SKY - Earnings call transcript Q2 2025 | Skyline Champion Corporation

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Operator

Good morning, and welcome to the Champion Homes Second Quarter Fiscal 2025 Earnings Call. My name is Sachi, and I will be coordinating your call today. [Operator Instructions] As a reminder, this conference is being recorded.

I will now turn the call over to your host, Jason Blair, to begin. ahead. go please Jason,

Jason Blair

you conference the business call quarter XXXX. the Thank us results to for second XX, September today's and ended for morning. time taking join for Good review our

results to Officer; Financial Executive Hough, Officer. are Here Laurie Champion's Mark Champion and and and Homes President Vice Yost, Executive Chief President Chief review

after market closed, the we release. Yesterday, issued our earnings

Exchange results materially in Reform forward-looking reminder, Act statements and and forth are risks could statements to cause call Such factors made the a expectations. in during Private statements the the risks and company's actual include Securities XXXX. set the Commission. the the of differ release Litigation the These and from subject filings release within and include company's with earnings meaning uncertainties earnings of As uncertainties Securities today's to that the

contain that in can evaluating useful in today's note we measures which be Please and these believe remarks financial be earnings of release. can Definitions non-GAAP performance. measures, reconciliations the found

I turn and the President to Homes Champion Yost. Mark CEO, to now like call over would

Mark Yost

morning, and Good for Thank joining ladies you call. earnings today's gentlemen.

commitment excellence role extended and an broader Keith mentor moment Homes. left outlook, significant Before roles. to steadfast industry to a the indelible our and played leadership corporate a our like results his memory both as beyond to served Anderson, influence Keith housing visionary boundaries company. shaping Board former and on colleague, of his at we honor His where as advisory Champion, in and and through I a mark he dear transformative CEO take leader the Champion discuss financial our would for Director a

purpose friend was with a innovation instilled distinguished excellence. to our culture by warm many dedication a His than corporate counsel of our us. a a comradery. and his lives personality leader. just career and more relentless wise professional mentor corporate and sense and enriched and was was of Keith's integrity, to He Keith

enduring with contributions to As not memory strong also shaped hold our and only proceed legacy. the future. His call, today's we but Keith's dear his have laid past, for foundation continue we by inspired be our

us let to this quarter's performance. move the of Now overview

quarter direct-to-consumer particularly advancing execution the the value company, performance to integration strategy, more efforts across this Champion from Homes customers. These digital Homes scaling acquisition deliver the our of enhancing effective demonstrates Regional have Our Champion Financing. to our enabled benefits and

sales X,XXX The home increasing second strong to units. quarter exhibited growth, with year-over-year XX%

builder/developer increase our we organic and a sales orders gains Additionally, partners. XX% community REIT across saw in year-over-year, retail, with

orders the these Despite policy no hurricane suffered end at the quarter, suspension manufacturing prolonged power extraordinary challenges, and to operations ensured the team's our However, disrupted that temporary both outages our impacts efforts and writing damage. by of of and locations both sales, significant retail affecting due insurers.

with the sequential saw time at million, lead The our quarter revenue in weeks, in grew $XX end million the end backlog quarter. quarter $XXX at decrease a second quarter. aligning fiscal while XX the average resulting steady fiscal backlog The of from first total the remained backlog a down of first the of $XX million,

that I'm the surpassed acquisition pleased Regional Homes announce expectations. our to has continued and of

projected Impressively, a full targets of the acquisition, marks ahead the schedule. comes quarter, significant synergy limit following We this year this for milestone have X upper achieved a which just us. year our of achievement

the and with dealers our gained collaboration further financing products. quarter. This has that financing new to on launched success Triad momentum with we manufactured The our programs encouraging, Financing, home for very growth and we've provide selected also recent can for significant Over financing housing independent these Financial floor from comprehensive options accessibility, our a market. commitment underscores our enhancing client outcomes in consumer bolstering solution. Champion Building early national been appealing confidence success, the customers initiatives plan buying have propelling this our quarters, our

support Altogether, our and shareholders. and accessible, our our strengthening value these for creating strategic providing commitment housing market our to actions comprehensive position solutions promise delivering of on

third we are which order line winter to -- observing slower quarter, our selling rates, we Looking a fiscal observed in season. our typically with in softening is

we Additionally, outcome as consumers have that approach, upcoming are await taking purchasing election. cautious a their they the the noticed decisions delaying of

affected want in the address X home our devastating events. Milton. Hurricane fulfillment, expected been retail to express I directly locations for impacts impacted, all Carolinas we and As heartfelt Florida, in to and plant and of sales. delays timing order from have XX leading those Helene concern by our Georgia the operational these deliveries

we Our and extensive in employees required are challenging on committed communities our time. these and the focus And regions. supporting to the efforts during cleanup is this rebuilding

disruptions Going mid-single do by to decrease sequentially. top anticipate decline in forward, third modest quarter, digits performance for from anticipated hurricanes. we timing the the a projected to dip is attributable line largely the This

places and strong a immediate medium- in spurred commitment our to affirming to on This recovery these efforts of the widespread position increase anticipate rebuilding to Despite and these in the demand communities. we pivotal demand, long-term headwinds, it us expected by within support homes. destruction regions in the is aid

performance Laurie, discuss I who call turn will now more detail. our financial the in will to over quarterly

