CAVCO INDUSTRIES, INC.

Previous wording

As of September 27, 2025 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 46 are located in Texas.

Current wording

We operate a total of 33 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 (two lines), Lancaster, 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 99 Company-owned U.S. retail stores, of which 62 are located in Texas.

Previous wording

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through August 2025 were 70,757, an increase of 3.2% compared to 68,550 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 November 2025 were 95,947, a decrease of 0.3% compared to 96,240 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

Key housing building materials include wood, wood products, steel, gypsum wallboard, windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances and electrical items. Fluctuations in the cost of materials and labor may affect gross margins from home sales to the extent that an increase in costs cannot be efficiently matched to the home sales price. Pricing and availability of certain raw materials have been volatile due to a number of factors in the current environment. We continue to monitor and react to inflation in the cost of these materials by maintaining a focus on our product pricing in response to higher materials costs, but such product pricing increases may lag behind the escalation of such costs. From time to time and to varying degrees, we may experience shortages in the availability of materials and/or labor in the markets served. Availability of these inputs has not caused significant production halts in the current period, but we have experienced periodic shutdowns in other periods and shortages of primary building materials have caused production inefficiencies as we have needed to change processes in response to the delay in materials. These shortages may also result in extended order backlogs, delays in the delivery of homes and reduced gross margins from home sales.

Current wording

Key housing building materials include wood, wood products, steel, gypsum wallboard, windows, doors fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, aluminum, appliances and electrical items. Fluctuations in the cost of materials and labor may affect gross margins from home sales to the extent that an increase in costs cannot be efficiently matched to the home sales price. Pricing and availability of certain raw materials have been volatile due to a number of factors in the current environment. We continue to monitor and react to inflation in the cost of these materials by maintaining a focus on our product pricing in response to higher materials costs, but such product pricing increases may lag behind the escalation of such costs. From time to time and to varying degrees, we may experience shortages in the availability of materials and/or labor in the markets in which we operate. Availability of these inputs has not caused significant production halts in the current period, but we have experienced periodic shutdowns in other periods and shortages of primary building materials have caused production inefficiencies as we have needed to change processes in response to the delay in materials. These shortages may also result in extended order backlogs, delays in the delivery of homes and reduced gross margins from home sales.

Previous wording

Our backlog at September 27, 2025 was $210 million compared to $197 million at March 29, 2025, an increase of $13 million, and down $66 million compared to $276 million at September 28, 2024.

Current wording

Our backlog at December 27, 2025 was $160 million compared to $197 million at March 29, 2025, a decrease of $37 million, and a decrease of $64 million compared to $224 million at December 28, 2024.

Previous wording

Factory-built housing Net revenue increased for the three and six months ended September 27, 2025 due to higher home sales volume and an increase in Net revenue per home sold.

Current wording

Factory-built housing Net revenue increased for the three and nine months ended December 27, 2025 due to higher home sales volume and an increase in Net revenue per home sold. The American Homestar acquisition contributed $42.0 million in the current year periods.

Previous wording

For the three and six months ended September 27, 2025, Financial services Net revenue increased primarily due to higher insurance premiums.

Current wording

For the three and nine months ended December 27, 2025, Financial services Net revenue increased primarily due to higher insurance premiums.

Previous wording

Factory-built housing Gross profit and Gross profit as a percentage of Net revenue for the three and six months ended September 27, 2025 increased due to higher sales volume and an increase in Net revenue per home sold.

Current wording

In the Factory-built housing segment, Gross profit for the three and nine months ended December 27, 2025 increased due to an increase in home sales volume and Net revenue per home sold, partially offset by higher costs per unit.

Previous wording

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue for the three and six months ended September 27, 2025 increased due to higher insurance premiums and lower claim losses. The claim loss reduction resulted from policy underwriting improvements and severe weather events in the prior year periods.

