CAVCO INDUSTRIES INC. [CVCO] Filings

10-Q 1 cvco-20221001.htm 10-Q cvco-20221001

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 1, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-08822

CAVCO INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Delaware

56-2405642

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3636 North Central Ave, Ste 1200

Phoenix

Arizona

85012

(Address of principal executive offices, including zip code)

(602) 256-6263

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	CVCO	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 28, 2022, 8,909,339 shares of the registrant's Common Stock, $.01 par value, were outstanding.

CAVCO INDUSTRIES, INC.

FORM 10-Q

October 1, 2022

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of October 1, 2022 (unaudited) and April 2, 2022			1
Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended October 1, 2022 and October 2, 2021			2
Consolidated Statements of Cash Flows (unaudited) for the six months ended October 1, 2022 and October 2, 2021			3
Notes to Consolidated Financial Statements (unaudited)			4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			28
Item 4. Controls and Procedures			28
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3. Not applicable
Item 4. Not applicable
Item 5. Other Information			29
Item 6. Exhibits			29
SIGNATURES			30

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

CAVCO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)


	October 1, 2022		April 2, 2022
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	333,249	$	244,150
Restricted cash, current	14,535		14,849
Accounts receivable, net	96,614		96,052
Short-term investments	16,367		20,086
Current portion of consumer loans receivable, net	18,400		20,639
Current portion of commercial loans receivable, net	32,452		32,272
Current portion of commercial loans receivable from affiliates, net	211		372
Inventories	233,965		243,971
Prepaid expenses and other current assets	73,998		71,726
Total current assets	819,791		744,117
Restricted cash	335		335
Investments	38,323		34,933
Consumer loans receivable, net	28,570		29,245
Commercial loans receivable, net	41,420		33,708
Commercial loans receivable from affiliates, net	2,022		2,214
Property, plant and equipment, net	189,968		164,016
Goodwill	100,577		100,993
Other intangibles, net	27,450		28,459
Operating lease right-of-use assets	16,210		16,952
Total assets	$	1,264,666	$	1,154,972
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	42,655	$	43,082
Accrued expenses and other current liabilities	263,396		251,088
Total current liabilities	306,051		294,170
Operating lease liabilities	12,289		13,158
Other liabilities	10,420		10,836
Deferred income taxes	6,048		5,528
Redeemable noncontrolling interest	926		825
Stockholders' equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding	—		—
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued 9,314,152 and 9,292,278 shares, respectively	93		93
Treasury stock, at cost; 404,813 and 241,773 shares, respectively	(100,000)		(61,040)
Additional paid-in capital	267,183		263,049
Retained earnings	762,474		628,756
Accumulated other comprehensive loss	(818)		(403)
Total stockholders' equity	928,932		830,455
Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	1,264,666	$	1,154,972

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Net revenue	$	577,392	$	359,543	$	1,165,730	$	689,965
Cost of sales	419,793		269,615		863,407		526,024
Gross profit	157,599		89,928		302,323		163,941
Selling, general and administrative expenses	66,894		45,372		133,030		86,204
Income from operations	90,705		44,556		169,293		77,737
Interest expense	(233)		(203)		(394)		(367)
Other income, net	2,339		4,668		3,222		7,129
Income before income taxes	92,811		49,021		172,121		84,499
Income tax expense	(18,613)		(11,338)		(38,229)		(19,770)
Net income	74,198		37,683		133,892		64,729
Less: net income attributable to redeemable noncontrolling interest	82		73		174		73
Net income attributable to Cavco common stockholders	$	74,116	$	37,610	$	133,718	$	64,656

Comprehensive income
Net income	$	74,198	$	37,683	$	133,892	$	64,729
Reclassification adjustment for securities sold	(6)		—		(6)		1
Applicable income taxes	1		—		1		—
Net change in unrealized position of investments held	(377)		(16)		(519)		(34)
Applicable income taxes	79		3		109		7
Comprehensive income	73,895		37,670		133,477		64,703
Less: comprehensive income attributable to redeemable noncontrolling interest	82		73		174		73
Comprehensive income attributable to Cavco common stockholders	$	73,813	$	37,597	$	133,303	$	64,630

