CVCO - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the First Quarter Fiscal Year 2021 Cavco Industries, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today’s conference is being recorded [Operator Instructions] I would now like to hand the conference over to one of your speakers today, Mr. Financial Investor of Director Fusler, Reporting Relations. and Mark please go ahead. Sir,

Mark Fusler

for day year for call. and Good joining XXXX thank conference fiscal Thanks. quarter you us first Cavco earnings Industries

and hearing President Vice Chief Financial Bigbee, Bill be Urness, Paul and you’ll and Accounting call, Officer; Dan this Boor, During President Chief Chief Officer; Executive Executive from Officer.

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

this from of and in and our operate ability adverse emergencies, inquiry, officers, lines is the XXst, call commercial shutdowns, vertically under whether finance, obligation to manufactured geographic of required contains and business, manufactured any to finance, written consumer forces government customer availability and chain safety on impact in date conditions, or that the restricts oral, broadcast, products, of conference the labor, certain that and our XXXX. the the and may for our to, of and supply products, and health the include, potential by federal of materials the revise or to operations as market impacts our as additional action, workforce, course, of Some reputational regulatory any insurance, industry including and July that capital the date fluctuations, federal but or forward-looking our call, involvement also to This except of time-sensitive Cavco demand suffer of as national matters integrated in regions, housing, undertakes housing state of affect impacts result liquidity action business manufacturer live loss events raw factors the and or our executive are the the circumstances regulations results pandemic accurate update our reflect of and regulatory availability information after affecting and statements, no access business only concentrated company’s COVID-XX a demand damage and such the litigation our of of availability ordinary limited that local risk may the of our of our our or Friday, law. financing for including Cavco housing. markets, not conference

Bill? Bill I’d call Chief Boor, like President to over Officer. turn the now, So and to Executive

Bill Boor

you that a on very Having all environment over just It with be simple, said and our would understand Welcome a considering to about Thank the I’m months, and that report general kind proud sure quarter, operations fluidity operations. you quarter have both the the summation market Cavco. of for we us of taking and it this and of the today. we’re great everyone. challenges strong statement past wasn’t feel the for to time quarter quarter. would fail straightforward and to market Any is that, capture our disruption what

as Of whether working putting simply course, an and therefore were quickly in option began we peak we of the Local directives understand disruption. hard even quarter the very place were to service to initial operate. we are approaching considered had essential authorities and were the

rely our fund even work. operate people’s recovery and sell, also operate is how very The be What’s employees, of Again, and ensure we for rate do, there to explained was last For that fully the did has eventually been during remarkable months were homes, really what levels. seen adhering communicated our XX% to to sufficient when early the year’s so It’s covered and which adjusted new been we produce, office-based the if been our orders that the could safely, exceeded April that which quickly year-end of early in any moving general our work-from-home year-over-year. to reported since would previously, From meaning if were, authority May, days, levels. drop April. at been beginning, we strongly almost and it we quickly of much for operations, seen to is believe a operate in end initially past buyers. essential up In there over clear would annual dealers for whether has but us that wanted sales, unsure orders, demand quarter in widely those to be bounced do home we above we pre-COVID orders we independent approximately X% and seasonally committed the there we and the on even is highest there June year-over-year provide back and in were approach. were because housing to have resolved safely wasn’t XXXX demand homes home be the We part quarter comments only health guidelines. while we the by

have keep dynamic pace stay and managing Manufacturing we’re been a orders opposite like ideally than continues drop So and to beginning be of backlogs now operations rather to the be. demand both where at down, would the at the unable dynamic. manufacturing them with would are to day-to-day our increasing concerns that we April where

plants have had lack applicants our of supply job the disruptions. of challenges absenteeism, with All and

to day, pause frankly, the stabilized moved one about to approximately Just anxious have plants and coworkers that observe next environment who ended struggled health and at ago. vice about need the take recognize the summer understaffed, to a detail, being of and commitment and up fortitude the want in the year week due and most our really production pandemic to Standing the face the compared from evolves guidelines, coverings changed to been hotspots we showing XX% quarter the I moment and plants operating a as that XX% despite utilization versa. being every and uncomfortable notably, heat. pandemic, the our back have

