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 January 30, 2021

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)

Securities registered pursuant to Section 12(b) of the Act: None

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 every Interactive Data File required to be submitted 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 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.

	Shares Outstanding on
Title of Class	March 16, 2021
Common Stock	3,632,100

NOBILITY HOMES, INC.

INDEX

		Page Number
PART I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of January 30, 2021 (Unaudited) and October 31, 2020		3
	Condensed Consolidated Statements of Income for the three months ended January 30, 2021 (Unaudited) and February 1, 2020 (Unaudited)		4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended January 30, 2021 (Unaudited) and February 1, 2020 (Unaudited)		5
	Condensed Consolidated Statements of Cash Flows for the three months ended January 30, 2021 (Unaudited) and February 1, 2020 (Unaudited)		6
	Notes to Condensed Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 4.	Controls and Procedures		15
PART II.	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 6.	Exhibits		16
Signatures			17

2

NOBILITY HOMES, INC.

Condensed Consolidated Balance Sheets

	January 30, 2021			October 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	32,963,523		$	30,305,902
Certificates of Deposit		3,082,111			4,602,307
Short-term investments		438,916			358,960
Accounts receivable - trade		1,057,086			790,046
Note receivable		29,259			35,997
Mortgage notes receivable		20,776			20,162
Income taxes receivable		—			105,676
Inventories		10,604,393			9,294,677
Pre-owned homes, net		389,679			441,937
Prepaid expenses and other current assets		1,553,057			1,014,849
Total current assets		50,138,800			46,970,513
Property, plant and equipment, net		5,363,841			5,142,714
Pre-owned homes, net		1,346,471			1,077,240
Note receivable, less current portion		6,573			6,573
Mortgage notes receivable, less current portion		226,286			227,509
Other investments		1,743,072			1,729,364
Deferred income taxes		3,598			3,598
Operating lease right of use assets		705,037			715,368
Cash surrender value of life insurance		3,840,452			3,795,902
Other assets		156,287			156,287
Total assets	$	63,530,417		$	59,825,068
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,100,355		$	928,095
Accrued compensation		446,745			670,520
Accrued expenses and other current liabilities		1,113,685			1,383,833
Income taxes payable		230,133			—
Operating lease obligation		27,128			24,192
Customer deposits		7,799,815			5,098,633
Total current liabilities		10,717,861			8,105,273
Operating lease obligation, less current portion		769,869			778,519
Total liabilities		11,487,730			8,883,792
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.10 par value, 500,000 shares authorized; none issued and outstanding		—			—
Common stock, $.10 par value, 10,000,000 shares authorized; 5,364,907 shares issued; 3,632,446 and 3,631,196 outstanding, respectively		536,491			536,491
Additional paid in capital		10,717,025			10,694,554
Retained earnings		59,041,816			57,976,051
Less treasury stock at cost, 1,732,461 shares in 2021 and 1,733,711 shares in 2020		(18,252,645	)		(18,265,820	)
Total stockholders’ equity		52,042,687			50,941,276
Total liabilities and stockholders’ equity	$	63,530,417		$	59,825,068

The accompanying notes are an integral part of these condensed consolidated financial statements

3

NOBILITY HOMES, INC.

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended
	January 30,			February 1,
	2021			2020
Net sales	$	9,071,511		$	9,443,852
Cost of sales		(6,574,064	)		(6,554,003	)
Gross profit		2,497,447			2,889,849
Selling, general and administrative expenses		(1,273,381	)		(1,256,144	)
Operating income		1,224,066			1,633,705
Other income:
Interest income		30,656			101,883
Undistributed earnings in joint venture - Majestic 21		13,708			19,872
Proceeds received under escrow arrangement		45,868			83,109
Increase in fair value of equity investment		79,956			—
Miscellaneous		7,320			7,152
Total other income		177,508			212,016
Income before provision for income taxes		1,401,574			1,845,721
Income tax expense		(335,809	)		(445,580	)
Net income	$	1,065,765		$	1,400,141
Weighted average number of shares outstanding:
Basic		3,631,924			3,659,241
Diluted		3,633,493			3,660,638
Net income per share:
Basic	$	0.29		$	0.38
Diluted	$	0.29		$	0.38

The accompanying notes are an integral part of these condensed consolidated financial statements

4

NOBILITY HOMES, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended January 30, 2021 and February 1, 2020

(Unaudited)

