Nobility Homes, Inc. Announces Increased Sales and Earnings for Its Fiscal Year 2019

OCALA, FL / ACCESSWIRE / December 19, 2019 / Today, Nobility Homes, Inc. (OTCQX:NOBH) announced increased sales and earnings results for its fiscal year ended November 2, 2019. Sales for fiscal year 2019 were up 11% to $47.3 million as compared to $42.8 million recorded in fiscal year 2018. Income from operations, up 45% for fiscal year 2019, was $8.3 million versus $5.7 million in the same period a year ago. Net income after taxes was $8.8 million as compared to $5.0 million for the same period last year. In June 2019 the Company sold its former Pace retail sales center property located in Pace, Florida for total net proceeds of $1.1 million and in October 2019 the Company sold its interest in Walden Woods South for total net proceeds of $1.5 million. Diluted earnings per share for fiscal year 2019 were $2.32 per share compared to $1.27 per share last year.

For the fourth quarter of fiscal 2019, sales were $11.8 million as compared to $12.8 million in the fourth quarter of last fiscal year. Income from operations for the fourth quarter of 2019 was up 6% to $2.1 million versus $2.0 million in the same period last year. Net income after taxes was $2.9 million versus last year's results of $1.6 million. Diluted earnings per share for the fourth quarter were $0.79 per share versus earnings of $0.40 per share last year.

Nobility's financial position during fiscal year 2019 remained very strong with cash and cash equivalents, short term investments and certificates of deposit of $33.2 million and no outstanding debt. Working capital is $38.1 million and our ratio of current assets to current liabilities is 5.2:1. Stockholders' equity is $49.5 million and the book value per share of common stock increased to $13.50.

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida continues to be good. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2018 through October 2019 were up approximately 17% from the same period last year. Constrained consumer credit and the lack of lenders in our industry, partly as a result of an increase in government regulations, still affects our results by limiting many affordable manufactured housing buyers from purchasing homes. However, legislation may help improve this situation 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, 2019 the Company celebrated its 52nd anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers 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 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, competitive pricing pressures at both the wholesale and retail levels, increasing material costs, uncertain economic conditions, 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, possible labor shortages, possible materials shortages, increasing labor cost, cyclical nature of the manufactured housing industry, impact of 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, impact of mandated tariffs on material prices, 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

 
November 2,
 
 
November 3,
 

 
2019
 
 
2018
 

 
(Unaudited)
 
 
 
 

Assets

Current assets:

Cash and cash equivalents

 
$ 
22,533,965
 
 
$ 
28,364,861
 

Certificates of Deposit

 
 
10,153,575
 
 
 
6,034,093
 

Short-term investments

 
 
521,283
 
 
 
537,767
 

Accounts receivable – trade

 
 
1,351,838
 
 
 
1,783,073
 

Note receivable

 
 
83,231
 
 
 
46,444
 

Mortgage notes receivable

 
 
17,896
 
 
 
15,664
 

Inventories

 
 
10,616,778
 
 
 
7,270,550
 

Pre-owned homes, net

 
 
331,103
 
 
 
933,640
 

Prepaid expenses and other current assets

 
 
1,399,527
 
 
 
1,090,152
 

Total current assets

 
 
47,009,196
 
 
 
46,076,244
 

Property, plant and equipment, net

 
 
4,823,879
 
 
 
4,763,566
 

Pre-owned homes, net

 
 
808,128
 
 
 
473,191
 

Note receivable, less current portion

 
 
43,769
 
 
 
46,265
 

Mortgage notes receivable, less current portion

 
 
232,148
 
 
 
236,402
 

Other investments

 
 
1,649,273
 
 
 
1,571,166
 

Property held for sale

 
 
–
 
 
 
213,437
 

Deferred income taxes

 
 
80,405
 
 
 
40,156
 

Cash surrender value of life insurance

 
 
3,617,975
 
 
 
3,437,974
 

Other assets

 
 
156,287
 
 
 
156,287
 

Total assets

 
$ 
58,421,060
 
 
$ 
57,014,688
 

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

 
$ 
1,111,216
 
 
$ 
1,085,095
 

Accrued compensation

 
 
748,626
 
 
 
869,657
 

Accrued expenses and other current liabilities

 
 
