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8-K - FORM 8-K - CAVCO INDUSTRIES INC. | c21096e8vk.htm |
Exhibit 99.1
For additional information, contact: Joseph Stegmayer Chairman and CEO Phone: 602-256-6263 joes@cavco.com On the Internet: www.cavco.com |
FOR IMMEDIATE RELEASE
CAVCO INDUSTRIES REPORTS FISCAL FIRST QUARTER RESULTS
PHOENIX, August 8, 2011 Cavco Industries, Inc. (NASDAQ: CVCO) today announced financial
results for the first quarter of its fiscal year 2012 ended June 30, 2011.
Fleetwood Homes, Inc., a subsidiary owned 50% by Cavco and 50% by Third Avenue Value Fund
(TAVFX), completed the acquisition of substantially all of the assets and assumption of certain
liabilities of Palm Harbor Homes, Inc. on April 23, 2011. Palm Harbor had been in the business of
manufacturing and marketing factory-built housing and providing related consumer financing and
insurance products. The aggregate gross purchase price, exclusive of transaction costs, specified
liabilities assumed and post-closing adjustments, was $83.9 million. Of the purchase price,
approximately $45.3 million was used to retire the debtor-in-possession loan previously made by
Fleetwood Homes to Palm Harbor. The purchase price was funded by Fleetwood Homes cash on hand
along with equal equity contributions from Cavco and Third Avenue. The transaction included the
assumption of specified liabilities, including primarily debt facilities of the mortgage
subsidiaries and certain warranty obligations.
Included in the purchased assets were five operating factory-built home production facilities,
idled factories in nine locations, 49 operating retail locations, one office building, real estate,
all related equipment, accounts receivable, customer deposits, inventory, certain trademarks and
trade names, intellectual property, and specified contracts and leases. All outstanding shares of
CountryPlace Acceptance Corp., Standard Insurance Agency, Inc. and their wholly-owned finance and
insurance subsidiaries were also part of the purchase. Regulatory approval of the acquisition of
Standard Casualty Co. was received on June 7, 2011, and the purchase was completed on June 10,
2011. The results of the Palm Harbor, CountryPlace and Standard operations have been included in
the Consolidated Financial Statements since their respective acquisition dates.
Net sales for the first quarter of fiscal 2012 totaled $98,981,000, up 108% from $47,505,000
for the first quarter of fiscal year 2011.
Net income for the fiscal 2012 first quarter was $17,459,000, compared to $850,000 reported in
the same quarter one year ago. Included in net income for the quarter ended June 30, 2011 was a
gain on bargain purchase of $18,780,000 resulting from the acquisition of Palm Harbor, as
calculated in accordance with FASB Accounting Standards Codification 805, Business
Combinations. During the quarter, we incurred $744,000 in acquisition related costs for the
purchase of the Palm Harbor Homes assets. We expect to have additional transaction-related
expenses during fiscal year 2012. Interest expense of $1,461,000 was recognized during the first
quarter of fiscal 2012 since April 23, 2011, primarily related to securitized financings and a
mortgage construction lending facility of the finance subsidiaries acquired.
Net income attributable to Cavco stockholders for the fiscal 2012 first quarter was $8,608,000
compared to $518,000 reported in the same quarter one year ago. Net income per share based on
basic and diluted weighted average shares outstanding was $1.26 and $1.25, respectively, versus
basic and diluted net income per share of $0.08 last year.
Referring to the first fiscal quarter, Joseph Stegmayer, Chairman, President and Chief
executive officer, commented, During this eventful quarter, we closed on the Palm Harbor
transaction and continued the associated operations under their new ownership structure. The Palm
Harbor businesses are in the process of transition and have already demonstrated resilience
post-bankruptcy. Certain streamlining actions have taken place which should improve operating
efficiencies and financial performance over time. Work will continue during the next several
quarters to integrate the Palm Harbor retail, manufacturing, finance and insurance lines of business for
the overall benefit of the Cavco group of companies.
