Champion Homes, Inc.

being recorded. I will now turn the call over to your host, Jason Blair, to begin. Jason, please go ahead.

Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the fourth quarter and full year ended March 29, 2025. Here to review our results are Tim Larson, Champion Homes President and Chief Executive Officer, and Lori Huff, Executive Vice President, Chief Financial Officer, and Treasurer. Earlier this morning, we issued our earnings release. As a reminder, the earnings release and statements made during today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission. Please note that today's remarks contain non-GAAP financial measures which we believe can be useful in evaluating performance. Definitions and reconciliations of these measures can be found in the earnings release. I will now turn the call over to Champion Homes CEO, Tim Larson.

Thank you, Jason, and good morning, everyone. On behalf of the Champion team, I'm proud to report that in fiscal 2025, we provided over 26,000 homes to customers and families across the U.S. and Canada. This represents a 19% increase in homes sold year over year, and revenue growth of 23%, resulting in fiscal year 2025 sales of 2.5 billion. Unit volume increase was driven by higher demand across all channels, including from the regional homes acquisition from the entirety of the fiscal year. Performance was driven by an unwavering focus on our customers and executing our strategic priorities. We are investing in new products and services for our channel partners and expanding our retail capabilities, including today announcing an acquisition of Eisman Homes which I will discuss further in a moment. We were very active in the marketplace during the quarter and had a tremendous reception to our new products at the International Builder Show, where we showcased models laser-focused on providing builders with relevant and affordable turnkey homes. In March, we had a great response to our Biloxi Show product lineup, reflecting the strength of the Champion Homes family of brands. More recently, we were able to engage with leadership from the Department of Housing and Urban Development, We are encouraged by the dialogue and the positive feedback we received during their recent visits. We are impressed by U.S. HUD Secretary Scott Turner's commitment to making homeownership more attainable. I appreciate the time we spent touring our homes and his willingness to learn how we can further expand manufactured housing to address the affordability needs across the country. The recent spotlight in Congress to reaffirm HUD's role as the sole regulator and removing the requirement that manufactured homes be on a permanent chassis are all steps in the right direction. And when combined with zoning reform, will reduce barriers to further grow the market for offsite built homes. A market that we are investing in for growth, as reflected in our strategic priorities and capital allocation, that are all aligned to deliver sustained value across all stakeholders. Given the current overall market uncertainty, we are focused on remaining nimble, while thoughtfully advancing our strategy. And that was very evident in the fourth quarter of fiscal 25. team continue to execute on the fundamentals and deliver profitable growth by navigating an unpredictable environment with tariffs and inflation looming throughout the quarter. Fourth quarter, year-over-year net sales increased 11% to $594 million, and homes sold during the period increased 6% to a total of 6,171 units. We experienced normal seasonality in the fourth quarter with a sequential decrease in revenue compared to the third quarter, and orders increased as we progressed through the quarter and our backlog at the end of the year was 343 million. Backlogs were up 9% from the end of last year and up 10% sequentially. Average backlog lead time ended the quarter at eight weeks, which is within our target range of four to 12 weeks. I'll provide some additional commentary from the quarter on each of our sales channels. Sales to our independent retail channel and through our captive retail stores both increased versus the prior year period. For independent retailers, We continue to advance our digital technology and lead management platform, including the phase launch of a dealer portal, which was receiving great reviews from the early adopters. Consistent with our strategy to expand our captive retail presence, we announced today an agreement to acquire Eisen Homes located in the Plains region of the US. We will use the strength of our in-house retail and our new Eisen Home team to drive growth in this region. I'll touch more on Eisen in a bit. Moving to the community channel, We remain focused on supporting our community partners by providing timely and relevant products at the right value. Through these efforts, sales in our community channel increased versus the prior year. Our builder-developer pipeline remains strong as we continue to grow the network. The projects are in various stages and are being paced somewhat by the market uncertainty. However, we are continuing to invest in this channel and believe over the long term, off-site build homes will become a more widely adopted approach for builders and land developers. Campion Financing, our joint venture with Triad Financial Services, continues to perform well. Our retail loan programs, when combined with the right home, provide today's consumers with their optimal monthly payment. Our floor plan programs allow us to support growth with our retailers by ensuring they have the right products for each market. We appreciate the collaboration with the ECM Capital and Triad teams and partners. Looking to our first fiscal quarter of 2016, As we thoughtfully navigate the market and consumer uncertainty, we anticipate QN revenue to be up low single digits compared to the same period last year. As we begin fiscal 2026, demand has been less predictable compared to a normal spring selling season. In addition, we are seeing a shift in consumer trends to smaller floor plans with fewer features and options. The near-term outlook to the community channel varies as we hear mixed views depending on the operator's geography and expansion pace. Despite the uncertain environment, we remain confident and focused on executing our strategy and leading and managing the variables within our control while remaining nimble in the market. We're actively managing within the dynamic tariff environment and are executing our playbook as developments unfold. But so far, the direct cost impact has been limited, although we do believe it is affecting consumer sentiment. Our strategy includes a balanced approach of selective price adjustments and material sourcing changes to optimally mitigate the impact. We are also being proactive and agile as we navigate the environment, including taking actions to thoughtfully control our fixed costs while not losing sight of our need to invest in our strategies for the long term. We recently idled one of our production locations in the Florida market by leveraging our remaining nearby facilities for customers in that region. Permitting and demand in Florida has been slow to recover from the 2024 hurricanes. In addition, in the British Columbia region, we are consolidating two of our Canadian factories into one, to improve operating efficiencies and reduce overhead costs. From a growth perspective, as I mentioned earlier, we announced the signing of a definitive agreement to acquire Eisman Homes, including its 10 retail sales centers in the Plains region of the US. This acquisition underscores our long-term strategy to expand our retail footprint and deliver market-relevant products, all while elevating the home buying experience for our customers. With annualized revenues of approximately $40 million, we see a pipeline of local market demand and synergistic opportunities. Champion Homes team is very excited to welcome Eisman Homes, and we look forward to their integration with our Champion family of brands. We expect the transaction to close by the end of our first fiscal quarter. In summary, we believe Champion Homes is well-positioned to weather the uncertain market environment while driving an unwavering focus on our long-term strategic growth priorities and day-to-day execution that are directly centered on our customers and teams. I'll now turn the call over to Lori, who will discuss our quarterly financial performance in more detail.

