Champion Homes Inc

Previous wording

Because of the need for affordable housing, the Company saw an increase in customers orders during the six months ended September 28, 2024 versus the same period last year that outpaced production rates. As a result, of the increased orders and the acquisition of Regional Homes, the Company's manufacturing backlog was $427.5 million as of September 28, 2024 compared to $257.8 million as of September 30, 2023.

Current wording

Because of the need for affordable housing, the Company saw an increase in customer orders during the nine months ended December 28, 2024 versus the same period last year. As a result of the increased orders the Company's manufacturing backlog was $312.6 million as of December 28, 2024 compared to $290.4 million as of December 30, 2023.

Previous wording

For the six months ended September 28, 2024, approximately 87% of the Company’s U.S. manufacturing sales were generated from the manufacture of homes that comply with the U.S. Department of Housing and Urban Development ("HUD") code construction standard in the U.S. Industry shipments of HUD-code homes are reported on a one-month lag. According to data reported by the Manufactured Housing Institute, HUD-code industry home shipments were 44,278 and 37,536 units during the five months ended August 31, 2024 and 2023, respectively. Based on industry data, the Company’s U.S. wholesale market share of HUD code homes sold was 21.9% and 17.9%, for the five months ended August 31, 2024 and 2023, respectively. Annual HUD-code industry shipments have generally increased since calendar year 2009 when only 50,000 HUD-coded manufactured homes were shipped, the lowest level since the industry began recording statistics in 1959. While shipments of HUD-coded manufactured homes have improved modestly in recent years, current manufactured housing shipments are still at lower levels than the long-term historical average of over 200,000 units per year. Manufactured home sales represent approximately 9% of all U.S. single family home starts. Our market share in the U.S total housing market was approximately 2.4% and 1.9% for the six months ended September 28, 2024 and September 30, 2023, respectively.

Current wording

For the nine months ended December 28, 2024, approximately 87% of the Company’s U.S. manufacturing sales were generated from the manufacture of homes that comply with the U.S. Department of Housing and Urban Development ("HUD") code construction standard in the U.S. Industry shipments of HUD-code homes are reported on a one-month lag. According to data reported by the Manufactured Housing Institute, HUD-code industry home shipments were 71,968 and 61,622 units during the eight months ended November 30, 2024 and 2023, respectively. Based on industry data, the Company’s U.S. wholesale market share of HUD code homes sold was 22.2% and 18.9%, for the eight months ended November 30, 2024 and 2023, respectively. Annual HUD-code industry shipments have generally increased since calendar year 2009 when only 50,000 HUD-coded manufactured homes were shipped, the lowest level since the industry began recording statistics in 1959. While shipments of HUD-coded manufactured homes have improved modestly in recent years, current manufactured housing shipments are still at lower levels than the long-term historical average of over 200,000 units per year. Manufactured home sales represent approximately 9% of all U.S. single family home starts. Our market share in the U.S total housing market was approximately 2.5% and 2.1% for the nine months ended December 28, 2024 and December 30, 2023, respectively.

Previous wording

UNAUDITED RESULTS OF OPERATIONS FOR THE SECOND QUARTER OF FISCAL 2025 VS. 2024

Current wording

UNAUDITED RESULTS OF OPERATIONS FOR THE THIRD QUARTER OF FISCAL 2025 VS. 2024

Previous wording

Net sales for the three months ended September 28, 2024 were $616.9 million, an increase of $152.6 million, or 32.9%, compared to the three months ended September 30, 2023. The following is a summary of the change by operating segment.

Current wording

Net sales for the three months ended December 28, 2024 were $644.9 million, an increase of $85.5 million, or 15.3%, compared to the three months ended December 30, 2023. The following is a summary of the change by operating segment.

Previous wording

Net sales for the Company’s U.S. manufacturing and retail operations increased by $159.0 million, or 37.1%, for the three months ended September 28, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to the inclusion of $148.0 million of net sales from Regional Homes in fiscal 2025. The number of new homes sold during the period increased 31.3% and the average selling price per new home increased 4.5%. The increase in the number of homes sold was due to higher customer demand and production volumes compared to the prior year, and the inclusion of Regional Homes in fiscal 2025. The increase in average selling price was due to the increase in the number of units sold through our company-owned retail sales centers, also in part a result of the addition of Regional Homes. The mix of wholesale unit sales sold to independent channels versus homes sold through our company-owned retail sales centers impacts average selling price since we capture revenue from additional installation services for homes sold through internal channels.