Mr. Stegmayer continued, With respect to marketplace conditions, general economic challenges,
including low consumer confidence levels, unemployment and underemployment, overall housing sector
weakness, and restricted mortgage loan markets continue to impede new home sales activity, even in
the affordable housing market in which we operate. However, we believe Cavcos strategic
initiatives during the past two years, including the Fleetwood Homes and Palm Harbor transactions,
improve our ability to pursue existing demand while better positioning us to take advantage of
future opportunities.
Cavcos senior management will hold a conference call to review these results tomorrow, August
9, 2011, at 12:00 noon (Eastern Time). Interested parties can access a live webcast of the
conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of
the webcast and presentation will be available for 90 days at www.cavco.com under the Investor
Relations link.
Cavco Industries, Inc., headquartered in Phoenix, Arizona, designs and produces factory-built
housing products primarily distributed through a network of independent and company-owned
retailers. We are the second largest producer of HUD code manufactured homes in the United States,
based on reported wholesale shipments, marketed under a variety of brand names including Cavco
Homes, Fleetwood Homes, and Palm Harbor Homes. The Company is also a leading
producer of park model homes, vacation cabins, and systems-built
commercial structures; as well as modular homes built primarily under
the Nationwide Homes brand. Our mortgage subsidiary, CountryPlace, is
an approved Fannie Mae and Ginnie Mae seller/servicer and offers conforming mortgages to purchasers of factory-built and site-built homes. Our
insurance subsidiary, Standard, provides property and casualty insurance for owners of manufactured
homes.
Certain statements contained in this release are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. In general, all statements that are
not historical in nature are forward-looking. Forward-looking statements are typically included,
for example, in discussions regarding the manufactured housing and site-built housing industries;
our financial performance and operating results; and the expected effect of certain risks and
uncertainties on our business, financial condition and results of operations. All forward-looking
statements are subject to risks and uncertainties, many of which are beyond our control. As a
result, our actual results or performance may differ materially from anticipated results or
performance. Factors that could cause such differences to occur include, but are not limited to:
adverse industry conditions; general deterioration in economic conditions and continued turmoil in
the credit markets; a write-off of all or part of our goodwill, which could adversely affect
operating results and net worth; the cyclical and seasonal nature of our business; limitations on
our ability to raise capital; curtailment of available financing in the manufactured housing
industry; our contingent repurchase obligations related to wholesale financing; competition; our
ability to maintain relationships with retailers; labor shortages; pricing and availability of raw
materials; unfavorable zoning ordinances; our ability to successfully integrate Fleetwood Homes,
Palm Harbor, and any future acquisition or attain the anticipated benefits of such acquisition; the
risk that the acquisition of Fleetwood Homes, Palm Harbor, and any future acquisition may adversely
impact our liquidity; expansion of retail and manufacturing businesses and entry into new lines of
business, namely manufactured housing consumer finance and insurance, through the Palm Harbor
transaction; our participation in certain wholesale financing programs for the purchase of our
products by industry retailers may expose us to additional risk of credit loss; together with all
of the other risks described in our filings with the Securities and Exchange Commission. Readers
are specifically referred to the Risk Factors described in Item 1A of the 2011 Form 10-K, as may be
amended from time to time, which identify important risks that could cause actual results to differ
from those contained in the forward-looking statements. Cavco expressly disclaims any obligation to
update any forward-looking statements contained in this release, whether as a result of new
information, future events or otherwise. Investors should not place any reliance on any such
forward-looking statements.
