Nobility Homes, Inc. Announces Sales and Earnings for Its First Quarter 2023
Nobility Homes, Inc. (OTCQX:NOBH) reported a strong first quarter for 2023, with sales rising 59% to $17.2 million compared to $10.8 million in Q1 2022. Income from operations surged 192% to $3.8 million, while net income increased 164% to $3.1 million. Diluted earnings per share improved to $0.91 from $0.33. The company maintains a robust financial position with cash and equivalents of $24.3 million and no debt. A one-time cash dividend of $1.00 per share will be distributed to shareholders on April 3, 2023. However, challenges such as supply chain issues and rising interest rates could impact future growth.
- Sales increased by 59% to $17.2 million.
- Income from operations rose by 192% to $3.8 million.
- Net income up 164% to $3.1 million.
- Diluted EPS increased to $0.91 from $0.33.
- Cash and equivalents stand at $24.3 million with no debt.
- Declared a one-time cash dividend of $1.00 per share.
- Challenges in supply chain have caused delays in home deliveries.
- Inflation and rising interest rates may impact future sales.
- Potential for deferred purchasing decisions from customers.
OCALA, FL / ACCESSWIRE / March 10, 2023 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its first quarter ended February 4, 2023. Sales for the first quarter of 2023 increased
Nobility's financial position during first quarter 2023 remains very strong with cash and cash equivalents, certificates of deposit and short-term investments of
The Board of Directors declared a one-time cash dividend of
The Company has no defined dividend policy. The Board of Directors maintains the authority to declare distributions at their discretion. The Board performs a thorough and extensive evaluation of the Company's balance sheet, cash flow, operating performance, and future earnings prospects when considering the declaration of any common dividend.
Terry Trexler, President, stated, "The current demand for affordable manufactured housing in Florida and the U.S. is slowing as a result of the increased interest rate environment driven by the Federal Reserve. Although net sales increased during the three months ended February 4, 2023, as compared to the same period last year, we continued to experience some 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 supply chain issues have caused 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 setup homes to customers. We expect that these challenges will continue for most of the fiscal year 2023 or until the industry supply chain normalizes. The Company has continued 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. In addition, potential customers may delay or defer purchasing decisions in light of the rising interest rate environment. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2022 through January 2023 were approximately a breakeven 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, 2022, the Company celebrated its 55th 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 32 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 the COVID-19 pandemic or other health pandemics, 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 or other attack, any armed conflict involving the United States and the impact of inflation.
NOBILITY HOMES, INC. Condensed Consolidated Balance Sheets | ||||||||
| February 4, | November 5, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 17,849,343 | $ | 16,653,449 | ||||
Certificates of deposit | 5,853,611 | 3,903,888 | ||||||
Short-term investments | 571,129 | 589,071 | ||||||
Accounts receivable - trade | 1,923,352 | 1,288,645 | ||||||
Note receivable | 23,905 | 23,905 | ||||||
Mortgage notes receivable | 4,197 | 16,191 | ||||||
Inventories | 23,319,061 | 23,457,493 | ||||||
Prepaid expenses and other current assets | 1,925,767 | 2,172,675 | ||||||
Total current assets | 51,470,365 | 48,105,317 | ||||||
Property, plant and equipment, net | 8,102,965 | 7,915,695 | ||||||
Note receivable, less current portion | 10,898 | 16,599 | ||||||
Mortgage notes receivable, less current portion | 143,320 | 131,514 | ||||||
Other investments | 1,871,719 | 1,848,893 | ||||||
Deferred income taxes | 43,778 | 43,778 | ||||||
Cash surrender value of life insurance | 4,187,060 | 4,143,035 | ||||||
Other assets | 156,287 | 156,287 | ||||||
Total assets | $ | 65,986,392 | $ | 62,361,118 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 798,894 | $ | 1,119,188 | ||||
Accrued compensation | 1,054,664 | 1,132,423 | ||||||
Accrued expenses and other current liabilities | 1,873,724 | 1,742,696 | ||||||
Income taxes payable | 1,161,041 | 229,200 | ||||||
Customer deposits | 10,082,580 | 10,214,078 | ||||||
Total current liabilities | 14,970,903 | 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; | ||||||||
3,370,912 shares outstanding, respectively | 536,491 | 536,491 | ||||||
Additional paid in capital | 10,884,676 | 10,849,687 | ||||||
Retained earnings | 66,498,779 | 63,441,812 | ||||||
Less treasury stock at cost, 1,993,995 shares | (26,904,457 | ) | (26,904,457 | ) | ||||
Total stockholders' equity | 51,015,489 | 47,923,533 | ||||||
Total liabilities and stockholders' equity | $ | 65,986,392 | $ | 62,361,118 | ||||
| NOBILITY HOMES, INC. Condensed Consolidated Statements of Income (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| February 4, | February 5, | |||||||
| 2023 | 2022 | |||||||
Net sales | $ | 17,164,753 | $ | 10,808,270 | ||||
Cost of sales | (11,293,157 | ) | (8,080,042 | ) | ||||
Gross profit | 5,871,596 | 2,728,228 | ||||||
Selling, general and administrative expenses | (2,035,477 | ) | (1,416,543 | ) | ||||
Operating income | 3,836,119 | 1,311,685 | ||||||
Other income (loss): | ||||||||
Interest income | 140,033 | 74,680 | ||||||
Undistributed earnings in joint venture - Majestic 21 | 22,826 | 12,557 | ||||||
Proceeds received under escrow arrangement | - | 118,045 | ||||||
Decrease in fair value of equity investment | (17,942 | ) | (4,093 | ) | ||||
Miscellaneous | 7,772 | 13,556 | ||||||
Total other income | 152,689 | 214,745 | ||||||
Income before provision for income taxes | 3,988,808 | 1,526,430 | ||||||
Income tax expense | (931,841 | ) | (369,396 | ) | ||||
Net income | $ | 3,056,967 | $ | 1,157,034 | ||||
Weighted average number of shares outstanding: | ||||||||
Basic | 3,370,912 | 3,532,803 | ||||||
Diluted | 3,371,418 | 3,544,584 | ||||||
Net income per share: | ||||||||
Basic | $ | 0.91 | $ | 0.33 | ||||
Diluted | $ | 0.91 | $ | 0.33 | ||||
SOURCE: Nobility Homes, Inc.
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