Earnings call transcript Q3 2023

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Operator

Good morning, and welcome to Skyline Champion Corporation's Third Quarter Fiscal 2023 Earnings Call. The company issued an earnings press release yesterday after close. I would like to remind everybody 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 factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission.

the be discuss commission useful performance. call, we measures, -- today's can believe in during company non-GAAP will which its Additionally, evaluating its reconciliation in be A measures release. earnings found these of the can

Skyline like now Officer. call Mark Chief turn I Champion's ahead. would and to President go over the to Yost, Please Executive

Mark Yost

update on in in quarter our report and prior despite briefly quarter our as I'm third and and fourth period. performance joined and solid sales for good ahead. highlights pleased call activity this so Thank CFO. on provide strong another I'm growth far I Laurie everyone. the the an our joining our by you year year-over-year EVP talk morning, profitability and we delivered then earnings call in to Hough, quarter year Today, will be about pleased to

impact way product sales During and to X% now XX points. grew Margins by and to began the monthly customers. margins product our have mix customer and for and our focus, on more EBITDA streamlining the areas remain FEMA a the we normalize by third XX%, expanding been fully basis of quarter, to realized bought. steadfast unit experience, our sales net by began payment We our the enhancing built affordable transforming key achieve homes shift are of offerings that

and dealer to at times to inventories XX% quarter. down September. seen the $XXX in backlog our normalizing or to compared the XX of XX destocking of of improved million end at the challenges. progress production Lead we to significant of the past during was quarter weeks quarter few $XXX capabilities, have weeks end quarters, Over compared backlog the because September supply million the stronger The easing chain

weeks homebuyer year-over-year developer saw of community meet benefits shipments also channels. growth Normalizing channels the during backlogs the in X customers. direct and and pricing our We and strong quarter our their levels better builder the helps lock needs -- both financing to to XX sales pre-pandemic of to to in REITs

from those from builders second healthy orders backlogs communities grew sequentially quarter both levels. as of Additionally, the were and of channels

retailer digital with leads credit year-over-year, closing customers good quality higher While rates. is traffic are walk-in down driving

we our result, home retail our the financial operations seeing in are number increase applications. a of year-over-year deposits As in increases captive are partners seeing an at loan and

interest have in our our from growth also future increased seen channels. homes We

manufacturer year, prior in In X,XXX the their in a plan We limits. X.X%. costs as and decline saw attended and Genesis Show to continue in Vegas destock homes where delivered retailers the higher levels slightly Production the our volumes their the quarter Las model down International total, response to credit to we carrying to last compared X,XXX roughly customers them. give rightsizing Builders' of could week, advantages, X homes rent builders of were floor during inventory homes

fiscal our are quoting in to expect retail in quarter destocking the subsided completion said, the Order activity the the reflects end trending March. the the FEMA inventory Sequentially, manufacturing of normal of through quarter. of the our part and decline production cancellations quarter. at shutdowns fourth at up and in the operations, end third have of holiday the units our That first prior we continue

expected quarter decline in high our short-term with have anticipate we where U.S. Consistent and members spring single-digits, revenue, above the top line our sequential the team for the with South geography estimate season. which a fourth the we varies lower putting in areas, the of backlogs these call, selling regions second earnings rates we last anticipated. Demand seasonal half while In lowered widely by talented production retaining and in plants the Central orders our for

In efforts. we have we focus near North our continue from in we our seen facilities the on streamlining as these at production X started Carolina. January, term, significant early manufacturing idled production of to In benefits

Decatur, additional Bartow, the plant of to housing open R&D our and and Indiana needs developer and our and short demand, Ian. we Florida impacts prepare long-term the Hurricane plant Additionally, from continue in growing to builder support

the ramping of plants that over our next affordable margins needed bring, as impact the we quarters anticipate housing We these will to customers. very few

