10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended February 3, 2018

Commission File number 000-06506

NOBILITY HOMES, INC.

(Exact name of registrant as specified in its charter)

Florida	59-1166102
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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  ☒;     No  ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒;    No  ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐;    No  ☒.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Title of Class	Shares Outstanding on March 19, 2018
Common Stock	3,893,069

NOBILITY HOMES, INC.

INDEX

		Page Number
PART I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of February 3, 2018 (Unaudited) and November 4, 2017		3
	Consolidated Statements of Income and Comprehensive Income for the three months ended February 3, 2018 (Unaudited) and February 4, 2017 (Unaudited)		4
	Consolidated Statements of Cash Flows for the three months ended February 3, 2018 (Unaudited) and February 4, 2017 (Unaudited)		5
	Notes to Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 4.	Controls and Procedures		16
PART II.	Other Information		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 6.	Exhibits		17
Signatures			18

2

NOBILITY HOMES, INC.

Consolidated Balance Sheets

	February 3,			November 4,
	2018			2017
	(Unaudited)
Assets
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			—
Inventories		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		(10,465,686	)		(10,371,186	)
Total stockholders’ equity		48,358,821			47,414,297
Total liabilities and stockholders’ equity	$	53,936,136		$	54,148,215

The accompanying notes are an integral part of these financial statements

3

NOBILITY HOMES, INC.

Consolidated Statements of Income and Comprehensive Income

(Unaudited)

	Three Months Ended
	February 3, 2018			February 4, 2017
Net sales	$	9,645,818		$	8,573,400
Cost of goods sold		(7,428,879	)		(6,549,336	)
Gross profit		2,216,939			2,024,064
Selling, general and administrative expenses		(1,126,782	)		(967,587	)
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
Miscellaneous		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		(138,641	)		(426,970	)
Net income		1,016,236			703,323
Other comprehensive income
Unrealized investment gain, net of taxes		22,347			115,167
Comprehensive income	$	1,038,583		$	818,490
Weighed average number of shares outstanding:
Basic		3,997,371			4,004,238
Diluted		3,999,202			4,005,538
Net income per share:
Basic	$	0.25		$	0.18
Diluted	$	0.25		$	0.18

The accompanying notes are an integral part of these financial statements

4

NOBILITY HOMES, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	February 3, 2018			February 4, 2017
Cash flows from operating activities:
Net income	$	1,016,236		$	703,323
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		29,639			24,615
Deferred income taxes		(120,016	)		(193,729	)
Undistributed earnings in joint venture - Majestic 21		(23,049	)		(28,598	)
Inventory impairment		105,000			65,000
Stock-based compensation		441			6,845
Increase in cash surrender value of life insurance		(45,000	)		(59,999	)
Decrease (increase) in:
Accounts receivable		(375,242	)		274,643
Inventories		648,581			(604,562	)
Pre-owned homes		138,295			213,947
Income tax receivable		(250,927	)		—
Prepaid expenses and other current assets		(416,407	)		(7,169	)
Interest receivable		(11,443	)		(18,594	)
(Decrease) increase in:
Accounts payable		(113,155	)		(63,802	)
Accrued compensation		(64,216	)		(176,174	)
Accrued expenses and other current liabilities		(216,702	)		(243,771	)
Income taxes payable		(260,416	)		(454,301	)
Customer deposits		(195,675	)		417,172
Net cash (used in) operating activities		(154,056	)		(145,154	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(385,546	)		(57,304	)
Collections on note receivable		—			1,000,000
Collections on mortgage notes receivable		526			—
Collections on equipment notes receivable		8,711			—
Issurance of equipment note receivable		(25,451	)		—
Net cash (used in) provided by investing activities		(401,760	)		942,696
Cash flows from financing activities:
Proceeds from exercise of employee stock options		—			6,350
Purchase of treasury stock		(94,500	)		—
Net cash (used in) provided by financing activities		(94,500	)		6,350
(Decrease) increase in cash and cash equivalents		(650,316	)		803,892
Cash and cash equivalents at beginning of year		27,910,504			24,562,638
Cash and cash equivalents at end of quarter	$	27,260,188		$	25,366,530
Supplemental disclosure of cash flows information:
Income taxes paid	$	770,000		$	1,075,000

The accompanying notes are an integral part of these financial statements

5

Nobility Homes, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1     Basis of Presentation and Accounting Policies

The consolidated financial statements include the accounts of Nobility Homes, Inc. (“Nobility”), its wholly-owned subsidiaries, Prestige Home Centers, Inc. (“Prestige”) Nobility Parks I, LLC, Nobility Parks II, LLC and Prestige’s wholly-owned subsidiaries, Mountain Financial, Inc., an independent insurance agency and licensed mortgage loan originator and Majestic Homes, Inc., (collectively the “Company”). The Company is engaged in the manufacture and sale of manufactured and modular homes to various dealerships, including its own retail sales centers, and manufactured housing communities throughout Florida. The Company has one manufacturing plant in operation that is located in Ocala, Florida. At February 3, 2018 Prestige operated ten Florida retail sales centers: Ocala (2), Chiefland, Auburndale, Inverness, Hudson, Tavares, Yulee, Panama City and Punta Gorda.

The accompanying unaudited consolidated financial statements as of and for the three months ended February 3, 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the three months ended February 3, 2018 are not necessarily indicative of the results of the full fiscal year.

The condensed consolidated financial statements included in this report should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 4, 2017.

