Nobility Homes, Inc. Announces Sales and Earnings for Its Second Quarter 2021

Rhea-AI Summary

Nobility Homes (OTCQX:NOBH) reported a robust second quarter for 2021, with sales increasing by 45% to $14,742,900, up from $10,202,502 in 2020. Income from operations reached $2,062,172, and net income climbed to $1,724,938. For the first six months, sales rose 21% to $23,814,411. However, gross profits were negatively impacted by ongoing supply challenges and inflation in building materials. Despite these challenges, the company maintains a strong financial position with $35,879,342 in cash and no debt.

Positive

• Sales increased 45% in Q2 2021 to $14,742,900.
• Net income rose to $1,724,938 compared to $1,550,004 in Q2 2020.
• Strong financial position with $35,879,342 in cash and no debt.

Negative

• Gross profits negatively affected by inflation in building products.
• Operational challenges due to ongoing supply and labor issues.
• COVID-19 measures reduced customer traffic and sales.

OCALA, FL / ACCESSWIRE / June 11, 2021 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its second quarter ended May 1, 2021. Sales for the second quarter of 2021 increased 45% to $14,742,900 as compared to $10,202,502 recorded in the second quarter of 2020. Income from operations for the second quarter of 2021 was $2,062,172 versus $1,914,867 in the same period a year ago. Net income after taxes was $1,724,938 as compared to $1,550,004 for the same period last year. Diluted earnings per share for the second quarter of 2021 were $0.47 per share compared to $0.43 per share last year.

For the first six months of fiscal 2021, sales increased 21% to $23,814,411 as compared to $19,646,354 for the first six months of 2020. Income from operations was $3,286,238 versus $3,548,572 last year. Net income after taxes was $2,790,703 compared to $2,950,145 last year. Diluted earnings per share were $0.77 per share compared to $0.81 per share last year.

Nobility's financial position during the second quarter 2021 remains very strong with cash and cash equivalents, certificates of deposit and short term investments of $35,879,342 and no outstanding debt. Working capital is $36,246,631 and our ratio of current assets to current liabilities is 3.6:1. Stockholders' equity is $50,141,381 and the book value per share of common stock increased to $13.81.

Terry Trexler, President, stated, "The Company's second quarter sales were exceptionally strong and continue to reflect an improving housing market. Ongoing supply and labor challenges, plus the unprecedented inflation in most building products have negatively affected the Company's gross profits.

Since May of 2020 the Company has experienced unprecedented inflation in most building products, with no immediate relief in sight resulting in significant increases to our material costs. We are monitoring this situation and will continue to adjust our selling prices to help offset the higher costs on each home.

The demand for affordable manufactured housing in Florida has been adversely impacted by coronavirus ("COVID-19") and actions taken in response thereto. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2020 through May 2021 were up approximately 6% from the same period last year. In addition, the lack of lenders in our industry, partly as a result of an increase in government regulations, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes.

The COVID-19 pandemic has resulted in government authorities implementing numerous measures to try to contain the virus. Although we were deemed an essential business and never closed our retail sales centers, these measures had a negative impact on customer traffic (and corresponding sales) within our centers and the operations of our business partners. While our manufacturing operations have continued, an outbreak in our manufacturing facility would negatively impact our ability to produce new homes. There is considerable uncertainty regarding the impact, and expected duration, of such measures and potential future measures, which could cause disruptions to our business 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, 2021 the Company celebrated its 54th anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers in Florida for over 30 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 pandemic, competitive pricing pressures at both the wholesale and retail levels, increasing material costs 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), 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.
Condensed Consolidated Balance Sheets

