Cavco Industries, Inc. · NASDAQ:CVCO
Cavco Industries — Investor Presentation (January 2018)
21 slides from Cavco Industries's investor presentation, January 2018
Slide 1: Cavco Industries, Inc. – Factory-Built Housing Solutions
FACTORY-BUILT HOUSING SOLUTIONS Cavco Industries, Inc. NASDAQ: CVCO
Slide 2: Our Building Facilities
Our Building Facilities 1. Fleetwood Pacific Northwest 6. Durango Homes by Cavco 11. Friendship Homes – I 16. Fleetwood East Woodburn, OR Phoenix, AZ Montevideo, MN Rocky Mt., VA 2. Palm Harbor Northwest 7. Palm Harbor Ft. Worth 12. Friendship Homes – II 17. Nationwide Homes Millersburg, OR Ft. Wort
Slide 3: Focused Transformation
Focused Transformation Acquisitions Cavco 2017 $774 million revenue 1 factory 3 factories Cavco 2009 Revenue: $105 million 1 factory Commercial Lending Standard Insurance 6 Retail CountryPlace 41 Retail Stores Mortgage Stores 5 factories 49 retail stores 3 Factories 20 Factories 7 factories Page 3
Slide 4: Company Highlights
Company Highlights Cavco 2009 Cavco 2017 • 700 Employees • 4,300 Employees • Serving 8 states • Serving 48 states, Canada, Japan & • 2.3% market share Mexico (HUD building code) • $1.4 billion market capitalization (January 4, 2018) • 2nd largest U.S. Builder (HUD building code) • 15% market share (
Slide 5: Company Highlights
Company Highlights AND… • Commercial loan programs • Mortgage origination & servicing • Property & casualty insurance • Top industry brands • Cavco Homes, Fleetwood Homes, Palm Harbor Homes, Fairmont Homes, Friendship Homes, Chariot Eagle and Lexington Homes • MHI Manufacturer of the Year- 7 consecu
Slide 6: Industry Market Share
Industry Market Share • Largest competitors and respective market share • Clayton Homes: ~ 48% • Champion Home Builders: ~13% • Skyline Corporation: ~4% • Remaining: ~20% Source: IBTS, Inc. Calendar year to date through March 2017 Page 6
Slide 7: Manufactured Housing Industry Profile
Manufactured Housing Industry Profile 35 corporations 129 homebuilding factories 4,000 home sales centers 50,000 land-lease communities 75,000 full-time U.S. employees In 2016, manufactured housing accounted for • 52% of all new homes sold under $200,000 • 80% of all new homes sold under $150,000 •
Slide 8: Manufactured Housing Industry Profile
Manufactured Housing Industry Profile • Approximately 9 million households with 22 million people living in manufactured homes (9% of nation’s single family housing stock) Page 8
Slide 9: Manufactured Housing Industry – 30 Year Annual Shipments
Manufactured Housing Industry- 30 year annual shipments 373,000 363,000 400,000 353,000 349,000 Average Annual Home Shipments 340,000 350,000 304,000 Since HUD code adoption (1976) 201,000 300,000 20 year average 144,000 254,000 251,000 233,000 218,000 211,000 250,000 198,000 193,000 188,000 171,000
Slide 10: Manufactured Home Shipments as a Percent of New Single-Family Home Sales
Manufactured Home Shipments as a percent of New Single-Family Home Sales 30% 28.7% Sub-prime boom for 25% site built Housing 17.5% 20% 14.7% 14.4% 12.9% 15% 14.4% 13.4% 12.3%12.8% 12.3%12.6% 10.3% 11% 11.7% 10.8% 9.8% 10.1% 10% 5% Page 10
Slide 11: Investment Considerations
Investment Considerations NASDAQ symbol: CVCO Liquidity • Solid balance sheet and liquidity position • Well positioned in affordable housing market Positioning • Demonstrated ability to adjust to market conditions: profitable in all but one year during entire housing/economic downturn Growth • Now w
Slide 12: Liquidity and Capital Allocation Strategy
Liquidity and Capital Allocation Strategy Liquidity Position ($ millions) Capital Allocation Opportunities $133 1) Support organic growth programs $98 * $97 • Mortgage lending $73 • Manufacturing expansion $48 • Product development 2) Pursue attractive M&A 3) Fund capital expenditures 4) Initiate di
Slide 13: Strong Financial Performance
Strong Financial Performance Net Revenue ($ millions) Diluted EPS $774 $4.17 $712 $567 $3.15 $533 $2.64 $452 $1.94 $0.71 Page 13
Slide 14: Potential Home Sales
Cavco Revenue Potential correlated to single-family home sales and manufactured-home industry sales Cavco Housing Segment ~$700m* ~$810m ~$920m ~$1.0b Revenue Potential Potential Home Sales 106,000 Industry Industry Industry 81,000 Industry Cavco Cavco Cavco Cavco 91,000 121,000 19,000 17,000 15,000
Slide 15: Economic Headwinds Diminishing
Economic Headwinds Diminishing Status of Overall Challenges to the Industry • Consumer confidence • Unemployment and underemployment • Financing availability, lack of secondary market Page 15
Slide 16: Manufactured Housing Market
Manufactured Housing Market Critical component of U.S. housing needs • Affordable housing – Most affordable form of home ownership – Ownership at monthly cost comparable to apartment rents – Average retail sales price approximately $70,000 (home only) • Custom and larger homes at better value than s
Slide 17: Manufactured Home Owners
Manufactured Home Owners Large and diverse markets • First-time home buyers • First move-up buyers • Immigrants • Baby boomers, empty nesters, and retirees – Lifestyle oriented homebuyers – age-restricted communities • Second home and seasonal living – Attractively priced, low maintenance alternativ
Slide 18: Favorable Demographic Trends
Favorable Demographic Trends U.S. Demographic Indicators • US adult population estimated to expand by 12 million between 2017 and 2022 • Home ownership rises with age – Over 75% of the population age 55+ are home owners – Population of 55+ projected to increase 26% from 2016-2031 • Gen Y (age 18-39)
Slide 19: U.S. Birth Rates
U.S. Birth Rates The two largest and fastest growing demographics are prime buyers of manufactured homes • 51 to 69 year olds (Baby Boom) • 21 to 35 year olds (Echo Boom) Baby Boom Echo Boom 4.5 1946-1964 1980-1994 4 Births (millions) 3.5 3 2.5 1946 1948 1950 1952 1954 1956 1958 1960 1964 1966 1968
Slide 20: Key Considerations
1. Strategic growth has developed a strong national footprint 2. Affordable homes 3. Dynamic segment of the housing industry, well positioned for growth 4. Attractive investment factors 5. Positive consumer demographics and trends Key Considerations For further information on the Company, visit www.
Slide 21: Forward Looking Statements
Forward Looking Statements Certain statements contained in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. In general, all sta
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