Nobility Homes, Inc. Announces Sales and Earnings for its Second Quarter 2023
OCALA, FL / ACCESSWIRE / June 5, 2023 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its second quarter ended May 6, 2023.
Sales for the second quarter of 2023 increased 58% to $16.8 million as compared to $10.6 million recorded in the second quarter of 2022. Income from operations for the second quarter of 2023 increased 127% to $3.7 million versus $1.6 million in the same period a year ago. Net income after taxes increased 96% to $2.9 million as compared to $1.5 million for the same period last year. Diluted earnings for the second quarter of 2023 were $0.85 per share compared to $0.42 per share last year.
For the first six months of fiscal 2023, sales increased 58% to $33.9 million as compared to $21.5 million in the second quarter of 2022. Income from operations for the second quarter of 2023 increased 156% to $7.6 million versus $3.0 million in the same period last year. Net income after taxes increased 126% to $5.9 million versus last year's results of $2.6 million. Diluted earnings were $1.75 per share compared to $0.74 per share last year.
Nobility's financial position for the first six months 2023 remains strong with cash and cash equivalents, certificates of deposit and short-term investments of $23.5 million and no outstanding debt. Working capital is $35.6 million and our ratio of current assets to current liabilities is 3.6:1. Stockholders' equity is $50.5 million and the book value per share of common stock of $14.98.
Terry Trexler, President, stated, "The primary reason that sales and net income increased was due to the severe supply chain challenges experienced during in the first six months of fiscal 2022 that impacted our ability to complete and deliver homes to customers. During the first six months of fiscal 2023, the supply chain challenges eased compared to the prior period and we were able to complete and deliver more retail customers' homes, which included us selling thirty-nine (39) ($6,558,882) new homes during the first six months of 2023 from other manufacturers, to help reduce our long backlog. Although net sales increased during the three and six months ended May 6, 2023, as compared to the same period last year, we continue to experience limitations being placed on certain key production materials from suppliers, the delay or lack of key components from vendors as well as back orders, delayed shipments, price increases and labor shortages. These issues continue to cause delays in the completion of the homes at the manufacturing facility and the set-up process of retail homes in the field, resulting in decreased net sales due to our inability to timely deliver and set up homes to customers. We expect that these challenges will continue throughout 2023 and potentially beyond. The Company also continues to experience inflation in some building products resulting in increases to our material and labor costs which may increase the wholesale and retail selling prices of our homes. Additionally, potential customers may delay or defer purchasing decisions considering the rising interest rate environment.
The current demand for affordable manufactured housing in Florida and the U.S. is slowing because of the increased interest rate environment driven by the Federal Reserve. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2022 through April 2023 were a decline of approximately 10% from the same period last year.
Maintaining our strong financial position is vital for future growth and success. Our many years of experience in the Florida market, combined with home buyers' increased need for more affordable housing, should serve the Company well in the coming years. Management remains convinced that our specific geographic market is one of the best long-term growth areas in the country."
On June 5, 2023, the Company will celebrate its 56th anniversary in business specializing in the design and production of quality, affordable manufactured and modular homes. With multiple retail sales centers in Florida for over 33 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.
MANAGEMENT WILL NOT HOLD A CONFERENCE CALL. IF YOU HAVE ANY QUESTIONS, PLEASE CALL TERRY OR TOM TREXLER @ 800-476-6624 EXT 121 OR TERRY@NOBILITYHOMES.COM OR TOM@NOBILITYHOMES.COM
Certain statements in this report are unaudited or forward-looking statements within the meaning of the federal securities laws. Although Nobility believes that the amounts and expectations reflected in such forward-looking statements are based on reasonable assumptions, there are risks and uncertainties that may cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the potential adverse impact on our business caused by competitive pricing pressures at both the wholesale and retail levels, inflation, increasing material costs (including forest based products) or availability of materials due to supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), changes in market demand, increase in interest rates, availability of financing for retail and wholesale purchasers, consumer confidence, adverse weather conditions that reduce sales at retail centers, the risk of manufacturing plant shutdowns due to storms or other factors, the impact of marketing and cost-management programs, reliance on the Florida economy, impact of labor shortage, impact of materials shortage, increasing labor cost, cyclical nature of the manufactured housing industry, impact of rising fuel costs, catastrophic events impacting insurance costs, availability of insurance coverage for various risks to Nobility, market demographics, management's ability to attract and retain executive officers and key personnel, increased global tensions, market disruptions resulting from terrorist attacks or other events such as a pandemic, any armed conflict involving the United States and the impact of inflation.
NOBILITY HOMES, INC.