	Common Stock Shares			Common Stock		Additional Paid-in-Capital		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total
Balance at October 31, 2020		3,631,196		$	536,491	$	10,694,554	$	57,976,051		$	—		$	(18,265,820	)	$	50,941,276
Stock-based compensation		—			—		20,521		—			—			—			20,521
Exercise of employee stock options		1,250			—		1,950		—			—			13,175			15,125
Net income		—			—		—		1,065,765			—			—			1,065,765
Balance at January 30, 2021		3,632,446		$	536,491	$	10,717,025	$	59,041,816		$	—		$	(18,252,645	)	$	52,042,687
Balance at November 2, 2019		3,664,070		$	536,491	$	10,687,662	$	55,298,750		$	389,164		$	(17,445,752)		$	49,466,315
Adoption of ASU 2016-01		—			—		—		389,164			(389,164	)		—			—
Adoption of ASU 2016-02		—			—		—		(64,591	)		—			—			(64,591	)
Balance at November 2, 2019		—			—		—		—			—			—			—
as adjusted		3,664,070			536,491		10,687,662		55,623,323			—			(17,445,752	)		49,401,724
Purchase of treasury stock		(14,400	)		—		—		—			—			(345,600	)		(345,600	)
Stock-based compensation		—			—		906		—			—			—			906
Net income		—			—		—		1,400,141			—			—			1,400,141
Balance at February 1, 2020		3,649,670		$	536,491	$	10,688,568	$	57,023,464		$	—		$	(17,791,352	)	$	50,457,171

The accompanying notes are an integral part of these condensed consolidated financial statements

5

NOBILITY HOMES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	January 30,			February 1,
	2021			2020
Cash flows from operating activities:
Net income	$	1,065,765		$	1,400,141
Adjustments to reconcile net income to net cash provide by operating activities:
Depreciation		56,943			39,453
Deferred income taxes		—			26,877
Undistributed earnings in joint venture - Majestic 21		(13,708	)		(19,872	)
(Increase) Decrease in fair market value of equity investments		(79,956	)		10,710
Stock-based compensation		20,521			906
Amortization of operating lease right of use assets		10,331			20,288
Decrease (increase) in:
Accounts receivable - trade		(267,040	)		(482,648	)
Inventories		(1,309,716	)		(34,891	)
Pre-owned homes		(216,973	)		(270,995	)
Prepaid expenses and other current assets		(538,208	)		2,449
Interest receivable		(8,444	)		(48,242	)
Income tax receivables		105,676			—
(Decrease) increase in:
Accounts payable		172,260			(538,411	)
Accrued compensation		(223,775	)		(291,764	)
Accrued expenses and other current liabilities		(270,148	)		(330,909	)
Income taxes payable		230,133			(1,608,214	)
Customer deposits		2,701,182			(529,473	)
Net cash provided by operating activities		1,434,843			(2,654,595	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(278,070	)		(232,649	)
Purchase of certificates of deposit		—			(20,000	)
Proceeds from certicates of deposit		1,500,000			—
Collections on interest receivable		28,640			50,998
Collections on mortgage notes receivable		609			696
Collections on equipment and other notes receivable		6,738			16,252
Increase in cash surrender value of life insurance		(44,550	)		(48,000	)
Net cash provided by (used in) investing activities		1,213,367			(232,703	)
Cash flows from financing activities:
Proceeds from excerise of employee stock option		15,125			—
Purchase of treasury stock		—			(345,600	)
Reduction of operating lease obligation		(5,714	)		(14,503	)
Net cash provided by (used in) financing activities		9,411			(360,103	)
Increase (Decrease) in cash and cash equivalents		2,657,621			(3,247,401	)
Cash and cash equivalents at beginning of year		30,305,902			22,533,965
Cash and cash equivalents at end of quarter	$	32,963,523		$	19,286,564
Supplemental disclosure of cash flows information:
Income taxes paid	$	—		$	2,020,000

The accompanying notes are an integral part of these condensed consolidated financial statements

6

Nobility Homes, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 Basis of Presentation and Accounting Policies

The accompanying unaudited condensed financial statements for the three months ended January 30, 2021 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 January 30, 2021 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 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

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. In addition, an allocation of depreciation and amortization is included in cost of goods sold. 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 net realizable value.

7

The Company acquired certain repossessed pre-owned inventory (Buy Back Inventory) in 2011 as part of an Amendment of the Finance Revenue Sharing 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 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, 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.

Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s condensed consolidated balance sheets. Consigned inventory was $1,385,470 and $1,277,681 as of January 30, 2021 and October 31, 2020, respectively.

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 than 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:

	January 30,			October 31,
	2021			2020
Raw materials	$	1,263,104		$	1,203,282
Work-in-process		100,935			107,651
Inventory consigned to affiliated entities		1,385,470			1,277,681
Finished homes		7,708,327			6,543,861
Model home furniture		146,557			162,202
Inventories	$	10,604,393		$	9,294,677
Pre-owned homes	$	1,875,477		$	1,686,373
Inventory impairment reserve		(139,327	)		(167,196	)
		1,736,150			1,519,177
Less homes expected to sell in 12 months		(389,679	)		(441,937	)
Pre-owned homes, long-term	$	1,346,471		$	1,077,240

8

Note 3 Short-term Investments

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

	January 30, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	270,986	$	—	$	438,916

	October 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	191,030	$	—	$	358,960

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).

