Cavco Industries (CVCO) Reports Quarterly Plunge – ‘Affordable Housing Crisis Intensifying’ per Boor in Fiscal 2024 2nd Quarter 8K Results – Facts and Analysis – plus MHVille Markets Update

CavcoIndustriesCVCOreportsQuarterlyPlungeAffordableHousingCrisisIntensifyingPerBoorFiscal2024.2ndQuarter8KresultsFactsAnalysisPlusMHVilleMarketsUpdateMHProNews
After years of fact checks and reviews by MHProNews, it has become apparent that all publicly traded “investor relations” presentations (a.k.a. “pitch decks”) can provide information potentially useful for a variety of insights and purposes. That will be demonstrated in this report on Cavco Industries (CVCO). Cavco is currently led by William “Bill” Boor, who took over the reins following the “debacle” that occurred during the tenure of prior Cavco President and CEO Joseph “Joe” Stegmayer. The Securities and Exchange Commission (SEC) took legal action against Stegmayer and Cavco. After years of battles that included investor, the SEC finally settled with Cavco. Whistleblower payouts were apparently reported. This is the recent backdrop to Cavco’s history and the current tenure of Bill Boor. According to Boor’s LinkedIn profile, he is Cavco’s President and CEO. According to the Manufactured Housing Institute (MHI) website, Boor is currently the chairman of the MHI board of directors.  By law, corporate documents and filings are supposed to be “materially” accurate. With that brief preface, according to Cavco Industries 8K filing with the Securities and Exchange Commission (SEC), in November 2023, the firm (Nasdaq: CVCO) (herein: “we,” “our,” the “Company” or “Cavco”) “announced financial results for the second fiscal quarter ended September 30, 2023.” The following facts and remarks in Part I are per Cavco’s 8K document filing. They include the phrase in the headline attributed to CEO Bill Boor by Cavco’s SEC form 8K filing: “the affordable housing crisis is intensifying.” Other statements, remarks by Boor and statements from Cavco are included per their November 2023 8K.
Part II of this report will be additional information with more MHProNews analysis. New and returning readers are reminded that MHProNews holds no position in this equity nor the others we routinely report on in manufactured housing. This report, nor others, should NOT be misconstrued as an endorsement of a firm or their business practices.
Part III of this report will be our MHProNews updates on over 2 dozen manufactured housing connected stocks and other equities, including Cavco, other HUD Code manufactured home producers, retail, suppliers, finance, manufactured home community (MHC) operators, plus larger conglomerates that have invested in manufactured housing in a notable fashion (example: Berkshire Hathaway (BRK-Clayton Homes, 21st Mortgage Corporation, plus Vanderbilt Mortgage and Finance, among others), BlackRock, Apollo, Blackstone and the Carlyle Group.

Part I – Cavco Industries Inc (CVCO) Reports 21.7% Decline in Net Revenue 

QuoteMarksLeftSideSecond Quarter Summary
•Net revenue was $452 million, down 21.7% compared to $577 million in the second quarter of the prior year.
•Factory-built housing gross profit as a percentage of Net revenue was 23.2%, compared to 26.7% in the prior year.
•Financial services Gross profit as a percentage of Net revenue was 35.9% compared to 44.6% in the prior year.
•Income before income taxes was $52 million, down 44.1% compared to $93 million in the prior year period.
•Net income per diluted share attributable to Cavco common stockholders was $4.76 compared to $8.25 in the prior year quarter.
•Backlogs were $170 million at the end of the quarter, down $7 million from $177 million three months prior.
•Returned nearly $47 million to shareholders through stock repurchases.
Commenting on the quarter, President and Chief Executive Officer Bill Boor said, “Backlogs have stabilized at about 6 weeks, reflecting modest improvement in wholesale orders while capacity utilization remained essentially unchanged from Q1. Our plants, and operations overall, continue to do an outstanding job maintaining healthy margins and generating strong cash flow despite market conditions.”
He continued, “Prospective homeowners have gotten no relief from the impact of rising interest rates and the affordable housing crisis is intensifying. At Cavco, we continue to manage the near-term challenges with a steady focus on improving the customer experience, deepening our distribution partnerships and developing innovative products and finance solutions so we can get more families into homes.”

