SKY - Earnings call transcript Q3 2022 | Skyline Champion Corporation

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Operator

Good morning and welcome to Skyline Champion Corporation's Third Quarter Fiscal Year 2022 Earnings call. The company issued an earnings press release yesterday after the close. I would like to remind everyone that yesterday's press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission.

the be discuss performance. useful call, it measures, today's can believes in during company non-GAAP will which Additionally, evaluating its reconciliation can release. measures of in A earnings the be found these call I like Champion's and Executive would Chief Mark to the President now Officer. Yost, over turn Skyline to go Please ahead.

Mark Yost

quarter, to outlook continued Good and levels, for discuss including of by in review quarter, growing a will our fiscal for quarter XXXX. site-built inventory In results, alternative thank customers give factors, joining. a and the far me the on and I demand homes. to morning, is third CFO. we Laurie on of fourth Today, favorable activity numerous low color everyone, our for base levels see the historically rapidly financing, so rising call Hough, you looking driven the With EVP some and third better

attractive of Increased third and through material, million $XXX Our as quarter points quarter, to along to supply the rising delivered backlogs rates year. prior drove of X,XXX from with third the the drove side headwind higher drive quarter, million production or X% at cover the homes price costs, from during We to rates a labor Strong remain order an at challenges output up year. the to to order the Fiscal revenue continue anticipate prior constraints in least the during disruptions half the price product increases first XXXX. weeks We freight end improvement XX% to of up average $X.X of offerings quarter. $XXX XX COVID levels. at an production our supply the continue industry-wide affordable billion, and

well to and Our execute very environment. in line difficult front continue today's teams operating unpredictable exceptionally

Second slightly of higher anticipated, was our due versus absenteeism. holiday planned and COVID-related sales Quarter lower levels to shutdowns the sequential home volume As

Our percentage four points capacity XX%. quarter the during to utilization improved sequentially

persistent us allows offerings, in material material shortages. without of to the particularly supply increasing streamlining see of which to our usage, benefits continue and environment produce We beneficial product is more this

are During are at We a acquisition integration month ramping. our our expansion in in to as proud manufacturing and production really giving workforce Texas on in operations efforts, region. mid-South we track the anticipated supply us have are the we the Thanks facilities with to the leverage I'm that also us. our the completed other the synergies ahead remain the quarter, that strategic partners which and in we of ScotBilt of the they report I'm and footprint our at impressed schedule material team with the pace facility. members joined and incredible Navasota, exceeding

look are conditions forward, starting together. to As market come we really

while have combined side The side, inflationary these higher rates historic shortages lows and and drive business In economic, interest conditions, We housing supply only demographic, model. to advantages supply dynamics enhanced. in demand. are continue pressures get favorable our factors migratory our the with to

International excited more As gain share even convert The we week will market rising have are of of our buyers cycles channel gains interest our will and our increasing journey tailwinds combined investments, digital output. with investments positive for deep and Homes to our these and rate us today's during their Builders the for These partners we in minimal Orlando builders capacity drive of launched past consumer better analytics on able types the one the focus next serve Because these to dynamics, making of better seen traditional by on help the to conditions. with business. will We customer. Strong significant Genesis growth and ourselves Genesis backlogs Show. order only to rates, fueled share. have double-digit market cancellations, in the of site-built building we by and and side help home experiences friction to eliminate heightened provide investments throughout be we're are

and good streamline very process product technology continuing to and our are manufacturing offerings on progress automation have plan on We side. both the made to our incorporate long-term

an we job partners technology XX. our of done unique solving accelerating the fiscal have be in processes. building will during challenges excellent Our technology investments And

an chain supporting supply have incredible Our partners us these also challenging done during job times.

overseas. in calendar and supply is the It many as partners is that trusted our more was partners us been It of care named brand this COVID only in we of prevalent anticipate quarter impacted their course to all will U.S. by customer We this by Skyline, have again, us our We turn mid-single call will be that increase top-line by people most that together the expect improvement year. the quarterly challenges also our trust. sequential moderate in from our now digits to our the year, the partners financials chain throughout because of fourth working to quarter. of of to detail. take I and discuss outbreaks supply our Laurie will the earned that over allow do this