Recently Issued or Adopted Accounting Pronouncements – In November 2015, the FASB issued ASU No. 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (ASU 2015-17). ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods there in and may be applied either prospectively or retrospectively to all periods presented. The Company has prospectively adopted ASU 2015-17 in its February 3, 2018 consolidated financial statements. As such, deferred tax assets and liabilities as of February 3, 2018 have been presented as a noncurrent asset and liability.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 (i.e., calendar years beginning on January 1, 2019), including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this amendment to have a material impact on its consolidated financial statements.

6

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2016. The Company adopted this ASU in the quarter ended February 3, 2018 and it did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09), which requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for some costs to obtain or fulfill a contract with a customer; and provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. With respect to public entities, this update, together with subsequent amendments, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company believes the implementation of this guidance will have no material impact on its consolidated financial statements.

The core principal of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Using this principle, a comprehensive framework was established for determining how much revenue to recognize and when it should be recognized. To be consistent with this core principle, an entity is required to apply the following five-step approach:

• Identify the contract(s) with a customer;

• Identify each performance obligation in the contract;

• Determine the transaction price;

• Allocate the transaction price to each performance obligation; and

• Recognize revenue when or as each performance obligation is satisfied.

The Company’s revenue comes substantially from the sale of manufactured housing, modular housing and park models, along with freight billed to customers, parts sold and aftermarket services.

The Company has evaluated how the adoption of ASU 2014-09 will impact its financial position and result of operations by applying the five-step approach to each revenue stream. No material changes resulting from this pending adoption were identified. The Company intends to adopt ASU 2014-09 using the modified retrospective method.

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

7

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

Note 2     Inventories

New home inventory is carried at the lower of cost or net realizable value. The cost of finished home inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. Under the specific identification method, if finished home inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or fair market value.

The Company acquired certain repossessed pre-owned inventory (Buy Back Inventory) in 2011 as part of an Amendment of the Finance Revenue Sharing Agreement (FRSA) agreement with 21^st Mortgage Corporation. This inventory is valued at the Company’s cost to acquire determined on the specific identification method, plus refurbishment costs (any item on the home that needs to be repaired or replaced) incurred to date to bring the inventory to a more saleable state. The Buy Back inventory amount is reduced where necessary on a unit specific basis by a valuation reserve which management believes results in inventory being valued at market.

Other pre-owned homes are acquired (Repossessions Inventory) as a convenience to the Company’s joint venture partner, 21st Mortgage Corporation. This inventory has been repossessed by 21^st Mortgage Corporation directly or through mortgage foreclosure. The Company acquired this inventory at the amount of the uncollected balance of the financing at the time of the foreclosure/repossessions by 21st Mortgage Corporation. The Company records this inventory at cost determined on the specific identification method. All of the refurbishment costs are paid by 21^st Mortgage Corporation. This arrangement assists 21^st Mortgage Corporation with liquidation of their repossessed inventory. The timing of these repurchases by the Company is unpredictable as it is based on the repossessions 21^st Mortgage Corporation incurs in the portfolio. When the home is sold, the Company retains the cost of the home, an interest factor on the cost of the home and a sales commission for the sale of the home, from the sales proceeds. Any additional proceeds are paid to 21^st Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21^st Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for this inventory.

Pre-owned homes are also taken as trade-ins on new home sales (Trade-in Inventory). This inventory is recorded at estimated actual wholesale value which is generally lower then market value, determined on the specific identification method, plus refurbishment costs incurred to date to bring the inventory to a more saleable state. The Trade-in inventory amount is reduced where necessary on a unit specific basis by a valuation reserve which management believes results in inventory being valued at market.

Other inventory costs are determined on a first-in, first-out basis.

8

A breakdown of the elements of inventory is as follows:

	February 3,			November 4,
	2018			2017
Raw materials	$	709,707		$	896,954
Work-in-process		103,667			110,847
Finished homes		5,916,037			6,369,495
Model home furniture and others		127,689			128,385
Inventories	$	6,857,100		$	7,505,681
Pre-owned homes	$	2,513,415		$	2,736,946
Inventory impairment reserve		(799,488	)		(779,725	)
		1,713,926			1,957,221
Less homes expected to sell in 12 months		(809,569	)		(1,141,863	)
Pre-owned homes, long-term	$	904,357		$	815,358

Note 3     Short-term Investments

The following is a summary of short-term investments (available for sale):

	February 3, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	489,939	$	—	$	657,869
	November 4, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	459,157	$	—	$	627,087

The fair values were estimated based on quoted market prices in active markets at each respective period end.

Note 4     Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses approximates fair value because of the short maturity of those instruments.

The Company accounts for the fair value of financial investments in accordance with FASB Accounting Standards Codification (ASC) No. 820 “Fair Value Measurements” (ASC 820).

9

ASC 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The ASC 820 fair value hierarchy is defined as follows:

• Level 1 - Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 - Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

• Level 3 - Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following tables represent the Company’s financial assets and liabilities which are carried at fair value.

	February 3, 2018
	Level 1		Level 2		Level 3
Equity securities in a public company	$	657,869	$	—	$	—
	November 4, 2017
	Level 1		Level 2		Level 3
Equity securities in a public company	$	627,087	$	—	$	—

Note 5      Investment in Retirement Community Limited Partnership

The Company has a 31.3% limited partnership interest in Walden Woods South LLC (“Walden Woods”), which owns and operates a retirement community. The Company’s investment in Walden Woods is fully impaired at February 3, 2018 and November 4, 2017.

