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Skyline Reports Third Quarter And First Nine Months Results

ELKHART, Ind., April 14, 2017 /PRNewswire/ -- For the third quarter of fiscal 2017, Skyline Corporation (NYSE MKT: SKY) ("Skyline" or the "Corporation") reported the following results:

  • Net sales from continuing operations of $51,640,000, an increase of 8.3% over net sales of $47,697,000 from continuing operations in the year ago quarter.  In June 2016, Skyline commenced operation of a leased facility in Elkhart, Indiana which contributed $4,300,000 of net sales and incurred a loss of $323,000 in the current quarter.
  • Loss from continuing operations of $2,447,000 as compared to a loss of $514,000 from continuing operations in the third quarter of fiscal 2016.  Operating results were adversely affected by increased manufacturing labor costs associated with hiring and training employees at facilities which are increasing production output.  In addition, newly-hired, inexperienced employees contributed to an increase in higher workers' compensation and warranty costs for the period.
  • No income or loss from discontinued operations as compared to a loss of $6,000 from discontinued operations in the third quarter of fiscal 2016.
  • Net loss of $2,447,000 or $0.29 per share as compared to a net loss of $520,000 or $0.06 per share in the third quarter of fiscal 2016.

For the first nine months of fiscal 2017, the Corporation reported the following results:

  • Net sales from continuing operations of $177,042,000, an increase of 14.1% over net sales of $155,123,000 from continuing operations in the year ago first three quarters.  Net sales attributable to the Elkhart facility during this period were $10,554,000 while losses at the Elkhart operations were $1,605,000.
  • Losses from continuing operations of $2,298,000 as compared to income of $339,000 from continuing operations in the first nine months of fiscal 2016.  Similar to the third quarter, operating results were adversely affected by increased manufacturing labor costs associated with hiring and training employees at facilities which are increasing production output.  In addition, newly-hired, inexperienced employees contributed to an increase in higher workers' compensation costs for the period.  Net income in the year ago first three quarters included a $250,000 payment on an account that had been previously reserved.
  • No income or loss from discontinued operations as compared to income of $13,000 from discontinued operations in the first nine months of fiscal 2016.
  • Net loss of $2,298,000 or $0.27 per share as compared to a net income of $352,000 or $0.04 per share in the first three quarters of fiscal 2016.

"While we are disappointed with our performance in the third quarter, our recent decision to close two underperforming plants will eliminate the persistent losses that they have incurred" said Richard W. Florea, President and Chief Executive Officer.  "The closure of these facilities will permit us to reallocate resources to focus on improving the profitability of our remaining plants."

Forward-Looking Statements

Information contained in this press release contains "forward-looking statements," including but not limited to statements related to the suspension of operations at the Elkhart and Mansfield facilities and the effects of such action, which are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially.  These risks and uncertainties include, but are not limited to, possible adverse consequences to the Corporation in connection with the suspension of operations at the facility, general business and economic conditions, and other factors, risks, and uncertainties contained in the Corporation's other filings with the Securities and Exchange Commission.  For a further list and description of such risks, see the reports and other filings made by the Corporation with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended May 31, 2016.  The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Skyline Corporation and Subsidiary Companies

Consolidated Balance Sheets

 (Dollars in thousands)


February 28, 2017


May 31, 2016


(Unaudited)



Current Assets:




Cash

$    5,232


$    7,659

Accounts receivable

14,857


15,153

Inventories

13,619


11,381

Workers' compensation security deposit

690


1,294

Other current assets

776


331





Total Current Assets

35,174


35,818





Property, Plant and Equipment, at Cost:




Land

2,996


2,996

Buildings and improvements

37,279


36,624

Machinery and equipment

17,364


16,977


57,639


56,597

Less accumulated depreciation

45,690


44,952


11,949


11,645





Other Assets

7,241


7,515





Total Assets

$   54,364


$   54,978





Current Liabilities:




Accounts payable, trade

$    3,776


$    3,921

Accrued salaries and wages

2,555


3,557

Accrued marketing programs

3,090


1,767

Accrued warranty

5,686


4,817

Customer deposits

1,664


1,521

Other accrued liabilities

2,918


2,448





Total Current Liabilities

19,689


18,031





Long-Term Liabilities:




Deferred compensation expense

4,921


5,002

Accrued warranty

2,500


2,500

Life insurance loans

4,312


4,312

Total Long-Term Liabilities

11,733


11,814





Shareholders' Equity:




Common stock, $.0277 par value, 15,000,000 shares




authorized; issued 11,217,144 shares

312


312

Additional paid-in capital

5,117


5,010

Retained earnings

83,257


85,555

Treasury stock, at cost, 2,825,900 shares

(65,744)


(65,744)

Total Shareholders' Equity

22,942


25,133





Total Liabilities and Shareholders' Equity

$   54,364


$   54,978

 

Skyline Corporation and Subsidiary Companies

Consolidated Statements of Operations

For the Three-Months and Nine-Months Ended February 28, 2017 and February 29, 2016

(Dollars in thousands, except share and per share amounts)




Three-Months Ended


Nine-Months Ended


2017


2016


2017


2016


(Unaudited)


(Unaudited)





OPERATIONS







Net sales

$  51,640


$  47,697


$177,042


$155,123

Cost of sales

48,421


42,887


162,013


138,443

Gross profit

3,219


4,810


15,029


16,680

Selling and administrative expenses

5,581


5,246


17,070


16,105

Operating (loss) income

(2,362)


(436)


(2,041)


575

Interest expense

(85)


(78)


(257)


(236)

(Loss) income from continuing operations








before income taxes

(2,447)


(514)


(2,298)


339

Income tax expense

-


-


-


-

(Loss) income from continuing operations

(2,447)


(514)


(2,298)


339

(Loss) income from discontinued operations,








net of taxes

-


(6)


-


13

Net (loss) income

$  (2,447)


$     (520)


$  (2,298)


$       352

Basic and diluted (loss) income per share

$      (.29)


$      (.06)


$      (.27)


$        .04

Basic and diluted (loss) income per share








from continuing operations

$      (.29)


$      (.06)


$      (.27)


$        .04

Basic and diluted (loss) income per share








from discontinued operations

$           -


$           -


$           -


$           -

Weighted average number of common shares








outstanding:








Basic

8,391,244


8,391,244


8,391,244


8,391,244

Diluted

8,391,244


8,391,244


8,391,244


8,391,244

 

 

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