May 24, 2013
Operator
Good day, ladies and gentlemen, and welcome to the Cavco Industries, Inc. Fourth Quarter Fiscal Year 2013 Earnings Call Webcast.
[Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Mr.
Joseph Stegmayer, Chairman and CEO. Please go ahead.
Joseph Stegmayer
Thank you, Ali. Good morning, everyone.
With me today is Dan Urness, our Vice President and Chief Financial Officer, who will begin with a recap of the numbers for the quarter and our financial position, and then we'll make a few comments and take your questions. Dan?
Daniel Urness
Good day, everyone. Before we begin today, we respectfully remind you that certain statements made on this call, either in our remarks or in our responses to questions, may not be historical in nature, and therefore considered forward-looking.
All statements and comments made today are made within the context of Safe Harbor rules.
Daniel Urness
All forward-looking statements are subject to risks and uncertainties, many of which are beyond our control. Our actual results or performance may differ materially from anticipated results or performance.
Daniel Urness
Cavco disclaims any obligation to update any forward-looking statements made on this call, and investors should not place any reliance on them. More complete information on this subject is included as part of our earnings release filed yesterday, and is available on our website and from other sources.
Daniel Urness
For our financial report this quarter, net revenue for the fourth quarter of fiscal 2013 was $108.8 million, up 9.4% compared to net revenue of $99.5 million during the fourth quarter of fiscal year 2012.
Daniel Urness
Income before income taxes increased to $4.2 million this quarter from $2.4 million in the same quarter last year. Net income was $3.0 million for the fiscal 2013 fourth quarter, compared to $2.9 million last year.
We call your attention to the fact that the prior year fourth quarter included a $1.2 million income tax benefit, related to an election made for the acquired Palm Harbor insurance group assets.
Daniel Urness
Net income attributable to Cavco stockholders for the fiscal 2013 fourth quarter was $1.4 million, compared to $1.7 million for the fourth quarter of fiscal 2012. The prior year included 1/2 of the $1.2 million income tax benefit from last year's tax election I just referred to.
This amount is consistent with Cavco's ownership percentage of Palm Harbor.
Daniel Urness
Diluted earnings per share in the fourth quarter was $0.20, versus $0.24 for the quarter ended March 31, 2012.
Daniel Urness
The company sold 15.1% more homes this quarter, amounting to 2,176 home sales, compared to 1,890 homes in the same quarter last year. The average sales price per home this quarter was $47,700, 5.5% lower than the same period in the prior year.
This was the result of product mix changes as demand favored smaller-sized homes and homes designed to sell at lower price points.
Daniel Urness
Consolidated gross profit, as a percentage of net sales, this quarter of 22.1% was lower than 24.8% recorded for last year's fourth quarter, mainly from higher volume of smaller and lower price point homes, raw material price increases and competitive wholesale pricing pressure.
Daniel Urness
Selling, general and administrative expenses in the fiscal 2013 fourth quarter were 8.6% lower than Q4 last year.
Daniel Urness
At March 30, 2013, order backlog stood at approximately $26 million, up from $14 million at the end of the same quarter last year. The higher backlog is the result of somewhat more consistent housing demand, some project work and typical seasonal improvement.
Daniel Urness
Comparing the balance sheets for March 30, 2013, to March 31, 2012, cash was up approximately $6.7 million, primarily from earnings, as well as changes in the operating account balances. Inventories were $6.6 million higher for group housing contracts that spanned quarter end at higher inventory levels necessary to support increased sales volume.
Daniel Urness
The current portion of inventory finance notes receivable grew approximately $2 million from the continued maturity of the loan balance and expansion of our wholesale finance initiatives with our independent retailers.
Daniel Urness
Consumer loans receivable and associated securitized financings were both lower, in connection with the ongoing maturity of the loan portfolios. Construction lending lines, previously utilized at our mortgage subsidiary, were paid off during the current year, and retained earnings grew by Cavco's applicable portion of net income.
Joe?
Joseph Stegmayer
Thank you, Dan. Industry shipments for calendar 2012 were 55,000 homes, up 6% from 2011.
Some economic forecasts call for an increase in 2013 to 64,000 units, which would be about a 16% improvement. Year-to-date, however, we have not experienced that level of improvement as shipments for the first 3 months of the calendar year were basically flat with the prior year period.
Joseph Stegmayer
The good news for Cavco is that we've seen our order rates improving. Dan mentioned our backlog.
We continue to see improvement in order rates through a number of plans, and we're increasing production rates as a result, hire more people to build our homes.
Joseph Stegmayer
Granted that these production increases are coming from a very low base rate, at which we have been operating, but still, the improvement is welcome and it provides opportunity for increased production efficiencies and improved operating margins.
Joseph Stegmayer
From a geographic standpoint, we've seen improvement in several regions. For example, here in the West, we've seen modest improvement in the California, Arizona markets, even Nevada, which was one of the toughest hit states.
And in the Northwest, we've seen improvement, that has also been a very highly impacted area in the past, but we're starting to see some improvement in the rate of incoming orders, and it's showing in the performance of those factories.
Joseph Stegmayer
The Florida market, which again was one of the most hard-hit in the economic downturn -- in the housing downturn, we've finally started to see some improvement in that market. And again, Texas, Oklahoma and New Mexico, which have been pretty consistently strong performers, continue their growth.
Joseph Stegmayer
We've not seen the same sort of improvement in the mid-Atlantic region, where we have facilities in Virginia and in Georgia. That area does not seem to experience yet the improvement that we're beginning to see in other parts of the country.
Joseph Stegmayer
From a expense control standpoint, we feel that we're -- have digested the acquisitions quite well. We're getting, we think, very good expense control, and you see it in our G&A expense this past quarter that Dan referred to.
Joseph Stegmayer
We have also made numerous improvements throughout the operations of the acquired entities, particularly Palm Harbor, which we just acquired 2 years ago, this past month. And we are quite pleased with the operating performance and the integration of the people and the operating culture of the 2 organizations.
So, so far, we're right on schedule with where we expected to be, and we have a lot of opportunity to continue the improvement in the 5 acquired plants from Palm Harbor and our retail financial services operations. But we're, as I say, very pleased with the performance to date.
Joseph Stegmayer
With that, we'll open it up to questions, and we'd be happy to try to answer anything we can. Ali?
Operator
[Operator Instructions] I'm showing no questions.
Joseph Stegmayer
Okay, Ali. Thank you very much, and we appreciate those who've attended, and we will be available, after this call, for individual questions, if you care to contact us.
Thanks for joining this morning.
Operator
Ladies and gentlemen, this does conclude today's conference. You may all disconnect, and have a wonderful day.