Editor’s Note: The following is an official statement from Skyline Corp. responding to Cavco Industries Inc.’s Sept. 26 announcement of its “interest in acquiring” the longtime Elkhart, Ind.-based manufactured housing and RV builder. Click here to view Cavco’s statement, which was issued shortly after news of a tentative agreement for Skyline to sell its RV interests to EverGreen Recreational Vehicles LLC. Click here to view the Skyline/EverGreen story posted on RVBusiness.com.
Skyline Corp. today issued the following statement regarding its ongoing efforts to evaluate strategic initiatives and to rebut certain statements contained in the Sept. 26 release issued by Cavco Industries Inc. and Cavco’s letter dated Sept. 22.
“The Skyline board of directors and management team are committed to act in the best interests of the company and our shareholders. In this regard, Skyline’s board of directors regularly considers initiatives to help optimize shareholder value over the long term.
Our board has established a special committee tasked to evaluate strategic initiatives and make recommendations to the full board. As part of its work, that committee, with input from our management team and advisors, plans to thoroughly evaluate all potential strategic proposals and other initiatives to further improve operations and strengthen our capitalization.
We are disappointed and find it counterproductive that Cavco issued its press release and published its letter. Contrary to the statements set forth in the release, the first time our board received a proposal with any semblance of specificity from Cavco was Sept. 22. While the board believes Cavco’s Sept. 22 letter significantly undervalues Skyline’s stock, the special committee and the board will thoroughly review Cavco’s proposals and respond in due course.
Upon receiving Cavco’s letter, the board promptly advised Cavco that it needed more time to consider the proposals. Following this communication, Cavco chose to publish its letter just four days after delivering the letter to Skyline, and on the same day that Skyline had previously announced it signed a letter of interest for EverGreen Recreational Vehicles LLC to acquire substantially all of the assets of the company’s recreational vehicle division. The board believes this transaction with EverGreen is aligned with our strategic objectives and is in the best interest of shareholders.
As always, our board and management team remain committed to executing on the company’s strategic plan and driving long-term shareholder value.”
The annual Florida RV SuperShow taking place in Tampa this week will offer attendees a look at the latest RV products, including park model RVs, the cottagelike units that are used as winter homes in Florida and across the Sunbelt.
“It’s an important show for us,” said Mark Kelly, vice president of sales and marketing for Palm Harbor Homes Inc.’s Florida division, headquartered in Plant City. “The orders we generate at the Tampa show will have a direct impact on our production and employment levels for the next several months.”
According to a press release, other upcoming RV and home shows in Florida will also serve as important venues, including the Ft. Myers RV Show, Jan. 23-26; the Ocala RV Show, Feb. 6-9; the Jacksonville RV Show and the West Palm Beach RV Show, both Feb. 13-16; the Germain RV Show in Estero, Feb. 14-16; and the Central Florida RV Show in DeLand, Feb. 27-March 2.
New units on display at the Tampa SuperShow and other upcoming RV and home shows include Palm Harbor’s 2014 Coastal Lodge and Coastal Cottage models, whose interiors feature laminate wood flooring, smooth painted drywall, cathedral ceilings and optional clerestory windows. The Coastal Cottage model also has optional lofts.
“We are also introducing several new looks in 2014,” Cater said, “including transom windows, horizon windows and 10- by 12-foot ‘Lifestyle Porches’ with Savannah posts and railing, a recessed entry and exterior ceiling fan with light, a flying gable and filigree. Our park models also feature Durabuilt cabinets and generally include ceramic tile floors or laminate flooring in our bathrooms and kitchens instead of sheet or linoleum flooring.”
Sales from these shows translate into jobs at Palm Harbor’s Plant City factory, which has increased its workforce by 25% during the past year to more than 200 employees. Palm Harbor is a division of Phoenix, Ariz.-based Cavco Industries Inc.
“We are doing more hiring and we expect to hire more people throughout the year,” Kelly said, adding that Palm Harbor plans to expand production later this year.
Randy Cater, district sales manager for Palm Harbor in Plant City, added that the company’s park models fill a unique niche in the marketplace. “We cater to a discriminating kind of buyer who is not out for the bottom price, but looking for park models that are very well constructed and have a special look and feel.”
Cavco Industries Inc. today (Aug. 2) announced financial results for the first quarter ended June 29, 2013, of fiscal year 2014.
