Cavco Industries, Inc.

Good day and thank you for standing by. Welcome to the third quarter fiscal year 2025 CAFCO Industries, Inc. earnings call webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Mark Fussler, Corporate Controller and Investor Relations. Please go ahead.

Good day, and thank you for joining us for CAVCO Industries' third quarter fiscal year 2025 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 comments made during this conference call by management It 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 CAFCO. I encourage you to review CAFCO'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 It is accurate only as of the date of this live broadcast, Friday, January 31st, 2025. CAFCO undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events 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?

Thanks, Mark. Welcome and thank you for joining us today to review our third quarter results. This quarter showed strong execution across our operations, supported by continued forward momentum in the market. Sequentially, our EPS jumped 30% to $6.90. Allison will provide a more detailed breakdown. However, the largest drivers were improved results in both financial services and factory-built housing. After a few challenging quarters, our financial services segment recorded its best quarterly profit in four years, driven primarily by our insurance operation. In insurance, the third quarter is typically more profitable due to lower weather-related claims costs, but the positive results were also driven by improvement efforts we discussed in previous calls. We've made significant changes to underwriting to manage claims costs, and we implemented needed premium increases. In addition to the quarter to quarter financial services improvement, factory built housing showed higher volume and gross margin. Despite normal winter and holiday seasonality, we were able to increase volume sequentially by about 3.4% and gross margin improved by 70 basis points. I feel really good about the continued progress our plants are making as they ramp up production. It's always more operationally challenging to increase production than to pull it down in a market downturn. With a lot of focus on hiring, onboarding, and training, we've been able to steadily raise production rates where the market has supported it. This ties into an important point about our backlog movement. Despite entering the seasonally slower third quarter, we made the decision that where our backlogs allowed, our plants would continue ramping production in anticipation of continued market improvement in 2025. We made this decision to press forward to higher production rates knowing that that would involve utilizing some of the backlog. Exiting the third quarter with a still very healthy aggregate backlog of six to eight weeks and a higher system production rate positions us very well for the coming quarters. Of course, market uncertainty remains and if demand weakens in the coming quarters, I have full confidence in our ability to adjust accordingly. Conversely, if demand strengthens, We're a step ahead in controlling backlog growth, and we will have maximized profitable operating days in Q3. While industry shipments declined from Q2, they continued to improve on a seasonally adjusted basis. December numbers are not out yet. However, the seasonally adjusted annual rate of HUD shipments in October and November was 108,000 and 109,000 annual units, respectively. This compares with about 93,000 a year ago for those months, and as low as 89,000 in early 2024. So the industry trend has been decidedly positive as we head into 2025. I also want to close off on an item from last quarter's earnings call, and you might remember that that was shortly after the two devastating hurricanes hit the southeast. At that time, there were questions about whether the southeast market activity would be slowed in Q3. Industry shipment data for October and November showed about 14% year-over-year shipment gain in the most impacted states, indicating that activity resumed quickly following the hurricanes. As the calendar year ends, it's a good time to touch on progress with our digital marketing strategy. Over the last two years, we've implemented a complete transformation of our digital marketing architecture, making it easier for prospective buyers to research our homes and easier to efficiently connect them with retailers. A significant part of our approach is to add value for our retailers as well. One important aspect of this rollout has been to provide dealers and communities easy to manage microsites branded to their businesses. Having their own CAFCO supported sites integrated directly into our overall platform is proving to be a significant value add for our partners. enabling them to generate leads through their microsites and receive leads from our cathcohomes.com digital platform. As we look back on calendar year 2024, the increased traffic, lead generation, and the number of independent retail businesses connecting to our platform have validated our strategy and approach. And as customer engagement and the market evolve, we'll be able to continue building on the platform in new ways. Switching gears, our cash flow generation continued to support a strong balance sheet and the ability to repurchase shares. This quarter, we repurchased $42 million of stock, and our quarter-to-quarter cash and cash equivalents remained essentially flat. With that, I'd like to turn it over to Allison to discuss the financial results in more detail.