10,765		10,236		6,502		6,241		Corporate debt securities	12,419		11,966		10,745		10,298
		$	19,977	$	19,036	$	18,270	$	17,760		$	20,584	$	19,821	$	19,335	$	18,555

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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). ~~Actual~~Expected maturities ~~may~~ differ from contractual maturities as borrowers may have the right to call or prepay obligations, with or without penalties.

December 31, 2022
Amortized
Cost Fair
Value
Due in less than one year $ 1,740 $ 1,715
Due after one year through five years 14,172 13,355
Due after five years through ten years 1,003 1,004
Due after ten years 392 390
Mortgage-backed securities 2,670 2,572
$ 19,977 $ 19,036

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	September 30, 2023
	Amortized Cost		Fair Value
Due in less than one year	$	3,422	$	3,365
Due after one year through five years	14,269		13,651
Due after five years through ten years	250		250
Due after ten years	389		387
Mortgage-backed securities	2,254		2,168
	$	20,584	$	19,821

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Marketable equity securities	Marketable equity securities									Marketable equity securities
Net gain (loss) recognized during the period		$	707	$	2,967	$	(1,868)	$	4,906
Net (loss) gain recognized during the period										Net (loss) gain recognized during the period	$	(185)	$	(233)	$	275	$	(2,575)
Less: Net (gain) loss recognized on securities sold during the period	Less: Net (gain) loss recognized on securities sold during the period	(107)		(257)		183		(536)		Less: Net (gain) loss recognized on securities sold during the period	(110)		216		(130)		290
Unrealized gain (loss) recognized during the period on securities still held		$	600	$	2,710	$	(1,685)	$	4,370
Unrealized (loss) gain recognized during the period on securities still held										Unrealized (loss) gain recognized during the period on securities still held	$	(295)	$	(17)	$	145	$	(2,285)

5. Inventories

Inventories consisted of the following (in thousands):


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Raw materials	Raw materials	$	87,239	$	95,929	Raw materials	$	85,663	$	92,045
Work in process	Work in process	29,400		30,638		Work in process	28,290		29,022
Finished goods	Finished goods	98,819		117,404		Finished goods	130,523		142,083
		$	215,458	$	243,971		$	244,476	$	263,150

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6. Consumer Loans Receivable

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

December 31,
2022 April 2,
2022
Loans held for investment, previously securitized $ 22,221 $ 26,014
Loans held for investment 14,513 14,771
Loans held for sale 5,049 8,500
Construction advances 757 3,547
42,540 52,832
Deferred financing fees and other, net (590) (833)
Allowance for loan losses (1,284) (2,115)
40,666 49,884
Less current portion (13,763) (20,639)
$ 26,903 $ 29,245

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	September 30, 2023		April 1, 2023
Loans held for investment, previously securitized	$	18,756	$	21,000
Loans held for investment	13,045		13,117
Loans held for sale	5,208		10,846
Construction advances	84		706
	37,093		45,669
Deferred financing fees and other, net	(312)		(368)
Allowance for loan losses	(1,045)		(1,153)
	35,736		44,148
Less current portion	(10,503)		(17,019)
	$	25,233	$	27,129

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				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Allowance for loan losses at beginning of period	Allowance for loan losses at beginning of period	$	1,739	$	2,799	$	2,115	$	3,188	Allowance for loan losses at beginning of period	$	1,144	$	1,905	$	1,153	$	2,115
Change in estimated loan losses, net	Change in estimated loan losses, net	(436)		(327)		(812)		(384)		Change in estimated loan losses, net	(99)		(166)		(108)		(376)
Charge-offs	Charge-offs	(19)		(85)		(38)		(417)		Charge-offs	—		—		—		(19)
Recoveries	Recoveries	—		—		19		—		Recoveries	—		—		—		19
Allowance for loan losses at end of period	Allowance for loan losses at end of period	$	1,284	$	2,387	$	1,284	$	2,387	Allowance for loan losses at end of period	$	1,045	$	1,739	$	1,045	$	1,739

The consumer loans held for investment had the following characteristics:


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Weighted average contractual interest rate	Weighted average contractual interest rate	8.1	%	8.3	%	Weighted average contractual interest rate	8.1	%	8.2	%
Weighted average effective interest rate	Weighted average effective interest rate	8.9	%	9.2	%	Weighted average effective interest rate	9.2	%	8.8	%
Weighted average months to maturity	Weighted average months to maturity	156		151		Weighted average months to maturity	164		150

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


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Current	Current	$	40,022	$	49,546	Current	$	35,457	$	43,252
31 to 60 days	31 to 60 days	1,140		1,202		31 to 60 days	157		1,247
61 to 90 days	61 to 90 days	163		41		61 to 90 days	185		213
91+ days	91+ days	1,215		2,043		91+ days	1,294		957
		$	42,540	$	52,832		$	37,093	$	45,669

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


		December 31, 2022															September 30, 2023
		2023		2022		2021		2020		2019		Prior		Total			2024		2023		2022		2021		2020		Prior		Total
Prime- FICO score 680 and greater	Prime- FICO score 680 and greater	$	4,788	$	1,085	$	1,059	$	2,124	$	1,198	$	17,690	$	27,944	Prime- FICO score 680 and greater	$	4,009	$	668	$	182	$	991	$	1,945	$	16,007	$	23,802
Near Prime- FICO score 620-679	Near Prime- FICO score 620-679	479		154		1,017		967		1,562		8,667		12,846		Near Prime- FICO score 620-679	546		—		—		1,217		1,062		9,238		12,063
Sub-Prime- FICO score less than 620	Sub-Prime- FICO score less than 620	125		—		20		51		—		1,106		1,302		Sub-Prime- FICO score less than 620	—		—		—		18		50		834		902
No FICO score	No FICO score	69		—		—		—		25		354		448		No FICO score	—		—		—		—		—		326		326
		$	5,461	$	1,239	$	2,096	$	3,142	$	2,785	$	27,817	$	42,540		$	4,555	$	668	$	182	$	2,226	$	3,057	$	26,405	$	37,093


		April 2, 2022															April 1, 2023
		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	$	8,155	$	1,615	$	2,371	$	1,339	$	853	$	20,485	$	34,818	Prime- FICO score 680 and greater	$	9,471	$	185	$	1,051	$	1,982	$	1,191	$	16,601	$	30,481
Near Prime- FICO score 620-679	Near Prime- FICO score 620-679	1,661		1,274		1,413		1,976		617		9,266		16,207		Near Prime- FICO score 620-679	1,695		—		1,012		1,131		1,550		8,244		13,632
Sub-Prime- FICO score less than 620	Sub-Prime- FICO score less than 620	45		20		52		—		—		1,318		1,435		Sub-Prime- FICO score less than 620	84		—		19		51		—		1,033		1,187
No FICO score	No FICO score	—		—		—		26		—		346		372		No FICO score	—		—		—		—		24		345		369
		$	9,861	$	2,909	$	3,836	$	3,341	$	1,470	$	31,415	$	52,832		$	11,250	$	185	$	2,082	$	3,164	$	2,765	$	26,223	$	45,669

As of ~~December 31, 2022 and April 2, 2022, 39%~~September 30, 2023, 40% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and ~~18%~~14% was concentrated in Florida. As of April 1, 2023, 44% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and ~~17%, respectively, were~~13% was concentrated in Florida. Other than Texas and Florida, no state had concentrations in excess of 10% of the outstanding principal balance of the consumer loans receivable as of ~~December 31, 2022~~September 30, 2023 or April ~~2, 2022.~~1, 2023.

Repossessed homes totaled approximately ~~$649,000~~$0.6 million and ~~$499,000~~$1.1 million as of ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022,~~1, 2023, respectively, and are included in Prepaid expenses and other current assets onin the Consolidated Balance Sheets. ~~Foreclosure~~Homes undergoing foreclosure or similar proceedings in progress totaled approximately ~~$535,000~~$0.8 million and $~~1.1~~0.5 million as of ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022,~~1, 2023, respectively.

7. Commercial Loans Receivable

The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community ~~operators~~owners and ~~residential~~ developers.

