ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of ea/Exchange on Which Registered | ||
Large, accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Title of Class |
Shares Outstanding on February 1 , 2023 | |
DOCUMENTS INCORPORATED BY REFERENCE | ||
Title |
Form 10-K | |
Definitive proxy statement for Annual Meeting of Shareholders to be held March 3, 2023 |
Part III, Items 10-14 |
TABLE OF CONTENTS
1
PART I
Item 1. | Business |
Nobility Homes, Inc., a Florida corporation incorporated in 1967, designs, manufactures and sells a broad line of manufactured and modular homes through its own retail sales centers throughout Florida. Nobility also sells its manufactured homes on a wholesale basis to independent manufactured home retail dealers and manufactured home communities. All references in this annual report on Form 10-K to “Nobility,” “Company,” “we,” “us,” or “our” refer to Nobility Homes, Inc. and its consolidated subsidiaries unless the context otherwise suggests.
Manufactured Homes
Nobility’s homes are available in approximately 100 active models sold under the trade names “Kingswood,” “Richwood,” “Tropic Isle,” “Regency Manor,” and “Tropic Manor.” The homes, ranging in size from 464 to 2,800 square feet and containing from one to five bedrooms, are available in:
• | Single-wide widths of 14 and 16 feet ranging from 35 to 72 feet in length. |
• | Double-wide widths of 20, 24, 26, 28 and 32 feet ranging from 32 to 72 feet in length. |
• | Triple-wide widths of 42 feet ranging from 60 to 72 feet in length. |
• | Quad unit with 2 sections 28 feet wide from 40 to 48 feet long and 2 sections 28 feet wide by 52 feet long. |
Our floor plans can be built as an on-frame modular home. We have been approved to build A.N.S.I. (American National Standards Institute) Park models less than 400 square feet and exposure D homes.
Nobility’s homes are sold primarily as unfurnished dwellings ready for permanent occupancy. Interiors are designed and color coordinated in a range of decors. Depending on the size of the unit and quality of appliances and other appointments, retail prices for Nobility’s homes typically range from approximately $70,000 to $220,000. Most of the prices of Nobility’s homes are considered by it to be within the low to medium price range of the industry.
Nobility’s manufacturing plant utilizes assembly line techniques in manufactured home production. The plant manufactures and assembles the floors, sidewalls, end walls, roofs and interior cabinets for their homes. Nobility purchases, from outside suppliers, various other components that are built into its homes including the axles, frames, tires, doors, windows, pre-finished sidings, plywood, ceiling panels, lumber, rafters, insulation, gypsum board, appliances, lighting and plumbing fixtures, carpeting and draperies. Nobility is not dependent upon any one particular supplier for its raw materials or component parts and is not required to carry significant amounts of inventory to assure itself of a continuous allotment of goods from suppliers.
Nobility generally does not manufacture its homes to be held by it as inventory (except for model home inventory of its wholly owned retail network subsidiary, Prestige Home Centers, Inc.), but, rather, manufactures its homes after receipt of orders. Although Nobility attempts to maintain a consistent level of production of homes throughout the fiscal year, seasonal fluctuations do occur, with sales of homes generally lower during the first fiscal quarter due to the holiday season.
The sales area for a manufactured home manufacturer is limited by substantial delivery costs of the finished product. Nobility’s homes are delivered by outside trucking companies. Nobility estimates that it can compete effectively within a range of approximately 350 miles from its manufacturing plant in Ocala, Florida. Substantially all of Nobility’s sales are made in Florida.
Retail Sales
Prestige Home Centers, Inc.(“Prestige”), our wholly owned subsidiary, operates ten retail sales centers in north and central Florida. Its principal executive offices are located at Nobility’s headquarters in Ocala, Florida. Sales by Prestige accounted for 95% and 87% of Nobility’s sales during fiscal years 2022 and 2021, respectively.
Each of Prestige’s retail sales centers are located within 350 miles of Nobility’s Ocala manufacturing facility. Prestige owns the land at eight of its retail sales centers and leases the remaining two retail sales centers from unaffiliated parties.
The primary customers of Prestige are homebuyers who generally purchase manufactured homes to place on their own home sites. Prestige operates its retail sales centers with a model home concept. Each of the homes displayed at its retail sales centers is furnished and decorated as a model home. Although the model homes may be purchased from Prestige’s model home inventory, generally, customers order homes which are shipped directly from the factory to their home site. Prestige sales generally are to purchasers living within a radius of approximately 100 miles from the selling retail lot. The Company’s internet-based marketing program generates numerous leads which are directed to the Prestige retail sales centers to assist a potential buyer in purchasing a home.
2
The retail sale of manufactured homes is a highly competitive business. Because of the number of retail sales centers located throughout Nobility’s market area, potential customers typically can find several sales centers within a 100-mile radius of their present home. Prestige competes with over 80 other retailers in its primary market area, some of which may have greater financial resources than Prestige. In addition, manufactured homes offered by Prestige compete with site-built housing.
