Champion Homes — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Net sales increased 6.2% year-over-year to $727.0 million for the quarter ended September 26, 2026, compared to $684.4 million in the prior-year period.
• Gross profit was $185.6 million, with an adjusted gross profit margin of 25.5%.
• Earnings per diluted share (EPS) were $0.97, while adjusted EPS was $0.95.
• Net income was $52.7 million, down from the prior year period primarily due to inflationary increases in cost of sales.
• Adjusted net income was $51.9 million.
• EBITDA was $77.6 million, and adjusted EBITDA was $76.6 million, representing an adjusted EBITDA margin of 10.5%.
• Selling, general, and administrative (SG&A) expenses increased to $119.8 million from $113.1 million; adjusted SG&A increased 5.4% to $118.5 million.
• Cash and cash equivalents totaled $702.8 million as of September 26, 2026.
• The company repurchased and retired $50.0 million of common stock during the quarter.

Guidance and Future Outlook:

• Management stated results were in line with expectations and highlighted the delivery of the "New Horizon" two-story home to the National Mall for Homes on the Hill.
• The company announced a planned acquisition of Timberline Homes to drive long-term growth in its retail channel.
• The Board of Directors refreshed the share repurchase authorization in October 2026 to provide for $150.0 million of potential future repurchases.
• Backlog increased to approximately $500 million.

Business Segments and Product Lines:

• The number of U.S. homes sold increased 2.3% to 6,724 units, driven by higher production rates and increased sales from captive retail stores.
• Average selling price (ASP) per U.S. home sold increased 4.1% to $102,700 due to channel and product mix and improved price realization.
• Canadian factory-built home sales totaled 198 units, compared to 196 units in the prior year.
• The company operates 95 retail locations across the United States.
• The company operates Star Fleet Trucking, providing transportation services for the manufactured housing and other industries.

Market and Competitive Landscape:

• Management noted the team outperformed the housing market in the quarter and built meaningful order momentum.
• The company highlighted its innovative "New Horizon" product, designed for vertical construction in narrow urban infill lots with a removed second-floor chassis to meet HUD Code requirements.

Risks and Challenges:

• Inflationary increases in cost of sales were cited as a primary driver for the decrease in net income compared to the prior year.
• The press release includes standard forward-looking statement risks regarding supply-related issues, material prices and availability, trade policies, labor conditions, housing industry cyclicality, interest rates, competition, and regulatory changes.

Management Commentary and Tone:

• Tim Larson, President and CEO, stated, "We delivered strong results in our second quarter that were in line with our expectations."
• Management emphasized focused execution against strategic priorities and flawless delivery of new products.
• The tone was confident regarding the ability to outperform the market and the potential for long-term growth through retail expansion and innovation.

Other Key Points:

• The company has 46 manufacturing facilities throughout the United States and western Canada.
• Total assets were $2,136.1 million as of September 26, 2026.
• Long-term debt decreased to $12.4 million from $14.4 million at the beginning of the fiscal year.
• The company employs approximately 9,200 people.
• A conference call and webcast were scheduled for November 4, 2026, to discuss results.
• Non-GAAP financial measures, including Adjusted Gross Profit, Adjusted SG&A, Adjusted EBITDA, and Adjusted Net Income, were provided to exclude items such as water intrusion product liability remediation, transaction costs, and restructuring charges.