CVCO - Earnings call transcript Q3 2022

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Operator

Thank you for standing by. Welcome to the Third Quarter Fiscal Year 2022, Cavco Industries Earnings Call Webcast. At this time, all participants are in listen-only mode after the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, [Operator Instructions]. Please be advised that today's conference is being recorded. the of to Relations. Financial return Mark speaker now Director Fusler, Reporting would conference your over today, I and Investor go ahead. Please

Mark Fusler

Industries, Good us XXXX you thank Conference Third Capital Earnings day Year Quarter for Call. Fiscal and for joining

Bill Chief you'll Officer, Chief Accounting Executive President Officer. from Aden, Officer, Financial President and and During this Chief hearing and Boor, call, Vice be Executive Allison Paul Bigbee,

volatility events forward-looking except comments forward-looking or market statements results statements, of or from circumstances as Cavco begin, forward-looking Cavco’s by day including Commission, its whether Before this assumptions no This live Cavco's made the forward-looking company's XX-Q I Friday, XXXX. Act to behalf the materially in management in to Cavco. broadcast, also only the to any you actual or required time undertakes and limitation or to cause made to or the involve during saving, statements specific the share, conference in operational results actual sensitive oral, or factors and with cause after like any identify this information materially on that call revise forward-looking from used, which cost to by described statements. February Reform this credit Cavco’s revenues, conditions. we'd that about the most we results events future which of differ without call, law. review may future contains encourage statements operational Securities the Exchange recent of earnings reflect cash could of forms, All you written contain and actual the under those of including and provisions Litigation differ or Private as accurate the per filings or call date conference is or conference efficiencies, uncertainties XX-K risks remind could obligation flow financial affect that Xth, may by expressed update performance, and markets, of Securities expectations those statements XXXX, current of

turn Now, to Boor, Executive call the like I President would and Bill. to Bill Officer. Chief over

William Boor

and which non-recurring credits, This review results year-ago recognize It's set joining compared positive expect was everyone Thank improvements for that nearly of that impact for Paul and the in quarter explain thank up our of over EPS to quarter. from happy another for was $X.XX that you and results period XXXX. fiscal was and continue We're today from excluding earnings. operational EPS $X.XX time. quarter And a a to record increased our gains Welcome large revenues third detail. us operations. will outstanding resulting EPS showed diluted tax due motion Allison in Mark. Revenues a more you, to really report it, XXX% to long from a the about XX% to in year-over-year, impact, quarter important even very to included we year momentum.

level, the offering rationalized a paying in is production challenges to team labor despite time utilization XX% supply of This combination of our the quarter. this reached The plants line product and retention. to and and effort higher achieved Our inefficiencies. accomplished persistent is result utilization, we result and offerings. some for staffing -pandemic a plants work improved their was stable it our and pre throughput focused improve simplify of also of all across is product capacity off. our underway and higher of with And more approximately it's skilled a The

with $X.X XX to weeks of weeks which consistent remained billion, quarter at XX backlog Our production. last represents

of function from industry. to meet that last down that production strong purely is our higher improving takeaway the and a backlogs this backlog those The recall weeks On across continuing large few a remains orders which rate. with the might production orders. You a related quarter, exist is strong is point,

on pressure any pricing. seeing not wholesale we're So

our addition of average QX. price result of the slightly consolidated sales, This down Commodore. and and the compared to including of a factors, is is wholesale retail selling While mix number of the

whether So difficult on quarter. availability to would the improve basis, pricing at labor to has really of both or continued been during improved plant say modest It this a back point, improvement. to same one the labor. a it be upward come like and to way volume I'd another if has general

has which significant I've progress improvements already operating However, commented have on. we directly enabled the made

XX efforts able before below development, increase very still pay and and improvement is months staffing. months. result The now to benefits. While in target to XX investment long-term a recruiting, started the It's of workplace, learning the improved a levels, plant that in last holistic been on-boarding, the disruption and we're been of approach seeing we've labor

levels staffing enable productivity. higher Continued will of retention progress and even in

to to to momentum demographic homes. build-up some expect discussed XX to years XX positive in intensifying people recent We in seen demand for large affordable time, need the drivers as continue products strategies. our past we've These drivers over manufactured for very we've strong Demand the our housing for housing the remains provide apply the outlook. due deficit particularly a housing

short-term economic industry. course, impact Of factors the

Allison of comes the schedule work exists what the hardest after line strong extraordinarily Glendale, number LinkedIn HUD the shortfall consider capacity one folks, remind last into that certainly integration. to And larger all remain investments, the case and within and model a the expectations a been Commodore up their we're been year. which acquisition, you With staying really has folks some going. that, will margins a over production. very our more have quarter lot when double for accomplished home in a communicated and everything's our of a want additional the in closes same at transition to at with Commodore's work very They full in facility now on has growing are quarter, same park I'll Cavco our Commodore Arizona on in work housing everyone of results with To their while in priced to of to Glendale discuss deal hard when starting second we quarter express It improving freeing We're aspects the will the be quarterly various do. demand, the this while up With it turn for this activities on facility, in for line reinforces happy need Goodyear worked the previously the quarter. new despite significant of quarters, appreciation transition off for detail. as calendar been customers. backlog. the homes time increases contribution to who focused from regard getting volume our we've I sincere homes at to how require so our they right The backlogs. to we experiencing lower this involved. the However, lot over growth the price

