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Skyline Champion (SKY)

Participants
Sarah Janowicz Director of Investor Relations and External Reporting
Mark Yost President, Chief Executive Officer
Laurie Hough Executive Vice President, Chief Financial Officer
Greg Palm Craig-Hallum Capital Group
Matthew Bouley Barclays
Daniel Moore CJS
Mike Dahl RBC Capital Markets
Rohit Seth SunTrust
Colin Devine Jefferies
Call transcript
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Operator

Good morning and welcome to Skyline Champion Corporation's second quarter fiscal year 2020 earnings call. The company issued an earnings press release yesterday after the close.

I would now like to introduce your host for today's call, Sarah Janowicz, the company's Director of Investor Relations and External Reporting. Sarah, you may begin.

Sarah Janowicz

Good morning and thank you for participating in our earnings call to discuss our second quarter results.

call EVP Yost, and today's and and on Hough, Laurie CFO. me is President Mark CEO Joining

I the in would forward-looking uncertainties like Reform to release meaning and risks to the cause actual the Act remind our filings everyone made of statements this Such projections. that of during and and XXXX. uncertainties call are Securities Securities that include Commission. results Private include statements These the statements from within Litigation yesterday's and subject and could risks set factors earnings with the in forth expectations our to differ release and Exchange materially press

measures Additionally, can during in A evaluating discuss non-GAAP call, these in will performance. be be earnings the measures, can which found release. useful we we our believe of today's reconciliation

like now Mark. the call turn to over would to I

Mark Yost

flat Sarah, Adjusted merger. and our quarter compared June report point our X.X%, usage Good year XX% gross was our improvement by for improvements from year gross merger was material the margin rate shipments in quarter. that our the basis and basis revenue quarter. XX% to quarterly driven Adjusted a EBITDA run our I increase margin year-over-year The delivered for solid With synergies the and in material generation from am profit. EBITDA were stable, consolidated rationalization the compared profit sequential were costs the improvement period. we XX market, grew reaching profit was improvement $XX.X was thank adjusted and pleased full product from the point to a in a XXX ago by a strong and morning flow industry year-over-year, HUD and million quarter cash you. to EBITDA the prior everyone. soft and revenue

The economic Turning by housing supply on for demographic is price very as is affordable the and growth, manufactured market. offered homes state driven continued remain demand We both all for limited. the underlying industry the in see to factors. positive point for in while outlook we opportunity strong, the

industry happens declined expected, for lower normally which approximately HUD months in August level. X.X% the recent backlogs As at shipments year-over-year. industry soft a HUD ended volume by the are were three when

we of The June, shorter retailers in are the backlogs primary HUD destocking, market and of ended based was order delivery from are feel, Texas, on the the driver is rates Since last concentrated their which largest in their levels. year's managing industry's the country. times generally state in decrease the manufacturers'

housing from single-family off-site seeing traditional construction interest regarding market, are In we increased the builders options. broader

early responses these the educating this in are site been on traditional We stages on getting have and good opportunity. growth and term of long introducing options builders

housing for during to year-over-year We year. remainder the affordable modestly to fiscal HUD remain of are seeing improve continued the the volumes industry's expect and strong demand the

We Canadian saw second the sales quarter. driven from stability bulk volume, during our home buys by small

our efforts expect plants We housing market manage of profitable well and reduce due Western the rates fixed to have face driven short run weak effectively In performed and cycle. relatively during to conditions, market these the remain the the in for Canada will slower that Canadian term. remain housing the expenses production oil

lower ordering delivering year. earlier year-over-year. our retailers and have compared was million and to destocking the million, their XX% driven U.S. for over levels keep end inventory their patterns, of company inventory their normalized worked backlog September, have reduce $XXX to seen Overall, decreased of inventories backlog by occurred on-site At year. this setting consolidated backlog that by $XXX last September than levels the at last the

