Good day and thank you for standing by. Welcome to the Fourth Quarter Fiscal Year 2024 Cavco Industries Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mark Fusler, Corporate Controller and Investor Relations. Please go ahead.

Good day, and thank you for joining us for Cavco Industries fourth quarter and fiscal year 2024 earnings conference call. During this call, you'll be hearing from Bill Boor, President and Chief Executive Officer; Allison Aden, Executive Vice President and Chief Financial Officer; and Paul Bigbee, Chief Accounting Officer. Before we begin, we'd like to remind you that the comments made during this conference call by management may contain forward-looking statements including statements of expectations or assumptions about Cavco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets or future market conditions. All forward-looking statements involve risks and uncertainties, which could affect Cavco's actual results 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, the company's most recent Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in any forward-looking statements. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, May 24, 2024. 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. Now I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill?

Thanks, Mark. Welcome and thank you for joining us today to review our fourth quarter results. The fourth quarter was the transition quarter we were looking for. Coming out of the holidays, we had a number of plants on four-day schedules, four day a week production schedules and several took extended holiday shutdowns in January due to low backlogs at the time. Those initial lost production days at the beginning of the quarter drove our essentially flat sequential wholesale shipments. During the quarter though, order rates strengthened and almost all of our plants have now worked their way back to five-day schedules and begun increasing their daily production rates. We saw the first quarter-to-quarter backlog increase since the downturn began, which is what we are looking for to indicate that buyers are continuing to return to the market. We had hoped this would be facilitated by declining mortgage rates, but as you know, that didn't happen. Still buyers are returning because they need homes, they're adjusting to the higher rates and they're adjusting their expectations around the home they can afford. On a same plant basis, orders continued their sequential improvement for the sixth straight quarter. It hasn't been dramatic, but it has been consistently improving despite the lack of rate relief noted earlier. Within the context of what I've said here, our capacity utilization for the quarter was consistent with the last few at approximately 60%. However, given the downtime earlier in the quarter, the takeaway is that we left the quarter at a higher utilization than we started. Regarding the backlog improvement, we ended the quarter with $191 million, up from $160 million in Q3. Pricing in the backlog was basically flat, so this represents a unit backlog improvement of roughly 20%. At quarter-end, we had about seven…

Thank you, Bill. Net revenue for the fourth fiscal quarter of 2024 was $420.1 million, down $56.3 million or 11.8% compared to $476.4 million during the prior year period. Sequentially, net revenues decreased $26.7 million, driven by a reduction in both units sold and to a lesser extent average selling prices, partially offset by higher revenues in financial services. Within the factory-built housing segment, fourth quarter revenue was $398.5 million, down $57.6 million or 12.6% from $456.1 million in the prior year quarter. The decrease was primarily due to a reduction in homes sold. Sequentially, for the factory-built housing segment, net revenues compared to the prior quarter was down $28.4 million or 6.7% from $426.9 million. The decrease was due to a reduction in homes sold and lower average selling price per home. Factory utilization for Q4 of 2024 was approximately 60% when considering all available days for production, but was nearly 70% excluding scheduled downtime for local market conditions. This utilization level was consistent with the past four quarters. For the Financial Services segment, net revenue increased 6.4% to $21.6 million in Q4 of 2024 from $20.3 million in the prior year period. This increase was primarily due to more insurance policies in force and higher insurance premiums as recent rate increases become realized partially offset by fewer loan sales. Consolidated gross profit in the fourth fiscal quarter as a percentage of net revenue was 23.6%, down 170 basis points from 25.3% in the same period last year. In the factory-built housing segment, the gross profit declined 200 basis points to 22.4% in Q4 of 2024 versus 24.4% in Q4 of 2023 driven by lower average selling prices and volume partially offset by lower input costs. Gross profit as a percentage of revenue in financial services decreased slightly to…