Laurie Hough

to I'll or of Quarter. $XXX price fiscal XX% response our by to average segment per Thanks, quarter to the third XXXX, the The U.S. a X.X% by well in selling the in factory-built discussion by in and fiscal in X,XXX as U.S. revenue and well financial U.S. price in sheet number the sales increase product to homes perform was by as well mix. selling as Mark, second revenue revenue I compared due Partially last XXX X% in the was planned a housing segment, home The cash sold. increase a increase as labor average growth home. followed flow. quarter year. units per to XX% the our growth a XXXX $XXX for selling We increase and holidays. sold in of revenue $XX the U.S. was everyone. homes material homes by total as maintenance, same our compared to built freight increase also offset X.X% briefly last was of manufacturing sold by decline per same of The costs, homes average number to near-term planned routine of of quarter was million. price morning, in sold factory price increases built in The the increased as home. in begin reviewing rising versus in the the by generated The X.X% housing quarter factory decline sequential sequential sold increased our driven in million and of increase $XX,XXX million primarily shutdowns of factory-built new good expectations. The will balance Canadian and number discuss driven the homes changes growth third of of in the due segment to number results Net year. an in for an

level higher COVID January. a to during the experienced disrupt to month has also $XX run which increased We million rate of Canadian absenteeism compared XX% in of December, to revenue last -related production continued year.

to same XX% quarter price XXX% to response versus units. primarily sold same freight rising up offset increased enacted Canada material, gross pricing As increased increased material to $XXX costs. driven the homes XXX costs. Consolidated and number $XXX,XXX selling in of sales year X% The in the actions rising million due by last year, last higher quarter the profit volume average labor, to home pricing of versus increased and to

the and more material certain primarily housing rationalization and the from our buying timing same compensation. focused higher to production buying our the year price of in the XXXX, raw last order U.S. SG&A continued customer leverage price to and rising to impact ScotBilt margins $XX Our XX.X% points and up of program. due the Gross of in by for the positively better gross million increased under material to third response net fixed period segment segment the costs simplification in last product year, basis $XX were were February from of acquisition variable million operations sales, quarter operating I,XXX than enhanced investment and in improve costs. margins efficiencies also experience. adjustments due manufacturing The third increases labor in increased materials impacted to in quarter to

the was higher quarter the XX.X%, million incremental from for fiscal R&D diluted million per $X.XX third a quarter benefit tax recognition quarter XXXX. third share combination effective tax quarter. rate of EBITDA EBITDA versus $XX the in customer $X.XX period margin the income ago. million Adjusted to over increase the gross basis company's to last period year per further of or a fixed last increase due was online in year same expanded related increase U.S. and expect XXX We during and tax for the a adjusted earnings was diluted the The by to in in due integration The of year. to $XX margin an year sales points for Net driven prior in was credit share cost an revenue improved increase income profitability. or through of same systems experience and leverage. compared $XX of XXX% net by improvement investments EPS a The XX.X% to higher

labor and in demand. material inflation chain products several and primarily production we widespread the changes on through the materials. substitutions, and be challenges, increasing chain of availability operational due to raw half raw costs, response our on price fiscal challenges to operational efforts impacted improvements, of Despite of product due on material to of supply the forward, levels remain to top first and supply and including inflation building magnitude and labor the of continues expect cost standardization, Looking the to raw costs to continue make utilize pass further to persistent materials XXXX, our levers by of elevated timeliness adjustments, improvements. including We volatility

Quarter, to in lumber third recent costs. During Third product increase see the margin to forest sequential the our lumber in inflation. the Quarter dip the In compression will we in product recent gross benefited that spot due our in Fourth buying from pricing we temporary the given March volatility versus quarter, fiscal in some and expect forest program quarter the increases

on levels. As had resulting enhance flows cash of of we our equivalents operating on production to output cash XXXX, initiatives during capabilities executing and and quarter. million cash million operational our $XXX higher $XX of January remain in We generated focused the Xst

in reinvest growth. the strategic Our continuously the us will back call business to some ability closing favorable position the Mark I for support to liquidity now to and turn remarks. allows