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.

9

	January 30, 2021
	Level 1		Level 2		Level 3
Equity securities in a public company	$	438,916	$	—	$	—

	October 31, 2020
	Level 1		Level 2		Level 3
Equity securities in a public company	$	358,960	$	—	$	—

Note 5 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 6    Revenues by Products and Service

The Company operates in one business segment, which is manufactured housing and ancillary services. The Company considers there to be revenue concentration risks for distribution of its products where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s distribution net product revenues below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective distribution channels experience difficulties.

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

	Three Months Ended
	January 30,		February 1,
	2021		2020
Manufactured housing
Homes sold through Company owned sales centers	$	7,543,182	$	6,758,531
Homes sold to independent dealers		1,203,736		2,153,322
Homes sold through manufactured home parks		218,435		359,742
	$	8,965,353	$	9,271,595
Pre-owned homes		40,187		105,509
Insurance agent commissions		65,971		66,748
Total net sales	$	9,071,511	$	9,443,852

Note 7 Operating Leases

The Company leases the property for several Prestige retail sales centers from various unrelated entities under operating lease agreements expiring through December 2021. The Company also leases certain equipment under unrelated operating leases. These leases have varying renewal options.

10

Right of use assets are included as a non-current asset in the amount of $705,037, net of amortization in the consolidated Balance Sheet as of January 30, 2021.

Based on the terms of the lease agreements, all of the Company’s leases are classified as operating leases. The weighted average remaining lease term and weighted average discount rate of the operating leases is 8.91 years and 3.0%, respectively.

Minimum rental payments under operating leases are recognized on a straight-line basis over the term of the lease. Individual components of the total lease cost incurred by the Company in the amount of $48,406 for the three months ended January 30, 2021.

The amount of future minimum lease payments under operating leases are as follows:

	Operating Lease
Undiscounted future minimum lease payments:
2021 (9 months remaining)	$	47,447
2022		68,401
2023		74,322
2024		80,955
Thereafter		458,175
Total		817,687
Amount representing imputed interest		(20,690	)
Total operating lease liability		796,997
Current portion of operating lease liability		(27,128	)
Operating lease liability, non-current	$	769,869

Note 8 Subsequent Events

The Board of Directors declared a one-time cash dividend of $1.00 per common share for fiscal year 2020. The cash dividend is payable on March 26, 2021 to stockholders of record as of March 12, 2021.

On February 1, 2021, the Company purchased land in Ocala for a future retail sales center for $1,040,000.

The Company repurchased 346 shares of its common stock in February 2021 at a price per share of $30.50.

11

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

Results of Operations

Total revenues in the first quarter of 2021 were $9,071,511 compared to $9,443,852 in first quarter 2020. The Company reported net income of $1,065,765 in the first quarter of 2021, compared to a net income of $1,400,141 during the first quarter of 2020. The demand for affordable manufactured housing in Florida has been adversely impacted by COVID-19 and actions taken in response thereto. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2020 through January 2021 were flat from the same period last year. In addition, the lack of lenders in our industry, partly as a result of an increase in government regulations, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes. Since May of 2020 the Company has experienced unprecedented inflation in forest products, with no immediate relief in sight resulting in significant increases to our material costs. The Company is monitoring these costs and have adjusted our selling prices accordingly to help offset the higher costs.

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

	Three Months Ended
	January 30,			February 1,
	2021			2020
New homes sold through Company owned sales centers		82			72
Pre-owned homes sold through Company owned sales centers:		1			2
Homes sold to independent dealers		40			56
Total new factory built homes produced		150			123
Average new manufactured home price - retail	$	88,250		$	95,390
Average new manufactured home price - wholesale	$	47,515		$	44,584
As a percent of net sales:
Gross profit from the Company owned retail sales centers		18	%		20	%
Gross profit from the manufacturing facilities - including intercompany sales		15	%		25	%

Maintaining our strong financial position is vital for future growth and success. Because of very challenging business conditions during economic recessions in our market area, management will continue to evaluate all expenses and react in a manner consistent with maintaining our strong financial position, while exploring opportunities to expand our distribution and manufacturing operations.

Our many years of experience in the Florida market, combined with home buyers’ increased need for more affordable housing, should serve the Company well in the coming years. Management remains convinced that our specific geographic market is one of the best long-term growth areas in the country.

On June 5, 2020 the Company celebrated its 53rd anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers in Florida for over 30 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.

12

Insurance agent commission revenues in the first quarter of 2021 were $65,971 compared to $66,748 in the first quarter of 2020. Revenues are generated by new and renewal policies being written which affects agent commission earned. 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 January 30, 2021 and October 31, 2020.

Gross profit as a percentage of net sales was 28% in first quarter of 2021 compared to 31% for the first quarter of 2020. The gross profit in the first quarter of 2021 was $2,497,447 compared to $2,889,849 in the first quarter of 2020. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The reduction in gross profit as a percentage of net sales is due to the decrease in sales and primarily due to the significant increases in material costs, primarily as a result of forest based products, which were not offset by additional increases in the sales price of each home manufactured in first quarter 2021.

