Cavco Industries, Inc. Price & Performance (CVCO)

And could cause its actual results to differ materially from those expressed in any forward looking statements made by or on behalf of Cavco. I encourage you to review Cavco's filings with the Securities and Exchange Commission including without limitation, company's most recent Forms 10 ks and 10 Q which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statements. This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast Friday, January 31, 2025. Cavco undertakes no obligation to revise or update any forward looking statement whether written or oral, to reflect events or circumstances after the date of this conference call. Except as required by law, I would like to turn the call over to Bill Boor, President and Chief Executive Officer. Thanks, Mark.

Welcome and thank you for joining us today to review our Q3 results. This quarter showed strong execution across our operations, supported by continued forward momentum in the market. Sequentially, Our EPS jumped 30% to $6.90 Allison will provide a more detailed breakdown over the largest drivers were improved results in both Financial Services and Factory Built Housing. After a few challenging quarters, our Financial Services segment recorded its best driven primarily by our insurance operation. In insurance, the 3rd quarter is typically more profitable due to lower weather related [indiscernible] The positive results were also driven by improvement efforts we discussed in previous calls. We've made significant changes to underwriting to manage claims costs and we implemented needed premium increases.

In addition to the quarter to quarter financial services improvement, factory build housing showed higher volume and gross margin. Despite normal winter and holiday seasonality, we were able to increase volume sequentially by about 3.4% and gross margin improved by 70 basis points. I feel really good about the continued progress our plants are making as they ramp up production. It's always more operationally challenging to increase production than to pull it down in a market downturn. With a lot of focus on hiring, onboarding and training, we've been able steadily raise production rates where the market has supported it. This ties into an important point about our backlog movement. Despite entering the seasonally slower 3rd quarter, we made the decision where our backlogs allowed our plants would continue ramping production in anticipation of continued market improvement in 2025. Made this decision to press forward to higher production rates knowing that that would involve utilizing some of the backlog. Exiting the 3rd quarter with a still very healthy aggregate back and a higher system production rate positions us very well for the coming quarters. Of course, market uncertainty remains and if demand weakens in the coming quarters, I have full confidence in our ability to adjust accordingly.

Conversely, if demand strengthens, we're a step ahead in controlling backlog growth and we will have maximized profit While industry shipments declined from Q2, continued to improve on a seasonally adjusted basis. December numbers are not out yet However, the seasonally adjusted annual rate of HUD shipments in October November was 108,000 and 109,000 annual units respectively. This compares with about 93,000 a year ago for those months and as low as 89,000 in early 2024. So the industry trend has been decidedly positive as we head into 20 25 I also want to close off on an item from last quarter's earnings [indiscernible] At that time, there were questions about whether the Southeast market activity would be slowed in Q3. Industry shipment data for October November shows that showed about 14% year over year shipment gain in the most impacted state. Indicating that activity resumed quickly following the hurricanes.

As the calendar year ends, it's a good time to touch on progress with our digital marketing strategy. Over the last 2 years, we've implemented a complete transformation of our digital marketing architecture. Making it easier for prospective buyers to research our homes, and easier to efficiently connect them with retailers. A significant part of our approach is to add value for our One important aspect of this rollout has been to provide dealers and communities easy to manage micro sites branded to their businesses, Having their own Cavco supported sites integrated directly into our overall overall platform is proving to be a significant value add for our partners enabling them to generate leads through their micro sites and receive leads from our pathcohomes.comdigital platform. As we look back on calendar year 2024, the increased traffic lead generation and the number of independent retail businesses connecting to our platform have validated our strategy and approach And as customer engagement and the market evolve, we'll be able to continue building on the platform in new ways.

Switching gears, our cash flow generation continued to support a strong balance sheet. And the ability to repurchase shares This quarter, we repurchased $42,000,000 of stock and our quarter to quarter cash and cash equivalents remained essentially flat. With that, I'd like to turn it over to Allison to discuss the financial results in more detail.

Thank you, Bill. Net revenue for the 3rd fiscal quarter 2025 was 522,000,000 dollars up $75,200,000 or 16.8 percent compared to $446,800,000 during the prior year. Sequentially, net revenues increased $14,600,000 driven by an increase in homes sold. Within the factory build housing segment, net revenue was $500,900,000 up $74,000,000 or 17.3 percent from $426,900,000 in the prior year quarter. The increase was primarily due with 21.6% increase in homes sold partially offset by a 3.5% decrease in average revenue per home sold.

