Cavco Industries : Annual Report Fiscal 2021

2021 Annual Report

investor.cavco.com

About Cavco Industries, Inc.

Cavco is one of the largest designers and builders of manufactured homes, modular homes, commercial buildings, park model RVs and vacation cabins. We produce and sell some of the most widely recognized brand names in the industry including Cavco Homes, Fleetwood Homes, Palm Harbor Homes, Fairmont Homes, Friendship Homes, Chariot Eagle and Destiny Homes. Standard Casualty Company offers a range of insurance products for manufactured home owners and CountryPlace Mortgage supplies a variety of homebuyer financing options.

1. Fleetwood Pacific Northwest
   WOODBURN, OR
2. Palm Harbor Northwest
   MILLERSBURG, OR
3. Fleetwood Northwest/Mountain
   NAMPA, ID
4. Fleetwood West
   RIVERSIDE, CA
5. Cavco West
   GOODYEAR, AZ
6. Durango Homes by Cavco
   PHOENIX, AZ
7. Palm Harbor Ft. Worth
   FT. WORTH, TX
8. Fleetwood Southwest
   WACO, TX
9. Palm Harbor Austin
   AUSTIN, TX

1. Cavco Homes of Texas
   SEGUIN, TX
2. Friendship Homes - I MONTEVIDEO, MN
3. Fairmont Homes
   NAPPANEE, IN
4. Fleetwood Midwest/Central
   LAFAYETTE, TN
5. Fleetwood East
   ROCKY MT., VA
6. Nationwide Homes
   MARTINSVILLE, VA
7. Destiny Homes
   MOULTRIE, GA
8. Fleetwood South
   DOUGLAS, GA
9. Chariot Eagle
   OCALA, FL
10. Palm Harbor Florida
    PLANT CITY, FL

Building	Commitment, Experience, Stability and Strength
Cavco is publicly traded on the Nasdaq Global Select Market (symbol CVCO). We are
within shorter completion times than on-site construction methods. Homes are sold
	committed to increasing the value of our shareholders' investment, providing quality,
	affordable housing to our customers and offering a rewarding work environment for
	our associates. Forbes Magazine selected Cavco as one of the 100 Best Managed
	Companies in the U.S. and the company has been listed as one of America's Best
	Small Companies. Cavco Industries is a seven time recipient of the prestigious MHI
	Manufacturer of the Year Award in recognition of its innovation, customer service and
	long-term stability.

Excellence in Innovation, Quality and Value

Cavco precision builds in controlled indoor environments at an attractive value and

Facilities	through both independent and company-owned retail centers. We offer a vast array of
styles and will custom build to home buyers' specifications. The company also designs
	models for the exclusive use of land/lease communities, subdivision developers, resort
	properties and workforce housing.
	Building Green, Energy Efficient and Sustainable Homes
	The processes and systems we utilize to build homes in our factories is inherently more
	efficient and environmentally beneficial than on-site construction methods. In addition,
	we can build homes with substantial utilization of renewable materials and high-tech
	energy saving features, and that are designed for the use of solar and wind power.

21	11
3
		12
			14
		13	15
4
5	6
	7		1617
	8

9	18
19
10

Dear Fellow Shareholders,

The extraordinary challenges of the past year demanded cohesiveness, flexibility, and commitment from everyone at Cavco. The year started with concerns about whether there would be any meaningful demand and ended with unprecedented order rates and backlogs. Initially, there were serious questions about whether we could operate at all. However, with our customers, homebuyers, and employees depending on us, leadership across the company resolved to continue all operations, as long as we could do so safely. We quickly adjusted policies and approaches to address the concerns and needs of our employees. As new information came to light and circumstances evolved, we continually reevaluated and adjusted accordingly.

How did it turn out? I am pleased to say that, against all odds, we set records for revenue and earnings, and our streak of growing both now stands at eleven straight years. Looking at the past 5 years, we have grown net revenue and net income at annualized rates of 9.2% and 21.8% respectively.

The fundamental reason for these results, both this year and over time, is our operating philosophy that has been consistent for decades. While the approaches predate almost all of us, our operational principles of local decision-making and accountability, as well as our intense focus on efficiency and cost management, are deeply ingrained in us and continue to serve us well.

In light of the challenges of fiscal year 2021, however, these results also attest to the resilience and perseverance of our people. I'm continually impressed and humbled as I observe the way the people of Cavco rise to the any occasion. That was never more evident than this year. It was certainly demonstrated in their response to COVID-19. And it again came to the forefront when the February Texas freeze personally impacted many of the same Cavco people who found ways to keep us going despite their challenges at home. Time and again, the people of Cavco do whatever it takes because we're driven to help people buy and protect homes that improve their lives.