Condensed Consolidated Balance Sheets
May 6, | November 5, | |||||||
2023 | 2022 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 15,167,269 | $ | 16,653,449 | ||||
Certificates of deposit | 7,861,355 | 3,903,888 | ||||||
Short-term investments | 460,054 | 589,071 | ||||||
Accounts receivable - trade | 988,570 | 1,288,645 | ||||||
Note receivable | 23,905 | 23,905 | ||||||
Mortgage notes receivable | 4,286 | 16,191 | ||||||
Inventories | 23,329,664 | 23,457,493 | ||||||
Prepaid expenses and other current assets | 1,723,686 | 2,172,675 | ||||||
Total current assets | 49,558,789 | 48,105,317 | ||||||
Property, plant and equipment, net | 8,236,805 | 7,915,695 | ||||||
Note receivable, less current portion | 5,181 | 16,599 | ||||||
Mortgage notes receivable, less current portion | 143,142 | 131,514 | ||||||
Other investments | 1,897,341 | 1,848,893 | ||||||
Property held for resale | 26,590 | - | ||||||
Deferred income taxes | 126,475 | 43,778 | ||||||
Cash surrender value of life insurance | 4,231,085 | 4,143,035 | ||||||
Other assets | 156,287 | 156,287 | ||||||
Total assets | $ | 64,381,695 | $ | 62,361,118 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,234,033 | $ | 1,119,188 | ||||
Accrued compensation | 1,235,691 | 1,132,423 | ||||||
Accrued expenses and other current liabilities | 1,674,052 | 1,742,696 | ||||||
Income taxes payable | 995,286 | 229,200 | ||||||
Customer deposits | 8,773,811 | 10,214,078 | ||||||
Total current liabilities | 13,912,873 | 14,437,585 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, $.10 par value, 500,000 shares | ||||||||
authorized; none issued and outstanding | - | - | ||||||
Common stock, $.10 par value, 10,000,000 | ||||||||
shares authorized; 5,364,907 shares issued; | ||||||||
3,368,829 shares outstanding, respectively 3,368,829 shares outstanding, respectively | 536,491 | 536,491 | ||||||
Additional paid in capital | 10,906,313 | 10,849,687 | ||||||
Retained earnings | 65,986,716 | 63,441,812 | ||||||
Less treasury stock at cost, 1,996,078 and | ||||||||
1,993,995 shares, respectively | (26,960,698 | ) | (26,904,457 | ) | ||||
Total stockholders' equity | 50,468,822 | 47,923,533 | ||||||
Total liabilities and stockholders' equity | $ | 64,381,695 | $ | 62,361,118 | ||||
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
May 6, | May 7, | May 6, | May 7, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 16,779,597 | $ | 10,645,046 | $ | 33,944,350 | $ | 21,453,316 | ||||||||
Cost of sales | (10,826,286 | ) | (7,623,128 | ) | (22,119,443 | ) | (15,703,170 | ) | ||||||||
Gross profit | 5,953,311 | 3,021,918 | 11,824,907 | 5,750,146 | ||||||||||||
Selling, general and administrative expenses | (2,215,198 | ) | (1,378,606 | ) | (4,250,675 | ) | (2,795,149 | ) | ||||||||
Operating income | 3,738,113 | 1,643,312 | 7,574,232 | 2,954,997 | ||||||||||||
Other income (loss): | ||||||||||||||||
Interest income | 169,982 | 39,577 | 310,015 | 114,257 | ||||||||||||
Undistributed earnings in joint venture - Majestic 21 | 25,622 | 12,665 | 48,448 | 25,222 | ||||||||||||
Proceeds received under escrow arrangement | 94,165 | 115,454 | 94,165 | 233,499 | ||||||||||||
Decrease in fair value of equity investment | (111,075 | ) | (19,681 | ) | (129,017 | ) | (23,774 | ) | ||||||||
Gain on disposal of property, plant and equipment | - | 88,936 | - | 88,936 | ||||||||||||
Miscellaneous | 18,590 | 12,352 | 26,362 | 25,908 | ||||||||||||
Total other income | 197,284 | 249,303 | 349,973 | 464,048 | ||||||||||||
Income before provision for income taxes | 3,935,397 | 1,892,615 | 7,924,205 | 3,419,045 | ||||||||||||
Income tax expense | (1,076,548 | ) | (435,789 | ) | (2,008,389 | ) | (805,185 | ) | ||||||||
Net income | $ | 2,858,849 | $ | 1,456,826 | $ | 5,915,816 | $ | 2,613,860 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 3,370,157 | 3,476,508 | 3,370,534 | 3,504,655 | ||||||||||||
Diluted | 3,373,036 | 3,487,516 | 3,372,417 | 3,515,994 | ||||||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.85 | $ | 0.42 | $ | 1.76 | $ | 0.75 | ||||||||
Diluted | $ | 0.85 | $ | 0.42 | $ | 1.75 | $ | 0.74 | ||||||||
SOURCE: Nobility Homes, Inc.
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