Earnings Call Transcript - CVCO Q3 2025

Mark Fusler, Corporate Controller and Investor Relations

Good day, and thank you for joining us for Cavco Industries third quarter fiscal year 2025 earnings conference call. During the 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 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 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 statements, 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?

William Boor, President and Chief Executive Officer

Thanks, Mark. Welcome, and thank you for joining us today to review our third quarter 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 quarterly profit in four years, driven primarily by our insurance operation. In insurance, the third quarter is typically more profitable due to lower weather-related claims costs, but the positive results were also driven by improvement efforts we discussed in previous calls. We've made significant changes to underwriting to manage claims cost, and we implemented needed premium increases. In addition to the quarter-to-quarter financial services improvement, factory-built 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 to 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 third quarter, we made the decision that, where our backlogs allowed, our plants would continue ramping production in anticipation of continued market improvement in 2025. We made this decision to press forward to higher production rates knowing that it would involve utilizing some of the backlog. Exiting the third quarter with a still very healthy aggregate backlog of six to eight weeks 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 profitable operating days in Q3. While industry shipments declined from Q2, it 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 and 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 2025. I also want to close off on an item from last quarter's earnings call. You might remember that was shortly after the two devastating hurricanes hit the Southeast. At that time, there were questions about whether the Southeast market activity would be slowed in Q3. Industry shipment data for October and November showed that about a 14% year-over-year shipment gain in the most impacted states indicated 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 two 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 retailers as well. One important aspect of this rollout has been to provide dealers and communities easy-to-manage microsites branded to their businesses, having their own Cavco supported sites integrated directly into our overall platform is proving to be a significant value add for our partners, enabling them to generate leads through their microsites and receive leads from our cavcohomes.com digital 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. 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 continue to support a strong balance sheet and the ability to repurchase shares. This quarter, we repurchased $42 million of stock and our quarter-to-quarter cash and cash equivalents remained essentially flat. With that, I would like to turn it over to Allison to discuss the financial results in more detail.

Allison Aden, Executive Vice President and Chief Financial Officer

Thank you, Bill. Net revenue for the third fiscal quarter of 2025 was $522 million, up $75.2 million or 16.8% compared to $446.8 million during the prior year. Sequentially, net revenues increased $14.6 million driven by an increase in homes sold. Within the Factory-built Housing segment, net revenue was $500.9 million, up $74 million or 17.3% from $426.9 million in the prior year quarter. The increase was primarily due to a 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 lower multi-wide in the mix. Factory 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 $21.2 million, up $1.4 million or 6.8% from $19.8 million in the prior year quarter, primarily due to higher insurance premium rates. Consolidated gross margins in the third 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% 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% in Q3 of 2025 from 36.8% in Q3 of 2024. The 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 third quarter of 2025 were $66 million or 12.6% of net revenue compared to $63.3 million or 14.2% of net revenue during the same quarter last year. The increase in these expenses was due to a higher variable compensation based on improved earnings and greater compensation related to acquired retail locations, partially offset by a $2 million reduction in legal expenses. Pretax profit was $69.3 million, up $25.4 million or 57.9% compared to $43.9 million in the prior year quarter. The effective income tax rate was 18.6% for the third 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 approximately $1 million or 1.4% in the third quarter of fiscal 2025. Net income was $56.5 million, up $20.5 million compared to $36 million in the same quarter of the prior year, and diluted earnings per share this quarter was $6.96 per share versus $4.27 per share in last year's third quarter. During the quarter, we also repurchased $42.4 million of common shares under our share repurchase program. Cumulative repurchases stand at $389 million since we began the program in the fourth quarter of fiscal year 2021. This leaves approximately $111 million 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 second quarter. The largest increase is due to the performance of the Financial Services segment. In Q2 of 2025, the segment was at a pretax loss of nearly $1 million compared to pretax income in Q3 of 2025 of $6.2 million, a swing of over $7 million. The Q3 2025 performance improved significantly due to higher premiums earned, lower claim volume from fewer weather events and changes in underwriting. The second largest impact is from improved factory-built housing sales volume and improved margins on those homes sold due to efficiencies on higher production levels. The third 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 it over to Paul to discuss the balance sheet.