Thanks, Tim, and good morning, everyone. I'll begin by reviewing our financial results for the fourth quarter, followed by a discussion of our balance sheet and cash flows. I will also briefly discuss our near-term expectations. During the fourth quarter, net sales increased 11% to $594 million compared to the same quarter last year, with U.S. factory-built housing revenue increasing 10%. The number of homes sold increased 5% to 5,941 homes in the U.S. compared to 5,652 homes in the prior year period. U.S. home volume during the quarter was supported by healthy demand across our retail and community channels. The average selling price per U.S. home sold increased by 5% to $94,300 due to product mix, including a higher number of units sold through our company-owned retail sales centers. On a sequential basis, U.S. factory-built housing revenue decreased 8% in the fourth quarter compared to the third quarter fiscal 2025. We saw a sequential decrease mainly due to expected seasonality as well as an impact from weather across the South. In addition, manufacturing capacity utilization was 60% compared to 63% in the third quarter. On a sequential basis, the average selling price per home was relatively flat. Canadian revenue during the quarter was $25 million, representing a 22% increase in the number of homes sold versus the prior year period. The average home selling price in Canada decreased 9% to $110,600, primarily due to a shift in product mix. Consolidated gross profit increased 55% to $152 million in the fourth quarter, and our gross margin expanded 740 basis points from 18.3% in the prior year period. The higher gross margin was primarily due to a product liability reserve of $34.5 million recorded in the fourth quarter of last year that did not reoccur in fiscal 2025, as well as higher average selling prices and a higher share of sales through our captive retail sales centers. Gross margin declined sequentially from our fiscal third quarter and was lower than expectations primarily due to higher material input costs relative to flat wholesale ASPs as well as lower capacity utilization causing decreased leverage of fixed overhead costs. SG&A in the fourth quarter increased $20 million over the prior year period to $110 million. The increase is primarily attributable to increased sales volumes through our company-owned retail sales centers and higher variable costs related to higher revenue. In addition, we increased marketing spend to drive awareness in our brands and homes and continue to make investments in technology to support future growth. The company's effective tax rate for the quarter was 17.1% versus an effective tax rate of 19.2% for the year-ago period. The decrease in the effective tax rate is primarily due to an increase in tax credits and a decrease in state income taxes. Net income attributable to Champion Homes for the fourth quarter increased by $33 million to $36 million or earnings of $0.63 per diluted share compared to net income of $3 million or earnings of $0.05 per diluted share during the same period last year. The increase in EPS was driven mainly by the absence of an adjustment to the water intrusion product liability reserve in the current year period. Adjusted EBITDA for the quarter was 53 million, which is consistent with the same period a year ago. Adjusted EBITDA margin was 8.9% compared to 9.9% in the prior year period. This decrease in EBITDA margin is mainly driven by higher SG&A. We expect near-term gross margin in the 25 to 26% range as we balance softening consumer confidence, decreased demand in certain markets, and inflation. In addition, we're seeing consumers shifting to homes with fewer or lower priced features and options, which impacts gross margin. To help offset some of this impact, and as Tim mentioned earlier, we're taking steps to balance SG&A spending while continuing to drive our strategic growth priorities, including investments in people and technology. As of March 29, 2025, we had $610 million of cash and cash equivalents and long-term borrowings of $25 million, with no maturities until July of 2026. We generated $46 million of operating cash flows for the quarter compared to $4 million in the prior year period. In the quarter, we leveraged our strong cash position and returned capital to our shareholders through $20 million in share repurchases. Additionally, our board recently refreshed our $100 million share repurchase authority, reflecting confidence in our continued strong cash generation. I'll now turn the call back to Tim for some closing remarks.