The decrease in average revenue per home was primarily due to a lower proportion of homes sold through our company owned stores and to a lesser extent product pricing decreases that were partially offset by more multi wide the mix. Factor utilization for Q3 of 2025 was approximately 75% when considering all available production days. Utilization was approximately 60% in the prior year period. Financial Services segment net revenue was $21,200,000 up 1,400,000 or 6.8 percent from $19,800,000 in the prior year quarter.

Primarily due to higher insurance premium rates. Consolidated gross margins in the 3rd fiscal quarter as a percentage of net revenue was 24.9% up 180 basis points from 23.1% in the same period last year. In the factory built housing segment, the gross profit increased 120 basis points to 23.6 percent in Q3 of 2025 versus 22.4% in Q3 of 2024 driven by lower input costs, leveraging fixed overhead, and other efficiencies on increased production partially offset by lower average selling prices. Financial Services gross margin as a percentage of revenue increased to 55.5 percent in Q3 of 2025 from 36.8% in Q3 of 2024, Insurance division improved due to a return to normal weather patterns the growing impact of premium increases and underwriting changes on policies. Selling, general and administrative expenses in the Q3 of 2025 were $66,000,000 or 12.6 percent of net revenue compared to $63,300,000 or 14.2 percent of net revenue during the same quarter last year.

The increase in these expenses was due to a higher variable and greater compensation related to acquired retail locations. Partially offset by a $2,000,000 reduction in legal expenses. Pretax profit was $69,300,000 up $25,400,000 or 57.9 percent compared to 43 $900,000 in the prior year quarter.

The effective income tax rate was 18 point 6% for the 3rd fiscal quarter down 1.7% compared to 20.3% in the second quarter. The decrease in the effective tax rate is primarily due to tax credits associated with higher shipments of ENERGY STAR compliant homes. This resulted in a decrease in tax expense of or 1.4 percent in the Q3 of fiscal 2025. Net income was 56,500,000 up $20,500,000 compared to $36,000,000 in the same quarter of the prior year and diluted earnings per share this quarter was 6.96 dollars per share versus $4.27 per share in last year's 3rd quarter. During the quarter, we also repurchased 42,400,000 of common shares under our share repurchase program cumulative repurchases stand at 3 $89,000,000 since we purchased since we began the program in the 4th quarter, of fiscal year 2021. This leaves approximately 111,000,000 under authorization for future repurchases. Before we discuss the balance sheet, I want to address the sequential change in our earnings per share which showed significant improvement from the 2nd quarter. The largest increase is due to the In Q2 of 2025, the segment was at a pre tax Loss of nearly $1,000,000 compared to pre tax income in Q3 of 2025 of $6,200,000 a swing of over $7,000,000 The Q3 2025 performance improved significantly due to higher premiums earned, lower claim volume from fewer weather events and changes in underwriting.

The 2nd largest impact is from improved factory build housing sales volume and improved margins on those homes sold.

Due to efficiencies on higher production levels.

The 3rd largest impact relates to our 170 basis points lower tax rate compared to 20.3% in the sequential quarter. The decrease in the effective tax rate is due primarily to higher shipments of ENERGY STAR compliant homes. The remaining is the benefit of our share repurchase program. In Q3 of 2025, we repurchased 98,000 shares further reducing our shares outstanding. Now I'll turn over to Paul to discuss the balance sheet.

Thanks, Allison.

In the Q3, we saw a decline in cash and restricted cash $7,600,000 bringing our balance to $378,600,000 dollars Cash flow from operating activities was $37,800,000 despite being impacted by an increase in our working capital. Cash used in investing activities was $3,000,000 net.

And cash used in finance financing activities was $42,400,000 primarily due to share repurchases.

Now moving on from the quarter and comparing the December 28, 20 24 balance sheet to March 30, 2024, Increase in accounts receivable is primarily related to organic growth we have experienced in the factory builds housing segment. The increase in short term consumer loans receivable is due to higher originations of loans held for sale in excess of actual sales. The balance of commercial loans in total remained relatively stable. The decrease in short term commercial loans receivable is primarily due to paydowns on floorplan lending and a shift to longer term loans. Current liabilities are up from increased compensation bonus accruals on higher earnings, increased insurance loss reserves for previous storms and higher customer deposits.

Finally, treasury stock increased due to buybacks executed in the 1st 3 quarters of fiscal 2025.

