CVCO 10-K & 10-Q changes, risk factors and insider trading

Loan contracts secured by collateral that is geographically concentrated could experience higher rates of delinquencies, default and foreclosure losses than loan contracts secured by collateral that is more geographically dispersed. We have loan contracts secured by factory-built homes located in 2627 states, including Texas, Florida, New MexicoOklahoma, and Oklahoma.New Mexico. Standard Casualty also specializes in writing contracts for the manufactured housing industry, primarily serving the Texas, Arizona, New Mexico and Nevada markets.

Certain manufacturing production employees (approximately 7% of our total employees as of March 29,28, 20252026) are represented by unions and are covered by collective bargaining agreements, which expire in AprilFebruary 20262027 and FebruaryApril 2027.2029. Wages, health and welfare benefits, work rules and other issues have historically been negotiated in a reasonable amount of time and have previously not resulted in any extended work stoppages. However, if we are unable to negotiate acceptable new agreements, it could result in worker strikes, loss of business, disruption of operations and increased operating costs as a result of higher wages or benefits paid to union members, which would have an adverse effect on our business and results of operations.

The manufactured housing industry is highly cyclical and seasonal and is influenced by many national and regional economic and demographic factors, including the availability of consumer financing for home buyers, the availability of wholesale financing for distributors, seasonality of demand, consumer confidence, interest rates, demographic and employment trends, income levels, housing demand, general economic conditions, including inflation and recessions, and the availability of suitable home sites. In addition, the housing industry is subject to seasonal fluctuations based on new home buyer purchasing patterns. Demand for our core new home products typically peaks each spring and summer before declining in the winder,winter, consistent with the overall housing industry. As a result of the foregoing economic, demographic and other factors, our revenues and operating results fluctuate, and we expect them to continue to fluctuate in the future.

It is difficult to predict the future of housing demand, employee availability, our supply chain or the Company's performance and operations. Our home order backlog at March 29,28, 20252026 was approximately $197$195 million in wholesale sales values, updown $6$2 million from $191$197 million one year earlier. Distributors may cancel orders prior to production without penalty. After production of a particular home has commenced, the order becomes non-cancelable and the distributor is obligated to take delivery of the home. Accordingly, until production of a particular home has commenced, we do not consider order backlog to be firm orders. We continue to focus on balancing the production levels and workforce size with the demand for our product offerings to maximize efficiencies.

In the financial services segment, we continue to assist customers in need by servicing existing loans and insurance policies and complying with state and federal regulations regarding loan forbearance, home foreclosures and policy cancellations. Certain loans serviced for investors expose us to cash flow deficits if customers do not make contractual monthly payments of principal and interest in a timely manner. For certain loans serviced for Ginnie Mae and Freddie Mac, and home-only loans serviced for certain other investors, we must remit scheduled monthly principal and/or interest payments and principal curtailments regardless of whether monthly mortgage payments are collected from borrowers.

We also work independently and with industry trade associations to encourage favorable legislative and GSE action to address the financing needs of buyers of affordable homes. Federal law requires GSEs to implement the "Duty to Serve" requirements specified in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. In AprilDecember 2022,2025, FHFA published Fannie Mae and Freddie Mac released theirMac’s Underserved Markets Plans for 2022-20242025-2027 that describe, with specificity, the actions they would take over the three-year period to fulfill the "Duty to Serve" obligation. As with prior plans, the 2022-20242025-2027 plans offer enhanced mortgage loan products for manufactured homes titled as real property, including Fannie Mae's "MH Advantage" and Freddie Mac's "ChoiceHome" programs that began in the latter part of calendar year 2018. Although some progress has been made with these programs, meaningful positive impact in the form of increased home orders has yet to be realized. The plans do not include purchases of home-only loans during the three-year 2022-20242025-2027 timeframe. Expansion of the secondary market for home-only loans through GSEs could support further demand for housing as lending options would likely become more available to home buyers.