Net income per share attributable to Cavco common stockholders
Basic	$	8.32	$	4.09	$	15.01	$	7.03
Diluted	$	8.25	$	4.06	$	14.88	$	6.97
Weighted average shares outstanding
Basic	8,903,703		9,190,866		8,910,933		9,194,577
Diluted	8,978,997		9,273,136		8,983,425		9,274,440

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Six Months Ended
	October 1, 2022		October 2, 2021
OPERATING ACTIVITIES
Net income	$	133,892	$	64,729
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	8,284		3,190
Provision for credit losses	(263)		(74)
Deferred income taxes	630		1,987
Stock-based compensation expense	3,525		2,417
Non-cash interest income, net	(280)		(770)
Gain on sale or retirement of property, plant and equipment, net	(25)		(41)
Gain on investments and sale of loans, net	(3,303)		(12,555)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable	(562)		(3,136)
Consumer loans receivable originated	(97,155)		(85,370)
Proceeds from sales of consumer loans	100,537		101,556
Principal payments received on consumer loans receivable	4,961		6,875
Inventories	10,006		(19,980)
Prepaid expenses and other current assets	(4,832)		993
Commercial loans receivable	(7,652)		3,331
Accounts payable and accrued expenses and other current liabilities	15,179		16,935
Net cash provided by operating activities	162,942		80,087
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(33,188)		(4,671)
Payments for acquisitions, net	—		(151,309)
Proceeds from sale of property, plant and equipment	402		53
Purchases of investments	(9,742)		(6,251)
Proceeds from sale of investments	7,595		6,133
Net cash used in investing activities	(34,933)		(156,045)
FINANCING ACTIVITIES
Payments for taxes on stock option exercises and releases of equity awards	(982)		(26)
Proceeds from exercise of stock options	1,591		2,891
Payments on finance leases and other secured financings	(393)		(1,122)
Payments for common stock repurchases	(38,960)		(20,436)
Distributions to noncontrolling interest	(480)		(180)
Net cash used in financing activities	(39,224)		(18,873)
Net increase (decrease) in cash, cash equivalents and restricted cash	88,785		(94,831)
Cash, cash equivalents and restricted cash at beginning of the fiscal year	259,334		339,307
Cash, cash equivalents and restricted cash at end of the period	$	348,119	$	244,476
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	48,027	$	19,127
Cash paid for interest	$	142	$	195
Supplemental disclosures of noncash activity
Change in GNMA loans eligible for repurchase	$	(3,286)	$	(8,830)
Right-of-use assets recognized and operating lease obligations incurred	$	1,445	$	2,205
Fair value of assets acquired under finance leases	$	—	$	7,398
Finance lease obligations incurred	$	—	$	6,043

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CAVCO INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for Quarterly Reports on Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In addition, references throughout to numbered "Notes" refer to these Notes to Consolidated Financial Statements, unless otherwise stated.

In the opinion of management, these financial statements include all adjustments, including normal recurring adjustments, that are necessary to fairly state the results for the periods presented. Certain prior period amounts have been reclassified from secured financings to accrued expenses to conform to current period classification. We have evaluated subsequent events after the balance sheet date through the date of the filing of this report with the SEC; and except for the events set forth in Note 20 of the Notes to Consolidated Financial Statements ("Notes") of the Company's Quarterly Report on Form 10-Q for the period ended October 1, 2022, there were no subsequent events requiring disclosure. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in our 2022 Annual Report on Form 10-K for the year ended April 2, 2022, filed with the SEC ("Form 10-K").

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Due to uncertainties, actual results could differ from the estimates and assumptions used in preparation of the Consolidated Financial Statements. The Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for the interim periods are not necessarily indicative of the results or cash flows for the full year. The Company operates on a 52-53 week fiscal year ending on the Saturday nearest to March 31st of each year. Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to March 31st. The current fiscal year will end on April 1, 2023 and will include 52 weeks.