challenges really run People need We’re I at and every HUD operating annual very manufactured XX% contributed and seasonally I reflect asking a that and shipments a is would our was suppliers than has across our more issue. challenges of similar industry show housing this has shipments hampered continue lot expect to day expect the We be production levels of relatively the more rate industries’ shipments the the deserve to labor as of the January reflection unemployment February low. May, ability And our to to will numbers. strong and appreciation. higher the insurance In believe overriding staff products. up to federal the adjusted well. the will and lower folks be demand our for to industry. subsidy understand, issues than

The first quarter key really takeaways. two demonstrated

affordable could to First, is realized that The and so Cavco we in impact are to of the I’m and an the a have issues affordable need to housing facing acute the the has our order affordable been and in quick for order committed doing put grow for strong opportunity not country. sure thesis housing harder need demonstrated positively recovery test. rates. about to housing

Second, our generate is severe sudden Cavco demonstrated to forward. the company has disruption. looking a even still and cash, during ability

and to of we the across our partly balance cash partly because in our confidence flow do and have because our We’re ability so, to able remain positive, of sheet operations. demonstrated coworkers

impressively been so would very back very The it bounce for not We’re There to real risk rising have were rates. still challenge. COVID-XX strong is interest demand the as low not forward. looking

and is many group plans, them. people while a there’s housing suspended be in level growing need strategy. to the confidence. be with who do persist This for in performed current is I The to improvements the Similarly, in strong questions there through sustained cash recognize know large for next employment behind in Overall, well our can demonstrated if fill their generation large demand will were our by buy of requires through rates allocation we While that time can’t We the and balance disruption. despite about buyers has of buyers. looking cash without the become quarter. many demand Cavco prohibited quite consumer will continue and demand feel

me it decreased the in we still I’ll increasing Let the growth message proven measured extent by Very expansion Dan standards will more on intend our will over have our will acquisitions our to aggressive results. and in slow lenders investing be in and saying lending our it’s our is review that servicing but it place line positive The continued primarily, be discussion are we growth, to in investment and are existing that that we platform conditions Urness very we with or investment here interest not start successfully. growth their To opportunities. to the opportunities home-only about we plants, new likely whether a opportunities. our the intending origination pace the financial our bottom competition. current is able become recently, with increasingly underwriting, discussed more pace, home-only turn be that it and pursue. underwriting get relative market to We’ve And of grow and direct, have to the so driven do that to competitive, by strategy lending home-only has to market that,

Dan Urness

it Bill, Thanks, year to everybody. to the year. Paul first then Net review million first Chief down for Cavco’s company’s fiscal balance the XXXX and good to Officer the X.X% and and during results Accounting I million quarter of turn rounds that’s over fiscal $XXX the last revenue sheet. to Bigbee, day compared will quarter financial $XXX review Today,

of down disruption mitigated operational plant reduction presented the the availability, challenges Unit decline prices selling proportion million year acquired declined guidelines. a by revenue by year Financial partially sales decline production factory-built ago. sales’ from operation, Homes retail was home The in sales company-owned X.X% Services with The revenue Within segment employee million to the and X.X% last unrealized the $XXX less home from units the in in which primarily equity partially from $XXX limited also net COVID-XX, offset mainly gains. a a revenue by stores the from prior quarter. quarter. result Home period was investments from were increased overall portfolio, though generally in supplier subsidiaries homes sold included larger was days absenteeism, sold. higher this and quarter, than while prior year’s the by negligible Destiny the segment, mix $X million million high $XX.X a declines XX% new the net unrealized housing from complying of million which in decreased hire gain to health on had $XX.X related insurance

prior XX.X%, a volume in quarter XX.X% and in result placed lower decline year. period net the increased was last compared mainly policies The quarter. as down profit same more to sales related is We Consolidated sales home percentage COVID-XX. revenue fiscal the gross of the of loan first also from insurance the home to year

