Nobility Homes, Inc. Announces Sales and Earnings for its Third Quarter 2021

Rhea-AI Summary

Nobility Homes, Inc. (OTCQX:NOBH) reported a 34% increase in sales for Q3 2021, totaling $11,778,120, compared to $8,800,410 in Q3 2020. However, income from operations decreased to $1,192,288 from $1,331,060 year-over-year. Net income also declined to $1,050,746 from $1,160,138. For the first nine months, sales rose 25% to $35,592,531, but income from operations fell to $4,478,526. The company maintains a strong financial position with $36,373,258 in cash and no debt, while overcoming challenges in production due to labor and material shortages.

Positive

• Sales increased 34% to $11,778,120 in Q3 2021.
• Strong financial position with cash of $36,373,258 and no debt.
• Book value per share increased to $13.52.

Negative

• Income from operations decreased to $1,192,288 from $1,331,060 in Q3 2020.
• Net income fell to $1,050,746 from $1,160,138 year-over-year.
• Production impacted by labor shortages and increased material costs.

OCALA, FL / ACCESSWIRE / September 8, 2021 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its third quarter ended July 31, 2021. Sales for the third quarter of 2021 increased 34% to $11,778,120 as compared to $8,800,410 recorded in the third quarter of 2020. Income from operations for the third quarter of 2021 was $1,192,288 versus $1,331,060 in the same period a year ago. Net income after taxes was $1,050,746 as compared to $1,160,138 for the same period last year. Diluted earnings per share for the third quarter of 2021 were $0.29 per share compared to $0.32 per share last year.

For the first nine months of fiscal 2021, sales increased 25% to $35,592,531 as compared to $28,446,764 for the first nine months of 2020. Income from operations was $4,478,526 versus $4,879,632 last year. Net income after taxes was $3,841,449 compared to $4,110,283 last year. Diluted earnings per share were $1.06 per share compared to $1.13 per share last year.

Nobility's financial position during the third quarter 2021 remains very strong with cash and cash equivalents, certificates of deposit and short term investments of $36,373,258 and no outstanding debt. Working capital is $34,059,497 and our ratio of current assets to current liabilities is 3.3:1. Stockholders' equity is $47,740,536 and the book value per share of common stock increased to $13.52.

Terry Trexler, President, stated, "The Company's third quarter sales were strong and continue to reflect a robust housing market. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2020 through July 2021 were up approximately 11% from the same period last year. The lack of lenders in our industry, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes.

During third quarter of 2021 our production of homes was impacted due to the challenges in hiring additional factory workers and the unpredictable absenteeism of the COVID-19 quarantine. These factors have continued in the fourth quarter of 2021. Also, production has incurred shortages in certain building products delaying the completion of the homes and has continued to experience inflation in most building products resulting in significant increases to our material costs and a corresponding decrease in gross profits. We have continued to focus on increasing production of homes due to the above challenges.

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, 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.

	Condensed Consolidated Balance Sheets
	July 31,			October 31,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	33,720,078		$	30,305,902
Certificates of deposit		2,090,910			4,602,307
Short-term investments		562,270			358,960
Accounts receivable - trade		1,134,675			790,046
Note receivable		41,636			35,997
Mortgage notes receivable		22,217			20,162
Income taxes receivable		81,262			105,676
Inventories		9,428,923			9,294,677
Pre-owned homes, net		678,303			441,937
Prepaid expenses and other current assets		1,370,339			1,014,849
Total current assets		49,130,613			46,970,513
Property, plant and equipment, net		6,916,778			5,142,714
Pre-owned homes, net		716,582			1,077,240
Note receivable, less current portion		44,595			6,573
Mortgage notes receivable, less current portion		223,762			227,509
Mobile home park note receivable		72,731			-
Other investments		1,775,323			1,729,364
Deferred income taxes		-			3,598
Operating lease right of use assets		684,142			715,368
Cash surrender value of life insurance		3,929,552			3,795,902
Other assets		156,287			156,287
Total assets	$	63,650,365		$	59,825,068
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	818,230		$	928,095
Accrued compensation		441,760			670,520
Accrued expenses and other current liabilities		1,427,862			1,383,833
Income taxes payable		-			-
Operating lease obligation		33,039			24,192
Customer deposits		12,350,225			5,098,633
Total current liabilities		15,071,116			8,105,273
Deferred income taxes		86,413			-
Operating lease obligation, less current portion		752,300			778,519
Total liabilities		15,909,829			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;
3,532,100 and 3,631,196 outstanding, respectively		536,491			536,491
Additional paid in capital		10,749,843			10,694,554
Retained earnings		58,185,400			57,976,051
Less treasury stock at cost, 1,832,807 shares in 2021 and
1,733,711 shares in 2020		(21,731,198	)		(18,265,820	)
Total stockholders' equity		47,740,536			50,941,276
Total liabilities and stockholders' equity	$	63,650,365		$	59,825,068

		Condensed Consolidated Statements of Income
		(Unaudited)
		Three Months Ended								Nine Months Ended
		July 31,				August 1,				July 31,				August 1,
		2021				2020				2021				2020
Net sales		$	11,778,120			$	8,800,410			$	35,592,531			$	28,446,764
Cost of sales			(9,265,376	)			(6,361,500	)			(26,969,655	)			(19,980,510	)
Gross profit			2,512,744				2,438,910				8,622,876				8,466,254
Selling, general and administrative expenses			(1,320,456	)			(1,107,850	)			(4,144,350	)			(3,586,622	)
Operating income			1,192,288				1,331,060				4,478,526				4,879,632
Other income (loss):
Interest income			62,491				53,209				145,621				239,365
Undistributed earnings in joint venture - Majestic 21			20,202				20,855				45,959				61,125
Proceeds received under escrow arrangement			75,156				64,053				121,024				336,447
Increase (decrease) in fair value of equity investment			(449	)			21,475				203,310				(159,051	)
Gain on sale of assets			-				32,041				-				32,041
Miscellaneous			48,169				12,910				73,434				32,504
Total other income			205,569				204,543				589,348				542,431
Income before provision for income taxes			1,397,857				1,535,603				5,067,874				5,422,063
Income tax expense			(347,111	)			(375,465	)			(1,226,425	)			(1,311,780	)
Net income			1,050,746				1,160,138				3,841,449				4,110,283
Weighted average number of shares outstanding:
Basic			3,599,133				3,631,089				3,621,084				3,641,048
Diluted			3,613,187				3,632,420				3,630,216				3,642,397
Net income per share:
Basic		$	0.29			$	0.32			$	1.06			$	1.13
Diluted		$	0.29			$	0.32			$	1.06			$	1.13

SOURCE: Nobility Homes, Inc.

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FAQ

What were Nobility Homes' earnings for Q3 2021?

Nobility Homes reported earnings of $1,050,746 for Q3 2021, down from $1,160,138 in Q3 2020.

How did sales perform for Nobility Homes in Q3 2021?

Sales for Q3 2021 increased by 34% to $11,778,120 compared to $8,800,410 in the prior year.

What is the current financial position of Nobility Homes?

Nobility Homes has cash and cash equivalents totaling $36,373,258 and no outstanding debt.

What challenges did Nobility Homes face in Q3 2021?

Challenges included labor shortages and increased material costs, impacting production.