Cavco Industries, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter and fiscal year 2022 CAFCO Industries earnings call-in webcast. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to Mark Fusler, Director of Financial Reporting and Investor Relations. You may begin.

Good day, and thank you for joining us for Capital Industries' fourth quarter and fiscal year 2022 earnings conference call. During the call, you'll be hearing from Bill Bohr, President and Chief Executive Officer, Allison Aden, Executive Vice President and Chief Financial Officer, and Paul Bigby, Chief Accounting Officer. Before we begin, we'd like to remind you that the comments made during this conference call by management may contain forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995. including statements of expectations or assumptions about Capco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets, or future market conditions. All four looking statements involve risks and uncertainties which could affect Capco's actual results and could cause its actual results to differ materially from those expressed in any four looking statements made by or on behalf of Capco. I encourage you to review Capco's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent forms, 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, May 27, 2022. CAPCO undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect defense or circumstances after the date of this conference call, except as required by law. I would like to turn the call over to Bill Bohr, President and Chief Executive Officer. Bill?

Welcome, and thank you for joining us today to review our results for the fourth quarter and fiscal year. Fiscal 22 is another year of increased revenue and operating earnings, our 12th in a row. Each of the last several years, as we've turned the corner, we've been facing a different set of challenges, which makes it particularly gratifying to be able to report record results. The year before last, fiscal 21, our revenue and earnings gains were both in the 4% to 5% range. This year, we not only hit new records, revenue grew by 47% and earnings by 119%. The acquisition of Commodore had a significant impact, but even without that addition, we would have grown the top line by about 15% and profit by well over 100%. Most importantly this year, we provided 16,697 homes to families across the country. It's tempting to attribute these results solely to market forces, given the strong demand and significant price increases. But underpinning our financial performance was an improvement in capacity utilization from approximately 75 percent in the fourth quarter a year ago to over 80 percent this past quarter, which is above pre-pandemic levels. Despite continuing labor and supply issues, we're making about 11 percent or 1,600 more homes than we were before the pandemic. Our plants have been extremely focused on improvements to increase staffing and retention. and the work they've been doing to reduce product complexity has been paying off with more homes, which is what our customers have needed the most. On a same-plant basis, production was up 14 percent compared to last year's fourth quarter. We have not seen a drop-off in customer quotes, which we watch as a leading indicator of demand. Similarly, retail traffic and deposits have remained healthy. Our backlog was flat on a sequential basis and up significantly year over year, and orders remained strong in the quarter, again, above healthy pre-pandemic levels. And we've accomplished the needed reduction in weeks of backlog through the significant increase in productivity. Our backlog ended the quarter at 32 to 34 weeks. Additionally, our well-run financial services operations continue to consistently provide steady growth and strong returns. And our ability to serve our customers is greatly enhanced by our lending and insurance businesses. In the coming months, our new plants in Glendale, Arizona, and Hamlet, North Carolina, will begin operations. During fiscal year 22, we initiated these state-of-the-art projects. We acquired Commodore, which added approximately 25% to our capacity. And we made throughput investments across our plant systems. While making those strategic investments, we also completed the $100 million stock repurchase authorization earlier this month. All of this is consistent with our stated capital allocation objectives and demonstrates our ability to return value directly to shareholders without limiting our growth strategy. And our board of directors provided a new reauthorization this week, giving us continued access to this important tool to responsibly manage our balance sheet. I commented at the beginning of the call that every year setting new records is a challenge because of uncertainties in the coming year. The specific uncertainties change from year to year. Over the past few years, it was clearly a question of COVID's impact on economic activity, and that risk has not gone completely away. Certainly, labor and supply challenges persist. This year, we face questions regarding the impact of increasing rates and general economic pressures. And stating the obvious, the rate increases we've already seen dramatically increase monthly payments, thereby decreasing affordability. We know that over the past couple years, the price increases have left many hopeful buyers without the ability to own a home in the near term. Interest rate increases continue that concerning trend. But what can be forgotten is the huge undersupply of housing, particularly less expensive housing. Rising rates don't erase that fundamental undersupply. And additionally, we know that as their options become more expensive, some buyers will move to lower price point home buying alternatives. While we aren't able to specifically quantify it, the movement of buyers from site-built into manufactured housing is real, and we expect that to continue in this rising rate environment. This has happened historically, and the value and quality of manufactured homes competing for these buyers has never been better. The extent to which these positive dynamics offset the impact of higher rates and increased home prices on demand is not yet known, and of course we'll be watching closely. I'm very confident in the increasing role manufactured housing will play in solving the deficit of housing over any strategic planning timeframe. Beyond taking share in traditional MH markets, we have the added opportunity of increasing shipments into urban areas, a dynamic we have barely scratched the surface of. So we remain optimistic, and I have extreme confidence in this organization's ability to successfully monitor and adjust to any shift in market dynamics, as I've seen our people do time and again. With that, I'll turn it over to Allison to discuss the quarterly results in more detail.