Thank you, Lori. While we anticipate near-term order rates to vary by channel and geography, the need for affordable housing remains ever-present across the U.S. and Canada. The long-term outlook for Champion is strong, and we have the strategies in place to deliver for all our stakeholders. Strategies that we are thoughtfully executing as we evolve the team with a combination of internal advancement, new talent, and selective engagement of outside resources. Our guiding priorities are not only for the long term, they provide a clear roadmap for today's environment and deploying our capital, including winning as a customer-centric, high-performance Agile team, innovating and differentiating with products and services that bring in new buyers, expanding and elevating our go-to-market channels, including delivering experiences before, during, and after the sale that earn new customers and their referrals, increasing awareness, demand, and advocacy for our brands and homes, and leveraging our costs, capacity, and investments in people and technology. Finally, I would like to recognize the entire Champion Homes team for their exceptional efforts to grow revenue and earnings in fiscal 2025 and as we work together to continue to execute our strategic initiatives for all our stakeholders. And now, let's open the line for questions. Operator, please proceed.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is from Daniel Moore with CJS Securities. Please proceed.

Thank you. Good morning, Tim. Good morning, Lori. Maybe you start with just elaborating on the discussions with customers in both retail and community markets and the cadence of order rates into April and thus far in May, and maybe a little bit more bifurcation by geography. Obviously, Florida, by all accounts, has been soft, but where you're seeing pockets of strength, pockets of weakness, et cetera.

Good morning, Dan. Encouraging-wise, we're seeing digital leads are up across a lot of our regions. But then when we talk to the retail teams, the in-store traffic has been mixed and certainly by a region of the country. And as I talked to our independents, they're seeing similar impacts in terms of certain areas where there's strong traffic, others that are a little weaker. But what I would say in general, what's encouraging is that there's more buyers, active buyers, and those buyers are ones that are more motivated to obviously purchase a home and our financing programs are helping that. So I would say there's more serious buyers in the market And that's why we reflected our low single digit growth for Q1 versus some of what you're seeing in the broader market. But I would say, you know, it's been mixed traffic this spring, but we've been driving more leads, certainly driving more of that engagement with our consumer at our retail stores. But it is more mixed, and that's why we signal a more low single digit rate for the quarter.

Sorry, that's helpful, Tim. And on the community side, Um, you know, a little bit of, uh, you know, continued interest, but, um, you know, maybe, uh, kind of a slow burner holding off for now. I, I, uh, I'm trying to remember your exact commentary, prepared remarks, but any, any elaborate there would be great. Thank you.