Prestige does not itself finance customers’ new home purchases. Financing for home purchases has historically been available from other independent sources that specialize in manufactured housing lending and banks that finance manufactured home purchases. Prestige and Nobility are not required to sign any recourse agreements with any of these retail financing sources.
Insurance and Financial Services
Mountain Financial, Inc., a wholly owned subsidiary of Prestige Home Centers, Inc., is an independent insurance agent and licensed mortgage loan originator. Its principal activity is providing retail insurance services, which involves placing various types of insurance, including property and casualty, automobile and extended home warranty coverage, with insurance underwriters on behalf of its Prestige customers in connection with their purchase and financing of manufactured homes. As agent, we solely assist our customers in obtaining various types of insurance and extended warranty coverage with insurance underwriters. As such, we have no agreements with homeowners and/or third-party insurance companies other than agency agreements with various insurance carriers. The Company provides 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 for fiscal years 2022 and 2021.
Wholesale Sales to Manufactured Home Communities
Nobility also sells its homes on a wholesale basis through two full-time salespersons to approximately 36 manufactured home communities and independent dealers. Nobility continues to seek new opportunities in the areas in which it operates, as there is ongoing turnover in the manufactured home communities as they achieve full occupancy levels. As is common in the industry, most of Nobility’s independent dealers sell homes produced by several manufacturers.
Nobility does not generally offer consigned inventory programs or other credit terms to its independent dealers and ordinarily receives payment for its homes within 15 to 30 days of delivery. However, Nobility may offer extended terms to park dealers who do a high volume of business with Nobility. In order to stimulate sales, Nobility sells homes for display to related party manufactured home communities on extended terms and recognizes revenue when the homes are sold to the end users. The high visibility of Nobility’s homes in such communities generates additional sales of its homes through such dealers.
Regulation
The manufacture, distribution and sale of homes are subject to governmental regulation at the federal, state and local levels. The Department of Housing and Urban Development (HUD) has adopted national construction and safety standards that preempt state standards. HUD regulations require that manufactured homes be constructed to more stringent wind load and thermal standards. Compliance with these standards involves approval by a HUD approved engineering firm of engineering plans and specifications on all models. HUD has also promulgated rules requiring producers of manufactured homes to utilize wood products certified by their suppliers to meet HUD’s established limits on formaldehyde emissions. HUD’s standards also require periodic inspection by state or other third-party inspectors of plant facilities and construction procedures, as well as inspection of manufactured home units during construction. In addition, some components of manufactured homes may also be subject to Consumer Product Safety Commission standards and recall requirements. Modular homes manufactured by Nobility are required to comply with the Florida Building Code established by the Florida Department of Business and Professional Regulations.
Nobility estimates that compliance with federal, state and local environmental protection laws will have no material effect upon capital expenditures for plant or equipment modifications or earnings for the next fiscal year.
The transportation of manufactured homes is subject to state regulation. Generally, special permits must be obtained to transport the home over public highways and restrictions are imposed to promote travel safety including restrictions relating to routes, travel periods, speed limits, safety equipment and size.
Nobility’s homes are subject to the requirements of the Magnuson-Moss Warranty Act and Federal Trade Commission rulings which regulate warranties on consumer products. Nobility provides a limited warranty of one year on the structural components of its homes.
3
The government measures as well as the public reaction to COVID-19 and the various variants previously had a negative impact on customer traffic (and corresponding sales) within our centers and the operations of our business partners, which has since subsided. However, whether caused by COVID-19 or other factors, we have experienced unprecedented inflation and shortages in many material products, and difficulty in hiring additional and retaining production workers, with no immediate relief in sight that have resulted in corresponding increases to our material and labor costs. The Company is monitoring these issues and has adjusted our selling prices accordingly to help offset the higher costs.
Competition
The manufactured home industry is highly competitive. The initial investment required for entry into the business of manufacturing homes is not unduly large. State bonding requirements for entry into the business vary from state to state. The bond requirement for Florida is $50,000. Nobility competes directly with other manufacturers, some of whom are both considerably larger and possess greater financial resources than Nobility. Nobility estimates that of the 20 manufacturers selling in the state, approximately 10 manufacture homes of the same type as Nobility and compete in the same market area. Nobility believes that it is generally competitive with most of those manufacturers in terms of price, service, warranties and product performance.
Employees
As of January 7, 2023, the Company had 145 full-time employees, including 32 employed by Prestige. Approximately 89 employees are factory personnel compared to approximately 74 in such positions a year ago and 56 are in management, administrative, supervisory, sales and clerical positions compared to approximately 57 a year ago. In addition, Nobility employs part-time employees when necessary.
The Company has managerial, administrative, supervisory, sales and manufacturing employees. We have a focus on safety and being drug free in our manufacturing operations.