have XX%. backlogs grown Sequentially from the June quarter, consolidated

at our at quarter. the U.S. backlog plant, Although seven backlog production stood varies of weeks the average by significantly end

chain and our supply third fourth vendors. then effectively seasonal to week backlog and of expect it fiscal to manage end quarter four in schedule months second the optimal range as us the in see allows us We the normal our quarters. is production our with in at backlog slowdown typically buildup six and winter Our and the

we portfolio loans duty-to-serve of lending we secondary mature post-housing longer working recently its to for On crisis originally take front, housing will completed the are $X.X GSEs than program. securitization first the about which that of saw roll-out determined totaling transaction the in The the expect financing kind. a home toward represent market of billion manufactured chattel still

duty-to-serve. educate and Choice the on benefits our that MH of the home customers MH GSEs of We to Advantage continue part the programs are

into the customers quarter as first We with channel. builder quarter to retail the new with this well traction efforts class starting of customers. process related continues current this home with independent our as to developer in ships see expanded our our are this homes education The

We new interest about as builder well of are really long the excited from subdivisions. potential of their to term as this homes utilize these in class homes developers

which Home level. and to the homes the builder national brand, Genesis new positioned serve class of recently retailers to of is our partners needs our dedicated a We at is and launched developer

two which show January kind its in of the the in International the world. is exhibiting at Show will largest We homes be Builders in Las Vegas,

specifications One of program. models to display Genesis on required a which for Home, the will be be the will the built financing

needed affordable dwelling are innovative, the urban effective, in an or called, housing home for the ADU throughout accessory unit they will which other is country, The housing much areas. option especially an as be

our homes. We new in benefits of are excited class the this about of investment future

to know, opening we footprint expanded include the facility manufacturing you our Louisiana As of with Leesville our June. in recently

the This of result also easily in and the can of East Texas. we state as opening. plant expected, channels serve plant in the distribution As are Louisiana experiencing demand housing strong is only manufactured a the

progress production great quarter, certification plant the efforts as During we on second as made well ramp process.

first we base. customer shipped In addition, to retail our growing our homes

are three cycle capacity into run We XX-month ramp profitability months levels. full about and rate to the

include plant, floor wall excited are other tools. this the making on builds progress the and piloted which We automated about we that and initiatives at are we technology automated

utilized business. these be our facilities can from and to term part other lessons our in strategy evaluating technology and that incorporate our initiatives as of to automation also longer applied are We learned

to to the turn Laurie discuss call in over quarterly financials going now detail. our am I more to

Laurie Hough

Thanks Mark.

XX% consolidated revenue of in base. as year-ago revenue comprised declines factory-built become sales $XXX by our year-ago our As business. HUD the factory-built Canadian remained segments the compared despite softness offset expected, and million the quarter, piece the was stable quarter, current industry some shipments U.S. transportation at the in segment a The growth U.S. of and and million business our company's business Revenue the housing transportation revenue. during to in transportation the of quarter, net in in has $X.X housing XX% smaller

U.S. shift the to The same revenue in due by a U.S. revenue number homes while versus $XX,XXX was The selling sold the factory-built X%. segment of average an flat price driven increase of to year, U.S. mix. primarily in U.S. quarter by X% homes in per increase was factory-built grew product sold last

increased compared same and the fiscal XXXX the broader modest year-over-year shortfall Western homes, to million, the the to increased Canadian year mix a home we X% due remainder in at compared pricing. while prices and for the XXX in quarter period selling homes stable year $XX,XXX product homes Average $XX volume revenue by X% of in XXX revenue to in remained the to number XXXX. to housing expect market the to sold Similar of Canada, prior period. fiscal

profit increased to million gross to XX% year quarter. the in $XX prior compared up Consolidated million, $XX