Net revenue for the first quarter of fiscal 2014 totaled $134.0 million, up 12.8% from $118.8 million for the first quarter of fiscal year 2013. Net income for the fiscal 2014 first quarter was $3.9 million compared to $1.6 million reported in the same quarter one year ago.
Net income attributable to Cavco stockholders for the fiscal 2014 first quarter was $1.8 million, compared to net income of $0.9 million reported in the same quarter of the prior year. Net income per share based on basic and diluted weighted average shares outstanding for the quarter ended June 29, 2013, was $0.26, versus $0.12 for the quarter ended June 30, 2012.
Subsequent to the end of the first fiscal 2014 quarter and as previously disclosed, Cavco completed the purchase of all noncontrolling interests in Fleetwood Homes Inc., a jointly-owned corporation formed in 2009 by the company and Third Avenue Value Fund. Fleetwood Homes Inc., a Cavco subsidiary, owns Fleetwood Homes, Palm Harbor Homes, CountryPlace Mortgage and Standard Casualty Co. As consideration for the 50% interest that it did not already own, the company agreed to pay $91.4 million in Cavco common stock. The resulting issuance of 1,867,370 shares increased the company’s total number of common shares outstanding to 8,837,324.
Historically, 50% of the financial results of these businesses have been recorded as attributable to Cavco’s common stockholders in the company’s consolidated financial statements. As of July 22, 2013, Cavco owns 100% of these businesses and is therefore entitled to all of the associated earnings from that date forward.
Commenting on the quarter, Joseph Stegmayer, chairman, president and CEO, said, “Positive quarterly sales and earnings growth reported for the first quarter of fiscal year 2014 was reflective of a somewhat healthier business environment and improved production efficiencies. The number of homes sold increased approximately 5% from the same quarter last year.”
Regarding the transaction, Stegmayer added, “This purchase establishes full ownership of all company operations by Cavco’s shareholders. We were gratified to have received supportive shareholder response to the transaction by way of favorable proxy voting turnout and results. We expect that the potential for earnings and equity accretion from the purchase will prove beneficial to our shareholders and the company going forward. Cavco is appreciative of the opportunity to have worked with Third Avenue Management through this transaction and value their continued investment in our company as a holder of Cavco common stock.”
Cavco’s management will hold a conference call to review these results today at noon EDT. Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of the webcast and presentation will be available for 90 days at www.cavco.com under the Investor Relations link.
Cavco Industries Inc. today (June 14) announced that it entered into an agreement to acquire full ownership of Fleetwood Homes Inc., the parent company of Fleetwood Homes, Palm Harbor Homes, CountryPlace Mortgage and Standard Casualty business units.
Cavco currently owns 50% of Fleetwood Homes Inc. and the acquisition will complete the purchase of the other 50% ownership of Fleetwood Homes Inc. currently held by Third Avenue Value Fund and an affiliate, according to a news release.
Cavco will issue shares of its common stock to Third Avenue and its affiliate for consideration for the shares of Fleetwood Homes Inc. that they own. This transaction is consistent with the original intention of the company and Third Avenue at the outset of their partnership in forming Fleetwood Homes Inc. in 2009. Although certain buyout terms were included in the shareholders’ agreement between the parties, this transaction was successfully separately negotiated approximately one year earlier than the buyout provisions in the shareholders’ agreement were to become effective.
Joseph Stegmayer, chairman, president and CEO, said, “We believe that the opportunity to obtain full ownership of these operations is attractive at this time. Although the manufactured housing industry remains challenged by overall economic conditions, we are encouraged by recent reports of improved general housing demand, consumer confidence, and unemployment levels. We have been fully responsible for operating the Fleetwood Homes business since August 2009 and the Palm Harbor Homes and related finance and insurance businesses since 2011. We believe the steady integration of these operations with each other and with Cavco’s legacy business units has developed well. The opportunity to now consummate full ownership is clearly beneficial financially and will also eliminate certain administrative activities required of a joint venture.”
Phoenix-based RV and manufactured home builder Cavco Industries Inc. announced on Thursday (May 23) after the market closed financial results for the fiscal fourth quarter and year ended March 30, 2013.
According to a news release, net revenue for the fourth quarter of fiscal 2013 totaled $108.8 million, up 9.4% from $99.5 million for the fourth quarter of fiscal year 2012. Income before income taxes for the fourth quarter improved to $4.2 million from $2.4 million for the fiscal 2012 fourth quarter. Net income was $3.0 million for the fiscal 2013 fourth quarter compared to $2.9 million, which included a $1.2 million income tax benefit related to an election made for the acquired Palm Harbor insurance group’s assets, as reported in the same quarter one year ago.