Thank you, Allison. Comparing the March 30, 2024 balance sheet to April 1, 2023, the cash balance was $352.7 million up $81.3 million or 30% from $271.4 million at the end of the prior fiscal year. The increase is primarily due to net income adjusted for noncash items, such as depreciation, stock compensation expense and gain on sale of loans and investments of $11 million. Working capital adjustments providing approximately $55.7 million of cash related to inventory and account receivable decreases and consumer and commercial loan activity with payments received and the sale of loans greater than the use of cash for originating loans. These increases were partially offset by pay downs in accounts payable and crude liabilities, the acquisition of Kentucky Dream Homes for $17.9 million. Net PP&E purchases of $17.4 million and share repurchases of $109.3 million. Restricted cash and related other current liability increased from cash collected on service loans in our Financial Services segment. Prepaid and other assets was lower due to a reduction in delinquent Ginnie Mae loans, partially offset by higher prepaid insurance. The remaining change is due to normal amortization of prepaid. Property, plant and equipment is down primarily due to current year purchases more than offset by depreciation and the sale of unutilized equipment acquired with Solitaire. Accrued expenses and other current liabilities are down from lower accrued bonuses, customer deposits and as mentioned above, reduction in delinquent Ginnie Mae loans. Lastly, stockholders' equity exceeded $1 billion, up $57.1 million from $976.3 million as of April 1, 2023. And with that, I'll turn it back to Bill.

Thank you, Paul. I can't let the moment pass without a comment about the SEC situation and closure of that issue. As Allison mentioned, our former CFO and the SEC reached a settlement that was recently made public. I've been here since the start of this situation initially as an independent director and then in my current role. I'm very proud that this company has continued to operate with excellence and grow in many important ways during this time. I can't count how many times I've told investors how much I look forward to the day when I can report that this issue is behind us and today is that day. To those investors who have stuck with us throughout, on behalf of everyone at Cavco, thank you very much for your continued confidence in us. With that, Marvin, please go ahead and open the line for questions.

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Greg Palm of Craig Hallum. Your line is now open.

Yes. Hi, everyone. Thanks for taking the questions. I wanted to start with a little bit of color on what you're seeing in the community channel. Correct me if I'm wrong, but it didn't sound like there was sort of much change in expectations there. But curious if you can at least comment on visibility levels and relative to last quarter maybe we'll start there?

Yes. Thanks, Greg. It is kind of more of the same on that. Even over the last several quarters, we kind of hate to speculate here, as you know, but we were still looking kind of well into calendar 2024 before we thought that we'd really start seeing community orders ramp up significantly. And so we're still not to that point. And it's kind of been more of the same. I think they're working through it. Even though the orders aren't here yet, I'm confident in my discussions that inventories are coming down. And so we still feel the same as we have for a while that we should see improvement this calendar year.

Yes, makes sense. And I know you're cognizant of the fact that you don't provide any guidance, but you at least gave a little bit of color around production rates, where it was, where it is today, should we at least - is there any sort of sense on an increase in production rates, for instance, this quarter versus last?

Yes. Tried to characterize this quarter as we see it, which is this past quarter, which is that it's been one of transition. Our shipment numbers were really heavily influenced by the last production days that I mentioned at the beginning of the quarter. And as I said in my comments, we talk about utilization of 60%, but if you think about that last time at the beginning that means we finished the quarter at a higher pace. So we're starting to, as I indicated, schedules are getting back. It's not only schedules, but it's also run rates that the plants are managing trying to ramp back up and stay kind of in line with market demand, so that in some cases so the backlogs don't actually get away from us. So I think we're clearly in a better position now than we were at the beginning of the calendar year and then we were for most of last year. We've seen that steady improvement in wholesale orders and I do think I'm repeating myself here a little bit, but I do think that's noteworthy given that we haven't really seen interest rate relief. So if you have a view that interest rates have some potential for going down a little bit in the coming quarters and if you agree with our view that community orders are a bit of a tailwind, then I think we're heading to some better times notwithstanding some significant economic shock.