XX points lower Our gross gross the up basis our sales, XX.X% margins slight curve. of margins housing U.S. quarter, June up Louisiana by Sequentially segment at year. housing that margins last material still the Leesville, from production were the were from segment's is working ramp plant through segment and XXXX net from factory-built XX.X% driven favorable XX.X% U.S. pricing

the and variable the period primarily decreased $XXX fiscal quarter-over-quarter, due a compensation last Leesville, year. higher expense offerings, million which and closed more quarter SG&A, in million million by basis triggered secondary recognized quarter the non-cash XXXX. expense during in expense. in second When of last investment equity our up the year's to same was facility due which The $XX in prior SG&A the from Louisiana the $XX.X comparable equity-based versus was million SG&A subtracting to decrease compensation provides $XX.X compensation our second of to of year

share profitability in interest equity $XX.X net share income, compared a a loss by or loss the operating or in compared reduction to an $X.XX On net expense. of we diluted million compensation increase generated in second from for was basis, and during expenses net a higher $X.XX the share year, the ago quarter. to million per driven per period the same and income Net $X.XX of income lower adjusted per $X.XX of $XX prior an year quarter in other

expenses nondeductible nondeductible transaction have been for X.X% rate. quarter's change was items, effective The a ongoing tax consistent the effective to effective the The months company's XX.X% quarter. ended was the tax three second tax rate XXXX expected and current year. related XX.X% rate tax September discrete effective these compensation is Absent rate XXXX, in tax stock an primarily effective of with rate negative for expense. rate XX, due fiscal company's the tax versus The last the would

execution a for EBITDA The earlier year's reaching margin of capture Adjusted due related same levels run combination continued on operational X.X%, to cost, adjusted year increase synergies expanded rate XXX margin an EBITDA to from fiscal quarter the XX% identified material by and largely year lower ago. points was over to basis the this $XX.X period million, last improvements. their

XXth by of during As higher same equivalents. and at generated transaction quarter $XXX million driven cash versus remains from lower $XX fiscal Cash related had steady million the operations we last margins. expenses year, the second and XXXX, September period operating XXXX of cash of

$X During revolving excess cash our the facility. quarter, pay down used of to credit we million

million result, $XX capacity XX, our XXXX. credit a of unused as under $XXX the September borrowing million of company facility As has revolving

our and We strategic facility a from strong position business our cash ample initiatives. liquidity credit added in invest that core flexibility with have to provides our

utilize to potential on identifying on expansion. including focused be strong continue areas flow acquisitions cash free to further our growth capacity organic or opportunistic We

remarks. Mark will for now it back I turn some closing to

Mark Yost

Thanks Laurie.

you and results, improve our to from performance. we continued As our operational financial see

importantly, track to the long margins continued sequential goals. progress We are and pleased we the of to continue improvements our achieve record path improvement along term our with as our in incremental more reaching

products. our on focused internal our opportunities enhance We near maintain costing well our strategies our processes as the in pricing term in and to and and as investing people, are

look solution With expect our housing their fundamentals, driven forward, demand healthy, a families. to to favorable to for and favorable Skyline financing affordable demand invest and we future of regulatory we long supported opportunities the by sustainable the by the Champion increasing as we markets continue evaluate remain customers As for and term position environments.

the you that, may with Q&A. lines operator, now open for And

Operator

[Operator Instructions].

Craig-Hallum Our with Please line of Palm first with proceed Capital question Greg the comes question. Group. your from

Greg Palm

Congrats Yes. Thanks. everyone. execution here, on really margins. morning continued Good the impressive

Mark Yost

Greg. morning Good you. Thank

Greg Palm

a environment bit. demand the with starting maybe little know, you Just

bit, think You alluded any little what softer the some bit can geographic you lease earlier maybe us about that is a then expectations like to the a outperforming? than it community And mean, land I the a being are for areas It Texas environment maybe maybe sounds tell on demand I little commentary still channel? drag. were.

