Q3 2024 Cavco Industries Inc Earnings Call

February 2, 2024

Okay.

Operator: Good day and thank you for standing by. Welcome to the 3rd quarter fiscal year 2024 Cavco Industries Inc. Earnings Call webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mark Fussler, Corporate Controller and Investor Relations. Please go ahead.

Yeah.

Speaker Change: Good day, and thank you for standing by welcome to the third quarter fiscal year 2024.

Speaker Change: <unk> Industries, Inc. Earnings call webcast at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising that you're headed right.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mark Fussler, Corporate Controller and Investor Relations. Please go ahead.

Speaker Change: Draw. Your question. Please press Star one again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker, Mark Butler corporate controller and Investor Relations. Please go ahead.

I would now like to hand the conference over to your speaker, Mark Fusler, Corporate Controller and Investor Relations. Please go ahead.

Mark Fussler: Good day and thank you for joining us for Cavco Industries' 3rd quarter fiscal year 2024 Earnings Conference Call. During this call, you'll be hearing from Bill Boor, President and Chief Executive Officer; Allison Aden, Executive Vice President and Chief Financial Officer and Paul Bigby, Chief Accounting Officer. Before we begin, we'd like to remind you that the comments made during this conference call by management may contain forward-looking statements, including statements of expectations or assumptions about Cavco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets or future market conditions. All forward-looking statements involve risks and uncertainties which could affect Cavco's actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Cavco.

Mark Fusler: Good day and thank you for joining us for Cavco Industries' 3rd quarter fiscal year 2024 Earnings Conference Call. During this call, you'll be hearing from Bill Boor, President and Chief Executive Officer; Allison Aden, Executive Vice President and Chief Financial Officer and Paul Bigby, Chief Accounting Officer.

Mark Butler: Good day, and thank you for joining us for capital industries third quarter fiscal year 'twenty 'twenty four earnings conference call.

Mark Butler: This call you'll be hearing from Bill Boor, President and Chief Executive Officer, Allison Aden Executive Vice President and Chief Financial Officer, and public D Chief Accounting Officer.

Before we begin, we'd like to remind you that the comments made during this conference call by management may contain forward-looking statements, including statements of expectations or assumptions about Cavco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets or future market conditions. All forward-looking statements involve risks and uncertainties which could affect Cavco's actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Cavco.

Mark Butler: Before we begin we'd like to remind you that the comments made during this conference call by management may contain forward looking statements, including statements of expectations or assumptions about <unk> financial and operational performance revenues earnings per share cash flow or use cost savings and operational efficiencies.

Mark Butler: Current or future volatility in the credit markets or future market conditions.

All forward-looking statements involve risks and uncertainties which could affect Cavco's actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Cavco. I encourage you to review Cavco's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in any forward-looking statements. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, February 2nd, 2024. Cavco undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Now, I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill?

Mark Butler: All forward looking statements involve risks and uncertainties, which could affect <unk> actual results.

Could cause its actual results to differ materially from those expressed in any forward looking statements made by or on behalf of capstone.

Mark Fussler: I encourage you to review Cavco's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in any forward-looking statement. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, February 2, 2024. Cavco undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Now, I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill said,

Mark Butler: Courage, you to review <unk> filings with the Securities and Exchange Commission, including without limitation. The company's most recent forms 10-K and 10-Q.

Mark Butler: One five specific factors that may cause actual results or events to differ materially from those described in any forward looking statements.

This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, February 2nd, 2024. Cavco undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law.

This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast -- Friday, February 2, 2024. Cavco undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or certain stances after the date of this conference call, except as required by law. Now, I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill?

Now, I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill?

Mark Butler: This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast.

Mark Butler: Today February <unk> 2024.

Mark Butler: Undertakes no obligation to revise or update any forward looking statement, whether written or oral to reflect events or circumstances. After the date of this conference call, except as required by law now.

Now, I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill?

Mark Butler: Now I'd like to turn the call over to Bill Boor, President and Chief Executive Officer.

William C. Boor: Welcome and thank you for joining us today to review our 3rd quarter results. While the earnings release focuses on year-over-year comparisons, in this market, I believe the quarter-to-quarter developments are more relevant to understanding current market dynamics. It's not to disregard any insights and bigger picture takeaways regarding the dynamics a year ago, relative to today. Last year, we were a couple quarters into the effect of rising interest rates. Industry backlogs were higher than now but they were declining rapidl, and the pace and direction of backlogs is generally more important than the level. As we wrapped up this third quarter,

Welcome and thank you for joining us today to review our 3rd quarter results. While the earnings release focuses on year-over-year comparisons, in this market, I believe the quarter-to-quarter developments are more relevant to understanding current market dynamics. It's not to disregard any insights and bigger picture takeaways regarding the dynamics a year ago, relative to today. Last year, we were a couple quarters into the effect of rising interest rates. Industry backlogs were higher than now but they were declining rapidl, and the pace and direction of backlogs is generally more important than the level.

William Boor: Welcome and thank you for joining us today to review our 3rd quarter results. While the earnings release focuses on year-over-year comparisons, in this market, I believe the quarter-to-quarter developments are more relevant to understanding current market dynamics. It's not to disregard any insights and bigger picture takeaways regarding the dynamics a year ago, relative to today.

William C. Boor: Welcome and thank you for joining us today to review our third quarter results.

The earnings release focuses on year over year comparisons in this market I believe or quarter to quarter developments are more relevant to understanding current market dynamics.

William C. Boor: It's not to disregard any insights and bigger picture takeaways regarding the dynamics of year ago relative to today.

Last year, we were a couple quarters into the effect of rising interest rates. Industry backlogs were higher than now but they were declining rapidly and the pace and direction of backlogs is generally more important than the level. As we wrapped up this third quarter, rates has [inaudible]. In fact, on a same plant basis, we have now seen five quarters of increasing net orders and backlogs are stabilized, albeit at low-capacity utilization. So, while economic uncertainty remains, the trends are pointed in the right direction as we emerge from the typically slower winter and holiday months. The positive trending we're seeing in the market is coming from the dealer channel. Their traffic remains healthy and conversions are improving.

William C. Boor: Last year, we were a couple of quarters into the effect of rising interest rates industry backlogs were higher than now, but they were declining rapidly and the pace and direction of backlogs is generally more important than the level.

As we wrapped up this third quarter,

William C. Boor: As we wrapped up this third quarter.

William C. Boor: In fact, on a same plant basis, we have now seen five quarters of increasing net orders, and backlogs are stabilized, albeit at low-capacity utilization. So while economic uncertainty remains, the trends are pointed in the right direction as we emerge from the typically slower winter and holiday months. The positive trending we're seeing in the market is coming from the dealer channel. Their traffic remains healthy, and conversions are improving.

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William C. Boor: In fact on a same plant basis, we have now seen five quarters of increasing net orders.

William C. Boor: And backlogs are stabilized, albeit at low capacity utilization.

So, while economic uncertainty remains, the trends are pointed in the right direction as we emerge from the typically slower winter and holiday months. The positive trending we're seeing in the market is coming from the dealer channel. Their traffic remains healthy and conversions are improving.

William C. Boor: So while economic uncertainty remains the trends are pointed in the right direction as we emerged from the typically slower winter and holiday months.

William C. Boor: The positive trends, we're seeing in the market is coming from the dealer channel.

William C. Boor: Their traffic remains healthy and conversions are improving.

William C. Boor: Buyers are adjusting to the now steadier interest rates and to the reality of how much home they can afford. The underlying need for affordable housing is coming to the forefront and driving modest, but meaningful, quarter-to-quarter order improvement. As discussed over the past few quarters, community orders continue to be off considerably. As industry backlogs decreased in the latter part of 2022, deliveries to communities accelerated, which resulted in excess community inventories going into calendar 2023. The issue is not whether there are buyers or renters once a given unit is put into service.

Buyers are adjusting to the now steadier interest rates and to the reality of how much home they can afford. The underlying need for affordable housing is coming to the forefront and driving modest, but meaningful, quarter-to-quarter order improvements. As discussed over the past few quarters, community orders continue to be off considerably. As industry backlogs decreased in the latter part of 2022, deliveries to communities accelerated, which resulted in excess community inventories going into calendar 2023. The issue is not whether there are buyers or renters once a given unit is put into service, it's how quickly the units can be permitted and set to reduce the inventory and resume more normal orders.

Buyers are adjusting to the now steadier interest rates and so the reality of how much home they can afford.

William C. Boor: The underlying need for affordable housing is coming to the forefront and driving modest but meaningful quarter to quarter order improvements.

The underlying need for affordable housing is coming to the forefront and driving modest, but meaningful, quarter-to-quarter order improvement. As discussed over the past few quarters, community orders continue to be off considerably. As industry backlogs decreased in the latter part of 2022, deliveries to communities accelerated, which resulted in excess community inventories going into calendar 2023. The issue is not whether there are buyers or renters once a given unit is put into service.

William C. Boor: As discussed over the past few quarters community orders continue to be off considerably.

As industry backlogs decreased in the latter part of 2022, deliveries to communities accelerated, which resulted in excess community inventories going into calendar 2023. The issue is not whether there are buyers or renters once a given unit is put into service, it's how quickly the units can be permitted and set to reduce the inventory and resume more normal orders.

William C. Boor: As industry backlog decreased in the latter part of 2022 deliveries to communities accelerated.

William C. Boor: Which resulted in excess community inventories going into calendar 2023.

William C. Boor: The issue is not whether there are buyers or renters. Once a given unit is put into service.

William C. Boor: It's how quickly the units can be permitted and set to reduce the inventory and resume more normal orders. In other words, placements are occurring at a much higher pace than orders until the balance is reestablished. The natural question is, when will this balance be achieved? Of course, it varies by operator and location.

It's how quickly the units can be permitted and set to reduce the inventory and resume more normal orders.

William C. Boor: It's how quickly the units can be permitted and set to reduce the inventory and resume more normal order.

In other words, placements are occurring at a much higher pace than orders until balance is re-established. The natural question is, when will this balance be achieved? Of course, it varies by operator and location, however, the outlook for this calendar year is considerably better than last, based on our discussions with community operators and developers. We expect we will see increased community orders as the year unfolds. Against that market backdrop, we've stabilized our backlog over the past three quarters by matching production to the pace of orders. Our capacity utilization remains steady this quarter at about 60% and while the value of orders in the backlog declined from $170 million last quarter to $160 million in Q3, the number of units in the backlog increased 3%.

In other words placements are occurring at a much higher pace than orders and so balances reestablished.

William C. Boor: The natural question is when will this balance be achieved.

William C. Boor: However, the outlook for this calendar year is considerably better than last, based on our discussions with community operators and developers. We expect we will see increased community orders as the year unfolds. Against that market backdrop, we've stabilized our backlog over the past three quarters by matching production to the pace of orders. Our capacity utilization remains steady this quarter at about 60%. And while the value of orders in the backlog declined from $170 million last quarter to $160 million in Q3, the number of units in the backlog increased 3%.

William C. Boor: Of course varies by operator on location. However, the outlook for this calendar year is considerably better than last based on our discussions with community operators and developers.

We expect we will see increased community orders as the year unfolds.

Against that market backdrop, we've stabilized our backlog over the past three quarters by matching production to the pace of orders. Our capacity utilization remains steady this quarter at about 60% and while the value of orders in the backlog declined from $170 million last quarter to $160 million in Q3, the number of units in the backlog increased 3%.

Against that market backdrop, we've stabilized our backlog over the past three quarters by matching production to the pace of orders.

William C. Boor: Our capacity utilization remained steady this quarter about 60% and while the value of orders in the backlog declined from $170 million last quarter to $160 million in Q3 the.

William C. Boor: The number of units in backlog increased 3%.

William C. Boor: The quarter-ending backlog represents five to seven weeks of production, consistent with last quarter. That stability is an important point coming through the winter months and heading into what we typically would expect to be better-selling months. We have a number of plants operating at reduced schedules that are looking to increase when the market supports. On the margin side, pricing has been relatively stable, while our overall factory-based housing gross margin declined 0.8% sequentially. This was driven more by the cost side and how the cost of goods sold flowed through our manufacturing and retail sales. Big picture margins remain healthy at 22.4% in our housing segment and prices are continuing to hold for the most part. Overall, our quarterly revenue was down about 1% sequentially to $447 million and pre-tax income dropped from $52 million last quarter to $44 million. Before repurchases and after acquisitions, cash flow is about positive $25 million. We used $50 million to repurchase shares, which resulted in our cash balance being down $24 million, relative to last quarter. Before handing the call over, it was good to see many of you at the Louisville show a couple of weeks ago. Among a number of other innovative homes, we brought our new Anthem Series duplex to Louisville. The Anthem is the first nationally available HUD-approved, multi-family unit.

The quarter-ending backlog represents five to seven weeks of production, consistent with last quarter. That stability is an important point coming through the winter months and heading into what we typically would expect to be better-selling months. We have a number of plants operating at reduced schedules that are looking to increase when the market supports.

William C. Boor: The quarter ending backlog represents 5% to seven weeks of production consistent with last quarter.

That stability is an important point coming through the winter months and heading into what we typically would expect to be better selling months.

William C. Boor: We have a number of plants operating at reduced schedules that are looking to increase when the market supports.

