卡寇工业(CVCO.US) 2026财年第二季度业绩电话会

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会议摘要

The earnings call discusses Cavco Industries' Q2 FY26 results, highlighting strong retail performance, particularly in Texas, and the successful integration of American HomeStar. Tariffs have increased COGS, but the company is optimistic about cost mitigation and passing on price increases. Financial services contribute significantly to profitability, and the company is adapting production rates to market conditions, focusing on digital marketing, rebranding, and local market strategies to outgrow the industry. The call concludes with confidence in executing in shifting markets and ongoing modernization projects.

会议速览

Cavco Industries Q2 FY2026 Earnings Call Highlights

Cavco Industries' earnings call covered Q2 FY2026 results, with leadership discussing financial performance, forward-looking statements, and associated risks, emphasizing accuracy and no obligation for future updates except by law.

Strong Q2 Results Amid Regional Market Variations and Strategic Capital Allocation

Highlights robust Q2 financials with 9.7% YoY revenue growth, operational adjustments in the Southeast, and strategic acquisitions and capital investments. Financial services show significant profit improvement, and capital allocation includes plant investments, acquisitions, and share repurchases.

Q2 2026 Financial Results and Capital Allocation Strategy

The dialogue covers Q2 2026 financial highlights, including a 9.7% year-over-year increase in net revenue, improvements in gross profit margins, and strategic capital allocation through acquisitions and share repurchases. It also discusses balance sheet adjustments and future growth initiatives.

Navigating Market Trends and Production Adjustments for Seasonal Fluctuations

Discussed regional market strengths, order trends, and production adjustments, highlighting a balanced market with potential for growth or slowdown, while maintaining steady production rates with minor regional tweaks.

Operational Balancing and Market Trends in Southeast and Texas

Discussion covers operational dynamics in the Southeast, noting increased production in some plants and a healthy, albeit fluctuating, market. Texas, particularly in retail, shows strong performance, driving production and signaling a positive market outlook despite HUD code shipment challenges.

Sustainability of Current Gross Margins Amid Rising Costs and Tariffs

Discussion revolves around the slight increase in gross margins despite flat revenue, with queries on the sustainability of these margins against potential input cost pressures and tariffs in the upcoming quarter.

Navigating Tariffs and Market Conditions: A Strategy for Margin Protection and Cost Management in Home Building

The dialogue discusses the impact of tariffs, particularly on lumber and other commodities, on the cost of goods in home building. It highlights strategies for managing costs, including efficiency improvements and potential price increases, while considering local market conditions. The conversation also touches on the recent changes in tariffs and their effects on projected costs, emphasizing the company's proactive approach to mitigate these impacts.

Analysis of Gross Margins Amid Tariff Risks and Lumber Costs

Discussion covers the impact of tariff risks and unexpectedly low lumber costs on gross margins, along with an update on American Home Star's performance post-acquisition and potential accounting impacts.

Synergies and Integration in Recent Retail Acquisition

The dialogue discusses the impact of a recent retail acquisition, highlighting its higher marketability and rational inventory levels, which are expected to minimize negative effects on consolidated margins. The speaker anticipates meaningful value addition through integration, suggesting a positive outlook for the deal's contribution over the next several quarters.

Outperforming Industry Growth: Strategies for Success

Discusses key strategies including digital marketing advancements, local market focus, sales team enhancements, and product innovation that have enabled the company to outperform industry growth despite market declines.

Analysis of Retail Channel Performance: Sequential and Year-over-Year Growth

The retail channel's contribution to sales increased to 22.9% in the current quarter, up 4% sequentially from 18.9% and 1.9% year-over-year from 21%. The speaker highlights Texas as a particularly strong market, noting improvements due to enhanced store performance rather than expansion. October trends align with recent positive developments, maintaining continuity in retail growth without significant disruptions.

Impact of Retail Integration and Regulatory Changes on Home Manufacturing

Discusses the increase in company-owned retail stores and manufactured homes integration, predicting a rise in integration percentage. Also touches on the potential long-term effects of regulatory changes in the industry.

Industry Optimism on HUD Code Updates and Regulatory Changes for Housing Innovation

The dialogue highlights the industry's positive outlook on recent HUD code updates, including simplified regulations for building multifamily units, increased electrical safety standards, and reduced bureaucracy. It also discusses broader regulatory efforts, such as the potential removal of the chassis rule to foster innovation and ensuring equal opportunities for community ownership models. The industry remains optimistic about these changes and their impact on housing development, despite uncertainties in the legislative process.