Current wording

Net sales for the Company’s U.S. manufacturing and retail operations increased by $89.6 million, or 17.2%, for the three months ended December 28, 2024 compared to the three months ended December 30, 2023. The increase was due to a 14.1% increase in new homes sold and a 2.8% increase in the average selling price per new home. The increase in the number of homes sold was due to higher customer demand and production volumes compared to the prior year, as well as an additional 2 weeks of activity from Regional Homes in the current quarter. The increase in average selling price was due to the increase in the number of units sold through our company-owned retail sales centers. The mix of wholesale unit sales sold to independent channels versus homes sold through our company-owned retail sales centers impacts average selling price since we capture revenue from additional installation services for homes sold through internal channels.

Previous wording

The Canadian Factory-built Housing segment net sales decreased by $7.0 million, or 24.0% for the three months ended September 28, 2024 compared to the same period in the prior fiscal year, primarily due to a 22.8% decrease in homes sold and a 1.5% decrease in average home selling price. The decrease in homes sold is due to slowing demand in the Canadian market. On a constant currency basis, net sales for the Canadian segment were unfavorably impacted by approximately $1.2 million due to fluctuations in the translation of the Canadian dollar to the U.S. dollar during the three months ended September 28, 2024 as compared to the same period of the prior fiscal year.

Current wording

The Canadian Factory-built Housing segment net sales decreased by $5.1 million, or 16.6% for the three months ended December 28, 2024 compared to the same period in the prior fiscal year, primarily due to a 16.1% decrease in homes sold and a 0.6% decrease in average home selling price. The decrease in homes sold is due to slowing demand for housing in the Canadian market. On a constant currency basis, net sales for the Canadian segment were favorably impacted by approximately $0.1 million due to fluctuations in the translation of the Canadian dollar to the U.S. dollar during the three months ended December 28, 2024 as compared to the same period of the prior fiscal year.

Previous wording

Net sales for Corporate/Other includes the Company’s transportation business, financing activities, and the elimination of intersegment sales. For the three months ended September 28, 2024, net sales increased $0.7 million, or 9.8%, primarily attributable to Champion Financing, partially offset by lower recreational vehicle shipments from the Company's transportation business.

Current wording

Net sales for Corporate/Other includes the Company’s transportation business, financing activities, and the elimination of intersegment sales. For the three months ended December 28, 2024, net sales increased $0.9 million, or 12.6%, primarily attributable to revenue generated from Champion Financing, partially offset by lower recreational vehicle shipments from the Company's transportation business.

Previous wording

Gross profit for the U.S. Factory-built Housing segment increased by $51.2 million, or 48.8%, during the three months ended September 28, 2024 compared to the same period in the prior fiscal year. Gross profit was 26.6% as a percent of segment net sales for the three months ended September 28, 2024 compared to 24.5% in the same period of the prior fiscal year. The increase in gross profit as a percent of segment net sales is being driven by higher average selling prices from our Company owned retail stores, which also generated a greater percentage of total segment revenue than the prior year as well as lower input costs primarily from forest products and higher capacity utilization.

Current wording

Gross profit for the U.S. Factory-built Housing segment increased by $39.5 million, or 30.8%, during the three months ended December 28, 2024 compared to the same period in the prior fiscal year. Gross profit was 27.4% as a percent of segment net sales for the three months ended December 28, 2024 compared to 24.6% in the same period of the prior fiscal year. The increase in gross profit as a percent of segment net sales is being driven by higher average selling prices on new homes sold through our Company-owned retail sales centers, which also generated a greater percentage of total segment revenue than the prior year as well as lower input costs and synergies realized from the acquisition of Regional Homes.