Selling, general and administrative expenses as a percent of net sales was 14% in first quarter of 2021 compared to 13% in the first quarter of 2020. Selling, general and administrative expenses in first quarter of 2021 was $1,273,381 compared to $1,256,144 in the first quarter of 2020. The increase in expenses in 2021 were due to the increase in variable expenses which were direct results of employee benefits compensation.

We earned interest income of $30,656 for the first quarter of 2021 compared to $101,883 for the first quarter of 2020. The decrease is primarily due to the decrease in the balance and applicable interest rate in the money market accounts and certificates of deposit.

Our earnings from Majestic 21 in the first quarter of 2021 were $13,708 compared to $19,872 for the first quarter of 2020. 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.

We received distributions of $45,868 in the first quarter of 2021 compared to $83,109 in the first quarter of 2020. The distributions are from an escrow arrangement related to a Finance Revenue Sharing Agreement between 21^st Mortgage Corporation and the Company. The distributions from the escrow arrangement, relates to certain loans financed by 21^st Mortgage Corporation, are recorded as income by the Company when received.

The Company realized pre-tax income in the first quarter of 2021 of $1,401,574 as compared to $1,845,721 in the first quarter of 2020.

The Company recorded an income tax expense in the amount of $335,809 in the first quarter of 2021 as compared to $445,580 in first quarter 2020.

We reported net income of $1,065,765 for the first quarter of 2021 or $0.29 per basic and diluted share, compared to $1,400,141 or $0.38 per basic and diluted share, for the first quarter of 2020.

Liquidity and Capital Resources

Cash and cash equivalents were $32,963,523 at January 30, 2021 compared to $30,305,902 at October 31, 2020. Certificates of deposit were $3,082,111 at January 30, 2021 compared to $4,602,307 at October 31, 2020. Short-term investments were $438,916 at January 30, 2021 compared to $358,960 at October 31, 2020. Working capital was $39,420,939 at January 30, 2021 as compared to $38,865,240 at October 31, 2020. The Company purchased the land for the Tavares retail sales center in January 2021 for $245,000. On February 1, 2021, the Company purchased land in Ocala for a future retail sales center for $1,040,000. We own the entire inventory for our Prestige retail sales centers which includes new, pre-owned, repossessed or foreclosed homes and do not incur any third party floor plan financing expenses. We have no material commitments for capital expenditures.

13

The Company currently has no line of credit facility and no debt and does not believe that such a facility is currently necessary to its operations. The Company also has approximately $3.8 million of cash surrender value of life insurance which it may be able to access as an additional source of liquidity though the Company has not currently viewed this to be necessary. As of January 30, 2021, the Company continued to report a strong balance sheet which included total assets of approximately $63 million which was funded primarily by stockholders’ equity of approximately $52 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 unaudited or forward-looking statements within the meaning of the federal securities laws. Although Nobility believes that the amounts and 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, the potential adverse impact on our business caused by the COVID-19 pandemic or other health pandemic, competitive pricing pressures at both the wholesale and retail levels, increasing material costs (including forest based products) or availability of materials due to potential supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), 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, impact of labor shortage, impact of materials shortage, increasing labor cost, cyclical nature of the manufactured housing industry, impact of rising 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, any armed conflict involving the United States and the impact of inflation.

14

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 January 30, 2021.

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 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

15

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 Company did not repurchase any shares of its common stock during the first quarter ended January 30, 2021.

In September 2020 the Company’s Board of Directors authorized 200,000 shares to be repurchased during fiscal year 2021 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

16

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 16, 2021	By: /s/ Terry E. Trexler
	Terry E. Trexler, Chairman,
	President and Chief Executive Officer
DATE: March 16, 2021	By: /s/ Thomas W. Trexler
	Thomas W. Trexler, Executive Vice President,
	and Chief Financial Officer
DATE: March 16, 2021	By: /s/ Lynn J. Cramer, Jr.
	Lynn J. Cramer, Jr., Treasurer
	and Principal Accounting Officer

17

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 16, 2021	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 16, 2021	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 January 30, 2021 (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 16, 2021	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 January 30, 2021 (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 16, 2021	By: /s/ Thomas W. Trexler
	Thomas W. Trexler, Executive Vice President,
	and Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Jan. 30, 2021	Mar. 16, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 30, 2021
Entity Registrant Name	NOBILITY HOMES INC
Entity Central Index Key	0000072205
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Trading Symbol	NOBH
Current Fiscal Year End Date	--10-30
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,632,100
Entity File Number	000-06506
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	3741 S.W. 7th Street
Entity Address, City or Town	Ocala
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	34474
City Area Code	352
Local Phone Number	732-5157
Title of 12(b) Security	Common Stock
Entity Interactive Data Current	Yes