Net income attributable to Cavco stockholders for the fiscal 2013 fourth quarter was $1.4 million, compared to $1.7 million for the fourth quarter of fiscal 2012, which included one half of the $1.2 million income tax benefit from last year’s tax election discussed above, consistent with Cavco’s ownership percentage of Palm Harbor.
Net income per share based on basic and diluted weighted average shares outstanding for the quarter ended March 30, 2013, was $0.20, versus basic and diluted net income per share of $0.24 for the quarter ended March 31, 2012.
For the fiscal year ended March 30, 2013, net revenue increased 2.1% to $452.3 million from $443.1 million for fiscal year 2012. Net income attributable to Cavco stockholders for fiscal year 2013 was $5.0 million compared to $15.2 million last year. Net income attributable to Cavco stockholders for fiscal year 2012 included one-half (or approximately $11.0 million) of the bargain purchase gain recognized from the Palm Harbor transaction, which occurred on April 23, 2011. This bargain purchase gain allocation was consistent with Cavco’s ownership percentage of Palm Harbor.
For fiscal year 2013, net income per share based on basic and diluted weighted average shares outstanding was $0.71, versus basic and diluted net income per share of $2.22 and $2.19, respectively, for the prior year period.
Commenting on the results, Joseph Stegmayer, chairman, president and CEO, said, “We are pleased to report improved results for the fourth quarter compared to the same period last year. We realized a 15.1% increase in home sales to 2,176, up from 1,890 homes sold in the fourth quarter of fiscal 2012. On an annual basis, the average sales price per home decreased to approximately $48,594 compared to $51,760 in fiscal year 2012, as demand rose for small size and lower price point homes. However, we sold 6.8% more homes overall in fiscal 2013 versus last year, totaling 8,398 homes compared to 7,860 in fiscal year 2012.”
He continued, “Several new product designs from each of our main housing brands, namely Cavco Homes, Fleetwood Homes, and Palm Harbor Homes, were individually recognized recently by receiving design awards from the Manufactured Housing Institute. We were also acknowledged as Manufacturer of the Year for the fourth year in a row, as voted by our peers in the industry trade association, a recognition that our employees enthusiastically share with our customers and vendors.”
Cavco Industries Inc. today (Nov. 1) announced financial results for the second quarter and first six months ended Sept. 30, of its fiscal year 2013.
Net sales for the second quarter of fiscal 2013 totaled $110 million, down 15.3% from $130 million for the second quarter of fiscal year 2012. Net income for the fiscal 2013 second quarter was $2.7 million compared to $3.2 million reported in the same quarter one year ago.
Net income per share based on basic and diluted weighted average shares outstanding for the quarter was 18 cents, versus basic and diluted net income per share the previous year of 24 cents.
For the first six months of fiscal 2013, net sales totaled $228.8 million versus $229 million for the comparable prior year period. Net income for the first half of fiscal 2013 was $2.1 million compared to $11.9 million last year. Net income for the six months ended Sept. 30, 2011, included one-half (or approximately $11 million) of the bargain purchase gain recognized from the Palm Harbor transaction, which closed on April 23, 2011. This bargain purchase gain allocation was consistent with Cavco’s ownership percentage of Palm Harbor.
For the six months ended Sept. 30, 2012, net income per share based on basic and diluted weighted average shares outstanding was 30 cents versus basic and diluted net income per share of $1.73 and $1.72, respectively, for the prior year period.
Referring to the fiscal 2013 second quarter results, Joseph Stegmayer, chairman, president and CEO, said, “Net sales were lower for the second quarter of fiscal year 2013 compared to the same quarter in the prior year for various reasons. These include fewer homes sold this quarter, lower average sales prices from a product mix skewed toward lower price-point homes, and competitive pricing pressures. Adversely impacting the number of homes sold was a larger proportion of internally financed wholesale sales, up 49.8% this quarter versus the second quarter last year, resulting in delayed recognition of the related revenue, consistent with applicable accounting principles. The company also modestly grew the proportion of factory sales to company-owned stores, which defers revenue recognition until the home sale process to the consumer is complete.”
Champion Home Builders Inc. has filed a countersuit in a copyright dispute with Cavco Industries Inc. and PHH Liquidation Trust Inc.
