Cavco Industries, Inc. (NASDAQ:CVCO) Q2 2021 Earnings Conference Call - Final Transcript
Oct 30, 2020 • 01:00 pm ET
a lower revenue base, offset by decreases in legal expenses.
Also wanted to call out in the second quarter of 2021 was favorably impacted as the Company received an $800,000 insurance recovery of prior legal expenses related to the SEC inquiry, resulting in a net benefit of $300,000 compared to last year's quarter $800,000 cost. Other income, net this quarter was $1.7 million compared to $5.2 million in last year's second quarter. This decline was primarily due to a $3.4 million gain that was recorded on the sale of idle land in the prior year quarter.
Effective income tax rate remained fairly stable, 23.2% for the second fiscal quarter compared to 23.4% in the same period last year. Net income came in at $15.1 million, down 27.8% compared to net income of $20.9 million in the same quarter of the prior year. Net income per diluted share this quarter was $1.62 versus $2.25 in the last year's second quarter.
Now, I'll turn it over to Mark to cover the balance sheet.
Thanks, Paul. I'll be covering the changes in the September 26, 2020 balance sheet compared to the March 28, 2020. The cash balance was $312.2 million, up from $241.8 million six months earlier. The increase was primarily due to five areas. Net income offset by other non-cash items, changes in working capital, including higher customer deposits received as a result of higher order rates, deferral of certain payroll taxes under the CARES Act, collections on outstanding accounts receivable and consumer loans principal balances, and lower net commercial lending activity.
The current portion of consumer loans increased from a greater number of loans classified as held for sale, which are expected to be sold in the near term due to the timing of such sale. Prepaid and other assets was higher from the assets recorded in regards to the loan repurchase option for delinquent loans that have been sold to Ginnie Mae, while we are not obligated to repurchase these loans, accounting guidance requires us to record an asset and liability for the potential of a repurchase. Balance increased from the additional loans in forbearance.
Long-term consumer loans receivable decreased from principal collection on loans held for investment that were previously securitized. Accounts payable and accrued expenses and other current liabilities increased from greater payments received on consumer loans to be remitted to third parties, higher customer deposits, which have grown with factory backlogs as well as the delinquent loan repurchase option discussed above. Lastly, stockholders equity was approximately $641.2 million as of September 26, 2020, up approximately $33.6 million from March 28, 2020 balance.
And that completes the financial report.
William C. Boor
Thank you, Mark. Sydney, let's turn it over for questions.