Mark Yost

I No, of Yes. industry kind driven we a think thing. are was Texas demand. overall seeing

I you the as Greg, think industry, in continue quarter good actually market Overall, HUD and during fairly to we ended Texas the down three the saw saw X.X% as months for the was see August. that.

flat. Our were shipments

are So happy we there. we a are outperforming kind bit little that of

short pressure operating term we last we demand built that we mentioned also as it saw, view environment as back we And to we expected, quarter expected of last with that shorter during this that in chose quarter, term a and on that that mentioned our improvements margin. we saw normalization quarter focus And we up. kind saw inventory pricing and of the that as

the think aspect in by I that. really margin So was part driven

strong. across think August think, X% staff overall. community So I based the through up very seen demand, strong. And good Right the month placements Underlying on now, country, three channel, have surveys, we data are very demand period. I for August, through

see we underlying healthy across the country. is consumer So demand actually quite

the been now. anywhere strong country, It's weakness se. actually right no So in per real

mouth. The is, before, only to mentioned orders we as see placing we thing retailers, hand

because little No are of they nature more shipments demand, of consumer there. they very how bit because But were are lag strong, wholesale going year ago, your the just demand a they real-time. to placing orders So to concerns say, a end community underlying let's versus strong. are channel how

Greg Palm

Yes.

makes sense. That's It Okay. helpful.

big excellence, EBITDA of margins pricing so September you gross still I an expectations. the Is some how saw quarter, mean, what I are had you pressure realization, improvement? the and it in biggest some operational And even outperformed of you levers forward, Is opportunity continued going your standardization? I for the volume? ahead? mean, continued mentioned it greatly mean is

Mark Yost

there. opportunity definite still There's

all We are at the early stages that. of of

good progress. made have We

market and we of operational pressures. This chasing those kind on opposed as pricing to improvements focused the really margin enhancements quarter, with

I I that. continue a lot So is made tremendous think go that think this But kind along we will there. traction path is still there a way And of there good to quarter. we long to see to of upside

Greg Palm

would us? if probably of a guess talk any a partner? you more themselves? And commentary? recent site of I in that guess, about interesting on one, the it any Would several this? Genesis on do I be to large that sort for Do be Great. just opinion JV? include Okay. commentary want I of thoughts they much a within it's of public your do starting on all much, what's builders favorable are think this construction that way. in helpful off-site And the potential mean, that some last Could they brand you you to

Mark Yost

Yes.

take timeliness, launching the to that's I with developers help what out quarter understand solutions generate for of awareness product brand we to and affordability products the really to that of are think, there them and why in ease And Genesis builder overall. them, is IBS this there, are investing developers. two business off-site the the to will show of targeted the I for think the doing it upcoming create that demonstrate builder and

in are So in see construction I shift builder from market the a absolutely off-site think you to going developers time.

partnership. think, on definitely know depends all the form. don't any developer it's it if that Obviously, themselves. on why we that's partnerships, be the really JVs, happen. I those alliance so taking strategic customers, to And I factors. It depends action make And It could it are depends builder on

as But place more and labor I to remodeling do, doesn't as population, require the market and our in continue need as aging an that's across which utilized country, to. the as to we it's it and stock people going especially current housing see think labor to repair effectively to will be for going they to because for more allow age tightens,

the the think become to going extraordinarily extreme, labor tight I costs year. are upcoming they are in

we movement to a from So are to to we think going partner you that. I to going are developers think see the for And them builder be do off-site.

Greg Palm

the That's time good Yes. it for It Thanks sounds forward. All like luck opportunity. me. an going right. obvious and for

Mark Yost

Thanks Greg.

Operator

Thank you.

