Champion Homes, Inc. · NYSE:SKY
Champion Homes — Q4 2024 Earnings Presentation
29 slides from Champion Homes's earnings presentation, May 22, 2024
Slide 1: Investor Presentation May 2024
Investor Presentation MAY 2024
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements Statements in this presentation and discussions that follow, including those about the industry shipments, demographic trends, financing availability, the potential results of operational improvements, strategic initiatives, and future market demand are intended
Slide 3: Company Overview
Company Overview e
Slide 4: Rethinking and transforming construction across the United States and Western Canada
Champion Homes, Inc. is rethinking and transforming construction across the United States and Western Canada. We are making it possible for people to have a home that is built better, built faster and is more attainable today. We achieve this by providing offsite solutions that are more innovative,
Slide 5: The Factory-Built Home Advantage
The Factory-Built Home Advantage Product Homeownership Production Labor Costs Improvement & Affordability Efficiency & Quality Innovation § Manufactured housing is the § Centralized, indoor facilities § Factory construction can § Designed flexibility largest source of for home building process achie
Slide 6: Corporate Responsibility
Corporate Responsibility Community Sustainability Health & Safety Governance Outreach § ENERGY STAR® certified homes § Ongoing behavior-based safety and § Encourage civic involvement at § Code of conduct certification training programs with a goal of local community level required at all levels with
Slide 7: By the Numbers
e | By the N um be rs ra
Slide 8: Fiscal 2024 Highlights
Fiscal 2024 Highlights $2.0 21,845 $90 19.9% 12.1% Billion Homes Sold in Thousand HUD Market Adjusted Revenue North America US Average Home Share Based on EBITDA Margin 1 Selling Price Shipment Data $192 $147 $2.53 25.7% $245 Million Million Earnings Adjusted Gross Million Adjusted Free Cash Flow 2
Slide 9: Footprint
Footprint Corporate Headquarters Manufacturing Facility Retail Operation Logistics Terminal 48 6 Operating Idle Plants for Manufacturing Future Growth Facilities 19 Manufacturing Facilities are in the 10 States with the Highest Number of Manufactured Home Shipments 9 74 Logistics Retail Note: Facili
Slide 10: Revenue Breakdown
Revenue Breakdown % of Fiscal 2024 Revenue % of US Manufacturing US HOUSING HUD-CODED HOMES 2% LOGISTICS 93% 84% 5% CANADIAN PARK 4% MODULAR HOMES 12% 2% 5% 93% 84% 12% 4% Logistics, Canadian US Hud-Coded Modular Park Corporate+ Housing Housing Homes Homes Model 10
Slide 11: Industry-Leading Family of Brands
Industry-Leading Family of Brands
Slide 12: Products & Price Point
Products & Price Point Comprehensive Product Offering Type / Styles Size / Price Range Single-Section Single-Family 400 – 3,100 sq. ft. / Multi-Section Single-Story $40 – $90 per sq. foot Manufactured Housing Single-Family 1,000 – 3,100 sq. ft. / Multi-Section Single-Story $60 – $110 per sq. foot Mo
Slide 13: Product Innovation
Product Innovation Value Without Compromise Elevated Features & Styling Builder/Developer The new Embrace national series strikes a smart The new Altitude national series of homes is Genesis Homes provides builder/developers with balance between beautiful design and value. It packed with elevated st
Slide 14: Opportunity
ty Opportuni e we
Slide 15: Business Strategies
Business Strategies Production Automation Increase Operating & Enterprise-Wide Capacity & Profitability Digital Technologies NUMEROUS GROWTH DRIVERS § Refine product floor plan designs and § Investment in production automation options to offer “designed flexibility” to TO FURTHER EXPAND OUR technolo
Slide 16: Investments in Growth Strategies
Investments in Growth Strategies Production Automation Direct-to-Consumer § Launched R&D Automation facility in F24 § Engaging new customers via social media, 2,255,000 followers and growing § Improves customer satisfaction focusing on high-quality, precision-driven production and assembly § Double-