Paul Bigbee, Chief Accounting Officer

Thanks, Allison. In the third quarter, we saw a decline in cash and restricted cash of $7.6 million, bringing our balance to $378.6 million. Cash flow from operating activities was $37.8 million despite being impacted by an increase in our working capital. Cash used in investing activities was $3 million net, and cash used in financing activities was $42.4 million, primarily due to share repurchases. Now moving on from the quarter and comparing the December 28, 2024 balance sheet to March 30, 2024. The increase in accounts receivable is primarily related to organic growth we have experienced in the Factory-built 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 of floor plan lending and a shift to longer-term loans. Current liabilities are up from increased compensation and 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 first three quarters of fiscal 2025. Now with that, I'll turn it back to Bill.

William Boor, President and Chief Executive Officer

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 use the third quarter to set ourselves up for continued momentum in the coming quarters. So with that, Michelle, would you please open the line for questions?

Operator, Operator

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

Daniel Moore, Analyst

Thank you. Good morning or good afternoon to 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 and 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.

William Boor, President and Chief Executive Officer

Yes, Dan, let me address a few points and feel free to ask if there are specific areas I didn't cover. This call always comes at an interesting time of year, as we've just completed the slower holiday and winter quarters. We're also still too early to draw strong conclusions about the Spring selling season. However, we're observing some trends. I mentioned in my opening remarks that industry shipments on a seasonally adjusted basis have shown an upward trend, which is encouraging. For the past few quarters, retail and dealer traffic has been healthy, even with rising interest rates. People are actively exploring their home-buying options and have adjusted their expectations in response to higher rates. When faced with increased rates, buyers often have to modify their expectations and purchase what they can afford. We've observed a psychological shift among consumers, reflected in conversion rates improving, which we've noticed in our stores and in discussions with independent retailers. Another point that drew attention last year is the community's efforts to manage inventory levels, which began to take effect late in the year and is expected to support overall demand as communities start to fulfill orders again in 2025. While I’ve shared several observations, it's important to note that these are leading indicators and may not guarantee certainty, as economic conditions can fluctuate. As this quarter progresses, we will have clearer insights, especially with improved weather and seasonal activity expected to pick up. Overall, we feel fairly confident, and part of our strategy to prepare for stronger quarters is based on our plants' ability to adapt production as needed. Therefore, we believe it was prudent to continue increasing production.

Daniel Moore, Analyst

Yes, that's good information. Really helpful. As we look at the transition from Q3 to Q4, are you planning to maintain a similar production rate? Are there any holidays or other factors we should consider that might affect shipping comparisons on a sequential basis?

William Boor, President and Chief Executive Officer

And nothing really that I would say would be less favorable. I mean the biggest thing is you've got more operating days in the fourth quarter than we had in the third quarter. And even though we talk at a high level in these calls by necessity, the plant decisions of how rapidly they ramp up or if they're even able to ramp up are 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 there is more upside to production and downside at this point. I realize as Allison was talking and I don't think I missed it in the script there, but that I usually talk about past utilization. We were around 75% in the third quarter. So we still have some room to keep expanding up.

Daniel Moore, Analyst

That's really helpful. Maybe I'll take one more question before passing it back. Regarding financial services, you clearly had an exceptional quarter. Could you discuss some of the changes you've implemented? I believe you mentioned three key areas: the rates, a decrease in claims instances, which is somewhat beyond your control but seasonally lighter, and the adjustments to underwriting. Please elaborate on the changes to underwriting firstly. Secondly, how should we approach determining a suitable long-term average range for gross margins or operating margins for that business, considering the variations driven by seasonality and other factors?

William Boor, President and Chief Executive Officer

We faced challenges as we transitioned from two difficult quarters to a historically strong one. To clarify, we typically expect the third quarter to outperform the first and second due to seasonal weather patterns. Historical data helps us estimate the frequency of major storms, making the third quarter crucial for profitability, especially since the earlier quarters can be tougher. Part of the improvement from one quarter to the next is due to lower claims costs. However, we're also making meaningful progress on the premium side by collaborating closely with actuaries to determine appropriate pricing for policies that ensures proper risk-adjusted returns. We are diligently working with state regulators to implement necessary premium increases, which is vital for our revenue. Regarding underwriting, we've had to make difficult choices, including non-renewing certain policyholders to reduce our exposure in specific regions. Additionally, we've enacted lower coverage options on renewed policies to guarantee that all policies remain profitable based on risk assessment. For instance, we have shifted some policies from full replacement cost for roof damage to compensating based on the depreciated value reflecting age and condition. This strategic adjustment has been crucial for maintaining an appropriate risk-reward balance. As for future guidance, the key factor remains seasonality, and analyzing past years while projecting forward on a quarter-over-quarter or year-over-year basis may provide the best insight. While this industry is volatile, we have consistently achieved strong returns on our investments over time and believe it remains a solid business.