strong, volume noted see production discussing we’re we are declines rapid rates OSB in press in increasing short-term, while operational more release, lumber home from prices. gross to that prices. in and and the profit, order of recent worth our mentioning led development rapidly home while is COVID-XX to profitability. margin challenges is In A gross pressure some increase here, lumber the As the building expect

cause may as pricing backlogs are homes on to surcharge our extended lumber order but margin have we factories. the which As we our speed do, we with home counteracting material some try prices the at work through at compression increased naturally

cooperate year’s $XXX,XXX aside quarter an continue insurance don’t moment, is that a receivables, The $XXX,XXX the SEC million compared in administrative inquiry the to Other the to and fiscal rates. related that as volume first Moving of $X in first offset further approximately to prior the this the decline interest fiscal was of with ongoing. was received we compared portfolio lower on remind Net $XXX,XXX reduction to same we $XXX,XXX were Selling, lower the quarter. strength claims Stepping of year’s investigation, the gross a general period last we was in weather-related other income, by recovery to profit primarily this than financial expenses in largely the impacted But than general matter, end percentage more XXXX the in current cost. by equity although operations. commercial the approximately on earned segment, income quarter. to because this $X.X SEC is $X SEC and negatively inquiry year same updates net XX.X% was Financial million unrealized the quarter these expenses revenue, was have XX.X% a reduced for any and from approximately quarter, the net, to Services interest of loan than regarding during for gains cash you of that given million year. last this higher the quarter, compared of last

little includes year’s the rate tax While current was quarter $X.XX was included from million fiscal first compared $X equity on gains balance is XX.X% year worth of over in Net And the our will share to compared stock income for in to down the same quarter. it year. investments, last Paul versus versus prior Net in it effective as year of with than per exercises it of the also corporate fewer prior current period same XX.X% The XX.X% to quarter higher million had effect, the that quarter. year. quarter net income fiscal quarter comparative that, $XX.X first last mentioning $XXX,XXX $X.XX benefits cover the the only to in last income I this tax option unrealized slightly diluted was turn income sheet. $XX.X quarter million,

Paul Bigbee

and changes be XXth, from XXth, partially in to day, Thanks, Dan. June million, balance going number goods related sheet including This timing. primarily receivable, consumer result as retail inventory $XX.X amortization million and The of manufacturing the in loans units income XXXX changes at loans prepaid greater consumer locations increased the working classified portion taxes. $XXX.X is well to earlier. up months originations net prepaid net Today, increase lower compared as I’ll current balances, at were sold, cash The were as held-for-sale, finished over other more activity. of everybody. million, cash net was mainly by from offset outstanding a loan the from greater premiums from through from on on was production as as officer sales. March challenges decreased assets XXXX. Good from balance and primarily lending our cash collections The the our commercial additional director of $XX accounts approximately lower income capital, facilities finished previously location sale goods Inventories of of as and insurance lower discussed. Prepaid well loan three lower,

from payable increased of accrued consumer manufacturing payments lease into entered third-parties. and increased loans our timing in be accounts and the we remitted current to from facilities and QX assets liabilities extension Our liabilities other of on right-of-use related received and service operating a to one expenses lease at

equity Lastly, $XXX And million approximately March I’ll up approximately XXth, balance. of to stockholders’ back XXXX, June it $XX.X XXth, as Bill. pass XXXX’s million with was that, from

Bill Boor

let’s Paul. questions. you, Michelle, it for turn over Thank

Operator

first Daniel line comes question Our of Instructions] All [Operator with CJS Moore Securities. right from the

ahead. Please open. go is line Your

Daniel Moore

Bill, Dan, taking good say, good afternoon, Thanks I guess should morning. the I for questions.