Slide 17: Acquisition of Regional Homes
Acquisition of Regional Homes Strategic Rationale Key Statistics § Combines #2 SKY with #4 Regional Homes § Operates three manufacturing facilities in enhancing combined procurement and national digital Northwest Alabama marketing leverage § 43 retail locations across the Southeastern US § Has stron
Slide 18: Investment in ECN Capital
Investment in ECN Capital Equity Investment Champion Financing § SKY purchased shares of ECN for $138M in § Captive finance partnership owned 51% by SKY September 2023 / 49% by Triad Financial • 27.450M preferred shares • 33.550M common shares § Provides tailored retail finance programs § SKY owns 1
Slide 19: Investment in ECN Capital: Transaction Rationale
Investment in ECN Capital Transaction Rationale § Drives growth by providing broader and more attractive financing options and services for Champion Homes’ customers through captive finance company § Magnifies the benefits of our digital and direct-to-consumer strategic investments § Ability to offe
Slide 20: HUD Industry Overview
HUD Industry Overview The Manufactured Housing Industry (HUD Product) has Significant Upside as Financing Returns 600 60% Aging installed HUD code product is generally sold to customers HUD is approx. 9% of single family housing starts base expected with either private land or REITs that fill parks
Slide 21: Market Demographic Trends
Market Demographic Trends 60% of the US Population Cannot Afford 2022 US Household Income Distribution (1) a Traditional Home (1) $200,000 $150,000 $94,300 37% $100,000 32% 31% $50,000 $0 20% 40% 60% 80% 95% Household Income Percentile Household Income Below $50,000 $50,000 to $100,000 Over $100,000
Slide 22: Customer Channels: Retail, Communities, Builder/Developer
Customer Channels: Retail, Communities, Builder/Developer Manufactured Housing Communities are Key Customers of Manufacturers (1) BUILDER/DEVELOPER 8% OTHER 4% Aging Installed Base Driving Replacement Need COMMUNITIES Fiscal 2024 24% US Manufacturing 21M 43K+ 650K Customer Channels RETAIL 64% Americ
Slide 23: Financing & Regulatory Environment
Financing & Regulatory Environment Challenging Historical Improving Financing Easing Regulation an Financing Environment Environment as Lenders Additional Tailwind Return to Market § Many manufactured homes are financed § Fannie Mae has introduced MH § HUD is actively assisting the industry by as a
Slide 24: Financial Highlights
ASS | Financial & | Highlights
Slide 25: Five-year Financial Summary
Five-year Financial Summary Historical ($Financials in millions) Commentary REVENUE Manufacturing footprint Retail acquisition of 12 Increased average selling expansion since FY20 Factory Expo locations in F23 price due to pricing actions includes organic expansions and 43 Regional locations in take
Slide 26: Cash Flow, Balance Sheet, & Capital Allocation
Cash Flow, Balance Sheet, & Capital Allocation Strong Free Cash Flow Generation (1)(2) Flexible Balance Sheet ($ in millions) ($ in millions) 3/30/24 $600 95% Cash and equivalents $ 495 91% 90% $500 90% Revolver ($200mm) - 85% Floor plan payable 91 $400 $493 78% Notes payable 13 80% $300 Industrial
Slide 27: Appendix
Apendix
Slide 28: Reconciliation of Net Income to Adjusted EBITDA & Free Cash Flow
Appendix Reconciliation of Net Income to Adjusted EBITDA & Free Cash Flow ($ in thous ands ) 2020 2021 2022 2023 2024 Net income from continuing operations $ 58,160 $ 84,899 $ 248,044 $ 401,802 $ 146,696 Interes t expens e (income), net 1,401 3,248 2,512 (14,977) (28,254) Income tax expens e (benefi
Slide 29: Reconciliation of Gross Profit to Adjusted Gross Profit
Appendix Reconciliation of Gross Profit to Adjusted Gross Profit & Adjusted Gross Profit Margin ($ in thous ands ) 2020 2021 2022 2023 2024 Gross profit $ 278,975 $ 287,295 $ 589,123 $ 818,681 $ 485,794 P roduct liability - water intrus ion - - - - 34,500 Adjusted Gross profit $ 278,975 $ 287,295 $