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Cavco Industries (CVCO) Class Action Suit

January 28th, 2019 Comments off

 

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The draft of the pending class action suit against Cavco Industries (CVCO) is the result of a news tip to the Daily Business News on MHProNews.

 

As regular MHProNews readers know, there are numerous law firms circling Cavco.  This report will review some key claims of the Howard G. Smith lawfirm’s attorneys, acting on behalf of CVCO shareholders in the pending suit.

Quoting from the attached draft, this report will start with – the Nature and Overview of the Plaintiffs Pending Complaint?

  1. This is a class action on behalf of persons and entities that acquired Cavco securities between August 6, 2018 and November 8, 2018, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

 

  1. On November 8, 2018, the Company revealed that it had received a subpoena from the SEC’s Division of Enforcement on August 20, 2018, requesting certain documents relating to trading in the stock of a public company, and that then-Chief Executive Officer Joseph Stegmayer had received a subpoena regarding similar issues on October 1, 2018.

 

  1. On this news, the Company’s share price fell $49.48 or over 23%, to close at $165.20 per share on November 9, 2018, on unusually heavy trading volume.

 

  1. Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company had agreed to refrain from trading the stock of public companies; (2) that, after such agreement, the Company’s CEO had engaged in the trading of the stock of public companies; (3) that such trading activities were reasonably likely to subject the Company to regulatory investigations; and (4) that, as a result of the foregoing, Defendants’ positive statements about 2 the Company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.

 

  1. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.

 

CLASS ACTION ALLEGATIONS

“(1) that the Company [Cavco] had [previously] agreed to refrain from trading the stock of public companies;

 

(2) that, after such agreement, the Company’s CEO [Joe Stegmayer] had engaged in the trading of the stock of public companies;

 

(3) that such trading activities were reasonably likely to subject the Company to regulatory investigations; and

 

(4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.

 

  1. Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors:

 

  1. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.”

 

 

Specific and Broader Take-Aways?

There are some voices in the industry’s legal community that indicate that the phrasing used above could potentially be used against some other publicly traded companies, specifically those associated with the Manufactured Housing Institute (MHI). If so, that in turn could mean MHI members who ignore the risks associated with the reports like the one linked here could be putting their shareholders at risk too.

Keep in mind that a contact at the Securities and Exchange Commissions (SEC) would neither confirm nor deny that Cavco is being investigated for possible market-rigging collusion in connection with Clayton Homes, a Berkshire Hathaway (BRK) subsidiary. Stegmayer was prior to going to Cavco, a Clayton division president. There have been persistent rumors among some HUD Code manufactured home independents and others that the move by Stegmayer to Cavco was part of a plan hatched at Clayton. But there is no documentation that has yet to be provided to MHProNews that supports such a claim. Why is that of interest?

Consider the second point from the plaintiff’s draft foundation.

Cavco purports to design and produce factory-built homes and to build park model RVs, vacation cabins and systems-built commercial structures.” Purports? Isn’t that the obvious thing that they are doing? Is the Howard G. Smith law-firm signaling that they have something more?

It should be noted that the Manufactured Housing Institute (MHI) has been characteristically mute on this developing issue. Stegmayer remains in place as the MHI Chairman.

Note too that some bloggers in the industry have attempted to white-wash the seriousness of this matter. There are those who believe that those cheerleading bloggers and ‘trade media’ are acting as a deliberate distraction mechanism from MHI and their puppet masters.

 

A contact at Cavco declined commenting about the specifics of the matter, saying to publisher L.A. ‘Tony’ Kovach “No comment sorryI appreciate the offer (to share a Cavco viewpoint). You are an honest man no matter what George [Allen] says…” It was an interesting comment, as doubtless many at the firm have been harmed, specifically if employees are also shareholders. It should be noted anew, given cheap shots from the galleries, that MHProNews follows the known facts, evidence, and the money.

The full draft legal document against Cavco is attached here.