Mark Yost

Laurie. Thanks,

solid with very a I'm results. despite pleased environment that our we in. business are and encouraged operating third quarter year-to-date with momentum in are our We turbulent the

and And Q&A. for lines to home solve transform Operator, building the backlog homes. to need that, open growing investment strong us with the for now you Our have our well-positioned may

Operator

you. Thank

queue. question [Operator question-and-answer will indicate speaker For while shall star handset conducting poll session. to be that up necessary participants keys. confirmation One We your using Instructions] be now the questions. may moment, The pick the Instructions] is line it for please, pressing our [Operator equipment, we your before in

line Our is Daniel first with coming with Please the question proceed of CJS from question. your Moore Securities.

Daniel Moore

Good prepared remarks. Thank the morning, morning, you. Maybe quarter. on, Laurie. exceptional with Mark. Congrats obviously start Good pretty

said, think, that I digits sequential going do I volume? this revenue, And about that How Mark, you growth right? Did into we hear think was quarter. mid-single that?

Mark Yost

kind a with at to We little topline Yeah, as chain there's bit. bit the think starting supply sequential Dan. of a that looking improvement rebound quarter-over-quarter. growth We're little revenue of

Daniel Moore

of is And you unit supply volume half Texas, expect move we helpful. and continued growth challenges, in as do or as sequential the the etc.? or would based we some fiscal on into other chain Perfect, TBD then, facility first that open you 'XX very expect

Mark Yost

would calendar chain the sequential starts factor, supply improvement would year. chain I but expect throughout be supply critical ease to Obviously, a up as

Daniel Moore

compression talk Obviously, it. maybe little -- for timing Laurie, price easier Got for our would and a color care some just changes going look terms patterns. what a this and Thank quarter, lives in of about sustainable gross say, But of, of fiscal buying let's forward? And rate run margin. and the that type in you to on make be lumber we might the

Laurie Hough

is lumber. increasing for and the in certainly favorability gross pretty some Yeah. in as Dan. saw everybody those third of steadily our costs are seeing because the spot-buying We margin And certainly quickly. programs Hi, quarter

to In also that filtered we higher SG&A balance at quarter COVID And and expecting some third gross out addition, into throughout margins level, in sequentially. levels the we're saw in second margin. then will January in somewhere had going I'm month we the are going of what impact that absenteeism mind of margin to and keeping between quarter. course, the EBITDA see increases the that

Daniel Moore

helpful. Very

whack-a-mole, color I long for bus know out you a get the specific but just Lastly, sense me, game is the a perspective. for you'd when Thank about -- right of take are it it's just maybe might better biggest again. a -- talk there the how what of call chain been now supply alleviate? to bottlenecks and to from anything the

Mark Yost

game think in and are Yeah, now, things small other the you supply as specific duck work electrical other challenges I biggest Dan, I chain would Right they're system. mentioned. say of grades things through roofing, components like is shingles colors by. are still that, come clearing like like like Different that a that of to whack-a-mole, the difficult things

it and improvement out shopping call since really consistence. kind not see changes the season, day-by-day we've we'd but inconsistent, So of it's that's improvement why come of steady so it a I'll some holiday

fills a chain timing we up and can the we're of So bring bring Navasota calendar align. the just It's year. Navasota throughout when that's why confident We're supply really issue further ramp. can we confident

Daniel Moore

will with Thank any I follow-ups. very back Got you it. jump much.