Note 6      Warranty Costs

The Company provides for a limited warranty as the manufactured homes are sold. Amounts related to these warranties are as follows:

	Three Months Ended
	February 3,			February 4,
	2018			2017
Beginning accrued warranty expense	$	125,000		$	125,000
Less: reduction for payments		(95,890	)		(88,846	)
Plus: additions to accrual		95,890			88,846
Ending accrued warranty expense	$	125,000		$	125,000

The Company’s limited warranty covers substantial defects in material or workmanship in specified components of the home including structural elements, plumbing systems, electrical systems, and heating and cooling systems which are supplied by the Company that may occur under normal use and service during a period of twelve (12) months from the date of delivery to the original homeowner, and applies to the original homeowner or any subsequent homeowner to whom this product is transferred during the duration of this twelve (12) month period.

10

The Company tracks the warranty claims per home. Based on the history of the warranty claims, the Company has determined that a majority of warranty claims usually occur within the first three months after the home is sold. The Company determines its warranty accrual using the last three months of home sales. Accrued warranty costs are included in accrued expenses in the accompanying consolidated balance sheets.

Note 7     Net Income per Share

These financial statements include “basic” and “diluted” net income per share information for all periods presented. The basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding. The diluted net income per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for dilutive common shares.

Note 8      Revenues by Products and Service

Revenues by net sales from manufactured housing, pre-owned homes and insurance agent commissions are as follows:

	Three Months Ended
	February 3,		February 4,
	2018		2017
Manufactured housing	$	9,279,022	$	8,020,617
Pre-owned homes		308,361		485,264
Insurance agent commissions		58,435		67,519
Total net sales	$	9,645,818	$	8,573,400

Note 9     Commitments and Contingent Liabilities

Majestic 21 – On May 20, 2009, the Company became a 50% guarantor on a $5 million note payable entered into by Majestic 21, a joint venture in which the Company owns a 50% interest. This guarantee was a requirement of the bank that provided the $5 million loan to Majestic 21. The $5 million guarantee of Majestic 21’s debt is for the life of the note. The amount of the guarantee declines with the amortization and repayment of the loan. As collateral for the loan, 21^st Mortgage Corporation (our joint venture partner) has granted the lender a security interest in a pool of loans encumbering homes sold by Prestige Homes Centers, Inc. If the pool of loans securing this note should decrease in value so that the notes outstanding principal balance is in excess of 80% of the principal balance of the pool of loans, then Majestic 21 would have to pay down the note’s principal balance to an amount that is no more than 80% of the principal balance of the pool of loans. The Company and 21^st Mortgage Corporation are obligated jointly to contribute the amount necessary to bring the loan balance back down to 80% of the collateral provided. We do not anticipate any required contributions as the pool of loans securing the note have historically been in excess of 100% of the collateral value. As of February 3, 2018, the outstanding principal balance of the note was $441,904 and the amount of collateral held by our joint venture partner for the Majestic 21 note payable was $1,410,771. Based upon management’s analysis, the fair value of the guarantee is not material and as a result, no liability for the guarantee has been recorded in the accompanying balance sheets of the Company.

11

Note 10    Subsequent Event

On March 2, 2018 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.

The Company repurchased 100,000 shares of its common stock, from a related party, on February 20, 2018, at a price of $20.22.

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Total revenues in the first quarter of 2018 were $9,645,818 up 13% compared to $8,573,400 in the first quarter of 2017. The Company reported net income of $1,016,236 in first quarter 2018, compared to a net income of $703,323 during first quarter 2017.    

The following table summarizes certain key sales statistics and percent of gross profit.

	Three Months Ended
	February 3,			February 4,
	2018			2017
New homes sold through Company owned sales centers		80			69
Pre-owned homes sold through Company owned sales centers:
Buy Back		2			4
Repossessions		3			3
Trade-Ins		2			1
Homes sold to independent dealers		66			71
Total new factory built homes produced		138			155
Average new manufactured home price - retail	$	77,244		$	74,849
Average new manufactured home price - wholesale	$	39,923		$	36,101
As a percent of net sales:
Gross profit from the Company owned retail sales centers		17	%		17	%
Gross profit from the manufacturing facilities - including intercompany sales		18	%		17	%

Sales to one publicly traded REIT (Real Estate Investment Trust) which owns multiple retirement communities in our market area accounted for $748,465 or 8% of our total sales in first quarter of 2018. Other companies which own multiple retirement communities in our market area accounted for $921,185 or 10% of our total sales in first quarter of 2018. Accounts receivable due from these customers were $1,775,258 at February 3, 2018.

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 affects our results by limiting many affordable manufactured housing buyers from purchasing 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.

13

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, 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.

Insurance agent commission revenues in the first quarter of 2018 were $58,435 compared to $67,519 in the first quarter of 2017. The insurance agent commissions were less in the first quarter of 2018 due to a decrease in an annual contingent commission earner. The Company establishes appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations at February 3, 2018 and November 4, 2017.

Gross profit as a percentage of net sales was 23% in first quarter of 2018 compared to 24% in the first quarter of 2017. The gross profit in first quarter of 2018 was $2,216,939 compared to $2,024,064 in the first quarter of 2017. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The dollar increase in gross profit is primarily due to the increase in the number of retail homes sold and the increase in the average retail home price.

Selling, general and administrative expense as a percent of net sales was 12% in first quarter of 2018 compared to 11% for the first quarter of 2017. Selling, general and administrative expenses in first quarter of 2018 were $1,126,782 compared to $967,587 in the first quarter of 2017. The increase in expenses resulted from the increase in compensation expenses directly related to our increased sales.

We earned interest of $35,937 for the first quarter of 2018 compared to $40,447 for the first quarter of 2017. Interest income is dependent on our cash balance and available rates of return and the accrued interest from the note receivable acquired in the sale of the investment in the Cypress Creek retirement manufactured home community.

Our earnings from Majestic 21 in the first quarter of 2018 were $23,049 compared to $28,598, for the first quarter of 2017. The earnings from Majestic 21 represent the allocation of profit and losses which are owned 50% by 21st Mortgage Corporation and 50% by the Company.