Bill Boor

you. thank Yeah,

Daniel Moore

next, six utilization, full you close wondering, a know, question, your labor months, be I’m start guess, that of to the just say, exited kind out, how over meaningful but entered talk I – the That’s seem given and is. know, you actual about as current how you to know capacity to quarter to that quarter? second Wanted constraints running the is we running how or what a specifically, lot more philosophical we you with, of capacity are number kind we let’s it. close

Bill Boor

for the really – of we addressing governor forth have question been little quarters, been and to bit many plus the we’ve on And a talking make about labor I we’re about We go aspect to the or typically, a running Yeah. back little mean that. bit. minus being it. sure philosophical got XX% your

And more that’s at when expressing quarter so convey much past kind finished we’re constrained this by it XX% we of that we that just that labor.

we’re So, as many before what, we running about, were the us kind XX% plant and units COVID shutdowns. issues as hit absenteeism with of

resonates of XX% I orders. way of utilization, in an there productivity with of but making And, capacity that using environment maybe the you, can know about where pre-COVID that are we’re that’s best if we’re level to very is. what course, of you So, know we we’re kind trying our the indicate everything don't strong

Daniel Moore

how be know to current add? rates prior growth You given question additional current capacity Indeed. we back demand guess able you production capacity get you’ll think I know, much And the prior and my quickly is can environment? order beyond that, add can how to we additional you do those rates? rates,

Bill Boor

investment teams, of in physical quickly over the working how always hate a looking it’s we’re which the I that, a regard. we’re projects really know, in And question can getting it, about a capacity you has Yeah, applicants but investing feel we job opportunities know some system from And taken record, you strength given the last we and step really months. plants recover and building of about sound couple question for our in backwards broken a perspective. on our like that

trying the of because we want hard belabor can. we’re do that to don’t So it’s issue, everything kind I to predict to that.

continued unemployment. had and which possible we’re to is which as it’s know getting that’s hire, has to tackling hopeful a blame federal it’s with and the not reality but $XXX I’m and in trying as what is going lot to today of reup. I a blocking guess us it’s unknown function done to causes or to since that back actually make government that’s much expires, to going get be lot just it’s You what’s applicants. job about there And on question – and think too for there quicker. if it week is, a If whether and gains affected we’ve that, around but seen be applicants be of a to people a to that that have difficult point since we be of able to ready subsidy good plants I about not, lot work, to trouble given we’ll our that a a be now, right is I productive issue the

that for sorry on answer, not precise touching you’re got for the know quantified business. we’ve now biggest unknown right but you our So

Daniel Moore

helpful No, terms of that’s in color.

And then, coming demand, obviously, of back think What in you really Have the That’s you hands. sitting into retail June well? two, community described. seen one. as your community traffic have their from more XX seen know I terms back ago, demand July? as on significantly far business As more of in we as you terms you days quickly was developers moved as dealers bounced

Bill Boor

traffic as we the the which quarter, of use ended know is we’re than seeing selling you we trying Traffic, to opportunities, Yeah. – to was convey. stronger what more – really are kind

speaking the we a that. and for did phone-up type started leads about about how year lot as significantly, kind and what folks remarkable they business part. We’re shifted same lot owned year in and quarter generate opportunities seeing they ended and to their to last this most time. a with The focus really less It and how of job composition coming saw quickly saw when walk-ins shifted of a speaks which I’m our the pretty retail was that the – more more has that the at than

deposits net walk-ins, So higher we phone-up meaningfully more a heard opportunities conversion of periods. opportunities, And had traffic in was and past ago. than than year into less others, as rate it us actually the you’ve type was more from that

companies total kind deposits – to coming mean, people pretty much at That’s as what it the it know you’re as mirrors manufactured housing know you seeing building, all of that mirrors mirrors when started much in as into are order leads mentioned seeing home comments, I a around far my coming were it think in you just rate. were the the stats converting housing I market, us and So general what continued. rates. in higher their I as

Dan Urness

on add, side, just And starting Dan, some to more see there. orders I the community would we’re that

well communities seen that connection of You the about. have continues think even some the owners has Bill in orders trend know I I but hoping and some of continue release the But community they’re additive I as that. housing think, with just strength think in that was and that will prior general, still the strength comfortable, strength that incremental retail making we were in been put we’re sure we collections, weighing are, so there talking see those to hold on and or that that side to that be of