There is speculation from a source that the draft was provided to MHProNews perhaps as a negotiation tool with Cavco, to use as leverage to quietly settle the case. MHProNews is not in a position to comment on the motivations, or lack thereof, of those who provide authentic news tips backed by evidence.

 

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There’s more on this evolving Cavco Industries (CVCO) and inter-related topic that MHProNews has obtained. In the days ahead, related reports will be published, possibly during the Louisville Show. Watch for it and sign up for the industry’s leading emailed headline news, found at the links below.

As a disclosure, MHProNews’ parent company management holds no position in any of the tracked stocks we include in our evening market report. Friday’s report is linked here. That’s MH “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” ## © (News, analysis, and commentary.)

 

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Related Reports:

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Insider Trades, New Cavco Industries Investigation, Selling – Plus More Manufactured Housing Stock Updates

 

Manufactured Home Production Decline Accelerates in November 2018

Positive, Uplifting Third-Party Reports Favor Modern Manufactured Housing, So What’s Going Wrong?

 

Manufactured Housing Institute on Cavco Industries, ex-Chairman Joe Stegmayer SEC “Debacle”

 

 

 

 

 

HUD Coders Outpace the RVers in Hall Campaign Challenge

March 28th, 2016 Comments off

rv_mh_hall_of_fame_and_useum__their_creditThe ongoing campaign challenge to eliminate the remaining $2 million debt of the RV/MH Hall of Fame and Museum, pitting the MH industry against the RV industry, with a goal of $1 million each, reveals the manufactured home industry is way ahead, $674,750 to $132,500.

Chairman and president of the Hall Darryl Searer announced the updated totals from the campaign that began 18 months ago, when Clayton Homes CEO Kevin Clayton proposed the challenge with a contribution of $200,000 over five years. He asked others in the MH industry to pitch in, and many responded, including Joseph Stegmayer, CEO of Cavco Industries who donated $50,000.

Searer’s efforts during his four years as volunteer head of the Hall has resulted in the reduction of the organization’s debt from $5.5 million to $1.2 million, taking up the challenge when few thought the Hall could survive.

Noting that the RV industry has fully recovered from the Recession and now “the RV business is booming,” Searer said, “I believe that the RV/MH Hall of Fame and Museum is a shining light for our two industries and belongs to everyone related to these two industries. We each should be proud of our beautiful facility, our history and heritage that it represents–proud enough to financially contribute to its continuing legacy.”

Thanking the board of directors, volunteers and others in the industry for their support, Searer stated when the final $1,192,750 is paid, the Hall will be self sufficient. “Income from museum admissions, gift shop sales and hosting many events at our Northern Indiana Event Center will provide the funds to operate in the black. In addition, the board of directors passed a resolution that requires any new major project or addition to our facilities will not begin until it is fully funded.”

He added, “”What we need is for a few more ‘angels’ on the RV side to step up.” ##

(Photo credit: RV/MH Hall of Fame and Museum)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

RV/MH 2016 Hall of Fame Inductees Announced

January 8th, 2016 Comments off

RV MH hall of fame in elkhart indianaThe nominating committee for the inductees into the RV/MH Hall of Fame had to narrow down a field of 72 to ten people, as MHProNews understands. The Board of Directors of the Heritage Foundation hereby presents the Class of 2016:

  • Gary Bunzer, Bunzer Consulting, 40 years as an RV training and tech specialist, Calif. and Wash. state.
  • Ernie F. Friesen, owner, All Seasons RV Center in Yuba City, and Redding RV Cener in Redding, Calif.
  • Jay C. Hesse (deceased), founder Blue Ox towbar assemblies and fifth-wheel tailgates, Nebraska.
  • Thomas R “Tim” McGuire, Coast Distribution System, first national distributor of RV accessories.
  • William “Bill” Overhulser, Del Rey Industries, in 1968 the largest producer of truck campers.
  • Ross Kinzler, retired Executive Director of the Wisconsin Manufactured Housing Association.
  • James “Jim” Miller, R-Anell Housing Group, North Carolina, and MH Industry OEM and supplier.
  • Robert Edward Richardson, Richardson Homes Corp., Indiana, MH Manufacturer, OEM, Supplier, Dealer.
  • Roland Sahm (deceased), founder Elixir Industries, Calif., RV/MH Supplier
  • Joseph H. Stegmayer, CEO Cavco Industries, Inc., Arizona, MH manufacturer.