Yeah. Yeah. We were up in the quarter year over year in the community segment, and we've certainly seen some returns with key customers there, but I would say it's mixed or some projects and some community developers that are pacing a bit. But we've been pleased with the growth of the community segment over their last year. They're now at 28% of our overall units, which is strong. And so we're pleased with how that's going. But we're just balanced about the community segment, given that they face some of the dynamics with the consumer as well.

Got it. And then on the SG&A side, increased sequentially despite the decline and sequential decline in revenue. Can you maybe just break out a little bit about how much was incentive comp versus investments and marketing and technology? Just trying to get a sense for how much SG&A and Q4 could be temporary versus kind of permanently higher cost structure.

Good morning, Dan. I would say, you know, we should remember in the fourth quarter that we have quite a few of our industry shows. That's kind of a cyclical timing issue for us in the fourth quarter. So that won't reoccur quite as strongly going into the first half of this fiscal year. But we aren't going to break out the components individually.

Understood. Okay. And then just last one for me, continue to utilize buybacks as an arrow in the quiver in terms of capital allocation. with shares indicating, you know, where they are this morning, just your thoughts about, you know, being more aggressive. Cash continues to grow, but despite buying back shares more aggressively. So any thoughts on that front? And thanks again for the color. Yeah, obviously we have, go ahead, Lori.

No, that's okay. Yeah, we have a really balanced capital allocation profile. So we'll keep an eye on that and obviously be opportunistic if, you know, if the shares allow, and just make judgment calls based on our overall strategy, Dan.

Thanks again. I was going to add, Dan, that we're pleased we refreshed our commitment to share repurchase, and we've added $100 million of cash versus last year, which certainly gives us options across our capital allocations.

Our next question is from Greg Palm with Craig Hallam Capital Group. Please proceed.

Yeah, good morning. Thanks. Going back to the quarter, I think you maybe talked or mentioned about some unfavorable weather conditions. Just based on order rates and any backlog, was there any inability to ship homes from retail to end customers? I know you had had a dynamic in the year ago period that came into play. But just curious if that was impacted at all this quarter as well.

Yeah, the Texas market and part of the South was a bit slower than typically would be. So there is some impact there. And we factored that into the first quarter of fiscal 26. But I think that plus some of the consumer dynamics I mentioned are factoring in. But we feel like we're in a good position now with where we are with our inventory and the opportunity to move in a nimble way, given consumers demand that if that, you know, continues to grow. So I think we're pretty balanced there.

Yep. Okay. And, and I guess it's not a secret that, you know, housing overall is, is pretty, pretty, pretty soft, but I know activity here is held up maybe better than, than, you know, stick built if you want to call it that, but, I'm just curious, if you just take a step back and talk a little bit about, you know, manufactured housing specifically in the customer base and the demographics and, you know, what gives you hope that maybe, you know, this is a time for more meaningful share gains? Maybe you can talk a little bit about sort of deregulation in there as well, because there's obviously some important things going on behind the scenes.

Yeah, for sure. There's a few different levers there. One of our commitments to have captive retail is that's where you really can drive the customer experience and the speed with the customer. And you combine that with their consumer financing program. So that's why we're expanding with Eisman. Second, another area you mentioned is the regulation elements. We're encouraged by the focus on reducing the chassis requirement, looking at different approach in terms of the reform around zoning potentially so that more local municipalities are supportive. Obviously, removing the chassis is going to help that in certain markets. The other driver is just an overall awareness. When we had the HUD secretary walk through our homes, his feedback was positive. Wow, these are beautiful homes, so well built. Just getting that advocacy out there so more consumers are aware of it. You see that with our investment and marketing spending and obviously what we're doing digitally. Then in terms of the consumer, really making sure they're aware of the price points that you can get in a brand new home. And that's obviously the key with our financing programs. You can get a customer matched to the right product with that right price point. just getting more awareness in the market and pulling in new consumers and we're putting our digital spend to work there we're using social media to attract people who typically would maybe aware of our products and pull them into our retail so those are all drivers now that's against the backdrop that there's more challenges with the consumer in terms of some of the uncertainty we're seeing so that that's why we're investing to make sure that we're getting into their mindset in terms of the consideration purchase the combination of those things i think are really are what's going to be in the near-term key But then from a longer term, our product innovation spend is to make sure that we have a range of products for those range of customers that are looking for the different types of homes and needs. And you saw that at the show. Many of you have been at our shows where you see the type of new products that we're coming out with. And I think those are all key in terms of growth and the strategic priorities that I laid out in my remarks. Yeah, okay. Makes sense. Thanks for the call.