Matthew question. proceed comes your question Our from Please next Bouley with Barclays. with

Matthew Bouley

questions. morning. on Congrats quarter you the Thank well. Good taking my as for

that might So kind sight Genesis, any point it Genesis? just follow up then Do two? is in around be to the what builder Thank to kind details have with on that to maybe last incremental kind you. developer helpful. year customer? actually of next be doing around line And of maybe penetrate some of are something some just or can of orders specifics there Or the you you

Mark Yost

good morning. Matt, Yes.

unit MH MH Genesis also the that overall Advantage think we the Genesis an product It I and well is we to what towards for. the ADU built urban builder really component has as to product to that geared started specs, I both product, for largely. Choice maybe, developer think dwelling is product generate is environments have mostly or the fit some channel. which for those done But of have is that the ADU accessory

retail past and MH We MH Advantage Choice product in quarter. our this customers have to shipped

product. that generating and shipping started actually have We

past seen have quarter. small, we that, happened So of some but incremental very it's pickup this

in we there. just to of the and developer I channel, get of IBS show, the this entrance especially and awareness exposure week growth will think it coming ago generate kind out we incremental and it the as out launched into definitely builder is Genesis our brand, which a opportunity

think It's that the future. definitely in awareness be our that affordable or it's out price accessible, to a the especially to a make way industry, this can there, bring is thinking I may we recessionary partners a retail point customers it environment the definitely about. target to are and way of other a and for mean, I recessionary potential people environment bring because awareness think, So product I

land of their I long robust. that in product of with because about risk concerned a turnaround cost seen we faster a recession, think still rumors can development their advantage, our time. up builder demand period developers tying any much hear for they think capital the of are our consumer I which as on profile very a haven't side as advantageous of is is we potential And

Matthew Bouley

product Okay. well, Got seeing to Vegas that. for that it. in forward out look January. Thank you think, Yes, I I in

you the other of into not than you guys, are the hearing what out really you guess, for incremental opportunities hearing built too I just you is from is momentum build-to-rent guess the doing secondly, anything there So bit comment of rent with different kind you. REIT it's customers. push I site marketplace. gains thing Can if are Thank are you there? builders a a your different already Obviously to there, or that as

Mark Yost

Yes.

a I good channel. think that's

We are not much. hearing

just think, thought of product the kind think our in the REITs, amount the a is bread housing But really to butter geared ours. and of process out we option on I of for a with large of do toward or show it's purchase business of homebuilders type interest that. MH MH and stages beginning at accommodations with are that And going product both at I you is and see there. rental a Choice Builders this build-to-rent Advantage

strongly, really really, it the and because rental its think of and point. amenities I market features suits So price

serve a for market. it's an developers think definitely growing opportunity definitely builder that So to It's I and trend.

Matthew Bouley

there. leave ton, a Mark. it. I it right. Thanks Got All will

Mark Yost

Matt. Thanks

Operator

you. Thank

next CJS. Our with Please question. Moore with from your comes proceed Daniel question

Daniel Moore

the for Laurie, and Mark good Thanks morning. taking questions.

Laurie Hough

morning Good Dan.

Mark Yost

Dan. morning Good

Daniel Moore

this I type that in we opportunity quarter. over QX, think term the obviously, Operationally, margin. of mentioned there is gross Near And with margins I mean, is this start time. Mark, you we of to year? more saw level wanted gross sustainable as that know, rest about very I is okay. That's strong

Laurie Hough

sustainable. we Yes. expect is and fourth And the our company holiday for other normal in quarter, will the bit we then third back bounce Canada pressure shutdowns Dan, some we U.S. quarter pretty But and But Star industry. probably impacts the some in and are third margins, in we the think in will our sustainable. a November and planned generally, mentioned. see see in and which generally December, generally from also, investments of show that, maybe little fourth. Fleet than then the that IBS

Daniel Moore

in And expect? at you can the you quantify show stage, the marketing that this investment

Laurie Hough

No.

