Nobility Homes, Inc. Announces Sales and Earnings for its Fiscal Year 2022

Rhea-AI Summary

Nobility Homes, Inc. (OTCQX:NOBH) reported strong financial performance for the fiscal year ended November 5, 2022. Sales rose 14% to $51.5 million, with income from operations increasing 37% to $8.4 million. Net income climbed 34% to $7.2 million, resulting in diluted earnings per share of $2.10, up from $1.50. In Q4, sales surged 71% to $16.2 million, and net income jumped 76% to $2.7 million. Nobility maintains a strong financial position with cash and investments of $21.1 million and no debt, reflecting a current ratio of 3.3:1.

Positive

• Sales increased 14% to $51.5 million for FY 2022.
• Net income rose 34% to $7.2 million for FY 2022.
• Q4 sales surged 71% year-over-year to $16.2 million.
• Strong financial position with cash and equivalents of $21.1 million and no debt.

Negative

• Limited production material availability causing delays in home delivery.
• Supply chain issues impacting sales and manufacturing operations are expected to persist into FY 2023.

OCALA, FL / ACCESSWIRE / December 22, 2022 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings results for its fiscal year ended November 5, 2022. Sales for fiscal year 2022 increased 14% to $51.5 million as compared to $45.1 million recorded in fiscal year 2021. Income from operations for fiscal year 2022 increased 37% to $8.4 million versus $6.1 million in the same period a year ago. Net income after taxes increased 34% to $7.2 million as compared to $5.4 million for the same period last year. Diluted earnings per share for fiscal year 2022 were $2.10 per share compared to $1.50 per share last year.

For the fourth quarter of fiscal 2022, sales increased 71% to $16.2 million as compared to $9.5 million in the fourth quarter of last fiscal year. Income from operations for the fourth quarter of 2022 increased 93% to $3.2 million versus $1.7 million in the same period last year. Net income after taxes increased 76% to $2.7 million versus last year's results of $1.6 million. Diluted earnings per share for the fourth quarter were $0.81 per share versus earnings of $0.44 per share last year.

Nobility's financial position during fiscal year 2022 remained very strong with cash and cash equivalents, certificates of deposit and short-term investments of $21.1 million and no outstanding debt. Working capital is $33.7 million and our ratio of current assets to current liabilities is 3.3:1. Stockholders' equity is $47.9 million and the book value per share of common stock increased to $14.22.

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida and the U.S. is starting to reflect the increased interest rate environment by the Federal Reserve. Although net sales increased during the twelve months ended November 5, 2022 as compared to the same period last year, we continued to experience the negative impact of 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 the first six months of fiscal year 2023 or until the industry supply chain normalizes. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2021 through October 2022 were up approximately 23% from the same period last year.

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, 2022, the Company celebrated its 55^th 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 potential supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), 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, any armed conflict involving the United States and the impact of inflation.

NOBILITY HOMES, INC.
Condensed Consolidated Balance Sheets

		November 5,				November 6,
		2022				2021
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	16,653,449			$	36,126,059
Certificates of deposit			3,903,888				2,093,015
Short-term investments			589,071				621,928
Accounts receivable - trade			1,288,645				680,228
Note receivable			23,905				32,825
Mortgage notes receivable			16,191				22,589
Income tax receivable			-				-
Inventories			22,775,239				10,394,288
Pre-owned homes, net			682,254				542,081
Prepaid expenses and other current assets			2,172,675				1,821,267
Total current assets			48,105,317				52,334,280
Property, plant and equipment, net			7,915,695				6,847,780
Pre-owned homes, net			-				755,394
Note receivable, less current portion			16,599				38,895
Mortgage notes receivable, less current portion			131,514				222,459
Mobile home park note receivable			-				72,731
Other investments			1,848,893				1,788,436
Deferred income taxes			43,778				-
Operating lease right of use assets			-				1,597
Cash surrender value of life insurance			4,143,035				3,966,939
Other assets			156,287				156,287
Total assets		$	62,361,118			$	66,184,798
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	1,119,188			$	939,964
Accrued compensation			1,132,423				555,222
Accrued expenses and other current liabilities			1,742,696				1,513,967
Income taxes payable			229,200				89,083
Operating lease obligation			-				1,597
Customer deposits			10,214,078				13,671,092
Total current liabilities			14,437,585				16,770,925
Deferred income taxes			-				99,568
Total liabilities			14,437,585				16,870,493
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 and 3,532,100 shares outstanding, respectively			536,491				536,491
Additional paid in capital			10,849,687				10,766,253
Retained earnings			63,441,812				59,742,759
Less treasury stock at cost, 1,993,995 and
1,832,807 shares, respectively			(26,904,457	)			(21,731,198	)
Total stockholders' equity			47,923,533				49,314,305
Total liabilities and stockholders' equity		$	62,361,118			$	66,184,798

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

		Three Months Ended								Twelve Months Ended
		November 5,				November 6,				November 5,				November 6,
		2022				2021				2022				2021
Net sales		$	16,222,040			$	9,470,027			$	51,522,054			$	45,062,558
Cost of sales			(10,966,808	)			(6,660,707	)			(36,618,616	)			(33,630,362	)
Gross profit			5,255,232				2,809,320				14,903,438				11,432,196
Selling, general and administrative expenses			(2,029,639	)			(1,141,822	)			(6,477,988	)			(5,286,172	)
Operating income			3,225,593				1,667,498				8,425,450				6,146,024
Other income (loss):
Interest income			58,098				35,014				234,804				180,635
Undistributed earnings in joint venture - Majestic 21			19,747				13,113				60,457				59,072
Proceeds received under escrow arrangement			78,881				125,192				364,520				246,216
(Decrease) increase in fair value of equity investment			47,939				58,658				(32,857	)			262,968
Gain on disposal of property, plant and equipment			-				-				88,936				-
Miscellaneous			108,159				150,384				295,224				223,818
Total other income			312,824				382,361				1,011,084				972,709
Income before provision for income taxes			3,538,417				2,049,859				9,436,534				7,118,733
Income tax expense			(805,007	)			(493,500	)			(2,204,505	)			(1,719,925	)
Net income		$	2,733,410			$	1,556,359			$	7,232,029			$	5,398,808
Weighted average number of shares outstanding:
Basic			3,370,912				3,532,100				3,437,784				3,597,759
Diluted			3,371,842				3,543,380				3,445,498				3,607,448
Net income per share:
Basic		$	0.81			$	0.44			$	2.10			$	1.50
Diluted		$	0.81			$	0.44			$	2.10			$	1.50

SOURCE: Nobility Homes, Inc.

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FAQ

What were Nobility Homes' earnings for FY 2022?

Nobility Homes reported net income of $7.2 million for FY 2022, with diluted earnings per share of $2.10.

How much did sales increase in the fourth quarter for Nobility Homes?

Sales for the fourth quarter increased by 71% to $16.2 million compared to the previous year.

What challenges is Nobility Homes facing in FY 2023?

Nobility Homes is experiencing supply chain issues, including material limitations and delays, expected to affect operations in the first half of FY 2023.

What is the current financial position of Nobility Homes?

Nobility Homes has cash and cash equivalents totaling $21.1 million and a current ratio of 3.3:1, with no outstanding debt.

How have Nobility Homes' operations been affected by supply chain issues?

Supply chain issues have caused delays in home completion and setup, resulting in decreased net sales.