On the margin side, pricing has been relatively stable, while our overall factory-based housing gross margin declined 0.8% sequentially. This was driven more by the cost side and how the cost of goods sold flowed through our manufacturing and retail sales. Big picture margins remain healthy at 22.4% in our housing segment and prices are continuing to hold for the most part. Overall, our quarterly revenue was down about 1% sequentially to $447 million and pre-tax income dropped from $52 million last quarter to $44 million. Before repurchases and after acquisitions, cash flow is about positive $25 million. We used $50 million to repurchase shares, which resulted in our cash balance being down $24 million, relative to last quarter. Before handing the call over, it was good to see many of you at the Louisville show a couple of weeks ago. Among a number of other innovative homes, we brought our new Anthem Series duplex to Louisville. The Anthem is the first nationally available HUD-approved, multi-family unit.

On the margin side pricing has been relatively stable.

William C. Boor: While our overall factory-based housing gross margin declined 0.8% sequentially, this was driven more by the cost side and how the cost of goods sold flowed through our manufacturing and retail sales. Big picture margins remain healthy at 22.4% in our housing segment, and prices are continuing to hold for the most part. Overall, our quarterly revenue was down about 1% sequentially to $447 million, and Pre-Tax Income dropped from $52 million last quarter to $44 Cash flow is about positive $25 million. We used $50 million to repurchase shares, which resulted in our cash balance being down $24 million relative to last quarter. Before handing the call over, it was good to see many of you at the Louisville show a couple of weeks ago. Among a number of other innovative homes, we brought our new Anthem Series Duplex to Louisville. The Anthem is the first nationally available HUD-approved multi-family unit.

William C. Boor: While our overall factory based housing gross margin declined <unk>, 8% sequentially. This was driven more by the cost side and how cost of goods sold flowed through our manufacturing and retail sales.

William C. Boor: Big picture margins remained healthy at 22, 4% and our housing segment and prices are continuing to hold for the most part.

Overall, our quarterly revenue was down about 1% sequentially to $447 million and pre-tax income dropped from $52 million last quarter to $44 million. Before repurchases and after acquisitions, cash flow is about positive $25 million. We used $50 million to repurchase shares, which resulted in our cash balance being down $24 million, relative to last quarter. Before handing the call over, it was good to see many of you at the Louisville show a couple of weeks ago. Among a number of other innovative homes, we brought our new Anthem Series duplex to Louisville. The Anthem is the first nationally available HUD-approved, multi-family unit.

William C. Boor: Overall, our quarterly revenue was down about 1% sequentially to $447 million.

William C. Boor: And pre tax income dropped from $52 million last quarter to $44 million.

William C. Boor: Before repurchases and after acquisitions.

Cash flow was about positive $25 million.

William C. Boor: We used $50 million to repurchase shares which resulted in our cash balance being down $24 million relative to last quarter.

Before handing the call over, it was good to see many of you at the Louisville show a couple of weeks ago. Among a number of other innovative homes, we brought our new Anthem Series duplex to Louisville. The Anthem is the first nationally available HUD-approved, multi-family unit. We're very excited about the affordability benefits these homes offer and the interest level has been tremendous, particularly with developers and community operators.

William C. Boor: Before handing the call over it was good to see many of Joseph Louisville show a couple of weeks ago.

William C. Boor: A number of other innovative homes, we brought our new anthem series duplex to Louisville.

William C. Boor: The anthem is the first nationally available HUD approved multifamily unit.

William C. Boor: We're very excited about the affordability benefits these homes offer and the interest level has been tremendous, particularly with developers and community operators. I also wanted to recognize and welcome Dustin Ewing and the people from Kentucky Dream Homes to the Cavco family. Kentucky Dream Homes operates five well-managed sales centers in Kentucky and Florida and we joined forces through an acquisition in the 3rd quarter. Dustin and his team are strong operators and great people to be associated with and we're very excited to be on the same team.

We're very excited about the affordability benefits these homes offer and the interest level has been tremendous, particularly with developers and community operators.

We're very excited about the affordability benefits these homes offer.

William C. Boor: The interest level has been tremendous, particularly with developers and community operators.

I also wanted to recognize and welcome Dustin Ewing and the people from Kentucky Dream Homes to the Cavco family. Kentucky Dream Homes operates five well-managed sales centers in Kentucky and Florida and we joined forces through an acquisition in the 3rd quarter. Dustin and his team are strong operators and great people to be associated with and we're very excited to be on the same team.

I also wanted to recognize and welcome dusting viewing in that people from Kentucky Dream homes to the Caf code family.

William C. Boor: Kentucky Dream homes operates five well managed sales centers in Kentucky, and Florida and.

Speaker Change: And we joined forces through an acquisition in the third quarter.

Allison Aden: Dustin and his team are strong operators and great people to be associated with and we're very excited to be on the same team. With that, I'd like to turn it over to Allison to discuss the financial results in more detail. Thank you, Bill. Net revenue for the third fiscal quarter of 2024 was $446.8 million, down $53.8 million, or 10.8%, compared to $500.6 million during the prior year. sequentially, net revenues decreased $5.3 million, driven by a reduction in units sold, partially offset by higher revenues in financial services. Within the factory built housing segment, net revenue was $427 million, down $54.2 million, or 11.3% from $481.2 million in the prior year quarter. The decrease was primarily due to a 13.7% decline in base business unit volume and a 5.3% decline in average revenue per home sold, partially offset by the Solitaire acquisition, which contributed $33 million during the quarter. The decrease in average revenue per home was primarily due to more single wides in the mix, and to a lesser extent, a decline in product pricing.

Dustin and his team are strong operators and great people to be associated with and we're very excited to be on the same team. With that, I'd like to turn it over to Allison to discuss the financial results in more detail.

Dustin and his team are strong operators and great people to be associated with and we're very excited to be on the same team.

Speaker Change: With that I'd like to turn it over to Alison to discuss the financial results in more detail.

With that, I'd like to turn it over to Allison to discuss the financial results in more detail.

Alison: Thank you Bill.

Alison: Net revenue for the third fiscal quarter of 2024 was $446 8 million down $53 8 million or 10, 8% compared to $500 6 million during the prior year.

Thank you, Bill. Net revenue for the 3rd fiscal quarter of 2024 was $446.8 million, down $53.8 million or 10.8%, compared to $500.6 million during the prior year. Sequentially, net revenues decreased $5.3 million, driven by a reduction in units sold, partially offset by higher revenues in financial services. Within the factory-built housing segment, net revenue was $427 million, down $54.2 million or 11.3% from $481.2 million in the prior year quarter. The decrease was primarily due to a 13.7% decline in base business unit volume and a 5.3% decline in average revenue per home sold, partially offset by the Solitaire acquisition, which contributed $33 million during the quarter. The decrease in average revenue per home was primarily due to more single-wides in the mix and to a lesser extent, a decline in product pricing.

Allison Aden: Thank you, Bill. Net revenue for the 3rd fiscal quarter of 2024 was $446.8 million, down $53.8 million or 10.8%, compared to $500.6 million during the prior year. Sequentially, net revenues decreased $5.3 million, driven by a reduction in units sold, partially offset by higher revenues in financial services.

Alison: So actually net revenues decreased $5 3 million driven by a reduction in units sold.

Really offset by higher revenues in financial services.

The factory built housing segment net revenue was $427 million down $54 2 million or 11, 3% from 481 2 million in the prior year quarter.

Within the factory-built housing segment, net revenue was $427 million, down $54.2 million or 11.3% from $481.2 million in the prior year quarter. The decrease was primarily due to a 13.7% decline in base business unit volume and a 5.3% decline in average revenue per home sold, partially offset by the Solitaire acquisition, which contributed $33 million during the quarter. The decrease in average revenue per home was primarily due to more single-wides in the mix and to a lesser extent, a decline in product pricing.

The decrease was primarily due to a 13, 7% decline in base business unit volume and a five 3% decline in average revenue per home sold partially offset by the solitaire acquisition, which contributed $33 million during the quarter.

Alison: The decrease in average rep.

Alison: Revenue hole revenue per home was primarily due to more single wise in the mix and to a lesser extent a decline in product pricing.

Allison Aden: Sequentially, for the factory-built housing segment, net revenue was down $7.1 million or 1.6% from $434.1 million. The decrease was primarily due to a 2.1% decline in units sold, partially offset by higher average revenue per home, primarily due to more double-wides in the mix and a higher proportion of homes sold through our company-owned stores. Factory utilization for Q3 of 2024 was approximately 60% when considering all available production days but with nearly 70%, excluding scheduled downtime for market or weather. This utilization level was consistent with the past three quarters. The financial services segment net revenue increased 2.1% to $19.8 million from $19.4 million, primarily due to more insurance policies in force, partially offset by fewer loan sales. Consolidated profit in the 3rd fiscal quarter as a percentage of net revenue was 23.1%, down 330 basis points from 26.4% in the same period last year. In the factory-built housing segment, the gross margin decreased 310 basis points to 22.4% in Q3 of 2024 versus 25.5% in Q3 of 2023, driven by lower average-selling prices and volumes, partially offset by lower input costs per floor.

Sequentially, for the factory-built housing segment, net revenue was down $7.1 million or 1.6% from $434.1 million. The decrease was primarily due to a 2.1% decline in units sold, partially offset by higher average revenue per home, primarily due to more double-wides in the mix and a higher proportion of homes sold through our company-owned stores. Factory utilization for Q3 of 2024 was approximately 60% when considering all available production days but with nearly 70%, excluding scheduled downtime for market or weather.

Alison: Sequentially for the factory built housing segment net revenue was down $7 1 million or one 6%.

Alison: $434 1 million a.

The decrease was primarily due to a two 1% decline in units sold partially offset by higher average revenue per home.

Alison: Really due to more double wise in the mix and a higher proportion of homes sold through our company owned stores.

Alison: The utilization for Q3 of 2024 was approximately 60%, while considering all available production days, but with nearly 70% excluding scheduled downtime for market or whether.

This utilization level was consistent with the past three quarters. The financial services segment net revenue increased 2.1% to $19.8 million from $19.4 million, primarily due to more insurance policies in force, partially offset by fewer loan sales. Consolidated profit in the 3rd fiscal quarter as a percentage of net revenue was 23.1%, down 330 basis points from 26.4% in the same period last year. In the factory-built housing segment, the gross margin decreased 310 basis points to 22.4% in Q3 of 2024 versus 25.5% in Q3 of 2023, driven by lower average-selling prices and volumes, partially offset by lower input costs per floor.

Alison: This utilization level was consistent with the past three quarters.

Alison: Financial services segment net revenue increased two 1% to $19 8 million and $19 4 million, primarily due to more insurance policies in force, partially offset by fewer loan sales.

Consolidated profit in the third fiscal quarter as a percentage of net revenue was 23, 1% down 330 basis points from 46, 4% in the same period last year.

Alison: In the factory built housing segment gross margin decreased 310 basis points to 22, 4% in Q3 of 2024 versus 25, 5% in Q3 of 2023.

Allison Aden: 22.4% in Q3 of 2024 versus 25.5% in Q3 of 2023, driven by lower average selling prices and volumes, partially offset by lower input costs per floor. Comparing to the sequential fiscal Q2 of 2024, while average selling prices increased due to a higher proportion of homes sold through company-owned retail stores, costs per unit sold also increased, with the net effect being an 80 basis point reduction in factory built housing gross margin. Gross margin as a percentage of revenue in financial services decreased to 36.8% in Q3 of 2024 from 46.6% in Q3 of 2023 due to higher insurance claim activity.

22.4% in Q3 of 2024 versus 25.5% in Q3 of 2023, driven by lower average selling prices and volumes, partially offset by lower input costs per floor.

Alison: Even by lower average selling prices and volumes, partially offset by lower input costs per floor.

Comparing to the sequential fiscal Q2 of 2024, while average selling prices increased due to a higher proportion of homes sold through company-owned retail stores, costs per unit sold also increased, with the net effect being 80 basis point reduction in factory-built housing gross margin. Gross margin as a percentage of revenue in financial services decreased to 36.8% in Q3 of 2024, from 46.6% in Q3 of 2023 from higher insurance claim activity.

Alison: Turning to the sequential fiscal Q2 of 2024, while average selling prices increased due to a higher proportion of homes sold through company owned retail stores.

Alison: Cost per units sold also increased with.

Alison: With a net effect in 80 basis point reduction in factory built housing gross margin.

Alison: Gross margin as a percentage of revenue and financial services decreased to 36, 8% in Q3, 24, and 46, 6% in Q3 of 2023.

Our insurance claim activity.

Allison Aden: Financial services gross margin increased sequentially, 90 basis points to 36.8% from 35.9% due to higher net insurance premiums earned. Selling general and administrative expenses in Q3 of 2024, where $63.3 million or 14.2% of net revenue, compared to $58.9 million or 11.8% of net revenue during the same quarter last year. Sequentially, SG&A increased $1.8 million. The increase in both periods is primarily due to higher costs in Q3 of 2024 related to the ongoing litigation between an identified former officer and the SEC, as well as higher compensation expense from acquisitions. Interest income for the 3rd quarter was $5.2 million, up 46.2% from the prior year quarter and down 9.9% over the sequential quarter. The increase over the prior year is primarily due to higher interest rates, whereas the sequential decrease is related to a lower average cash balance over the period. Interest expenses quarter was $0.8 million compared to $0.2 million in the prior year quarter.

Financial services gross margin increased sequentially, 90 basis points to 36.8% from 35.9%, due to higher net insurance premiums earned. Selling general and administrative expenses in Q3 of 2024, where $63.3 million or 14.2% of net revenue, compared to $58.9 million or 11.8% of net revenue during the same quarter last year. Sequentially, SG&A increased $1.8 million.

Alison: Financial services gross margin increased sequentially 90 basis points to 36, 8%.

Alison: 35, 9% due to higher net insurance premiums earned.

Alison: Selling general and administrative expenses in Q3 of 2024 or $63 3 million or 14, 2% of net revenue compared to $58 9 million or 11, 8% of net revenue during the same quarter last year.