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


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Loans receivable	Loans receivable	$	79,345	$	69,693	Loans receivable	$	96,148	$	103,726
Allowance for loan losses	Allowance for loan losses	(1,255)		(1,011)		Allowance for loan losses	(1,497)		(1,586)
Deferred financing fees, net	Deferred financing fees, net	(117)		(116)		Deferred financing fees, net	(183)		(163)
		77,973		68,566			94,468		101,977
Less current portion		(34,197)		(32,644)
Less current portion of commercial loans receivable (including from affiliates), net						Less current portion of commercial loans receivable (including from affiliates), net	(50,542)		(44,054)
		$	43,776	$	35,922		$	43,926	$	57,923

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The commercial loans receivable balance had the following characteristics:


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Weighted average contractual interest rate	Weighted average contractual interest rate	6.7	%	6.4	%	Weighted average contractual interest rate	7.5	%	7.6	%
Weighted average months outstanding	Weighted average months outstanding	9		9		Weighted average months outstanding	11		9

The following table represents changes in the estimated allowance for loan losses (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Balance at beginning of period	Balance at beginning of period	$	1,123	$	826	$	1,011	$	816	Balance at beginning of period	$	1,614	$	1,054	$	1,586	$	1,011
Change in estimated loan losses, net	Change in estimated loan losses, net	132		304		244		314		Change in estimated loan losses, net	(117)		69		(89)		112
Balance at end of period	Balance at end of period	$	1,255	$	1,130	$	1,255	$	1,130	Balance at end of period	$	1,497	$	1,123	$	1,497	$	1,123

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 ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022,~~1, 2023, there were no commercial loans considered watch list or nonperforming. The following table disaggregates ~~the principal value of~~ our commercial loans receivable by credit quality indicator and fiscal year of origination (in thousands):

December 31, 2022
2023 2022 2021 2020 2019 Prior Total
Performing $ 52,498 $ 18,324 $ 4,770 $ 2,321 $ 682 $ 750 $ 79,345


	September 30, 2023
	2024		2023		2022		2021		2020		Prior		Total
Performing	$	34,942	$	47,827	$	8,306	$	2,652	$	1,538	$	883	$	96,148

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


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

As of ~~December 31, 2022,~~September 30, 2023 and April 1, 2023, 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 ~~December 31, 2022 and April 2, 2022,~~September 30, 2023, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of ~~22%~~16% and ~~25%, respectively.~~California of 11%. As of April 1, 2023, 18% of our outstanding principal balance of the commercial loans receivable balance was in New York. No other state had concentrations in excess of 10% of the outstanding principal balance of the commercial loans receivable as of ~~December 31, 2022~~September 30, 2023 or April ~~2, 2022.~~1, 2023.

As of ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022,~~1, 2023, one independent third-party and its affiliates comprised 12% ~~and 14%, respectively,~~ of the net commercial loans receivable principal balance outstanding, all of which was secured.

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8. Property, Plant and Equipment, net

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


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Property, plant and equipment, at cost	Property, plant and equipment, at cost					Property, plant and equipment, at cost
Land		$	36,193	$	32,154
Buildings and improvements	Buildings and improvements	142,420		100,775		Buildings and improvements	$	169,331	$	167,291
Machinery and equipment	Machinery and equipment	63,795		48,638		Machinery and equipment	75,381		76,826
Land						Land	39,822		39,822
Construction in progress	Construction in progress	8,713		29,281		Construction in progress	8,228		5,472
		251,121		210,848			292,762		289,411
Accumulated depreciation	Accumulated depreciation	(56,792)		(46,832)		Accumulated depreciation	(69,098)		(61,133)
		$	194,329	$	164,016		$	223,664	$	228,278

Depreciation expense for the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 was ~~$3.4~~$4.3 million and ~~$10.7~~$8.4 million, respectively. Depreciation expense for the three and ~~nine~~six months ended ~~January~~October 1, 2022 was ~~$3.0~~$3.8 million and ~~$5.9~~$7.3 million, respectively.

9. Leases

We lease certain production and retail locations, office space and equipment. The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets as of ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022~~1, 2023 (in thousands):


		Classification	December 31, 2022		April 2, 2022			Classification	September 30, 2023		April 1, 2023
ROU assets	ROU assets						ROU assets
Operating lease assets	Operating lease assets	Operating lease right-of-use assets	$	17,230	$	16,952	Operating lease assets	Operating lease right-of-use assets	$	34,413	$	26,755
Finance lease assets	Finance lease assets	Property, plant and equipment, net (1)	6,132		7,070		Finance lease assets	Property, plant and equipment, net (1)	6,044		6,088
Total lease assets	Total lease assets		$	23,362	$	24,022	Total lease assets		$	40,457	$	32,843

Lease Liabilities	Lease Liabilities						Lease Liabilities
Current:	Current:						Current:
Operating lease liabilities	Operating lease liabilities	Accrued expenses and other current liabilities	$	5,389	$	5,085	Operating lease liabilities	Accrued expenses and other current liabilities	$	5,027	$	6,262
Finance lease liabilities	Finance lease liabilities	Accrued expenses and other current liabilities	347		347		Finance lease liabilities	Accrued expenses and other current liabilities	78		347
Non-current:	Non-current:						Non-current:
Operating lease liabilities	Operating lease liabilities	Operating lease liabilities	13,058		13,158		Operating lease liabilities	Operating lease liabilities	30,529		21,678
Finance lease liabilities	Finance lease liabilities	Other liabilities	5,914		5,969		Finance lease liabilities	Other liabilities	6,127		5,896
Total lease liabilities	Total lease liabilities		$	24,708	$	24,559	Total lease liabilities		$	41,761	$	34,183

(1) Recorded net of accumulated amortization of ~~$219,000 and $87,000~~$0.3 million as of ~~December 31, 2022~~September 30, 2023 and April ~~2, 2022, respectively.~~1, 2023.

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The following table provides information about the financial statement classification of our lease expenses reported within the Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2022 and January 1, 2022 (in thousands):

Three Months Ended Nine Months Ended
Lease Expense Category Classification December 31,
2022 January 1,
2022 December 31,
2022 January 1,
2022
Operating lease expense(2):
Cost of sales $ 297 $ 286 $ 898 $ 858
Selling, general and administrative expenses 1,057 910 3,012 2,640
Finance lease expense:
Amortization of leased assets Cost of sales 44 9 131 26
Interest on lease liabilities Interest expense 71 73 212 80
Total lease expense $ 1,469 $ 1,278 $ 4,253 $ 3,604

~~(2) Excludes short-term and variable lease expenses, which are immaterial.~~

~~Cash payments for operating and finance leases were as follows (in thousands):~~

Three Months Ended Nine Months Ended
December 31,
2022 January 1,
2022 December 31,
2022 January 1,
2022
Operating leases $ 1,372 $ 1,190 $ 4,003 $ 2,277
Finance leases 89 18 267 37

The present value of ~~the~~ minimum payments for future fiscal years under non-cancelable leases as of ~~December 31, 2022~~September 30,
2023 was as follows (in thousands):
Operating Leases Finance Leases Total
Remainder of 2023 $ 1,405 $ 89 $ 1,494
2024 5,308 356 5,664
2025 4,318 356 4,674
2026 3,897 356 4,253
2027 1,686 356 2,042
2028 1,203 356 1,559
Thereafter 2,795 10,585 13,380
Total lease payments 20,612 12,454 33,066
Less amount representing interest (2,165) (6,193) (8,358)
Present value of lease liabilities $ 18,447 $ 6,261 $ 24,708

~~Table of Contents~~


	Operating Leases		Finance Leases		Total
Remainder of fiscal 2024	$	3,254	$	178	$	3,432
Fiscal 2025	6,582		356		6,938
Fiscal 2026	6,160		356		6,516
Fiscal 2027	3,655		356		4,011
Fiscal 2028	3,141		356		3,497
Fiscal 2029	3,072		356		3,428
Thereafter	18,140		10,230		28,370
	44,004		12,188		56,192
Less: Amount representing interest	(8,448)		(5,983)		(14,431)
	$	35,556	$	6,205	$	41,761

~~The following table provides information about the weighted average remaining lease terms and weighted average discount rates as of December 31, 2022:~~
Remaining Lease Term (Years) Discount Rate
Operating leases 4.9 4.6 %
Finance leases 34.9 4.5 %

10. Goodwill and Other Intangibles

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


		December 31, 2022						April 2, 2022							September 30, 2023						April 1, 2023
		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	$	100,577	$	—	$	100,577	$	100,993	$	—	$	100,993	Goodwill	$	116,015	$	—	$	116,015	$	114,547	$	—	$	114,547
Trademarks and trade names	Trademarks and trade names	15,680		—		15,680		15,680		—		15,680		Trademarks and trade names	16,980		—		16,980		16,980		—		16,980
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
		117,357		—		117,357		117,773		—		117,773			134,095		—		134,095		132,627		—		132,627
Finite-lived	Finite-lived													Finite-lived
Customer relationships	Customer relationships	15,000		(5,302)		9,698		19,500		(8,392)		11,108		Customer relationships	15,000		(4,616)		10,384		16,900		(5,818)		11,082
Other	Other	914		(444)		470		1,924		(1,353)		571		Other	1,114		(573)		541		1,114		(486)		628
		$	133,271	$	(5,746)	$	127,525	$	139,197	$	(9,745)	$	129,452		$	150,209	$	(5,189)	$	145,020	$	150,641	$	(6,304)	$	144,337

During the six months ended September 30, 2023, fair value adjustments were made to certain assets and liabilities of Solitaire Homes in connection with the purchase accounting measurement period. This resulted in additional Goodwill of $1.0 million. See Note 21.

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Amortization expense recognized on intangible assets ~~was $501,000 and $1.5 million~~ for the three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023 was $0.4 million and $0.8 million, respectively. Amortization expense recognized on intangible assets ~~was $523,000 and $862,000~~ for the three and ~~nine~~six months ended ~~January~~October 1, 2022 was $0.5 million and $1.0 million, respectively. Customer relationships have a weighted average remaining life of 7.4 years and other finite lived intangibles have a weighted average remaining life of 3.0 years.

