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<SEC-DOCUMENT>0000950153-04-001296.txt : 20040524
<SEC-HEADER>0000950153-04-001296.hdr.sgml : 20040524
<ACCEPTANCE-DATETIME>20040524135420
ACCESSION NUMBER:		0000950153-04-001296
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		17
CONFORMED PERIOD OF REPORT:	20040331
FILED AS OF DATE:		20040524

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAVCO INDUSTRIES INC
		CENTRAL INDEX KEY:			0000278166
		STANDARD INDUSTRIAL CLASSIFICATION:	MOBILE HOMES [2451]
		IRS NUMBER:				860214910
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08822
		FILM NUMBER:		04826416

	BUSINESS ADDRESS:	
		STREET 1:		2728 N HARWOOD
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75201-1516
		BUSINESS PHONE:		2149815000

	MAIL ADDRESS:	
		STREET 1:		2728 N HARWOOD
		CITY:			DALLAS
		STATE:			AZ
		ZIP:			75201-1516
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>p69164e10vk.htm
<DESCRIPTION>10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES &#038; EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt">Washington, D.C. 20549
</DIV>

<P align="center" style="font-size: 18pt"><B>FORM 10-K</B>


<P align="center" style="font-size: 10pt"><FONT style="font-size:12pt"><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</B></FONT>



<P align="center" style="font-size: 10pt"><B>For the fiscal year ended March&nbsp;31, 2004</B>



<P align="center" style="font-size: 10pt"><B>Commission File Number 000-08822</B>


<P align="center" style="font-size: 24pt"><B>Cavco Industries, Inc.</B>

<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="45%" align="center"></DIV>


<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>56-2405642</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>(State of incorporation)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(IRS Employer Identification No.)</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>1001 North Central Avenue, Suite&nbsp;800</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>602-256-6263</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>Phoenix, Arizona 85004</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Registrant&#146;s telephone number</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>(Address of principal executive offices)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(including area code)</B></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">Securities registered pursuant to Section&nbsp;12(b) of the Act: None



<P align="center" style="font-size: 10pt">Securities registered pursuant to Section&nbsp;12(g) of the Act:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Title of each class
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Name on each Exchange on which registered</TD>
</TR>

<TR style="font-size: 1px">
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Common Stock, par value $0.01
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">NASDAQ National Market</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports), and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days. Yes &#091;X&#093; No &#091;&nbsp;&nbsp;&#093;



<P align="left" style="font-size: 10pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405
of Regulation&nbsp;S-K is not contained herein, and will not be contained, to the
best of registrant&#146;s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form&nbsp;10-K or any amendment to
this Form&nbsp;10-K. &#091;X&#093;



<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule&nbsp;12b-2). Yes &#091;&nbsp;&nbsp;&#093; No &#091;X&#093;



<P align="left" style="font-size: 10pt">The aggregate market value of voting stock held by non-affiliates of the
registrant, computed by reference to the closing price of such stock on the
NASDAQ National Market as of September&nbsp;30, 2003 was $66,203,035.


<P align="center" style="font-size: 10pt"><B>3,144,365<BR>
(Number of shares of common stock outstanding as of May&nbsp;19, 2004)</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC.<BR>
ANNUAL REPORT ON FORM 10-K<BR>
FOR THE FISCAL YEAR ENDED MARCH 31, 2004</B>



<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="94%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-10px"> <B>PART I</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#101">Item&nbsp;1. &nbsp;&nbsp;&nbsp;Business</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#102">Item&nbsp;2.
&nbsp;&nbsp;&nbsp;Properties</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#103">Item&nbsp;3. &nbsp;&nbsp;&nbsp;Legal Proceedings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#104">Item&nbsp;4. &nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-10px"><A href="#105"> <B>PART II</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#106">Item&nbsp;5.
&nbsp;&nbsp;&nbsp;Market for Registrant's Common Equity and Related Stockholder Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#107">Item&nbsp;6. &nbsp;&nbsp;&nbsp;Selected Financial Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#108">Item&nbsp;7. &nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#109">Item&nbsp;7A. Quantitative and Qualitative Disclosures about Market Risk</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#110">Item&nbsp;8. &nbsp;&nbsp;&nbsp;Financial Statements and Supplementary Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#111">Item&nbsp;9. &nbsp;&nbsp;&nbsp;Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#112">Item&nbsp;9A. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-10px"><A href="#113"> <B>PART III</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#114">Item&nbsp;10.
&nbsp;&nbsp;&nbsp;Directors and Executive Officers of the Registrant</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#115">Item&nbsp;11. &nbsp;&nbsp;&nbsp;Executive Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#116">Item&nbsp;12. &nbsp;&nbsp;&nbsp;Security Ownership of Certain Beneficial Owners and Management</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#117">Item&nbsp;13. &nbsp;&nbsp;&nbsp;Certain Relationships and Related Transactions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#118">Item&nbsp;14. &nbsp;&nbsp;&nbsp;Principal Accountant Fees and Services</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#119">Item&nbsp;15. &nbsp;&nbsp;&nbsp;Exhibits, Financial Statement Schedules and Reports on Form&nbsp;8-K</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:65px; text-indent:-10px"><A href="#120">Signatures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:65px; text-indent:-10px"><A href="#121">Index to Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-1</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv3w1.txt">EX-3.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv3w2.txt">Ex-3.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w2.txt">Ex-10.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w3.txt">Ex-10.3</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w4.txt">EX-10.4</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w6.txt">EX-10.6</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w7.txt">EX-10.7</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w8.txt">Ex-10.8</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w9.txt">Ex-10.9</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv10w10.txt">Ex-10.10</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv21.txt">Ex-21</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv23.txt">Ex-23</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv31w1.htm">Ex-31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv31w2.htm">EX-31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv32w1.htm">Ex-32.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p69164exv32w2.htm">EX-32.2</A></FONT></TD></TR>
</TABLE>
</DIV>


<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise indicated in the Form 10-K, &#147;Cavco,&#148; &#147;us,&#148; &#147;we,&#148; &#147;our,&#148;
&#147;the Company&#148; and similar terms refer to Cavco Industries, Inc. and its
subsidiary.


<P align="center" style="font-size: 10pt">1
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC.<BR>
ANNUAL REPORT ON FORM 10-K<BR>
FOR THE FISCAL YEAR ENDED MARCH 31, 2004</B>


<DIV align="left">
<A name="101"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 1. BUSINESS</B>



<P align="left" style="font-size: 10pt">General



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective June&nbsp;30, 2003, Cavco Industries, LLC, an indirect wholly-owned
subsidiary of Centex Corporation (&#147;Centex&#148;) and our predecessor, was merged
into Cavco Industries, Inc. and 100% of the outstanding shares of our common
stock was distributed to the stockholders of Centex. Upon this distribution,
we became a separate public company. Unless the context otherwise requires,
all financial information contained in this section gives effect to the
reorganization as if it had occurred prior to the date of such financial
information.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are the largest producer of manufactured homes in Arizona, having made
wholesale shipments of 3,646 manufactured housing units during our fiscal year
ended March&nbsp;31, 2004. We are also the 12th largest producer of manufactured
homes in the United States in terms of wholesale shipments, based on 2002 data
published by Manufactured Home Merchandiser, an industry trade publication.
Our business is vertically integrated and encompasses manufacturing and
wholesale and retail marketing and sales operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our manufactured homes are produced under various tradenames and in a
variety of floor plans and price ranges. We produce homes constructed to the
building standards promulgated by the U.S. Department of Housing and Urban
Development, or HUD, and by the International and Universal Building Codes as
well as park model homes. Our HUD code homes generally range in size from
approximately 500 to 3,000 square feet and typically include two to five
bedrooms, a living room, dining room, kitchen and two or more full bathrooms.
Most of these are multi-section homes, although we do produce a limited number
of single-section homes. Our park model homes are less than 400 square feet in
size and are purchased primarily for use as second homes, vacation homes or for
retirement living and are placed in planned communities or recreational home
parks. We also produce camping cabins and commercial structures for a variety
of purposes, including portable school classrooms, automobile and other
showrooms and offices.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently operate three manufacturing plants in the Phoenix, Arizona
area, which range in size from 79,000 to 203,000 square feet. We construct our
homes using an assembly-line process in which each section or floor is
assembled in stages. Our assembly-line process is designed to be flexible
enough to accommodate significant customization as requested by our customers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sell manufactured homes through both a network of independent dealers
and through company-owned retail outlets. As of March&nbsp;31, 2004, our products
were offered for sale through approximately 379 independent retail outlets in
17 states. A substantial majority of these independent retail outlets are
located in Arizona, California, New Mexico and Colorado. As of March&nbsp;31, 2004,
we had a total of 18 company-owned retail outlets, located primarily in Texas
and Arizona. We disposed of 8 of our company-owned retail outlets in fiscal
2004 and we expect to dispose of or close more than half of our remaining
retail outlets during the next 12&nbsp;months. We plan to dispose of or close these
retail outlets because they have generated substantial operating losses in
recent years and, as a result of weak industry conditions and adverse
legislation enacted in Texas, we do not anticipate significant improvements in
the markets in which these outlets operate in the foreseeable future. The
disposition or closure of these retail outlets will reduce future operating
losses from our retail operations and will provide cash through the liquidation
of their inventory that can be redeployed to more profitable operations. We do
not anticipate that the closure of these retail outlets will materially affect
the operations of our manufacturing segment as the majority of these outlets do
not sell products manufactured by us. See &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations &#151; Industry and
Company Outlook.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Despite a pronounced downturn in the manufactured housing industry, we
generated earnings from continuing operations before income taxes, which
primarily encompass three manufacturing plants in Arizona and our corporate
office, of $3.1&nbsp;million , $6.8&nbsp;million and $9.3&nbsp;million for fiscal 2002, 2003
and 2004, respectively. We believe that our ability to maintain the
profitability of our continuing operations during the current industry downturn
is attributable in significant part to efficient production, a high value
product line, focused sales efforts and stringent cost control.


<P align="left" style="font-size: 10pt">Industry Overview



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General. </I>Manufactured housing provides an alternative in suburban and
rural areas to other forms of new low-cost housing such as site-built housing,
panelized homes and condominiums, and to existing housing such as pre-owned
homes and apartments. According to statistics published by the National
Conference of States on Building Codes and Standards, or the NCSBCS, and the
United States Department of Commerce, Bureau of the Census, for the year ended
December&nbsp;31, 2003, manufactured housing wholesale shipments of HUD code homes
accounted for an estimated 8% of all new single-family housing starts and 11%
of all new single-family homes sold.


<P align="center" style="font-size: 10pt">2
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industry wholesale shipments of HUD code homes totaled approximately
131,000 homes in 2003, versus 168,000 homes in 2002 according to data reported
by the Manufactured Housing Institute. However, we believe that demand for
manufactured housing is significantly higher, as evidenced by the retail sale
of an estimated 90,000 repossessed homes during each of the last three years.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe the segment of the housing market in which manufactured housing
is most competitive includes consumers with household incomes under $40,000.
This segment has a high representation of young single persons and young
married couples, as well as seniors and retired persons. The comparatively low
cost of fully equipped manufactured housing attracts these consumers. Persons
in rural areas, where fewer housing alternatives exist, and those who presently
live in manufactured homes also make up a significant portion of the demand for
new manufactured housing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Current Industry Downturn. </I>The U.S. manufactured housing industry
experienced a period of substantial growth in the 1990s as total wholesale
shipments increased from 171,000 homes in 1991 to a peak of 373,000 homes in
1998 according to data reported by MHI. This growth was driven by the
introduction of new multi-section designs that appealed to a broader range of
customers and the improved availability of consumer financing, including
financing for lower-income and higher-risk borrowers. In response to the
increased demand for manufactured homes during this period, manufacturers
expanded production capacity and the number of retail locations increased.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since mid-1999, the manufactured housing industry has experienced a
prolonged and significant downturn. This downturn has resulted in part from
the fact that, beginning in 1999, consumer lenders in the sector began to
tighten underwriting standards and curtail credit availability in response to
higher than anticipated rates of loan defaults and significant losses upon the
repossession and resale of the homes securing defaulted loans. Other causes of
the downturn include a reduced number of consumer lenders in the traditional
chattel (home-only) lending sector, higher interest rates on home-only loans
and generally unfavorable economic conditions. These factors have resulted in
declining wholesale shipments, excess manufacturing and retail locations and
surplus inventory.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the foregoing factors, based on industry data, we estimate
that approximately 52% of all industry retail locations have closed since 1999
and that industry manufacturers have closed approximately 124 manufacturing
operations, representing approximately 38% of the industry&#146;s manufacturing
facilities. In addition, we estimate that inventories of new manufactured
homes in the retail marketplace declined by approximately 56% from June&nbsp;1999 to
January&nbsp;2004. These industry conditions have adversely affected the results of
operations of all of the major producers of manufactured homes, including our
company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal regional markets we have targeted have also experienced a
pronounced downturn. The number of manufactured housing units shipped in
Arizona declined approximately 48% from 1998 to 2003. Even more severe
declines were experienced in New Mexico and Texas, where the number of
manufactured housing units shipped declined approximately 77% and 76%,
respectively, during the same period.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. wholesale shipments and retail sales of manufactured homes could
continue to experience adverse conditions for the remainder of 2004 due to some
or all of the factors described above. We expect industry sales volumes to be
adversely affected until consumer and wholesale financing is more readily
available, consumer repossessions return to normal levels and retail and
wholesale inventories of new homes are reduced.


<P align="left" style="font-size: 10pt">Business Strategy



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our marketing strategy is to offer a line of manufactured homes that
appeal to a wide range of homebuyers. Our principal focus is the mainstream
market, which involves the sale of high-value homes to entry-level and move-up
buyers. We also market to special niches such as sub-division developers,
senior living community operations and vacation homebuyers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our production strategy is to develop and maintain the resources necessary
to build to varied and unique customer specifications in an efficient factory
production environment. This enables us to attract retailers and consumers who
want the flexibility to build homes to meet their specific needs, but still
seek the value created by building a home on a factory production line.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot compete based on size, as there are other larger manufacturers
with greater resources. Therefore, our competitive strategy is to build homes
of superior quality, offer innovative designs and floor plans, demonstrate
exceptional value, provide the engineering and technical resources to enable
custom home building and to be responsive and efficient in servicing the
customer after the sale. We strive to make our size a competitive advantage by
reacting more quickly to changes in the marketplace and to the specific needs
of our retailers and consumers.


<P align="center" style="font-size: 10pt">3
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">Products



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of our homes are constructed in accordance with the National
Manufactured Home Construction and Safety Standards promulgated by HUD.
Approximately 72% of the homes we produced in fiscal 2004 were HUD code homes.
The remaining homes we produce are primarily park model homes, which are
constructed to building standards approved by the American National Standards
Institute, a private, non-profit organization that administers and coordinates
a voluntary standardization and conformity program. We also produce camping
cabins and commercial structures built to state and local standards for a
variety of purposes, including portable school classrooms, retail showrooms and
offices.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We produce a broad range of HUD code homes under various trade names and
brand names and in a variety of floor plans and price ranges. Substantially
all of these homes are ranch-style homes. Our HUD code homes generally range
in size from approximately 500 to 3,000 square feet. In recent years, our
sales of larger multi-section homes has been increasing. In fiscal 2004, we
produced and sold 3,646 homes, of which 2,508 were multi-section. Included in
single-section production are park model homes, which are less than 400 square
feet in size and are purchased primarily for use as second homes, vacation
homes or retirement living and are placed in planned communities or
recreational home parks.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each home contains a living room, dining area, kitchen, one, two, three,
four or five bedrooms and one or more bathrooms, and is equipped with central
heating and hot water systems, kitchen appliances, carpeting and window
treatments. Optional equipment includes a fireplace, central air conditioning,
tile roofs, vaulted ceilings, skylights, hardwood floors and cabinetry and
energy conservation items. We also offer a variety of structural and
decorative customizations to meet the home buyer&#146;s specifications.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal 2004, our average wholesale home price for a HUD code home
was approximately $40,000, excluding delivery. Retail sales prices of our
homes, without land, generally range from $18,000 to more than $100,000,
depending upon size, floor plan, features and options.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately 90% of the homes we produce are sold in transactions
covering both the home and the land on which it is placed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The homes we manufacture are sold under a variety of registered
trademarks, including &#147;Cavco,&#148; &#147;Cavco Homes,&#148; &#147;Sunbuilt,&#148; &#147;Villager,&#148; &#147;Sun
Villa,&#148; &#147;Cedar Court,&#148; &#147;Westcourt,&#148; &#147;Winrock,&#148; &#147;Catalina,&#148; &#147;Cavco Gold Key
Guarantee,&#148; &#147;Saguara,&#148; &#147;Elite,&#148; &#147;Desert Rose,&#148; &#147;Sunburst,&#148; &#147;Cavco Cabins,&#148; &#147;AAA
Homes,&#148; &#147;Litchfield Limited,&#148; &#147;Vantage,&#148; &#147;SmartBuilt&#148; and &#147;Cavco Home Center.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our manufactured homes are constructed and equipped at our manufacturing
facilities. The finished home is then transported by independent trucking
companies either to a retail sales center or the customer&#146;s site. The
transportation cost is borne by the retailer. Retailers or other independent
installers are responsible for placing the home on site and, in certain
instances, arranging for connections to utilities and providing installation
and finish-out services. Although our manufactured homes are designed to be
transportable, only a small percentage are ever moved from their original site
after installation.


<P align="left" style="font-size: 10pt">Manufacturing Operations



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our homes are constructed in plant facilities using an assembly-line
process employing approximately 250 to 500 employees at each facility. Most of
our homes are constructed in one or more sections (also known as floors) on a
permanently affixed steel support chassis. Each section or floor is assembled
in stages beginning with the construction of the chassis, followed by the
addition of other constructed and purchased components, and ending with a final
quality control inspection. The efficiency of the assembly-line process and
the benefits of protection from weather resulting from indoor facilities enable
us to produce quality homes in less time and at a lower cost per square foot
than conventional site-built housing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently operate three manufacturing facilities in the Phoenix area.
Our manufacturing facilities range from approximately 79,000 to 203,000 square
feet of floor space. The production schedules for our manufacturing facilities
are based on wholesale and retail orders received from buyers, which fluctuate
from week to week. In general, however, our facilities operate on a one shift
per day, five and one-half days per week basis, and we currently manufacture a
typical home in approximately five to six days. As of March&nbsp;31, 2004, our
current rate of production was approximately 26 sections per day.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the industry downturn, we have closed two manufacturing
facilities since 1999. These facilities were located in Belen, New Mexico and
Seguin, Texas. In March&nbsp;2003, we transferred all of our ownership interests in
these facilities to Centex and Centex has assumed all associated obligations
and liabilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufactured housing is a regional business and the primary geographic
market for a typical manufacturing facility is within a 350-mile radius. Each
of our manufacturing facilities typically serves between 120 and 160 retailers.
Because we produce homes to fill existing wholesale and retail orders, our
manufacturing plants generally do not carry finished goods inventories, except
for homes awaiting delivery.


<P align="center" style="font-size: 10pt">4
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the total number of homes sold and the
number of manufacturing facilities operated by us for the fiscal years
indicated, excluding homes produced at idled manufacturing facilities that have
been classified as discontinued operations in our consolidated financial
statements:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Homes sold:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Single-section</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,138</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Multi-section</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total homes sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,646</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Operating manufacturing facilities at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal materials used in the production of our manufactured homes
include wood, wood products, aluminum, steel, gypsum wallboard, tires,
fiberglass insulation, carpet, vinyl, fasteners, appliances, electrical items,
windows and doors. Approximately 12% of the unit cost of our homes is
attributable to raw wood products. We buy the majority of these materials from
third-party manufacturers and distributors located in California, Texas and
Arizona. In most cases, we believe that the materials used in the production
of our homes are readily available at competitive prices from a wide variety of
suppliers. We do not believe that the loss of any single supplier would have a
material adverse effect on our business.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our backlog of orders as of March&nbsp;31, 2004 was approximately $18&nbsp;million.
Retailers may cancel orders prior to production without penalty. After
production of a particular home has commenced, the order becomes noncancelable
and the retailer is obligated to take delivery of the home. Accordingly, until
production of a particular home has commenced, we do not consider our order
backlog to be firm orders. We have, however, historically experienced only a
limited number of cancellations. Because of the seasonality of the housing
market, the level of our order backlog generally declines during the winter
months.


<P align="left" style="font-size: 10pt">Sales and Distribution



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the number of homes sold by us through
independent and company-owned distribution channels during the last three
fiscal years (excluding homes produced at idled manufacturing facilities), as
well as the number of independent retail outlets and company-owned retail
centers at the end of the applicable period:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="79%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Home sold through:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Independent retail outlets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,411</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Company-owned retail centers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">235</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total homes sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,646</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Number of independent retail outlets at the end of the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">379</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Number of company-owned retail centers at the end
of the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Independent Retailers. </I>As of March&nbsp;31, 2004, we had a network of 379
independent retail outlets, of which there were 161 in Arizona, 126 in
California, 28 in New Mexico, 26 in Colorado, 9 in Utah, 8 in Nevada, 6 in
Washington, 3 in Texas, 3 in Oregon, 2 in Idaho, 2 in Wyoming and 1 in each of
Alaska, Illinois, Indiana, Florida and Michigan. As is common in the industry,
our independent retailers typically sell manufactured homes produced by other
manufacturers in addition to those we produce. Some independent retailers
operate multiple sales outlets. In fiscal 2004, no single independent retailer
accounted for more than 5% of our manufacturing sales.


<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continually seek to increase our wholesale shipments by growing sales
at our existing independent retailers and by finding new independent retailers
to sell our homes. We provide comprehensive sales training to our retail sales
associates and bring them to our manufacturing facilities for product training
and to view new product designs as they are developed. These training seminars
facilitate the sale of our homes by increasing the skill and knowledge of the
retail sales consultants. In addition, we display our products in trade shows
and support our retailers through the distribution of floor plan literature,
brochures, decor boards and point of sale promotional material.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent retailers frequently finance a portion of their home purchases
through wholesale floor plan financing arrangements. In most cases, we receive
a deposit or a commitment from the retailer&#146;s lender for each home ordered. We
then manufacture the home and ship it at the dealer&#146;s expense. Payment is due
from the lender upon the acceptance by the retailer of the product. For a
description of wholesale floor plan financing arrangements used by independent
retailers and our obligations in connection with these arrangements, see
&#147;Financing &#151; Wholesale Financing&#148; below.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company-Owned Retail Sales Centers. </I>As of March&nbsp;31, 2004 we had a total
of 18 company-owned retail centers, of which 8 sold exclusively our homes and
the remainder sold primarily homes manufactured by other companies. Over the
next 12&nbsp;months, we plan to dispose of or close certain company-owned retail
centers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of our company-owned retail sales centers has a sales office, which
is generally a factory-built structure, and a variety of model homes of various
sizes, floor plans, features and prices. Customers may purchase a home from an
inventory of homes maintained at the location, including a model home, or may
order a home that will be built at a manufacturing facility.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our company-owned sales centers are generally located on a main road or
highway for high visibility. Model homes may be displayed in a residential
setting with sidewalks and landscaping. Each sales center usually employs a
manager and three or four
salespersons.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2004, company-owned sales centers had an average inventory
of 11 new homes per location. This number of homes in inventory includes homes
delivered to a consumer home site but not yet recorded as a sale. We
internally finance our inventories and currently have no outstanding debt.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our company-owned retail centers employ salespersons who are compensated
through a combination of salary and commission. Retail centers do not have
administrative staffs, as we perform most administrative functions at our
corporate headquarters.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Warranties. </I>We provide a limited warranty to original retail purchasers
of our homes. We warrant structural components for 12&nbsp;months. Nonstructural
components of a cosmetic nature are warranted for 120&nbsp;days, except in specific
cases where state laws require longer warranty terms. Our warranty does not
extend to installation and setup of the home, which is generally arranged by
the retailer. Appliances, carpeting, roofing and certain other components are
warranted by their original manufacturer for various lengths of time.


<P align="left" style="font-size: 10pt">Financing



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Wholesale Financing. </I>In accordance with manufactured housing industry
practice, approximately 37% of our wholesale sales are to independent retailers
who finance a portion of their home purchases through wholesale floor plan
financing arrangements. Under a typical floor plan financing arrangement, an
independent financial institution specializing in this line of business
provides the retailer with a loan for the purchase price of the home and
maintains a security interest in the home as collateral. The financial
institution customarily requires us, as the manufacturer of the home, to enter
into a separate repurchase agreement with the financial institution under which
we are obligated, upon default by the retailer and under certain other
circumstances, to repurchase the financed home at declining prices over the
term of the repurchase agreement (which in most cases is 18&nbsp;months). The price
at which we may be obligated to repurchase a home under these agreements is
based upon our original invoice price plus certain administrative and shipping
expenses. Our obligation under these repurchase agreements ceases upon the
purchase of the home by the retail customer. We estimate that our potential
obligations under such repurchase agreements were approximately $19.7&nbsp;million
as of March&nbsp;31, 2004. During fiscal 2002, 2003 and 2004, we incurred net
expenses under these repurchase agreements totaling approximately $316,000, $0
and $0, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Consumer Financing. </I>Conventional lenders provide two basic types of
consumer financing in the manufactured housing industry:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>chattel (or home-only) loans for purchasers of a home with no real
estate involved; and</TD>
</TR>

</TABLE>


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>real estate loans for purchasers of the home and the land on which
the home is placed.</TD>
</TR>


</TABLE>

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loose credit standards for home-only loans in the mid-1990s contributed to
the recent high number of industry repossessions. During the past three years,
a number of home-only lenders have exited the market. The remaining lenders
have tightened their credit standards and increased their interest rates, which
has reduced the volume of new loans.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning in the late 1990s, the number of manufactured housing purchases
financed with real estate loans has increased significantly. There are two
types of mortgage loans: conforming and non-conforming. Conforming loans
conform to requirements imposed by FHA, VA, Freddie Mac and Fannie Mae.
Generally, conforming loans require foundations installed in accordance with
specified Federal requirements and the borrower must meet certain criteria.
Non-conforming loans are financed by a major bank or lending institution which
does not require a specific foundation type and may have more flexible
criteria.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2002, Texas House Bill 1869 was enacted, amending the Texas
Manufactured Housing Standards Act to establish financing and acquisition
procedures for retailers and consumers of manufactured homes and to provide for
notification to consumers of their responsibilities before purchasing a
manufactured home. The bill required, among other things, that all manufactured
homes that are acquired with third-party financing in Texas, other than those
placed in manufactured home rental communities or on a lot that is not titled
in the name of the consumer under a deed or contract for sale, be financed with
conventional financing covering both the land and home. While this legislation
was subsequently repealed in September&nbsp;2003, chattel financing in Texas was
significantly curtailed and has not recovered.


<P align="left" style="font-size: 10pt">Competition



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The manufactured housing industry is highly competitive at both the
manufacturing and retail levels, with competition based upon several factors,
including price, product features, reputation for service and quality, depth of
field inventory, promotion, merchandising and the terms of retail customer
financing. We compete with other producers of manufactured homes, as well as
companies offering for sale homes repossessed from wholesalers or
consumers. In addition, manufactured homes compete with new and existing
site-built homes, as well as apartments, townhouses and condominiums.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to us, there are a number of other manufacturers competing for
a significant share of the manufactured housing market in the Arizona,
California and New Mexico areas, including Palm Harbor Homes, Inc., Fleetwood
Enterprises, Inc., Clayton Homes, Inc., Oakwood Homes Corporation, Champion
Enterprises, Inc., Chariot Eagle Homes and Karsten Homes. Clayton Homes, Inc.
and Oakwood Home Corporation were recently acquired by Berkshire Hathaway Inc.
We believe that our business (based on retail sales) accounted in 2003 for an
approximate 32% share of the Arizona market area, an approximate 9% share of
the New Mexico market area, an approximate 7% share of the California market
area and smaller shares of market areas in the other states in which we do
business. We do not view any of our competitors as being dominant in the
industry as a whole or the principal markets in which we compete, although a
number of our competitors possess substantially greater financial,
manufacturing, distribution and marketing resources than us.


<P align="left" style="font-size: 10pt">Government Regulation



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our manufactured homes are subject to a number of federal, state and local
laws, codes and regulations. Construction of manufactured housing is governed
by the National Manufactured Housing Construction and Safety Standards Act of
1974, as amended, or the Home Construction Act. In 1976, HUD issued regulations
under the Home Construction Act establishing comprehensive national
construction standards. The HUD regulations, known collectively as the Federal
Manufactured Home Construction and Safety Standards, cover all aspects of
manufactured home construction, including structural integrity, fire safety,
wind loads, thermal protection and ventilation. Such regulations preempt
conflicting state and local regulations on such matters, and are subject to
periodic change. Our manufacturing facilities and the plans and specifications
of our manufactured homes have been approved by a HUD-certified inspection
agency. Further, an independent HUD-certified third-party inspector regularly
reviews our manufactured homes for compliance with the HUD regulations during
construction. Failure to comply with applicable HUD regulations could expose us
to a wide variety of sanctions, including mandated closings of our
manufacturing facilities. We believe our manufactured homes are in substantial
compliance with all present HUD requirements. Our park model homes are not
subject to HUD regulations, but we believe that our park model homes meet all
present standards of the American National Standards Institute.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufactured and site-built homes are all typically built with wood
products that contain formaldehyde resins. HUD regulates the allowable
concentrations of formaldehyde in certain products used in manufactured homes
and requires manufacturers to warn purchasers as to formaldehyde-associated
risks. The Environmental Protection Agency, or EPA, and other governmental
agencies have in the past evaluated the effects of formaldehyde. We use
materials in our manufactured homes that meet HUD standards for formaldehyde
emissions and believe we comply with HUD and other applicable government
regulations in this regard.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transportation of manufactured homes on highways is subject to
regulation by various federal, state and local authorities. Such regulations
may prescribe size and road use limitations and impose lower than normal speed
limits and various other requirements.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have leased space for our manufacturing facility in Goodyear, Arizona
from the Loral Corporation (and Loral&#146;s successor-in-interest Lockheed Martin
Corporation) since 1993. The leased premises are part of what is referred to as
the South Site of the Phoenix Goodyear Airport Superfund Site, which was
designated as a National Priorities List, or NPL, site under the authority of
the Comprehensive Environmental Response, Compensation, and Liability Act in
1983. The reason for the site&#146;s NPL designation was because of extensive soil
and groundwater contamination (trichloroethylene or TCE, chromium and cadmium)
that resulted from historic manufacturing activities of the Goodyear Tire and
Rubber Company and the Department of Defense.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The South Site of the Phoenix Goodyear Airport Superfund Site is being
investigated and remediated by the Goodyear Tire and Rubber Company and
Lockheed Martin Corporation pursuant to a consent decree executed with the
United States Environmental Protection Agency, or EPA. In 1999, the Goodyear
Tire and Rubber Company completed its cleanup of contaminated soils. Since
then, its efforts have focused on pumping and treating contaminated
groundwater. Although health exposure concerns have been raised by former
employees of the Unidynamics Corporation who worked on the North Site of the
Phoenix Goodyear Airport Superfund Site, the State of Arizona determined in
2000 that there is &#147;no apparent public health hazard&#148; associated with the North
Site. Similar concerns have not been raised with respect to the South Site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our lease with Lockheed Martin Corporation specifically refers to the
consent decree with the EPA and provides that as between Lockheed Martin
Corporation and us, Lockheed Martin Corporation will be responsible for any
liabilities resulting from the existing contamination at the site and that
Lockheed Martin Corporation will indemnify us for such liabilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the eleven years that we have conducted manufacturing operations at
the Goodyear, Arizona facility, we have never received any inquiry or notice
from the EPA or the Arizona Department of Environmental Quality suggesting that
we may be liable for any costs associated with the remediation or investigation
of the site. We do not have any underground storage tanks at our Goodyear,
Arizona facility.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our manufactured homes are subject to local zoning and housing
regulations. In certain cities and counties in areas where our homes are sold,
local governmental ordinances and regulations have been enacted which restrict
the placement of manufactured homes on privately-owned land or which require
the placement of manufactured homes in manufactured home communities. Such
ordinances and regulations may adversely affect our ability to sell homes for
installation in communities where they are in effect.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A number of states have adopted procedures governing the installation of
manufactured homes. Utility connections are subject to state and local
regulations which must be complied with by the retailer or other person
installing the home.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain warranties we issue may be subject to the Magnuson-Moss Warranty
Federal Trade Commission Improvement Act, which regulates the descriptions of
warranties on consumer products. In the case of warranties subject to the
Magnuson-Moss Warranty Act, the Company is subject to a number of additional
regulatory requirements. For example, warranties that are subject to the act
must be included in a single easy-to-read document that is generally made
available prior to purchase. The act also prohibits certain attempts to
disclaim or modify implied warranties and the use of deceptive or misleading
terms. A claim for a violation of the act can be the subject of an action in
federal court in which consumers may be able to recover attorneys&#146; fees. The
description and substance of our warranties are also subject to a variety of
state laws and regulations. A number of states, including Arizona and New
Mexico, require manufactured home producers to post bonds to ensure the
satisfaction of consumer warranty claims.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governmental authorities have the power to enforce compliance with their
regulations, and violations may result in the payment of fines, the entry of
injunctions or both. Although we believe that our operations are in substantial
compliance with the requirements of all applicable laws and regulations, these
requirements have generally become more strict in recent years. Accordingly, we
are unable to predict the ultimate cost of compliance with environmental laws
and enforcement policies.


<P align="left" style="font-size: 10pt">Employees



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2004, we had approximately 1,200 employees. None of our
employees are represented by a labor union. We have not experienced any
labor-related work stoppages and believe that our relationship with our
employees is good.


<P align="left" style="font-size: 10pt">Risk Factors



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The ownership of our common stock involves a number of risks and
uncertainties. You should carefully consider the following risks, together
with the information provided elsewhere in this Annual Report. The risks
described below are not the only ones facing us. Additional risks that are
currently unknown to us or that we currently consider to be immaterial may also
impair our business or adversely affect our financial condition or results of
operations.</I>


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<P align="left" style="font-size: 10pt">Risks Related to Our Business



<P align="left" style="font-size: 10pt"><B><I>We have incurred net losses in prior periods and there can be no assurance that
we will generate income in the future</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we generated income from continuing operations during the past
three fiscal years, we incurred net losses of $27.3&nbsp;million, $1.4&nbsp;million and
$4.5&nbsp;million in fiscal 2001, 2002 and 2003, respectively. The loss for fiscal
2001 reflected, among other things, write-offs of $9.5&nbsp;million of goodwill
related to the acquisition of our retail operations, charges of $6.5&nbsp;million
related to the idling of manufacturing facilities in Texas and New Mexico, a
write-down of $1.5&nbsp;million related to retail inventories and goodwill
amortization of $3.4&nbsp;million. The loss for fiscal 2003 reflected, among other
things, a $2.7&nbsp;million write-down of the value of property, plant and equipment
of our retail operations, a $2.2&nbsp;million charge to write down the value of our
Texas manufacturing facility and a $2.2&nbsp;million charge to write down retail
inventories. The net losses for these years were attributable in substantial
part to the recent downturn affecting the manufactured housing industry, which
is discussed in detail below. The likelihood that we will generate net income
in the future must be considered in light of the difficulties facing the
manufactured housing industry as a whole, as well as the competitive
environment in which we operate and the other risks and uncertainties discussed
in this Annual Report. There can be no assurance that we will generate net
income in the future.


<P align="left" style="font-size: 10pt"><B><I>We operate in an industry that is currently experiencing a prolonged and
significant downturn</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since mid-1999, the manufactured housing industry has experienced a
prolonged and significant downturn. This downturn has resulted in part from
the fact that, beginning in 1999, consumer lenders in the sector began to
tighten underwriting standards and curtail credit availability in response to
higher than anticipated rates of loan defaults and significant losses upon the
repossession and resale of homes securing defaulted loans. Other causes of the
downturn include a reduced number of consumer lenders in the traditional
chattel (home-only) lending sector, higher interest rates on home-only loans
and generally unfavorable economic
conditions. These factors have resulted in declining wholesale shipments,
excess manufacturing and retail locations and surplus inventory.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the foregoing factors, based on industry data, we estimate
that approximately 52% of all industry retail locations have closed since 1999
and that industry manufacturers have closed approximately 124 manufacturing
facilities, representing approximately 38% of the industry&#146;s manufacturing
facilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect that the current industry downturn is likely to continue, at
least in the near term. The availability of consumer financing for the
purchase of manufactured homes continues to be constrained, as discussed below.
In addition, the large number of repossessed homes being offered for sale
continues to have an adverse impact on demand for new manufactured homes.
Although it is difficult to predict future industry conditions, these factors
tend to indicate that a sustained recovery in the manufactured housing industry
is unlikely to occur in the near term.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the current industry downturn gets materially worse, we may incur
operating and net losses, and may be required to take steps in an attempt to
mitigate the effect of unfavorable industry conditions, such as the closure of
facilities or consolidation of existing operations. These steps could impair
our ability to conduct our business in a manner consistent with past practice
and could make it more difficult for us to expand our operations if and when
industry conditions improve. Furthermore, some of these steps could lead to
fixed asset impairment charges and goodwill impairment charges.


<P align="left" style="font-size: 10pt"><B><I>A write-off of all or part of our goodwill could adversely affect our operating
results and net worth</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A substantial portion of our total assets at March&nbsp;31, 2004 consisted of
goodwill, all of which is attributable to our manufacturing operations. In
particular, goodwill, net of accumulated amortization, accounted for
approximately 52% of our total assets at March&nbsp;31, 2004. Effective in fiscal
2002, we adopted Statement of Financial Accounting Standards No.&nbsp;142, Goodwill
and Other Intangible Assets. As a result, we no longer amortize goodwill.
Instead, we review goodwill at least annually to determine whether it has
become impaired. If goodwill has become impaired, we charge the impairment as
an expense in the period in which the impairment occurred. See &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations &#151;
Critical Accounting Policies&#148; and Note 1 to our consolidated financial
statements. Our goodwill could be impaired if developments affecting our
manufacturing operations or the markets in which we produce manufactured homes
lead us to conclude that the cash flows we expect to derive from our
manufacturing operations will be substantially reduced. A write off of all or
part of our goodwill could adversely affect our results of operations and
financial condition.


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<P align="left" style="font-size: 10pt"><B><I>The cyclical nature of the manufactured housing industry causes our revenues
and operating results to fluctuate, and we expect this cyclicality to continue
in the future</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The manufactured housing industry is highly cyclical and is influenced by
many national and regional economic and demographic factors, including:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
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    <TD width="1%">&nbsp;</TD>
    <TD>the availability of consumer financing for homebuyers;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability of wholesale financing for retailers;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>consumer confidence;</TD>
</TR>

</TABLE>


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>interest rates;</TD>
</TR>

</TABLE>


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>demographic and employment trends;</TD>
</TR>

</TABLE>


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>income levels;</TD>
</TR>

</TABLE>


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>housing demand;</TD>
</TR>

</TABLE>


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general economic conditions, including inflation and recessions; and</TD>
</TR>

</TABLE>


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability of suitable homesites.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">As a result of the foregoing economic, demographic and other factors, our
revenues and operating results fluctuate, and we expect them to continue to
fluctuate in the future. Moreover, we may experience operating losses during
cyclical downturns in the manufactured housing market.



<P align="left" style="font-size: 10pt"><B><I>Our liquidity and ability to raise capital may be limited</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From 1998 through June of 2003, our operations were funded principally
through intercompany borrowings from Centex. Centex is a company with
investment grade credit ratings that has access to a wide variety of credit
sources. We no longer have access to funding provided by Centex.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may need to obtain additional debt or equity financing in the future.
The type, timing and terms of the financing selected by us will depend on,
among other things, our cash needs, the availability of other financing sources
and prevailing conditions in the financial markets. There can be no assurance
that any of these sources will be available to us at any time or that they will
be available on satisfactory terms.


<P align="left" style="font-size: 10pt"><B><I>Tightened credit standards and curtailed lending activity by home-only lenders
have contributed to a constrained consumer financing market</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers who buy our manufactured homes have historically secured retail
financing from third-party lenders. The availability, terms and costs of
retail financing depend on the lending practices of financial institutions,
governmental policies and economic and other conditions, all of which are
beyond our control. A consumer seeking to finance the purchase of a
manufactured home without land will generally pay a higher interest rate and
have a shorter loan maturity than a consumer seeking to finance the purchase of
land and the home. In addition, home-only financing is at times more difficult
to obtain than financing for site-built homes. Since 1999, home-only lenders
have tightened the credit underwriting standards and increased interest rates
for loans to purchase manufactured homes, which has reduced lending volumes and
caused our sales to decline. In addition, most of the national lenders who
have historically provided home-only loans have exited this sector of the
industry. Conseco Finance was historically one of the largest originators of
home-only loans in the manufactured housing industry. In December&nbsp;2002,
Conseco Inc., the parent company of Conseco Finance Corp., filed for bankruptcy
protection and ceased its lending activities. In May&nbsp;2004, JP Morgan Chase
Bank, the lender with the largest loan origination volume in the home-only
financing market, announced it was ceasing its manufactured housing lending
activities. If home-only financing were to become further curtailed or
unavailable, we would expect to experience further retail and manufacturing
sales declines.


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<P align="left" style="font-size: 10pt"><B><I>The availability of wholesale financing for industry retailers is limited due
to a reduced number of floor plan lenders and reduced lending limits</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufactured housing retailers generally finance their inventory purchases
with wholesale floor plan financing provided by lending institutions. The
availability of wholesale financing is significantly affected by the number of
floor plan lenders and their lending limits. During the past five years, a
substantial number of wholesale lenders have exited the industry or curtailed
their floor plan operations. Conseco Finance was historically the largest
floor plan lender, previously providing about 25% of the industry&#146;s wholesale
financing. Conseco Finance discontinued approving and funding new floor plan
loan requests in April&nbsp;2002 and filed for bankruptcy protection in December
2002. With Conseco&#146;s exit, Deutsche Financial Services was the largest
remaining floor plan lender, providing approximately 20% of the industry&#146;s
wholesale financing. Deutsche Financial Services discontinued approving and
funding new floor plan loan requests in November&nbsp;2002 and proceeded to
liquidate its existing floor plan receivables. There are currently three
national lending institutions that specialize in providing wholesale floor plan
financing to manufactured housing retailers. Reduced availability of floor
plan lending may affect the inventory levels of our independent retailers,
their number of retail sales centers and related wholesale demand, and may also
have an adverse effect on our access to capital on an ongoing basis.


<P align="left" style="font-size: 10pt"><B><I>We have contingent repurchase obligations related to wholesale financing
provided to industry retailers</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with customary business practice in the manufactured housing
industry, we have entered into repurchase agreements with various financial
institutions and other credit sources who provide floor plan financing to
industry retailers, which provide that we will be obligated, under certain
circumstances, to repurchase homes sold to retailers in the event of a default
by a retailer in its obligation to such credit sources. Under these

agreements, we have agreed to repurchase homes at declining prices over the
term of the agreement (which in most cases is 18&nbsp;months). We estimate that our
potential obligations under such repurchase agreements were approximately $19.7
million as of March&nbsp;31, 2004. During fiscal 2002, fiscal 2003 and fiscal 2004,
we incurred net expenses under
these repurchase agreements totaling approximately $316,000, $0 and $0,
respectively. We may be required to honor contingent repurchase obligations in
the future and may incur additional expense as a consequence of these
repurchase agreements.


<P align="left" style="font-size: 10pt"><B><I>The manufactured housing industry is highly competitive, and competition may
increase the adverse effects of industry conditions</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The manufactured housing industry is highly competitive. Competition at
both the manufacturing and retail levels is based upon several factors,
including price, product features, reputation for service and quality,
merchandising, terms of retailer promotional programs and the terms of retail
customer financing. Numerous companies produce manufactured homes in our
markets. In addition, our homes compete with repossessed homes that are
offered for sale in our markets. A number of our manufacturing competitors
also have their own retail distribution systems and consumer finance and
insurance operations. The ability to offer consumer finance and insurance
products may provide some competitors with an advantage. In
addition, there are many independent manufactured housing retail locations in
most areas where we have retail operations. We believe that where wholesale
floor plan financing is available, it is relatively easy for new retailers to
enter into our markets as competitors. In addition, our products compete with
other forms of low to moderate-cost housing, including new and existing
site-built homes, apartments, townhouses and condominiums. If we are unable to
compete effectively in this environment, our retail sales and wholesale
shipments could be reduced. As a result, our growth could be limited.


<P align="left" style="font-size: 10pt"><B><I>If we are unable to establish or maintain relationships with independent
retailers who sell our homes, our sales could decline</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal 2004, approximately 94% of our wholesale shipments of
manufactured homes were made to independent retail locations in the United
States. As is common in the industry, independent retailers may sell
manufactured homes produced by competing manufacturers. We may not be able to
establish relationships with new independent retailers or maintain good
relationships with independent retailers that sell our homes. Even if we do
establish and maintain relationships with independent retailers, these
retailers are not obligated to sell our manufactured homes exclusively, and may
choose to sell our competitors&#146; homes instead. The independent retailers with
whom we have relationships can cancel these relationships on short notice. In
addition, these retailers may not remain financially solvent, as they are
subject to industry, economic, demographic and seasonal trends similar to the
ones we face. If we do not establish and maintain relationships with solvent
independent retailers in one or more of our markets, sales in those markets
could decline.


<P align="left" style="font-size: 10pt"><B><I>The manufactured housing industry is seasonal, and this causes our results of
operations to fluctuate</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The manufactured housing industry is generally seasonal. In states other
than Arizona, sales during the period from March to November are higher than in
other months. As a result, our operating results tend to fluctuate on a
seasonal basis, with less favorable conditions prevailing in the winter months.


<P align="center" style="font-size: 10pt">11
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<P align="left" style="font-size: 10pt"><B><I>Our results of operations can be adversely affected by the pricing and
availability of raw materials</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our results of operations can be affected by the pricing and availability
of raw materials. Although we attempt to increase the sales prices of our
homes in response to higher materials costs, such increases typically lag
behind the escalation of materials costs. Four of the most important raw
materials used in our operations, wood and wood products, gypsum wallboard,
steel and insulation, have experienced significant price increases in recent
periods. Although we have not experienced any severe or prolonged shortage of
such building materials to date, there can be no assurance that sufficient
supplies of wood and wood products, gypsum wallboard, steel and insulation, as
well as other raw materials, will continue to be available to us on
satisfactory terms.


<P align="left" style="font-size: 10pt"><B><I>If the manufactured housing industry is not able to secure favorable local
zoning ordinances, our sales could decline and our business could be adversely
affected</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufactured housing communities and individual home placements are
subject to local zoning ordinances and other local regulations relating to
utility service and construction of roadways. In the past, property owners
often have resisted the adoption of zoning ordinances permitting the location
of manufactured homes in residential areas, which we believe has restricted the
growth of the industry. Manufactured homes may not achieve widespread
acceptance and localities may not adopt zoning ordinances permitting the
development of manufactured home communities. If the manufactured housing
industry is unable to secure favorable local zoning ordinances, our sales could
decline and our business, results of operations and financial condition could
be adversely affected.


<P align="left" style="font-size: 10pt"><B><I>The loss of any of our executive officers could reduce our ability to execute
our business strategy and could have a material adverse effect on our business
and results of operations</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are dependent to a significant extent upon the efforts of our executive
officers, particularly Joseph H. Stegmayer, our Chief
Executive Officer, David L. Blank, our Vice President of Operations, and
Sean K. Nolen, our Chief Financial Officer. The loss of the services of one or
more of our executive officers could impair our ability to execute our business
strategy and have a material adverse effect upon our business, financial
condition and results of operations. We currently have no key man life
insurance for any of our executive officers.


