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Cavco Reports Gains for 2Q Revenue, Income

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November 9, 2018 by   Leave a Comment

Cavco Industries Inc., a builder of manufactured housing and park model RVs, today (Nov. 9) announced financial results for its second fiscal quarter, ended Sept. 29.

Net revenue for the second quarter totaled $241.5 million, up 20.4% from $200.5 million for the second quarter of fiscal year 2018. Net revenue for the first six months of fiscal 2019 was $487.9 million, a 19.8% increase from $407.3 million in the comparable prior year period. The increases were primarily from higher home selling prices from input cost inflation, modestly larger home sizes and improved home sales volume. 

Net income was $15.6 million for the second quarter, compared to net income of $6.2 million in the same quarter of the prior year, a 151.6% increase. For the six months, net income was $35.3 million, up 97.2% from net income of $17.9 million in the prior year period. Diluted net income per share was $1.67 and $3.80 for the three and six months ended September 29, 2018, respectively, compared to 67 cents and $1.96 for the comparable periods last year.

Cavco noted the prior year’s second fiscal quarter was adversely impacted by Hurricane Harvey, which resulted in significant homeowners’ insurance claims in Cavco’s financial services segment and caused delays in manufacturing and retail sales, as well as new home inventory damage at certain company-owned retail centers. While not as severe, during the second quarter of fiscal year 2019, financial services results were adversely impacted by a windstorm in Arizona, which resulted in increased homeowners’ insurance claims for the period. The company’s insurance subsidiary maintains reinsurance for loss events in excess of $1.5 million.

Other second quarter highlights:

• Net Income before income taxes was $19.5 million for the second quarter, a 129.4% increase from $8.5 million in the comparable quarter last year. For the first six months, income before income taxes increased 80.6% to $43.7 million from $24.2 million in the prior year period.

• Income before income tax for the first six months of fiscal year 2019 also included a benefit of $1.1 million from unrealized gains on corporate investments recorded in other income, net. 

• Income tax expense was $3.9 million, resulting in an effective tax rate of 20.2% for the second quarter of fiscal year 2019 compared to $2.3 million and an effective tax rate of 27.3% in the same quarter of the prior year. For the six months ended Sept. 29, income tax expense was $8.4 million, resulting in an effective tax rate of 19.2%. Income tax expense was $6.2 million with an effective rate of 25.7% for the prior six-month period.

 

 

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