SOURCE: Nobility Homes, Inc.

Nobility Homes, Inc.

September 13, 2016 13:05 ET

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

OCALA, FL--(Marketwired - Sep 13, 2016) - Today Nobility Homes, Inc. (OTCQX: NOBH) announced increased sales and earnings results for its third quarter ended July 30, 2016. Sales for third quarter 2016 were up 39% to $9,779,621 as compared to $7,059,263 recorded in third quarter 2015. Income from operations was up 58% to $1,240,492 versus $787,272 last year. Net income after taxes was $894,271 as compared to $746,770 last year. Diluted earnings per share were $0.22 per share compared to $0.18 per share last year.

For the first nine months of fiscal 2016, sales were up 31% to $25,269,511 as compared to $19,342,181 for the first nine months of 2015. Income from operations was up 69% to $3,170,102 versus $1,872,811 last year. Net income after taxes was $5,244,553 compared to $1,907,111 last year. Diluted earnings per share were $1.30 per share compared to $0.47 per share last year.

Nobility's financial position for the first nine months of 2016 remains very strong with cash and cash equivalents and short term investments of $22,730,960 and no outstanding debt. Working capital is $31,353,487 and our ratio of current assets to current liabilities is 9.7:1. Stockholders' equity is $44,154,178 and the book value per share of common stock outstanding increased to $10.98. 

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 July 2016 were up approximately 22% 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  
             
    July 30,     October 31,  
    2016     2015  
    (Unaudited)        
Assets                
Current assets:                
  Cash and cash equivalents   $ 22,308,809     $ 16,769,292  
  Short-term investments     422,151       462,578  
  Accounts receivable - trade     3,077,283       2,937,922  
  Note receivable     500,000       -  
  Mortgage notes receivable     9,164       9,851  
  Income tax receivable     -       335  
  Inventories     6,280,367       6,019,705  
  Pre-owned homes     1,245,653       1,366,974  
  Prepaid expenses and other current assets     495,754       826,180  
  Deferred income taxes     613,568       655,193  
    Total current assets     34,952,749       29,048,030  
                 
Property, plant and equipment, net     4,702,882       3,964,878  
Pre-owned homes     2,283,336       2,724,190  
Interest receivable     27,997       -  
Note receivable, less current portion     2,030,000       -  
Mortgage notes receivable, long term     175,135       177,644  
Other investments     1,341,263       2,243,729  
Deferred income taxes     -       1,210,630  
Cash surrender value of life insurance     3,050,468       2,915,469  
Other assets     156,287       156,287  
    Total assets   $ 48,720,117     $ 42,440,857  
                 
Liabilities and Stockholders' Equity                
Current liabilities:                
  Accounts payable   $ 413,320     $ 704,467  
  Accrued compensation     378,862       390,573  
  Accrued expenses and other current liabilities     926,971       926,204  
  Income taxes payable     675,037       -  
  Customer deposits     1,205,072       1,323,861  
    Total current liabilities     3,599,262       3,345,105  
                 
Deferred income taxes     966,677       -  
    Total liabilities     4,565,939       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     10,662,414       10,650,723  
  Retained earnings     42,737,630       37,493,077  
  Accumulated other comprehensive income     207,297       247,724  
  Less treasury stock at cost, 1,344,700 shares in 2016 and 1,333,338 shares in 2015    
(9,989,654
)    
(9,832,263
)
    Total stockholders' equity     44,154,178       39,095,752  
    Total liabilities and stockholders' equity   $ 48,720,117     $ 42,440,857  
                 
                 
   
NOBILITY HOMES, INC.  
Consolidated Statements of Comprehensive Income  
Unaudited  
                         
    Three Months Ended     Nine Months Ended  
    July 30,     August 1,     July 30,     August 1,  
    2016     2015     2016     2015  
                                 
Net sales   $ 9,779,621     $ 7,059,263     $ 25,269,511     $ 19,342,181  
                                 
Cost of goods sold     (7,599,070 )     (5,495,061 )     (19,366,957 )     (15,067,042 )
                                 
    Gross profit     2,180,551       1,564,202       5,902,554       4,275,139  
                                 
Selling, general and administrative expenses     (940,059 )     (776,930 )     (2,732,452 )     (2,402,328 )
                                 
    Operating income     1,240,492       787,272       3,170,102       1,872,811  
                                 
Other income (loss):                                
  Interest income     43,155       10,437       77,246       40,409  
  Undistributed earnings in joint venture - Majestic 21     28,429       37,212       97,539       106,027  
  Proceeds received under escrow arrangement     -       -       788,566       -  
  Losses from investments in retirement community limited partnerships    
-
     
(89,053
)    
-
     
(146,403
)
  Gain on sale of investment in retirement community     -       -       3,990,000       -  
  Miscellaneous     5,559       1,030       25,404       39,896  
    Total other income (loss)     77,143       (40,374 )     4,978,755       39,929  
                                 
Income before provision for income taxes     1,317,635       746,898       8,148,857       1,912,740  
                                 
Income tax expense     (423,364 )     (128 )     (2,904,304 )     (5,629 )
                                 
    Net income     894,271       746,770       5,244,553       1,907,111  
                                 
Other comprehensive income (loss)                                
  Unrealized investment gain (loss)     (13,176 )     28,035       (40,427 )     (1,009 )
                                 
  Comprehensive income   $ 881,095     $ 774,805     $ 5,204,126     $ 1,906,102  
                                 
Weighed average number of shares outstanding:                                
  Basic     4,022,311       4,048,554       4,023,689       4,058,106  
  Diluted     4,023,714       4,048,994       4,024,739       4,058,540  
                                 
Net income per share:                                
  Basic   $ 0.22     $ 0.18     $ 1.30     $ 0.47  
  Diluted   $ 0.22     $ 0.18     $ 1.30     $ 0.47  
                                 

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