Analysis of Sales Distribution, Multi-Section Business Trends, and Regional Pricing Variations in Home Construction Industry

Discussed the potential shift in sales distribution towards retail, observed a slight increase in multi-section business which isn't yet declared a trend, and identified regional pricing differences with Southeast maintaining pricing despite volume drop, while acknowledging higher costs in northern markets could influence average selling prices.

Update on Mortgage Rates, GSE Duties, and Pending Legislative Actions

Discussed current mortgage rates dropping to an 8% range, the Senate's passed bill awaiting House approval, and the ongoing push for GSEs to fulfill their duty to serve through shadow lending programs. Emphasized no imminent action from DC on duty to serve plans, but advocacy continues.

Affordable Housing & Tariff Impact on Manufacturing Industry

Discusses the role of manufactured housing in addressing affordable housing, highlighting industry's increased visibility in policy discussions. Also clarifies the impact of tariffs on Canadian lumber, indicating potential higher costs but optimism on mitigating factors.

Discussion on Canadian Lumber Tariffs, Anti-Dumping Measures, and Secondary Market Loan Appetite

The dialogue covers the impact of Canadian lumber tariffs and anti-dumping measures on cost ranges, noting recent increases. It also discusses shifts in the secondary market's appetite for chattel loans, emphasizing the complexity of forming partnerships and the preference for loan buyers.

Balancing Pricing Strategies and Demand in Southeast vs. Northeast Markets

The dialogue explores the strategic approach to maintaining pricing stability in the Southeast while managing lower demand and shipment rates. It contrasts this with the robust market conditions in the Northeast, emphasizing the decision-making process around pricing and capacity utilization. The discussion highlights the current stability in the Southeast, avoiding aggressive price cuts to gain market share, and underscores the strength of the northern markets.

Investment in Plant Modernization and Automation for Enhanced Efficiency and Safety

The dialogue highlights the company's ongoing investment in plant upgrades, emphasizing the benefits of modernization projects, including increased throughput, safety improvements, and quality enhancements. These initiatives, driven by skilled engineering resources, contribute significantly to operational efficiency and capacity expansion.

Average Chassis Costs and Usage Percentage in Home Shipping Industry

Discussed the estimated average cost of a chassis at approximately $1500 per unit, emphasizing the potential for recycling similar to modular construction practices. Also addressed the current percentage of homes shipped with chassis, highlighting the industry's approach to chassis utilization in overall production.

Balancing Savings, Innovation, and Profitability in Business Operations

The dialogue explores the allocation of savings from cost efficiencies, emphasizing a balance between enhancing bottom-line profitability and offering customer savings. It highlights the significant contribution of financial services to operating profit, attributing over 50% of profitability improvements to strategic changes, despite the influence of favorable weather conditions. The discussion underscores the importance of innovation-driven chassis development and the anticipation of maintaining enhanced profitability levels in typical weather scenarios.

Adapting to Market Shifts and Enhancing Operations for Long-Term Success

Emphasized the importance of adapting to market changes, highlighted successful operational adjustments, ERP system upgrades, and modernization projects, expressing gratitude to participants and concluding the conference.

要点回答

Q：What were the overall results for cavco's second quarter compared to the previous year and previous quarter?

A：For the second quarter of fiscal year 2026, cavco Industries reported revenue up 9.7% year over year and flat sequentially. Operating profit was up significantly from the prior year and increased from the prior quarter.

Q：What were the notable regional differences in the building materials market according to published industry data?

A：The building materials market showed significant regional differences. Year to date, national shipments were up over Ed through August in many regions across the northern US, with double-digit increases in some regions. However, the Southeast region showed a slowdown, with shipments down 4% year to date and 10% in July and August compared to the prior year.

Q：How was production managed in response to regional differences and what adjustments were made?

A：In response to the regional differences, production was pushed across the system with the ability to adjust back if needed. In the first quarter, Southeast production was slowed down through extended downtime during the July holiday and production rate reductions. Production is currently operating just above last year's pace in all other regions, maintaining elevated production rates from the prior quarter.

Q：What is the current status of backlogs in the plants that serve the southeast and what actions are being taken?