Allison Aden

increased $XXX.X for and Bill. you, the record million of to quarter achieved acquisition driver million from up of million increase. results full year's compared Thank to income this The by revenue The with contributed the pleased XX.X% homes Commodore XXXX. main $XXX.X We're of fiscal third increase. for third quarter report period quarter first Sequentially during the second net prior were XX.X% quarter. the being revenues Cavco breaking the net of $XX.X the fiscal for results Commodore's revenues that net XXXX,

sold. quarter. and prior from Commodore's homes. the year in The increase by shift million a by driven $XXX.X XX.X% operation to total sold more in X,XXX, from segment, of The home multi-section increase XXXX. the net to units XX.X% average pricing The of due a million revenues revenue increases factory-built in in units was average sold increase $XXX.X and full to to Within up per housing the increased revenue was primarily home per QX X,XXX mixed XX.X% quarter product increased

Our coupled increase highest reduction This with as hours factory since in XX% last in production module. the an a from level result to improvement in increased of of pandemic. in utilization factory a a XX% utilization labor headcount, XXXX, QX per quarter

operations increased insurance segment building period. Financial absenteeism, million to successful higher field million the $XX a from Our employee challenges disruptions. and sales unpredictable home higher prior revenues $XX.X supply policies to services hiring and number of to to be both in continue X.X% compared due net overcoming material loan

XX.X% In year-over-year gross also the consolidated revenue quarter, to year, we profit in XX.X% in the period declines flow XXXX. quarter. segment. was quarter prices margin improvements, of last XX.X% in XX.X% driven cost the from as addition segment in driven in sales by in fiscal continue up margin increases gross by operational of housing and pricing, for largely to revenue factory-built housing expanded net percentage, gross for third a percentage to same that the the QX last versus experienced XXXX of the of factory-built increased in was This QX The summer, through our lumber

Bill was As selling was We margin negatively the gross sale of Commodore no generated that still a items, price homes improvement. to on slightly The a our of transaction. basis basis were impacted on recognized though XXX XXXX. acquired down consolidated percentages acquisition as the profit average explained, quarter accounting-related two inventories compared gross from from point in purchase

be net inventory by realized sales to All has future assets acquisition fair acquired will GAAP up not required these on impacted. been the written value were As date. periods and in now

to gross in therefore Additionally, lower we homes were we're sales had work through priced, commodore’s margins. backlog continue protected. that of And that

up margin securities the working general financial lower QX compared or $XX.X were to revenue million way third of net and as and revenue and year. last expenses we on to from $XX.X on period income quarter the million consultants fiscal the with marketable compared commission Gross million income $X.X XX% review quarter. QX was of due due and of in unrealized to XX.X% the was to The in million million the in and XXXX Commodore from XX.X% our XXXX effective higher as We $X.X in balances. homes, a is driven Pretax quarter fiscal of the gains weather-related decreased equity last progressed earned non-recurring associated Selling of quarter from greater on equity same $X.X net third-party to loan year XX% administrative $X.X tax and same addition is incentive unrealized The the period. costs improved our period. third prior of expense this in interest $XX.X improved marketable and credits $XX.X the of margins from tax the to an prior-year events for or profit XXXX this higher quarter a primarily higher increase income securities to percentage the on XX.X% increase to commercial homes million are gain Net by during benefit This earnings. energy was XX.X% of current and in million million quarter. XXX.X% other revenue wages quarter realized gross compared of services rate year. through these

XXXX homes. benefit efficient non-recurring credits QX at the sale included related for to income energy Our tax tax $XX.X of a million

item as one-time our income consistent of have levels. with would this expense prior Excluding tax XX.X% been percentage a pretax period