Operator

coming next Group, proceed with question. Palm please Thank Capital Craig-Hallum Greg with is you. The your from question

Greg Palm

for the as Yeah. Good my questions and well. will morning and thanks taking add I congratulations

Mark Yost

morning. good Greg, Thanks,

Greg Palm

Maybe about year-to-date? to start, seeing terms rates order in can you of what you're talk

Mark Yost

Order overall, to I have a lot there's rates year-to-date. been order expect backlogs flat. quarter January, are say of but so normally would -- would Yeah. I during volatility Obviously, rates in it's the be relatively good

So still rates are good. order very

Greg Palm

Got it.

customers types out mentioned out of of that that help a you'd from maybe flush you share of types those new can expect think the environment type comments meaningful is may [Indiscernible]. where the bit terms seeing of be In take there, Maybe this more? the to customers, I you you

Mark Yost

Sure, Yeah. Greg.

high on there's think mainly a is pressures driven factors across and inflationary the few side here. seeing I the labor we're material board, One the side.

builders use versus labor our So We competitiveness per if site competitors, substantially site-built use do. than you we most material think our than less of substantially home deal. site less builders

so effective, the as we and cost inflationary become gets result, a position our times, in curve So much on cost more better. much

is amount can able of come in inflationary. CapEx minimal look we key on inflation. offset you driver model, So very just prices Plus, investments, pass that inflationary grow raise topline we're really We with our efficiencies to business tremendous that's our revenue and general when our one times. generate to shine at cash, we can to

I of those dynamics business good. So think very are our model

then think think site built expectations $XXX,XXX I afford home I recent per fourth cannot per on just and interest up even average. the with favorably coming new with median increases. rate assume, if in higher interest home price the rate interest were quarter compounded on out rates price for $XX,XXX customer Because the increases, interest most average calendar X.X%, And that's if stats by increases. less you - with builders look you rate site the the go

be builders really an form, successful. be forced different that to plays alternative going to they're fact find to and are that going a alternative, model incentivize to switch a to us, find really into and So to different offsite to into or start the plays

Greg Palm

helpful. see the gross supply make that assumptions likely see throughout fiscal periods capacity of If that ramping at elevated sort to think thinking to those some at and to as relative gross modest for and lift That's we even go-forward you current think volumes won't margin issues Last to demand you're a not of absenteeism there quarter? volumes in any XX, chain and reason of gross sense. Is Makes margin. least you're going Hopefully, we some that to COVID increased the not impact what levels, same are margin. least the standard one, about the around up. back levels in circling

Laurie Hough

come production But some output. sales of of our majority products cost we Yeah, offering through to deficiencies our increased as continue there the is be and simplify Greg, variable. that will

see as efficiencies. some and So we on focus we'll product continue improvement to the simplification initiative

Greg Palm

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

Mark Yost

you. Thank

Operator

you. Thank from Matthew your proceed Bouley with question. Please is question The next Barclays. with coming

Matthew Bouley

qualification change I'm curious fallout guess or X, a heart what of is dealers work have I terms X, and said guess you protected in number in testing given Question just rates. ownership start long that this are guys Morning, think if everyone. guess, for the and to what they of XX related in chattel just they're on, all know start cancellations with Thank but take I long rate backlog, backlog is of I having you've done before construction. customer And questions are I you results. in that either the when on I that around the environment number relatively Buyers rates and know I for happening weeks. you you taking this to backlog financing risk risk qualification time, how the you of construction. congrats a

So risk of the Thanks. all what's that?

Mark Yost

Yeah, Matt. you. Thank

customer dealer there's in the overall, time weeks’ thus close, there's they a will could we've other very time. onto generally cancellation post extreme low make seen dealer before far. home the customer that be few think discussion then fully Very sure a that's a that produced, qualified a before that, rates words, if requalify customer puts I going that order generally prior Generally, requalify when to that just in low that cancellations. there to period. but that In puts it's online, window, before the Obviously, rates a to generally, volatility home production.

now alternative home actually necessarily. a of up-to-date. and at so what they good visibility not still growing those are moving on qualify keep So we're actually site-built from and a credit can most of home the that other $XXX,XXX price price, really buyers, a more who when qualify. issues, to affordable better going customers Actually, have good good income and bubble they're really and base they're And they're a first-time and scores, able think customer scores credit going we have on seeing forward I our most right to are is people

Matthew Bouley

there, Makes that. thank now. That's for sense great color you Mark,

as believe, much the Second simplification obviously benefit this, I'm things I know well. a stick material rationalization. I kind environment lack are just so have around structural of of too kind prices of rationalization tight gross margin. those but I those one, and know at back term? the go to of environment, into the gross simplification efforts the discussed first supply or mentioned Thank to if Laurie, I But function a where and this there reading efforts. you product those just the the margin don't normalized you speaking more lumber specifically not of a the better on may in point for Are you.