		May 1,				October 31,
		2021				2020
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	33,227,818			$	30,305,902
Certificates of Deposit			2,088,805				4,602,307
Short-term investments			562,719				358,960
Accounts receivable - trade			1,817,588				790,046
Note receivable			29,110				35,997
Mortgage notes receivable			23,752				20,162
Income taxes receivable			-				105,676
Inventories			10,179,102				9,294,677
Pre-owned homes, net			552,375				441,937
Prepaid expenses and other current assets			1,637,504				1,014,849
Total current assets			50,118,773				46,970,513
Property, plant and equipment, net			6,918,792				5,142,714
Pre-owned homes, net			1,036,596				1,077,240
Note receivable, less current portion			-				6,573
Mortgage notes receivable, less current portion			222,556				227,509
Mobile home park note receivable			2,481				-
Other investments			1,755,121				1,729,364
Deferred income taxes			-				3,598
Operating lease right of use assets			694,629				715,368
Cash surrender value of life insurance			3,885,002				3,795,902
Other assets			156,287				156,287
Total assets		$	64,790,237			$	59,825,068
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	1,285,506			$	928,095
Accrued compensation			706,736				670,520
Accrued expenses and other current liabilities			1,484,542				1,383,833
Income taxes payable			219,456				-
Operating lease obligation			30,078				24,192
Customer deposits			10,145,824				5,098,633
Total current liabilities			13,872,142				8,105,273
Deferred income taxes			15,584				-
Operating lease obligation, less current portion			761,130				778,519
Total liabilities			14,648,856				8,883,792
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;
3,632,100 and 3,631,196 outstanding, respectively			536,491				536,491
Additional paid in capital			10,733,434				10,694,554
Retained earnings			57,134,654				57,976,051
Less treasury stock at cost, 1,732,807 shares in 2021 and
1,733,711 shares in 2020			(18,263,198	)			(18,265,820	)
Total stockholders' equity			50,141,381				50,941,276
Total liabilities and stockholders' equity		$	64,790,237			$	59,825,068

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

		Three Months Ended								Six Months Ended
		May 1				May 2				May 1				May 2
		2021				2020				2021				2020
Net sales		$	14,742,900			$	10,202,502			$	23,814,411			$	19,646,354
Cost of sales			(11,130,215	)			(7,065,007	)			(17,704,279	)			(13,619,010	)
Gross profit			3,612,685				3,137,495				6,110,132				6,027,344
Selling, general and administrative expenses			(1,550,513	)			(1,222,628	)			(2,823,894	)			(2,478,772	)
Operating income			2,062,172				1,914,867				3,286,238				3,548,572
Other income (loss):
Interest income			52,474				84,273				83,130				186,156
Undistributed earnings in joint venture - Majestic 21			12,049				20,398				25,757				40,270
Proceeds received under escrow arrangement			-				189,285				45,868				272,394
Increase (decrease) in fair value of equity investment			123,803				(176,733	)			203,759				(180,526	)
Miscellaneous			17,945				8,649				25,265				19,594
Total other income			206,271				125,872				383,779				337,888
Income before provision for income taxes			2,268,443				2,040,739				3,670,017				3,886,460
Income tax expense			(543,505	)			(490,735	)			(879,314	)			(936,315	)
Net income		$	1,724,938			$	1,550,004			$	2,790,703			$	2,950,145
Weighted average number of shares outstanding:
Basic			3,632,195				3,632,614				3,632,060				3,646,000
Diluted			3,642,501				3,633,933				3,638,140				3,647,329
Net income per share:
Basic		$	0.47			$	0.43			$	0.77			$	0.81
Diluted		$	0.47			$	0.43			$	0.77			$	0.81

SOURCE: Nobility Homes, Inc.

View source version on accesswire.com:
https://www.accesswire.com/651446/Nobility-Homes-Inc-Announces-Sales-and-Earnings-for-Its-Second-Quarter-2021

FAQ

What were Nobility Homes' Q2 2021 earnings results?

Nobility Homes reported Q2 2021 sales of $14,742,900, and net income of $1,724,938, with diluted earnings per share at $0.47.

How did Nobility Homes perform in the first half of 2021?

Sales for the first six months of 2021 increased by 21% to $23,814,411, while net income decreased to $2,790,703 from $2,950,145 in 2020.

What impact did supply chain issues have on Nobility Homes?

Supply and labor challenges combined with inflation in building materials negatively affected Nobility Homes' gross profits.

What is the current financial position of Nobility Homes?

Nobility Homes has a strong financial position with $35,879,342 in cash, no outstanding debt, and current assets exceeding current liabilities by a 3.6:1 ratio.