Champion Homes, Inc.

Previous wording

In addition to those acquisitions, the Company is also focused on enhancing its U.S. manufacturing production capacity, as well as redeployment of capital and resources through strategic actions at specific plants. During the first quarter of fiscal 2026, the Company idled production at the Bartow, Florida manufacturing plant and communicated a plan to cease operations at the Kelowna, British Columbia manufacturing plant. We believe these actions will ultimately lead to greater operating efficiency and profitability. The Company owns seven idle manufacturing facilities that could be used for further manufacturing capacity expansion in future periods.

Current wording

In addition to those acquisitions, the Company is also focused on enhancing its U.S. manufacturing production capacity, as well as redeployment of capital and resources through strategic actions at specific plants. During the first half of fiscal 2026, the Company idled production at the Bartow, Florida manufacturing plant and ceased operations at the Kelowna, British Columbia manufacturing plant. The Company believes those actions will ultimately lead to greater operating efficiency and profitability. In addition, the Company sold a previously idled manufacturing facility during the second quarter of fiscal 2026. The Company continues to own six idle manufacturing facilities that could be used for further manufacturing capacity expansion in future periods.

Previous wording

The Company saw a decrease in customer orders during the three months ended June 28, 2025 versus the same period last year. As a result of the decreased orders, combined with higher production rates versus the prior year, the Company's manufacturing backlog decreased to $302.5 million as of June 28, 2025 compared to $404.8 million as of June 29, 2024.

Current wording

The Company saw a decrease in customer orders during the six months ended September 27, 2025 versus the same period last year. As a result of the decreased orders, combined with higher production rates versus the prior year, the Company's manufacturing backlog decreased to $313.2 million as of September 27, 2025 compared to $427.5 million as of September 28, 2024.

Previous wording

For the three months ended June 28, 2025, approximately 85.1% 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 27,676 and 27,024 units during the three months ended May 31, 2025 and 2024, respectively. Based on industry data, the Company’s U.S. wholesale market share of HUD code homes sold was 22.5% and 21.3%, for the three months ended May 31, 2025 and 2024, 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 11% of all U.S. single family home starts. Our market share in the U.S total housing market was approximately 2.7% and 2.5% for the three months ended June 28, 2025 and June 29, 2024, respectively.

Current wording

For the six months ended September 27, 2025, approximately 87.3% 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 44,567 and 44,278 units during the five months ended August 31, 2025 and 2024, respectively. Based on industry data, the Company’s U.S. wholesale market share of HUD code homes sold was 22.6% and 21.9%, for the five months ended August 31, 2025 and 2024, 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 2.6% and 2.4% for the six months ended September 27, 2025 and September 28, 2024, respectively.

Previous wording

UNAUDITED RESULTS OF OPERATIONS FOR THE FIRST QUARTER OF FISCAL 2026 VS. 2025

Current wording

UNAUDITED RESULTS OF OPERATIONS FOR THE SECOND QUARTER OF FISCAL 2026 VS. 2025

Previous wording

Net sales for the three months ended June 28, 2025 were $701.3 million, an increase of $73.5 million, or 11.7%, compared to the three months ended June 29, 2024. The following is a summary of the change by operating segment.

Current wording

Net sales for the three months ended September 27, 2025 were $684.4 million, an increase of $67.6 million, or 11.0%, compared to the three months ended September 28, 2024. The following is a summary of the change by operating segment.

Previous wording

The Canadian Factory-built Housing segment net sales increased by $9.3 million, or 44.8% for the three months ended June 28, 2025 compared to the same period in the prior fiscal year, primarily due to a 49.7% increase in homes sold partially offset by a 3.3% decrease in average home selling price. The increase in homes sold was due to higher demand in certain markets. The decrease in average selling price was due to product mix. On a constant currency basis, net sales for the Canadian segment were unfavorably impacted by approximately $0.7 million due to fluctuations in the translation of the Canadian dollar to the U.S. dollar during the three months ended June 28, 2025 as compared to the same period of the prior fiscal year.