Previous wording

Gross profit for the Canadian Factory-built Housing segment decreased by $3.2 million, or 39.6%, during the three months ended September 28, 2024 compared to the same period in the prior fiscal year. The decrease in gross profit is primarily due to lower sales volumes and average selling prices caused by slowing demand. Gross profit as a percent of net sales was 21.8% for the three months ended September 28, 2024, compared to 27.4% in the same period of the prior year, primarily due to less absorption of fixed costs due to lower sales volumes.

Current wording

Gross profit for the Canadian Factory-built Housing segment decreased by $2.3 million, or 25.2%, during the three months ended December 28, 2024 compared to the same period in the prior fiscal year. The decrease in gross profit is primarily due to lower sales volumes and average selling prices caused by slowing demand. Gross profit as a percent of net sales was 26.4% for the three months ended December 28, 2024, compared to 29.4% in the same period of the prior year, primarily due to less absorption of fixed costs due to lower sales volumes.

Previous wording

Gross profit for the Corporate/Other segment increased $1.8 million, or 52.4%, during the three months ended September 28, 2024 compared to the same period of the prior fiscal year due primarily to the inclusion of Champion Financing.

Current wording

Gross profit for the Corporate/Other segment increased $2.6 million, or 62.0%, during the three months ended December 28, 2024 compared to the same period of the prior fiscal year due primarily to the inclusion of Champion Financing.

Previous wording

Selling, general, and administrative expenses were $99.7 million for the three months ended September 28, 2024, an increase of $35.2 million, or 54.6%, compared to the same period in the prior fiscal year. The following is a summary of the change by operating segment.

Current wording

Selling, general, and administrative expenses were $108.2 million for the three months ended December 28, 2024, an increase of $23.1 million, or 27.2%, compared to the same period in the prior fiscal year. The following is a summary of the change by operating segment.

Previous wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $30.2 million, or 64.7%, during the three months ended September 28, 2024 as compared to the same period in the prior fiscal year. SG&A, as a percent of segment net sales increased to 13.1% for the three months ended September 28, 2024 compared to 10.9% during the comparable period of the prior fiscal year. The acquisition of Regional Homes was the primary driver of the increase in both the amount of SG&A and as a percent of sales. Sales through our internal retail channels incur a higher percent of SG&A than wholesale sales to independent retailers. We also had higher incentive compensation during the period, which is generally based on sales volume or a measure of profitability.

Current wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $14.8 million, or 22.7%, during the three months ended December 28, 2024 as compared to the same period in the prior fiscal year. SG&A, as a percent of segment net sales increased to 13.1% for the three months ended December 28, 2024 compared to 12.5% during the comparable period of the prior fiscal year. The increase in SG&A as a percent of segment sales was due to higher sales volumes through our Company-owned retail sales centers which incur a higher percent of SG&A than wholesale sales to independent retailers. Additionally, we incurred higher incentive compensation during the period, which is generally based on sales volume or a measure of profitability.

Previous wording

Selling, general, and administrative expenses for the Canadian Factory-built Housing segment decreased $0.3 million, or 11.3%, for the three months ended September 28, 2024 when compared to the same period of the prior fiscal year. Selling, general, and administrative expenses as a percent of segment net sales increased to 10.4% for the three months ended September 28, 2024 compared to 8.9% during the comparable period of the prior fiscal year due to decreased leverage of fixed manufacturing costs.

Current wording

Selling, general, and administrative expenses for the Canadian Factory-built Housing segment decreased $0.3 million, or 9.9%, for the three months ended December 28, 2024 when compared to the same period of the prior fiscal year. Selling, general, and administrative expenses as a percent of segment net sales increased to 10.4% for the three months ended December 28, 2024 compared to 9.6% during the comparable period of the prior fiscal year due to decreased leverage of fixed costs as a result of the reduction in sales during the period.

Previous wording

Selling, general, and administrative expenses for Corporate/Other includes the Company’s transportation operations, corporate costs incurred for all segments, and intersegment eliminations. Selling, general, and administrative expenses for Corporate/Other increased $5.3 million, or 35.0%, during the three months ended September 28, 2024 as compared to the same period of the prior fiscal year. The increase was due to investments made in people and information systems to support future growth.