XML

Condensed Consolidated Balance Sheets - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Current assets:
Cash and cash equivalents	$ 32,963,523	$ 30,305,902
Certificates of Deposit	3,082,111	4,602,307
Short-term investments	438,916	358,960
Accounts receivable-trade	1,057,086	790,046
Note receivable	29,259	35,997
Mortgage notes receivable	20,776	20,162
Income taxes receivable		105,676
Inventories	10,604,393	9,294,677
Pre-owned homes, net	389,679	441,937
Prepaid expenses and other current assets	1,553,057	1,014,849
Total current assets	50,138,800	46,970,513
Property, plant and equipment, net	5,363,841	5,142,714
Pre-owned homes, net	1,346,471	1,077,240
Note receivable, less current portion	6,573	6,573
Mortgage notes receivable, less current portion	226,286	227,509
Other investments	1,743,072	1,729,364
Deferred income taxes	3,598	3,598
Operating lease right of use assets	705,037	715,368
Cash surrender value of life insurance	3,840,452	3,795,902
Other assets	156,287	156,287
Total assets	63,530,417	59,825,068
Current liabilities:
Accounts payable	1,100,355	928,095
Accrued compensation	446,745	670,520
Accrued expenses and other current liabilities	1,113,685	1,383,833
Income taxes payable	230,133
Operating lease obligation	27,128	24,192
Customer deposits	7,799,815	5,098,633
Total current liabilities	10,717,861	8,105,273
Operating lease obligation, less current portion	769,869	778,519
Total liabilities	11,487,730	8,883,792
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.10 par value, 500,000 shares authorized; none issued and outstanding
Common stock, $.10 par value, 10,000,000 shares authorized; 5,364,907 shares issued; 3,632,446 and 3,631,196 outstanding, respectively	536,491	536,491
Additional paid in capital	10,717,025	10,694,554
Retained earnings	59,041,816	57,976,051
Less treasury stock at cost, 1,732,461 shares in 2021 and 1,733,711 shares in 2020	(18,252,645)	(18,265,820)
Total stockholders' equity	52,042,687	50,941,276
Total liabilities and stockholders' equity	$ 63,530,417	$ 59,825,068

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jan. 30, 2021	Oct. 31, 2020
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
Common Stock, shares outstanding	3,632,446	3,631,196
Treasury stock, shares	1,732,461	1,733,711

XML

Condensed Consolidated Statements of Income and Comprehensive Income - USD ($)	3 Months Ended
	Jan. 30, 2021	Feb. 01, 2020
Income Statement [Abstract]
Net sales	$ 9,071,511	$ 9,443,852
Cost of sales	(6,574,064)	(6,554,003)
Gross profit	2,497,447	2,889,849
Selling, general and administrative expenses	(1,273,381)	(1,256,144)
Operating income	1,224,066	1,633,705
Other income :
Interest income	30,656	101,883
Undistributed earnings in joint venture - Majestic 21	13,708	19,872
Proceeds received under escrow arrangement	45,868	83,109
Increase in fair value of equity investment	79,956
Miscellaneous	7,320	7,152
Total other income	177,508	212,016
Income before provision for income taxes	1,401,574	1,845,721
Income tax expense	(335,809)	(445,580)
Net income	$ 1,065,765	$ 1,400,141
Weighted average number of shares outstanding:
Basic	3,631,924	3,659,241
Diluted	3,633,493	3,660,638
Net income per share:
Basic	$ 0.29	$ 0.38
Diluted	$ 0.29	$ 0.38

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Total	Previously reported [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member]	Common Stock [Member] Previously reported [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Previously reported [Member]	Retained Earnings [Member]	Retained Earnings [Member] Previously reported [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Accumulated Other Comprehensive Income [Member] Previously reported [Member]	Accumulated Other Comprehensive Income [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Treasury Stock [Member]	Treasury Stock [Member] Previously reported [Member]
Balance at Nov. 02, 2019		$ 49,466,315			$ 536,491		$ 10,687,662		$ 55,298,750		$ 389,164			$ (17,445,752)
Balance (Adjustments for New Accounting Pronouncement [Member]) at Nov. 02, 2019				$ 536,491
Balance, shares at Nov. 02, 2019					3,664,070
Adoption of ASU 2016 (Adoption of ASU 2016-01 [Member]) at Feb. 01, 2020										$ 389,164		$ (389,164)
Adoption of ASU 2016 (Adoption of ASU 2016-02 [Member]) at Feb. 01, 2020			$ (64,591)							$ (64,591)
Purchase of treasury stock	$ (345,600)												$ (345,600)
Purchase of treasury stock, shares				(14,400)
Stock-based compensation	906					$ 906
Net income	1,400,141							$ 1,400,141
Balance at Feb. 01, 2020	50,457,171			$ 536,491		10,688,568		57,023,464					(17,791,352)
Balance (Adjustments for New Accounting Pronouncement [Member]) at Feb. 01, 2020	49,401,724					10,687,662		55,623,323					(17,445,752)
Balance, shares at Feb. 01, 2020				3,649,670
Balance, shares (Adjustments for New Accounting Pronouncement [Member]) at Feb. 01, 2020				3,664,070
Balance at Oct. 31, 2020	50,941,276			$ 536,491		10,694,554		57,976,051					(18,265,820)
Balance, shares at Oct. 31, 2020				3,631,196
Stock-based compensation	20,521					20,521
Exercise of employee stock options	15,125					1,950							13,175
Exercise of employee stock options, shares				1,250
Net income	1,065,765							1,065,765
Balance at Jan. 30, 2021	$ 52,042,687			$ 536,491		$ 10,717,025		$ 59,041,816					$ (18,252,645)
Balance, shares at Jan. 30, 2021				3,632,446

