Good day, ladies and gentlemen and welcome to the Cavco Industries, Inc., Second Quarter Fiscal Year 2016 Earnings Call Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instruction will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would like to introduce your host for today’s conference Mr. Joe Stegmayer, Chairman and CEO. Sir, you may begin.

Thank you, Turia and good morning everyone. Good afternoon. We’re pleased to speak to you today about our second quarter results and we’ll begin with Dan Urness, our Chief Financial Officer covering those results.

Good day, everyone. Before we begin, we respectfully remind you that certain statements made on this call either in our remarks or in our responses to questions may not be historical in nature, and therefore are considered forward-looking. All statements and comments today are made within the context of the Safe Harbor rules. All forward-looking statements are subject to risks and uncertainties many of which are beyond our control. Our actual results or performance may differ materially from anticipated results or performance. Cavco disclaims any obligation to update any forward-looking statements made on this call, and investors should not place any reliance on them. More complete information on this subject is included as part of our earnings release filed yesterday and is available on our website and from other sources. Reporting on the financial results this quarter net revenue for the second fiscal quarter was $192 million, up 38% compared to $139 million during the second quarter of fiscal year 2015. The increase was from higher sales volume from core or existing operations and a full quarter of home sales activity from the new factory operations purchase during the first quarter of fiscal 2016. Consolidated gross profit in the second fiscal quarter as a percentage of net revenue was 20.6% down from 22.7% in last year's second fiscal quarter. The decline was largely from lower gross margin homes sold during the quarter within normal product mix fluctuation. Selling, general and administrative expenses in the fiscal 2016 second quarter as a percentage of net revenue was 13.8% compared to 16.0% during the same quarter last year. The improvement was from SG&A utilization on higher sales volumes in the quarter. The effective income tax rate for the second fiscal quarter was 35.4% compared to 37.2% last year’s second quarter. The lower effective tax rate was positively impacted by adjustments arising from manufacturing specific deductions. Net income for the second fiscal quarter of 2016 was $8.1 million compared to net income of $5.5 million reported in the same quarter of the prior year. Net income per diluted share for the second quarter was $0.89 versus $0.61 during last year's second fiscal quarter. Comparing the balance sheets for September 26, 2015 to March 28, 2015 cash was approximately $93 million at the end of the second fiscal quarter compared to approximately $97 million six months earlier. The decrease was primarily from cash paid on acquisitions completed during that period, partially offset by net income and cash provided by operating activities. Most of the balance sheet account increases are mainly from the new factory transactions last quarter. Commercial loans receivable also grew from additional inventory floor plan lending activities during the period. Finally, stockholders equity grew to approximately $335 million as of September 26, 2015, up nearly $15 million from the March 28, 2015 balance. Joe that completes the financial report.

Thank you, Dan. There are few observations we would offer today. One is that new home sales U.S. have been positive so far over the past year although September's new home sales were down compared with August they were up slightly 2% from the prior year. The number of new homes sold in the U.S. priced $400,000 and above has increased 25% over the past year. However, the phase of new homes sold under $400,000 has dropped almost an 11% during the same period. We believe this is likely due to the greater challenges facing lower income households in obtaining mortgage financing and the fact that conventional builders are focusing on higher value, higher margin new home segments. Also development and construction costs put down pressure on the profitability of on-site homebuilders making the economics of lower price product much more difficult for them. Median value of a new single family detached home in U.S. is up 13.5% September 2015 compared with just one-year ago. Obviously new home prices are far outpacing inflation. Apartment rents are increasing. More millennials are entering the peak home-buying age group and a just over 500,000 new home sales annually including about 68,000 manufactured homes, the industry is operating well below its 50-year average.Building homes in a controlled environment as is our business model enables more effective use of raw materials, better and more efficient quality control, more favorable conditions for employees and other advantages all of which ultimately create a better value for the consumer. It is not the state-of-the-art or not challenges, primarily the job growth in full-time gain full employment being among them so as consumer confidence and there will certainly be seasonal swings in our business. Overall however, we remain optimistic, the demand can continue to increase in the coming years and we are well positioned to benefit from such growth and are investing in our business accordingly. With that, we will be glad to take any questions. Turia.

[Operator Instructions] Our first question comes from Daniel Moore of CJS Securities. Your line is now open.

Good afternoon.

Hi Dan.

Joe and Dan, I’m wondering if you can provide - willing to provide any additional color on how much the improvement year-over-year in revenue and in cash generation we saw was from the acquired businesses of Fairmont and Chariot Eagle versus kind of your organic improvements?

