-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BX3fuRursBOzQbFawqOzHN/U1z+SgPJyuS34mX3DMcj7fBUruvPEzOQ57TfQsJ++ OqA0yj3j7OSrfBLP7gUcDQ== 0000897069-98-000455.txt : 19980916 0000897069-98-000455.hdr.sgml : 19980916 ACCESSION NUMBER: 0000897069-98-000455 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980801 FILED AS OF DATE: 19980915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOBILITY HOMES INC CENTRAL INDEX KEY: 0000072205 STANDARD INDUSTRIAL CLASSIFICATION: MOBILE HOMES [2451] IRS NUMBER: 591166102 STATE OF INCORPORATION: FL FISCAL YEAR END: 1027 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06506 FILM NUMBER: 98709544 BUSINESS ADDRESS: STREET 1: 3741 S W 7TH ST CITY: OCALA STATE: FL ZIP: 34478 BUSINESS PHONE: 9047325157 MAIL ADDRESS: STREET 1: P O BOX 1659 CITY: OCALA STATE: FL ZIP: 34478-1659 10-Q 1 NOBILITY HOMES, INC.'S FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the Quarterly period ended August 1, 1998 Commission File number 0-6506 NOBILITY HOMES, INC. (Exact name of registrant as specified in its charter) Florida 59-1166102 (State or other jurisdiction (I.R.S. Employer of incorporation or Identification No.) organization) 3741 S.W. 7th Street Ocala, Florida 34474 (Address of principal executive offices) (Zip Code) (352) 732-5157 (Issuer's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered None None Securities registered pursuant to Section 12(g) of the Act: Common Stock $.10 par value (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X; No _____. (APPLICABLE ONLY TO CORPORATE ISSUERS) State the number of shares outstanding of each of the issuer's classes of common equity, as of September 14, 1998. 4,456,251 NOBILITY HOMES, INC. INDEX Page Number PART I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of August 1, 1998 and November 1, 1997 3 Consolidated Statements of Income for the three and nine months ended August 4 1, 1998 and August 2, 1997 Consolidated Statements of Cash Flows for the nine months ended August 1, 5 1998 and August 2, 1997 Notes to Consolidated Financial 6 Statements Item 2. Management's Discussion and Analysis of Results of Operations and Financial 7 Conditions PART II. Other Information and Signatures Item 5. Other Information 7 Item 6. Exhibits and Reports of Form 8-K 8 PART I. FINANCIAL INFORMATION NOBILITY HOMES, INC. CONSOLIDATED BALANCE SHEETS
August 1, 1998 November 1, 1997 -------------- ---------------- ASSETS (Unaudited) Current Assets: Cash and cash equivalents $ 7,597,575 $ 6,293,924 Accounts receivable - trade 1,396,880 386,019 Inventories 8,031,811 8,041,471 Deferred income taxes 150,100 150,100 Prepaid expenses and other current assets 186,702 113,857 --------------- ------------ Total current assets 17,363,068 14,985,371 Property, plant and equipment, net 1,769,869 1,285,112 Investment in joint venture 343,082 263,024 Deferred income taxes - noncurrent 697,100 697,100 Other assets 1,675,246 1,710,023 --------------- ------------ Total assets $ 21,848,365 $ 18,940,630 =============== ============ LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,106,655 $ 1,592,980 Accrued compensation 552,630 606,651 Accrued expenses and other current liabilities 1,752,737 1,044,186 Income taxes payable 301,050 402,979 --------------- ------------ Total current liabilities 3,713,072 3,646,796 --------------- ------------ Stockholders' equity: Preferred stock, $.10 par value, 500,000 shares authorized, none issued - - Common stock, $.10 par value, 10,000,000 shares authorized, 4,922,087 shares issued in 1998 and 1997 492,209 492,209 Additional paid in capital 2,197,185 2,197,185 Retained earnings 17,125,966 14,284,507 Less treasury stock at cost, 465,836 shares (1,680,067) (1,680,067) --------------- ------------ Total stockholders' equity 18,135,293 15,293,834 --------------- ------------ Commitments and contingencies - - --------------- ------------ Total liabilities and stockholders' equity $ 21,848,365 $ 18,940,630 =============== ============
NOBILITY HOMES, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended August 1, August 2, August 1, August 2, 1998 1997 1998 1997 --------- --------- --------- --------- Net sales $ 11,403,117 $ 10,367,297 $ 33,269,675 $ 28,867,127 Net sales - related parties 94,005 248,990 157,915 399,853 ----------- ----------- ----------- ----------- Total net sales 11,497,122 10,616,287 33,427,590 29,266,980 Less cost of goods sold (8,276,954) (7,779,104) (24,457,559) (21,714,518) ----------- ----------- ----------- ----------- Gross profit 3,220,168 2,837,183 8,970,031 7,552,462 Selling, general and administrative expense (1,687,594) (1,666,105) (4,694,036) (4,452,000) ----------- ----------- ----------- ----------- Operating income 1,532,574 1,171,078 4,275,995 3,100,462 Other income: Interest income 77,337 35,272 213,982 73,093 Undistributed earnings in joint venture 32,236 3,376 80,058 3,376 Miscellaneous income 34,655 56,875 42,424 112,866 ----------- ----------- ----------- ----------- 144,228 95,523 336,464 189,335 ----------- ----------- ----------- ----------- Income before provision for income taxes 1,676,802 1,266,601 4,612,459 3,289,797 Less provision for income taxes (644,000) (486,000) (1,771,000) (1,263,000) ----------- ----------- ----------- ----------- Net income $ 1,032,802 $ 780,601 $ 2,841,459 $ 2,026,797 =========== =========== =========== =========== Weighted average shares outstanding(1) Basic 4,456,251 4,456,251 4,456,251 4,456,251 Diluted 4,536,320 4,456,251 4,536,320 4,456,251 Earnings per share(1) Basic $ 0.23 $ 0.18 $ 0.64 $ 0.46 Diluted $ 0.23 $ 0.18 $ 0.63 $ 0.46