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jan. 30, 2021	Feb. 01, 2020
Cash flows from operating activities:
Net income	$ 1,065,765	$ 1,400,141
Adjustments to reconcile net income to net cash provide by operating activities:
Depreciation	56,943	39,453
Deferred income taxes		26,877
Undistributed earnings in joint venture - Majestic 21	(13,708)	(19,872)
(Increase) Decrease in fair market value of equity investments	(79,956)	10,710
Stock-based compensation	20,521	906
Amortization of operating lease right of use assets	10,331	20,288
Decrease (Increase) in:
Accounts receivable - trade	(267,040)	(482,648)
Inventories	(1,309,716)	(34,891)
Pre-owned homes	(216,973)	(270,995)
Prepaid expenses and other current assets	(538,208)	2,449
Interest receivable	(8,444)	(48,242)
Income tax receivables	105,676
(Decrease) increase in:
Accounts payable	172,260	(538,411)
Accrued compensation	(223,775)	(291,764)
Accrued expenses and other current liabilities	(270,148)	(330,909)
Income taxes payable	230,133	(1,608,214)
Customer deposits	2,701,182	(529,473)
Net cash provided by operating activities	1,434,843	(2,654,595)
Cash flows from investing activities:
Purchase of property, plant and equipment	(278,070)	(232,649)
Purchase of certificates of deposit		(20,000)
Proceeds from certicates of deposit	1,500,000
Collections on interest receivable	28,640	50,998
Collections on mortgage notes receivable	609	696
Collections on equipment and other notes receivable	6,738	16,252
Increase in cash surrender value of life insurance	(44,550)	(48,000)
Net cash provided by (used in) investing activities	1,213,367	(232,703)
Cash flows from financing activities:
Proceeds from excerise of employee stock options	15,125
Purchase of treasury stock		(345,600)
Reduction of operating lease obligation	(5,714)	(14,503)
Net cash provided by (used in) financing activities	9,411	(360,103)
Increase (Decrease) in cash and cash equivalents	2,657,621	(3,247,401)
Cash and cash equivalents at beginning of year	30,305,902	22,533,965
Cash and cash equivalents at end of quarter	$ 32,963,523	19,286,564
Supplemental disclosure of cash flows information:
Income taxes paid		$ 2,020,000

XML

Basis of Presentation and Accounting Policies

3 Months Ended

Jan. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Accounting Policies

Note 1 Basis of Presentation and Accounting Policies

The accompanying unaudited condensed financial statements for the three months ended January 30, 2021 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 January 30, 2021 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 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

XML

Inventories

3 Months Ended

Jan. 30, 2021

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. In addition, an allocation of depreciation and amortization is included in cost of goods sold. 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 net realizable 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 with 21st 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 21st Mortgage Corporation 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 21st Mortgage Corporation. This arrangement assists 21st 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 21st 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, from the sales proceeds. Any additional proceeds are paid to 21st Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21st Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for this inventory.

Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s condensed consolidated balance sheets. Consigned inventory was $1,385,470 and $1,277,681 as of January 30, 2021 and October 31, 2020, respectively.

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 than 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:

	January 30,			October 31,
	2021			2020
Raw materials	$	1,263,104		$	1,203,282
Work-in-process		100,935			107,651
Inventory consigned to affiliated entities		1,385,470			1,277,681
Finished homes		7,708,327			6,543,861
Model home furniture		146,557			162,202
Inventories	$	10,604,393		$	9,294,677
Pre-owned homes	$	1,875,477		$	1,686,373
Inventory impairment reserve		(139,327	)		(167,196	)
		1,736,150			1,519,177
Less homes expected to sell in 12 months		(389,679	)		(441,937	)
Pre-owned homes, long-term	$	1,346,471		$	1,077,240

XML

Short-term Investments

3 Months Ended

Jan. 30, 2021

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):

	January 30, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	270,986	$	—	$	438,916

	October 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	191,030	$	—	$	358,960

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

XML

Fair Value of Financial Instruments

3 Months Ended

Jan. 30, 2021

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.