Daniel Moore, Analyst

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

William Boor, President and Chief Executive Officer

Financial Service segment typically will be significantly above the factory that built housing segment on a gross margin basis. So I agree with that. I don't think I could endpoint a particular number for you though.

Daniel Moore, Analyst

That's helpful. Lastly, the tax rate you mentioned has decreased. Year-to-date, it's about 20%, which is lower than what we previously projected. What are your thoughts on this? Is it a reasonable range considering some of the ENERGY STAR production credits? How should we approach this moving forward?

Allison Aden, Executive Vice President and Chief Financial Officer

Thank you for the question. We consider this quarter to have been exceptional for tax credits, as mentioned. If we look at our Q4 of 2024, along with Q1 and Q2 of 2025, averaging those would provide a better idea of what we anticipate as a normalized rate.

Daniel Moore, Analyst

Got it. That's helpful. I'll jump back, if there are any follow-ups. Thank you again.

William Boor, President and Chief Executive Officer

Thanks, Dan.

Operator, Operator

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

Danny Eggerichs, Analyst

Thank 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'd want to call out specifically?

William Boor, President and Chief Executive Officer

Yes, I may have mentioned this last quarter, so I'll repeat myself to provide an update. I can't recall my exact comments from last quarter. However, it has been interesting to see a market improvement over several quarters. It hasn’t been a dramatic rise but rather a steady progression. You'll recall that when this trend began, we noted the Southeast and Texas as areas showing renewed strength, and they continue to perform well. In contrast, Florida has been quite challenging and remains difficult. The Southwest has also experienced slower and less dramatic increases, but it is showing improvement. There are some ongoing regional disparities, but I don’t think there's much to interpret from that. It’s simply an observation. If there’s one area of concern where we hope to see strengthening in the future, it would be Florida. Interestingly, that trend does not apply to the Southeast, which is doing well, excluding Florida.

Danny Eggerichs, Analyst

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

William Boor, President and Chief Executive Officer

Yes, I think you kind of have to separate their demands 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. If 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 in 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, and 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.

Danny Eggerichs, Analyst

Okay. That makes sense. Could you provide a quick update on the builder developer channel? I know it has been performing well in the last couple of quarters. I'm not sure if you mentioned anything about it in your prepared remarks, but any insights would be appreciated.

William Boor, President and Chief Executive Officer

Yes, I haven't broken it down specifically. We've been observing the trends in the three groups: dealers, communities, and builder developers over the past year. The builder developer segment is the smallest of the three. In the past, we often combined them with communities since they are quite similar from a customer standpoint. However, we monitor all three individually. Both communities and builder developers continue to increase as a percentage of our total business. Their performance is closely aligned with that of the community operators.

Danny Eggerichs, Analyst

Okay. I'll leave it there. Thanks everyone.

William Boor, President and Chief Executive Officer

Thanks, Danny.

Operator, Operator

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

Jay McCanless, Analyst

Hey, everyone. Hope you guys are doing well.

William Boor, President and Chief Executive Officer

Thanks.

Jay McCanless, Analyst

So first question with sadly, a lot of disasters happening around the country. Haven't really heard much in terms of FEMA orders or any things 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?

William Boor, President and Chief Executive Officer

It's been interesting because I share your sentiments. We stay closely tuned to FEMA as well as state and local efforts for disaster relief. I've noticed that many local governments are discussing providing relief without FEMA due to the challenges and delays involved in working with them. Regarding FEMA, it seems there should be some orders coming given previous discussions, particularly one from the latter half of last year that suggested there would be orders related to manufactured housing. However, these have not yet appeared, which isn't necessarily a sign they won't happen. We believe they may have lost some inventory in recent hurricanes. It's been unusually quiet, and we remain vigilant since we won't know about any bids until they are announced. Concerning the local situation with the LA fires, I'm seeking more information, but it's still early to fully grasp the outcomes. Many local leaders are expressing a desire to minimize reliance on federal assistance, although there's still some uncertainty about how they plan to manage relief on their own. This situation is frustrating because we believe our industry can contribute significantly to providing housing solutions, but so far, we haven't seen any tangible developments.

Jay McCanless, Analyst

Got it. If you think about the plant-based bill, Cavco's plant base, 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? You also headquarters in Phoenix, of course, but I would think you've got some other plants in the California market, etc. 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?