Current wording

The Canadian Factory-built Housing segment net sales increased by $3.9 million, or 17.5% for the three months ended September 27, 2025 compared to the same period in the prior fiscal year, primarily due to a 9.5% increase in homes sold and a 7.3% increase in average home selling price. The increase in homes sold was due to higher demand in certain markets. The increase in average selling price was due to increased pricing and product mix. On a constant currency basis, net sales for the Canadian segment were unfavorably 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 September 27, 2025 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 June 28, 2025, net sales increased $1.8 million, or 24.4%, primarily attributable to revenue generated from 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 September 27, 2025, net sales increased $1.7 million, or 23.1%, primarily attributable to increased revenue generated from Champion Financing, partially offset by lower recreational vehicle shipments from the Company's transportation business.

Previous wording

Gross profit as a percent of sales during the three months ended June 28, 2025 was 27.1% compared to 26.2% during the three months ended June 29, 2024. The following is a summary of the change by operating segment.

Current wording

Gross profit as a percent of sales during the three months ended September 27, 2025 was 27.5% compared to 27.0% during the three months ended September 28, 2024. The following is a summary of the change by operating segment.

Previous wording

Gross profit for the Canadian Factory-built Housing segment increased by $2.9 million, or 54.6%, during the three months ended June 28, 2025 compared to the same period in the prior fiscal year. The increase in gross profit is primarily due to higher sales volumes. Gross profit as a percent of net sales was 27.5% for the three months ended June 28, 2025, compared to 25.7% in the same period of the prior year, primarily due to more absorption of fixed costs due to higher sales volumes.

Current wording

Gross profit for the Canadian Factory-built Housing segment increased by $2.6 million, or 54.2%, during the three months ended September 27, 2025 compared to the same period in the prior fiscal year. The increase in gross profit is primarily due to higher sales volumes. Gross profit as a percent of net sales was 28.6% for the three months ended September 27, 2025, compared to 21.8% in the same period of the prior year, primarily due to more absorption of fixed costs due to higher sales volumes and higher average selling prices.

Previous wording

Gross profit for the Corporate/Other segment increased $2.6 million, or 58.2%, during the three months ended June 28, 2025 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 $2.5 million, or 49.1%, during the three months ended September 27, 2025 compared to the same period of the prior fiscal year due primarily to increased operating activity at Champion Financing.

Previous wording

Selling, general, and administrative expenses were $111.3 million for the three months ended June 28, 2025, an increase of $2.5 million, or 2.3%, 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 $113.1 million for the three months ended September 27, 2025, an increase of $13.5 million, or 13.5%, 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 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 decreased $1.6 million, or 7.7%, during the three months ended June 28, 2025 as compared to the same period of the prior fiscal year. The decrease was primarily due to lower IT related costs and lower foreign currency transaction losses, partially offset by higher professional fees related to the acquisition of Iseman Homes.

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 $3.5 million, or 17.0%, during the three months ended September 27, 2025 as compared to the same period of the prior fiscal year. The increase was primarily due to higher professional fees and incentive compensation, partially offset by lower IT costs.

Previous wording

Interest income, net was $4.5 million for the three months ended June 28, 2025, compared to $4.2 million in the same period of the prior fiscal year. The change was primarily due to lower interest rates on invested cash balances and floor plan payables.

Current wording

Interest income, net was $4.0 million for the three months ended September 27, 2025, compared to $4.7 million in the same period of the prior fiscal year. The change was primarily due to lower interest rates on invested cash balances and floor plan payables.

Previous wording

EQUITY IN NET INCOME OF AFFILIATES

Current wording

EQUITY IN NET LOSS OF AFFILIATES

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 $0.6 million for the three months ended June 28, 2025 represents a loss on the equity method investment in ECN of $0.5 million and net losses from other unconsolidated equity method investments of $0.1 million. Equity in net loss of affiliates of $1.3 million for the three months ended June 29, 2024 represents a loss on the equity method investment in ECN of $1.2 million and net losses from other equity method investments of $0.1 million.

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 loss of affiliates of $0.1 million for the three months ended September 27, 2025 represents losses on the equity method investment in ECN and other unconsolidated equity method investments. 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 equity method investments of $1.4 million.

Previous wording

Adjusted EBITDA for the three months ended June 28, 2025 was $94.2 million, an increase of $19.2 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.

