Cavco Industries Inc., a builder of park model RVs and manufactured housing, today (Aug. 7) announced a 66.9% increase in net income for the first fiscal quarter, ended June 30.
Net revenue during the period totaled $246.4 million, up 19.1% from $206.8 million in the first quarter of fiscal year 2018. The increase was primarily from improved home sales volume and higher home selling prices from input cost inflation and modestly larger home sizes. Current quarter net revenue also includes $6.5 million from this quarter’s required implementation of accounting standards whereby subcontracted pass-through services, such as the preparation of a home site or other home enhancements, are now recognized on a gross basis rather than net of associated costs.
Net income was $19.7 million for the first quarter of fiscal year 2019, compared to net income of $11.8 million in the same quarter of the prior year. Diluted net income per share was $2.12 compared to diluted net income per share of $1.28 for the comparable quarter last year.
Other highlights include:
- Income before income taxes was $24.1 million for the first quarter, a 53.5% increase from $15.7 million in the comparable quarter last year. As part of this increase, $1.5 million in unrealized gains on corporate investments from this quarter’s implementation of new accounting standards was recorded in other income, net.
- Income tax expense was $4.4 million, resulting in an effective tax rate of 18.4% for the first quarter of fiscal year 2019 compared to $3.9 million and an effective tax rate of 24.9% in the same quarter of the prior year. The current fiscal quarter was benefited by the Tax Cuts and Jobs Act, which was enacted on Dec. 22, 2017. The Tax Act reduced the federal corporate tax rate to 21% for our fiscal year ending March 30, 2019. In addition, the current quarter includes a deduction of $1.2 million related to excess tax benefits from exercises of stock options, compared to $1.4 million deducted in the prior year period.
Commenting on the quarter, Chairman, President and Chief Executive Officer Joseph Stegmayer said, “Cavco’s home order rates continue to benefit from the improving housing market and economy. At the end of the first fiscal quarter, Cavco’s sales order backlog was $196 million compared to $137 million at the end of the same quarter last year. The tight labor market remains a challenge; accordingly we continue to focus our efforts on talent recruiting, training and retention programs, along with increasing factory production rates by investing in production capacity and efficiency initiatives.”