A：Backlogs in the plants that serve the southeast have stabilized and have been edging up over the last month. There is no systemic issue to explain the regional shifts, and the company will continue monitoring and adjusting production to manage appropriate backlogs.

Q：What were the changes in average selling prices and unit backlog, and what causes them?

A：Average selling prices increased this quarter, with wholesale prices being essentially flat and pricing holding up across the board, including in the Southeast. The significant upward movement in reported average selling price (ASP) was primarily the result of a higher percentage of recognized units from retail and a mix shift toward multi-section homes.

Q：What is the outlook for demand in the Southeast and how is the company prepared to operate in this environment?

A：The outlook for demand in the Southeast during a period of continuing market uncertainty is not predictable. The market seems in balance with manufacturer production, and scenarios for strengthening or weakening are possible. The company is comfortable operating in this environment because it has demonstrated the ability to monitor and adjust, as shown in the current quarter.

Q：How has the performance in the financial services segment been?

A：The financial services segment has continued to perform strongly. Revenue is up about 10% and operating profit is up $14 million from a loss last year to an $18 million profit this year, driven by aggressive actions taken to pair unprofitable policies and changes made to underwriting and claims management.

Q：What was the impact of the American Home Star acquisition and how is integration progressing?

A：The American Home Star acquisition closed shortly after the second quarter ended, and integration is moving quickly and very well, thanks to the cooperation of both company's teams. The combined company is off to a great start, and the acquisition has been positively affected by the commitment to a smooth transition by the American Home Star leadership.

Q：What is the approach to capital allocation, and what has been done in this regard?

A：The company continued investing in its existing plants, closed on the American Homes Star acquisition immediately after the quarter using cash on hand, and repurchased $36 million of its common shares. The capital allocation approach will continue to focus on balance sheet strength and cash generation, with an ongoing commitment to investing in plant facilities, acquisitions, lending operations, and share repurchases.

Q：What caused the increase in property, plant, and equipment?

A：Property, plant, and equipment increased from continued investments in existing manufacturing facilities.

Q：What effect did the American Home Acquisition have on the cash balance?

A：The cash balance was reduced by the purchase price of American Home Acquisition, which was 190 million before customary adjustments, funded with cash on hand.

Q：How did the regional performance of the factory built housing segment compare?

A：Regionally, there was a marked difference between the southeastern area and the rest of the country. While the rest of the country experienced double-digit growth, the southeastern area showed a pullback in shipments.

Q：What was the trend in wholesale orders and how does it affect production expectations?

A：Wholesale orders were down slightly in the quarter, which is not unusual for the summer. The view going forward is that October tends to be strong, followed by a slowdown through the holidays. The general strength in the market drives the direction of orders quarter to quarter.

Q：How is the market in Texas performing?

A：The market in Texas is performing well. The retail business is centered in Texas and is doing a great job, which translates into stronger production. The company is feeling comfortable with the balance of the market in Texas.

Q：What are the expectations for the next quarter's gross margins?

A：Gross margins are expected to be affected by input cost pressures, including tariffs. The exact levels of the impact are hard to predict, but the company has been focusing on keeping variable costs low and adjusting prices where feasible based on local market conditions.

Q：What was the impact of tariffs in the latest quarter and what is the expectation for future quarters?

A：The impact of tariffs in the latest quarter was approximately an additional 2 million in costs of goods sold. The projected overall impact of tariffs is expected to be between 2 to 5.5 million a quarter if the discussed tariffs are fully implemented. The company continues to monitor these risks closely and focus on cost efficiencies, as well as passing on costs in pricing based on local market conditions.

Q：What were the financial numbers for American Home Star when the deal was announced in July, and how are they trending?

A：The financial numbers for American Home Star when the deal was announced in July were 194 million revenue and 18 million EBITDA. The speaker indicates that while they have had the company for a month, they do not have a huge update on trends yet, but they are seeing a considerable impact from the retail side.

Q：How is American Home Star's integration into the acquiring company going?

A：American Home Star's integration into the acquiring company is going well. Although the speaker does not provide a detailed update, they imply that over time they will likely be able to add meaningful value to the deal, and the integration will not just be a complete bolt-on but will have a positive impact over the next several quarters.

Q：What is the expected impact of the acquisition on the consolidated gross margin level?