Current wording

Adjusted EBITDA for the three months ended September 27, 2025 was $83.4 million, an increase of $9.1 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

Net sales for the Company’s U.S. manufacturing and retail operations increased by $62.4 million, or 10.4%, for the three months ended June 28, 2025 compared to the three months ended June 29, 2024. The increase was due to a 6.5% increase in new homes sold and a 3.6% increase in the average selling price per new home. The increase in the number of homes sold was due to higher production volumes compared to the prior year. The increase in average selling price was due to a shift in mix to more multi-wide units and increased pricing at our company-owned retail sales centers.

Current wording

Net sales for the Company’s U.S. manufacturing and retail operations increased by $124.3 million, or 10.5%, for the six months ended September 27, 2025 compared to the six months ended September 28, 2024. The increase was due to a 5.0% increase in the number of new homes sold and a 5.2% increase in the average selling price per new home. The increase in the number of homes sold was due to higher production volumes compared to the prior year and the inclusion of Iseman Homes since May 30, 2025. The increase in average selling price was due primarily to a shift in mix to more multi-wide units and increased pricing at our company-owned retail sales centers.

Previous wording

Gross profit for the U.S. Factory-built Housing segment increased by $20.1 million, or 13.0%, during the three months ended June 28, 2025 compared to the same period in the prior fiscal year. Gross profit was 26.3% as a percent of segment net sales for the three months ended June 28, 2025 compared to 25.7% 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 and the reduction in the impact to the carrying value of inventory from purchase accounting as a result of the acquisition of Regional Homes in October 2023.

Current wording

Gross profit for the U.S. Factory-built Housing segment increased by $36.5 million or 11.7%, during the six months ended September 27, 2025 compared to the same period in the prior fiscal year. The increase in gross profit was driven by higher revenue, including the addition of Iseman Homes. Gross profit was 26.5% as a percent of segment net sales for the six months ended September 27, 2025 compared to 26.2% 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 the reduction in the impact to the carrying value of inventory from purchase accounting as a result of the acquisition of Regional Homes in October 2023.

Previous wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $1.2 million, or 1.5%, during the three months ended June 28, 2025 as compared to the same period in the prior fiscal year. SG&A, as a percent of segment net sales decreased to 13.1% for the three months ended June 28, 2025 compared to 14.2% during the comparable period of the prior fiscal year. The increase in SG&A was due to higher incentive compensation, the acquisition of Iseman Homes and $1.0 million of costs associated with the idling of the Bartow, Florida plant, partially offset by 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 which did not recur in the current period. The decrease in SG&A as a percent of segment sales was a result of higher sales volumes.

Current wording

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment increased $8.3 million, or 5.1%, during the six months ended September 27, 2025 as compared to the same period in the prior fiscal year. Selling, general, and administrative expenses, as a percent of segment net sales decreased to 13.0% for the six months ended September 27, 2025 compared to 13.7% during the comparable period of the prior fiscal year. The increase in selling, general, and administrative expenses was primarily due to higher wages and incentive compensation costs, which are generally based on sales volume or measures of profitability, the inclusion of Iseman Homes, and $1.0 million of costs associated with the idling of the Bartow, Florida plant, partially offset by a $3.7 million gain on the sale of an idle facility in the second quarter of fiscal 2026 and 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 which did not recur in the current year.

Previous wording

Other income for each of the three months ended June 28, 2025 and June 29, 2024 represents dividend income of $1.2 million from the investment in ECN Preferred Shares.

Current wording

Other (income) of $1.1 million for the six months ended September 27, 2025 and $1.2 million for the six months ended September 28, 2024 primarily represents dividend income from the investment in ECN Preferred Shares.

Previous wording

Income tax expense for the three months ended June 28, 2025 was $17.7 million, representing an effective tax rate of 21.0%, compared to income tax expense of $13.7 million, representing an effective tax rate of 22.5% for the three months ended June 29, 2024.

Current wording

Income tax expense for the six months ended September 27, 2025 was $36.3 million, representing an effective tax rate of 22.2%, compared to income tax expense of $29.1 million, representing an effective tax rate of 22.0% for the six months ended September 28, 2024.

Previous wording

Although orders from customers can be canceled at any time without penalty, and unfilled orders are not necessarily an indication of future business, the Company’s unfilled U.S. and Canadian manufacturing orders at June 28, 2025 totaled $302.5 million compared to $404.8 million at June 29, 2024. The decrease in backlog is a function of lower orders and higher production rates during the first quarter of fiscal 2026 compared to the same period in the prior year.

