Good morning. And welcome to Skyline Champion Corporation’s Fourth Quarter and Full Year Fiscal 2022 Earnings Call. The company issued an earnings press release yesterday after close. I would like to remind everyone that yesterday’s press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company’s expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in the company’s filings with the Securities and Exchange Commission. Additionally, during today’s call, the company will discuss non-GAAP measures, which it believes can be useful in evaluating its performance. A reconciliation of these measures can be found in the earnings release. I would now like to turn the call over to Mark Yost, Skyline Champion’s President and Chief Executive Officer. Please go ahead.

Thank you for joining our earnings call, and good morning, everyone. Joining me on the call is Laurie Hough, EVP and CFO. Today, I will briefly talk about our full year and fourth quarter highlights. Then provide an update on activity so far in our first quarter of fiscal 2023 and wrap up with thoughts about the balance of the year. I am pleased with the results Skyline Champion achieved in fiscal 2022, as we continue to make progress delivering topline growth and expanding our profitability, while improving our capacity and capabilities to better serve our customers. For the year, we were able to provide 26,165 customers and families a place to call home, as we grew net sales by 55% and adjusted EBITDA by 163%, expanding margins by 650 basis points. Our results were driven by the rising demand for affordable housing and our ability to increase output at higher profitability levels, despite ongoing supply chain headwinds and inflationary pressures. From an industry standpoint, demand remains strong as supply side housing shortages, a growing base of homebuyers and higher interest rates and inflationary pressures are converging, greatly raising the need for affordable housing solutions. The current environment has increased the awareness of our housing solutions, and our investments in enhancing the buyer experience have allowed us to convert more traditional site buyers and expand our market share. We ended the year on a strong note with an excellent fourth quarter, results driven by the demand for new housing and our improved operational capabilities. Our affordable price point during these inflationary times continued to generate healthy order demand, with backlogs growing by $127 million during the fourth quarter to reach $1.6 billion. Fortunately, we were able to increase production during the quarter, allowing us to improve our delivery times to our customers to 35 weeks at the end of the quarter, compared to 43 weeks at the end of the third quarter. As a result of the solid production increases, we delivered 6,980 homes, an improvement of 10% from the prior year and up 13% sequentially. We improved our U.S. manufacturing facilities' capacity utilization to 72% for the quarter, an increase of 4 percentage points from the third quarter, achieving these production gains despite facing operational challenges caused by supply chain disruptions across our manufacturing operations and the industry. Our improved production efficiencies were helped by the continued progress streamlining our product offerings and allowed us to increase daily production rates. While we were able to add to our workforce, transportation cost availability remains a challenge to output, with truck driver shortages across all regions of the country. Additionally, our Navasota, Texas plant completed its certification process in March and began shipping homes in April. We have built an incredible team that continues to impress with their pace and dedication in ramping up the facility. In February, we exhibited one of our Genesis homes at the International Builders Show in Orlando and again at the MHI Congress and Expo in March. This home design helps builders achieve tremendous value for homebuyers for far less than traditional site-built homes, stretching the homebuyer’s dollar in a rising interest rate environment. To that end, we recently signed a multiyear agreement with a top 100 builder to provide our Genesis Homes for their development, allowing them to profitably hit an affordable price point. During the quarter, we also entered into a Delivery Disaster Relief Order for the production and delivery of FEMA units. The order totals approximately $200 million and will be produced in the first quarter and second quarter of fiscal 2023. FEMA units generally have more specifications than typical homes and therefore drive a higher average selling price. We will be producing these units in batches at several of our factories across the U.S., which will help with production efficiencies, as well as minimize the impact on our long-term primary customers. We are also excited to announce that on May 16th we closed on the asset purchase of maintenance custom homebuilders. With the addition of the 250,000 square foot campus in Laurinburg, North Carolina, and its retail location in Eastern North Carolina, along with our existing North Carolina campuses, we are now better able to serve customers throughout the region with cost-effective, streamlined product offerings that are greatly needed in this current economic environment. We anticipate continuing to build out the approximate $15 million of existing backlog as we upgrade and retool portions of the plant. As we look forward, market conditions remain healthy with historically low availability of affordable housing supply, favorable demographics and migratory factors. With rising interest rates and inflation, we are seeing traditional site-built homebuyers moving into a more value-oriented factory-built home solution. Additionally, we see demand from communities and build-for-rent increasing as retail traffic tempers. Our orders in April and so far in May have kept pace with our increased production levels, and cancellations due to rising interest rates or price increases have been minimal in most regions and slightly elevated in a few regions. With the addition of our Navasota, Texas plant, our recent acquisition of Manis Homes and our continued efforts to streamline production at our existing facilities and FEMA production, we expect revenue to increase sequentially by mid-single digits in the first quarter of fiscal 2023. Despite our team's efforts and our supply chain partners, we do expect availability of some raw materials to become more scarce in the mid to late summertime period. We are planning for this and will continue to manage through these challenges, but it may impact our production during fiscal 2023. These, along with the availability of drivers to transport our homes, are some of the challenges we will face when increasing production. We are excited once again to be promoting factory-built affordable housing solutions during the innovative housing showcase in Washington, DC in early June. This event is hosted by the U.S. Department of Housing and Urban Development and will showcase the value of factory-built homes to policymakers, the media and homebuyers. Focusing on the longer term, it’s becoming more evident every day that the antiquated system of traditional homebuilding is not sufficient to meet the needs of customers. Due to the early successes we have seen both in manufacturing, technology and digital offerings, we will be ramping up our investments in these areas to make homes more affordable and attainable for our customers. I will now turn the call over to Laurie to discuss our quarterly financials in more detail.

