CVCO - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter and Fiscal Year 2019 Cavco Industries, Inc. Earnings Call Webcast. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Financial of Director Fulser, Reporting. Mark begin. Sir, you may

Mark Fulser

Thank you, Lauren.

most cash Litigation efficiencies. which about assumptions All results involve and materially the we could made those will uncertainties, cause share, this forward-looking XX-Q, its affect of during expectations please to Private materially differ forward-looking the and XX-K actual contain may statements Forms results use, XXXX, on the or Cavco's that advised factors begin, cost filings in limitation, the and to Cavco. be statements Commission, differ revenues, comments Securities earnings which the conference of specific statements those the made Securities actual Act of without operational results statements events under and or of cause including Before forward-looking Cavco's or encourage statements. performance, Exchange savings you forward-looking provisions described could Reform call in from by actual including, financial company's per Cavco's or flow review include and any behalf operational I risks management expressed from by to recent with and

or risk and may and that including adverse include, action investigation received that business, arising the Cavco's vertically as internal consumer lines industry factors affect in litigation November potential call forces Friday, governmental accurate involvement this housing regulatory no operations information call, Cavco to, this begin or date result conference housing, suffer regulatory our or geographic integrated concentrated the potential SEC, manufactured forward-looking and contains or of to manufactured market the findings, live damage are our revise reputational as under fluctuations, disruption officers, finance any conditions, executive of regions, time the X, and loss after only Bill? a SEC arising broadcast, our update action from except housing. that by certain obligation demand extensive matters events undertakes of investigation, its XXXX. insurance, This of from litigation law. and is date of results may also limited circumstances affecting not the sensitive from reflect the Cavco Some the we any of required to as related regulation of conference regulatory but business subpoena risk in statement and of being of

William Boor

leadership be for is to Thank you, member second Board Bill Mark. a quarter everyone long Good announced team. the the our changes new our leadership been My name executive regarding to Cavco association pleasure Chairman of to when Boor, of an for discussing Acting Urness I've by up Directors. XXXX. know part call real his in introduce dating our Officer. years it the well, know was having many many Executive I'd like that Centex I new President start of because pleasure you Financial and independent and XXXX, I today also we -- back as Corporation discuss and the the Cavco's since morning, as Dan joining Chief and call financial Chief company's spin-off of strong board till you, Dan to I'm have its with of thank that today's we'll and our results, Officer. of

and is the established board and company had role well him numerous Dan the of key the years. and on has he's the very leadership operational successes. company's for thoughtful for advancing to nearly a XX worked in excellent have played an opportunity CFO, While to get has leader. Cavco's the positions, the years know foundation initiatives for He which over in behalf

Treasurer to his very several discussion in succession about operations recently, left planning. experience CFO succession that our valuable board's role Dan center front and gain And and in plan. years of Dan now, For as as has manufacturing been part Cavco's

board His Dan a significant and experience the our make transition a knowledge confident smooth is company our to that success. institutional company's ensure come is industry time of to leadership will the has and Now the transition. build right on person

securities former legal certain is as former as new allow and President operational stepped after from Joe moment our investigation continues Initiatives, or on to It's to like to transitioning by accounting company deep not very to this of Director that internal Our Strategic remains CEO, a experience. violations subpoenas important a will the industry are be Joe and changes, the spend yesterday. an of Stegmayer issues that announced CEO that policy Chairman, result to Cavco were at counsel down leader. SEC into an company. roles identified his related we operational disclosed conducted we and independent of trading. understand Cavco the and retain leadership role his strong industry I'd

yesterday, a about stock quarter's filing business this. at strong can subpoena Moreover, spent a on As have Upon in that know time received things, in in the for press fully participants documents regarding requested point call the inquiry. we SEC I'm stage sure in talk of with time, of on a and on to, regarding and The intends this learning process that we a limited the this at best the the SEC the like remaining the company. Joe also today's testimony subpoena understand this, SEC in mentioned is relating board and an initiated will to call cooperate what point, is another among investigation, the in other the this we results. XX-Q from Stegmayer, the what focusing separate trading public we're which sent independent to the company documents certain at SEC company Form ongoing topics. similar the release we

additional disclosed our in can we we there's what any XX-Q, Beyond provide. not information

investors. be and reasons, those be not call today's taking questions Instead, For we'll will we with on one-on-one conducting analysts call.

-- -- as we're Mark call, XXX-XXX-XXXX, forward, we going go contact a please we're arrange to course, to Fusler of going as to and So appropriate. going at we provide updates to provide are

Cavco's Before confident support that to strategy. announced that execution strategy want strongly is I that the of to believe current we've and in the board continue will changes conclude, very I state the

I'd the Officer. the Chief to call to President that, Dan? Urness, and turn with Acting So like company's over Executive Dan