The Company recorded an income tax expense in the amount of $138,641 in the first quarter of 2018 as compared to $426,970 in first quarter of 2017. The decrease in income tax expense is attributable to the reduction in the corporate income tax rate from 34% to 21% that occurred on December 22, 2017 by the Tax Cuts and Jobs Act.

We reported net income of $1,016,236 for the first quarter of 2018 or $0.25 per share, compared to $703,323 or $0.18 per share, for the first quarter of 2017.

Liquidity and Capital Resources

Cash and cash equivalents were $27,260,188 at February 3, 2018 compared to $27,910,504 at November 4, 2017. Short-term investments were $657,869 at February 3, 2018 compared to $627,087 at November 4, 2017. Working capital was $36,086,489 at February 3, 2018 as compared to $36,403,372 at November 4, 2017. In November 2017, the Company purchased the land for one existing retail sales center for $330,000. In January 2018, the Company repurchased 4,500 shares of its common stock for $21 per share and in February 2018 the Company repurchased, from a related party, 100,000 shares of its common stock at $20.22 per share. We

14

own the entire inventory for our Prestige retail sales centers which includes new, pre-owned and repossessed or foreclosed homes and do not incur any third party floor plan financing expenses. The Company has no material commitments for capital expenditures.

We view our liquidity as our total cash and short term investments. We currently have no line of credit facility and we do not believe that such a facility is currently necessary for our operations.    We have no debt. We also have approximately $3.3 million of cash surrender value of life insurance which we could access as an additional source of liquidity though we have not currently viewed this to be necessary. As of February 3, 2018, the Company continued to report a strong balance sheet which included total assets of approximately $54 million and stockholders’ equity of approximately $48 million.

Critical Accounting Policies and Estimates

In Item 7 of our Form 10-K, under the heading “Critical Accounting Policies and Estimates,” we have provided a discussion of the critical accounting policies and estimates that management believes affect its more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. No significant changes have occurred since that time.

Forward-Looking Statements

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.

15

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a–15(e) and 15d–15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of February 3, 2018.

Changes in Internal Control over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during the first quarter of fiscal 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

16

Part II. OTHER INFORMATION AND SIGNATURES

There were no reportable events for Item 1 and Items 3 through 5.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

The following table represents information with respect to purchases by the Company of its common stock during the months presented:

Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs
Nov. 5 – Dec 4, 2017	0	N/A	N/A	N/A
Dec 5 – Jan 4, 2018	0	N/A	N/A	N/A
Jan 5 – Feb 3, 2018	4,500	$21.00	N/A	N/A

The Company’s Board of Directors has authorized management to repurchase shares of the Company’s common stock up to 200,000 shares or less per year in the open market.

Item 6. Exhibits

31.	(a)	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
	(b)	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
32.	(a)	Written Statement of Chief Executive Officer Pursuant to 18 U.S.C. §1350
	(b)	Written Statement of Chief Financial Officer Pursuant to 18 U.S.C. §1350
101.		Interactive data filing formatted in XBRL

17

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: March 19, 2018	By:	/s/ Terry E. Trexler
		Terry E. Trexler, Chairman,
		President and Chief Executive Officer
DATE: March 19, 2018	By:	/s/ Thomas W. Trexler
		Thomas W. Trexler, Executive Vice President,
		and Chief Financial Officer
DATE: March 19, 2018	By:	/s/ Lynn J. Cramer, Jr.
		Lynn J. Cramer, Jr., Treasurer
		and Principal Accounting Officer

18

EX-31.(A)

Exhibit 31(a)

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)

or 15d-14(a) under the Securities Exchange Act of 1934

I, Terry E. Trexler, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Nobility Homes, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: March 19, 2018	By:	/s/ Terry E. Trexler
		Terry E. Trexler, Chairman,
		President and Chief Executive Officer

EX-31.(B)

Exhibit 31(b)

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)

or 15d-14(a) under the Securities Exchange Act of 1934

I, Thomas W. Trexler, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Nobility Homes, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: March 19, 2018	By:	/s/ Thomas W. Trexler
		Thomas W. Trexler, Executive Vice President,
		and Chief Financial Officer

EX-32.(A)

Exhibit 32(a)

Written Statement of the Chief Executive Officer

Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chairman and Chief Executive Officer of Nobility Homes, Inc. (the “Company”), hereby certify that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended February 3, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: March 19, 2018	By:	/s/ Terry E. Trexler
		Terry E. Trexler, Chairman,
		President and Chief Executive Officer

EX-32.(B)

Exhibit 32(b)

Written Statement of the Chief Financial Officer

Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Executive Vice President and Chief Financial Officer of Nobility Homes, Inc. (the “Company”), hereby certify that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended February 3, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: March 19, 2018	By:	/s/ Thomas W. Trexler
		Thomas W. Trexler, Executive Vice President,
		and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Feb. 03, 2018	Mar. 19, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Feb. 03, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Trading Symbol	NOBH
Entity Registrant Name	NOBILITY HOMES INC
Entity Central Index Key	0000072205
Current Fiscal Year End Date	--11-04
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		3,893,069

XML

Consolidated Balance Sheets - USD ($)	Feb. 03, 2018	Nov. 04, 2017
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
Inventories	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
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	(10,465,686)	(10,371,186)
Total stockholders' equity	48,358,821	47,414,297
Total liabilities and stockholders' equity	$ 53,936,136	$ 54,148,215

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Feb. 03, 2018	Nov. 04, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,364,907	5,364,907
Treasury stock, shares	1,371,838	1,367,338