Now with that, I'll turn it back to Bill.

Thank you, Paul.

It's been very satisfying to see the strong execution of our operating plans across the business segment this quarter. In addition to posting strong results, we feel we effectively used the 3rd quarter to set our So with that, Michelle, would you please open the line for questions?

Our first question comes from Daniel Moore with CJS Securities. Your line is open.

Thank you. Good morning or good afternoon, should say, Bill, Allison, Paul. Thanks for taking the questions. Obviously, feeling pretty good about the trajectory of the business and order rates and demand given the decision to continue to increase production this past quarter in a seasonally late period. What can you tell us about your discussions with customers across various end markets and the cadence of order rates through the quarter and what you're seeing thus far in fiscal Q4. Just trying to get a sense, are you hearing from customers their expectations that things are going to pick up? Is it more of an anticipation of a stronger spring selling season? Anything you can tell us kind of across markets would be really helpful.

Yes, Dan, let me hit a couple of points and shoot it back to me if you had some questions or some areas or aspects I didn't touch on. We always this call always comes at an interesting time in the year, right, because we've finished the seasonally slower holiday quarter and winter quarter and then we're still a little too early to really have strong conclusions around how the spring selling season is going to materialize. But obviously, we watch some things. I commented at some length in my opening remarks about just watching industry shipments on a seasonally adjusted rate and how they have continued to trend upward So at a high level, that's been encouraging. Traffic really said this for a few quarters now traffic and retail and dealers has been pretty healthy and has remained healthy even when the interest rates shot up. We know people are out there trying to figure out if they can buy homes. And I think some of what we really saw this past year Was the adjustment that prospective buyers made to higher interest rates. If you need a home and the rates go up on you, you can't afford maybe as much home.

As you were looking at previously at some point you make that adjustment and you buy what you can afford. And I think that That psychological shift the consumer side has been something we've watched We see it in things like [indiscernible] If you assume traffic is pretty healthy as I described, you see it in conversion rates. Picking up and that's something we've seen in our stores and we've talked to independents about.

The other factor that got a lot of airtime last year and I think we tried to say, hey, it's not a big story now, but when you look at it over several quarters, the community is getting their inventories under control. That's something that kind of happened late in the year. And so that's a bit of a tailwind for for overall demand as communities kind of take their proportion of orders again in 2025 and that's what we expect to see. So yes, I'm rattle off quite a few things, but some of these are leading indicators Some of them are just watching the trend in the seasonally adjusted rate. I think they all you never give you certainty. As I was careful to say, is always economic uncertainty. We'll know more as this quarter starts to unfold because we really haven't hit that improved weather in the time when we see activity seasonally pick up. But we obviously are feeling fairly confident about it. And also, as I said, part of our our operating decision to prepare ourselves for stronger quarters ahead is made because we know our plants are really good at adjusting if we need to adjust. [indiscernible] we show it was the right move to continue to build production.

Yes, that's good color, really helpful. Are you as we think about sort of sequentially from Q3 to Q4, maintaining similar rate of production Is there holidays or other things we should sort of think about that would create a favorable or maybe slightly less favorable shipping comparison on a sequential basis.

Nothing really that I would say would be less favorable. I mean, biggest thing is you got more operating days in the Q4 than we had in the Q3. And even though we talk at a high level in these calls by necessity, plant decisions of how rapidly they ramp up or if they're even able to ramp up really unique to their backlogs. So I guess what I'm saying is if the market continues to support us as we've been going, then is more upside production and downside at this point. I realize as Alison was talking and I don't think I missed it in the script there, but that I usually talk about capacity utilization. We were around 75% the 3rd quarter. So we still have some some room to keep expanding up That's really helpful. Maybe one more and I'll shift hand it back off In terms of Financial Services, great color, obviously had an exceptional quarter.

Maybe talk about what some of the changes that you've made I think you described kind of 3 things, the rates, being 1, lower claims instances, which is sort of out of your control, but seasonally lighter. And then the changes to underwriting, maybe talk about the changes to underwriting number 1. And number 2, how do we think about like an appropriate sort of long term average range for whether it be gross margins or operating margins for that business? Because it's obviously all over the board based on seasonality and other factors. We made it tough on you guys because we really swung from 2 quarters that were pretty rough The one that was very strong historically. So the first thing and I'll just go back through them again. Because I think it's important to be as clear as we can.