The increase in both periods is primarily due to higher costs in Q3 of 2024 related to the ongoing litigation between an identified former officer and the SEC, as well as higher compensation expense from acquisitions. Interest income for the 3rd quarter was $5.2 million, up 46.2% from the prior year quarter and down 9.9% over the sequential quarter. The increase over the prior year is primarily due to higher interest rates, whereas the sequential decrease is related to a lower average cash balance over the period. Interest expenses quarter was $0.8 million compared to $0.2 million in the prior year quarter.

The increase in both periods is primarily due to higher costs in Q3 of 2024, related to the ongoing litigation between an identified former officer and the SEC, as well as higher compensation expense from acquisitions. Interest income for the 3rd quarter was $5.2 million, up 46.2% from the prior year quarter and down 9.9% over the sequential quarter.

Alison: Sequentially.

Alison: G&A increased to $1 8 million.

Alison: The increase in both periods is primarily due to higher costs in Q3 of 2024 related to the ongoing litigation between indemnify, a former officer of the and the SEC as.

Alison: As well as higher compensation expense from acquisitions.

Net income for the third quarter was $5 2 million.

The increase over the prior year is primarily due to higher interest rates, whereas the sequential decrease is related to a lower average cash balance over the period. Interest expenses quarter was $0.8 million compared to $0.2 million in the prior year quarter. This interest relates to adjustments of our redeemable, non-controllable interest in Craftsman Home LLC. Net other expenses quarter was $0.2 million compared to $0.3 million in the prior year quarter. Pre-tax profit for Q3 2024 was $43.9 million, down $32.2 million from the prior year period. The effective income tax rate was 18% for the 3rd fiscal quarter, compared to 21.7% in the same period last year.

Up 46, 2% from the prior year quarter and down nine 9% over the sequential quarter.

Alison: The increase over the prior year is primarily due to higher interest rates, whereas the sequential decrease is related to a lower average cash balance over the period.

Net other expenses quarter was $0.2 million compared to $0.3 million in the prior year quarter. Pre-tax profit for Q3 2024 was $43.9 million, down $32.2 million from the prior year period. The effective income tax rate was 18% for the 3rd fiscal quarter, compared to 21.7% in the same period last year.

Alison: Interest expense this quarter was <unk> 8 million compared to <unk> 2 million in the prior year quarter.

Allison Aden: This interest relates to adjustments of our redeemable, non-controllable interest in Craftsman Home LLC. Net other expenses for the third fiscal quarter were $0.2 million compared to $0.3 million in the prior year quarter. Pre-tax profit for Q3 2024 was $43.9 million, down $32.2 million from the prior year period. The effective income tax rate was 18% for the third fiscal quarter, compared to 21.7% in the same period last year.

Alison: This interest relates to adjustments of a redeemable noncontrolling interest in Craftsman home LLC.

Alison: Net other expense this quarter was <unk> 2 million compared to $1 3 million in the prior year quarter.

Alison: Pretax profit for Q3, 2024 was $43 9 million down $32 2 million from the prior year period.

Alison: The effective income tax rate was 18% for the third fiscal quarter compared to 21, 7% in the same period last year.

Allison Aden: The change between periods is primarily the result of higher benefits from stock option exercises. Net income attributable to Cavco shareholders was $36 million, compared to net income of $59.5 million in the same quarter of the prior year. And diluted earnings per share in Q3 of 2024 was $4.27 per share versus $6.66 per share in last year's 3rd quarter. Before we discuss the balance sheet, I'd like to take a minute to talk further about capital allocation. As announced in our press release, the company's board of directors approved a new $100 million stock repurchase program that can be used to purchase its outstanding common stock. This increases the total available to $139 million, including the amount remaining under the program announced in 2023 after our purchase of $50 million this quarter. Our strategic capital allocation priorities remain improvement, further acquisitions, and ongoing evaluation of the opportunities in our lending operation. We continue to use stock buybacks as a tool to responsibly manage our balance sheet.

The change between periods is primarily the result of higher benefits from stock option exercises. Net income attributable to Cavco shareholders was $36 million, compared to net income of $59.5 million in the same quarter of the prior year. And diluted earnings per share in Q3 of 2024 was $4.27 per share versus $6.66 per share in last year's 3rd quarter.

The change between periods is primarily the result of higher benefits.

Alison: Doc option exercises.

Alison: Net income attributable to cap co shareholders was $36 million compared to net income of $59 5 million in the same quarter of the prior year and diluted earnings per share in Q3 of 2024 was $4 27 per share versus $6.

Before we discuss the balance sheet, I'd like to take a minute to talk further about capital allocation. As announced in our press release, the company's board of directors approved a new $100 million stock repurchase program that can be used to purchase its outstanding common stock. This increases the total available to $139 million, including the amount remaining under the program announced in 2023 after our purchase of $50 million this quarter. Our strategic capital allocation priorities remain improvement, further acquisitions and ongoing evaluation of the opportunities in our lending operation. We continue to use stock buybacks as a tool to responsibly manage our balance sheet.

Alison: <unk> 66 per share in last year's third quarter.

Speaker Change: Before we discuss the balance sheet I'd like to take a minute to talk further about capital allocation.

Speaker Change: Announced with our press release, the Companys Board of directors approved a new $100 million stock repurchase program. It can be used to purchase its outstanding common stock.

This increases the total available to $139 million, including the amount remaining under the program announced in 2023 after our purchase of $50 million this quarter. Our strategic capital allocation priorities remain and improvement, further acquisitions and ongoing evaluation of the opportunities in our lending operation. We continue to use stock buybacks as a tool to responsibly manage our balance sheet.

This increases the total available to $139 million, including the amount remaining under the program announced in 2023 after our purchase of $50 million this quarter.

Speaker Change: Our strategic capital allocation priorities remain an improvement further acquisitions and ongoing evaluation of the opportunities in our lending operation.

Speaker Change: We continue to use stock buybacks as a tool to responsibly manage our balance sheet.

Paul Bigby: Now I'll turn it over to Paul to discuss the balance sheet. Thanks, Allison. So I'm going to cover the changes in the December 30 2023 balance sheet from April 1 2023. Our cash balance was $352.8 million, up $81.4 million or 30% from $271.4 million at the end of the prior fiscal year. The increases are primarily due to net income adjusted for non-cash items such as depreciation and stock compensation expense and working capital adjustments, including the following.

Now I'll turn it over to Paul to discuss the balance sheet.

Speaker Change: Now I'll turn it over to Paul to discuss the balance sheet.

Paul Bigbee: Thanks, Allison. So, I'm going to cover the changes in the December 30, 2023 balance sheet from April 1, 2023. Our cash balance was $352.8 million, up $81.4 million or 30% from $271.4 million at the end of the prior fiscal year. The increases are primarily due to net income adjusted for non-cash items, such as depreciation and stock compensation expense and working capital adjustments, including the following: inventory decreases, which provided $51.2 million from lower balances of raw materials at our production facilities and finished goods at our retail locations; decrease in accounts receivable of $18.2 million; prepaid and other asset decreases provided $9.9 million.

Paul: Thanks, Allison so I'm going to cover the changes in the December 32023 balance sheet from April one 2023.

Paul: Our cash balance was $352 8 million up $81 4 million or 30% from $271 4 million at the end of the prior fiscal year.

Paul: The increases are primarily due to net income adjusted for noncash items, such as depreciation and stock compensation expense and working capital adjustments, including.

Paul Bigby: Inventory decreases, which provided $51.2 million from lower balances of raw materials at our production facilities and finished goods at our retail locations; decrease in accounts receivable of $18.2 million; prepaid and other asset decreases provided $9.9 million. Primary uses of cash for the nine months offsetting the above include decreases in accounts payable, accrued expenses and other liabilities of approximately $23 million, our acquisition of five retail stores and associated inventory for $19.7 million and share repurchases for $96.8 million. Outside of cash, consumer and commercial loans decreased from the pay-down of associated loans that were greater than the amount of new loan origination.

Inventory decreases, which provided $51.2 million from lower balances of raw materials at our production facilities and finished goods at our retail locations; decrease in accounts receivable of $18.2 million; prepaid and other asset decreases provided $9.9 million.

Paul: Following inventory decreases which provided $51 2 million from lower balances of raw materials at our production facilities in finished goods at our retail locations.

Paul: Kris and accounts receivable of $18 2 million prepaid.

Paul: Prepaid another asset decreases provided $9 9 million.

Primary uses of cash for the nine months offsetting the above include decreases in accounts payable, accrued expenses and other liabilities of approximately $23 million, our acquisition of five retail stores and associated inventory for $19.7 million and share repurchases for $96.8 million. Outside of cash, consumer and commercial loans decreased from the pay-down of associated loans that were greater than the amount of new loan origination.

Paul: Primary uses of cash for the nine months offsetting the above include decreases in accounts payable accrued expenses and other liabilities of approximately $23 million.

Paul: Our acquisition of five retail stores and associated inventory for $19 7 million in share repurchases for $96 8 million.

Paul: Outside of cash consumer and commercial loans decreased from the Paydown of associated loans that were greater than the amount of new loan originations prepay.

Paul Bigby: Prepaid and other assets was lowered due to lower prepaid income taxes and a reduction in delinquent Ginnie Mae loans. The remaining change is due to normal amortization of prepaid. Property, plant and equipment net is down from the sale of un-utilized equipment acquired with Solitaire Home. Accrued expenses and other current liabilities are down from lower accrued bonuses, customer deposits and commission taxes. Lastly, stockholders' equity exceeded $1 billion, up $32.4 million from $976.3 million as of April 1, 2022. Now, I'll turn it back to Bill. Thanks. Thanks, Paul. Tony, why don't we just go ahead and turn it over for questions? Certainly. Ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Prepaid and other assets was lowered due to lower prepaid income taxes and a reduction in delinquent Ginnie Mae loans. The remaining change is due to normal amortization of prepaid. Property, plant and equipment net is down from the sale of un-utilized equipment acquired with Solitaire Home. Accrued expenses and other current liabilities are down from lower accrued bonuses, customer deposits and commission taxes. Lastly, stockholders' equity exceeded $1 billion, up $32.4 million from $976.3 million as of April 1, 2022. Now, I'll turn it back to Bill.

Paul: Prepaid and other assets was lower due to lower prepaid income taxes, and a reduction in delinquent Ginnie Mae loans.

The remaining changes due to normal amortization of prepaid.

Paul: Property plant and equipment net is down from the sale of Unutilized equipment acquired with solid per home.

Paul: Accrued expenses and other current liabilities are down from lower accrued bonuses customer deposits and commission taxes.

Lastly, stockholders equity exceeded $1 billion up $32 4 million from $976 3 million as of April one 2023.

Thanks, Paul. So, why don't we just go ahead and turn it over for questions? Certainly. Ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

William Boor: Thanks, Paul. So, why don't we just go ahead and turn it over for questions?

Paul: Now I'll turn it back to bill.

William C. Boor: Thanks, Thanks, Paul.

Operator: Certainly. Ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And one moment for our first question, which will come from Daniel Moore of CJS Securities. Your line is open.

William C. Boor: Tony Why don't we just go ahead and turn it over for questions.

Tony: Certainly ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster and one moment for our first question, which will come from Daniel Moore of CGS Securities. Your line is open. Good morning, Bill, Alison, Paul. Good afternoon, I should say, off the East Coast. But thanks for your time and taking the questions. Maybe start with your kind of outlook.

Please stand by while we compile the Q&A roster and one moment for our first question, which will come from Daniel Moore of CGS Securities. Your line is open.

Tony: One moment for our first question.

Tony: Which will come from Daniel Moore of CJS Securities. Your line is open.

Daniel Moore - CJS Securities, Inc.: Good morning Bill, Alison, Paul. Good afternoon, I should say, from the East Coast. But thanks for your time and taking the questions. Maybe start with your kind of outlook. What are your expectations for sequential growth in production and shipment in terms of both modules, as well as the number of homes, as we look to the March quarter relative to December. And similar question, what are your expectations for average selling price?

Daniel L. Urness: Good morning, Bill Alex and Paul.

Daniel L. Urness: Good afternoon, I should say the east coast, but thanks for the time and taking the questions.

Daniel L. Urness: Maybe start with your.

Daniel L. Urness: What are your expectations for sequential growth in production and shipment? You know, in terms of both modules, as well as the number of homes, as we look to the March quarter relative to December and similar questions. You know, what are your expectations for average selling price again? Well, you know, we don't give guidance.

What are your expectations for sequential growth in production and shipment? You know, in terms of both modules, as well as the number of homes, as we look to the March quarter relative to December and similar questions. You know, what are your expectations for average selling price again?

Daniel L. Urness: Kind of outlook, what are your expectations for sequential growth in production and shipments in terms of both modules as well as the number of homes as we look to the March quarter relative to December and similar question what are your expectations for average selling price.

Well, you know we don't give guidance. And I guess every time we get asked that question, I always feel like we're in a point -- it always feels like we're in a point where it could go one way or the other, right? I think you probably took from some of my comments that the general feeling is pretty positive going into the spring, that's mostly coming from just how well the dealer channels are going. And we feel like we're in a position to respond to the upside and that's where most of our energies are at this point, is getting ready for that upside. But we don't have a specific expectation to share at this point. Understood. I guess. What would it maybe talk about when you would expect to have a better sense of the true underlying demand right now? It's been improving sequentially and certainly strong from a seasonal perspective, but you know by April or May, when do you have a better sense for, you know, whether you might be in a position to start to ramp production?