(1) Restated to reflect three-for-two-stock split in the form of a stock dividend paid on February 20, 1998 NOBILITY HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended August 1, August 2, 1998 1997 --------- --------- Cash flows from operating activities: Net income $ 2,841,459 $ 2,026,797 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation and amortization 153,743 110,178 Undistributed earnings in joint venture (80,058) (3,376) (Increase) decrease in: Accounts receivable - trade (1,010,861) (620,073) Inventories 9,660 (949,718) Prepaid expenses and other current assets (72,845) 149,676 Increase (decrease) in: Accounts payable (486,325) (303,391) Accrued compensation (54,021) 226,373 Accrued expenses and other current liabilities 708,551 259,190 Income taxes payable (101,929) 289,005 ----------- ----------- Net cash flows provided by operating activities 1,907,374 1,184,661 ----------- ----------- Cash flows from investing activities: Investment in joint venture - Nobility 21 - (250,000) Purchase of property, plant and equipment (603,723) (299,438) ----------- ----------- Net cash flows (used in) investing activities (603,723) (549,438) ----------- ----------- Increase in cash and cash equivalents 1,303,651 635,223 Cash and cash equivalents at beginning of year 6,293,924 2,049,184 ----------- ----------- Cash and cash equivalents at end of quarter $ 7,597,575 $ 2,684,407 =========== =========== Supplemental disclosure of cash flow information Income taxes paid $ 1,891,000 $ 1,142,500 =========== ===========
NOBILITY HOMES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The unaudited financial information included in this report includes all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The operations for the nine months ended August 1, 1998 are not necessarily indicative of the results of the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the Securities Exchange Commission rules and regulations governing form 10-Q. The condensed financial statements included in this report should be read in conjunction with the financial statements and notes thereto included in the Registrant's November 1, 1997 form 10-K annual report. 2. Inventories Inventories are carried at the lower of cost or market. Cost of finished home inventories is determined on the specific identification method. Other inventory costs are determined on a first-in, first-out basis. Inventories at August 1, 1998 and November 1, 1997 are summarized as follows: August 1, November 1, 1998 1997 --------- ----------- Raw Materials $ 572,760 $ 540,279 Work-in-process 87,043 75,022 Finished homes 6,383,297 6,501,759 Pre-owned manufactured homes 454,317 340,751 Model home furniture and other 534,394 583,660 ----------- ----------- $ 8,031,811 $ 8,041,471 =========== =========== 3. Earnings Per Share Effective for the quarter ended January 31, 1998, the Company adopted FASB Statement on Accounting Standards No. 128, Earnings Per Share. The Statement simplifies the standards for computing earnings per share by replacing the presentation of primary earnings per share with a presentation of basic earnings per share. Prior years have been restated to reflect this change. The following reconciliation details the numerators and denominators used to calculate basic and diluted earnings per share for the respective periods. Three Months Ended Nine Months Ended August 1, August 2, August 1, August 2, 1998 1997 1998 1997 --------- --------- --------- --------- Net Income $ 1,032,802 $ 780,601 $ 2,841,459 $ 2,026,797 ========== ========== ========== ========== Weighted average shares outstanding Basic 4,456,251 4,456,251 4,456,251 4,456,251 Add: common stock equivalents 80,069 -- 80,069 -- ---------- ---------- ---------- ---------- Diluted 4,536,320 4,456,251 4,536,320 4,456,251 ========== ========== ========== ========== Earning per share: Basic $ 0.23 $ 0.18 $ 0.64 $ 0.46 ========== ========== ========== ========== Diluted $ 0.23 $ 0.18 $ 0.63 $ 0.46 ========== ========== ========== ========== 4. Three-for-two Stock Split On January 6, 1998, the Company declared a three-for-two stock split in the form of a stock dividend, payable on February 20, 1998 to shareholders of record as of January 30, 1998. Fiscal 1997 stockholders' equity has been restated to give retroactive recognition to the stock split in the prior period by reclassifying from additional paid-in-capital to common stock the par value of the 1,485,297 shares arising from the split. In addition, all references to per share amounts of the Company's common stock have been restated. 