Current wording

Selling, general, and administrative expenses for Corporate/Other includes the Company’s transportation operations, corporate costs incurred for all segments, and intersegment eliminations. Selling, general, and administrative expenses for Corporate/Other increased $8.6 million, or 51.1%, during the three months ended December 28, 2024 as compared to the same period of the prior fiscal year. The increase was due primarily to investments made in people and information systems to support future growth.

Previous wording

Interest income, net was $4.7 million for the three months ended September 28, 2024, compared to $10.5 million in the same period of the prior fiscal year. The change was primarily due to lower interest income from lower average invested cash balances and higher interest expense from larger average floor plan payables and long-term debt balances assumed in the acquisition of Regional Homes.

Current wording

Interest income, net was $4.0 million for the three months ended December 28, 2024, compared to $4.3 million in the same period of the prior fiscal year. The change was primarily due to lower interest income from lower average invested cash balances and higher interest expense from higher average outstanding floor plan payables.

Previous wording

Other (income) of $1.2 million for the six months ended September 28, 2024 represents dividend income from the investment in ECN Preferred shares. Other expense of $2.1 million for the six months ended September 30, 2023 represents transaction costs incurred for the acquisition of Regional Homes.

Current wording

Other income for the three months ended December 28, 2024 represents dividend income of $1.2 million from the investment in ECN Preferred Shares and $1.0 million insurance proceeds for partial settlement of certain Champion Home Builders’ pre-bankruptcy workers' compensation claims. Other expense for the three months ended December 30, 2023 primarily related to $1.2 million of transaction costs incurred for the acquisition of Regional Homes, partially offset by dividend income of $0.6 million from the investment in ECN Preferred Shares.

Previous wording

Income tax expense for the six months ended September 28, 2024 was $29.1 million, representing an effective tax rate of 22.0%, compared to income tax expense of $32.0 million, representing an effective tax rate of 24.8% for the six months ended September 30, 2023. The effective tax rate for the six months ended September 28, 2024 was positively impacted by an increase in recognition of tax credits related to the sale of energy efficient homes.

Current wording

Income tax expense for the three months ended December 28, 2024 was $16.7 million, representing an effective tax rate of 21.1%, compared to income tax expense of $12.8 million, representing an effective tax rate of 21.4% for the three months ended December 30, 2023.

Previous wording

EQUITY IN NET LOSS OF AFFILIATES

Current wording

EQUITY IN NET INCOME OF AFFILIATES

Previous wording

The following table summarizes equity in net loss of affiliates for the three months ended September 28, 2024 and September 30, 2023:

Current wording

The following table summarizes equity in net income of affiliates for the three months ended December 28, 2024 and December 30, 2023:

Previous wording

The Company's investment in ECN is accounted for under the equity method and the Company’s share of the earnings or losses of ECN are recorded on a three-month lag. Equity in net loss of affiliates of $0.7 million for the three months ended September 28, 2024 represents a gain on the equity method investment in ECN of $0.7 million and net losses from other unconsolidated affiliates of $1.4 million. There were no earnings or losses recognized related to equity method investments for the three months ended September 30, 2023.

Current wording

The Company's investment in ECN is accounted for under the equity method and the Company’s share of the earnings or losses of ECN are recorded on a three-month lag. Equity in net income of affiliates of $0.6 million for the three months ended December 28, 2024 represents a gain on the equity method investment in ECN of $0.7 million and net losses from other unconsolidated affiliates of $0.1 million.

Previous wording

Adjusted EBITDA for the three months ended September 28, 2024 was $74.2 million, an increase of $15.4 million from the same period of the prior fiscal year. The increase is primarily a result of higher sales volumes and gross profit, partially offset by higher SG&A expenses, primarily due to the inclusion of Regional Homes.

Current wording

Adjusted EBITDA for the three months ended December 28, 2024 was $83.3 million, an increase of $17.0 million from the same period of the prior fiscal year. The increase is primarily a result of higher sales volumes and gross profit, partially offset by higher SG&A expenses.

Previous wording

UNAUDITED INCOME STATEMENTS FOR THE FIRST HALF OF FISCAL 2025 VS. 2024

Current wording

UNAUDITED INCOME STATEMENTS FOR THE FIRST NINE MONTHS OF FISCAL 2025 VS. 2024

Previous wording

Net sales for the six months ended September 28, 2024 were $1.2 billion, an increase of $315.7 million, or 34.0%, compared to the six months ended September 30, 2023. The following is a summary of the change by operating segment.

