A North American factory-built housing company that builds manufactured and modular homes, park model RVs, and accessory dwelling units sold through its own and independent retailers. It traces back to 1953, when Walter W. Clark and Henry E. George opened a single plant in Dryden, Michigan, later merging with Skyline Corporation in 2018 to become one of the largest producers of its kind. It also runs Star Fleet Trucking and a home-financing joint venture, Champion Financing.
Gross margin fell to 25.2% as higher material costs compressed profitability, while backlog rose 39% to $421.8M on stronger orders.
Higher U.S. material costs compressed margins, pushing down 24%. rose 1.3% to $710.2 million, but contracted 1.9 points to 25.2%, driving a 24% drop in net income to $49.2 million. The manufacturing rose 39% to $421.8 million, signaling demand is returning even as profitability faces cost pressure.
Key takeaways
contracted 1.9 points to 25.2%, as higher manufacturing material input costs in the U.S. Factory-built Housing more than offset a 2.3% increase in U.S. manufacturing and retail sales.
fell 24% to $49.2 million, and declined 21.2% to $0.89, as the flowed through to the bottom line.
The manufacturing rose 39% to $421.8 million from $302.5 million a year ago, as incoming order rates exceeded production rates during the quarter — a reversal from the multi-quarter drawdown that had shrunk the backlog from a post-acquisition peak of $428 million.
Section summaries
Management's Discussion and Analysis
Q1 FY2027 net income fell 24% to $49.2M as higher U.S. material costs compressed margins, while backlog rose 39% to $421.8M.
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rose 1.3% to $710.2M, driven by a 2.3% increase in U.S. manufacturing and retail sales from higher unit volume and average selling price, partially offset by a 22.6% decline in Canadian sales due to lower demand and a plant closure.
SG&A expenses rose 6.9% to $119.0 million, driven by higher corporate costs including foreign currency transaction losses, employee severance, and stock compensation, as well as the full-period inclusion of Iseman Homes.
Cash and equivalents rose 29.6% to $784.7 million, boosted by $137.0 million in proceeds from the liquidation of the ECN Capital investment, while fell 40.1% to $14.4 million.
Canadian sales fell 22.6%, reflecting lower demand and the impact of a plant closure, partially offsetting the U.S. increase.
What changed
The drawdown that had been flagged as a concern since Q1 FY2026 reversed: the backlog rose to $421.8 million from $302.5 million a year ago, as order rates exceeded production, compared to the prior quarter's $316.0 million and the $428 million peak in Q2 FY2025.
, which had been flagged to watch for stabilization around 26%, fell further to 25.2% — its lowest Q1 level since the 18.3% water-intrusion-impacted Q4 FY2024 — as higher material costs overwhelmed the pricing gains that had supported margins in recent quarters.
The ECN Capital investment, which had been flagged as a watch item since its $143.4 million acquisition in FY2024 to launch Champion Financing, was liquidated during the quarter for $137.0 million in proceeds, removing a source of uncertainty around the captive finance joint venture.
The material weakness in internal controls at Regional Homes retail operations, flagged as an ongoing concern, was not mentioned as remediated in this filing, suggesting it persists into a third year.
What to watch
Whether the $421.8 million converts to at margins above or below the 25.2% level, and whether the higher material costs that compressed margins this quarter persist or ease.
Whether the continues to build or whether the 39% increase represents a one-quarter order increase that normalizes, particularly given the prior multi-quarter drawdown.
Whether the material weakness in internal controls at Regional Homes retail operations is remediated, or whether it persists and raises the risk of a financial restatement.
Any development on the water intrusion claims, which remain an unquantified contingent liability after multiple years of disclosure.
contracted to 25.2% from 27.1%, primarily due to higher manufacturing material input costs in the U.S. Factory-built Housing .
expenses increased 6.9% to $119.0M, driven by higher corporate costs including foreign currency transaction losses, employee severance, and stock compensation, as well as the full-period inclusion of Iseman Homes.
decreased 21.9% to $73.6M, reflecting lower from compressed gross margins.
Cash provided by investing activities swung to $126.0M from a $33.9M use, largely due to $137.0M in proceeds from the liquidation of the ECN investment.
The manufacturing grew to $421.8M from $302.5M, as order rates exceeded production rates during the quarter.
Quantitative and Qualitative Disclosures About Market Risk
For a discussion of the Company’s interest rate and foreign exchange risks, see Part II, Item 7A of the Fiscal 2026 Annual Report, under the heading "Quantitative and Qualitative Disclosures about Market Risk." There have been no significant changes in such risks since March 28,…
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For a discussion of the Company’s interest rate and foreign exchange risks, see Part II, Item 7A of the Fiscal 2026 Annual Report, under the heading "Quantitative and Qualitative Disclosures about Market Risk." There have been no significant changes in such risks since March 28, 2026.
We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims and other matters. For additional information on legal proceedings, see Note 14 “Commitments, Contingencies and…
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We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims and other matters. For additional information on legal proceedings, see Note 14 “Commitments, Contingencies and Legal Proceedings – Legal Proceedings,” to the condensed consolidated financial statements included in this Report.