Daniel Moore

volume to too the remainder single volume you for Okay. the modest about we year not the but of growth, sort down And Or your Laurie, growth as expectations for ASPs pin of are And well? digit? that for should remainder much, year? expect think of what as low the

Mark Yost

think, growth remainder of we of Yes. kind volume mid see digits. Dan, I year, for the single the

it increase think the quarter. I as to we will fourth quarter from go third

But digits. So a will the we fourth of that average single stronger less that in third the is think it than I through. as kind and be mid the little go in

think go. up as it pick will we So I

not six kind into really they time lean want are going normalized holiday to the then or more to months that build, levels lean to down. after go the there. and until inventory December spent rebuild destocking resurge period effort, they to are And and of have to going after season to Retailers all inventories inventories stock a year

Daniel Moore

some education? it it stage? As in securitization, on finger What portfolio. first work that than was sort of things great maybe seasoned obviously this we sign, purely loans other little at the put bit your can a had talk you that's And about that we expected? taking lending, sense. longer is GSEs? is the chattel which Makes toward Or the just albeit Mark, a Is

Mark Yost

No.

timing just initiatives end November the are the I it's prompt October, and with think longer government market, we I just on here securitization firmly programs traction. beginning always of in of and issue. all at The I really not it's it's get taking think just to think a is their and

front was and there duty-to-serve to Just progressing that Congress, still weeks are there's the ago along in of still a discussion few they commitment and track.

going and than get to make just to we year, this where And just first at a today. the they it think longer I that I of little given move end done. think are take need calendar at that's

Daniel Moore

me. from last And

going? that plants? of You opportunity legacy building. terms in mentioned been capabilities has Leesville some across And or Thanks. is of in those installed of transport an of "automation" is other floor How that learning some some the and how existing it the wall of big to

Mark Yost

Yes. Thanks Dan.

what piece doing especially right But think the equipment XX-foot I production. that builds done today been, well I team normal it this type small anything of a actually. that you everything that They equipment like company takeaways no of wall really that. manufactured has couldn't big phenomenally things else. floor, be requirement learning's process rough the wall from that for doing an the gone and difference different panel, about the fact panels given more have automation have XX-foot an done for a or light-build when for load it's have does a automation to excited

by another it. of So Leesville right the out we fast can to that very and monumental some what from now ramp a would be are larger we those of of I and bit. little have like we been in a look And those to of process it I are takeaways projects few the in automation tools, final it kinks is automated think, terms I at terms seeing we and at approaching look impressed is builds the see and think dynamics. tune how would floor the encouraging. fine I that. months There But how wall and think the roll-out get then had other

Daniel Moore

you. Thank Very helpful.

Mark Yost

Thank you.

Operator

Thank you.

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

Mike Dahl

questions. my Thanks morning. Good for taking

Mark Yost

Mike. morning Good

Mike Dahl

follow-ups the Mark, for look months alluded volume to that couple year-to-date. up running implication data side. summer. on the the to accelerated think actually if at that summer a X% through have the you And I specifically is you digits, placement of I the And high-single

second higher for digit that mid is growth quarter same to and and timing the there expectations relates growth in it we as potentially fourth then prevents seeing half, the in other So placements? the lag than are really out the I or whether not volume higher a through some also because will things have choosing price the in see more be am that just pass that Just you mix the that's on been you may from see of single unit color for what your numbers, about putting you little you And pointed but that price? low anything getting seeing to thinking it's single out driven to are great. as we on would it

Mark Yost

Mike. Sure, Yes.

one clarification. Just

I ended think X% August. the for the was in three last months

So It data. year-to-date for MH necessarily. it's not is placement

kind of So go. period we comparable is rate us. type a X% seeing from nothing I stopping But it's for growth as a of think there the us

big inventory. I this normalized our was think we I and quarter, mentioned, as the we past saw rebuilt things

some you and quarter we destocked a or normalization. generation call shipments remember, flow last inventory and from if had we So we cash it of inventory expected

built quarter. So this good our up finished have inventory we back

backlog. that's went process and Backlogs up are why seeing in our of the built we some So that healthily there.