Laurie Hough

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

increased quarter X,XXX U.S. sales quarter to supported quarter, to that to U.S. same housing XX% the and number acquisition Regional volume capacity with million During was The period. $XXX additional the retail approximately the sales manufacturing Home's the in XX% net to in resulting revenue from year $XXX to the quarter. compared prior during homes increasing homes during U.S. million XX%. second compared factory-built last by contributed the the home year, homes X,XXX net increased of sold

a due The a higher fiscal average mix decreased centers. X% basis, $XX,XXX of compared first revenue sold XXXX. selling in the sequential the housing to price company-owned U.S. increased factory-built On our to through to per units second quarter quarter by U.S. sold retail sales homes of X.X%

days to were of the due the Helene's or mainly prior Several decline landfall our a end X sequential slight unable of manufacturing X Carolinas Hurricane and production of Georgia to ship the a and lost saw Florida, second quarter. day to in plants We homes.

In in addition, selling changes sales. captive increased delayed in closing mix. X% the a per basis, due our On retail average locations home several were sequential to home product price

online compared the to Manufacturing capacity rates recently opened of XXXX. utilization quarter reflect brought XX% Current primarily in sequential first capacity fiscal XX% the through plants. increased utilization was

of interest The conditions tempered a that decline a rates, Canada market X.X% in uncertainty in and decline $XX including of homes. the impact homes The the shift and quarter the home our during reduction dynamics a are continue home in in near by have average higher to revenue $XXX,XXX sold number to Canadian the anticipated prior Canada attributed was million, the to price be economic due in key enthusiasm sales selling the per in mix. combination decreased factors, in a period. to selling These product average price year to housing volume XX% can markets representing term. versus new for in

selling margin to our higher captured company-owned homes XXX expanded XX% in year share greater versus $XXX prices primarily gross Consolidated prior average year. from on XX.X% our by sold points gross higher was of basis increased margin million due a overall prior period. the as the quarter, sales retail to profit new gross second in and The sales centers the

margin finished These the basis impact the with a increases gross inventory of In value goods favorable gross Homes contributed acquisition consolidated to during addition, the materials trends were effect lower margin was the acquired which point accounting the Regional by to input carrying the costs, negative margin higher that of primarily from had profile. quarter. XX forest partially offset product purchase on

higher to and is margin On profitability. costs million and better increase a year The second captive $XXX than primarily the period input the due the acquisition $XX anticipated costs revenue in attributable to sequential retail higher to quarter Regional variable basis, related SG&A to increased in gross Homes lower prior million. higher over sales. and came

effective rate of by an the the sale credits of tax to positively recognition XX.X% rate an The for tax ago the quarter year versus tax rate was of XX.X% homes. energy-efficient increase in related period. impacted tax effective company's for was effective The

Net of $X.XX increase the Homes quarter. earnings million to for earnings operating diluted per was of Champion share XX% EPS by to in higher attributable year. the second or net in compared The income $XX second income $X.XX diluted period driven to during quarter million last share increased or income the same mainly per $XX of

was which XX.X% for by the year Adjusted in million compared XX.X% EBITDA in prior period, the million EBITDA quarter $XX was the SG&A. period. higher year prior was $XX to to compared margin Adjusted impacted

Gross revenue third We extensive is expect have will quarter, although the the to in fiscal Southeast recent impact estimate. stabilized. our margins the hurricanes impact in difficult

However, to result we quarter-to-quarter a margins expect product of mix. as fluctuate

compared As generated for We of quarter $XXX and long-term $XX of cash of million September until borrowings XXXX. and cash cash the XXXX, million we by inventory equivalents million of year period. no in XX, with to flows $XX partially $XX maturities operating flows had increase an period. The reflects million for increase prior the year in prior balances net the compared our offset to when income higher operating cash

repurchases. our million the strong capital and we to returned shareholders $XX cash through leveraged In position quarter, share our in

confidence in replenishment of share our million cash generation. our Additionally, reflecting our Board the strong recently authority, $XXX repurchase approved

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

Mark Yost

construction, the of our general new Laurie. against traditional demand optimistic, from particularly company backdrop Despite healthy our outlook housing and the you, Thank the The are resilient operations benefiting challenges margins. remains the facing market. for broader