XML

Consolidated Statements of Income and Comprehensive Income - USD ($)	3 Months Ended
	Feb. 03, 2018	Feb. 04, 2017
Income Statement [Abstract]
Net sales	$ 9,645,818	$ 8,573,400
Cost of goods sold	(7,428,879)	(6,549,336)
Gross profit	2,216,939	2,024,064
Selling, general and administrative expenses	(1,126,782)	(967,587)
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
Miscellaneous	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	(138,641)	(426,970)
Net income	1,016,236	703,323
Other comprehensive income
Unrealized investment gain, net of taxes	22,347	115,167
Comprehensive income	$ 1,038,583	$ 818,490
Weighed average number of shares outstanding:
Basic	3,997,371	4,004,238
Diluted	3,999,202	4,005,538
Net income per share:
Basic	$ 0.25	$ 0.18
Diluted	$ 0.25	$ 0.18

XML

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Feb. 03, 2018	Feb. 04, 2017
Cash flows from operating activities:
Net income	$ 1,016,236	$ 703,323
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	29,639	24,615
Deferred income taxes	(120,016)	(193,729)
Undistributed earnings in joint venture - Majestic 21	(23,049)	(28,598)
Inventory impairment	105,000	65,000
Stock-based compensation	441	6,845
Increase in cash surrender value of life insurance	(45,000)	(59,999)
Decrease (increase) in:
Accounts receivable	(375,242)	274,643
Inventories	648,581	(604,562)
Pre-owned homes	138,295	213,947
Income tax receivable	(250,927)
Prepaid expenses and other current assets	(416,407)	(7,169)
Interest receivable	(11,443)	(18,594)
(Decrease) increase in:
Accounts payable	(113,155)	(63,802)
Accrued compensation	(64,216)	(176,174)
Accrued expenses and other current liabilities	(216,702)	(243,771)
Income taxes payable	(260,416)	(454,301)
Customer deposits	(195,675)	417,172
Net cash (used in) operating activities	(154,056)	(145,154)
Cash flows from investing activities:
Purchases of property, plant and equipment	(385,546)	(57,304)
Collections on note receivable		1,000,000
Collections on mortgage notes receivable	526
Collections on equipment notes receivable	8,711
Issurance of equipment note receivable	(25,451)
Net cash (used in) provided by investing activities	(401,760)	942,696
Cash flows from financing activities:
Proceeds from exercise of employee stock options		6,350
Purchase of treasury stock	(94,500)
Net cash (used in) provided by financing activities	(94,500)	6,350
(Decrease) increase in cash and cash equivalents	(650,316)	803,892
Cash and cash equivalents at beginning of year	27,910,504	24,562,638
Cash and cash equivalents at end of quarter	27,260,188	25,366,530
Supplemental disclosure of cash flows information:
Income taxes paid	$ 770,000	$ 1,075,000

XML

Basis of Presentation and Accounting Policies

3 Months Ended

Feb. 03, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Accounting Policies

Note 1     Basis of Presentation and Accounting Policies

The consolidated financial statements include the accounts of Nobility Homes, Inc. (“Nobility”), its wholly-owned subsidiaries, Prestige Home Centers, Inc. (“Prestige”) Nobility Parks I, LLC, Nobility Parks II, LLC and Prestige’s wholly-owned subsidiaries, Mountain Financial, Inc., an independent insurance agency and licensed mortgage loan originator and Majestic Homes, Inc., (collectively the “Company”). The Company is engaged in the manufacture and sale of manufactured and modular homes to various dealerships, including its own retail sales centers, and manufactured housing communities throughout Florida. The Company has one manufacturing plant in operation that is located in Ocala, Florida. At February 3, 2018 Prestige operated ten Florida retail sales centers: Ocala (2), Chiefland, Auburndale, Inverness, Hudson, Tavares, Yulee, Panama City and Punta Gorda.

The accompanying unaudited consolidated financial statements as of and for the three months ended February 3, 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the three months ended February 3, 2018 are not necessarily indicative of the results of the full fiscal year.

The condensed consolidated financial statements included in this report should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 4, 2017.

Recently Issued or Adopted Accounting Pronouncements – In November 2015, the FASB issued ASU No. 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (ASU 2015-17). ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods there in and may be applied either prospectively or retrospectively to all periods presented. The Company has prospectively adopted ASU 2015-17 in its February 3, 2018 consolidated financial statements. As such, deferred tax assets and liabilities as of February 3, 2018 have been presented as a noncurrent asset and liability.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 (i.e., calendar years beginning on January 1, 2019), including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this amendment to have a material impact on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2016. The Company adopted this ASU in the quarter ended February 3, 2018 and it did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09), which requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for some costs to obtain or fulfill a contract with a customer; and provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. With respect to public entities, this update, together with subsequent amendments, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company believes the implementation of this guidance will have no material impact on its consolidated financial statements.

The core principal of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Using this principle, a comprehensive framework was established for determining how much revenue to recognize and when it should be recognized. To be consistent with this core principle, an entity is required to apply the following five-step approach:

• Identify the contract(s) with a customer;

• Identify each performance obligation in the contract;

• Determine the transaction price;

• Allocate the transaction price to each performance obligation; and

• Recognize revenue when or as each performance obligation is satisfied.

The Company’s revenue comes substantially from the sale of manufactured housing, modular housing and park models, along with freight billed to customers, parts sold and aftermarket services.

The Company has evaluated how the adoption of ASU 2014-09 will impact its financial position and result of operations by applying the five-step approach to each revenue stream. No material changes resulting from this pending adoption were identified. The Company intends to adopt ASU 2014-09 using the modified retrospective method.