Current wording

Although orders from customers can be canceled at any time without penalty, and unfilled orders are not necessarily an indication of future business, the Company’s unfilled U.S. and Canadian manufacturing orders at September 27, 2025 totaled $313.2 million compared to $427.5 million at September 28, 2024. The decrease in backlog is a function of lower orders and higher production rates during the first half of fiscal 2026 compared to the same period in the prior year.

Previous wording

The Company’s primary sources of liquidity are cash flows from operations and existing cash balances. Cash balances and cash flows from operations for the next year are expected to be adequate to cover working capital requirements, capital expenditures, and strategic initiatives and investments. The Company has an Amended Credit Agreement which provides for a $200.0 million revolving credit facility, including a $45.0 million letter of credit sub-facility. At June 28, 2025, $172.5 million was available for borrowing under the Amended Credit Agreement. The Company’s revolving credit facility includes (i) a maximum consolidated total net leverage ratio of 3.25 to 1.00, subject to an upward adjustment upon the consummation of a material acquisition, and (ii) a minimum interest coverage ratio of 3.00 to 1.00. The Company anticipates compliance with its debt covenants and projects its level of cash availability to be in excess of cash needed to operate the business for the next year and beyond. In the event operating cash flow and existing cash balances were deemed inadequate to support the Company’s liquidity needs, and one or more capital resources were to become unavailable, the Company would revise its operating strategies.

Current wording

The Company’s primary sources of liquidity are cash flows from operations and existing cash balances. Cash balances and cash flows from operations for the next year are expected to be adequate to cover working capital requirements, capital expenditures, and strategic initiatives and investments. The Company's Second Amended Credit Agreement provides for a $200.0 million revolving credit facility, including a $45.0 million letter of credit sub-facility. At September 27, 2025, $172.5 million was available for borrowing under the Second Amended Credit Agreement. The Company’s revolving credit facility includes (i) a maximum consolidated total net leverage ratio of 3.25 to 1.00, subject to an upward adjustment upon the consummation of a material acquisition, and (ii) a minimum interest coverage ratio of 3.00 to 1.00. The Company anticipates compliance with its debt covenants and projects its level of cash availability to be in excess of cash needed to operate the business for the next year and beyond. In the event operating cash flow and existing cash balances were deemed inadequate to support the Company’s liquidity needs, and one or more capital resources were to become unavailable, the Company would revise its operating strategies.

Previous wording

Cash provided by operating activities was $75.3 million for the three months ended June 28, 2025 compared to $84.6 million for the three months ended June 29, 2024. The decrease was primarily driven by less favorable changes in working capital items during the first three months of fiscal 2025 as compared to the same period of the prior year, partially offset by higher operating income before non-cash charges.

Current wording

Cash provided by operating activities was $151.2 million for the six months ended September 27, 2025 compared to $144.4 million for the six months ended September 28, 2024. The increase is primarily driven higher operating income before non-cash charges partially offset by less favorable changes in working capital items during the first six months of fiscal 2026 as compared to the same period of the prior year.

Previous wording

Cash used in investing activities was $33.9 million for the three months ended June 28, 2025 compared to $9.1 million for the three months ended June 29, 2024. The increase in cash used in investing activities was related to net cash used to acquire Iseman Homes in the first quarter of fiscal 2026.

Current wording

Cash used in investing activities was $37.8 million for the six months ended September 27, 2025 compared to $22.6 million for the six months ended September 28, 2024. The increase in cash used in investing activities was related to net cash used to acquire Iseman Homes in the first quarter of fiscal 2026.

Previous wording

Cash used in financing activities was $51.9 million for the three months ended June 28, 2025 compared to $20.6 million for the three months ended June 29, 2024. The change between periods was primarily a result of repurchases of the Company's common stock which totaled $50.0 million in first quarter fiscal 2026 compared to $20.0 million in the first quarter of fiscal 2025.

Current wording

Cash used in financing activities was $107.9 million for the six months ended September 27, 2025 compared to $47.3 million for the six months ended September 28, 2024. The change between periods was primarily a result of repurchases of the Company's common stock which totaled $100.0 million in first six months of fiscal 2026 compared to $40.0 million in the first six months of fiscal 2025.