As we and rates are look home facing forward, buyers higher inflation. interest

homebuyers result, seeing we a more are value-oriented factory-built our As site-built traditional moving solutions. home into

expanded confidence penetration potential channel the from strengthened builder by midsized traditional upside REIT the build-to-rent is in growth further the the and growing into long-term Our interest growing from the developers. channel,

and continue results While longer-term excited and accessibility. by these are impact housing we the time and encouraged make are growth drivers by to will to the mature, to the the the we take progress overall impact,

to to continue that of this introducing need with number the in need environment, affordable we who connect innovation offerings housing. customers by invest In economic growing

accelerating are customer and into We our production automation investments the experience.

manufactured by our continue in presence homes. technology the that We on consumers educates digital expand of investing to engages content value and and

straight visually This while These where the for it the find brand great home. by additional their Most Research of and leads can Trusted We've customers our as social bring easier as price for customers and investments personalize our media new quality in our homes as demonstrate includes were for been their to and via to online. awareness we design year. homes allow the expanding well design we to dealers making recently Lifestyle Manufactured housing advancements third recognized our named Housing

over in the I will financials now to more turn to quarterly the Laurie detail. discuss call

Laurie Hough

will discuss the I'll begin by for discussion also and followed reviewing and sheet by morning, results good near-term Mark, Thanks of briefly flows. our our balance our financial a third expectations. quarter, everyone. cash I

During compared year. to last the to $XXX X% sales quarter quarter, million same increased the net third

last sold U.S. down units, quarter same growth X,XXX was segment saw to of primarily average year. factory-built quarter, housing by homes increase the the of of number price. or during which quarter $XX for in X%, a compared during in We revenue was million roughly the driven XX The homes the the total selling

demand our opening certain homes realigned and due quarter were business increased Homes retailer levels price locations retail capacity year-over-year given Volumes on year. plant schedules. core Expo where inventory selling U.S. due or Manis by reduced average of offset the production our in Plants during to production Navasota, supported price schedules destocking to Factory input acquisitions per increased and down mix shutdowns. backlogs the volume XX% U.S. higher to the and year-over-year elsewhere holiday lower by and markets by the softened sold this product located were in Texas driven occurred, earlier of costs. The to $XX,XXX increases products the

of to year. due This U.S. of quarter which quarter completing in quarter A holidays. sold completed were absence a to second quarter, drove the XX% of X% in order of same the the core primarily decrease third and in On which around XX% a FEMA number factory-built in in FEMA decreased ASPs average a decline of result the the is in homes basis, home was and sequential the shutdowns plant segment the per the XXXX of revenue products. selling decline prior compared the higher price fiscal our prior sales, the versus the

on a smaller, a product a due in In decrease and to optioned our to less sequentially basis. product material core ASPs in reduction a homes shift surcharges mix our in addition, we home per saw

to compared to reduced retailer XX% softening quarter resulting decrease quarter experiencing average in XX% some which XX% per the are sold, driven revenue the by price to home. earlier, destocking, offset third of Canadian million a because number the an to by markets homes decreased $XX prior increase XX% selling year, to last the in of decline demand mentioned in compared during quarter. levels, partially capacity caused production As the utilization our in

selling in by by increased to markets demand volume The average was costs. caused response previously price softening a in price in X% to home certain decline and rising was $XXX,XXX increases in Canada and The shift labor and product enacted in mix. material driven

margins million profit quarter, increased due average the prior XX points gross in the primarily versus gross $XXX year XX% quarter, higher improved basis selling Consolidated prices. to third to while

Our were percentage due total year, of segment, third up in margins operations. the our basis quarter from retail housing from the captive increase retail sales, U.S. sales U.S. segment of housing segment net points XX.X% our XX a last as expansion of the to primarily resulting gross