Phoenix-based Cavco, which builds manufactured homes and RVs, and its Palm Harbor Homes division filed the initial copyright suit in U.S. Federal Court against Champion, claiming Champion violated the copyright law and misappropriated trade secrets regarding manufactured home designs and floorplans.
Joseph Kesterson, a resident of Denton County, Texas, who formerly worked at Palm Harbor Homes and now works for Champion, is also a plaintiff in the countersuit.
In a countersuit filed Sept. 7 in U.S. Federal Court in Sherman, Texas, Troy, Mich.-based Champion and Kesterson deny they violated the copyright law.
Moreover, plaintiffs deny that the designs and floorplans at issue constitute copyrightable work. They seek a declaratory judgment in their favor. They also seek a judgment that the designs and floorplans are not copyrightable material of the defendants.
The case was assigned to Magistrate Judge Amos L. Mazzant.
Through a new partnership with Cavco Industries Inc. and Reliable Home Solutions, the Stockton Delta KOA will begin selling park model cabins at its site in Lido, Calif. According to a press release, a dozen units are currently being sold at prices ranging from the mid-$40,000 to the mid-$60,000 range.
The Stockton Delta KOA is the first KOA campground in the western United States to sell the new Deluxe Cabins. “We think they’re going to sell like hotcakes,” said Scott Haar, general manager of the 400-site Stockton KOA.
“Having a vacation cottage at the Stockton KOA is going to be very attractive for people who are looking for affordable ways to have a weekend getaway cabin or vacation cottage,” added Gene Davis, president of Sacramento-based Reliable Home Solutions, which is marketing the units on behalf of KOA and Cavco.
The 400-square-foot park models are manufactured by Phoenix-based Cavco, which has been building park model cabins and cottages for use as private vacation cottages in campgrounds for nearly 20 years.
While park models have been used as vacation cottages in campgrounds throughout much of Arizona, Texas and Florida as well as the Midwest and East Coast regions, they are just now being introduced in campgrounds in the West, and even then mostly as rental accommodations.
“We think the market is ready for this,” Davis said, adding that people are already bringing their friends to see the demonstration park model that was recently set up at the Stockton KOA.
Consumers who purchase the units will also need to pay a lease fee to keep their units at the KOA. Annual site lease costs range from $900 to $1,900 for the first year, but will jump to $3,960 to $5,400 for each year thereafter, Haar said, adding that the rent will include water, sewer, Wi-Fi and trash pickup as well as security at the park.
The Stockton KOA has 400 campsites, including 21 Deluxe Cabins and three Airstream trailers.
For more information about Stockton KOA, visit www.stocktonkoa.com.
Cavco Industries Inc. announced on Tuesday (May 29) financial results for the fourth quarter and fiscal year ended March 31, 2012.
Net sales for the fourth quarter of fiscal 2012 totaled $99,513,000, up 156% from $38,822,000 for the fourth quarter of fiscal year 2011, according to a news release.
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. The results of these new operations have been included in Cavco’s Consolidated Financial Statements since acquisition. Palm Harbor Homes Inc. 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 $83,900,000.
Net income for the fiscal 2012 fourth quarter was $2,888,000, compared to $1,733,000 reported in the same quarter one year ago. Net income attributable to Cavco stockholders for the fiscal 2012 fourth quarter was $1,653,000 compared to $1,609,000 reported in the same quarter one year ago.
During the fiscal 2012 fourth quarter, the company made an election pursuant to section 338(h)(10) of the Internal Revenue Code, allowing the company to step up the tax basis of the Palm Harbor insurance group’s assets to fair value. This election offset income tax expense by $1,241,000, resulting in a net tax benefit of $502,000 for the company in the quarter. Net income per share attributable to Cavco stockholders based on basic and diluted weighted average shares outstanding was $0.24 for the fiscal 2012 fourth quarter, versus basic and diluted net income per share of $0.24 and $0.23 in last year’s fourth quarter, respectively. Net income attributable to Cavco stockholders for the quarter ended March 31, 2012, includes one half of the $1,241,000 tax benefit from this election, consistent with Cavco’s ownership percentage of Fleetwood Homes.
For the fiscal year ended March 31, 2012, net sales increased 158% to $443,066,000 from $171,827,000 for fiscal year 2011. Net income for fiscal year 2012 was $29,728,000 compared to $4,072,000 for the prior year. Included in net income for fiscal 2012 was a gain on bargain purchase of $22,009,000 resulting from the Palm Harbor transaction, calculated in accordance with the accounting standards for business combinations.