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

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Inventories

3 Months Ended

Feb. 03, 2018

Inventory Disclosure [Abstract]

Inventories

Note 2     Inventories

New home inventory is carried at the lower of cost or net realizable value. The cost of finished home inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. Under the specific identification method, if finished home inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or fair market value.

The Company acquired certain repossessed pre-owned inventory (Buy Back Inventory) in 2011 as part of an Amendment of the Finance Revenue Sharing Agreement (FRSA) agreement with 21^st Mortgage Corporation. This inventory is valued at the Company’s cost to acquire determined on the specific identification method, plus refurbishment costs (any item on the home that needs to be repaired or replaced) incurred to date to bring the inventory to a more saleable state. The Buy Back inventory amount is reduced where necessary on a unit specific basis by a valuation reserve which management believes results in inventory being valued at market.

Other pre-owned homes are acquired (Repossessions Inventory) as a convenience to the Company’s joint venture partner, 21st Mortgage Corporation. This inventory has been repossessed by 21^st Mortgage Corporation directly or through mortgage foreclosure. The Company acquired this inventory at the amount of the uncollected balance of the financing at the time of the foreclosure/repossessions by 21st Mortgage Corporation. The Company records this inventory at cost determined on the specific identification method. All of the refurbishment costs are paid by 21^st Mortgage Corporation. This arrangement assists 21^st Mortgage Corporation with liquidation of their repossessed inventory. The timing of these repurchases by the Company is unpredictable as it is based on the repossessions 21^st Mortgage Corporation incurs in the portfolio. When the home is sold, the Company retains the cost of the home, an interest factor on the cost of the home and a sales commission for the sale of the home, from the sales proceeds. Any additional proceeds are paid to 21^st Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21^st Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for this inventory.

Pre-owned homes are also taken as trade-ins on new home sales (Trade-in Inventory). This inventory is recorded at estimated actual wholesale value which is generally lower then market value, determined on the specific identification method, plus refurbishment costs incurred to date to bring the inventory to a more saleable state. The Trade-in inventory amount is reduced where necessary on a unit specific basis by a valuation reserve which management believes results in inventory being valued at market.

Other inventory costs are determined on a first-in, first-out basis.

A breakdown of the elements of inventory is as follows:

	February 3,			November 4,
	2018			2017
Raw materials	$	709,707		$	896,954
Work-in-process		103,667			110,847
Finished homes		5,916,037			6,369,495
Model home furniture and others		127,689			128,385
Inventories	$	6,857,100		$	7,505,681
Pre-owned homes	$	2,513,415		$	2,736,946
Inventory impairment reserve		(799,488	)		(779,725	)
		1,713,926			1,957,221
Less homes expected to sell in 12 months		(809,569	)		(1,141,863	)
Pre-owned homes, long-term	$	904,357		$	815,358

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Short-term Investments

3 Months Ended

Feb. 03, 2018

Investments, Debt and Equity Securities [Abstract]

Short-term Investments

Note 3     Short-term Investments

The following is a summary of short-term investments (available for sale):

	February 3, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	489,939	$	—	$	657,869
	November 4, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	459,157	$	—	$	627,087

The fair values were estimated based on quoted market prices in active markets at each respective period end.

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Fair Value of Financial Instruments

3 Months Ended

Feb. 03, 2018

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 4     Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses approximates fair value because of the short maturity of those instruments.

The Company accounts for the fair value of financial investments in accordance with FASB Accounting Standards Codification (ASC) No. 820 “Fair Value Measurements” (ASC 820).

ASC 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The ASC 820 fair value hierarchy is defined as follows:

• Level 1 - Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 - Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

• Level 3 - Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following tables represent the Company’s financial assets and liabilities which are carried at fair value.

	February 3, 2018
	Level 1		Level 2		Level 3
Equity securities in a public company	$	657,869	$	—	$	—
	November 4, 2017
	Level 1		Level 2		Level 3
Equity securities in a public company	$	627,087	$	—	$	—

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Investment in Retirement Community Limited Partnership

3 Months Ended

Feb. 03, 2018

Equity Method Investments and Joint Ventures [Abstract]

Investment in Retirement Community Limited Partnership

Note 5      Investment in Retirement Community Limited Partnership

The Company has a 31.3% limited partnership interest in Walden Woods South LLC (“Walden Woods”), which owns and operates a retirement community. The Company’s investment in Walden Woods is fully impaired at February 3, 2018 and November 4, 2017.

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Warranty Costs

3 Months Ended

Feb. 03, 2018

Guarantees and Product Warranties [Abstract]

Warranty Costs

Note 6      Warranty Costs

The Company provides for a limited warranty as the manufactured homes are sold. Amounts related to these warranties are as follows:

	Three Months Ended
	February 3,			February 4,
	2018			2017
Beginning accrued warranty expense	$	125,000		$	125,000
Less: reduction for payments		(95,890	)		(88,846	)
Plus: additions to accrual		95,890			88,846
Ending accrued warranty expense	$	125,000		$	125,000

The Company’s limited warranty covers substantial defects in material or workmanship in specified components of the home including structural elements, plumbing systems, electrical systems, and heating and cooling systems which are supplied by the Company that may occur under normal use and service during a period of twelve (12) months from the date of delivery to the original homeowner, and applies to the original homeowner or any subsequent homeowner to whom this product is transferred during the duration of this twelve (12) month period.

The Company tracks the warranty claims per home. Based on the history of the warranty claims, the Company has determined that a majority of warranty claims usually occur within the first three months after the home is sold. The Company determines its warranty accrual using the last three months of home sales. Accrued warranty costs are included in accrued expenses in the accompanying consolidated balance sheets.