William Boor: Well, you know we don't give guidance. And I guess every time we get asked that question, I always feel like we're in a point -- it always feels like we're in a point where it could go one way or the other, right? I think you probably took from some of my comments that the general feeling is pretty positive going into the spring, that's mostly coming from just how well the dealer channels are going. And we feel like we're in a position to respond to the upside and that's where most of our energies are at this point, is getting ready for that upside. But we don't have a specific expectation to share at this point.

Hey, Dan.

Speaker Change: But you know we don't give guidance.

William C. Boor: And I guess every time we get asked that question, I always feel like we're in a point where it could go one way or the other, right? I think you probably picked up from some of my comments that the general feeling is pretty positive going into the spring. That's mostly coming from just how well the dealer channels are going, and So we feel like we're in a position to respond to the upside, and that's where most of our energies are at this point, getting ready for that upside, but we don't have a specific expectation to share at this point. Okay, I guess. What would it maybe talk about when you would expect to have a better sense of the true underlying demand right now? It's been improving sequentially and certainly strong from a seasonal perspective, but you know by April or May, when do you have a better sense for, you know, whether you might be in a position to start to ramp production?

Speaker Change: And.

Dan: I guess every time, we get asked that question I always feel like we're in.

Speaker Change: And a point it always feels like we're in a point, where it could go one way or the other I think.

Speaker Change: You probably took from some of my comments that the general feeling is pretty positive going into the spring.

Speaker Change: That's mostly coming from just how well the dealer channels going in.

Speaker Change: So we feel like we're in a position to respond to the upside and Thats, where most of our.

Speaker Change: Most of our energies are at this point is getting ready for that upside, but we don't have a <unk>.

Speaker Change: Specific expectation to share at this point.

Daniel Moore - CJS Securities, Inc.: Understood. I guess, what would it -- maybe talk about when you would expect to have a better sense of the true underlying demand. Right now, it's been improving sequentially and certainly, strong from a seasonal perspective but by April or May, when do you have a better sense for whether you might be in a position to start to ramp production?

Speaker Change: Understood I guess.

Speaker Change: What would it maybe talk about.

Speaker Change: When you would expect to have a better sense of the true underlying demand right now it's been <unk>.

Speaker Change: Improving sequentially and certainly strong seasonal perspective, but by April may when do you have a better sense for whether you might be in a position to start to ramp production.

William Boor: Yeah, absolutely. We're sitting here, beginning of February, always making very general statements when we do a market locally, as I always remind everyone. But I think internally, we're kind of looking to late February, March timeframe to see an uptick, see the normal selling season and how that develops. And so, we're kind of in that waiting mode right now coming out of the winter and the holidays. So, in the next couple months, we'll know whether we saw the meaningful improvement that we're hoping for in the spring or whether there's some other issue going on.

Speaker Change: Yes, absolutely.

Speaker Change: We're sitting here beginning of February.

Speaker Change: Always making very general statements when we do a market locally.

Speaker Change: Please remind everyone but.

Speaker Change: I think internally, we're kind of look into late February March timeframe too.

Speaker Change: See an uptick sees a normal selling season and how that develops.

Speaker Change: And so we're kind of.

Speaker Change: And that waiting mode, right now coming out of the winter and the holidays. So in the next couple months, we'll know whether we saw the meaningful improvement that we're hoping for in the spring or whether there is some other issue going on.

William C. Boor: So in the next couple months, we'll know whether we saw the meaningful improvement that we're hoping for in the spring or whether there's some other issue going on. I feel like, you know, as I said in my comments, I think the buyer is there. The interest rates have stabilized. They're higher than they were a bit ago, and that's hard for people, but they are kind of acclimating to that in some cases. I think we've got good and sufficient indications that They recognize they can't buy as big a home as they could have bought if they had done so a couple years ago, but they're adjusting to all that. So the underlying demand, and I would include, as my comment said, I would include the communities as well. If they can get a home set, they've got a renter or a buyer for that home.

So in the next couple months, we'll know whether we saw the meaningful improvement that we're hoping for in the spring or whether there's some other issue going on.

I feel like, as I said in my comments, I think the buyer is there. The interest rates have stabilized, they're higher than they were a bit ago and that's hard for people but they are kind of acclimating to that. In some cases, I think we've got good indications that they recognize they can't buy as big a home as they could have bought if they had done so a couple years ago but they're adjusting to all that. The underlying demand -- and I would include, as my comment said -- I would include the communities as well in this. If they can get their home set, they've got a renter or a buyer for that home. So, we should see some improvement from, or we're hoping -- we'll be watching to see some improvement in the selling season. And as the year unfolds, we're also looking for that community order pattern to start improving.

Speaker Change: I feel like.

Speaker Change: As I said in my comments I think the buyers there.

Speaker Change: Interest rates have stabilized.

Speaker Change: They are higher than they were a bit ago and thats hard for people, but they are kind of acclimating to that in some cases I think we've got good effort good indications that.

Speaker Change: They recognize they can't buy us being at home as they could have but let's say it done so a couple of years ago.

The underlying demand -- and I would include, as my comment said -- I would include the communities as well in this. If they can get their home set, they've got a renter or a buyer for that home. So, we should see some improvement from, or we're hoping -- we'll be watching to see some improvement in the selling season. And as the year unfolds, we're also looking for that community order pattern to start improving.

Speaker Change: But they are adjusting to all of that so the underlying demand and I would include as my comments said that would include the communities as well on this.

Speaker Change: If they can get our homes said, they've got a rent or a buyer for that home.

William C. Boor: So, we should see some improvement from, or we're hoping, we'll be watching to see some improvement in the selling season. And as the year unfolds, we're also looking for that community order pattern to start improving. And just based, maybe it's more anecdotal, Bill, but based on your conversations with some of the community operators, the REITs, where are we, you know, if it's the baseball analogy in that, you know, getting through the inventory trouble issues or the set and finish challenges, you know, or I know it's market by market, but in general, you know, do we have quarters to go, And you'll make an analogy you remember when we were coming out of the retail inventory issue. It wasn't sudden, right?

So, we should see some improvement from, or we're hoping, we'll be watching to see some improvement in the selling season. And as the year unfolds, we're also looking for that community order pattern to start improving.

So we should see.

Speaker Change: Some improvement from or we're hoping we'll be watching to see some improvement in the selling season and as the year end.

Speaker Change: Excuse me as the year unfolds. We're also looking for that community order pattern to start improving.

And just based -- maybe it's more anecdotal, Bill -- but based on your conversations with some of the community operators, the REITs, where are we -- if it's the baseball analogy -- in getting through the inventory trouble issues or the set and finish challenges. I know it's market by market, but in general, do we have quarters to go, getting to tag ends and waiting on orders? What are you hearing? And you'll make an analogy you remember when we were coming out of the retail inventory issue. It wasn't sudden, right?

Daniel Moore - CJS Securities, Inc.: And just based -- maybe it's more anecdotal, Bill -- but based on your conversations with some of the community operators, the REITs, where are we -- if it's the baseball analogy -- in getting through the inventory trouble issues or the set and finish challenges. I know it's market by market, but in general, do we have quarters to go, getting to tag ends and waiting on orders? What are you hearing?

Speaker Change: And just based maybe it's more anecdotal build it based on your conversations with some of the community operators the rights.

Speaker Change: Where are we outfit the baseball analogy and that.

Speaker Change: Getting through the inventory trouble issues or the set in finished challenges.

Speaker Change: I know it's market by market, but.

Yes in general we have quarters to go getting to tag ins and waiting on orders what are you hearing.

Speaker Change: Yes. This is completely anecdotal and field based on those discussions and you'll I'll make an analogy you remember when we were coming out of the retail inventory issue.

Yeah. This is completely anecdotal and field-based on those discussions. And you'll make an analogy you remember when we were coming out of the retail inventory issue. It wasn't sudden, right? I mean, it just kind of happens individually, and it builds up, and next thing you know, you're not talking about the problem anymore. So I think it's going to feel like that, but in our discussions, in my discussions with folks at the larger community operators, they definitely are projecting higher order rates for calendar year 24 than 73. So I think in order for that to take place, you know, we should see some improvement in the next couple quarters. Last one, I'll jump out.

Yeah. This is completely anecdotal and field-based on those discussions. I'll make an analogy, you remember when we were coming out of the retail inventory issue -- it wasn't sudden, right? I mean, it just kind of happens individually and it builds up and next thing you know, you're not talking about the problem anymore. So, I think it's going to feel like that but in my discussions with folks at the larger community operators, they definitely are projecting higher order rates for calendar year '24 than '23. So, I think, in order for that to take place, we should see some improvement in the next couple quarters. Last one, I'll jump out.

William Boor: Yeah. This is completely anecdotal and field-based on those discussions. I'll make an analogy, you remember when we were coming out of the retail inventory issue -- it wasn't sudden, right? I mean, it just kind of happens individually and it builds up and next thing you know, you're not talking about the problem anymore.

And you'll make an analogy you remember when we were coming out of the retail inventory issue. It wasn't sudden, right? I mean, it just kind of happens individually, and it builds up, and next thing you know, you're not talking about the problem anymore. So I think it's going to feel like that, but in our discussions, in my discussions with folks at the larger community operators, they definitely are projecting higher order rates for calendar year 24 than 73. So I think in order for that to take place, you know, we should see some improvement in the next couple quarters. Last one, I'll jump out.

William C. Boor: I mean, it just kind of happens individually, and it builds up, and next thing you know, you're not talking about the problem anymore. So I think it's going to feel like that, but in our discussions, in my discussions with folks at the larger community operators, they definitely are projecting higher order rates for calendar year 24 than 73. So I think in order for that to take place, you know, we should see some improvement in the next couple quarters. Last one, I'll jump out.

Speaker Change: Wasn't sudden right I mean, it just kind of happens individually and it builds up and next thing you know you're not talking about the problem anymore. So I think it's going to feel like that but in our discussions in my discussions with folks at the larger community operators. They.

So, I think it's going to feel like that but in my discussions with folks at the larger community operators, they definitely are projecting higher order rates for calendar year '24 than '23. So, I think, in order for that to take place, we should see some improvement in the next couple quarters.

Speaker Change: They definitely are projecting higher order rates for calendar year 'twenty four then 73.

Speaker Change: So I think in order for that to take place we should see some improvement in the next couple of quarters.

Helpful. Last one, I'll jump out. Thanks for the color, Allison, as well on the gross margin front and the timing of how COGS are rolling through. You know, at current levels, just speak to your confidence around holding gross margins, where we are at these levels and what kind of potential upside we might have, if and when, the demand comes back and capacity utilization improves. Thanks again. Yeah, sure, Dan.

Daniel Moore - CJS Securities, Inc.: Helpful. Last one, I'll jump out. Thanks for the color, Allison, as well on the gross margin front and the timing of how COGS are rolling through. You know, at current levels, just speak to your confidence around holding gross margins, where we are at these levels and what kind of potential upside we might have, if and when, the demand comes back and capacity utilization improves. Thanks again.

Speaker Change: Helpful last one and I'll jump out.

Allison Aden: Thanks for the color, Allison, as well as on the gross margin front and the timing of kind of how COGS are rolling through. You know, at current levels, just speak to your confidence around holding gross margins where we are at these levels and what kind of potential upside we might have if and when the demand comes back and capacity utilization improves. Thanks. Yeah, sure, Dan.

Speaker Change: Thanks for the color Allison as well on gross margin front and the timing of kind of how Cogs are rolling through.

Speaker Change: At kind of current levels, just speak to your confidence around holding.

Speaker Change: Gross margins, where we are at these levels and what kind of potential upside we might have.

Speaker Change: If and when.

Speaker Change: The demand comes back in capacity utilization improves thanks again.

Allison Aden: Yeah. Sure, Dan. Thanks for the question. And just, as we said, big picture -- the factory-built housing margins remain very healthy at 22.4% this quarter. And prices are continuing to hold for the most part. And while we know it's based on our prior quarter comments, it's really hard to speculate on price. I think P&L pricing and cost are obviously going to be the key elements to determining future margins. And from commenting on price, we're seeing some regions where pressure is becoming more apparent and some where it's not so, it's a mixed bag.

Allison Aden: Thanks for the question. And just, you know, as we said, the big picture, the factory built housing margins remain very healthy at 22.4% this quarter. And prices are continuing to hold for the most part. And while we know it's based on our prior quarter comments, it's really hard to speculate on price. I think, you know, pricing and cost are obviously going to be the key elements to determining future margins. And from a comment on price, you know, we're seeing some regions where pressure is becoming more apparent and some where it's not. So it's a mixed bag.

Allison Aden: Yes, sure Dan Thanks for the questions and just as we said Big picture the factory built housing margins.

Speaker Change: Very healthy at 22, 4%.

Speaker Change: This quarter.

Speaker Change: Prices are continuing really to hold for the most part.

Speaker Change: Well, we know based on our prior quarter comments, it's really hard to speculate on price I think.

Speaker Change: Pricing and costs are obviously going to be the key elements of the terminal.

Speaker Change: <unk> margins.

Speaker Change: And from a comment in the price, we're seeing some regions where pressure is becoming more apparent.

Speaker Change: And somewhere its not so it's a mixed bag also from a cost perspective, we're seeing the movement.

Daniel L. Urness: Also, from a cost perspective, we're seeing the movement in commodities can be a little volatile and hard to predict. So, we continue to watch lumber and OSB and as we said last quarter, we believe that we're doing a good job of really managing our cost of sales. And if we see the top line increase, we certainly have leverage still, of absorption costing within our cost of goods and also at a SG&A level. Okay, I'll jump back with any follow-ups. Thanks, Dan.