Expected amortization for future fiscal years is as follows (in thousands):
Remainder of fiscal year 2023 $ 501
2024 1,339
2025 1,300
2026 1,258
2027 1,185
2028 1,079
Thereafter 3,506
$ 10,168


Remainder of fiscal year 2024	$	785
Fiscal 2025	1,530
Fiscal 2026	1,488
Fiscal 2027	1,415
Fiscal 2028	1,299
Fiscal 2029	1,265
Thereafter	3,143
	$	10,925

~~Table of Contents~~

11. Accrued Expenses and Other Current Liabilities

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


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Salaries, wages and benefits						Salaries, wages and benefits	$	45,250	$	47,100
Customer deposits	Customer deposits	$	46,399	$	56,318	Customer deposits	43,477		45,193
Salaries, wages and benefits		43,365		54,172
Estimated warranties	Estimated warranties	30,946		26,250		Estimated warranties	33,015		31,368
Unearned insurance premiums	Unearned insurance premiums	25,758		24,917		Unearned insurance premiums	30,449		27,901
Accrued volume rebates	Accrued volume rebates	25,660		18,641		Accrued volume rebates	23,925		22,858

Other	Other	79,507		70,790		Other	88,264		88,241
		$	251,635	$	251,088		$	264,380	$	262,661

12. Warranties

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

Three Months Ended Nine Months Ended
December 31,
2022 January 1,
2022 December 31,
2022 January 1,
2022
Balance at beginning of period $ 30,841 $ 25,745 $ 26,250 $ 18,032
Purchase accounting additions — — — 6,928
Charged to costs and expenses 12,036 10,883 40,663 28,002
Payments and deductions (11,931) (10,394) (35,967) (26,728)
Balance at end of period $ 30,946 $ 26,234 $ 30,946 $ 26,234

~~13. Other Liabilities~~

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

December 31,
2022 April 2,
2022
Finance lease payables $ 6,261 $ 6,316
Other secured financing 2,450 2,933
Mandatorily redeemable noncontrolling interest 2,318 2,371
11,029 11,620
Less current portion included in Accrued expenses and other current liabilities (3,131) (784)
$ 7,898 $ 10,836


	Three Months Ended				Six Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Balance at beginning of period	$	32,401	$	28,802	$	31,368	$	26,250

Charged to costs and expenses	12,206		13,623		25,615		28,627
Payments and deductions	(11,592)		(11,584)		(23,968)		(24,036)
Balance at end of period	$	33,015	$	30,841	$	33,015	$	30,841

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13. Other Liabilities

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


	September 30, 2023		April 1, 2023
Finance lease payables	$	6,205	$	6,243
Mandatorily redeemable noncontrolling interest	2,442		2,268
Other secured financing	2,067		2,379
	10,714		10,890
Less current portion included in Accrued expenses and other current liabilities	(2,922)		(3,070)
	$	7,792	$	7,820

14. Debt

~~On November 22, 2022, we entered into~~We are party to a Credit Agreement ~~among the Company,~~(the "Credit Agreement") that expires in 2027 with Bank of America, N.A., ~~as administrative agent, swing line lender and letter of credit issuer, and the guarantors party thereto (the "Credit Agreement"),~~ providing for a ~~$50.0~~$50 million revolving credit facility (the "Revolving Credit Facility").

~~Loans~~, which may be increased up to an aggregate amount of $100 million. Borrowings under the Revolving Credit Facility ~~will~~generally bear interest at ~~a rate equal to (i)~~ the Secured Overnight Financing Rate plus a credit spread ~~adjustment of 0.10% (as adjusted, "Term SOFR"), plus the "applicable rate" or (ii) the "base rate" (defined as the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50%,~~ and ~~(c) Term SOFR plus 1.00%) plus the "applicable rate." The applicable rate will be determined in accordance with~~ a ~~pricing grid~~margin based on ~~the Company's~~our Consolidated Total Leverage Ratio (as defined in the Credit Agreement) ranging from 1.125% to 1.350% per annum for Term SOFR rate loans and from 0.125% to 0.350% per annum for base rate loans. In addition, the Company will pay a commitment fee on the unused portion of the Revolving Credit Facility of 0.15% per annum.

Ratio. The ~~Revolving Credit Facility is guaranteed, on a joint and several basis, by certain of the Company’s subsidiaries.~~

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants (including restrictions, subject to customary exceptions, qualifications, and baskets, on the ability of the Company and its subsidiaries to incur additional indebtedness or guarantees of indebtedness, pay dividends or distributions on, redeem, repurchase, or retire capital stock, make investments, loans, advances, or acquisitions, enter into sale and leaseback transactions, engage in transactions with affiliates, create liens, transfer, or sell assets, create restrictions on the payment of dividends or other amounts from their subsidiaries, and consolidate, merge, or transfer all or substantially all of the assets of the Company and its subsidiaries taken as a whole), and events of default (as defined in the Credit Agreement).

~~In addition, the~~ Credit Agreement includes the following financial ~~covenants~~covenants: (i) as of the end of any fiscal quarter, the Consolidated Total Leverage Ratio (as defined in the Credit Agreement) cannot exceed 3.25 to 1.00 and (ii) a requirement to maintain Consolidated EBITDA (as defined in the Credit Agreement) for any period of four fiscal quarters of at least $75 million. The Credit Agreement also contains customary representations and warranties, and affirmative negative covenants.

As of ~~December 31, 2022,~~September 30, 2023 and April 1, 2023, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants.

15. 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.

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


		Three Months Ended									Three Months Ended
		December 31, 2022				January 1, 2022					September 30, 2023				October 1, 2022
		Written		Earned		Written		Earned			Written		Earned		Written		Earned
Direct premiums	Direct premiums	$	7,454	$	7,529	$	6,380	$	6,557	Direct premiums	$	10,067	$	9,371	$	7,168	$	7,338
Assumed premiums—nonaffiliated	Assumed premiums—nonaffiliated	7,709		8,358		7,023		7,822		Assumed premiums—nonaffiliated	9,505		8,851		8,818		8,211
Ceded premiums—nonaffiliated	Ceded premiums—nonaffiliated	(4,413)		(4,413)		(3,866)		(3,866)		Ceded premiums—nonaffiliated	(6,438)		(6,438)		(4,414)		(4,414)
		$	10,750	$	11,474	$	9,537	$	10,513		$	13,134	$	11,784	$	11,572	$	11,135

		Nine Months Ended									Six Months Ended
		December 31, 2022				January 1, 2022					September 30, 2023				October 1, 2022
		Written		Earned		Written		Earned			Written		Earned		Written		Earned
Direct premiums	Direct premiums	$	22,350	$	21,917	$	19,529	$	18,876	Direct premiums	$	20,446	$	18,047	$	14,896	$	14,388
Assumed premiums—nonaffiliated	Assumed premiums—nonaffiliated	25,555		24,526		23,837		22,830		Assumed premiums—nonaffiliated	19,305		17,421		17,846		16,168
Ceded premiums—nonaffiliated	Ceded premiums—nonaffiliated	(13,056)		(13,056)		(11,227)		(11,227)		Ceded premiums—nonaffiliated	(12,565)		(12,565)		(8,643)		(8,643)
		$	34,849	$	33,387	$	32,139	$	30,479		$	27,186	$	22,903	$	24,099	$	21,913

Typical insurance policies written or assumed have a maximum coverage of ~~$300,000~~$0.4 million per claim, of which we cede ~~$125,000~~$0.2 million of the risk of loss per reinsurance. Therefore, our risk of loss is limited to ~~$175,000~~$0.2 million 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$3.0 million per occurrence, up to a maximum of ~~$70~~$100 million in the aggregate for that occurrence.

Standard Casualty establishes reserves for claims and claims expense on reported and 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 Sheets and claims expenses are recorded in Cost of sales on the Consolidated Statements of Comprehensive Income. The following details the activity in the reserve for the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 and ~~January~~October 1, 2022 (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Balance at beginning of period	Balance at beginning of period	$	7,790	$	7,350	$	8,149	$	7,451	Balance at beginning of period	$	13,001	$	8,574	$	10,939	$	8,149
Net incurred losses during the period	Net incurred losses during the period	8,464		5,046		25,050		20,303		Net incurred losses during the period	8,586		7,809		19,663		16,586
Net claim payments during the period	Net claim payments during the period	(7,163)		(4,916)		(24,108)		(20,274)		Net claim payments during the period	(12,433)		(8,593)		(21,448)		(16,945)
Balance at end of period	Balance at end of period	$	9,091	$	7,480	$	9,091	$	7,480	Balance at end of period	$	9,154	$	7,790	$	9,154	$	7,790

16. ~~Income Taxes~~Commitments and Contingencies

~~For~~Repurchase Contingencies. The maximum amount for which the ~~three and nine months ended December 31, 2022, Income tax (expense) benefit included $2.4~~Company was liable under the terms of repurchase agreements with financial institutions that provide inventory financing to independent distributors of our products approximated $157 million and ~~$5.1~~$178 million at September 30, 2023 and April 1, 2023, respectively, without reduction for the resale value of ~~estimated tax credits related to~~ the ~~manufacture~~homes. During the second quarter of fiscal 2024, we received one repurchase demand notice and ~~sale~~the inventory was obtained shortly after period end. As the fair value of ~~energy efficient homes. This credit~~the inventory exceeded its carrying value, no reserve was ~~initially established under~~deemed necessary. During the ~~Federal Energy Policy Act~~fourth quarter of ~~2005~~fiscal 2023, we received one repurchase demand notice and ~~most recently extended~~the inventory was acquired during the first quarter of fiscal 2024. Our reserve for repurchase commitments, recorded in ~~the Consolidated Appropriations Act, 2021. The three~~Accrued expenses and ~~nine months ended January~~other current liabilities, was $3.7 million at September 30, 2023 and $5.2 million at April 1, 2022 included $34.4 million of such credits, which included catch up credits for homes sold between 2018 through 2021, and resulted in a net Income tax benefit of $20.7 million and $0.9 million, respectively.2023.