$XX last compensation. the of systems, and retail investments period experience partially acquisition quarter and in made million year which the this from online to enhance the supporting earlier SG&A both in third Expo locations increased were primarily to same due million incentive Factory customer XX lower year, $XX of by to our offset

of was Net income $XX to period $X.XX the for earnings last XX% ago interest of or well XX.X% income. improved was of margin, gross EPS in million resulting share higher XX.X% improved quarter. The higher to million per for the $XX share during the an third or $X.XX increase diluted rate the diluted by quarter effective and income year tax profitability as effective per company's net same year. tax for The quarter net compared increased rate driven sales versus as in

in was points expanded in EBITDA the decrease the XX ago, for basis to XX% tax margin tax was the improvement. for million, an to same tax The lower period a an increase effective increase state Adjusted adjusted the EBITDA gross XX.X% due and tax primarily to of R&D quarter by expense credits. the margin rate benefit year $XXX over due

our economic our customers capabilities, The periods also strengthened structural ability uncertainty, years These last enhance increased operational to improvements have in the protect and continuing navigate profitability. our leading to profile. over while our our of service business few improvements margin to

expectations less, margins toward consumers interest we monthly back we to normalizing to to the with affordable move fiscal more mix anticipate options our and payments. end as offset of maintain headwinds XXXX product fiscal XXXX, to inflation increases reiterate homes with and of As moving rate we our our levels

Carolina, expect facilities the Indiana Florida. the some margin from in North of X new addition, we ramp manufacturing and compression In

XX, is cash an the due $XXX net in generated borrowings million We of $XX increase million increase XXXX. equivalents December million to the long-term of of with primarily of in no cash flows for maturities increase the prior and operating $XX As cash year of and to operating we The $XX cash compared income. flows quarter, until XXXX, period. million had

million, we retail support executing position, its our to cash the reinvest given our utilize that floor long-term to quarter, initiatives, plan for of repaid growth. third historically the opportunities liquidity fund on outstanding borrowings favorable our $XX in to and business of inventory focused the company remain During captive on purchase for operational the utilized our We strategic which and home plan operations.

call to some turn closing remarks. I'll now Mark for the back

Mark Yost

Thanks, Laurie.

current due interest raised sustained to higher of consumers level the caution economic inflation, uncertainty. While with has rates global and the environment

to that and continue confident our initiatives. due affordable to points, our core are broader the We price market housing Skyline outperform Champion strategic can positioning

demand as helping well consumer manufactured REITs, partners opportunities demographics. the for supported to outlook channel builder to as our is with developers, different and community The retail by rent adapt

believe that to housing we elevated In addition, the traditional more and cost drive housing site-built continues of the our buyers for need affordable homes. grow, to will

open for Champion we Before ability of entire result take lines of a team, thank to is and performance our the want customers. strong to as Skyline moment a Q&A, our our care focus, consistently work hard take our our to I

Operator

Instructions] CJS with first is Securities. Moore Our Daniel from [Operator question

Dan Moore

the Start prior sounds thoughts. inventories. retail bit with March, more, end about the destocking consistent through of Mark, talk on like a your side, which It is maybe maybe little with

far we in more process? of point? how at that that sort Just are phenomenon geography-by-geography a And along this market-by-market, is

Mark Yost

see say certain that's destocking I of definitely we has prior. order South be in seeing would is as majority of finalized will of we're destocking say dealers quote to certain that destocking. time I the markets. the March But a consistent up most has the it's what I market-by-market, and Dan, a -- activity markets we've with period, and primary thought area cancellations still seen in pick region and that the inventory it say most certain would today. do, Mid by dealer-by-dealer we that would Central geography-based occurred around in regions, that it's the indications more already the which

Dan Moore

pullback I inquiries, traditional in little helpful. rates quoting so? are pickup or from but retail seeing over more the you're retail with month the Very to know talk at last you Maybe all a kind about traditional digital, bit recent a traffic shifting traffic. of

Mark Yost

levels. traffic, say has since those that Digital calendar traffic retail of beginning traffic speaking. foot up Yes, exceeding the is the year I generally would been still

I has been January. then down was the So quarter, say Digital since about foot XX%. to improved in third would It's always since traffic strong. XX%

captive we by So our X%. at retail activity seen increase our have year-over-year deposit

stronger homes are last definitely people People definitely than and on So are buying shopping. deposits year. were they putting

Dan Moore

Got color. it. And I appreciate the

decline so in think if kind we to are I'm just a I June double-digit into of any March cadence for right as So, further look out about little, high quarter. way revenue heard low volumes. And single-digits a little correctly, I that Is correct? the maybe the down a assuming the down sequentially Is ASPs And quarter? that it? think