Our next question is from Matthew Boulay with Barclays. Please proceed.

Morning, everyone. Thank you for taking the questions. I'll ask on the gross margin, you know, the change to the near-term guide, I think you said 25% to 26%. I think previously it was in that 26% to 27% range. So my question is if some of the, I guess, pressures that you're seeing today are if your view is they're sort of more temporary and that the 26 to 27 is still realistic over time, or is it that you're kind of still, I guess, looking for what the structural gross margins of the business should be going forward as obviously the business mix has shifted over the years? Thank you.

Good morning, Matt. Thanks for the question. We do think that the lowering to the 25-26% range is just for the short term, based on softening consumer confidence and decrease in demand in certain markets, as well as some inflation that we're seeing in material costs. Long term, we still expect structural margins to be in the 26-27% range, based on the improvements that we've made across the platform.

Got it. Okay. Thanks for that, Laurie. And then, yeah, secondly, you know, interesting discussion at the top there around some of your discussions with the new HUD secretary, maybe just around that potential removal of the permanent chassis requirement. Any color on sort of what that would do for your own costs? You know, how realistic is that, you know, actually happening? And, you know, I guess how would you then react around either passing that through to consumers or maybe just impacting other designs, you know, just kind of giving you more flexibility in the product design. Just how would that all play out? Thank you.

Yeah, first off, from a consumer perspective, it allows you to do maybe two stories more effectively, give some elevations because you can do more slab on grade. So it gives that benefit from a curb appeal. And then there's some municipalities that are still hung up on having a chassis under a home, so it helps with the zoning support. From a cost perspective, certainly not having the chassis underneath, you know, you need it for transport, different types of transport that may be lower cost. So there is some opportunity there. As far as how we would approach it, our goal is to create the right product price value. And if we haven't a chance to do that for a consumer that this allows it, great. But obviously we want it to drive margins. We'd have to look at the balance there. But it's encouraging that it's actually now in discussion and there's progress in terms of regulators. And I think it's because of the strength of the quality of our homes and the way that we can deliver them. it really gives us the confidence that this should happen and likely will happen. But also, ultimately, that has to go through the bills process, which is well underway at this point. So we're encouraged by it, and we're also looking at product innovations that would leverage from it. So we'll keep you posted as it evolves, but it's an encouraging sign.

All right. Thanks, Tim. Good luck, guys.

Our next question is from Mike Dahl with RBC Capital Markets. Please proceed.

Morning. Thanks for taking my questions. A couple follow-ups here. First on the gross margin dynamics, can you be more specific about what role the input costs are playing in the near term? Because if I look at kind of wood products, even though lumber is up a little, OSB is down a lot, so I would think your blended wood basket is actually kind of flattish, but maybe just give us a sense of what's impacting, you know, what's the cost impact versus that mix or mix-down impact in your near-term margin expectations?

Hey, Mike, good morning. I would say that obviously we're not going to break out components, but we do have portions of our wood products that we buy at the spot rate and also portions that we buy on contract. So the mix of those don't necessarily align 100% with the spot rate activity, so we need to keep that in mind. We're also seeing some increases in some other component costs. across the board. So, and then we are seeing some pricing pressure in certain regions of the country based on consumer competence.

Okay, got it.

Appreciate that. And then just to follow up on that response to Matt's question on the permanent chassis requirement, With builder-developer specifically, as you've kind of rolled out and tried to promote the Genesis brand and build those relationships, has that been a hang-up in your discussions with builders because that is a limiting factor? Or how would you describe that when you think about the potential to unlock that part of your business or further that part of your business specifically? And then if I could just ask more directly, broadly when you talk about kind of some more measured pace on that side of the business recently. Understandable, but maybe just put some numbers around that.