TheOur insurance subsidiary is subject to adverse effects from excessive policy claims that may occur during periods of inclement weather, including seasonal spring storms or fall hurricane activity in Texas where most of its policies are underwritten. Where applicable, losses from catastrophic events are mitigated by reinsurance contracts in place as part of our loss mitigation structure. Purchasing reinsurance contracts mitigates the frequency and/or severity of losses incurred on insurance policies issued, such as in the case of a catastrophe that generates a large number of serious claims on multiple policies at the same time. Under these agreements, we may be required to repurchase and reestablish the reinsurance contracts for the remainder of the year to the extent that they have been utilized. See Note 15 to the Consolidated Financial Statements for additional information.

We believe that cash and cash equivalents at March 29, 2025, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in U.S. Treasury and other money market funds, some of which are in excess of federally insured limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on our liquidity and capital resources. We have sufficient liquid resources including our $75.0 million revolving credit facility, of which no amounts were outstanding at March 29,28, 2025.2026. The revolving credit facility is part of the Amended and Restated Credit Agreement among the Company, Bank of America, N.A., as administrative agent, swing line lender, letter of credit issuer, and the guarantors party thereto (the “"Credit Agreement”"). The Credit Agreement includes the following financial covenants: (i) as of the end of any fiscal quarter, the Consolidated Total Leverage Ratio (as defined in the Credit Agreement) cannot exceed 3.25 to 1.00 and (ii) a requirement to maintain Consolidated EBITDA (as defined in the Credit Agreement) for any period of four fiscal quarters of at least $75 million. The Credit Agreement also contains customary representations and warranties, and affirmative and negative covenants. The Company anticipates compliance with its debt covenants and projects its level of cash availability to be in excess of cash needed to operate the business for the next year. Regardless, depending on our operating results and strategic opportunities, we may choose to seek additional or alternative sources of financing in the future. There can be no assurance that such financing would be available on satisfactory terms, if at all. If this financing were not available, it could be necessary for us to reevaluate our long-term operating plans to make more efficient use of our existing capital resources at such time. The exact nature of any changes to our plans that would be considered depends on various factors, such as conditions in the factory-built housing industry and general economic conditions outside of our control.

Consumer loan originations decreased $24.7$2.1 million to $64.0 million during the year ended March 28, 2026, from $66.1 million during the year ended March 29, 2025, from $90.8 million during the year ended March 30, 2024.2025. Proceeds from the sale of consumer loans provided $51.1$79.6 million in cash, compared to $91.5$51.1 million in the previous year, a net decreaseincrease of $40.4$28.5 million.

Commercial loan originations increased $32.1$15.2 million to $158.5 million during the year ended March 28, 2026, from $143.4 million during the year ended March 29, 2025, from $111.2 million during the year ended March 30, 2024.2025. Proceeds from the collection on commercial loans provided $135.1$142.7 million in cash,cash compared to $117.3$135.1 million in the previous year, a net increase of $17.8$7.6 million.

Statements in this Quarterly Report on Form 10-Q (the "Report") include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," or "anticipates," or by discussions of strategy, plans or intentions. Forward-looking statements include, for example, discussions regarding the manufactured housing and site-built housing industries; discussions regarding our efforts and the efforts of other industry participants to develop the home-only loan secondary market; our financial performance and operating results; our strategy; our liquidity and financial resources; our outlook with respect to Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") and the manufactured housing business in general; the expected effect of certain risks and uncertainties on our business, financial condition and results of operations; economic conditions, including concerns of a possible recession, and consumer confidence; trends in interest rates and inflation; potential acquisitions, strategic investments and other expansions; the sufficiency of our liquidity; that we may seek alternative sources of financing in the future; operational and legal risks; how we may be affected by any pandemic or outbreak; geopolitical conditions; the cost and availability of labor and raw materials; governmental regulations and legal proceedings; the availability of favorable consumer and wholesale manufactured home financing; and the ultimate outcome of our commitments and contingencies. Forward-looking statements contained in this Report speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document. We dodisclaim notany intendobligation to publicly update or revise any forward-looking statement contained in this Report or in any document incorporated herein by reference to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by law.