Mark Yost

earnings the quarter consistent guidance. I Yes, call March think our prior is with

quarter, So call. the We consistent March we on just in good third prior with the very holding result. a we had anticipated what we're quarter thought

down, basis, So it's thought prior we sequential but it's on with a -- consistent previously. what

in And the winter people happens anticipate buying pick time then it's quarter, December are rates up months during time The order volumes June typically the through and the up after Overall, seasonality. we normal pick March February, we destocking usually, the kind our period in again. and this start to time period. of our shipment and lowest spring

Dan Moore

historical levels. a a Excellent. consistent guidance perspective, out, back from of to getting Last from jump sort me, margin and but I'll

XX.X% that I the sort some the the of that incremental said Laurie of of those for pressure XX%, And range. magnitude I X that what's think remembering was is correctly? Is maybe there in am the facilities? -- new -- we ramp-up previously

Laurie Hough

in I would the side XX% XX%, of yes, three given lower Dan, say new the factories on out. range starting range, probably that the

Operator

Palm Capital Craig-Hallum Group. with Our is from question next Greg

Greg Palm

were to production pretty of first margin they margins. the being volumes down pretty that, discussion. It's wanted much I maintain light in to as impressive elevated your on ability follow-up as

maybe ahead, to of of if this as able to volumes maintain prepared be then was remind you historical the guess, kind still or can think margins? we in of just business much whether comments, raw costs importantly, And the some So improvements much, made where we expect, more up your pick else as lower material production us benefit that of you some of -- sort about one-time level structural of you're something to we I of? of sort the the higher should even follow-up that aware just don't like than a maybe anything quarter,

Laurie Hough

we Yes, and that with couple finally rates. material to so to units and shifting be And to unusual in really consumer mix smaller monthly hit our also features in that reduction I not did a anything elimination start of higher payment the in of that order with then are the for going quarter's through they and quarter, the happening. coming of the think in results, things to strongly more options fourth surcharges are units the product see interest production this less continue of need would or the the that

implications. So where I majority saw next of the probably piece factories on just quarter, X going we new quarter's over probably a bringing that having mentioned, next of this we're then as vast those to quarters. we're see product And X the

impact that's so going And somewhat. to margins

the forgot Oh, part the X those I -- structural second your changes. So sorry, question. of

campus and The of as are offering kind structural changes streamlining of a that the taking primarily approach well. product to

that and the products that production another, streamlining easier making close facilities are make the So workforce production on to similar direct not and only we're producing also to production-friendly, one but we're of it simplifying campuses the we and are for that labor it build. floor are options plans more to

Greg Palm

forward, feel right? room at for some simplification area. like can I'm product you of like And margins you're sounds increase some going then accelerating benefit on improvements do in some those your point there's it that have And to also of further still investments in guessing sort automation, maybe the

Laurie Hough

general so to Yes, and go automation. of let of to product we room offering streamlining speak just have Mark offering. as the simplification as still the far certainly I'll that product

Mark Yost

of product. through Yes, think about Greg, halfway probably that I we're streamlining

and we're on As -- certain the innovation. that mentioned we towards automation, far call as R&D I dedicating facilities have

facility, company, automation call, be along looking an that produce but of company which products, So for campuses will the other on center R&D well. up our of as some the the kind we're for got part, opening we're Decatur, will -- customer hub it I at we've with Indiana mentioned -- an in kind doing

country make housing in population with really the that actually the a change innovation the affordable level honest to level from the we'll is a different quality we much for for a home to you. mind-blowing more in an The automation general the will It be home affordable kind can of automation in step different attainable and is whole company see transform So future. very -- future.

to efficiencies, other bring benefiting think and workforce of workforce our a all operation. I things of the not So better allow the only that health a because but will do and single-shift terms huge job of work will the make plants to it in today work us safety, it at, multi-shift to

run and staff efficiencies can a of we greater products just we that which way, outside the bring can are So will a simplification. way, different different streamlining the

Greg Palm

great. okay Yes

getting were then Looking on you updates a just lastly, developer think to on and that And on community more basis. clarification, builder forward. a that up backlogs of actually sequential I forward going mentioned more