Also, from a cost perspective, we're seeing the movement in commodities can be a little volatile and hard to predict. So, we continue to watch lumber and OSB and as we said last quarter, we believe that we're doing a good job of really managing our cost of sales. And if we see the top line increase, we certainly have leverage still, of absorption costing within our cost of goods and also at a SG&A level.

Speaker Change: Can be a little volatile and hard to predict.

Speaker Change: So we continue to watch lumber and OSB as we saw.

Speaker Change: Said last quarter.

Speaker Change: Leave that we're doing a good job of really.

Speaker Change: Managing our cost of sales and if we see the top line increase we certainly have leverage still.

Speaker Change: Absorption costs within our cost of goods and also added SG&A level.

Okay. I'll jump back with any follow-ups, thank you. Thanks, Dan.

Daniel Moore - CJS Securities, Inc.: Okay. I'll jump back with any follow-ups, thank you.

Speaker Change: Okay, I'll jump back with any follow ups. Thank you.

William Boor: Thanks, Dan.

Operator: And one moment for our next question. Our next question will be coming from Greg Palm of Craighalem Capital Group. Your line is open, Greg. Hi, thanks. This is Danny Eggertron for Greg today.

Operator: And one moment for our next question. Our next question will be coming from Greg Palm of Craig-Hallum Capital Group. Your line is open, Greg.

Speaker Change: Thanks, Dan.

One moment for our next question.

Speaker Change: And our next question will be coming from Greg Palm of Craig Hallum Capital Group. Your line is open great.

Hi, thanks. This is Danny Eggertron for Greg today. Hoping to just kind of go back and touch on what you're seeing in fiscal quarter four again. Can you maybe just remind us, I know it's kind of jumped around in the past, of the seasonality from December to March quarter, and maybe on top of that, any impacts that you felt from maybe adverse weather in the month of January? Let me take that second part first. We did have some pretty isolated down days due to the weather. I know in Texas, we had some, and in the northwest.

Danny James Eggerichs: Hi, thanks. This is Danny Eggerichs for Greg today. Hoping to just kind of go back and touch on what you're seeing in fiscal quarter four again. Can you maybe just remind us -- I know it's kind of jumped on in the past, the seasonality from December to March quarter and maybe on top of that, any impacts that you felt from maybe adverse weather in the month of January?

Speaker Change: Alright. Thanks, This is danny acreage on for Greg today.

Greg Palm: Hoping to just kind of go back and touch on what you're seeing in fiscal quarter four again. Can you maybe just remind us, I know it's kind of jumped around in the past, of the seasonality from December to March quarter, and maybe on top of that, any impacts that you felt from maybe adverse weather in the month of January? Let me take that second part first. We did have some pretty isolated down days due to the weather. I know in Texas, we had some, and in the northwest.

Daniel L. Urness: Hoping to just kind of go back and touch on on what Youre seeing in fiscal quarter.

Daniel L. Urness: Quarter four again can.

Daniel L. Urness: Can you, maybe just remind us I know its kind of jumped around in the past of the seasonality.

Daniel L. Urness: From December to March quarter, and maybe on top of that.

Daniel L. Urness: Any impacts that you felt from maybe adverse weather in the month of January.

Let me take that second part first. We did have some pretty isolated down days due to the weather. I know in Texas we had some and in the Northwest, but I think it was to an extent that we're hoping we can make it up over the course of this quarter, if that makes sense, because we are running at a reduced overall rate. And so, while we did have some down days, it shouldn't really knock us off where we would end the quarter otherwise on a production basis, if that makes sense. On the seasonality, I know we've looked at that -- Mark might have a comment on the percentages, but what I'll say before we say that is, we look at seasonality over a long period of time and many years. And you can kind of glean from that what an average seasonal change will be and yet, I think when you look at any given year, it never really plays out that way because the macroeconomic factor is probably way heavier than the seasonality at times.

William Boor: Let me take that second part first. We did have some pretty isolated down days due to the weather. I know in Texas we had some and in the Northwest, but I think it was to an extent that we're hoping we can make it up over the course of this quarter, if that makes sense, because we are running at a reduced overall rate. And so, while we did have some down days, it shouldn't really knock us off where we would end the quarter otherwise on a production basis, if that makes sense.

Daniel L. Urness: Right.

So let me take that second part first we did have.

Daniel L. Urness: Some pretty isolated down days due to the weather I know in Texas, we had some and in the northwest.

William C. Boor: But I think it was to an extent that we're hoping we can make it up over the course of this quarter, if that makes sense, because we are running at a reduced overall rate. And so, you know, while we did have some down days, it shouldn't really knock us off. You know, where we would end the quarter otherwise on a production basis, if that makes sense. On seasonality, I know we've looked at that. Mark might have a comment on the percentages, but what I'll say before we say that is, we look at seasonality over a long period of time and many years, and you can kind of glean from that what the average seasonal change will be, and yet I think when you look at any given year, it never really plays out that way because the macroeconomic factor is probably way heavier than the seasonality at times.

Daniel L. Urness: But I think it was.

Daniel L. Urness: To an extent that we're hoping we can make it up over the course of this quarter if that makes sense because we are running at a reduced overall rate.

Daniel L. Urness: And so while we did have some down days it shouldnt really knock us off.

Daniel L. Urness: Where we would end the quarter otherwise on a production basis, if that makes sense.

On the seasonality, I know we've looked at that -- Mark might have a comment on the percentages, but what I'll say before we say that is, we look at seasonality over a long period of time and many years. And you can kind of glean from that what an average seasonal change will be and yet, I think when you look at any given year, it never really plays out that way because the macroeconomic factor is probably way heavier than the seasonality at times.

Speaker Change: On the seasonality I know, we've looked at that Mark might have a comment on the percentages, but what I will say before we say that is.

Speaker Change: We look at seasonality over a long period of time in many years and you can kind of gleaned from that.

Speaker Change: <unk>.

Speaker Change: Average seasonal change will be and yet I think when you look at any given year. It never really plays out that way because the macroeconomic factors probably weighted heavier than the.

William C. Boor: But given that -- Mark, I'll check my recollection -- I mean, at most 10%. Yeah, I was gonna say around 5% probably. 5 to 10%. But again, we are hitting the better part of that from a seasonality perspective. Okay, got it.

But given that -- Mark, I'll check my recollection -- I mean, at most 10%.

Speaker Change: Seasonality at times, but given that.

Speaker Change: Mark I'll check my recollection, I mean at most 10%, let's say around 5% probably closer to 10%.

Yeah, I was gonna say around 5%, probably. 5 to 10%. But again, we are hitting the better part of that from a seasonality perspective. Okay, got it.

Mark Fusler: Yeah, I was gonna say around 5%, probably.

5 to 10%. But again, we are hitting the better part of that from a seasonality perspective. Okay, got it.

William Boor: 5 to 10%. But again, we are hitting the better part of that from a seasonality perspective.

Speaker Change: But again, we are hitting the better part of that from a seasonality perspective.

Okay, got it. Um, then maybe just touching on ASPs again. You kind of commented that within the backlog, you're seeing some lower ASPs. So I guess, is that a good proxy for this current quarter on ASPs and, and within that, is that just kind of mixed, then, or what do we see in there? Yeah, what I would say is, um, we've kind of had a movement. We talked about in previous quarters that if you looked on a year over year basis, we're selling more single section units and multi-section. So, I would suggest, and I'll look around to see your reactions too, I would suggest that our lower value in the backlog is more driven by that change than it is by the fundamental pricing of a given. I think that's your question, but let me know, Daniel, does that answer your question?

Danny James Eggerichs: Okay, got it. Then maybe just touching on ASPs again, you kind of commented that within the backlog, you're seeing some lower ASPs. So, I guess, is that a good proxy for this current quarter on ASPs and within that, is that just kind of mixed, then or what do we see in there?

William C. Boor: Um, then maybe just touching on ASPs again. You kind of commented that within the backlog, you're seeing some lower ASPs. So I guess, is that a good proxy for this current quarter on ASPs and, and within that, is that just kind of mixed, then, or what do we see in there? Yeah, what I would say is, um, we've kind of had a movement. We talked about in previous quarters that if you looked on a year over year basis, we're selling more single section units and multi-section. So, I would suggest, and I'll look around to see your reactions too, I would suggest that our lower value in the backlog is more driven by that change than it is by the fundamental pricing of a given. I think that's your question, but let me know, Daniel, does that answer your question?

Speaker Change: Okay got it.

Speaker Change: And then maybe just touch on Asps again.

Speaker Change: Kind of commented that.

Speaker Change: Within the backlog Youre seeing some lower asps. So I guess is that a good proxy for this current quarter on asps.

Speaker Change: And within that is that just kind of mix then or what are we seeing there.

William Boor: Yeah. What I would say is, we've kind of had a movement we've talked about in previous quarters, that if you looked on a year-over-year basis, we're selling more single-section units and multi-section units. So, I would suggest -- and I'll look around to see your reactions too -- I would suggest that our lower value in the backlog is more driven by that change than it is by the fundamental pricing of a given unit. I think that's your question, but let me know, Daniel -- does that answer your question?

Speaker Change: Yes, what I would say is we've kind of had a movement and we've talked about in previous quarters that if you look on a year over year basis, we're selling more single section units and multi section units.

Speaker Change: So.

Speaker Change: I would suggest and I'll look around to see your reactions to I would suggest that our lower value in.

Speaker Change: And the backlog is more driven by <unk>.

Speaker Change: That change than it is by the fundamental pricing of a given unit.

Speaker Change: I think that's your question, but let me know again.

William C. Boor: Yeah, yeah, you just kind of mentioned that pricing was holding steady, but backlogs, and ASPs were kind of coming down, so we're just wondering if that was mixed or not or what. So, yeah, I think you answered that, if the backlog moves more to a character where it's got more single lines than multi-section, then you're going to naturally see that.

Danny James Eggerichs: Yeah, you just kind of mentioned that pricing was holding steady but backlogs, ASPs were kind of coming down. So, we're just wondering if that was mixed or what. So, yeah, I think you answered that,

Speaker Change: To your question, Yes, Yes, you would just kind of mentioned that pricing was holding steady, but but backlogs asps were kind of coming down so.

Speaker Change: I was just wondering if that was mix or what.

So, yeah, I think you answered that, if the backlog moves more to a character where it's got more single lines than multi-section, then you're going to naturally see that.

So, yeah, I think you answered that,

William Boor: If the backlog moves more to a character where it's got more single lines than multi-section, then you're going to naturally see that value per unit go down, right?

Speaker Change: To answer that.

Speaker Change: Yes, the backlog.

Speaker Change: Moves more to a character it has gotten more single Wides and multi section then youre going to naturally see that.

William C. Boor: The value per unit goes down, right? Yep. Okay, that makes sense. Maybe just one more on, maybe the Anthem product. Just kind of initial interest.

The value per unit goes down, right?

Speaker Change: <unk> per unit go down right.

Danny James Eggerichs: Yep. Okay, that makes sense. Maybe just one last more on, maybe the Anthem product, just kind of initial interest. I know you're showing that off at the Louisville show and how big you think that could be and what the market could potentially be like for that certain product.

Speaker Change: Yes.

Speaker Change: Okay that makes sense, maybe just one last more on maybe the anthem product.

Speaker Change: Just kind of initial interest and all your showing that off at the Louisville show in and how big you think that could be and what the market could potentially be like for that certain product.

William C. Boor: I know you're showing that off at the Louisville show and how big you think that could be and what the market could potentially be like for that certain product. Yeah, we're obviously really excited about it. I mean, this is a change that's been made after a lot of work at the industry level, basically with HUD, to allow multifamily units to be coded under the HUD code. And we are excited about it. We had a launch event, one of our lead, basically our lead plant on this is the Rocky Mount Virginia plant, in early December.

I know you're showing that off at the Louisville show and how big you think that could be and what the market could potentially be like for that certain product.

Yeah, we're obviously really excited about it. I mean, this is a change that's been made after a lot of work at the industry level basically, with HUD, to allow multi-family units to be coded under the HUD code. And we are excited about it. We had a launch event, one of our lead -- basically our lead plant on this, is the Rocky Mount Virginia plant. And we had a launch event in early December and I was there and I was really impressed by the support we were getting, not only from dealers and community operators, but also from municipalities showing up looking for solutions to their density and affordability issues. We've talked about it as being nationally available, we're going to produce that variations of the Anthem product. I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're gonna get more revenue, essentially, from a given lot. And at the same time, those two residences or households are going to both benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because, obviously, we're pretty excited about it. Yeah, sounds like a lot of good stuff.

William Boor: Yeah, we're obviously really excited about it. I mean, this is a change that's been made after a lot of work at the industry level basically, with HUD, to allow multi-family units to be coded under the HUD code. And we are excited about it. We had a launch event, one of our lead -- basically our lead plant on this, is the Rocky Mount Virginia plant.

Speaker Change: Yes, we're obviously really excited about it I mean this is a change that's been made after a lot of work at the industry level basically with HUD to allow multifamily units to be coded under the HUD code.

Speaker Change: <unk>.

Speaker Change: We are excited about it we.

Speaker Change: Had a launch event one of our basically our lead plan on this is Rocky Mountain, Virginia plant.

Speaker Change: And we had a launch event in early December and I was there and I was really impressed by the support we are getting not only from.

William C. Boor: And I was there, and I was really impressed by the support we were getting, not only from dealers and community operators but also from municipalities showing up looking for solutions to their density and affordability issues. And so, you know, we've talked about it as being nationally available. We're, we're going to produce that. Variations of the Anthem product. I mean, there's more than one floor plan. The example of a community operator gives the opportunity to get some density.