Bill Boor

already It’s the been – communities. it’s on switch like they of it’s in of had I kind These incremental system. orders a incremental with think the don’t – turning releases orders, it’s

see don’t to at in I community we’ve suddenly release that and large point we think time, said, have, operators up. to we’re a But pick more, “hey, seen as say, go.” let’s going Dan So start some the just

Daniel Moore

you seeing went I Have too seen you summer Switching stick-built. of and about believe as of that Got any kind financing. bit and in maybe months and you quantification? to were traditional talk home we tighten it, land spreads continue lend then each spreads versus and had indicated gears into other terms chattel understood. the a tighten versus

Bill Boor

it rates tends I to pretty and put but X%. I finger have heard have rate those because rates it’s Yeah, kind has try where X.X% different it, know, your a notable might on significantly. to chattel in they rates. target to typically lending that numbers down think, really interest of doesn’t we’ve mean, particular, been down come moving – to we’ve X%, the because historically chattel, heard it’s for of stable correlate to, be It’s a example, been tend that’s mortgage you in

of not, more rates question pretty not And rates that really to other correlated correlated again, low as your mortgage publicized know those home, land that’s where that’s part remarkable. the is nationally is of so and have to very you which been well. And that’s kind

been it’s competitive been seen, and helpful your – – environment orders a the a also perspective, a it’s on that So interestingly chattel from lending very been we’ve perspective. very it’s for depending that

You’ve got something to add?

Daniel Moore

Got part And continue quarter maybe from Financial more out. one slipping staying it. maybe of with have first Services, jump seen tick volumes last? and this I’ll into you claims the to But higher, what we saw

Dan Urness

you Yeah, Gulf the part happy us the had we’ve watch based which And closely. we’ve caused think to, we concentrations have the weather, our hurricane we Dan. seen activity came we on didn’t in that of really large know a southern It impact through to where and – some don’t Texas.

and impact – write Texas inland in the a the went reminder, get that. the know we But Just see inland, from an of – to into that this on impact. we we right don’t some you expect an area on don’t in lot zip and as codes can come a Gulf, windstorms through area we one Gulf, but

eye we’ll You to know those. be hurricane season, so a it’s getting keep close on

reminder, that’s now. seeing insurance some write a in Florida don’t As activity right policies any we

Mexico. primarily in then Texas are Arizona New secondarily policies Our and in and

Daniel Moore

back you. Okay, I if follow-ups. helpful. that’s Thank any in will jump queue,

Dan Urness

Thanks, Dan.

Operator

comes from question our And you. next Palm line Greg of with Capital. the Craig-Hallum Thank

is ahead. line go open. Please Your

Danny Eggerichs

the guys taking you Thanks. for Eggerichs today. This appreciate is questions. actually I Danny on Greg

Bill Boor

Hey, Dan.

Danny Eggerichs

of drop May would the any any kind said, know helpful there XX% could monthly how Is you additional maybe and quantify of in way know you April. in on as in well. rates kind June cadence order be and July color I you

Dan Urness

fairly that and order quantify to to because say, a the point got and did did that from better progressed want rates to throughout of know you scenario, The – be low continue needless the it, necessarily strong. it’s progressively yeah, we but quarter didn’t substantially fluid – make jump kind we

building So to each to point, those you more kind months, And more building there our topic can while at have we that back we’re got the of orders needless know you instead specific of build. to more then we now, backlog. orders know now, right we’re don’t homes this is convert of it’s point, opportunities because we larger build those say, getting revenue we’ve although right production of to into think backlog, numbers for

Danny Eggerichs

guess And demand, just strengths terms or or Got could in kind just plain try it’s for I seeing urban it. from, way then financing demand is rural that whether what there in like migration coming the to of back of there? you’d home be any or you desire bounce where ownership,