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~~17. 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 the Company was liable under such agreements approximated $193.5 million and $141.0 million~~ ~~at December 31, 2022 and April 2, 2022, respectively, without reduction for the resale value of the homes. We~~ ~~had a reserve for repurchase commitments of $4.9 million at December 31, 2022 and $3.6 million at April 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.

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


		December 31, 2022		April 2, 2022			September 30, 2023		April 1, 2023
Construction loan contract amount	Construction loan contract amount	$	3,251	$	9,330	Construction loan contract amount	$	371	$	2,214
Cumulative advances	Cumulative advances	(757)		(3,547)		Cumulative advances	(84)		(706)
		$	2,494	$	5,783		$	287	$	1,508

Representations and Warranties of Mortgages Sold. We sell loans to Government-Sponsored Enterprises ("GSEs") and whole-loan purchasers. In connection with these activities, we provide representations and warranties related to the loans sold or financed.The ~~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~~repurchases and indemnification obliga~~tions. This reserve of $819,000~~tions was $0.6 million as of ~~December 31, 2022~~September 30, 2023 and ~~$866,000~~$0.7 million as of April ~~2, 2022,~~1, 2023, included in Accrued expenses and other current liabilities on the Consolidated Balance ~~Sheets, reflects management's estimate of probable loss.~~Sheets. There were no claim requests that resulted in the repurchase of ~~a loan~~any loans during the ~~nine~~six months ended ~~December 31, 2022.~~September 30, 2023 or October 1, 2022.

Interest Rate Lock Commitments ("IRLCs"). 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 ~~December 31, 2022, we~~September 30, 2023, we had outstanding IRLCs with a notional amount of ~~$41.0~~$31.6 million. For the three and six months ended ~~December 31, 2022,~~September 30, 2023, we recognized ~~gains of $12,000~~ ~~on outstanding IRLCs. There were no gains or~~insignificant non-cash losses on outstanding ~~IRLCs for~~IRLCs. For the three and six months ended ~~January 1, 2022. For the~~ ~~nine months ended~~ ~~December 31, 2022 and January~~October 1, 2022, we recognized insignificant non-cash losses and gains, ~~of $43,000 and $42,000, respectively.~~respectively, on outstanding IRLCs.

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 and whole loan sale commitments (collectively "Commitments"). As of ~~December 31, 2022,~~September 30, 2023, we had ~~$3.9~~$1.5 million in outstanding ~~Commitments. We recognized non-cash losses~~ ~~of $197,000 and $61,000 during the~~ ~~three months ended December 31, 2022~~ ~~and~~ ~~January 1, 2022, respectively~~forward sales commitments ("Commitments"). During the ~~nine~~three and six months ended ~~December 31, 2022~~ September 30, 2023, we recognized insignificant non-cash gains. During the three and ~~January~~six months ended October 1, 2022, we recognized non-cash gains and losses of ~~$282,000~~$0.2 million and ~~$329,000, respectively.~~$0.1 million, respectively, relating to our Commitments.

~~Table of Contents~~

Legal Matters. We are party to certain lawsuits in the ordinary course of business. Based on management's present knowledge of the facts and (in certain 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.

~~18.~~

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17. Stockholders' Equity and Redeemable Noncontrolling Interest

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 (dollars in thousands):


		Equity Attributable to Cavco Stockholders																											Equity Attributable to Cavco Stockholders
					Treasury stock				Additional paid-in capital		Retained earnings				Accumulated other comprehensive 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 2, 2022		9,292,278	$	93			$	(61,040)					$	263,049			$	628,756					$	(403)						$	830,455			$	825
Net income		—	—				—						—				59,602					—					59,602					92
Other comprehensive loss, net		—	—		—				—		—				(112)					(112)					—
Issuance of common stock under stock incentive plans, net		5,957	—		—				(848)		—				—					(848)					—
Stock-based compensation		—	—		—				1,425		—				—					1,425					—
Common stock repurchases		—	—		(38,960)				—		—				—					(38,960)					—
Distributions		—	—		—				—		—				—					—					(240)
Balance, July 2, 2022		9,298,235	$	93	$	(100,000)			$	263,626	$	688,358			$	(515)				$	851,562				$	677
Balance, April 1, 2023																												Balance, April 1, 2023	9,337,125			$	93			$	(164,452)		$	271,950		$	869,310		$	(615)		$	976,286		$	1,219
Net income	Net income	—	—		—				—		74,116				—					74,116					82			Net income	—			—				—		—			46,357			—			46,357			54
Other comprehensive loss, net	Other comprehensive loss, net	—	—		—				—		—				(303)					(303)					—			Other comprehensive loss, net	—			—				—		—			—			(42)			(42)			—
Issuance of common stock under stock incentive plans, net	Issuance of common stock under stock incentive plans, net	15,917	—		—				1,457		—				—					1,457					—			Issuance of common stock under stock incentive plans, net	10,095			—				—		(1,213)			—			—			(1,213)			—
Stock-based compensation	Stock-based compensation	—	—		—				2,100		—				—					2,100					—			Stock-based compensation	—			—				—		1,438			—			—			1,438			—
Distributions	Distributions	—	—		—				—		—				—					—					(240)			Distributions	—			—				—		—			—			—			—			(120)
Subsequent valuation adjustment		—	—		—				—		—				—					—					407
Balance, October 1, 2022		9,314,152	$	93	$	(100,000)			$	267,183	$	762,474			$	(818)				$	928,932				$	926
Valuation adjustment																												Valuation adjustment	—			—				—		—			—			—			—			(33)
Balance, July 1, 2023																												Balance, July 1, 2023	9,347,220			93				(164,452)		272,175			915,667			(657)			1,022,826			1,120
Net income	Net income	—	—		—				—		59,524				—					59,524					65			Net income	—			—				—		—			41,539			—			41,539			34
Other comprehensive income, net	Other comprehensive income, net	—	—		—				—		—				74					74					—			Other comprehensive income, net	—			—				—		—			—			54			54			—
Issuance of common stock under stock incentive plans, net	Issuance of common stock under stock incentive plans, net	5,548	—		—				(90)		—				—					(90)					—			Issuance of common stock under stock incentive plans, net	9,201			1				—		478			—			—			479			—
Stock-based compensation	Stock-based compensation	—	—		—				1,330		—				—					1,330					—			Stock-based compensation	—			—				—		1,551			—			—			1,551			—
Common stock repurchases	Common stock repurchases	—	—		(34,270)				—		—				—					(34,270)					—			Common stock repurchases	—			—				(47,194)		—			—			—			(47,194)			—
Distributions	Distributions	—	—		—				—		—				—					—					(120)			Distributions	—			—				—		—			—			—			—			(180)
Subsequent valuation adjustment		—	—		—				—		—				—					—					61
Balance, December 31, 2022		9,319,700	$	93	$	(134,270)			$	268,423	$	821,998			$	(744)				$	955,500				$	932
Conversion to mandatorily redeemable noncontrolling interest																												Conversion to mandatorily redeemable noncontrolling interest	—			—				—		—			—			—			—			(974)
Balance, September 30, 2023																												Balance, September 30, 2023	9,356,421			$	94			$	(211,646)	$	274,204		$	957,206		$	(603)		$	1,019,255		$	—

1817

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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, net 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
Net income — — — — 37,610 — 37,610 73
Other comprehensive loss, net — — — — — (13) (13) —
Issuance of common stock under stock incentive plans, net 29,295 1 — 2,728 — — 2,729 —
Stock-based compensation — — — 1,317 — — 1,317 —
Common stock repurchases — — (7,594) — — — (7,594) —
Distributions — — — — — — — (180)
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, net 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


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

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~~19.~~18. 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					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net income attributable to Cavco common stockholders	Net income attributable to Cavco common stockholders	$	59,524	$	79,419	$	193,242	$	144,075	Net income attributable to Cavco common stockholders	$	41,539	$	74,116	$	87,896	$	133,718
Weighted average shares outstanding	Weighted average shares outstanding									Weighted average shares outstanding
Basic	Basic	8,870,565		9,174,224		8,897,405		9,187,828		Basic	8,656,537		8,903,703		8,663,430		8,910,933
Effect of dilutive securities	Effect of dilutive securities	65,510		96,214		71,699		83,027		Effect of dilutive securities	74,882		75,294		79,304		72,492
Diluted	Diluted	8,936,075		9,270,438		8,969,104		9,270,855		Diluted	8,731,419		8,978,997		8,742,734		8,983,425
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	$	6.71	$	8.66	$	21.72	$	15.68	Basic	$	4.80	$	8.32	$	10.15	$	15.01
Diluted	Diluted	$	6.66	$	8.57	$	21.55	$	15.54	Diluted	$	4.76	$	8.25	$	10.05	$	14.88

