-----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, AkcQtfSufVW1RA1V6omd6Z8uuHypgSO3Z5lYznWVJPuGCkD3i8IA3Jo2IZVaYtPJ tOqdZLzJ1PQf4sZCVuEBhQ== /in/edgar/work/20000918/0000897069-00-000464/0000897069-00-000464.txt : 20000923 0000897069-00-000464.hdr.sgml : 20000923 ACCESSION NUMBER: 0000897069-00-000464 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000805 FILED AS OF DATE: 20000918 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOBILITY HOMES INC CENTRAL INDEX KEY: 0000072205 STANDARD INDUSTRIAL CLASSIFICATION: [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: 724572 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 0001.txt NOBILITY HOME, INC.'S THIRD QUARTER 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 5, 2000 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 (Registrant's telephone number, including area code) 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 _____. The number of shares outstanding of each of the issuer's classes of common equity as of September 12, 2000 was 4,505,838 NOBILITY HOMES, INC. INDEX Page Number PART I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of August 5, 2000 and November 6, 1999 3 Consolidated Statements of Income for the three and nine months ended August 5, 2000 and July 31, 1999 4 Consolidated Statements of Cash Flows for the nine months ended August 5, 2000 and July 31, 1999 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Conditions 8 PART II. Other Information and Signatures 10 Item 6. Exhibits Page 2 PART I. FINANCIAL INFORMATION NOBILITY HOMES, INC. CONSOLIDATED BALANCE SHEETS
August 5, 2000 November 6, 1999 ------------------- ------------------- ASSETS (UNAUDITED) Current Assets: Cash and cash equivalents $ 9,076,594 $ 7,973,241 Accounts receivable 131,631 167,764 Inventories 7,648,756 9,149,924 Deferred income taxes 179,900 179,900 Prepaid expenses and other current assets 346,995 310,642 ------------- ------------- Total current assets 17,383,876 17,781,471 Property, plant and equipment, net 2,531,620 1,987,047 Investment in joint venture - Majestic 21 697,865 431,433 Deferred income taxes - noncurrent 665,400 665,400 Other assets 2,287,254 2,256,984 ------------- ------------- Total assets $ 23,566,015 $ 23,122,335 ============= ============= LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 922,952 $ 1,183,765 Accrued expenses and other current liabilities 1,376,528 974,286 Accrued compensation 368,664 428,343 Income taxes payable 115,150 99,150 ------------- ------------- Total current liabilities 2,783,294 2,685,544 ------------- ------------- Commitments and contingencies Stockholders' equity: Preferred stock, $.10 par value, 500,000 shares authorized, none issued - - Common stock, $.10 par value, 10,000,000 shares authorized; 5,364,907 shares issued 536,491 536,491 Additional paid in capital 8,629,144 8,629,144 Retained earnings 16,057,324 14,540,965 Less treasury stock at cost, 856,269 and 633,069 shares, respectively, in 2000 and 1999 (4,440,238) (3,269,809) ------------- ------------- Total stockholders' equity 20,782,721 20,436,791 ------------- ------------- Total liabilities and stockholders' equity $ 23,566,015 $ 23,122,335 ============= =============
The accompanying notes are an integral part of these financial statements Page 3 NOBILITY HOMES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended August 5, July 31, August 5, July 31, 2000 1999 2000 1999 ---------------- ---------------- ---------------- ---------------- Net sales $ 7,638,698 $ 9,424,872 $ 20,758,292 $ 30,372,033 Net sales - related parties - - 25,245 85,575 ------------ ------------ ------------- ------------- Total net sales 7,638,698 9,424,872 20,783,537 30,457,608 Cost of goods sold (5,727,020) (7,133,791) (15,518,677) (22,283,408) ------------ ------------ ------------- ------------- Gross profit 1,911,678 2,291,081 5,264,860 8,174,200 Selling, general and administrative expenses (1,373,974) (1,735,915) (4,051,995) (5,330,339) Revaluation adjustment of goodwill - (78,000) (18,000) (78,000) ------------ ------------ ------------- ------------- Operating income 537,704 477,166 1,194,865 2,765,861 ------------ ------------ ------------- ------------- Other income: Interest income 101,432 52,828 264,552 147,446 Undistributed earnings in joint venture - Majestic 21 56,469 172,654 266,432 367,639 Miscellaneous (Note 4) 272,721 19,859 720,511 29,023 ------------ ------------ ------------- ------------- 430,622 245,341 1,251,495 544,108 ------------ ------------ ------------- ------------- Income before provision for income taxes 968,326 722,507 2,446,360 3,309,969 Provision for income taxes (363,000) (271,000) (930,000) (1,244,000) ------------ ------------ ------------- ------------- Net income $ 605,326 $ 451,507 $ 1,516,360 $ 2,065,969 ============ ============ ============= ============= Weighted average shares outstanding Basic 4,603,412 4,805,684 4,652,835 4,839,059 Diluted 4,603,412 4,806,904 4,652,835 4,885,862 Earnings per share Basic $ .13 $ .09 $ .33 $ .43 Diluted $ .13 $ .09 $ .33 $ .42