We operate in two segments: (1) factory-built housing, which includes wholesale and retail factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance. We design and build a wide variety of affordable manufactured homes, modular homes and park model RVs through 26 homebuilding production lines located throughout the United States, which are sold to a network of independent distributors, community operators and residential developers and through our 42 Company-owned retail stores. The financial services segment is comprised of a finance subsidiary, CountryPlace Acceptance Corp. ("CountryPlace"), and an insurance subsidiary, Standard Casualty Company ("Standard Casualty"). CountryPlace is an approved Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac") seller/servicer and a Government National Mortgage Association ("Ginnie Mae") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Standard Casualty provides property and casualty insurance primarily to owners of manufactured homes.

During fiscal 2022, we acquired an additional 20% ownership in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively known as "Craftsman"), which gave us a controlling interest and therefore became a consolidated entity, and we purchased certain manufactured housing assets and assumed certain liabilities of The Commodore Corporation ("Commodore"). Craftsman is a manufactured home retailer with four locations in Nevada selling Company and other manufacturer branded homes. Commodore added six manufacturing facilities and two wholly-owned retail locations, and also participates in commercial lending operations with its dealers.

In addition to the below, for a description of significant accounting policies we used in the preparation of our Consolidated Financial Statements, please refer to Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K.

Table of Contents

2. Revenue from Contracts with Customers

The following table summarizes customer contract revenues disaggregated by reportable segment and source (in thousands):


	Three Months Ended				Six Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Factory-built housing
U.S. Housing and Urban Development code homes	$	496,763	$	285,947	$	1,003,946	$	548,337
Modular homes	37,236		31,386		71,574		58,003
Park model RVs	10,502		9,728		24,257		19,399
Other	15,101		15,033		32,422		28,638
	559,602		342,094		1,132,199		654,377
Financial services
Insurance agency commissions received from third-party insurance companies	1,029		850		2,426		1,723
All other sources	16,761		16,599		31,105		33,865
	17,790		17,449		33,531		35,588
	$	577,392	$	359,543	$	1,165,730	$	689,965

3. Restricted Cash

Restricted cash consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Cash related to CountryPlace customer payments to be remitted to third parties	$	13,933	$	13,857
Other restricted cash	937		1,327
	14,870		15,184
Current portion	(14,535)		(14,849)
	$	335	$	335

Corresponding amounts for customer payments to be remitted to third parties are recorded in Accounts payable.

The following table provides a reconciliation of Cash and cash equivalents and Restricted cash reported within the Consolidated Balance Sheets to the combined amounts shown in the Consolidated Statements of Cash Flows (in thousands):


	October 1, 2022		October 2, 2021
Cash and cash equivalents	$	333,249	$	224,291
Restricted cash	14,870		20,185
	$	348,119	$	244,476

Table of Contents

4. Investments

Investments consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Available-for-sale debt securities	$	19,488	$	17,760
Marketable equity securities	14,441		16,780
Non-marketable equity investments	20,761		20,479
	54,690		55,019
Less short-term investments	(16,367)		(20,086)
	$	38,323	$	34,933

Investments in marketable equity securities consist of investments in the common stock of industrial and other companies.

Our non-marketable equity investments include investments in community-based initiatives that buy and sell our homes and provide home-only financing to residents of certain manufactured home communities and other investments in manufactured housing distributors.

The amortized cost and fair value of our investments in available-for-sale debt securities, by security type are shown in the table below (in thousands):


	October 1, 2022				April 2, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Residential mortgage-backed securities	$	3,161	$	3,059	$	1,668	$	1,613
State and political subdivision debt securities	6,560		6,208		10,100		9,906
Corporate debt securities	10,802		10,221		6,502		6,241
	$	20,523	$	19,488	$	18,270	$	17,760

The amortized cost and fair value of our investments in available-for-sale debt securities, by contractual maturity, are shown in the table below (in thousands). Expected maturities differ from contractual maturities as borrowers may have the right to call or prepay obligations, with or without penalties.


	October 1, 2022
	Amortized Cost		Fair Value
Due in less than one year	$	1,443	$	1,423
Due after one year through five years	14,521		13,610
Due after five years through ten years	1,005		1,007
Due after ten years	393		389
Mortgage-backed securities	3,161		3,059
	$	20,523	$	19,488

There were no gross gains or losses realized on the sale of available-for-sale debt securities during the three and six months ended October 1, 2022 or October 2, 2021.