This from our resilience growth. persistent partners, us for affordable demonstrate trends as a also positions housing our only community but for market retailers the not well These ideally sustained developers solutions. includes and as revised of reflecting need orders builder

are sales value to are expanding solutions. Builder-as-a-Service financing our complemented platforms, we through innovative into Moreover, reach our growth retail for enhance These initiatives all and digital consumer strategically drive designed and by stakeholders. our

The recovery market the opportunities. pivotal surge us ultimately presence to recent timing impacting positions regions, hurricanes growth a and long-term demand capitalize on and efforts. in rebuilding our the to solidify affected affirming expected are This in near-term in our further create while role

like questions. now proceed. open to for I'd And the Operator, floor please

Operator

Palm first [Operator Greg is Craig-Hallum. from Instructions] from question The

Greg Palm

about outside like comments a your He company. lot to inside on people a of and the strong Keith. also had influence echo I'd really

a of by missed lot be to people going here. So

Any with, standpoint? of wanted to of if from in revenue just able quarter. completed the a some to or term, current volume quantify recently the quarter, both you're sort maybe in from the storms impacts near start to just either way quantify I

the think in it Is it the do you at up that guess I is, question your Do catch guess demand? year? of takes next bigger pent-up this what best point? quarters? of couple sort And at you point a What's

Mark Yost

you, Thank Yes. Greg.

facilities our and Carolinas week those were flooding of stores outages Georgia Florida, in of several to had Florida, last and close in week North the and Retail of insurers Carolina I and surrounding at to think September power production binding the the in policies final stopped interrupted areas. due the September. placements

So there definitely the on impact an quarter. was

a as rebuild. think as it when really far that up, catch we I the on Overall, infrastructure depends lot

So there. rebuild. goes But if it's the little this take that schedule, to or think into ahead moves right maybe for quicker I going we're demand next that probably then and is cleanup little a to bit now, quarter a the assuming infrastructure of quarter them

Greg Palm

some just quarter I remarkable seeing in gross I And of purchase performance the there. accounting margin bright the spot side you're really things, And think really, headwinds. the still Okay. obvious think on

going what At maybe question. margin gross X-part term, some not assume close, those even pretty near -- better as we're -- looking sort a ahead, but capacity of kind maybe just do to is knowing a of this rate, just I point but end we're have, So from upside that -- increases?

going just more sort of else highlight of outperformance. out Anything in that want terms than a units mix through on of other maybe to bit little the call the quarter you terms of the captive. And the

Laurie Hough

some Greg, say yes, would lower forest costs. saw I input impact on for positive definitely product gross margins

that in the expect to quarter. don't be significant fiscal as we third quite So

kind we're impact So going perspective, margins. that forward. be this immaterial do accounting will at a purchase through will we point, that of it and negatively From feel

the And then impact last key running sales as you component through hurricane. expected was mentioned, even the with stronger of this retail than we the captive quarter

really the retail segment captive So did well.

Operator

The from question CJS from Securities. Moore is next Daniel

Dan Moore

period. terms And more a going just helpful. is obviously, bit the Maybe softer of little in bit the to color a little hurricanes clearly, a of we're impact seasonally of,

spring into think thoughts kind and X order summer and your the Just backlog rates we get a about expectations stronger of for seasonally pick to up quarter about potentially before Should -- overall moderating we perhaps, for selling start starting as or backlog. season.

terms about say, Just rates you the production to -- for how order quarters? thinking versus how of just X X next, thinking in you're managing

Mark Yost

Dan. Yes. Thank you,

election. this and were think softening we into a order going an looking little bit I at expecting presidential the of

really As I I'll of a the quarter, of, current X last at tale it call a halves. looked it was quarter

the The of quarter, orders first in were in -- last range. of organically half strong, the kind XX% very

soon think soften we as as as a orders started right week expected as a mentioned little kind of things that incentive, I bit, $XX,XXX presidential then presidential into the And to candidates soon as the -- like going election. after

on So the of orders going I to trajectory outcome a is little think election bit. influence the that

the purposely So of bit actually waiting been building the elections. season, little of backlog we've into winter on a going outcome the

is pace still good, So year-over-year, up very think very I XX% organically so pace. good order

once get bit moderate December. which pace candidate wins candidate in proposing. the each going a fourth could through And quarter, influence on expect, we the and depending on structure maybe I will depending the backlogs the and/or incentive I is think third environment, order regulatory into cycle, election little

Dan Moore

Really front. helpful. And up maybe gross Greg's on just question margin on following the

had terms forest of costs between or of we in you and kind of How delta to that products about order the sequentially would of the mix. input either sort rank year-over-year? think favorable quarter If or impacts lower the

