Skyline Champion Announces First Quarter Fiscal 2024 Results
First Quarter Fiscal 2024 Highlights (compared to First Quarter Fiscal 2023)
-
Net sales decreased
36.0% to$464.8 million -
U.S. homes sold decreased29.3% to 4,817 -
Total backlog decreased
15.7% to from the sequential fourth quarter$260 million -
Average selling price (“ASP”) per
U.S. home sold decreased8.2% to$89,000 -
Gross profit margin contracted by 370 basis points to
27.9% -
Net income decreased by
56.2% to$51.3 million -
Earnings per share (“EPS”) decreased
56.4% to$0.89 -
Adjusted EBITDA decreased
58.9% to$66.8 million -
Adjusted EBITDA margin contracted by 800 basis points to
14.4% -
Net cash generated by operating activities of
during the quarter$74.9 million
“Skyline Champion’s results for the first quarter of fiscal 2024 met expectations, reflecting continued execution on our operational initiatives as we navigate the current environment and shifts in demand” said Mark Yost, Skyline Champion’s President, and Chief Executive Officer. “On a sequential basis we are seeing orders increase and backlogs return to historically normal levels, while managing production to align with current demand trends. Skyline Champion continues to drive our strategic initiatives to transform homebuilding, generating value for shareholders now and in years to come.”
First Quarter Fiscal 2024 Results
Net sales for the first quarter fiscal 2024 decreased
Gross profit decreased by
Selling, general, and administrative expenses (“SG&A”) in the first quarter fiscal 2024 decreased to
Net income decreased by
Adjusted EBITDA for the first quarter fiscal 2024 decreased by
As of July 1, 2023, Skyline Champion had
Conference Call and Webcast Information:
Skyline Champion management will host a conference call tomorrow, August 2, 2023, at 9:00 a.m. Eastern Time, to discuss Skyline Champion’s financial results and an update on current operations.
Investors and other interested parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of Skyline Champion’s website at skylinechampion.com. The online replay will be available on the same website immediately following the call.
The conference call can also be accessed by dialing (877) 407-4018 (domestic) or (201) 689-8471 (international). A telephonic replay will be available approximately two hours after the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 13739924. The replay will be available until 11:59 P.M. Eastern Time on August 16, 2023.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) is a leading producer of factory-built housing in
In addition to its core home building business, Skyline Champion provides construction services to install and set-up factory-built homes, operates a factory-direct retail business with 31 retail locations across
Skyline Champion builds homes under some of the most well-known brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit,
Presentation of Non-GAAP Financial Measures
In addition to the results provided in accordance with
Skyline Champion defines Adjusted EBITDA as net income or loss plus expenses or minus income, (a) the provision for income taxes, (b) interest income or expense, net, (c) depreciation and amortization, (d) gain or loss from discontinued operations, (e) non-cash restructuring charges and impairment of assets, (f) other non-operating income and costs, including but not limited to those costs for the acquisition and integration or disposition of businesses and idle facilities. Adjusted EBITDA is not a measure of earnings calculated in accordance with
Forward-Looking Statements
Statements in this press release, including certain statements regarding Skyline Champion’s strategic initiatives, and future market demand are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of words such as "believe," "expect," "future," "anticipate," "intend," "plan," "foresee," "may," "could," "should," "will," "potential," "continue," or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Skyline Champion. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include regional, national and international economic, financial, public health and labor conditions, and the following: supply-related issues, including prices and availability of materials; labor-related issues; inflationary pressures in the North American economy; the cyclicality and seasonality of the housing industry and its sensitivity to changes in general economic or other business conditions; demand fluctuations in the housing industry, including as a result of actual or anticipated increases in homeowner borrowing rates; the possible unavailability of additional capital when needed; competition and competitive pressures; changes in consumer preferences for our products or our failure to gauge those preferences; quality problems, including the quality of parts sourced from suppliers and related liability and reputational issues; data security breaches, cybersecurity attacks, and other information technology disruptions; the potential disruption of operations caused by the conversion to new information systems; the extensive regulation affecting the production and sale of factory-built housing and the effects of possible changes in laws with which we must comply; the potential impact of natural disasters on sales and raw material costs; the risks associated with mergers and acquisitions, including integration of operations and information systems; periodic inventory adjustments by, and changes to relationships with, independent retailers; changes in interest and foreign exchange rates; insurance coverage and cost issues; the possibility that all or part of our intangible assets, including goodwill, might become impaired; the possibility that our risk management practices may leave us exposed to unidentified or unanticipated risks; the potential disruption to our business caused by public health issues, such as an epidemic or pandemic, and resulting government actions; and other risks set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections, as applicable, in our Annual Reports on Form 10-K, including our Annual Report on Form 10-K for the fiscal year ended April 1, 2023 previously filed with the Securities and Exchange Commission (“SEC”), as well as in our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with or furnished to the SEC.
