updated 1/27/2011 4:17:44 PM ET 2011-01-27T21:17:44

PHOENIX, Jan. 27, 2011 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq:CVCO) today announced financial results for the third quarter and first nine months of its fiscal year 2011 ended December 31, 2010.

Net sales for the third quarter of fiscal 2011 totaled $39,612,000, up 9% from $36,369,000 for the third quarter of fiscal year 2010. Net income attributable to Cavco stockholders for the fiscal 2011 third quarter was $24,000 compared to a net loss of $1,030,000 reported in the same quarter one year ago. Net income per share based on basic and diluted weighted average shares outstanding was four-tenths of one cent, versus basic and diluted net loss per share of $0.16 last year.

For the first nine months of fiscal 2011, net sales increased 68% to $133,005,000 from $79,341,000 for the first nine months of fiscal 2010. The prior year period includes the financial results of Fleetwood Homes since August 17, 2009, the date of acquisition, as previously disclosed. Net income attributable to Cavco stockholders for the first nine months of fiscal 2011 was $1,222,000 compared to a net loss of $2,642,000 last year. For the nine months ended December 31, 2010, net income per share based on basic and diluted weighted average shares outstanding was $0.19 and $0.18, respectively, versus basic and diluted net loss per share of $0.41 for the prior year period.

"Geographic and product-line diversification favorably impacted results during the third quarter compared to the same quarter in the prior year. However, the well-publicized and ongoing housing industry challenges continued to negatively affect our operations. Compared to the second quarter of fiscal year 2011, revenue and backlogs were reduced by low incoming order rates, which caused production inefficiencies unfavorably impacting gross margins. Margins were also pressured by pricing competition and certain raw material cost increases. Currently, our plants have substantial operating leverage and are well-positioned to benefit from any improvement in capacity utilization," said Dan Urness, Vice President and Chief Financial Officer.

During the fiscal quarter ended December 31, 2010 and as previously reported, Fleetwood Homes, Inc., a subsidiary owned 50% by Cavco and 50% by Third Avenue Value Fund (TAVFX), provided a $50 million debtor-in-possession credit facility to Palm Harbor Homes, Inc. Palm Harbor is a manufacturer and marketer of factory-built housing and a provider of related consumer financing and insurance products. Palm Harbor and certain of its subsidiaries filed for chapter 11 bankruptcy protection on November 29, 2010. Subsequently, Fleetwood Homes became the court-approved "stalking horse" bidder to acquire substantially all of Palm Harbor's assets and to assume certain liabilities. Fleetwood Homes' $57.5 million bid is subject to customary conditions to closing, certain post-closing adjustments, and bankruptcy court approval. The asset purchase transaction is expected to be conducted pursuant to an auction process under section 363 of the U.S. Bankruptcy Code.

"We are pleased to have this opportunity to partner with Palm Harbor Homes and look forward to a successful outcome of this process. Our mutual intention is to help Palm Harbor continue its heritage of providing quality home building and retailing, financing, insurance products and outstanding customer service," said Joseph Stegmayer, Chairman, President and Chief Executive Officer. "Meanwhile, we continue to aggressively pursue all markets for systems-built buildings from our ten substantially underutilized factories across the country," Mr. Stegmayer concluded.

Cavco's senior management will hold a conference call to review these results tomorrow, January 28, 2011, at 11:00 AM (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, is one of the largest producers of HUD code manufactured homes in the United States, based on reported wholesale shipments of both Cavco and Fleetwood Homes. The Company is also a leading producer of park model homes and vacation cabins in the United States.

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 complete the acquisition of the Palm Harbor assets and certain liabilities and 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; 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 2010 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.