Daniel Urness

have Bill. President quarter morning. the honored I new company. Good serve financial role have to to I XXXX. look years, our look Thanks, has Cavco's in I'm review forward opportunities to privilege a work CEO, for with today respected. fiscal speaking Joe of serving Joe his Acting to positions that a second I these and forward part year to been to for opportunity always as It and all distinct of the with as results work of

with facilities, our the Over the years, I've past and had in associates. our learning and customers, and of partners valued worked XX our working alongside honor toured collaborated from and

is we our in for robust realize serve. strong products and the we to Our demand continue company markets

continue during Our groundwork high-quality innovative relation after and execute in laid and customer the housing to several excellent the sale, people can to building last service on providing over the years homes designs. creating

report. for Chief like Josh Officer, Now Barsetti, turn our Accounting to I call over financial the our to would

and Cavco accounting As financial in I You will financial make other positions an team. Josh with him joining Josh? held has business. valued his know, you before reporting will and companies after level of now on accounting update high review adept results, experience our give a XXXX. our member remarks, with Josh Josh is our executive public

Joshua Barsetti

million, Thanks, year quarter Dan. for fiscal Net compared $XXX million of XXXX during fiscal quarter second second to XXXX. revenue the was up $XXX XX% the

sales revenue volume. net nearly home housing segment, grew from built Within the factory average improved million and mainly prices home $XX sales

period factory-built premium subcontracted year. revenue adversely this in Hurricane retail services was the $X.X current as prior required in second revenue during segment Harvey of Hurricane million XX.X% new revenue XX% sales. quarter pass-through net required In locations. home services retail The was insurance Harvey. on and buybacks financial percentage reduction of housing the fiscal result last for home certain by damage XX.X%, financial weather from as same to quarter second revenue in from Financial million net Hurricane sales related that results, fiscal addition, profit certain Harvey. in of services a purposes. revenue were of the building a The as Consolidated delays at accounting quarter event to inventory experience included changes the in second resulted reinsurance result made included up a gross $X.X home year net increased the year's increase services related also deductible in implementation higher caused related fiscal segment of the segment last a cost large reinsurance did year claim to in impacted activity which standards primarily financial during a

the last to than during cost as Selling, severe net administrative XXXX from quarter net in effective percentage the a fiscal the event However, gained year. revenue levels. tax second and same Tax XX% Overall, rate U.S. much same rate less this efficiencies comprehensive prior December, The last quarter was year was revenue hurricane. general from federal was of Act fixed of compared The of enacting to legislation, the the XX.X% year. is of was the to income reduced past which tax government result in corporate for tax compared the as referred XX%. quarter fiscal to rate a commonly the the XX.X% tax improvement XX.X% quarter year's higher second the this expenses lower

the balance mainly reported includes quarter by $X.X compared same $XXX diluted million X quarter quarter a $XX.X provided prior benefits loan The million operating was cash commercial earlier. million the excess million prior the receivable this growth of $XXX loan activities $X.XX increased receivable quarter. last of our XXXX increased benefit on a net net Total approximately stock the higher Net lending. income result March by related in current sales benefit tax in income quarter for sheet to income was overall compared $XXX,XXX options addition, months to XX, Comparing of Accounts In from exercises fiscal the period. Net XXXX net increased period. to to of compared the $X.XX the of loans balance wholesale increase in year's was programs. under to during XXXX, cash share income of offset September second second and XX, from was to $X.X activity the compared per the year. million, year commercial

facilities. sales deflating on terms. included to with other payoffs increased with related volume Current balance year liabilities accounts, accrued improved to from early the financings higher terms and Prepaid increased deposit customer financings increased home estimated accordance contractual prior tax the earnings. securitized current higher assets thereby contractual on balance. increased as rates. addition, from certain related higher these these the balances order securitized customer from decreased higher as Non-current in well line in In Accrued rebates expenses payments

grew of stockholders as approximately balance. up from the completes $XX financial the approximately Lastly, to $XXX XX, XX, equity million that million March report. XXXX, XXXX September Dan,

Daniel Urness

the XX% Cavco's compared XXXX, new approximately Thank consumer up ability and have year. results fiscal Homeownership home the $XXX economic our $XXX,XXX backlog you, in jobs the XX% improvements rates during This, Josh. At including a of September sold Reported at million continue quarter, in the were manufactured Also XXXX growing low of and to capacity are unemployment to demand. buying and financial year X this utilization the new and quarter. customers. and We compared $XXX of confidence, under with were approximately to represent end pleased measures wages growth XX% year quarter. approximated affordable XX, increased portion months homes in first of overall support million our our homes. was prior prior calendar to continued over homes housing of second

through is are labor processes, with operate We and business housing for investments Further, well high our further diverse in are Production make housing retention quality. products residential standards mortgage We business for rents our and in homebuilding employee training also to product an production significant solid strong of increasingly affordable efforts. of needs. recruitment our capabilities, in offerings In focus affordable increase that quality solution. rates prices, home assurance staff we housing key areas believe positioned after volume manufactured working closing, site-built and present marketplace. and fundamentals, rising to given high value, with the reputation homes benefit our and demand interest sought geographies Cavco precision home built

have appeal. respected Our products wide well we demographic and are

concludes continuing addition, In to valued people our forward today. Thank to Lauren? look joining we that are customers. for And our serve our you and remarks talented call. our

Operator

Thank for in does disconnect. you. Ladies conference. This And today's have you today's a and participating conclude gentlemen, thank may program. wonderful you day. Everyone, all

Cavco Industries (CVCO) 12 Nov 182019 Q2 Earnings call transcript