<P align="left" style="font-size: 10pt"><B><I>We have a limited operating history as an independent company</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to June&nbsp;30, 2003, our manufactured housing business had operated as
a wholly-owned subsidiary of Centex. Accordingly, our management team does not
have any recent experience in operating our company as an independent public
company. We are now an independent public company and have no affiliation with
Centex. Our ability to satisfy our obligations and achieve or maintain
profitability is solely dependent upon the future performance of our business,
and we will not be able to rely upon the financial and other resources of
Centex. In addition, our management team will need to comply with the numerous
regulatory and other requirements applicable to independent public companies,
including requirements relating to corporate governance, listing standards and
securities and investor relations issues.


<P align="left" style="font-size: 10pt"><B><I>You may have difficulty evaluating our business, as our historical financial
information may not be representative of what our results of operations would
have been if we had been an independent company</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our historical financial statements included in this Annual Report may not
reflect the results of operations, financial condition and cash flows that
would have been achieved by our company had we been operated independently
prior to June&nbsp;30, 2003. We have not made adjustments to this information to
reflect changes that will or may occur in our cost structure, funding and
operations as a result of being an independent public company. Among other
things, our historical financial statements may not reflect the costs to us of
borrowing funds as a stand-alone entity, additional compensation costs or the
costs of complying with laws and regulations applicable to public companies.


<P align="left" style="font-size: 10pt"><B><I>We could be responsible for certain tax liabilities if the Internal Revenue
Service challenges the tax-free nature of the distribution</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Centex received a private letter ruling from the Internal Revenue Service
to the effect that the distribution of shares of Cavco common stock to
stockholders of Centex will be tax-free to its stockholders, except to the
extent that cash is received in lieu of fractional shares, and that Centex will
generally not recognize income, gain or loss for federal income tax purposes as
a result of the distribution. The ruling is based on current law and is
subject to the accuracy of certain representations made by Centex in its
request for the private letter ruling and certain assumptions regarding Centex
and us that are described in the ruling.


<P align="center" style="font-size: 10pt">12
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although Centex and we are not aware of any facts or circumstances that
would cause the representations made by Centex in its request for the private
letter ruling or the assumptions on which the ruling is based to be materially
incorrect, no assurance can be given in this regard. If any of these
representations or assumptions were to prove to be materially incorrect, and
the Internal Revenue Service were to challenge the tax-free nature of the
distribution, it is possible that the distribution could be held to be a
distribution taxable as a dividend by Centex of our common stock to the
stockholders of Centex for federal income tax purposes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the distribution were held to be a taxable distribution, Centex would
be subject to tax to the extent that the fair market value of our common stock
exceeds the adjusted tax basis of Centex in our common stock at the time of the
distribution. In addition, each holder of Centex common stock who received
shares of our common stock in the distribution would generally be treated as
having received a taxable dividend in an amount equal to the fair market value
of our common stock received at the time of the distribution (assuming that
Centex has current or accumulated earnings and profits equal to the total value
of the distribution).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the tax sharing agreement entered into between us and Centex,
we have agreed, in certain circumstances, to indemnify Centex against any tax
liability that is incurred as a result of the failure of the distribution to
qualify as a tax-free transaction. If we are required to make this payment and
the amount is significant, the payment could have a material adverse effect on
our financial condition and results of operations.


<P align="left" style="font-size: 10pt"><B><I>Events could result in significant tax liability</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under United States federal income tax laws, even if the distribution
qualifies for tax-free treatment, Centex may nevertheless be subject to tax if
acquisitions or issuances of either our common stock or Centex stock following
the distribution cause the stockholders of Centex (determined as of the
effective time of the distribution) to subsequently own less than a majority of
outstanding shares of either Centex or us. In particular, this tax will apply
if such issuances or acquisitions occur as part of a plan or series of related
transactions that include the distribution. For this purpose, any
acquisitions or issuance of Centex stock or our stock within two years before
or after the distribution are presumed to be part of such a plan, although this
presumption may be rebutted. If the subsequent acquisitions or issuance of
either the stock of Centex or our stock triggers this tax, Centex will be
subject to tax on the gain that would have resulted from a sale of our stock
distributed in the distribution. Because of this, pursuant to a tax sharing
agreement between us and Centex, we have agreed that we will not liquidate,
merge or consolidate with any other entity within two years of the
distribution, dispose of a substantial portion of our assets within two years
of the distribution, or take any other action which would cause the
distribution to fail to qualify as a tax-free transaction. In addition, we are
obligated in certain circumstances to indemnify Centex against any losses or
expenses incurred by Centex in the event any such tax is imposed by the
Internal Revenue Service.


<P align="left" style="font-size: 10pt"><B><I>We may be required to satisfy certain indemnification obligations to Centex, or
may not be able to collect on indemnification rights from Centex</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into a distribution agreement with Centex in connection
with the distribution, which agreement allocates responsibility between Centex
and us for various liabilities and obligations. For example, the distribution
agreement provides that we and Centex will agree to indemnify one another
against claims arising with respect to the indebtedness, liabilities and
obligations that will be retained by our respective companies. The principal
purpose for our indemnification obligations is to provide assurance to Centex
that we will bear all liabilities arising from the Cavco business and
associated assets. Our ability to satisfy any such indemnification obligations
will depend upon the future financial strength of our company. At the present
time, although we cannot determine the amount for which we may be obligated to
indemnify Centex, we do not believe that the amount of our potential
indemnification obligations is likely to be material. We also cannot assure
you that we will be successful in collecting on any indemnification obligations
that may be owing to us by Centex. If we or Centex were unable to fund or
collect on these indemnification obligations, our financial condition and
results of operations could be adversely affected.


<P align="left" style="font-size: 10pt"><B><I>Certain provisions of our organizational documents could delay or make more
difficult a change in control of our company</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain provisions of our restated certificate of incorporation and
restated bylaws could delay or make more difficult transactions involving a
change of control of our company, and may have the effect of entrenching our
current management or possibly depressing the market price of our common stock.
For example, our restated certificate of incorporation and restated bylaws
authorize blank series preferred stock, establish a staggered board of
directors and impose certain procedural and other requirements for stockholder
proposals. Furthermore, the fact that income taxes could be imposed as a
result of ownership changes occurring in conjunction with the distribution may
have the effect of delaying or making more difficult certain transactions
involving a change of control of our company.


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<P align="left" style="font-size: 10pt"><B><I>We do not expect to pay dividends on our common stock</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not expect to pay any dividends on our common stock in the
foreseeable future. The payment of dividends to our stockholders is subject to
the discretion of our board of directors, and various factors may prevent us
from paying dividends. Such factors include our cash requirements and
liquidity and the requirements of state corporate and other laws. In addition,
the terms of our credit facility with Bank One limit our ability to pay
dividends and make other distributions.


<P align="left" style="font-size: 10pt"><B><I>Volatility of Stock Price</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The price of our common stock may fluctuate widely, depending upon a
number of factors, many of which are beyond our control. These factors include:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the perceived prospects of our business and the manufactured housing
industry as whole;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>differences between our actual financial and operating results and
those expected by investors and analysts;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in analysts&#146; recommendations or projections;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes affecting the availability of financing in the wholesale and
consumer lending markets;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actions or announcements by competitors;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the regulatory environment in which we operate; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in general economic or market conditions.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, stock markets generally experience significant price and
volume volatility from time to time which may adversely affect the market price
of our common stock for reasons unrelated to our performance.


<P align="left" style="font-size: 10pt"><B><I>Requirements of the Sarbanes-Oxley Act of 2002</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sarbanes-Oxley Act of 2002 has introduced many new requirements
applicable to the company regarding corporate governance and financial
reporting. Among many other requirements is the requirement under Section&nbsp;404
of the Act for management to report on the company&#146;s internal controls over
financial reporting and for our registered public accountant to attest to this
report. Currently, we anticipate we will be required to comply with Section
404 for our fiscal year ending March&nbsp;31, 2005. We are currently devoting
substantial time and will incur substantial costs during fiscal 2005 to ensure
compliance. There can be no assurance that we will be successful in complying
with Section&nbsp;404. Failure to do so could result in penalties and additional
expenditures to meet the requirements which could affect the ability of our
auditors to issue an unqualified report.



<P align="center" style="font-size: 10pt">14
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<DIV align="left">
<A name="102"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 2. PROPERTIES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently own or lease and operate three manufacturing facilities in
the Phoenix, Arizona area. Except in the case of the Litchfield plant, we own
the land on which these facilities are located. We also own substantially all
of the machinery and equipment used at these facilities. We believe that these
facilities are adequately maintained and suitable for the purposes for which
they are used.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information with respect to our
active manufacturing facilities:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Commencement</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned /</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Square</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Location</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Operations</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Leased</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Feet</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Litchfield plant &#151; Goodyear, Arizona (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Leased</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">203,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Durango plant &#151; Phoenix, Arizona</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Specialty plant &#151; Phoenix, Arizona</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94,000</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This lease expires in January&nbsp;2008 and the Company has an option to
extend it for 5 additional years to January&nbsp;2013.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our company-owned retail centers generally range in size from one acre to
5 acres. All of these locations are leased by us. Over the next 12&nbsp;months, we
plan to dispose of or close more than one-half of our remaining company-owned
retail centers. The following table sets forth our 18 current company-owned
retail centers by location.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="50%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Lease Term</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Location</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Expiration</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Avondale, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;30, 2006</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Marana, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2008</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mesa, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tucson, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Month-To-Month</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tucson, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">February&nbsp;17, 2005</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Yuma, AZ
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">February&nbsp;17, 2005</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fort Collins, CO
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">August&nbsp;18, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bossier City, LA (1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">December&nbsp;30, 2006</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Opelousas, LA (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">February&nbsp;25, 2007</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Albuquerque, NM
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">June&nbsp;30, 2005</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Austin, TX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">August&nbsp;15, 2005</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bastrop, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;31, 2006</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Buda, TX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;14, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kaufman, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">December&nbsp;10, 2005</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">New Braunfels, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;30, 2008</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Porter, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;30, 2009</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wills Point, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;31, 2006</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Spring, TX (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">May&nbsp;31, 2005</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disposed of after March&nbsp;31, 2004</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has early termination options ranging from 3 to 6&nbsp;months
for these leases.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also lease approximately 22,000 square feet of office space in Phoenix,
Arizona for our corporate headquarters. Our corporate headquarters lease is
scheduled to expire in 2006.

<DIV align="left">
<A name="103"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 3. LEGAL PROCEEDINGS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are party to certain legal proceedings that arise in the ordinary
course of business. Certain of the claims pending against us in these
proceedings allege, among other things, breach of contract and warranty,
product liability and personal injury. In our judgment, none of these
proceedings is expected to have a material adverse effect on our business,
financial condition or results of operations.

<DIV align="left">
<A name="104"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No matters were submitted to the shareholders during the fourth quarter of
fiscal 2004.


<P align="center" style="font-size: 10pt">15
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="105"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART II</B>

<DIV align="left">
<A name="106"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 5. MARKET FOR
REGISTRANT&#146;S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s common stock began trading on the NASDAQ National Market
under the symbol &#147;CVCO&#148; on July&nbsp;1, 2003 following its spin-off from Centex
Corporation. The following table sets forth, for each of the periods indicated,
the reported high and low closing sale prices per share on the NASDAQ for the
Company&#146;s common stock.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Closing Sales Price</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>High</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Low</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Year ended March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">39.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.52</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.96</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May&nbsp;7, 2004, the Company had approximately 1,184 shareholders of
record and approximately 10,000 beneficial holders of its common stock, based
upon information in securities position listings by registered clearing
agencies upon request of the Company&#146;s transfer agent.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not expect to pay any dividends on our common stock in the
foreseeable future. The payment of dividends to our stockholders is subject to
the discretion of our board of directors, and various factors may prevent us
from paying dividends. Such factors include our cash requirements and
liquidity and the requirements of state corporate and other laws. In addition,
the terms of our credit facility with Bank One limit our ability to pay
dividends and make other distributions.


<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="107"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA</B>



<P align="center" style="font-size: 10pt"><B>SELECTED CONSOLIDATED FINANCIAL DATA</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents selected consolidated financial data
regarding Cavco Industries, Inc. and its subsidiary for the fiscal years
indicated. The data set forth below should be read in conjunction with, and is
qualified in its entirety by reference to, the information presented in
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148; and the consolidated financial statements and notes thereto
included elsewhere in this Annual Report. The selected consolidated financial
data as of March&nbsp;31, 2002, 2003 and 2004 and for the fiscal years ended March
31, 2001, 2002, 2003 and 2004 were derived from the audited consolidated
financial statements of Cavco Industries, Inc. and its subsidiary. The
selected consolidated financial data as of March&nbsp;31, 2000 and 2001 and for the
fiscal year ended March&nbsp;31, 2000 were derived from unaudited consolidated
financial statements of Cavco Industries, Inc. and its subsidiary.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>(In thousands, except per share data)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Income Statement Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">118,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">95,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">95,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,627</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Selling, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,583</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Impairment charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Goodwill amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income (loss)&nbsp;from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,594</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,044</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest income (expense), net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,073</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(344</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">233</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income (loss)&nbsp;from continuing operations
before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,667</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,054</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,667</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,223</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued manufacturing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(785</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,235</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,777</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,404</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued retail operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,804</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,367</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,768</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(27,269</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Weighted average shares outstanding:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,591</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,155,906</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Pro Forma Data (unaudited):</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income (loss)&nbsp;from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(10,667</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma income tax (expense)&nbsp;benefit (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,212</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,244</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,724</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,711</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma net income (loss)&nbsp;from
continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(6,400</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,566</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma weighted average common
shares outstanding (basic) (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,591</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma net income (loss)&nbsp;per share
from continuing operations (basic)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2.07</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.78</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma weighted average common
shares outstanding (diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,155,906</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma net income (loss)&nbsp;per share
from continuing operations (diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2.07</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Other Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation-continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,163</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Capital expenditures-continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">222</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">17
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>(In thousands, except per share data)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Balance Sheet Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Restricted cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">827</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,479</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,995</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Prepaid expenses and other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,701</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Receivable from Centex (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail assets held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,941</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing assets to be distributed
to Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Property, plant and equipment &#151; net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">142,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">119,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">117,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">111,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">43,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,091</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Long-term debt, less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,915</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Funding provided by Centex (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,933</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total liabilities and stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">142,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">119,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">117,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">111,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><HR size="1" noshade width="15%" align="left">



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selected consolidated financial data set forth above includes the
accounts of Cavco Industries, Inc. and its wholly-owned subsidiary, CRG
Holdings, LLC. Effective June&nbsp;30, 2003, Cavco Industries, LLC, the company&#146;s
predecessor, was merged into Cavco Industries, Inc. and 100% of the outstanding
shares of its common stock was distributed to the stockholders of Centex. Upon
this distribution, Cavco Industries, Inc. became a separate public company.
Stockholders&#146; equity has been presented assuming the merger had occurred at the
beginning of each fiscal year presented. Pro forma data for each fiscal year
also gives effect to the distribution as if it had occurred at the beginning of
the fiscal year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selected consolidated financial data and pro forma data set forth
above may not be indicative of our future performance and do not necessarily
reflect what our consolidated financial position and consolidated results of
operations would have been had we operated as a separate, stand-alone entity
during the periods presented.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents the tax (expense)&nbsp;benefit assumed to be incurred, at an
effective tax rate of 40%, if we had been a taxable entity during the
applicable period.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents the number of shares of our common stock distributed to the
stockholders of Centex. There were no dilutive securities outstanding
prior to April&nbsp;1, 2003.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents funding provided by Centex arising from various transactions
between Centex and us. In anticipation of the distribution, Centex
contributed the net amount of the funding obligation through March&nbsp;31,
2003, as well as an additional amount required to increase our tangible
net worth to $25.0&nbsp;million.</TD>
</TR>


</TABLE>

<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>

<DIV align="left">
<A name="108"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS</B>



<P align="left" style="font-size: 10pt"><B>Overview</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cavco Industries, Inc. is the largest producer of manufactured homes in
Arizona and 12th largest producer of manufactured homes in the United States in
terms of wholesale shipments, based on 2002 data published by Manufactured Home
Merchandiser. Headquartered in Phoenix, Arizona, the Company designs and
produces manufactured homes which are sold to a network of retailers located
primarily in the Southwestern United States. The retail segment of the Company
operates retail sales locations which offer homes produced by the Company and
other manufacturers to retail customers. As of March&nbsp;31, 2004, the Company
operated three homebuilding facilities located in Arizona and 18 Company-owned
sales centers in five states. Homes produced by the Company are also sold
through a network of 379 independent retail outlets in 17 states.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective June&nbsp;30, 2003, Cavco Industries, LLC, the Company&#146;s predecessor,
was merged into Cavco Industries, Inc. and 100% of the outstanding shares of
its common stock was distributed to the stockholders of Centex. Upon this
distribution, Cavco Industries, Inc. became a separate public company. Unless
the context otherwise requires, all financial information contained in this
section gives effect to the reorganization as if it had occurred prior to the
date of such financial information.


<P align="left" style="font-size: 10pt"><B>Industry and Company Outlook</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During much of the 1990s, the manufactured home industry expanded
significantly with the number of retail dealerships, retail inventory levels,
manufacturing capacity, wholesale shipments and overall competition increasing.
According to the Manufactured Housing Institute, wholesale shipments increased
from 171,000 homes in 1991 to a peak of 373,000 homes in 1998. One of the
major contributing factors to this expansion was the level and availability of
retail and wholesale financing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning in 1999, consumer lenders began to tighten underwriting
standards and curtail credit availability in response to higher than
anticipated rates of loan defaults and significant losses upon the repossession
and resale of homes securing defaulted loans. Certain consumer lenders in the
traditional chattel (home-only) lending sector exited the market and rates for
these home-only loans increased. Although a portion of the home-only loans
have been replaced by land/home financing that generally provides more
competitive credit terms to the retail buyer of manufactured housing, the
effort, time and expense associated with closing land/home transactions is
greater. Additionally, effective January&nbsp;1, 2002, the State of Texas, which
historically has been one of the largest states for consumer purchases of
manufactured housing, enacted a law that further restricted the availability of
financing. While this legislation was subsequently repealed, chattel financing
in Texas was significantly curtailed and has not recovered. In addition to the
changing environment in retail lending, some of the wholesale lenders providing
floor plan financing to dealers have exited the industry. During 2002, Conseco
Finance Corp., formerly the industry&#146;s largest floor plan lender and consumer
lender, exited the market. Also in 2002, Deutsche Financial Services exited
the manufactured housing floor plan lending business. Lastly, competition from
sales of repossessed homes has negatively impacted retail sales of new homes.
We estimate that approximately 90,000 repossessed homes were resold in each of
the last three years. These factors have ultimately resulted in a prolonged
and significant downturn in the manufactured housing industry since mid-1999
which has resulted in declining wholesale shipments, excess manufacturing and
retail locations and surplus inventory.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the foregoing factors, based on industry data, we estimate
that approximately 52% of all industry retail locations have closed since
mid-1999 and that industry manufacturers have closed approximately 124
manufacturing facilities, representing approximately 38% of the industry&#146;s
manufacturing facilities. In addition, we estimate that inventories of new
manufactured homes in the retail marketplace declined by approximately 56% from
June&nbsp;1999 to January&nbsp;2004. According to data reported by MHI, wholesale
shipments declined by 22.0% to 131,000 units for 2003. This followed declines
of 12.8%, 22.9% and 28.1% for 2002, 2001, and 2000, respectively. The
principal regional markets in which we participate have also experienced a
pronounced downturn. The number of manufactured housing units shipped in
Arizona declined approximately 48% from 1998 to 2003. Even more severe
declines were experienced in New Mexico and Texas, where the number of
manufactured housing units shipped declined approximately 77% and 76%,
respectively, during the same period.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In response to these industry conditions, we closed our New Mexico and
Texas manufacturing facilities during fiscal 2001. In connection with these
plant closures, we recorded impairment charges totaling $6.5&nbsp;million. Due to
the continuation of negative industry conditions through fiscal 2003, as well
as the adverse legislation in Texas, we initiated plans during fiscal 2003 to
dispose of or close certain of our retail sales centers. As a result, we
recorded impairment charges of $2.7&nbsp;million to write down retail-related
property, plant and equipment to its fair value during fiscal 2003 and a charge
of $2.2&nbsp;million to record retail inventories at their market value. As of
March&nbsp;31, 2004, we have a total of 18 Company-owned retail outlets, located
primarily in Texas and Arizona. We disposed of 8 of our Company-owned sales
retail outlets in fiscal 2004, and we expect to dispose of or close more than
half of our remaining outlets during the next 12&nbsp;months. We expect that the
costs of closing these outlets, including leasehold termination and


<P align="center" style="font-size: 10pt">19
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">severance
costs, will be less than $500,000 in fiscal 2005. The disposition or closure of
these retail outlets will reduce future operating losses from our retail
operations and will provide cash through the liquidation of their inventory
that can be redeployed to more profitable operations. We do not anticipate
that the closure of these retail outlets will materially affect the operations
of our manufacturing segment as the majority of these outlets do not sell
products manufactured by our manufacturing facilities. In anticipation of the
distribution, the Company distributed to Centex its ownership interest in its
idled manufacturing facilities in New Mexico and Texas during fiscal 2003. We
recorded an impairment charge of $2.2&nbsp;million to record the Texas manufacturing
facility at its estimated fair value prior to its distribution to Centex. See
&#147;Discontinued Manufacturing Operations&#148; below for additional discussion.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we believe the closures, sales and distribution to Centex
described above should improve our prospects of generating operating earnings
and positive cash flow, we will continue to evaluate industry conditions and
operating performance to determine if adjustments to our strategic direction
are warranted. The availability of consumer financing for the retail purchase
of manufactured homes and floor plan financing for the wholesale purchase of
manufactured homes continues to be constrained. In addition, the large number
of repossessed homes that are being offered for sale continues to have an
adverse impact on demand for new manufactured homes. Although it is difficult
to predict future industry conditions, these factors tend to indicate that a
sustained recovery in the manufactured housing industry is unlikely to occur in
the near term.


<P align="left" style="font-size: 10pt"><B>Results of Operations<BR>
(Dollars in thousands)</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes certain financial and operating data for
fiscal 2002, fiscal 2003 and fiscal 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Statement of Operations Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net sales
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">
Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">96,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">106,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,362</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Less: Intercompany</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,097</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,855</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,541</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,857</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,627</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Selling, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,583</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,044</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest income (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(344</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">233</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,054</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,223</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued manufacturing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,777</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,404</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued retail operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,768</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Pro Forma Data (unaudited):</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,244</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,724</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,711</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Pro forma net income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,566</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Other Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Floor shipments &#151; manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Home shipments &#151; manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,646</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Home shipments &#151; retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,163</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">222</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">20
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt"><B><I>Fiscal 2004 Compared to Fiscal 2003</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Sales. </I>Total net sales increased 17.1% to $128,857 in fiscal 2004
from $110,037 in fiscal 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing net sales increased 15.2% to $123,036 in fiscal 2004 from
$106,833 in fiscal 2003. This increase was primarily attributable to the trend
toward larger homes with more amenities and a higher volume of homes sold. The
increase in homes sold was the result of our efforts to expand our market share
in Arizona and California through recruiting of new independent dealers and
increased sales of specialty products in new and existing markets. Total homes
sold during fiscal 2004 increased 8.0% to 3,646 wholesale shipments versus
3,375 last year and the average wholesale sales price per home increased 6.6%
to $33,745 versus $31,654 last year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail net sales increased slightly to $15,362 in fiscal 2004 from $15,059
in fiscal 2003. This increase in sales was primarily due to one new retail
sales center added during fiscal 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross Profit. </I>Gross profit as a percent of sales was 17.6% for both
fiscal 2004 and fiscal 2003. Gross profit increased 16.9% to $22,627 in fiscal
2004 from $19,354 in fiscal 2003. While gross profit as a percent of sales
benefited from the efficiencies of increased production, this positive impact
was offset by increased material costs and increased labor costs due to
building more
complex and diverse products. The increase in gross profit was due to the
overall increase in sales.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Selling, General and Administrative Expenses. </I>Selling, general and
administrative expenses were $13,583 or 10.5% of net sales for fiscal 2004
versus $12,200 or 11.1% of net sales for fiscal 2003, an increase of 11.3% or
$1,383. This increase was primarily attributable to the incremental costs
related to being a stand-alone public company. In addition, fiscal 2004
includes increased selling costs as we expanded our marketing efforts to
identify additional distribution opportunities and a $300 charge for accrued
lease costs related to vacated corporate office space.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest Expense. </I>Interest income in fiscal 2004 represents income
earned on unrestricted cash. In anticipation of the distribution noted above,
all of our outstanding third party debt was repaid and the intercompany debt
owed to Centex was contributed to capital prior to March&nbsp;31, 2003. As a
result, we have not incurred any interest expense in fiscal 2004. Although any
future indebtedness would likely have interest rates higher than the rates we
have paid on funding provided by Centex, we anticipate having sufficient
resources to fund our operations over the next twelve months without having to
incur any significant indebtedness. Therefore, we do not anticipate an increase
in interest expense in fiscal 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income Taxes. </I>The effective income tax rates for the period from July&nbsp;1,
2003 to March&nbsp;31, 2004 approximated our combined statutory rate of 40%. Prior
to the distribution on June&nbsp;30, 2003, we were incorporated in the consolidated
Federal income tax return of Centex. Therefore, income taxes were not provided
for by us as we had agreed with Centex that all taxes or tax benefits from
filing a consolidated income tax return would either be borne by or benefit
Centex. We were a disregarded entity for Federal income tax purposes and
therefore, on a stand-alone basis would not be subject to Federal income taxes.
As a result of the distribution described above, proforma tax amounts for all
periods prior to the date of the distribution have been presented on the face
of the statements of operations as if we were a stand-alone taxable entity.
Proforma income tax expense (benefit)&nbsp;is calculated based on a combined
statutory rate of 40%.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Discontinued Manufacturing Operations. </I>In anticipation of the
distribution, we distributed to Centex our ownership interest in our idled
manufacturing facilities in New Mexico and Texas during fiscal 2003 and these
operations are classified as discontinued. Because we no longer own or operate
these facilities, there were no results of operations during fiscal 2004. The
loss from discontinued manufacturing operations for fiscal 2003 includes an
impairment charge of $2,215 to record the Texas manufacturing facility at its
estimated fair value prior to its distribution to Centex and operating losses
related to these plants of $1,189.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Discontinued Retail Operations. </I>We initiated plans during fiscal 2003 to
dispose of or close certain of our retail sales centers. As of March&nbsp;31, 2004,
we have a total of 18 Company-owned retail outlets, located primarily in Texas
and Arizona. We disposed of 8 of our Company-owned retail outlets in fiscal
2004 and we expect to dispose of or close more than half of our remaining
outlets during the next 12&nbsp;months. Because we believe it is probable that the
assets of the retail sales centers to be disposed of will be sold within one
year, these assets are classified as held for sale and the operations of these
retail sales centers are classified as discontinued operations. The loss from
discontinued retail operations for fiscal 2004 primarily represents accrued
lease costs related to one of the retail locations we closed during the year.
There were no operating losses for fiscal 2004 for the stores we have
identified for sale or disposal as the costs related to the liquidation of
inventory were in line with our expectations of net realizable values. In
fiscal 2004, the retail sales centers classified as discontinued operations
generated sales of $20.9&nbsp;million versus $27.9&nbsp;million in fiscal 2003. The loss
from discontinued retail operations for fiscal 2003 includes an impairment
charge of $2,691 to write down property, plant and equipment to its fair value
and a charge of $2,200 to record retail inventories at their market value. The
operating losses related to these sales centers were $3,060 for fiscal 2003.


<P align="center" style="font-size: 10pt">21
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B><I>Fiscal 2003 Compared to Fiscal 2002</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Sales. </I>Total net sales increased 14.9% to $110,037 in fiscal 2003
from $95,728 in fiscal 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing net sales increased 10.8% to $106,833 in fiscal 2003 from
$96,450 in fiscal 2002. This increase was primarily attributable to higher
volume of homes sold as a result of our efforts to expand our market share in
Arizona and California and expansion of specialty products to markets different
from those for traditional manufactured homes. Based on retail sales for
Arizona as compiled by third party sources, we increased our market share to
28.9% for calendar 2002 from 24.5% for calendar 2001 despite a 10.9% decrease
in total retail sales throughout the state. Total floors shipped increased 6.5%
to 5,816 in fiscal 2003 from 5,463 in fiscal 2002. The average wholesale sales
price per floor increased 4.0% to $18,369 from $17,655 due to trends toward
larger homes with more options. There was no provision recorded against sales
for potential repurchases in fiscal 2003 versus a provision of $316 for fiscal
2002. No provision was considered to be necessary based upon the absence of
dealer defaults in fiscal 2003 and a reduction in the balance of outstanding
dealer inventories. See &#147;Business &#151; Risk Factors&#148; and &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of Operations &#151; Critical
Accounting Policies.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail net sales increased 32.4% to $15,059 in fiscal 2003 from $11,375 in
fiscal 2002. This increase was primarily attributable to our efforts to expand
financing alternatives for retail sales, particularly land/home financing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross Profit. </I>Gross profit as a percent of sales increased to 17.6% for
fiscal 2003 from 16.0% for fiscal 2002. Gross profit increased 26.5% to $19,354
in fiscal 2003 from $15,299 in fiscal 2002. The increase in gross profit as a
percent of sales was primarily the result of trends toward larger homes with
more options and our efforts to reduce warranty costs. Warranty expense
decreased 12.1% to $5,805 for fiscal 2003 from $6,606 for fiscal 2002 due to
our efforts to improve production quality, aggressively address customer issues
and the continuation of our On-Site program initiated in fiscal 2000 to assist
retailers with managing the home installation process. Gross profit increased
due to the improved gross profit percentage and the overall increase in net
sales.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Selling, General and Administrative Expenses. </I>Selling, general and
administrative expenses were $12,200 or 11.1% of net sales for fiscal 2003
versus $11,535 or 12.0% of net sales for fiscal 2002, an increase of 5.8% or
$665. The overall increase is primarily from selling expenses associated with
increases in net sales. This increase was partially offset by the results of
our continuing efforts to reduce overhead costs.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest Expense. </I>Interest expense decreased 47.5% to $344 for fiscal
2003 from $655 for fiscal 2002. This decrease was due to lower interest rates
charged on funding provided by Centex and lower average funding levels during
fiscal 2003. As discussed more fully under &#147;Liquidity and Capital Resources&#148;
below, all of our debt was either contributed to capital or repaid as of March
31, 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income Taxes. </I>We were incorporated in the consolidated federal income tax
return of Centex prior to June&nbsp;30, 2003. Therefore, income taxes were not
provided for by us as we had agreed with Centex that all taxes or tax benefits
from filing a consolidated income tax return would either be borne by or
benefit Centex. We were a disregarded entity for Federal income tax purposes
and therefore on a stand-alone basis would not be subject to federal income
taxes. Pro forma income tax expense (benefit)&nbsp;is calculated based on a 40%
effective rate.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Discontinued Manufacturing Operations. </I>In anticipation of the
distribution, we distributed to Centex our ownership interest in our idled
manufacturing facilities in New Mexico and Texas during fiscal 2003 and these
operations are classified as discontinued. The loss from discontinued
manufacturing operations for fiscal 2003 includes an impairment charge of
$2,215 to record the Texas manufacturing facility at its estimated fair value
prior to its distribution to Centex. The operating losses related to these
plants decreased 33.1% to $1,189 for fiscal 2003 from $1,777 for fiscal 2002.
The decrease in operating losses resulted from our efforts to minimize the
ongoing carrying costs of these idled plants.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Discontinued Retail Operations. </I>During fiscal 2003, we initiated plans to
dispose of or close more than two-thirds of our retail sales centers. Because
we believe it is probable that the assets of the retail sales centers to be
disposed of will be sold within one year, these assets are classified as held
for sale and the operations of these retail sales centers are classified as
discontinued operations. In fiscal 2003, the retail sales centers classified
as discontinued operations generated sales of $27.9&nbsp;million, as compared to
sales of $15.1&nbsp;million generated by the retail sales centers that are included
in our continuing operations. The loss from discontinued retail operations for
fiscal 2003 includes an impairment charge of $2,691 to write down property,
plant and equipment to its fair value and a charge of $2,200 to record retail
inventories at their market value. The operating losses related to these sales
centers increased 10.5% to $3,060 for fiscal 2003 from $2,768 for fiscal 2002
primarily due to adverse legislation enacted in Texas that affected the form
and structure of financing extended to Texas manufactured home consumers


<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Liquidity and Capital Resources</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the distribution on June&nbsp;30, 2003, we participated in Centex&#146;s
central cash management program, wherein all of our cash receipts were remitted
to Centex and all cash disbursements were funded by Centex. The net balance
resulting from these transactions was included in our balance sheet as &#147;Funding
Provided by Centex.&#148; There were no terms of settlement and interest accrued at
Centex&#146;s short-term blended cost of funds. In anticipation of the
distribution, Centex contributed the net amount funded through March&nbsp;31, 2003
as well as an additional amount to our capital to increase our tangible net
worth to $25.0&nbsp;million. The additional amount contributed was recorded as a
receivable from Centex at March&nbsp;31, 2003 and was paid in May&nbsp;2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the distribution, we are now responsible for funding our
own operating needs and are no longer able to depend on Centex. Centex is a
company with investment grade credit ratings that has access to a wide variety
of credit sources. We no longer have access to funding provided by Centex.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;17, 2003, we established a revolving line of credit facility
(&#147;RLC&#148;) with Bank One, NA. The RLC provides for borrowings up to $15&nbsp;million
with availability limited to 80% of eligible accounts receivable and 50% of
eligible inventory, as determined on a monthly basis. As of March&nbsp;31, 2004,
the amount available under the RLC was approximately $9.1&nbsp;million of which $495
is reserved for an outstanding letter of credit issued for our workmen&#146;s
compensation insurance program. We have not made any
draws under the RLC. The outstanding principal amount of borrowings under
the RLC bears interest at our election of either the prime rate or the London
Interbank Offered Rate plus 2.25% and the RLC expires on July&nbsp;31, 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The RLC contains certain restrictive and financial covenants, which, among
other things, limit our ability to pay dividends, purchase treasury stock,
pledge assets, incur additional indebtedness and make capital expenditures, and
requires us to maintain certain defined leverage and debt service coverage
ratios.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that cash on hand at March&nbsp;31, 2004, together with cash flow
from operations and cash to be provided by retail assets held for sale will be
sufficient to fund our operations for at least the next twelve months. In
addition, as described above, we have entered into a $15&nbsp;million credit
facility with Bank One that can be used to supplement these sources of
liquidity. However, depending on our operating results, we may need to seek
alternative sources of financing. There can be no assurance that such
financing would be available on satisfactory terms, if at all. If this
financing were not available, it could be necessary for us to reevaluate our
long-term operating plans to make more efficient use of our existing capital
resources. The exact nature of any changes to our plans that would be
considered depends on various factors, such as conditions in the manufactured
housing industry and general economic conditions outside of our control.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Projected cash to be provided by operations in the coming year is largely
dependent on sales volume. Our manufactured homes are sold mainly through
independent dealers who generally rely on third-party lenders to provide floor
plan financing for homes purchased. In addition, third-party lenders generally
provide consumer financing for manufactured home purchases. Our sales depend
in large part on the availability and cost of financing for manufactured home
purchasers and dealers as well as our own retail locations. The availability
and cost of such financing is further dependent on the number of financial
institutions participating in the industry, the departure of financial
institutions from the industry, the financial institutions&#146; lending practices,
and the strength of the credit markets generally, governmental policies and
other conditions, all of which are beyond our control. During 2002, Conseco
Finance Corp., formerly the industry&#146;s largest floor plan lender, exited the
market. Also in 2002, Deutsche Financial Services exited the manufactured
housing floor plan lending business. The exit of these lenders has had an
adverse effect on the manufactured housing industry and may impact the ability
of our retailers to obtain financing for home purchases. In addition, states
may classify manufactured homes for both legal and tax purposes as personal
property rather than real estate. As a result, financing for the purchase of
manufactured homes is characterized by shorter loan maturities and higher
interest rates, and in certain periods such financing is more difficult to
obtain than conventional home mortgages. Unfavorable changes in these factors
and the current adverse trend in the availability and terms of financing in the
industry may have a material adverse effect on our results of operations and
financial condition.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating activities provided $18.8&nbsp;million of cash during fiscal 2004
compared to providing $3.0&nbsp;million of cash during fiscal 2003. Cash generated
by operating activities in fiscal 2003 was primarily derived from operating
income before non-cash charges, the liquidation of retail inventories and an
increase in accounts payable and accrued expenses resulting from the timing of
payments owed to vendors and various service providers. These amounts were
partially offset by an increase in accounts receivable due to increased sales
and an increase in prepaid insurance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing activities required the use of $222,000 of cash during fiscal
2004 compared to the use of $352,000 of cash during fiscal 2003. The cash used
for investing activities during fiscal 2004 and fiscal 2003 was for normal
recurring capital expenditures.


<P align="center" style="font-size: 10pt">23
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing activities provided $12.2&nbsp;million in cash in fiscal 2004 as a
result of the final funding by Centex noted above. Financing activities
required the use of $2.6&nbsp;million of cash in fiscal 2003 principally due to
prepayment of certain outstanding debt obligations encumbering our former New
Mexico manufacturing facility.


<P align="left" style="font-size: 10pt"><B>Contractual Obligations and Commitments</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our contractual obligations at March&nbsp;31,
2004, consisting of future payments under non-cancelable operating lease
agreements. For additional information related to these obligations, see Note
10 to the consolidated financial statements. This table excludes long-term
obligations for which there is no definite commitment period.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="23"><B>Payments Due by Period</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1- 3</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>4 - 5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1 year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>(In thousands)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Commitments for future payments
under noncancelable operating
lease commitments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->

<TR><TD>&nbsp;</TD></TR>
<TR>
   <TD colspan="29">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our contingent commitments at March&nbsp;31,
2004, consisting of contingent repurchase obligations. For additional
information related to these contingent obligations, see Note 10 to the
consolidated financial statements and &#147;Critical Accounting Policies&#148; below.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<!-- Begin Table Head -->
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="23"><B>Contingent Payments Due by Period</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1- 3</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>4 - 5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1 year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3"><B>(In thousands)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Repurchase obligations (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">For a complete description of the contingent repurchase obligation, see
&#147;Critical Accounting Policies &#151; Reserve for Repurchase Commitments&#148; below.
Although the commitments outstanding at March&nbsp;31, 2004 have a finite
life, these commitments are continually replaced as we continue to sell
manufactured homes to dealers under repurchase and other recourse
agreements with lending institutions which have provided wholesale floor
plan financing to dealers. The cost of these contingent repurchase
obligations was $316,000, $0 and $0 for fiscal 2002, 2003 and 2004,
respectively.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>Critical Accounting Policies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management believes the following critical accounting policies, among
others, affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Warranties. </I>We provide the retail home buyer a one-year limited warranty
covering defects in material or workmanship in home structure, plumbing and
electrical systems. We record a liability for estimated future warranty costs
relating to homes sold, based upon our assessment of historical experience
factors and industry trends. Factors we use in the estimation of the warranty
liability include historical sales amounts, warranty costs related to homes
sold and the timing in which work orders are completed. We have a reserve for
estimated warranties of $4.2&nbsp;million and $4.6&nbsp;million at March&nbsp;31, 2003 and
2004, respectively. Although we maintain reserves for such claims, based on
our assessments as described above, which to date have been adequate, there can
be no assurance that warranty expense levels will remain at current levels or
that such reserves will continue to be adequate. A large number of warranty
claims exceeding our current warranty expense levels could have a material
adverse effect on our results of operations.


<P align="center" style="font-size: 10pt">24
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reserve for Repurchase Commitments. </I>Manufactured housing companies
customarily enter into repurchase and other recourse agreements with lending
institutions which have provided wholesale floor plan financing to dealers. A
significant portion of our sales are made to dealers located primarily in the
southwestern United States pursuant to repurchase agreements with lending
institutions. These agreements generally provide that we will repurchase our
new products from the lending institutions in the event such product is
repossessed upon a dealer&#146;s default. The risk of loss under repurchase
agreements is lessened by certain factors, including the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales of our manufactured homes are spread over a relatively large
number of independent dealers;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price that we are obligated to pay under such repurchase
agreements declines based on predetermined amounts over the period of
the agreement (generally 18&nbsp;months); and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we have historically been able to resell homes repurchased from
lenders.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We review the aging of retail dealers&#146; inventory to estimate the amount of
inventory subject to repurchase obligation. Additionally, we review repurchase
notifications received from floor plan sources and review our dealer inventory
for expected repurchase notifications based on various communications from the
lenders and the dealers as well as for dealers who, we believe, are
experiencing financial difficulty. We apply a historical loss factor to
the inventory estimated to be repurchased and consider individual dealers
financial condition. The maximum amount for which we are contingently liable
under such agreements approximated $19.7&nbsp;million at March&nbsp;31, 2004. Since
mid-1999, the manufactured housing industry has been affected by three major
challenges &#151; retail financing availability, repossessions and retail inventory
levels. The rapid growth in the number of retailers prior to the deterioration
of retail financing has resulted in an imbalance between retail inventory
levels and consumer demand. If retail financing were to significantly weaken
further, the inventory imbalance could result in even greater price
competition, gross margin deterioration and have an overall material adverse
effect on our operating results. Although our practice of manufacturing only
to order coupled with closely monitoring retail stocking levels has enabled us
to continue to tightly manage inventories, we are unable to predict the impact
on our results of operations and financial condition if industry conditions
were to further deteriorate. We have a reserve for repurchase commitments of
$2.0&nbsp;million at both March&nbsp;31, 2003 and 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impairment of Long-Lived Assets. </I>Since the latter part of 1999, we and
the manufactured housing industry have experienced a downturn in business as
discussed above. Due to deteriorating market conditions, during this time, we
idled our New Mexico and Texas manufactured housing facilities and implemented
plans to dispose of or close certain of our under-performing retail locations.
We periodically evaluate the carrying value of long-lived assets to be held and
used, including goodwill and other intangible assets, when events and
circumstances warrant such a review. The carrying value of long-lived assets
is considered impaired when the anticipated undiscounted cash flow from such
assets is less than its carrying value. In that event, a loss is recognized
based on the amount by which the carrying value exceeds the fair market value
of the long-lived assets. Fair market value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the risk
involved. Losses on long-lived assets to be disposed of are determined in a
similar manner, except that the fair market values are based primarily on
independent appraisals and preliminary or definitive contractual arrangements
less costs to dispose.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Goodwill. </I>We tests goodwill annually for impairment by reporting unit and
record an impairment charge if the implied fair value of a reporting unit,
including goodwill, is less than its carrying value. We generally utilize
either quoted market values or a discounted cash flow methodology to test for
impairment of goodwill. The results of discounted cash flow methodology depend
upon a number of estimates and assumptions relating to cash flows, discount
rates and other matters. Accordingly, such testing is subject to certain
uncertainties, which could cause the fair value of goodwill to fluctuate from
period to period.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;31, 2004, all of our goodwill is attributable to our
manufacturing reporting unit. We performed our annual goodwill impairment
analysis as of March&nbsp;31, 2004. This analysis used the market value of our
outstanding common stock which is primarily supported by our manufacturing
operations and resulted in the conclusion that the goodwill was not impaired.
The current year analysis further validated the analysis used at March&nbsp;31, 2003
that used a discounted cash flow methodology with respect to the anticipated
future cash flows of the manufacturing operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that we are not able to achieve expected cash flow levels, or
other factors indicate that goodwill is impaired, we may need to write off all
or part of our goodwill, which would adversely effect our operating results and
net worth. See &#147;Business &#151; Risk Factors.&#148;


<P align="center" style="font-size: 10pt">25
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Other Matters</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Related Party Transactions. </I>During fiscal 2002, 2003, and 2004, we
purchased raw materials of approximately $1.5&nbsp;million, $3.0&nbsp;million, and $3.5
million, respectively, from affiliates of Centex. These purchases have been at
prices and on terms comparable to those that would be available in arm&#146;s-length
transactions. We expect to continue to purchase these materials on
arm&#146;s-length terms from these affiliates of Centex in the future. However,
these materials are also readily available from other suppliers at market
rates, and we are under no obligation to purchase these materials from current
or former affiliates of Centex. During fiscal 2002 and 2003, we sold homes for
approximately $1.0&nbsp;million and $2.0&nbsp;million, respectively, to an affiliate of
Centex.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impact of Inflation. </I>We believe that the relatively moderate rate of
general inflation over the past several years has not had a significant impact
on our sales or profitability, but can give no assurance that this trend will
continue in the future. We generally have been able to increase our selling
prices to offset increased costs. However, sudden increases in costs, such as
those we are currently experiencing, as well as price competition, can affect
our ability to increase our selling prices and adversely impact our
results of
operations. Therefore, we can give no assurance that inflation or the impact
of rising material costs will not have a significant impact on our sales or
results of operations in the future.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impact of Accounting Statements. </I>In December&nbsp;2002, the FASB issued SFAS
No.&nbsp;148, Accounting for Stock-Based
Compensation &#151; Transition and Disclosure, an amendment of FASB Statement
No.&nbsp;123. SFAS No.&nbsp;148 amends SFAS No.&nbsp;123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, SFAS No.&nbsp;148 amends the disclosure requirements of
SFAS No.&nbsp;123 to require prominent disclosures in both annual and interim
financial statements. These disclosure modifications are included in the notes
to consolidated financial statements. In April&nbsp;2003, the FASB determined that
stock-based compensation should be recognized as a cost in the financial
statements and that such cost be measured according to the fair value of the
stock options. The FASB has not yet determined the methodology for calculating
fair value and plans to issue an accounting standard that may become effective
in 2005. We will continue to monitor communications on this subject from the
FASB in order to determine the impact on our financial position or results of
operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2003, the FASB issued Interpretation No.&nbsp;46, Consolidation of
Variable Interest Entities, an Interpretation of ARB No.&nbsp;51 (FIN 46). FIN 46
requires certain variable interest entities (also formerly referred to as
special purpose entities) to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of
a controlling financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 is effective for all new variable interest
entities created or acquired after January&nbsp;31, 2003. For variable interest
entities created or acquired prior to February&nbsp;1, 2003, the provisions of FIN
46 must be applied for the first interim or annual period beginning after
December&nbsp;15, 2003. In December&nbsp;2003, the FASB issued Interpretation No.&nbsp;46R,
Consolidation of Variable Interest Entities&#151;an interpretation of ARB 51
(revised December&nbsp;2003) (&#147;FIN 46R&#148;), which includes significant amendments to
previously issued FIN 46. Among other provisions, FIN 46R includes revised
transition dates for public entities. Adoption of FIN 46R is required for
financial statements issued after March&nbsp;15, 2004. The adoption of this
interpretation is not expected to have a material effect on our financial
position or results of operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;2003, the FASB issued SFAS No.&nbsp;150, &#147;Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.&#148;
SFAS No.&nbsp;150 specifies the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity. This Statement
requires that qualifying instruments be classified as liabilities in statements
of financial position. The adoption of this standard is not expected to have a
material effect on our financial position or results of operations.