XX%. backlogs Our up are

So we environment demand healthy see quite through. are processing as orders

availability when everything and if the December depending That's and over going right. else. it's take with into I said, they take are few in those and I of down going everything them question holiday going customers those to comes in it those weeks to the of or all are last Like timing set take deals the crew else, when really if roll on January, of demand to things. the their the seasons the don't really and to know,

Mike Dahl

it. Got

have and pace My have where would and helpful as fairly and a question relates rapid the encouraging. certainly the job a picture That's expanding past guys expected. others guess second bigger of at really you margin year have done ahead I margins over we alluded to, to Okay. tremendous

the recovery months question left view, is, yet realistic in your XX made, as the recovering get we post you of progress through over already the versus margins internal to and goal XX And have still how months? would for runway what's initiatives say volumes. the that is that's next XX So can a to market that EBITDA next think the given to you XX where much

Laurie Hough

as take before, to that months, get think the might may bit because a really level. low little fruit. have be XX margins XX% our than XX it to do the can I I Mike. stated hanging Hi we have the all we around EBITDA think months, captured way the we longer

Now just time to focusing plants. that we been we about, have takes are all roll-out improvements XX operational talking on to the which

to but going see it's are that going that volume margins, to of increase slow be improvements operational EBITDA improvement. progression we So in really all in from

Mark Yost

Volume be -- improvement would

Laurie Hough

Upside.

Mike Dahl

that. to Upside

Laurie Hough

Yes.

Mike Dahl

what that's see larger or further deals to you whether done of lines? entrants deals same Okay. about, potentially have starting That's occurred. great. as encourage post And any in more And you talk Can the little far any into this? landscape you to market Mark, new recently a are mentioned last the bit securitization that along heard that one me. the lending back on from the changes the as you

Mark Yost

are new the improvements just my is, seen environment and maybe in have as existing important think because players of in Yes. lending important Mike, seeing mind in we we of even it's definitely entrants new I kind market. the the from entrants or

competition. is more There turnaround a The of level faster. are times is faster. The definitely is there responsiveness stronger engagement. So

whole think has process I the improved. chain in the

That one been mature its everybody, be that of that will was would completed, I of has thing the away. to The wonderful transparent that the it market to honest loans. went the since, portfolio that, see securitization is call just a I kind it, been has was thing first and secondary a to type caution

had agencies. rating by rated good it duration. good had It it. was the to strength So It

they So able ratings. those accomplish to were

the having will bucket And so we on loans have quite say, easier, a than it. mature portfolio doesn't that is have a getting of of time a duration newly secondary it we issuance issued maturity

there performed So is secondary well. a that market I excitement and think there is it

going is, to of I that to Freddie, new people I and kind the the okay, are look ball, and and in Fannie those batch process. are a market, we But secondary next through do think when assist in the a two, get of securitization think now, And have the secondary players rating that got their actually of at the look who they market that. you offering a other irregardless take to market started to get going step agencies Fannie now activity I and from the of to target will just also, see portfolios Freddie. current more think the loans

and will and that the I go for wait route think in Fannie they Freddie. you the see and independent to Fannie won't lenders start market So of Freddie

as got think it as good a Freddie helpful sign. But I program be would So behind and is Fannie well. it it obviously the started and

Mike Dahl

Great.

both. you Thank Okay.

Operator

Thank you.

from Seth with with comes your question question. Rohit next SunTrust. Our proceed Please

Rohit Seth

Hi. taking my Thanks for question.

