Nobility Homes, Inc. Announces Sales and Earnings for Its Second Quarter 2022

Rhea-AI Summary

Nobility Homes, Inc. (OTCQX:NOBH) reported a decline in sales for Q2 2022, generating $10.6 million compared to $14.7 million in Q2 2021. Income from operations fell to $1.6 million from $2.1 million, with net income after taxes at $1.5 million versus $1.7 million last year. Diluted earnings per share decreased to $0.42 from $0.47. For the first half of 2022, sales reached $21.5 million, down from $23.8 million in 2021. The company maintains a strong financial position with $27.1 million in cash and no debt. Challenges from supply chain issues are impacting operations.

Positive

• Strong financial position with cash and cash equivalents of $27.1 million and no debt.
• Stockholders' equity stands at $43.3 million with a book value per share of $12.83.

Negative

• Sales decreased by 28.1% in Q2 2022 compared to Q2 2021.
• Net income after taxes fell to $1.5 million, a decline of 11.8% year-over-year.
• Ongoing supply chain issues and labor shortages are delaying home completions and affecting sales.

OCALA, FL / ACCESSWIRE / June 17, 2022 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its second quarter ended May 7, 2022. Sales for the second quarter of 2022 was $10.6 million as compared to $14.7 million recorded in the second quarter of 2021. Income from operations for the second quarter of 2022 was $1.6 million versus $2.1 million in the same period a year ago. Net income after taxes was $1.5 million as compared to $1.7 million for the same period last year. Diluted earnings per share for the second quarter of 2022 were $0.42 per share compared to $0.47 per share last year.

For the first six months of fiscal 2022 sales were $21.5 million as compared to $23.8 million for the first six months of 2021. Income from operations was $3.0 million versus $3.3 million last year. Net income after taxes was $2.6 million compared to $2.8 million last year. Diluted earnings per share were $0.74 per share compared to $0.77 per share last year.

Nobility's financial position during the second quarter 2022 remains very strong with cash and cash equivalents and short term investments of $27.1 million and no outstanding debt. Working capital is $29.6 million and our ratio of current assets to current liabilities is 2.7:1. Stockholders' equity is $43.3 million and the book value per share of common stock was $12.83.

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida and the U.S. continues to improve. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2021 through April 2022 were up approximately 23% from the same period last year. Our sales and earnings continue to be affected as we continue 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. This has caused delays in completion of the homes at the manufacturing facility and the set up process of retail homes in the field. We expect that these challenges will continue for the remainder of fiscal year 2022 and potentially beyond until the industry supply chain normalizes.

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 55th anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers in Florida for over 31 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

		May 7,				November 6,
		2022				2021
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	26,530,111			$	36,126,059
Certificates of deposit			-				2,093,015
Short-term investments			598,154				621,928
Accounts receivable - trade			807,197				680,228
Note receivable			23,905				32,825
Mortgage notes receivable			24,291				22,589
Income tax receivable			42,792				-
Inventories			16,801,175				10,394,288
Pre-owned homes, net			-				542,081
Prepaid expenses and other current assets			2,283,654				1,821,267
Total current assets			47,111,279				52,334,280
Property, plant and equipment, net			7,305,133				6,847,780
Pre-owned homes, net			-				755,394
Note receivable, less current portion			27,849				38,895
Mortgage notes receivable, less current portion			219,772				222,459
Mobile home park note receivable			136,509				72,731
Other investments			1,813,658				1,788,436
Operating lease right of use assets			-				1,597
Cash surrender value of life insurance			4,052,457				3,966,939
Other assets			156,287				156,287
Total assets		$	60,822,944			$	66,184,798
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	1,819,257			$	939,964
Accrued compensation			777,649				555,222
Accrued expenses and other current liabilities			1,627,284				1,513,967
Income taxes payable			-				89,083
Operating lease obligation			-				1,597
Customer deposits			13,285,127				13,671,092
Total current liabilities			17,509,317				16,770,925
Deferred income taxes			51,027				99,568
Total liabilities			17,560,344				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 outstanding, respectively			536,491				536,491
Additional paid in capital			10,806,923				10,766,253
Retained earnings			58,823,643				59,742,759
Less treasury stock at cost, 1,993,995 shares in 2022 and
1,832,807 shares in 2021			(26,904,457	)			(21,731,198	)
Total stockholders' equity			43,262,600				49,314,305
Total liabilities and stockholders' equity		$	60,822,944			$	66,184,798

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

		Three Months Ended								Six Months Ended
		May 7,				May 1,				May 7,				May 1,
		2022				2021				2022				2021
Net sales		$	10,645,046			$	14,742,900			$	21,453,316			$	23,814,411
Cost of sales			(7,623,128	)			(11,130,215	)			(15,703,170	)			(17,704,279	)
Gross profit			3,021,918				3,612,685				5,750,146				6,110,132
Selling, general and administrative expenses			(1,378,606	)			(1,550,513	)			(2,795,149	)			(2,823,894	)
Operating income			1,643,312				2,062,172				2,954,997				3,286,238
Other income (loss):
Interest income			39,577				52,474				114,257				83,130
Undistributed earnings in joint venture - Majestic 21			12,665				12,049				25,222				25,757
Proceeds received under escrow arrangement			115,454				-				233,499				45,868
(Decrease) Increase in fair value of equity investment			(19,681	)			123,803				(23,774	)			203,759
Gain on disposal of property, plant and equipment			88,936				-				88,936				-
Miscellaneous			12,352				17,945				25,908				25,265
Total other income			249,303				206,271				464,048				383,779
Income before provision for income taxes			1,892,615				2,268,443				3,419,045				3,670,017
Income tax expense			(435,789	)			(543,505	)			(805,185	)			(879,314	)
Net income			1,456,826				1,724,938				2,613,860				2,790,703
Weighted average number of shares outstanding:
Basic			3,476,508				3,632,195				3,504,655				3,632,060
Diluted			3,487,516				3,642,501				3,515,994				3,638,140
Net income per share:
Basic		$	0.42			$	0.47			$	0.75			$	0.77
Diluted		$	0.42			$	0.47			$	0.74			$	0.77

SOURCE: Nobility Homes, Inc.

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FAQ

What were Nobility Homes' earnings for Q2 2022?

Nobility Homes reported diluted earnings per share of $0.42 for Q2 2022, down from $0.47 in Q2 2021.

How did Nobility Homes' sales compare year-over-year for the first half of 2022?

For the first six months of 2022, Nobility Homes reported sales of $21.5 million, a decrease from $23.8 million in the same period in 2021.

What challenges is Nobility Homes facing in 2022?

Nobility Homes is experiencing challenges due to supply chain issues, labor shortages, and delays in key components impacting home production.

What is the current financial position of Nobility Homes?

Nobility Homes has $27.1 million in cash and cash equivalents, no outstanding debt, and strong working capital of $29.6 million.