Yeah, yeah, makes sense. A couple for Allison, first on SG&A, it was down a little bit sequentially. Was that mostly just on lower revenue in the variable portion? And I guess more importantly, how do you sort of feel about SG&A going forward in terms of an absolute level?

Yes. As I mentioned in the call, when you compare it to the prior year, obviously, we're down for some nonrecurring costs. And quarter-to-quarter, you saw the reduction in that we had no SEC-related indemnified costs of former officer. I think that as we look at costs now, and as we go forward, we've talked about that the SG&A is a high variable cost component to that. So we're looking at a pretty steady state right now and of course as the top line grows, we will see our variable compensation flow through SG&A. So still, as I said, it stays pretty consistent to the level of top line and still a high component that's variable.

Okay. And then my last one was just more of a clarification. Was there any purchase accounting impact on gross margin associated with the Solitaire acquisition in this past quarter? Are we past that at this point?

I'd say largely we're past. It was very - it was a small amount.

Okay. Perfect.

We're still selling that inventory off, but it's pretty insignificant at this point, Greg.

Perfect. I will leave it there. Thanks.

Thank you.

Thank you. One moment for our next question. [Operator Instructions] Our next question comes from the line of Jay McCanless of Wedbush. Your line is now open.

Hey, good morning, everyone. So the first question I had was shipments being down 12% in the quarter versus the industry being up nearly 15%. Can you talk about what's going on there and what the plan is to maybe catch up and be back in line with the industry over the next couple of quarters?

Yes, Jay, I think this is a really important question because I think there's noise in what people kind of see at a headline level. First point I want to make is that if you really dissect the industry shipments and you can do this with publicly available HUD shipment data, if you really dissect it and look at it on a regional basis, even though the industry was up, I think I'm talking year-over-year for this discussion, even though the industry was up 15%, yes, I think it was 14.7%. When you look at it regionally, the range of increases and decreases is more than you might expect. And just to give you a feel, the East South Central, which includes Tennessee, Alabama, Kentucky, Mississippi just looking at the numbers here that was up 50%. You can trust that to an area like East North Central Illinois, Michigan, Ohio which was down 31%. So I'm belaboring the point, but if you dissect that you really have to look at how any given manufacturer lines up with their exposure to those regions to get a clear picture of whether they stayed with market or not. Now setting that aside to really understand the answer to your question, the other thing I'd say, and I'm again working year-over-year numbers. You need to look at both shipments and backlog changes. And when you do you really get a clear picture of what underlying demand and a more normalized view of share is. So let's talk about last year. Let's remember where we were in the industry last year. The context behind our shipments then we shipped just roughly 4,500 units. And during that quarter, our backlog dropped $180 million. So if you remember, we are kind of in a really declining backlog…

No. It makes sense. I guess the next one I had, if you look at the rapid rise in the number of retail stores, is there anything we need to be cognizant of from a GAAP accounting perspective, in terms of those internal sales versus external sales, maybe some of those shipments are getting not hung up, but maybe not recognized yet until those are sold at retail?

There's a little bit of that and I could have added that to my long complicated explanation, but I kind of felt like that was a little bit of a fringe issue for us. We certainly are more integrated if you just look at retail sales compared to our wholesale shipments. So that does create some changes like you mentioned. They're kind of moment in time changes and over time they'll work themselves through. And of course it also changes things like average selling price which is you know is a combination of retail and wholesale price for us. But I think you're right. I just I don't think it was a kind of a main event that we would have highlighted.

Okay. That's good to hear. Thank you. And then I guess with the rise that we saw in mortgage rates in April and then a little bit of pullback in May, I guess, would it be safe to say that demand and I think based the way you answered some of the other questions that this is the case, but has the demand that you saw exiting 4Q continued into 1Q 2025?

