Cavco Industries, Inc.

Good day, and thank you for standing by. Welcome to the fourth quarter fiscal year 2024 CAFCO industry earnings call. At this time, I'll participate on listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mark Fuster, Corporate Controller, Investor Relations. Please go ahead.

Good day, and thank you for joining us for Capital Industries' fourth quarter and fiscal year 2024 earnings conference call. During this call, you'll be hearing from Bill Bohr, President and Chief Executive Officer, Allison Aden, Executive Vice President and Chief Financial Officer, and Paul Digby, Chief Accounting Officer. Before we begin, we'd like to remind you that comments made during this conference call by management may contain forward-looking statements, including statements of expectations or assumptions about CAFCO'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 forward-looking statements involve risks and uncertainties which could affect CAFCO's actual results and could cause its actual results to differ materially from those expressed in any forward-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 any 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 24th, 2024. CAPCO undertakes no obligation to revise or update any forelooking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Now I'd like to turn the call over to Bill Bohr, President and Chief Executive Officer. Bill?

Thanks, Mark. Welcome and thank you for joining us today to review our fourth quarter results. The fourth quarter was the transition quarter we were looking for. Coming out of the holidays, we had a number of plants on four-day schedules, four-day-a-week production schedules, and several took extended holiday shutdowns in January due to low backlogs at the time. Those initial lost production days at the beginning of the quarter drove our essentially flat, sequential wholesale shipments. During the quarter, though, order rates strengthened, and almost all of our plants have now worked their way back to five-day schedules and begun increasing their daily production rates. We saw the first quarter-to-quarter backlog increase since the downturn began, which is what we were looking for to indicate that buyers are continuing to return to the market. We had hoped this would be facilitated by declining mortgage rates, but as you know, that didn't happen. Still, buyers are returning because they need homes, they're adjusting to the higher rates, and they're adjusting their expectations around the home they can afford. On the same plant basis, orders continued their sequential improvement for the sixth straight quarter. It hasn't been dramatic, but it has been consistently improving despite the lack of rate relief noted earlier. Within the context of what I've said here, our capacity utilization for the quarter was consistent with the last few at approximately 60%. However, given the downtime earlier in the quarter, the takeaway is that we left the quarter at a higher utilization than we started. Regarding the backlog improvement, We ended the quarter with $191 million, up from $160 million in Q3. Pricing in the backlog was basically flat, so this represents a unit backlog improvement of roughly 20%. At quarter end, we had about seven to eight weeks in the backlog. Despite a small reduction in average selling price, we were able to maintain gross margin in the housing segment at 22.4%. which was flat compared to the gross margin last quarter. I know there's continuing interest in understanding the status of community orders. We've discussed this for several quarters, having said that we expect it to take a few quarters into calendar 2024 to really see meaningful improvement. Community orders are still lagging. Every community has its own story, so improvement will happen over a period of time. Our expectation remains that community orders will improve this calendar year as inventory levels come down. The order strength we've seen thus far has primarily come from retail dealers, so the order boost from communities is still ahead. Commenting on the fiscal year, our teams across operations, including retail and financial services, really showed their ability to react quickly and effectively to market dynamics. Despite the slowdown, we've maintained healthy margins, profitability, and cash flows. Now, as we increase schedules, our operators are ramping production rates in an effort to keep backlogs in check. This is the nature of the industry, and the ability to adapt quickly is being shown throughout our operations. I want to take a few minutes to comment on the year we just completed and some of the really important accomplishments. Our stated objective is the market got hit with rapid interest rate increases was not only to effectively manage the cycle, but to stay focused on our priorities so we would come out of the down cycle stronger and even more prepared to supply homes to deserving families. First and foremost, our plants continued an impressive improvement in our safety results. This fiscal year, our total recordable injury rate was reduced 37%. This continues a multi-year trend of significant improvement, and in calendar 2023, we experienced a 35% lower incident rate compared to the industry benchmark. We also grew our retail footprint by adding 15 stores in the fiscal year after growing 19 stores in fiscal year 23. This growth is in support of our plant distribution needs, and our current system stands at 79 retail locations. We announced the first nationally available HUD-approved line of duplex homes. Interest in our Anthem series has exceeded expectations, and we anticipate orders for this new answer to the affordable housing crisis to grow in the coming quarters. We also continued development and rollout of our digital marketing platform across our family of brands with very strong contacts and lead generation. We completed the integration of the Solitaire Acquisition, which closed in late fiscal year 23. This included efforts to optimize product offerings across the combined retail system, as well as refreshing the Solitaire product offering. The full impact of this acquisition will show in the improving markets. We advanced our people strategy with continued improvements in leadership and development, pay and benefits, career processes, and workplace improvements. This work is resulting in higher skills, reduced turnover, and improved job satisfaction, and it creates the foundation for our long-term success. A critically important part of that people strategy is training and development. After a standing start only a few years ago, CAFCO was recognized this past year as one of the top training organizations in the world through the training magazine's APEX award. We purchased $110 million of our stock while maintaining a very strong balance sheet capable of supporting our continued growth investment. With all these improvements, steady increases in orders, and a return to normal community orders still ahead of us, we're looking forward to producing more quality, affordable homes in the quarters and years ahead. With that, I'd like to turn it over to Allison to discuss the financial results in more detail.