5. Subsequent Events On August 11, 1998, the Company acquired six manufactured home retail sales centers located in the panhandle of Florida. This transaction will be accounted for using the purchase method of accounting; accordingly, the purchased assets have been recorded at their estimated fair market value at the date of acquisition. The results of operations of the acquired businesses will be included in the consolidated financial statements from the date of acquisition. On August 18, 1998, the Company opened a retail sales center located in Yulee, Florida. The cost of the land and land improvements was approximately $450,000. Nobility Homes, Inc. Management's Discussion And Analysis Of Results Of Operations And Financial Condition Results of Operations Net sales for the three months ended August 1, 1998 increased 8 percent to $11,497,122 from $10,616,287 for the same period last year. Net sales for the nine months increased 14 percent to $33,427,590 from $29,266,980 a year ago. The increase in sales was primarily due to the same store sales volume at the Company's Prestige Home Centers increasing 11.6 percent to $9,035,609 for the third quarter of 1998 from $8,098,521 for the same period last year and increasing 13.7 percent to $24,701,913 for the nine months of 1998 from $21,725,048 for the same nine month period last year. Gross profit, as a percentage of net sales, increased to 28 percent in the third quarter of 1998 from 26.7 percent for the same period last year. For the nine months, gross profit, as a percentage of net sales, increased to 26.8 percent as of August 1, 1998 from 25.8 percent for the same nine month period last year. The increase in gross profit was primarily a result of improvements in the gross margins at both the manufacturing plants and retails sales centers. Selling, general and administrative expenses, as a percentage of net sales, declined to 14.7 percent in the third quarter of 1998 from 15.7 percent for the third quarter last year. For the nine months, selling, general and administrative expenses, as a percentage of net sales, declined to 14 percent as of August 1, 1998 from 15.2 percent for the same nine month period last year. The decline in selling, general and administrative expenses as a percent of net sales was primarily due to better operating efficiencies at both the manufacturing plants and retail sales centers. Other income for the third quarter of 1998 was $144,228 of which $77,337 was from interest on short term investments and $32,236 represented undistributed earnings from Nobility 21, a joint venture which began operations in May 1997 and which provides financing to Prestige's retail customers. For the third quarter of 1997, other income was $95,523. For the nine months ended August 1, 1998, other income was $336,464 of which $213,982 was from interest on short term investments and $80,058 was undistributed earnings from Nobility 21. For the same nine month period last year, other income was $189,335. As a result of the factors discussed above, net income for the third quarter of 1998 increased 32% to $1,032,802 or $.23 per diluted share, compared to $780,601 or $.18 per diluted share in 1997. For the nine months ended August 1, 1998 net income increased 40% to $2,841,459 or $.63 per diluted share, compared to $2,026,797 or $.46 per diluted share as of August 2, 1997. Earnings per share for 1997 have been restated to reflect a three-for-two stock split in the form of a 50% stock dividend paid on February 20, 1998. Liquidity and Capital Resources Cash and cash equivalents were $7,597,575 at August 1, 1998 compared to $6,293,924 as of November 1, 1997. Accounts receivable - trade increased to $1,396,880 at August 1, 1998 from an abnormally low $386,019 at November 1, 1997, but was down from $1,613,078 at August 2, 1997. On August 11, 1998 the Company closed on the acquisition of six retail sales centers located in the panhandle of Florida. On August 18, 1998 the Company opened a retail sales center located in Yulee, Florida. The cost of the land and land improvements was approximately $450,000. The Company maintains a revolving credit agreement with a major bank providing for borrowings up to $2.5 million and a second revolving line of credit agreement with a major bank which provides for borrowings up to $1.5 million. These two agreements provide the Company with an additional $4.0 million of working capital for use in connection with its overall operations. At