The Class of 2016 will be officially inducted into the RV/MH Hall of Fame at the Annual Induction Dinner on Monday, August 1, 2016, in Elkhart, Indiana. ##

(Photo credit: RV/MH Hall of Fame–Heritage Foundation)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Insider Trading at Cavco Industries

December 31st, 2015 Comments off

Cavco-Wedge  cabin  rvdailyreport comIn insider trading, Chales E. Lott, president of Fleetwood Homes, a division of Cavco, Industries (CVCO), sold 1,516 shares of company stock at an average price of $95.25 per share for a transaction valued at $144,399.00. He currently owns 2,000 shares of the company with a value of $190,500, according to what putnamstandard tells MHProNews.

Additionally, Cavco CEO Joseph H. Stegmayer sold 20,000 shares of the stock at an average of $92.86 for a total transaction valued at $1,857,200. He now owns 522,248 shares of the stock with a value of $48,495,949.28.

In its last quarterly report released at the end of Oct., Cavco beat analysts’ earnings per share (EPS) estimate by $0.14 and their revenue estimate by $20 million. Revenue ws up 37.8 percent on a year-over-year basis. The company has a market cap of $756.58 million and a P/E ratio of 29.51.

Cavco is one of the largest producers of manufactured homes in the U. S. ##

(Photo credit: rvdailyreport-Cavco wedge cabin)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Cavco CEO Sells Block of Company Stock

December 2nd, 2015 Comments off

Cavco-Wedge  cabin  rvdailyreport comMHProNews has learned from analystratings the CEO and president of Cavco Industries, Inc., Joseph Stegmayer, sold shares of the company for $1.86 million. The stock climbed 48.7 percent after Stegmayer’s last sell transaction on May 21, 2012.

As MHProNews reported Oct. 30, 2015 on our daily stock report, Cavco’s stock spiked +19.15 percent, +15.85 points, to close at $98.60, following the latest quarterly earnings report Sept. 30 that the company’s net income rose to $8.1 million for Q2 2016 from $5.5 million for the comparable quarter 2015.

Revenue increased from $139.3 million in Q2 2015 to $192 million for the quarter ending Q2 2016, a gain of 37.8 percent.

Cavco stock has a 52-week high of $106.55 and a 52-week low of $64.54; the market cap is $824 million, and the P/E ratio is 32.1 percent.

Blogger coverage of the company indicates there is a 100 percent bullish tendency on the stock, as compared to a 67 percent bullish tendency within the conglomerates sector.

From its headquarters in Phoenix, Arizona, Cavco designs and produces manufactured homes as well as modular homes, park models, vacation cabins and commercial structures. ##

(Photo credit: Cavco Industries, Inc.-Wedge Cabin)

matthew-silver-daily-business-news-mhpronews-comArticle submitted  by Matthew J. Silver to Daily Business News-MHProNews.

Cavco’s Net Revenue Jumps Sharply, Gaining 37.8%

October 30th, 2015 Comments off

cavco logoFinancials for the second quarter of 2016 for Cavco Industries, Inc. (NASDAQ:CVCO) ending Sept. 26, 2015 indicate net revenue hit $192 million, an increase of 37.8 percent over the $139.3 million for the same period of 2015, as globenewswire reports. Cavco attributes the increase to the operations of two manufactured home builders –Chariot Eagle and Fairmont Homes—the company acquired during Q1 of FY 2016.