Yes, we're definitely if you take that snapshot in time at the end of the quarter transitioning into our first fiscal quarter, it was definitely up. And I think that's I apologize for repeating myself. I just think that's noteworthy because we didn't get the rate improvement, right. In fact and it's split in half because it was pretty mild but rates ended the quarter the fourth fiscal quarter a little bit higher than they entered it. So to have that kind of demand come through, part of its spring selling season, but to have that kind of underlying demand come through without a boost in interest rate improvement I think is really noteworthy.

Yes, that is. And then when I think about inputs to gross margin, it sounds like you're going to get a little bit of boost from potentially increased volume. But what about some of the other inputs, labor, OSB, some of those? I know there were some noise around OSB earlier in the year. So any color or commentary you can give us on gross margin and directionally how you're feeling about that as we move into the next quarter?

So, I mean, essentially, we've seen lumber and OSB somewhat level off, but we continue to stay obviously close to that component of our gross margin as we move forward. But there's been just a little bit of volatility, so it is a little hard to predict.

Okay. And then the next question I had just maybe could you talk about where chattel rates are now and maybe versus last year at this time?

Yes, sure, Jay. So right now they're about still about low 9% range, so kind of a range of 9% to 9.4%. And then kind of if we look at kind of towards last year, it looks like they were in the high 8% range.

Okay, great. That is all I have for now. I'll get back in queue. Thank you.

Thanks, Jay.

Thank you. One moment for next question. Our next question comes from the line of Daniel Moore of CJS Securities. Your line is now open.

Thank you. Thanks for taking the questions. Obviously, we covered a lot of them. I guess, first off, maybe just talk about ASPs. So you see the sort of trade down to lower priced, maybe lower option homes continue and what was your expectations for the direction of ASPs versus what we saw in Q4 for the next couple of quarters?

Yeah. It's been kind of almost surprisingly consistent story over the last couple of months or last couple of quarters. I always first think about the same house selling out in the market and across the entire landscape, I'd say, we continue to see really pretty minor leakage of pricing. And I'm always trying to put a context because it is it has been through our fourth quarter kind of just a very slow reduction and still at a pretty high level. But as far as trade down, I think we definitely have seen the mix shift to singles, which we kind of look at and say, well, some of that's probably people trading down. I mentioned in my comments that I think buyers are coming to terms with the home they can afford. That doesn't mean for everyone that you've got to go from a multi section to a single section. It might just mean a reduction in options or different floor plan, but the trends towards single I think and it's not been dramatic, that trend kind of indicates what you're mentioning and that people are kind of moving down. We always talk about this in a couple of different parts of the market. The intersection with a lower price they're not low priced, but lower priced site-built home. We absolutely you've heard me say it before, we absolutely know because of our own retail and our connection to our independent retailers. We know there are people that are considering and then many are buying higher priced manufactured homes rather than their site-built options at this point. But, yeah, they're moving down a little bit even within the manufactured housing scope. I think that's all how they've been adjusting to interest rates and the impact on the monthly cost.

Okay. And I appreciate the color on the community and community developers and kind of where we are and the expectation of an uptick later in the year. But aside from that as a static group, maybe just talk about dialogues, conversations, efforts you're having at expanding or increasing penetration to that obviously large category even if orders are still a little quiet at the moment?

Yes. No, you don't stop your efforts to stay close to those folks. And I think we as a company see an opportunity really to continue to deepen relationships there and get frankly get more business out of that group. It's really tightly connected to something we changed a couple of years ago in our company. We had previously had all of our plants with their own sales teams, which we still have and they're the ones closest to where the rubber hits the road. But then we added a national sales team in manufacturing and a component of that national sales team was a group that we're still continuing to build out focused on communities. And when I talk about communities, I've said this before, when we say communities, historically, we've always included builder developers and land lease community operators kind of in that whole category. So we've definitely upped our game as far as approaching that segment. And not only do we look forward to that segment coming back to the market, but we're looking forward to penetrating a little bit better ourselves.