Table of Contents

Net investment gains and losses on marketable equity securities were as follows (in thousands):


	Three Months Ended				Six Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Marketable equity securities
Net (loss) gain recognized during the period	$	(233)	$	243	$	(2,575)	$	1,939
Less: Net loss (gain) recognized on securities sold during the period	216		(143)		290		(279)
Unrealized (loss) gain recognized during the period on securities still held	$	(17)	$	100	$	(2,285)	$	1,660

5. Inventories

Inventories consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Raw materials	$	93,358	$	95,929
Work in process	29,600		30,638
Finished goods	111,007		117,404
	$	233,965	$	243,971

6. Consumer Loans Receivable

The following table summarizes consumer loans receivable (in thousands):


	October 1, 2022		April 2, 2022
Loans held for investment, previously securitized	$	23,241	$	26,014
Loans held for investment	14,213		14,771
Loans held for sale	11,035		8,500
Construction advances	993		3,547
	49,482		52,832
Deferred financing fees and other, net	(773)		(833)
Allowance for loan losses	(1,739)		(2,115)
	46,970		49,884
Less current portion	(18,400)		(20,639)
	$	28,570	$	29,245

Table of Contents

The following table represents changes in the estimated allowance for loan losses, including related additions and deductions to the allowance for loan losses (in thousands):


	Three Months Ended				Six Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Allowance for loan losses at beginning of period	$	1,905	$	2,918	$	2,115	$	3,188
Change in estimated loan losses, net	(166)		210		(376)		(57)
Charge-offs	—		(329)		(19)		(332)
Recoveries	—		—		19		—
Allowance for loan losses at end of period	$	1,739	$	2,799	$	1,739	$	2,799

The consumer loans held for investment had the following characteristics:


	October 1, 2022		April 2, 2022
Weighted average contractual interest rate	8.3	%	8.3	%
Weighted average effective interest rate	9.0	%	9.2	%
Weighted average months to maturity	150		151

The following table is a consolidated summary of the delinquency status of the outstanding consumer loans receivable (in thousands):


	October 1, 2022		April 2, 2022
Current	$	47,539	$	49,546
31 to 60 days	336		1,202
61 to 90 days	361		41
91+ days	1,246		2,043
	$	49,482	$	52,832

The following tables disaggregate the principal value of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):


	October 1, 2022
	2023		2022		2021		2020		2019		Prior		Total
Prime- FICO score 680 and greater	$	8,596	$	1,624	$	1,064	$	2,411	$	1,265	$	19,014	$	33,974
Near Prime- FICO score 620-679	1,049		153		1,022		1,135		1,615		9,116		14,090
Sub-Prime- FICO score less than 620	—		—		20		52		—		1,173		1,245
No FICO score	—		—		—		16		25		132		173
	$	9,645	$	1,777	$	2,106	$	3,614	$	2,905	$	29,435	$	49,482

Table of Contents


	April 2, 2022
	2022		2021		2020		2019		2018		Prior		Total
Prime- FICO score 680 and greater	$	8,155	$	1,615	$	2,371	$	1,339	$	853	$	20,485	$	34,818
Near Prime- FICO score 620-679	1,661		1,274		1,413		1,976		617		9,266		16,207
Sub-Prime- FICO score less than 620	45		20		52		—		—		1,318		1,435
No FICO score	—		—		—		26		—		346		372
	$	9,861	$	2,909	$	3,836	$	3,341	$	1,470	$	31,415	$	52,832

As of October 1, 2022 and April 2, 2022, 43% and 39% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas, respectively, and 16% and 17%, respectively was concentrated in Florida. Other than Texas and Florida, no state had concentrations in excess of 10% of the outstanding principal balance of the consumer loans receivable as of October 1, 2022 or April 2, 2022.

Repossessed homes totaled approximately $375,000 and $499,000 as of October 1, 2022 and April 2, 2022, respectively, and are included in Prepaid expenses and other current assets on the Consolidated Balance Sheets. Foreclosure or similar proceedings in progress totaled approximately $605,000 and $1.1 million as of October 1, 2022 and April 2, 2022, respectively.

7. Commercial Loans Receivable

The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community operators and residential developers.