Historically, we have had low turnover rates with our non-manufacturing employees. It is currently difficult for us to attract long-term quality employees for our manufacturing operations. We have experienced disruption in production as a result of our inability to find labor. We are using different hiring practices such as work release programs and employment services to reduce the turnover. However, we are still experiencing a shortage of qualified factory production employees.
Nobility makes contributions toward employees’ group health and life insurance. Nobility, which is not subject to any collective bargaining agreements, has not experienced any work stoppage or labor disputes and considers its relationship with employees to be generally satisfactory.
Item 1A. | Risk Factors |
As a smaller reporting company, we are not required to provide the information required by this item.
Item 1B. | Unresolved Staff Comments |
None.
Item 2. | Properties |
As of February 1, 2023, Nobility owned one manufacturing plant as follows:
Location |
Approximate Size | |||
3741 SW 7th Street Ocala, Florida |
72,000 sq. ft. |
Nobility’s Ocala facility is located on approximately 35.5 acres of land on which an additional two-story structure adjoining the plant serves as Nobility’s corporate offices. The plant, which is of metal construction, is in good condition and requires little maintenance. In December 2021, the Company broke ground to build an 11,900 square foot frame shop constructed of concrete block and metal to manufacture steel frames for our homes, on our current manufacturing plant property in Ocala, Florida. It is anticipated that this project will be completed in fiscal year 2023.
4
Prestige owns the properties on which it’s Ocala South, Ocala North, Auburndale, Inverness, Tavares, Panama City, Yulee and Punta Gorda, Florida retail sales centers are located. Prestige leases the property for its other two retail sales centers located in Chiefland and Hudson Florida. The Company in April 2022 sold 4.38 acres of land frontage at the Inverness location for $96,970 to the Florida Department of Transportation for SR 41 road widening project. In January 2021 the Company purchased the land for the Tavares retail sales center for $245,000, land in Ocala for a future retail sales center in February 2021 for $1,040,000 and the land for the Ocala South retail sales center in March 2021 for $500,000.
Item 3. | Legal Proceedings |
Certain claims and suits arising in the ordinary course of business have been filed or are pending against the Company. In the opinion of management, the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
The Company does not maintain casualty insurance on some of our property, including the inventory at our retail centers, our plant machinery and plant equipment and is at risk for those types of losses.
Item 4. | Mine Safety Disclosures |
None.
5
PART II
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Market Information
The Company’s common stock currently trades under the symbol NOBH on the OTCQX market. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Holders
At January 31, 2023 the approximate number of holders on record of common stock was 86 (not including individual participants in security position listings).
Dividends
The Board of Directors declared a one-time cash dividend of $1.00 per common share for fiscal year 2021 paid to stockholders of record as of March 22, 2022. Any future determination to pay dividends will be at the discretion of our Board of Directors.
Securities Authorized for Issuance under Equity Compensation Plans
The following table displays equity compensation plan information as of the end of the fiscal year ended November 5, 2022 (see Note 13 to the Company’s financial statement included herein).
Equity Compensation Plan Information | ||||||||||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining equity compensation plans (excluding securities reflected in column (a)) |
||||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders |
66,200 | $ | 27.37 | N/A | ||||||||
Equity compensation plans not approved by security holders |
N/A | N/A | 233,800 | |||||||||
|
|
|
|
|
|
|||||||
Total |
66,200 | $ | 27.37 | 233,800 |
Recent Sales of Unregistered Securities
None.
Issuer Repurchases of Equity Securities
The Company did not repurchase any shares of its common stock during the fourth quarter ended November 5. 2022.
In September 2022, the Company’s Board of Directors authorized the Company to repurchase up to 200,000 shares of the Company’s common stock during fiscal year 2023 on the open market.
The Company’s Board of Directors in September 2021 authorized 200,000 and in June 2022 authorized 62,300 shares to be repurchased during fiscal year 2022 on the open market. During the twelve months ended November 5, 2022 the Company repurchased an aggregate of 162,570 shares of common stock.
In April 2022, the Company repurchased 100,000 shares of common stock from its president (see note 4) to the Company’s financial statements included herein.
6
Item 6. | Reserved |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
General
Nobility focuses on home buyers who generally purchase their manufactured homes from retail sales centers to locate on property they own. Nobility has aggressively pursued this market through its Prestige retail sales centers. While Nobility actively seeks to make wholesale sales to independent retail dealers, its presence as a competitor limits potential sales to dealers located in the same geographic areas serviced by its Prestige retail sales centers.
Nobility has aggressively targeted the retirement community market, which is made up of retirees moving to Florida and typically purchasing homes to be located on sites leased from park communities offering a variety of amenities. Sales are not limited by the presence of the Company’s Prestige retail sales centers in this type of arrangement, as the retirement community sells homes only within their community.