And then you touched on this Bill in the prepared remarks, but as orders have improved, would you prefer to let backlogs continue to build as we look out into fiscal Q1 or do you expect to ramp production in line with order rates from what we saw exiting the quarter?

Yes. I remember I haven't heard this discussion too much in the last little bit, but I remember in years gone by the questions always revolved around what would be the ideal backlog. And my answer was always if you could lock one in and it wouldn't change, you'd want it to be probably around six weeks. It gives you time to plan your production and it gives you a quick delivery for the customer which is an advantage of factory-built housing. Now we're actually touch above that and it's increasing, but really instead of thinking about it as an entire system to answer your question more directly, each one of our plants is in a little bit different situation. We have some that I think they really got to work hard to keep the backlogs from getting away from meaning getting too long. And we've got others that are under that seven to eight week range that are still open to build up to a more comfortable level. So it's we got-- the theme today is transition, right? We've kind of got the gambit as far as plants that are in a little bit different position, but they're all generally they're all seeing the opportunity to increase production. We definitely, if we can help it, we want to deliver homes. We don't want to see backlogs go anywhere near what we've seen in the past couple of years and seven to eight weeks on average is a pretty nice spot.

Great. I'm going to ask one or two more quickly that kind of asked, but I'm not sure what the if I have perfect clarity on the answer, so forgive me. But traffic and order rates at retail, how are they trending thus far in April and May? Have they picked up from where you left off at the end of fiscal Q1 given we're into a little bit seasonally stronger period?

Yes, I think you did pick up my comments. So you can kind of try to shy away from giving too much of an update in quarter, but there was a trajectory in the fourth quarter, right, net trajectories. Nothing's changed that trajectory. This is -- it's on an upward path. And I've kind of commented even through the downturn that traffic in retail has been pretty encouraging. People didn't stop coming to retail stores. They were just puzzling over how to make the purchase happen. One of the things we've certainly noticed recently is that even though traffic is already at a healthy rate and improving, we're getting a higher conversion rate and that's really what's changed. It's the conversion rate more than a huge uptick in the number of people that are visiting or calling. It's been a positive trend.

Okay, really helpful. And then last for me is, we touched on the components of gross margin with utilization certainly improving as we exit the quarter and on that trajectory, is there any reason gross margins wouldn't be up a little bit? Is that sort of a bottom for the near term or are we just kind of staying away from that? Thanks again. I appreciate it.

Yes, I mean, I would say that as we've talked about before, on the gross margins, it is fairly hard to predict. And we did you're right in that despite a small reduction that we had in ASP this quarter, we were able to maintain the gross margin for the housing segment at 22.4%. So consider we continue to stay close to the price and pressure on price and we continue to stay focused on watching commodity pricing and really managing our variable costs. So you see a lot of consistency in both the utilization in the ASP and in our ability to keep our costs on the variable cost structure and that's resulted in fairly consistent margins over last three quarters.

Okay. Thanks again. Appreciate the color and congrats on putting the investigation to final -- fully to bed for this a long road and the efforts are appreciated and as is the transparency. Thank you again.

Thanks a lot, Dan.

Thank you. One moment for our next question. Our next question comes from the line of Michael Chapman of Aviance Capital Partners. Your line is now open.

Thanks. I guess everybody is kind of focused on the shorter term. I guess kind of a question more about kind of the longer term corporate strategy around retail and kind of captive finance. You mentioned conversion rates are going up and that's helping. And I would assume internally conversion rates are something that you would like to see increase. Obviously, you mentioned of buy downs of interest rates to help that. When you're thinking out three to five years is the retail build out what helps you get closer to the customer and increase conversion rates? And is there a need to have a bigger captive finance component so that you can be even more adept at converting the customers at the end? And any thoughts around how you think that plays out for you guys over the next couple of years? I'd really appreciate it.