William Boor, President and Chief Executive Officer

Yes, it has provided relief for Southern California. We have Glendale, which is the park model facility that can easily make ADUs. There are three plants in the Phoenix area that can also reach there easily. Additionally, we have the Riverside, California plant that is very close by. Therefore, it's quite simple to have those four plants involved in providing homes for the region.

Jay McCanless, Analyst

Got you. And if we could talk about what you're seeing on channel rates?

Paul Bigbee, Chief Accounting Officer

Yes. 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.

Jay McCanless, Analyst

How much up is that? That's just a small increase, right?

Paul Bigbee, Chief Accounting Officer

Yes, a small increase from last quarter.

Jay McCanless, Analyst

And then I guess and probably way too early to tell, but anything with this new administration that either you guys are looking forward to, or what you think might be a headwind? Anything worth calling out that you've already seen from the Trump administration?

William Boor, President and Chief Executive Officer

There hasn't been much impact from what we've seen so far. There is a lot of discussion surrounding tariffs, and we need to be vigilant as they could lead to increased costs for some of our inputs. However, it's difficult to assess the extent of this without knowing the administration's final stance on the tariffs. So far, we have been able to hire people quite easily, and attracting talent has not posed a challenge. While it's possible that immigration policies could affect labor availability, I think the risk of this impacting us significantly is low. We're continuing to monitor the situation and prepare for any changes. I am cautiously optimistic about the regulatory environment. For instance, the Department of Energy's energy regulations have not been well-suited for our industry, and we've been advocating against them successfully for some time. Ideally, it would be beneficial to have a regulatory framework that is more collaborative with us and recognizes HUD as our primary regulators. I see potential for improvement in this area over time.

Jay McCanless, Analyst

That's great. And then the last question I had, just thinking about input prices and maybe some hints towards gross margin in the fourth quarter. We've seen OSB prices come down pretty dramatically in the last three weeks. It looks like drywall is up a little, framing numbers are 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 could talk about what you're seeing there and maybe directionally where you think gross margin trends might go in 4Q?

Allison Aden, Executive Vice President and Chief Financial Officer

Thank you. Regarding gross margins, we closely monitor several factors. The first is the average selling price, which has faced some downward pressure in the third quarter, though it has been fairly stable over the past few quarters. The second factor is cost, particularly material costs. Like all builders, we rely on lumber and oriented strand board. The fluctuations in the commodities market are significant, and we keep a close watch on them. These changes will reflect in our cost of goods sold over the next 60 to 90 days. We have noticed a slight decrease in OSB prices recently. By staying attentive to the market trends, we can anticipate how shifts in commodity prices will impact our costs and, consequently, our gross margin over the next couple of months.

Jay McCanless, Analyst

Okay. All right. Great. That's all I had. Thanks guys. Appreciate it.

William Boor, President and Chief Executive Officer

Thanks, Jay.

Operator, Operator

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

Daniel Moore, Analyst

Yes. Just one more question regarding capital allocation and cash flow. You have repurchased over $40 million each in the past two quarters, and your cash balance has stabilized, aligning the buybacks with cash flow. The share count has decreased by over 8% in the last two years according to my calculations. Is this the plan moving forward? How are you planning to manage cash balances and utilize that additional cash flow?

Allison Aden, Executive Vice President and Chief Financial Officer

I appreciate the opportunity to discuss our capital allocation. Our primary focus is on expanding our existing plant capacity. If we had a dollar to spend, we would likely invest that dollar in growing our current plant capacity. We've initiated several projects in recent years and continue to evaluate new opportunities regularly as our network expands. Additionally, we are actively exploring M&A prospects that align with our strategic market objectives while enhancing our capacity. We have been proactive in this area and expect to maintain that momentum. Furthermore, we are examining chattel lending options as part of our strategic plan. Lastly, as you noted, we've utilized share buybacks to prudently manage our balance sheet in line with our capital allocation strategies. It’s important to consider our historical cash flows, which remain robust due to our solid business model and variable cost management. While there may be fluctuations in our share repurchases based on M&A activity, they generally reflect our past performance and indicate what we can expect moving forward.

Daniel Moore, Analyst

Yes, very helpful. Thank you again.

William Boor, President and Chief Executive Officer

Thanks, Dan.

Operator, Operator

Thank you. There are no further questions at this time. I'd like to turn the call back over to Bill Boor for closing remarks.

William Boor, President and Chief Executive Officer

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 of, at a macro level, on an aggregate basis, we're very happy with. So that's well positioned, and we're continuing to ramp up our throughput. So we 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 we look forward to keeping you updated. Thank you.

Operator, Operator

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