While the pandemic could have consumed our full attention, a supportive Board of Directors, great operational leadership, and our strong balance sheet enabled us to remain focused on long-term value creation without pause or hesitation. We invested in our plants to increase capacity and product flexibility. We also made the decision to add a new park model production facility in Glendale, AZ. Now well into the development phase, this project will not only increase our park model capability, but will also improve efficiency and productivity in our Goodyear, AZ factory by focusing that operation on producing HUD-code homes. And most importantly, we made significant investments in our people through benefits improvements, increased production employee wages, and a new company-wide leadership development program that is already showing strong results.

With excessive backlogs and continuing strong order rates, we leave the year with a clear need to increase capacity and production. We expect high levels of demand to persist based on the dramatic housing deficit created by over a decade of undersupply. There will be inevitable demand cycles driven by macro-economic shifts. However, over time, more affordable housing is needed, and we intend to play an increasing role in addressing this problem in traditional markets as well as urban and suburban areas. The low-cost and environmental advantages of quality, factory-built housing solutions need to be brought to bear in these markets where manufactured housing has not traditionally been impactful. We intend to lead the way in this important work.

We have a tremendous opportunity at Cavco to pursue valuable business opportunities, and in so doing, to address one of the most pressing social issues of our time - affordable housing. We are convinced that demographics and the housing supply shortage provide the context for us to continue our growth and make a meaningful impact. It is to that end that each of our 4,700 Cavco team members contributes when they build, sell, fund, and insure someone's new home.

On behalf of everyone at Cavco, we want to thank you, our owners, for your continued confidence and support. We look forward to updating you on our progress in fiscal year 2022.

June 23, 2021

U!'ED &'A'E& &EUR'E& A!D E+HA!GE OMM&&O!

-s4in3t;n D.. 2 59

FORM K

(M-rk On1

A!!UA RE#OR' #UR&UA!' 'O &E'O! 3 OR 5(0 OF 'HE &EUR'E& E+HA!GE

A' OF 93

F;r t41 fis/-8E1-r 1n010 A

;r

'RA!&'O! RE#OR' #UR&UA!' 'O &E'O! 3 OR 5(0 OF 'HE &EUR'E&

E+HA!GE A' OF 93

F;r t41 tr-nsiti;n <1ri;0 fr;m	t;
	;mmissi;n Fi81 !Am.1r 22

AVO !DU&'RE& !.

(ED-/tn-m1 ;f r13istr-nt-s s<1/ifi10 in its /4-rt1r

D18-C-r1	52 52
(&t-t1 ;r ;t41r 6Aris0i/ti;n ;f	(.R.&. Em<8;E1r
in/;r<;r-ti;n ;r ;r3-niF-ti;n	01ntifi/-ti;n !;.

33 !;rt4 1ntr-8Av1 &t1 2

#4;1niD AriF;n- 5 2

(A00r1ss ;f 1D1/Ativ1 ;ffi/1s in/8A0in3 Fi< /;01

( 2 2523

(R13istr-nt's t181<4;n1 nAm.1r in/8A0in3 -r1- /;01

&1/Ariti1s r13ist1r10 <> t; &1/ti;n 2(. ;f t41 A/t:

'it81 ;f 1-/4 /8-ss	'r-0in3 &Em.;8	!-m1 ;f 1-/41D/4-n31 ;n
C4i/4 r13ist1r10
CAACB-HC7?D5FJ5@I9	0)	.<9(5G85E-HC7?'5F?9H&&
		(5G85E!@C65@-9@97H'5F?9H

&1/Ariti1s r13ist1r10 <> t; &1/ti;n 2(3 ;f t41 A/t: !;n1

#B8=75H96M7<97?A5F?=:H<9F9;=GHF5BH=G5K9@@?BCKBG95GCB98=GGI9F5G89:=B98=B,I@9C:H<9-97IF=H=9G7H39G(C #B8=75H96M7<97?A5F?=:H<9F9;=GHF5BH=GBCHF9EI=F98HC:=@9F9DCFHGDIFGI5BHHC-97H=CBCF-97H=CB8C:H<97H39G(C