In terms last that were to year, of there any associated with still you yet that win come? are or orders top those specifically XXX that builder talked about

Mark Yost

very builder I have channel up XX%. Yes, quarter, strong. our Actually, community the builder was think Greg, and in been the channels developer year-over-year

community Our the quarter. during year-over-year the tiny the was as saw quarter you the for our in We Park And think growth home backlogs actually community up importantly, even quarter. in channel very developer increased during builder and XX%. mentioned, I channel Model

as period probably orders backlogs all really up in issue those was go. really XXX in. maybe into We April time rolling has during builder not when yet. March, rolling the we as the backlog the of it So retail The a, quarter into put far start signed they that top anticipate

late would if I fiscal April. next in of first the not quarter expect in it early quarter, fourth So year

Operator

Jefferies. with question is Phil Our Ng next from

Phil Ng

now? me hear you Can

Operator

ahead. Yes, please go

Phil Ng

Sorry about that.

XXXX, about from of demand some once Certainly, you was out look kind pretty of how Another standpoint fiscal we thinking are when after than some of out the components upbeat driving you out of hard retail a commentary this your they've destock, I lot about builders we flush talked sounds, of really point? think kind your strong kind strip a what FEMA? to quarter, site-built this perhaps traditional more at Mark,

Mark Yost

Yes.

forward. I 'XX going think I'm optimistic fiscal on pretty

properties I low and now think half-century of for rental we right properties. today, supply kind at overall, homes vacant see of a rental in sale terms just we're of --

low for So we're side at the a supply on housing general. in half-century

people make for them high, site-built of be - puts I which less, will where into Fed major employment points. levels just jobs foreseeable on to price interest to the expect price so those traditional future, hit afford have downward don't they'll our rates, able moves are the homes the builders can't point

I expect destocking. So builders us flush gain we versus to the after share site-built this through traditional

on shaping it's real us of heard traditional same were think up we very Phil, where well solutions last I that builders the and can cost the vis-a-vis So International Show, very And we side for the were were in commentary advantages interested side the time The provide at we our them builders. week. and very and material. number that Builders' very

start some times difficult challenges So solve to with share during partnership those gain them. these as I their we'll for of in builders to well them help think

Phil Ng

Got you've sizable some there that it. from demand end Mark, outside code side real to builder on if got of of a the meet are from just pretty standpoint of the production your through, things? going bottlenecks order dynamic HUD any a

Mark Yost

it's running builders when little Phil, and order generally to is in capacity need part process. bit of and They with we're expanding different the a type excess I of essence, orders. a come up reason capacity think capacity product, bulk need because opening us

with XX% plant's home or needs. capacity either of their take XX% they'll XX% a So or

run can definitely. that little to think excess a I we to sure we make bit So supply in adequately, channel need

that Supply say, well. chain chain supply make still be available channel the capacity that's and taking we're and as say would they that sure us. to the also of would them but maybe cleared making customers care are I the most today, that existing pretty main them is I much are bottleneck sure to have is have the and HVAC some lingering, main, making labor available behind issues would our to of that issues sure So we product

Phil Ng

chattel just reacted performed me. this helpful? and And X, few would current Any last the how it side Certainly, loan environment, spread X of rates last on color from the kind color any have be Super. call on to months?

Mark Yost

The surprisingly chattel loans have performed well.

FICO customers was for a XX-year XX about good think are or down. then the depending chattel, X.X% versus up probably loans to X.X% score traditional I a point to X.X%, XX-year X%, XXX running how looked are so spread score seen about I down, at score, XX% you're week to X.X%. FICO and good for last on mortgage even quality is. traditional We've the mortgage or credit XX seeing If the seeing closer We're FICO this basis score spreads X% only low customers. XXX-plus

their seeing depending quality. in So be on very spread. they we're X%, buyers, good could that, X.X%, tight range, X% But customer a credit for

Phil Ng

X come it's months? Has or that X to spread pretty constant, call down -- last it,

Mark Yost

-- would to I say pretty yes, where consistent I'd say been. it's it's

Operator

Jay with Our Wedbush next from Securities. question McCanless is

Jay McCanless

you hear now? Sorry. Can me

Operator

Yes.