Anti-dilutive common stock equivalents excluded	Anti-dilutive common stock equivalents excluded	930		1,640		776		2,449		Anti-dilutive common stock equivalents excluded	335		413		320		596

~~20.~~

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19. Fair Value Measurements

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


		December 31, 2022				April 2, 2022					September 30, 2023				April 1, 2023
		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	$	19,036	$	19,036	$	17,760	$	17,760	Available-for-sale debt securities	$	19,821	$	19,821	$	18,555	$	18,555
Marketable equity securities	Marketable equity securities	14,103		14,103		16,780		16,780		Marketable equity securities	10,121		10,121		9,989		9,989
Non-marketable equity investments	Non-marketable equity investments	5,290		5,290		20,479		20,479		Non-marketable equity investments	4,923		4,923		5,073		5,073
Consumer loans receivable	Consumer loans receivable	40,666		47,039		49,884		53,354		Consumer loans receivable	35,736		38,537		44,148		50,686
Commercial loans receivable	Commercial loans receivable	77,973		73,343		68,566		65,942		Commercial loans receivable	94,468		86,328		101,977		97,106
Other secured financing	Other secured financing	(2,450)		(2,357)		(2,933)		(3,119)		Other secured financing	(2,067)		(1,972)		(2,379)		(2,332)

See Note ~~19,~~20, 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~~ recorded at fair value in Prepaid expenses and other current assets on the Consolidated Balance Sheets.


		December 31, 2022			April 2, 2022				September 30, 2023			April 1, 2023
Number of loans serviced with MSRs	Number of loans serviced with MSRs	4,101			4,346			Number of loans serviced with MSRs	3,949			4,070
Weighted average servicing fee (basis points)	Weighted average servicing fee (basis points)	34.72			34.76			Weighted average servicing fee (basis points)	34.75			34.71
Capitalized servicing multiple	Capitalized servicing multiple	114.0		%	85.07		%	Capitalized servicing multiple	181.0		%	98.99		%
Capitalized servicing rate (basis points)	Capitalized servicing rate (basis points)	39.57			29.57			Capitalized servicing rate (basis points)	62.90			34.36
Serviced portfolio with MSRs (in thousands)	Serviced portfolio with MSRs (in thousands)	$	526,535		$	560,178		Serviced portfolio with MSRs (in thousands)	$	502,162		$	520,458
MSRs (in thousands)	MSRs (in thousands)	$	2,083		$	1,656		MSRs (in thousands)	$	3,159		$	1,788

20. Related Party Transactions

We have non-marketable equity investments in other distribution operations outside of Company-owned retail stores. In the ordinary course of business, we sell homes and lend to certain of these operations through our commercial lending programs. For the three and six months ended September 30, 2023, the total amount of sales to related parties was $16.0 million and $31.0 million, respectively. For the three and six months ended October 1, 2022, the total amount of sales to related parties was $20.1 million and $37.3 million, respectively. As of September 30, 2023, receivables from related parties included $6.0 million of accounts receivable and $4.9 million of commercial loans outstanding. As of April 1, 2023, receivables from related parties included $5.7 million of accounts receivable and $4.7 million of commercial loans outstanding.

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21. Acquisition

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

Our provisional estimates of the fair values of the assets that we acquired and the liabilities that we assumed were based on the information that was available as of the Acquisition Date. We are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, these provisional estimates are subject to change during the measurement period, which is up to one year from the Acquisition Date. During the six months ended September 30, 2023, we made certain adjustments to the assets and liabilities based on information that became available.

The following table presents our provisional estimates of the fair values of the assets that we acquired and the liabilities that we assumed on the Acquisition Date as of the end of the 2024 second quarter (in thousands):


	January 3, 2023		Adjustments		January 3, 2023 (as Adjusted at September 30, 2023)
Cash	$	5,119	$	(77)	$	5,042
Investments	334		—		334
Accounts receivable	3,536		(778)		2,758
Inventories	58,045		(54)		57,991
Property, plant and equipment	36,109		(70)		36,039
Other current assets	1,519		—		1,519
Intangible assets	3,400		—		3,400
Total identifiable assets acquired	108,062		(979)		107,083
Accounts payable and accrued liabilities	11,251		21		11,272
Net identifiable assets acquired	96,811		(1,000)		95,811
Goodwill	13,970		1,000		14,970
Net assets acquired	$	110,781	$	—	$	110,781

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


	October 1, 2022
	Three Months Ended		Six Months Ended
Net revenue	$	613,566	$	1,238,077
Net income attributable to Cavco common stockholders	76,159		137,804
Diluted net income per share	8.48		15.34

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~~21. Related Party Transactions~~

In addition to our Company-owned stores, we have non-marketable equity investments in other manufactured housing distributors. In the ordinary course of business, we sell homes and lend to certain of these distributors through our commercial lending programs. For the three and nine months ended December 31, 2022, the total amount of sales to related parties was $18.7 million and $56.0 million, respectively. For the three and nine months ended January 1, 2022, the total amount of sales to related parties was $15.8 million and $44.6 million, respectively. As of December 31, 2022, receivables from related parties included $6.3 million of accounts receivable and $3.3 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.

22. Business Segment Information

We operate principally in two 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					Three Months Ended				Six Months Ended
		December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net revenue
Net revenue:										Net revenue:
Factory-built housing	Factory-built housing	$	481,193	$	413,590	$	1,613,392	$	1,067,967	Factory-built housing	$	434,066	$	559,602	$	891,175	$	1,132,199
Financial services	Financial services	19,410		18,124		52,941		53,712		Financial services	17,964		17,790		36,730		33,531
		$	500,603	$	431,714	$	1,666,333	$	1,121,679		$	452,030	$	577,392	$	927,905	$	1,165,730

Income before income taxes
Income before income taxes:										Income before income taxes:
Factory-built housing	Factory-built housing	$	71,813	$	52,905	$	241,959	$	133,357	Factory-built housing	$	50,226	$	90,374	$	112,051	$	170,146
Financial services	Financial services	4,268		6,030		6,243		10,077		Financial services	1,435		2,437		287		1,975
		$	76,081	$	58,935	$	248,202	$	143,434		$	51,661	$	92,811	$	112,338	$	172,121

December 31,
2022 April 2,
2022
Total assets:
Factory-built housing $ 1,072,652 $ 929,535
Financial services 191,822 225,437
$ 1,264,474 $ 1,154,972

~~23. Subsequent Event~~

As announced on January 3, 2023 in a current report on Form 8-K, we completed the acquisition of Solitaire Inc. and other related entities (collectively "Solitaire Homes"), including their four manufacturing facilities and twenty-two retail locations. The addition of Solitaire Homes to our existing manufacturing and retail system strengthens our position in the Southwest and expands our manufacturing capabilities into Mexico.

The purchase price totaled $93 million, before certain customary adjustments, and was funded with cash on hand. The allocation of the purchase price is still preliminary as of the date of this report and will be finalized upon completion of the analysis of the fair values of the acquired assets, liabilities assumed and intangible assets. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date. Accordingly, supplemental pro-forma information is not available and is therefore omitted.


	September 30, 2023		April 1, 2023
Total assets:
Factory-built housing	$	1,168,127	$	1,107,555
Financial services	200,664		200,420
	$	1,368,791	$	1,307,975

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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 ~~("Report"~~(the "Report") include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," or "anticipates," or by discussions of strategy, plans or intentions. Forward-looking statements include, for example, discussions regarding the manufactured housing and site-built housing industries; our financial performance and operating results; our strategy; our liquidity and financial resources; our outlook with respect to Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") and the manufactured housing business in general; the expected effect of certain risks and uncertainties on our business, financial condition and results of operations; economic conditions, including concerns of a possible recession, and consumer confidence; trends in interest rates and inflation; potential acquisitions, strategic investments and other expansions; the sufficiency of our liquidity; that we may seek alternative sources of financing in the future; operational and legal risks; how we may be affected by any pandemic or outbreak; geopolitical ~~conditions (including the continuing Russia-Ukraine conflict);~~conditions; the cost and availability of labor and raw materials; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; and the ultimate outcome of our commitments and contingencies. Forward-looking statements contained in this Report speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document. We do not intend to publicly update or revise any forward-looking statement contained in this Report or in any document incorporated herein by reference to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by law.

Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, many of which are beyond our control. To the extent that our assumptions and expectations differ from actual results, our ability to meet such forward-looking statements, 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 under Risk Factors in Part I, Item 1A of our ~~2022~~2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "Form 10-K").

Introduction

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

Company Overview

Headquartered in Phoenix, Arizona, we design and produce factory-built ~~housing products~~homes 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, MidCountry and Solitaire. We are also a leading 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"~~GNMA") 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 primarily to owners of manufactured homes.