If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, then the developments and future events concerning Skyline Champion set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. Skyline Champion assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.
SKYLINE CHAMPION CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited, dollars and shares in thousands) |
||||||||
July 1,
|
April 1,
|
|||||||
(unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
797,717 |
|
$ |
747,453 |
|
||
Trade accounts receivable, net |
|
50,678 |
|
|
67,296 |
|
||
Inventories, net |
|
196,510 |
|
|
202,238 |
|
||
Other current assets |
|
34,123 |
|
|
26,479 |
|
||
Total current assets |
|
1,079,028 |
|
|
1,043,466 |
|
||
Long-term assets: |
||||||||
Property, plant, and equipment, net |
|
184,259 |
|
|
177,125 |
|
||
Goodwill |
|
196,574 |
|
|
196,574 |
|
||
Amortizable intangible assets, net |
|
42,383 |
|
|
45,343 |
|
||
Deferred tax assets |
|
18,746 |
|
|
17,422 |
|
||
Other noncurrent assets |
|
96,669 |
|
|
82,794 |
|
||
Total assets |
$ |
1,617,659 |
|
$ |
1,562,724 |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
47,218 |
|
$ |
44,702 |
|
||
Other current liabilities |
|
198,726 |
|
|
204,215 |
|
||
Total current liabilities |
|
245,944 |
|
|
248,917 |
|
||
Long-term liabilities: |
||||||||
Long-term debt |
|
12,430 |
|
|
12,430 |
|
||
Deferred tax liabilities |
|
6,305 |
|
|
5,964 |
|
||
Other liabilities |
|
62,059 |
|
|
62,412 |
|
||
Total long-term liabilities |
|
80,794 |
|
|
80,806 |
|
||
|
||||||||
Stockholders' Equity: |
||||||||
Common stock, 57,108 shares issued as of July 1, 2023 and April 1, 2023, respectively |
|
1,586 |
|
|
1,585 |
|
||
Additional paid-in capital |
|
524,907 |
|
|
519,479 |
|
||
Retained earnings |
|
775,980 |
|
|
725,672 |
|
||
Accumulated other comprehensive loss |
|
(11,552 |
) |
|
(13,735 |
) |
||
Total stockholders’ equity |
|
1,290,921 |
|
|
1,233,001 |
|
||
Total liabilities and stockholders’ equity |
$ |
1,617,659 |
|
$ |
1,562,724 |
|
SKYLINE CHAMPION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, dollars and shares in thousands, except per share amounts) |
||||||||
Three months ended |
||||||||
July 1,
|
July 2,
|
|||||||
Net sales |
$ |
464,769 |
|
$ |
725,881 |
|
||
Cost of sales |
|
335,096 |
|
|
496,546 |
|
||
Gross profit |
|
129,673 |
|
|
229,335 |
|
||
Selling, general, and administrative expenses |
|
70,439 |
|
|
72,282 |
|
||
Operating income |
|
59,234 |
|
|
157,053 |
|
||
Interest (income) expense, net |
|
(9,301 |
) |
|
90 |
|
||
Other (income) |
|
— |
|
|
(634 |
) |
||
Income before income taxes |
|
68,535 |
|
|
157,597 |
|
||
Income tax expense |
|
17,266 |
|
|
40,446 |
|
||
Net income |
$ |
51,269 |
|
$ |
117,151 |
|
||
Net income per share: |
||||||||
Basic |
$ |
0.90 |
|
$ |
2.06 |
|
||
Diluted |
$ |
0.89 |
|
$ |
2.04 |
|