<P align="left" style="font-size: 10pt"><B>FORWARD-LOOKING STATEMENTS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements contained in this Annual Report on Form 10-K are
forward-looking statements. In general, all statements contained in this
information statement that are not historical in nature are forward-looking,
and the words &#147;anticipate,&#148; &#147;believe,&#148; &#147;expect,&#148; &#147;project,&#148; &#147;intend,&#148;
&#147;estimate&#148; and similar expressions are generally intended to identify
forward-looking statements. Forward-looking statements are included, for
example, in discussions regarding:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the manufactured housing industry;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our financial performance and operating results;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our operational and legal risks;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>how we may be affected by governmental regulations and legal
proceedings;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the expected effect of certain risks and uncertainties on our
business, financial condition and results of operations;</TD>
</TR>


</TABLE>

<P align="center" style="font-size: 10pt">26
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the distribution of our shares of common stock by Centex; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our relationship with Centex after the distribution.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All forward-looking statements are subject to risks and uncertainties,
many of which are beyond our control. As a result, our actual results or
performance may differ materially from anticipated results or performance.
Also, forward-looking statements are based upon management&#146;s estimates of fair
values and of future costs, using currently available information. Therefore,
actual results may differ materially from those expressed or implied in those
statements. Factors that could cause such differences to occur include, but are
not limited to, those discussed under the heading &#147;Risk Factors&#148; and elsewhere
in this Annual Report. We expressly disclaim any obligation to update any
forward-looking statements contained in this Annual Report, whether as a result
of new information, future events or otherwise. For all of these reasons, you
are cautioned not to place undue reliance on any forward-looking statements
included in this Annual Report.

<DIV align="left">
<A name="109"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market risk is the risk of loss arising from adverse changes in market
prices and interest rates. We may from time to time be
exposed to interest rate risk inherent in our financial instruments, but
are not currently subject to foreign currency or commodity price risk. We
manage our exposure to these market risks through our regular operating and
financing activities. We are not currently party to any market risk sensitive
instruments that could be reasonably expected to have a material effect on our
financial condition or results of operations.

<DIV align="left">
<A name="110"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is made to the consolidated financial statements, the reports
thereon, the notes thereto, and the supplementary data commencing on page F-1
of this report, which consolidated financial statements, reports, notes and
data are incorporated herein by reference.

<DIV align="left">
<A name="111"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">None.

<DIV align="left">
<A name="112"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 9A. CONTROLS AND PROCEDURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluation of Disclosure Controls and Procedures &#151; The Company&#146;s
President/Chief Executive Officer and its Chief Financial Officer have reviewed
the Company&#146;s disclosure controls and procedures (as defined in Exchange Act
Rules&nbsp;13a-14 (c)&nbsp;and 15d-14 (c)), within 90&nbsp;days of the filing of this report,
and have determined such disclosure controls and procedures to be effective in
alerting them to material information relating to the Company that may be
required to be included in the Company&#146;s periodic filings.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in Internal Controls &#151; Since the date of the review, there have
been no significant changes in the Company&#146;s internal controls or in other
factors that could significantly affect these controls.

<DIV align="left">
<A name="113"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART III</B>


<DIV align="left">
<A name="114"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 10. DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of the directors and executive officers of the Company,
see &#147;Election of Directors,&#148; &#147;Executive Officers and Principal Stockholders,&#148;
and &#147;Section&nbsp;16(a) Beneficial Ownership Reporting Compliance&#148; of the Company&#146;s
Proxy Statement for the Annual Meeting of Stockholders to be held on June&nbsp;22,
2004, which are incorporated herein by reference.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For disclosure regarding the Company&#146;s Code of Ethics, see &#147;Corporate
Governance&#148; of the Company&#146;s Proxy Statement for the Annual Meeting of
Stockholders to be held June&nbsp;22, 2004, which is incorporated herein by
reference.


<P align="center" style="font-size: 10pt">27
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="115"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 11. EXECUTIVE COMPENSATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of the Company&#146;s executive compensation, see &#147;Election
of Directors,&#148; &#147;Executive Officers and Principal Stockholders,&#148; &#147;Executive
Compensation&#148; (other than the &#147;Report of the Compensation Committee on
Executive Compensation&#148; and the &#147;Performance Graph&#148;), &#147;Compensation Committee
Interlocks and Insider Participation,&#148; and &#147;Certain Relationships and Related
Transactions&#148; of the Company&#146;s Proxy Statement for the Annual Meeting of
Stockholders to be held on June&nbsp;22, 2004, which are incorporated herein by
reference.

<DIV align="left">
<A name="116"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>



<P align="left" style="font-size: 10pt">For a description of the security ownership of management and certain
beneficial owners, see &#147;Executive Officers and Principal Stockholders&#148; of the
Company&#146;s Proxy Statement for the Annual Meeting of Stockholders to be held on
June&nbsp;22, 2004, which are incorporated herein by reference.

<DIV align="left">
<A name="117"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of certain relationships and related transactions of the
Company, see &#147;Compensation Committee Interlocks and
Insider Participation,&#148; and &#147;Certain Relationships and Related
Transactions&#148; of the Company&#146;s Proxy Statement for the Annual Meeting of
Stockholders to be held on June&nbsp;22, 2004, which are incorporated herein by
reference.

<DIV align="left">
<A name="118"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 14 . PRINCIPAL ACCOUNTANT FEES AND SERVICES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of principal accounting fees and services, see &#147;Fee
Disclosure&#148; of the Company&#146;s Proxy Statement for the Annual Meeting of
Stockholders to be held on June&nbsp;22, 2004, which are incorporated herein by
reference.


<P align="center" style="font-size: 10pt"><B>PART IV</B>


<DIV align="left">
<A name="119"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>(a)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Financial Statements and Financial Statement Schedules</B></TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt; margin-left:3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements are listed in the Index to Financial Statements
on page F-1 of this report.


<P align="left" style="font-size: 10pt; margin-left:3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All schedules are omitted because they are not applicable, not
required, or because the required information is included in the
consolidated financial statements or notes thereto.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>(b)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Reports on Form&nbsp;8-K</B></TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt; margin-left:3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company filed a Current Report on Form 8-K on January&nbsp;22, 2004,
with respect to a press release announcing its fiscal third quarter net
earnings for the quarter ended December&nbsp;31, 2003.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>(c)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Exhibits</B></TD>
</TR>

</TABLE>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Filed Herewith or</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Incorporated by Reference</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of
Incorporation of Cavco Industries, Inc. (&#147;Cavco&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws of
Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Incentive Plan of Cavco*</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;10.6 to the
Registration Statement on Form&nbsp;10/A (File No.&nbsp;000-08822)
filed by Cavco on April&nbsp;23, 2003, as amended by Form&nbsp;10/A
dated May&nbsp;21, 2003, Form&nbsp;10/A dated May&nbsp;30, 2003,
Form&nbsp;10/A dated June&nbsp;17, 2003, and Form&nbsp;10/A dated
June&nbsp;20, 2003</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement, dated
June&nbsp;30, 2003, between Joseph&nbsp;H. Stegmayer and Cavco*</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">28
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Filed Herewith or</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Incorporated by Reference</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement, dated
June&nbsp;30, 2003, between Sean K. Nolen and Cavco*</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restricted Stock Award Agreement,
dated June&nbsp;30, 2003, between Joseph H. Stegmayer and Cavco*</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Agreement dated
September&nbsp;17, 2003 between Bank One NA and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;10.1 of the Quarterly
Report on Form&nbsp;10-Q for the fiscal quarter ended
September&nbsp;30, 2003</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Credit Agreement dated
as of December&nbsp;16, 2003 between Bank One NA and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement to Assign Trademark
Rights and Limited Consent to Use Centex Trademarks, dated
June&nbsp;30, 2003, between Centex Corporation (&#147;Centex&#148;)
and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Administrative Services Agreement,
dated June&nbsp;30, 2003, between Centex Service Company and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distribution Agreement, dated
May&nbsp;30, 2003, among Centex, Cavco Industries, LLC, and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tax Sharing Agreement, dated
June&nbsp;30, 2003, among Centex, Centex&#146;s Affiliates, and Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>






<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">List of Subsidiaries of Cavco</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Auditors</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of CEO -
Rule&nbsp;13a-14/15d-14</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of CFO -
Rule&nbsp;13a-14/15d-14</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of CEO -
Section&nbsp;906</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith**</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of CFO - Section&nbsp;906</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filed herewith**</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
contract or compensatory plan or arrangement

<P align="left" style="font-size: 10pt">**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
certifications are not &#147;filed&#148; for purposes of
Section&nbsp;18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liability of that section. These
certifications are not to be deemed incorporated by reference into
any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, unless Cavco
specifically incorporates them by reference.

<P align="center" style="font-size: 10pt">29
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="120"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Cavco Industries, Inc.</B></TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Registrant</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Joseph H. Stegmayer</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Joseph H. Stegmayer &#150; Chairman,</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">President and</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Executive Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Principal Executive Officer)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Sean K. Nolen</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President, Chief Financial</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Officer, Treasurer and Secretary</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Principal Financial and</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accounting Officer)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Joseph H. Stegmayer
<HR size="1" noshade>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board, Director
and Principal Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Steven G. Bunger
<HR size="1" noshade>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jacqueline Dout<BR>
<HR size="1" noshade>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jack Hanna<BR>
<HR size="1" noshade>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Michael Thomas<BR>
<HR size="1" noshade>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;24, 2004</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">30
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC.</B>


<DIV align="left">
<A name="121"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Report of Independent Auditors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Consolidated Balance Sheets as of March&nbsp;31, 2003 and 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Consolidated Statements of Operations for the Years Ended
March&nbsp;31, 2002, 2003 and 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Consolidated Statements of Stockholders&#146; Equity for the Years Ended
March&nbsp;31, 2002, 2003 and 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Consolidated Statements of Cash Flows for the Years Ended
March&nbsp;31, 2002, 2003 and 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Notes to Consolidated Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-7</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">F-1
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="122"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>REPORT OF INDEPENDENT AUDITORS</B>


<P align="left" style="font-size: 10pt"><B>Board of Directors and Stockholders of<BR>
Cavco Industries, Inc.</B>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We have audited the accompanying consolidated balance sheets of Cavco
Industries, Inc. and subsidiary as of March&nbsp;31, 2003 and 2004, and the related
consolidated statements of operations, stockholders&#146; equity and cash flows for
each of the three years in the period ended March&nbsp;31, 2004. These financial
statements are the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cavco Industries,
Inc. and subsidiary at March&nbsp;31, 2003 and 2004, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended March&nbsp;31, 2004, in conformity with accounting principles generally
accepted in the United States.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for purchased goodwill in accordance with
Statement of Financial Accounting Standards No.&nbsp;142 during the first quarter of
fiscal 2002.


<P align="left" style="font-size: 10pt; margin-left: 50%">/s/ ERNST
&#038; YOUNG LLP


<P align="left" style="font-size: 10pt">Phoenix, Arizona<BR>
April&nbsp;21, 2004


<P align="center" style="font-size: 10pt">F-2
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC. AND SUBSIDIARY</B>


<DIV align="left">
<A name="123"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED BALANCE SHEETS<BR></B>
(Dollars in thousands)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Restricted cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">827</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,479</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,995</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Prepaid expenses and other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,701</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Receivable from Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail assets held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,941</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and equipment, at cost:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,330</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Buildings and improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,043</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Machinery and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,216</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,589</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,541</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,369</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,220</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,346</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">111,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,986</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,091</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,830</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Commitments and contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Preferred Stock, $.01 par value, 1,000,000 shares authorized;
no shares issued or outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Common Stock, $.01 par value; 10,000,000 shares authorized;
Outstanding 3,089,269 at March&nbsp;31, 2003 (proforma)&nbsp;and
3,144,365 at March&nbsp;31, 2004 shares, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,030</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Unamortized value of restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(563</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accumulated deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(27,715</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(21,565</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,933</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total liabilities and stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">111,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">See accompanying notes.



<P align="center" style="font-size: 10pt">F-3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC. AND SUBSIDIARY</B>


<DIV align="left">
<A name="124"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF OPERATIONS<BR></B>
(Dollars in thousands, except per share amounts)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">95,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,627</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Selling, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,583</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,044</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest income (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(344</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">233</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from continuing operations before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,054</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,223</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Discontinued operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued manufacturing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,777</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,404</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss from discontinued retail operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,768</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average shares outstanding:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,591</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,155,906</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma financial information:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proforma income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,244</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,724</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,711</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proforma income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,566</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proforma loss from discontinued operations, net
of proforma taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,727</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,813</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proforma net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(862</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,727</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,522</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income (loss)&nbsp;per share &#151; basic:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income (loss)&nbsp;per share &#151; diluted:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma weighted average shares outstanding:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,591</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,155,906</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">See accompanying notes.



<P align="center" style="font-size: 10pt">F-4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC. AND SUBSIDIARY</B>


<DIV align="left">
<A name="125"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY<BR></B>
(Dollars in thousands)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Common Stock</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Additional<BR>paid-in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unamortized<BR>value of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>capital</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>restricted stock</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>deficit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance, April&nbsp;1, 2001</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">74,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(15,912</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">58,409</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance, March&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(17,348</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,973</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distribution to Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,822</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,822</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Contribution from Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,740</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance, March&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,089,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(27,715</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,346</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Assumption of net deferred tax
liability from Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,000</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issuance of restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Amortization of restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance, March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,144,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">120,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(563</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(21,565</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">97,933</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">See accompanying notes.





<P align="center" style="font-size: 10pt">F-5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC. AND SUBSIDIARY</B>


<DIV align="left">
<A name="126"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS<BR></B>
(Dollars in thousands)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">OPERATING ACTIVITIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,436</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Adjustments to reconcile net income (loss)&nbsp;to net
cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Depreciation &#151; continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,163</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Depreciation &#151; discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Amortization of restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Deferred income taxes provision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Impairment and other related charges-discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Changes in operating assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:70px; text-indent:-10px">Restricted cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,127</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,448</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:70px; text-indent:-10px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,430</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,215</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:70px; text-indent:-10px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(183</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,766</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:70px; text-indent:-10px">Prepaid expenses and other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,061</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:70px; text-indent:-10px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,263</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,730</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,773</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">INVESTING ACTIVITIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Continuing operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Purchases of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,465</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(373</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(222</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Proceeds from disposition of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Discontinued operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Purchases of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(615</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(225</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:50px; text-indent:-10px">Proceeds from disposition of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,378</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(352</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(222</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">FINANCING ACTIVITIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Funding provided by Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(340</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,575</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,224</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Principal payments on long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net cash provided by (used in) financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,605</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,224</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net increase in cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,775</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,775</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Supplemental disclosures of cash flow information:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Cash paid during the year for interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Cash paid during the year for income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Supplemental schedule of non-cash financing and investing activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Issuance of restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Assumption of net deferred tax liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Property, plant and equipment distributed to Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Capital contribution provided by Centex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">See accompanying notes.



<P align="center" style="font-size: 10pt">F-6
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CAVCO INDUSTRIES, INC. AND SUBSIDIARY</B>


<DIV align="left">
<A name="127"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
(Dollars in thousands)</B></DIV>



<P align="left" style="font-size: 10pt"><B>1. Summary of Significant Accounting Policies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principles of Consolidation &#151; These consolidated financial statements
include the accounts of Cavco Industries, Inc., (&#147;Cavco Inc.&#148;) and its
wholly-owned subsidiary, CRG Holdings, LLC, (collectively, the &#147;Company&#148;). All
significant intercompany transactions and balances have been eliminated in
consolidation. See Note 14 for information related to the Company&#146;s business
segments.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nature of Operations &#151; Headquartered in Phoenix, Arizona, the Company&#146;s
manufacturing segment designs and produces manufactured homes which are sold to
a network of retailers located primarily in the Southwestern United States.
The Company&#146;s retail segment operates retail sales locations which offer the
Company&#146;s homes and homes of other manufacturers to retail customers. Prior to
June&nbsp;30, 2003, the Company was an indirect wholly-owned subsidiary of Centex
Corporation (&#147;Centex&#148;) (Note 2).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting Estimates &#151; Preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported
in the financial statements and the accompanying notes. Actual results could
differ from the estimates and assumptions used by management in preparation of
the financial statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of Financial Instruments &#151; The carrying value of the Company&#146;s
accounts receivable, accounts payable and accrued liabilities approximates fair
value because of the short-term nature of these instruments.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition &#151; Revenue from homes sold to independent retailers are
recognized when the home is shipped, which is when the title passes to the
independent retailer. Homes sold to independent retailers are generally paid
for prior to shipment or financed by the independent retailer through standard
industry arrangements which include repurchase agreements (see Note 10).
Manufacturing sales are reduced by a provision for estimated repurchase
obligations based upon past experience and market conditions. Retail sales for
Company locations are recognized when funding is reasonably assured, the
customer has entered into a legally binding sales contract, title has
transferred and the home is accepted by the customer, delivered and permanently
located at the customer&#146;s site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Cash &#151; Restricted cash represents deposits received from
customers required to be held in trust accounts which the Company can not
access for general operating purposes until the sale of the home to the
customer is completed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable &#151; The Company extends credit in the normal course of
business under normal trade terms and our accounts receivable are subject to
normal industry risk. The Company provides for reserves against accounts
receivable for estimated losses that may result from customers&#146; inability to
pay. Uncollectible accounts receivable have historically been insignificant
and therefore the Company has no reserve for credit losses at March&nbsp;31, 2003
and 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories &#151; Raw materials inventories are valued at the lower of cost
(first-in, first-out method which approximates actual cost) or market.
Finished goods are valued at the lower of cost or market, using the specific
identification method.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, Plant and Equipment &#151; Property, plant and equipment are carried
at cost. Depreciation is calculated using the straight-line method over the
assets&#146; estimated useful lives. Estimated useful lives for significant classes
of assets are as follows: Buildings and Improvements 10 to 30&nbsp;years, and
Machinery and Equipment 7 to 25&nbsp;years. Repairs and maintenance are expensed as
incurred.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset Impairment &#151; The Company periodically evaluates the carrying value
of long-lived assets to be held and used, when events and circumstances warrant
such a review. The carrying value of a long-lived asset is considered impaired
when the anticipated undiscounted cash flow from such asset is less than its
carrying value. In that event, a loss is recognized based on the amount by
which the carrying value exceeds the fair market value of the long-lived asset.
Fair market value is determined primarily using the anticipated cash flows
discounted at a rate commensurate with the risk involved. Losses on long-lived
assets to be disposed of are determined in a similar manner, except that the
fair market values are primarily based on independent appraisals and
preliminary or definitive contractual arrangements less costs to dispose. See
Note 3 for impairment charges recorded by the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill &#151; Goodwill is the excess of cost over fair value of net assets of
businesses acquired. The Company accounts for goodwill using the provisions of
Statement of Financial Accounting Standards (SFAS)&nbsp;No.&nbsp;142, &#147;Goodwill and Other
Intangibles&#148; and accordingly, goodwill is no longer amortized.


<P align="center" style="font-size: 10pt">F-7
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company tests goodwill annually for impairment by reporting unit and
records an impairment charge if the implied fair value of a reporting unit,
including goodwill, is less than its carrying value. As of March&nbsp;31, 2003 and
2004, all of the Company&#146;s goodwill is attributable to its manufacturing
reporting unit. The Company performed its annual goodwill impairment analysis
as of March&nbsp;31, 2004. This analysis used the market value of the Company&#146;s
outstanding common stock which is primarily supported by the Company&#146;s
manufacturing operations and resulted in the conclusion that the goodwill was
not impaired.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warranties &#151; Homes are warranted against manufacturing defects for a
period of one year commencing at the time of sale to the retail customer.
Estimated costs relating to home warranties are provided at the date of sale.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insurance &#151; The Company&#146;s workmen&#146;s compensation insurance coverages have
been provided under an insurance policy whereby the Company is responsible for
individual claims up to $500. Incurred claims identified under the third party
administrator&#146;s incident reporting system and incurred but not reported claims
are accrued based on estimates provided by the plan&#146;s administrator as well as
the Company&#146;s prior experience. The Company&#146;s product liability and general
liability insurance coverages have been provided under insurance policies which
provide for deductibles of $1,000. Incurred claims identified under the
Company&#146;s incident reporting system and incurred but not reported claims are
accrued based on estimates that incorporate the Company&#146;s past experience, as
well as other considerations, such as the nature of each claim or incident.
Total insurance expense for workmen&#146;s compensation insurance and liability
insurance coverages were $917, $1,163 and $1,044 for the fiscal years ended
March&nbsp;31, 2002, 2003 and 2004, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes &#151; Prior to the spin-off from Centex (Note 2), the Company was
incorporated in the consolidated Federal income tax returns of Centex.
Therefore, income taxes are not provided for in these financial statements for
periods prior to June&nbsp;30, 2003 as the Company and Centex agreed that all taxes
or tax benefits from filing a consolidated income tax return would either be
borne by or benefit Centex. Pro forma income tax expense (benefit)&nbsp;for the
fiscal years ended March&nbsp;31, 2002 and 2003 and for the first quarter of the
fiscal year ended March&nbsp;31, 2004 has been calculated based on a 40% effective
tax rate and presented on the face of the statement of operations as if the
Company had been a stand-alone taxable entity for those periods.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Income Per Share &#150; The Company reports two separate net income per
share numbers, basic and diluted. Both are computed by dividing net income by
the weighted average shares outstanding (basic)&nbsp;or weighted average shares
outstanding assuming dilution (diluted). Diluted earnings per share
calculations include dilutive stock options of 25,315 for fiscal 2004.
Proforma net income (loss)&nbsp;per share is calculated using the number of shares
of our common stock which were distributed to the stockholders of Centex (Note
2).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting For Stock Based Compensation &#151; The Company accounts for its
stock-based compensation programs under APB No.&nbsp;25, Accounting for Stock Issued
to Employees and related interpretations, under which no compensation expense
has been recognized, as all options have been granted with an exercise price
equal to the fair value of the common stock on the date of grant. The Company
has adopted the disclosure-only provisions of SFAS No.&nbsp;123, Accounting for
Stock Based Compensation, as amended by SFAS No.&nbsp;148, Accounting for Stock
Based Compensation-Transition and Disclosure. For the disclosure requirements
of SFAS No.&nbsp;123 as amended by SFAS 148, the fair value of each option grant as
of the date of the grant was estimated using the Black-Scholes option pricing
method. The assumptions used for the year ended March&nbsp;31, 2004 were volatility
of 24.7%, risk-free interest rate of 2.1%, dividend rate of 0.0% and an
expected life of the options of 5&nbsp;years.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options granted vest over a three-year period with 25% becoming vested on
the grant date and the remainder becoming vested in cumulative 25% increments
on each of the first three anniversaries of the grant date. Had compensation
cost been determined as prescribed by SFAS No.&nbsp;123, utilizing the assumptions
detailed above and amortizing the resulting fair value of the stock options
granted over the respective vesting period of the options, net income and
earnings per share would have been reduced to the proforma amounts for the year
ended March&nbsp;31, 2004 as follows. Net income presented in the following table
includes the proforma income tax provision discussed above.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="91%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>March 31, 2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,522</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less: Total stock-based employee compensation determined under the fair
value based method for all awards, net of related tax effects of $225</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(338</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income, as adjusted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,184</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income per share &#151; Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income per share &#151; Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">F-8
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising &#151; Advertising costs are expensed as incurred and were $850,
$830 and $574 for the fiscal years ended March&nbsp;31, 2002, 2003 and 2004,
respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Freight &#151; Substantially all freight costs are reimbursed by the Company&#146;s
customers. Sales and cost of sales include freight income and expense of
$3,856, $4,210 and $4,910 for the fiscal years ended March&nbsp;31, 2002, 2003 and
2004, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent Accounting Pronouncements &#151; In December&nbsp;2002, the FASB issued SFAS
No.&nbsp;148, Accounting for Stock-Based Compensation &#151; Transition and Disclosure,
an amendment of FASB Statement No.&nbsp;123. SFAS No.&nbsp;148 amends SFAS No.&nbsp;123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value method of accounting for
stock-based employee compensation. In addition, SFAS No.&nbsp;148 amends the
disclosure requirements of SFAS No.&nbsp;123 to require prominent disclosures in
both annual and interim financial statements. These disclosure modifications
are included in the notes to these consolidated financial statements. In April
2003, the FASB determined that stock-based compensation should be recognized as
a cost in the financial statements and that such cost be measured according to
the fair value of the stock options. The FASB has not yet determined the
methodology for calculating fair value and plans to issue an accounting
standard that may become effective in 2005. The Company will continue to
monitor communications on this subject from the FASB in order to determine the
impact on the financial position or results of operations of the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2003, the FASB issued Interpretation No.&nbsp;46, Consolidation of
Variable Interest Entities, an Interpretation of ARB No.&nbsp;51 (FIN 46). FIN 46
requires certain variable interest entities (also formerly referred to as
special purpose entities) to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of
a controlling financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 is effective for all new variable interest
entities created or acquired after January&nbsp;31, 2003. For variable interest
entities created or acquired prior to February&nbsp;1, 2003, the provisions of FIN
46 must be applied for the first interim or annual period beginning after
December&nbsp;15, 2003. In December&nbsp;2003, the FASB issued Interpretation No.&nbsp;46R,
Consolidation of Variable Interest Entities&#151;an interpretation of ARB 51
(revised December&nbsp;2003) (&#147;FIN 46R&#148;), which includes significant amendments to
previously issued FIN 46. Among other provisions, FIN 46R includes revised
transition dates for public entities. Adoption of FIN 46R is required for
financial statements issued after March&nbsp;15, 2004. The adoption of this
interpretation is not expected to have a material effect on the financial
position or results of operations of the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;2003, the FASB issued SFAS No.&nbsp;150, &#147;Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.&#148;
SFAS No.&nbsp;150 specifies the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity. This Statement
requires that qualifying instruments be classified as liabilities in statements
of financial position. The adoption of this standard is not expected to have a
material effect on the financial position or results of operations of the
Company.


<P align="left" style="font-size: 10pt"><B>2. Spin-Off from Centex Corporation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective June&nbsp;30, 2003, Cavco Industries, LLC (&#147;Cavco LLC&#148;) was merged
into Cavco Inc. and 100% of the outstanding shares of common stock of Cavco
Inc. were distributed to the stockholders of Centex, Cavco Inc.&#146;s parent
company (the &#147;Distribution&#148;). Upon this Distribution, Cavco Inc. became a
separate public company. The stockholders&#146; equity section of the balance sheet
and the statement of stockholders&#146; equity have been presented assuming the
merger of Cavco LLC into Cavco Inc. had occurred on March&nbsp;31, 2001 and
3,089,269 shares of common stock of Cavco Inc. were issued and outstanding.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Distribution, Cavco Inc. entered into a three-year
administrative services agreement with Centex Service Company (&#147;CSC&#148;), a
subsidiary of Centex, pursuant to which CSC will provide Cavco Inc. with
certain legal, public/investor relations, accounting and benefit services after
the Distribution. In exchange for these services, Cavco Inc. will pay CSC a
fee of $75 per year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Distribution, Cavco Inc. entered into a tax sharing
agreement with Centex in order to allocate the responsibilities for certain tax
matters. Pursuant to the agreements, Cavco Inc. will not liquidate, merge or
consolidate with any other entity within two years of the Distribution, dispose
of a substantial portion of its assets within two years of the Distribution, or
take any other action which would cause the Distribution to fail to qualify as
a tax-free transaction. In addition, Cavco Inc. also agreed, in certain
circumstances, to indemnify Centex against any tax liability that is incurred
as a result of a failure to qualify as a tax-free transaction.


<P align="center" style="font-size: 10pt">F-9
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>3. Impairment and Other Related Charges</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the continuation of weak industry conditions through fiscal 2003 as
well as adverse legislation that affected the form and structure of permanent
financing extended to Texas manufactured home consumers which further
negatively affected retail sales volumes in Texas, the Company initiated plans
to dispose of more than two-thirds of its retail sales locations and their
assets. As a result of these difficult industry conditions and the Company&#146;s
plans to dispose of these assets, the Company recorded an impairment charge of
$2,691 to write down property, plant and equipment to its fair value and a
charge of $2,200 to record retail inventories at their market value both of
which are included in the loss from discontinued operations (Note 4) for fiscal
2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the Company&#146;s strategic decision to dispose of certain of
its retail operations as noted above, reopening the Company&#146;s idled Texas
manufacturing facility was no longer economically viable. The Company
therefore decided to sell this facility and an impairment charge of $2,215 was
recorded in fiscal 2003 to reduce this facility to its estimated fair value
based upon the expected net sales proceeds. In connection with the
Distribution, the Company distributed to Centex its idled manufacturing
facilities in New Mexico and Texas during fiscal 2003. The fair value of these
manufacturing facilities at the date of the distribution to Centex was $5,822.
The New Mexico facility had previously been written down to its estimated fair
value in fiscal 2001.


<P align="left" style="font-size: 10pt"><B>4. Discontinued Operations</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operations of the Company&#146;s New Mexico and Texas manufacturing
facilities which have been distributed to Centex (Note 3) are classified as
discontinued operations. Net sales for these manufacturing facilities were
$929 for the fiscal year ended March&nbsp;31, 2002. These facilities had no sales
subsequent to March&nbsp;31, 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed in Note 3, the Company has initiated plans to sell or dispose
of certain of its retail sales centers and their underlying assets. Because the
Company believes it is probable that the assets of the retail sales centers to
be disposed of will be sold within one year, these assets are classified as
held for sale. The operations of these retail sales centers and two retail
sales centers previously identified for closure in fiscal 2001 are classified
as discontinued operations. Net sales for these retail sales centers were
$28,681, $27,880 and $20,912 for the fiscal years ended March&nbsp;31, 2002, 2003
and 2004. Retail assets held for sale, consisting solely of inventories, were
$7,841 and $2,941 at March&nbsp;31, 2003 and 2004, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense specifically incurred by the Company&#146;s retail segment
(Note 14) has been allocated to discontinued retail operations based on the
ratio of the assets of the discontinued retail operations to total retail
assets. Interest expense included in discontinued operations was $1,110, $535
and $0 for the fiscal years ended March&nbsp;31, 2002, 2003 and 2004, respectively.
General corporate administrative expenses are not allocated to discontinued
operations.


<P align="left" style="font-size: 10pt"><B>5. Inventories</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories consist of the following:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Raw materials</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Work in process</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,981</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Finished goods</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,010</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,995</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>6. Related Party Transactions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Funding &#151; In anticipation of the Distribution, Centex contributed the net
amount it had advanced to the Company through March&nbsp;31, 2003 for various
transactions as well as an additional amount to the capital of the Company to
increase the Company&#146;s tangible net worth to $25,000. The additional amount
contributed was recorded as a receivable from Centex at March&nbsp;31, 2003, and
this amount was paid in full by Centex in May&nbsp;2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Services &#151; In accordance with Staff Accounting Bulletin No.&nbsp;55,
expense allocations from Centex have been reflected in these financial
statements. These expenses include management compensation, legal and general
corporate administration. These charges were based on amounts negotiated
between the Company and Centex or percentage allocations based on estimates of
actual time spent. Such allocations and charges totaled $360 and $475 for the
fiscal years ended March&nbsp;31, 2002 and 2003, respectively. Management believes
that the basis used for allocating services provided by Centex is reasonable.
However, the terms of these
transactions may differ from those that would have resulted from
transactions among unrelated parties. For the fiscal year ended March&nbsp;31,
2004, the Company has been solely responsible for all of its operating
expenses.


<P align="center" style="font-size: 10pt">F-10
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal 2002, 2003, and 2004, the Company purchased raw materials of
approximately $1.5&nbsp;million, $3.0&nbsp;million, and $3.5&nbsp;million, respectively, from
affiliates of Centex. During fiscal 2002 and 2003, the Company sold homes for
approximately $1.0&nbsp;million and $2.0&nbsp;million, respectively, to an affiliate of
Centex.


<P align="left" style="font-size: 10pt"><B>7. Revolving Line of Credit</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a revolving line of credit facility (&#147;RLC&#148;) with Bank One,
NA. The RLC provides for borrowings up to $15&nbsp;million with availability
limited to 80% of eligible accounts receivable and 50% of eligible inventory,
as determined on a monthly basis. As of March&nbsp;31, 2004, the amount available
under the RLC was approximately $9,100 of which $495 is reserved for an
outstanding letter of credit issued for the Company&#146;s workmen&#146;s compensation
insurance program (Note 1). The Company has not made any draws under the RLC.
The outstanding principal amount of borrowings under the RLC bears interest at
the Company&#146;s election at either the prime rate or the London Interbank Offered
Rate plus 2.25%. The RLC expires on July&nbsp;31, 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The RLC contains certain restrictive and financial covenants, which, among
other things, limit the Company&#146;s ability to pay dividends, purchase treasury
stock, pledge assets, incur additional indebtedness and make capital
expenditures, and requires the Company to maintain certain defined leverage and
debt service coverage ratios.


<P align="left" style="font-size: 10pt"><B>8. Accrued Liabilities</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities consist of the following:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Estimated warranties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,596</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Salaries, wages and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Customer deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,675</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accrued expenses on homes sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,079</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,536</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Reserve for repurchase commitments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accrued insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,952</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,538</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,986</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>9. Employee Benefit Plans</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a self-funded group medical plan which is administered by
third party administrators. The medical plan has reinsurance coverage limiting
liability for any individual employee loss to a maximum of $200. Incurred
claims identified under the third party administrator&#146;s incident reporting
system and incurred but not reported claims are accrued based on estimates that
incorporate the Company&#146;s past experience, as well as other considerations such
as the nature of each claim or incident, relevant trend factors and advice from
consulting actuaries when necessary. Medical claims expense was $1,560, $2,262
and $2,301 for the fiscal years ended March&nbsp;31, 2002, 2003 and 2004,
respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company sponsors an employee savings plan (the &#147;401k Plan&#148;) that is
intended to provide participating employees with additional income upon
retirement. Employees may contribute up to 100% of their eligible compensation
up to federal limits to the 401k Plan. The Company matches 50% of the first 5%
contributed by employees. Employees are immediately eligible to participate
and employer matching contributions are vested progressively over a four year
period. Contribution expense was $130, $133 and $133 in fiscal years 2002,
2003 and 2004, respectively.


<P align="left" style="font-size: 10pt"><B>10. Commitments and Contingencies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is contingently liable under terms of repurchase agreements
with financial institutions providing inventory financing for independent
retailers of its products. These arrangements, which are customary in the
industry, provide for the repurchase of products sold to retailers in the event
of default by the retailer. The risk of loss under these agreements is spread
over numerous retailers. The price the Company is obligated to pay generally
declines over the period of the agreement and is further reduced by the resale
value of repurchased homes. The maximum amount for which the Company was
contingently liable under such agreements approximated $19,700 at March&nbsp;31,
2004. The Company has a reserve for repurchase commitments of $2,000 at March
31, 2003 and 2004, respectively, based on prior experience and existing market
conditions. In connection with the repurchase
agreement with one financial institution, the Company has provided a
guaranty in the amount of $300 to guaranty payment should one of the Company&#146;s
larger independent dealers default on certain of its obligations in the event
of a repurchase by the lender. The potential liability related to this
guaranty is included in the Company&#146;s reserve for repurchase commitments.


<P align="center" style="font-size: 10pt">F-11
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company leases certain equipment and facilities under noncancelable
operating leases with various renewal options. Rent expense (net of sublease
income) was $2,362, $2,434 and $2,345 for fiscal years 2002, 2003 and 2004,
respectively. Future minimum lease payments for all noncancelable operating
leases having a remaining term in excess of one year at March&nbsp;31, 2004, are as
follows (in thousands):

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fiscal Year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,306</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">684</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">405</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2009 and thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is engaged in various legal proceedings that are incidental to
and arise in the course of its business. Certain of the cases filed against
the Company and other companies engaged in businesses similar to the Company
allege, among other things, breach of contract and warranty, product liability
and personal injury. These kinds of suits are typical of suits that have been
filed in recent years, and they sometimes seek certification as class actions,
the imposition of large amounts of compensatory and punitive damages and trials
by jury. Legal fees associated with these lawsuits are expensed as incurred.
In the opinion of management, the ultimate liability, if any, with respect to
the proceedings in which the Company is currently involved is not expected to
have a material adverse effect on the Company&#146;s financial position or results
of operations. However, the potential exists for unanticipated material
adverse judgments against the Company.


<P align="left" style="font-size: 10pt"><B>11. Valuation and Qualifying Accounts</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain valuation and qualifying accounts
for the fiscal years ended March&nbsp;31, 2002, 2003 and 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Charged to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beginning</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Costs and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>End of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expenses</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Deductions</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Reserve for repurchase commitments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(216</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Estimated warranties:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,031</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,789</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,353</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Year ended March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,987</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,596</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>12. Income Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the spin-off from Centex (Note 2), the Company was incorporated
in the consolidated Federal income tax returns of Centex. Therefore, income
taxes are not provided for in these financial statements for periods prior to
June&nbsp;30, 2003. The provision for income taxes for the period from July&nbsp;1, 2003
to March&nbsp;31, 2004 is as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Federal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">676</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">State</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total current</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">795</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Deferred</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Federal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,920</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">State</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">339</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total deferred</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,259</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total provision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,054</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">F-12
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provision for income taxes differs from the amount of income tax
determined by applying the applicable statutory Federal income tax rate to
pretax income for the period from July&nbsp;1, 2003 to March&nbsp;31, 2004 as a result of
the following differences:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="87%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from continuing operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">For the year ended March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Less: Period from April&nbsp;1, 2003 to June&nbsp;30, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,642</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:20px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Period from July&nbsp;1, 2003 to March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income tax provision at expected Federal income tax rate of 34%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,596</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">State income taxes, net of Federal tax effect</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">458</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total provision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,054</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net current deferred tax assets and net long-term deferred tax liabilities
at June&nbsp;30, 2003, the date of the Distribution, and March&nbsp;31, 2004 were as
follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>March 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net current deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Warranty reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,838</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Repurchase reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Insurance reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">418</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">577</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">514</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,570</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net long-term deferred tax (liabilities)&nbsp;assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(5,727</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(7,358</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">528</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,618</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(6,830</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>13. Stock Options and Incentive Plan</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a stock incentive plan whereby stock options or awards of
restricted stock may be made to certain of our officers, directors and key
employees. Stock options may not be granted below 100% of the fair market
value of the Company&#146;s common stock at the date of grant and generally expire
seven years from the date of grant. Stock options and awards of restricted
stock generally vest over a three-year period with 25% becoming vested on the
grant date and the remainder becoming vested in cumulative 25% increments on
each of the first three anniversaries of the grant date. As of March&nbsp;31, 2004,
72,198 options were exercisable. The following table summarizes the activity
in outstanding stock options for the year ended March&nbsp;31, 2004. There were no
stock options or awards of restricted stock prior to April&nbsp;1, 2003.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Weighted</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Average</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Outstanding at April&nbsp;1, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Canceled or forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Outstanding at March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23.10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended March&nbsp;31, 2004, the Company granted 55,096 shares of
restricted stock which were recorded at their fair market value at the date of
grant. The fair value of restricted stock is amortized to compensation expense
as they vest.


<P align="center" style="font-size: 10pt">F-13
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes information about equity compensation plans
as of March&nbsp;31, 2004:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of securities</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>securities to be</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>remaining available</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>issued upon</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Weighted-average</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>for future issuance</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>exercise of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>exercise price of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>under equity</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>compensation plans</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>options, warrants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>options, warrants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>excluding securities</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>and rights</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>and rights</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>reflected in column (a)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Equity compensation plans approved
by stockholders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Stock incentive plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">450,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Equity compensation plans not
approved by stockholders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">None</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>14. Business Segment Information</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company operates in two business segments &#151; Manufacturing and Retail.
Through its Manufacturing segment, the Company designs and manufactures homes
which are sold primarily in the southwestern United States to a network of
dealers which includes Company-owned retail locations comprising the Retail
segment. The Company&#146;s Retail segment derives its revenues from home sales to
individuals. The accounting policies of the segments are the same as those
described in Note 1, &#147;Summary of Significant Accounting Policies&#148;. Retail
segment results include retail profits from the sale of homes to consumers but
do not include any manufacturing segment profits associated with the homes
sold. Intercompany transactions between reportable operating segments are
eliminated in consolidation. Each segment&#146;s results include corporate office
costs that are directly and exclusively incurred for the segment. The
following table summarizes information with respect to the Company&#146;s business
segments for the periods indicated:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">96,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">106,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">123,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,362</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Less: Intercompany</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,097</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,855</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,541</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total consolidated net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">95,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,857</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income (loss)&nbsp;from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,773</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,375</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(999</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(374</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Intercompany profit in inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">General corporate charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,648</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,706</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,515</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total consolidated income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,044</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">85,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">85,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">88,631</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing assets distributed to Centex Corporation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,774</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail assets held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,941</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Corporate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total consolidated assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">117,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">111,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">F-14
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="67%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended March 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">785</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Corporate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total consolidated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,163</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Manufacturing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retail</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Corporate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total consolidated capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">222</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Corporate assets are comprised primarily of the receivable from
Centex at March&nbsp;31, 2003 and cash and deferred taxes at March&nbsp;31, 2004.


<P align="left" style="font-size: 10pt"><B>15. Quarterly Financial Data (Unaudited)</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables sets forth certain unaudited quarterly financial
information for the years ended March&nbsp;31, 2003 and 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>First</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Second</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Third</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fourth</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fiscal year ended March&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,037</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,354</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Loss from discontinued
manufacturing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(254</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(237</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(243</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,670</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,404</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Loss from discontinued
retail operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(758</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(965</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(616</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,612</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net (loss)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,845</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,545</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma financial information:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(607</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(721</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(515</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,970</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,813</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(4,108</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,727</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income (loss)&nbsp;per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Continuing operations (basic and diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations (basic and diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.61</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.20</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income (basic and diluted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1.33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.88</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">F-15
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>First</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Second</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Third</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fourth</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fiscal year ended March&nbsp;31, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">29,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,627</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Loss from discontinued
manufacturing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Loss from discontinued
retail operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income (loss)&nbsp;per share (basic):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Proforma net income (loss)&nbsp;per share (diluted):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fourth quarter of fiscal 2003, the Company recorded an
impairment charge of $2,691 to write-down property, plant and equipment
relating to the Company&#146;s plans to dispose of or close more than two-thirds of
its retail sales locations, a charge of $2,200 to record retail inventories at
their estimated market value and an impairment charge of $2,215 to record the
idled Texas manufacturing facility at its estimated fair value.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For all periods prior to June&nbsp;30, 2003, the date of the Distribution, per
share amounts are based on proforma income and the shares of our common stock
which were distributed to the stockholders of Centex (Notes 1 and 2).



<P align="center" style="font-size: 10pt">F-16
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>p69164exv3w1.txt
<DESCRIPTION>EX-3.1
<TEXT>
<PAGE>

                                                                     EXHIBIT 3.1

                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                             CAVCO INDUSTRIES, INC.

                        UNDER SECTIONS 242 AND 245 OF THE
                        DELAWARE GENERAL CORPORATION LAW

         CAVCO INDUSTRIES, INC. ("the Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, hereby certifies as follows:

      1.    The name of the Corporation is:

                             Cavco Industries, Inc.

The Corporation was originally incorporated under the same name upon the filing
of the Certificate of Incorporation of the Corporation with the Secretary of
State of the State of Delaware on January 14, 2003.

      2.    The restatement and amendment of the Certificate of Incorporation
has been duly adopted by a resolution of the Board of Directors of the
Corporation (the "Board of Directors") proposing and declaring advisable this
Restated Certificate of Incorporation, and the sole holder of all shares of the
capital stock of the Corporation has duly approved and adopted this Restated
Certificate of Incorporation, all in accordance with the provisions of Sections
228, 242 and 245 of the General Corporation Law of the State of Delaware.

      3.    This Restated Certificate of Incorporation restates and amends the
Certificate of Incorporation of the Corporation.

      4.    The text of the Certificate of Incorporation is hereby restated and
amended to read in its entirety as follows:

      FIRST: The name of the Corporation is Cavco Industries, Inc. (hereinafter,
the "Corporation").

      SECOND: The address of the registered office of the Corporation in the
State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington,
County of New Castle, Delaware 19808, and the name of the registered agent of
the Corporation at such address is Corporation Service Company.

                                       1
<PAGE>

      THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").

      FOURTH: The aggregate number of shares of capital stock that the
Corporation shall have authority to issue is 11,000,000, of which 10,000,000
shares are classified as common stock, par value $.01 per share ("Common
Stock"), and 1,000,000 shares are classified as preferred stock, par value $.01
per share ("Preferred Stock").

      The Corporation may issue shares of any class or series of its capital
stock from time to time for such consideration and for such corporate purposes
as the Board of Directors of the Corporation (the "Board of Directors") may from
time to time determine.

      The following is a statement of the powers, preferences and rights, and
the qualifications, limitations or restrictions, of the Preferred Stock and the
Common Stock:

                           DIVISION A. PREFERRED STOCK

      The shares of Preferred Stock may be divided into and issued in one or
more series, the relative rights, powers and preferences of which series may
vary in any and all respects. The Board of Directors is expressly vested with
the authority to fix, by resolution or resolutions adopted prior to and
providing for the issuance of any shares of each particular series of Preferred
Stock, and incorporate in a certificate of designations filed with the Secretary
of State of the State of Delaware, the designations, powers, preferences,
rights, qualifications, limitations and restrictions thereof, of the shares of
each series of Preferred Stock, to the extent not provided for in this Restated
Certificate of Incorporation. The Board of Directors is also expressly vested
with the authority to increase or decrease the number of shares within each such
series; provided, however, that the Board of Directors may not decrease the
number of shares within a series of Preferred Stock below the number of shares
within such series that is then issued. The authority of the Board of Directors
with respect to fixing the designations, powers, preferences, rights,
qualifications, limitations and restrictions of each such series of Preferred
Stock shall include, but not be limited to, determination of the following:

      (1)   the distinctive designation and number of shares of that series;

      (2)   the rate of dividends (or the method of calculation thereof) payable
with respect to shares of that series, the dates, terms and other conditions
upon which such dividends shall be payable, and the relative rights of priority
of such dividends to dividends payable on any other class or series of capital
stock of the Corporation;

                                       2
<PAGE>

      (3)   the nature of the dividend payable with respect to shares of that
series as cumulative, noncumulative or partially cumulative, and if cumulative
or partially cumulative, from which date or dates and under what circumstances;

      (4)   whether shares of that series shall be subject to redemption, and,
if made subject to redemption, the times, prices, rates, adjustments and other
terms and conditions of such redemption (including the manner of selecting
shares of that series for redemption if fewer than all shares of such series are
to be redeemed);

      (5)   the rights of the holders of shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation (which rights may be different if such action is voluntary than if
it is involuntary), including the relative rights of priority in such event as
to the rights of the holders of any other class or series of capital stock of
the Corporation;

      (6)   the terms, amounts and other conditions of any sinking or similar
purchase or other fund provided for the purchase or redemption of shares of that
series;

      (7)   whether shares of that series shall be convertible into or
exchangeable for shares of capital stock or other securities of the Corporation
or of any other corporation or entity, and, if provision be made for conversion
or exchange, the times, prices, rates, adjustments, and other terms and
conditions of such conversion or exchange;

      (8)   the extent, if any, to which the holders of shares of that series
shall be entitled (in addition to any voting rights provided by law) to vote as
a class or otherwise with respect to the election of directors or otherwise;

      (9)   the restrictions and conditions, if any, upon the issue or reissue
of any additional Preferred Stock ranking on a parity with or prior to shares of
that series as to dividends or upon liquidation, dissolution or winding up;

      (10)  any other repurchase obligations of the Corporation, subject to any
limitations of applicable law; and

      (11)  any other designations, powers, preferences, rights, qualifications,
limitations or restrictions of shares of that series.