Thanks, Mark, and good morning, everyone. I will begin by reviewing our financial results for the fourth quarter, followed by a discussion of our balance sheet and cash flows. I will also briefly discuss our near-term expectation. During the fourth quarter, net sales increased by 43% to $638 million compared to the same quarter last year. We saw revenue growth of $180 million in the U.S. factory-built housing segment during the quarter, despite the prior year's quarter having an extra fiscal week, which accounted for approximately $31 million of sales. The increase in U.S. factory-built revenue was driven by an increase in the number of homes sold and an increase in the average selling price. The increase in the number of homes sold was 11% or 657 units for a total of 6,580 homes compared to the same quarter last year. The average selling price per U.S. home sold increased by 31% to $87,800, due to price increases to offset inflation brought on by rising material, labor and transportation costs. On a sequential basis, revenue in the U.S. factory-built segment increased 19% in the fourth quarter compared to the third quarter of fiscal 2022. This increase was driven by a 13% increase in homes sold and a 6% increase in the average selling price per home. Canadian revenue increased 30% to $46 million compared to the fourth quarter of last year, driven primarily by a 36% increase in the average home selling price, partially offset by a 5% decline in the number of homes sold. The higher average home selling price in Canada of $114,700 was driven by price increases enacted in response to inflationary pressures. The decline in the number of homes sold during the quarter was a result of the prior year quarter having an extra fiscal week of production. Consolidated gross profit increased to $191 million in the fourth quarter, up 93% versus the prior year's quarter due to higher volumes, pricing and improved operations. Our U.S. housing segment gross margins were 29.6% of segment net sales, up more than 700 basis points from the fourth quarter last year. In addition to strong demand and pricing, continued product standardization and material rationalization helped to increase production, enabling us to leverage fixed costs. SG&A in the fourth quarter increased to $75 million from $52 million in the same period last year, primarily due to higher variable compensation driven by the increase in sales volume and profitability. The increase in SG&A also reflects our investments in additional capacity and initiatives focused on enhancing the customer buying experience. The online customer buying experience remains a key initiative, and we expect incremental investments to continue through fiscal 2023. Net income for the fourth quarter was $87 million or $0.51 per diluted share, compared to net income of $35 million or earnings of $0.59 per diluted share during the same period last year. The increase in EPS was driven by higher sales and improved operating efficiencies, resulting in improved profitability. The company’s effective tax rate for the quarter was 24.8% versus an effective tax rate of 24.5% for the year-ago quarter. Adjusted EBITDA for the quarter was $121 million, an increase of 137% over the same period a year ago. The adjusted EBITDA margin expanded by 760 basis points to 19% due to higher sales, gross margin improvement and leverage of fixed costs. Looking forward, we expect inflation on building products, labor and transportation costs to remain persistent through the first half of fiscal 2023. We utilize several levers in response to increasing costs, including price adjustments, product standardization, raw material substitutions and further operational improvements. Despite our efforts to continue to pass on inflation and make operational improvements, our production may be impacted by the availability and timeliness of raw materials, as well as possible shifts in product mix caused by economic pressures, driving homebuyers to smaller, less optioned homes, which will soften margins. While we remain confident in our ability to execute in the current environment, the impact of an elongated inflationary environment does create a natural headwind on our margin progression. As of April 2, 2022, we have $435 million of cash and cash equivalents and long-term borrowings of $12 million, with no maturities until 2029. We generated $224 million of operating cash flows for the year, an increase of $71 million year-over-year. The increase in operating cash flows is primarily due to the increase in net income and customer deposits, which were partially offset by an increase in inventory balances, accounts receivable and capitalized cloud computing costs. We remain focused on executing our operational initiatives and given our favorable liquidity position, plan to utilize our cash to reinvest in the business and to support strategic long-term growth. I will now turn the call back to Mark for some closing remarks.