Yes. Let me try to tackle it. You could tell me if I leave anything out. The one thing I'd say about our strategy with retail in general or with distribution is that we are perfectly happy working with independent dealers and close relationships. We've got so many good relationships out there that have been going on for a long time and we work with them even our digital marketing project that we've talked about over time or not project, but our work in digital marketing, a lot of that has been focused on actually giving tools to our independent dealers to help them get leads and help them have closer real time information about our products and quicker response times. So we don't really I've said this a number of times, when we think about company owned retail, it's basically we will expand in the company owned retail when we look at one of our plants and have long term concerns about access to market. If the solution is to greenfield or buy a retailer in that area and own it, we are more than happy to do it. But it's not really a driver to us to grow retail in its own right outside of that strategic reason. And again that's because we're so comfortable with the independents. So I think we can get just as close to the customer with digital marketing and tight relationships with retailers if they're independent, frankly as we can and sort of maybe that's a little bit of an overstatement, but I think it's generally true. On financing, we're always looking at this. We have talked for a number of years now when people talk to us about capital allocation that we've got a healthy balance sheet and we're always kind of…

Yeah. No, that's helpful. I mean, this is looking like we're close to the bottom. Your gross margins are a lot better now than they were last couple of downturns. And I think that's the industry's consolidated, you guys have gotten better at what you do, but that gives you more flexibility. And then to your point given how clean your balance sheet is, I mean, I would think that there's no need to run your gross margins up to 26%, 27%, if you can increase the velocity through your plants and actually get gross margins by just increasing the turns. And that's kind of where I'm getting at is with that flexibility, what are the levers and you kind of mentioned it that you can pull to do that. You're tight with your independent dealer channel and obviously you can do buy downs and other stuff like that. But I think from an investor standpoint, we're always looking at like what's happening in the site-built homes. And they seem to be able to get pretty good conversion rates and bring in traffic. And the idea would be what are the things that you can do to get on to a similar trajectory that those guys have been on because it seems like financial flexibility should allow you to try a bunch of different things and so if you have or our planning what those would be to allow you to increase the velocity would be helpful for us to know as investors.

Yes. And I guess I would kind of tell you that the lending space is clearly an active space in our industry. And so we'll try things sometimes on a smaller scale that probably never kind of reach the radar screen. But it's all in kind of testing and figuring out what we think the right decision at the time is. If we went back and this isn't true for now, but it's kind of more on the strategic question you're asking. If we went back when the retailers were having big inventory challenges, frankly, I think it would have been a little bit foolish for us to think we could increase turns by for example doing a commercial lending program because the orders weren't out there to be had. You would have been kind of throwing away money. Now we're in a different situation, but we're on an upswing. So you have to decide is the market given us as much as we need so that we can keep backlogs in the right range in a given plant or would it help to kind of boost that a little bit? So those are the kind of discussions that are always going on here. One thing I'm really happy about in the company is that the leaders of all those operations, our lending leader is in very close contact frankly daily if not weekly if not daily with leaders in our MH side. And so I think the team has really come together in a way where they can optimize these kind of issues.

But is there ability to increase capital to the lending side to increase conversion rates or is it that's kind of concurrent with what happens in the market. But is that something that you can do to increase the velocity through there by having more financing available either floor plan or other for you guys? Or is that kind of like you mentioned, there's small things you can do, but they're under the radar that it doesn't make sense to throw big amounts of money at that because the cost benefit is not there. And so strategically, there'll be changes on the margin, but nothing that is imminently noticeable from the outside.

Yes. So that what I was mentioning there is all part of your ear to the ground and trying to figure out what's going to be the best trade off at any given point in time. But to your question, can we allocate capital to ensure? I mean that's why we have such a strong balance sheet. So if we saw the need to go out with more lending on the commercial or the consumer side, we absolutely have the firepower to do it. From a company strategy perspective, we're a core business as a manufacturer, right? And we don't want our balance sheet to become a lending balance sheet. So and we're also conscious of that and conscious of why people invest in us. But we absolutely have the ability if there was a competitive situation to kind of swing some capital over the lending side and either act aggressively or protect our interest.