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We operate a total of 31 homebuilding production lines with 29 domestic locations in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix, Glendale and Goodyear, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; ~~Cherryville~~Crouse and Hamlet, North Carolina; Ocala and Plant City, Florida; and two international locations in Ojinaga, Mexico. ~~The majority of the homes produced are sold to, and distributed by, independently owned retail operations located throughout the United States and Canada. In addition,~~We distribute our homes ~~are sold~~ through 64a large network of independent distribution points in 48 states and Canada and 68 Company-owned U.S. retail ~~locations, including the 22 retail locations acquired with Solitaire Homes.~~

~~During fiscal 2022, we acquired an additional 20% ownership~~stores, of which 41 are located in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively known as "Craftsman"), which gave us a 70% majority controlling interest. Craftsman is a manufactured home retailer with four locations in Nevada selling Company and other manufacturer branded homes. We also purchased certain manufactured housing assets and assumed certain liabilities of The Commodore Corporation ("Commodore"). Commodore added six manufacturing facilities and two wholly-owned retail locations, and also participates in commercial lending operations with its dealers.

On January 3, 2023, subsequent to the end of the third fiscal quarter of 2023, we completed the acquisition of Solitaire Homes, including its four manufacturing facilities, twenty-two retail locations and its dedicated transportation operations. The addition of Solitaire Homes to our existing manufacturing and retail system strengthens our position in the Southwest and expands our manufacturing capabilities into Mexico.Texas.

Company and Industry Outlook

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through ~~November 2022~~August 2023 were ~~106,454, an increase~~58,698, a decrease of ~~8.9%~~27.0% compared to ~~97,745~~80,408 shipments in the same calendar period last year. Higher interest rates and continued inflationary pressures have tempered industry demand. However, the manufactured h

~~The~~ousing industry offers solutions to the ~~affordable~~ housing crisis ~~and these shipment numbers reflect the industry's ability to produce in the current environment. The~~with lower average price per square foot ~~for a manufactured home is usually lower~~ than a site-built ~~home. Also, based on~~home and the comparatively low cost associated with manufactured home ownership ~~our products have traditionally competed~~remains competitive with rental ~~housing's monthly payment affordability.~~housing.

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 employ a concerted effort to identify niche market opportunities where our diverse product lines and ~~custom~~flexible building capabilities provide us with a competitive advantage. We are focused on building quality, energy efficient homes for the modern home buyer. Our green building initiatives involve the creation of an energy efficient envelope resulting in lower utility costs, as well as the higher utilization of renewable materials in our manufacturing process. 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.

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 operators and residential developers (see Note 7 to the unaudited Consolidated Financial Statements). Our involvement in commercial lending helps to increase the availability of manufactured home financing to distributors, community operators and residential developers and provides additional opportunities for product exposure to potential home buyers. While these initiatives support our ongoing efforts to expand product distribution, they also expose us to risks associated with the creditworthiness of this customer base and our inventory financing partners.

~~Table of Contents~~

The lack of an efficient secondary market for manufactured home-only loans and the limited number of institutions providing such loans results in higher borrowing costs for home-only loans and continues to constrain industry growth. We work independently and with other industry participants to develop secondary market opportunities for manufactured home-only loan and non-conforming mortgage portfolios and expand lending availability in the industry. ~~Additionally, we continue to invest in community-based lending initiatives that provide home-only financing to 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 factory-built housing operations and reduce our exposure to the actions of independent lenders.

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Key housing building materials include wood, wood products, steel, gypsum wallboard, windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances and electrical items. 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 been volatile due to a number of factors in the 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 inputs has not caused significant production halts in the current period, but we have experienced periodic shutdowns in other periods and shortages of primary building materials have caused production inefficiencies as 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.

Our backlog at ~~December 31, 2022~~September 30, 2023 was $~~427~~170 million compared to ~~$651~~$177 million ~~last quarter,~~at July 1, 2023, a decrease of ~~$224~~$7 million ~~or 34.4%,~~ and down ~~$678~~$481 million ~~or 61.4%, compared~~compared to ~~$1.1 billion~~$651 million at ~~January~~October 1, 2022. ~~This was largely due to lower home order rates net of cancellations. Order rates are down from the extreme highs we saw during the summer of 2020 to the summer of 2021.~~

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 meeting demand. 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 working to more extensively use 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.

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. Monthly collections of principal and interest from borrowers have exceeded scheduled principal and interest payments owed to 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.

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Results of Operations

Net Revenue


		Three Months Ended									Three Months Ended
($ in thousands, except revenue per home sold)	($ in thousands, except revenue per home sold)	December 31, 2022		January 1, 2022		Change				($ in thousands, except revenue per home sold)	September 30, 2023		October 1, 2022		Change
Factory-built housing	Factory-built housing	$	481,193	$	413,590	$	67,603	16.3	%	Factory-built housing	$	434,066	$	559,602	$	(125,536)	(22.4)	%
Financial services	Financial services	19,410		18,124		1,286		7.1	%	Financial services	17,964		17,790		174		1.0	%
		$	500,603	$	431,714	$	68,889	16.0	%		$	452,030	$	577,392	$	(125,362)	(21.7)	%
Factory-built homes sold	Factory-built homes sold									Factory-built homes sold
by Company-owned retail sales centers	by Company-owned retail sales centers	748		658		90		13.7	%	by Company-owned retail sales centers	1,014		860		154		17.9	%
to independent retailers, builders, communities and developers	to independent retailers, builders, communities and developers	3,694		3,766		(72)		(1.9)	%	to independent retailers, builders, communities and developers	3,234		4,251		(1,017)		(23.9)	%
		4,442		4,424		18		0.4	%		4,248		5,111		(863)		(16.9)	%
Net factory-built housing revenue per home sold	Net factory-built housing revenue per home sold	$	108,328	$	93,488	$	14,840	15.9	%	Net factory-built housing revenue per home sold	$	102,181	$	109,490	$	(7,309)	(6.7)	%

		Nine Months Ended									Six Months Ended
($ in thousands, except revenue per home sold)	($ in thousands, except revenue per home sold)	December 31, 2022		January 1, 2022		Change				($ in thousands, except revenue per home sold)	September 30, 2023		October 1, 2022		Change
Factory-built housing	Factory-built housing	$	1,613,392	$	1,067,967	$	545,425	51.1	%	Factory-built housing	$	891,175	$	1,132,199	$	(241,024)	(21.3)	%
Financial services	Financial services	52,941		53,712		(771)		(1.4)	%	Financial services	36,730		33,531		3,199		9.5	%
		$	1,666,333	$	1,121,679	$	544,654	48.6	%		$	927,905	$	1,165,730	$	(237,825)	(20.4)	%
Factory-built homes sold	Factory-built homes sold									Factory-built homes sold
by Company-owned retail sales centers	by Company-owned retail sales centers	2,481		2,091		390		18.7	%	by Company-owned retail sales centers	1,973		1,733		240		13.8	%
to independent retailers, builders, communities and developers	to independent retailers, builders, communities and developers	12,418		9,630		2,788		29.0	%	to independent retailers, builders, communities and developers	6,857		8,724		(1,867)		(21.4)	%
		14,899		11,721		3,178		27.1	%		8,830		10,457		(1,627)		(15.6)	%
Net factory-built housing revenue per home sold	Net factory-built housing revenue per home sold	$	108,289	$	91,116	$	17,173	18.8	%	Net factory-built housing revenue per home sold	$	100,926	$	108,272	$	(7,346)	(6.8)	%

In ~~factory-built~~Factory-built housing, Net revenue decreased for ~~both~~ the three and ~~nine~~six months ended ~~December 31, 2022 increased~~September 30, 2023 compared to the respective periods in the prior year due to ~~higher~~lower home sales volume and ~~higher~~lower home selling ~~prices. Also included in both current year periods is $3.9 million~~prices, partially offset by the addition of home sales revenue from an equity method joint venture. This represents revenue that was previously deferred and now recognized in the third quarter upon that entity selling those homes to an unrelated third party.Solitaire Homes.

Net factory-built housing revenue per home sold is a volatile metric dependent upon several factors. A primary factor is the price disparity between sales of homes to independent 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 tables below presents the mix of modules and homes sold for~~

For the three and ~~nine~~six months ended ~~December 31, 2022 and January 1, 2022:~~September 30, 2023, Net revenue in Financial services increased primarily due to more insurance policies in force in the current period compared to the prior period. This was partially offset by lower interest income earned on the acquired consumer loan portfolios.

Table of Contents

Three Months Ended
December 31,
2022 January 1,
2022 Change
Modules Homes Modules Homes Modules Homes
U.S. Housing and Urban Development ("HUD") code homes 5,852 3,454 6,166 3,583 (5.1) % (3.6) %
Modular homes 1,412 708 1,270 632 11.2 % 12.0 %
Park model RVs 280 280 209 209 34.0 % 34.0 %
7,544 4,442 7,645 4,424 (1.3) % 0.4 %
Nine Months Ended
December 31,
2022 January 1,
2022 Change
Modules Homes Modules Homes Modules Homes
HUD code homes 20,474 11,925 17,366 10,013 17.9 % 19.1 %
Modular homes 4,408 2,207 2,257 1,112 95.3 % 98.5 %
Park model RVs 767 767 596 596 28.7 % 28.7 %
25,649 14,899 20,219 11,721 26.9 % 27.1 %

For the three months ended December 31, 2022, Financial services segment Net revenue increased 7.1% primarily due to more policies in force in the current period, partially offset by lower interest income earned on the acquired consumer loan portfolios. For the nine months ended December 31, 2022, Net revenue decreased 1.4% primarily due to realized and unrealized losses on marketable equity securities in the insurance subsidiary's portfolio during such period, lower interest income earned on the acquired consumer loan portfolios and lower volume in home loan sales. These items were partially offset by more insurance policies in force in the current period compared to the prior period.