Current wording

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue increased for the three and nine months ended December 27, 2025 due to higher insurance premiums and lower claim losses. The claim loss reduction resulted from policy underwriting improvements and severe weather events in the prior year periods.

Previous wording

Financial services Selling, general and administrative expenses for the three and six months ended September 27, 2025 increased primarily due to increases in compensation year over year.

Current wording

Financial services Selling, general and administrative expenses for the three and nine months ended December 27, 2025 increased primarily due to increases in compensation year over year.

Previous wording

Interest income consists primarily of interest earned on cash balances held in money market accounts, and interest earned on commercial floorplan lending. Interest expense consists primarily of interest related to finance leases.

Current wording

Interest income consists primarily of interest earned on cash balances held in money market accounts and interest earned on commercial floorplan lending. Interest income is down in thethree and nine months ended December 27, 2025 primarily due to lower interest rates on deposited cash and a decrease in cash balances due to the American Homestar acquisition in the three months ended December 27, 2025. Interest expense consists primarily of interest related to finance leases.

Previous wording

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

Current wording

Income tax expense increased compared to the prior year period due to higher income before income taxes and a change in the effective tax rate due primarily to fewer energy star credits in the current year as well as certain deal costs that are not deductible for federal income tax purposes.

Previous wording

We believe that cash and cash equivalents at September 27, 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.

Current wording

We believe that cash and cash equivalents at December 27, 2025, 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 by up to an aggregate amount of $75 million up to $150 million. No amounts are currently outstanding under the Revolving Credit Facility. 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 six months ended September 27, 2025 and September 28, 2024, respectively:

Current wording

The following is a summary of the Company's cash flows for the nine months ended December 27, 2025 and December 28, 2024, respectively:

Previous wording

Net cash provided by operating activities increased primarily from higher Net income, a decrease in Consumer loans originated compared to the prior year period and a decrease in Prepaid expenses and other current assets. The increase was partially offset by an increase in Commercial loans originated.

Current wording

Net cash provided by operating activities increased primarily from higher Net income, an increase in Deferred income taxes, a decrease in Consumer loans originated compared to the prior year period and decreases in Accounts receivable, net and Inventory. The increase was partially offset by an increase in Commercial loans originated.

Previous wording

Consumer loan originations decreased $10.1 million to $29.8 million for the six months ended September 27, 2025 from $39.9 million for the six months ended September 28, 2024, and proceeds from consumer loans decreased $0.1 million to $33.9 million for the six months ended September 27, 2025 from $34.0 million for the six months ended September 28, 2024.

Current wording

Consumer loan originations decreased $11.2 million to $43.0 million for the nine months ended December 27, 2025 from $54.2 million for the nine months ended December 28, 2024, and proceeds from consumer loans decreased $4.3 million to $42.8 million for the nine months ended December 27, 2025 from $47.0 million for the nine months ended December 28, 2024.

Previous wording

Commercial loan originations increased $28.5 million to $83.2 million for the six months ended September 27, 2025 from $54.7 million for the six months ended September 28, 2024. Proceeds from the collection on commercial loans provided $75.4 million this year, compared to $55.1 million in the prior year, a net increase of $20.3 million.

Current wording

Commercial loan originations increased $29.8 million to $117.3 million for the nine months ended December 27, 2025 from $87.5 million for the nine months ended December 28, 2024. Proceeds from the collection on commercial loans provided $110.8 million for the nine months ended December 27, 2025, compared to $85.0 million in the comparable prior year, a net increase of $25.8 million.

Previous 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.

Current wording

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

Previous wording

The change in Net cash used in financing activities was primarily due to the repurchase of more shares of common stock and at a higher average daily stock price.

Current wording

The change in Net cash used in financing activities was primarily due to the repurchase of a higher number of shares of common stock, which were also at a higher average daily stock price.

Previous wording

There have been no significant changes to our critical accounting estimates during the six months ended September 27, 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.

Current wording

There have been no significant changes to our critical accounting estimates during the nine months ended December 27, 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.