A：The expected impact of the acquisition on the consolidated gross margin level is probably going to be pretty small. This is because the acquisition has a high marketability to the type of product, allowing for quicker market penetration and success, as well as extremely rational inventory levels that minimize impact on the consolidated margin.

Q：How has the company continued to outgrow the industry despite market declines?

A：The company has continued to outgrow the industry despite market declines by focusing on digital marketing, rebranding, generating good leads, and educating consumers on their products. They have also structurally differentiated themselves by treating the market as very local, giving decision-making power and accountability to local operations, and improving the selling approach to communities and developers.

Q：What percentage of homes were sold through company-owned retail channels in the quarter mentioned, and how does that compare to the prior year?

A：In the quarter mentioned, approximately 22.9% of homes were sold through company-owned retail channels, which is up sequentially from 18.9% in the previous quarter. Year over year, the percentage was 21%, showing an increase of about 1.9%.

Q：What is the expected shift in the integration of homes through company-owned retail stores after the acquisition of American Home Star?

A：After the acquisition of American Home Star, the company will increase from 31 to 33 plants and from approximately 80 to 100 company-owned stores. The degree of integration through retail will increase, as 60% of manufactured homes were going through company-owned stores. This will have an upward effect on the percent integration.

Q：What are the potential impacts of recent regulatory changes and future regulatory actions on the company?

A：Recent regulatory changes like the HUD code update are generally positive and could lead to innovation and increased production efficiency. Other potential impacts include the possibility of chassis removal and support for HUD as a sole regulator. The company remains optimistic about regulatory changes like the HUD update being included in larger bills and becoming law, although the exact timing and route are uncertain.

Q：What is the projected increase in plant ownerships and how does it affect the company's operations?

A：The projected increase in plant ownerships is two-thirds of the current plants, suggesting a significant rise in operational capacity. The effect on the company's operations would be an estimated 20% increase in plants' operations relative to the current average.

Q：Is the increase in multi-section business expected to continue, and what does the current backlog indicate?

A：The increase in multi-section business is considered a trend by the company as it has been swinging back after a few quarters with a small movement in the other direction. However, it is not deemed a definitive trend yet, with more variation than solid evidence of a consistent pattern.

Q：How does the pricing comparison between the Southeast and other regions, especially the Northeast, influence the company's pricing strategy?

A：Pricing has been a strong point across the country, with no drop in the Southeast despite lower volumes. There is a recognized price differential between the Southeast and the Northeast, primarily due to higher costs in the latter. This differential indicates a potential for higher prices in the Northern markets, although the exact impact on Average Sales Price (ASP) and whether it is a significant driver is still under evaluation.

Q：What factors might contribute to the increase in the Average Sales Price (ASP)?

A：The non-southeastern plants' mix is suggested as a potential driver of the increase in the Average Sales Price (ASP), although the exact significance of this driver is questioned, and it may not be substantial enough to show up as a significant factor in calculations.

Q：What is the current state of the Senate's version of the bill and the possibility of regulatory changes?

A：The Senate has passed their version of the bill, but further action is needed from the House of Representatives. The government needs to be reopened for the House to proceed. There is ongoing discussion regarding regulatory changes, with particular emphasis on the GSEs' duty to serve and the shadow lending programs. However, no imminent changes are anticipated, and the discussion is not yet yielding concrete outcomes.

Q：How have recent changes in the housing industry impacted perceptions of manufactured housing?

A：Recent changes have significantly increased public awareness and discussions regarding the housing industry, with manufactured housing becoming a central part of conversations on affordability and production. This shift is attributed to proactive efforts by the industry and its association, resulting in a notable change from its previous marginal presence.

Q：What is the impact of the recent increase in Canadian lumber tariffs on the company's financials?

A：The recent increase in Canadian lumber tariffs has affected the company's financials, with the impact falling at the higher end of the previously estimated range. The new tariffs have led to an increase of 35% at the end of July and an additional 10% in October. Consequently, the forecasted range for the impact of these tariffs has been updated to consider these recent increases, resulting in a potential quarterly impact of between 2 to 5.5 million dollars.

Q：What challenges are involved in selling manufactured housing loans in the secondary market?

A：Selling manufactured housing loans in the secondary market is challenging as the process is complex and involves a lot of work to finalize agreements. Partnerships are being sought to expand lending capacity, but the process is arduous, involving various parties like insurance money managers. Despite significant interest, closing deals is labor-intensive and time-consuming.

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