Income before taxes was $12.5 million for Q2 2016, an increase of $3.8 million over the $8.7 million for the comparable quarter last year. Net income rose from $5.5 million in the second quarter of 2015 to $8.1 million for Q2 2016.

Net income per share for Q2 2016 based on diluted shares rose from $0.61 in the comparable quarter last year to $0.89 this year.

Joseph Stegmayer, Chairman, President and CEO said, “The integrations of the recently purchased Fairmont Homes and Chariot Eagle operations are progressing as expected. The newly acquired operations are producing affordable housing solutions complementary to Cavco’s growing home product lineup while expanding our geographic footprint.

The management of Cavco will sponsor a conference call, Fri., Oct. 30, 2015 at 1 PM EDT to discuss the results.

MHProNews knows Cavco is one of the largest producers of manufactured homes as well as other offsite-built housing and buildings in the U. S. ##

(Image credit: Cavco Industries, Inc.)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

 

Cavco Industries Reports Financials for First Fiscal Quarter of 2016

August 6th, 2015 Comments off

cavco-lapsiding-manufactured-homeIn its report of first quarter 2016 financial results, Cavco Industries, Inc. (NASDAQ:CVCO) says net income per share, based on basic and diluted weighted average shares outstanding, was $0.61 and $0.60 respectively, as compared to $0.65 and $0.64 for the same quarter 2014.

According to cnnmoney, net revenue for Q1 2016 was $161.7 million, an increase of 16.2 percent over the $139.2 million reported in the comparable period of 2015. The increase is attributed to sales resulting from Cavco’s acquisitions of Chariot Eagle and Fairmont Homes this year, both of which are manufactured home (MH) producers. In addition, both Chariot and Fairmont manufacture Park Model recreational vehicles (RVs); Fairmont produces modular homes as well.

Income before taxes was $8.6 million for Q1 2016, a $0.3 million drop from the $8.9 million reported in Q1 2015, largely due to the manufactured home insurance subsidiary’s claims generated by the excessive storms in Texas. Rainfall in the first six months of 2015 was 80 percent higher than normal, marking the wettest year-to-date. Net income dropped slightly from $5.8 million in the previous year’s first quarter to $5.4 million Q1 2016.

Joseph Stegmayer, Chairman, President and Chief Executive Officer said, “We continue to be excited about the opportunities these businesses (Fairmont and Chariot) bring to our family of companies and expect future revenue and earnings growth as the integration process continues. The financial services segment’s earnings were significantly impacted this quarter by unpredictably high insurance claims activity.

Mr. Stegmayer concluded, “The Company has expanded to provide a broad range of systems-built housing solutions in most of the key market regions in the United States and Canada. Meanwhile, Cavco has maintained a solid financial structure to support continued growth. While the manufactured housing industry is still faced with challenging economic and regulatory conditions, we believe that our organization is well positioned in the current environment as well as for the longer term.

As MHProNews knows, Cavco is the second largest producer of manufactured and modular homes in the nation. ##

(Image credit: Cavco Industries, Inc.–Cavco lapsided home)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Cavco Financials show Distinguished Gain

May 22nd, 2015 Comments off

cavco-lapsiding-manufactured-homeCavco Industries, Inc. reports net revenue for the fiscal fourth quarter of 2015 was $141.2 million, an increase of 7.7 percent over the $131.2 million for the same period of 2014. For the fiscal year ending March 28, 2015, net revenue was $566.7 million, an increase of 6.2 percent over the $533.3 million for fiscal 2014.

For the fourth quarter of fiscal 2015, income before taxes rose 40 percent, from $6.5 million to $9.1 million. On the year, income before taxes rose from $27.8 in 2014 to $37.3 million for the year ending March 28, 2015.

