Good day, ladies and gentlemen and welcome to the Cavco Industries’ First Quarter Fiscal Year 2017 Earnings Call Webcast. At this time, all participants are in a listen-only model. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Joe Stegmayer, Chairman and CEO. Sir, you may begin.

Thank you, Shannon and welcome everyone. We’ll start with Dan Urness our Chief Financial Officer reviewing results for the quarter and we’ll be happy to answer any questions following that. Dan?

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. For complete information on the subject is included as part of our earnings release filed yesterday and is available on our website and from other sources. Net revenue for the first fiscal quarter was $185.1 million, up 14.5% compared to $161.7 million during the first quarter of fiscal year 2016. The increase was from achieving 3,395 home sales this quarter, a 17% increase from 2,902 homes during the comparable period last year. The current quarter contained one additional month of Fairmont Homes operations as Fairmont Homes was purchased by the company last year on May 01, 2015. Consolidated gross profit in the first fiscal quarter as a percentage of net revenue was 17.9%, down from 19.7% in the same period last year. The decline was primarily from higher insurance claim activity at our financial services group. As reported by numerous insurance industry participants, the 2016 spring storm season in Texas was unusually severe and included significant damage from the associated tail on wind. One of the April hailstorms was the costliest for insurance providers in the state’s history, with hail as large as 4.5 inches in diameter. 2016 hail damage in Texas has already met a…

Thank you, Dan. We were certainly pleased with the results for housing group which performed very well for the quarter. Obviously, the insurance business was a major drag on our performance and Dan pointed out very unusual claims experience even for entry as a whole this past year and particularly in the first six months of calendar year ‘16. So one might ask why be in the insurance business? And the answer is that it has been a good performing business for us since acquisition in 2011, notwithstanding this tough six months we’ve had, that business has generated returns on investment in the mid-teens. So, we can’t do much obviously about the unusual hailstorm activity, you’d think that which were very unusual, some label as one in a 150 year event. And so we certainly expect better performance for our insurance business going forward as we’ve experienced in the past. Again, housing is doing well, we are still very optimistic about the longer term for our business. Everything one reads from analyst and in the general press, certainly support the fact that entry level housing is in short-supply that conventional builders do not really see an opportunity to build entry-level housing and make money doing so. And so our folks - higher price point product generally speaking. I think the need for [indiscernible] will be there and we think again we’re very well positioned to take advantage of that over the longer term, surely short term issues including typical slowdown, we’ve seen historically in this industry during our major election cycle, the presidential election cycle, we’ll see if that holds true again this year. But we typically see the drop off in traffic during that time period. However, our traffic figures recently have been encouraging and again, we’re very optimistic about the outlook where the balance of the fiscal year for housing business. With that, Shannon, we’re happy to take any questions.

Thank you. [Operator Instructions] Our first question is from Dan Moore with CJS Securities. You may begin.

Good afternoon. This is actually Robert Magic filling in for Dan. Manufactured housing growth has accelerated up 20% year-to-date. What are the factors that’s driving that in your view? And has financing improved or is it simply a function of pent-up demand?

Well I think it’s a combination. Certainly there is we believe demand is there, again, people are looking for entry-level affordable housing. So we think that’s certainly major part of the case. Financing is generally available for people with respectable credit history, still not as robust as we’d like it to be as an industry, but there are products available FHA products, - home, traditional mortgages on manufacturing housing for the personal property lending or chattel lending, there are couple of sources available. We’d like to see more activity in that spectrum of the industry and the challenge there is if there’s really had not been a secondary market for lenders to sell chattel loans too. So as a result very few chattel lenders in the marketplace and chattel lending for those who are not familiar with it is where the home is the only security for the loan. The home might be based on private land that the owner does not want to place to lend on or they might be placed in manufacturing housing communities of various sorts throughout the country. And in those cases, the land obviously can’t be secured, home owners leasing the land and buying the home, so they do a chattel loan or personal property loan in a home. Again that part of the lending industry Robert could certainly be stronger than it is and we’re as an industry going to try and develop secondary markets for those loans.

Thank you. That was helpful. And can you tell us the organic growth in the number of homes sold during the quarter?

Say it again.

Can you tell us the organic growth in the number of homes sold during the quarter?

Well we have a 17% increase in the number of homes sold as we indicated and we also mentioned that there’s one month of Fairmont that is not comparable. So, while we didn’t break out the specific differences there, it’s only one month worth of activities specific to the Fairmont operations. And because we don’t break out factor specific operating results, we haven’t added that data, but our quarterly comparison going forward will be fully comparable for you.

Thank you. And lastly from me, is it possible to quantify the impact of unusual claims for volume during the quarter?

We have as we’ve obviously have talked about in some length here the volume, we certainly haven’t broken out the exact amount but you can see that it’s by comparison pretty significant. So no, we don’t have it broken out specifically as far as the claims in any given quarter because the claims are obviously offset by various items in any given quarter including this one just that the claims were excessive here. So we don’t have that broken out separately but this is the first time we’ve had a loss in the financial services segment and that’s been driven by the claims that we talked about.

We carry reinsurance forecast events but obviously we have an initial portion of that claims that we cover and then reinsurance covers in certain catastrophic events. So fortunately that reinsurance has proved helpful and we are receiving on a timely basis all our reimbursements from our insurance programs. But it’s just the fact that the severity was so great, in Texas alone, the in April the multiple hailstones that occurred was the costliest in Texas history and that’s almost $2 billion of insurance loss within industry. And then there was another catastrophic event during latter part of April which resulted in significant windstorm damages in Texas and neighboring states like Oklahoma. Then there was a third catastrophic event in late May which included both windstorm and some flood damages in Southeast Texas. So all these were very unusual combination of events, but as Dan said, we don’t necessarily report our losses incurred in that business in any given quarter.

And I had also mentioned Robert that we’ve got the reinsurance notes that Joe referred to included in these numbers in the quarter. There’s no drag or carryover from these events into the following quarter starting in July. And then on the upside, we certainly have – we expect to be able to raise premiums and rates going forward and that would kick in --

Thank you.

Thank you. [Operator Instructions] And I’m showing no further participants at this time. I’d like to turn the call back over to Joe Stegmayer for closing remarks.

Thank you very much Shannon. Well we’ll be available as usual to answer your questions via phone or email and we appreciate you being on the call and look forward to talk to you soon. Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day.