SOURCE: Nobility Homes, Inc.

Nobility Homes, Inc.

June 10, 2016 17:33 ET

Nobility Homes, Inc. Announces Increase in Sales and Earnings for Its Second Quarter 2016

OCALA, FL--(Marketwired - Jun 10, 2016) - Today Nobility Homes, Inc. (OTCQX: NOBH) announced increased sales and earnings results for its second quarter ended April 30, 2016. Sales for second quarter 2016 were up 21% to $8,115,840 as compared to $6,706,118 recorded in second quarter 2015. Income from operations was up 44% to $953,869 versus $660,719 last year. Net income after taxes was $3,671,881 as compared to $680,553 last year. On March 31, 2016, the Company sold its limited partnership interest in CRF III, Ltd. ("Cypress Creek"), a retirement community which resulted in a gain of $3,990,000. We also received revenue of $788,566 in the second quarter of 2016 under an escrow arrangement related to the Finance Revenue Sharing Agreement between 21st Mortgage Corporation, Prestige Home Centers, Inc. and Majestic Homes Inc. Diluted earnings per share were $0.91 per share compared to $.17 per share last year.

For the first six months of fiscal 2016, sales were up 26% to $15,489,890 as compared to $12,282,918 for the first six months of 2015. Income from operations was up 78% to $1,929,610 versus $1,085,539 last year. Net income after taxes was $4,350,282 compared to $1,160,341 last year. Diluted earnings per share were $1.08 per share compared to $.29 per share last year.

Nobility's financial position for the first six months of 2016 remains very strong with cash and cash equivalents and short term investments of $20,614,116 and no outstanding debt. During the second quarter of 2016 the Company received a distribution from the Majestic 21 partnership with 21st Mortgage Corporation in the amount of $1,000,005. Working capital is $29,426,668 and our ratio of current assets to current liabilities is 9.1:1. Stockholders' equity is $43,322,379 and the book value per share of common stock outstanding increased to $10.77. 

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida and the U.S. is improving. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2015 through April 2016 were up approximately 27% from the same period last year. Our sales and earnings continue to be affected by the challenging housing environment, the uncertainty of the U.S. and world economy, employment levels, consumer confidence and, in particular, the lack of available retail and wholesale financing. Constrained consumer credit and the lack of lenders in the industry, partly as a result of an increase in government regulations, have limited many affordable manufactured housing buyers from purchasing homes.

We understand that during this uncertain economic environment, maintaining our strong financial position is vital for future growth and success. Because of the recent years of very challenging business conditions in our market area, management will continue to evaluate all expenses and react in a manner consistent with maintaining our strong financial position, while exploring opportunities to expand our distribution and manufacturing operations.

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."

The Company has specialized for over 49 years in the design and production of quality, affordable manufactured homes at its plant located in central Florida. With multiple retail sales centers, an insurance subsidiary, and an investment in a retirement manufactured home community, 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 221 OR TERRY@NOBILITYHOMES.COM OR TOM@NOBILITYHOMES.COM

Certain statements in this report are forward-looking statements within the meaning of the federal securities laws. Although Nobility believes that the 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, competitive pricing pressures at both the wholesale and retail levels, increasing material costs, continued excess retail inventory, increase in repossessions, changes in market demand, changes 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 or other attack and any armed conflict involving the United States and the impact of inflation.

   
NOBILITY HOMES, INC.  
Consolidated Balance Sheets  
             
    April 30,     October 31,  
    2016     2015  
    (Unaudited)        
Assets            
Current assets:            
  Cash and cash equivalents   $ 20,178,789     $ 16,769,292  
  Short-term investments     435,327       462,578  
  Accounts receivable - trade     2,411,196       2,937,922  
  Note receivable     500,000       -  
  Mortgage notes receivable     9,464       9,851  
  Income tax receivable     -       335  
  Inventories     6,839,285       6,019,705  
  Pre-owned homes     1,146,105       1,366,974  
  Prepaid expenses and other current assets     1,039,387       826,180  
  Deferred income taxes     490,376       655,193  
    Total current assets     33,049,929       29,048,030  
                 