First thing is we would always expect the 3rd quarter to be stronger than the 1st and second. That's just based on on weather. Kind of use historical data to predict the number of major storms we'll have and as you would expect the 3rd quarter is really the time when you want to make sure you're making good money because sometimes the first and second can be rough. So absolutely part of the change quarter to quarter is just due to lower claims cost had we done nothing else. But having said that, I do think we're having a significant impact On the premium side, probably taking you through too much detail or more than you want, but on premium side, the process is really working with actuarial to figure out what we need to charge for a policy in order to get the proper risk adjusted return And we've just been really diligent making sure that we're you got to go to the state regulators making sure that we're getting those premiums in place as increases. And I think that's important on the revenue side. And then you were asking about underwriting. We've had to make some tough decisions.

We've had to non renew policyholders where we needed to thin out our exposure in certain areas. We've had to [indiscernible] lower coverage decisions on the policies that we do renew but we needed to make sure that every policy was profitable on a risk adjusted basis. So I will give you one example and there's many of them just to give you a flavor for it. You can write an underwriting you can write a policy for roof damage that's full replacement cost or you can write a policy for roof damage that pays for the depreciated value of the roof. Based on its age and condition.

We've made those kind of changes over the past year fairly aggressively because we knew we needed to make sure that risk reward was in place You asked I think the follow-up was how do you what guidance or help can we give you on further quarters? It's tough. I'll tell you the My only the only thing I think I could say is the seasonality is a big factor. So looking back at past years, and rolling that forward quarter to quarter, Year over year is probably the best chance you have pretty close and it is a it's a volatile business as I said a quarter or 2 when we were talking about the poor returns. But it's a business that over time we've gotten pretty strong return on investment. So we think it's a good business.

Yes, not quarterly, but going back several years, it was a business that earned 50% gross margins on average annually or plus. Is that where you think it should be?

Not necessarily on a quarterly basis, but Financial service segment typically will be significantly above the factory build housing segment on a gross margin basis. So I'd agree with that. I don't think I could endpoint a particular number for you though.

That's helpful. Lastly, and I'll jump out. Tax rate, Allison, you pointed out dipped lower Year to date, it's about 20% and that's below where we had modeled previous What are your expectations? Is that a sort of a good range blended with some of the Energy Star production credits? How do we think about going forward?

Yes. Thanks for the question.

I think the way that we look at it is this was an unusually good quarter for the tax credits as we talked about. If you look back to say our Q4 of 20 24, our Q1 of this year 2025 and Q2 2025 kind of take an average of those to me that would be more representative of what we would expect to be kind of a normalized rate.

Got it. That's all I'll jump back to my follow ups. Thank you again.

Thanks, Jeff.

Thank you. Our next question comes from Danny Eggers with Craig Hallum. Capital Group. Your line is open.

Yes, thanks. On for Greg Palm today. I guess just more broadly speaking, demand from a geography perspective. I guess any pockets of strength or geographies that are still kind of lagging or maybe were lagging and are starting to boost up a little bit that you want to call it specifically? Yes.

I might have commented on this last quarter and I saw you repeating myself, which is useful to kind of update the view. I can't remember exactly what I said last quarter, but it's been interesting. I mean, this has been a market improvement over a number of quarters, right? It hasn't been a rocket ship. It's been nice and steady over some quarters. And might remember that when that trend started, we kind of pointed to the Southeast and Texas as being the first ones to show some renewed strength. And they continue to be pretty strong The laggards have been Florida absolutely. Florida has been very tough and it continues to be tough. And then the Southwest I think has been slower and less dramatic in its its increases, but it is improving there. So have been some lingering differences regionally. I don't think there's a lot to read into that. It's just an observation.

But if I had to say one area that is kind of concerning and we're hoping we'll see some strengthening here in the future. It would be Florida And it's interesting because the Southeast, that's not true. It's just it's the Southeast minus Florida.

Got it. That's helpful. Maybe just circling back to I know you gave some color on both retail and and community channels, but maybe more specifically on REITs, it sounds like activity is still going good and the past couple of years, we had the inventory problem and kind of the rate problem. But just now in kind of the current rate environment, is there any worry that some of these communities might start tempering it back a little bit or I guess what are you hearing out there?

I think you kind of have to separate there demand into the categories of filling out existing communities and replacements and things like that, which we expect to be pretty strong versus doing new projects, which might be more influenced by their cost of capital. As they've already got a community and they've got the opportunity to get incremental revenue by leasing an additional lot, then they're going to be all about that. And we expect overall, I mean, my view is, and talking to our partners on the community side, is that this should be a pretty solid year for them. The inventory is finally behind them.