      Any of the designations, powers, preferences, rights, qualifications,
limitations or restrictions of any series of Preferred Stock may be dependent on
facts ascertainable outside this Restated Certificate of Incorporation, or
outside the resolution or resolutions providing for the issue of such series of
Preferred Stock adopted by the Board of Directors pursuant to authority
expressly vested in it by this Restated Certificate of Incorporation. Except as
applicable law or this Restated Certificate of


                                       3
<PAGE>

Incorporation otherwise may require, the terms of any series of Preferred Stock
may be amended without consent of the holders of any other series of Preferred
Stock or any class of capital stock of the Corporation.

      The relative powers, preferences and rights of each series of Preferred
Stock in relation to the powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time to time by the Board
of Directors in the resolution or resolutions adopted pursuant to the authority
granted in this Division A of this Article Fourth, and the consent, by class or
series vote or otherwise, of holders of Preferred Stock of such of the series of
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock,
whether or not the powers, preferences and rights of such other series shall be
fixed by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of holders of at least a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon shall
be required for the issuance of shares of any or all other series of Preferred
Stock.

      Shares of any series of Preferred Stock shall have no voting rights except
as required by law or as provided in the relative powers, preferences and rights
of such series.

                            DIVISION B. COMMON STOCK

      1.    Dividends. Dividends may be paid on the Common Stock, as the Board
of Directors shall from time to time determine, out of any assets of the
Corporation available for the payment of such dividends after full cumulative
dividends on all outstanding shares of capital stock of all series ranking
senior to the Common Stock in respect of dividends and liquidation rights
(referred to in this Division B as "stock ranking senior to the Common Stock")
have been paid, or have been declared and a sum sufficient for the payment
thereof has been set apart, for all past quarterly dividend periods, and after
or concurrently with making payment of or provision for dividends on all
outstanding shares of stock ranking senior to the Common Stock for the then
current quarterly dividend period.

      2.    Distribution of Assets. In the event of any liquidation, dissolution
or winding up of the Corporation, after there shall have been paid to or set
aside for the holders of the stock ranking senior to the Common Stock the full
preferential amounts to which they are respectively entitled, the holders of the
Common Stock shall be entitled to receive, on a pro rata basis, all of the
remaining assets of the Corporation available for distribution to its
stockholders. The Board of Directors, by vote of a majority of the members
thereof, may distribute in kind to the holders of the Common

                                       4
<PAGE>

Stock such remaining assets of the Corporation, or may sell, transfer or
otherwise dispose of all or any of the remaining property and assets of the
Corporation to any other corporation or other purchaser and receive payment
therefor wholly or partly in cash or property, or in stock of any such
corporation, or in obligations of such corporation or other purchaser, and may
sell all or any part of the consideration received therefor and distribute the
same or the proceeds thereof to the holders of the Common Stock.

      3.    Voting Rights. Subject to the voting rights expressly conferred
under prescribed conditions upon the stock ranking senior to the Common Stock,
the holders of the Common Stock shall exclusively possess full voting power for
the election of directors and for all other purposes.

                   DIVISION C. OTHER PROVISIONS APPLICABLE TO
                                  CAPITAL STOCK

      1.    Preemptive Rights. No holder of any stock of the Corporation shall
be entitled as of right to purchase or subscribe for any part of any unissued or
treasury stock of the Corporation, or of any additional stock of any class, to
be issued by reason of any increase of the authorized capital stock of the
Corporation, or to be issued from any unissued or additionally authorized stock,
or of bonds, certificates of indebtedness, debentures or other securities
convertible into stock of the Corporation, but any such unissued or treasury
stock, or any such additional authorized issue of new stock or securities
convertible into stock, may be issued and disposed of by the Board of Directors
to such persons, firms, corporations or associations, and upon such terms as the
Board of Directors may, in its discretion, determine, without offering to the
stockholders then of record, or any class of stockholders, any thereof, on the
same terms or any terms.

      2.    Votes Per Share. Any stockholder of the Corporation having the right
to vote at any meeting of the stockholders or of any class or series thereof,
shall be entitled to one vote for each share of stock held by him, except as
otherwise provided with respect to any series of Preferred Stock pursuant to
this Restated Certificate of Incorporation or a resolution of the Board of
Directors providing for the establishment of such series of Preferred Stock;
provided that no holder of Common Stock shall be entitled to cumulate his votes
for the election of one or more directors or for any other purpose.

      FIFTH: (a) Directors. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. In addition to the
authority and powers conferred on the Board of Directors by the DGCL or by the
other provisions of this Restated Certificate of Incorporation, the Board of
Directors is authorized and empowered to exercise all such powers and do all
such acts and things as may be exercised or done by the Corporation, subject to
the provisions of the DGCL,

                                       5
<PAGE>

this Restated Certificate of Incorporation and the Bylaws of the Corporation;
provided, however, that no Bylaws hereafter adopted, or any amendments thereto,
shall invalidate any prior act of the Board of Directors that would have been
valid if such Bylaws or amendment had not been adopted.

            (b)   Number, Election and Terms of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
from time to time by a majority of the directors then in office, but in any
event shall not be less than one nor more than 15. Effective upon and commencing
as of the first date on which the Board of Directors shall fix the number of
directors which shall constitute the whole Board of Directors to be a number
equal to or greater than three, the directors, other than those who may be
elected by the holders of any series of Preferred Stock, shall be divided into
three classes: Class I, Class II and Class III, it being understood that the
Board of Directors shall assign each person who is then serving as a director to
one of such classes. Such classes shall be as nearly equal in number of
directors as possible. Each director shall serve for a term ending on the third
annual meeting of stockholders following the annual meeting of stockholders at
which that director was elected; provided, however, that the directors first
designated as Class I directors shall serve for a term expiring at the annual
meeting of stockholders next following the date of their designation as Class I
directors, the directors first designated as Class II directors shall serve for
a term expiring at the second annual meeting of stockholders next following the
date of their designation as Class II directors, and the directors first
designated as Class III directors shall serve for a term expiring at the third
annual meeting of stockholders next following the date of their designation as
Class III directors. Each director shall hold office until the annual meeting of
stockholders at which that director's term expires and, the foregoing
notwithstanding, shall serve until his successor shall have been duly elected
and qualified or until his earlier death, resignation or removal.

            At each annual election, the directors chosen to succeed those whose
terms then expire shall be of the same class as the directors they succeed,
unless, by reason of any intervening changes in the authorized number of
directors, the Board of Directors shall have designated one or more
directorships whose term then expires as directorships of another class in order
to more nearly achieve equality of number of directors among the classes.

            In the event of any change in the authorized number of directors,
each director then continuing to serve as such shall nevertheless continue as a
director of the class of which he is a member until the expiration of his
current term, or his prior death, resignation or removal. The Board of Directors
shall specify the class to which a newly created directorship shall be
allocated.

            Election of directors need not be by written ballot unless the
Bylaws of the Corporation so provide.

                                       6
<PAGE>

            (c)   Removal of Directors. No director of the Corporation may be
removed from office as a director by vote or other action of the stockholders or
otherwise except for cause, and then only by the affirmative vote of the holders
of at least a majority of the voting power of all outstanding shares of capital
stock of the Corporation generally entitled to vote in the election of
directors, voting together as a single class. Except as applicable law otherwise
provides, cause for the removal of a director shall be deemed to exist only if
the director whose removal is proposed: (i) has been convicted, or has been
granted immunity to testify in any proceeding in which another has been
convicted, of a felony by a court of competent jurisdiction and that conviction
is no longer subject to direct appeal; (ii) has been found to have been
negligent or guilty of misconduct in the performance of his duties to the
Corporation in any matter of substantial importance to the Corporation by (A)
the affirmative vote of at least 80% of the directors then in office at any
meeting of the Board of Directors called for that purpose or (B) a court of
competent jurisdiction; or (iii) has been adjudicated by a court of competent
jurisdiction to be mentally incompetent, which mental incompetency directly
affects his ability to serve as a director of the Corporation. Notwithstanding
the foregoing, whenever holders of outstanding shares of one or more series of
Preferred Stock are entitled to elect members of the Board of Directors pursuant
to a resolution of the Board of Directors providing for the establishment of any
series of Preferred Stock, any such director of the Corporation so elected may
be removed in accordance with the provisions of this Restated Certificate of
Incorporation or such resolution.

            (d)   Vacancies. Except as a resolution of the Board of Directors
providing for the establishment of any series of Preferred Stock may provide
otherwise, newly created directorships resulting from any increase in the number
of directors and any vacancies on the Board of Directors resulting from death,
resignation, removal, disqualification or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until that director's successor shall have
been elected and qualified or until his earlier death, resignation or removal.
No decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.

            (e)   Amendment of this Article Fifth. In addition to any other
affirmative vote required by applicable law, this Article Fifth may not be
amended, modified or repealed except by the affirmative vote of the holders of
at least sixty six and two-thirds percent (66-2/3%) of the voting power of all
outstanding shares of capital stock of the Corporation generally entitled to
vote in the election of directors, voting together as a single class.

                                       7
<PAGE>

            SIXTH: (a) Action by Written Consent; Special Meetings. No action
required to be taken or that may be taken at any annual or special meeting of
the stockholders of the Corporation may be taken without a meeting, and the
power of the stockholders of the Corporation to consent in writing to the taking
of any action by written consent without a meeting is specifically denied.
Unless otherwise provided by the DGCL, by this Restated Certificate of
Incorporation or by any provisions established pursuant to Article Fourth hereof
with respect to the rights of holders of one or more outstanding series of
Preferred Stock, special meetings of the stockholders of the Corporation may be
called at any time only by the Chairman of the Board of Directors, the President
and Chief Executive Officer of the Corporation, or by the Board of Directors
pursuant to a resolution approved by the affirmative vote of at least a majority
of the members of the Board of Directors, and no such special meeting may be
called by any other person or persons.

            (b)   Amendment of this Article Sixth. In addition to any other
affirmative vote required by applicable law, this Article Sixth may not be
amended, modified or repealed except by the affirmative vote of the holders of
at least sixty six and two-thirds percent (66-2/3%) of the voting power of all
outstanding shares of capital stock of the Corporation generally entitled to
vote in the election of directors, voting together as a single class.

      SEVENTH: No director of the Corporation shall be personally liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director of the Corporation; provided, however, that this
Article Seventh shall not eliminate or limit the liability of such a director
(1) for any breach of such director's duty of loyalty to the Corporation or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the DGCL, as the same exists or as such provision may hereafter be amended,
supplemented or replaced, or (4) for any transactions from which such director
derived an improper personal benefit. If the DGCL is amended after the filing of
this Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be limited to the fullest extent permitted by
such law, as so amended. Any repeal or modification of this Article Seventh by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.

      EIGHTH: (a) Indemnification. Each person who was or is made a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise (an "Indemnitee"), shall

                                       8
<PAGE>

be indemnified and held harmless by the Corporation to the fullest extent
permitted by the DGCL and other applicable law in effect on the date of the
filing of this Restated Certificate of Incorporation, and to such greater extent
as applicable law may thereafter permit, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement incurred by
such Indemnitee in connection with such a Proceeding, and such right of
indemnification shall continue with respect to an Indemnitee who has ceased to
be such a director or officer and shall inure to the benefit of his or her
heirs, executors and administrators. The rights of an Indemnitee under the
immediately proceeding sentence shall include, but not be limited to, the right
to be indemnified to the fullest extent permitted by Section 145(b) of the DGCL
in the case of Proceedings by or in the right of the Corporation and to the
fullest extent permitted by Section 145(a) of the DGCL in the case of all other
Proceedings.

            (b)   Advancement of Expenses. An Indemnitee shall be entitled to
the payment of expenses (including attorneys' fees) incurred in defending any
Proceeding in advance of the final disposition thereof in accordance with the
provisions set forth in the Bylaws of the Corporation or, if no provisions
relating to the advancement of expenses are set forth therein, in accordance
with such terms and conditions as the Board of Directors deems appropriate.

            (c)   Determination of Entitlement to Indemnification. A
determination as to whether an Indemnitee is entitled to indemnification in
respect of any expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement incurred by such Indemnitee in connection with a Proceeding
shall be made in accordance with Section 145(d) of the DGCL and the provisions
set forth in the Bylaws of the Corporation.

            (d)   Non-Exclusivity. The rights conferred by this Article Eighth
shall not be exclusive of any other rights which an Indemnitee or any other
person may now or hereafter have under this Restated Certificate of
Incorporation or any bylaw, agreement, vote or stockholder or disinterested
directors or otherwise.

      NINTH: The Board of Directors is expressly empowered to adopt, amend or
repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the Corporation by the Board of Directors shall require the
affirmative vote of at least eighty percent (80%) of all directors then in
office at any regular or special meeting of the Board of Directors called for
that purpose. In addition to any other affirmative vote required by applicable
law, this Article Ninth may not be amended, modified or repealed except by the
affirmative vote of the holders of at least eighty percent (80%) of the voting
power of all outstanding shares of capital stock of the Corporation generally
entitled to vote in the election of directors, voting together as a single
class.

                                       9
<PAGE>

      TENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of the DGCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of the DGCL, order a meeting of the creditors or
class of creditors, and/or the stockholders or a class of stockholders of the
Corporation as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which said application has
been made, be binding on all of the creditors or class of creditors, and/or the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.

      ELEVENTH: The Corporation has elected not to be governed by Section 203 of
the DGCL until the first date on which no person (as defined in such Section) is
the beneficial owner (as such term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of at least a majority of the outstanding voting stock (as
defined in such Section) of the Corporation. From such date forward, the
Corporation shall be governed by Section 203 of the DGCL, and will continue to
be governed by such section even if after such date a person becomes the
beneficial owner of a majority (or more) of the outstanding voting stock of the
Corporation.

      IN WITNESS WHEREOF, the Corporation has caused the Restated Certificate of
Incorporation to be signed and attested by its duly authorized officer, this
30th day of June 2003.

                                               CAVCO INDUSTRIES, INC.

                                               By:  /s/ JOSEPH H. STEGMAYER
                                                   -------------------------
                                                   Name:  Joseph H. Stegmayer
                                                   Title:  President and C.E.O.

                                       10

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>p69164exv3w2.txt
<DESCRIPTION>EX-3.2
<TEXT>
<PAGE>

                                                                     EXHIBIT 3.2

                           AMENDED AND RESTATED BYLAWS

                                       OF

                             CAVCO INDUSTRIES, INC.

                                   ARTICLE I.
                                  CAPITAL STOCK

      SECTION 1. Share Ownership. Shares of the capital stock of Cavco
Industries, Inc., a Delaware corporation (the "Company"), shall be certificated;
provided, however, that the Board of Directors of the Company may provide by
resolution or resolutions that some or all classes or series of the Company's
stock may be uncertificated shares. Owners of shares of the capital stock of the
Company shall be recorded in the share transfer records of the Company and
ownership of such shares shall be evidenced by a certificate or book entry
notation in the share transfer records of the Company. Any certificates
representing such shares shall be signed by the Chairman of the Board, if there
is one, the President or a Vice President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary and shall be sealed with the
seal of the Company, which signatures and seal may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Company with the same effect as if such person
were such officer at the date of its issuance.

      SECTION 2. Stockholders of Record. The Board of Directors of the Company
may appoint one or more transfer agents or registrars of any class of stock or
other security of the Company. The Company may be its own transfer agent if so
appointed by the Board of Directors. The Company shall be entitled to treat the
holder of record of any shares of the Company as the owner thereof for all
purposes, and shall not be bound to recognize any equitable or other claim to,
or interest in, such shares or any rights deriving from such shares, on the part
of any other person, including (but without limitation) a purchaser, assignee or
transferee, unless and until such other person becomes the holder of record of
such shares, whether or not the Company shall have either actual or constructive
notice of the interest of such other person.

      SECTION 3. Transfer of Shares. The shares of the capital stock of the
Company shall be transferable in the share transfer records of the Company by
the holder of record thereof, or his duly authorized attorney or legal
representative. All certificates representing shares surrendered for transfer,
properly endorsed, shall be canceled and new certificates for a like number of
shares shall be issued therefor. In the case of lost, stolen, destroyed or
mutilated certificates representing shares for which the Company has been
requested to issue new certificates, new certificates or other

                                      -1-
<PAGE>

evidence of such new shares may be issued upon such conditions as may be
required by the Board of Directors or the Secretary or an Assistant Secretary
for the protection of the Company and any transfer agent or registrar.
Uncertificated shares shall be transferred in the share transfer records of the
Company upon the written instruction originated by the appropriate person to
transfer the shares.

      SECTION 4. Stockholders of Record and Fixing of Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive a
distribution by the Company (other than a distribution involving a purchase or
redemption by the Company of any of its own shares) or a share dividend, or in
order to make a determination of stockholders for any other proper purpose, the
Board of Directors may provide that the share transfer records shall be closed
for a stated period of not more than 60 days, and in the case of a meeting of
stockholders not less than ten days, immediately preceding the meeting, or it
may fix in advance a record date for any such determination of stockholders,
such date to be not more than 60 days, and in the case of a meeting of
stockholders not less than ten days, prior to the date on which the particular
action requiring such determination of stockholders is to be taken. If the share
transfer records are not closed and no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders, or stockholders entitled to receive a distribution (other than a
distribution involving a purchase or redemption by the Company of any of its own
shares) or a share dividend, the day next preceding the date on which notice of
the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such distribution or share dividend is adopted, as the case
may be, shall be the record date for such determination of stockholders. When a
determination of stockholders entitled to vote at any meeting of stockholders
has been made as herein provided, such determination shall apply to any
adjournment thereof except where the determination has been made through the
closing of the share transfer records and the stated period of closing has
expired.

                                   ARTICLE II.
                            MEETINGS OF STOCKHOLDERS

      SECTION 1. Place of Meetings. All meetings of stockholders shall be held
at the principal office of the Company, in the City of Phoenix, Arizona, or at
such other place within or without the State of Delaware as may be designated by
the Board of Directors or officer calling the meeting.

      SECTION 2. Annual Meeting. The annual meeting of the stockholders shall be
held on such date and at such time as shall be designated from time to time by
the Board of Directors or as may otherwise be stated in the notice of the
meeting. Failure to designate a time for the annual meeting or to hold the
annual meeting at the designated time shall not work a dissolution of the
Company.

                                      -2-
<PAGE>

      SECTION 3. Special Meetings. Unless otherwise provided by the General
Corporation Law of the State of Delaware (the "DGCL"), by the Restated
Certificate of Incorporation of the Company or by any provisions established
pursuant thereto with respect to the rights of holders of one or more
outstanding series of the Company's preferred stock, special meetings of the
stockholders of the Company may be called at any time only by the Chairman of
the Board, if there is one, the Chief Executive Officer of the Company, if there
is one, the President, or by the Board of Directors pursuant to a resolution
approved by the affirmative vote of at least a majority of the members of the
Board of Directors, and no such special meeting may be called by any other
person or persons, including, without limitation, the holders of shares of the
Company's common stock.

      SECTION 4. Notice of Meeting. Written or printed notice of all meetings
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of the Chairman of
the Board, if there is one, the Chief Executive Officer, if there is one, the
President, the Secretary or the officer or person calling the meeting to each
stockholder of record entitled to vote at such meetings. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his address as it appears on
the share transfer records of the Company, with postage thereon prepaid.

      Any notice required to be given to any stockholder, under any provision of
the DGCL, the Restated Certificate of Incorporation of the Company or these
Bylaws, need not be given to a stockholder if notice of two consecutive annual
meetings and all notices of meetings held during the period between those annual
meetings, if any, or all (but in no event less than two) payments (if sent by
first class mail) of dividends or interest on securities during a 12-month
period have been mailed to that person, addressed at his address as shown on the
share transfer records of the Company, and have been returned undeliverable. Any
action or meeting taken or held without notice to such person shall have the
same force and effect as if the notice had been duly given. If such a person
delivers to the Company a written notice setting forth his then current address,
the requirement that notice be given to that person shall be reinstated.

      SECTION 5. Voting List. The officer or agent having charge of the share
transfer records for shares of the Company shall make, at least ten days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote at such meeting or any adjournment thereof, arranged in alphabetical order,
with the address of and the number of shares held by each, which list, for a
period of ten days prior to such meeting, shall be kept on file at the principal
place of business of the Company and shall be subject to inspection by any
stockholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the whole time

                                      -3-
<PAGE>

of the meeting. The original share transfer records shall be prima facie
evidence as to who are the stockholders entitled to examine such list or to vote
at any meeting of stockholders. Failure to comply with any requirements of this
Section 5 shall not affect the validity of any action taken at such meeting.

      SECTION 6. Voting; Proxies. Except as otherwise provided in the Restated
Certificate of Incorporation of the Company or as otherwise provided under the
DGCL, each holder of shares of capital stock of the Company entitled to vote
shall be entitled to one vote for each share standing in his name on the records
of the Company, either in person or by proxy executed in writing by him or by
his duly authorized attorney-in-fact. A proxy shall be revocable unless
expressly provided therein to be irrevocable and the proxy is coupled with an
interest sufficient in law to support an irrevocable power. At each election of
directors, every holder of shares of the Company entitled to vote shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected, and for whose election he has
a right to vote, but in no event shall he be permitted to cumulate his votes for
one or more directors.

      SECTION 7. Quorum and Vote of Stockholders. Except as otherwise provided
by law, the Restated Certificate of Incorporation of the Company or these
Bylaws, the holders of a majority of shares entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders, but,
if a quorum is not represented, a majority in interest of those represented may
adjourn the meeting from time to time. Directors shall be elected by a plurality
of the votes cast by the holders of shares entitled to vote in the election of
directors at a meeting of stockholders at which a quorum is present. With
respect to each matter other than the election of directors as to which no other
voting requirement is specified by law, the Restated Certificate of
Incorporation of the Company or in this Section 7, the affirmative vote of the
holders of a majority of the shares entitled to vote on that matter and
represented in person or by proxy at a meeting at which a quorum is present
shall be the act of the stockholders. With respect to a matter submitted to a
vote of the stockholders as to which a stockholder approval requirement is
applicable under the stockholder approval policy of the Nasdaq National Market,
or any provision of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), in each case for which no higher voting requirement is specified
by law, the Restated Certificate of Incorporation of the Company or these
Bylaws, the affirmative vote of the holders of a majority of the shares entitled
to vote on, and voted for or against, that matter at a meeting at which a quorum
is present shall be the act of the stockholders, provided that approval of such
matter shall also be conditioned on any more restrictive requirement of such
stockholder approval policy or Internal Revenue Code provision, as applicable,
being satisfied. With respect to the approval of independent public accountants
(if submitted for a vote of the stockholders), the affirmative vote of the
holders of a majority of the shares entitled to vote on, and voted for or
against, that matter at a meeting of stockholders at which a quorum is present
shall be the act of the stockholders.

                                      -4-
<PAGE>

      SECTION 8. Presiding Officer and Conduct of Meetings. The Chairman of the
Board, if there is one, or in his absence, the Chief Executive Officer, if there
is one, or in his absence, the President shall preside at all meetings of the
stockholders or, if such officers are not present at a meeting, by such other
person as the Board of Directors shall designate or if no such person is
designated by the Board of Directors, the most senior officer of the Company
present at the meeting. The Secretary of the Company, if present, shall act as
secretary of each meeting of stockholders; if he is not present at a meeting,
then such person as may be designated by the presiding officer shall act as
secretary of the meeting. Meetings of stockholders shall follow reasonable and
fair procedure. Subject to the foregoing, the conduct of any meeting of
stockholders and the determination of procedure and rules shall be within the
absolute discretion of the officer presiding at such meeting (the "Chairman of
the Meeting"), and there shall be no appeal from any ruling of the Chairman of
the Meeting with respect to procedure or rules. Accordingly, in any meeting of
stockholders or part thereof, the Chairman of the Meeting shall have the sole
power to determine appropriate rules or to dispense with theretofore prevailing
rules. Without limiting the foregoing, the following rules shall apply:

            (a)   if disorder should arise which prevents continuation of the
      legitimate business of the meeting, the Chairman of the Meeting may
      announce the adjournment of the meeting; and upon so doing, the meeting
      shall be immediately adjourned.

            (b)   The Chairman of the Meeting may ask or require that anyone not
      a bona fide stockholder or proxy leave the meeting.

            (c)   A resolution or motion proposed by a stockholder shall only be
      considered for vote of the stockholders if it meets the criteria of
      Article II, Section 9 (Proper Business - Annual Meeting of Stockholders)
      or Article II, Section 10 (Proper Business - Special Meeting of
      Stockholders), as the case may be. The Chairman of the Meeting may propose
      any resolution or motion for vote of the stockholders.

            (d)   The order of business at all meetings of stockholders shall be
      determined by the Chairman of the Meeting.

            (e)   The Chairman of the Meeting may impose any reasonable limits
      with respect to participation in the meeting by stockholders, including,
      but not limited to, limits on the amount of time taken up by the remarks
      or questions of any stockholder, limits on the number of questions per
      stockholder and limits as to the subject matter and timing of questions
      and remarks by stockholders.

                                      -5-
<PAGE>

            (f)   Before any meeting of stockholders, the Board of Directors (i)
      shall appoint three persons other than nominees for office to act as
      inspectors of election at the meeting or its adjournment and (ii) may
      designate one or more alternate inspectors to replace any inspector who
      fails to act. If no inspector or alternate is able to act at a meeting of
      stockholders, the Chairman of the Meeting shall appoint one or more, up to
      a maximum of three, inspectors of election to act at the meeting of the
      stockholders.

            The duties of the inspectors shall be to:

                  (i)   determine the number of shares outstanding and the
            voting power of each such share, the shares represented at the
            meeting, the existence of a quorum, and the authenticity, validity
            and effect of proxies and ballots;

                  (ii)  receive votes or ballots;

                  (iii) hear and determine all challenges and questions in any
            way arising in connection with the vote and retain for a reasonable
            period a record of the disposition of any challenges made to any
            determination by the inspectors;

                  (iv)  count and tabulate all votes and ballots;

                  (v)   report and certify to the Board of Directors the results
            based on the information assembled by the inspectors; and

                  (vi)  do any other acts that may be proper to conduct the
            election or vote with fairness to all stockholders.

            (g)   Each inspector of election, before entering upon the discharge
      of the duties of inspector, shall take and sign an oath faithfully to
      execute the duties of inspector with strict impartiality and according to
      the best of such inspector's ability.

            (h)   In determining the validity and counting of proxies and
      ballots, the inspectors of election shall be limited to an examination of
      the items specifically allowed by Section 231(d) of the DGCL.

      All determinations of the Chairman of the Meeting shall be conclusive
unless a matter is determined otherwise upon motion duly adopted by the
affirmative vote of the holders of at least 80% of the voting power of the
shares of capital stock of the

                                      -6-
<PAGE>

Company entitled to vote in the election of directors held by stockholders
present in person or represented by proxy at such meeting.

      SECTION 9. Proper Business - Annual Meeting of Stockholders. At any annual
meeting of stockholders, only such business shall be conducted as shall be a
proper subject for the meeting and shall have been properly brought before the
meeting. To be properly brought before an annual meeting of stockholders,
business (other than business relating to any nomination of directors, which is
governed by Article III, Section 4 of these Bylaws) must (a) be specified in the
notice of such meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee thereof), (b)
otherwise be properly brought before the meeting by or at the direction of the
Chairman of the Meeting or the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise (i) be properly requested to be brought
before the meeting by a stockholder of record entitled to vote in the election
of directors generally, in compliance with the provisions of this Section 9 and
(ii) constitute a proper subject to be brought before such meeting. For business
to be properly brought before an annual meeting of stockholders, any stockholder
who intends to bring any matter (other than a matter relating to any nomination
of directors, which is governed by Article III, Section 4 of these Bylaws)
before an annual meeting of stockholders and is entitled to vote on such matter
must deliver written notice of such stockholder's intent to bring such matter
before the annual meeting of stockholders, either by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Company. Such
notice must be received by the Secretary not less than 90 days nor more than 180
days prior to the date on which the immediately preceding year's annual meeting
of stockholders was held. In no event shall the public disclosure of an
adjournment of an annual meeting of stockholders commence a new time period for
the giving of a stockholder's notice as described above.

      To be in proper written form, a stockholder's notice to the Secretary
shall set forth as to each matter the stockholder proposes to bring before the
annual meeting of stockholders (a) a brief description of the business desired
to be brought before the meeting and the reasons for conducting such business at
the meeting, (b) the name and address, as they appear on the Company's books and
records, of the stockholder proposing such business, (c) evidence, reasonably
satisfactory to the Secretary of the Company, of such stockholder's status as
such and of the number of shares of each class of capital stock of the Company
of which such stockholder is the beneficial owner, (d) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names and the number of shares beneficially owned by
them) in connection with the proposal of such business by such stockholder and
any material interest of such stockholder in such business and (e) a
representation that such stockholder intends to appear in person or by proxy at
the annual meeting to bring such business before the meeting. No business shall
be conducted at an annual meeting of stockholders (other than business relating
to the election of directors, which is governed by Article III, Section 4 of
these Bylaws) unless it shall have been brought before the meeting in accordance
with the procedures set forth in this Section 9.

                                      -7-
<PAGE>

Beneficial ownership shall be determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). When used in
these Bylaws, "person" has the meaning ascribed to such term in Section 2(a)(2)
of the Securities Act of 1933, as amended, unless the context otherwise
requires.

      Within 30 days after such stockholder shall have submitted the aforesaid
items, the Secretary or the Board of Directors of the Company shall determine
whether the proposed business has been properly requested to be brought before
the annual meeting of stockholders and shall notify such stockholder in writing
of its determination. If such stockholder fails to submit a required item in the
form or within the time indicated, or if the Secretary or the Board of Directors
of the Company determines that the proposed business otherwise has not been
properly requested, then such proposal by such stockholder shall not be voted
upon by the stockholders of the Company at such annual meeting of stockholders.
The Chairman of the Meeting shall, if the facts warrant, determine and declare
to the meeting that a proposal made by a stockholder of the Company pursuant to
this Section 9 was not made in accordance with the procedures prescribed by
these Bylaws, and if he should so determine, he shall so declare to the meeting
and the defective proposal shall be disregarded.

      Nothing in this Section 9 shall be interpreted or construed to require the
inclusion of information about any such proposal in any proxy statement
distributed by, at the direction of, or on behalf of the Board of Directors of
the Company.

      SECTION 10. Proper Business - Special Meeting of Stockholders. At any
special meeting of stockholders, only such business shall be conducted as shall
have been stated in the notice of such meeting or shall otherwise have been
properly brought before the meeting by or at the direction of the Chairman of
the Meeting or the Board of Directors (or any duly authorized committee
thereof).

      SECTION 11. Action by Written Consent. No action required to be taken or
that may be taken at any annual or special meeting of the stockholders of the
Company may be taken without a meeting, and the power of the stockholders of the
Company to consent in writing to the taking of any action by written consent
without a meeting is specifically denied.

                                  ARTICLE III.
                                    DIRECTORS

      SECTION 1. General. The business and affairs of the Company shall be
managed by or under the direction of the Board of Directors. In addition to the
authority and powers conferred on the Board of Directors by the DGCL or by the
Restated Certificate of Incorporation of the Company, the Board of Directors is
authorized and empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Company, subject to the provisions of
the DGCL,

                                      -8-
<PAGE>

the Restated Certificate of Incorporation of the Company and these Bylaws;
provided, however, that no Bylaws hereafter adopted, or any amendments thereto,
shall invalidate any prior act of the Board of Directors that would have been
valid if such Bylaws or amendment had not been adopted.

      SECTION 2. Classification of Board of Directors; Qualifications. The
number of directors which shall constitute the whole Board of Directors shall be
fixed in the manner provided in the Restated Certificate of Incorporation of the
Company. As provided in Article Fifth of the Restated Certificate of
Incorporation of the Company, effective upon and commencing as of the date
specified in paragraph (b) of such Article Fifth (such date hereinafter referred
to as the "Classification Date"), the directors, other than those who may be
elected by the holders of any series of Preferred Stock, shall be divided into
three classes: Class I, Class II and Class III.

      At each annual election on or after the Classification Date, the directors
chosen to succeed those whose terms then expire shall be of the same class as
the directors they succeed, unless, by reason of any intervening changes in the
authorized number of directors, the Board of Directors shall designate one or
more directorships whose term then expires as directorships of another class in
order more nearly to achieve equality of number of directors among the classes.

      Notwithstanding the provision in Article Fifth of the Restated Certificate
of Incorporation of the Company to the effect that, commencing as of the
Classification Date, the three classes of directors shall be as nearly equal in
number of directors as possible, in the event of any change in the authorized
number of directors, each director then continuing to serve as such shall
nevertheless continue as a director of the class of which he or she is a member
until the expiration of his or her current term, or his or her prior death,
resignation, disqualification or removal.

      No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.

      Unless the Board of Directors otherwise determines in its sole discretion,
no person shall continue to serve as a member of the Board of Directors if the
director ceases for any reason to hold the principal employment or position he
or she held at the time first elected to the Board of Directors and does not
secure a comparable employment or position, as determined in the sole judgment
of the Board of Directors, within one year thereof.

      No person who is also an employee of the Company or one of its corporate
affiliates shall continue to serve as a member of the Board of Directors after
his or her retirement, termination or material downward change in status in the
Company, as determined in the sole judgment of the Board of Directors.

                                      -9-
<PAGE>

      The Board of Directors may waive any qualification set forth above in this
Section 2 if it determines that the director has special skill, experience or
distinction having value to the Company that is not readily available or
transferable. Any such waiver shall be made by a majority of the Board of
Directors, excluding the director whose disqualification is being waived.

      Any vacancies on the Board of Directors resulting from the
disqualification of a director by virtue of the above qualifications may be
filled as provided in Section 3 of this Article III.

      The above qualifications and limitations notwithstanding, each director
shall serve until his successor shall have been duly elected and qualified,
unless he or she shall resign, become disqualified, disabled or shall otherwise
be removed.

      SECTION 3. Newly Created Directorships and Vacancies. Newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation, removal,
disqualification or other cause shall be filled by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until that director's successor shall have been elected and
qualified or until his earlier death, resignation or removal.

      SECTION 4. Nomination of Directors. Nominations for the election of
directors may be made by the Board of Directors or by any stockholder (each, a
"Nominator") entitled to vote in the election of directors. Such nominations,
other than those made by the Board of Directors, shall be made in writing
pursuant to timely notice delivered to or mailed and received by the Secretary
of the Company as set forth in this Section 4. To be timely in connection with
an annual meeting of stockholders, a Nominator's notice, setting forth the name
and address of the person to be nominated, shall be delivered to or mailed and
received at the principal executive offices of the Company not less than 90 days
nor more than 180 days prior to the date on which the immediately preceding
year's annual meeting of stockholders was held. To be timely in connection with
any election of a director at a special meeting of the stockholders, a
Nominator's notice, setting forth the name of the person to be nominated, shall
be delivered to or mailed and received at the principal executive offices of the
Company not less than 40 days nor more than 60 days prior to the date of such
meeting; provided, however, that in the event that less than 47 days' notice or
prior public disclosure of the date of the special meeting of the stockholders
is given or made to the stockholders, the Nominator's notice to be timely must
be so received not later than the close of business on the seventh day following
the day on which such notice of date of the meeting was mailed or such public
disclosure was made. At such time, the Nominator shall also submit written
evidence, reasonably satisfactory to the Secretary of the Company, that

                                      -10-
<PAGE>

the Nominator is a stockholder of the Company and shall identify in writing (a)
the name and address of the Nominator, (b) the number of shares of each class of
capital stock of the Company owned beneficially by the Nominator, (c) the name
and address of each of the persons with whom the Nominator is acting in concert,
(d) the number of shares of capital stock beneficially owned by each such person
with whom the Nominator is acting in concert and (e) a description of all
arrangements or understandings between the Nominator and each nominee and any
other persons with whom the Nominator is acting in concert pursuant to which the
nomination or nominations are to be made. At such time, the Nominator shall also
submit in writing (i) the information with respect to each such proposed nominee
that would be required to be provided in a proxy statement prepared in
accordance with Regulation 14A under the Exchange Act and (ii) a notarized
affidavit executed by each such proposed nominee to the effect that, if elected
as a member of the Board of Directors, he will serve and that he is eligible for
election as a member of the Board of Directors. Within 30 days (or such shorter
time period that may exist prior to the date of the meeting) after the Nominator
has submitted the aforesaid items to the Secretary of the Company, the Secretary
of the Company shall determine whether the evidence of the Nominator's status as
a stockholder submitted by the Nominator is reasonably satisfactory and shall
notify the Nominator in writing of his determination. The failure of the
Secretary of the Company to find such evidence reasonably satisfactory, or the
failure of the Nominator to submit the requisite information in the form or
within the time indicated, shall make the person to be nominated ineligible for
nomination at the meeting at which such person is proposed to be nominated. The
Chairman of the Meeting shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the procedures
prescribed by these Bylaws, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded. Beneficial
ownership shall be determined in accordance with Rule 13d-3 under the Exchange
Act.

      SECTION 5. Place of Meetings and Meetings by Telephone. Meetings of the
Board of Directors may be held either within or without the State of Delaware,
at whatever place is specified by the officer calling the meeting. Meetings of
the Board of Directors may also be held by means of conference telephone or
other communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in such a meeting by means of
conference telephone or other communications equipment shall constitute presence
in person at such meeting, except where a director participates in a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened. In the absence of
specific designation by the officer calling the meeting, the meetings shall be
held at the principal office of the Company.

      SECTION 6. Regular Meetings. The Board of Directors shall meet each year
immediately following the annual meeting of the stockholders for the transaction
of such business as may properly be brought before the meeting. The Board of
Directors

                                      -11-
<PAGE>

shall also meet regularly at such other times as shall be designated by the
Board of Directors. No notice of any kind to either existing or newly elected
members of the Board of Directors for such annual or regular meetings shall be
necessary.

      SECTION 7. Special Meetings. Special meetings of the Board of Directors
may be held at any time upon the call of the Chairman of the Board, if there is
one, the Chief Executive Officer, if there is one, the President or the
Secretary of the Company or a majority of the directors then in office. Notice
shall be sent by mail, facsimile or telegram to the last known address of the
director at least two days before the meeting, or oral notice may be substituted
for such written notice if received not later than the day preceding such
meeting. Notice of the time, place and purpose of such meeting may be waived in
writing before or after such meeting, and shall be equivalent to the giving of
notice. Attendance of a director at such meeting shall also constitute a waiver
of notice thereof, except where he attends for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened. Except as otherwise provided by these Bylaws,
neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.

      SECTION 8. Quorum and Voting. Except as otherwise provided by law, a
majority of the number of directors fixed in the manner provided in the Restated
Certificate of Incorporation of the Company shall constitute a quorum for the
transaction of business. Except as otherwise provided by law, the Restated
Certificate of Incorporation of the Company or these Bylaws, the affirmative
vote of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors. Any regular or special
meeting of the Board of Directors may be adjourned from time to time by those
present, whether a quorum is present or not.

      SECTION 9. Compensation. Directors shall receive such compensation for
their services as shall be determined by the Board of Directors.

      SECTION 10. Removal. No director of the Company may be removed from office
as a director by vote or other action of the stockholders or otherwise except
for cause, and then only by the affirmative vote of the holders of at least a
majority of the voting power of all outstanding shares of capital stock of the
Company generally entitled to vote in the election of directors, voting together
as a single class.

      Except as applicable law otherwise provides, cause for the removal of a
director shall be deemed to exist only if the director whose removal is
proposed: (i) has been convicted, or has been granted immunity to testify in any
proceeding in which another has been convicted, of a felony by a court of
competent jurisdiction and that conviction is no longer subject to direct
appeal; (ii) has been found to have been negligent or guilty of misconduct in
the performance of his duties to the Company in any matter of substantial
importance to the Company by (A) the affirmative vote of at least 80%

                                      -12-
<PAGE>

of the directors then in office at any meeting of the Board of Directors called
for that purpose or (B) a court of competent jurisdiction; or (iii) has been
adjudicated by a court of competent jurisdiction to be mentally incompetent,
which mental incompetency directly affects his ability to serve as a director of
the Company.

      Notwithstanding the foregoing, whenever holders of outstanding shares of
one or more series of Preferred Stock are entitled to elect members of the Board
of Directors pursuant to a resolution of the Board of Directors providing for
the establishment of any series of Preferred Stock, any such director of the
Company so elected may be removed in accordance with the provisions of the
Restated Certificate of Incorporation of the Company or such resolution.

      No proposal by a stockholder to remove a director of the Company,
regardless of whether such director was elected by holders of outstanding shares
of any series of Preferred Stock (or elected by such directors to fill a
vacancy), shall be voted upon at an annual meeting of the stockholders unless
such stockholder shall have delivered or mailed in a timely manner (as set forth
in this Section 10) and in writing to the Secretary of the Company (a) notice of
such proposal, (b) a statement of the grounds, if any, on which such director is
proposed to be removed, (c) evidence, reasonably satisfactory to the Secretary
of the Company, of such stockholder's status as such and of the number of shares
of each class of the capital stock of the Company beneficially owned by such
stockholder, (d) a list of the names and addresses of other beneficial owners of
shares of the capital stock of the Company, if any, with whom such stockholder
is acting in concert, and of the number of shares of each class of the capital
stock of the Company beneficially owned by each such beneficial owner and (e) an
opinion of counsel, which counsel and the form and substance of which opinion
shall be reasonably satisfactory to the Board of Directors of the Company
(excluding the director proposed to be removed), to the effect that, if adopted
at a duly called special or annual meeting of the stockholders of the Company by
the required vote as set forth in the first paragraph of this Section 10, such
removal would not be in violation of the laws of the State of Delaware, the
Restated Certificate of Incorporation of the Company or these Bylaws. To be
timely in connection with an annual meeting of stockholders, a stockholder's
notice and other aforesaid items shall be delivered to or mailed and received at
the principal executive offices of the Company not less than 90 nor more than
180 days prior to the date on which the immediately preceding year's annual
meeting of stockholders was held. Within 30 days after such stockholder shall
have delivered the aforesaid items to the Secretary of the Company, the
Secretary and the Board of Directors of the Company shall respectively determine
whether the items to be ruled upon by them are reasonably satisfactory and shall
notify such stockholder in writing of their respective determinations. If such
stockholder fails to submit a required item in the form or within the time
indicated, or if the Secretary or the Board of Directors of the Company
determines that the items to be ruled upon by them are not reasonably
satisfactory, then such proposal by such stockholder may not be voted upon by
the stockholders of the Company at such annual meeting of the stockholders. The

                                      -13-
<PAGE>

Chairman of the Meeting shall, if the facts warrant, determine and declare to
the meeting that a proposal to remove a director of the Company was not made in
accordance with the procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective proposal shall
be disregarded. Beneficial ownership shall be determined as specified in
accordance with Rule 13d-3 under the Exchange Act.

      No proposal by a stockholder to remove a director of the Company,
regardless of whether such director was elected by holders of outstanding shares
of any series of Preferred Stock (or elected by such directors to fill a
vacancy), shall be voted upon at a special meeting of the stockholders.

      SECTION 11. Executive and Other Committees. The Board of Directors, by
resolution or resolutions adopted by a majority of the full Board of Directors,
may designate one or more members of the Board of Directors to constitute an
Executive Committee, and one or more other committees, which shall in each case
consist of such number of directors as the Board of Directors may determine from
time to time. Subject to such restrictions as may be contained in the Company's
Restated Certificate of Incorporation or that may be imposed by the DGCL, any
such committee shall have and may exercise such powers and authority of the
Board of Directors in the management of the business and affairs of the Company
as the Board of Directors may determine by resolution and specify in the
respective resolutions appointing them, and may authorize the seal of the
Company to be affixed to all papers which may require it; but no such committee
shall have the power or authority in reference to the following matters: (a)
approving or adopting, or recommending to the stockholders of the Company, any
action or matter expressly required by the DGCL to be submitted to the
stockholders for approval or (b) adopting, amending or repealing any Bylaw of
the Company. Each duly authorized action taken with respect to a given matter by
any such duly appointed committee of the Board of Directors shall have the same
force and effect as the action of the full Board of Directors and shall
constitute for all purposes the action of the full Board of Directors with
respect to such matter.

      The Board of Directors shall have the power at any time to change the
membership of any such committee and to fill vacancies in it. A majority of the
members of any such committee shall constitute a quorum. The Board of Directors
shall name a chairman at the time it designates members to a committee. Each
such committee shall appoint such subcommittees and assistants as it may deem
necessary. Except as otherwise provided by the Board of Directors, meetings of
any committee shall be conducted in accordance with the provisions of Sections 5
and 7 of this Article III, as the same shall from time to time be amended. Any
member of any such committee elected or appointed by the Board of Directors may
be removed by the Board of Directors whenever in its judgment the best interests
of the Company will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the

                                      -14-
<PAGE>

person so removed. Election or appointment of a member of a committee shall not
of itself create contract rights.

                                   ARTICLE IV.
                                    OFFICERS

      SECTION 1. Officers. The officers of the Company shall consist of a
President and a Secretary and such other officers and agents as the Board of
Directors may from time to time elect or appoint. The Board of Directors may
delegate to the Chairman of the Board, if there is one, or the Chief Executive
Officer, if there is one, the authority to appoint additional officers and
agents of the Company. Each officer shall hold office until his successor shall
have been duly elected or appointed and shall qualify or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided. Any two or more offices may be held by the same person. Except for the
Chairman of the Board, if any, no officer need be a director.

      SECTION 2. Vacancies; Removal. Whenever any vacancies shall occur in any
office by death, resignation, increase in the number of offices of the Company,
or otherwise, the officer so elected shall hold office until his successor is
chosen and qualified. The Board of Directors may at any time remove any officer
of the Company, whenever in its judgment the best interests of the Company will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.

      SECTION 3. Powers and Duties of Officers. The officers of the Company
shall have such powers and duties as generally pertain to their offices as well
as such powers and duties as from time to time shall be conferred by the Board
of Directors. The Secretary shall have the duty to record the proceedings of the
meetings of the stockholders and directors in a book to be kept for that
purpose.

                                   ARTICLE V.
                                 INDEMNIFICATION

      SECTION 1. General. The Company shall, to the fullest extent permitted by
applicable law in effect on the date of effectiveness of these Bylaws, and to
such greater extent as applicable law may thereafter permit, indemnify and hold
Indemnitee (as this and all other capitalized words used in this Article V not
previously defined in these Bylaws are defined in Article V, Section 16
(Definitions)) harmless from and against any and all losses, liabilities,
claims, damages and, subject to Article V, Section 2 (Expenses), all Expenses
whatsoever arising out of any event or occurrence related to the fact that
Indemnitee is or was a director or officer of the Company or is or was serving
in another Corporate Status.

                                      -15-
<PAGE>

      SECTION 2. Expenses. If Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to any Matter in such Proceeding, the Company shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him or on his behalf relating
to such Matter. The termination of any Matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
Matter. To the extent that the Indemnitee is, by reason of his Corporate Status,
a witness in any Proceeding, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.

      SECTION 3. Advances. In the event of any threatened or pending action,
suit or proceeding in which Indemnitee is a party or is involved and that may
give rise to a right of indemnification under this Article V, following written
request to the Company by Indemnitee, the Company shall promptly pay to
Indemnitee amounts to cover all Expenses reasonably incurred by Indemnitee in
such proceeding in advance of its final disposition upon the receipt by the
Company of (i) a written undertaking executed by or on behalf of Indemnitee
providing that Indemnitee will repay the advance if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
provided in these Bylaws and (ii) satisfactory evidence as to the amount of such
expenses.

