Palm Harbor Acquisition Boosts Cavco’s Sales
Cavco Industries Inc. reported a 189% increase in sales for its third quarter, ended Dec. 31, buoyed by a major acquisition.
Net sales for the third quarter of fiscal 2012 totaled $114.6 million compared with $39.6 million the year prior. As previously reported, Fleetwood Homes Inc., a subsidiary owned 50% by Cavco and 50% by Third Avenue Value Fund, completed the acquisition of substantially all of the assets and assumption of certain liabilities of Palm Harbor Homes Inc. during the quarter ended June 30, 2011.
Palm Harbor had been in the business of manufacturing and marketing factory-built housing and providing related consumer financing and insurance products. The aggregate gross purchase price, exclusive of transaction costs, specified liabilities assumed and post-closing adjustments, was $83.9 million. The results of the Palm Harbor operations have been included in Cavco’s financial statements since acquisition.
Net income for the fiscal 2012 third quarter was nearly $3 million compared to $290,000 reported in the same quarter one year ago. Net income attributable to Cavco stockholders for the fiscal 2012 third quarter was $1.7 million compared to $24,000 reported in the same quarter one year ago. Net income per share based on basic and diluted weighted average shares outstanding was 24 cents, versus basic and diluted net income of four-tenths of one cent per share last year.
For the first nine months of fiscal 2012, sales increased 158% to $343.5 million from $133 million for the comparable prior year period. Net income for the first nine months of fiscal 2012 was $26.8 million compared to $2.3 million for the prior year period. Included in net income for the nine months was a gain on bargain purchase of $22 million resulting from the Palm Harbor transaction, calculated in accordance with the accounting standards for business combinations.