Well, I think I’d sum it up by saying that while the acquired operations certainly did contribute for the quarter, or what we might call legacy business units we had prior to those recent acquisitions were up significantly from the prior year. So I think we would have done well on our own, certainly the addition particularly of our Midwest operation, Fairmont Homes certainly aided our improvements this quarter versus last year. I’m not sure we’ll get more specific on that Dan, but as we say we could have an excellent quarter without the acquisitions.

That’s definitely helpful. And in terms of average selling price the trend had been down a bit in terms of mix ticked up again this quarter. Is there any pattern to be seen, anything you are seeing that could drive improvement going forward or is it still sort of a quarter-to-quarter phenomenon?

I think it’s the latter, I think we will continue to see some fluctuations in average selling price depending. I would say generally speaking the lower price point product still dominates we are seeing some trend modest trend of demand for more expensive larger units with more amenities, but I am not saying it’s a Ground Swell I think is - quite gradual and the lower price point product for lower income individuals and people are trying to qualified and make to get the mortgage are still predominant.

That’s helpful and switching gears a little bit financial services operating or cash flow rebounded nicely after that challenging fiscal Q1, would expectations as we move forward and what is sort of how should we think about the growth outlook in that piece of your business?

Right good point you might have brought that up and to remind those you are not on the call last time are not familiar with this week. Last quarter we did we’re impacted by the severe weather in that quarter in Texas and the result our insurance company which insures manufactured homes throughout that state and other states suffered inordinate losses. And we did not see that this quarter we saw much better claims expense in this prior quarter we just reported as a result the insurance whatever business did better has did our mortgage company. We are still seeing fluctuations from time-to-time that business there are generally kind of one-time events that sometimes good quarters and claims and sometimes we won’t, but right now for example we have some claims in Houston. So you might be might have read about some of the storm activity in the Houston area, but not nearly to the extent that we saw from the Helen and rain storms we saw in Texas earlier this year. So we don't expect nearly the impact, but as we’ve mentioned before the insurance business has been good long-term for us even just in the four years we've owned it, it’s done well and I think we can handle the ups and downs of that business with this overall to small part of total operations. The mortgage company continues to do well and we are very proud of how it’s performing. We continue to look for more sources of capital to provide personal property lending, chattel lending because that securitization market still is not open up to that product. But we still do a very good level of business in traditional land-home mortgages where the home and the land is security for the loan and we are very active in that market.

Very helpful. And Dan almost sounded apologetic regarding gross margins despite the really significant operating leverage you saw on the quarter, talk about the leverage you can pull and what are your sort of - if it’s on a goal directionally speaking with the opportunity set for gross margin as we move forward?

Well, as Joe mentioned we’ve got a fairly competitive environment that we are still operating in. The average sales prices still continue to be on the lower price point side, although we do see some increase and some demand growing for larger more monetized homes and I think that’s where our large potential is. Certainly on the home side, home-building side of the business and certainly as we are able to sell larger square footage homes with more amenities and options built into them, we can have a great respect on our gross margins. That also can be increased by volume as volume improves, we can gain production efficiencies, we have seen that in our model in the past and it’s certainly still there, so we have good operating leverage in the model as well.

Very good. And one more and I’ll jump back in queue. You mentioned the financing environment remains very tight, any updates with the potential legislation or other anything else on the horizon good, bad or otherwise that you see in terms of the general financing environment?

We’ve had some modest successes industry in that Consumer Financial Protection Bureau has adjusted some of the rules that will help our industry in lending environment. But the biggest issue we still need to address is the hope that triggers the interest rate levels, which are manufactured home loans in this industry, particularly the chattel lending, specifically the chattel lending I should say - I hope it triggers and creates presumably more liability for the lender, the investor knows in those loans and it’s not fair, it’s not right so-called unintended consequence of legislation was done during the Dodd-Frank year and we are still struggling to try to get legislative relief. We think we have gained some momentum in that regard and we are hopeful, but trying to predict what Congress might do as well beyond our capability, but the industry is making good effort to and has had good receptivity on the part of legislators to understand the problem. And these rules are only hurting the affordable home buyer. So I think you’ll stay tune on that Dan. I think we are moving in the right direction, but no great relief yet.

Good color and congrats on great quarter, I’ll jump back in queue, thank you.

Thank you.

Thank you. And at this time I’m showing no further participants in the queue. I’d like to turn the call back to the management for any closing remarks.

Well, I think that sums it up. If any of you have questions you like to ask, don’t want to ask on the conference call will obviously be available. And we look forward to talking to you in the months ahead. Good day.

Ladies and gentlemen, thank you for your participation on today's conference. This concludes your program. You may now disconnect. Everyone have a great day.