Financial Results
Three Months Ended
($ in thousands, except revenue per home sold) September 30,
2023
October 1,
2022
Change
Net revenue
Factory-built housing $ 434,066 $ 559,602 $ (125,536) (22.4) %
Financial services 17,964 17,790 174 1.0 %
$ 452,030 $ 577,392 $ (125,362) (21.7) %
Factory-built modules sold 6,912 8,863 (1,951) (22.0) %
Factory-built homes sold (consisting of one or more modules) 4,248 5,111 (863) (16.9) %
Net factory-built housing revenue per home sold $ 102,181 $ 109,490 $ (7,309) (6.7) %
Six Months Ended
($ in thousands, except revenue per home sold) September 30,
2023
October 1,
2022
Change
Net revenue
Factory-built housing $ 891,175 $ 1,132,199 $ (241,024) (21.3) %
Financial services 36,730 33,531 3,199 9.5 %
$ 927,905 $ 1,165,730 $ (237,825) (20.4) %
Factory-built modules sold 14,318 18,105 (3,787) (20.9) %
Factory-built homes sold (consisting of one or more modules) 8,830 10,457 (1,627) (15.6) %
Net factory-built housing revenue per home sold $ 100,926 $ 108,272 $ (7,346) (6.8) %
•In the factory-built housing segment, the decrease in Net revenue for the three and six months was due to lower home sales volume and lower home selling prices, partially offset by the addition of Solitaire Homes.
•Financial services segment Net revenue increased for the three and six months from more insurance policies in force in the current period compared to the prior year.

Three Months Ended
($ in thousands) September 30,
2023
October 1,
2022
Change
Gross profit
Factory-built housing $ 100,507 $ 149,665 $ (49,158) (32.8) %
Financial services 6,450 7,934 (1,484) (18.7) %
$ 106,957 $ 157,599 $ (50,642) (32.1) %
Gross profit as % of Net revenue
Consolidated 23.7 % 27.3 % N/A (3.6) %
Factory-built housing 23.2 % 26.7 % N/A (3.5) %
Financial services 35.9 % 44.6 % N/A (8.7) %
Selling, general and administrative expenses
Factory-built housing $ 56,455 $ 61,640 $ (5,185) (8.4) %
Financial services 5,051 5,254 (203) (3.9) %
$ 61,506 $ 66,894 $ (5,388) (8.1) %
Income from operations
Factory-built housing $ 44,052 $ 88,025 $ (43,973) (50.0) %
Financial services 1,399 2,680 (1,281) (47.8) %
$ 45,451 $ 90,705 $ (45,254) (49.9) %
Six Months Ended
($ in thousands) September 30,
2023
October 1,
2022
Change
Gross profit
Factory-built housing $ 213,875 $ 289,251 $ (75,376) (26.1) %
Financial services 10,961 13,072 (2,111) (16.1) %
$ 224,836 $ 302,323 $ (77,487) (25.6) %
Gross profit as % of Net revenue
Consolidated 24.2 % 25.9 % N/A (1.7) %
Factory-built housing 24.0 % 25.5 % N/A (1.5) %
Financial services 29.8 % 39.0 % N/A (9.2) %
Selling, general and administrative expenses
Factory-built housing $ 112,476 $ 122,563 $ (10,087) (8.2) %
Financial services 10,710 10,467 243 2.3 %
$ 123,186 $ 133,030 $ (9,844) (7.4) %
Income from operations
Factory-built housing $ 101,399 $ 166,688 $ (65,289) (39.2) %
Financial services 251 2,605 (2,354) (90.4) %
$ 101,650 $ 169,293 $ (67,643) (40.0) %
•In the factory-built housing segment, Gross profit as a percent of Net revenue for the three and six months was down primarily due to lower average selling price, partially offset by lower input costs.

•In the financial services segment, Gross profit and Income from operations for the three and six months were negatively affected by higher insurance claims from weather related events.
•Selling, general and administrative expenses decreased for the three and six months primarily as a result of lower incentive compensation on reduced sales and lower professional expenses.
Three Months Ended
($ in thousands, except per share amounts) September 30,
2023
October 1,
2022
Change
Net income attributable to Cavco common stockholders $ 41,539 $ 74,116 $ (32,577) (44.0) %
Diluted net income per share $ 4.76 $ 8.25 $ (3.49) (42.3) %
Six Months Ended
($ in thousands, except per share amounts) September 30,
2023
October 1,
2022
Change
Net income attributable to Cavco common stockholders $ 87,896 $ 133,718 $ (45,822) (34.3) %
Diluted net income per share $ 10.05 $ 14.88 $ (4.83) (32.5) %
Items ancillary to our core operations had the following impact on the results of operations:
Three Months Ended Six Months Ended
($ in millions) September 30,
2023
October 1,
2022
September 30,
2023
October 1,
2022
Net revenue
Unrealized (losses) recognized during the period on securities held in the financial services segment $ (0.3) $ $ $ (1.2)
Selling, general and administrative expenses
Expenses incurred in engaging third-party consultants in relation to the non-recurring energy efficient home tax credits
(1.9) (4.5)
Legal and other expense related to the Securities and Exchange Commission inquiry (0.7) (1.4) (1.0) (2.8)
Other income, net
Corporate unrealized gains (losses) recognized during the period on securities held 0.1 (1.1)

