CAVCO INDUSTRIES, INC.

Previous wording

Headquartered in Phoenix, Arizona, we design and produce factory-built homes primarily distributed through a network of independent and Company-owned retailers, planned community operators and residential developers. We are one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments. Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and Solitaire. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures. Our finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer, and a Government National Mortgage Association ("GNMA") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty Company, provides property and casualty insurance primarily to owners of manufactured homes.

Current wording

Headquartered in Phoenix, Arizona, we design and produce factory-built homes primarily distributed through a network of independent and Company-owned retailers, planned community operators and residential developers. We are one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures. Our finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer, and a Government National Mortgage Association ("GNMA") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty Company, provides property and casualty insurance primarily to owners of manufactured homes.

Previous wording

We operate a total of 31 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix, Glendale and Goodyear, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville (two lines) and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; Crouse and Hamlet, North Carolina; Ocala and Plant City, Florida; and two international lines in Ojinaga, Mexico. We distribute our homes through a large network of independent distribution points and 79 Company-owned U.S. retail stores, of which 47 are located in Texas.

Current wording

We operate a total of 31 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix, Glendale and Goodyear, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville (two lines) and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; Crouse and Hamlet, North Carolina; Ocala and Plant City, Florida; and two international lines in Ojinaga, Mexico. We distribute our homes through a large network of independent distribution points and 80 Company-owned U.S. retail stores, of which 46 are located in Texas.

Previous wording

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through November 2024 were 96,240, an increase of 16.3% compared to 82,784 shipments in the same calendar period last year. The manufactured housing industry offers solutions to the housing crisis with lower average price per square foot than a site-built home and the comparatively lower cost associated with manufactured home ownership, which remains competitive with rental housing.

Current wording

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through May 2025 were 44,927, an increase of 5.3% compared to 42,650 shipments in the same calendar period last year. The manufactured housing industry offers solutions to the housing crisis with lower average price per square foot than a site-built home and the comparatively lower cost associated with manufactured home ownership, which remains competitive with rental housing.

Previous wording

Our backlog at December 28, 2024 was $224 million compared to $276 million at September 28, 2024, a decrease of $52 million, and up $64 million compared to $160 million at December 30, 2023.

Current wording

Our backlog at June 28, 2025 was $200 million compared to $197 million at March 29, 2025, an increase of $3 million, and down $32 million compared to $232 million at June 29, 2024.

Previous wording

Factory-built housing Net revenue increased for the three and nine months ended December 28, 2024 due to higher home sales volume, partially offset by a decrease in Net revenue per home sold primarily caused by a lower proportion of homes sold through our Company-owned stores.

Current wording

Factory-built housing Net revenue increased for the three months ended June 28, 2025 due to higher home sales volume and an increase in Net revenue per home sold.

Previous wording

For the three and nine months ended December 28, 2024, Financial services Net revenue increased primarily due to higher insurance premiums.

Current wording

For the three months ended June 28, 2025, Financial services Net revenue increased primarily due to higher insurance premiums.

Previous wording

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue for the three months increased due to higher insurance premiums and lower claim losses. For the nine months, Gross profit in dollars and as a percentage of Net revenue decreased due to higher expenses from higher storm and fire activity, partially offset by higher insurance premiums.

Current wording

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue for the three months increased due to higher insurance premiums, lower claim losses and reduced costs from improved underwriting guidelines.

Previous wording

Factory-built housing Selling, general and administrative expenses increased for the three and nine months ended December 28, 2024 as a result of increases in variable compensation driven by higher incentive compensation in the third quarter and as a result of increases in compensation related to acquired retail locations for both periods.

Current wording

Factory-built housing Selling, general and administrative expenses increased for the three months ended June 28, 2025 as a result of variable compensation driven by higher incentive compensation due to higher earnings compared to the prior year period.

Previous wording

Financial services Selling, general and administrative expenses for the three months increased primarily due to increases in compensation year over year. For the nine months ended it was essentially flat.

Current wording

Financial services Selling, general and administrative expenses for the three months increased primarily due to increases in compensation year over year.

Previous wording

Other income (expense), net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from the sale of property, plant and equipment.

Current wording

Other (expense), net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from the sale of property, plant and equipment.

Previous wording

Income tax expense increased for both periods ended compared to the prior year periods primarily due to higher profit before income taxes.