Let estimated XXXX, fiscal the Federal Consolidated associated minute program. information under benefit Under income extended the fiscal period. available which units credits considering of a $XX.X XXXX, Code, legislation. year total on credits expenses, to determine homes as on efficient through third The federal non-recurring These the home future January net refunds XXXX. the for impacted in in through the credits XX, is on levels and to under energy this fiscal modified net XXL, tax favorably tax approximately meet per year the lower was this after company tax received December of these This ended me XXXX. the expert or examine quarter manufactured established energy that expand certain of sale months received XXXX XXXX. Energy payments for the homes be take return. related calendar qualify Cash periods expected Policy million for in Act related was end of qualified the between previous to to tax are manufacturers third-party Section are these such, Internal for tax from for and a sold diluted not fiscal will the be X, program Act specific energy $X.XX the year's ended efficient enlisted of Cash year unless company the credits Revenue share million and to share. XXXX the In company benefit efficient qualify per to by credits Appropriations which related tax $XX.X three the as program will the recorded credits and by extended XXXX form

Cavco associated versus compared $X.XX Net As Net up the quarter $XX.X of million QX attributable per of this income returns. tax net we of amend in to prior million was year. XXX.X% income diluted share quarter per the share the $XX.X per in was share to income XXXX. to shareholders $X.XX same

turn the I to Now will Paul over discuss it balance sheet. to

Paul Bigbee

Thanks, Allison.

some of accounts going Commodore number balance for Prepaid, and of to held million and A inventories, discussed. increased increased open other receivable in sales acquisition XXXX. sheet to offset loans from of expenses. just reduced investment was for now and from income and from increased principal by the used balance and XXL X equipment, at last, Consumer other collection loans, efficient receivable, higher previously. due I'm tax collections receivable net compared the XXX.X current decrease in repurchases plant assets the energy accrued and down payable non-cash was intangibles, related January million goodwill $XXX.X balances credits, cash XXXX X, X, to Commodore decreased were million liability of expenses from million on highlight Act So payroll as the I'm including deposits equity changes primarily April to January income Accrued The and The from sorry. CARES $XXX consumer of $XXX.XX changes result cash tax capital, was from $XX deferred in months earlier. tax Allison a million a rates. accounts on common order from items, greater loans -- compared stock accounts rebates cash. higher property decreases loans. months payments and commercial receivable, It working and million as due customer received under of XXX.XX to $XXX.X purchases. for was million inventory and volume up And the stockholder’s partially These it's

William Boor

you, it Paul. Catherine, over for let's Thank turn questions.

Operator

Thank you. [Operator Instructions].

Our with comes Moore Daniel first from question Securities. CJS

open. Your line is

Daniel Moore

Allison, if they quarter. the like. Good growth contributed that you How to there in Commodore, Just Bill, a questions. think $XX with of sense and organic trying morning Start said I Thank what Paul. did many for get heard looks it out you. right, taking ship? thanks the I million, shipment units

William Boor

were shipment like my of that expected in going Commodore to we shipments. line our down the talked separating pretty to with overall go path in well not We're when we what out said they XX% the in capacity But I expectations. comments, they and acquisition had about

Daniel Moore

backlog Maybe Okay. demand strong. exceptionally obviously and remained

Just elaborate that, beyond order that we that? or Or your rates. moderate you perspective? would in color seasonality think just there normal great. slowing are from be comments on Is I a decline described Any

William Boor

just I strong XX moderate and a I continue honest, rates for to I there don't we a seasonal to where which some, but after know where is high. shape order are rates be said XXXX we seeing still of guess be the order to to which We've mid-XX’, levels very the strong. decline order above were rates about period the months feel from unbelievably back there are mid-XX’to a and gotten like

a does So mode we industry seem mode point. we away we're about a things, still still but at -- and shipments where we're backlogs still to in in talk fact, problem about turning and in this demands not and a we're be talk business we're where

holding is demand So up well. really

Daniel Moore

experienced material, Commodore’s Thank from margin say would That's during of in moving you little get sense homes the gross a margin there's a of gross Talking there, in quarter what quarter? you. the parts timing how normalized a much lumber much Just margin selling like. really helpful. raw how to impact protected backlog would a some bit, about for trying in purchases? benefit price look you Conversely, did

Allison Aden

near-term. strong supporting prices lumber quarter are us sold. host. they and including still Yes. our Thank you, input, in is prior unpredictable third labor the a essentially for price continue to every And last increasing. Dan. of of flow lower summer, remain commodities And late also backlog through The the the Costs, cost from goods

at fair we in points. what XX think really think level of the a impact step Commodore if right from up. a to say it I high quantify quarter if the It's about basis was inside was back the just

Daniel Moore

ahead. was very That Okay. helpful. Go

Allison Aden

Yes.

the Specifically accounting related to issue?