Laurie Hough

break impact. Yes, Dan, the of to out the going we're not buckets

Dan Moore

translates next previously. can kind and well impact commentary you're into about just X customers Appreciate Maybe look the developers confidence seasonality how from the Understood. hearing to and your quarters? of hurricanes the we as out talk the X beyond that as out of community taking of REIT just what both as the you equation,

Mark Yost

the REITs tone very I channel. think good. were is No, in marketplace growth the Community strong a order

extremely developers builder quarter were This strong.

order confidence election, results akin if the consumer the really really is for of areas, the and think. So the the slowed in was certain at retail I of all, in think channel pace it which to I waiting some

So very good sides. optimism on all

up. are Our leads

activity strong. Our very is quote

shopping. They're We've got I traffic good community people So our both and partners. are think retail at coming in. with

think the I So traffic there. is

off of execution for election. type just if people until some holding some see of they of incentive think on are buying post opportunity I the decision the there's type

Dan Moore

during lastly, bought back All stock the little And right. you sense. Makes maybe a bit in -- quarter. of

kind You through with of the of the of or acquisition synergies ahead them most schedule. basically a year

quarters? we X next for appetite allocation think going capital M&A for and priorities your about forward talk about how the Just to X

Mark Yost

Thank Yes. you, Dan.

blessed M&A the amazing definitely that at priority a things. the people think Regional is us. acquisition the We're I at for and team and done Regional have

in so us I confidence further acquisitions. And think gives some that doing

Our robust. pipeline very is

also some we're So that our top with, priority the be our we're in platforms about in our cash. I think and strategy that, driving go would then active we of forward as since capital and in thinking course, of direct-to-consumer pivotal innovation growth very would be that, of high generating and along

to to well. return ability as have the We some shareholders

Operator

The Bouley Barclays. next from question from Matthew is

Elizabeth Langan

on Langan Matt Elizabeth today. have You for

developer kind builder you relative or a it's sign-ups, about -- talk kind seen of was more staying and little what bit stable? last in about demand extremely the you've that builder quarter, whether to with your continuing that accelerate mentioned channel of Could to You strong.

Mark Yost

Yes.

the the So slightly this capture last new builder quarter quarter. over new builder, accelerated

compression I So it builders large we're some under margin homebuyers. in small to builders, first-time to pressure meet The seeing rate of and to ability accelerate. capture the starting are are demands see pressure. as the Even think, traditional mid-tier their

well So we I forward. as think for that bodes go us

escalate, will So foreseeable for developer a growth be builder the we anticipate to continues and strong channel it future.

Elizabeth Langan

of are or we there Or about be impact or the be the demand -- that anything any about that? stocking at if people should up more might thinking expecting is expecting hurricanes. dealers think whether of kind stocking not they're might in pick And inventory anything you of then terms position? impact to And the around

Mark Yost

No.

call to are thousands backfill dealers probably think, start see obviously, areas, get near as going start, certain rebuilt think I I in homes to they of start unfortunately the term thousands There in would I they're upon to destroyed. to demand. infrastructure need going because to was order the

regions is substantial. housing be so demand those to going for And the in

expect, homeowners start readily timing, see yes, orders So would of place to to care in I of who been have more the terms infrastructure they'll the displaced. then visibility as take they

Operator

Shang Jefferies. Next Fiona from question is from

Fiona Shang

on on growth fiscal from the this Fiona more curious, back damage you is going contract the given in unit Ng. good the the to XXXX, Hurricane quarter. in Phil for potential and of This comparing to just Congrats forward? see do Milton unit guys any see And expecting year awarded FEMA time? I'm Helene are you guys upside from

Mark Yost

Yes.

yet. haven't destruction any mass far as orders of regions. there's we type FEMA, received think I been those Obviously, in as

federal figure yet. do, of response state governments with out the as FEMA of there's to what but no to along government, for trying are So actively activity type

Fiona Shang

just then And follow-up. Okay. another

like rates, any the Given charter the seen the charter XX-year rates rate mortgage quarter? fixed usually have you for movement this for

Mark Yost

generally changes spread They're at about credit, X%, XXX No. The of something by for charter in say, I like fairly good credit. X generally months, that basis X.X%, would point running a for rates currently mortgages a about X%, so somewhere north lag good speaking.

Operator

closing There no I would at questions turn over like to floor this are Yost to the further back comments. Mark for time.

Mark Yost

I quarter great forward to our our and day. taking your a this morning continued to and to Champion interest We thank you, in for on updating call. Thank time want the on fiscal to look call you for earnings our listen everyone third Homes. progress have

Operator

today's This teleconference. concludes

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

Skyline Champion (SKY) 29 Oct 242025 Q2 Earnings call transcript