Laurie Hough

No, varies I they're along say structural of simplification that we It more definitely would changes. more the far in plant. by structural. How are process but

Matthew Bouley

Thanks much and again perfect. results. congrats on the Okay,

Operator

Thank you.

from is Capital question. Please question Mike with next Markets. Our Dahl with RBC your proceed

Mike Dahl

Hi. Thanks for questions. taking my

sorry the lumber of spiked by last gross last dynamics a from a quantification First of keep spike for little much temporary the by. in excess didn't more question, view benefit But the in 'XX proportion, because hurt lumber in hoping harping and what you seems to spring on year. I'm side. get far the seem to hurt when dip that margin calendar

a can into on changes spot your just more little contracts. Or versus go have the spot help to bit was benefit a on And elaborate quarter exactly what little from just detail made So you you lumber? more the in program? the

Laurie Hough

Sure.

we So changes. made have

percentage contract the SKUs. varies We the buy price varies of of versus on Mike. by plant, And it have also based a

as the prices the that. that bought with we program up. go spot quarter, lower simple this lumber would during through anticipation as It's at So more dining it

are it quantifying publicly. We

Mike Dahl

it. Got

Okay. second question. Thanks. My

you are capacity you've geographically to positioned just think the widespread you're you there I way on of Just the and seen but growth, the demand, adjustments demand backlog obviously, overarching evolve? availability when labor. constraints, inclusive light whether growth what you're bringing of of today, you demand to right your the in backlog, most think think your have seeing of the that, or material where and terms can you trends most talk are capacity you that relative further if only think where capacity about about is in get about obviously, that needed the the supply

Mark Yost

Yeah, Mike.

question. two there's of that parts think I

out we're there. think demand I well geographically trends is, positioned for the first that The are

Texas. look you those been have amount states those through our been people Georgia, migratory where a There's migration U.S. relocated the and we've tremendous factors If Carolina, I think Florida, in presence in growing regions. of to to, of the

capacity, I capacity think bought those opened advance advantage to up So in in of regions take we've that.

for day, the we I are As say positioned are need that number with that every but, turning -- I probably the we're on I today orders we mention need we I more far the many demand, think today, entire geographies same as capacity and away those would well were throughout of it's capacity definitely orders we so would in it's passing would Then throughout. say that country. more rejecting

Canada regions a say additional It as out could there's regions, there, U.S. generally and be of little but There's are robust in seasonal would housing speaking in that I Texas capacity demand Eastern Oregon Some the soft. that one as the some tremendous due a capacity. on northern not of or that's good. would take is be draw to and Plains very Great softer are there the two climates. but demand you There's geographies other U.S fantastic there. there of through line weather few regions,

This we've think so homebuilders turned robust past away So to backlogs, I more rate demand, calendar margin. our demand. by mean than a our outpaced And large of it's I every year. pretty order growth orders

Mike Dahl

maybe MH see Thanks for of time view that affordability of in housing I your on factor step I as the last some certainly potential appreciate saw shifts back XXXX you and XXXX versus rate shock. the one. my understand manufactured but a take makes and decline site-built we that alongside if site-built Mark. last for and point And conversion and sense, a did housing

it share arguments I'm there not were ago, few data made. the that gains really been of the could've these years a just So some same I in guess seeing and

few out? the next just through year didn't this as talk years ago dynamic you what when or maybe in upcoming that see a So play maybe couple of differences versus years

Mark Yost

Yes.

manufactured back if - let's historical I at period time if to have Presentation. on our Go I the look current through back saw rates inflationary think environment think were I housing pressures faced and mentioned, robust we're few and the with period in you say that growth of was a go robust you higher industry, XXXXs were as XXXXs. similarly history, that there that's outlook. growth, One, Investor know today's to a but data obviously we extraordinary not a things. in you we