#B8=75H96M7<97?A5F?K<9H<9FH<9F9;=GHF5BH<5G:=@985@@F9DCFHGF9EI=F98HC69:=@986M-97H=CBCF8C:H<9-97IF=H=9GL7<5B;9 7HC:8IF=B;H<9DF9798=B;ACBH<><_cfh9f01_d9f3d_c801_h3c_5h01_h3c_901_f93b_3d_ghf5bh01_k5g01_f9ei3d_f9801_hc01_3a_3d_40_901_gi73c_01_f9dcfhg08_0b_01_5b801_07_11_08_01_3c_5g01_699b01_ gi6="">97HHCGI7<:=@=B;F9EI=F9A9BHG:CFH<9D5GH85MG39G(C

#B8=75H96M7<97?A5F?K<9H<9FH<9F9;=GHF5BH<5GGI6A=HH989@97HFCB=75@@M9J9FM#BH9F57H=J95H5 =@9F9EI=F98HC69GI6A=HH98DIFGI5BHHC ,I@9C:,9;I@5H=CB-.PC:H<=G7<5DH9F8IF=B;H<9DF9798=B;ACBH<><> F9EI=F98HCGI6A=HGI7<:=@9G39G(C

#B8=75H96M7<97?A5F?K<9H<9FH<9F9;=GHF5BH=G5@5F;95779@9F5H98:=@9F5B5779@9F5H98:=@9F5BCB5779@9F5H98:=@9F5GA5@@9FF9DCFH=B; 7CAD5BMCF5B9A9F;=B;;FCKH<7CAD5BM-9989:=B=H=CBGC:@5F;95779@9F5H98:=@9F5779@9F5H98:=@9FGA5@@9FF9DCFH=B;7CAD5BM5B8 9A9F;=B;;FCKH<7CAD5BM=B,I@96C:H<9L7<5B;97H

&5F;9779@9F5H98 =@9F		779@9F5H98 =@9F
(CB5779@9F5H98 =@9F		-A5@@9F,9DCFH=B;CAD5BM
A9F;=B;!FCKH

#:5B9A9F;=B;;FCKH<7CAD5BM=B8=75H96M7<97?A5F?=:H<9F9;=GHF5BH<5G9@97H98BCHHCIG9H<99LH9B898HF5BG=H=CBD9F=C8:CF7CAD@M=B; K=H<5BMB9KCFF9J=G98:=B5B7=5@577CIBH=B;GH5B85F8GDFCJ=898DIFGI5BHHC-97H=CB5C:H<9L7<5B;97H

#B8=75H96M7<97?A5F?K<9H<9FH<9F9;=GHF5BH<5G:=@985F9DCFHCB5B85HH9GH5H=CBHC=HGA5B5;9A9BHG5GG9GGA9BHC:H<99::97H=J9B9GGC:=HG =BH9FB5@7CBHFC@CJ9F:=B5B7=5@F9DCFH=B;IB89F-97H=CB6C:H<9-5F65B9G)L@9M7H/-66MH<9F9;=GH9F98DI6@=7 577CIBH=B;:=FAH<5HDF9D5F98CF=GGI98=HG5I8=HF9DCFH

#B8=75H96M7<97?A5F?K<9H<9FH<9F9;=GHF5BH=G5G<9@@7CAD5BM5G89:=B98=B,I@96C:H<9L7<5B;97H39G(C

.<95;;F9;5H9A5F?9HJ5@I9C:H<9JCH=B;5B8BCBJCH=B;7CAACB9EI=HM<9@86MBCB5::=@=5H9G5GC:-9DH9A69F65G98CBH<97@CG=B;DF=79CBH<9(5G85E!@C65@-9@97H'5F?9HCB-9DH9A69FK5G-<5F9GC:CAACB-HC7?<9@86M957 89H9FA=B5H=CBC:5::=@=5H9GH5HIG=GBCHB979GG5F=@M57CB7@IG=J989H9FA=B5H=CB:CFCH<9FDIFDCG9G

GC:'5MG<5F9GC:H<9F9;=GHF5BHGCAACB-HC7?D5FJ5@I9K9F9CIHGH5B8=B;

DOUME!'& !OR#ORA'ED , REFERE!E

*CFH=CBGC:5J7C#B8IGHF=9G#B7G9:=B=H=J9*FCLM-H5H9A9BHF9@5H=B;HC=HGBBI5@'99H=B;C:-HC7?<_c40_89fg0b_01_k3c_3d_73c_01_3d_g01_9ld97h9801_hc01_6901_ _3a_="@98K=H<=B85MG:C@@CK=B;H<99B8C:H<9F9;=GHF5BHG:=G75@M95F9B898DF=@5F9=B7CFDCF5H986MF9:9F9B79=BHC*5FH###<9F9C:">