Current wording

Net sales for the nine months ended December 28, 2024 were $1.9 billion, an increase of $401.1 million, or 26.9%, compared to the nine months ended December 30, 2023. The following is a summary of the change by operating segment.

Previous wording

Net sales for the Company’s U.S. manufacturing and retail operations increased by $329.7 million, or 38.5%, for the six months ended September 28, 2024 compared to the six months ended September 30, 2023. The increase was primarily due to the inclusion of $299.4 million of net sales from Regional Homes in fiscal 2025. The number of homes sold during the period increased 33.5% and the average home selling price increased 3.7%. The increase in the number of homes sold was due to higher customer demand and production volumes compared to the prior year and the inclusion of Regional Homes in fiscal 2025. The increase in average selling price was due to the increase in the number of units sold through our company-owned retail sales centers, also in part a result of the addition of Regional Homes. The mix of wholesale unit sales versus homes sold through our company-owned stores impacts average selling price. During the six months ended September 28, 2024, wholesale average selling price per new home decreased due to the changes in product mix, including customers choosing homes with fewer or lower cost options.

Current wording

Net sales for the Company’s U.S. manufacturing and retail operations increased by $419.4 million, or 30.4%, for the nine months ended December 28, 2024 compared to the nine months ended December 30, 2023. The increase was primarily due to the inclusion of $447.3 million of net sales from Regional Homes in fiscal 2025 compared to $119.7 million in the prior-year period, which represented approximately 2.5 months of operations from the date of acquisition through December 30, 2023. The number of homes sold during the period increased 26.3% and the total average home selling price increased 3.3%. The increase in the number of homes sold was due to higher customer demand and production volumes compared to the prior year and the inclusion of Regional Homes sales for all of the first nine months of fiscal 2025 compared to 2.5 months in the prior year period. The increase in average selling price was due primarily to the increase in the number of units sold through our company-owned retail sales centers, also in part a result of the addition of Regional Homes. The mix of wholesale unit sales versus homes sold through our company-owned retail sales centers impacts average selling price. During the nine months ended December 28, 2024, wholesale average selling price per new home decreased due to changes in product mix, including customers choosing homes with fewer or lower cost options.

Previous wording

The Canadian Factory-built Housing segment net sales decreased by $12.3 million, or 22.3% for the six months ended September 28, 2024 compared to the same period in the prior fiscal year, primarily due to a 23.6% decrease in homes sold, partially offset by a 1.8% increase in average home selling price. The decrease in homes sold is due to slowing demand in the Canadian market. On a constant currency basis, net sales for the Canadian segment were unfavorably impacted by approximately $0.8 million due to fluctuations in the translation of the Canadian dollar to the U.S. dollar during the six months ended September 28, 2024 as compared to the same period of the prior fiscal year.

Current wording

The Canadian Factory-built Housing segment net sales decreased by $17.5 million, or 20.3% for the nine months ended December 28, 2024 compared to the same period in the prior fiscal year, primarily due to a 20.9% decrease in homes sold, partially offset by a 0.8% increase in average home selling price. The decrease in homes sold is due to slowing demand in the Canadian market. On a constant currency basis, net sales for the Canadian segment were unfavorably impacted by approximately $1.2 million due to fluctuations in the translation of the Canadian dollar to the U.S. dollar during the nine months ended December 28, 2024 as compared to the same period of the prior fiscal year.

Previous wording

Net sales for Corporate/Other includes the Company’s transportation business, financing activities and the elimination of intersegment sales. For the six months ended September 28, 2024, net sales decreased $1.7 million, or 10.5%, primarily attributable to the decrease in recreational vehicle shipments, offset in part by the inclusion of Champion Financing.

Current wording

Net sales for Corporate/Other includes the Company’s transportation business, financing activities and the elimination of intersegment sales. For the nine months ended December 28, 2024, net sales decreased $0.8 million, or 3.3%, primarily attributable to a decrease in recreational vehicle shipments, offset in part by the inclusion of Champion Financing.