Conference Call Details
Cavco’s management will hold a conference call to review these results tomorrow, November 3, 2023, at 1:00 p.m. (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at https://investor.cavco.com or via telephone. To participate by phone, please register at https://register.vevent.com/register/BI5482f8d4e8a84a199406d7dcd5c3fe5a to receive the dial in number and your PIN. An archive of the webcast and presentation will be available for 90 days at https://investor.cavco.com.
About Cavco
Cavco Industries, Inc., headquartered in Phoenix, Arizona, designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. We are one of the largest producers of manufactured and modular homes in the United States, based on reported wholesale shipments. Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and Solitaire. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures. Cavco’s finance subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/servicer and a Ginnie Mae mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.

Forward-Looking Statements
Certain statements contained in this release are forward-looking statements. In general, all statements that are not historical in nature are forward-looking. Forward-looking statements are typically included, for example, in discussions regarding the manufactured housing industry; our financial performance and operating results; and the expected effect of certain risks and uncertainties on our business, financial condition and results of operations. All forward-looking statements are subject to risks and uncertainties, many of which are beyond our control. As a result, our actual results or performance may differ materially from anticipated results or performance. Factors that could cause such differences to occur include, but are not limited to: the impact of local or national emergencies including the COVID-19 pandemic, including such impacts from state and federal regulatory action that restricts our ability to operate our business in the ordinary course and impacts on (i) customer demand and the availability of financing for our products, (ii) our supply chain and the availability of raw materials for the manufacture of our products, (iii) the availability of labor and the health and safety of our workforce and (iv) our liquidity and access to the capital markets; labor shortages and the pricing and availability of transportation or raw materials; increased health and safety incidents; our ability to negotiate reasonable collective bargaining agreements with the unions representing certain employees; increases in the rate of cancellations of home sales orders; our ability to successfully integrate past acquisitions or future acquisitions; involvement in vertically integrated lines of business, including manufactured housing consumer finance, commercial finance and insurance; information technology failures or cyber incidents; our ability to maintain the security of personally identifiable information of our customers, suppliers and employees; our participation in certain financing programs for the purchase of our products by industry distributors and consumers, which may expose us to additional risk of credit loss; our exposure to significant warranty and construction defect claims; our exposure to claims and liabilities relating to products supplied to the Company or work done by subcontractors; our contingent repurchase obligations related to wholesale financing provided to industry distributors; a write-off of all or part of our goodwill; our ability to maintain relationships with independent distributors; our business and operations being concentrated in certain geographic regions; taxation authorities initiating or successfully asserting tax positions which are contrary to ours; governmental and regulatory disruption, including (i) prolonged delays by Congress and the President to approve budgets or continuing appropriations resolutions to facilitate the operation of the federal government or (ii) shutdowns or delays at the Mexico border; curtailment of available financing from home-only lenders and increased lending regulations; the effect of increasing interest rates on our customer’s ability to finance home purchases; availability of wholesale financing and limited floor plan lenders; market forces, rising interest rates, fluctuations in exchange rates and housing demand fluctuations; the cyclical and seasonal nature of our business; competition; general deterioration in economic conditions and turmoil in the financial markets; unfavorable zoning ordinances; extensive regulation affecting the production and sale of manufactured housing; potential financial impact on the Company from the recently settled regulatory action by the SEC against the Company, including potential higher insurance costs as a result of such action, potential reputational damage that the Company may suffer and the Company’s potential ongoing indemnification obligations related to ongoing litigation not involving the Company; losses not covered by our director and officer insurance, which may be large, adversely impacting financial performance; loss of any of our executive officers; liquidity and ability to raise capital may be limited; and organizational document provisions delaying or making a change in control more difficult; together with all of the other risks described in our filings with the SEC. Readers are specifically referred to the Risk Factors described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended April 1, 2023 as may be updated from time to time in future filings on Form 10-Q and other reports filed by the Company pursuant to the Securities Exchange Act of 1934, which identify important risks that could cause actual results to differ from those contained in the forward-looking statements. Cavco expressly disclaims any obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise, as required by law. Investors should not place undue reliance on any such forward-looking statements.

CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

September 30,
2023
April 1,
2023
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 377,264 $ 271,427
Restricted cash, current 17,180 11,728
Accounts receivable, net 88,560 89,347
Short-term investments 14,358 14,978
Current portion of consumer loans receivable, net 10,503 17,019
Current portion of commercial loans receivable, net 48,583 43,414
Current portion of commercial loans receivable from affiliates, net 1,959 640
Inventories 244,476 263,150
Prepaid expenses and other current assets 72,560 92,876
Total current assets 875,443 804,579
Restricted cash 585 335
Investments 20,507 18,639
Consumer loans receivable, net 25,233 27,129
Commercial loans receivable, net 40,998 53,890
Commercial loans receivable from affiliates, net 2,928 4,033
Property, plant and equipment, net 223,664 228,278
Goodwill 116,015 114,547
Other intangibles, net 29,005 29,790
Operating lease right-of-use assets 34,413 26,755
Total assets $ 1,368,791 $ 1,307,975
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 41,095 $ 30,730
Accrued expenses and other current liabilities 264,380 262,661
Total current liabilities 305,475 293,391
Operating lease liabilities 30,529 21,678
Other liabilities 7,792 7,820
Deferred income taxes 5,740 7,581
Redeemable noncontrolling interest 1,219
Stockholders’ equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,356,421 and 9,337,125 shares, respectively
94 93
Treasury stock, at cost; 844,742 and 671,801 shares, respectively
(211,646) (164,452)
Additional paid-in capital 274,204 271,950
Retained earnings 957,206 869,310
Accumulated other comprehensive loss (603) (615)
Total stockholders’ equity 1,019,255 976,286
Total liabilities, redeemable noncontrolling interest and stockholders’ equity $ 1,368,791 $ 1,307,975

CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
September 30,
2023
October 1,
2022
September 30,
2023
October 1,
2022
Net revenue $ 452,030 $ 577,392 $ 927,905 $ 1,165,730
Cost of sales 345,073 419,793 703,069 863,407
Gross profit 106,957 157,599 224,836 302,323
Selling, general and administrative expenses 61,506 66,894 123,186 133,030
Income from operations 45,451 90,705 101,650 169,293
Interest income 5,812 1,851 10,430 3,165
Interest expense (257) (233) (523) (394)
Other income, net 655 488 781 57
Income before income taxes 51,661 92,811 112,338 172,121
Income tax expense (10,088) (18,613) (24,354) (38,229)
Net income 41,573 74,198 87,984 133,892
Less: net income attributable to redeemable noncontrolling interest 34 82 88 174
Net income attributable to Cavco common stockholders $ 41,539 $ 74,116 $ 87,896 $ 133,718
Net income per share attributable to Cavco common stockholders
Basic $ 4.80 $ 8.32 $ 10.15 $ 15.01
Diluted $ 4.76 $ 8.25 $ 10.05 $ 14.88
Weighted average shares outstanding
Basic 8,656,537 8,903,703 8,663,430 8,910,933
Diluted 8,731,419 8,978,997 8,742,734 8,983,425
CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
September 30,
2023
October 1,
2022
September 30,
2023
October 1,
2022
Capital expenditures $ 4,287 $ 8,181 $ 8,470 $ 33,188
Depreciation $ 4,275 $ 3,836 $ 8,449 $ 7,274
Amortization of other intangibles $ 393 $ 502 $ 785 $ 1,010
###

Part II – Additional Information with More MHProNews Analysis and Commentary

From the SEC document linked here are the following remarks found in “Assessing Materiality: Focusing on the Reasonable Investor When Evaluating Errors.”

QuoteMarksLeftSideUnder our federal securities laws, public companies are required to disclose certain financial and other information to investors. The basic premise of this disclosure-based regulatory regime is that if investors have timely, accurate, and complete financial and other information, they can make informed, rational investment decisions.”

MHProNews hereby notes that failure for a firm to provide accurate information, and failure to correct information that may be “material” to a “reasonable” investor can be an important legal issue.

That noted, from that same SEC document: “Management is responsible for providing investors with GAAP-compliant financial statements, so whenever a material error is identified in previously-issued financial statements,[2] investors must be notified promptly and the error must be corrected. The determination of whether an error is material is an objective assessment focused on whether there is a substantial likelihood it is important to the reasonable investor.[3]

QuoteMarksLeftSide…The Supreme Court has held that a fact is material if there is: “a substantial likelihood that the … fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.”[4] When an error is determined to be material to previously-issued financial statements, the error must be corrected by restating the prior-period financial statements.[5] This type of restatement is sometimes
referred to colloquially as a reissuance restatement or a “Big R” restatement.” “such errors [both Big R and little r] should be transparently disclosed to investors.”  “Since the concept of materiality is focused on the total mix of information from the perspective of a reasonable investor, those who assess the materiality of errors, including registrants, auditors, audit committees, and others, should do so through the lens of the reasonable investor.”