Jay McCanless

show love So that and do higher that to on the heard and have last any Would maybe guess difference big table, where, guess, you side Mark, Genesis the Vegas you get coast given the I you've on just prices? the that. of the to more then the from builders now west you shown take either the week. Genesis Orlando your out at homes opportunities there's, I think brings naturally where show affordability

Mark Yost

of on Yes solicited current country Vegas customers Jay, information, that activity I real higher, serves area provided on. and in it the working they're amounts much the say, to numerous would actually of have had I we with of who but on Genesis interest nationwide, that think customers show their the projects they're not was say actively was only depending builders product in interest. would in. what kind the you, be I honest at that

specs. quoting in out interested very We're

that and builders the interest. pipeline So actually saw during works It working they're understand projects out it their of starting to walk-by existing our a we product numerous was for subdivision if -- in. wasn't just show, actually quote it

rate and end and affordability interest increased given of with consumers think the and challenges see capital I think speed challenges the the facing, I availability that a So rate think it's the along facing, the of are I are product. interest the And builders cost they same. challenges with win-win the

Jay McCanless

was more retail the through traffic some Could second this good maybe now? owned year, and amazing. set you my this earlier wholly wholly I it Yes retail pretty talk for of models owned units. the now question, you how with guess level to many have dealerships acquisition all

potential, a sales? the there might homes through sold versus point, the wholesale going Is sounds like margin. out because gross owned so wholly forward? And Is that it owned see that at channel should can not had higher we expect a we something retail wholly bracket some

Mark Yost

you I capture. there vertical obviously margin model, integrated of the can with more the Yes, value are your get more think the chain

think Expo, grown locations. XX retail footprint of acquisition the Factory retail we've I our With to

we the expanded, especially So Factory side we have that more things. digital digital of acquired. retailer on of Expo is a

we meet, a a aging there's, locations of the more think, of I retailers, can of lot out there's business, geographies retailers, lot especially that As and phase digitally.

in I think the And opportunities way. want there's, business distribution future. ensure to retail. to exit our to or into definitely and Should the make we sure supply want for retailers retire some expansion

Operator

Bouley question is Barclays. next with Matthew Our from

Matthew Bouley

from in channel, behind the was builder can expectation the the now quarters? like What basically issues chain continue on channel Is little coming channels. gave bit, that a think just past, holding you hearing And talked about maybe channel to over that's 'XX? your fiscal REIT on the REIT the supply that side those back how you? you channel quantification are this should from That customers? a in helpful we order on about and that that you grow I think guess that some were maybe the focusing preventing I

Mark Yost

Yes, out think, for thanks, demand I the and currently. Matt. most and housing they're and solution, It's community affordable, renting people channel, there high-quality I transformers both starting land REIT The think, Most which, the channel has expand. of lease bottleneck, the communities are the starting starting transformers basis. critical was to probably to come selling greenfields in. electrical see We're to are on a high

the concrete It But been I shortages but bit. fully some that's and resolved. limiting And will little up I the in it starting as critical is very easing most concrete hasn't normalize will to which kind that years. is is a I delays. greenfield past think There's, Their still expansions the to XX for factor have think also be to bottleneck, grow ease, XX will calendar planned strong, the and them, throughout of continue demand of year, a they've and but it they I transformers think believe.

Ian in down activity that are XX, So I there. and compounding communities. of in lot that repair obviously happened is horrible impacted alone are units coming years damage of the communities a that of happening of Hurricane is let the in And communities, then XX the replacement upon think Florida old greenfield in many with and these the number homeowners who

cleaning those getting in temporary shelter at have and properties divisions. those done amazing that they getting REITs organized job people and an can The into

there from I communities So coming the think is for substantial foreseeable future. demand

Matthew Bouley

Got there. it. color That's helpful very

the have channel? retail of quoting, that's just getting some subsiding QX. the zoom I say Presumably, one, into you gave to cancellation January and when kind subsided, to cancelations order of early kind guide, Second order you you gave trends, better. related know

relative just improved. of I'm that? kind curious, of kind say the this But to across you you Is around January do some channels? what than kind when Is just in detail see you any sort better holidays, think that have and of seasonality? driven of uptick what trends that normally Is has all it