August 1, 1998 there were no amounts outstanding under these agreements. Consistent with normal practice, the Company's operations are not expected to require significant capital expenditures during fiscal 1998. Working capital requirements for the home inventory for new sales centers will be met with internal sources. Year 2000 Issue Many existing computer programs use only two digits to identify a year in the date field. As the century date change occurs, these programs may recognize the year 2000 as 1900, or not at all. If not corrected, many computer systems and applications could fail or create erroneous results by or at the year 2000 (the "Year 2000 Issue"). The Company has developed plans to address its possible exposures related to the impact of the Year 2000 Issue on its internal systems. These plans are expected to be implemented primarily with the use of internal resources. The Company's internal systems consist of its central operating and accounting systems, which handle the majority of its business transactions. The Company has completed an assessment of its central operating and accounting systems which resulted in the identification of certain modifications necessary to bring these systems into year 2000 compliance. These modifications have been made, primarily through the purchase of updated hardware and updated vendor-supplied software. Based on the results of initial testing, with respect to these systems, the Company does not anticipate that the Year 2000 Issue will materially impact operations or operating results. Management believes that total pretax costs incurred to date in connection with the Year 2000 Issue have not materially impacted the Company's operating results. The Company believes its planning efforts are adequate to address the Year 2000 Issue and that its risk factors are primarily those that it cannot directly control, including the readiness of its major suppliers, customers and service providers. Failure on the part of these entities to timely remediate their Year 2000 Issues could result in disruptions in the Company's supply of materials, disruptions in its customers' ability to conduct business and interruptions to the Company's daily operations. Management believes that its exposure to third party risk may be minimized to some extent because it does not rely significantly on any one supplier or customer. There can be no guarantee, however, that the systems of other unrelated entities on which the Company's systems and operations relay will be corrected on a timely basis and will not have a material adverse effect on the Company. The Company does not currently have formal contingency plans or a timetable for implementing them. contingency plans will be established, if they are deemed necessary, after the company has adequately assessed the impact on its operations should third parties fail to properly remediate their computer systems. Contingency plans would include such items as identifying alternative suppliers and increasing inventory levels prior to the year 2000 to ensure availability of supplies for the Company's customers. Part II. Other Information And Signatures Item 1. There were no reportable events for item 1 through item 4. Item 5. Other Information. The deadline for submission of shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (""Rule 14a- 8"), for inclusion in the Company's proxy statement for its 1999 Annual Meeting of Shareholders is October 7, 1998. After December 21, 1999, notice to the Company of a shareholder proposal submitted otherwise than pursuant to Rule 14a-8 will considered untimely, and the persons named in proxies solicited by the Company's Board of Directors for its 1999 Annual Meeting of Shareholders may exercise discretionary voting power with respect to any such proposal as to which the Company does not receive timely notice. Item 6. Exhibits and Reports on Form 8-K Exhibit 27 Financial Data Schedule Signatures In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, there unto duly authorized. NOBILITY HOMES, INC. DATE: September 14, 1998 By: /s/ Terry E. Trexler Terry E. Trexler, Chairman, President and Chief Executive Officer DATE: September 14, 1998 By: /s/ Thomas W. Trexler Thomas W. Trexler, Executive Vice President, Chief Financial Officer DATE: September 14, 1998 By: /s/ Lynn J. Cramer, Jr Lynn J. Cramer, Jr., Treasurer and Principal Accounting Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF NOBILITY HOMES, INC. AS OF AND FOR THE QUARTERLY PERIOD ENDED AUGUST 1, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS OCT-31-1998 MAY-03-1998 AUG-01-1998 7,597,575 0 1,396,880 0 8,031,811 17,363,068 3,251,036 1,481,167 21,848,365 3,713,074 0 0 0 492,209 17,643,082 21,848,365 11,497,122 11,497,122 8,276,954 1,687,594 0 0 0 1,676,802 644,000 0 0 0 0 1,032,802 .23 .23
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