      SECTION 4. Repayment of Advances or Other Expenses. Indemnitee shall be
obligated to reimburse the Company for all expenses paid by the Company in
defending any civil, criminal, administrative or investigative action, suit or
proceeding against Indemnitee in the event and only to the extent that it shall
be determined pursuant to the provisions of this Article V or by final judgment
or other final adjudication under the provisions of any applicable law that
Indemnitee is not entitled to be indemnified by the Company for such expenses.

      SECTION 5. Request for Indemnification. To obtain indemnification,
Indemnitee shall submit to the Secretary of the Company a written claim or
request. Such written claim or request shall contain sufficient information to
reasonably inform the Company about the nature and extent of the indemnification
or advance sought by Indemnitee. The Secretary of the Company shall promptly
advise the Board of Directors of such request.

      SECTION 6. Determination of Entitlement; No Change of Control. If there
has been no Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be determined in
accordance with Section 145(d) of the DGCL. If entitlement to indemnification is
to be determined by independent Counsel, the Company shall furnish notice to
Indemnitee within ten days

                                      -16-
<PAGE>

after receipt of the request for indemnification, specifying the identity and
address of Independent Counsel. The Indemnitee may, within fourteen days after
receipt of such written notice of selection, deliver to the Company a written
objection to such selection. Such objection may be asserted only on the ground
that the Independent Counsel so selected does not meet the requirements of
Independent Counsel and the objection shall set forth with particularity the
factual basis for such assertion. If there is an objection to the selection of
Independent Counsel, either the Company or Indemnitee may petition the Court for
a determination that the objection is without a reasonable basis and/or for the
appointment of Independent Counsel selected by the Court.

      SECTION 7. Determination of Entitlement; Change of Control. If there has
been a Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be determined in a
written opinion by Independent Counsel selected by Indemnitee. Indemnitee shall
give the Company written notice advising of the identity and address of the
Independent Counsel so selected. The Company may, within seven days after
receipt of such written notice of selection, deliver to the Indemnitee a written
objection to such selection. Indemnitee may, within five days after the receipt
of such objection from the Company, submit the name of another Independent
Counsel and the Company may, within seven days after receipt of such written
notice of selection, deliver to the Indemnitee a written objection to such
selection. Any objections referred to in this Section 7 may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of independent Counsel and such objection shall set forth with
particularity the factual basis for such assertion. Indemnitee may petition the
Court for a determination that the Company's objection to the first and/or
second selection of independent Counsel is without a reasonable basis and/or for
the appointment as Independent Counsel of a person selected by the Court.

      SECTION 8. Procedures of Independent Counsel. If a Change of Control shall
have occurred before the request for indemnification is sent by Indemnitee,
Indemnitee shall be presumed (except as otherwise expressly provided in this
Article V) to be entitled to indemnification upon submission of a request for
indemnification in accordance with Article V, Section 5 (Request for
Indemnification), and thereafter the Company shall have the burden of proof to
overcome the presumption in reaching a contrary determination. The presumption
shall be used by Independent Counsel as a basis for a determination of
entitlement to indemnification unless the Company provides information
sufficient to overcome such presumption by clear and convincing evidence or the
investigation, review and analysis of Independent Counsel convinces him by clear
and convincing evidence that the presumption should not apply.

      Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Article V, Section 6 (Determination of Entitlement; No Change of
Control) or Section 7 (Determination of Entitlement; Change of Control) to
determine entitlement to

                                      -17-
<PAGE>

indemnification shall not have made and furnished to Indemnitee in writing a
determination within 60 days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification unless Indemnitee knowingly misrepresented a material fact in
connection with the request for indemnification or such indemnification is
prohibited by applicable law. The termination of any Proceeding or of any Matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Article V) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner that he reasonably believed to be in or not opposed to the
best interests of the Company, or with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was unlawful. A
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
of the Company shall be deemed to have acted in a manner not opposed to the best
interests of the Company.

      For purposes of any determination hereunder, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, or, with respect to any criminal
action or Proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account of the
Company or another enterprise or on information supplied to him by the officers
of the Company or another enterprise in the course of their duties or on the
advice of legal counsel for the Company or another enterprise or on information
or records given or reports made to the Company or another enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or another enterprise. The term
"another enterprise" as used in this Section shall mean any other company or any
partnership, limited liability company, association, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was serving
at the request of the Company as a director, officer, employee or agent. The
provisions of this paragraph shall not be deemed to be exclusive or to limit in
any way the circumstances in which an Indemnitee may be deemed to have met the
applicable standards of conduct for determining entitlement to rights under this
Article V.

      SECTION 9. Independent Counsel Expenses. The Company shall pay any and all
reasonable fees and expenses of Independent Counsel incurred acting pursuant to
this Article V and in any proceeding to which it is a party or witness in
respect of its investigation and written report and shall pay all reasonable
fees and expenses incident to the procedures in which such Independent Counsel
was selected or appointed. No Independent Counsel may serve if a timely
objection has been made to his selection until a Court has determined that such
objection is without a reasonable basis.

                                      -18-
<PAGE>

      SECTION 10. Adjudication. In the event that (i) a determination is made
pursuant to Article V, Section 6 (Determination of Entitlement; No Change of
Control) or Section 7 (Determination of Entitlement; Change of Control) that
Indemnitee is not entitled to indemnification under this Article V; (ii)
advancement of Expenses is not timely made pursuant to Article V, Section 3
(Advances); (iii) Independent Counsel has not made and delivered a written
opinion determining the request for indemnification (a) within ninety days after
being appointed by the Court, (b) within ninety days after objections to his
selection have been overruled by the Court or (c) within ninety days after the
time for the Company or Indemnitee to object to his selection; or (iv) payment
of indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Article V, Section 6 (Determination of Entitlement; No Change of
Control), Section 7 (Determination of Entitlement; Change of Control) or Section
8 (Procedures of Independent Counsel), Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other
court of competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. In the event that a determination shall have been made
that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding commenced pursuant to this Section 10, the
Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Indemnitee
is entitled to indemnification, the Company shall be bound by such determination
in any judicial proceeding commenced pursuant to this Section 10, or otherwise,
unless Indemnitee knowingly misrepresented a material fact in connection with
the request for indemnification, or such indemnification is prohibited by law.

      The Company shall be precluded from asserting in any judicial proceeding
commenced pursuant to this Section 10 that the procedures and presumptions of
this Article V are not valid, binding and enforceable and shall stipulate in any
such proceeding that the Company is bound by all provisions of this Article V.
In the event that Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication to enforce his rights under, or to recover damages for breach of,
this Article V, Indemnitee shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any and all Expenses actually and
reasonably incurred by him in such judicial adjudication, but only if he
prevails therein. If it shall be determined in such judicial adjudication that
Indemnitee is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.

      SECTION 11. Participation by the Company. With respect to any such claim,
action, suit, proceeding or investigation as to which Indemnitee notifies the
Company of

                                      -19-
<PAGE>

the commencement thereof: (a) the Company will be entitled to participate
therein at its own expense; (b) except as otherwise provided below, to the
extent that it may wish, the Company (jointly with any other indemnifying party
similarly notified) will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After receipt of notice from the Company
to Indemnitee of the Company's election so to assume the defense thereof, the
Company will not be liable to Indemnitee under this Article V for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ his own counsel in
such action, suit, proceeding or investigation but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee shall
have reasonably concluded that there is a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such action or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of this
Article V. The Company shall not be entitled to assume the defense of any
action, suit, proceeding or investigation brought in the name of or on behalf of
the Company or as to which Indemnitee shall have made the conclusion provided
for in (ii) above; and (c) the Company shall not be liable to indemnify
Indemnitee under this Article V for any amounts paid in settlement of any action
or claim effected without its written consent, which consent shall not be
unreasonably withheld. The Company shall not settle any action or claim in any
manner that would impose any limitation or unindemnified penalty on Indemnitee
without Indemnitee's written consent, which consent shall not be unreasonably
withheld.

      SECTION 12. Nonexclusivity of Rights. The rights of indemnification and
advancement of Expenses as provided by this Article V shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled to
under applicable law, the Restated Certificate of Incorporation of the Company,
these Bylaws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Article V or
any provision hereof shall be effective as to any Indemnitee for acts, events
and circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Article V shall continue as to an
Indemnitee whose Corporate Status has ceased for any reason and shall inure to
the benefit of his heirs, executors and administrators. Neither the provisions
of this Article V nor those of any agreement to which the Company is a party
shall be deemed to preclude the indemnification of any person who is not
specified in this Article V as having the right to receive indemnification or is
not a party to any such agreement, but whom the Company has the power or
obligation to indemnify under the provisions of the DGCL.

                                      -20-
<PAGE>

      SECTION 13. Insurance and Subrogation. The Company may maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent
of the Company or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not the
Company would have the power to indemnify such person against such expense,
liability or loss under applicable law.

      The Company shall not be liable under this Article V to make any payment
of amounts otherwise indemnifiable hereunder if, but only to the extent that,
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

      In the event of any payment hereunder, the Company shall be subrogated to
the extent of such payment to all the rights of recovery of Indemnitee, who
shall execute all papers required and take all action reasonably requested by
the Company to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.

      SECTION 14. Severability. If any provision or provisions of this Article V
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Article V shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.

      SECTION 15. Certain Actions for Which Indemnification Is Not Provided.
Notwithstanding any other provision of this Article V, no person shall be
entitled to indemnification or advancement of Expenses under this Article V with
respect to any Proceeding, or any Matter therein, brought or made by such person
against the Company.

      SECTION 16. Definitions. For purposes of this Article V:

      "Change of Control" means a change in control of the Company after later
of (a) June 30, 2003 or (b) the date Indemnitee acquired his Corporate Status,
which shall be deemed to have occurred in any one of the following circumstances
occurring after such date: (i) there shall have occurred an event required to be
reported with respect to the Company in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not the Company is then
subject to such reporting requirement; (ii) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) shall have become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding voting securities

                                      -21-
<PAGE>

without prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such percentage
interest; (iii) the Company is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iv) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (including,
for this purpose, any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

      "Corporate Status" describes the status of Indemnitee as a director,
officer, employee, agent or fiduciary of the Company or of any other
corporation, partnership, limited liability company, association, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was
serving at the request of the Company.

      "Court" means the Court of Chancery of the State of Delaware or any other
court of competent jurisdiction.

      "Designated Professional Capacity" shall include, but not be limited to, a
physician, nurse, psychologist or therapist, registered surveyor, registered
engineer, registered architect, attorney, certified public accountant or other
person who renders such professional services within the course and scope of his
employment, who is licensed by appropriate regulatory authorities to practice
such profession and who, while acting in the course of such employment,
committed or is alleged to have committed any negligent acts, errors or
omissions in rendering such professional services at the request of the Company
or pursuant to his employment (including, without limitation, rendering written
or oral opinions to third parties).

      "Expenses" shall include all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a
Proceeding.

      "Indemnitee" includes any officer or director of the Company who is, or is
threatened to be made, a witness in or a party to any Proceeding as described in
Article V, Section 1 (General) or Section 2 (Expenses) by reason of his
Corporate Status.

      "Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
five years previous to his selection or appointment has been, retained to
represent: (i) the

                                      -22-
<PAGE>

Company or Indemnitee in any matter material to either such party or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder.

      "Matter" is a claim, a material issue or a substantial request for relief.

      "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee pursuant to Article V, Section 10 (Adjudication) to
enforce his rights under this Article V.

      SECTION 17. Notices. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance pursuant
to the terms of this Article V, notify the Company of the commencement of such
action, suit or proceeding; provided, however, that any delay in so notifying
the Company shall not constitute a waiver or release by Indemnitee of rights
hereunder and that any omission by Indemnitee to so notify the Company shall not
relieve the Company from any liability that it may have to Indemnitee otherwise
than under this Article V. Any communication required or permitted to the
Company shall be addressed to the Secretary of the Company and any such
communication to Indemnitee shall be addressed to Indemnitee's address as shown
on the Company's records unless he specifies otherwise and shall be personally
delivered or delivered by overnight mail delivery. Any such notice shall be
effective upon receipt.

      SECTION 18. Contractual Rights. The right to be indemnified or to the
advancement or reimbursement of Expenses (i) is a contract right based upon good
and valuable consideration, pursuant to which Indemnitee may sue as if these
provisions were set forth in a separate written contract between Indemnitee and
the Company, (ii) is and is intended to be retroactive and shall be available as
to events occurring prior to the adoption of these provisions and (iii) shall
continue after any rescission or restrictive modification of such provisions as
to events occurring prior thereto.

      SECTION 19. Indemnification of Employees, Agents and Fiduciaries. The
Company, by adoption of a resolution of the Board of Directors, may indemnify
and advance expenses to a person who is an employee (including an employee
acting in his Designated Professional Capacity), agent or fiduciary of the
Company including any such person who is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
corporation, partnership, joint venture, limited liability company, trust,
employee benefit plan or other enterprise to the same extent and subject to the
same conditions (or to such lesser extent and/or with such other conditions as
the Board of Directors may determine) under which it may indemnify and advance
expenses to an Indemnitee under this Article V.

                                      -23-
<PAGE>

                                   ARTICLE VI.
                            MISCELLANEOUS PROVISIONS

      SECTION 1. Offices. The address of the registered office of the Company in
the State of Delaware is Corporation Service Company, 2711 Centerville Road,
Suite 400, City of Wilmington, County of New Castle, Delaware 19808, and the
name of the registered agent of the Company at such address is The Corporation
Trust Company. The principal office of the Company shall be located in Phoenix,
Arizona, unless and until changed by resolution of the Board of Directors. The
Company may also have offices at such other places as the Board of Directors may
designate from time to time, or as the business of the Company may require. The
principal office and registered office may be, but need not be, the same.

      SECTION 2. Resignations. Any director or officer may resign at any time.
Such resignations shall be made in writing and shall take effect at the time
specified therein, or, if no time is specified, at the time of its receipt by
the Chairman of the Board, if there is one, the Chief Executive Officer, if
there is one, the President or the Secretary. The acceptance of a resignation
shall not be necessary to make it effective, unless expressly so provided in the
resignation.

      SECTION 3. Seal. The Corporate Seal shall be circular in form, shall have
inscribed thereon the name of the Company and may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise reproduced.

      SECTION 4. Separability. If one or more of the provisions of these Bylaws
shall be held to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provision hereof and
these Bylaws shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein.

                                  ARTICLE VII.
                               AMENDMENT OF BYLAWS

      SECTION 1. Vote Requirements. The Board of Directors is expressly
empowered to adopt, amend or repeal these Bylaws. Any adoption, amendment or
repeal of these Bylaws by the Board of Directors shall require the affirmative
vote of at least 80% of all directors then in office at any regular or special
meeting of the Board of Directors called for that purpose.

                                      -24-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>p69164exv10w2.txt
<DESCRIPTION>EX-10.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                                                                [EXECUTION COPY]

                              EMPLOYMENT AGREEMENT

      This EMPLOYMENT AGREEMENT ("Agreement") is entered into as June 30, 2003
by and between CAVCO INDUSTRIES, INC., a Delaware corporation (the "Company"),
and JOSEPH H. STEGMAYER (the "Executive").

                              W I T N E S S E T H:

      WHEREAS, the Board of Directors of Centex Corporation ("Centex") has
determined that it would be advisable and in the best interests of Centex for
Centex to organize the Company, and to transfer substantially all of the
business, operations, assets and liabilities related to Cavco Industries, LLC to
the Company; and

      WHEREAS, the Company has agreed to assume substantially all of the
business, operations, assets and liabilities related to Cavco Industries, LLC;
and

      WHEREAS, the Board of Directors of Centex has also determined that it
would be advisable and in the best interests of Centex for Centex to distribute
on a pro-rata basis to the holders of record of Centex common stock, par value
$0.25 per share (the "Centex Common Stock"), without any consideration being
paid by such holders, all of the outstanding shares of the Company's common
stock, par value $.01 per share (the "Cavco Common Stock"), owned by Centex (the
"Distribution"); and

      WHEREAS, for United States federal income tax purposes, the Distribution
is intended to qualify as a tax-free spin-off within the meaning of Sections 355
and 368(a)(1)(D) of the United States Internal Revenue Code of 1986, as amended
(the "Code"); and

      WHEREAS, from and after the date (the "Effective Date") upon which the
Distribution is effectuated, the Company desires to employ the Executive, and
the Executive is willing to accept such employment, all upon the terms and
conditions set forth herein.

      NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and subject to the Distribution being effectuated on or
before June 30, 2003, the parties hereto agree as follows:

      SECTION 1. Definitions. For purposes of this Agreement, the following
definitions shall apply:

      "Average Bonus" shall mean the result obtained by dividing by two the sum
      of the bonuses, if any, paid to the Executive pursuant to Subsection 5(b)
      below in

<PAGE>

      respect of the two (2) fiscal years next preceding the fiscal year in
      which the Average Bonus is due. If the employment of the Executive is
      terminated prior to the conclusion of two (2) fiscal years under the Term
      of this Agreement, and payment of the Average Bonus is due to Employee,
      then the amount paid will be $400,000.

      "Board" shall mean the Board of Directors of the Company.

      "Breach" shall mean a breach by either the Executive or the Company, as
      the case may be, of a term of this Agreement which breach remains uncured
      for 15 days after written notice is received by the party in breach from
      the party asserting the breach.

      "Change in Control" shall be deemed to have occurred if, subsequent to the
      Distribution: (i) the Company merges or consolidates with any other
      corporation (other than a wholly-owned subsidiary) and is not the
      surviving corporation (or survives only as a subsidiary of another
      corporation), (ii) the Company sells all or substantially all of its
      assets to any other person or entity (other than a wholly-owned
      subsidiary), (iii) the Company is dissolved, or (iv) a third person,
      including a "group" as defined in Section 13(d)(3) of the Securities
      Exchange Act of 1934, becomes the beneficial owner of shares of Cavco
      Common Stock having 50% or more of the total number of votes that may be
      cast for the election of directors of the Company; or as a result of, or
      in connection with, a contested election for directors, the persons who
      were directors of the Company before such election shall cease to
      constitute a majority of the Board of the Company. Notwithstanding any
      provision of this paragraph, an event, transaction, or corporate action
      described in this Subsection which would otherwise be deemed a Change in
      Control, will not be deemed a Change in Control if: it is a management led
      or supported transaction by persons who were the directors of the Company
      and persons who were the executive officers of the Company as of six
      months prior to such event; and if immediately after such event such
      persons constitute a majority of the directors and constitute a majority
      of executive officers for, and own in the aggregate at least fifteen
      percent of the voting securities or interest of, the Company or the
      surviving or resulting corporation or the parent of the resulting
      corporation.

      "Common Stock" means the common stock of the Company, par value $.01.

      "Disability" shall mean the Executive's inability, by reason of a mental
      or physical impairment, to perform his duties and responsibilities, as set
      forth in Section 4, below for a period of at least six (6) consecutive
      months.

      "Termination for Cause" shall mean the Company's termination of the
      Executive's employment pursuant to a determination by the Board, in its
      sole and absolute discretion, but acting in good faith, that the Executive
      is guilty of engaging in acts

                                       2
<PAGE>

      during the Term of this Agreement that constitute theft, dishonesty,
      fraud, or embezzlement, or that constitute willful and repeated
      insubordination.

      "Termination Without Cause" shall mean the Company's termination of the
      Executive's employment other than a Termination for Cause. In addition, if
      the Board alters the Executive's duties so that he no longer renders such
      services of an executive and administrative character to the Company as
      are usual and customary in the case of the chief executive officer of an
      entity such as the Company, and the Executive thereafter terminates
      employment with the Company, such termination by the Executive shall be
      deemed not a voluntary termination of employment by the Executive but a
      Termination Without Cause.

      All other defined terms set forth in the text of this Agreement will have
the meaning assigned to them in this Agreement.

      SECTION 2. Employment. From and after the Effective Date, the Company will
employ the Executive upon the terms and conditions set forth herein.

      SECTION 3. Term. Subject to the terms and conditions set forth herein, the
Executive shall be employed for a term commencing on the Effective Date and
ending on the third anniversary thereof (the "Initial Term"), unless earlier
terminated as provided in this Agreement. Thereafter, the term of this Agreement
shall automatically be extended for successive one (1) year periods ("Renewal
Terms") unless either the Board or the Executive gives written notice to the
other at least ninety (90) days prior to the end of the Initial Term or any
Renewal Term, as the case may be, of its or his intention not to renew the term
of this Agreement. The Initial Term and any Renewal Terms of this Agreement
shall be collectively referred to as the "Term."

      SECTION 4. Duties and Responsibilities.

      (a)   The Executive shall initially serve in the capacity of Chairman of
the Board, President and Chief Executive Officer of the Company, subject to the
direction of the Board of Directors of the Company. The Executive's duties under
this Agreement shall consist of the performance of such services as are
consistent with the responsibilities of said office and such other services
commensurate with his position as a senior executive of the Company as may be
assigned to him from time to time by the Board. Such duties shall be performed
within the policies and guidelines established from time to time by the Board,
subject at all times to the ultimate control and direction of the Board.

      (b)   At all times during the Term, the Executive shall devote
substantially all of his business time, attention and energies to the
performance of his duties under this Agreement, and shall not undertake or be
engaged in any other activities, whether or not pursued for gain, profit or
other pecuniary advantage, which could impair his ability to fulfill his duties
to the Company under this Agreement, without the prior written consent

                                       3
<PAGE>

of the Board. Notwithstanding the foregoing, the Company agrees that it shall
not be a violation of this paragraph for the Executive to provide services as a
part-time employee-consultant to Centex through March 31, 2005.

      (c)   The Executive shall perform his duties under this Agreement with
fidelity and loyalty, to the best of his ability, experience and talent and in a
manner consistent with his fiduciary responsibilities.

      SECTION 5. Compensation.

      (a)   Base Salary. During the Term, the Company shall pay a salary (the
"Base Salary") of $225,000 per annum to the Executive, payable in accordance
with the general payroll practices of the Company in effect from time to time.
The Company shall review the Base Salary then being paid to the Executive at
such times as the Company regularly reviews the compensation being paid to its
executives generally (but no less frequently than once each year). Upon
completion of such review, the Company may in its sole discretion adjust the
Executive's then current Base Salary; provided, however, that the Company may
not decrease the Executive's then current Base Salary without the prior written
consent of the Executive.

      (b)   Bonus. In addition to the payment of Base Salary, for each fiscal
year of the Company during the Term, the Executive shall be awarded a bonus in
an amount equal to (i) three percent (3%) of the first $2.5 million of pretax
income of the Company, plus (ii) 6% of the pretax income of the Company above
$2.5 million (if any). For purposes of this paragraph, the amount of pretax
income of the Company for the relevant time periods shall be determined by the
Board of Directors of the Company.

      (c)   Stock Options. In connection with the Distribution, the Company has
established or will establish a stock incentive plan (the "Plan"). As soon as
reasonably practicable following the Effective Date, the Company shall reserve a
sufficient number of shares to grant to the Executive the following stock
options in accordance with the Plan:

            (i)   Initial Grant. As soon as reasonably practicable following the
      Effective Date, the Company will grant the Executive an initial
      non-qualified option to purchase a number of shares of Cavco Common Stock
      equal to 6% of all then issued and outstanding Cavco Common Stock. The
      Initial Grant shall be subject to pro rata vesting over a three-year
      period (i.e., 25% on the grant date, with the remainder becoming vested in
      cumulative 25% increments on each of the first through third anniversaries
      of the grant date).

            (ii)  First Anniversary Grant. As soon as reasonably practicable
      following the first anniversary of the Distribution, the Company will
      grant the Executive a non-qualified option to purchase a number of shares
      of Cavco Common Stock not less than 1% of the then issued and outstanding
      Cavco

                                       4
<PAGE>

      Common Stock. The vesting schedule of this option grant will match the
      vesting schedule of the initial grant.

            (iii) Second Anniversary Grant. As soon as reasonably practicable
      following the second anniversary of the Distribution, the Company will
      grant the Executive an additional non-qualified option to purchase a
      number of shares of Cavco Common Stock not less than 1% of the then issued
      and outstanding Cavco Common Stock. The vesting schedule of this option
      grant will match the vesting schedule of the initial grant.

      Each such option grant shall be memorialized in a written agreement. The
per share exercise price will be equal to the fair market value of Cavco Common
Stock on the date of the grant, as determined in accordance with the Plan. When
calculating the number of outstanding shares of Cavco Common Stock for purposes
of the Initial, First Anniversary and Second Anniversary Grants, the Restricted
Stock awarded to the Executive in accordance with Subsection 5(d) below shall be
included in the total number of outstanding shares of Cavco Common Stock.

      (d)   Restricted Stock. As soon as reasonably practicable, the Company
shall reserve a sufficient number of shares to grant to the Executive following
the Effective Date a number of shares of Cavco Common Stock (the "Restricted
Stock") having a fair market value on the date of the grant equal to the sum of
One Million ($1,000,000) Dollars. Upon receipt of the required approval by the
Company's Board, the Executive will receive said grant of Restricted Stock,
which shall be reflected in a written agreement. The Restricted Stock shall be
ratably released from restriction (or "vested") over a three-year period (i.e.,
25% on the grant date, with the remainder becoming vested in cumulative 25%
increments on each of the first through third anniversaries of the grant date).
Except as provided herein, vesting of this award is dependent on the Executive's
continued employment with the Company.

      (e)   Expense Reimbursement. During the Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable out-of-pocket
expenses incurred in the reasonable discretion of the Executive in connection
with the due and proper performance of his duties hereunder in accordance with
the Company's regular practices with respect to other similarly situated
executives of the Company.

      (f)   Incentive, Savings and Retirement Plans. During the Term, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans (whether or not qualified under the Code) as amended,
established or adopted and maintained by the Company from time to time, in
accordance with the Company's regular practices applicable to other similarly
situated executives of the Company. The provisions of this paragraph (f) shall
not affect in any way the rights of the Company to amend or terminate any such
incentive, savings or retirement plans in accordance with the terms of such
plans and the provisions of applicable law.

                                       5
<PAGE>

      (g)   Group Benefit Plans. During the Term, the Executive shall be
entitled to participate in all group benefit plans (including, but not limited
to, disability, accident, medical, life insurance and hospitalization plans)
established or adopted and maintained by the Company from time to time, in
accordance with the Company's regular practices applicable to other similarly
situated executives of the Company. The provisions of this paragraph (g) shall
not affect in any way the rights of the Company to amend or terminate any such
group benefit plans in accordance with the terms of such plans and the
provisions of applicable law.

      (h)   Vacation. The Executive shall be entitled to such vacation, holidays
and other paid or unpaid leaves of absence as are consistent with the Company's
normal policies or as are otherwise approved by the Company.

      (i)   Automobile Allowance. The Company will provide the Executive with an
automobile allowance consistent with the terms of the Company's policies as from
time to time in effect.

      SECTION 6. Termination and Resignation. The Company shall have the right
to terminate the Executive's employment hereunder at any time and for any
reason, and upon any such termination the Executive shall be entitled to receive
from the Company prompt payment of the amount determined pursuant to the
applicable Subsection of Section 7 below. The Executive shall have the right to
terminate his employment hereunder at any time by resignation, and thereupon the
Executive will be entitled to receive from the Company prompt payment of the
amount determined pursuant to the applicable Subsection of Section 7 below.

      SECTION 7. Payments Upon Termination and Resignation.

      (a)   Pro Rata Payment. If the Company terminates the Executive's
employment for Cause, or if the Executive voluntarily resigns prior to the
occurrence of a Change in Control of the Company at a time when there is no
uncured Breach by the Company of this Agreement, then in either case the
Executive shall be entitled to receive only his then current Base Salary on a
pro rata basis to the date of such termination or resignation.

      (b)   Base Salary Payment. If the Executive dies, or becomes Disabled, or
if the Company terminates the Executive's employment Without Cause prior to the
occurrence of a Change in Control, or if the Executive resigns because of a
Breach by the Company of this Agreement, then in each case the Executive (or his
heirs or executors) shall continue to receive his Base Salary for each fiscal
year under the remaining Term of this Agreement and the Average Bonus for such
year(s), plus an additional year of Base Salary, an Average Bonus and health
insurance for such additional year.

      (c)   Multiple Base Salary and Bonus Payment. If within two (2) years
after the occurrence of a Change in Control of the Company, (a) the Company
terminates the

                                       6
<PAGE>

Executive's employment hereunder for any reason other than for Cause, or (b) the
Executive voluntarily resigns his employment hereunder for any reason, then in
each case the Company will pay to the Executive a lump sum termination payment
equal to two times the sum of the Executive's then current Base Salary and
Average Bonus.

      SECTION 8. Confidentiality. The Executive recognizes and acknowledges that
the names of the Company's customers, the Company's methods of operation, sales,
engineering and other trade secrets, as they may exist from time to time, are
valuable, special and unique assets of the Company. The Executive shall not,
during or after the term of his employment under this Agreement, disclose any
such names or other trade secrets, or any part thereof, that he becomes aware of
during his employment, to any person, firm, corporation, association or other
entity.

      SECTION 9. Competitive Activity.

      (a)   The Executive recognizes and acknowledges that the relationship
created by this Agreement is one of trust, and the Executive agrees that, while
he is employed by the Company or is being paid under this Agreement following a
Termination Without Cause, the Executive shall not (whether acting alone or
through any affiliate) or in any other capacity whatsoever and whether by
investing in, or holding securities of, any corporation or other entity,
advancing or lending any funds to, making available any facilities, equipment or
other assets to any entity or other person, engage in any of the following
activities:

            (i)   except in connection with the due and proper performance of
      his duties hereunder, engage in the business of designing, manufacturing
      or selling manufactured housing;

            (ii)  except in connection with the due and proper performance of
      his duties hereunder, solicit or contact (with respect to the manufactured
      housing industry) retailers, dealers, suppliers, customers or potential
      customers on behalf of any corporation or other entity or any other person
      engaged in the business of designing, manufacturing and selling
      manufactured housing;

            (iii) solicit or otherwise induce any employee of the Company or any
      of its subsidiaries to terminate his or her service with the Company or
      any such subsidiary or hire any person who was an employee of the Company
      or any such subsidiary at any time during the 12-month period immediately
      prior to the date of termination or expiration of the Executive's
      employment hereunder.

      (c)   Notwithstanding anything to the contrary in this Section 9, the
Company agrees that it shall not be a violation of this Agreement for the
Executive to provide services as a part-time employee-consultant to Centex
through March 31, 2005.

                                       7
<PAGE>

      (d)   Notwithstanding anything to the contrary in this Section 9, the
Executive may own, for investment purposes only, up to three percent of the
stock of any publicly-held corporation that engages in the business of
designing, manufacturing and selling manufactured housing or that otherwise
directly or indirectly competes with the Company if the stock of such
corporation is either listed on a national securities exchange or traded on the
NASDAQ National Market and if the Executive is not an employee or consultant of,
and is not otherwise affiliated with, such corporation.

      (e)   It is hereby agreed by and between the Executive and the Company
that if (notwithstanding the provisions of paragraph (d) below) the
non-competition covenants contained in this Agreement should be held by any
court or other constituted legal authority to be void or unenforceable in any
particular area or jurisdiction, then the parties hereto shall consider this
Agreement to be amended and modified so as to eliminate therefrom that
particular area or jurisdiction as to which the non-competition covenants are
held to be void or otherwise unenforceable, and as to all other areas and
jurisdictions covered by this Agreement, the terms and provisions hereof shall
remain in full force and effect as originally written.

      (f)   It is further agreed that if the non-competition covenants contained
in this Agreement should be held by any court or other constituted legal
authority to be effective in any particular area or jurisdiction only if said
covenants are modified to limit their duration or scope, then the parties hereto
shall consider such non-competition covenants to be amended and modified with
respect to that particular area or jurisdiction so as to comply with the order
of any court or other constituted legal authority, and as to all other areas and
jurisdictions, the non-competition covenants contained herein shall remain in
full force and effect as originally written.

      (g)   The Executive and the Company agree that the covenants set forth
herein are appropriate and reasonable when considered in light of the nature and
extent of the business of designing, manufacturing and selling manufactured
housing as conducted by the Company and its subsidiaries. The Executive
acknowledges that (i) the Company has a legitimate interest in protecting its
business, (ii) the covenants set forth herein are not oppressive to the
Executive and contain such reasonable limitations as to time, scope,
geographical area and activity, (iii) the covenants do not harm in any manner
whatsoever the public interest, and (iv) the Executive has received and will
receive substantial consideration for agreeing to such covenants.

      SECTION 10. Miscellaneous.

      (a)   Reimbursement of Legal Expenses. If at any time the Executive (or
his beneficiary or beneficiaries, or his estate, as the case may be) shall
commence any legal action to enforce any of the terms or provisions of this
Agreement, including, without limitation, any term or provision requiring the
payment of compensation to the Executive hereunder, whether in installments or
in a lump sum, or the payment of the severance benefit hereunder, and such legal
action results in a decision favorable to the person so

                                       8
<PAGE>

commencing such action, the Company agrees to reimburse such person for all
costs and expenses of such action, including reasonable attorney's fees,
incurred by such person in connection therewith.

      (b)   Succession. This Agreement shall inure to the benefit of and be
binding upon the Company, its successors and assigns, including without
limitation, any person, partnership or corporation which may acquire all or
substantially all or a majority of the Company's assets and business, or with or
into which the Company may be consolidated or merged, and this provision shall
apply in the event of any subsequent mergers, consolidations, and transfers, and
shall be binding upon the Executive, his heirs and personal representatives.

      (c)   No Waiver. The failure of either party to insist, in any one or more
instances, upon performance of any of the terms or conditions of this Agreement
shall not be construed as a waiver or a relinquishment of any right granted
hereunder or of the future performance of any such term or condition, but the
obligation of the other party with respect thereto shall continue in full force
and effect.

      (d)   Notice. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and personally
delivered or mailed by certified mail to its office at 1001 N. Central Avenue,
8th Floor, Phoenix, Arizona 85004, Attn: Secretary. Any notice to be given to
the Executive hereunder shall be deemed sufficient if addressed to the Executive
in writing and personally delivered or mailed by certified mail to 1001 N.
Central Avenue, 8th Floor, Phoenix, Arizona 85004. Either party may, by notice
as aforesaid, designate a different address or addresses.

      (e)   Severability. In any event any provision of this Agreement shall be
held to be illegal, invalid or unenforceable for any reason, the illegality,
invalidity, or unenforceability shall not affect the remaining provisions
hereof, but such illegal, invalid or unenforceable provision shall be fully
severable and this Agreement shall be construed and enforced as if the illegal,
invalid or unenforceable provision had never been included herein.

      (f)   Headings. The titles and headings of Sections are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

      (g)   Word Usage. Words used in the masculine shall apply in the feminine
where applicable, and wherever the context of this Agreement dictates, the
plural shall be read as the singular and the singular as the plural.

      (h)   Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Arizona.

                                       9
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

CAVCO INDUSTRIES, INC.

By:/s/ SEAN K. NOLEN
   -------------------------------
Its Vice President and Chief
   Financial Officer

 /s/  JOSEPH H. STEGMAYER
 ----------------------------------
JOSEPH H. STEGMAYER

                                       10

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>p69164exv10w3.txt
<DESCRIPTION>EX-10.3
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.3

                                                                [EXECUTION COPY]

                              EMPLOYMENT AGREEMENT

      This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of June 30,
2003 by and between CAVCO INDUSTRIES, INC., a Delaware corporation (the
"Company"), and SEAN K. NOLEN (the "Executive").

                              W I T N E S S E T H:

      WHEREAS, the Board of Directors of Centex Corporation ("Centex") has
determined that it would be advisable and in the best interests of Centex and
its stockholders for Centex to organize the Company, and to transfer
substantially all of the business, operations, assets and liabilities related to
Cavco Industries, LLC to the Company; and

      WHEREAS, the Company has agreed to assume substantially all of the
business, operations, assets and liabilities related to Cavco Industries, LLC;
and

      WHEREAS, the Board of Directors of Centex has also determined that it
would be advisable and in the best interests of Centex and its stockholders for
Centex to distribute on a pro-rata basis to the holders of record of Centex
common stock, par value $0.25 per share (the "Centex Common Stock"), without any
consideration being paid by such holders, all of the outstanding shares of the
Company's common stock, par value $.01 per share (the "Cavco Common Stock"),
owned by Centex (the "Distribution"); and

      WHEREAS, for United States federal income tax purposes, the Distribution
is intended to qualify as a tax-free spin-off within the meaning of Sections 355
and 368(a)(1)(D) of the United States Internal Revenue Code of 1986, as amended
(the "Code"); and

      WHEREAS, from and after the date (the "Effective Date") upon which the
Distribution is effectuated, the Company desires to employ the Executive, and
the Executive is willing to accept such employment, all upon the terms and
conditions set forth herein.

      NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and subject to the Distribution being effectuated on or
before June 30, 2003, the parties hereto agree as follows:

      SECTION 1. Definitions. For purposes of this Agreement, the following
definitions shall apply:

                                       1
<PAGE>

      "Breach" shall mean a breach by either the Executive or the Company, as
      the case may be, of a term of this Agreement which breach remains uncured
      for 15 days after written notice is received by the party in breach from
      the party asserting the breach.

      "Change in Control" shall be deemed to have occurred if, subsequent to the
      Distribution: (i) the Company merges or consolidates with any other
      corporation (other than a wholly-owned subsidiary) and is not the
      surviving corporation (or survives only as a subsidiary of another
      corporation), (ii) the Company sells all or substantially all of its
      assets to any other person or entity (other than a wholly-owned
      subsidiary), (iii) the Company is dissolved, or (iv) a third person,
      including a "group" as defined in Section 13(d)(3) of the Securities
      Exchange Act of 1934, becomes the beneficial owner of shares of Cavco
      Common Stock having 50% or more of the total number of votes that may be
      cast for the election of directors of the Company; or as a result of, or
      in connection with, a contested election for directors, the persons who
      were directors of the Company before such election shall cease to
      constitute a majority of the Board of Directors of the Company.
      Notwithstanding any provision of this paragraph, an event, transaction, or
      corporate action described in this Subsection which would otherwise be
      deemed a Change in Control, will not be deemed a Change in Control if: it
      is a management led or supported transaction by persons who were the
      directors of the Company and persons who were the executive officers of
      the Company as of six months prior to such event; and if immediately after
      such event such persons constitute a majority of the directors and
      constitute a majority of executive officers for, and own in the aggregate
      at least fifteen percent of the voting securities or interest of, the
      Company or the surviving or resulting corporation or the parent of the
      resulting corporation.

      "Common Stock" means the common stock of the Company, par value $.01.

      "Disability" shall mean the Executive's inability, by reason of a mental
      or physical impairment, to perform his duties and responsibilities, as set
      forth in Section 4, below for a period of at least six (6) consecutive
      months.

      "Termination for Cause" shall mean the Company's termination of the
      Executive's employment pursuant to a determination by the Company's Board
      of Directors, in its sole and absolute discretion, but acting in good
      faith, that the Executive is guilty of engaging in acts during the Term of
      this Agreement that constitute theft, dishonesty, fraud, or embezzlement,
      or that constitute willful and repeated insubordination.

      "Termination Without Cause" shall mean the Company's termination of the
      Executive's employment other than a Termination for Cause. In addition, if
      the Company alters the Executive's duties so that he no longer renders
      such services

                                       2
<PAGE>

      of an executive and administrative character to the Company as are usual
      and customary in the case of the chief financial officer of an entity such
      as the Company, and the Executive thereafter terminates employment with
      the Company, such termination by the Executive shall be deemed not a
      voluntary termination of employment by the Executive but a Termination
      Without Cause.

      All other defined terms set forth in the text of this Agreement will have
the meaning assigned to them in this Agreement.

      SECTION 2. Employment. From and after the Effective Date, the Executive
will be employed by the Company upon the terms and conditions set forth herein.

      SECTION 3. Term. Subject to the terms and conditions set forth herein, the
Executive shall be employed for a term commencing on the Effective Date and
ending on the third anniversary thereof (the "Initial Term"), unless earlier
terminated as provided in this Agreement. Thereafter, the term of this Agreement
shall automatically be extended for successive one (1) year periods ("Renewal
Terms") unless either the Company or the Executive gives written notice to the
other at least ninety (90) days prior to the end of the Initial Term or any
Renewal Term, as the case may be, of its or his intention not to renew the term
of this Agreement. The Initial Term and any Renewal Terms of this Agreement
shall be collectively referred to as the "Term."

      SECTION 4. Duties and Responsibilities.

      (a)   The Executive shall initially serve in the capacity of Vice
President, Chief Financial Officer and Treasurer of the Company, subject to the
direction of the President and Chief Executive Officer of the Company. The
Executive's duties under this Agreement shall consist of the performance of such
services as are consistent with the responsibilities of said office and such
other services commensurate with his position as a senior executive of the
Company as may be assigned to him from time to time by the President and Chief
Executive Officer of the Company. Such duties shall be performed within the
policies and guidelines established from time to time by the Company.

      (b)   At all times during the Term, the Executive shall devote
substantially all of his business time, attention and energies to the
performance of his duties under this Agreement, and shall not undertake or be
engaged in any other activities, whether or not pursued for gain, profit or
other pecuniary advantage, which could impair his ability to fulfill his duties
to the Company under this Agreement, without the prior written consent of the
Company.

     (c)   The Executive shall perform his duties under this Agreement with
fidelity and loyalty, to the best of his ability, experience and talent and in a
manner consistent with his fiduciary responsibilities.

      SECTION 5. Compensation.

                                       3
<PAGE>

      (a)   Base Salary. During the Term, the Company shall pay a salary (the
"Base Salary") of $150,000 per annum to the Executive, payable in accordance
with the general payroll practices of the Company in effect from time to time.
The Company shall review the Base Salary then being paid to the Executive at
such times as the Company regularly reviews the compensation being paid to its
executives generally (but no less frequently than once each year). Upon
completion of such review, the Company may in its sole discretion adjust the
Executive's then current Base Salary; provided, however, that the Company may
not decrease the Executive's then current Base Salary without the prior written
consent of the Executive.

      (b)   Bonus. In addition to the payment of Base Salary, for each fiscal
year of the Company during the Term, the Executive shall be awarded a bonus in
an amount to be determined from time to time by the Board of Directors of the
Company after consultation with the Chief Executive Officer of the Company.

      (c)   Stock Options. In connection with the Distribution, the Company has
established or will establish a stock incentive plan (the "Plan"). As soon as
reasonably practicable following the Effective Date, the Company will grant the
Executive a non-qualified option to purchase fifty thousand (50,000) shares of
Cavco Common Stock. This grant shall be subject to pro rata vesting over a
three-year period (i.e., 25% on the grant date, with the remainder becoming
vested in cumulative 25% increments on each of the first through third
anniversaries of the grant date). Said option grant shall be memorialized in a
written agreement. The per share exercise price will be equal to the fair market
value of Cavco Common Stock on the date of the grant, as determined in
accordance with the Plan.

      (d)   Expense Reimbursement. During the Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable out-of-pocket
expenses incurred in the reasonable discretion of the Executive in connection
with the due and proper performance of his duties hereunder in accordance with
the Company's regular practices with respect to other similarly situated
executives of the Company.

      (e)   Incentive, Savings and Retirement Plans. During the Term, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans (whether or not qualified under the Code) as amended,
established or adopted and maintained by the Company from time to time, in
accordance with the Company's regular practices applicable to other similarly
situated executives of the Company. The provisions of this paragraph (e) shall
not affect in any way the rights of the Company to amend or terminate any such
incentive, savings or retirement plans in accordance with the terms of such
plans and the provisions of applicable law.

      (f)   Group Benefit Plans. During the Term, the Executive shall be
entitled to participate in all group benefit plans (including, but not limited
to, disability, accident, medical, life insurance and hospitalization plans)
established or adopted and maintained

                                       4
<PAGE>

by the Company from time to time, in accordance with the Company's regular
practices applicable to other similarly situated executives of the Company. The
provisions of this paragraph (f) shall not affect in any way the rights of the
Company to amend or terminate any such group benefit plans in accordance with
the terms of such plans and the provisions of applicable law.

      (g)   Vacation. The Executive shall be entitled to vacation, holidays and
other paid or unpaid leaves of absence as are consistent with the Company's
normal policies or as are otherwise approved by the Company.

      SECTION 6. Termination and Resignation. The Company shall have the right
to terminate the Executive's employment hereunder at any time and for any
reason, and upon any such termination the Executive shall be entitled to receive
from the Company prompt payment of the amount determined pursuant to the
applicable Subsection of Section 7 below. The Executive shall have the right to
terminate his employment hereunder at any time by resignation, and thereupon the
Executive will be entitled to receive from the Company prompt payment of the
amount determined pursuant to the applicable Subsection of Section 7 below.

      SECTION 7. Payments Upon Termination and Resignation.

      (a)   Pro Rata Payment. If the Company terminates the Executive's
employment for Cause, or if the Executive voluntarily resigns prior to the
occurrence of a Change in Control of the Company at a time when there is no
uncured Breach by the Company of this Agreement, then in either case the
Executive shall be entitled to receive only his then current Base Salary on a
pro rata basis to the date of such termination or resignation.

      (b)   Base Salary Payment. If the Executive dies, or becomes Disabled, or
if the Company terminates the Executive's employment Without Cause prior to the
occurrence of a Change in Control, or if the Executive resigns because of a
Breach by the Company of this Agreement, then in each case the Executive (or his
heirs or executors) shall be entitled to receive the Executive's Base Salary for
a period of twelve (12) months.

      (c)   Lump Sum Payment. If within one (1) year after the occurrence of a
Change in Control of the Company, the Company terminates the Executive's
employment hereunder for any reason other than for Cause, then the Company will
pay to the Executive the Executive's then current Base Salary for a period of
twelve months.

      SECTION 8. Confidentiality. The Executive recognizes and acknowledges that
the names of the Company's customers, the Company's methods of operation, sales,
engineering and other trade secrets, as they may exist from time to time, are
valuable, special and unique assets of the Company. The Executive shall not,
during or after the term of his employment under this Agreement, disclose any
such names or other trade

                                       5
<PAGE>

secrets, or any part thereof, that he becomes aware of during his employment, to
any person, firm, corporation, association or other entity.

      SECTION 9. Competitive Activity.

      (a)   The Executive recognizes and acknowledges that the relationship
created by this Agreement is one of trust, and the Executive agrees that, while
he is employed by the Company or is being paid under this Agreement in
accordance with a Non-Compete Election (as defined below), the Executive shall
not (whether acting alone or through any affiliate) or in any other capacity
whatsoever and whether by investing in, or holding securities of, any
corporation or other entity, advancing or lending any funds to, making available
any facilities, equipment or other assets to any entity or other person, engage
in any of the following activities (the "Competitive Activities"):

            (i)   except in connection with the due and proper performance of
      his duties hereunder, engage in the business of designing, manufacturing
      or selling manufactured housing;

            (ii)  except in connection with the due and proper performance of
      his duties hereunder, solicit or contact (with respect to the manufactured
      housing industry) retailers, dealers, suppliers, customers or potential
      customers on behalf of any corporation or other entity or any other person
      engaged in the business of designing, manufacturing and selling
      manufactured housing;

            (iii) solicit or otherwise induce any employee of the Company or any
      of its subsidiaries to terminate his or her service with the Company or
      any such subsidiary or hire any person who was an employee of the Company
      or any such subsidiary at any time during the 12-month period immediately
      prior to the date of termination or expiration of the Executive's
      employment hereunder.