~~Table of Contents~~

Gross Profit


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Factory-built housing	Factory-built housing	$	122,923		$	104,119		$	18,804	18.1	%	Factory-built housing	$	100,507		$	149,665		$	(49,158)	(32.8)	%
Financial services	Financial services	9,045			11,089			(2,044)		(18.4)	%	Financial services	6,450			7,934			(1,484)		(18.7)	%
		$	131,968		$	115,208		$	16,760	14.5	%		$	106,957		$	157,599		$	(50,642)	(32.1)	%

Gross profit as % of Net revenue	Gross profit as % of Net revenue											Gross profit as % of Net revenue
Consolidated	Consolidated	26.4		%	26.7		%	N/A		(0.3)	%	Consolidated	23.7		%	27.3		%	N/A		(3.6)	%
Factory-built housing	Factory-built housing	25.5		%	25.2		%	N/A		0.3	%	Factory-built housing	23.2		%	26.7		%	N/A		(3.5)	%
Financial services	Financial services	46.6		%	61.2		%	N/A		(14.6)	%	Financial services	35.9		%	44.6		%	N/A		(8.7)	%

		Nine Months Ended											Six Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Factory-built housing	Factory-built housing	$	412,174		$	252,691		$	159,483	63.1	%	Factory-built housing	$	213,875		$	289,251		$	(75,376)	(26.1)	%
Financial services	Financial services	22,117			26,458			(4,341)		(16.4)	%	Financial services	10,961			13,072			(2,111)		(16.1)	%
		$	434,291		$	279,149		$	155,142	55.6	%		$	224,836		$	302,323		$	(77,487)	(25.6)	%

Gross profit as % of Net revenue	Gross profit as % of Net revenue											Gross profit as % of Net revenue
Consolidated	Consolidated	26.1		%	24.9		%	N/A		1.2	%	Consolidated	24.2		%	25.9		%	N/A		(1.7)	%
Factory-built housing	Factory-built housing	25.5		%	23.7		%	N/A		1.8	%	Factory-built housing	24.0		%	25.5		%	N/A		(1.5)	%
Financial services	Financial services	41.8		%	49.3		%	N/A		(7.5)	%	Financial services	29.8		%	39.0		%	N/A		(9.2)	%

Factory-built housing Gross profit ~~and Gross profit~~ percentage ~~increased for the three and nine months ended December 31, 2022~~decreased primarily ~~due to higher~~from lower average ~~sales~~selling prices.

In Financial services, Gross profit and Gross profit percentage decreased ~~for the three and nine months ended December 31, 2022~~ primarily due to higher insurance claims from Arizona and Texas weather related events partially offset by greater realized and ~~greater~~ unrealized ~~losses~~gains on marketable equity ~~securities compared to the same period last year.~~securities.

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Table of Contents

Selling, General and Administrative Expenses


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Factory-built housing	Factory-built housing	$	54,127		$	55,735		$	(1,608)	(2.9)	%	Factory-built housing	$	56,455		$	61,640		$	(5,185)	(8.4)	%
Financial services	Financial services	4,777			4,587			190		4.1	%	Financial services	5,051			5,254			(203)		(3.9)	%
		$	58,904		$	60,322		$	(1,418)	(2.4)	%		$	61,506		$	66,894		$	(5,388)	(8.1)	%
Selling, general and administrative expenses as % of Net revenue	Selling, general and administrative expenses as % of Net revenue	11.8		%	14.0		%	N/A		(2.2)	%	Selling, general and administrative expenses as % of Net revenue	13.6		%	11.6		%	N/A		2.0	%

		Nine Months Ended											Six Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Factory-built housing	Factory-built housing	$	176,690		$	131,579		$	45,111	34.3	%	Factory-built housing	$	112,476		$	122,563		$	(10,087)	(8.2)	%
Financial services	Financial services	15,244			14,947			297		2.0	%	Financial services	10,710			10,467			243		2.3	%
		$	191,934		$	146,526		$	45,408	31.0	%		$	123,186		$	133,030		$	(9,844)	(7.4)	%
Selling, general and administrative expenses as % of Net revenue	Selling, general and administrative expenses as % of Net revenue	11.5		%	13.1		%	N/A		(1.6)	%	Selling, general and administrative expenses as % of Net revenue	13.3		%	11.4		%	N/A		1.9	%

~~For the three months ended December 31, 2022,~~ Selling, general and administrative expenses ~~related to factory-built housing~~ decreased primarily from lower legal ~~and~~expenses, professional fees and incentive compensation expense, partially offset by higher ~~incentive compensation on improved earnings. For~~expenses reflecting the nine months ended December 31, 2022, Selling, general and administrative expenses increased primarily from higher legal and professional fees and higher salary and incentive compensation expense on improved earnings.

~~As a percentage~~addition of Net revenue, Selling, general and administrative expenses improved by 220 and 160 basis points for the three and nine months ended December 31, 2022, respectively, from better utilization of fixed costs on higher sales.

~~Table of Contents~~

Solitaire Homes.

Other Components of Net Income


		Three Months Ended											Three Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Interest income												Interest income	$	5,812		$	1,851		$	3,961	214.0	%
Interest expense	Interest expense	$	216		$	209		$	7	3.3	%	Interest expense	(257)			(233)			(24)		10.3	%
Other income, net	Other income, net	3,233			4,258			(1,025)		24	%	Other income, net	655			488			167		(34.2)	%
Income tax (expense) benefit		(16,492)			20,680			(37,172)		179.7	%
Income tax expense												Income tax expense	(10,088)			(18,613)			8,525		45.8	%
Effective tax rate	Effective tax rate	21.7		%	(35.1)		%	N/A		N/M		Effective tax rate	19.5		%	20.1		%	N/A		(0.60)	%

		Nine Months Ended											Six Months Ended
($ in thousands)	($ in thousands)	December 31, 2022			January 1, 2022			Change				($ in thousands)	September 30, 2023			October 1, 2022			Change
Interest income												Interest income	$	10,430		$	3,165		$	7,265	229.5	%
Interest expense	Interest expense	$	610		$	576		$	34	5.9	%	Interest expense	(523)			(394)			(129)		32.7	%
Other income, net	Other income, net	6,455			11,387			(4,932)		43.3	%	Other income, net	781			57			724		N/M
Income tax (expense) benefit		(54,721)			910			(55,631)		6,113.3	%
Income tax expense												Income tax expense	(24,354)			(38,229)			(13,875)		(36.3)	%
Effective tax rate	Effective tax rate	22.0		%	(0.6)		%	N/A		N/M		Effective tax rate	21.7		%	22.2		%	N/A		(0.50)	%

Interest income consists primarily of interest earned on cash balances held in money market accounts, and interest earned on commercial floorplan lending. Interest expense consists primarily of interest related to 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, interest income earned on cash balances~~ and gains and losses from the sale of property, plant and equipment. ~~The decrease in Other income, net is primarily due to a $3.3 million gain recognized in the second quarter~~

Table of ~~last year on the remeasurement of the assets and liabilities of Craftsman upon acquisition of a controlling interest. Additionally, for the~~ ~~nine months ended December 31, 2022,~~ we recognized a $1.2 million unrealized loss on corporate marketable investments compared to a $4.0 million unrealized gain in the prior year. These items were partially offset by higher interest income earned on a larger cash balance held in high yield money market funds.Contents

For the three and nine months ended January 1, 2022, the effective income tax rate was a benefit due to $34.4 million of energy efficient home tax credits, which included catch up credits for homes sold between 2018 through 2021. The effective tax rate for the three and nine months ended December 31, 2022 was 21.7% and 22.0%, respectively.

Liquidity and Capital Resources

We believe that cash and cash equivalents at ~~December 31, 2022,~~September 30, 2023, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in U.S. Treasury and other money market funds, some of which are in excess of federally insured ~~limits.~~limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to 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. We have sufficient liquid resources including our recently implemented $50.0 million Revolving Credit Facility, of which no amounts were outstanding at ~~December 31, 2022.~~September 30, 2023. 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.