And we had a launch event in early December and I was there and I was really impressed by the support we were getting, not only from dealers and community operators, but also from municipalities showing up looking for solutions to their density and affordability issues. We've talked about it as being nationally available, we're going to produce that variations of the Anthem product. I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're gonna get more revenue, essentially, from a given lot. And at the same time, those two residences or households are going to both benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because, obviously, we're pretty excited about it.

Speaker Change: Dealers and community operators, but also from municipalities showing up looking for solutions to their density and affordability issues.

Speaker Change: And so we've talked about it as being a nationally available work, we're going to produce that variations.

Speaker Change: <unk> of the anthem product I mean, theres more than one floor plan.

I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're gonna get more revenue, essentially, from a given lot. And at the same time, those two residences or households are going to both benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because, obviously, we're pretty excited about it.

I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're going to get more revenue, essentially from a given lot. And at the same time, those two residences or households are going to benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because obviously, we're pretty excited about it. Yeah. Sounds like a lot of good stuff so, I'll leave it there, thanks.

I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're going to get more revenue, essentially from a given lot. And at the same time, those two residences or households are going to benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because obviously, we're pretty excited about it. Yeah.

I mean, there's more than one floor plan, the variations that we're going to produce in plants across the country. I don't have any numbers for you, to share at this point but we've been really excited about the interest level. And if you think about it, if you're running -- let's just take for example, a community operator. The opportunity to get some density, you're going to get more revenue, essentially from a given lot. And at the same time, those two residences or households are going to benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because obviously, we're pretty excited about it.

Speaker Change: Variations that we're going to produce and plants across the country. So yes.

Speaker Change: Yes, I don't have any numbers for you to share at this point, but we've been really excited about the interest level in if you think about it if you're running let's just take the example of a community operator, the opportunity to get some density.

The opportunity to get some density, you're going to get more revenue, essentially from a given lot. And at the same time, those two residences or households are going to benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because obviously, we're pretty excited about it.

Sounds like a lot of good stuff so, I'll leave it there, thanks.

Danny James Eggerichs: Yeah. Sounds like a lot of good stuff so, I'll leave it there, thanks.

William C. Boor: You're gonna get more revenue, essentially, from a given lot. And at the same time, those two residences or households are going to both benefit from the density at a lower cost. And so that's what solving the affordability issue is all about. So I appreciate you asking because, obviously, we're pretty excited about it. Yeah, sounds like a lot of good stuff.

The opportunity to get some density, you're gonna get more revenue, essentially, from a given lot. And at the same time, those two residences or households are going to both benefit from the density with lower cost. And so, that's what solving the affordability issue is all about. I appreciate you asking because, obviously, we're pretty excited about it.

Youre going to get more.

Revenue essentially from a given.

Speaker Change: Slide <unk>.

Speaker Change: And at the same time those two <unk>.

Speaker Change: <unk> our households are going to both benefit from the density with lower cost.

Speaker Change: So that's what that's what the salt and the affordability issues all about.

Speaker Change: So I appreciate you asking because obviously, we're pretty excited about it.

Danny James Eggerichs: Yeah, sounds like a lot of good stuff. So, I'll leave it there. Thanks.

Speaker Change: Yeah sounds like sounds like a lot of good stuff. So I'll leave it there. Thanks.

William C. Boor: So I'll leave it there. Thanks. Thank you. And one moment for our next question. And our next question will be coming from Jay McCandless of Wedbush. Your line is open, Jay. Hey, good morning, everyone.

So I'll leave it there. Thanks.

Thank you. And one moment for our next question. And our next question will be coming from Jay McCandless of Wedbush. Your line is open, Jay. Hey, good morning, everyone.

William Boor: Thank you.

And one moment for our next question. And our next question will be coming from Jay McCandless of Wedbush. Your line is open, Jay. Hey, good morning, everyone.

Operator: And one moment for our next question. And our next question will be coming from Jay McCanless of Wedbush. Your line is open, Jay.

Speaker Change: Thank you.

Speaker Change: And one moment for our next question.

Speaker Change: And our next question will be coming from Jay Mccanless of Wedbush. Your line is open.

Hey. Good morning, everyone. So Bill, could you maybe talk about the Kentucky Dream acquisition? How many owned stores does that take Cavco to now and what's your outlook for more acquisitions like this in the coming year? Yeah, we've had a bit of an increase in our total number of owned stores. And a big chunk of that came through the Solitaire acquisition a year ago. We were in the low 40s before that acquisition, I think brought us 22.

Jay McCanless: Hey. Good morning, everyone. So Bill, could you maybe talk about the Kentucky Dream acquisition? How many owned stores does that take Cavco to now and what's your outlook for more acquisitions like this in the coming year?

Jay Mccanless: Hey, good morning, everyone. So bill could you maybe talk about the Kentucky Dream acquisition, how many owned stores does that take cap co. Two now and what's kind of your outlook for more acquisitions like this come in the coming year.

Jay McCandless: So Bill, could you maybe talk about the Kentucky Dream acquisition? How many owned stores does that take Cavco to now? And what's your outlook for more acquisitions like this in the coming year? Yeah, we've had a bit of an increase in our total number of owned stores. And a big chunk of that came through the Solitaire acquisition a year ago. We were in the low 40s before that acquisition, I think brought us 22.

Yeah, we've had a bit of an increase in our total number of owned stores and a big chunk of that came through the Solitaire acquisition a year ago. We were in the low 40s before that, Solitaire, I think brought us 22 and then with a few greenfields and then the Kentucky Dream Homes acquisition, we're at 72 now. I think you're asking for a little more detail on those assets, is that right, Jay? Well, yeah and just are there other larger dealer chains out there that you might be looking at from an M&A perspective? And if there are, what is the goal -- to get to 100, 150? What's your kind of long-term vision for the retail stores?

William Boor: Yeah, we've had a bit of an increase in our total number of owned stores and a big chunk of that came through the Solitaire acquisition a year ago. We were in the low 40s before that, Solitaire, I think brought us 22 and then with a few greenfields and then the Kentucky Dream Homes acquisition, we're at 72 now. I think you're asking for a little more detail on those assets, is that right, Jay?

Speaker Change: Yes, we've had a bit of an increase in our total iron stores.

William C. Boor: And it came a big chunk of that came through the solitaire acquisition a year ago. We were in the low 40 percents before that Solitaire I think brought US 22, and then with a few Greenfields and then the Kentucky Dream Islands acquisition, we're at 72 now.

William C. Boor: And then with a few greenfields and then the Kentucky Dream Homes acquisition, we're at 72 now. So I think you're asking for a little more detail on those assets. Is that right, Jay? Well, yeah, and just, you know, are there other larger dealer chains out there that you might be looking at from an M&A perspective? And if there are, what is the goal to get to 100, 150?

Speaker Change: So I think youre asking for a little more detail on those assets is that right Jay.

Jay McCanless: Well, yeah and just are there other larger dealer chains out there that you might be looking at from an M&A perspective? And if there are, what is the goal -- to get to 100, 150? What's your kind of long-term vision for the retail stores?

Jay Mccanless: And just are there are there other larger dealer chains out there that you might be looking at from an M&A perspective.

And if there are what kind of is the goal to get to 100 150, what's what's kind of your long term vision for the retail stores.

William C. Boor: What's your kind of long-term vision for the retail stores? Yeah, I'll take you back and tell you how we think about retail real quickly. We have not generally had a strategy of trying to grow retail for its own sake.

What's your kind of long-term vision for the retail stores?

I'll take you back and tell you how we think about retail, real quickly. We have not generally had a strategy of trying to grow retail for its own sake. We've had a strategy that's been very clear that we want to look at every one of our plants in the local market and make sure we've got the right access to market. If we look down the road and we see, for example, a lot of integration by competitors and that increases our risk of distribution, that's when we try to figure out a good solution. That solution could be anything from developing a closer partnership with an existing dealer, an independent dealer, to greenfield and then to acquisitions, in the example of Kentucky Dream Homes. So, we don't have a goal to reach a certain level. We're not pushing growth in the retail segment, necessarily. We're only happy to make a good acquisition when it's both a good investment and improves our distribution. Kentucky Dream Homes is a great example of that.

William Boor: I'll take you back and tell you how we think about retail, real quickly. We have not generally had a strategy of trying to grow retail for its own sake. We've had a strategy that's been very clear that we want to look at every one of our plants in the local market and make sure we've got the right access to market.

Jay Mccanless: Yeah.

I'll take you back and tell you, how we think about retail real quickly.

Jay Mccanless: Not generally had a strategy of trying to grow retail for its own sake. We've had a strategy has been very clear that we want to look at every one of our plants and our local market and make sure. We've got the right access to market. So if we look down the road and we see for example, a lot of integration.

William C. Boor: We've had a strategy that was very clear that we wanted to look at every one of our plants in the local market and make sure we've got the right access to the market. So if we look down the road and we see, for example, a lot of integration by competitors, and that increases our risk of distribution. That's when we try to figure out a good solution. That solution could be anything from developing a closer partnership with an existing dealer, an independent dealer, to Greenfield and then to acquisitions, as in the example of Kentucky Dream Mounds. So we don't have a goal to reach a certain level.

If we look down the road and we see, for example, a lot of integration by competitors and that increases our risk of distribution, that's when we try to figure out a good solution. That solution could be anything from developing a closer partnership with an existing dealer, an independent dealer, to greenfield and then to acquisitions, in the example of Kentucky Dream Homes. So, we don't have a goal to reach a certain level. We're not pushing growth in the retail segment, necessarily. We're only happy to make a good acquisition when it's both a good investment and improves our distribution. Kentucky Dream Homes is a great example of that.

Jay Mccanless: Integration by competitors in that.

Jay Mccanless: Increases our risk of distribution thats, when we try to figure out a good solution that solution can be anywhere thing from that.

Jay Mccanless: <unk>, a closer partnership with existing dealer independent dealer too.

Jay Mccanless: <unk>.

Jay Mccanless: Greenfield and then two acquisitions and the example that Kentucky Dreamer and so we don't have a goal to reach a certain level, we're not pushing growth in the retail segment necessarily we're only happy to make a good acquisition when it's.

So, we don't have a goal to reach a certain level. We're not pushing growth in the retail segment, necessarily. We're only happy to make a good acquisition when it's both a good investment and improves our distribution. Kentucky Dream Homes is a great example of that. I mean, Dustin's run a great business, they built a great business. I'm really thrilled at the fact that he's staying on board and his management team is staying on board because they're good at what they do. They have five stores in Kentucky and in Florida and we folded them, repurchased them during the third quarter.

William C. Boor: We're not necessarily pushing growth in the retail segment necessarily. We're only happy to make a good acquisition when it's both a good investment and improves our distribution. Kentucky Dream Mounds is a great example of that.

Jay Mccanless: Both are good investment and improves our distribution, Kentucky Dreamer and this is a great example of that I mean does.

William C. Boor: I mean, Dustin's run a great business. They built a great business. I'm really thrilled at the fact that he's staying on board and his management team is staying on board because they're good at what they do. Five stores in Kentucky and in Florida, and yeah, we folded them, we purchased them during the third quarter.

Jay Mccanless: <unk> run a great business, they built a great business.

Jay Mccanless: I'm really thrilled with the fact that they stay on board and as management team standalone toward because theyre here what they do.

I'm really thrilled at the fact that he's staying on board and his management team is staying on board because they're good at what they do. They have five stores in Kentucky and in Florida and we folded them, repurchased them during the third quarter.

Jay Mccanless: They have <unk>.

Jay Mccanless: Five stores in Kentucky, and Florida.

Jay Mccanless: <unk>.

Speaker Change: Yeah, we folded them repurchase them during the third quarter.

Jay McCanless: Got you. The other thing I wanted to ask about is what you're talking about before Allison with the increased cost of goods sold; is it still just OSB or are you starting to see some wage inflation kick in? Maybe what are the drivers that are driving the COGS lineup?

Speaker Change: Got you.

Speaker Change: The other thing I wanted to ask about is.

Speaker Change: What youre talking about before Alison with the increased cost of goods sold is it still just OSB or are you starting to see some some wage inflation kick in maybe what are the drivers that are driving the cogs lineup.

Allison Aden: Yes. On the COGS, Jay, it's largely the commodities -- as we mentioned last quarter, with a focus, of course, on OSB and lumber. We stay pretty close to it and currently, it looks like it's a similar trend to what we talked about last quarter. That's all I have.

Alison: Yes, so on the call today is largely the commodities as we mentioned last quarter with the focus of course on OSB and lumber and.

Alison: And we stay pretty close to it.

Currently it looks like it's.

Alison: So similar trend to what we talked about last quarter.

Jay McCanless: That's all I have. Thank you.

Jay McCandless: Thank you. All right. Thanks, Jay. And one moment for our next question. And our next question will be coming from Camden Roberts of the University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Thank you. All right. Thanks, Jay. And one moment for our next question. And our next question will be coming from Camden Roberts of the University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Thank you.

Speaker Change: Okay. That's all I had thank you.

All right. Thanks, Jay. And one moment for our next question. And our next question will be coming from Camden Roberts of the University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

William Boor: Alright. Thanks, Jay.

And one moment for our next question. And our next question will be coming from Camden Roberts of University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Operator: And one moment for our next question. And our next question will be coming from Camden Roberts of University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Operator: And one moment for our next question. And our next question will be coming from Camden Roberts of University of South Carolina. Camden, your line is open.

Speaker Change: Alright, Thanks Jay.

Speaker Change: One moment for our next question.

University of South Carolina. Camden, your line is open. Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Speaker Change: And our next question will be coming from Camden Roberts of University of South Carolina Camden. Your line is open.

Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina, and we had a great tour.

Camden Roberts: Hey guys, thank you for the great earnings call. I'm calling from South Carolina. We were actually just at the Hamlet factory in North Carolina and we had a great tour. And I just wanted to ask you what should we be looking at in 2024? Are you optimistic about Anthem and those duplex sales? I'm sure there's a lot of pent up demand for that or should we be looking more at the recent Solitaire acquisition? What are you most optimistic about? And what should we be focusing on in 2024?

Speaker Change: <unk>.

Camden Roberts: Hey, guys. Thank you for the Great earnings call I am calling from South Carolina, we were actually Jonathan Abbvie Hamblett in factory in North Carolina, and we had a great tour and I just wanted to ask you. What are you what should we be looking at in 2024 are you optimistic about anthem and those duplex sales I'm sure there are.

Camden Roberts: And I just wanted to ask you what you think we should be looking at in 2024? Are you optimistic about Anthem and those duplex sales? I'm sure there's a lot of pent up demand for that. Or should we be looking more at the recent Solitaire acquisition? What are you most optimistic about? And what should we be focusing on in 2020?

William C. Boor: Or should we be looking more at the recent Solitaire acquisition? What are you most optimistic about? And what should we be focusing on in 2020? It's a big question.

Or should we be looking more at the recent Solitaire acquisition? What are you most optimistic about? And what should we be focusing on in 2020?

Camden Roberts: A lot of pent up demand for that or should we be looking more at the recent solitaire acquisition. What are you most optimistic about and what should we be focusing on in 2024.

It's a big question. It's great to hear you were at Hamlet and we thought that was a good tour. We're pretty proud of that new plant and how it's coming up and we think it's targeted at the right point in the market for what's going on from an industry dynamics perspective. They're making kind of at a lower price point product and they really come up very quickly. As far as the most excited, I mean, we talked about Anthem. I think that's going to be good business for us. I also, to be honest, I also think that from a broader perspective, those are the kind of solutions that can move the ball forward on affordability. So, I'm really excited about the potential of the industry taking advantage of those changes in the HUD code to get better solutions for affordability. You touched on Solitaire.

William Boor: It's a big question. It's great to hear you were at Hamlet and we thought that was a good tour. We're pretty proud of that new plant and how it's coming up and we think it's targeted at the right point in the market for what's going on from an industry dynamics perspective. They're making kind of at a lower price point product and they really come up very quickly.

William C. Boor: It's great to hear you were at Hamlet, and we thought that was a good tour. We're pretty proud of that new plant and how it's come along, and we think it's targeted at the right point in the market for what's going on from an industry dynamics perspective. They're making kind of a lower price point product, and they really come up very quickly. As far as the most excited, I mean, we talked about Anthem. We think that, You know, I, I think that's going to be good business for us. I also, to be honest, I also think that from a broader perspective, those are the kind of solutions that can move the ball forward on affordability. So I'm really excited about the potential of the industry taking advantage of those changes in the HUD code to get better solutions for affordability. You touched on Solitaire.

Speaker Change: The Big question Glen Great to hear your it Hasnt Pam was we thought that was a good tour, we're pretty proud of that new plant and how it has come up and we think it's targeted at the right point in the market for what's going on from an industry dynamics perspective.

We're making kind of at the lower price point.

Speaker Change: Products and.

They really come up very quickly as far as most excited I mean, we talked about anthem, we think thats.

As far as the most excited, I mean, we talked about Anthem. I think that's going to be good business for us. I also, to be honest, I also think that from a broader perspective, those are the kind of solutions that can move the ball forward on affordability. So, I'm really excited about the potential of the industry taking advantage of those changes in the HUD code to get better solutions for affordability.

Speaker Change: I think thats going to be good business for us I also to be honest I also think that from.

Speaker Change: Broader perspective, those are the kinds of solutions that can move the ball forward on affordability. So I'm really excited about the potential of the industry taken advantage of those changes.

Speaker Change: So get better solutions for affordability.

You touched on Solitaire. We've had a year now with Solitaire and we're excited about that acquisition. We told folks when we announced that acquisition that we bought some really good plants and they've got a great brand in the market that's kind of in a particular niche and we think that's going to -- [inaudible] acquisition is going to be a great one for us. Overall -- you know, again, you asked a broad question, I could probably talk all day -- overall, I'm excited to see the industry start picking up as community orders start to pick up. The dealer channel has gotten back on its feet and I think it's doing pretty well. You could almost look at the difference in the peak HUD sales for this industry compared to the most recent, seasonally adjusted level in December based on HUD shipments and pretty much, can be explained by the drop-off in community orders this past year. So, I think as the year unfolds -- I'm not able to make predictions about it -- but as the year unfolds and we see communities get their inventory behind them and start resuming their orders, I think it's a lot of good positive upside for the industry. I feel like I rambled there a little bit, Camden. You asked me an open-ended question.

Speaker Change: You touched on Solitaire, we've had a year now with solitaire, we're excited about that acquisition.

William C. Boor: We've had a year now with Solitaire, and we're excited about that acquisition. We told folks when we announced that acquisition that we bought some really good plants, and they've got a great brand in the market that's kind of in a particular niche, and we think that's going to be a great acquisition. It's going to be a great one for us. You know, again, you asked a broad question. I could probably talk all day.

Speaker Change: We told folks when we announced that acquisition that we bought some really good plants and they've got a great brand in the market.

Speaker Change: It's kind of in a particular niche and.

Speaker Change: We think thats going to where the <unk> acquisition is going to be a great one for us overall.

Overall -- you know, again, you asked a broad question, I could probably talk all day -- overall, I'm excited to see the industry start picking up as community orders start to pick up. The dealer channel has gotten back on its feet and I think it's doing pretty well. You could almost look at the difference in the peak HUD sales for this industry compared to the most recent, seasonally adjusted level in December based on HUD shipments and pretty much, can be explained by the drop-off in community orders this past year. So, I think as the year unfolds -- I'm not able to make predictions about it -- but as the year unfolds and we see communities get their inventory behind them and start resuming their orders, I think it's a lot of good positive upside for the industry. I feel like I rambled there a little bit, Camden. You asked me an open-ended question.

Speaker Change: Again, you asked a broad question I could probably talk all day overall I am excited to see the industry started.

William C. Boor: Overall, I'm excited to see the industry start picking up as community orders start to pick up. You know, the dealer channel has been, has gotten back on its feet, and I think it's doing pretty well. You could almost look at the difference in peak HUD sales for this industry compared to the most recent seasonally adjusted level in December based on HUD shipments, and it can be explained pretty much by the drop-off in community orders this past year. So I think as the year unfolds... I'm not able to make predictions about it, but as the year unfolds and we see communities get their inventory behind them and start resuming their orders, I think there is a lot of good positive upside for the industry. I feel like I rambled there a little bit, Camden.

Speaker Change: Picking up those community orders start to pick up the dealer channel has been has gotten back on its feet and I think it's doing pretty well.

Speaker Change: You could almost look at the difference in.

Speaker Change: The <unk> sales to this industry compared to the most recent seasonally adjusted level in December based on shipments and it pretty much.

It can be explained by the drop off in community orders this past year.

So, I think as the year unfolds -- I'm not able to make predictions about it -- but as the year unfolds and we see communities get their inventory behind them and start resuming their orders, I think it's a lot of good positive upside for the industry. I feel like I rambled there a little bit, Camden. You asked me an open-ended question.

Speaker Change: So I think as we as the year unfolds.

Speaker Change: Im not able to make predictions about if it is euro unfolds and we see communities get their inventory behind them and start resuming their orders I think it's a lot of good positive upside for the industry.

Speaker Change: Jellicoe ramping there bill.

Camden Roberts: You asked me an open-ended question. Thank you, Bill. I mean, I know it is open-ended.

You asked me an open-ended question.

Speaker Change: Yes, Yes, you can open ended questions.

Camden Roberts: Thank you, Bill. I mean, I know it is open-ended. There's a lot to be excited about so, I just wanted to know where to pinpoint it down but those three, definitely community sales too, it does sound exciting. So, thank you very much.

Okay.

Speaker Change: Thank you Bill I mean, I know it is open ended I mean, theres a lot to be excited about so I just wanted to know where to pinpoint it down but those three that would be community sales to desktop excited so thank you very much.

Camden Roberts: I mean, there's a lot to be excited about, so I just wanted to know where to pinpoint it. But those three, definitely community sales too. It does sound exciting. So, thank you very much. All right. Thank you. And again, if you'd like to ask a question, please press star 1-1 on your touchtone telephone. And our next question will be a follow-up from Daniel Moore of CGS Securities. Daniel, your line is open.

I mean, there's a lot to be excited about, so I just wanted to know where to pinpoint it. But those three, definitely community sales too. It does sound exciting. So, thank you very much.

Alright, thank you.

All right. Thank you. And again, if you'd like to ask a question, please press star 1-1 on your touchtone telephone. And our next question will be a follow-up from Daniel Moore of CGS Securities. Daniel, your line is open.

William Boor: Alright. Thank you.

Operator: And again, if you'd like to ask a question, please press star 1-1 on your touchtone telephone. And our next question will be a follow-up from Daniel Moore of CJS Securities. Daniel, your line is open.

Speaker Change: And again, if you'd like to ask a question. Please press star one on your Touchtone telephone.

Speaker Change: And our next question will be a follow up from Daniel Moore of CJS Securities. Daniel Your line is open.

Daniel L. Urness: Thank you again. I just wanted a quick question or two on kind of update on financing and availability. So, any meaningful change in spreads over the last 90-plus days, both for chattel as well as land home versus traditional stick-built mortgage rates? And how would you describe the lending environment today relative to a year ago? You know, you've seen more community banks exit stable or others backfilling, any kind of color you might give there would be helpful. Thank you. Okay, yes, I'll start with the rates, Dan. So the rates for just home only loans, quoted rates are in the high 8%, low 9% range still, and that's been pretty consistent these past 90 days.

Daniel Moore - CJS Securities, Inc.: Thank you again. I just wanted a quick question or two on kind of update on financing and availability. So, any meaningful change in spreads over the last 90-plus days, both for chattel as well as land home versus traditional stick-built mortgage rates? And how would you describe the lending environment today relative to a year ago? You know, you've seen more community banks exit stable or others backfilling, any kind of color you might give there would be helpful. Thank you. Okay,

Speaker Change: Yes.

Daniel L. Urness: Thank you again I just wanted to quick question or two on kind of update on.

Financing and availability, so any meaningful change in spreads over the last 90 plus days, both for channel as well as land home versus traditional stick built mortgage rates.

Daniel L. Urness: And how would you describe the lending environment today relative to a year ago, you're seeing more community banks exit.

Table or others back filling.

Daniel L. Urness: Any kind of.

Mark Fusler: Yeah. I'll start with the rates, Dan. So, the rates for just home-only loans, quoted rates are in the high 8%, low 9% range still and that's been pretty consistent these past 90 days.

Speaker Change: Color you might give there would be helpful. Thank you.

Speaker Change: Yes, I'll start with the rates Dan So the rates for just home only loans quoted rates are in the high 8% low 9% range still and Thats been pretty consistent these past 90 days.

William C. Boor: Picking up on your question, that I hope I rephrased it accurately. The investors in MH loans -- for example, community banks and regional banks and credit union-type investors -- they can be finicky. I'll tell you that I don't want this to be alarmist at all because it shouldn't be, but they've tightened up a little bit. I think we'll work through that, I don't think it's a major issue from the perspective of lending availability to the consumers. And why I say that is, there are a lot of folks in that market and they're not all heavily dependent on those outlets or those final investors. One thing we've talked about in the past -- I'm losing track of time, but it's been a while -- is that, for a while GSE loans, the conforming loans, had really kind of gone out of the market. Basically, what happened is, GSEs raised their requirements, raised their terms and interest rates and the investors we're talking about, like the regional banks, credit union-type investors, really didn't respond as quickly. I think that's because they have a lot of capital put in place. Now, what we're seeing is that the regional -- I call them non-conforming investors, have increased their requirements. Well, what happens is, GSEs become more competitive in the market and we'll probably see a swing back to that final funding source for the loans. As usual, I think I've given a long answer to a short question but we're not -- we'll watch those dynamics but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced loans. No, that's a good color.

Picking up on your question, that I hope I rephrased it accurately. The investors in MH loans -- for example, community banks and regional banks and credit union-type investors -- they can be finicky. I'll tell you that I don't want this to be alarmist at all because it shouldn't be, but they've tightened up a little bit. I think we'll work through that, I don't think it's a major issue from the perspective of lending availability to the consumers. And why I say that is, there are a lot of folks in that market and they're not all heavily dependent on those outlets or those final investors. One thing we've talked about in the past -- I'm losing track of time, but it's been a while -- is that, for a while GSE loans, the conforming loans, had really kind of gone out of the market. Basically, what happened is, GSEs raised their requirements, raised their terms and interest rates and the investors we're talking about, like the regional banks, credit union-type investors, really didn't respond as quickly. I think that's because they have a lot of capital put in place. Now, what we're seeing is that the regional -- I call them non-conforming investors, have increased their requirements. Well, what happens is, GSEs become more competitive in the market and we'll probably see a swing back to that final funding source for the loans. As usual, I think I've given a long answer to a short question but we're not -- we'll watch those dynamics but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced loans.

William Boor: Picking up on your question, that I hope I rephrased it accurately. The investors in MH loans -- for example, community banks and regional banks and credit union-type investors -- they can be finicky. I'll tell you that I don't want this to be alarmist at all because it shouldn't be, but they've tightened up a little bit. I think we'll work through that, I don't think it's a major issue from the perspective of lending availability to the consumers.