Nobility has a product line of approximately 100 active models. Although market demand can fluctuate on a fairly short-term basis, the manufacturing process is such that Nobility can alter its product mix relatively quickly in response to changes in the market. During fiscal years 2022 and 2021, Nobility continued to experience consumer demand for affordable manufactured homes in Florida. Our three-, four- and five-bedroom manufactured homes are favored by families, compared with the one, two and three-bedroom homes that typically appeal to the retirement buyers who reside in the manufactured housing communities.
In an effort to make manufactured homes more competitive with site-built housing, financing packages are available through third-party lenders to provide (1) 30-year financing, (2) an interest rate reduction program (buy-down), (3) combination land/manufactured home loans, and (4) a 5% down payment program for qualified buyers.
Prestige maintains several outside financing sources that provide financing to retail homebuyers for its manufactured homes. The Company continually tries to develop relationships with new lenders, since established lenders will occasionally leave manufactured home lending. 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. In addition, rising interest rates have slowed the demand for retail homebuyers.
Prestige’s wholly owned subsidiary, Mountain Financial, Inc., is an independent insurance agent and licensed loan originator. Mountain Financial provides automobile insurance, extended warranty coverage and property and casualty insurance to Prestige customers in connection with their purchase and financing of manufactured homes.
The rising interest rate environment’s future impact on the housing market as well as the continued negative impact from COVID-19 and other factors on the Company’s production work force, supply of certain building products and the operations of the Company are difficult to forecast for fiscal year 2023. These factors have had a negative impact on customer traffic (and corresponding sales) within our sales centers, operations of the manufacturing facility and our business partners through the most part of fiscal year 2022 and during the third and fourth quarters of fiscal 2021.
In fiscal year 2022 Prestige purchased from other manufacturers 153 ($12,595,593) new homes to help eliminate the large backlog from Nobility. Prestige has 99 ($8,198,040) new homes from Nobility and outside manufacturers that are included in inventory and are in the field waiting to be completed and closed.
Nobility believes that being located in Florida offers a number of advantages such as an increasing population and a low-tax and business friendly state government. However, Nobility is also aware of climate-related risks such as hurricanes, tornados, sea-level rise, flooding and wildfires which are prone to occur in Florida. To date, management does not believe these climate-related risks have adversely impacted the Company. However, management believes if such climate-related events impacted the Company’s manufacturing or sales facilities, then the Company would be adversely impacted. If such climate-related events should deter future population growth in Florida, then the Company would be adversely impacted. If climate-related disclosures are required in the future by the Securities and Exchange Commission or if customary business practices should change to require greater climate-risk mitigation, then the Company would face increased compliance costs and costs of doing business. Such costs are not currently quantifiable.
The Company’s fiscal year ends on the first Saturday on or after October 31. The year ended November 5, 2022 (fiscal year 2022) consisted of a fifty-two-week period and the year ended November 6, 2021 (fiscal year 2021) consisted of a fifty-three-week period.
7
Results of Operations
Total net sales in fiscal year 2022 increased 14% to $51,522,054 compared to $45,062,558 in fiscal year 2021. The Company reported net income of $7,232,029 in fiscal year 2022, an increase of 34% compared to $5,398,808 during fiscal year 2021. The demand for affordable manufactured housing in Florida and the U.S. is slowing as a result of the increased interest rate environment driven by the Federal Reserve. Although net sales increased during the twelve months ended November 5, 2022 as compared to the same period last year, we continued to experience the negative impact of limitations being placed on certain key production materials from suppliers, the delay or lack of key components from vendors as well as back orders, delayed shipments, price increases and labor shortages. These supply chain issues have caused delays in the completion of the homes at the manufacturing facility and the set-up process of retail homes in the field, resulting in decreased net sales due to our inability to timely deliver and setup homes to customers. Certainly, the COVID-19 pandemic has had an impact on each of these areas. We expect that these challenges will continue for the first six months of fiscal year 2023 or until the industry supply chain normalizes. The Company has continued to experience inflation in most building products resulting in increases to our material and labor costs which has increased the wholesale and retail selling prices of our homes. In addition, potential customers may delay or defer purchasing decisions in light of the rising interest rate environment. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2021 through October 2022 were up approximately 23% from the same period last year.
The following table summarizes certain key sales statistics and percent of gross profit as of and for fiscal years 2022 and 2021.
2022 | 2021 | |||||||
New homes sold through Company owned sales centers |
371 | 394 | ||||||
Pre-owned homes sold through Company owned sales centers |
13 | 15 | ||||||
Homes sold to independent dealers |
43 | 139 | ||||||
Total new factory built homes produced |
423 | 557 | ||||||
Average new manufactured home price—retail |
$ | 126,438 | $ | 93,824 | ||||
Average new manufactured home price—wholesale |
$ | 72,983 | $ | 50,183 | ||||
As a percent of net sales: |
||||||||
Gross profit from the Company owned retail sales centers |
20 | % | 17 | % | ||||
Gross profit from the manufacturing facilities—including intercompany sales |
16 | % | 15 | % |
Maintaining our strong financial position is vital for future growth and success. 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, 2022, we celebrated our 55th anniversary in business specializing in the design and production of quality, affordable manufactured and modular homes. With multiple retail sales centers in Florida for over 32 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.