Previous wording

The following table summarizes gross profit for the six months ended September 28, 2024 and September 30, 2023:

Current wording

The following table summarizes gross profit for the nine months ended December 28, 2024 and December 30, 2023:

Previous wording

Gross profit for the U.S. Factory-built Housing segment increased by $87.2 million or 39.0%, during the six months ended September 28, 2024 compared to the same period in the prior fiscal year. The increase in gross profit was driven by higher unit volume due to higher customer demand and production rates and the inclusion of Regional Homes. Gross profit was 26.2% as a percent of segment net sales for the six months ended September 28, 2024 compared to 26.1% in the same period of the prior fiscal year.

Current wording

Gross profit for the U.S. Factory-built Housing segment increased by $126.6 million or 36.0%, during the nine months ended December 28, 2024 compared to the same period in the prior fiscal year. The increase in gross profit was driven by higher unit volume due to higher customer demand and the addition of Regional Homes. Gross profit was 26.6% as a percent of segment net sales for the nine months ended December 28, 2024 compared to 25.5% in the same period of the prior fiscal year. The increase in gross profit as a percent of segment net sales is driven by a greater percentage of homes sold through our company-owned retail sales centers and lower manufacturing input costs.

Previous wording

Gross profit for the Canadian Factory-built Housing segment decreased by $4.8 million, or 32.2% during the six months ended September 28, 2024 compared to the same period in the prior fiscal year. The decrease in gross profit is primarily due to lower sales volumes. Gross profit as a percent of net sales was 23.7% for the six months ended September 28, 2024, compared to 27.2% in the same period of the prior year, primarily the result of decreased leverage of fixed manufacturing costs.

Current wording

Gross profit for the Canadian Factory-built Housing segment decreased by $7.1 million, or 29.6% during the nine months ended December 28, 2024 compared to the same period in the prior fiscal year. The decrease in gross profit is primarily due to lower sales volumes.

Previous wording

Gross profit for the Corporate/Other segment increased $2.1 million, or 27.3%, during the six months ended September 28, 2024 compared to the same period of the prior fiscal year. Gross profit increased as a a result of the revenue mix in the Company's transportation operations and the inclusion of Champion Financing.

Current wording

Gross profit for the Corporate/Other segment increased $4.7 million, or 39.6%, during the nine months ended December 28, 2024 compared to the same period of the prior fiscal year. Gross profit increased as a result of the revenue mix in the Company's transportation operations and the inclusion of Champion Financing.

Previous wording

Selling, general, and administrative expenses include in part costs that are not directly attributable to the manufacture or resale of our products, including foreign currency transaction gains and losses, equity compensation, and intangible amortization expense. The following table summarizes selling, general, and administrative expenses for the six months ended September 28, 2024 and September 30, 2023:

Current wording

Selling, general, and administrative expenses include in part costs that are not directly attributable to the manufacture or resale of our products, including foreign currency transaction gains and losses, equity compensation, and intangible amortization expense. The following table summarizes selling, general, and administrative expenses for the nine months ended December 28, 2024 and December 30, 2023:

Previous wording

Selling, general, and administrative expenses were $208.5 million for the six months ended September 28, 2024, an increase of $73.6 million, or 54.6%, compared to the same period in the prior fiscal year. The following is a summary of the change by operating segment.

Current wording

Selling, general, and administrative expenses were $316.7 million for the nine months ended December 28, 2024, an increase of $96.7 million, or 44.0%, compared to the same period in the prior fiscal year. The following is a summary of the change by operating segment.

Previous wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $64.2 million, or 65.6%, during the six months ended September 28, 2024 as compared to the same period in the prior fiscal year. Selling, general, and administrative expenses, as a percent of segment net sales increased to 13.7% for the six months ended September 28, 2024 compared to 11.4% during the comparable period of the prior fiscal year primarily due to the acquisition of Regional Homes, including a charge of $7.9 million in the first quarter of fiscal 2025 related to the change in fair value of the contingent consideration included in the acquisition of Regional Homes, as well as higher incentive compensation, which is generally based on sales volume or a measure of profitability.

