Cavco Industries Inc (CVCO) Reports 21.7% Decline in Net Revenue and 44. ...
Net revenue for Q2 was $452 million, a decrease of 21.7% compared to the same period last year.
Income before income taxes was $52 million, down 44.1% compared to the prior year period.
Net income per diluted share attributable to Cavco common stockholders was $4.76, compared to $8.25 in the prior year quarter.
The company returned nearly $47 million to shareholders through stock repurchases.
On November 2, 2023, Cavco Industries Inc (NASDAQ:CVCO) released its financial results for the second fiscal quarter ended September 30, 2023. The company reported a significant decrease in net revenue and income before taxes, reflecting the challenges faced in the current market conditions.
Financial Performance Overview
For the second quarter, Cavco Industries Inc (NASDAQ:CVCO) reported net revenue of $452 million, down 21.7% compared to $577 million in the second quarter of the prior year. The factory-built housing gross profit as a percentage of net revenue was 23.2%, compared to 26.7% in the prior year. The financial services gross profit as a percentage of net revenue was 35.9% compared to 44.6% in the prior year. Income before income taxes was $52 million, down 44.1% compared to $93 million in the prior year period. Net income per diluted share attributable to Cavco common stockholders was $4.76 compared to $8.25 in the prior year quarter.
CEO's Commentary
Backlogs have stabilized at about 6 weeks, reflecting modest improvement in wholesale orders while capacity utilization remained essentially unchanged from Q1. Our plants, and operations overall, continue to do an outstanding job maintaining healthy margins and generating strong cash flow despite market conditions." - Bill Boor, President and Chief Executive Officer of Cavco Industries Inc (NASDAQ:CVCO).
Financial Tables Summary
The financial tables provided in the report show a decrease in net revenue for both the factory-built housing and financial services segments. The decrease in net revenue for the three and six months was due to lower home sales volume and lower home selling prices, partially offset by the addition of Solitaire Homes. The financial services segment net revenue increased for the three and six months from more insurance policies in force in the current period compared to the prior year.
Analysis of Company's Performance
Despite the decrease in net revenue and income before taxes, Cavco Industries Inc (NASDAQ:CVCO) has managed to maintain healthy margins and generate strong cash flow. The company has also returned nearly $47 million to shareholders through stock repurchases, demonstrating its commitment to shareholder value. However, the company faces challenges in the form of rising interest rates and an intensifying affordable housing crisis. Moving forward, Cavco Industries Inc (NASDAQ:CVCO) aims to improve the customer experience, deepen distribution partnerships, and develop innovative products and finance solutions.
Explore the complete 8-K earnings release (here) from Cavco Industries Inc for further details.
This article first appeared on GuruFocus.