~~Table of Contents~~

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~~six months ended ~~December 31, 2022~~September 30, 2023 and ~~January~~October 1, 2022, respectively:


		Nine Months Ended							Six Months Ended
(in thousands)	(in thousands)	December 31, 2022		January 1, 2022		$ Change		(in thousands)	September 30, 2023		October 1, 2022		$ 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	$	259,334	$	339,307	$	(79,973)	Cash, cash equivalents and restricted cash at beginning of the fiscal year	$	283,490	$	259,334	$	24,156
Net cash provided by operating activities	Net cash provided by operating activities	230,119		125,967		104,152		Net cash provided by operating activities	160,200		162,942		(2,742)
Net cash used in investing activities	Net cash used in investing activities	(29,199)		(147,842)		118,643		Net cash used in investing activities	(6,421)		(34,933)		28,512
Net cash used in financing activities	Net cash used in financing activities	(73,860)		(34,290)		(39,570)		Net cash used in financing activities	(42,240)		(39,224)		(3,016)
Cash, cash equivalents and restricted cash at end of the period	Cash, cash equivalents and restricted cash at end of the period	$	386,394	$	283,142	$	103,252	Cash, cash equivalents and restricted cash at end of the period	$	395,029	$	348,119	$	46,910

Net cash provided by operating activities ~~increased~~decreased primarily from ~~higher net~~lower Net income, ~~adjusted for non-cash items. This increase was~~ partially offset by ~~increased lending~~a reduction in ~~our Financial Services segment, as well as under our~~prepaid expenses and other current assets and higher principal payments received on commercial ~~loan programs.~~ loans.

Consumer loan originations ~~increased $12.7~~decreased $41.0 million to ~~$135.6~~$56.2 million for the ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 from ~~$122.9~~$97.2 million for the ~~nine~~six months ended ~~January~~October 1, 2022, ~~which was partially offset by increased~~and proceeds of ~~$3.6 million~~ from sales of consumer ~~loans.~~loans decreased $35.4 million to $65.1 million for the six months ended September 30, 2023 from $100.5 million for the six months ended October 1, 2022.

Commercial loan originations increased $2.3 million to $51.8 million for the six months ended September 30, 2023 from $49.5 million for the six months ended October 1, 2022. Proceeds from the collection on commercial loans provided $59.4 million this year, compared to $41.8 million in the prior year, a net increase of $17.6 million.

Net cash ~~used in~~for investing activities consists of buying and selling debt and marketable equity securities in our Financial Services segment, purchases of property, plant and equipment and funding strategic growth acquisitions. Cash used in the ~~current~~prior year period reflects the purchase of our plant facilities in Hamlet, North Carolina and development of our facility in Glendale, Arizona. These expenditures were partially offset by a $12.2 million return of invested capital from one of our equity method joint ventures. Cash used in the prior period reflects the purchase of Commodore and Craftsman.Carolina.

Net cash used in financing activities ~~for the current period~~ was primarily for the repurchase of common stock.

~~See Note 17 to the Consolidated Financial Statements~~ ~~for a discussion~~Table of ~~our off-balance sheet commitments, which discussion is incorporated herein by reference.~~Contents

Obligations and Commitments. There were no material changes to the obligations and commitments as set forth in the Form 10-K.

Critical Accounting Estimates

There have been no significant changes to our critical accounting estimates during the ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect ~~its more~~ significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.

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.

~~Table of Contents~~

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 ~~December 31, 2022,~~September 30, 2023, its disclosure controls and procedures were effective.

(b) Changes in Internal Control Over Financial Reporting

There has been no 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 ~~December 31, 2022 which~~September 30, 2023 that has materially affected, or 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 1716 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. ~~Except as set forth below, there have been no material changes to the risk factors disclosed~~The risks described in this Report and in the Form ~~10-K. These~~10-K are ~~also~~ not the only risks facing the ~~Company; additional~~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.

~~The following risk factors are added as Business and Operational Risks, Industry and Economic Risks and Legal and Regulatory Risks as noted below.~~

~~Business and Operational Risks~~

~~Shutdowns or delays at the United States/Mexico border could affect the Company's ability to ship materials to and receive finished goods from our Mexico production facilities~~

Our production operations in Mexico are dependent upon receiving materials from facilities in Presidio, Texas, and our sales from our Mexican operations are dependent upon shipments from our Ojinaga, Mexico facility. Shutdown or delays at the United States/Mexico border could impact our production at the Mexico facilities or our ability to receive finished goods from our Mexico facilities into the Unites States following production, each of which could adversely affect our results of operations.

~~Casualty losses associated with the Company's transportation operations may be large, which could adversely impact our financial performance~~

In the ordinary course of business, we may incur property or casualty losses during the transportation of raw materials or finished homes. Although we maintain general liability insurance, estimating the number and severity of claims, as well as related judgment or settlement amounts, is inherently difficult, and claims may ultimately prove to be more severe than our estimates. This, along with legal expenses, incurred but not reported claims, and other uncertainties can cause unfavorable differences between actual costs and our reserve estimates. Accordingly, ultimate results may differ materially from our estimates, which could result in losses and materially adversely affect our financial condition and results of operations.

~~Industry and Economic Risks~~

~~Changes in the exchange rates for Mexican Pesos could adversely affect the value of the Company's investments in Mexico and cause foreign exchange losses~~

~~We have production operations in Mexico, and unfavorable changes in the exchange rate for Mexican Pesos could adversely affect the reported value of our investments and/or results of operations.~~

~~Table of Contents~~

~~Legal and Regulatory Risks~~

~~Changes in existing regulations or violations of existing or future regulations could have a materially adverse effect on the Company's operations and profitability~~

We are subject to regulation by the United States Department of Transportation, the United States Environmental Protection Agency, the United States Department of Homeland Security and other state and federal agencies. Future laws and regulations or changes to existing laws and regulations may be more stringent, require changes in our operating practices, or require us to incur significant additional costs, which could materially adversely affect our business, financial condition, and results of operations.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Repurchases of Equity Securities

Issuer Purchases of Equity Securities

As announced on May 26, 2022 in a current report on Form 8-K, the Company's Board of Directors approved a $100 million stock repurchase program with the same terms and conditions as the previous plan. ~~The~~On August 1, 2023, the Company's Board of Directors approved another $100 million stock repurchase program ~~is funded using our available cash.~~ with the same terms and conditions as the previous plans. The following table sets forth repurchases of our common stock during the ~~third~~second quarter of fiscal year ~~2023:~~2024:


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (in thousands)
July 2, 2023 to August 5, 2023	—	$	—	—	$	135,731
August 6, 2023 to September 2, 2023	—	—		—	135,731
September 3, 2023 to September 30, 2023	172,941	270.51		172,941	88,949
	172,941			172,941

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 2, 2022 to
      November 5, 2022
— $ — — $ 100,000
November 6, 2022 to
      December 3, 2022
70,467 216.96 70,467 84,712
December 4, 2022 to
      December 31, 2022
81,064 234.16 81,064 65,730
151,531 151,531

Item 5. Other Information

~~There is no other information required to be disclosed~~Rule 10b5-1 Plan Adoptions and Modifications

No officers or directors adopted or terminated any 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined under ~~this item which was not previously disclosed.~~Item 408 of Regulation S-K) during the three months ended September 30, 2023.

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Item 6. Exhibits

Exhibit No.

Exhibit

Exhibit No.

Exhibit

10.1

(1)

Credit Agreement, dated as of November 22, 2022, among Cavco Industries, Inc., the guarantors party thereto, and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer

10.1*

(1)

Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan

10.1.1*

(2)

Form of Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan Restricted Stock Unit Award Agreement

10.1.2*

(2)

Form of Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan Restricted Stock Unit Award Agreement for Section 16 Employees and Above

10.1.3*

(2)

Form of Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan Restricted Stock Unit Agreement for Non-Employee Directors

10.1.4*

(2)

Form of Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan Performance-based Restricted Stock Unit Award Agreement

10.1.5*

(2)

Form of Cavco Industries, Inc. 2023 Omnibus Equity Incentive Plan Performance-based Restricted Stock Unit Award Agreement for Section 16 Employees and Above

31.1

(2)

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

(2)

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

(2)

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

(2)

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Rule 13a-14(a)/15d-14(a)

(3)

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

(3)

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

The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.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)

*Management Contract or Compensatory Plan, Contract or Arrangement

(1) Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed on August 1, 2023.

(2) Filed herewith.

(3) Furnished herewith.

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

~~(1) Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Cavco Industries Inc. filed on November 23, 2022.~~

~~(2) Filed herewith.~~

~~(3) Furnished herewith.~~

3431

Table of Contents

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~~November 3, 2023
William C. Boor	(Principal Executive Officer)

/s/ Allison K. Aden	Executive Vice President, Chief Financial Officer & Treasurer	~~February~~November 3, 2023
Allison K. Aden	(Principal Financial Officer)

3532


		Three Months Ended				Nine Months Ended
Lease Expense Category	Classification	December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022
Operating lease expense(2):
	Cost of sales	$	297	$	286	$	898	$	858
	Selling, general and administrative expenses	1,057		910		3,012		2,640
Finance lease expense:
Amortization of leased assets	Cost of sales	44		9		131		26
Interest on lease liabilities	Interest expense	71		73		212		80
Total lease expense		$	1,469	$	1,278	$	4,253	$	3,604


	Remaining Lease Term (Years)	Discount Rate
Operating leases	4.9	4.6	%
Finance leases	34.9	4.5	%


Remainder of fiscal year 2023	$	501
2024	1,339
2025	1,300
2026	1,258
2027	1,185
2028	1,079
Thereafter	3,506
	$	10,168