Bill Boor

know Yeah, it, mean, I I my from have I data guess tremendous that, on know can I perspective. but I speak don’t don’t we

in years starts is I over really think created my the that has biggest rates opinion for need driver and interest housing formation the lagging a overall new of pent-up homes. and demand the incredible household number with

lot of they are a of that thesis thing seems. So you a are remarkable people my COVID know powered I been just out there and the like this, right interest think they’ve it’s, it as I said that when through need of in comments, rates I homes it’s think kind test

trends rural and a conscious flight to we’re and situation environments COVID-XX know the urban know by you we’re see from to environments. more been like So that things thinking initiated whether going about you have

lot really that don’t we’d data think I can of have that right be says and point speculating that we to now. we see a can

It’s really really attractive point. they’re of buying don’t but So, for a disclaiming are and rates all good magnitude where need it situation have and a homes them. at we’re the this feel people just interest not that,

Dan Urness

we’ve benefits to period loan, has economy, needed to directly they we’ve impacting even that have somebody you add unemployment is know a benefits that on been one through, direct get just have to had maybe it’s a and because note but a in And to sales, not general here the those so aren’t you helped where I’d home obviously Those though know benefit. the coming benefits a job qualify. unemployment

Danny Eggerichs

just I to guess jumping back sense. that labor quick. Yeah, makes real Then

In quarter. how you guess I of the the facilities, the plants members a I Do of be lack – to guys you a better of the in within shutting see industry retain really earlier rate higher you to industry lot terms guess, any labor saw or able industry you own shutdowns of were of, your where to comparable compared where you to were may rest the that? sense have do down

Bill Boor

this Yeah, kind that my be knew mind us didn’t think of this and this started, thinking mean, you know heading, on was to about for we sure. interesting the into know wanted when thing for to the for keep to independent think to was and in in was lifeblood flow right? our because know, to – were know us I wanted commitment extent was we are that preparation keep me to put where you to running retain And – for back trying it’s your dealers, but our running none that homes productive call question, I they flowing keep to able you of paychecks it directionally But I and to trying to needed. good employees time. our of our keep a point we people

place other a reason whether for had of were we’ve in a be also policies our had when work hard caretaker. to they to paying tried time and during because to We’ve be very having with people, was, folks period for You absent, and were done symptoms consistent continue policies with or or we’ve some it had high-risk needed know pretty they lot they employment this to our them.

and months on battle. feel retention. helped have good believe to with still a So our last us But it’s approach that the looking back about incrementally several it’s really

Danny Eggerichs

I’ll the hop into thanks That’s right, for color. queue. from back All me. it

Bill Boor

Thank you.

Operator

Wedbush. Thank [Operator line from with next the question comes of Jay Instructions] you. Our McCanless

Your line ahead. go is open. Please

Jay McCanless

questions. my taking for thanks Hey,

homes that’s benefit toward to there? I the any there’s margin some maybe in presumably section be The weighted single the having more that going give lumber discussed gross first you out wanted Does active when ask, offsets in prepared about higher more than the I if commentary. trying backlog, one you little cost that Just to figure to better to independents. think positive

Dan Urness

developer help and is not we can to and company-owned sure guess, and with at amounts, orders obviously charge. know how that and and Dan, a but I’ll you bit includes I’m the backlog Well, I our given I have community stab know varied for if see it said that. and you any independent take you floor that don’t store little we plan, This answer

as distribution or know So goes, independents other as and the you is no preference far there there say, benefit channels. avenues between,

of respect for and we’ll at to singles that what best try with margin spot in are there. the and the to look marketplace opportunities sweet the mix know the always doubles, mix and the demand You find with us

company, but you always taking be we’ll focused home respect that, want into specifics, if for build, all into And yeah, hard know details – in a we you let and on we margin looking, with contribution. account get our me know to things more know really So, on to you as we’ve that’s because every to know helpful. those

Jay McCanless

moving is, I other knowing you now? question there? Yeah, second Any had worried from yeah, seeing commodities that thing I the we the higher, guess need lumber absolutely. are to that is what about right other be

Dan Urness

And know certainly. now focus we where OSB the that I mentioned on right lumber think is related you call. that products, lumber the that is