      (b)   Notwithstanding anything to the contrary in this Section 9, the
Executive may own, for investment purposes only, up to two percent of the stock
of any publicly-held corporation that engages in the business of designing,
manufacturing and selling manufactured housing or that otherwise directly or
indirectly competes with the Company if the stock of such corporation is either
listed on a national securities exchange or traded on the NASDAQ National Market
and if the Executive is not an employee or consultant of, and is not otherwise
affiliated with, such corporation.

      (c)   The Executive specifically acknowledges and agrees that in the event
of the Executive's termination of employment, the Company may elect in its sole
discretion to have the Executive refrain from engaging in any Competitive
Activities (the "Non-Compete Election") for any period not to exceed two (2)
years as the Company may reasonably determine. If the Company makes the
Non-Compete Election, it shall provide written notice thereof to the Executive
and the Executive agrees not to engage in any Competitive Activities for the
period of time specified by the Company in the notice. As

                                       6
<PAGE>

compensation therefor, the Company shall compensate the Executive by making
periodic Base Salary Payments to the Executive as though he were still employed
by the Company during the specified period.

      (d)   It is hereby agreed by and between the Executive and the Company
that if (notwithstanding the provisions of paragraph (d) below) the
non-competition covenants contained in this Agreement should be held by any
court or other constituted legal authority to be void or unenforceable in any
particular area or jurisdiction, then the parties hereto shall consider this
Agreement to be amended and modified so as to eliminate therefrom that
particular area or jurisdiction as to which the non-competition covenants are
held to be void or otherwise unenforceable, and as to all other areas and
jurisdictions covered by this Agreement, the terms and provisions hereof shall
remain in full force and effect as originally written.

      (e)   It is further agreed that if the non-competition covenants contained
in this Agreement should be held by any court or other constituted legal
authority to be effective in any particular area or jurisdiction only if said
covenants are modified to limit their duration or scope, then the parties hereto
shall consider such non-competition covenants to be amended and modified with
respect to that particular area or jurisdiction so as to comply with the order
of any court or other constituted legal authority, and as to all other areas and
jurisdictions, the non-competition covenants contained herein shall remain in
full force and effect as originally written.

      (f)   The Executive and the Company agree that the covenants set forth
herein are appropriate and reasonable when considered in light of the nature and
extent of the business of designing, manufacturing and selling manufactured
housing as conducted by the Company and its subsidiaries. The Executive
acknowledges that (i) the Company has a legitimate interest in protecting its
business, (ii) the covenants set forth herein are not oppressive to the
Executive and contain such reasonable limitations as to time, scope,
geographical area and activity, (iii) the covenants do not harm in any manner
whatsoever the public interest, and (iv) the Executive has received and will
receive substantial consideration for agreeing to such covenants.

      SECTION 10. Miscellaneous.

      (a)   Reimbursement of Legal Expenses. If at any time the Executive (or
his beneficiary or beneficiaries, or his estate, as the case may be) shall
commence any legal action to enforce any of the terms or provisions of this
Agreement, including, without limitation, any term or provision requiring the
payment of compensation to the Executive hereunder, whether in installments or
in a lump sum, or the payment of the severance benefit hereunder, and such legal
action results in a decision favorable to the person so commencing such action,
the Company agrees to reimburse such person for all costs and expenses of such
action, including reasonable attorney's fees, incurred by such person in
connection therewith.

                                       7
<PAGE>

      (b)   Succession. This Agreement shall inure to the benefit of and be
binding upon the Company, its successors and assigns, including without
limitation, any person, partnership or corporation which may acquire all or
substantially all or a majority of the Company's assets and business, or with or
into which the Company may be consolidated or merged, and this provision shall
apply in the event of any subsequent mergers, consolidations, and transfers, and
shall be binding upon the Executive, his heirs and personal representatives.

      (c)   No Waiver. The failure of either party to insist, in any one or more
instances, upon performance of any of the terms or conditions of this Agreement
shall not be construed as a waiver or a relinquishment of any right granted
hereunder or of the future performance of any such term or condition, but the
obligation of the other party with respect thereto shall continue in full force
and effect.

      (d)   Notice. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and personally
delivered or mailed by certified mail to its office at 1001 N. Central Avenue,
8th Floor, Phoenix, Arizona 85004, Attn: Secretary. Any notice to be given to
the Executive hereunder shall be deemed sufficient if addressed to the Executive
in writing and personally delivered or mailed by certified mail to 1001 N.
Central Avenue, 8th Floor, Phoenix, Arizona 85004. Either party may, by notice
as aforesaid, designate a different address or addresses.

      (e)   Severability. In any event any provision of this Agreement shall be
held to be illegal, invalid or unenforceable for any reason, the illegality,
invalidity, or unenforceability shall not affect the remaining provisions
hereof, but such illegal, invalid or unenforceable provision shall be fully
severable and this Agreement shall be construed and enforced as if the illegal,
invalid or unenforceable provision had never been included herein.

      (f)   Headings. The titles and headings of Sections are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

      (g)   Word Usage. Words used in the masculine shall apply in the feminine
where applicable, and wherever the context of this Agreement dictates, the
plural shall be read as the singular and the singular as the plural.

      (h)   Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Arizona.

                                       8
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

CAVCO INDUSTRIES, INC.

By:  /s/ JOSEPH H. STEGMAYER
   -------------------------
Its:  President and Chief Executive Officer

 /s/ SEAN K. NOLEN
- ---------------------------
SEAN K. NOLEN

                                       9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>p69164exv10w4.txt
<DESCRIPTION>EX-10.4
<TEXT>
<PAGE>


                                                                    EXHIBIT 10.4

                             CAVCO INDUSTRIES, INC.

                        RESTRICTED STOCK AWARD AGREEMENT

                  THIS RESTRICTED STOCK AWARD AGREEMENT ("Award Agreement") is
made as of the 7th day of July, 2003, by and between Cavco Industries, Inc., a
Delaware corporation (the "Company"), and Joseph H. Stegmayer (the "Grantee").

                  The Company and the Grantee therefore agree as follows:

                  1. GRANT OF RESTRICTED STOCK. Effective as of July 7, 2003
(the "Grant Date"), the Company has awarded to the Grantee a total of 55,096
shares of the common stock, par value $.01 per share ("Common Stock"), subject
to the conditions and restrictions set forth below (the "Restricted Stock").

                  2. DEFINITIONS. For purposes of this Award Agreement:

                  (a) "Board" means the Board of Directors of the Company.

                  (b) "Breach" has the meaning set forth in the Employment
         Agreement.

                  (c) "Committee" means (i) the Board, during any period in
         which there shall be no Compensation Committee of the Board comprised
         of two or more nonemployee directors or during any other period during
         which the Board elects to exercise the authority of the Committee, or
         (ii) the Compensation Committee of the Board, during all other periods.

                  (d) "Disability" has the meaning set forth in the Employment
         Agreement.

                  (e) "Employment Agreement" means the Employment Agreement,
         dated as of June 30, 2003, between the Company and the Grantee.

                  (f) "Service" means employment with the Company or any of its
         subsidiaries.

                  (g) "Restricted Period" means the period commencing on the
         Grant Date and ending on the date that the Grantee obtains a vested
         right to all of the Total Restricted Shares (and the restrictions
         thereon terminate) in accordance with Paragraph 3.

                  (h) "Termination for Cause" has the meaning set forth in the
         Employment Agreement.


                                       1
<PAGE>
                  (i) "Total Restricted Shares" means the total number of shares
         of Restricted Stock that are the subject of this Award on the Grant
         Date.

                  3. VESTING.

                  (a) The Grantee shall become vested with respect to 25% of the
         Total Restricted Shares on the Grant Date and an additional 25% of the
         Total Restricted Shares on each of the first, second and third
         anniversaries of the Grant Date; provided, however, that the Grantee
         must be in continuous Service from the Grant Date through the date of
         the applicable anniversary in order to vest in shares of Restricted
         Stock as to which the Grantee would otherwise vest on such anniversary.
         In the event that any day on which the Grantee would otherwise obtain a
         vested right to additional shares of Restricted Stock is a Saturday,
         Sunday or holiday, the Grantee shall instead obtain that vested right
         on the first business day immediately following such date. The
         foregoing provisions of this Paragraph 3(a) are subject to the
         provisions below, addressing events that may result in early
         termination of the Restricted Period or forfeiture of the Grantee's
         interest in all or part of the Restricted Stock.

                  (b) All of the Total Restricted Shares shall fully vest,
         regardless of the limitations set forth in subparagraph (a) above, in
         the event of the Grantee's termination of Service, other than as a
         result of a Termination for Cause, a voluntary resignation of the
         Grantee when there is no uncured Breach by the Company of the
         Employment Agreement, Disability or Death; provided, however, that the
         Grantee has been in continuous Service since the Grant Date.

                  (c) In the event of a termination of Service as a result of a
         Termination for Cause, a voluntary resignation of the Grantee when
         there is an uncured Breach by the Company of the Employment Agreement,
         Disability or death, this Award Agreement shall immediately terminate,
         to the extent not theretofore vested, and be of no force and effect and
         all Restricted Stock awarded to the Grantee that has not previously
         vested shall be forfeited.

                  4. RESTRICTIONS. Restricted Stock shall constitute issued and
outstanding shares of common stock for all corporate purposes. The Grantee will
have the right (a) to vote such Restricted Stock, (b) to receive and retain such
dividends and distributions, as the Committee may in its sole discretion
designate, paid or distributed on such Restricted Stock and (c) to exercise all
other rights, powers and privileges of a holder of Common Stock with respect to
such Restricted Stock; except, that (i) the Grantee will not be entitled to
delivery of the stock certificate or certificates representing such Restricted
Stock until the Restricted Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived,
(ii) the Company will retain custody of the stock certificate or certificates
representing the Restricted Stock during the Restricted Period as provided in
Paragraph 8, (iii) other than such dividends and distributions as the Committee
may in its sole discretion designate, the Company will retain custody of all
distributions ("Retained Distributions") made or declared with respect to the
Restricted Stock (and such


                                       2
<PAGE>
Retained Distributions will be subject to the same restrictions, terms and
vesting and other conditions as are applicable to the Restricted Stock) until
such time, if ever, as the Restricted Stock with respect to which such Retained
Distributions shall have been made, paid or declared shall have become vested,
and such Retained Distributions shall not bear interest or be segregated in a
separate account, (iv) the Grantee may not sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Stock or any Retained
Distributions or the Grantee's interest in any of them during the Restricted
Period, and (v) a breach of any restrictions, terms or conditions provided in
this Award Agreement or established by the Committee with respect to any
Restricted Stock or Retained Distributions will cause a forfeiture of such
Restricted Stock and any Retained Distributions with respect thereto.

                  5. COMPLETION OF THE RESTRICTED PERIOD. On the vesting date
with respect to any shares of Restricted Stock, and the satisfaction of any
other applicable restrictions, terms and conditions (a) all or the applicable
portion of such Restricted Stock shall become vested and (b) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested. Any
such Restricted Stock and Retained Distributions that shall not become vested
shall be forfeited to the Company and the Grantee shall not thereafter have any
rights (including dividend and voting rights) with respect to such Restricted
Stock and Retained Distributions that shall have been so forfeited.

                  6. NO CODE SECTION 83(B) ELECTION. The Grantee shall not make
an election, under Section 83(b) of the Internal Revenue Code of 1986, as
amended, to include an amount in income in respect of the Restricted Stock.

                  7. SALE OF RESTRICTED STOCK. The Grantee agrees that the
Grantee shall not sell, transfer or dispose of the Restricted Stock and that the
Company shall not be obligated to deliver any shares of common stock if counsel
to the Company determines that such sale, transfer, disposition or delivery
would violate any applicable law or any rule or regulation of any governmental
authority or any rule or regulation of, or agreement of the Company with, any
securities exchange or association or automated quotation system upon which the
common stock is listed or quoted. The Company shall in no event be obligated to
take any affirmative action in order to cause the delivery of shares of common
stock to comply with any such law, rule, regulation or agreement.

                  8. ESCROW OF SHARES. Shares of Restricted Stock shall be, at
the election of the Committee, either (a) registered in book entry form, (b)
registered in the name of the Grantee and deposited with the Secretary of the
Company or (c) held in nominee name for the benefit of the Grantee during the
Restricted Period, in any case, if the Company requests, together with a stock
power endorsed by the Grantee in blank. Any certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms, conditions and
restrictions described in this Award Agreement. Upon termination of the
Restricted Period with respect to shares of Restricted Stock, a



                                       3
<PAGE>
certificate representing such shares shall be delivered upon written request to
the Grantee as promptly as is reasonably practicable following such termination.

                  9. BENEFICIARY DESIGNATIONS. The Grantee shall file with the
Committee on the form appended to this Award Agreement as Exhibit A or such
other form as may be prescribed by the Company, a designation of one or more
beneficiaries (each, a "Beneficiary") to whom shares otherwise due to the
Grantee shall be distributed in the event of the death of the Grantee while in
the Service of the Company. The Grantee shall have the right to change the
Beneficiary or Beneficiaries from time to time; provided, however, that any
change shall not become effective until received in writing by the Committee. If
any designated Beneficiary survives the Grantee but dies before receiving all of
the Grantee's benefits hereunder, any remaining benefits due the Grantee shall
be distributed to the deceased Beneficiary's estate. If there is no effective
Beneficiary designation on file with the Committee at the time of the Grantee's
death, or if the designated Beneficiary or Beneficiaries have all predeceased
such Grantee, the payment of any remaining benefits shall be made to the
Grantee's estate.

                  10. NONALIENATION OF BENEFITS. Except as contemplated by
Paragraph 9 above, and other than pursuant to a qualified domestic relations
order, no right or benefit under this Award Agreement shall be subject to
transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, whether voluntary, involuntary or by operation of law, and any attempt
to transfer, anticipate, alienate, sell, assign, pledge, encumber or charge the
same shall be void. No right or benefit hereunder shall in any manner be liable
for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If the Grantee or the Grantee's Beneficiary hereunder
shall become bankrupt or attempt to transfer, anticipate, alienate, assign,
sell, pledge, encumber or charge any right or benefit hereunder, other than as
contemplated by Paragraph 9 above or other than pursuant to a qualified domestic
relations order, or if any creditor shall attempt to subject the same to a writ
of garnishment, attachment, execution, sequestration or any other form of
process or involuntary lien or seizure, then such right or benefit shall cease
and terminate.

                  11. PREREQUISITES TO BENEFITS. Neither the Grantee nor any
person claiming through the Grantee shall have any right or interest in the
Restricted Stock awarded hereunder, unless and until all the terms, conditions
and provisions of this Award Agreement which affect the Grantee or such other
person shall have been complied with as specified herein.

                  12. RIGHTS AS A STOCKHOLDER. Subject to the limitations and
restrictions contained herein, the Grantee (or Beneficiary) shall have all
rights as a stockholder with respect to the shares of the Restricted Stock once
such shares have been registered in the Grantee's name or issued for the benefit
of the Grantee hereunder.

                  13. CERTAIN CORPORATE TRANSACTIONS; ADJUSTMENTS. The existence
of this Agreement or the award of the Restricted Stock made hereunder shall not
affect



                                       4
<PAGE>
in any manner the right and power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock (whether or not such issue is prior to, on a parity with
or junior to the Common Stock) or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding of any kind, whether or not of a character
similar to that of the acts or proceedings enumerated above. The Committee, in
its sole discretion, may (but shall not be obligated to) make appropriate
adjustments to the number of shares of Restricted Stock or any other terms
applicable to the award made pursuant to this Agreement upon the occurrence of
(i) a reclassification, subdivision or combination of the Company's common
stock, (ii) a dividend, stock split or any distribution to holders of the
Company's common stock payable in shares of the Company's common stock or other
securities or property or (iii) a recapitalization or capital reorganization of
the Company, a merger, consolidation or the adoption of a plan of exchange
affecting the Common Stock; provided, however, that any such adjustment shall
only be made as necessary to maintain the proportionate interest of the Grantee
and preserve, without increasing, the value of the award made hereunder.

                  14. NOTICE. Unless the Company notifies the Grantee in writing
of a different procedure, any notice or other communication to the Company with
respect to this Award Agreement shall be in writing and shall be delivered
personally or by first class mail, postage prepaid and addressed, to the
following address:

                                   Cavco Industries, Inc.
                                   Attention:  Secretary
                                   1001 North Central
                                   Suite 800
                                   Phoenix, Arizona  85004

Any notice or other communication to the Grantee with respect to this Award
Agreement shall be in writing and shall be delivered personally or shall be sent
by first class mail, postage prepaid, to the Grantee's address as listed in the
records of the Company on the Grant Date, unless the Company has received
written notification from the Grantee of a change of address.

                  15. AMENDMENT. This Award Agreement may be supplemented or
amended from time to time as approved by the Committee, provided, however, that
an amendment shall not adversely affect the rights of the Grantee with respect
to the award of Restricted Stock evidenced hereby without the Grantee's written
consent.

                  16. GRANTEE SERVICE. Nothing contained in this Award
Agreement, and no action of the Company or the Committee with respect hereto,
shall confer or be construed to confer on the Grantee any right to continue in
the Service of the Company.


                                       5
<PAGE>
                  17. SUCCESSORS AND ASSIGNS. This Award Agreement shall bind
and enure to the benefit of and be enforceable by the Grantee, the Company and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Grantee may not assign any
rights or obligations under this Award Agreement except to the extent and in a
manner expressly provided herein.

                  18. GOVERNING LAW. This Award Agreement shall in all respects
be governed by, and construed and enforced in accordance with, the laws of the
State of Arizona to the extent not preempted by federal law.

                  19. CONSTRUCTION. References in this Award Agreement to "this
Award Agreement" and the words "herein," "hereof," "hereunder" and similar terms
include all Exhibits appended hereto. The headings of the Paragraphs of this
Award Agreement have been included for convenience of reference only and are not
to be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof. All decisions of the Committee regarding this Award
Agreement shall be conclusive.

                  20. DUPLICATE ORIGINALS. The Company and the Grantee may sign
any number of copies of this Award Agreement. Each signed copy shall be an
original, but all of them together represent the same agreement.

                  21. ENTIRE AGREEMENT. The Grantee and the Company hereby
declare and represent that no promise or agreement not herein expressed has been
made and that this Award Agreement contains the entire agreement between the
parties hereto with respect to the Restricted Stock granted herein and replaces
and makes null and void any prior agreements, oral or written, between the
Grantee and the Company regarding the Restricted Stock awarded herein.

                  22. GRANTEE ACCEPTANCE. The Grantee shall signify acceptance
of the terms and conditions of this Award Agreement by signing in the space
provided at the end hereof and returning an executed copy to the Company.

                                       CAVCO INDUSTRIES, INC.

                                       By:  /s/ Sean K. Nolen
                                            ------------------------------------
                                            Name:  Sean K. Nolen
                                            Title:   Vice President and Chief
                                                     Financial Officer



                                       6
<PAGE>
                                       ACCEPTED:

                                       /s/ Joseph H. Stegmayer
                                       -----------------------------------------
                                       Grantee:  Joseph H. Stegmayer




                                       7
<PAGE>
                                  Exhibit A to Restricted Stock Award Agreement,
                                  dated as of July 7, 2003


                             CAVCO INDUSTRIES, INC.

                           DESIGNATION OF BENEFICIARY

                  I, Joseph H. Stegmayer (the "Grantee"), hereby declare that
upon my death                                 (the "Beneficiary") who resides at
             ---------------------------------

- -------------------------------------------------------------------------------,
Street Address         City             State                         Zip Code

and is my                                               , shall be
         -----------------------------------------------
entitled to the Restricted Stock and all other rights accorded the Grantee by
the above-referenced Restricted Stock Award Agreement (the "Award Agreement").

                  It is understood that this Designation of Beneficiary is made
pursuant to the Award Agreement and is subject to the conditions stated therein,
including the Beneficiary's survival of the Grantee's death. If any such
condition is not satisfied, such rights shall devolve according to the Grantee's
will or the laws of descent and distribution.

                  It is further understood that all prior designations of
beneficiary under the Award Agreement are hereby revoked and that this
Designation of Beneficiary may only be revoked in writing, signed by the Grantee
and filed with the Company prior to the Grantee's death.


- ---------------------                                         ------------------
Date                                                          Grantee



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>7
<FILENAME>p69164exv10w6.txt
<DESCRIPTION>EX-10.6
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.6

[BANK ONE LOGO]                                   AMENDMENT TO CREDIT AGREEMENT

This agreement is dated as of December 16, 2003, to be effective as of 12/17/03
by and between Cavco Industries, Inc. (the "Borrower") and Bank One, NA, with
its main office in Chicago, II (the "Bank"), and its successors and assigns.

WHEREAS, the Borrower and the Bank entered into a credit agreement dated
September 17, 2003, as amended (if applicable) (the "Credit Agreement"); and

WHEREAS, the Borrower has requested and the Bank has agreed to amend the Credit
Agreement as set forth below;

NOW, THEREFORE, in mutual consideration of the agreements contained herein and
for other good and valuable consideration, the parties agree as follows:

1.    DEFINED TERMS. Capitalized terms not defined herein shall have the meaning
      ascribed in the Credit Agreement.

2.    MODIFICATION OF CREDIT AGREEMENT. The Credit Agreement is hereby amended
      as follows:

      2.1   From and after the date of this agreement, the following provision
            is hereby added to the Credit Agreement:

            1.4   LETTER OF CREDIT SUBLIMIT. At any time the Borrower is
                  entitled to an advance under Facility A, the Bank agrees to
                  issue letters of credit for the account of the Borrower in an
                  amount not in excess of the maximum advance that the Borrower
                  would then be entitled to obtain under Facility A, provided
                  that (a) the aggregate maximum available amount which is drawn
                  and unreimbursed or may be drawn under all letters of credit
                  which are outstanding at any time, including without
                  limitation all letters of credit issued for the account of the
                  Borrower which are outstanding on the date of the Line of
                  Credit Note, shall not exceed $5,000,000.00, (b) the issuance
                  of any letter of credit with an expiration date beyond the
                  maturity date of the Line of Credit Note shall be entirely at
                  the discretion of the Bank, (c) any letter of credit shall be
                  a standby letter of credit and the form of the requested
                  letter of credit shall be satisfactory to the Bank, in the
                  Bank's sole discretion, and (d) the Borrower shall have
                  executed an application and reimbursement agreement for any
                  letter of credit in the Bank's standard form. While any letter
                  of credit is outstanding, the maximum amount of advances that
                  may be outstanding under the Line of Credit Note shall be
                  automatically reduced by the maximum amount available to be
                  drawn under any and all such letters of credit. The Borrower
                  shall pay the Bank a fee for each standby letter of credit
                  that is issued, calculated at the rate of 2% per annum of the
                  original maximum amount available of such standby letter of
                  credit, with  such fee being calculated on the basis of a
                  360-day year and the actual number of days in the period
                  during which the standby letter of credit will be outstanding;
                  provided, however, that such fee shall not be less than
                  $200.00 for each letter of credit. No credit shall be given
                  for fees paid due to early termination of any letter of
                  credit. The Borrower shall also pay the Bank's standard
                  transaction fees with respect to any transactions occurring on
                  an account of any letter of credit. Each fee shall be payable
                  when the related letter of credit is issued, and transaction
                  fees shall be payable upon completion of the transaction as to
                  which they are charged. All fees may be debited by the Bank to
                  any deposit account of the Borrower carried with the Bank
                  without further authority and, in any event, shall be paid by
                  the Borrower within ten (10) days following billing. If on the
                  maturity date of the Line of Credit Note, any letter of credit
                  issued by Bank hereunder remains outstanding, Borrower shall
                  if requested by Bank, within five (5) business days after such
                  request, cause to be placed in a deposit account with Bank
                  which is assigned to Bank to secure Borrower's reimbursement
                  obligation(s) applicable to such outstanding letters of
                  credit, cash in an amount which is not less than the aggregate
                  of the unfunded amounts under all such outstanding letters of
                  credit. Failure to timely comply with such request shall be a
                  default and Event of Default under this agreement and the
                  other loan documents, and Bank may proceed to exercise and
                  enforce its rights and remedies against any collateral and
                  utilize the proceeds thereof to create such cash deposit.

      2.2   From and after the date of this agreement, the provision in the
            Credit Agreement captioned 4.5 FINANCIAL REPORTS.

            A. is amended as follows; the portion of the provision now reading:
            "Within thirty (30) days after and as of the end of each calendar
            month" is replaced with the following:

            Within thirty (30) days after the end of each calendar month in
            which as of the last day of such month, there is an outstanding
            advance under Facility A,

<PAGE>

      2.3   From and after the date of this agreement, the provision in the
            Credit Agreement captioned 4.5 FINANCIAL REPORTS.

            B. is amended as follows: the portion of the provision now reading:
            "Within thirty (30) days after each monthly period," is replaced
            with the following:

            Within thirty (30) days after the end of each monthly period in
            which as of the last day of such month, there is an outstanding
            advance under Facility A,

3.    RATIFICATION. The Borrower ratifies and reaffirms the Credit Agreement and
      the Credit Agreement shall remain in full force and effect as modified
      herein.

4.    BORROWER REPRESENTATIONS AND WARRANTIES. The Borrower represents and
      warrants that (a) the representations and warranties contained in the
      Credit Agreement are true and correct in all material respects as of the
      date of this agreement, (b) no condition, act or event which could
      constitute an event of default under the Credit Agreement or any
      promissory note or credit facility executed in reference to the Credit
      Agreement exists, and (c) no condition, event, act or omission has
      occurred, which, with the giving of notice or passage of time, would
      constitute an event of default under the Credit Agreement or any
      promissory note or credit facility executed in reference to the Credit
      Agreement.

5.    FEES AND EXPENSES. The Borrower agrees to pay all fees and out-of-pocket
      disbursements incurred by the Bank in connection with this agreement,
      including legal fees incurred by the Bank in the preparation,
      consummation, administration and enforcement of this agreement.

6.    EXECUTION AND DELIVERY. This agreement shall become effective only after
      it is fully executed by the Borrower and the Bank.

7.    ACKNOWLEDGEMENTS OF BORROWER. The Borrower acknowledges that as of the
      date of this agreement it has no offsets with respect to all amounts owed
      by the Borrower to the Bank arising under or related to the Credit
      Agreement on or prior to the date of this agreement. The Borrower fully,
      finally and forever releases and discharges the Bank and its successors,
      assigns, directors, officers, employees, agents and representatives from
      any and all claims, causes of action, debts and liabilities, of whatever
      kind or nature, in law or in equity, of the Borrower, whether now known or
      unknown to the Borrower, which may have arisen in connection with the
      Credit Agreement or the actions or omissions of the Bank related to the
      Credit Agreement on or prior to the date hereof. The Borrower acknowledges
      and agrees that this agreement is limited to the terms outlined above, and
      shall not be construed as an agreement to change any other terms or
      provisions of the Credit Agreement. This agreement shall not establish a
      course of dealing or be construed as evidence of any willingness on the
      Bank's part to grant other or future agreements, should any be requested.

                 [THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

NOT A NOVATION. This agreement is a modification only and not a novation. Expect
for the above-quoted modification(s), the Credit Agreement, any loan agreements,
credit agreements, reimbursement agreements, security agreements, mortgages,
deeds of trust, pledge agreements, assignments, guaranties, instruments or
documents executed in connection with the Credit Agreement, and all the terms
and conditions thereof, shall be and remain in full force and effect with the
changes herein deemed to be incorporated therein. This agreement is to be
considered attached to the Credit Agreement and made a part thereof. This
agreement shall not release or affect the liability of any guarantor of any
promissory note or credit facility executed in reference to the Credit Agreement
or release any owner of collateral granted as security for the Credit Agreement.
The validity, priority and enforceability of the Credit Agreement shall not be
impaired hereby. To the extent that any provision of this agreement conflicts
with any term or condition set forth in the Credit Agreement, or any document
executed in conjunction therewith, the provisions of this agreement shall
supersede and control. The Bank expressly reserves all rights against all
parties to the Credit Agreement.

                     BORROWER:

                     Cavco Industries Inc.

                     BY: /s/ Sean K. Nolen
                         -------------------------------------------------------
                         Sean K. Nolen        CFO, Treasurer and Vice President
                         -------------------------------------------------------
                         Printed Name                     Title

                     Date Signed: 12/17/03

                     BANK:

                     Bank One, NA, with its main office in Chicago, IL

                     By: /s/ Sanat B. Patel
                         ------------------------------------------------------
                         Sanat B. Patel              Vice President
                         ------------------------------------------------------
                         Printed Name                     Title

                     Data Signed: 12/17/03

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>8
<FILENAME>p69164exv10w7.txt
<DESCRIPTION>EX-10.7
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.7

                                                                [EXECUTION COPY]

                      AGREEMENT TO ASSIGN TRADEMARK RIGHTS
                  AND LIMITED CONSENT TO USE CENTEX TRADEMARKS

      THIS AGREEMENT (this "Agreement") is entered into as of June 30, 2003 (the
"Effective Date") by and between Centex Corporation, a corporation organized
under the laws of the State of Nevada ("Centex"), and Cavco Industries, Inc., a
corporation organized under the laws of the State of Delaware ("Cavco"). Centex
and Cavco are hereinafter referred to as the "Parties."

      WHEREAS, the Parties have entered into a Distribution Agreement dated as
of May 30, 2003 (the "Distribution Agreement"); and

      WHEREAS, as part of the consideration of the Distribution Agreement,
Centex desires to assign, and Cavco desires to acquire, all right, title, and
interest in and to a number of trademarks that are owned by Centex.

      NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, receipt of which each
party hereby acknowledges, the Parties hereby agree as follows:

1.    DEFINITIONS

      1.1   "Assigned Marks" means the trademarks listed in Exhibit 1 and all
Intellectual Property Rights therein.

      1.2   "Intellectual Property Rights" means copyrights, patents (including
patent improvements), patent applications, trade secrets, trademarks, trade
names or service marks, pending trademark applications or existing trademark
registrations with the United States Patent and Trademark Office, or other
intellectual property rights (including common law rights) under applicable law.

2.    GRANT OF RIGHTS

      2.1   Centex agrees to assign all of Centex's right, title and interest in
the Assigned Marks to Cavco as set forth in this Agreement. In order to perfect
such ownership transfer, contemporaneously with the execution of this Agreement,
Centex has executed a separate assignment document to be recorded with the
United States Patent and Trademark Office. Centex shall reasonably cooperate
with Cavco in the filing and prosecution of the Assigned Marks if necessary.

      2.2   Centex promptly shall deliver to Cavco all documentation pertaining
to the Assigned Marks, including copies of all correspondence to or from
examining authorities regarding such Assigned Marks, trademark searches
pertaining to such Assigned Marks, and all correspondence with any attorney
involved in the preparation and/or prosecution of the Assigned Marks.

<PAGE>
3.    LIMITED CONSENT TO USE CENTEX TRADEMARK

      3.1   As soon as practicable, and in any event within six (6) months after
the Effective Date, Cavco, at Cavco's expense, shall remove any and all exterior
and interior signs and identifiers which refer or pertain to Centex. After such
period, Cavco shall not use or display the name "Centex" or variations thereof,
or other trademarks, tradenames, logos or identifiers using such name or
otherwise owned by or licensed to Centex which have not been assigned or
licensed to Cavco (collectively, the "Centex Trademarks"), without the prior
written consent of Centex. However, nothing contained in this Agreement shall
prevent Cavco from using the Centex name in public filings with governmental
authorities, materials intended for distribution to Cavco stockholders, or any
other communication in any medium which describes the relationship between the
Parties.

      3.2   Cavco shall have the right to use existing products, supplies and
documents (including, but not limited to, purchase orders, forms, labels,
shipping materials, catalogues, sales brochures, operating manuals,
instructional documents and similar materials, and advertising material) being
transferred to it which have imprinted thereon or otherwise use a Centex
Trademark, for a period not to exceed six (6) months following the Effective
Date. However, Cavco agrees (i) to use only such supplies and documents existing
in inventory as of the Effective Date and (ii) not to order or utilize in any
manner any additional supplies and documents which have imprinted thereon or
otherwise use a Centex Trademark.

      3.3   Cavco acknowledges and agrees that Centex does not consent to any
use of the Centex Trademarks by Cavco other than as provided above, and that no
license to use the Centex Trademarks has been granted to Cavco by Centex by this
Section 3. The provisions of this Section 3 provide only a limited consent from
Centex to Cavco to continue to display the Centex Trademarks on existing signage
and other items until the earlier of (i) six months from the date of this
Agreement; or (ii) the date Cavco fully complies with the provisions of Section
3.1, and for no other reason.

4.    WARRANTIES

      4.1   Centex represents and warrants that: (a) it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada and has full power and authority to enter into this Agreement and perform
its obligations hereunder; (b) immediately prior to the execution of this
Agreement, Centex owns all right, title and interest in and to the Assigned
Marks; and (c) it has the legal right to grant all the rights it purports to
grant and to convey all the rights it purports to convey pursuant to Section 2.1
above.

      4.2   Cavco represents and warrants that: (a) it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has

<PAGE>

full power and authority to enter into this Agreement and perform its
obligations hereunder.

      5.    GENERAL

      5.1   Entire Agreement. This Agreement constitutes the entire agreement of
the Parties with respect to the subject matter hereof, and to the extent that
this agreement is inconsistent with any prior agreement(s) between the Parties,
the terms of this agreement are to control.

      5.2   Amendment. This Agreement shall not be amended or otherwise modified
except by a written agreement dated subsequent to the date of this Agreement and
signed on behalf of Centex and Cavco by their respective duly authorized
representatives.

      5.3   Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

      5.4   Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and the Parties' respective successors and
assigns.

      5.5   No Waiver. No waiver of any breach of any provision of this
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party.

      5.6   Savings Clause. If any provision of this Agreement shall be held by
a court of competent jurisdiction to be illegal, invalid or unenforceable, the
remaining provisions shall remain in full force and effect.

      5.7   Further Assurances. The Parties agree to take such further action
and execute, deliver and/or file such documents or instruments as are necessary
to carry out the terms and purposes of this Agreement.

      5.8   Section Headings. The section headings used in this Agreement are
intended for convenience only and shall not be deemed to supersede or modify any
provisions.

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.

CENTEX CORPORATION                          CAVCO INDUSTRIES, INC.

By:  /s/ MICHAEL S. ALBRIGHT                By: /s/ JOSEPH H. STEGMAYER
   -------------------------                    -------------------------
Its: Senior Vice President                  Its:President and Chief Executive
                                                Officer

<PAGE>

                                    EXHIBIT 1

                                 ASSIGNED MARKS

                                      CAVCO
                                   CAVCO HOMES
                                    SUNBUILT
                                    VILLAGER
                                    SUN VILLA
                                   CEDAR COURT
                                    WESTCOURT
                                     WINROCK
                                    CATALINA
                            CAVCO GOLD KEY GUARANTEE
                                     SAGUARA
                                      ELITE
                                   DESERT ROSE
                                    SUNBURST
                                  CAVCO CABINS
                                    AAA HOMES
                                CAVCO HOME CENTER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>9
<FILENAME>p69164exv10w8.txt
<DESCRIPTION>EX-10.8
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.8

                        ADMINISTRATIVE SERVICES AGREEMENT

      This ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is made and entered
into as of June 30, 2003 by and between CAVCO INDUSTRIES, INC., an Arizona
corporation ("Cavco"), and CENTEX SERVICE COMPANY, a Nevada corporation
("Service Company").

                                 R E C I T A L S

      Cavco desires to engage Service Company to perform certain services for
Cavco as hereinafter set forth, and Service Company desires to accept such
engagement, upon the terms and subject to the conditions set forth in this
Agreement.

                                A G R E E M E N T

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Cavco and Service Company do
hereby agree as follows.

      1.    Term of Agreement. The initial term of this Agreement shall extend
from the date hereof to the close of business on the third anniversary of the
date hereof; provided that this Agreement may be sooner terminated in accordance
with the provisions of Section 8 hereof.

      2.    Services. Service Company shall provide to Cavco such services as
are described in Exhibit A hereto. Following the conclusion of the first year of
the three year term of this Agreement, the parties will implement a mutual plan
to discontinue the Services provided hereunder by Service Company to Cavco
incrementally over the remaining term of this Agreement so that by the end of
the three-year term all of such services will be provided internally by Cavco,
or to Cavco by third parties not affiliated with Service Company.

      3.    Insurance Coverage. At the commencement of this Agreement, Service
Company will manage and monitor all of Cavco's insurance and bonding programs,
and shall maintain joint insurance coverage, including general liability,
primary and excess umbrella, automobile, liability, and workers' compensation,
as well as joint bonding programs, for the benefit of Cavco. The amount, term
and conditions of coverage to be maintained will be determined by Service
Company in its sole and absolute discretion. The allocation of cost between
Cavco and Service Company will be determined by Service Company and will be
based on, among other things, revenues, number of employees, types of business
and nature of risks. The parties intend that Cavco shall

                                       1
<PAGE>

develop its own broker relationships and transition to stand alone programs when
such a transition is feasible at reasonable cost.

      Cavco will pay its allocated cost to Service Company within ten days
following receipt of an invoice therefor. If payment is not made within said
ten-day period, then the amount so owing by Cavco to Service Company shall bear
interest from and after the date of such invoice until such amount has been paid
in full, at a rate (the "Interest Rate") equal to the lesser of the prime rate
announced or published by Bank of America, N.A. (or its successor) from time to
time or the maximum rate of interest permitted under applicable law.

      Service Company shall have the right during the term of this Agreement, in
the sole and absolute discretion of Service Company, to amend or eliminate any
part or all of the insurance coverage described above, with a corresponding
adjustment to the cost allocated to Cavco. Service Company will give Cavco at
least ninety (90) days advance notice of any such action.

      4.    Liability of Service Company. Service Company shall not be liable,
responsible or accountable in damages or otherwise to Cavco for any act
performed by Service Company on behalf of Cavco in a manner reasonably believed
by Service Company to be within the scope of the authority granted to it by this
Agreement and in the interest of Cavco, provided that Service Company was not
guilty of gross negligence or willful or wanton misconduct.

      5.    Indemnification. Cavco shall indemnify, save harmless and defend
Service Company and each of Service Company's shareholders, directors, officers,
employees, agents, attorneys and insurers (each individually, an "Indemnitee")
against any and all losses, damages, liabilities, judgments, fines, penalties,
amounts paid in settlement and expenses, including reasonable attorneys' fees,
which are incurred, whether as the result of the negligence of any Indemnitee or
otherwise, as a result of or in connection with anything done or omitted by such
Indemnitee in connection with the performance by Service Company of its duties
and obligations under this Agreement; provided that such Indemnitee's conduct
did not constitute gross negligence or willful or wanton misconduct.
Notwithstanding anything in this Agreement to the contrary, the obligation of
Cavco to indemnify, save harmless and defend each Indemnitee will survive the
expiration or termination of this Agreement, no matter what the reason thereof,
and such obligation to indemnify, defend and hold harmless will remain binding
upon Cavco thereafter.

      6.    Compensation. Service Company shall receive a fee for its services
under this Agreement of $75,000 per year, which shall be paid by Cavco to
Service Company in monthly installments of $6,250 within five (5) days after the
end of each month. Such fee is intended to represent an agreed upon estimate of
the fair market value of such services, and the parties hereto hereby agree that
such amount represents such fair market value. If Cavco fails to make such
monthly payment within ten (10)

                                       2
<PAGE>

days following the first day of any month, the amount so owing by Cavco shall
bear interest from and after the first day of such month until such amount has
been paid in full at a rate equal to the Interest Rate. Prior to March 31 of
each year during the term of this Agreement, the parties will mutually
determine, based on the fair market value of such services, the monthly fee to
be paid to Service Company under this Agreement for the twelve month period
commencing April 1 of the same year.

      In addition to the monthly compensation described above, Cavco will
reimburse Service Company for all out-of-pocket expenses incurred by Service
Company in connection with the performance of services described above in
Section 2. Out-of-pocket expenses will not include general and administrative
expenses.

      7.    Assignment and Delegation. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be assigned by either
party without the prior written consent of the other party hereto. Any consent
granted by either party to an assignment by the other party shall not be deemed
a consent to any subsequent assignment. Notwithstanding the foregoing, Service
Company may, without the consent of Cavco, assign and delegate the performance
of and the responsibility for any duties and obligations of Service Company
hereunder to any corporation, firm joint venture or partnership fifty percent
(50%) or more of whose voting stock (or its equivalent) is owned directly or
indirectly by, or which is otherwise controlled by, Centex Corporation. Upon
execution of any such assignment and delegation, notice thereof in the form of
an executed copy of the document or instrument effecting such assignment and
delegation shall be delivered promptly by Service Company to Cavco and Service
Company shall be released from any further obligation or responsibility under
this Agreement for the performance of the duties and obligations so assigned and
delegated.

      8.    Termination. This Agreement may be terminated by any of the
following methods:

      (a)   This Agreement may be terminated at any time by written agreement of
            the parties hereto.

      (b)   If either party fails to make any payment due hereunder or breaches
            any of the other terms of this Agreement in any material respect,
            the other party hereto shall give the breaching party written notice
            of such breach. If the breaching party fails to remedy the breach
            within thirty (30) days after receiving such notice, the other party
            may terminate this Agreement; provided, however, that if at the
            expiration of such thirty (30) day period the breaching party is
            diligently using its best efforts to remedy the breach, the other
            party may not terminate this Agreement on account of such breach
            during the additional period, not to exceed sixty

                                       3
<PAGE>

            (60) days, in which the breaching party continues without
            interruption to use its best efforts to remedy the breach.

      (c)   If either party hereto shall be dissolved and its business
            terminated, this Agreement shall automatically terminate upon the
            effectiveness of such dissolution.

      (d)   This Agreement may be terminated by notice of Cavco to Service
            Company delivered no less than thirty (30) days prior to the
            effective date of termination, and such notice may be delivered for
            any reason.

      No termination of this Agreement shall have the effect of terminating
Service Company's right to collect any amounts owed to it under this Agreement.

      Within thirty (30) days following the termination of this Agreement,
Service Company shall deliver to Cavco all instruments, documents, reports,
books, accounts and records, and copies thereof, that Service Company has
received from Cavco in connection with the rendering of services hereunder.

      9.    Confidentiality. Service Company agrees that any information
regarding Cavco that Service Company obtains or is furnished in connection with
the performance of its duties and obligations under this Agreement, including,
but not limited to, information regarding Cavco's business and operations, is
confidential and proprietary, and Service Company agrees to maintain the
confidentiality of such information and not to disclose such information to any
other party without prior written consent of Cavco, except to the extent that
such disclosure is necessary to enable Service Company to perform its duties and
obligations under this Agreement or to comply with its legal obligations.
Information that is generally known in the industry or to the public or was
known by Service Company prior to disclosure by Cavco pursuant to this Agreement
shall not be deemed confidential or proprietary information for purposes of this
Section 9. The terms of this Section 9 shall survive, and remain in effect
following, the termination of this Agreement.

      10.   Notices. Any notice, statement or demand required or permitted to be
given under this Agreement shall be in writing and shall be personally
delivered, sent by mail, sent by nationally known overnight courier service or
sent by facsimile transmission, confirmed by letter, addressed to the party in
the manner and at the address shown below, or at such other address as the party
shall have designated in writing to the other party:

      To Cavco:
             1001 North Central, 8th floor
             Phoenix, Arizona  85004
             Attention:    President
             Fax: (602) 256-6176

                                       4
<PAGE>

      To Service Company:

             2728 North Harwood
             Dallas, Texas 75201
             Attention:   Secretary
             Fax: (214) 981-6855

      11.   Nature of Relationship. The parties hereto intend that Service
Company's relationship to Cavco shall be that of an independent contractor.
Nothing contained in this Agreement shall constitute or be construed to be or
create a partnership or joint venture between Service Company and Cavco or their
successors or assigns, and neither Service Company nor any officer or employee
of Service Company shall be considered at any time to be an employee of Cavco.

      12.   Amendments. This Agreement cannot be amended, changed or modified
except by another agreement in writing, duly signed by both parties hereto.

      13.   Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof.

      14.   Headings. The section headings contained herein are for convenience
of reference only and are not intended to define, limit, or describe the scope
or intent of any provision of this Agreement.

      15.   Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Texas.

      16.   Severability. Any provision of this Agreement that is prohibited or
unenforceable under the laws of any jurisdiction shall be ineffective in such
jurisdiction to the extent necessary to render such provision valid and
enforceable, and if such provision cannot be rendered valid and enforceable in
such jurisdiction by limitation it shall be ineffective therein. The invalidity
or unenforceability of any provision of this Agreement shall not render invalid
or unenforceable any other provision of this Agreement, unless the Agreement
without the invalid or unenforceable provisions would be manifestly unfair to
either party.

                            [Signature page follows.]

                                       5
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.

                                        CAVCO INDUSTRIES, INC.

                                        By: /s/ JOSEPH H. STEGMAYER
                                            --------------------------------
                                            President

                                        CENTEX SERVICE COMPANY

                                        By: /s/  MICHAEL S. ALBRIGHT
                                            ----------------------------
                                            Senior Vice President

                                       6
<PAGE>

                                                                       EXHIBIT A

                SERVICES TO BE PROVIDED BY CENTEX SERVICE COMPANY

1.    LEGAL AND CORPORATE SECRETARY.

      a.    Management of intellectual property rights in protected names and
            marks used by Cavco

      b.    Assistance with paralegal management of customer litigation with
            consultation by Centex Law Department attorneys as requested

      c.    Assistance with public company reporting issues and required filings
            with and reports to stock exchanges and the Securities and Exchange
            Commission, and assistance with corporate governance matters

      d.    Keeping minute books, foreign qualifications and other corporate
            secretarial matters

2.    PUBLIC AND INVESTOR RELATIONS.

      a.    Review and distribution of press releases through existing resources
            and relationships.

      b.    Advice on an as-needed basis

3.    ACCOUNTING. Advice and assistance with technical questions on an as-needed
      basis

4.    BENEFITS ADMINISTRATION.

      a.    Assistance in management of Cavco's health and welfare and
            retirement benefit plans

      b.    Assistance with negotiation and transition of health and welfare and
            retirement benefit plans into separate stand-alone plans.

                                       1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>10
<FILENAME>p69164exv10w9.txt
<DESCRIPTION>EX-10.9
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.9

                                                                        Draft of
                                                                  January 8,2003

================================================================================

                             DISTRIBUTION AGREEMENT

                                      AMONG

                               CENTEX CORPORATION,

                              CAVCO INDUSTRIES, LLC

                                       AND

                             CAVCO INDUSTRIES, INC.