Daniel Moore

that quarter QX Is we Right. another have or fiscal or runoff in to go? so

Allison Aden

No, we quarter, as were run did last this them. in to, able we've with shared quarter you we fact through

Daniel Moore

Perfect. just more And me. one for then

headwinds fiscal some into job some utilization, the more capacity unit great XX% a through lingering do quarters maybe through would sequentially growth get to we at getting are plant. homes think the in QX despite do capacity We of Thanks. obviously production helpful. How couple we and of more see about we comments doing just pickup few terms utilization? Can expect of modest a be first sequentially? Any

William Boor

solid good That's several good quarters we're folks comments we're pre on to that volumes there. last the how remember even when where several production And -- I back of we're to our -- made preparing getting about be heading. had comparisons up, out still am -pandemic though these hours. we things a talked, they're the really when the because last lot dramatically the employee less still I calls we've quarters we've pointed

ahead think up. should climbing we've I right here. say getting XX% inefficiencies to to momentum able I labor going with and we we we're I'm to keep that think challenged myself confidence now. gotten fact that to there back supply And now of we're is production. still pushing little bit the still and the gives So a challenged I'm keep that able are me be with

Daniel Moore

Thanks. follow-ups. in I'll Very helpful. back any with jump queue

William Boor

Dan. you, Thank

Allison Aden

you. Thank

Operator

Thank you.

question next with comes Our Palm from Graig-Hallum. Greg

open. is line Your

Gregory Palm

here. for and results, Congrats the good Thanks. taking thanks questions on the everyone,

William Boor

Greg. Thanks,

Gregory Palm

synergy capture can maybe Commodore. on I'm Any initial I there? with if thoughts start curious,

William Boor

out mean, put than to much guess, big with we operational my synergies didn't over-blow was that we about and to are there we've with opportunity brought and get about always optimize past. opinion One we too there with. with transactions products or more opportunity. Yeah. talked able an talked remember change our into are some cost-oriented. they come do And forms that this in something believe other and the to of they the that in I company began is our customer length, think that this those Destiny versus work the we customers dealers vice I more at being to I

other Commodore things with improvements. bit a about that best The you're quite technologies of some manufacturing thoughts quite it's talked and And into that really has but a for before, -- and excited and we've is can couple quality, that labor process. will broader bring practices some there to being both to certainly about Commodore the we're end content a things improve the I feel the done are bit talked operational together, and go thing around the system I've about opportunity on. of operations, after a to our bring going most Those directions technologies focused improve production lot going reduce really ones safety,

think go any could we overhead not We're talk figure for looking for we of But about right things synergies we've the to past. long done and stabilize term. just things. nature. those We're where I that the wishing perspective in a out to from cost and transactions similar now,

Gregory Palm

acquired pretty I number, Got at mentioned you I if And when all number factory a the inclusion Commodore, it. had big that utilization they think by it. recall, utilization of you was driven had

William Boor

rate the as rest the they're well. would say effect range I up down, Yeah, no or at XX% system. it's rate of they interestingly,

Gregory Palm

it. Got

the for thoughts that, appetite are given opening. mean, I plant your Okay. new on really what

footprint? about facility -- of any model still got thoughts have you what What if Can online the but increasing of your plant capacity I you outside don't coming -- have remind soon, park idle you know you an that, us hotline. outside if new existing green here the fielding? on are So a sort

William Boor

I think capacity. the industry frankly needs more

that is working through out. participate a that. We've we we're to looking we're figure at big constantly things got that move So those to direction. in how can a of Glendale couple try in things

staffing kinds belabor to adding City, Florida perspective, probably call production manufactured that back bit We it that up. our currently. won't projects. is ago And it concerns of that production or project many physical this produce and be a up capacity It's at an building from pretty it we a near-term a -- about a doing evaluating plant line years to products would of housing, one sound The not a rapidly Plant We're you but means this could that was have used supplies. that bring line overstatement. our be get those to idled like to little concerns

And the opportunities. you of thing gives so really kinds that's pause into any you only dig that when those

we're on So working things.

of we're a mind and projects of to demand I as in a will I said flows the thinking we're near-term ebbs longer a from and this is the underlying think, fantastic my underlying there think cyclical be but is confident economic kind to comments, decisions. drivers no the industry I point, that about pretty so when the demand perspective factors. due don't we're of demand

Gregory Palm

guess terms mean, into channel, I there you a maybe buyers? about in seeing question where asked is you I've either demographic? I strongest, question my of the by out this sense there, have are demand but before, What demand. last by the like do dovetails