You other in areas, it’s stable. been relatively know

it, close are to know know and an with to I of having. think produce to attention countries. strength the doors and but largest industry it’s of is we and supply next within other Most that something are our in production on are to, well making issues the issues access paying course, domestic, Maybe are and the as made our component suppliers these as production materials to have the demand that as the far being regions, we’re eye we’re topic is talking domestic even where up. about availability having parts ability be to need, you continues sure we that can continue whether you just that all keep

a – an done issues. still and constraints. company we people very job I have So think on those But good are continue supply we have to eye have and our done fantastically to through managing with keep our

Jay McCanless

that COVID trouble pieces it Is the appliances it and is boxes like was early or getting things mean, electrical it more or the smaller I homes? larger because segments getting about builders on, equipment? the in the stick – trouble electrical have and it is of talked

Bill Boor

and scurry where windows. some memory concerns, if kind times and get at folks of to to struggled my fighting right, timeframe. our ongoing OSB, that I up, May for point kind it. that try first variety not now to appliances was it this started appliance to a and the had with And It and we’re we transitioned but to of are with the it to shooting of around Yeah, out it’s then lumber April minimize it’s the costs of transitioned it’s was, the is where to also thing gotten us of in back the know, think you kind

a difficult message So And those only Dan issue. I issue, a are well. in trying consistent it’s cost not as conditions manufacturing said, it’s it’s supply as think just operate folks to a that

about asking So speculation up facilities some markets is have you shut OSB shooting lumber my having that their and price is and like of the you struggles weren’t know that because down. been this, manufacturing

going about that I bumpy good in to in, to job an some sustained earlier. need for it’s workers believe can and us to a a going for through. it’s they lag up but just commented eye to for bumpy eye think prices are to And on back that getting a bring but their kind of but of pricing to protecting also issues we’re at supply margins. try we’re our our be I to doing sure plants is probably keeping on sometimes, try price manage high the while. in I a think Dan There going ride. the make a the And So that that, be And going that I be don’t go level, capacity know be still. keeping

Jay McCanless

Understood. And you, for question then last the Bill. is

more for don’t in from are to to story, and more conditions Cavco who bit space? aggressive what lending you the your terms little what elaborate the been know in you market people are thoughts get just doing in that the would like that you If to have more newer see want myself, mind, of the a past in home-only

Bill Boor

in Yeah, mean, right, by one now interesting well. and their that’s moves we were – other down always expand to intention lending because pretty I kind you are driving we as intending affected earlier lenders have seen home-only. the indicating right sense we underwriting rates I what’s of an our It’s is guess know aggressive that comments and it’s in that my

part going embroiled it. the That’s to lack we’re time, of chase grow origination sheet feed base Relations So to But it. to to of of we we’re buyers our need we to securitization from all be the balance a to like And develop we to a we get bit need got of not that we’d the the chattel able we’re with our buyers. that, market, the perspective to to have going securitizations. be intend And from Investor customer that. of point there loans the to do in want is And in over and of this relationships to to – we’re industry a order that and loans. those our participate to strategy more is we’ve those but to do be servicing backdrop hopeful able where of back able

reasons, our the sheet, our grow those So intention chattel balance is lending. to for including all know you available

Jay McCanless

Bill. questions. color, taking for my you Great, that you’ll Appreciate thank

Bill Boor

Thanks, Jay.

Dan Urness

you, Thank Jay.

