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Cavco Industries Provides Business Update on Coronavirus Pandemic

General News

Cavco Industries, Inc. (the “Company”)┬áprovided a business and operations update regarding the novel coronavirus COVID-19 (“COVID-19”) pandemic. The Company is taking actions to minimize exposure and transmission risks while continuing to serve its customers, support its suppliers and maintain a safe work environment for its employees.

As more state and local jurisdictions enact “shelter in place” or “stay at home” orders, the Company has been carefully evaluating each individual directive to determine the appropriate course of action. Based on current guidance from the Department of Homeland Security, housing construction operations are considered essential and can remain in operation during the COVID-19 pandemic. While it is not mandatory for state and local jurisdictions to follow this federal guidance, many state and local jurisdiction restrictive orders provide exceptions for sectors or industries designated to be an essential business, including residential home building.

The Company has continued to operate substantially all of its homebuilding and retail sales facilities while working to follow the COVID-19 health guidelines. In addition to health and regulatory guidelines, the Company is sensitive to the variety of factors that are involved in decisions to operate at each location, including the perspectives of employees, local communities, suppliers, retail distributors, and of course, our homebuyers.

Bill Boor, President and Chief Executive Officer said, “We believe that the Company is well positioned to execute during these uncertain times. We can adjust our production levels on a daily basis, as dictated by the evolving circumstances. We entered the current quarter with a healthy home order backlog and a strong cash position. As a result, during this challenging period, we are focusing on the responsibilities we have to our employees, customers, suppliers and communities.”

The Company has instituted a task force to make ongoing operating decisions and direct implementation of recommendations from the Centers for Disease Control, the World Health Organization and other health authorities. The Company’s manufacturing operations are generally producing homes at lower rates of production in order to operate in accordance with the added health-related guidelines. Employee policies have been adjusted accordingly to accommodate the needs of our people. Where possible, work-from-home options are in place while also allowing for workplace flexibility as needed. The Company has also suspended non-critical business travel.

Home sales order activity is being assessed on an ongoing basis. While not currently quantifiable, the Company is receiving fewer home orders from its independent distribution channels and Company-owned retail stores than would be typically expected during the spring selling period. While Company-owned stores and most independently owned sales locations are open for business, customer traffic is understandably declining. At the request of some retailers, certain home orders included in the Company’s backlog, but for which construction has not begun, have been paused and others have been canceled. The Company cannot predict the impact on housing demand or the continuation of operations at each location due to the COVID-19 situation. Generally, our wholesale customers have been positive about continuing the process of delivering homes and supportive of our efforts to continue production to meet housing needs.

The Company continues to closely communicate with its suppliers and monitor supply chain risks. The Company’s primary suppliers are domestic. The ability for suppliers to fulfill orders on behalf of the Company on pre-existing terms are dependent upon their particular circumstances including those related to the COVID-19 pandemic. Some suppliers have reduced operations and others have closed temporarily with stated plans to re-open. While the Company is adjusting to maintain supplies, as needed, some factory operations have been adversely affected and could experience further disruption. Because supply disruptions can emerge quickly, contingency plans are in place to minimize them.

Financial and Insurance service operations continue to operate as well, largely through the implementation of work-from-home solutions. This includes accepting and processing new applications as well as servicing home loans and insurance policies. The Company is complying with all state and federal regulations regarding foreclosures and is assisting customers in need due to the COVID-19 pandemic.

Mr. Boor went on to say, “I’m extremely proud of how people across the Company are demonstrating a great deal of creativity, flexibility and commitment as we continue the important work of providing affordable housing, while at the same time we are rising to the challenge of implementing necessary health practices.”

About Cavco

Cavco Industries, Inc., headquartered in Phoenix, Arizona, designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. The Company is one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments, marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Fairmont, Friendship, Chariot Eagle, Lexington and Destiny. The Company is also a leading producer of park model RVs, vacation cabins and systems-built commercial structures, as well as modular homes. Cavco’s finance subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/servicer and a Ginnie Mae mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.

Contact:

Mark Fusler – Director of Financial Reporting & Investor Relations – investor_relations@cavco.com – (602) 256-6263

Source: Cavco Industries, Inc.