Net income attributable to Cavco stockholders for fiscal 2012 was $15,237,000 compared to $2,831,000 last year. For the fiscal year ended March 31, 2012, net income per share based on basic and diluted weighted average shares outstanding was $2.22 and $2.19, respectively, versus $0.43 and $0.41 for the prior year, respectively. Net income attributable to Cavco stockholders for the fiscal year ended March 31, 2012, includes one half of the bargain purchase gain recognized, consistent with Cavco’s ownership percentage of Fleetwood Homes.
Commenting on the final quarter of fiscal year 2012, Joseph Stegmayer, chairman, president and CEO, said, “The company’s fourth quarter financial results were positive in light of the ongoing economic challenges affecting the homebuilding industry. Home sales were adversely impacted this quarter by seasonally slow winter home buying activity; however, we began to see some modest improvement in consumer interest and traffic levels at the end of the quarter. The financial services segment continued to provide sound mortgage and insurance products while being a strong contributor to our fourth quarter profitability during these difficult times.”
Stegmayer continued, “Current economic and market headwinds including low consumer confidence levels, high unemployment rates, significant underemployment, and strict mortgage underwriting standards have not changed our optimistic long-term perspective. Cavco has accomplished a strategically eventful fiscal year in which the company grew considerably in size as well as in capability. The Palm Harbor transaction this year expanded the geographic reach of the company as well as the diversity of our home products and provided the introduction of related mortgage and insurance business lines. With the fiscal 2012 Palm Harbor and fiscal 2010 Fleetwood Homes asset purchases, our company is better situated to operate in the current environment and well positioned to benefit as the economy begins to improve.”
Cavco’s management will hold a conference call to review these results today (May 30) at noon (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of the webcast and presentation will be available for 90 days at www.cavco.com under the Investor Relations link.
Editor’s Note: The following is an excerpt from a Wall Street Journal story looking at the oil and gas boom and the resulting boost for the economy, including a lift in production at Fleetwood Homes, a subsidiary of Cavco Industries Inc. To view the entire article click here.
The staccato of nail guns echoes across a cavernous building as workers for Nampa, Idaho-based Fleetwood Homes piece together manufactured houses with easy-to-clean linoleum floors and rugged interiors for muddy oil-field workers.
There is no oil and gas production in Idaho, but that doesn’t mean the U.S. energy boom has bypassed this bedroom community west of Boise. Fleetwood Homes, a subsidiary of Cavco Industries Inc., has increased production by 25% since last fall at its Nampa factory, hiring 40 workers and adding hours for employees. It is building the extra-insulated “Dakota” model for shipment 1,000 miles east to the Bakken oil field in North Dakota.
Were it not for the new demand for oil-field housing, factory manager Jeff Chrisman says he would be handing out furloughs, not overtime. Instead, “We’ve been able to bring back people that we hated losing a couple of years ago,” he says.
An energy boom is revving up the U.S. economy. The use of new drilling techniques to tap oil and gas in shale rocks far underground helped add about 158,500 new oil and gas jobs over the past five years, and economists think it has created even more jobs in companies supplying the energy industry and in the broader service industry. U.S. oil production is rising for the first time in decades. Natural gas has become so plentiful that prices recently plunged to a 10-year low.
“This is probably the biggest stimulus we have going,” says Michael Lynch, president of Strategic Energy & Economic Research, a consultant based in Amherst, Mass. Some $145 billion will be spent drilling and completing U.S. wells this year, up from $13 billion in 2000, estimates Spears & Associates Inc., an oil-field market research firm.
Chrisman said he had no clue about the energy boom until he received a call from a planned 300-unit housing development in Williston, N.D. He traveled there in 2010 and saw well-paid workers sleeping in their cars in a local Wal-Mart parking lot during winter because of the lack of housing.
As the factory’s pace of production began picking up last summer, Mr. Chrisman rehired workers he had let go amid the housing downturn. Shannon Smith returned to her job caulking tiles and cleaning up the houses before they are loaded onto trucks.
“In the two years I was laid off, we lost our house” and racked up a lot of credit-card debt, says Ms. Smith, a mother of two. “There was no money and nothing to do. This is chance to buy groceries again and keep paying the bills.”
Though she has never seen an oil well, Smith says, “I hope it keeps coming.”