Property, plant and equipment, net     4,654,212       3,964,878  
Pre-owned homes     2,734,203       2,724,190  
Interest receivable     7,596       -  
Note receivable, less current portion     2,530,000       -  
Mortgage notes receivable, long term     175,985       177,644  
Other investments     1,312,834       2,243,729  
Deferred income taxes     -       1,210,630  
Cash surrender value of life insurance     3,005,468       2,915,469  
Other assets     156,287       156,287  
    Total assets   $ 47,626,514     $ 42,440,857  
                 
Liabilities and Stockholders' Equity                
Current liabilities:                
  Accounts payable   $ 624,645     $ 704,467  
  Accrued compensation     385,489       390,573  
  Accrued expenses and other current liabilities     938,612       926,204  
  Income taxes payable     414,284       -  
  Customer deposits     1,260,231       1,323,861  
    Total current liabilities     3,623,261       3,345,105  
                 
Deferred income taxes     680,874       -  
    Total liabilities     4,304,135       3,345,105  
                 
Commitments and contingent liabilities                
                 
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     536,491       536,491  
  Additional paid in capital     10,661,425       10,650,723  
  Retained earnings     41,843,359       37,493,077  
  Accumulated other comprehensive income     220,473       247,724  
  Less treasury stock at cost, 1,341,200 shares in 2016 and 1,333,338 shares in 2015     (9,939,369 )     (9,832,263 )
    Total stockholders' equity     43,322,379       39,095,752  
    Total liabilities and stockholders' equity   $ 47,626,514     $ 42,440,857  
   
   
NOBILITY HOMES, INC.  
Consolidated Statements of Comprehensive Income  
Unaudited  
                         
    Three Months Ended     Six Months Ended  
    April 30,     May 2,     April 30,     May 2,  
    2016     2015     2016     2015  
                         
Net sales   $ 8,115,840     $ 6,706,118     $ 15,489,890     $ 12,282,918  
                                 
Cost of goods sold     (6,150,272 )     (5,167,950 )     (11,767,887 )     (9,571,981 )
                                 
    Gross profit     1,965,568       1,538,168       3,722,003       2,710,937  
                                 
Selling, general and administrative expenses     (1,011,699 )     (877,449 )     (1,792,393 )     (1,625,398 )
                                 
    Operating income     953,869       660,719       1,929,610       1,085,539  
                                 
Other income (loss):                                
  Interest income     22,044       16,852       34,091       29,972  
  Undistributed earnings in joint venture - Majestic 21     35,702       35,237       69,110       68,815  
  Proceeds received under escrow arrangement     788,566       -       788,566       -  
  Losses from investments in retirement community limited partnerships     -       (51,657 )     -       (57,350 )
  Gain on sale of investment in retirement community     3,990,000       -       3,990,000       -  
  Miscellaneous     10,076       23,696       19,845       38,866  
    Total other income (loss)     4,846,388       24,128       4,901,612       80,303  
                                 
Income before provision for income taxes     5,800,257       684,847       6,831,222       1,165,842  
                                 
Income tax expense     (2,128,376 )     (4,294 )     (2,480,940 )     (5,501 )
                                 
    Net income     3,671,881       680,553       4,350,282       1,160,341  
                                 
Other comprehensive income (loss)                                
  Unrealized investment gain (loss)     42,388       41,941       (27,251 )     (29,044 )
                                 
  Comprehensive income   $ 3,714,269     $ 722,494     $ 4,323,031     $ 1,131,297  
                                 
Weighed average number of shares outstanding:                                
  Basic     4,023,439       4,061,853       4,024,378       4,062,883  
  Diluted     4,024,181       4,062,423       4,025,069       4,063,314  
                                 
Net income per share:                                
  Basic   $ 0.91     $ 0.02     $ 1.08     $ 0.29  
  Diluted   $ 0.91     $ 0.17     $ 1.08     $ 0.29  
                                   

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