Cavco Industries Inc., a builder of park model RVs and manufactured housing, reported a 5.6% increase in revenue for its fiscal third quarter, ended Dec. 29, 2018.
Net revenue during the period was $233.7 million, up from $221.4 million for the third quarter of fiscal year 2018. The increase was primarily from higher home selling prices as a result of input cost inflation and modestly larger home sizes.
Net revenue for the first nine months of fiscal 2019 was $721.6 million, a 14.8% increase from $628.7 million in the same period last year. Net revenue for the three and nine months includes subcontracted pass-through services of $5.9 million and $18.7 million, respectively, which are now recognized on a gross basis rather than net of associated costs.
Net income was $13.4 million for the third quarter compared to net income of $21.4 million in the same quarter of the prior year, a 37.4% decrease. For the nine months, net income was $48.7 million, up 23.6% from net income of $39.4 million in the prior year period. Diluted net income per share was $1.44 and $5.24 for the three and nine months, respectively, compared to $2.33 and $4.28 for the comparable periods last year.
Dan Urness, president and acting chief executive officer, stated, “The company performed well during the most recently completed fiscal quarter. The financial results were benefited by productivity gains and a more favorable product mix. We experienced some softening in home order rates beyond the typical seasonal slowdown expected during winter months. This order rate decline was most prevalent in the South Central and South Eastern United States, excluding Florida. However, economic fundamentals have been resilient and we are optimistic about our product’s ability to uniquely fulfill the need for affordable housing. Recent progress by Fannie Mae and Freddie Mac in their Duty-to-Serve initiatives, as well as the highest homeownership rates in four years, bode well for our industry.”
Income before income taxes was $16.9 million for the third quarter, a 28.7% decrease from $23.7 million in the comparable quarter last year. The current quarter’s results were impacted by unrealized losses of $2.1 million on corporate equity investments due to the implementation of new accounting standards. Further increasing the adverse quarterly comparison, income before income taxes for the prior year third fiscal quarter benefited from a $3.4 million favorable dispute settlement resolution and the production of a limited number of disaster-relief units for the Federal Emergency Management Agency (FEMA).
For the first nine months of fiscal 2019, income before income taxes increased 26.8% to $60.6 million from $47.8 million in the prior year period.
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