I a think in dynamic is few referring the of that that much you're you where have we part financing as it financing, difference if to back a years didn't fact ago. will, back just

as you what XX If now. ago, recall, to I spread were years mortgages are think as recently just spread traditional they double

during you when period spread rates think I extraordinarily time. see and we that interest had time, buyers in rising still of mostly at cash-only high point that

So buyers environment little out right SUMH, what financing in previously. in a generally the different in is the different 'XX of A the tone say a back an of demand I place to make they housing of saw is different little MH XXXX today lot than And the a think industry. as I different, a XX% S-U-M-H. communities. that's also we little market terms were think there and up bit there's of and XX%

build period and very for That into today. market build rent channel. think I the on the time. outlook that's of sidelines the flowing on were more at rental that's the rent, the with Obviously, So capital different -- they market those housing outlook for

robust. very Let lease communities land is alone go

it's tone a different very today. think I So

environment, I interest at at pricing vastly right at think today. factors period spreads look the the And look at channel are the different at market dip would it, look the in their of I and time. so difference Look housing those rates. All that demand and previously in

Mike Dahl

perspective. I that. Thanks. for the Thanks appreciate

Operator

of question with proceed is line your Phil next from Jefferies. Our question. coming with Please Ng the

Collin Verron

then Hey, you I a good to the between size of expect about. in and calling air or higher pocket And any buyers? the follow-up morning. financing bit just just demand more Collin the talking in on XXXX on environment color little as XX-year move for by mortgage year give you're Phil. traditional maybe more quantify spread are rates? MH is rates in This after you Can the calendar actually recent the mortgage digested do Lending just want home

Mark Yost

few it's think factors there's holding the I a one, Collin, last that's where been that so, X-XXX traditional think mortgages, points right now I basis to are quarter. spreads

So around spread. a rates bump to XX-year, move there, I it's think the you'll see as mortgage so that spread constant

pockets, don't likely move -- see interest outpaced as completions some I this pressures starts pockets be Single-family much housing happen there so much calendar and the will as rates so home-building as have think, I As year. world, housing that in far later I process think in or to have a because XXX and starts housing market work supply completions. caught catch-up improves that between to you come be of as going kind given a there's let's they're where that take homes XX,XXX to say chain

long It low be but bunch there put to but to you existing will you'll come -- think there, little term. so I where the offset supply gap see elements, a So thing of nothing market. doesn't see houses a of really bit little a to with of bit be a in concerned

Collin Verron

you on improving the for term to you've you then those of over those about give several on longer-term in production over Can process a you and Okay. you maybe us That's helpful get able past quarterly I long rates, rates, where the talk annual and quarters your quarters. couple color. of just are, basis? goalpost just production the or increase next some if And been of in can terms guess,

Mark Yost

appropriate supply depends seven at chain look that now, Right we will tell supply Collin improves so and it got the to I as continue. giving time we're and but we've on would really restart dynamics guidance, you idle plants Yes, chain. market not bring on

be and would those are less our Obviously, production. operating plants enhanced think current shortages I off. than of resequencing plants of material efficiently existing because we So as start

I would in chain be improves. supply volatile be but will the So late chain calendar towards year, in the some year the volatile obviously, this West it throughout that -- supply But enhancements in as by production do there will it and foresee recover calendar be might the short-term.

Collin Verron

questions. my you for Thank taking Great.

Mark Yost

you. Thank

Operator

you. Thank

question coming proceed from is next with McCanless Wedbush. your Our Please question. with Jay

Jay McCanless

morning. good questions. taking my for Hey, Thanks

First basket the us remind are benefit any question, and still fit your to in from in you in that seeing price COGS declines recent commodity? there how could you

Mark Yost

I it factors meaning pricing chassis. a think in It's HUD obviously that Yes. Jay, on are to pales comparison still lumber. steel related for -- our not in products

some in significant. that see but of you not So it's there relief

Jay McCanless

one increases My and least maybe down is the going you them commodities about up. question, in Quarter? you where talking volume maybe the trends saw Third year-over-year business earlier communities, At of highlight are what talk were your could with about instead of you type second

Mark Yost

disclose don't by channel, been strong community sales We think has channels but I Yes. active. and very the

look at public which communities, communities their probably most the processes If they're UMH, where UMH, going. in representative some very are Greenfield very, of others. have development and of ones, strong of especially EOS, you terms the

are for So we they tremendous I see upside think and clamoring product.

