Market Overview

Nobility Homes, Inc. Announces Increased Sales and Earnings for Its First Quarter 2018


OCALA, FL / ACCESSWIRE / March 16, 2018 / Today, Nobility Homes, Inc. (OTCQX: NOBH) announced increased sales and earnings for its first quarter ended February 3, 2018. Sales for the first quarter of 2018 were up 13% to $9,645,818, as compared to $8,573,400 recorded in the first quarter of 2017. Income from operations for the first quarter of 2018 was up 3% to $1,090,157, versus $1,056,477 in the same period a year ago. Net income after taxes was $1,016,236, as compared to $703,323 for the same period last year. Diluted earnings per share for the first quarter of 2018 were $0.25 per share, compared to $0.18 per share last year.

Nobility's financial position during the first quarter 2018 remains very strong with cash and cash equivalents and short term investments of $27,918,057 and no outstanding debt. Working capital is $36,086,489 and our ratio of current assets to current liabilities is 8.5:1. Stockholders' equity is $48,358,821 and the book value per share of common stock increased to $12.11.

The Board of Directors declared a one-time cash dividend of $.20 per common share for fiscal year 2017. The cash dividend is payable on April 16, 2018 to stockholders of record as of March 26, 2018.

Terry Trexler, President, stated, "The demand for affordable manufactured housing in Florida and the U.S. continues to improve. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2017 through January 2018 were up approximately 3% from the same period last year. Our sales for fiscal 2018 continue to look positive. Shipment of homes in our market area should improve and, if we can adequately control the material and labor cost increases that the Company is experiencing because of the improvements in the total housing picture, then earnings should also improve. Constrained consumer credit and the lack of lenders in our industry, partly as a result of an increase in government regulations, still affect our results by limiting many manufactured housing buyers from purchasing affordable homes.

We understand that maintaining our strong financial position is vital for future growth and success. Because of the recent years of very challenging business conditions 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 homebuyers' 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, 2017, the Company celebrated its 50th anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers, an insurance agency subsidiary, and an investment in a retirement manufactured home community, we are the only vertically integrated manufactured home company headquartered in Florida.


Certain statements in this report are 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, market disruptions resulting from terrorist or other attack and any armed conflict involving the United States and the impact of inflation.

Consolidated Balance Sheets

February 3,
November 4,
Current assets:
Cash and cash equivalents
$ 27,260,188 $ 27,910,504
Short-term investments
657,869 627,087
Accounts receivable - trade
3,309,542 2,934,300
Note receivable
500,000 500,000
Mortgage notes receivable
13,910 13,495
Income tax receivable
250,927 -
6,857,100 7,505,681
Pre-owned homes, net
809,569 1,141,863
Prepaid expenses and other current assets
1,236,587 820,224
Deferred income taxes
- 609,629
Total current assets
40,895,692 42,062,783
Property, plant and equipment, net
4,660,678 4,304,771
Pre-owned homes, net
904,357 815,358
Interest receivable
112,744 101,301
Note receivable, less current portion
1,150,826 1,134,086
Mortgage notes receivable, less current portion
239,356 240,297
Other investments
1,494,078 1,471,029
Property held for sale
599,455 599,455
Deferred income taxes
414,815 -
Cash surrender value of life insurance
3,307,848 3,262,848
Other assets
156,287 156,287
Total assets
$ 53,936,136 $ 54,148,215
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 736,627 $ 849,782
Accrued compensation
560,773 624,989
Accrued expenses and other current liabilities
910,651 1,127,397
Income taxes payable
- 260,416
Customer deposits
2,601,152 2,796,827
Total current liabilities
4,809,203 5,659,411
Deferred income taxes
768,112 1,074,507
Total liabilities
5,577,315 6,733,918
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
536,491 536,491
Additional paid in capital
10,669,672 10,669,231
Retained earnings
47,183,764 46,167,528
Accumulated other comprehensive income
434,580 412,233
Less treasury stock at cost, 1,371,838 shares in 2018 and
1,367,338 shares in 2017
Total stockholders' equity
48,358,821 47,414,297
Total liabilities and stockholders' equity
$ 53,936,136 $ 54,148,215

Consolidated Statements of Comprehensive Income

Three Months Ended
February 3,
February 4,
Net sales
$ 9,645,818 $ 8,573,400
Cost of goods sold
Gross profit
2,216,939 2,024,064
Selling, general and administrative expenses
Operating income
1,090,157 1,056,477
Other income:
Interest income
35,937 40,447
Undistributed earnings in joint venture - Majestic 21
23,049 28,598
5,734 4,771
Total other income
64,720 73,816
Income before provision for income taxes
1,154,877 1,130,293
Income tax expense
Net income
1,016,236 703,323
Other comprehensive income
Unrealized investment gain
22,347 115,167
Comprehensive income
$ 1,038,583 $ 818,490
Weighed average number of shares outstanding:
3,997,371 4,004,238
3,999,202 4,005,538
Net income per share:
$ 0.25 $ 0.18
$ 0.25 $ 0.18

SOURCE: Nobility Homes, Inc.

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