                                   DATED AS OF

                                  May 30, 2003

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                                                                                                          <C>
ARTICLE I. DEFINITIONS................................................................................         2
         SECTION  1.1. Certain Definitions............................................................         2
         SECTION  1.2. Other Defined Terms............................................................         6

ARTICLE II. PRELIMINARY TRANSACTIONS..................................................................         7
         SECTION  2.1. Regulatory Filings and Related Actions.........................................         7
         SECTION  2.2. Nasdaq National Market Application.............................................         8
         SECTION  2.3. Business Separation............................................................         8
         SECTION  2.4. Internal Distributions.........................................................         9
         SECTION  2.5. Resignations...................................................................         9
         SECTION  2.6. Ancillary Agreements...........................................................        10
         SECTION  2.7. Restated Cavco Charter and Restated Cavco Bylaws...............................        10

ARTICLE III. THE DISTRIBUTION.........................................................................        10
         SECTION  3.1. Record Date and Distribution Date..............................................        10
         SECTION  3.2. Distribution Agent.............................................................        10
         SECTION  3.3. Delivery of Certificates.......................................................        10
         SECTION  3.4. The Distribution...............................................................        11
         SECTION  3.5. Fractional Shares..............................................................        11

ARTICLE IV. ACCESS TO INFORMATION.....................................................................        11
         SECTION  4.1. Provision of Corporate Records.................................................        11
         SECTION  4.2. Access to Information..........................................................        11
         SECTION  4.3. Litigation Cooperation.........................................................        12
         SECTION  4.4. Reimbursement..................................................................        13
         SECTION  4.5. Treatment of Records...........................................................        13
         SECTION  4.6. Confidentiality................................................................        13
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                           <C>
ARTICLE V. CERTAIN OTHER AGREEMENTS...................................................................        14
         SECTION  5.1. Intercompany Accounts..........................................................        14
         SECTION  5.2. Further Assurances and Consents................................................        14

ARTICLE VI. INDEMNIFICATION AND OTHER MATTERS.........................................................        14
         SECTION  6.1. Assumed Liabilities, Exculpation and Indemnification by Cavco..................        14
         SECTION  6.2. Exculpation and Indemnification by Centex......................................        15
         SECTION  6.3. Specific Indemnification Issues................................................        16
         SECTION  6.4. Notice and Payment of Claims...................................................        17
         SECTION  6.5. Defense of Third-Party Claims..................................................        17

ARTICLE VII...........................................................................................        18
         SECTION  7.1. Conditions.....................................................................        18

ARTICLE VIII. DISPUTE RESOLUTION......................................................................        19
         SECTION  8.1. Application....................................................................        19
         SECTION  8.2. Initial Discussions............................................................        20
         SECTION  8.3. Appeal to Higher Management....................................................        20
         SECTION  8.4. Mediation......................................................................        20
         SECTION  8.5. Arbitration....................................................................        20

ARTICLE IX. MISCELLANEOUS.............................................................................        22
         SECTION  9.1. Notices........................................................................        22
         SECTION  9.2. Interpretation.................................................................        22
         SECTION  9.3. Amendments; No Waivers.........................................................        23
         SECTION  9.4. Successors and Assigns.........................................................        23
         SECTION  9.5. Governing Law..................................................................        23
         SECTION  9.6. Counterparts; Effectiveness....................................................        23
         SECTION  9.7. Entire Agreement...............................................................        24
         SECTION  9.8. Severability...................................................................        24
         SECTION  9.9. Termination....................................................................        24
         SECTION  9.10. Survival......................................................................        24
</TABLE>

                                       ii

<PAGE>
<TABLE>
<S>                                                                                                           <C>
SECTION  9.11. Expenses...............................................................................        24
</TABLE>

EXHIBITS

Exhibit A     --    Form of Administrative Services Agreement
Exhibit B     --    Form of Agreement to Assign Trademark Rights and Limited
                    Consent to Use Centex Trademarks
Exhibit C     --    Form of Tax Sharing Agreement

                                      iii

<PAGE>

                             DISTRIBUTION AGREEMENT

      This DISTRIBUTION AGREEMENT, dated as of May 30, 2003 (this "Agreement")
is entered into by and among CENTEX CORPORATION, a Nevada corporation
("Centex"), CAVCO INDUSTRIES, LLC, a Delaware limited liability company ("Cavco
LLC"), and CAVCO INDUSTRIES, INC., a Delaware corporation ("Cavco" and, together
with Cavco LLC, the "Cavco Parties");

                              W I T N E S S E T H:

      WHEREAS, the Board of Directors of Centex has determined that it is in the
best interests of Centex and its shareholders to separate the businesses
currently conducted by Cavco LLC from the other businesses conducted by Centex
and its Subsidiaries (as hereinafter defined);

      WHEREAS, in furtherance of the foregoing, Centex intends to cause (i)
certain intellectual property held in the name of Centex to be transferred to
Cavco and (ii) Cavco LLC to be merged with and into Cavco;

      WHEREAS, upon the consummation of the transactions described above and
subject to the fulfillment of the conditions set forth herein, Centex intends to
effect the distribution (the "Distribution") of all of the outstanding shares of
common stock, par value $.01 per share, of Cavco (the "Cavco Common Stock") on a
pro rata basis to the holders of shares of common stock, par value $.25 per
share, of Centex (the "Centex Common Stock") as of the Record Date (as
hereinafter defined);

      WHEREAS, Centex and Cavco intend for the Distribution to qualify as a
tax-free transaction under the Internal Revenue Code of 1986, as amended (the
"Code");

      WHEREAS, Centex and Cavco desire to set forth herein certain terms and
provisions governing the principal transactions to be effected in connection
with the Distribution; and

      WHEREAS, Centex and Cavco propose to enter into the Ancillary Agreements
(as hereinafter defined) in order to set forth certain terms and provisions
governing the relationship between the parties in connection with and after the
Distribution;

                                      -1-
<PAGE>

      NOW, THEREFORE, in consideration of the premises, the terms and conditions
set forth herein, the mutual benefits to be gained from the performance thereof,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      SECTION 1.1. Certain Definitions. The following terms, as used herein,
have the following meanings:

            "AAA Holdings" means AAA Holdings, Inc., a Delaware corporation and
an indirect wholly owned Subsidiary of Centex.

            "AAA Sub" means a Delaware limited liability company to be formed as
a wholly owned Subsidiary of AAA.

            "Action" means any suit, action, arbitration, inquiry, investigation
or other proceeding of any nature (whether criminal, civil, legislative,
administrative, regulatory, prosecutorial or otherwise) by or before any
arbitrator or Governmental Entity or similar Person or body.

            "Administrative Services Agreement" means the Administrative
Services Agreement to be entered into on or before the Distribution Date between
Cavco and Centex Service Company, which shall be substantially in the form of
Exhibit A hereto, with such changes therein as Cavco and Centex Service Company
shall mutually agree.

            "Affiliate" has the meaning assigned to such term in Rule 12b-2 of
the Exchange Act; provided, however, that Centex and Cavco shall not be deemed
to be Affiliates of each other for purposes of this Agreement.

            "Ancillary Agreements" means all agreements, certificates, deeds,
instruments, assignments and other written arrangements (other than this
Agreement) entered into between Centex and Cavco in connection with the
transactions contemplated hereby, including the Administrative Services
Agreement, the Intellectual Property Agreement and the Tax Sharing Agreement.

            "Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized or required by law to close in New York, New York.

            "Cavco Business" means the businesses of manufacturing and selling
manufactured homes, park model homes and commercial structures as conducted by

                                      -2-
<PAGE>

Cavco LLC and its Subsidiaries prior to the Merger and as the same is to be
conducted by Cavco and its Subsidiaries after the Merger.

            "Cavco Group" means (i) prior to the Merger Date, Cavco LLC and its
Subsidiaries and their respective successors and (ii) after the Merger Date,
Cavco and its Subsidiaries and their respective successors, but in each case
excludes Centex and its Subsidiaries.

            "Cavco Group Liabilities" means the following Liabilities (including
Liabilities arising out of any litigation): (a) the Liabilities arising from or
related to the ownership, operation or conduct of the Cavco Business or the use,
possession or enjoyment of the assets used in connection therewith at any time
prior to or on the Distribution Date, (b) all other Liabilities of the Cavco
Group expressly contemplated by the Transaction Agreements as Liabilities of or
to be assumed by Cavco or any member of the Cavco Group and (c) all other
Liabilities that would be reflected as liabilities or obligations on a balance
sheet dated as of the Distribution Date relating solely to the Cavco Business.
Notwithstanding the foregoing, (i) Liabilities arising from or relating to the
Transferred Intellectual Property shall be deemed "Cavco Group Liabilities" and
(ii) Liabilities arising from or relating to the Excluded Plants shall not be
deemed "Cavco Group Liabilities."

            "Centex Business" means the businesses of home building, investment
real estate, financial services, construction products and construction services
and all other businesses conducted by the Centex Group.

            "Centex Group" means Centex and its Subsidiaries and their
respective successors, but excludes any members of the Cavco Group.

            "Centex Group Liabilities" means all Liabilities of Centex or any
other member of the Centex Group (including Liabilities arising out of any
litigation), except for the Cavco Group Liabilities.

            "Centex Service Company" means Centex Service Company, a Nevada
corporation and an indirect wholly owned Subsidiary of Centex.

            "Commission" means the Securities and Exchange Commission.

            "Contract" means any agreement, lease, license, contract, treaty,
note, mortgage, indenture, franchise, permit, concession, arrangement or other
obligation.

            "CREC" means Centex Real Estate Corporation, a Nevada corporation
and an indirect wholly owned Subsidiary of Centex.

                                      -3-
<PAGE>

            "Damages" means, with respect to any Person, any and all damages
(including punitive and consequential damages if not otherwise expressly
excluded), losses, Liabilities, fines, costs and expenses incurred or suffered
by such Person (including all expenses of investigation, all reasonable
attorneys' and expert witnesses' fees and all other out-of-pocket expenses
incurred in connection with any Action or threatened Action).

            "Distribution Agent" means Mellon Investor Services L.L.C.

            "Distribution Date" means the date and time as of which the
Distribution shall be effected, which shall be determined by, or under the
authority of, the Board of Directors of Centex.

            "Distribution Ratio" means .05 shares of Cavco Common Stock for each
share of Centex Common Stock outstanding as of the Record Date.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

            "Excluded Plants" means (i) the manufacturing plant previously owned
by Cavco LLC located in Seguin, Texas and (ii) the manufacturing facility
previously leased by Cavco LLC located in Belen, New Mexico, which in each case
have been transferred and distributed to a wholly owned indirect Subsidiary of
Centex.

            "Finally Determined" means, with respect to any Action, threatened
Action or other matter, that the outcome or resolution of that Action,
threatened Action or other matter either (i) has been decided through binding
arbitration or by a Governmental Entity of competent jurisdiction by judgment,
order, award or other ruling or (ii) has been settled or voluntarily dismissed
by the parties pursuant to the dispute resolution procedure set forth in Article
VIII or otherwise and, in the case of each of clauses (i) and (ii), the
claimants' rights to maintain that Action, threatened Action or other matter
have been finally adjudicated, waived, released, discharged, barred or
extinguished or the judgment, order, ruling, award, settlement or dismissal
(whether mandatory or voluntary, but if voluntary the dismissal must be final,
binding and with prejudice as to all claims specifically pleaded in that Action,
threatened Action or other matter) resolving the same is subject to no further
appeal, vacatur proceeding or discretionary review.

            "Form 10" means the registration statement on Form 10 filed by Cavco
with the Commission in order to effect the registration of Cavco Common Stock
pursuant to Section 12(g) of the Exchange Act, as the same may be supplemented
and amended from time to time.

                                      -4-
<PAGE>

            "Governmental Entity" means any federal, state, local or foreign
government or any court, tribunal, administrative agency or commission or other
governmental or regulatory authority or agency, domestic, foreign or
supranational.

            "Group" means the Cavco Group or the Centex Group, as the context
requires.

            "Information Statement" means the information statement to be mailed
to each holder of record of Centex Common Stock as of the Record Date in
connection with the Distribution.

            "Intellectual Property Agreement" means the Agreement to Assign
Trademark Rights and Limited Consent to Use Centex Trademarks to be entered into
on or before the Distribution Date between Centex and Cavco, which shall be
substantially in the form of Exhibit B hereto, with such changes thereto as
Centex and Cavco shall mutually agree.

            "International" means Centex International, Inc., a Nevada
corporation and a direct wholly owned Subsidiary of Centex.

            "IRS" means the Internal Revenue Service.

            "Law" means any applicable federal, state, local or foreign law,
statute, ordinance, directive, rule, regulation, judgment, order, injunction,
decree, arbitration award, agency requirement, license or permit of any
Governmental Entity.

            "Liability" or "Liabilities" means any and all claims, debts,
liabilities, assessments, costs, deficiencies, charges, demands, fines,
penalties, damages, losses, disgorgements and obligations of any kind, character
or description (whether absolute, contingent, matured, not matured, liquidated,
unliquidated, accrued, known, unknown, direct, indirect, derivative or
otherwise) whenever arising, including all costs, interest and expenses relating
thereto (including all expenses of investigation, all reasonable attorneys' and
expert witnesses' fees and all other out-of-pocket expenses in connection with
any Action or threatened Action) and expressly including any of the foregoing
arising from the negligence or other misconduct of an Indemnified Party.

            "Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.

            "Record Date" means the close of business on the date determined by
the Board of Directors of Centex (or by a committee of such Board of Directors
or any other Person acting under authority duly delegated to that committee or
Person by the Board of Directors of Centex or a committee of such Board of
Directors) as the record

                                      -5-
<PAGE>

date for determining the holders of record of Centex Common Stock entitled to
receive the Distribution.

            "Restated Cavco Bylaws" means the restated Bylaws of Cavco, which
shall be in such form as the Board of Directors of Cavco reasonably determines
with the approval of Centex.

            "Restated Cavco Charter" means the restated Certificate of
Incorporation of Cavco, which shall be in such form as the Board of Directors of
Cavco reasonably determines with the approval of Centex.

            "Subsidiary" means, with respect to any Person, (i) any corporation
of which at least a majority of the securities or other ownership interests
having by their terms ordinary voting power to elect a majority of the board of
directors are directly or indirectly owned or controlled by such Person and its
Subsidiaries, (ii) any partnership of which such Person or one of its
Subsidiaries is a general partner or as to which such Person and its
Subsidiaries are entitled to receive at least a majority of the assets upon the
liquidation thereof or (iii) any limited liability company of which such Person
or one of its Subsidiaries is a manager (or is entitled as a member to exercise
management rights over the conduct of the business of such limited liability
company) or as to which such Person and its Subsidiaries are entitled to receive
at least a majority of the assets upon the liquidation thereof.

            "Tax Returns" has the meaning set forth in the Tax Sharing
Agreement.

            "Tax Sharing Agreement" means the Tax Sharing Agreement to be
entered into on or before the Distribution Date between Centex and its
Affiliates and Cavco, which shall be substantially in the form attached as
Exhibit C hereto, with such changes thereto as Centex and Cavco shall mutually
agree.

            "Taxes" has the meaning set forth in the Tax Sharing Agreement.

            "Transaction Agreements" means this Agreement and the Ancillary
Agreements.

      SECTION 1.2. Other Defined Terms. Each of the terms set forth below has
the meaning set forth in the provision set forth opposite such term:

<TABLE>
<CAPTION>
            TERM                                                      SECTION
            ----                                                      -------
<S>                                                                <C>
AAA                                                                Section 8.5(b)
Agreement                                                          Preamble
Cavco                                                              Preamble
Cavco Common Stock                                                 Recitals
Cavco Damages                                                      Section 6.2(b)
</TABLE>

                                      -6-
<PAGE>

<TABLE>
<CAPTION>
            TERM                                                      SECTION
            ----                                                      -------
<S>                                                                <C>
Cavco Indemnifiable Liabilities                                    Section 6.1(a)
Cavco Indemnitees                                                  Section 6.2(a)
Cavco Licenses                                                     Section 2.3(c)
Cavco LLC                                                          Preamble
Cavco Parties                                                      Preamble
Centex                                                             Preamble
Centex Common Stock                                                Recitals
Centex Damages                                                     Section 6.1(b)
Centex Indemnifiable Liabilities                                   Section 6.2(a)
Centex Indemnitees                                                 Section 6.1(a)
Code                                                               Recitals
Corporate Records                                                  Section 4.1
Distribution                                                       Recitals
Indemnified Party                                                  Section 6.4(a)
Indemnifying Party                                                 Section 6.4(a)
Merger                                                             Section 2.3(b)
Merger Date                                                        Section 2.3(a)
Transferred Intellectual Property                                  Section 2.3(a)
</TABLE>

                                   ARTICLE II.

                            PRELIMINARY TRANSACTIONS

            SECTION 2.1. Regulatory Filings and Related Actions.

            (a)   Centex and Cavco have prepared, and Cavco has filed with the
Commission, the Form 10, which includes the Information Statement as an exhibit
thereto. Each of Centex and Cavco shall use commercially reasonable efforts to
cause the Form 10 to become effective under the Exchange Act as promptly as
reasonably practicable after the date upon which it is filed with the
Commission.

            (b)   Centex and Cavco have prepared the Information Statement.
Centex shall, if required by law, file the Information Statement with the
Commission. As promptly as practicable after the Form 10 has become effective,
Centex shall mail the Information Statement to the holders of record of Centex
Common Stock as of the Record Date.

            (c)   Each of Centex and Cavco shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of states or
other

                                      -7-
<PAGE>

jurisdictions within the United States in connection with the Distribution and
the other transactions contemplated hereby.

      SECTION 2.2. Nasdaq National Market Application. Centex and Cavco have
prepared and filed with the National Association of Securities Dealers, Inc., an
application for the Cavco Common Stock to be admitted for quotation on the
Nasdaq National Market. Each of Centex and Cavco shall use commercially
reasonable efforts to cause such application to be approved so that the Cavco
Common Stock is admitted for quotation on the Nasdaq National Market prior to
the Distribution Date.

      SECTION 2.3. Business Separation.

            (a)   Prior to the date and time at which the Merger is consummated
(the "Merger Date"), Centex shall grant, assign, contribute, convey, transfer
and deliver to Cavco all intellectual property rights that are identified in the
Intellectual Property Agreement as being transferred to Cavco (the "Transferred
Intellectual Property").

            (b)   Prior to the Distribution Date, Centex shall cause Cavco LLC
to be merged with and into Cavco, with Cavco being the sole surviving entity in
the merger (the "Merger"). As a result of the Merger, (i) Cavco LLC shall cease
to exist, (ii) Cavco shall succeed to all of the properties, assets, rights and
entitlements of Cavco LLC and shall be subject to all of its Liabilities and
(iii) the total number of outstanding shares of Cavco Common Stock shall be
increased to equal the product of the Distribution Ratio and the number of
shares of Centex Common Stock outstanding on the Record Date.

            (c)   Centex and the Cavco Parties shall use commercially reasonable
efforts to cooperate in transferring to Cavco all licenses, permits and
authorizations that relate to the Cavco Business (the "Cavco Licenses") but that
are held in the name of Centex or any other member of the Centex Group or any of
their respective employees, officers, directors, stockholders, agents or
otherwise (or, in the case of any Cavco Licenses that are held in the name of
Centex or any other member of the Centex Group or any of their respective
employees, officers, directors, stockholders, agents or otherwise that are not
transferable under applicable Law, obtaining new licenses, permits and
authorizations from the relevant Governmental Entities in the name of Cavco to
replace such Cavco Licenses). In the event any such transfer of the Cavco
Licenses (or the grant of any new licenses, permits and authorizations to
replace such Cavco Licenses) cannot be effected prior to the Distribution Date,
Centex shall, except as prohibited by applicable Law, allow Cavco to operate the
Cavco Business under such Cavco Licenses until such transfer can be effected (or
new licenses, permits and authorizations are granted by the relevant
Governmental Entities).

                                      -8-
<PAGE>

            (d)   Centex and the Cavco Parties shall use commercially reasonable
efforts to have Centex and any other member of the Centex Group released, on or
prior to the Distribution Date or as soon as practicable thereafter, as a
guarantor in respect of any guarantees of any Cavco Group Liabilities.

            (e)   It is the intention of the parties that all material
transactions contemplated by this Section 2.3 shall be consummated prior to or
on the Distribution Date; provided, however, that, to the extent that any such
transactions shall not have been consummated prior to or on the Distribution
Date, Centex and Cavco shall cooperate to effect such transactions as promptly
as practicable after Distribution Date. Nothing contained in this Agreement
shall be deemed to require the transfer of any properties, assets, rights or
entitlements, the assumption of any Liabilities or the release of guarantees
which, by their terms or by operation of Law, cannot be transferred, assumed or
released; provided, however, that Centex and the Cavco Parties shall cooperate
to seek to obtain any necessary consent or approval for any transfer, assumption
or release contemplated by this Section 2.3. In the event that any such
transfer, assumption or release has not been consummated as of the Distribution
Date, then, from and after the Distribution Date, the party who retains the
applicable asset or Liability or who is not able to obtain a release of the
applicable guarantee shall hold such asset in trust for the use and benefit of
the party entitled thereto (at the expense of the party entitled thereto), shall
retain such Liability for the account of the party by whom such Liability is to
be assumed or shall hold the other parties harmless against the guarantee to be
released, as the case may be, and take such other action as may be reasonably
requested by the party to whom such asset is to be transferred, from whom such
liability is to be assumed or for the benefit of whom such guarantee is to be
released, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such asset
been transferred, such liability assumed or such guarantee released as
contemplated hereby. As and when any such asset becomes transferable, such
liability becomes assumable or such release is obtainable, the transfer,
assumption or release thereof shall be effected forthwith by the parties hereto.

      SECTION 2.4. Internal Distributions. Immediately after the Merger Date,
Centex shall cause (i) AAA Holdings to distribute all of the outstanding shares
of Cavco Common Stock to CREC, (ii) CREC to distribute all of the outstanding
shares of Cavco Common Stock to International and (iii) International to
distribute all of the outstanding shares of Cavco Common Stock to the
Corporation.

      SECTION 2.5. Resignations. Centex shall cause all of its directors,
officers and employees who will be officers or employees of the Centex Group
from and after the Distribution Date (as designated by Centex) to resign,
effective as of the Distribution Date, from all positions as directors, officers
or employees of Cavco or any its Subsidiaries; provided, however, that Mr.
Laurence E. Hirsch, who is an executive officer and Chairman of the Board of
Directors of Centex, shall not resign his position

                                      -9-
<PAGE>

as a member of the Board of Directors of Cavco. Cavco shall cause all of its
directors, officers and employees who will be officers and employees of Cavco or
any of its Subsidiaries after the Distribution Date (as jointly designated by
Centex and Cavco) to resign, effective as of the Distribution Date, from all
positions as officers or employees of Centex or any member of the Centex Group
in which they serve.

      SECTION 2.6. Ancillary Agreements. Prior to or on the Distribution Date,
(i) Centex shall cause Centex Service Company to, and Cavco shall, enter into
the Administrative Services Agreement, (ii) Centex and Cavco shall enter into
the Intellectual Property Agreement and (iii) Centex, on behalf of itself and
its Affiliates, and Cavco shall enter into the Tax Sharing Agreement.

      SECTION 2.7. Restated Cavco Charter and Restated Cavco Bylaws. Prior to or
on the Distribution Date, (i) Cavco and Centex shall take such action as is
required to adopt the Restated Cavco Charter and (ii) Cavco shall take such
action as is required to adopt the Restated Cavco Bylaws. ARTICLE III.

                                  ARTICLE III.

                                THE DISTRIBUTION

      SECTION 3.1. Record Date and Distribution Date. Subject to the fulfillment
of the conditions set forth in Section 7.1, the Board of Directors of Centex (or
a duly authorized committee thereof) shall, in the manner provided for under
applicable Law, declare the Distribution and establish the Record Date and the
Distribution Date and any appropriate procedures in connection with the
Distribution.

      SECTION 3.2. Distribution Agent. Prior to or on the Distribution Date,
Centex shall enter into an agreement with the Distribution Agent providing for,
among other things, the delivery to the holders of Centex Common Stock as of the
Record Date of certificates evidencing the shares of Cavco Common Stock included
in the Distribution.

      SECTION 3.3. Delivery of Certificates. Prior to the Distribution Date,
Centex shall deliver to the Distribution Agent, for the benefit of the holders
of Centex Common Stock as of the Record Date, a stock certificate or
certificates, representing all of the outstanding shares of Cavco Common Stock
to be owned by Centex as of the Distribution Date. After the Distribution Date,
Cavco shall, upon request of the Distribution Agent, provide to the Distribution
Agent any additional certificates representing shares of Cavco Common Stock that
the Distribution Agent shall require to effect the Distribution.

                                      -10-
<PAGE>

      SECTION 3.4. The Distribution. Subject to the terms and conditions hereof,
Centex shall instruct the Distribution Agent to distribute, on or as soon as
practicable after the Distribution Date, to each holder of record of Centex
Common Stock as of the Record Date a number of shares of Cavco Common Stock
equal to the result obtained by multiplying the Distribution Ratio by the number
of shares of Centex Common Stock held by such holder as of the Record Date. Such
distribution shall be effected by the mailing of stock certificates to such
holders or, if practicable, by book-entry transfer. All of the shares of Cavco
Common Stock issued in the Distribution shall have been duly authorized and
shall be fully paid and nonassessable.

      SECTION 3.5. Fractional Shares. Notwithstanding anything to the contrary
contained in this Article III, no fractional shares of Cavco Common Stock shall
be distributed in the Distribution. The parties shall direct the Distribution
Agent to determine the number of fractional shares of Cavco Common Stock
allocable to each holder of record of Centex Common Stock as of the Record Date.
After the Distribution Date, upon the determination by the Distribution Agent of
such number of fractional shares, the Distribution Agent, acting on behalf of
the holders thereof, shall sell such fractional shares for cash on the open
market at the then-prevailing market prices and shall disburse to each holder
entitled thereto, in lieu of any fractional share, without interest, that
holder's ratable share of the proceeds of that sale, after making appropriate
deductions of the amounts required, if any, to be withheld for United States
federal income tax purposes, and to repay expenses of the Distribution Agent in
connection with such sale.

                                   ARTICLE IV.

                              ACCESS TO INFORMATION

      SECTION 4.1. Provision of Corporate Records. Except as otherwise
specifically set forth in the Transaction Agreements, as soon as practicable
after the Distribution Date, each Group shall deliver to the other Group all
documents, Contracts, books, records and data (including minute books, stock
registers, stock certificates and documents of title) (collectively, "Corporate
Records") in its possession relating primarily to the other Group or its
business, assets and affairs; provided, however, that if any such documents,
Contracts, books, records or data relate to both Groups or their businesses,
assets and affairs, each such Group shall provide to the other Group true and
complete copies of such documents, Contracts, books, records or data. Data
stored in electronic form shall be provided in the format in which it existed at
the Distribution Date, except as otherwise specifically set forth in the
Transaction Agreements.

      SECTION 4.2. Access to Information. From and after the Distribution Date,
each Group shall afford to the other Group and its accountants, counsel and
other

                                      -11-
<PAGE>

designated representatives reasonable access during normal business hours to all
personnel, documents, Contracts, books, records, computer data and other data in
such Group's possession relating to the other Group or the business and affairs
of such other Group (other than data and information subject to an
attorney-client or other privilege that is not specifically subject to the
provisions of this Article IV), insofar as such access is reasonably required by
such other Group for a reasonable and appropriate purpose, including for audit,
accounting, regulatory compliance and disclosure and reporting purposes.

      SECTION 4.3. Litigation Cooperation. From and after the Distribution Date:

            (a)   Each Group shall use all reasonable efforts to make available
to the other Group and its accountants, counsel and other designated
representatives, upon written request, its current and former directors,
officers, employees and representatives as witnesses, and shall otherwise
cooperate with the other Group, to the extent reasonably required in connection
with any Action or threatened Action arising out of either Group's business and
operations in which the requesting party may from time to time be involved,
except for any action in which one Group is asserting a claim against or seeking
relief from the other Group and except to the extent that there is a conflict of
interest in the Action or threatened Action between the requesting Group and
itself.

            (b)   Each Group shall promptly notify the other Group, upon its
receipt or the receipt by any of its members, of a request or requirement (by
written questions, interrogatories, requests for information or documents,
subpoenas, civil investigative demands or other similar processes) that relates
to the business and operations of the other Group that could reasonably be
regarded as calling for the inspection or production of any documents or other
information in its possession, custody or control. Each Group shall assert and
maintain, or cause its members to assert and maintain, any applicable claim to
privilege, immunity, confidentiality or protection in order to protect such
documents and other information from disclosure, and shall seek to condition any
disclosure that may be required on such protective terms as may be appropriate.
No Group may voluntarily waive, undermine or fail to take any action reasonably
necessary to preserve an applicable privilege without the prior written consent
of the affected party (or any affected Group member or Affiliates of any such
party) except, in the opinion of such party's counsel, as required by law.

            (c)   Each Group shall enter into such joint defense agreements with
the other Group, in customary form, as Centex and Cavco shall determine are
necessary, appropriate or advisable.

                                      -12-
<PAGE>

      SECTION 4.4. Reimbursement. Except to the extent that any member of one
Group is obligated to indemnify any member of the other Group under Article VI
for such cost or expense, each Group providing information or witnesses to the
other Group, or otherwise incurring any expense in connection with cooperating,
under Sections 4.1, 4.2 or 4.3, shall be entitled to receive from the recipient
thereof, upon the presentation of reasonably detailed invoices therefor, payment
for all out-of-pocket costs and expenses that may reasonably be incurred in
providing such information, witnesses or cooperation.

      SECTION 4.5. Treatment of Records. Except as otherwise required by law or
agreed to in writing, upon compliance with the requirements set forth in Section
4.1, each of Centex and Cavco shall, and shall cause the members of its
respective Group to, destroy or otherwise dispose of any photocopies or similar
reproductions of all Corporate Records provided to, or relating primarily to,
the other Group or its business, assets and affairs; provided, however, that
prior to any such destruction, the other party shall be provided the opportunity
to take possession of such records if it so desires. Any Corporate Records
received by any member of one Group after the Distribution Date and relating
primarily to the other Group or its business, assets or affairs shall promptly
be delivered to such other Group, and retained, in accordance with the
procedures set forth in Section 4.1 and this Section 4.5. Notwithstanding the
foregoing, there shall be no requirement for Centex or Cavco, or any members of
their respective Groups, to destroy or otherwise dispose of any Corporate
Records (or photocopies or similar reproductions thereof) to the extent that
such Corporate Records relate to its business, assets and affairs.

      SECTION 4.6. Confidentiality. Except as may be more specifically addressed
in any Transaction Agreement, each party shall hold, and shall cause its
consultants and advisors to hold, in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of Law, all confidential or proprietary
information concerning the other party hereto furnished it by such other party
or its representatives pursuant to this Agreement (except to the extent that
such information can be shown to have been (i) previously known by the party to
which it was furnished, (ii) in the public domain through no fault of the party
to which it was furnished or (iii) independently developed by the receiving
party), and each party shall not release or disclose such information to any
other Person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors who shall be advised of the provisions of this
Section 4.6.

                                      -13-
<PAGE>

                                   ARTICLE V.

                            CERTAIN OTHER AGREEMENTS

      SECTION 5.1. Intercompany Accounts. Except as otherwise specifically set
forth in any of the Transaction Agreements, all intercompany loan balances,
accounts receivable and accounts payable between any member of one Group and any
member of another Group in existence at the Distribution Date shall be settled
and paid in full, in cash or other immediately available funds, by the party or
parties owing such obligations as soon as practicable (but in no event more than
60 calendar days) after the Distribution Date. If, at any time after the
Distribution Date, either party receives payments belonging to the other party,
the recipient shall promptly account for and remit said payment to the other
party.

      SECTION 5.2. Further Assurances and Consents. In addition to the actions
specifically provided for elsewhere in the Transaction Agreements, each of
Centex and Cavco shall use its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things, reasonably necessary,
proper or advisable under applicable Laws, regulations and agreements or
otherwise to consummate and make effective the transactions contemplated by this
Agreement, including using its reasonable efforts to obtain any consents and
approvals and to make any filings and applications necessary or desirable in
order to consummate the transactions contemplated by this Agreement. Centex and
Cavco agree to enter into and execute such additional documents as may be
reasonably necessary, proper or advisable to effect the transactions
contemplated by the Transaction Agreements.

                                   ARTICLE VI.

                        INDEMNIFICATION AND OTHER MATTERS

      SECTION 6.1. Assumed Liabilities, Exculpation and Indemnification by
Cavco.

      (a)   From and after the Distribution Date, Cavco shall, without any
further responsibility or liability of, or recourse to, Centex or any Affiliate
of Centex or any of their respective directors, stockholders, officers,
employees, agents, consultants, representatives, successors, transferees or
assignees (collectively, the "Centex Indemnitees"), absolutely and irrevocably
assume and be solely liable and responsible for the Cavco Group Liabilities.
Neither Centex nor any of the Centex Indemnitees shall be liable to Cavco or any
Affiliate of Cavco or any of their respective directors, stockholders, officers,
employees, agents, consultants, customers, representatives, successors,
transferees or assignees for any reason whatsoever on account of (i) any Cavco
Group Liabilities or (ii) any Liabilities arising from the breach by Cavco of
any

                                      -14-
<PAGE>

of its obligations under this Agreement; provided that Centex shall remain
liable to Cavco for any breach by Centex of any of its obligations under this
Agreement. The matters with respect to which Cavco assumes liability pursuant to
clauses (i) and (ii) above are referred to herein as the "Cavco Indemnifiable
Liabilities."

      (b)   Cavco shall indemnify, save and hold harmless each of the Centex
Indemnitees from and against all (i) all Cavco Indemnifiable Liabilities and
(ii) except as otherwise provided in the Transaction Agreements, all Liabilities
that are or are alleged to be related to, arising from, or associated with the
ownership, operation or conduct of the Cavco Business or the use, possession or
enjoyment of the assets used in connection therewith at any time after the
Distribution Date (all of which are collectively called the "Centex Damages").
In addition, if Centex so elects in its sole discretion, Cavco shall defend any
or all of the Centex Indemnities in any Action in which any Centex Damages are
asserted against any Centex Indemnitees.

      (c)   Centex Damages with respect to which, but only to the extent that,
any proceeds are received by Centex, or by any of its Affiliates, from any third
party insurance policy (and are non-reimbursable by Centex under any self
insurance policy), shall not be the subject of indemnification under this
Agreement.

      SECTION 6.2. Exculpation and Indemnification by Centex.

      (a)   Centex shall, without any further responsibility or liability of, or
recourse to, Cavco or any Affiliate of Cavco or any of their respective
directors, stockholders, officers, employees, agents, consultants,
representatives, successors, transferees or assignees (collectively, the "Cavco
Indemnitees"), absolutely and irrevocably be solely liable and responsible for
the Centex Group Liabilities. Neither Cavco nor any of the other Cavco
Indemnitees shall be liable to Centex or any Affiliate of Centex or any of their
respective directors, stockholders, officers, employees, agents, consultants,
customers, representatives, successors, transferees or assignees for any reason
whatsoever on account of (i) any Centex Group Liabilities or (ii) any
Liabilities arising from the breach by Centex of any of its obligations under
this Agreement; provided that Cavco shall remain liable to Centex for any breach
by Cavco of any of its obligations under this Agreement. The matters with
respect to which Centex retains liability pursuant to clauses (i) and (ii) above
are referred to herein as the "Centex Indemnifiable Liabilities."

      (b)   Centex shall indemnify, save and hold harmless each of the Cavco
Indemnitees from and against (i) all Centex Indemnifiable Liabilities and (ii)
except as otherwise provided in the Transaction Agreements, all Liabilities that
are or are alleged to be related to, arising from, or associated with the
ownership, operation or conduct of the Centex Businesses or the use, possession
or enjoyment of the assets used in connection therewith at any time after the
Distribution Date, other than the Cavco Indemnifiable Liabilities (all of which
are collectively called the "Cavco Damages"). In

                                      -15-
<PAGE>

addition, if Cavco so elects in its sole discretion, Centex shall defend any or
all of the Cavco Indemnities in any Action in which any Cavco Damages are
asserted against any Cavco Indemnitees.

      (c)   Cavco Damages with respect to which, but only to the extent that,
any proceeds are received by, or on behalf of, Cavco or by any of its
Affiliates, from any third party insurance policy (and are non-reimbursable
under any self insurance policy), shall not be the subject of indemnification
under this Agreement.

      SECTION 6.3. Specific Indemnification Issues.

      (a)   It is the express intention of the parties hereto that each party to
be indemnified pursuant to this Article VI shall be indemnified and held
harmless from and against all Damages as to which indemnity is provided for
hereunder, NOTWITHSTANDING THAT ANY SUCH DAMAGES ARISE OUT OF OR RESULT FROM THE
ORDINARY, STRICT, SOLE, OR CONTRIBUTORY NEGLIGENCE, OR THE STRICT LIABILITY (OR
OTHER LIABILITY WITHOUT FAULT) OF SUCH PARTY AND REGARDLESS OF WHETHER ANY OTHER
PARTY (INCLUDING ANOTHER PARTY TO THIS AGREEMENT) IS OR IS NOT ALSO NEGLIGENT OR
OTHERWISE LIABLE WITH RESPECT TO THE MATTER IN QUESTION.

      (b)   It is acknowledged that after the Distribution Date the parties will
have negotiated business relationships, which relationships will be described in
the Contracts, agreements and other documents entered into in the normal course
of business. Such documents may include agreements by the parties and their
Affiliates and Subsidiaries to supply, after the Distribution Date, materials,
products and services and to lease facilities, tangible and intangible property.
Such business relationships shall not be subject to the indemnity provisions
hereof, unless the parties expressly agree to the contrary in the agreements
governing such relationships.

      (c)   Except as otherwise provided herein, in the event an Action is
brought by a third party in which the liability as between Centex and Cavco is
Finally Determined to be joint or in which the entitlement to indemnification
hereunder is not determinable, the parties shall negotiate in good faith in an
effort to agree, as between Centex and Cavco, on the proper allocation of
liability or entitlement to indemnification, as well as the proper allocation of
the costs of any joint defense or settlement pursuant to Section 6.5, all in
accordance with the provisions of, and the principles set forth in, this
Agreement. In the absence of any such agreement, such allocation of liability or
entitlement to indemnification, and such allocation of costs, shall be subject
to ultimate resolution between Centex and Cavco pursuant to Article IX.

                                      -16-
<PAGE>

      SECTION 6.4. Notice and Payment of Claims.

      (a)   If any party to this Agreement or a person entitled to
indemnification under this Agreement (an "Indemnified Party") determines that it
is or may be entitled to a defense or indemnification by Centex or Cavco, as the
case may be (the "Indemnifying Party"), under this Agreement, the Indemnified
Party shall deliver promptly to the Indemnifying Party a written notice and
demand for indemnification, specifying the basis for the claim for
indemnification, the nature of the claim, and, if known, the amount for which
the Indemnified Party reasonably believes it is entitled to be indemnified. The
Indemnifying Party shall have 30 days from receipt of such notice in which to:
(w) assume the defense of such litigation or claim; (x) pay the claim in
immediately available funds; (y) reserve its rights pending negotiations under
Section 6.5 or (z) object in accordance with Section 6.4(b). This 30-day period
may be extended by express agreement of the parties.

      (b)   An Indemnifying Party may object to, or reserve its rights with
respect to, the claim for indemnification set forth in any notice delivered by
the Indemnified Party pursuant to Section 6.4(a) so long as it acts in good
faith and with a reasonable basis for its belief that it is not obligated to
indemnify the Indemnified Party.

      SECTION 6.5. Defense of Third-Party Claims.

      (a)   If the Indemnified Party's claim for Indemnification is based, under
this Agreement, on an Action, judicial or otherwise, brought by a third party,
and the Indemnifying Party does not object under Section 6.4(b), the
Indemnifying Party may, participate in the defense of such Action and may assume
the defense of such Action with counsel satisfactory to the Indemnified Party if
(i) the Indemnified Party agrees to assumption thereof by the Indemnifying Party
or (ii) the Indemnifying Party shall have confirmed in writing (without
reservation or qualification) its obligation to provide indemnification for the
liability asserted in such action. If the Indemnified Party shall reasonably
conclude that its interests in such Action are materially different from those
of the Indemnifying Party or that it may have defenses that are different from
or in addition to those available to the Indemnifying Party, the Indemnified
Party may use separate counsel to protect such interests and assert such
defenses and otherwise participate in the defense of such Action. If the
Indemnifying Party shall assume the defense with counsel satisfactory to the
Indemnified Party, the Indemnifying Party shall not be liable for any legal
expenses (other than investigation expenses) subsequently incurred by the
Indemnified Party, unless the Indemnified Party shall have employed separate
counsel in accordance with the preceding sentence.

      (b)   The Indemnifying Party shall pay to the Indemnified Party in
immediately available funds the amounts for which the Indemnified Party is
entitled to

                                      -17-
<PAGE>

be indemnified within 30 days after such third party claim is Finally Determined
(or within such longer period as agreed to by the parties).

      (c)   In the event an Action is brought by a third party in which the
liability as between Centex and Cavco is alleged to be joint or in which the
entitlement to indemnification hereunder is not determinable or as to which
there has been a reservation of rights, the parties shall cooperate in a joint
defense. Such joint defense shall be under the general management and
supervision of the party which is expected to bear the greater share of the
liability; provided, however, that neither party shall settle or compromise any
such joint defense matter without the consent of the other. The costs of such
joint defense shall be borne as the parties may agree, or in the absence of such
agreement, such costs shall be borne by the party incurring such costs, subject
to ultimate resolution pursuant to Article IX hereof.

                                  ARTICLE VII.

                                   CONDITIONS

      SECTION 7.1. Conditions. The obligations of Centex and Cavco to consummate
the Distribution shall be subject to the fulfillment (or, if permissible under
applicable law, the waiver by Centex) of the following conditions at or prior to
the Distribution Date:

      (a)   The Form 10 shall have become effective under the Exchange Act, and
no stop order with respect thereto shall be in effect;

      (b)   The Information Statement shall have been mailed to the holders of
record of Centex Common Stock as of the Record Date;

      (c)   The shares of Cavco Common Stock to be delivered in the Distribution
shall have been approved for quotation on the Nasdaq National Market;

      (d)   The transactions contemplated by Section 2.3 shall have been
consummated on terms satisfactory to Centex in its sole discretion;

      (e)   Each of the Ancillary Agreements shall have been executed and
delivered by the Persons who are proposed to become parties thereto;

      (f)   The Restated Cavco Charter and Restated Cavco Bylaws shall be in
effect;

                                      -18-
<PAGE>

      (g)   all consents, approvals and authorizations of any Governmental
Entity required for the consummation of the Distribution and the other
transactions contemplated hereby and by the Ancillary Agreements shall have been
obtained and shall be in full force and effect, and such consents, approvals and
authorizations shall be in form and substance satisfactory to Centex in its sole
discretion;

      (h)   no order, preliminary or permanent injunction or decree shall have
been issued by any court or agency of competent jurisdiction or any other
Governmental Entity and no other legal restraint or prohibition shall be in
effect that prevents or makes unlawful the Distribution;

      (i)   the Centex Board of Directors shall have received an opinion from a
nationally recognized valuation firm, which opinion shall be in form and
substance satisfactory to Centex in its sole discretion, and Centex shall
otherwise be reasonably satisfied that, after giving effect to the Distribution,
(i) the present fair saleable value and the fair value of the assets of Centex
and Cavco will exceed their liabilities; (ii) Cavco and Centex will be able to
pay their debts as such debts mature during the normal course of business; (iii)
Cavco will not have unreasonably small capital for the business in which it is
and will be engaged; and (iv) the total assets of Centex will exceed its total
liabilities, plus the amount that would be needed, if Centex were dissolved at
the time of the distribution, to satisfy any preferential rights of stockholders
whose preferential rights are superior to those receiving the distribution; and

      (j)   Centex shall have received a ruling from the IRS to the effect that
the Distribution will be a tax-free transaction for federal income tax purposes,
and such ruling shall be in form and substance satisfactory to Centex in its
sole discretion.

                                  ARTICLE VIII.

                               DISPUTE RESOLUTION

      SECTION 8.1. Application. Any dispute arising out of or relating to this
Agreement, including the breach or termination hereof, shall be resolved in
accordance with the procedures specified in this Article VIII, which shall be
the sole and exclusive procedure for the resolution of any such disputes;
provided, however, that a party may file a complaint to seek a preliminary
injunction or other provisional judicial relief, if in its sole judgment such
action is necessary. Despite such action the parties will continue to
participate in good faith in the procedures set forth in this Article VIII and
each party is required to continue to perform its obligations under this
Agreement pending final resolution of any dispute arising out of or relating to
this Agreement, unless to do so would be impossible or impracticable under the
circumstances. All negotiations between the parties pursuant to this Article
VIII are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.

                                      -19-
<PAGE>

The requirements of this Article VIII shall not be deemed a waiver of any right
of termination under this Agreement.

      SECTION 8.2. Initial Discussions. Any dispute shall be first discussed by
an appropriate senior executive officer of each of the parties or his or her
designee. Any party may initiate such discussions by giving the other party
written notice specifying in detail the nature of the dispute. Within 15
Business Days after delivery of the notice, the receiving party shall submit to
the other a written response, including a statement of such party's position and
a summary of arguments supporting such position. Within 10 Business Days (or
such other period as agreed upon by the parties) after receipt of such response,
the executives of both parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to attempt to
resolve the dispute. All reasonable requests for information made by one party
to the other shall be honored.

      SECTION 8.3. Appeal to Higher Management. If, in spite of such
discussions, no mutually acceptable solution is reached within 30 Business Days
after the delivery of one party's written request to the other party to discuss
such dispute, any such dispute shall be referred to the Chief Legal Officer of
Centex and the Chief Executive Officer of Cavco.

      SECTION 8.4. Mediation. If the dispute is not resolved within 30 Business
Days (or such other period as agreed upon by the parties) following the
submission of the dispute to senior management pursuant to Section 8.3, the
parties shall attempt to resolve the dispute employing non-binding mediation
under the then-current CPR Mediation Procedure. If within 10 Business Days (or
any other period agreed upon by the parties) after the commencement of such
mediation the dispute still has not been resolved, each of the parties may
commence arbitration proceedings pursuant to Section 8.5.

      SECTION 8.5. Arbitration. The parties hereto agree that all disputes,
controversies or claims that may arise out of the transactions contemplated by
this Agreement, or the breach, termination or invalidity thereof, shall be
submitted to, and determined by, binding arbitration in accordance with the
following procedures:

      (a)   Either Centex or Cavco may submit a dispute, controversy or claim to
arbitration by giving the other party written notice to such effect, which
notice shall describe, in reasonable detail, the facts and legal grounds forming
the basis for the filing party's request for relief. The arbitration shall be
held before one neutral arbitrator in Dallas, Texas.

      (b)   Within 30 days after the other party's receipt of such demand,
Centex and Cavco shall mutually determine who the arbitrator will be. If the
parties are unable to agree on the arbitrator within that time period, the
arbitrator shall be selected by the

                                      -20-
<PAGE>

American Arbitration Association ("AAA"). In any event, the arbitrator shall
have a background in, and knowledge of, transactions in the homebuilding or
manufactured housing industries and shall otherwise be an appropriate person
based on the nature of the dispute. If a person with experience in such matters
is not available, the arbitrator shall be chosen from the retired federal judges
pool.

      (c)   The arbitration shall be governed by the Commercial Arbitration
Rules of the AAA, except as otherwise expressly provided in this Section 8.5.
However, the arbitration shall be administered by any organization mutually
agreed to in writing by the parties. If the parties are unable to agree on the
organization to administer the arbitration, it shall be administered by the AAA.

      (d)   Discovery shall be limited to the request for and production of
documents, depositions and interrogatories. Interrogatories shall be allowed
only as to the names, last known addresses and telephone numbers of all persons
having knowledge of facts relevant to the dispute and a brief description of
that person's knowledge and the names, addresses and telephone numbers of any
experts who may be called as an expert witness or who have been used for
consultation. All discovery shall be guided by the Federal Rules of Civil
Procedure. All issues concerning discovery upon which the parties cannot agree
shall be submitted to the arbitrator for determination.

      (e)   In rendering an award, the arbitrator shall determine the rights and
obligations of the parties according to the substantive and procedural laws of
the State of Delaware.

      (f)   The decision of, and award rendered by, the arbitrator shall be
determined no more than 30 days after the selection of the arbitrator and shall
be final and binding on the parties and shall not be subject to appeal. Judgment
on the award may be entered in and enforced by any court of competent
jurisdiction.

      (g)   Each party shall bear its own costs and expenses (including filing
fees) with respect to the arbitration, including one-half of the fees and
expenses of the arbitrator.