Insurance agent commissions in fiscal year 2022 were $299,672 compared to $283,154 in fiscal year 2021. We have established 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 November 5, 2022 and November 6, 2021.
Cost of goods sold at our manufacturing facilities include materials, direct and indirect labor and manufacturing expenses (which consists of factory occupancy, salary and salary related, delivery costs, manufactured home service costs and other manufacturing expenses). Cost of goods sold at our retail sales centers include appliances, air conditioners, electrical and plumbing hook-ups, furniture, insurance, impact and permit fees, land and home fees, manufactured home, service warranty, setup contractor, interior drywall finish, setup display, skirting, steps, well, septic tank and other expenses.
Gross profit as a percentage of net sales was 29% in fiscal year 2022 compared to 25% in fiscal year 2021. Our gross profit was $14,903,438 for fiscal year 2022 compared to $11,432,196 for fiscal year 2021. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The increase in gross profit as a percentage of net sales is primarily due to the increase in the wholesale and retail selling prices of our homes.
Selling, general and administrative expenses at our manufacturing facility include salaries, professional services, advertising and promotions, corporate expenses, employee benefits, office equipment and supplies and utilities. Selling, general and administrative expenses at our retail sales center include advertising, retail sales centers expenses, salary and salary related, professional fees, corporate expense, employee benefit, office equipment and supplies, utilities and travel. Selling, general and administrative expenses at the insurance company include advertising, professional fees and office supplies.
8
Selling, general and administrative expenses as a percentage of net sales was 13% in fiscal year 2022 compared to 12% in fiscal year 2021. Selling, general and administrative expenses were $6,477,988 for fiscal year 2022 compared to $5,286,172 for fiscal year 2021. The dollar increases in expenses in 2022 were due to the increase in variable expenses which were a direct result of employee benefits compensation due to the increase in sales.
The Company earned interest in the amount of $234,804 in fiscal year 2022 compared to $180,635 in fiscal year 2021. Interest income is dependent on our cash balance and available rates of return. The increase during 2022 is primarily due to the increase in the interest rates.
The Company earned $60,457 from its joint venture, Majestic 21, in fiscal year 2022 compared to $59,072 in fiscal year 2021. 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 earnings from the Majestic 21 loan portfolio could vary year to year, but overall, the earnings will continue to decrease due to the amortization, maturity and payoff of the loans.
We received $364,520 in fiscal year 2022 and $246,216 in fiscal year 2021 under an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21st Mortgage Corporation and the Company. The distributions from the escrow account, related to certain loans financed by 21st Mortgage Corporation, are recorded in income by the Company as received, which has been the Company’s past practice. The increase in earnings is primarily due to the four distributions received in fiscal year 2022 compared to three distributions received fiscal year 2021. The earnings overall from the FRSA loan portfolio will continue to decrease due to the amortization and payoff of the loans.
The Company realized pre-tax income of $9,436,534 in fiscal year 2022 compared to a pre-tax income of $7,118,733 in fiscal year 2021.
The Company recorded an income tax expense of $2,204,505 in fiscal year 2022 compared to $1,719,925 in fiscal year 2021.
Net income in fiscal year 2022 was $7,232,029 or $2.10 per basic and diluted share and net income in fiscal year 2021 was $5,398,808 or $1.50 per basic and diluted share.
Liquidity and Capital Resources
Cash and cash equivalents were $16,653,449 at November 5, 2022 compared to $36,126,059 at November 6, 2021. Certificates of deposit were $3,903,888 at November 5, 2022 compared to $2,093,015 at November 6, 2021. Short-term investments were $589,071 at November 5, 2022 compared to $621,928 at November 6, 2021. Working capital was $33,667,732 at November 5, 2022 compared to $35,563,355 at November 6, 2021. A cash dividend was paid from our cash reserves in April 2022 in the amount of $1.00 per share ($3,532,976). During fiscal 2022, the Company repurchased an aggregate 162,570 of shares of its common stock for an aggregate of $5,195,267 and Prestige purchased from other manufacturers 153 ($12,595,593) new homes to help eliminate the large backlog from Nobility. Prestige new home inventory was $20,016,093 at November 5, 2022 compared to $7,140,880 at November 6, 2021. The increase in Prestige new home inventory was due to the 121 ($10,432,998) new homes in inventory that were purchased from other manufacturers. Prestige has 99 ($8,198,040) new homes from Nobility and other manufacturers that are included in inventory and are in the field waiting to be completed and closed. We 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 incurred $1.1 million in fiscal year 2022 in building an 11,900 square foot frame shop to manufacture steel frames for our homes. In April 2022 Prestige sold 4.38 acres of land frontage at the Inverness location for $96,970 to the Florida Department of Transportation for SR 41 road widening project. A cash dividend was paid from our cash reserves in March 2021 in the amount of $1.00 per share ($3,632,100). During fiscal 2021, the Company repurchased an aggregate of 100,346 shares of its common stock for an aggregate of $3,478,553. In January 2021 the Company purchased the land for the Tavares retail sales center for $245,000, land in Ocala for a future retail sales center in February 2021 for $1,040,000 and land for the Ocala South retail sales center in March 2021 for $500,000.