William Boor

of third dimensions that's interesting the of you the community or the growth a mean, coming. history. or of endpoint couple before XX% from I growth where housing. was from guys are for different There pandemic, they're was But a There a of and most period before know business. in well when to -- about total this manufactured it that channel pandemic, Well Yeah. industry the coming time the perspective, was so the a

it stopped. as think wait you produce, industry. looking channel that we're able an been than so of They're It's held business, see up. picked both and almost of are But from could at perspective, a really to They inflationary steadily for housings site-built manufactured up took shot time I is market a strong. about prices when on for back relative interesting a think know, to and think where advantage market to pretty From so demand more you a what's attitude, we much. those mean, I from most right think talked. And building really that what in anymore. both homes either hit what industry as period we're of What -- of I and seeing As interface now I a channels upper really we've being orders just as the dealers builders pandemic end few that the guys and can't price housing channels. is gone the cost grows the manufactured and quite quarters demographic in or we're does up hit have points don't site separate all now between

that we're think in taking end really And is kind zone. share meaningful conversely, affordability the I lower a of at worse. As increase

think couple could've points this seen to shift a they're those been that of to to be the single it's in manufactured demand home housing priced relative years and multi-section to afford still So at continuing you've But more lower end upper homes to folks price get able I ago single-family. the ways what of out. too. and that homes that And find hopefully more does in module the exists we'll people shift

over that's seen in I've quarters. the that several the last the So movement industry really

Gregory Palm

Where even is talking numbers of where out mean, those right are the production not from? issues industry they sort And same or If helpful. up the the going? in pent-up Would same industry more one the everybody down not backlog. the rates. I is orders? importantly, the in is know increase you're more are My need really that last orders to everybody orders don't demand you in me, And there's in that and talk even showing about that coming really That's even capacity for in facing necessarily? we turning Is about the in or there that assumption spot. guess that's the

William Boor

right. I -- I absolutely mean, think the yeah. you're

industry and homes a demands. to not think shipments are on we've what really it's of true turning we're haven't When can shipments really for couple means we mainly, some looking to talking taken underlying and probably any saying with dealers by understate and believe that coming orders a orders, distribution. orders we while things, industry for about I been this don't we away demand reflect orders talk place saying, us and basically of just they're I points new worked quite we're

demand the a projects. that's really in And an of and a telling in homes on take we're that community is can't that community, And down form of the them turning So order. our operators [Indiscernible] for there Many orders. we other backlogs. -- is lot the just given

I total are not think backlogs right conclusion that comfortable that with reflective shipment the So yes, I'm conclusion -- and very demand of the now.

Gregory Palm

right, All Interesting. I'll there. luck. leave it Thanks good and

Operator

you. Instructions]. [Operator Thank

Our from Securities. Wedbush McCanless with Jay next question comes

line Your is open.

Jay McCanless

Hey, good morning, everyone.

more? forward, you this that gross look margins what broken that question like a on a drag we my if remember tailwind I guys XX should bit So first legacy out, around maybe even point basis Commodore’s Cavco. was going Commodore, little quarter, and can't if expect to turn have versus and a be

Allison Aden

We there that XX also drag quarter we've also quarter. acquisition as coming taken this not up the a we Also, it during through broken protected. be mentioned would would haven't time been having the write step as inherited on the at focus it out that the gone the back, was a of that in their points. see the the basis we that We of backlog but inventory specifically, price we've acquisition -- of to the assumed fact

to worked They're lifting and up be over So backlog that as would being our comparable expect their work we time to margin, down margins. see to lower we to that zero. margins through overarching network

William Boor

sure That their clear that points is I up specific impact XX overall to bit to pricing write sure larger not, issue. the or inventory really I that basis it's piece. Their was accounting the want want that need isolating just to was clear I'm make at purchase it sure backlog not was. make if because of our that's to margins that a than on acquisition.

Jay McCanless

is. Bill. Thank you, it Yeah,

William Boor

as profitability the And that got but to plants backlog of with I'd work that's will far the on that. Commodore expectation our our as to through, system, rest Alice's be goal. comments echo is We par

Jay McCanless

Okay. for the of out in and that break third a margin -- I gross little drag. It on to the the looking because that? if think a guys looks benefit you have the up And What few like you this it over next you at just have without XX% about bit gross just you moving the then natural lumber did quarters. guys margin and guess that Commodore you was question is next I'd love quarter. mid-XXs could the do if XQ path of

Allison Aden

cost that, that we think specific them lumber that it's to will have with trying hard I in see uptake provide to -- impact perspective. several don't And the done on of the and we've mean, news won't as from into we the that a a seen all quarters, recent we lumber, increases but good really variety still go from while ability commodities. is we've Backlogs speculate to but show to of supply any don't expect the materials think homes. we making So as relief price margin last I'm the job of seen really we've a our I the out good

lumber remain does wildcard and main the OSB So cost.

Jay McCanless

just the backlog think you the Commodore deliver, could balance average us between this Cavco's figure that to prices chance product. Any or price guys you're for average what and to about you the quarter price on give what trying out

William Boor

for looking Jay? you're what again Say Sure.