                                      -21-
<PAGE>

                                   ARTICLE IX.

                                  MISCELLANEOUS

      SECTION 9.1. Notices. Any and all notices or other communications required
or permitted to be given under any of the provisions of this Agreement shall be
in writing and may be delivered by hand, by certified mail, return receipt
requested, postage prepaid, or by nationally recognized overnight courier
service, or by facsimile transmission addressed as follows:

             If to Centex:

             Centex Corporation
             2728 North Harwood
             Dallas, Texas 75201
             Fax No.: (214) 981-6855
             Attention: Chief Legal Officer

             If to Cavco:

             Cavco Industries, Inc.
             1001 North Central Avenue
             Suite 800
             Phoenix, Arizona 85004
             Fax No.: (602) 256-6189
             Attention: Chief Executive Officer

      SECTION 9.2. Interpretation.

      (a)   The article, section and paragraph headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of said articles, sections or paragraphs. Whenever the words "include,"
"includes" and "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Whenever a reference is made in this
Agreement to a "party" or "parties," such reference shall be to a party or
parties to this Agreement unless otherwise indicated. Whenever the context
requires, the use of any gender herein shall be deemed to be or include the
other genders and the use of the singular herein shall be deemed to include the
plural (and vice versa). The use of the words "hereof" and "herein" and words of
similar import shall refer to this entire Agreement and not to any particular
article, section, subsection, clause, paragraph or other subdivision of this
Agreement, unless the context otherwise requires.

      (b)   Each party hereto stipulates and agrees that the rule of
construction to the effect that any ambiguities are to be or any be resolved
against the drafting party shall

                                      -22-
<PAGE>

not be employed in the interpretation of this Agreement to favor any party
against the other, and that no party, including any drafting party, shall have
the benefit of any legal presumption (including "meaning of the authors") or the
detriment of any burden of proof by reason of any ambiguity or uncertain meaning
contained in this Agreement.

      (c)   If this Agreement contains any terms and provisions (including, but
not limited to, the provisions of Article VI) that govern or otherwise apply, or
could be construed to govern or otherwise apply, to the preparation or filing of
Tax Returns, the allocation of liability for Taxes or any other matter relating
to the obligations of the parties with respect to Taxes or any Action arising in
connection therewith, to the extent that any such terms and provisions are
inconsistent in any respect with the terms and provisions of the Tax Sharing
Agreement, the terms and conditions of the Tax Sharing Agreement shall control
and shall be deemed to supersede the terms and provisions hereof.

      SECTION 9.3. Amendments; No Waivers. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each party, or in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

      SECTION 9.4. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing contained in this Agreement
is intended to confer upon any Person other than the parties hereto and their
respective successors and permitted assigns, any benefit, right or remedies
under or by reason of this Agreement, except that the provisions of Article VI
shall inure to the benefit of the Centex Indemnitees and the Cavco Indemnitees.
Neither party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the other
party hereto, which shall not be unreasonably withheld.

      SECTION 9.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas, without regard
to the conflict of laws rules thereof.

      SECTION 9.6. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.

                                      -23-
<PAGE>

      SECTION 9.7. Entire Agreement. This Agreement and other Transaction
Agreements constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter hereof and thereof. No representation, inducement,
promise, understanding, condition or warranty not set forth in the Transaction
Documents has been made or relied upon by any party hereto.

      SECTION 9.8. Severability. If any one or more of the provisions contained
in this Agreement should be declared invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained in this Agreement shall not in any way be affected or impaired thereby
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a declaration, the parties shall modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner so
that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible. SECTION 9.9. Termination.
Notwithstanding any provision in this Agreement to the contrary, this Agreement
may be terminated and the Distribution amended, modified or abandoned at any
time prior to the Distribution, without penalty or liability, by and in the sole
discretion of Centex and without the approval of Cavco or of Centex's
stockholders.

      SECTION 9.10. Survival. All covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.

      SECTION 9.11. Expenses. Except as otherwise set forth in the Transaction
Agreements, all costs and expenses incurred prior to or on the Distribution Date
in connection with the preparation, execution and delivery of the Transaction
Agreements, the preparation of the Information Statement (including any
registration statement on Form 10 of which such Information Statement may be a
part) and the consummation of the Distribution and the other transactions
contemplated thereby shall be charged to and paid by AAA Holdings, CREC,
International, Centex and Cavco on a pro rata basis in proportion to the net
book value of their respective assets as of such date as Centex shall determine.

                            [Signature page follows]

                                      -24-
<PAGE>

            IN WITNESS WHEREOF the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date first
above written.

                                            CENTEX CORPORATION

                                            By:  /s/  MICHAEL S. ALBRIGHT
                                               ---------------------------------
                                               Name:  Michael S. Albright
                                               Title:  Senior Vice President

                                            CAVCO INDUSTRIES, LLC

                                            By:  /s/  JOSEPH H. STEGMAYER
                                               ---------------------------------
                                               Name:  Joseph H. Stegmayer
                                               Title:  President and C.E.O.

                                            CAVCO INDUSTRIES, INC.

                                            By:  /s/  JOSEPH H. STEGMAYER
                                               ---------------------------------
                                               Name:  Joseph H. Stegmayer
                                               Title:  President and C.E.O.

                                      -25-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>11
<FILENAME>p69164exv10w10.txt
<DESCRIPTION>EX-10.10
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.10

                                                                [EXECUTION COPY]

                              TAX SHARING AGREEMENT

                                  BY AND AMONG

                               CENTEX CORPORATION

                               AND ITS AFFILIATES

                                       AND

                             CAVCO INDUSTRIES, INC.

Dated June 30, 2003

      This TAX SHARING AGREEMENT (the "Agreement") dated as of June 30, 2003, by
and among Centex Corporation ("Centex"), a Nevada corporation and each Centex
Affiliate (as defined below), and Cavco Industries, Inc. ("Cavco"), a newly
formed Delaware corporation and indirect, wholly owned subsidiary of Centex, is
entered into in connection with the Distribution (as defined below).

                                    RECITALS

      WHEREAS, the Centex Board of Directors has determined, subject to certain
conditions, that it is appropriate and desirable to make a pro rata distribution
of one hundred percent (100%) of the stock of Cavco to its common shareholders,
with cash distributed in lieu of any fractional shares of Cavco, on the
Distribution Date, as defined below (the "Public Distribution"); and

      WHEREAS, in order to consummate the Public Distribution, it is necessary
and desirable for AAA Holdings, Inc. ("AAA"), a Delaware corporation and
currently the direct parent of Cavco Industries, LLC ("Cavco LLC") to form Cavco
and to then merge Cavco LLC with and into Cavco (the "Merger"); and

      WHEREAS, in order to consummate the Public Distribution, it is necessary
and desirable for AAA to make a pro rata distribution of one hundred percent
(100%) of the stock of Cavco to its sole shareholder, Centex Real Estate
Corporation ("CREC") (the "Internal Distribution 1"); and

      WHEREAS, in order to consummate the Public Distribution, it is necessary
and desirable for CREC to make a pro rata distribution of one hundred percent
(100%) of the stock of Cavco to its sole shareholder, Centex International, Inc.
("International") (the "Internal Distribution 2"); and

<PAGE>

      WHEREAS, in order to consummate the Public Distribution, it is necessary
and desirable for International to make a pro rata distribution of one hundred
percent (100%) of the stock of Cavco to its sole shareholder, Centex (the
"Internal Distribution 3"); and

      WHEREAS, the Merger is intended to qualify as a reorganization under
section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Public Distribution and Internal Distributions 1 through 3
(collectively the "Internal Distributions") are intended to qualify as tax free
distributions under Code section 355; and

      WHEREAS, it is appropriate and desirable to set forth the principles and
responsibilities of the parties to this Agreement regarding the allocation of
Tax (as defined below) and other related liabilities and adjustments with
respect to Taxes, Tax contests and other related Tax matters; and

      WHEREAS, to that end, the parties wish to enter into this Tax Sharing
Agreement;

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

      "Audit" includes any audit, assessment of Taxes, other examination by any
Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial.

      "Centex Affiliate" means any corporation or other entity directly or
indirectly controlled by Centex, excluding Cavco.

      "Centex Group" means the affiliated group of corporations as defined in
Section 1504 (a) of the Code, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which Centex is
the common parent, and any corporation or other entity which may be, may have
been or may become a member of such group from time to time, but excluding
Cavco.

      "Combined Group" means a group of corporations or other entities that
files a Combined Return.

      "Combined Return" means any Tax Return with respect to Non-Federal Taxes
filed on a consolidated, combined (including nexus combination, worldwide
combination, domestic combination, line of business combination or any other
form of combination) or unitary basis wherein Cavco joins in the filing of such
Tax Return (for any taxable period or portion thereof) with Centex or one or
more Centex Affiliates.

<PAGE>

      "Consolidated Group" means an affiliated group of corporations within the
meaning of Section 1504 (a) of the Code that files a Consolidated Return.

      "Consolidated Return" means any Tax Return with respect to Federal Income
Taxes filed on a consolidated basis wherein Cavco joins in the filing of such
Tax Return (for any taxable period or portion thereof) with Centex or one or
more Centex Affiliates.

      "Distribution" means the Internal Distributions and/or the Public
Distribution.

      "Distribution Date" means the close of business on the date on which the
Public Distribution is effected.

      "Federal Income Tax" means any Tax imposed under Subtitle A of the Code
(including the Taxes imposed by Sections 11, 55, 59A, and 1201(a) of the Code),
and any interest, additions to Tax or penalties applicable or related thereto,
and any other income-based United States federal Tax which is hereinafter
imposed upon corporations.

      "Federal Tax" means any Tax imposed or required to be withheld by any Tax
Authority of the United States.

      "Final Determination" means any of (a) the final resolution of any Tax (or
other matter) for a taxable period, including related interest or penalties,
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise, including (1) by the expiration
of a statute of limitations or a period for the filing of claims for refunds,
amending Tax Returns, appealing from adverse determinations, or recovering any
refund (including by offset), (2) by a decision, judgment, decree, or other
order by a court of competent jurisdiction, which has become final and
unappealable, (3) by a closing agreement or an accepted offer in compromise
under Section 7121 or 7122 of the Code, or comparable agreements under laws of
other jurisdictions, (4) by execution of an Internal Revenue Service Form 870 or
870AD, or by a comparable form under the laws of other jurisdictions (excluding,
however, with respect to a particular Tax Item for a particular taxable period
any such form that reserves (whether by its terms or by operation of law) the
right of the taxpayer to file a claim for refund and/or the right of the Tax
Authority to assert a further deficiency with respect to such Tax Item for such
period), or (5) by any allowance of a refund or credit, but only after the
expiration of all periods during which such refund or credit may be recovered
(including by way of offset), or (b) the payment of Tax by any member of the
Consolidated Group or Combined Group with respect to any Tax Item disallowed or
adjusted by a Tax Authority provided that Centex determines that no action
should be taken to recoup such payment.

      "Income Taxes" means (a) any Tax based upon, measured by, or calculated
with respect to (1) net income or profits (including any capital gains Tax,
minimum Tax and any Tax on items of Tax preference, but not including sales,
use, real or personal property, gross or net receipts, transfer or similar
Taxes) or (2) multiple bases if one or more of the bases upon which such Tax may
be based, measured by, or calculated with respect to, is described in clause (1)
above, or (b) any U.S. state or local franchise Tax.

                                       3
<PAGE>

      "Interest Accrual Period" has the meaning set forth in Section 6.4 of this
Agreement.

      "Non-Federal Combined Tax" means any Non-Federal Tax with respect to which
a Combined Return is filed.

      "Non-Federal Separate Tax" means any Non-Federal Tax other than a
Non-Federal Combined Tax.

      "Non-Federal Tax" means any Tax other than a Federal Tax.

      "Payment Period" has the meaning set forth in Section 5.3 of this
Agreement.

      "Post-Distribution Period" means a taxable period beginning after the
Distribution Date.

      "Pre-Distribution Period" means a taxable period beginning on or before
the Distribution Date.

      "Privilege" means any privilege that may be asserted under applicable law
including, any privilege arising under or relating to the attorney-client
relationship (including the attorney-client and work product privileges), the
accountant-client privilege, and any privilege relating to internal evaluation
processes.

      "Restructuring Tax" means any Tax imposed upon Centex or a Centex
Affiliate and reasonable professional fees that are attributable to, or result
from, the failure of the Distribution to qualify under Section 355 of the Code
(including any Tax attributable to the application of Section 355(e) or Section
355(f) of the Code to the Distribution) or corresponding provisions of the laws
of other jurisdictions. Each Tax referred to in the preceding sentence shall be
determined using the highest marginal corporate Tax rate for the relevant
taxable period (or any portion thereof). For the avoidance of doubt,
Restructuring Tax does not include an amount described in this paragraph that is
imposed upon a shareholder of Centex in its capacity as a shareholder of Centex.

      "Ruling Documents" means (a) the request for a ruling under Section 355
and various other sections of the Code, filed with the Service on November 5,
2002, together with any supplemental filings or ruling requests or other
materials subsequently submitted on behalf of Centex, its subsidiaries and
shareholders to the Service, the appendices and exhibits thereto, and any
rulings issued by the Service to Centex (or any Centex Affiliate) in connection
with the Distribution or (b) any similar filings submitted to, or rulings issued
by, any other Tax Authority in connection with the Distribution.

      "Separate Return" means any Tax Return with respect to Non-Federal
Separate Taxes filed by Centex, Cavco, or any of their respective affiliates.

      "Service" means the Internal Revenue Service.

                                       4
<PAGE>

      "Tax" means any charges, fees, levies, imposts, duties, or other
assessments of a similar nature, including income, alternative or add-on
minimum, gross receipts, profits, lease, service, service use, wage, wage
withholding, employment, workers compensation, business occupation, occupation,
premiums, environmental, estimated, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
withholding, social security, unemployment, disability, ad valorem, estimated,
highway use, commercial rent, capital stock, paid up capital, recording,
registration, property, real property gains, value added, business license,
custom duties, or other tax or governmental fee of any kind whatsoever, imposed
or required to be withheld by any Tax Authority including any interest,
additions to tax, or penalties applicable or related thereto.

      "Tax Authority" means governmental authority or any subdivision, agency,
commission or authority thereof or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of any
Tax (including the Service).

      "Tax Item" means any item of income, gain, loss, deduction or credit, or
other attribute that may have the effect of increasing or decreasing any Tax.

      "Tax Return" means any return, report, certificate, form or similar
statement or document (including, any related or supporting information or
schedule attached thereto and any information return, amended tax return, claim
for refund or declaration of estimated tax) required to be supplied to, or filed
with, a Tax Authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or
administrative requirements relating to any Tax.

                                    ARTICLE 2
                      PREPARATION AND FILING OF TAX RETURNS

2.1   In General.

      (a)   Centex shall have the sole and exclusive responsibility for the
            preparation and filing of the following Tax Returns: (1) all
            Consolidated Returns for any Pre-Distribution Period, (2) all
            Combined Returns for any Pre-Distribution Period, and (3) any
            Separate Return for any Pre-Distribution Period beginning before and
            ending on or before the Distribution Date (specifically including,
            but not limited to, any Texas franchise tax returns for the fiscal
            year ending March 31, 2003).

      (b)   Except as provided in Section 2.1(a) of this Agreement, Cavco shall
            have the sole and exclusive responsibility for the preparation and
            filing of all other Tax Returns for Cavco (or which relate to its
            businesses, assets or activities) which are required to be filed for
            any Pre-Distribution Period (including (i) any Pre-Distribution
            Period beginning before and ending on or before the Distribution
            Date and (ii) any Pre-Distribution Period beginning before and
            ending after the Distribution Date) and any Post-Distribution
            Period.

2.2   Manner of Filing Tax Returns.

                                       5
<PAGE>

      (a)   All Tax Returns filed after the date of this Agreement by Centex,
            any Centex Affiliate, or Cavco shall be

            (1)   prepared in a manner that is consistent with the Ruling
                  Documents, and

            (2)   filed on a timely basis (including extensions) by the party
                  responsible for such filing under Section 2.1 of this
                  Agreement.

      (b)   Centex and Cavco agree to file all Tax Returns for any
            Pre-Distribution Period, as provided for in Section 2.1, and to take
            all other actions in a manner consistent with the position that
            Cavco is part of any Consolidated Group and any Combined Group for
            all days through and including the Distribution Date.

      (c)   Except as otherwise provided in this Section 2.2, Centex shall have
            the exclusive right, in its sole discretion, with respect to any Tax
            Return described in Section 2.1(a) of this Agreement to determine:

            (1)   the manner in which such Tax Return shall be prepared and
                  filed, including the elections, methods of accounting,
                  positions, conventions and principles of taxation to be used
                  and the manner in which any Tax Item shall be reported;

            (2)   whether any extensions may be requested;

            (3)   the elections that will be made by Centex, any Centex
                  Affiliate, and Cavco in such Tax Return;

            (4)   whether any amended Tax Returns shall be filed;

            (5)   whether any claims for refund shall be made;

            (6)   whether any refunds shall be paid by way of refund or credited
                  against any liability for the related Tax; and

            (7)   whether to retain outside specialists to prepare such Tax
                  Return, whom to retain for such purpose and the scope of any
                  such retainer.

      (d)   In the event that a Tax Item is includable in a Tax Return described
            in Section 2.1(a) of this Agreement and also in a Tax Return
            described in Section 2.1(b) of this Agreement that is filed after
            the date of this Agreement, Cavco preparing, or causing the
            preparation of, such Tax Return under Section 2.1(b) of this
            Agreement shall conform the treatment of such Tax Item in such Tax
            Return described in Section 2.1(b) of this Agreement to the
            treatment of such Tax Item in the applicable Tax Return described in
            Section 2.1(a) of this Agreement.

                                       6
<PAGE>

      (e)   Any Tax Return described in (1) Section 2.1(a) of this Agreement
            (but only with respect to Tax Items of Cavco) or (2) Section 2.1(b)
            of this Agreement, in either case which Tax Return is filed after
            the date of this Agreement, shall be prepared on a basis consistent
            with the elections, methods of accounting, positions, conventions
            and principles of taxation and the manner in which any Tax Item or
            other information is reported as reflected on the most recently
            filed Tax Returns involving similar matters. The preceding sentence
            shall not apply (1) to the extent otherwise required by Section
            2.2(a)(1) of this Agreement or (2) if (i) Cavco obtains Centex's
            prior written consent (which consent shall not be unreasonably
            withheld), (ii) there has been a controlling change in law or
            circumstances, or (iii) the failure to be consistent will not result
            in an increased Tax liability to, or reduction in a Tax Asset of,
            Centex or any Centex Affiliate with respect to a Pre-Distribution
            Period, not fully compensated by Cavco. For purposes of this Section
            2.2(e), a controlling change in law or circumstances includes, with
            respect to Post-Distribution Periods (but not Pre-Distribution
            Periods), permission to change a method of accounting granted by the
            relevant Tax Authority.

2.3   Agent. Cavco hereby irrevocably designates Centex as its sole and
      exclusive agent and attorney-in-fact to take such action (including
      execution of documents) as Centex, in its sole discretion, may deem
      appropriate in any and all matters (including Audits) relating to any Tax
      Return described in Section 2.1(a) of this Agreement.

2.4   Provision of Tax Return Information.

      (a)   Both Cavco and Centex agree to provide all documents and
            information, and to make available their employees and officers, as
            may be reasonably requested by either party to prepare any Tax
            Return described in Section 2.1 of this Agreement.

      (b)   In the case of any Tax Return described in Section 2.1(a) that is
            filed after the date of this Agreement, Centex shall, upon request
            of Cavco, provide Cavco a copy of each such Tax Return and all
            related Tax accounting work papers to the extent that they relate to
            Cavco.

      (c)   In the case of any Tax Return in Centex's possession that was filed
            before the date of this Agreement, Centex shall, upon request of
            Cavco, provide Cavco a copy of each such Tax Return and all related
            Tax accounting work papers to the extent that they relate to Cavco.

      (d)   Notwithstanding any other provision of this Agreement, no member of
            the Centex Group shall be required to provide Cavco access to or
            copies of:

            (1)   any information that relates to any member of the Centex
                  Group,

            (2)   any information as to which any member of the Centex Group is
                  entitled to assert the protection of any Privilege, or

                                       7
<PAGE>

            (3)   any information as to which any member of the Centex Group is
                  subject to an obligation to maintain the confidentiality of
                  such information.

            Centex shall use reasonable efforts to separate any such information
            from any other information to which Cavco is entitled to access or
            to which Cavco is entitled to copy under this Agreement, to the
            extent consistent with preserving its rights under this Section
            2.4(d).

                                    ARTICLE 3
                        TAX SHARING AND PAYMENT OF TAXES

3.1   Cavco Liability for Payment of Taxes. Cavco shall pay to the appropriate
      Tax Authorities all Taxes due and payable for all Pre-Distribution Periods
      and all Post-Distribution Periods for which it is responsible for filing
      any Tax Return pursuant to Section 2.1(b). Cavco shall also provide Centex
      a check made payable to the appropriate Tax Authority for all Taxes due
      and payable for any Pre-Distribution Period for which Centex is
      responsible for filing any Separate Return pursuant to Section 2.1(a)(3).
      Cavco shall deliver such check to Centex within 5 days of Centex's request
      for such payment.

3.2   Centex Liability for Payment of Taxes. Except as provided in Section 3.1
      (with respect to Cavco's payment of any Tax that may be due of a Separate
      Return filed by Centex pursuant to Section 2.1(a)(3)), Centex shall pay to
      the appropriate Tax Authorities all Taxes due and payable for all
      Pre-Distribution Periods for which it is responsible for filing any Tax
      Return pursuant to Section 2.1.

3.3   Additional Liability Allocation. Except with respect to any Restructuring
      Tax, Cavco shall have no further liability to Centex for any Taxes for any
      Pre-Distribution Period for which Centex is responsible for filing any Tax
      Return pursuant to Section 2.1(a)(1) and 2.1(a)(2).

                                    ARTICLE 4
                                 DECONSOLIDATION

4.1   Distribution Related Items.

      (a)   Restrictions on Certain Post-Distribution Actions.

            (1)   Cavco Restrictions. Cavco covenants to Centex that it will not
                  take or fail to take any action where such action or failure
                  to act would cause the Merger and Distribution to fail to
                  qualify under Sections 355(a) and 368(a)(1)(D) of the Code or
                  any corresponding provisions of state or local law. Without
                  limiting the foregoing, Cavco covenants to Centex that: (i)
                  during the two-year period following the Distribution Date,
                  Cavco will not liquidate, merge or consolidate with any other
                  person; (ii) during the two-year period following the
                  Distribution Date, Cavco will not sell, exchange, or
                  distribute or otherwise dispose of all or a substantial
                  portion of its assets except in the ordinary course of
                  business; (iii) during the two-year period following the

                                       8
<PAGE>

                  Distribution Date, Cavco will continue the active conduct of
                  the historic business as transferred to it in the Merger; (iv)
                  Cavco will not take any action inconsistent with the
                  information and representations in the Ruling Documents; (v)
                  Cavco will not repurchase stock of Cavco in a manner contrary
                  to the requirements of Section 4.05(1)(b) of Revenue Procedure
                  96-30 or in a manner contrary to the representations made in
                  the Ruling Documents; and (vi) Cavco will not enter into any
                  negotiations, agreements or arrangements with respect to any
                  of the foregoing.

            (2)   Centex Restrictions. Centex convenants to Cavco that it will
                  not take or fail to take any action where such action or
                  failure to act would cause the Merger and Distribution to fail
                  to qualify under Sections 355(a) and 368(a)(1)(D) of the Code
                  or any corresponding provisions of state or local law.

      (b)   Liability for Undertaking Certain Actions.

            (1)   Cavco Liability. Cavco shall be responsible for one hundred
                  percent (100%) of any Restructuring Taxes that are
                  attributable to, or result from, any act or failure to act
                  described in Section 4.1(a)(1) of this Agreement by Cavco.
                  Cavco shall indemnify Centex, each Centex Affiliate and their
                  directors, officers and employees and hold them harmless from
                  and against any such Restructuring Taxes.

            (2)   Centex Liability. Centex and each Centex Affiliate shall be
                  responsible for one hundred percent (100%) of any
                  Restructuring Taxes that are attributable to, or result from,
                  any act or failure to act described in Section 4.1(a)(2) of
                  this Agreement by Centex or any Centex Affiliate. Centex and
                  each Centex Affiliate shall jointly and severally indemnify
                  Cavco and their directors, officers and employees and hold
                  them harmless from and against any such Restructuring Tax.

      (c)   Information. Centex has provided Cavco with copies of the Ruling
            Documents submitted on or prior to the date hereof, and shall
            provide Cavco with copies of any additional Ruling Documents
            prepared after the date hereof prior to the submission of such
            Ruling Documents to a Tax Authority.

      (d)   Liability for Breach of Representation. Each of Centex and Cavco
            hereby represents that (1) it has read the Ruling Documents
            submitted on or prior to the date hereof, (2) all information
            contained in such Ruling Documents that concerns or relates to such
            party or any affiliate of such party, other than information which
            is provided by an external expert, is true, correct and complete in
            all material respects, and (3) except to the extent that such party
            shall have notified the other party in writing to the contrary and
            with reasonable specificity prior to the Distribution Date, all such
            information that concerns or relates to such party or any affiliate
            of such party, other than information which is provided by an
            external

                                       9
<PAGE>

            expert, is and will be true, correct and complete in all material
            respects as of the Distribution Date.

            Cavco acknowledges and agrees that the term "Ruling Documents,"
            whenever used in this Agreement, includes all filings or ruling
            requests or other materials, appendices and exhibits submitted after
            the date hereof to the Service or any Tax Authority in connection
            with the Distribution and provided by Centex to Cavco under Section
            4.1 of this Agreement.

            If any Tax Authority withdraws any portion of a ruling issued to
            Centex in connection with the Distribution because of a breach by
            Cavco of a representation made in this Section 4.1, Cavco shall be
            responsible for one hundred percent (100%) of any Restructuring
            Taxes. In such event, Cavco shall indemnify Centex, each Centex
            Affiliate and their directors, officers and employees and hold them
            harmless from and against any Restructuring Taxes. If any Tax
            Authority withdraws any portion of a ruling issued to Centex in
            connection with the Distribution because of a breach by Centex or
            any Centex Affiliate of a representation made in this Section 4.1,
            Centex and each Centex Affiliate shall be responsible for one
            hundred percent (100%) of any Restructuring Taxes. In such event,
            Centex and each Centex Affiliate shall jointly and severally
            indemnify Cavco and its directors, officers and employees and hold
            them harmless from and against any Restructuring Taxes.

      (e)   Payment. Cavco shall make or cause to be made all payments for which
            it may be liable under this Section 4.1. Such payments shall be made
            to Centex or to the appropriate Tax Authority as specified by Centex
            no later than five (5) days after delivery by Centex to Cavco of
            written notice of a payment by or liability of Centex (or a Centex
            Affiliate or a director, officer or employee) based on a Final
            Determination, together with a computation of the amounts due.

4.2   Information for Shareholders. Centex shall provide each shareholder that
      receives stock of Cavco pursuant to the Public Distribution with the
      information necessary for such shareholder to comply with the requirements
      of Section 355 of the Code and the Treasury regulations thereunder with
      respect to statements that such shareholders must file with their Federal
      Income Tax Returns demonstrating the applicability of Section 355 of the
      Code to the Public Distribution.

4.3   Special Indemnification. Centex expressly agrees to indemnify Cavco for
      any Federal Income Tax with respect to any Consolidated Return for which
      Centex is responsible for filing pursuant to Section 2.1(a)(1) in the
      event that Cavco is liable to the Service for any such Federal Income Tax
      pursuant to Treasury Regulation section 1.1502-6.

                                    ARTICLE 5
                             ADDITIONAL OBLIGATIONS

5.1   Provision of Information.

                                       10
<PAGE>

      (a)   Cavco shall furnish to Centex in a timely manner such information
            and documents as Centex may reasonably request for purposes of (1)
            preparing any Tax Return for which Centex has filing responsibility
            under this Agreement, (2) contesting or defending any Audit, and (3)
            making any determination or computation necessary or appropriate
            under this Agreement.

      (b)   Cavco shall make its employees available to provide explanations of
            documents and other materials and such other information as Centex
            may reasonably request in connection with any of the foregoing.

      (c)   Cavco shall cooperate in any Audit of any Consolidated Return or
            Combined Return.

      (d)   Cavco shall retain and provide on demand books, records,
            documentation or other information relating to any Tax Return until
            the later of (1) the expiration of the applicable statute of
            limitations (giving effect to any extension, waiver, or mitigation
            thereof) and (2) in the event any claim is made under this Agreement
            for which such information is relevant, until a Final Determination
            with respect to such claim.

      (e)   Cavco shall take such action as Centex may reasonably deem
            appropriate in connection with the provision of information under
            this Section 5.1.

5.2   Indemnification.

      (a)   Failure to Pay. Centex and each Centex Affiliate shall jointly and
            severally indemnify Cavco and its respective directors, officers and
            employees, and hold them harmless from and against any loss, cost,
            damage or expense, including reasonable attorneys' fees and costs,
            that is attributable to, or results from the failure of Centex, any
            Centex Affiliate or any director, officer or employee to make any
            payment required to be made under this Agreement. Cavco shall
            indemnify Centex, each Centex Affiliate and their respective
            directors, officers and employees, and hold them harmless from and
            against any loss, cost, damage or expense, including reasonable
            attorneys' fees and costs, that is attributable to, or results from,
            the failure of Cavco or any director, officer or employee to make
            any payment required to be made under this Agreement.

      (b)   Inaccurate or Incomplete Information. Centex and each Centex
            Affiliate shall jointly and severally indemnify Cavco and their
            respective directors, officers and employees, and hold them harmless
            from and against any cost, fine, penalty, or other expense of any
            kind attributable to the negligence of Centex or any Centex
            Affiliate in supplying Cavco with inaccurate or incomplete
            information, in connection with the preparation of any Tax Return.
            Cavco shall indemnify Centex, each Centex Affiliate and their
            respective directors, officers and employees, and hold them harmless
            from and against any cost, fine, penalty, or other expenses of

                                       11
<PAGE>

            any kind attributable to the negligence of Cavco in supplying Centex
            or any Centex Affiliate with inaccurate or incomplete information,
            in connection with the preparation of any Tax Return.

5.3   Interest. Payments pursuant to this Agreement that are not made within the
      period prescribed in this Agreement or, if no period is prescribed, within
      thirty (30) days after demand for payment is made (the "Payment Period")
      shall bear interest for the period from and including the date immediately
      following the last date of the Payment Period through and including the
      date of payment (the "Interest Accrual Period") at a per annum rate equal
      to Cavco's weighted average interest rate for debt capital for each year,
      or part thereof, included in the Interest Accrual Period plus 50 basis
      points. Such interest will be payable at the same time as the payment to
      which it relates and shall be calculated on the basis of a year of 365
      days and the actual number of days for which due.

                                    ARTICLE 6
                                     AUDITS

6.1   In General.

      (a)   Centex shall have the exclusive right, in its sole discretion, to
            control, contest, and represent the interests of Centex, any Centex
            Affiliate, or Cavco in any Audit relating to any Tax Return
            described in Section 2.1(a)(1) or 2.1(a)(2) of this Agreement and to
            resolve, settle or agree to any deficiency, claim or adjustment
            proposed, asserted or assessed in connection with or as a result of
            any such Audit.

      (b)   Cavco shall have the exclusive right, in its sole discretion, to
            control, contest, and represent the interests of Cavco in any Audit
            relating to any Tax Return described in Section 2.1(b) or Section
            2.1(a)(3) of this Agreement and to resolve, settle, or agree to any
            deficiency, claim or adjustment proposed, asserted or assessed in
            connection with or as a result of any such Audit.

      (c)   After the Distribution Date, Centex and Cavco shall cooperate in
            order to transfer to Cavco the exclusive right to control, contest
            and represent the interests of Cavco in any Audit and to resolve,
            settle, or agree to any deficiency, claim or adjustment proposed,
            asserted or assessed in connection with or as a result of any such
            Audit in each case relating to all Separate Returns of Cavco
            relating to Non-Federal Separate Taxes.

6.2   Notice. If, after the Distribution Date, Centex or any member of the
      Centex Group receives written notice of, or relating to, an Audit from a
      Tax Authority that asserts, proposes or recommends a deficiency, claim or
      adjustment that, if sustained, would result in any Restructuring Taxes for
      which Cavco could be responsible under this Agreement, Centex shall notify
      Cavco in writing of such deficiency, claim or adjustment within ten (10)
      days of its receipt. If Cavco receives written notice of or relating to an
      audit from a Tax Authority with respect to a Tax Return described in
      Section 2.1(a)(1) or 2.1(a)(2) of this Agreement, Cavco shall provide a
      copy of such notice to Centex within ten (10) days of

                                       12
<PAGE>

      receiving such notice of such Audit, but in no case later than thirty (30)
      days before a response is required to be provided to the relevant Tax
      Authority.

6.3   Participation Rights.

      (a)   If a Tax Authority asserts, proposes or recommends a deficiency,
            claim or adjustment that, if sustained, would result in
            Restructuring Taxes for which Cavco could be responsible under this
            Agreement, and Cavco acknowledges in writing to Centex that, as
            between Cavco and Centex, Cavco shall be responsible for one hundred
            percent (100%) of any such Restructuring Taxes that are determined
            pursuant to a Final Determination, then (1) Centex shall take all
            actions requested by Cavco to contest such deficiency, claim or
            adjustment, including administrative and judicial proceedings; (2)
            Cavco shall have the right to fully participate with respect to such
            deficiency, claim or adjustment and related proceedings and Centex
            shall accept all reasonable suggestions by Cavco in connection with
            the management and substance of such proceedings, and (3) in no
            event shall Centex settle or compromise any such deficiency, claim
            or adjustment without the written consent of Cavco.

      (b)   If a Tax Authority asserts, proposes or recommends a deficiency,
            claim or adjustment that, if sustained, would result in
            Restructuring Taxes for which Cavco could be responsible under this
            Agreement and has not admitted liability for such Restructuring
            Taxes pursuant to Section 6.3(a):

            (1)   Centex shall keep Cavco informed in a timely manner of all
                  material actions taken or proposed to be taken by Centex in
                  connection with such deficiency, claim or adjustment;

            (2)   Centex shall reasonably consider any comments that Cavco makes
                  with respect to the handling of the case and provide Cavco an
                  opportunity to attend any meetings with the Tax Authority; and

            (3)   Centex shall have no obligation to appeal a determination of
                  any Tax Authority in any judicial forum.

6.4   Failure to Notify, Etc. The failure of Centex promptly to notify Cavco of
      any matter relating to a particular Tax for a taxable period or to take
      any action specified in Section 6.3 of this Agreement shall not relieve
      Cavco of any liability and/or obligation which it may have to Centex or
      any Centex Affiliate under this Agreement with respect to such
      Restructuring Taxes except to the extent that Cavco's rights hereunder are
      materially prejudiced by such failure and in no event shall such failure
      relieve Cavco of any other liability and/or obligation which it may have
      to Centex or any Centex Affiliate.

                                       13
<PAGE>

                                    ARTICLE 7
                               DISPUTE RESOLUTION

7.1   Governed by Distribution Agreement. Any dispute arising out of or relating
to this Agreement, including the breach or termination hereof, shall be resolved
in accordance with the procedures specified in Article 8 of that certain
Distribution Agreement between Centex and Cavco dated as of _____________ to
which this Agreement is attached as an exhibit.

                                    ARTICLE 8
                                  MISCELLANEOUS

8.1   Effectiveness. This Agreement shall become effective upon execution by
      both parties hereto.

8.2   Notices. Any notice, request, instruction or other document to be given or
      delivered under this Agreement by any party to another party shall be in
      writing and shall be deemed to have been duly given or delivered when (1)
      delivered in person, (2) sent by facsimile, (3) deposited in the United
      States mail, postage prepaid and sent certified mail, return receipt
      requested, or (4) delivered to Federal Express or similar service for
      overnight delivery to the address of the party set forth below.

                         If to Centex or any Centex Affiliate, to:

                         Centex Corporation
                         2728 North Harwood
                         Dallas, Texas 75201
                         Fax No.:  (214) ____________________
                         Attention:  ________________________

                         With copy to:

                         Centex Corporation
                         2728 North Harwood
                         Dallas, TX  75201
                         Fax. No.:  (214) 981-6855
                         Attention:  General Counsel

                         If to Cavco:

                         Cavco Industries, Inc.
                         1001 North Central Avenue
                         Suite 800
                         Phoenix, Arizona 85004
                         Fax No.: (602) 256-6189
                         Attention:  Chief Executive Officer

                                       14
<PAGE>

      Any party may, by written notice to the other parties, change the address
      or the party to which any notice, request, instruction or other document
      (or any copy thereof) is to be delivered.

8.3   Changes in Law. Any reference to a provision of the Code or a law of
      another jurisdiction shall include a reference to any applicable successor
      provision or law.

8.4   Confidentiality. Each party shall hold and cause its directors, officers,
      employees, advisors and consultants to hold in strict confidence, unless
      compelled to disclose by judicial or administrative process or, in the
      opinion of its counsel, by other requirements of law, all information
      (other than any such information relating solely to the business or
      affairs of such party) concerning the other parties hereto furnished it by
      such other party or its representatives pursuant to this Agreement (except
      to the extent that such information can be shown to have been (1)
      previously known by the party to which it was furnished, (2) in the public
      domain through no fault of such party, or (3) later lawfully acquired from
      other sources not under a duty of confidentiality by the party to which it
      was furnished), and each party shall not release or disclose such
      information to any other person, except its directors, officers,
      employees, auditors, attorneys, financial advisors, bankers and other
      consultants who shall be advised of and agree to be bound by the
      provisions of this Section 9.4. Each party shall be deemed to have
      satisfied its obligation to hold confidential information concerning or
      supplied by the other party if it exercises the same care as it takes to
      preserve confidentiality for its own similar information.

8.5   Successors. This Agreement shall be binding on and inure to the benefit of
      any successor, by merger, acquisition of assets or otherwise, to any of
      the parties hereto, to the same extent as if such successor had been an
      original party.

8.6   Affiliates. Centex shall cause to be performed, and hereby guarantees the
      performance of, all actions, agreements and obligations set forth herein
      to be performed by a Centex Affiliate; provided, however, that if a Centex
      Affiliate ceases to be a Centex Affiliate as a result of a transfer of its
      stock or other ownership interests to a third party in exchange for
      consideration in an amount approximately equal to the fair market value of
      the stock or other ownership interests transferred and such consideration
      is not distributed outside of the Centex Group to the shareholders of
      Centex then Cavco shall, upon request, execute a release of such Centex
      Affiliate from its obligations under this Agreement upon such transfer
      provided that such Centex Affiliate shall have executed a release of any
      rights it may have against Cavco or any Cavco Affiliate by reason of this
      Agreement.

8.7   Authorization, Etc. Each of the parties hereto hereby represents and
      warrants that it has the power and authority to execute, deliver and
      perform this Agreement, that this Agreement has been duly authorized by
      all necessary corporate action on the part of such party, that this
      Agreement constitutes a legal, valid and binding obligation of each such
      party and that the execution, delivery and performance of this Agreement
      by such party does not contravene or conflict with any provision of law or
      of its charter or bylaws or any agreement, instrument or order binding on
      such party.

                                       15
<PAGE>

8.8   Entire Agreement. This Agreement contains the entire agreement among the
      parties hereto with respect to the subject matter hereof and amends and
      restates all prior Tax sharing agreements between Centex or any Centex
      Affiliate and Cavco and such prior tax sharing agreements shall have no
      further force and effect.

8.9   Section Captions. Section captions used in this Agreement are for
      convenience and reference only and shall not affect the construction of
      this Agreement.

8.10  Governing Law. This Agreement shall be governed by and construed in
      accordance with laws of the State of Texas without giving effect to laws
      and principles relating to conflicts of law.

8.11  Counterparts. This Agreement may be executed in any number of
      counterparts, each of which shall be deemed an original, but all of which
      together shall constitute one and the same Agreement.

8.12  Severability. If any term, provision, covenant, or restriction of this
      Agreement is held by a court of competent jurisdiction (or an arbitrator
      or arbitration panel) to be invalid, void, or unenforceable, the remainder
      of the terms, provisions, covenants, and restrictions set forth herein
      shall remain in full force and effect, and shall in no way be affected,
      impaired, or invalidated. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining
      terms, provisions, covenants, and restrictions without including any of
      such which may be hereafter declared invalid, void, or unenforceable. In
      the event that any such term, provision, covenant or restriction is held
      to be invalid, void or unenforceable, the parties hereto shall use their
      best efforts to find and employ an alternate means to achieve the same or
      substantially the same result as that contemplated by such terms,
      provisions, covenant, or restriction.

8.13  No Third Party Beneficiaries. This Agreement is solely for the benefit of
      Centex, the Centex Affiliates, and Cavco. This Agreement should not be
      deemed to confer upon third parties any remedy, claim, liability,
      reimbursement, cause of action or other rights in excess of those existing
      without this Agreement.

8.14  Waivers, Etc. No failure or delay on the part of the parties in exercising
      any power or right hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise of any such right or power, or any
      abandonment or discontinuance of steps to enforce such right or power,
      preclude any other or further exercise thereof or the exercise of any
      other right or power. No modification or waiver of any provision of this
      Agreement nor consent to any departure by the parties therefrom shall in
      any event be effective unless the same shall be in writing, and then such
      waiver or consent shall be effective only in the specific instance and for
      the purpose for which given.

8.15  Setoff. All payments to be made by any party under this Agreement shall be
      made without setoff, counterclaim, or withholding, all of which are
      expressly waived.

                                       16
<PAGE>

8.16  Change of Law. If, due to any change in applicable law or regulations or
      their interpretation by any court of law or other governing body having
      jurisdiction subsequent to the date of this Agreement, performance of any
      provision of this Agreement or any transaction contemplated thereby shall
      become impracticable or impossible, the parties hereto shall use their
      commercially reasonable efforts to find and employ an alternative means to
      achieve the same or substantially the same result as that contemplated by
      such provision.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

                     CENTEX CORPORATION, on behalf of itself and its affiliates

                     By

                     Name: /s/ MICHAEL S. ALBRIGHT
                          -----------------------------------------------------
                     Title:  Senior Vice President

                     CAVCO INDUSTRIES, INC.

                     By

                     Name: /s/  JOSEPH H. STEGMAYER
                          -----------------------------------------------------
                     Title: President and Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>12
<FILENAME>p69164exv21.txt
<DESCRIPTION>EX-21
<TEXT>
<PAGE>
                                                                      Exhibit 21

                              LIST OF SUBSIDIARIES

NAME                                 JURISDICTION OF ORGANIZATION
- ----                                 ----------------------------
CRG Holdings, LLC                    Delaware

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>13
<FILENAME>p69164exv23.txt
<DESCRIPTION>EX-23
<TEXT>
<PAGE>

                                                                      Exhibit 23

               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-106861) pertaining to the 2003 Stock Incentive Plan of Cavco
Industries, Inc. of our report dated April 21, 2004, with respect to the
consolidated financial statements of Cavco Industries, Inc. included in the
Annual Report (Form 10-K) for the year-ended March 31, 2004.

                                                     /s/ Ernst & Young LLP

Phoenix, Arizona
May 17, 2004

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>14
<FILENAME>p69164exv31w1.htm
<DESCRIPTION>EX-31.1
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.1</B>


<P align="center" style="font-size: 10pt"><B>CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER</B>



<P align="left" style="font-size: 10pt">I, Joseph H. Stegmayer, certify that:


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 10-K of
Cavco Industries, Inc.;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and
other financial information included in this report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and
procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this report is
being prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the
registrant&#146;s disclosure controls and procedures and
presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based
on such evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change
in the registrant&#146;s internal control over financial
reporting that occurred during the registrant&#146;s most
recent fiscal quarter (the registrant&#146;s fourth fiscal
quarter in the case of an annual report) that has
materially affected, or is reasonably likely to
materially affect, the registrant&#146;s internal control
over financial reporting; and</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors
and the audit committee of the registrant&#146;s board of directors
(or persons performing the equivalent functions):</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and
material weaknesses in the design or operation of
internal control over financial reporting which are
reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report
financial information; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material,
that involves management or other employees who have a
significant role in the registrant&#146;s internal control
over financial reporting.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Joseph H. Stegmayer</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Joseph H. Stegmayer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">31
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>15
<FILENAME>p69164exv31w2.htm
<DESCRIPTION>EX-31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;31.2</B>


<P align="center" style="font-size: 10pt"><B>CERTIFICATION OF CHIEF FINANCIAL OFFICER</B>



<P align="left" style="font-size: 10pt">I, Sean K. Nolen, certify that:


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 10-K of Cavco
Industries, Inc.;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) for the
registrant and have:</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure
controls and procedures, or caused such disclosure
controls and procedures to be designed under our
supervision, to ensure that material information
relating to the registrant, including its
consolidated subsidiaries, is made known to us by
others within those entities, particularly during
the period in which this report is being prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness
of the registrant&#146;s disclosure controls and
procedures and presented in this report our
conclusions about the effectiveness of the
disclosure controls and procedures, as of the end
of the period covered by this report based on such
evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report
any change in the registrant&#146;s internal control
over financial reporting that occurred during the
registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of
an annual report) that has materially affected, or
is reasonably likely to materially affect, the
registrant&#146;s internal control over financial
reporting; and</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;The registrant&#146;s other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant&#146;s auditors and the audit committee of the
registrant&#146;s board of directors (or persons performing the equivalent
functions):


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant
deficiencies and material weaknesses in the design
or operation of internal control over financial
reporting which are reasonably likely to adversely
affect the registrant&#146;s ability to record, process,
summarize and report financial information; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not
material, that involves management or other
employees who have a significant role in the
registrant&#146;s internal control over financial
reporting.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Sean K. Nolen</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sean K. Nolen</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">32
</DIV>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>16
<FILENAME>p69164exv32w1.htm
<DESCRIPTION>EX-32.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;32.1</B>


<P align="center" style="font-size: 10pt"><B>Certification of Periodic Report Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purpose of 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, the undersigned, Joseph H. Stegmayer,
the Chief Executive Officer of Cavco Industries, Inc. (the &#147;Company&#148;), hereby
certifies that, to his knowledge:


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Annual Report on Form 10-K of the Company for the year
ended March&nbsp;31, 2004, as filed with the Securities and Exchange
Commission on the date hereof (the &#147;Report&#148;) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Joseph H. Stegmayer</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Joseph H. Stegmayer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing certification is being furnished as an exhibit to the Form
10-K pursuant to Item&nbsp;601(b)(32) of Regulation&nbsp;S-K and Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002 and, accordingly, is not being filed as part of the
Form 10-K.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>17
<FILENAME>p69164exv32w2.htm
<DESCRIPTION>EX-32.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32w2</TITLE>
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<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;32.2</B>


<P align="center" style="font-size: 10pt"><B>Certification of Periodic Report Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purpose of 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, the undersigned, Sean K. Nolen, the
Chief Financial Officer of Cavco Industries, Inc. (the &#147;Company&#148;), hereby
certifies that, to his knowledge:


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Annual Report on Form 10-K of the Company for the year
ended March&nbsp;31, 2004, as filed with the Securities and Exchange
Commission on the date hereof (the &#147;Report&#148;) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Sean K. Nolen</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sean K. Nolen</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;24, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing certification is being furnished as an exhibit to the Form
10-K pursuant to Item&nbsp;601(b)(32) of Regulation&nbsp;S-K and Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002 and, accordingly, is not being filed as part of the
Form 10-K.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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