Okay, great. Appreciate it. Thanks for the time.

Yes, good questions. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Jay McCanless of Wedbush. Your line is now open.

Hey, thanks for taking my follow ups. The first one, what was the share repurchase authorization at the end of fiscal 2024? How much did you have outstanding?

Yes. So outstanding at the end of 2024, we have $126.4 million remaining on the authorization.

126.4?

Yes.

That was finishing up one, and then remember the Board gave us an additional $100 million even as we were finishing up the last.

Got it. And still opportunistic on that or how are you thinking about repurchase for this year?

We'd stay consistent in our capital allocation strategy. And as we've touched during the call, the first and foremost, we like to put our dollars into our planned improvement, expansion of efficiency and effectiveness. Also, we stay active, as you've seen historically, in the M&A market. And then we really continue to, as Bill just mentioned, ongoing valuation of opportunities in our lending operation. We really use the share repurchases as a balance is a way to really responsibly balance the cash that we have and responsibly manage the balance sheet. You've seen historically when we're in the market and sometimes we'll deviate from quarter-to-quarter just based on activity that we're seeing in the marketplace, and also betting opportunities at some of our M&A pipeline.

And so then going back to the industry shipments in the first quarter of calendar '24, I mean who's taking volume at this point? Is it the larger manufacturers or who I guess who do you guys think was driving that plus 15 for the quarter?

Jay, it kind of goes back to my long winded answer that I think the regions are really what you'd have to dig into. I think it was more a regional story than it was one manufacturer taking and a quarter isn't a long time for variations in those kind of numbers. So if I would give you any kind of trend, we touched on one of the other questions, but the products that are moving the best are the lower price points. So you've got regional differences and then a general movement toward lower price point homes. So any plant that is positioned in a region that had good growth and was positioned at lower price points was kind of in the sweet spot for that limited period of time. So I don't think you're seeing material shifts in market share just based on the data that you were looking at.

And then the last one I was going to ask, it sounds like there still is a little bit of pricing pressure out there. And kind of the same question as before, is that something that you're seeing the larger players, everyone trying to compete for price? Or is this more smaller, more regional players that where you're having to be more aggressive on your pricing to be competitive?

Yes. Well, I think one reason why we haven't seen bigger reductions in price in this downturn is that we really haven't seen anyone get into financial distress, right? Everyone still presumably got pretty good gross margins and coming off some very strong earnings years. So people haven't been desperate in the sense of financial distress. We haven't had that activity. But the pricing reductions that we've seen are kind of very episodic and kind of very location oriented. Whether it's big players or small, I don't think I could generate or generalize about that. And it's been modest. It really has. I think if we see the order trends that we've talked a lot about on this call, then I think that kind of takes some of the motivation even that small amount of leakage away.

Okay, well, so to paraphrase and please fix or change this if I need to, but it sounds like the industry in general is behaving pretty well on price, but everyone is having to figure out ways to find affordability for their customers. Is that the right way to think about it?

Sure. And a lot of that is in the retail store trying to get them to the right product, right?

Got it. Okay, great. Thanks for taking my follow-up.

Thanks, Jay.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Bill Boor, President and CEO, for closing remarks.

I know we're running short on time and I appreciate everyone's interest and good discussion. There's no doubt we look back on fiscal 2024 as a down year, but I wanted to share one reflection that I had when I was kind of looking over our results. Despite the down market resulting in our plant system running at a significantly reduced pace all year long, not only was this the third highest net income year in our history, it more than doubled the income from three years ago, which was a record at the time. So I think just putting it in perspective, we've come a long way and with expectations of improving conditions in front of us, I really feel like we're in a great position to deliver more homes than ever before. So thank you all as always for your interest in Cavco and we look forward to keeping you updated on our progress.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.