Cavco Industries, Inc.

Good day, and thank you for standing by. Welcome to the third quarter fiscal year 2026 Cap Call 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. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message by the way your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference will be recorded on night 10. Conference, over to your first speaker today, Mark Fessler, Corporate Controller and Investor Relations. Please go ahead.

Good day, and thank you for joining us for Capco Industries' third quarter fiscal year 2026 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 Bigby, 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. Forward-looking statements include statements about our future or expected business and financial performance and are not promises or guarantees of future performance. They are expectations or assumptions about CADCO'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. For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings with the SEC which are also available on our investor relations website and at sec.gov. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, January 30th, 2026. CAPCOM undertakes no obligation to revise or update any forward-looking statements, 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 for our third quarter results for fiscal 2026. There are a lot of moving parts in our Q3 results, mostly due to the closing of the American Home Star deal and its impact on the quarter. Later in my comments, I'll discuss the integration activities and our solidifying view of the deal synergies. But I'd like to start by framing the discussion that Allison and Paul will fill in around the profit and EPS results. The year-over-year EPS decrease is best dissected starting from the bottom of the income statement. Our tax rate was considerably higher than a year ago, partly due to declining tax credits from the phasing out of the Energy Star program and partly due to non-deductible deal costs. Moving up the P&L to SG&A, the increase this quarter was mainly the result of bringing American Homestar overhead costs into the company and the aforementioned one-time transaction costs. These SG&A and tax rate items represent a considerable part of the year-over-year EPS difference, but not all of it. So now let's get into the underlying business environment and results. Based on HUD shipment data, industry shipments slowed in October and November. Those two months were down 13% from the calendar 2024 period. We don't yet have the December data point to round out the quarter. We were not immune to the overall decrease. Excluding the volume pickup we got from American Home Star, our volume was down about 4% compared to last year and 6% sequentially. From an operational perspective, we took some additional down days around the holidays where it made sense. But we deliberately maintained our daily production rate, or floors per day, so that we could stay positioned for opportunities in the spring selling season. While we're all looking to see how orders shape up in the weeks ahead, the bias in our plants generally is to hold pace and go up from here whenever orders and backlogs allow. As part of staying poised for market opportunities, we utilized about a week of overall backlog, similar to what we did last year in the third quarter. and we finished this quarter in the four to six weeks range. Early indications are that backlogs are stable and could increase, or if we pick up production pace, be maintained at this level heading into the spring. Last quarter, I referenced some relative slowdown in the southeast region of the country compared to other regions. I said at the time that we didn't see any systemic reason for the variation, and sure enough, The southeast stabilized and saw higher volume in Q3 versus Q2, while most all the other regions had declining shipments. Regarding channels, communities represented most of the reduced volume we experienced. Retailers remained steady quarter to quarter. A positive indicator of underlying demand continues to be average selling price, which grew sequentially despite the volume drop-off. After considering the impacts of product mix and retail integration, both of which pushed average selling price upward, single-section home prices were roughly flat and multi-section pricing was up. We have seen the trend toward multi-section homes for a while now, both in the HUD data and our results. It's difficult to pinpoint any one reason. However, it seems fair to conclude that affordability at the lowest price levels is increasingly strained. In other words, households that are seeking to become homeowners of the lowest priced homes seem to be increasingly priced out or they're lacking the confidence to purchase in this environment. Sequentially, our gross margin dropped in the quarter despite the average selling price increase. While usually the primary factors driving movement in factory-built gross margin are manufacturing costs, those period-to-period changes roughly netted out. We saw some compression between retail and wholesale prices in our retail operations, which drove the bulk of our gross margin decrease. And to be clear, those retail comments are based on our pre-Homestar network, not due to the addition of the acquired operations. And it's worth noting that retail, our retail operations remain primarily centered in the south central region. We don't believe that price compression is either an indication of the broader market or that it represents a meaningful shift over time. I know the focus is rightly looking forward and trying to figure out where the industry will go from here in the coming quarters. While the uncertainty remains, the tone we're picking up in both our operations and in the market is optimistic. The leading indicators such as quotes and retail traffic remain healthy. Notably, policy discussions are increasingly focused on affordable housing and specifically, on increasing supply for first-time buyers. Affordable housing is one of the highest voter priorities heading into the November election, and policies to increase supply, remove barriers, enable innovation, and help buyers are all supportive of factory-built housing. It will be interesting to see the proposals shape up in the coming months. It's important to comment on financial services, where the trend continued with another strong quarter, driven by our insurance operations. Our lending operations have been less of a contributor in recent periods. However, we've been making progress identifying buyers of our loans, and I expect the originations and loan sales to pick up in the coming quarters. Both of these operations are important strategic contributors to the integrated value of CAVCO and our ability to provide complete solutions for our homebuyers. Now I'd like to take a few minutes to talk about the American Home Star integration. First, we had a solid integration plan heading into the combination, and both organizations have come together, really hitting the ground running as one company. We're right on that plan with impressive execution from HR benefits and payroll to finance, IT, and operations. Now that we've been together for over a quarter, our view of synergies is starting to firm up. What I'd like to share today is our view of the most tangible cost reduction synergies. We spoke previously about this deal offering meaningful purchasing, labor, and SG&A cost savings. Our total view of these tangible and measurable synergies is now above $10 million on an annual basis, and we estimate that about half has been achieved in the run rate as we entered Q4. The positive impact didn't show itself in Q3 because the gains were achieved as the quarter progressed, and they were offset by integration costs that will decline going forward. I thought it important to provide this information at a time when we're well into our integration work and can provide a more informed view. It's good news that the current picture is significantly higher than our pre-deal internal estimates. Additionally, there are a number of areas where precise quantification is difficult, but where we know value is being created. Areas like the ability to optimize product within and across plants as the system grows and the ability to fill out company store offerings with Capco product from various plants are examples of the very real ways in which the strategic benefits of a combination like this show. Again, these are very real synergies and are not included in the tangible cost savings I laid out. And finally, we continued our share repurchases during the quarter with another $44 million used to buy back company stock. With this return of capital and the significant use of cash for the acquisition in the quarter, our unrestricted cash balance at the end of Q3 was a healthy $225 million. Now I'll turn it over to Allison to give more details on the financial results.