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

OCALA, FL / ACCESSWIRE / September 11, 2020 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its third quarter ended August 1, 2020. Sales for the third quarter of 2020 were $8,800,410 as compared to $11,785,366 recorded in the third quarter of 2019. Income from operations for the third quarter of 2020 was $1,331,060 versus $2,293,141 in the same period a year ago. Net income after taxes was $1,160,138 as compared to $2,543,104 for the same period last year. Diluted earnings per share for the third quarter of 2020 were $0.32 per share compared to $0.67 per share last year.

For the first nine months of fiscal 2020, sales were $28,446,764 as compared to $35,567,828 for the first nine months of 2019. Income from operations was $4,879,632 versus $6,200,698 last year. Net income after taxes was $4,110,283 compared to $5,898,635 last year. Diluted earnings per share were $1.13 per share compared to $1.53 per share last year.

Nobility’s financial position for the first nine months of 2020 remains very strong with cash and cash equivalents, certificates of deposit and short term investments of $29,458,877 and no outstanding debt. Working capital is $36,802,695 and our ratio of current assets to current liabilities is 7.8:1. Stockholders’ equity is $49,066,955 and the book value per share of common stock outstanding is $13.51.

Terry Trexler, President, stated, “The coronavirus (“COVID-19”) pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns. Although we were deemed an essential business and never closed our manufacturing plant or retail sales centers, these measures had a negative impact on customer traffic (and corresponding sales) within our centers and the operations of our business partners. While our manufacturing operations have continued, an outbreak in our manufacturing facility would adversely impact our ability to produce new homes. There is considerable uncertainty regarding the impact, and expected duration, of such measures and potential future measures, which could cause disruptions to our business in the future. Since May of 2020 the Company has experienced unprecedented inflation in forest products, with no immediate relief in sight. The rapid increases have resulted in increases to our material costs. Recently, Hurricane Laura damaged some of the plants that supply the resin used in residential vinyl siding and PVC piping, which is currently threatening our supply chain. The Company is monitoring these issues daily and have adjusted our selling prices accordingly to help offset the higher costs.

The demand for affordable manufactured housing in Florida has been adversely impacted by COVID-19 and actions taken in response thereto. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2019 through July 2020 were down approximately 16% from the same period last year. In addition, the lack of lenders in our industry, partly as a result of an increase in government regulations, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes.

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, 2020 the Company celebrated its 53rd 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.


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 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

  August 1,     November 2,  
  2020     2019  
Current assets:
Cash and cash equivalents
  $ 20,911,248     $ 22,533,965  
Certificates of Deposit
    8,192,314       10,153,575  
Short-term investments
    355,315       521,283  
Accounts receivable – trade
    713,358       1,351,838  
Note receivable
    49,089       83,231  
Mortgage notes receivable
    19,742       17,896  
    10,637,620       10,616,778  
Pre-owned homes, net
    253,060       331,103  
Prepaid expenses and other current assets
    1,062,244       1,217,762  
Total current assets
    42,193,990       46,827,431  
Property, plant and equipment, net
    5,156,732       5,005,644  
Pre-owned homes, net
    1,271,768       808,128  
Note receivable, less current portion
    11,693       43,769  
Mortgage notes receivable, less current portion
    228,706       232,148  
Other investments
    1,710,398       1,649,273  
Deferred income taxes
    27,267       80,405  
Operating lease right of use assets
Cash surrender value of life insurance
    3,761,974       3,617,974  
Other assets
    156,287       156,287  
Total assets
  $ 55,245,995     $ 58,421,059  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
  $ 653,332     $ 1,111,216  
Accrued compensation
    451,891       748,626  
Accrued expenses and other current liabilities
    1,172,806       2,055,952  
Income taxes payable
Operating lease obligation
Customer deposits
    3,091,885       3,022,818  
Total current liabilities
    5,391,295       8,954,744  
Operating lease obligation, less current portion
Total liabilities
    6,179,040       8,954,744  
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;
3,631,196 and 3,664,070 outstanding, respectively
    536,491       536,491  
Additional paid in capital
    10,693,648       10,687,662  
Retained earnings
    56,102,636       55,298,750  
Accumulated other comprehensive income
Less treasury stock at cost, 1,733,711 shares in 2020 and
1,700,837 shares in 2019
    (18,265,820)       (17,445,752)  
Total stockholders’ equity
    49,066,955       49,466,315  
Total liabilities and stockholders’ equity
  $ 55,245,995     $ 58,421,059  

Condensed Consolidated Statements of Income and Comprehensive Income

  Three Months Ended     Nine Months Ended  
  August 1,     August 3,     August 1,     August 3,  
  2020     2019     2020     2019  
Net sales
  8,800,410     11,785,366     28,446,764     35,567,828  
Cost of sales
    (6,361,500)       (8,139,910)       (19,980,510)       (25,506,957)  
Gross profit
    2,438,910       3,645,456       8,466,254       10,060,871  
Selling, general and administrative expenses
    (1,107,850)       (1,352,315)       (3,586,622)       (3,860,173)  
Operating income
    1,331,060       2,293,141       4,879,632       6,200,698  
Other income (loss):
Interest income
    53,209       134,526       239,365       431,995  
Undistributed earnings in joint venture – Majestic 21
    20,855       19,800       61,125       60,555  
Proceeds received under escrow arrangement
    64,053       76,734       336,447       289,341  
Market value of equity investment
    21,475             (159,051)        
Gain on sale of assets
    32,041       864,887       32,041       880,129  
    12,910       10,834       32,504       33,714  
Total other income
    204,543       1,106,781       542,431       1,695,734  
Income before provision for income taxes
    1,535,603       3,399,922       5,422,063       7,896,432  
Income tax expense
    (375,465)       (856,818)       (1,311,780)       (1,997,797)  
Net income
    1,160,138       2,543,104       4,110,283       5,898,635  
Other comprehensive income (loss)
Unrealized investment income net of tax effect
          (96,120)             (40,408)  
Comprehensive income
  1,160,138     2,446,984     4,110,283     5,858,227  
Weighted average number of shares outstanding:
    3,631,089       3,807,357       3,641,048       3,848,936  
    3,632,420       3,808,617       3,642,397       3,850,169  
Net income per share:
  0.32     0.67     1.13     1.53  
  0.32     0.67     1.13     1.53  

SOURCE: Nobility Homes, Inc.


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