	January 30, 2021
	Level 1		Level 2		Level 3
Equity securities in a public company	$	438,916	$	—	$	—

	October 31, 2020
	Level 1		Level 2		Level 3
Equity securities in a public company	$	358,960	$	—	$	—

XML

Net Income per Share

3 Months Ended

Jan. 30, 2021

Earnings Per Share [Abstract]

Net Income per Share

Note 5 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.

XML

Revenues by Products and Service

3 Months Ended

Jan. 30, 2021

Segment Reporting [Abstract]

Revenues by Products and Service

Note 6    Revenues by Products and Service

The Company operates in one business segment, which is manufactured housing and ancillary services. The Company considers there to be revenue concentration risks for distribution of its products where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s distribution net product revenues below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective distribution channels experience difficulties.

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

	Three Months Ended
	January 30,		February 1,
	2021		2020
Manufactured housing
Homes sold through Company owned sales centers	$	7,543,182	$	6,758,531
Homes sold to independent dealers		1,203,736		2,153,322
Homes sold through manufactured home parks		218,435		359,742
	$	8,965,353	$	9,271,595
Pre-owned homes		40,187		105,509
Insurance agent commissions		65,971		66,748
Total net sales	$	9,071,511	$	9,443,852

XML

Operating Leases

3 Months Ended

Jan. 30, 2021

Leases [Abstract]

Operating Leases

Note 7 Operating Leases

The Company leases the property for several Prestige retail sales centers from various unrelated entities under operating lease agreements expiring through December 2021. The Company also leases certain equipment under unrelated operating leases. These leases have varying renewal options.

Right of use assets are included as a non-current asset in the amount of $705,037, net of amortization in the consolidated Balance Sheet as of January 30, 2021.

Based on the terms of the lease agreements, all of the Company’s leases are classified as operating leases. The weighted average remaining lease term and weighted average discount rate of the operating leases is 8.91 years and 3.0%, respectively.

Minimum rental payments under operating leases are recognized on a straight-line basis over the term of the lease. Individual components of the total lease cost incurred by the Company in the amount of $48,406 for the three months ended January 30, 2021.

The amount of future minimum lease payments under operating leases are as follows:

	Operating Lease
Undiscounted future minimum lease payments:
2021 (9 months remaining)	$	47,447
2022		68,401
2023		74,322
2024		80,955
Thereafter		458,175
Total		817,687
Amount representing imputed interest		(20,690	)
Total operating lease liability		796,997
Current portion of operating lease liability		(27,128	)
Operating lease liability, non-current	$	769,869

XML

Subsequent Event

3 Months Ended

Jan. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

Note 8 Subsequent Events

The Board of Directors declared a one-time cash dividend of $1.00 per common share for fiscal year 2020. The cash dividend is payable on March 26, 2021 to stockholders of record as of March 12, 2021.

On February 1, 2021, the Company purchased land in Ocala for a future retail sales center for $1,040,000.

The Company repurchased 346 shares of its common stock in February 2021 at a price per share of $30.50.

XML

Inventories (Tables)

3 Months Ended

Jan. 30, 2021

Inventory Disclosure [Abstract]

Summary of Breakdown of Elements of Inventory

Other inventory costs are determined on a first-in, first-out basis. A breakdown of the elements of inventory is as follows:

	January 30,			October 31,
	2021			2020
Raw materials	$	1,263,104		$	1,203,282
Work-in-process		100,935			107,651
Inventory consigned to affiliated entities		1,385,470			1,277,681
Finished homes		7,708,327			6,543,861
Model home furniture		146,557			162,202
Inventories	$	10,604,393		$	9,294,677
Pre-owned homes	$	1,875,477		$	1,686,373
Inventory impairment reserve		(139,327	)		(167,196	)
		1,736,150			1,519,177
Less homes expected to sell in 12 months		(389,679	)		(441,937	)
Pre-owned homes, long-term	$	1,346,471		$	1,077,240

XML

Short-term Investments (Tables)

3 Months Ended

Jan. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Short-term Investments

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

	January 30, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	270,986	$	—	$	438,916

	October 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Equity securities in a public company	$	167,930	$	191,030	$	—	$	358,960

XML

Fair Value of Financial Instruments (Tables)

3 Months Ended

Jan. 30, 2021

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.