2,055,949
 
 
 
1,349,381
 

Income taxes payable

 
 
2,016,132
 
 
 
579,786
 

Customer deposits

 
 
3,022,818
 
 
 
4,064,268
 

Total current liabilities

 
 
8,954,741
 
 
 
7,948,187
 

Commitments and contingent liabilities

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;

3,664,070 and 3,873,731 outstanding, respectively

 
 
536,491
 
 
 
536,491
 

Additional paid in capital

 
 
10,687,662
 
 
 
10,670,848
 

Retained earnings

 
 
55,298,754
 
 
 
50,352,546
 

Accumulated other comprehensive income

 
 
389,164
 
 
 
390,407
 

Less treasury stock at cost, 1,700,837 shares in 2019 and

1,491,176 shares in 2018

 
 
(17,445,752
)
 
 
(12,883,791
)

Total stockholders' equity

 
 
49,466,319
 
 
 
49,066,501
 

Total liabilities and stockholders' equity

 
$ 
58,421,060
 
 
$ 
57,014,688
 

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

 
Three Months Ended
 
 
Twelve Months Ended
 

 
Nov 2,
 
 
Nov 3,
 
 
Nov 2,
 
 
Nov 3,
 

 
2019
 
 
2018
 
 
2019
 
 
2018
 

Net sales

 
$ 
11,780,803
 
 
$ 
12,796,547
 
 
$ 
47,348,631
 
 
$ 
42,812,265
 

Cost of sales

 
 
(8,188,674
)
 
 
(9,386,554
)
 
 
(33,695,631
)
 
 
(32,132,238
)

Gross profit

 
 
3,592,129
 
 
 
3,409,993
 
 
 
13,653,000
 
 
 
10,680,027
 

Selling, general and administrative expenses

 
 
(1,492,146
)
 
 
(1,431,663
)
 
 
(5,352,319
)
 
 
(4,957,201
)

Operating income

 
 
2,099,983
 
 
 
1,978,330
 
 
 
8,300,681
 
 
 
5,722,826
 

Other income:

Interest income

 
 
124,147
 
 
 
145,144
 
 
 
556,142
 
 
 
362,121
 

Undistributed earnings in joint venture – Majestic 21

 
 
17,552
 
 
 
21,220
 
 
 
78,107
 
 
 
100,137
 

Proceeds received under escrow arrangement

 
 
89,763
 
 
 
–
 
 
 
379,104
 
 
 
172,911
 

Gain on sale of assets

 
 
1,510,000
 
 
 
–
 
 
 
2,390,129
 
 
 
203,512
 

Miscellaneous

 
 
41,652
 
 
 
21,288
 
 
 
75,366
 
 
 
43,955
 

Total other income

 
 
1,783,114
 
 
 
187,652
 
 
 
3,478,848
 
 
 
882,636
 

Income before provision for income taxes

 
 
3,883,097
 
 
 
2,165,982
 
 
 
11,779,529
 
 
 
6,605,462
 

Income tax expense

 
 
(971,312
)
 
 
(602,275
)
 
 
(2,969,109
)
 
 
(1,641,830
)

Net income

 
 
2,911,785
 
 
 
1,563,707
 
 
 
8,810,420
 
 
 
4,963,632
 

Other comprehensive income (loss)

Unrealized investment income (loss), net of tax effect

 
 
45,432
 
 
 
28,730
 
 
 
5,024
 
 
 
(21,826
)

Comprehensive income

 
$ 
2,957,217
 
 
$ 
1,592,437
 
 
$ 
8,815,444
 
 
$ 
4,941,806
 

Weighted average number of shares outstanding:

Basic

 
 
3,666,790
 
 
 
3,873,731
 
 
 
3,803,400
 
 
 
3,912,188
 

Diluted

 
 
3,668,170
 
 
 
3,876,034
 
 
 
3,804,673
 
 
 
3,914,312
 

Net income per share:

Basic

 
$ 
0.79
 
 
$ 
0.40
 
 
$ 
2.32
 
 
$ 
1.27
 

Diluted

 
$ 
0.79
 
 
$ 
0.40
 
 
$ 
2.32
 
 
$ 
1.27
 

 SOURCE: Nobility Homes, Inc.

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