As cnnmoney informs MHProNews, net income attributable to stockholders for the fourth quarter of fiscal 2015 was $6 million as compared to $4 million for Q4 2014. On the year, net income attributable to shareholders rose from $16.2 million year end 2014 to $23.8 million year ending March 28, 2015.

Net income per diluted share attributable to stockholders for Q4 2015 was $0.66 versus $0.47 for the same period 2014. On the year ending March 28, 2015, net income per diluted share was $2.64 versus $1.94 for the fiscal year ending March 28, 2014.

Joseph Stegmayer, Chairman, President and Chief Executive Officer said, “We are pleased to report positive results for the final quarter of this fiscal year. Although the winter quarter following the holidays typically has lower sales volume compared to the rest of the year, we experienced a more consistent rate of new home orders during this quarter than the same quarter last year. We believe this is an indication of a modestly strengthening market environment in which consumer confidence levels and employment rates have been reported as improving.

Headquartered in Phoenix, Arizona, Cavco is one of the largest producers of manufactured homes in the nation, and also manufactures park model RVs, vacation cabins and modular homes and commercial buildings. ##

(Image credit: Cavco Industries, Inc.-lapsided home)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Cavco Industries Acquires RV and Manufactured Home Producer Chariot Eagle

March 30th, 2015 Comments off

chariot_eagle_manufactured_homeAccording to rvbusiness, Phoenix-based Cavco Industries, Inc. has acquired Chariot Eagle, Inc. of Ocala, Florida, a manufacturer of Park Model recreational vehicles (RVs) and manufactured homes. This will add to Cavco’s current line of park model RVs, and extend the company’s each into the southeastern U. S.

Cavco’s CEO and President, Joseph Stegmayer, says, “We are pleased to have the opportunity to bring aboard entrepreneur Bob Holliday and his team of highly experienced people and to integrate the strong Chariot Eagle brand and family of product offerings with our own growing business. We have been patient in seeking additional growth opportunities for our park model RV and cabin businesses and believe that this acquisition will be a positive long-term strategic move for Cavco and our customers.

Holliday, who has developed a following for 30 years, will continue to serve as president, and the Chariot Eagle brand name will also continue. MHProNews was not immediately able to determine the purchase price. Cavco is one of the largest producers of off-site homes and buildings in the U. S. Forbes Magazine named it to the list of “America’s Best Small Companies 2014.” ##

(Photo credit: Chariot Eagle-manufactured home)

matthew-silver-daily-business-news-mhpronews-com   Article submitted by Matthew J. Silver to Daily Business News-MHProNews.

Cavco Industries Attempting to Acquire Skyline Corp.

September 29th, 2014 Comments off

cavco-lapsiding-manufactured-homeFollowing on the heels of Skyline Corporation’s tentative agreement to sell its recreational vehicle (RV) division to Evergreen Recreational Vehicles LLC, as MHProNews reported Sept. 26, Cavco Industries, Inc. announced that it has attempted for the past 30 days, through various channels, to open a dialogue with the Skyline board of directors about acquiring the company. The sole communication from Skyline produced a negative response according to rvbusiness.com. Cavco’s CEO and president, Joseph Stegmayer, even attended Skyline’s annual shareholders meeting in an attempt to discuss the matter.

Noting Skyline shareholders’ equity has fallen from $178 million at the beginning of 2008 to $34 million as of May 31, 2014, and the company has reported annual losses for seven consecutive years, Cavco has offered shareholders 29 percent to 66 percent above the Sept. 24 closing price of $2.71 per share. Stegmayer said, “Cavco has a great deal of respect for the Skyline brand and for Skyline’s experienced and highly credentialed board members. Unfortunately, Skyline has experienced difficult times during the past seven years and has meaningfully underperformed.” Cavco remains interested in holding talks with Skyline, a producer of manufactured and modular homes as well as rvs, suggesting that a possible transaction could occur within a relatively short time. ##

(Image credit: Cavco Industries, Inc.–lapsided manufactured home)