We operate a total of 33 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon; Riverside, California; Nampa, Idaho; Phoenix,Glendale, GlendaleGoodyear and Goodyear,Phoenix, Arizona; Deming, New Mexico; Duncan, Oklahoma; Austin, Fort Worth (two lines), Lancaster, Seguin and Waco, Texas; Montevideo, Minnesota; Dorchester, Wisconsin; Nappanee and Goshen, Indiana; Lafayette, Tennessee; Douglas and Moultrie, Georgia; Shippenville (two lines) and Emlenton, Pennsylvania; Martinsville and Rocky Mount, Virginia; Crouse and Hamlet, North Carolina; Ocala and Plant City, Florida; and two international lines in Ojinaga, Mexico. We distribute our homes through a large network of independent distribution points and 9992 Company-owned U.S. retail stores, of which 6257 are located in Texas.

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through NovemberMay 20252026 were 95,947,41,453, a decrease of 0.3%7.7% compared to 96,24044,927 shipments in the same calendar period last year. The manufactured housing industry offers solutions to the housing crisis with lower average price per square foot than a site-built home and the comparatively lower cost associated with manufactured home ownership, which remains competitive with rental housing.

We continue to make certain commercial loan programs available to members of our wholesale distribution chain. Under direct commercial loan arrangements, we provide funds for financed home purchases by distributors, community operators and residential developers (see Note 8, Commercial Loans Receivable, to the unaudited Consolidated Financial Statements included in this report). Our involvement in commercial lending helps to increase the availability of manufactured home financing to distributors, community operators and residential developers and provides additional opportunities for product exposure to potential home buyers. While these initiatives support our ongoing efforts to expand product distribution, they also expose us to risks associated with the creditworthiness of this customer base and our inventory financing partners.

The lack of an efficient secondary market for manufactured home-only loans and the limited number of institutions providing such loans resultsresult in higher borrowing costs for home-only loans and continuescontinue to constrain industry growth. We work independently and with other industry participants to develop secondary market opportunities for manufactured home-only loanloans and non-conforming mortgage portfolios and expand lending availability in the industry. Additionally, we continue to invest in community-based lending initiatives that provide home-only financing to residents of certain manufactured home communities. We also develop and invest in home-only lending programs to grow sales of homes through traditional distribution points. We believe that growing our investment and participation in home-only lending may provide additional sales growth opportunities for our Factory-builtfactory-built housing operations and reduce our customers'exposure dependenceto onthe actions of independent lenders for this source of financing.lenders.

Our backlog at DecemberJune 27, 20252026 was $160$298 million compared to $197$195 million at March 29,28, 2025,2026, aan decreaseincrease of $37$103 million, and aup decrease of $64$98 million compared to $224$200 million at DecemberJune 28, 2024.2025.

Factory-built housing Net revenue increased for the three and nine months ended DecemberJune 27, 20252026 due to higherthe homeacquisition of American Homestar which contributed $52.8 million. This was partially offset by reduced sales volume and an increase in Net revenue per home sold. Theexcluding American Homestar acquisition contributed $42.0 million in the current year periods.Homestar.

For the three and nine months ended DecemberJune 27, 2025,2026, Financial services Net revenue increased primarily due to higherincreased insuranceloan premiums.sales in the mortgage division and unrealized gains on the Financial services equity portfolio.

In the Factory-built housing segment, Gross profit for the three and nine months ended DecemberJune 27, 20252026 increased due to an increase in home sales volume and price. Gross profit as a percentage of Net revenue perfor homethe sold,three partiallymonths offsetdecreased bydue to higher costsinput per unit.costs.

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue increased for the three and nine months ended December 27, 2025increased due to higherprimarily insurancelower premiumsclaims loss, increased loan sales, and lowerunrealized claimgains losses. The claim loss reduction resulted from policy underwriting improvements and severe weather events inon the priorFinancial yearservices periods.equity portfolio.

Factory-built housing Selling, general and administrative expenses increased for the three and nine months ended DecemberJune 27, 20252026 primarily due primarily to the additionacquisition of American Homestar,Homestar which added $6.9$7.3 millionmillion. Additionally, the first quarter of incrementalfiscal expense,year 2027 saw increases in compensation and employee related expenses, as well as acquisitionsales relatedand dealmarketing costs of $2.9 million. For the nine months ended December 27, 2025, in addition to the above items, the increase is also due to higher incentive based compensation from higher earnings compared to the prior year period, as well as an additional $1.5 million in deal costs during that period. Total deal costs in the nine months ended December 27, 2025 was $4.4 million.expense.