Speaker Change: Picking up on your question.

Speaker Change: Nope I rephrased it accurately kind of the.

Speaker Change: The investors in the MH loans for example community banks.

Speaker Change: And like regional banks and credit unions type investors.

Speaker Change: It can be finicky and.

Speaker Change: I'll tell you that I don't want this to be alarmist, it all because it shouldnt be but it has tightened up a little bit.

William C. Boor: I don't think it's a major issue from the perspective of lending availability to consumers. And why I say that is there are a lot of folks in that market, and they're not all heavily dependent on those outlets or those final investors. And one thing we've talked about in the past, I'm losing track of time, but it's been a while, GSE loans, the conforming loans had really kind of gone out of the market, and basically, what happened is GSEs raised their requirements, raised their terms and interest rates, and the investors we're talking about, like the regional banks, credit union type investors, really didn't respond as quickly. I think that's because Now what we're seeing is that the and non-conforming investors have increased their requirements. Well, what happens is GSEs become more competitive in the market, and we'll probably see a swing back to that final funding source for the loans.

Speaker Change: But I think we'll work through that I don't think it's a major issue from the perspective of lending availability to the consumers and why I say that is there are a lot of folks in that market and theyre not all heavily dependent on those.

And why I say that is, there are a lot of folks in that market and they're not all heavily dependent on those outlets or those final investors. One thing we've talked about in the past -- I'm losing track of time, but it's been a while -- is that, for a while GSE loans, the conforming loans, had really kind of gone out of the market. Basically, what happened is, GSEs raised their requirements, raised their terms and interest rates and the investors we're talking about, like the regional banks, credit union-type investors, really didn't respond as quickly. I think that's because they have a lot of capital put in place. Now, what we're seeing is that the regional -- I call them non-conforming investors, have increased their requirements. Well, what happens is, GSEs become more competitive in the market and we'll probably see a swing back to that final funding source for the loans. As usual, I think I've given a long answer to a short question but we're not -- we'll watch those dynamics but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced loans.

Speaker Change: Those outlets are those final investors.

Speaker Change: And one thing we've talked about over the past.

Speaker Change: I'm, losing track of time, but it's been a while is that.

For awhile GSE loans, the conforming loans had really kind of gone out of the market.

Speaker Change: And basically what happened is <unk> <unk>.

Basically, what happened is, GSEs raised their requirements, raised their terms and interest rates and the investors we're talking about, like the regional banks, credit union-type investors, really didn't respond as quickly. I think that's because they have a lot of capital put in place. Now, what we're seeing is that the regional -- I call them non-conforming investors, have increased their requirements. Well, what happens is, GSEs become more competitive in the market and we'll probably see a swing back to that final funding source for the loans. As usual, I think I've given a long answer to a short question but we're not -- we'll watch those dynamics but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced loans.

Raised there.

Our requirements raise their terms and interest rates and the investors were talking about.

Speaker Change: Regional banks credit unions type investors really didn't respond as quickly I think that's because they had a lot of capital put in place.

Speaker Change: Now what we're seeing is that the.

Speaker Change: Regional.

Speaker Change: Calling the nonconforming investors.

Speaker Change: Increase their requirements.

Speaker Change: What happens is GSE has become more competitive in the market and we'll probably see a swing back to that that final.

Funding source for the loans.

As usual, I think I've given a long answer to a short question but we're not -- we'll watch those dynamics but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced loans.

William C. Boor: As usual, I think I've given a long answer to a short question. But we're not we'll watch those dynamics, but we're not really seeing anything that gives us concern about the end consumers' access to reasonably priced lines. No, that's a good color.

Speaker Change: As usual I think.

Given a long answer to a short question, but.

Speaker Change: We're not we'll watch those dynamics, but we are not really seeing anything that gives us concern about CN consumers access to reasonably priced loans.

No, that's good color. I appreciate it. I'm going to ask one more and maybe it's a variation on a prior question, maybe not, I'll let you judge. But at this stage, we're pretty stable at 60%-ish capacity utilization, plus or minus. Would you be looking to add capacity when you think about the opportunity set and the lack of availability in terms of affordable homes over the next 2. 3, 5 years? Or are we more, kind of stick where we are, wait and see how the demand builds over the coming quarters? Thanks, again. That's a really good question, actually. CVCO wouldn't charge that much for something like a fixed price, right? The estimate for that is $400,000. We didn't like the J1 H5 XDP. Yeah, that's a really good question, actually.

Daniel Moore - CJS Securities, Inc.: No, that's good color. I appreciate it. I'm going to ask one more and maybe it's a variation on a prior question, maybe not, I'll let you judge. But at this stage, we're pretty stable at 60%-ish capacity utilization, plus or minus. Would you be looking to add capacity when you think about the opportunity set and the lack of availability in terms of affordable homes over the next 2. 3, 5 years? Or are we more, kind of stick where we are, wait and see how the demand builds over the coming quarters? Thanks, again.

Daniel L. Urness: I appreciate it. I'm going to ask one more, and maybe it's maybe it's a variation on a prior question, maybe not. I'll let you judge, but at this stage, you know, we're stable, pretty stable at 60 percent capacity utilization, plus or minus. Would you be looking to add capacity when you think about the opportunity set and the lack of affordability, you know, availability in terms of affordable homes over the next... CVCO wouldn't charge that much for something like a fixed price, right? The estimate for that is $400,000. We didn't like the J1 H5 XDP. Yeah, that's a really good question, actually.

Speaker Change: No thats good color I appreciate it.

Speaker Change: And then I'm going to ask one more and maybe it's maybe it's a variation on the prior question, maybe not I'll, let you judge but.

Speaker Change: At this stage, we're stable pretty stable at 60% ish capacity utilization plus or minus.

Speaker Change: Would you be looking to add capacity when you think about the opportunity set and the lack of affordable.

Speaker Change: Availability in terms of affordable homes over the next 235 years.

That's a really good question, actually. I guess I would say it's the latter -- or it's the former, I haven't restated. I don't think Cavco would hesitate to add capacity in this industry, given what we see strategically. And when you look at a strategic timeframe, which I define as three plus years, it takes time to put capacity in place. This country has -- depending on your favorite economist, 6 million housing unit deficit to be filled. And so, strategically, we look right through the many cycles, like the one we're operating in right now, and we know that there's an opportunity to continue doing more to bring down -- to increase the availability of affordable housing. Very helpful. Thanks again.

Speaker Change: Or are we more let's kind of stick, where we are wait and see.

Speaker Change: And see how the demand builds over the coming quarters. Thanks again.

Speaker Change: Yeah, that's a really good question actually.

William C. Boor: I guess I would say it's the latter or it's the former; I'm going to restate it. I would not, I don't think Cavco would hesitate to add capacity in this industry, given what we see strategically. And when you look at a strategic timeframe, which I define as three plus years, you know, it takes time to put capacity in place. This country has.

Speaker Change: I guess I would say its the latter its the former restated.

Speaker Change: <unk>.

Speaker Change: I would not I don't think Kafka would hesitate to add capacity in this industry given what we see strategically and when you look at our strategic timeframe, which I define as three plus years.

Speaker Change: It takes time to put capacity in place this country has.

William C. Boor: Depending on your favorite economist, there is a 6 million housing unit deficit to be filled. And so, strategically, we look right through the many cycles like the one we're operating in right now, and we know that there's an opportunity to continue doing more to bring down, and increase the availability of affordable housing. Very helpful. Thanks again.

Speaker Change: Depending on your favorite economists 6 million housing unit deficit to be filled.

Speaker Change: And so.

Speaker Change: Strategically we look right through the many cycles like the one we're operating in right now and we know that there is an opportunity to continue doing more to bring down.

Speaker Change: To increase the availability of affordable housing.

Very helpful. Thanks again.

Daniel L. Urness: No, that's good color. I appreciate it. I'm going to ask one more and maybe it's a variation on a prior question, maybe not, I'll let you judge. But at this stage, we're pretty stable at 60%-ish capacity utilization, plus or minus. Would you be looking to add capacity when you think about the opportunity set and the lack of availability in terms of affordable homes over the next 2. 3, 5 years? Or are we more, kind of stick where we are, wait and see how the demand builds over the coming quarters? Thanks, again. That's a really good question, actually. I guess I would say it's the latter -- or it's the former, I haven't restated. I don't think Cavco would hesitate to add capacity in this industry, given what we see strategically. And when you look at a strategic timeframe, which I define as three plus years, it takes time to put capacity in place. This country has -- depending on your favorite economist, 6 million housing unit deficit to be filled. And so, strategically, we look right through the many cycles, like the one we're operating in right now, and we know that there's an opportunity to continue doing more to bring down -- to increase the availability of affordable housing. I look forward to catching up soon. Thanks, Dan. I would now like to turn the conference back to Bill for his closing remarks. Okay, thank you.

Speaker Change: Very helpful. Thanks, again look forward to catching up soon.

Speaker Change: Thanks, Dan.

William Boor: That's a really good question, actually. I guess I would say it's the latter -- or it's the former, I haven't restated. I don't think Cavco would hesitate to add capacity in this industry, given what we see strategically. And when you look at a strategic timeframe, which I define as three plus years, it takes time to put capacity in place.

Speaker Change: I would now like to turn the conference back to Bill for closing remarks.

This country has -- depending on your favorite economist, 6 million housing unit deficit to be filled. And so, strategically, we look right through the many cycles, like the one we're operating in right now, and we know that there's an opportunity to continue doing more to bring down -- to increase the availability of affordable housing. Very helpful. Thanks again, I look forward to catching up soon. Thanks, Dan. I would now like to turn the conference back to Bill for his closing remarks. Okay, thank you.

Very helpful. Thanks again, I look forward to catching up soon. Thanks, Dan. I would now like to turn the conference back to Bill for his closing remarks. Okay, thank you.

Daniel Moore - CJS Securities, Inc.: Very helpful. Thanks again, I look forward to catching up soon.

Thanks, Dan. I would now like to turn the conference back to Bill for his closing remarks. Okay, thank you.

William Boor: Thanks, Dan.

I would now like to turn the conference back to Bill for his closing remarks. Okay, thank you.

Operator: I would now like to turn the conference back to Bill for closing remarks.

Okay. Thank you.

William C. Boor: I mentioned the Louisville show in my opening comments; we showcased 15 homes from nine Cavco plants at the show. We also had our lending company, Country Place Mortgage, there. They were there to talk to customers about how we can meet their commercial and consumer lending needs, so it was a great effort to try to get out there and show what we can do from a partnership perspective. I wanna take a quick moment to thank everyone at Cavco who has been involved in our development and launch of the Anthem Duplex line and in all that went into the Louisville show. From the folks who are designing and building these homes to the marketing and sales teams, the commitment to teamwork has really been outstanding.

Okay, thank you. I mentioned the Louisville show in my opening comments;, we showcased 15 homes from 9 Cavco plants at the show. We also had our lending company, CountryPlace Mortgage, there. They were there to talk to customers about how we can meet their commercial and consumer lending needs. So, it was a great effort to try to get out there and show what we can do from a partnership perspective. I wanna take a quick moment to thank everyone at Cavco who has been involved in our development and launch of the Anthem Duplex line and in all that went into the Louisville show. From the folks who are designing and building these homes, to the marketing and sales teams, the commitment to teamwork has really been outstanding.

William Boor: Okay, thank you. I mentioned the Louisville show in my opening comments;, we showcased 15 homes from 9 Cavco plants at the show. We also had our lending company, CountryPlace Mortgage, there. They were there to talk to customers about how we can meet their commercial and consumer lending needs. So, it was a great effort to try to get out there and show what we can do from a partnership perspective.

William C. Boor: I mentioned Louisville show in my opening comments, we showcased 15 homes from nine Caf co plants at the show. We also had our lending company country place mortgage there.

William C. Boor: They were there to talk to customers about how we can meet their commercial and consumer lending needs. So it was a great effort to try to get out there and and so we can do from a partnership perspective I want to take a quick moment to thank everyone. At <unk>, who has been involved in our development and launch of the anthem duplex line and in all of that went into the loop.

I wanna take a quick moment to thank everyone at Cavco who has been involved in our development and launch of the Anthem Duplex line and in all that went into the Louisville show. From the folks who are designing and building these homes, to the marketing and sales teams, the commitment to teamwork has really been outstanding.

William C. Boor: They'll show.

From the folks who are designing and building these homes to the marketing and sales teams. The commitment teamwork has really been outstanding.

William C. Boor: At both events, it was great to see the strength of our organization coming to the forefront. Our drive during this downturn has been to keep focused on getting better in every way so we're ready to run when the inevitable market upswing occurs. And I'm very confident we're doing just that. So, I want to thank you, as always, for your interest in Cavco and we look forward to keeping you updated on our progress. This concludes today's conference call. Thank you for participating, you may now disconnect.

At both events, it was great to see the strength of our organization coming to the forefront. Our drive during this downturn has been to keep focused on getting better in every way so we're ready to run when the inevitable market upswing occurs. And I'm very confident we're doing just that. So, I want to thank you, as always, for your interest in Cavco and we look forward to keeping you updated on our progress.

William C. Boor: At both events it was great to see the strength of our organization coming to the forefront.

William C. Boor: Drive during this downturn has been to keep focused on getting better in every way. So we're ready to run when the inevitable market upswing occurs and I'm very confident we're doing just that.

Speaker Change: I want to thank you as always for your interest in <unk> and we look forward to keeping updated on our progress.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Speaker Change: [music].

Speaker Change: Okay.

Operator: This concludes today's conference call. Thank you for participating, you may now disconnect.

[music].

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