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

Rhea-AI Summary

Nobility Homes (OTCQX:NOBH) reported strong financial results for Q3 2022, with sales increasing by 18% to $13.8 million compared to $11.8 million in Q3 2021. Income from operations rose to $2.2 million, up from $1.2 million the previous year. Net income after taxes was $1.9 million versus $1.0 million last year, resulting in diluted earnings per share of $0.56, compared to $0.29. However, supply chain issues are impacting production and delivery timelines, which may affect future sales.

Positive

• Sales increased by 18% to $13.8 million in Q3 2022.
• Net income after taxes grew to $1.9 million, up from $1.0 million last year.
• Diluted earnings per share reached $0.56, compared to $0.29 in Q3 2021.
• Strong financial position with $22.9 million in cash and no outstanding debt.
• Stockholders' equity stands at $45.2 million with a book value per share of $13.40.

Negative

• Supply chain issues are causing delays in production and delivery of homes.
• The company experienced a decrease in net sales due to supply chain limitations.
• Challenges are expected to persist for the remainder of fiscal 2022 and possibly beyond.

OCALA, FL / ACCESSWIRE / September 16, 2022 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its third quarter ended August 6, 2022. Sales for the third quarter of 2022 were up 18% to $13.8 million as compared to $11.8 million recorded in the third quarter of 2021. Income from operations for the third quarter of 2022 was $2.2 million versus $1.2 million in the same period a year ago. Net income after taxes was $1.9 million as compared to $1.0 million for the same period last year. Diluted earnings per share for the third quarter of 2022 were $0.56 per share compared to $0.29 per share last year.

For the first nine months of fiscal 2022 sales were $35.3 million as compared to $35.6 million for the first nine months of 2021. Income from operations was $5.2 million versus $4.5 million last year. Net income after taxes was $4.5 million compared to $3.8 million last year. Diluted earnings per share were $1.30 per share compared to $1.06 per share last year.

Nobility's financial position during the third quarter 2022 remains very strong with cash and cash equivalents, certificate of deposits and short term investments of $22.9 million and no outstanding debt. Working capital is $31.2 million and our ratio of current assets to current liabilities is 3.0:1. Stockholders' equity is $45.2 million and the book value per share of common stock was $13.40.

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida and the U.S. continues to be strong. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2021 through July 2022 were up approximately 22% from the same period last year. Although net sales increased during the three months ended August 6, 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 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 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

		August 6,				November 6,
		2022				2021
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	20,437,309			$	36,126,059
Certificates of deposit			1,946,429				2,093,015
Short-term investments			541,132				621,928
Accounts receivable - trade			775,596				680,228
Note receivable			23,905				32,825
Mortgage notes receivable			15,566				22,589
Inventories			20,385,622				10,394,288
Pre-owned homes, net			662,453				542,081
Prepaid expenses and other current assets			2,314,540				1,821,267
Total current assets			47,102,552				52,334,280
Property, plant and equipment, net			7,569,386				6,847,780
Pre-owned homes, net			-				755,394
Note receivable, less current portion			22,243				38,895
Mortgage notes receivable, less current portion			132,184				222,459
Mobile home park note receivable			201,464				72,731
Other investments			1,829,146				1,788,436
Operating lease right of use assets			-				1,597
Cash surrender value of life insurance			4,095,216				3,966,939
Other assets			156,287				156,287
Total assets		$	61,108,478			$	66,184,798
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	1,329,275			$	939,964
Accrued compensation			832,632				555,222
Accrued expenses and other current liabilities			1,571,351				1,513,967
Income taxes payable			156,918				89,083
Operating lease obligation			-				1,597
Customer deposits			11,984,065				13,671,092
Total current liabilities			15,874,241				16,770,925
Deferred income taxes			65,496				99,568
Total liabilities			15,939,737				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			10,828,305				10,766,253
Retained earnings			60,708,402				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			45,168,741				49,314,305
Total liabilities and stockholders' equity		$	61,108,478			$	66,184,798

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

		Three Months Ended								Nine Months Ended
		August 6,				July 31,				August 6,				July 31,
		2022				2021				2022				2021
Net sales		$	13,846,698			$	11,778,120			$	35,300,014			$	35,592,531
Cost of sales			(9,948,638	)			(9,265,376	)			(25,651,808	)			(26,969,655	)
Gross profit			3,898,060				2,512,744				9,648,206				8,622,876
Selling, general and administrative expenses			(1,653,200	)			(1,320,456	)			(4,448,349	)			(4,144,350	)
Operating income			2,244,860				1,192,288				5,199,857				4,478,526
Other income (loss):
Interest income			62,449				62,491				176,706				145,621
Undistributed earnings in joint venture - Majestic 21			15,488				20,202				40,710				45,959
Proceeds received under escrow arrangement			52,140				75,156				285,639				121,024
(Decrease) increase in fair value of equity investment			(57,022	)			(449	)			(80,796	)			203,310
Gain on disposal of property, plant and equipment			-				-				88,936				-
Miscellaneous			161,157				48,169				187,065				73,434
Total other income			234,212				205,569				698,260				589,348
Income before provision for income taxes			2,479,072				1,397,857				5,898,117				5,067,874
Income tax expense			(594,313	)			(347,111	)			(1,399,498	)			(1,226,425	)
Net income			1,884,759				1,050,746				4,498,619				3,841,449
Weighted average number of shares outstanding:
Basic			3,370,912				3,599,133				3,460,074				3,621,084
Diluted			3,376,771				3,613,187				3,469,769				3,630,216
Net income per share:
Basic		$	0.56			$	0.29			$	1.30			$	1.06
Diluted		$	0.56			$	0.29			$	1.30			$	1.06

SOURCE: Nobility Homes, Inc.

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FAQ

What were Nobility Homes' earnings for Q3 2022?

Nobility Homes reported net income after taxes of $1.9 million for Q3 2022.

How did sales perform in Q3 2022 for NOBH?

Sales for Q3 2022 increased by 18% to $13.8 million compared to Q3 2021.

What is the current diluted earnings per share for NOBH?

The diluted earnings per share for Q3 2022 were $0.56.

Is Nobility Homes facing any challenges?

Yes, Nobility Homes is facing supply chain issues affecting production and delivery timelines.

What is the financial position of Nobility Homes as of Q3 2022?

Nobility Homes has cash and cash equivalents of $22.9 million and no outstanding debt.