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 $4.1 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 November 5, 2022, the Company continued to report a strong balance sheet which included total assets of approximately $62.4 million which was funded primarily by stockholders’ equity of approximately $47.9 million.
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Looking ahead, the Company’s strong balance sheet and significant cash reserves accumulated in profitable years has allowed the Company to remain sufficiently liquid to allow the continuation of operations and should enable the Company to take advantage of any market opportunities. Management believes it has sufficient levels of liquidity as of the date of the filing of this Form 10-K to allow the Company to operate into the foreseeable future.
Critical Accounting Policies and Estimates
The Company applies judgment and estimates, which may have a material effect in the eventual outcome of assets, liabilities, revenues and expenses, accounts receivable, inventory and goodwill. The following explains the basis and the procedure where judgment and estimates are applied.
Revenue Recognition
The Company recognizes revenue from its retail sales of new manufactured homes upon the occurrence of the following:
• | Its receipt of a down payment, |
• | Construction of the home is complete, |
• | Home has been delivered and set up at the retail home buyer’s site and title has been transferred to the retail home buyer, |
• | Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and |
• | Completion of any other significant obligations. |
The Company recognizes revenue from the sale of the repurchased homes upon transfer of title to the new purchaser.
The Company recognizes revenue from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home and transferring title and risk of loss to the independent dealer. For wholesale shipments to independent dealers, the Company has no obligation to set up the home or to complete any other significant obligations.
Sales of homes to affiliated entities that are subject to contingent payment terms are considered inventory consignment arrangements. Revenue from such arrangements is recognized when the homes are sold to the end users and payment is collected by the affiliated entity.
See Note 4 “Related Party Transactions” to the Company’s financial statement included herein
The Company recognizes revenue from its wholly owned subsidiary, Mountain Financial, Inc., as follows: commission income (and fees in lieu of commissions) is recorded as of the effective date of insurance coverage or the billing date, whichever is later. Commissions on premiums billed and collected directly by insurance companies are recorded as revenue when received which, in many cases, is the Company’s first notification of amounts earned due to the lack of policy and renewal information. Contingent commissions are recorded as revenue when received. Contingent commissions are commissions paid by insurance underwriters and are based on the estimated profit and/or overall volume of business placed with the underwriter. The data necessary for the calculation of contingent commissions cannot be reasonably obtained prior to the receipt of the commission which, in many cases, is the Company’s first notification of amounts earned. The Company provides 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 on November 5, 2022 or November 6, 2021.
Income Taxes
The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
10
Rebate Program
The Company has a rebate program for some dealers, based upon the number and type of homes purchased, which pays rebates based upon sales volume to the dealers. Volume rebates are recorded as a reduction of sales in the accompanying consolidated financial statements. The rebate liability is calculated and recognized as eligible homes are sold based upon factors surrounding the activity and prior experience of specific dealers and is included in accrued expenses in the accompanying consolidated balance sheets.
Off-Balance Sheet Arrangements
As part of our ongoing business, we generally do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities (“VIE’s”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of November 5, 2022, we are not involved in any material unconsolidated entities (other than the Company’s investments in Majestic 21).
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 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 pandemics, competitive pricing pressures at both the wholesale and retail levels, inflation, increasing material costs (including forest based products) or availability of materials due to supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), changes in market demand, increase 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.
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
As a smaller reporting company, we are not required to provide the information required by this item.