Yeah, yeah, great question. In terms of the chat, yeah, that is a key opportunity with those developers because oftentimes those developers are going into new municipalities, new land zoning, and that certainly would help if they're looking for that more single family, you know, slab on grade look. The other factor is those builders at times are looking for two-story projects, which this would be an advantage for that approach. In terms of the overall builder-developer, you know, the pipeline is continuing to build, and we've had really good response to the new products that we've come out with. One of the realities of that business, and given it's a smaller size in our total portfolio, is the time it takes for those projects. They can be anywhere from 12 months to 24 months, so that pace does impact when those orders really materialize. but we're encouraged by the pipeline and we're working directly with those builders. And I think the pacing also is with the macro and macro environment. Some of them are looking at the phases and how quickly they deployed, but we're working with them directly to make sure that we can help and support that and move those projects along. And we're leveraging what we've learned from the projects that we've done so far. So again, that's, that's a longer term development channel for us, but it's one that both the regulatory opportunities and the way we're pacing it is really helping. So I appreciate the question on builder developer.

Thanks, Tim.

Our next question is from Phil Eng with Jefferies. Please proceed.

Hey, guys. I guess a question for Laurie. Your near-term margin guidance is pretty steady from Q4, which is great, but certainly we're still seeing impacts from tariffs. It doesn't sound like it's massive, but help us kind of think through how that could impact margins, and do you have to take incremental price, because you kind of alluded to perhaps some pricing pressures in certain markets.

Hey, Phil. Good morning. Yeah, so we're not seeing, you know, a significant increase from tariffs currently. We are watching and monitoring as it changes on a daily basis, so keeping track of that and understanding where our products come from and what the impact will be and then just being proactive about sourcing from other locations and so forth. We have an active playbook of things that we can do when that comes up, but we're not quantifying what that will be.

Okay. But let's say if you do see a little more inflation, just given the current demand backdrop, do you feel comfortable that you have the ability to take some price, or are you going to have to manage through that, I guess, in the near term?

I think it depends on the region of the country. So keeping in mind that our plants ship within a 500-mile radius generally without being too cost-prohibitive on transportation. So, ultimately, the decision still lies on price with and at the plant level. We give them guidance, but they have to measure competitively what's happening in their markets relative to consumer demand and pricing more broadly.

Okay, super. I guess question for you, Tim, on the Iceman transaction, certainly you guys had great success with regional homes. Can you give us a little color on the opportunity here in terms of driving gross margin tire and some of the synergies? And then the $40 million number, is that all incremental? I just wasn't sure if you guys were selling to them already.

Yeah, in terms of the $40 million, there are key customers today, but there's still meaningful opportunities to bring existing volume that they're doing with other providers to us. And we'll do that over time. In terms of the opportunities beyond that, you know, one of the things we've learned this last year at Regional is in addition to the synergies, we can also drive accretive growth, which we did with Regional, and we certainly are prepared to do with Eisman. Ken and his team, they're a great team. There's an opportunity to collaborate with both of our organizations from what we've learned. And now we can bring some of the tools directly to that team and directly to the consumer. So we're excited about that and opportunities with product. And so, you know, we've got a lot to build on with the success of regional, but also in a broader market in the Midwest. And strategically, obviously, you see we've had a presence in the South and Southeast. We're excited to expand that in the Midwest. So those are opportunities for us. Would it be a creative gross margins out of Gates, Tim? You know, I think we'll get through that. We're just obviously announced today. We're going to work through integration. We're seeing some things that are encouraging in that front, but we'll be back to you as we work through the acquisition. Um, but we're excited to move to that integration phase next. And we anticipating closing this at the end of June.

Okay. Appreciate the call.

Our next question is from Jesse Lederman with Zellman and associates. Please proceed.

Hey, thanks for taking the questions. Laura, I just want to clarify, so it sounds like the 25 to 26 gross margin guide, you're not seeing any impact from tariffs yet. Does that number include any baked in conservatism from potential inflation from tariffs or no?

It does not, no.

Okay. Thanks for clarifying that. I'm curious, when you talk about you're seeing mix shifts lower to either smaller-sized homes or less options and upgrades, are you also seeing or able to quantify mix shift from maybe buyers that would otherwise be buying an existing home that are now considering a manufactured home, maybe even a single section? Is that something you can track? Is that something you expect? Maybe can you talk a little bit about what you're seeing at the larger-sized homes?