The accompanying notes are an integral part of these financial statements Page 4 NOBILITY HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended August 5, July 31, 2000 1999 --------------- --------------- Cash flows from operating activities: Net income $ 1,516,360 $ 2,065,969 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 190,693 186,335 Impairment adjustment of goodwill 18,000 78,000 Gain on recovery of TLT, Inc. note receivable (666,099) - Undistributed earnings in joint venture - Majestic 21 (266,432) (367,639) (Increase) decrease in: Accounts receivable 36,133 (126,427) Inventories 1,501,168 (7,177) Prepaid expenses and other current assets (36,353) 58,269 Increase (decrease) in: Accounts payable (260,813) (839,543) Accrued expenses and other current liabilities 402,242 (147,240) Accrued compensation (59,679) (322,404) Income taxes payable 16,000 (295,000) ------------ ------------ Net cash provided by operating activities 2,391,220 283,143 ------------ ------------ Cash flows from investing activities: Purchase of property and equipment (708,540) (127,126) Increase in receivable from officers for life insurance premiums (74,997) (18,423) ------------ ------------ Net cash used in investing activities (783,537) (145,549) Cash flows from financing activities: Purchase of treasury stock (1,170,429) (619,435) Collection of TLT,Inc. note receivable 666,099 - ------------ ------------ Net cash used in financing activities (504,330) (619,435) Increase (decrease) in cash and cash equivalents 1,103,353 (481,841) Cash and cash equivalents at beginning of year 7,973,241 5,891,994 ------------ ------------ Cash and cash equivalents at end of quarter $ 9,076,594 $ 5,410,153 ============ ============ Supplemental disclosure of cash flow information Income taxes paid $ 914,000 $ 1,685,000 ============ ============
The accompanying notes are an integral part of these financial statements Page 5 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 three and nine months ended August 5, 2000 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 and 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 6, 1999 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 5, 2000 and November 6, 1999 are summarized as follows:
August 5, November 6, 2000 1999 ----------------- ----------------- Raw materials $ 554,518 $ 571,151 Work-in-process 104,100 114,733 Finished homes 6,226,287 7,425,884 Pre-owned manufactured homes 360,649 496,593 Model home furniture and other 403,201 541,563 ----------------- ---------------- $ 7,648,756 $ 9,149,924 ================= ================
Page 6 NOBILITY HOMES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (UNAUDITED)
Three Months Ended Nine Months Ended August 5, July 31, August 5, July 31, 2000 1999 2000 1999 --------------- --------------- -------------- -------------- --------------- --------------- -------------- -------------- Net income $ 605,326 $ 451,507 $ 1,516,360 $ 2,065,969 =========== =========== =========== =========== Weighted average shares outstanding: Basic 4,603,412 4,805,684 4,652,835 4,839,059 Add: common stock equivalents - 1,220 - 46,803 ----------- ----------- ----------- ----------- Diluted 4,603,412 4,806,904 4,652,835 4,885,862 =========== =========== =========== =========== Earnings per share: Basic $ 0.13 $ 0.09 $ 0.33 $ 0.43 =========== =========== =========== =========== Diluted $ 0.13 $ 0.09 $ 0.33 $ 0.42 =========== =========== =========== ===========
3. Stock Dividend -------------- On December 15, 1998, the Company's Board of Directors declared a 10% stock dividend which was paid on February 19, 1999 to stockholders of record on January 15, 1999. This resulted in the issuance of 442,820 additional shares of common stock. The dividend was charged to retained earnings in the amount of approximately $6.5 million, which was based upon the fair value of the Company's common stock. All references to weighted-average shares outstanding and per share amounts included herein reflect the 10% stock dividend and its retroactive effect. 4. Affiliated Entities ------------------- In the first nine months of 2000, TLT paid $666,099 to the Company for advances that are non-interest bearing and have been fully reserved since 1991. The balance of the unpaid advances at August 5, 2000, which are fully reserved, total $852,655. The amount collected has been recorded as gain on recovery ot the TLT, Inc. note receivable in the accompanying consolidated financial statements. Page 7 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 5, 2000 decreased to $7,638,698 from $9,424,872 for the same period last year. Net sales for the nine months also decreased to $20,783,537 from $30,457,608 a year ago. Although third quarter of 2000 net sales increased 24.0 and 9.2 percent over first and second quarters of 2000 respectively, the decrease in sales from the comparable period in 1999 was primarily due to a very competitive market caused by the industry's excess retail inventory. This excess inventory has developed from industry growth of new retail locations that has outpaced consumer demand. Tighter credit standards, increasing mortgage interest rates and management's decision not to discount homes to maintain sales volume also adversely impacted sales. Gross profit, as a percentage of net sales, was 25.0 percent in the third quarter of 2000 compared to 24.3 percent for the same period last year. For the nine months gross profit, as a percentage of net sales, was 25.3 percent compared to 26.8 percent for the same nine month period last year. The decrease in gross profit for the nine months was primarily due to the