The last remark might be worth repeating for emphasis (with bold added by MHProNews) for better understanding the analysis that follows. “Since the concept of materiality is focused on the total mix of information from the perspective of a reasonable investor, those who assess the materiality of errors, including registrants, auditors, audit committees, and others, should do so through the lens of the reasonable investor.”

MHProNews asked Bing AI the following.

> “What is a fiduciary duty in law with respect to investing in publicly traded companies?”

BingsAIchatAnswerImage-MHProNewsDirectors of a publicly traded company have a fiduciary duty to12345:

  • Exercise due care in how they manage a corporation’s affairs
  • Handle their powers only for the collective benefit of the corporation and its stockholders
  • Make decisions in good faith for shareholders in a reasonably prudent manner
  • Not put other interests, causes, or entities above the interest of the company and its shareholders
  • Choose the best option to serve the company and its stakeholders
  • Exercise their business judgment in considering and reconciling the interests of various stakeholders, including shareholders, employees, customers, suppliers, the environment and communities, and the attendant risks and opportunities for the corporation.
With that foundation, let’s go step by step through several items with respect to Cavco specifically but also with respect to the bigger picture of the manufactured housing industry, which is arguably underperforming during an affordable housing crisis.
1) Compare what Cavco’s William “Bill” Boor said, per their 8K statements above with what the TMHA said in the report linked below that quotation.
President and Chief Executive Officer Bill Boor said, “Backlogs have stabilized at about 6 weeks, reflecting modest improvement in wholesale orders while capacity utilization remained essentially unchanged from Q1.
One should keep in mind that several publicly traded companies have operations involving Texas. Note for now that reports by TRERC and the TMHA can be used to cross check the remarks made by publicly traded firms. But it is also true that insights from public firms, like Cavco, can be used to check the quality of the information being generated in those monthly TRERC reports, such as the one linked above.
2) “Prospective homeowners have gotten no relief from the impact of rising interest rates and the affordable housing crisis is intensifying,” said Boor.  Those remarks are in line with what MHLivingNews recently reported about the Wall Street Journal and other sources reporting on the fading of the American Dream.

 

3) Boor ought to play an outsized role at MHI, given that he is their current chairman.   Boor’s remarks on behalf of Cavco: “Prospective homeowners have gotten no relief from the impact of rising interest rates and the affordable housing crisis is intensifying” is arguably one more addition to the ‘indictment’ of the Arlington, VA based national trade association that he currently heads up as their corporate board leader.

 

Manufactured Housing Institute Oddly Details Association’s Failures-New State-by-State Production/Shipment Info-Affordable HOMES Act, Communities Bill Initiated in Congress – Facts and Analysis

 

4) Comparing Cavco’s quarterly results to that of the industry as a whole is a commonsense step for manufactured housing stakeholders and corporate shareholders, among others evaluating the information that Cavco’s has provided. Cavco has reportedly dropped some 22 percent, which is broadly in line with the fall in production reported by MHARR, IBTS, and other sources (see the above and below reports for details).

 

Manufactured Housing Production Decline Persists in Sept 2023 per Manufactured Housing Association ‘During Affordable Housing Crisis Affordable Manufactured Housing Continues to Underperform’, Facts Analysis –

 

5) That said, affordable manufactured housing has apparently broadly performed worse than conventional housing, based upon recent reporting. See that data in the report linked below. The fact that manufactured housing is underperforming far costlier conventional housing ought to be a reason for a range of individuals, public officials, and advocates to wonder, why is this the case? What helps explain the apparently poor performance of several manufactured housing industry firms during an affordable housing crisis?

 

‘U.S. Housing Market Summed up in Five Charts’ – NBC News Tees Up Conventional Housing Data for Easy Comparisons to Manufactured Housing Market, plus Sunday Weekly MHVille Headlines Review

 

6) MHProNews will not do at this time a page-by-page “fisking” of Cavco’s latest investor pitch deck (investor presentation for November 2023).  What we will do is focus this analysis to the following. The following page is from a previous Cavco Industries investor presentation. However, it is also page four of their current (November 2023) presentation (investor pitch deck).

Note: to expand this image below to a larger or full size, see the instructions

below the graphic below or click the image and follow the prompts.