Thanks, Laurie. The solid momentum we continue to see in our business is being driven by our focus on the customer and our ability to execute, which has strengthened our position to satisfy the demand for affordable homes. Before we open up the lines for Q&A, I want to take a moment to thank the entire Skyline Champion team, as our consistently strong performance is a result of our focus, hard work and ability to increase output for our customers in this very challenging environment. And with that, Operator, you may now open the line for Q&A.

Thank you. Our first question is from Greg Palm with Craig-Hallum Capital Group. Please proceed.

Thanks for taking the questions. Good morning and congrats on the good execution in the quarter.

Good morning, Greg. Thank you.

I wanted to explore the demand situation a bit further, as there is a lot of concern about the consumer lately. It appears that demand is still quite strong even for the current quarter. I would like to know what you think is driving that and if you could discuss the characteristics of some of the newer buyers you are seeing compared to a few years ago.

Yeah. Thanks, Greg. Demand does remain strong. Our new incoming orders are matching production right now in April and May, so they are actually higher than they were in the third quarter. Demand remains good overall. We are seeing a few things in the buyer demographic: One, generally a better quality buyer with higher down payments. We are also seeing traditional homebuyers who can’t afford a traditional site-built home or existing home move into a better value proposition in buying our homes, with a larger number of cash buyers coming into the market. I think we are definitely seeing a shift of what I call first-time homebuyers and better-quality buyers coming to the market for us.

Makes sense. And in terms of the opportunity within builder developer, I know there are several ongoing projects out there, I think maybe some of them have been completed already. But can you just talk about how those are going, what the feedback is, and then in terms of that win that you disclosed with a top 100 builder, can you give us some sense on potential volumes there, are they shifting some of their production to offsite, are they using you as an additional supplier, what’s really going on behind the scenes?