(more)
CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, | March 31, | |||||||
2011 | 2011 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 33,537 | $ | 76,513 | ||||
Restricted cash, current |
6,541 | 436 | ||||||
Accounts
receivable, net |
11,428 | 6,571 | ||||||
Short-term investments |
4,727 | | ||||||
Current portion of consumer loans receivable, net |
20,347 | | ||||||
Inventories |
59,030 | 16,036 | ||||||
Assets held for sale |
9,278 | | ||||||
Prepaid expenses and other current assets |
8,179 | 2,495 | ||||||
Debtor-in-possession note receivable |
| 40,060 | ||||||
Deferred income taxes |
6,062 | 4,720 | ||||||
Total current assets |
159,129 | 146,831 | ||||||
Restricted cash |
453 | | ||||||
Investments |
10,806 | | ||||||
Consumer loans receivable, net |
105,804 | | ||||||
Inventory finance notes receivable, net |
18,244 | 17,759 | ||||||
Property, plant and equipment, net |
50,344 | 35,993 | ||||||
Goodwill and other intangibles, net |
83,746 | 68,859 | ||||||
Total assets |
$ | 428,526 | $ | 269,442 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 10,851 | $ | 3,495 | ||||
Accrued liabilities |
60,829 | 26,245 | ||||||
Construction lending line |
4,782 | | ||||||
Current portion of securitized financings |
11,934 | | ||||||
Noncontrolling interest note payable |
| 36,000 | ||||||
Total current liabilities |
88,396 | 65,740 | ||||||
Securitized financings |
87,571 | | ||||||
Deferred income taxes |
10,881 | 17,214 | ||||||
Redeemable noncontrolling interest |
80,843 | 35,819 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $.01 par value; 1,000,000 shares authorized; No shares issued or outstanding |
| | ||||||
Common stock, $.01 par value; 20,000,000 shares authorized; Outstanding 6,889,513 and 6,817,606 shares, respectively |
69 | 68 | ||||||
Additional paid-in capital |
130,831 | 129,211 | ||||||
Retained earnings |
29,998 | 21,390 | ||||||
Accumulated other comprehensive loss |
(63 | ) | | |||||
Total stockholders equity |
160,835 | 150,669 | ||||||
Total liabilities, redeemable noncontrolling interest and
stockholders equity |
$ | 428,526 | $ | 269,442 | ||||
(more)
CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended | ||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Net sales |
$ | 98,981 | $ | 47,505 | ||||
Cost of sales |
82,821 | 41,064 | ||||||
Gross profit |
16,160 | 6,441 | ||||||
Selling, general and administrative expenses |
16,990 | 5,236 | ||||||
(Loss) income from operations |
(830 | ) | 1,205 | |||||
Interest expense |
(1,461 | ) | | |||||
Other income |
360 | 180 | ||||||
Gain on bargain purchase |
18,780 | | ||||||
Income before income taxes |
16,849 | 1,385 | ||||||
Income tax benefit (expense) |
610 | (535 | ) | |||||
Net income |
17,459 | 850 | ||||||
Less: net income attributable to
noncontrolling interest |
8,851 | 332 | ||||||
Net income attributable to Cavco
common stockholders |
$ | 8,608 | $ | 518 | ||||
Net income per share attributable to Cavco
common stockholders: |
||||||||
Basic |
$ | 1.26 | $ | 0.08 | ||||
Diluted |
$ | 1.25 | $ | 0.08 | ||||
Weighted average shares outstanding: |
||||||||
Basic |
6,838,324 | 6,541,739 | ||||||
Diluted |
6,894,380 | 6,753,265 | ||||||
(more)
CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Net sales: |
||||||||
Factory-built housing |
$ | 92,840 | $ | 47,505 | ||||
Financial services |
6,141 | | ||||||
Total net sales |
$ | 98,981 | $ | 47,505 | ||||
Capital expenditures |
$ | 1,029 | $ | 239 | ||||
Depreciation |
$ | 460 | $ | 325 | ||||
Amortization of other intangibles |
$ | 407 | $ | 13 | ||||
Factory-built homes sold: |
||||||||
by Company owned stores |
417 | 30 | ||||||
to independent dealers, builders & developers |
1,434 | 1,286 | ||||||
Total factory-built homes sold |
1,851 | 1,316 | ||||||
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