CavcoIndustriesLOGO-CVCOInvestorPresentationIR-AffordableHousingCrisisQuotesJan2023Page4MHProNewsFactCheckAnalysisCommentary
https://www.manufacturedhomepronews.com/manufactured-housing-institute-mhi-claims-contradicted-by-cavco-industries-ir-statements-shortage-of-affordable-housing-costs-economy-2trillion-annually-plus-mhville-markets-upd/ There is no lack of evidence that there is an affordable housing crisis. But that being so, why did MHI make the odd argument in their most recent (4.10.2023) Federated States ‘Newsletter’
that the industry ought to expect this current downturn because more expensive site-built housing is also in a downturn? MHI’s research and reasoning are arguably a classic example of PALTERING and the use of a RED HERRING logical fallacy. Note: depending on your browser or device, many images in this report and others on MHProNews can be clicked to expand. Click the image and follow the prompts. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

According to a search using Bing AI, the quotation above from the National Association of Home Builders CEO Jerry Howard is based upon remarks he made to Fox Business on the Varney and Company program on 11.22.2022. The precise quoted remark posted on their website says the following.

“Right now, in almost no market in this country, can a homebuilder build a house that is affordable for a first-time homebuyer,” National Association of Home Builders CEO Jerry Howard said on “Varney & Co.” Thursday. “We can’t do it. The costs that are on us make it impossible.” So, first, while Cavco’s quotation is close, it is NOT precise. Cavco’s version of NAHB CEO Howard’s remark omits the word “almost” Here is how Cavco posted it in their investor relations page 4 above. “…(in) no market in this country can a homebuilder build a house that is affordable for a first-time home buyer.” National Association of Home Builders CEO, Jerry Howard. Note that while Cavco cited the sources for 3 other remarks on that page (Pew, NPR, and Forbes), it failed to cite the source for NAHB CEO Howard’s remark. That said, the points that Cavco has made with that slide are important.

Next to “Why it matters” are these three remarks.

  • Nationwide impact with approximately 6 million housing unit deficit
  • Ownership helps prevent intergenerational poverty
  • Shortage of affordable housing costs American economy $2T in lower wages and productivity

Once again, as with the Howard quote, those statements aren’t supported by the sources for those comments. That noted, there is support for those claims, as MHProNews previously noted in detail in the report linked below.

 

ManufacturedHousingInstituteMHIclaimsContradictedByCavcoIndustriesIRstatementsShortageOfAffordableHousingCostsEconomy$2TrillionAnnuallyPlusMHVilleMarketsUpdateMHProNews
https://www.manufacturedhomepronews.com/manufactured-housing-institute-mhi-claims-contradicted-by-cavco-industries-ir-statements-shortage-of-affordable-housing-costs-economy-2trillion-annually-plus-mhville-markets-upd/

 

For those interested in ESG, those remarks are powerful. That said, Cavco’s Boor used ESG as a pivot point to make other remarks to Congress on July 14, 2023. Perhaps oddly, Cavco’s CEO Boor made distinctively different remarks to investors just a few weeks after his remarks to Congress.

7). Perhaps this next slide from Cavco’s 11.2023 investor presentation is where a question of materiality and the firm’s fiduciary duty to investors and stakeholders could come in to play (see preface and the introduction to Part II, above).

 

Note: to expand this image below to a larger or full size, see the instructions

below the graphic below or click the image and follow the prompts.

CavcoIndustriesNov2023InvestorRelationsPg5-2023-11-28_03-11-43ManufacturedHomeProNewsMHProNewsFactCheckExpertAnalysisByLATonyKovach
The first 5 statements could find broad support from third-party evidence. That said, the statements in the last two call out boxes from Cavco Industries’ pitch are problematic for the reasons shown by MHProNews. Additionally, while MHProNews broadly agrees with Cavco’s remarks about “Rising interest rates have proportionately less impact on monthly payment on MH buyers than site-built buyers” that arguably cuts against some remarks made by MHI, TRERC, TMHA, and others. Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

 

On the bottom left of page 5 (the MHProNews annotated screen capture above) is this statement. “* Source: Manufactured Housing Institute’s 2022 Manufactured Housing Facts: Industry Overview.” MHProNews has raised the topic several times that MHI’s recently revised website has made several changes beyond mere appearances. The case can be made that information previously made available by MHI to the public has been removed. What is interesting is that some of that removed information were the subjects of MHProNews fact checks.  That reference from Cavco is to one of those removed (i.e.: now hidden, taken down, or perhaps members only) documents. This has occurred at about the same time as national class action lawsuits were filed against several prominent MHI members.