Yeah. Greg, I am very excited about Genesis in that segment of the market, and part of the reason we diversified into that segment a little more is that we have seen success with our Genesis subdivisions. Just recently there’s a subdivision, the first MH Advantage subdivision in the State of Texas that we completed. That subdivision is for a small localized builder. What I think is really important is that builder is selling comparable homes to some of the biggest builders in the country and is selling them for about 20% to 25% less when you take a look at what they are selling on Zillow. That speaks to the value proposition for the builders. But I think what’s also important there and it goes back to the demand situation is just recently we have seen that the average mortgage rate for a 30-year mortgage is now $29,000 a year, according to Redfin. If we can save the customer 20% to 25% off of that amount, it equates to roughly $6,000 of savings for that customer, which today with inflation happening, is costing the average customer about $4,000. If they can get into our Genesis product and save $6,000, they can offset all their other inflationary costs and put another $2,000 in their pocket, which I think is meaningful for today’s average customer. We are seeing more interest in that product and this builder developer that we have signed a multiyear agreement with, it’s a meaningful amount of product for us. It will definitely add to our builder developer channel growth in the future. We are not disclosing the amount right now, but it’s definitely a good deal and will add a good portion of revenue for the company over the next three to five years.

And I guess just this is a last one is a follow-up to that. Do you guys have a sense of whether if backlogs start to come down from current levels, do you get a sense for whether that builder developer opportunity starts to ramp off? I mean, what’s the biggest kind of pushback or constraint you get, because it sounds like at least initially things are going pretty well in that space?

I believe the timing of subdivisions and ensuring builders are comfortable with it is crucial. In the current market, having a diverse portfolio is essential. We have secured the FEMA contract, which represents our government channel. We are expanding Genesis and our ADU market is growing. The community channel remains very strong. However, I do notice some temporary challenges in the retail channel, particularly related to down payments and similar factors. On the positive side, we are experiencing significant demand growth from REITs, along with increased interest from both rental and builder developers.

Okay. Great. All right. I will hop back in the queue. Thanks and good luck.

Thank you, Greg.

Our next question is from Daniel Moore with CJS Securities. Please proceed.

Thank you, Mark and Laurie. Congratulations on the solid numbers. Regarding FEMA, this is the first time we've heard from them in a while. Sometimes they order in multiple phases. Do you anticipate additional orders following this one, or do you believe this will meet their needs, at least for the short term?

We don’t have any indications of future orders, Dan. But I will say we are heading into what is typically viewed as hurricane season in the U.S., and I know inventories are low. There could be some need for future housing, but there’s really no indication of that currently.

Got it. And appreciate the color from a margin perspective. You gave guidance, mid-single-digit growth going sequentially on the topline. How should we think about margins vis-à-vis your performance in Q4 over the next, say, quarter or two? And then, looking out mid-term, Laurie, are we in the sort of mid-to-high 20s; is that a more sort of new normal for the near-term at least? If you can just put any more granularity around some of your commentary there from a gross margin perspective, that would be really helpful?

Thank you, Dan. Yeah. I expect gross margins to be relatively flat sequentially in the next couple of quarters and then start to compress somewhat later in the year to the range, as you mentioned, as smaller, less optioned homes move through the backlog.

Got it. I will pass it on. The Biden administration recently outlined a series of proposals to help address the gap between demand and supply for affordable housing. Are there specific proposals, such as those involving Freddie Mac and chattel loans, that you believe could have a more significant impact compared to some of the duty to serve initiatives or other proposals from previous years? Thanks.

Yeah. I mean, there’s definitely some good long-term traction in what they have proposed. I don’t think it will impact anything in the very near term. Some of the bond cap limits are 50% hurdle rates and other things. If done right, that could impact new builds and refurbishment of stock positively. Chattel, in their proposals on channel, gained traction, but I think in the interim, it’s about getting that through Congress, getting things passed and see what they actually take action on. So it’s a little too early in the cycle to rely upon or count. But it’s definitely a great longer-term tailwind. I think we are going to see more benefits and emphasis on regulatory relief, because of the need for affordable housing. There are definitely going to be things like ADU zoning relief and things like that passed at a faster rate. So there are definitely longer-term opportunities, but it won’t impact anything in the very near term.

Makes sense. I appreciate the insight. I will follow up if there are any further questions. Thanks.

Thank you.

Our next question is from Matthew Bouley with Barclays. Please proceed.