Jay McCanless

would this you price. a the or I model. would what's you if backlog average if that, But trying be price just be would have done of think you to able an figure on to what quarter to willing -- the price going guys between they're idea helpful in number average that of now, the deliver to be if be in still have some Just difference the just you as share our Commodore's price rough well. Cavco's it out and we've that mean, for

Allison Aden

between think there's curved to at the integrate two very between don't achieve I the specific pricing differentiation to that beginning since out want overarching point this much. we anything the would and Cavco network are in the

William Boor

Our price Commodore you current all is think think excluding I backlog, to of can market.

that with as it able we're working mean higher lower from has to pricing this quarter system of going said comments, not a because lower went to just it's into margins which think specifically work the are with to of price backlog at their in separate price I Allison rest So stuff, their they her matter they point. than down the be left continuing the I they them happened. through

Jay McCanless

days space Your some new comments as into chattels. And very competitor for favorable manufactured ago couple housing potentially a of both chattel I'm money assuming the low, rates coming had well maybe staying some as guys an what home on land you would guys an now also front are that of love and where are rates seeing. deals, what and just idea to about get update chattel you are seeing

William Boor

since took Yeah. I Mark said. Chattel big a they drop. what has with rates stable stayed very generally agree

I the low but flies, think of two. ago, been up over year-and-a-half fives, they're the high timing the X% time in that it's fours or hasn't month probably been stable. rate. And to very a last low-to-mid really It's moved

really are rates are We market. stable. it's rates well, say a chattel -- always the essentially to not mortgage correlated more much So different

site That that's to MH home I about the MH the think another premium single-family, And a tight. kind that product. for too. there's to loans. been loans call GSE That's rates compare And non been about I been it's XX-basis point of what home or this can't at premium you close stable discussion load manufactured pretty imagine this built ever land, housing, an range. to point, If land compared

this to is there. at point. as Was kind So chattel your stable. have of moving there right mortgage very missed just I is land are more MH might something up home question? rates

Jay McCanless

anything, was love that, that No. the you duty the FHFA that guys and manufactured the now to submissions what projected might serve you it I an asked from interesting same mean, hearing, hear are the I that that I'll was if follow-up from I to GSEs would expanded thought I the industry. the be something Mark. very ask GSEs housing to serve duty right [Indiscernible] help mean,

William Boor

just lending is mean MH a haven't to Frankly, I'm of just overly an out the space. negative I yet, seen lot And that come bitterness. We and we'd serve saying love accusatory to fact we very time and capital in see over the interested and in again, way the duty or don't not this it's it.

in at people the good If sell loans good So we're hasn't are been it driving really to issue. much there. investors aren't The we they're an time. point from and this able loans interest really seeing GFCs really qualified, to get

Jay McCanless

taking Got for my thanks Well, Great. it. questions.

Allison Aden

Thank you.

Operator

you. Thank

DeForest Our Walthausen and with comes Company. Hinman from next question

line Your is open.

DeForest Hinman

Thanks for taking questions from shareholders.

On MH? the that for it XX commentary, margin margin points, Gross basis the consolidated Gross the margin just is we're or so the is clear, segment Gross

Allison Aden

right. gross on margin. consolidated are the That's You

DeForest Hinman

FICO demand Any furthering in mortgage any provide Is can side, you do the to going insights from on pay And be Okay. of the credit have to you the the the on are Thank from customers discussion that inbound score? able quality side, longer-term? color there. quality credit terms coming you.

William Boor

see generally higher there's And skewing lending at any credit supply and business, had to I we think industry we've we've real industry, we've disciplined. that mean, there's continued constrained lending And No fico you think I that what when are to I been really really don't you the down. guess we scores. to a lending strength really I in point. and more think chasing -- no generally disclosed working applications by our to you lower too, force, sense in consider makes our that's seen would think, cause the industries applications there. that haven't in need very has industry credit seen are would I filings, this in Yeah. I shift

DeForest Hinman

rates last fall going space call is demand be, that's there away. this, being that change the discussion, want everyone fundamental not further the to clear into don't to that case. weeks around the I spending rising helpful. on more word has this if color to very of discussing I couple it's think but off you're it’s been think talked because I of you and glad time the provided you No, lots and seems And I'm becoming I this you the And mean, on turned glad over units table. whole there overhang about use know to in I'm demand

making I'm communities You you be? than with thinking a they've have look parks made of some terms and I'm some greets publicly, there at perspective have disclosures But opportunity from and that their some publicly, you I'm do done can and thinking The customers have just sure not in return and the maybe units done is year. of analysis at out you of parks. you, looked of certain math can space. some the because these might at big per availability build of capital. the a even these not further and share the And public mentioned you some next in how acreage, of that attractive acre and business are that very the amount these terms returns anything It's -- of to some sometimes with but REIT us about you've park communities.

provide, units, says, So that next any color the have you units years. five XX,XXX there you need anything look, these could a X,XXX guys over

the because people to be so framing or really guys appreciated can any making you're just shareholder how at could you community looking are how So you give would comments, facts but just just figures understand obviously the understand things. demand very positive are you