And their growth plans for just filling out existing communities are pretty strong. So that translates into wholesale orders So I take your point and I think if they were looking at a new development, which is very hard to get done anyway in today's environment, Very few of those have gotten titled and permitted.

Then the cost of capital is obviously more of a barrier than it has been in the past. But the majority of their volume really comes from the other side where they're replacing and building out communities.

Okay. Makes sense. Maybe just one more quick one. Any update on builder developer channel? I know last couple of quarters, it's been a bright spot. Don't know if you've mentioned it in your prepared, but anything any color there?

Yes. I don't think I separated it out. I'd say we've been watching kind of the trending of say those 3 groups, right, dealers, communities and builder developers. Over the last year. The builder developer is the smallest of the 3. In fact, Danny, you know that in the past, we tended to just lump them together with communities because they're very similar from a customer perspective. But we do watch all 3 separately. And absolutely, both communities and builder developers continue to trend up for us on a percentage of total business basis. So they're tracking pretty much along like the community operators themselves.

Okay.

I'll leave it there. Thanks everyone.

Thanks, Danny. Thank you. Our next question comes from Jay McCanless with Wedbush. Your line is open.

Hey, everyone. Hope you guys are doing well. So first question, [indiscernible] sadly a lot of disasters happening around the country, Haven't really heard much in terms of FEMA or what's going on there? So could you guys give us an update on what if anything you're hearing from FEMA in terms of temporary housing relief Yes. It's been interesting because I echo your feelings. We obviously keep our ears close to the ground as we can on not only FEMA, but also state and local efforts to provide relief. And I'll just comment on that real quickly that don't know the value of the comment for the group, but from my perspective, we see and hear a lot of state and local Government and all others talk about providing disaster relief without FEMA. Because of how challenging it can be to work through them and the time delays that they run into. Let me touch on FEMA real quick. Tried that struggled in how to convey this. Effectively, but Everything seems to point to there should be some FEM orders. Right? I mean, there's been reference even on past calls there was a call second half of last calendar year that was pretty open, would FEMA and manufactured housing.

And it just seemingly to set the stage that they were going to have some orders coming.

So far, they haven't materialized. And I don't think that's necessarily an indication they won't. It feels like they should. We think that they lost some inventory in some of the hurricanes in fact. And so I don't have a lot to give you except kind of an agreement that it's been strangely quiet. And we're keeping our eyes open because I guess we won't know there's an off or bid put out until it happens. And I'd say the state and local, on the LA fires, I'm trying to get closer to this. I don't feel like I'm an expert on what's going on so soon after this fires happened. But we are hearing there a lot of state and local folks talking about not relying on the federal assistance so much But I'd also say that there's still a bit of lack of clarity about how they're going to organize to provide the relief themselves. So it's frustrating because I think I'm not just saying this from a Cavco perspective, I think our industry stands ready to try to do everything we can to provide home free situations. And we just haven't seen anything break loose at this point.

If you think about the plant based bill, CapCo's plant based, I guess how much and just even rough terms would be great. How much of your existing plant base do you think would be in a position to ship to it Y'all's headquarters is in Phoenix, of course, but I would think you've got some other plants in the California market, etcetera, So just have you guys thought about what percent of your plant base might ship into that area if they do get it together and start ordering homes?

Yes, it's a pride relief for Southern California specifically, Jay? [indiscernible] Yes. I mean, we've got including Glendale, which is the park model facility that can make ADUs pretty readily. We've got 3 plants in the Phoenix area could all reach there pretty readily. And then we've got the Riverside, California plant that's really close by. So pretty straightforward to have those 4 plants or be part of providing homes for the area.

That's it. And if we could talk about what you're seeing on channel rates [indiscernible] So they picked up a little bit. So right now, there's a range of 8.6 to about 9.6 in the market right now.

How much up is that? That's just a small increase, right? Yes, small increase from last quarter. And then I guess [indiscernible] way too early to tell, but anything with this new administration that either you guys are looking forward to or you think might be a headwind, anything worth calling out that you've already seen from the Trump administration?

Not a lot of that we've already seen impact anything. I mean, there's a lot of discussion about tariffs and we're just going to have to kind of watch and be ready that that could be inflationary on some of our input costs for sure. But it's hard to tell the magnitude of that because we don't know exactly where the administration will land on some of those tariffs. And then the labor force for quite a while now has been we've been able to hire people pretty readily.