	January 30, 2021
	Level 1		Level 2		Level 3
Equity securities in a public company	$	438,916	$	—	$	—

	October 31, 2020
	Level 1		Level 2		Level 3
Equity securities in a public company	$	358,960	$	—	$	—

XML

Revenues by Products and Service (Tables)

3 Months Ended

Jan. 30, 2021

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
	January 30,		February 1,
	2021		2020
Manufactured housing
Homes sold through Company owned sales centers	$	7,543,182	$	6,758,531
Homes sold to independent dealers		1,203,736		2,153,322
Homes sold through manufactured home parks		218,435		359,742
	$	8,965,353	$	9,271,595
Pre-owned homes		40,187		105,509
Insurance agent commissions		65,971		66,748
Total net sales	$	9,071,511	$	9,443,852

XML

Operating Leases (Table)

3 Months Ended

Jan. 30, 2021

Leases [Abstract]

Schedule of future minimum rental payments for operating leases

The amount of future minimum lease payments under operating leases are as follows:

	Operating Lease
Undiscounted future minimum lease payments:
2021 (9 months remaining)	$	47,447
2022		68,401
2023		74,322
2024		80,955
Thereafter		458,175
Total		817,687
Amount representing imputed interest		(20,690	)
Total operating lease liability		796,997
Current portion of operating lease liability		(27,128	)
Operating lease liability, non-current	$	769,869

XML

Inventories - Additional Information (Detail) - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Inventory Disclosure [Abstract]
Inventory Consigned To Affiliated Entities	$ 1,385,470	$ 1,277,681

XML

Inventories - Summary of Breakdown of Elements of Inventory (Detail) - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 1,263,104	$ 1,203,282
Work-in-process	100,935	107,651
Inventory consigned to affiliated entities	1,385,470	1,277,681
Finished homes	7,708,327	6,543,861
Model home furniture	146,557	162,202
Inventories	10,604,393	9,294,677
Pre-owned homes	1,875,477	1,686,373
Inventory impairment reserve	(139,327)	(167,196)
Pre-owned homes, net	1,736,150	1,519,177
Less homes expected to sell in 12 months	(389,679)	(441,937)
Pre-owned homes, long-term	$ 1,346,471	$ 1,077,240

XML

Short-term Investments - Summary of Short-term Investments (Detail) - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Available-for-sale Securities, Amortized Cost	$ 167,930	$ 167,930
Available-for-sale Securities, Gross Unrealized Gains	270,986	191,030
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Estimated Fair Value	$ 438,916	$ 358,960

XML

Fair Value of Financial Instruments - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Equity securities in a public company	$ 438,916	$ 358,960
Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Equity securities in a public company	$ 438,916	$ 358,960

XML

Revenues by Products and Service - Revenues by Net Sales - Additional Information (Detail)	3 Months Ended
	Jan. 30, 2021
Revenue Concentration Risks Recognation terms	The Company considers there to be revenue concentration risks for distribution of its products where net product revenues exceed 10% of consolidated net product revenues.

XML

Revenues by Products and Service - Revenues by Net Sales (Detail) - USD ($)	3 Months Ended
	Jan. 30, 2021	Feb. 01, 2020
Sales Information [Line Items]
Total net sales	$ 9,071,511	$ 9,443,852
Manufactured Housing [Member]
Sales Information [Line Items]
Total net sales	8,965,353	9,271,595
Manufactured Housing [Member] | Homes sold through Company owned sales centers
Sales Information [Line Items]
Total net sales	7,543,182	6,758,531
Manufactured Housing [Member] | Homes sold to independent dealers
Sales Information [Line Items]
Total net sales	1,203,736	2,153,322
Manufactured Housing [Member] | Homes sold through manufactured home parks
Sales Information [Line Items]
Total net sales	218,435	359,742
Pre-Owned Homes [Member]
Sales Information [Line Items]
Total net sales	40,187	105,509
Insurance Agent Commissions [Member]
Sales Information [Line Items]
Total net sales	$ 65,971	$ 66,748

XML

Operating Leases - Additional Information (Detail)	3 Months Ended
	Jan. 30, 2021 USD ($)
Leases [Abstract]
Operating lease right of use assets	$ 705,037
Lease cost	$ 48,406
Weighted Average Remaining Lease term, Operating Lease	8 years 10 months 27 days
Weighted Average Discount Rate, Operating Lease	3.00%

XML

Operating Leases - Summary of future minimum lease payments (Detail) - USD ($)	Jan. 30, 2021	Oct. 31, 2020
Leases [Abstract]
2021 (9 months remaining)	$ 47,447
2022	68,401
2023	74,322
2024	80,955
Thereafter	458,175
Total	817,687
Amount representing imputed interest	(20,690)
Total operating lease liability	796,997
Current portion of operating lease liability	(27,128)
Operating lease liability, non-current	$ 769,869	$ 778,519

XML

Subsequent Event - Additional Information (Detail) - USD ($)		3 Months Ended
	Feb. 01, 2021	Jan. 30, 2021
Subsequent Event [Line Items]
Dividend declared		$ 1.00
Dividend payable date		Mar. 26, 2021
Dividend record date		Mar. 12, 2021
Ocala [Member] | Land [Member]
Subsequent Event [Line Items]
Purchase of land for a future retail sales center	$ 1,040,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Repurchased shares of common stock	346
Shares Issued, Price Per Share	$ 30.50