Nobility Homes, Inc. Announces Sales and Earnings for Its First Quarter 2020
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Nobility Homes, Inc. Announces Sales and Earnings for Its First Quarter 2020

Thursday, March 12, 2020 3:30 PM
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OCALA, FL / ACCESSWIRE / March 12, 2020 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its first quarter ended February 1, 2020. Sales for the first quarter of 2020 were $9,443,852 as compared to $11,039,774 recorded in the first quarter of 2019. Income from operations for the first quarter of 2020 was $1,633,705 versus $1,771,831 in the same period a year ago. Net income after taxes was $1,400,141 as compared to $1,535,806 for the same period last year. Diluted earnings per share for the first quarter of 2020 were $0.38 per share compared to $0.40 per share last year.

Nobility's financial position during the first quarter 2020 remains very strong with cash and cash equivalents, certificates of deposit and short term investments of $29,967,956 and no outstanding debt. Working capital is $38,334,114 and our ratio of current assets to current liabilities is 7.8:1. Stockholders' equity is $50,457,170 and the book value per share of common stock increased to $13.83.

The Board of Directors declared a one-time cash dividend of $1.00 per common share for fiscal year 2019. The cash dividend is payable on March 27, 2020 to stockholders of record as of March 13, 2020. Nobility Homes has distributed one-time cash dividends of $1.00 and $.20 in fiscal years ending 2018 and 2017, respectively.

The Company has no defined dividend policy. The Board of Directors maintains the authority to declare distributions at their discretion. The Board performs a thorough and extensive evaluation of the Company's balance sheet, cash flow, operating performance, and future earnings prospects when considering the declaration of any common dividend.

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 2019 through January 2020 were down approximately 12% 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.


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 negative impact on our business caused by the coronavirus or other health pandemic, competitive pricing pressures at both the wholesale and retail levels, increasing material costs or availability of materials due to potential supply chain interruptions, continued excess retail inventory, increase in repossessions, 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 and any armed conflict involving the United States and the impact of inflation.

Condensed Consolidated Balance Sheets

  February 1,     November 2,  
  2020     2019  
Current assets:
Cash and cash equivalents
  19,286,564     22,533,965  
Certificates of Deposit
    10,170,819       10,153,575  
Short-term investments
    510,573       521,283  
Accounts receivable - trade
    1,834,486       1,351,838  
Note receivable
    78,432       83,231  
Mortgage notes receivable
    18,323       17,896  
    10,651,669       10,616,778  
Pre-owned homes, net
    240,178       331,103  
Prepaid expenses and other current assets
    1,215,313       1,217,762  
Total current assets
    44,006,357       46,827,431  
Property, plant and equipment, net
    5,198,840       5,005,644  
Pre-owned homes, net
    1,170,048       808,128  
Note receivable, less current portion
    32,316       43,769  
Mortgage notes receivable, less current portion
    231,025       232,148  
Other investments
    1,669,145       1,649,273  
Deferred income taxes
    53,528       80,405  
Operating lease right of use asset
    740,505       -  
Cash surrender value of life insurance
    3,665,974       3,617,974  
Other assets
    156,287       156,287  
Total assets
  56,924,025     58,421,059  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
  572,805     1,111,216  
Accrued compensation
    456,862       748,626  
Accrued expenses and other current liabilities
    1,725,044       2,055,952  
Income taxes payable
    407,918       2,016,132  
Operating lease
    16,269       -  
Customer deposits
    2,493,345       3,022,818  
Total current liabilities
    5,672,243       8,954,744  
Operating lease, less current portion
    794,612       -  
Total liabilities
    6,466,855       8,954,744  
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;
3,649,670 and 3,664,070 outstanding, respectively
    536,491       536,491  
Additional paid in capital
    10,688,568       10,687,662  
Retained earnings
    57,023,463       55,298,750  
Accumulated other comprehensive income
    -       389,164  
Less treasury stock at cost, 1,715,237 shares in 2020 and
1,700,837 shares in 2019
    (17,791,352 )     (17,445,752 )
Total stockholders' equity
    50,457,170       49,466,315  
Total liabilities and stockholders' equity
  56,924,025     58,421,059  

Condensed Consolidated Statements of Income and Comprehensive Income

  Three Months Ended  
  February 1,     February 2,  
  2020     2019  
Net sales
  9,443,852     11,039,774  
Cost of sales
    (6,554,003 )     (8,070,771 )
Gross profit
    2,889,849       2,969,003  
Selling, general and administrative expenses
    (1,256,144 )     (1,197,172 )
Operating income
    1,633,705       1,771,831  
Other income:
Interest income
    101,883       152,443  
Undistributed earnings in joint venture - Majestic 21
    19,872       19,524  
Proceeds received under escrow arrangement
    83,109       104,488  
    7,152       8,918  
Total other income
    212,016       285,373  
Income before provision for income taxes
    1,845,721       2,057,204  
Income tax expense
    (445,580 )     (521,398 )
Net income
    1,400,141       1,535,806  
Other comprehensive loss
Unrealized investment loss, net of tax effect
    -       (16,540 )
Comprehensive income
  1,400,141     1,519,266  
Weighted average number of shares outstanding:
    3,659,241       3,873,864  
    3,660,638       3,876,085  
Net income per share:
  0.38     0.40  
  0.38     0.40  

SOURCE: Nobility Homes, Inc.

Nobility Homes, Inc.
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