11
Item 8. |
Financial Statements and Supplementary Data |
13 | ||
14 | ||
15 | ||
16 | ||
17 | ||
18 |
November 5, | November 6, | |||||||
2022 | 2021 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Certificates of deposit |
||||||||
Short-term investments |
||||||||
Accounts receivable - trade |
||||||||
Note receivable |
||||||||
Mortgage notes receivable |
||||||||
Inventories |
||||||||
Pre-owned homes, net |
||||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
Property, plant and equipment, net |
||||||||
Pre-owned homes, net |
— | |||||||
Note receivable, less current portion |
||||||||
Mortgage notes receivable, less current portion |
||||||||
Mobile home park note receivable |
— | |||||||
Other investments |
||||||||
Deferred income taxes |
— | |||||||
Operating lease right of use assets |
— | |||||||
Cash surrender value of life insurance |
||||||||
Other assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued compensation |
||||||||
Accrued expenses and other current liabilities |
||||||||
Income taxes payable |
||||||||
Operating lease obligation |
— | |||||||
Customer deposits |
||||||||
Total current liabilities |
||||||||
Deferred income taxes |
— | |||||||
Total liabilities |
||||||||
Commitments and contingencies |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid in capital |
||||||||
Retained earnings |
||||||||
Less treasury stock at cost, |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
Year Ended | ||||||||
November 5, | November 6, | |||||||
2022 | 2021 | |||||||
Net sales |
$ | $ | ||||||
Cost of sales |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Gross profit |
||||||||
Selling, general and administrative expenses |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Operating income |
||||||||
|
|
|
|
|||||
Other income (loss): |
||||||||
Interest income |
||||||||
Undistributed earnings in joint venture - Majestic 21 |
||||||||
Proceeds received under escrow arrangement |
||||||||
(Decrease) increase in fair value of equity investment |
( |
) | ||||||
Gain on disposal of property, plant and equipment |
— | |||||||
Miscellaneous |
||||||||
|
|
|
|
|||||
Total other income |
||||||||
|
|
|
|
|||||
Income before provision for income taxes |
||||||||
Income tax expense |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net income |
$ | $ | ||||||
|
|
|
|
|||||
Weighted average number of shares outstanding: |
||||||||
Basic |
||||||||
Diluted |
||||||||
Net income per share: |
$ | $ | ||||||
Basic |
$ | $ | ||||||
Diluted |
Common | Common | Additional | Retained | Treasury | ||||||||||||||||||||
Stock Shares | Stock | Paid-in-Capital |
Earnings | Stock | Total | |||||||||||||||||||
Balance at November 6, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Cash dividend |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Purchase of treasury stock |
( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||
Stock-based compensation |
— | — | ||||||||||||||||||||||
Exercise of employee stock |
||||||||||||||||||||||||
options |
— | ( |
) | — | — | |||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at November 5, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common | Common | Additional | Retained | Treasury | ||||||||||||||||||||
Stock Shares | Stock | Paid-in-Capital |
Earnings | Stock | Total | |||||||||||||||||||
Balance at October 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Cash dividend |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Purchase of treasury stock |
( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||
Stock-based compensation |
— | — | — | — | ||||||||||||||||||||
Exercise of employee stock |
— | |||||||||||||||||||||||
options |
— | — | ||||||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at November 6, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended | ||||||||
November 5, | November 6, | |||||||
2022 | 2021 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
||||||||
Depreciation |
||||||||
Deferred income taxes |
( |
) | ||||||
Undistributed earnings in joint venture - Majestic 21 |
( |
) | ( |
) | ||||
Gain on disposal of property, plant and equipment |
( |
) | — | |||||
Decrease (increase) in fair market value of equity investments |
( |
) | ||||||
Stock-based compensation |
||||||||
Amortization of operating lease right of use assets |
||||||||
Decrease (increase) in: |
||||||||
Accounts receivable - trade |
( |
) | ||||||
Inventories |
( |
) | ( |
) | ||||
Pre-owned homes |
||||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Interest receivable |
( |
) | ( |
) | ||||
(Decrease) increase in: |
||||||||
Accounts payable |
||||||||
Accrued compensation |
( |
) | ||||||
Accrued expenses and other current liabilities |
||||||||
Income taxes payable |
||||||||
Customer deposits |
( |
) | ||||||
Net cash (used in) provided by operating activities |
( |
) | ||||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
Purchase certificates of deposit |
( |
) | — | |||||
Proceeds from certificates of deposit |
||||||||
Proceeds from disposal of property, plant and equipment |
— | |||||||
Collections on interest receivable |
||||||||
Collections on mortgage notes receivable |
||||||||
Collections on equipment and other notes receivable |
||||||||
