Nobility Homes, Inc. Announces Increased Sales and Earnings for Its Fiscal Year 2019

OCALA, FL / ACCESSWIRE / December 19, 2019 / Today, Nobility Homes, Inc. (OTCQX:NOBH) announced increased sales and earnings results for its fiscal year ended November 2, 2019. Sales for fiscal year 2019 were up 11% to $47.3 million as compared to $42.8 million recorded in fiscal year 2018. Income from operations, up 45% for fiscal year 2019, was $8.3 million versus $5.7 million in the same period a year ago. Net income after taxes was $8.8 million as compared to $5.0 million for the same period last year. In June 2019 the Company sold its former Pace retail sales center property located in Pace, Florida for total net proceeds of $1.1 million and in October 2019 the Company sold its interest in Walden Woods South for total net proceeds of $1.5 million. Diluted earnings per share for fiscal year 2019 were $2.32 per share compared to $1.27 per share last year.

For the fourth quarter of fiscal 2019, sales were $11.8 million as compared to $12.8 million in the fourth quarter of last fiscal year. Income from operations for the fourth quarter of 2019 was up 6% to $2.1 million versus $2.0 million in the same period last year. Net income after taxes was $2.9 million versus last year’s results of $1.6 million. Diluted earnings per share for the fourth quarter were $0.79 per share versus earnings of $0.40 per share last year.

Nobility’s financial position during fiscal year 2019 remained very strong with cash and cash equivalents, short term investments and certificates of deposit of $33.2 million and no outstanding debt. Working capital is $38.1 million and our ratio of current assets to current liabilities is 5.2:1. Stockholders’ equity is $49.5 million and the book value per share of common stock increased to $13.50.

Terry Trexler, President, stated, “The demand for affordable manufactured housing in Florida continues to be good. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2018 through October 2019 were up approximately 17% from the same period last year. Constrained consumer credit and the lack of lenders in our industry, partly as a result of an increase in government regulations, still affects our results by limiting many affordable manufactured housing buyers from purchasing homes. However, legislation may help improve this situation in the future.

Maintaining our strong financial position is vital for future growth and success. Because of very challenging business conditions during economic recessions 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”.

On June 5, 2019 the Company celebrated its 52nd anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers 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 [email protected] OR [email protected]

Certain statements in this report are unaudited or 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, uncertain economic conditions, 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, possible labor shortages, possible materials shortages, increasing labor cost, cyclical nature of the manufactured housing industry, impact of 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, impact of mandated tariffs on material prices, market disruptions resulting from terrorist or other attack and any armed conflict involving the United States and the impact of inflation.

NOBILITY HOMES, INC.
Condensed Consolidated Balance Sheets

             
 
  November 2,     November 3,  
 
  2019     2018  
 
  (Unaudited)        
Assets
           
Current assets:
           
Cash and cash equivalents
  22,533,965     28,364,861  
Certificates of Deposit
    10,153,575       6,034,093  
Short-term investments
    521,283       537,767  
Accounts receivable – trade
    1,351,838       1,783,073  
Note receivable
    83,231       46,444  
Mortgage notes receivable
    17,896       15,664  
Inventories
    10,616,778       7,270,550  
Pre-owned homes, net
    331,103       933,640  
Prepaid expenses and other current assets
    1,399,527       1,090,152  
Total current assets
    47,009,196       46,076,244  
 
               
Property, plant and equipment, net
    4,823,879       4,763,566  
Pre-owned homes, net
    808,128       473,191  
Note receivable, less current portion
    43,769       46,265  
Mortgage notes receivable, less current portion
    232,148       236,402  
Other investments
    1,649,273       1,571,166  
Property held for sale
          213,437  
Deferred income taxes
    80,405       40,156  
Cash surrender value of life insurance
    3,617,975       3,437,974  
Other assets
    156,287       156,287  
Total assets
  58,421,060     57,014,688  
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Accounts payable
  1,111,216     1,085,095  
Accrued compensation
    748,626       869,657  
Accrued expenses and other current liabilities
    2,055,949       1,349,381  
Income taxes payable
    2,016,132       579,786  
Customer deposits
    3,022,818       4,064,268  
Total current liabilities
    8,954,741       7,948,187  
 
               
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;
               
3,664,070 and 3,873,731 outstanding, respectively
    536,491       536,491  
Additional paid in capital
    10,687,662       10,670,848  
Retained earnings
    55,298,754       50,352,546  
Accumulated other comprehensive income
    389,164       390,407  
Less treasury stock at cost, 1,700,837 shares in 2019 and
               
1,491,176 shares in 2018
    (17,445,752 )     (12,883,791 )
Total stockholders’ equity
    49,466,319       49,066,501  
Total liabilities and stockholders’ equity
  58,421,060     57,014,688  
 
               

NOBILITY HOMES, INC.
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)

             
 
  Three Months Ended     Twelve Months Ended  
 
  Nov 2,     Nov 3,     Nov 2,     Nov 3,  
 
  2019     2018     2019     2018  
 
                       
Net sales
  11,780,803     12,796,547     47,348,631     42,812,265  
 
                               
Cost of sales
    (8,188,674 )     (9,386,554 )     (33,695,631 )     (32,132,238 )
 
                               
Gross profit
    3,592,129       3,409,993       13,653,000       10,680,027  
 
                               
Selling, general and administrative expenses
    (1,492,146 )     (1,431,663 )     (5,352,319 )     (4,957,201 )
 
                               
Operating income
    2,099,983       1,978,330       8,300,681       5,722,826  
 
                               
Other income:
                               
Interest income
    124,147       145,144       556,142       362,121  
Undistributed earnings in joint venture – Majestic 21
    17,552       21,220       78,107       100,137  
Proceeds received under escrow arrangement
    89,763             379,104       172,911  
Gain on sale of assets
    1,510,000             2,390,129       203,512  
Miscellaneous
    41,652       21,288       75,366       43,955  
Total other income
    1,783,114       187,652       3,478,848       882,636  
 
                               
Income before provision for income taxes
    3,883,097       2,165,982       11,779,529       6,605,462  
 
                               
Income tax expense
    (971,312 )     (602,275 )     (2,969,109 )     (1,641,830 )
 
                               
Net income
    2,911,785       1,563,707       8,810,420       4,963,632  
 
                               
Other comprehensive income (loss)
                               
Unrealized investment income (loss), net of tax effect
    45,432       28,730       5,024       (21,826 )
 
                               
Comprehensive income
  2,957,217     1,592,437     8,815,444     4,941,806  
 
                               
Weighted average number of shares outstanding:
                               
Basic
    3,666,790       3,873,731       3,803,400       3,912,188  
Diluted
    3,668,170       3,876,034       3,804,673       3,914,312  
 
                               
Net income per share:
                               
Basic
  0.79     0.40     2.32     1.27  
Diluted
  0.79     0.40     2.32     1.27  
 
                               

 SOURCE: Nobility Homes, Inc.

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