Nobility Homes, Inc. Announces Increased Sales and Earnings for Its Third Quarter 2019

OCALA, FL / ACCESSWIRE / September 9, 2019 / Today Nobility Homes, Inc. (OTCQX:NOBH) announced sales and earnings for its third quarter ended August 3, 2019. Sales for the third quarter of 2019 were up 3% to $11,785,366 as compared to $11,447,636 recorded in the third quarter of 2018. Income from operations for the third quarter of 2019 was up 57% to $2,293,141 versus $1,462,392 in the same period a year ago. Net income after taxes was up 104% to $2,543,104 as compared to $1,248,084 for the same period last year. On June 28, 2019 the Company sold its former Pace retail sales center property located in Pace, Florida for total net proceeds of $1,078,325. The Company recognized a gain on the sale of this property of $864,887. Diluted earnings per share for the third quarter of 2019 were $0.67 per share compared to $0.32 per share last year.

For the first nine months of fiscal 2019, sales were up 19% to $35,567,828 as compared to $30,015,718 for the first nine months of 2018. Income from operations was up 66% to $6,200,698 versus $3,744,496 last year. Net income after taxes was up 73% to $5,898,635 compared to $3,399,925 last year. Diluted earnings per share were $1.53 per share compared to $0.87 per share last year.

Nobility’s financial position for the first nine months of 2019 remains very strong with cash and cash equivalents, certificates of deposit and short term investments of $31,762,269 and no outstanding debt. Working capital is $37,042,814 and our ratio of current assets to current liabilities is 5.9:1. Stockholders’ equity is $48,246,860 and the book value per share of common stock outstanding increased to $12.88.

Terry Trexler, President, stated, “The demand for affordable manufactured housing in Florida continues to be strong. According to the Florida Manufactured Housing Association, shipments in Florida for the period from November 2018 through July 2019 were up approximately 19.4% 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, 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.

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

August 3, November 3,
2019 2018
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$ 21,146,880 $ 28,364,861
Certificates of Deposit
10,118,833 6,034,093
Short-term investments
496,556 537,767
Accounts receivable – trade
1,993,058 1,783,073
Note receivable
67,899 46,444
Mortgage notes receivable
17,317 15,664
Inventories
9,070,508 7,270,550
Pre-owned homes, net
499,463 933,640
Prepaid expenses and other current assets
1,238,456 1,090,152
Total current assets
44,648,970 46,076,244
Property, plant and equipment, net
4,900,716 4,763,566
Pre-owned homes, net
793,671 473,191
Note receivable, less current portion
42,047 46,265
Mortgage notes receivable, less current portion
233,247 236,402
Other investments
1,631,721 1,571,166
Property held for sale
213,437
Deferred income taxes
40,156
Cash surrender value of life insurance
3,572,974 3,437,974
Other assets
156,287 156,287
Total assets
$ 55,979,633 $ 57,014,688
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$ 933,587 $ 1,085,095
Accrued compensation
768,825 869,657
Accrued expenses and other current liabilities
1,943,653 1,349,381
Income taxes payable
852,236 579,786
Customer deposits
3,107,855 4,064,268
Total current liabilities
7,606,156 7,948,187
Deferred income taxes
126,617
Total liabilities
7,732,773 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;
3,746,570 and 3,873,731 outstanding, respectively
536,491 536,491
Additional paid in capital
10,686,657 10,670,848
Retained earnings
52,386,965 50,352,546
Accumulated other comprehensive income
349,999 390,407
Less treasury stock at cost, 1,618,337 shares in 2019 and
1,491,176 shares in 2018
(15,713,252 ) (12,883,791 )
Total stockholders’ equity
48,246,860 49,066,501
Total liabilities and stockholders’ equity
$ 55,979,633 $ 57,014,688

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

Three Months Ended Nine Months Ended
August 3, August 4, August 3, August 4,
2019 2018 2019 2018
Net sales
$ 11,785,366 $ 11,447,636 $ 35,567,828 $ 30,015,718
Cost of sales
(8,139,910) (8,705,847) (25,506,957) (22,745,684)
Gross profit
3,645,456 2,741,789 10,060,871 7,270,034
Selling, general and administrative expenses
(1,352,315) (1,279,397) (3,860,173) (3,525,538)
Operating income
2,293,141 1,462,392 6,200,698 3,744,496
Other income:
Interest income
134,526 99,594 431,995 216,977
Undistributed earnings in joint venture – Majestic 21
19,800 28,602 60,555 78,917
Proceeds received under escrow arrangement
76,734 117,271 289,341 172,911
Gain on sale of assets
864,887 880,129 203,512
Miscellaneous
10,834 10,083 33,714 22,667
Total other income
1,106,781 255,550 1,695,734 694,984
Income before provision for income taxes
3,399,922 1,717,942 7,896,432 4,439,480
Income tax expense
(856,818) (469,858) (1,997,797) (1,039,555)
Net income
2,543,104 1,248,084 5,898,635 3,399,925
Other comprehensive loss
Unrealized investment loss, net of tax effect
(96,120) (5,046) (40,408) (50,556)
Comprehensive income
$ 2,446,984 $ 1,243,038 $ 5,858,227 $ 3,349,369
Weighted average number of shares outstanding:
Basic
3,807,357 3,873,746 3,848,936 3,925,007
Diluted
3,808,617 3,875,897 3,850,169 3,927,066
Net income per share:
Basic
$ 0.67 $ 0.32 $ 1.53 $ 0.87
Diluted
$ 0.67 $ 0.32 $ 1.53 $ 0.87

SOURCE: Nobility Homes, Inc.

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