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Net Income per Share

3 Months Ended

Feb. 03, 2018

Earnings Per Share [Abstract]

Net Income per Share

Note 7     Net Income per Share

These financial statements include “basic” and “diluted” net income per share information for all periods presented. The basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding. The diluted net income per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for dilutive common shares.

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Revenues by Products and Service

3 Months Ended

Feb. 03, 2018

Segment Reporting [Abstract]

Revenues by Products and Service

Note 8      Revenues by Products and Service

Revenues by net sales from manufactured housing, pre-owned homes and insurance agent commissions are as follows:

	Three Months Ended
	February 3,		February 4,
	2018		2017
Manufactured housing	$	9,279,022	$	8,020,617
Pre-owned homes		308,361		485,264
Insurance agent commissions		58,435		67,519
Total net sales	$	9,645,818	$	8,573,400

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Commitments and Contingent Liabilities

3 Months Ended

Feb. 03, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Note 9     Commitments and Contingent Liabilities

Majestic 21 – On May 20, 2009, the Company became a 50% guarantor on a $5 million note payable entered into by Majestic 21, a joint venture in which the Company owns a 50% interest. This guarantee was a requirement of the bank that provided the $5 million loan to Majestic 21. The $5 million guarantee of Majestic 21’s debt is for the life of the note. The amount of the guarantee declines with the amortization and repayment of the loan. As collateral for the loan, 21^st Mortgage Corporation (our joint venture partner) has granted the lender a security interest in a pool of loans encumbering homes sold by Prestige Homes Centers, Inc. If the pool of loans securing this note should decrease in value so that the notes outstanding principal balance is in excess of 80% of the principal balance of the pool of loans, then Majestic 21 would have to pay down the note’s principal balance to an amount that is no more than 80% of the principal balance of the pool of loans. The Company and 21^st Mortgage Corporation are obligated jointly to contribute the amount necessary to bring the loan balance back down to 80% of the collateral provided. We do not anticipate any required contributions as the pool of loans securing the note have historically been in excess of 100% of the collateral value. As of February 3, 2018, the outstanding principal balance of the note was $441,904 and the amount of collateral held by our joint venture partner for the Majestic 21 note payable was $1,410,771. Based upon management’s analysis, the fair value of the guarantee is not material and as a result, no liability for the guarantee has been recorded in the accompanying balance sheets of the Company.

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Subsequent Event

3 Months Ended

Feb. 03, 2018

Subsequent Events [Abstract]

Subsequent Event

Note 10    Subsequent Event

On March 2, 2018 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.

The Company repurchased 100,000 shares of its common stock, from a related party, on February 20, 2018, at a price of $20.22.

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Basis of Presentation and Accounting Policies (Policies)

3 Months Ended

Feb. 03, 2018

Fair Value Disclosures [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 (i.e., calendar years beginning on January 1, 2019), including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this amendment to have a material impact on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2016. The Company adopted this ASU in the quarter ended February 3, 2018 and it did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09), which requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for some costs to obtain or fulfill a contract with a customer; and provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. With respect to public entities, this update, together with subsequent amendments, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company believes the implementation of this guidance will have no material impact on its consolidated financial statements.

The core principal of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Using this principle, a comprehensive framework was established for determining how much revenue to recognize and when it should be recognized. To be consistent with this core principle, an entity is required to apply the following five-step approach:

• Identify the contract(s) with a customer;

• Identify each performance obligation in the contract;

• Determine the transaction price;

• Allocate the transaction price to each performance obligation; and

• Recognize revenue when or as each performance obligation is satisfied.

The Company’s revenue comes substantially from the sale of manufactured housing, modular housing and park models, along with freight billed to customers, parts sold and aftermarket services.

The Company has evaluated how the adoption of ASU 2014-09 will impact its financial position and result of operations by applying the five-step approach to each revenue stream. No material changes resulting from this pending adoption were identified. The Company intends to adopt ASU 2014-09 using the modified retrospective method.

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

The Company, upon adoption of ASU 2014-09, will greatly increase the amount of required disclosures, including but not limited to:

• Disaggregation of revenue in to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

• The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;

• Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

• Information about performance obligations in contracts with customers; and

• Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing of satisfaction of performance obligation, and the transaction price and the amounts allocation to performance obligations.

Fair Value Measurements

The Company accounts for the fair value of financial investments in accordance with FASB Accounting Standards Codification (ASC) No. 820 “Fair Value Measurements” (ASC 820).

ASC 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The ASC 820 fair value hierarchy is defined as follows:

• Level 1 - Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 - Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

• Level 3 - Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

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Inventories (Tables)

3 Months Ended

Feb. 03, 2018

Inventory Disclosure [Abstract]

Summary of Breakdown of Elements of Inventory

A breakdown of the elements of inventory is as follows:

	February 3,			November 4,
	2018			2017
Raw materials	$	709,707		$	896,954
Work-in-process		103,667			110,847
Finished homes		5,916,037			6,369,495
Model home furniture and others		127,689			128,385
Inventories	$	6,857,100		$	7,505,681
Pre-owned homes	$	2,513,415		$	2,736,946
Inventory impairment reserve		(799,488	)		(779,725	)
		1,713,926			1,957,221
Less homes expected to sell in 12 months		(809,569	)		(1,141,863	)
Pre-owned homes, long-term	$	904,357		$	815,358

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Short-term Investments (Tables)

3 Months Ended

Feb. 03, 2018

Investments, Debt and Equity Securities [Abstract]

Summary of Short-term Investments

The following is a summary of short-term investments (available for sale):

	February 3, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	489,939	$	—	$	657,869
	November 4, 2017
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	459,157	$	—	$	627,087

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Feb. 03, 2018

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value

The following tables represent the Company’s financial assets and liabilities which are carried at fair value.