Yeah, I think in terms of the market trends, we are seeing that smaller size, and that's driven more by price point and monthly payment, which speaks to the consumer environment. As far as new consumers coming in the category, I mentioned our efforts to pull in those consumers, and certainly those first-time homebuyers or buyers that are looking for entry-level but a new home, that gives us the opportunity, so we're starting to see that. But I would say as an industry, one of the things we have to be focused on is how we attract even more new consumers, and that's why the actions with the administration, what we're doing with new products, and certainly the messaging around awareness are key. But now is a good environment to be doing that.

Absolutely. It sounds like there's some opportunity even just as industry to do some consumer education from a, you know, buying process perspective or financing perspective and kind of how the manufactured housing home buying process works. So hopefully that's something that can be a talent as well. One more for you, Tim. You talked about the dealer portal that you've started to roll out. Can you talk a little bit about how that may work in practice and maybe some signs you're seeing into the effectiveness of that program? Thank you.

Yeah, so it ties in tandem with our consumer platform at championhomes.com that we launched. That allows then their dealer to visibly see the leads that are coming through and to quickly respond to those and engage with those. And then also manages downstream in the process with order status and being able to connect that to our plans. We also are able through that portal to give them the latest digital marketing tools and our capabilities that we can do nationally to support them. And so it starts to organize around the hub of how they work with Champion as a retailer. and leverage the effectiveness. And so we're rolling it out in phases. The early response has been really good, but we see it as key to integrating the digital experience from the consumer to the retailer and to us as the OEM in an integrated way.

Awesome. Sounds very exciting. Thanks a lot.

Our next question is from Jay McCandless with Wedbush Securities. Please proceed.

Hey, good morning, everyone. Laurie was hoping you could drill down more on the price competition, what markets specifically are seeing the price competition, and is it more focused on single-section or double-section homes?

Yeah, it varies, Jay. We are seeing a pickup, actually, in activity out west. We are seeing a little bit of slowness in Florida, as we mentioned, and then also in the northeast. We are seeing a shift to more single wides and smaller homes, a smaller footprint home with less features and options. And as we mentioned, that'll have an impact on margins because our option content generally comes in at higher margins than the base price of the house.

Great, thanks. And then the second question, still haven't heard FEMA, I think, ordering any homes. Have you all heard anything recently from them, whether it be out west or some of the stuff in the Carolinas?

Yeah, no orders of yet. Obviously, we're working with them to prepare for whenever they're ready for that. But we certainly are supportive whenever that occurs. But no orders at this point.

Okay. And then the last question for me, just kind of Talk about where chattel rates went this quarter versus last year, and anything positive or negative you guys are seeing on credit availability for chattel?

Yeah, credit availability is pretty stable, Jay. And as far as rates, you know, they're still about 150 to 200 basis points higher than the 30-year fixed for a well-qualified buyer.

Got it. Okay. Thanks. Appreciate it.

As a reminder to Star 1 on your telephone keypad, if you would like to ask a question, our next question is from Daniel Moore with CJS Securities. Please proceed.

Thank you again. My follow-up was on Eisman was answered, but maybe just talk a little about the level of discussions with other regional dealer groups and maybe the M&A pipeline more generally.

Yeah, I mean, we're not going to talk about specifics, but bigger picture, you look at our strategy, and we've laid out those five priorities at the end of my remarks. Those are aligning how we're thinking about M&A, capital allocation, and certainly we're excited about Eisman, and we're going to focus on that execution integration. But certainly our strategy reflects where we want to put our capital going forward.

Okay, thanks again.

There are no further questions at this time. I would like to turn the floor back over to Tim for closing remarks.

Well, obviously you can see in our first month here of operating the agility and action orientation that we have. I mean, if you think about, we've had 26,000 homes wrapped up last year, which is the highest ever outside of one year of the pandemic. The acquisition of Iseman homes, we executed and, you know, idling a couple of our plants, which is always a tough decision, but the right decision for fixed costs. We launched our integrated digital platform that we talked about today, and we talked a bit about purchasing, but we've strengthened that team pretty notably, and that allows us to navigate this environment. We're advocating and advancing MH policy, and we had another $100 million in our balance sheet, and obviously that's in addition to the stock that we repurchased. So as we go forward here, we're in a really strong position with our strategy and our team. We're going to continue to build on that and navigate this environment, and we really look forward to updating our progress And thank you for your continued interest, and thank you for joining us this morning. Thank you.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.