Good morning, everyone. Thank you for taking the questions and congrats on the results. I have to ask the cancellation question, because you daylighted at the top mark that you said cancellations have become a little elevated in a few regions, although low in most places. Should we take that as a signal that cancellations could actually worsen here, given what’s going on with rates, and if that’s the case, how does that kind of impact you guys from a financial and production efficiency standpoint?

Yeah. Thanks, Matt. No. I think cancellations really are driven by rates. There are two things happening related to rates and cancellations. First, with our retail inventory, floor plan interest rates are also elevating, not just end consumer rates, so as floor plan interest rates increase, it becomes more costly for our retailers to carry stock units. Hence, we will see some destocking of the channel to keep their largest expense at bay as interest rates tick up. So, you are going to see a one-time adjustment regarding stock at retail inventory nationwide due to rising interest rates, where retailers will carry less. Secondly, that customer base, especially the lower end customer, is likely feeling the most inflationary pressure as well. So you will see higher retail cancellations as interest rates and inflation impact that customer base. The magnitude of that is not material in the overall scheme of our backlog, so it’s not a concern. I think it’s just going to be a one-time clean-up as interest rates increase.

Got it. Okay. That’s really helpful color there, Mark. Thank you for that. And secondly, I wanted to follow up on the discussion on the builder developer order because I think in the past few quarters you had spoken to sort of turning away orders and really trying to focus on your long-term customers. But in a market where there could be either retail destocking or just otherwise consumer pressure, is there sufficient demand from that builder developer channel or the build-to-rent and community channel? Just some of those sort of big one-time one-off orders that you had previously been turning away, is there room for some of those customers to absorb what might be missing from the rest of the retail channel?

Yeah. Definitely. I think we are seeing a much larger interest from the community and the REITs to builder developers. That has the potential to more than offset the retail softness. We will have to make sure to adjust production levels in the right regions to accommodate that over time, as geography will play into that.

Got you. All right. Well, thank you and good luck, guys.

Thank you.

Our next question is from Mike Dahl with RBC Capital Markets. Please proceed.

Good morning. Thank you, Mark and Laurie, for taking the questions. I would like to follow up on the demand questions. First, could you share the order details in terms of units and the year-on-year change for your quarter as well as for April and May? It seems that if I exclude the FEMA order, the dollar value of orders might be down year-on-year. There are certainly some tough comparisons, but it looks like unit orders may have decreased significantly. I'm trying to reconcile this with your comments about orders aligning with supply in April and May. Any insights on the year-on-year unit performance would be appreciated.

Yeah. Mike, we don’t give the unit comps, but our order rates quarter-over-quarter increased by production and shipment rates increased quarter-over-quarter sequentially by 13%. Part of the backlog delta you are seeing is we were able to dramatically increase production quarter-over-quarter. The new orders we are seeing today are matching our higher elevated production rates. So we are kind of running on par with production and orders.

Okay. Right. And the other follow up I had just on the cancellation topic, I think you had characterized it in your opening remarks as being somewhat region specific. So what regions are you seeing the most pronounced cancellations in right now?

Generally, I would say the mid-south region, and that’s predominantly because they generally sell a lower ASP or lower-end product. Interest rates will have the most meaningful impact on the retailer’s ability to stock those units. Higher retail cancellations as interest rates and inflation impact that customer will primarily occur in the mid-south region.

Okay. That makes sense.

Okay.

Got it. Okay. One last question, just the comments around mix, Laurie or Mark, I wasn’t sure if we should take those comments on mix of kind of the lower endless optioned models as being indicative of you are already seeing that in the incoming order rates or that’s just your expectation for how things will progress just given what’s happening with prices and rates. So are you already seeing that or that’s just kind of hedging a bit on future expectations?

Mike, the mix is a bit geographic as well, kind of to Mark’s point earlier, but we are starting to see that in order, so that’s a timing issue coming through backlog.

Okay. Appreciate it. Thank you.

Thank you.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

Thank you for participating in today’s call. We appreciate your time and continued interest. We look forward to updating you on our progress on our next call. Take care and be safe.

Thank you. This does conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.