William Boor

years is not to to us we're guess position question. be interaction And know years, impacts immediately our not doesn't have certainly able the -- they feel land a general and haven't that come we for, a us. let filling comfortable homes. certainly of we But I of seen very your most up in close know number just as close And that's if projection of over so we interest to to being as it that number communities’ over that said a it's availability manufacturer a I about it buying a zoning big certain it orders number like customers. as large a the a earlier, does constraint. the the be get see asking I to they're And in answer know talked any I of don't a what with I number to

Of as first. and your want we rates it course demand. the And at that being can against weigh give because helps It now. I you length I with strong we rates, see for rising got payments, you that wish stand to. customers you that's then Weigh think more something causes up, a from and touch buy go see I demographic and basis to of That what on it If monthly tell be to for them us. look strong the off positive against let's loans about a but back talk up, that specific, while last also I to did -- concerned off been our on. you about could come we've I payments were -- that it commented of impacts comments kind people interest affordability. we interest just that's quarter. The that people's go increase lower you loans alluded talked so monthly is the thing new about really

And a us. to I they on there's opinion affects housing than to right muted history site seen housing. But pressure comes builders. it environments the it that you've are significantly near-term affordability be interest has Not impact. manufactured rising interest in toward and flow go the affects So when Because rate manufactured think impact I downward shows that, up. my it a no rising rates less think

a eyes But keep There's going about the invest very these I'm we're of and confident so at you drivers man, lot ability our look on to the down. into over things. upward if demographic to pressures that. And all time,

DeForest Hinman

products And you're where are in think No. can anyway in a raw things color answer, us with? on dealing you good improvement, worse the you're before -- with That's materials staying these of any that of and any or raw struggling terms give the the than are an paying that the everybody. same is helpful. on with, the you getting material what's I'll -- That's very very just ask given but seeing just points front, I terms of update I good know the the, for then question

William Boor

told actually that getting from been had We've situation for feel plants refrigerators, continuing parts. example. do broken from a very have fasteners, it's phone notes challenging on just record I've guys Yeah, electrical installation my I and said like across-the-board. before, this and months a because the it's they're that morning operating We're with and our rattle out a off

flex dot. of a right now interesting hot One things the it's really button overhead is

issues late. really, part this where point perspective, is and efficiency that us bit say the we're would the it much it's The So every ordering but items, sometimes now trucking, been. fact the significantly and of isn't as that is specific I available, across-the-board, a is my but the trucking trucks and today supply these from are in story, given late, so dynamic supply news major it's interesting a affecting it's has

So logistics are a the big of supply part thing.

our and mean So our drag and efficiency really on I to guys well it up. -- like I a have been we've push mark yet able been throughput I'm not feel it's managed --

in from impact continue So quantify. we're approaching shutdowns, never about to feel it, how like supply a Overall, be running, we plant a on going day it whether to know Really I'm we've confident given cause the little you going really we're that's but is to they stop. is true able edge to but some every which and if lot to them hard but minimal of stop had efficiency this. bit

DeForest Hinman

we you question not there? then the on that previously? just is energy we just missing last And or just give how came I with Can for mean, XX the were X color us year? last audit over we're tax a something Something you. an Thank this accruing up credit. review,

Allison Aden

that -- for those. of tax one, continue incentives. part And process this identified evaluate to evaluate to opportunity questions we our always was are continuous good and identify Thanks as the for opportunities overarching

in credit. current what appreciate, and the this and process. did of credit period quarter's third-party estimate expert, peers, with a deal homebuilding To complex, periods As swoop, you to see as lengthy to what you impact under fair after tell and for that review this balance with the the the able we move and a of credit the time encapsulated were which now, great all specifically was we you the a you the in determine size one and some our can utilize have the researching fairly take consultation some And Kota is forward complex this GAAP, and actually of of earnings. IRS and into was been can we've

DeForest Hinman

be had Did situation forward. should perfect. repurchases odd energy then at did, this it a question fourth quarter? repurchases. from that I going know preclude Okay, level point higher this credit. And on or with anticipating share pacing us And during we the buying any if stock accelerated you last of share

Allison Aden

So buybacks shareholders. very this for our preclude We particular to is to us important and return from be a item not still did us purchasing cash lever to shares, excess able about the we've quarter and were to of third $XXX if about able million accomplish recall, have burned purchase and a authorization in that. the through $X million you'll we about in

us this So the a to proactive and to view for way still excess very we as deploy cash return shareholders.

DeForest Hinman

the number more is right So probably or $XX million is it or less?

Allison Aden

been We've to -- we be outcome. guiding particular a won't

couple depending be it marketplace. quarter that some the that if to pace, to the in was the quarters, indication over gives probably think I an look the company to very quarter on last you that has it of information

DeForest Hinman

questions. you my Thank all for taking Okay.