Commercial loans receivable (including from affiliates), net consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Loans receivable	$	77,345	$	69,693
Allowance for loan losses	(1,123)		(1,011)
Deferred financing fees, net	(117)		(116)
	76,105		68,566
Less current portion	(32,663)		(32,644)
	$	43,442	$	35,922

The commercial loans receivable balance had the following characteristics:


	October 1, 2022		April 2, 2022
Weighted average contractual interest rate	6.1	%	6.4	%
Weighted average months outstanding	9		9

Table of Contents

The following table represents changes in the estimated allowance for loan losses (in thousands):


	Three Months Ended				Six Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Balance at beginning of period	$	1,054	$	785	$	1,011	$	816
Change in estimated loan losses, net	69		41		112		10
Balance at end of period	$	1,123	$	826	$	1,123	$	826

Loans with indicators of potential performance problems are placed on watch list status and are subject to additional monitoring and scrutiny. Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with principal payments 90 days or more past due. As of October 1, 2022 and April 2, 2022, there were no commercial loans considered watch list or nonperforming. The following table disaggregates the principal value of our commercial loans receivable by fiscal year of origination (in thousands):


	October 1, 2022
	2023		2022		2021		2020		2019		Prior		Total
Performing	$	43,323	$	23,047	$	6,698	$	2,561	$	815	$	901	$	77,345


	April 2, 2022
	2022		2021		2020		2019		2018		Prior		Total
Performing	$	52,592	$	10,181	$	4,031	$	1,391	$	1,498	$	—	$	69,693

As of October 1, 2022, there were no commercial loans 90 days or more past due that were still accruing interest, and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance.

As of October 1, 2022 and April 2, 2022, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 19% and 25%, respectively. No other state had concentrations in excess of 10% of the outstanding principal balance of the commercial loans receivable as of October 1, 2022 or April 2, 2022.

As of October 1, 2022 and April 2, 2022, one independent third-party and its affiliates comprised 13% and 14%, respectively, of the net commercial loans receivable principal balance outstanding, all of which was secured.

8. Property, Plant and Equipment, net

Property, plant and equipment, net, consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Property, plant and equipment, at cost
Land	$	34,777	$	32,154
Buildings and improvements	142,890		100,775
Machinery and equipment	56,601		48,638
Construction in progress	12,474		29,281
	246,742		210,848
Accumulated depreciation	(56,774)		(46,832)
	$	189,968	$	164,016

Depreciation expense for the three and six months ended October 1, 2022 was $3.8 million and $7.3 million, respectively. Depreciation expense for the three and six months ended October 2, 2021 was $1.4 million and $2.9 million, respectively.

Table of Contents

9. Goodwill and Other Intangibles

Goodwill and other intangibles, net, consisted of the following (in thousands):


	October 1, 2022						April 2, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived
Goodwill	$	100,577	$	—	$	100,577	$	100,993	$	—	$	100,993
Trademarks and trade names	15,680		—		15,680		15,680		—		15,680
State insurance licenses	1,100		—		1,100		1,100		—		1,100
	117,357		—		117,357		117,773		—		117,773
Finite-lived
Customer relationships	19,500		(9,334)		10,166		19,500		(8,392)		11,108
Other	1,924		(1,420)		504		1,924		(1,353)		571
	$	138,781	$	(10,754)	$	128,027	$	139,197	$	(9,745)	$	129,452

Amortization expense recognized on intangible assets was $502,000 and $1.0 million for the three and six months ended October 1, 2022, respectively. Amortization expense recognized on intangible assets was $166,000 and $339,000 for the three and six months ended October 2, 2021, respectively.

Expected amortization for future fiscal years is as follows (in thousands):


Remainder of fiscal year	$	1,003
2024	1,339
2025	1,300
2026	1,258
2027	1,185
2028	1,079
Thereafter	3,506

During the second fiscal quarter, we finalized the purchase price allocation related to the Commodore acquisition, and recorded purchase accounting adjustments that did not have a material effect on the Consolidated Financial Statements.

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	October 1, 2022		April 2, 2022
Salaries, wages and benefits	$	55,232	$	54,172
Customer deposits	48,255