Current wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $79.0 million, or 48.4%, during the nine months ended December 28, 2024 as compared to the same period in the prior fiscal year. Selling, general, and administrative expenses, as a percent of segment net sales increased to 13.5% for the nine months ended December 28, 2024 compared to 11.8% during the comparable period of the prior fiscal year. The increases were primarily due to the inclusion of Regional Homes for the full period of fiscal 2025 compared to 2.5 months in the prior period, as well as a charge of $7.9 million in the first quarter of fiscal 2025 related to the change in fair value of the contingent consideration included in the acquisition of Regional Homes. Additionally, incentive compensation costs, which are generally based on sales volume or measures of profitability, increased in the current period.

Previous wording

Selling, general, and administrative expenses for the Canadian Factory-built Housing segment were flat when compared to the same period of the prior fiscal year. Selling, general, and administrative expenses as a percent of segment net sales increased to 12.1% for the six months ended September 28, 2024 compared to 9.4% during the comparable period of the prior fiscal year due to less absorption of fixed costs caused by lower sales.

Current wording

Selling, general, and administrative expenses for the Canadian Factory-built Housing segment were lower by $0.3 million compared to the same period of the prior fiscal year. Selling, general, and administrative expenses as a percent of segment net sales increased to 11.5% for the nine months ended December 28, 2024 compared to 9.5% during the comparable period of the prior fiscal year due to less absorption of fixed costs caused by lower sales.

Previous wording

Selling, general, and administrative expenses for Corporate/Other includes the Company’s transportation operations, corporate costs incurred for all segments, and intersegment eliminations. Selling, general, and administrative expenses for Corporate/Other increased $9.4 million, or 29.5%, during the six months ended September 28, 2024 as compared to the same period of the prior fiscal year due primarily to higher incentive and stock-based compensation expense and investments made in people and information systems to support future growth.

Current wording

Selling, general, and administrative expenses for Corporate/Other includes the Company’s transportation operations, corporate costs incurred for all segments, and intersegment eliminations. Selling, general, and administrative expenses for Corporate/Other increased $18.0 million, or 37.0%, during the nine months ended December 28, 2024 as compared to the same period of the prior fiscal year due primarily to higher incentive compensation and investments made in people and information systems to support future growth.

Previous wording

The following table summarizes the components of interest (income), net for the six months ended September 28, 2024 and September 30, 2023:

Current wording

The following table summarizes the components of interest (income), net for the nine months ended December 28, 2024 and December 30, 2023:

Previous wording

Interest (income), net was $9.0 million for the six months ended September 28, 2024, compared to $19.8 million in the same period of the prior fiscal year. The change was primarily due to lower interest income from lower average invested cash balances and higher interest expense from higher average floor plan payables and long-term debt balances assumed in the acquisition of Regional Homes.

Current wording

Interest (income), net was $13.0 million for the nine months ended December 28, 2024, compared to $24.1 million in the same period of the prior fiscal year. The change was primarily due to lower interest income from lower average invested cash balances and higher interest expense from higher average floor plan payables and long-term debt balances assumed in the acquisition of Regional Homes.

Previous wording

The following table summarizes other (income) expense for the six months ended September 28, 2024 and September 30, 2023:

Current wording

The following table summarizes other (income) expense for the nine months ended December 28, 2024 and December 30, 2023:

Previous wording

The following table summarizes income tax expense for the six months ended September 28, 2024 and September 30, 2023:

Current wording

The following table summarizes income tax expense for the nine months ended December 28, 2024 and December 30, 2023:

Previous wording

Income tax expense for the three months ended September 28, 2024 was $15.4 million, representing an effective tax rate of 21.6%, compared to income tax expense of $14.8 million, representing an effective tax rate of 24.5% for the three months ended September 30, 2023. The effective tax rate for the three months ended September 28, 2024 was positively impacted by an increase in recognition of tax credits related to the sale of energy efficient homes.

Current wording

Income tax expense for the nine months ended December 28, 2024 was $45.8 million, representing an effective tax rate of 21.7%, compared to income tax expense of $44.8 million, representing an effective tax rate of 23.7% for the nine months ended December 30, 2023. The effective tax rate for the nine months ended December 28, 2024 was positively impacted by an increase in recognition of tax credits related to the sale of energy efficient homes.