Keep in mind the information in linked in the opening paragraph of this article.  In the recent past, Cavco has had years of legal woes.

 

NewCavcoIndustriesLogo2021SecuritiesExchComLogoMastProjectSaturnCodeNameMonarchSECvCavcoStegmayerUrnessCavcoUMH-NOBH-DVLY-SkylineChampSKYmonopoolySchemeManufacturedHousingInst
https://www.manufacturedhomepronews.com/masthead/project-saturn-code-name-monarch-sec-v-cavco-stegmayer-et-al-federal-suit-revelations-about-cavco-skyline-champion-other-manufactured-housing-brands-apparen/

 

SEC-SecuritiesExchangeCommissionWhistleblowerProgramRecordPayoutScreenCaptureCavcoIndustriesJosephStegmayerDanielUrnessMHProNewsReportFactCheckAnalysisMHProNews
MHProNews Note: depending on your browser or device, many images in this report can be clicked to expand. Click the image and follow the prompts. For instance, in some browsers, you will click to open the image in a new window, and then click to open that new window image to expand its size. Then, to return to this page, use your back key, escape or x out to exit. In each case, follow the browser/device prompts.

 

WhistleblowerPayoutCavcoIndustriesSettleWithSECinSecuritiesAndExchangeCommissionCaseVsCavcoCVCOformerCEOJosephStegmayerDanielUrness21-cv-01507WilliamBillBoorMHProNews1
https://www.manufacturedhomepronews.com/whistleblower-payout-cavco-cvco-settle-with-sec-in-securities-and-exchange-commission-case-vs-cavco-former-ceo-joseph-stegmayer-daniel-urness-21-cv-01507-u-s-district-court-of-az/

 

For employees working for a firm that may have problematic business practices, the above and next reports are reminders that it can be beneficial to several for formal complaints, and/or news tips to media like ours that is willing to hold firms and organizations accountable for problematic actions/inactions.  While the system may be problematic, it would be wrong to say that the system never works. It has worked in numbers of higher profile cases, such as the examples noted in the report and analysis linked below.

 

JurySaidGUILTY!SBF-FTXrecapFannie-Freddie-Theranos-Enron-WorldCom-Madoff-Lehman AI InsightsUSAlessonsForMHVilleBlackGrayWhiteHatsPlusMHVilleMarketsMHProNews
https://www.manufacturedhomepronews.com/jury-said-guilty-sbf-ftx-recap-w-fannie-freddie-theranos-enron-worldcom-madoff-lehman-ai-insights-usa-lessons-for-mhville-black-gray-white-hats-plus-mhville-markets/

 

8) Cavco has made a big deal about encouraging the raising of concerns and complaints to management.  Cavco, and perhaps several other MHI member firms, may have reason to hope and pray that their employees don’t blow the whistle on several aspects of their operations, especially in the light of the class action and other legal cases noted and linked from this report.

CavcoInauguralEnvironmentalSocialGovernanceESGreportExaminedAskQuestionsRaiseConcernsIfTheyExistBBBratingCorpHistoryFactualInsightsEvidenceExploredMHProNews
https://www.manufacturedhomepronews.com/cavcos-inaugural-environmental-social-and-governance-esg-report-examined-ask-questions-raise-concerns-if-they-exist-bbb-rating-corp-history-other-factual-insights-a/

 

9) Back to the point raised in #7 above. Cavco cited an MHI document that was once publicly available, but now no longer is, according to the search of the MHI website shown below.

 

Note: to expand these images below to a larger or full size, see the instructions

below the graphic below or click the image and follow the prompts.

ManufacturedHousingInstituteQuickFactsIndustryOverview2023-11-28_03-00-40MHProNewsFactCheckAnalysisCommentary
Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

 

ManufacturedHousingInstituteWebsiteManufacturedHousingIndustryOverview2023-11-28_02-47-58MHProNewsFactCheck
Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

 

ManufacturedHousingInstituteQuickFactsIndustryOverviewMHProNewsFactCheckAnalysis2023-11-28_02-54-33
Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

 

It isn’t just that document, but others that were once publicly available that have since been removed. Another example recently detected is the one shown below. For the possible significance, see the deeper dive on MHI linked here. But keep in mind that Cavco is a prominent MHI member. That MHI “priorities” document that was removed included the issue of zoning barriers.

 

ManufacturedHousingInstituteIndustryPriorities2023-11-28_02-46-28MHProNews
Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.