lower sales volume at both the Nobility manufacturing plants and Prestige retail sales centers. Selling, general and administrative expenses, as a percentage of net sales, was 18.0 percent in the third quarter of 2000 compared to 18.4 percent for the same period last year. For the nine months selling, general and administrative expenses, as a percentage of net sales, was 19.5 percent compared to 17.5 percent for the same nine month period last year. The increase in selling, general and administrative expenses, as a percent of net sales, was due to the fixed overhead cost associated with the lower sales volume. Other income for third quarter 2000 was $430,622 of which $101,432 was from interest on short term investments and $56,469 was undistributed earnings from the Company's financing joint venture, Majestic 21. The Company also received a $250,894 payment from TLT Communities against $1,103,548 of advances that are non-interest bearing and have been fully reserved since 1991. For the nine months of 2000 other income was $1,251,495 of which $264,552 was from interest on short term investments and $266,432 was undistributed earnings from the Company's financing joint venture, Majestic 21. The Company in fiscal year 2000 received a total of $666,099 in payments from TLT Communities. For the same nine month period in fiscal 1999 other income was $544,108 of which $147,446 was from interest income, $367,639 from Majestic 21 and $29,023 in miscellaneous income. There was no payment from TLT Communities during the first nine months of 1999. As a result of the factors discussed above, net income for the third quarter of 2000 was $605,326 or $.13 per share, compared to $451,507 or $.09 per share in the third quarter of 1999. For the nine months ended August 5, 2000 net income was $1,516,360 or $.33 per share, compared to $2,065,969 or $.42 per share as of July 31, 1999. Liquidity and Capital Resources - ------------------------------- Cash and cash equivalents were $9,076,594 at August 5, 2000 compared to $7,973,241 as of November 6, 1999. Working capital was $14,600,582 at August 5, 2000 compared to $15,095,927 at November 6, 1999. Inventories decreased to $7,648,756 in the third quarter of 2000 from $9,149,924 at the fourth quarter of 1999, as a result of Prestige reducing the number of model homes in stock at their retail sales centers. Prestige purchased the land for two of its existing retail sales centers during the second quarter of 2000 for $638,738. The Company had previously leased the property from unrelated entities under operating lease agreements. The Company repurchased 223,200 shares of its common stock in the open market during the first nine months of 2000 for $1,170,429. In the current nine months if fiscal 2000 Prestige closed one of its sales centers in Chiefland, Florida, November 1999, and made an impairment adjustment to goodwill in the amount of $18,000. For the nine months of fiscal year 1999 one sales center was closed and the Company made an impairment adjustment to goodwill in the amount of $78,000. The Company maintains a revolving credit agreement with a major bank providing for borrowings up to $4.0 million. At August 5, 2000 there were no amounts outstanding under this agreement. Consistent with normal practice, the Company's operations are not expected to require significant capital expenditures during fiscal year 2000. Working capital requirements for the home inventory for new and existing sales centers will be met with internal sources. Page 8 NOBILITY HOMES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued) Forward Looking Statements - -------------------------- Certain statements in this report are forward-looking statements within the meaning of the federal securities laws. Although the Company 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, changes in market demand, increasing interest rates, adverse weather conditions that reduce sales at retail centers, price increases in raw material costs, the risk of manufacturing plant shutdowns due to storms or other factors, and the impact of marketing and cost-management programs. Page 9 Part II. OTHER INFORMATION AND SIGNATURES Item 1. There were no reportable events for Item 1 through Item 5 Item 6. Exhibits Exhibit 27 Financial Data Schedule Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NOBILITY HOMES, INC. DATE: September 12, 2000 By: /s/ Terry E. Trexler ------------------------------------ Terry E. Trexler, Chairman, President and Chief Executive Officer DATE: September 12, 2000 By: /s/ Thomas W. Trexler ------------------------------------ Thomas W. Trexler, Executive Vice President, Chief Financial Officer DATE: September 12, 2000 By: /s/ Lynn J. Cramer, Jr. ------------------------------------ Lynn J. Cramer, Jr., Treasurer and Principal Accounting Officer Page 10 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF NOBILITY HOMES, INC. AS OF AND FOR THE QUARTER ENDED AUGUST 5, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000072205 NOBILITY HOMES, INC. U.S. DOLLARS 9-MOS NOV-04-2000 NOV-07-1999 AUG-05-2000 1 9,076,594 0 131,631 0 7,648,756 17,383,876 4,434,227 1,902,607 23,566,015 2,783,294 0 0 0 536,491 20,246,230 23,566,015 20,783,537 20,783,537 15,518,677 4,051,995 18,000 0 0 2,446,360 930,000 0 0 0 0 1,516,360 0.33 0.33
-----END PRIVACY-ENHANCED MESSAGE-----