     
     
CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
     
     
   December 31,

2010 
 March 31,

2010 
   (Unaudited)   
 ASSETS     
 Current assets     
 Cash and cash equivalents   $ 49,162  $ 74,988
 Restricted cash   213  227
 Accounts receivable   4,457  9,428
 Inventories   16,804  15,751
 Prepaid expenses and other current assets   6,604  6,278
 Debtor-in-possession note receivable   38,516  -- 
 Deferred income taxes   5,223  6,240
 Total current assets   120,979  112,912
     
 Property, plant and equipment, at cost:     
 Land   16,194  16,194
 Buildings and improvements   20,275  20,345
 Machinery and equipment   11,458  10,983
   47,927  47,522
 Accumulated depreciation   (10,896)  (9,933)
   37,031  37,589
     
 Inventory finance notes receivable, net   18,413  12,929
 Goodwill and other intangibles, net   68,872  68,912
     
 Total assets   $ 245,295  $ 232,342
     
 LIABILITIES AND STOCKHOLDERS' EQUITY     
 Current liabilities     
 Accounts payable   $ 2,318  $ 5,375
 Accrued liabilities   25,972  26,919
 Noncontrolling interest note payable   14,000  -- 
 Total current liabilities   42,290  32,294
     
 Deferred income taxes   18,412  19,694
     
 Commitments and contingencies     
     
 Cavco Industries, Inc. 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 6,817,606 and 6,541,684 shares, respectively   68  65
 Additional paid-in capital   129,049  127,152
 Retained earnings   19,781  18,559
 Total Cavco Industries, Inc. stockholders' equity   148,898  145,776
     
 Noncontrolling interest   35,695  34,578
 Total equity   184,593  180,354
     
 Total liabilities and stockholders' equity   $ 245,295  $ 232,342
         
         
CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
         
         
   Three Months Ended

December 31, 
 Nine Months Ended

December 31, 
  2010 2009 2010 2009
         
 Net sales   $ 39,612  $ 36,369  $ 133,005  $ 79,341
 Cost of sales   34,269  33,106  114,042  71,836
 Gross profit   5,343  3,263  18,963  7,505
 Selling, general and administrative expenses   5,275  4,954  16,000  11,964
 Income (loss) from operations   68  (1,691)  2,963  (4,459)
 Interest income   511  52  957  108
 Income (loss) before income taxes   579  (1,639)  3,920  (4,351)
 Income tax (expense) benefit   (289)  471  (1,581)  1,512
 Net income (loss)   290  (1,168)  2,339  (2,839)
 Less: net income (loss) attributable to noncontrolling interest   266  (138)  1,117  (197)
 Net income (loss) attributable to Cavco Industries, Inc. common stockholders   $ 24  $ (1,030)  $ 1,222  $ (2,642)
         
 Net income (loss) per share attributable to Cavco Industries, Inc. common stockholders: 
 Basic   $ 0.00  $ (0.16)  $ 0.19  $ (0.41)
 Diluted   $ 0.00  $ (0.16)  $ 0.18  $ (0.41)
         
 Weighted average shares outstanding:         
 Basic   6,651,928  6,511,184  6,578,732  6,508,552
 Diluted   6,841,802  6,511,184  6,860,385  6,508,552
         
         
CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA – CONTINUING OPERATIONS
(Dollars in thousands, except average sales price amounts)
(Unaudited)
         
         
         
   Three Months Ended

December 31, 
 Nine Months Ended

December 31, 
   2010   2009   2010   2009 
         
 Net sales         
 Manufacturing   $ 38,927  $ 35,323  $ 128,976  $ 77,025
 Retail   2,073  1,999  7,633  6,122
 Less: Intercompany   (1,388)  (953)  (3,604)  (3,806)
         
 Net sales   $ 39,612  $ 36,369  $ 133,005  $ 79,341
         
 Floors sold - manufacturing   1,745  1,565  5,713  3,280
 Average sales price per floor -- manufacturing   $ 22,308  $ 22,571  $ 22,576  $ 23,483
         
 Homes sold - manufacturing   1,140  1,026  3,668  2,184
 Average sales price per home -- manufacturing   $ 34,146  $ 34,428  $ 35,162  $ 35,268
         
 Homes sold - retail   24  29  91  88
         
 Capital expenditures   $ 221  $ 21  $ 680  $ 178
 Depreciation   $ 331  $ 334  $ 984  $ 843
CONTACT: Joseph Stegmayer
         Chairman and CEO
         Phone: 602-256-6263
         joes@cavco.com
         
         On the Internet:
         www.cavco.com

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