On the loan was the to side? purchase, that just on clear, secondary be chattel

Mark Yost

think Yes. about Yes, was I that of that yes, XX% loans, Rohit, chattel was,

Rohit Seth

Okay. you what produced MH the was Advantage that Homes? ASP in And those the Genesis of then homes

Mark Yost

by amenity just feature and out. varies is the rolling and really It brand

are the work with to would chooses, in pricing component and garage we will through going product, features may So it's like up have customer a I But our added line it. the by HUD Builders everything show. else to they the if with say, be slightly generally generally that

price, for the with built other be and garage getting the will a amenities but you money. are which will it So raise house more

ASP to average is general higher. So be going

Rohit Seth

pipeline? have comments you do Okay. And on then the any M&A

Mark Yost

M&A always pipeline is good.

at looking always are We that.

for that anything. rush can utilize. that have we of the sheet amount say, into and sure We and we would a now, I looking just right diligence opportunities the we right are balance right not stronger do making

opportunities. looking the So kind I and right for say, diligence prudent would of

Rohit Seth

the both? on side side looking the or you are manufacturing or regional And

Mark Yost

It above. the any and all could be

Rohit Seth

have. right. That's you. I Thank all All Yes.

Operator

Instructions]. [Operator

with Phil Our your question. with comes next from Ng Please question proceed Jefferies.

Colin Devine

you the the Hi. revenues? on being how Good the any can you has you I cost developers? on the actually days, for much wanted I Like do And able early morning. you anticipate Skyline, of that's color that back just in developers? to to for this value proposition know for Can whether any along? time see And much Genesis more or pass size builder go shipments to save that how the Phil. it's It's give builder brand. quantification opportunity savings but Colin,

Mark Yost

Yes.

home value trades think average market the builder build today subcontracting I uses proposition for a the home. is, to XX the

use builders are There that varies. it sometimes subcontractors. And some XX

But those build use the average, months build subcontracting or months everything home. type on to less. generally, homes, geography, can to industry, else, across XX on multi-year few a Some of. upon XX the trades use sub-division a to take depending And months a they

it look their subcontracting I I or subcontractors. capital you call on if think essence, our employed have on improves We, the that, developer really getting multiple the returns return it into the being their all the think in if speed at weeks benefit augment, return the I eliminates the in invested in of capital replace is, and will trade. for to they builder product put able they site, overall will, and managing and challenges it, a and

all are those So, we are architect, we to the things the the the we builder, are the we of electrician, plumber, are builder.

industry So the last and somewhat over is Right this family the now I today, housing is the XX-month there. between think XX,XXX Single year. manufactured market period. is XXX,XXX units XXX,XXX starts

to ourselves sell our take and So when a broaden market retail opportunity up XXX,XXX is our unit partners for type opening the into and that really you it, horizon. look at market

a are you will So on we weeks. risk, hard a developers subdivision liquidity risk, start partners invested trades two capital and become because return large when employ with especially to about and liquidity together, mind it's them return they more on on supply capital focused one within as risk, I more as be entire are it trades, subcontracting at becomes labor they think or subdivision, hold perceived and or if can concerned challenges challenged a builder or houses other where hard really to liquidity employed and top time subcontracting opportunity, and it's stop of

Colin Devine

if move Thank Okay. of understand in order of how higher help the was much seasonality any was trends versus could And backlog, just you you. wondering acceleration sequential then your normal I that us terms from you your saw customers? Great. in

Mark Yost

saw the our I So would we in quarter. curve think, and we the backlog, just say normal demand I that during backlog saw growth that's XX%

the of half So strong, really, was, rebuilt quarter. early orders we as inventory of the and way and we in the in quarter backlog then we saw up latter the quarter built months were the demand the

good. it's So

Colin Devine

very Okay. you Great. Thank much.

Operator

appears Thank this have you. time. additional we It no at questions

Mr. comments. I additional to for floor the like concluding Yost back So or would to any over pass

Mark Yost

the Vegas we IBS opportunities. game-changing. Las the January about the is new everyone. Hopefully at you, Well, will product. we progress have the show about of Vegas to Excited It really the see see from made in you all at thank show

We the it. talk Have to soon. forward you will day. to Look very are we excited about and opportunity a great

Operator

and this participation lines today's time. this conclude disconnect does Ladies your gentlemen, you at and teleconference. you We thank your for may