Financial services Selling, general and administrative expenses for the three and nine months ended December 27, 2025 increased primarily due to increasesa headcount increase to handle increased loan activity due to a forward flow agreement signed in compensationthe fourth quarter of the prior year overand year.higher incentive compensation on better results.

Interest income consists primarily of interest earned on cash balances held in money market accountsaccounts, and interest earned on commercial floorplan lending. Interest income is down in the three and nine months ended December 27, 2025 primarily due to lower interest rates on deposited cash and a decrease in cash balances due to the American Homestar acquisition in the three months ended December 27, 2025. Interest expense consists primarily of interest related to finance leases.

Other income,expense, net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from the sale of property, plant and equipment.

We believe that cash and cash equivalents at DecemberJune 27, 2025,2026, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations and provide for growth for the next 12 months and into the foreseeable future. We maintain cash in U.S. Treasury and other money market funds, some of which is in excess of federally insured limits, but we have not experienced any losses with regards to such excesses. We expect to continue to evaluate potential acquisitions of, or strategic investments in, businesses that are complementary to the Company, as well as other expansion opportunities. Such transactions may require the use of cash and have other impacts on our liquidity and capital resources. We believe we have sufficient liquid resources including our $75$75.0 million Revolving Credit Facility, of which may be increased from time to time through additional term facilities by up to an aggregate amount of $75 million up to $150 million. Nono amounts are currentlywere outstanding underat theJune 27, 2026. The Revolving Credit Facility.Facility is part of the Credit Agreement which includes the following financial covenants: (i) as of the end of any fiscal quarter, the Consolidated Total Leverage Ratio (as defined in the Credit Agreement) cannot exceed 3.25 to 1.00 and (ii) a requirement to maintain Consolidated EBITDA (as defined in the Credit Agreement) for any period of four fiscal quarters of at least $75 million. The Credit Agreement also contains customary representations and warranties, and affirmative and negative covenants. The Company anticipates compliance with its debt covenants and projects its level of cash availability to be in excess of cash needed to operate the business for the next year. Depending on our operating results and strategic opportunities, we may choose to seek additional or alternative sources of financing in the future. There can be no assurance that such financing would be available on satisfactory terms, if at all. If this financing were not available, it could be necessary for us to reevaluate our long-term operating plans to make more efficient use of our existing capital resources at such time. The exact nature of any changes to our plans that would be considered depends on various factors, such as conditions in the Factory-builtfactory-built housing industry and general economic conditions outside of our control.

The following is a summary of the Company's cash flows for the ninethree months ended DecemberJune 27, 20252026 and DecemberJune 28, 2024,2025, respectively:

Consumer loan originations decreasedincreased $11.2$11.7 million to $43.0$26.9 million for the ninethree months ended DecemberJune 27, 20252026 from $54.2$15.2 million for the ninethree months ended DecemberJune 28, 2024,2025, and proceeds from consumer loansloan decreasedsales $4.3and principal payments received increased $16.6 million to $42.8$30.4 million for the ninethree months ended DecemberJune 27, 20252026 from $47.0$13.8 million for the ninethree months ended DecemberJune 28, 2024.2025.

Commercial loan originations increased $29.8$1.3 million to $117.3$43.7 million for the ninethree months ended DecemberJune 27, 20252026 from $87.5$42.4 million for the ninethree months ended DecemberJune 28, 2024.2025. Proceeds from the collection on commercial loans provided $110.8$38.6 million forthis the nine months ended December 27, 2025,year, compared to $85.0$34.5 million in the comparable prior year, a net increase of $25.8$4.1 million.

The change in Net cash used in investing activities is primarily due to the cash paid for the acquisition of American Homestar and an increase in cash paid for propertyproperty, plant and equipment in the current year.year due to large planned capital expenditures.

The change in Net cash used in financing activities was primarily due to the repurchase of a higher number offewer shares of common stock, whichpartially wereoffset also atby a higher average dailyprice stockper price.share.

There have been no significant changes to our critical accounting estimates during the ninethree months ended DecemberJune 27, 2025,2026, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.