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Commitments, Contingencies and Legal Proceedings | 9 Months Ended
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Dec. 28, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments, Contingencies and Legal Proceedings | 14. Commitments, Contingencies, and Legal Proceedings Repurchase Contingencies and Guarantees The Company is contingently liable under terms of repurchase agreements with lending institutions that provide wholesale floor plan financing to retailers. These arrangements, which are customary in the manufactured housing industry, provide for the repurchase of products sold to retailers in the event of default by the retailer on its agreement to pay the financial institution. The risk of loss from these agreements is significantly reduced by the potential resale value of any products that are subject to repurchase and is spread over numerous retailers. The repurchase price is generally determined by the original sales price of the product less contractually defined curtailment payments. Based on these repurchase agreements and our historical loss experience, we established an associated loss reserve which was $1.7 million at December 28, 2024 and $1.8 million at March 30, 2024, respectively. Excluding the resale value of the homes, the contingent repurchase obligation as of December 28, 2024 was estimated to be $253.0 million. Losses incurred on homes repurchased were immaterial during the three and nine months ended December 28, 2024 and December 30, 2023. At December 28, 2024, the Company was contingently o bligated for $31.5 million under letters of credit, consisting of $12.7 million to support long-term debt, $18.5 million to support the casualty insurance program, and $0.3 million to support b onding agreements. The letters of credit are issued from a sub-facility of the Amended Credit Agreement. The Company was also contingently obligated for $19.6 million under surety bonds, generally to support performance on long-term construction contracts and license and service bonding requirements. In the normal course of business, the Company’s former subsidiaries that operated in the United Kingdom historically provided certain guarantees to two customers. Those guarantees provide contractual liability for proven construction defects up to 12 years from the date of delivery of certain products. The guarantees remain a contingent liability of the Company which declines over time through October 2027. As of the date of this report, the Company expects few, if any, claims to be reported under the terms of the guarantees. Product Liability - Water Intrusion The Company has received consumer complaints for damages related to water intrusion in homes built in one of its manufacturing facilities prior to fiscal 2022. The Company has investigated, and believes, the cause of the damage is the result of materials that did not perform in accordance with the manufacturer's contractual obligations. The Company has identified certain homes constructed over that period that may be affected. Based on the results of ongoing investigation and repair efforts, the Company has developed and HUD has approved a remediation plan under Subpart I of the HUD code. The plan calls for inspection and repair of affected homes if there is evidence of damage, or procedures to mitigate the opportunity for future damage. The Company recorded charges to execute the remediation plan o f $34.5 million during the fourth quarter of fiscal 2024. The Company estimated the charges by establishing a range of total expected costs determined by an actu ary using a Monte Carlo simulation. The analysis resulted in a range of losses between $34.5 mi llion and $85.0 m illion. The Company was not able to determine a value in the range that was more likely than any other value, and as prescribed by U.S. GAAP, recorded the charge for remediation based on the low end of the range of potential losses. The Company is monitoring the results of the inspection and repair activities, and may revise the amount of the estimated liability, which could result in an increase or decrease in the estimated liability in future periods. The liability, net of $0.1 million of remediation payments made during the third quarter of fiscal 2025, is included in other current liabilities in the accompanying Condensed Consolidated Balance Sheets. Based on the Company's investigation into the cause of the water intrusion, including third-party testing of the material at issue, the Company believes it is possible that it will recover some or all of the estimated remediation costs. The Company will attempt to recover those costs from the manufacturer of the material, the distributor of the material, their related insurance providers or from the Company's insurance providers. However, the Company is unable to record an offset for any estimated costs at this time in accordance with U.S. GAAP. Legal Proceedings The Company has agreed to indemnify counterparties in the ordinary course of its business in agreements to acquire and sell business assets and in financing arrangements. The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. As of the date of this filing, the Company believes the ultimate liability with respect to these contingent obligations will not have, either individually or in the aggregate, a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

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