Manufactured Housing Institute Oddly Details Association’s Failures-New State-by-State Production/Shipment Info-Affordable HOMES Act, Communities Bill Initiated in Congress – Facts and Analysis

 

10) While MHI is ironically pitching potential and new members on the notion that they should sign up (see report linked above) to get access to a “members only” tool that details zoning barriers in the U.S., Cavco Industries is telling investor that “Zoning restrictions are beginning to ease in response to affordability issues.” Seriously? Where is the evidence for that remark? While there may be a very limited number of possible examples for that which Cavco could point to, the fact that their own CEO – Bill Boor – made remarks to Congress asking for help with HUD’s failure to press zoning issues ought to be a red flag for a disconnect between what Boor told Congress, and what Cavco told investors previously and in recent remarks that questionably claim that “Zoning restrictions are beginning to ease in response to affordability issues.”

 

HUDmustStrengthenPreemptionEnforcementProvideTransparentGuildelinesHUDmustRespondWheneverLocalitiesViolateEnhancedPreemptionBillBoorCEOcavcoIndustriesMHIvChairMHLivingNews
https://www.manufacturedhomelivingnews.com/double-digit-2023-manufactured-home-production-slide-continues-per-national-manufactured-housing-association-more-new-manufactured-home-living-facts/

 

11) Put simply, Cavco can’t have it both ways. They can’t tell Congress that zoning barriers are a serious problem (they are, as a notable example, see the report linked here), and then tell investors that zoning barriers are easing. Perhaps more revealing is the point that Cavco and MHI leaders have apparently had face-to-face meetings with HUD Secretary Marcia Fudge, yet there is no known evidence that the topic of “enhanced preemption” (see Boor’s remarks shown above about preemption enforcement) has been raised face to face with Fudge or senior HUD leadership. Yet Fudge said in video recorded remarks to Congress that these issues (zoning barriers) will “perpetually” persist until these legal questions are solved.

 

HUDSecMarciaFudgeMHIinActionManufaturedHousingInstituteLOGOZoningManufacturedHomesUntilWeAddressThisWeAreContinuePerpetuallyInThisSituationQuotePlusManufacturedHousingStockUpdates
https://www.manufacturedhomepronews.com/hud-sec-marcia-fudge-zoning-manufactured-homes-until-we-start-to-address-this-we-are-going-to-continue-to-be-perpetually-in-this-kind-of-situation-news-analys/

 

12) But those points are conveniently ignored in MHI’s recent or several prior messages to members and on the MHI website. Industry professionals, perhaps especially management, are often busy. They may not think that they have the time to spend checking up on the how ethical their national association (i.e.: MHI) and or MHI affiliated state associations happen to be. That said, state associations (dubbed by MHI as state affiliates) and MHI’s own previously asserted history items are also among the ones seemingly missing from their revised website.  MHI boldly claims in their new home page that they are: “Expanding Attainable Homeownership” at a time when the industry is in a documented 11 months of year-over-year declining production. MHI leaders have made statements under oath which arguably have not been supported by the evidence

13) To illustrate and give evidence in support of several of these points, the following inquiry was put to Bing AI.

> “Is there any known evidence that Manufactured Housing Institute corporate or staff leaders have discussed the lack of enforcement of the enhanced preemption issue under the Manufactured Housing Improvement Act of 2000 with HUD Secretary Marcia Fudge?”

BingsAIchatAnswerImage-MHProNewsI found a news article from Manufactured Home News that reports on the lack of enforcement of the enhanced preemption issue under the Manufactured Housing Improvement Act of 2000 by HUD. The article mentions that the Manufactured Housing Institute (MHI) has failed to press on this issue and that MHI’s CEO, Lesli Gooch, Ph.D., has said that HUD continues to fail to enforce the Manufactured Housing Improvement Act of 2000 1.

I also found an article from Manufactured Home Pro News that reports on a formal inquiry sent to MHI’s corporate leaders and staff, including MHI’s CEO, Lesli Gooch, Ph.D., asking why MHI has not sued HUD for failure to enforce the Manufactured Housing Improvement Act enhanced preemption 2.

Unfortunately, I could not find any evidence that Manufactured Housing Institute corporate or staff leaders have discussed the lack of enforcement of the enhanced preemption issue under the Manufactured Housing Improvement Act of 2000 with HUD Secretary Marcia Fudge.

If you have any further questions, please let me know.

mas kovach mhpronews shopping with soheyla .jp

Get our ‘read-hot’ industry-leading 

get our ‘read-hot’ industry-leading emailed headline news updates

Scroll to Top
Glastrennwände
blumen verschicken Blumenversand
blumen verschicken Blumenversand
Reinigungsservice Reinigungsservice Berlin
küchenrenovierung küchenfronten renovieren küchenfront erneuern