William Boor

Thanks DeForest.

Operator

you. Thank

Our next with Ethan from question SG Steinberg Capital. comes

line Your open. is

Ethan Steinberg

drag was priced for much from on just basis the the great Can Hey low of us the there on give taking accounting sense how was a working job execution. for you guys. XX Thanks through acquisition. the just points the call, backlog? [Indiscernible]

Allison Aden

in would say X I that low percentage the was priced points X points working quarter. to probably the through backlog percentage

Ethan Steinberg

basis XXX or XXX points?

Allison Aden

Yes. That's correct.

Ethan Steinberg

So the total gross margin?

Allison Aden

that's Yes, correct.

Ethan Steinberg

that's left down been it is get how sense a quite worked that Can of a of you much sounds bit? like

Allison Aden

progress indication quarters. of if through think the specific less how you it about becomes about the uplift point, we average lines the less gives in and the think [Indiscernible] backlog coming might as but of some course, that their quarter, price we

William Boor

on star. [Indiscernible] backlog a ratio basis [Indiscernible]

a not you it's for backlog. give to just feel So the

Ethan Steinberg

based So sequentially building a right thinking lot change like. seems rate upward when X it on about the XX in the XX% that interpretation? the momentum and run of are here blended. of factors, to Is we that There's from those

Allison Aden

those regards be in that'd fair. isolation, factors With to two

Ethan Steinberg

still growing then operations? of units, from surprises also a to applied on That's absent you about units check nicely that big good tailwind. here, lot And pretty feel want

William Boor

these to And challenges these able and suppliers ought you what ahead to go myself, labor we've it's be I -- progress the huge to but and I'm operations challenges. I with I And XX% settle we're get we're doing. someday XX% it consider said, still make labor, while continuing our get will always we mean, I which if a you that we then think hope natural to on for higher. do. like we've to supply with do I momentum to can be more would with by And fundamentals. got nervous driving of getting think accomplishment have out would

Ethan Steinberg

on get do think working What maybe that that not priced do it's it? down anymore. But your you're see done something low much you when measure we of that XXX% product, you think mostly to don't

that's end the done think by this You quarter? of

Allison Aden

the which into are hard aggressive probably I to more something timing tend think it's very that they pinpoint. of to would them, quarter is backlog to projection, the or see say that similar with I we the have ours.

William Boor

And it will dwindle down.

Ethan Steinberg

But the of degree pressure diminishes?

William Boor

Yes.

Allison Aden

Yes. That's correct.

William Boor

it, that's making we're stratification perfectly about got prices. price. oldest think a one's you in lowest the this today [Indiscernible] or It's the If you but homes not the way, got backlog, of the

will think impact way the So the to be down a about several will dwindle it. quarters, next over

Ethan Steinberg

still moving sequentially up makes on the here on pieces, the not? on is was generally getting Yeah, price the based thing going color just from that should the that price average in sense. that what's Last be or helpful it backlog

William Boor

relation do appropriately costs, sure. but industry in to not that a it long price -- about much there's of being so Still we're say an has we that this I down always for foreign talk backlogs, quite bit in

-- plant comment local in price still inputs want pretty local We prices. same local made we seeing basis us. a and I increasing basis; the much our quarter. So still with their like But it's my plant cost dynamics. plants unique the third at a or manage talking during we're their to remarks market

room still So there's some there potentially.

Ethan Steinberg

That's thing. - Was ish in great, or there one OpEx one any SG&A more of cost acquisition time I thought anywhere?

Allison Aden

quarter his No, not

Ethan Steinberg

you. Okay. Great Thank job.

Operator

we a with have CJS from you. Thank Securities. And follow-up Moore Daniel

open. is line Your

Daniel Moore

the from quarter Thank during you this, the tax to again. forgive what And was the but you related the fees consultant SG and Allison if impact benefit? gave me

Allison Aden

Yes.

high was expert a used went that process pretty that in we level through. a it protractive we So

be in right total to estimated So the around fees million. $X.X

Daniel Moore

Thank helpful. you. Very

Operator

Thank to Wolfenden you. there call And questions for no are back other like the to closing queue. turn the in remarks. Bill I would

William Boor

from really the strong Thanks, areas that forces -- do we that it operational improvement. feel operating improvements we ultimately quarter Catherine, quarter we a I'm led in strides great favorable clearly to many beyond was market talked all about, like made

we Thanks. we appreciate and you everyone's So go updated we really forward as interest, to forward. look keeping

Operator

concludes This conference today's participating. call. Thank for you

may You now disconnect.

Cavco Industries (CVCO) 4 Feb 222022 Q3 Earnings call transcript