Current wording

Income tax expense increased compared to the prior year period due to higher profit before income taxes.

Previous wording

We believe that cash and cash equivalents at December 28, 2024, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in U.S. Treasury and other money market funds, some of which is in excess of federally insured limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on our liquidity and capital resources. We believe we have sufficient liquid resources including our $75 million Revolving Credit Facility, which may be increased from time to time through additional term facilities up to an aggregate amount of $75 million, and no amounts are outstanding. Depending on our operating results and strategic opportunities, we may choose to seek additional or alternative sources of financing in the future. There can be no assurance that such financing would be available on satisfactory terms, if at all. If this financing were not available, it could be necessary for us to reevaluate our long-term operating plans to make more efficient use of our existing capital resources at such time. The exact nature of any changes to our plans that would be considered depends on various factors, such as conditions in the factory-built housing industry and general economic conditions outside of our control.

Current wording

We believe that cash and cash equivalents at June 28, 2025, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations, provide for our planned acquisition of American Homestar and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in U.S. Treasury and other money market funds, some of which is in excess of federally insured limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on our liquidity and capital resources. We believe we have sufficient liquid resources including our $75 million Revolving Credit Facility, which may be increased from time to time through additional term facilities by up to an aggregate amount of $75 million up to $150 million. No amounts are currently outstanding. Depending on our operating results and strategic opportunities, we may choose to seek additional or alternative sources of financing in the future. There can be no assurance that such financing would be available on satisfactory terms, if at all. If this financing were not available, it could be necessary for us to reevaluate our long-term operating plans to make more efficient use of our existing capital resources at such time. The exact nature of any changes to our plans that would be considered depends on various factors, such as conditions in the factory-built housing industry and general economic conditions outside of our control.

Previous wording

The following is a summary of the Company's cash flows for the nine months ended December 28, 2024 and December 30, 2023, respectively:

Current wording

The following is a summary of the Company's cash flows for the three months ended June 28, 2025 and June 29, 2024, respectively:

Previous wording

Net cash provided by operating activities decreased primarily from increases in working capital, primarily from increases in Inventory and Accounts receivable. This was partially offset by higher Net income and changes in Accounts payable, accrued expenses due primarily to increased customer deposits and volume rebates due to customers.

Current wording

Net cash provided by operating activities increased primarily from higher Net income, partially offset by changes in Accounts receivable and Inventory due to increased working capital needs on higher revenue and reduced cash provided by Accounts payable, accrued expenses and other liabilities compared to the prior year due largely to lower insurance loss reserves in the current period.

Previous wording

Consumer loan originations decreased $20.1 million to $54.2 million for the nine months ended December 28, 2024 from $74.3 million for the nine months ended December 30, 2023, and proceeds from sales of consumer loans decreased $77.3 million to $4.4 million for the nine months ended December 28, 2024 from $81.8 million for the nine months ended December 30, 2023.

Current wording

Consumer loan originations decreased $5.6 million to $15.2 million for the three months ended June 28, 2025 from $20.8 million for the three months ended June 29, 2024, and proceeds from consumer loans decreased 0.7 million to $13.8 million for the three months ended June 28, 2025 from $14.5 million for the three months ended June 29, 2024.

Previous wording

Commercial loan originations increased $4.0 million to $87.5 million for the nine months ended December 28, 2024 from $83.5 million for the nine months ended December 30, 2023. Proceeds from the collection on commercial loans provided $85.0 million this year, compared to $87.6 million in the prior year, a net decrease of $2.6 million.

Current wording

Commercial loan originations increased $15.6 million to $42.4 million for the three months ended June 28, 2025 from $26.8 million for the three months ended June 29, 2024. Proceeds from the collection on commercial loans provided $34.5 million this year, compared to $22.4 million in the prior year, a net increase of $12.1 million.

Previous wording

The change in Net cash used in investing activities is primarily due to the prior year period including payments for acquisitions that did not repeat in the current year.

Current wording

The change in Net cash used in investing activities is primarily due to an increase in cash paid for property plant and equipment in the current year.

Previous wording

There have been no significant changes to our critical accounting estimates during the nine months ended December 28, 2024, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.

Current wording

There have been no significant changes to our critical accounting estimates during the three months ended June 28, 2025, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.