So attracting people into our operations has not been difficult. And there again, I'm not trying to overstate it as a risk, but I guess it's conceivable immigration or that the immigration policies could impact just general labor availability But it seems like a relatively low risk that there would be a significant impact [indiscernible] we're still in the mode of just trying to watch and pay attention and make sure We're ready to deal with whatever comes our way. I think the this is me being a little bit optimistic. I think the regulatory environment in I think we've talked about things like the DOE energy rules that really were not well designed for our industry We've been fighting that as an industry level for quite a while now. With some success. I think optimistically, it would be great if we could see a regulatory regime that kind of listens and works with us a little bit better there and and identifies HUD as our sole regulators in the industry. There's some upside in my opinion over time on the regulatory side. That's great. And then the last question I had, just thinking about input prices and maybe some hints towards gross margin in the Q4.

We've seen OSB prices come down pretty dramatically the last 3 weeks. Looks like drywall is up a little, framing lumber is up a little, but it seems like not only are you guys getting a good volume tailwind into the spring season, but maybe from a cost perspective things are looking a little better. So Allison or Bill, if you all could talk about what you're seeing there and maybe directionally where you think gross margin trends might go in 4Q?

Sure. Thank you. So on gross margins, we couple of items that we look at very closely, right? First of course is the average selling price, which we did see a little bit of pressure in Q3 downward pressure.

For the last several several quarters, it has been fairly consistent. And to your point, the second component is cost, right? And more specifically, material cost. And we like all the builders, right, to depend on lumber and oriented strand board. So you're right. What you see in the commodities market, we stay very close to it. We'll play through in our cost of goods sold during the next 60 to 90 days. So as you can see, it has drifted lower a little bit on the OSB and we just stay very close to it. And that's it's a way that you could see [indiscernible] Publicly also how commodity markets are moving and just consider they'll make their way through our caustic goods and therefore our gross margin in about 60 to 90 days. [indiscernible] That's all I had. Thanks guys. Appreciate it.

Thanks, Jay. Thank you. Our next question comes from Daniel Moore with CJS Securities. Your line is open.

Yes. Thanks again. Just maybe one more on kind of the capital allocation and cash flow, bought back over $40,000,000 each of the past two quarters. [indiscernible] Buying back and sort of in lockstep with cash flow and the share count's down by my math over 8% over the last 2 years. So So is that likely the plan going forward? How are you thinking about managing cash balances in putting sort of that incremental cash flow to work? Yes, I think that that's yes, appreciate that. It gives us a chance just to high level talk about our capital allocation. And really our focus is on expanding our capacity for our plant network. So the way we think about it is if we had a dollar to [indiscernible] we probably would spend that dollar in growing our existing plant capacity. And we've had a number of projects that we've been able to invest in over the last couple of years and we continue to invest those on a regular basis and in fact we were able to do that as our network grows. And then second, we're always active actively vetting our pipeline of M and A opportunities that also help us build strategic areas of our market and also to continue to grow our capacity.

And you can see that over time, we've been active and imagine that we will continue to be active in that space. We also look and continue to look at Cheddar lending opportunities for our lending operations and that is an important part of our strategic plan.

And lastly, as you mentioned, we used the share buybacks as a way to respond [indiscernible] allocation priorities. You can look at history and the level of our cash flows, which are pretty strong. Because the business model is strong and the way we manage it. From a variable cost factor.

And while sometimes we have in flow as far as our our share repurchases in the quarter depending on activity around the M and A. But it is a good indicator of what to look forward. Our history what you can look forward to in the future.

Very helpful. Thank you again.

Thanks, Dan. Thank you. There are no further questions at this time. Like to turn the call back over to Bill Boor for closing remarks.

Yes. I think just very consistent with the discussion we've had today, we've seen steady improvement in the market for a number of quarters now and with the channel inventory issues behind us, we've got a backlog that at a macro level. On an aggregate basis, we're very happy with, so that's well positioned. Our throughput. So feel really well positioned for the coming quarters and we're not taking anything for granted. We understand the ever present economic uncertainties, but we're optimistic about continued steady improvement. So I really want to thank everyone for joining us today and for your interest in Cavco and look forward to keeping you updated.

Thank you.

Thank you for your participation. This does conclude the program and you may now disconnect. Good day.