Mark Yost

Matt. thanks, Yes,

another by we X, it's January, few into the cancellations XX%. year, order the improved a earlier that saw there's, we in going December. think XX% cancellations I And even in think I then things. saw December, improved going here into

year. where is So cancellations are on were channel earlier the mainly retail improved from side. That by the they in XX%

were their majority as right-size that cancel They limits. was to compliance would that plan just retailers orders needing And I to credit to a say facilities. basically get was. floor were trying of our really in credit with

need it Some were were the by more done until of some cancellations don't June. terms of really But REITs. I terms of orders in in the those cancellations of

backlog So not but they're future. foreseeable terms of in buildable there, still the our they're out in

So, they in in June. we'll when them reput need those

Operator

Mike [Operator next from is Instructions] Our Capital Markets. question RBC Dahl with

Mike Dahl

lower product coming coming the when lower A in periods look mix think than the here, when expect that to towards product impacts, of the as lower that quarters few normal you're that price than mix a or of mix normal think you had in normalizing in kind backlog mix. the of below now mix When at out now normalized some you're couple a follow-ups mix you'd was of off tailwind or product product a context, the a about through inflation, a smaller we is just a that over you long-term what's calling kind shift Laurie, terms mix, about medium what represent next lot where of you long-term? view would do you

Laurie Hough

question, good a That's Mike.

term. channel we've I amenities typically think lower our as couple that ASPs certainly mix is margins, a up necessarily lower it features larger -- but the be the can bit in the homes not more that it's geography, those going think differs over developer longer ASPs, also but will go what builder impact that and to the grows, because seen to with than by be years. last I of

develop As supply and to about, agreements types longer bit a those we've talked take materialize. of

Mike Dahl

diving unit, be again, at of Yes, XXX, price I historically, right, difference XXXk. the the also might makes census think like numbers side that retail look at grew okay. All least maybe if the up we And retail sense. sales the into

in the price been XXs wholesale low somewhere XXs. ex has the FEMA, Your to

of quarter you'd made of down dynamic, ongoing the an we into kind as that I'm you as wondering retail surcharges think into bit off. how back to ASP as come would to should a you previously think little more? the a And vertically, mix last a helps that rolled about if have you that XXs I support that ASP But some model retail have impact integrated that than might ASP? expect expected? comment But higher

Laurie Hough

are depends the a relative ASPs Yes, retail the certainly, really than higher at on level, mix. It wholesale.

manufacturing certainly internal the the a of percentage retail a add a U.S. that versus Does units make over how we're in on or going in ASP being growth, long-term. shift manufacturing medium units, toward right, of because goes add just So as more And manufacturing we capacity, -- to sense? -- the it's sold leans manufacturing relatively. it's organic much retail. see dependency to If are acquisitions higher we'll ASP then to that

Mike Dahl

little Yes more right. specifically guess about maybe alone thinking into should I of how seems like then would Okay, quarter? you it the drop on a quarter, down quarter-on-quarter which fourth expect versus back that the be unit because much if the imply XXs in maybe all a single-digit did color the of so sequentially and be kind dynamic high kind at decline, ASP fourth more you we unit ASP don't may that

Laurie Hough

third down talked to things optioned the elimination because and versus a more well of ASPs homes. the surcharges bit Sequentially, before, about less I expect would of shift I mix more retail across come to quarter, material as the of smaller, primarily broadly as the manufacturing the

Operator

like would to our Mark end question-and-answer closing over of turn for comments. conference to the back I We the session. have reached

Mark Yost

Thank you We you May. Stay your look progress in on your today's appreciate in fiscal late Take interest. on to forward amazing. for updating participating well, We care. time our stay call. year-end our continued call and

Operator

conference. This does you. today's conclude Thank

lines your You thank may your and this for disconnect participation. at you time

Skyline Champion (SKY) 7 Feb 232023 Q3 Earnings call transcript