Operator

Moore is question line next Securities. our And question a follow-up from the Daniel you. of CJS with Thank

open. Please go ahead. is line Your

Daniel Moore

Maybe again. you, Thank follow-ups. two one or quick

year higher where above or in backlogs back of backlog or if you the ago? or to know year than to Any of when they customers continue or want weeks, are losing them kind we your Are you’d be. risks of dealer plus orders you we mentioned overall where concerns terms grow? number we backlogs of You peaked were our or meaningful last near

Dan Urness

Dan. over and I’ll were year. mention right Last last this weeks that we around year just now try nine seven. eight about up backlog, And in the jump right to we’re and time, at that is

backlog. yeah, we’ve got So, more

with You calculus lower, But to too. again, of the like know, a that’s than being yeah, have. higher little it’s there bit backlog a production would part we

Bill Boor

yeah. Yeah,

So does seeing we’re losing yeah I backlogs most higher companies and your backlog think think that question sales? asking And also about right growing are I manufactured It’s all housing about, relative, mean you’re right? probably about losing, worried now.

losing don’t sales. as long all as If same sale it. necessarily we home, with then we long that a consider lot think we’re we’re every the make deal, I opportunity we can a But the So backlog sell day. can issue struggling there, to

it it say. four we’d and dial where prefer the we we’ve just backlogs, to it’s if mean, So want in about week not talked in we be. want backlogs, lock past, I you have could it, probably to

across system. above So whole that our general statement that’s we’re and well level, a

Daniel Moore

what expand you last Jay’s then – going would forward target generate you rates kind up, on historically your as And lending side, of it. I rates know we but in believe question, Got the typically get of you and that following rates it’s of if past? loan that in return lending opening to on has up? stream chattel portfolio kind and you capital do assume generate the back What or of back of return does

DanUrness

rates churn. of churn sure little can can that sell, return pinpoint – the and originate buy the the number. can – I’m a we dynamic the I it’s speed bit, When are you can I just of high, a when we not because tell very

of, kind Plan us, so that’s And for A.

we return sale. long-term with comments about you interested know the You getting And know rates to of A. loans, to a more higher opportunities really do Plan I ago, then the guess, comments, being there that high. like with churn, like and is, Jay call our more that the the quick that which when loans, you the rate originate then origination you’re kind our like not warehousing A good, the Plan are you really in intention not keep rate hold you the expand know minute to very we these talking B, that, interest our alternative mentioned. we’d we’re had type develop And expand which When Plan is to at that’s

those you’re know other holding and chattel got dynamics pushing are right, historically of loss loans, you’re if to you X you’ve that other So in some X, probably reserves, has the But that around. been that range, side that rate. got you’ve

Daniel Moore

Okay, that’s you Bill color Appreciate Dan. Thank for and again. it, the helpful.

Bill Boor

that of willing after of we’re some we’re our dropped balance willing relationships, going sales. confident A guess we’re time this going means sheet those, our customer and on after sheet is that some I have period Plan – and view balance kind Just that, while to to to the continue, on, invested just continue we’re we on enough if I’m have to developing probably to off, those in for a to developing of sorry, have thought adding he we’re

So, sorry, I added off, jumped that Dan. before you probably you

Operator

remarks. to Thank the showing Bill to Boor conference turn at no for you. And like would any back I further further this questions And over I’m time. Mr.

Bill Boor

just summarize, Michelle. pretty without you, a demanding I been saying, goes quarter. to Thank Yeah, Okay. guess, it it’s

We’re to and seeing to demands folks a who of kind of filled very doing remain what the flexible situation and where capable end ourselves of with of we of it. we’re know committed problems the company, and proven that that that’s but is solve our continue and proud lot the is, really which very company we’re not that’s we’ve don’t

has So very proud of to responded our this. how company

hopeful pick is labor challenge increase people to the main allow said what to get work, a will us that which do that. will And up market we’re key quite to here, Our and manufacturing bit to is, is the back productivity. we’ve will

demonstration we by for products. strong the need for demand the our encouraged And affordable in housing. certainly believe of really We’re

and providing in we thanks to long-term look hope and your at new safe. Cavco. try interest today. we everyone you the that part continue and each situations investing even we’re taking And that, plants in for as in want of our really staying growth With time healthy We solutions. thank your these commitment the to our to of middle So opportunities for of in the are to all families going and

Operator

participating the gentlemen, have conclude disconnect. and Everyone, and does This conference. for a day. Ladies may you you great all today’s in thank program

Cavco Industries (CVCO) 1 Aug 202021 Q1 Earnings call transcript