SKYLINE CHAMPION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, dollars in thousand) |
||||||||
Three months ended |
||||||||
July 1,
|
July 2,
|
|||||||
Cash flows from operating activities |
||||||||
Net income |
$ |
51,269 |
|
$ |
117,151 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
|
7,592 |
|
|
5,616 |
|
||
Amortization of deferred financing fees |
|
69 |
|
|
95 |
|
||
Equity-based compensation |
|
5,428 |
|
|
3,960 |
|
||
Deferred taxes |
|
(997 |
) |
|
1,685 |
|
||
Loss on disposal of property, plant, and equipment |
|
1 |
|
|
6 |
|
||
Foreign currency transaction (gain) loss |
|
(207 |
) |
|
351 |
|
||
Change in assets and liabilities: |
||||||||
Accounts receivable |
|
16,676 |
|
|
(38,141 |
) |
||
Inventories |
|
6,173 |
|
|
(48,855 |
) |
||
Other assets |
|
(6,974 |
) |
|
(11,084 |
) |
||
Accounts payable |
|
1,375 |
|
|
(15,931 |
) |
||
Accrued expenses and other liabilities |
|
(5,548 |
) |
|
32,569 |
|
||
Net cash provided by operating activities |
|
74,857 |
|
|
47,422 |
|
||
Cash flows from investing activities |
||||||||
Additions to property, plant, and equipment |
|
(10,341 |
) |
|
(9,435 |
) |
||
Investment in floor plan loans |
|
(18,466 |
) |
|
— |
|
||
Proceeds from floor plan loans |
|
3,184 |
|
|
— |
|
||
Acquisitions, net of cash acquired |
|
— |
|
|
(9,553 |
) |
||
Proceeds from disposal of property, plant, and equipment |
|
8 |
|
|
17 |
|
||
Net cash used in investing activities |
|
(25,615 |
) |
|
(18,971 |
) |
||
Cash flows from financing activities |
||||||||
Changes in floor plan financing, net |
|
— |
|
|
2,398 |
|
||
Stock option exercises |
|
— |
|
|
9 |
|
||
Tax payments for equity-based compensation |
|
(961 |
) |
|
(351 |
) |
||
Net cash (used in) provided by financing activities |
|
(961 |
) |
|
2,056 |
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
1,983 |
|
|
(2,142 |
) |
||
Net increase in cash and cash equivalents |
|
50,264 |
|
|
28,365 |
|
||
Cash and cash equivalents at beginning of period |
|
747,453 |
|
|
435,413 |
|
||
Cash and cash equivalents at end of period |
$ |
797,717 |
|
$ |
463,778 |
|
SKYLINE CHAMPION CORPORATION RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (Unaudited, dollars in thousand) |
|||||||||
Three Months Ended |
|||||||||
July 1,
|
July 2,
|
||||||||
Net income |
$ |
51,269 |
|
$ |
117,151 |
|
|||
Income tax expense |
|
17,266 |
|
|
40,446 |
|
|||
Interest (income) expense, net |
|
(9,301 |
) |
|
90 |
|
|||
Depreciation and amortization |
|
7,592 |
|
|
5,616 |
|
|||
EBITDA |
|
66,826 |
|
|
163,303 |
|
|||
Transaction costs |
|
- |
|
|
338 |
|
|||
Other |
|
- |
|
|
(973 |
) |
|||
Adjusted EBITDA |
$ |
66,826 |
|
$ |
162,668 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801446323/en/
Investor:
Name: Kevin Doherty
Email: investorrelations@championhomes.com
Phone: (248) 614-8211
Source: Skyline Champion Corporation