So of terms in demand, the there up. the channel order in our strong model, up. retail well that very tiny growth, retail producing are park models trend is very definitely ADU but are partners, distribution homes, out rates They're

today. we're demand we seeing in really, that across, benefits how capacity So fill allocate limited our really of it's on demand more to

Jay McCanless

the the fairly in ramping those? progress Could an update Exciting the plants plant on quickly. is purchased Carolinas, to you on any hear that us give Texas you

Mark Yost

Yes.

plant, plants two on we and into want to waiting everyone to at That and ramp. visibility, we hit firm speed have we Carolina. only well. commitments a the on start -- really go supply up chain. chain never to your Those plants in doesn't train get and idle weeks So acquired to look North you plants labor, will Once we're three supply

supply of So to ramp supply you of and certainty enough need supply and it. into consistency

Carolina's, will bullish bring as the in when So right we're Obviously, market the chain supply on dictate. the plants geographies. dictates we on

Jay McCanless

change being of seeing terms you were So get quarter to really in into from last consistent no those supply what plants? able

Mark Yost

Correct.

Jay McCanless

the notable and call? And last to about rejected Okay. high-level you any I industry GSE's then, we the anything with second that question interaction since had know have, that terms submissions. on MH it very was thought GSE the the I or quarter the if in talked latest duty interesting Don't thoughts FHFA of serve new

Mark Yost

surprising terms really interaction in on of that really between new the carbon. Yeah. nothing and the Nothing front

that and is Fortunately secondary for enough us, I a capital. to in bring some private offerings happened market think strong have secondary there

seeing. impediment And not to I demand we're think any those of the are so trends now right

Jay McCanless

Okay.

Sounds Great. my Thanks questions. taking for

Mark Yost

Thank you.

Operator

Thank Instructions]. you. [Operator

Please Our question. CJS next Moore question with from proceed is your with coming Securities. Daniel

Daniel Moore

two Thanks or in really of the margin follow-ups, the of commentary, general, sense historical gross Champion's, is margin obviously not Mark putting together just EBITDA. were either some again, but perspective Skyline one or maybe just Any profiles helpful. where

that During rising like high you previously? the inflation, rates mentioned XXs periods of

Mark Yost

work of look versus inefficiencies information Generally, of I industry be over would maintained to inflationary if cycle, site back some is stuff. And and in able the pass want inflationary pass to there builders significant times, I as terms during price time. basis of short-term customers the Dan, to you a their But don't do increases you're you but the on ASP Obviously, are pressure. their able during and goes over far it to that is on in whole margin. on a of say relative I with have maintain us got higher margins. because times to that out just pricing at volatility there's obviously going increases your loan

think increases very passing into I and doable. is keeping on So affordable price

Daniel Moore

more in uses One of Understood. cash. just of terms

can are flow generation. ramp of higher the reinvesting in with probably cash of cash level the that obviously keep CapEx up rates you business even You and can't

status terms capital you the like quo consider seen in alternatives Thanks or kind periods to buybacks of we've So of take advantage again. share price allocation would with of of priorities? volatility year-to-date like sticking

Laurie Hough

Yeah, up today. and as production our to continuing major our allocations focus customer well automation, opening business idled Dan. for in capital the That's R&D, based as capacity, We're website enhancements. additional in through invest

Daniel Moore

appreciate color again. I the Okay.

Operator

Thank you.

to additional questions so management to this time any pass would at I the like have We no closing floor remarks. back for

Mark Yost

Thank Take building and future you everyone dial to care. stay Look into We time we taking home we sold morning this amazing. our care, forward to Take as appreciate call. it. it. stay as know for the safe, the transform

Operator

this conclude today's gentlemen, teleconference. does and Ladies

You your time. may disconnect at lines this

Skyline Champion (SKY) 3 Feb 222022 Q3 Earnings call transcript