	February 3, 2018
	Level 1		Level 2		Level 3
Equity securities in a public company	$	657,869	$	—	$	—
	November 4, 2017
	Level 1		Level 2		Level 3
Equity securities in a public company	$	627,087	$	—	$	—

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Warranty Costs (Tables)

3 Months Ended

Feb. 03, 2018

Guarantees and Product Warranties [Abstract]

Summary of Amounts Related to Limited Warranty

Amounts related to these warranties are as follows:

	Three Months Ended
	February 3,			February 4,
	2018			2017
Beginning accrued warranty expense	$	125,000		$	125,000
Less: reduction for payments		(95,890	)		(88,846	)
Plus: additions to accrual		95,890			88,846
Ending accrued warranty expense	$	125,000		$	125,000

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Revenues by Products and Service (Tables)

3 Months Ended

Feb. 03, 2018

Segment Reporting [Abstract]

Revenues by Net Sales

Revenues by net sales from manufactured housing, pre-owned homes and insurance agent commissions are as follows:

	Three Months Ended
	February 3,		February 4,
	2018		2017
Manufactured housing	$	9,279,022	$	8,020,617
Pre-owned homes		308,361		485,264
Insurance agent commissions		58,435		67,519
Total net sales	$	9,645,818	$	8,573,400

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Basis of Presentation and Accounting Policies - Additional Information (Detail)	3 Months Ended
	Feb. 03, 2018 Retailer Plant
Schedule Of Organization And Summary Of Significant Accounting Policies [Line Items]
Number of retail centers | Retailer	10
Ocala Fl [Member]
Schedule Of Organization And Summary Of Significant Accounting Policies [Line Items]
Number of manufacturing plants | Plant	1

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Inventories - Summary of Breakdown of Elements of Inventory (Detail) - USD ($)	Feb. 03, 2018	Nov. 04, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 709,707	$ 896,954
Work-in-process	103,667	110,847
Finished homes	5,916,037	6,369,495
Model home furniture and others	127,689	128,385
Inventories	6,857,100	7,505,681
Pre-owned homes	2,513,415	2,736,946
Inventory impairment reserve	(799,488)	(779,725)
Pre-owned homes, net	1,713,926	1,957,221
Pre-owned homes, net	1,713,926	1,957,221
Less homes expected to sell in 12 months	(809,569)	(1,141,863)
Pre-owned homes, long-term	$ 904,357	$ 815,358

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Short-term Investments - Summary of Short-term Investments (Detail) - USD ($)	Feb. 03, 2018	Nov. 04, 2017
Investments, Debt and Equity Securities [Abstract]
Available-for-sale Securities, Cost	$ 167,930	$ 167,930
Available-for-sale Securities, Gross Unrealized Gains	489,939	459,157
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Estimated Fair Value	$ 657,869	$ 627,087

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Fair Values of Financial Investments - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($)	Feb. 03, 2018	Nov. 04, 2017
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Equity securities in a public company	$ 657,869	$ 627,087
Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Equity securities in a public company	$ 657,869	$ 627,087

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Investment in Retirement Community Limited Partnerships - Additional Information (Detail)	Feb. 03, 2018
Walden Woods South LLC [Member]
Investments [Line Items]
Percentage of limited partnership ownership interest	31.30%

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Warranty Costs - Summary of Amounts Related to Limited Warranty (Detail) - USD ($)	3 Months Ended
	Feb. 03, 2018	Feb. 04, 2017
Accounting Policies [Abstract]
Beginning accrued warranty expense	$ 125,000	$ 125,000
Less: reduction for payments	(95,890)	(88,846)
Plus: additions to accrual	95,890	88,846
Ending accrued warranty expense	$ 125,000	$ 125,000

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Warranty Costs - Additional Information (Detail)	3 Months Ended
	Feb. 03, 2018
Accounting Policies [Abstract]
Warranty period of homes	12 months

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Revenues by Products and Service - Revenues by Net Sales (Detail) - USD ($)	3 Months Ended
	Feb. 03, 2018	Feb. 04, 2017
Sales Information [Line Items]
Total net sales	$ 9,645,818	$ 8,573,400
Manufactured Housing [Member]
Sales Information [Line Items]
Total net sales	9,279,022	8,020,617
Pre-Owned Homes [Member]
Sales Information [Line Items]
Total net sales	308,361	485,264
Insurance Agent Commissions [Member]
Sales Information [Line Items]
Total net sales	$ 58,435	$ 67,519

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Commitments and Contingent Liabilities - Additional Information (Detail)	3 Months Ended
	Feb. 03, 2018 USD ($)
Commitments And Contingencies [Line Items]
Percentage of joint venture loan guaranteed by company	50.00%
Guarantee obligations note payable principal amount	$ 5,000,000
Guarantee obligations principal balance of pool of loans percentage	80.00%
Percentage of collateral value for pool of loan securing note	100.00%
Guarantee obligations outstanding note payable principal amount	$ 441,904
Collateral value for pool of loan securing note payable by joint venture	$ 1,410,771
Majestic 21 [Member]
Commitments And Contingencies [Line Items]
Percentage of ownership interest	50.00%

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Subsequent Event - Additional Information (Detail) - Subsequent Event [Member] - USD ($)	Mar. 02, 2018	Feb. 20, 2018
Subsequent Event [Line Items]
Dividend declared	$ 0.20
Dividend payable date	Apr. 16, 2018
Dividend record date	Mar. 26, 2018
Related Party [Member]
Subsequent Event [Line Items]
Repurchased shares of common stock		100,000
Purchase price of common stock		$ 20.22