Collections of mobile park Note receivable |
— | |||||||
Issuance of equipment note receivable |
— | ( |
) | |||||
Issuance of mobile home park note receivable |
( |
) | ( |
) | ||||
Increase in cash surrender value of life insurance |
( |
) | ( |
) | ||||
Net cash (used in) provided by investing activities |
( |
) | ||||||
Cash flows from financing activities: |
||||||||
Payment of cash dividend |
( |
) | ( |
) | ||||
Proceeds from exercise of employee stock option |
— | |||||||
Purchase of treasury stock |
( |
) | ( |
) | ||||
Reduction of operating lease obligation |
( |
) | ( |
) | ||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
(Decrease) increase in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of year |
||||||||
Cash and cash equivalents at end of year |
$ | $ | ||||||
Supplemental disclosure of cash flows information: |
||||||||
Income taxes paid |
$ | $ | ||||||
Noncash exercise of employee stock options |
$ | ( |
) | $ | — | |||
1. | Identify the contract(s) with a customer. |
2. | Identify each performance obligation in the contract. |
3. | Determine the transaction price. |
4. | Allocate the transaction price to each performance obligation; and |
5. | Recognize revenue when or as each performance obligation is satisfied. |
• | Its receipt of a down payment, |
• | Construction of the home is complete, |
• | Home has been delivered and set up at the retail home buyer’s site, and title has been transferred to the retail home buyer, |
• | Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and |
• | Completion of any other significant obligations. |
202 2 |
2021 | |||||||
Manufactured housing |
$ | $ | ||||||
Pre-owned homes |
||||||||
Insurance agent commissions |
||||||||
|
|
|
|
|||||
Total net sales |
$ | $ | ||||||
|
|
|
|
2022 | 2021 | |||||||
Beginning accrued warranty expense |
$ | $ | ||||||
Less: reduction for payments |
( |
) | ( |
) | ||||
Plus: additions to accrual |
||||||||
|
|
|
|
|||||
Ending accrued warranty expense |
$ | $ | ||||||
|
|
|
|
November 5, 2022 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Equity securities in a public company |
$ | $ | $ | $ | ||||||||||||
November 6, 2021 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Equity securities in a public company |
$ | $ | $ | |
$ | |||||||||||
• | 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. |
November 5, 2022 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Equity securities in a public company |
$ | $ | $ | |||||||||
November 6, 2021 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Equity securities in a public company |
$ | $ | $ | |||||||||
November 5, 2022 |
November 6, 2021 |
|||||||
Raw materials |
$ | $ | ||||||
Work-in-process |
||||||||
Inventory consigned to affiliated entities |
||||||||
Finished homes – Nobility |
||||||||
Finished homes – Other |
||||||||
Model home furniture |
||||||||
|
|
|
|
|||||
Inventories |
$ | $ | ||||||
|
|
|
|
|||||
Pre-owned homes |
$ | $ | ||||||
Less homes expected to sell in 12 months |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Pre-owned homes, long-term |
$ | $ | ||||||
|
|
|
|
Range of Lives in Years | November 5, 2022 | November 6, 2021 | ||||||||||
Land |
$ | $ | ||||||||||
Land improvements |
||||||||||||
Buildings and improvements |
||||||||||||
Machinery and equipment |
||||||||||||
Furniture and fixtures |
||||||||||||
Construction in progress |
||||||||||||
|
|
|
|
|
|
|||||||
Less accumulated depreciation |
( |
) | ( |
) | ||||||||
|
|
|
|
|||||||||
$ | $ | |||||||||||
|
|
|
|
November 5, 2022 |
November 6, 2021 |
|||||||
Accrued warranty expense |
$ | $ | ||||||
Accrued property and sales taxes |
||||||||
Other accrued expenses |
||||||||
|
|
|
|
|||||
Total accrued expenses and other current liabilities |
$ | $ | ||||||
|
|
|
|
November 5, 2022 | November 6, 2021 | |||||||
Current tax expense: |
||||||||
Federal |
$ | $ | ||||||
State |
||||||||
Deferred tax (benefit) |
( |
) | ||||||
|
|
|
|
|||||
Provision for income taxes |
$ | $ | ||||||
|
|
|
|
November 5, 2022 | November 6, 2021 | |||||||
Provision—federal statutory tax rate |
$ | $ | ||||||
Increase (decrease) resulting from: |
||||||||
State taxes, net of federal tax benefit |
||||||||
Permanent differences: |
||||||||
Decrease in FL corporate tax rate |
( |
) | ||||||
Other |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Provision for income taxes |
$ | $ | ||||||
|
|
|
|
November 5, 2022 | November 6, 2021 | |||||||
Deferred tax assets: |
||||||||
Allowance for doubtful accounts |
$ | $ | ||||||
Prepaid Expenses . |
||||||||
Accrued expenses |
||||||||
Other assets |
||||||||
Lease right of use liability |
||||||||
Stock-based compensation |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Deferred tax liabilities: |
||||||||
Depreciation |
( |
) | ( |
) | ||||
Carrying value of investments |
( |
) | ( |
) | ||||
Amortization |
( |
) | ( |
) | ||||
Prepaid expenses |
( |
) | ( |
) | ||||
Lease right of use asset |
( |
) | ||||||
|
|
|
|
|||||
Net deferred tax assets (liabilities) |
$ | $ | ( |
) | ||||
|
|
|
|
November 5, 2022 | November 6, 2021 | |||||||
Current assets (liabilities): |
||||||||
Deferred tax assets |
$ | $ | ||||||
Deferred tax liabilities |
||||||||
|
|
|
|
|||||
Net current deferred tax assets |
||||||||
|
|
|
|
|||||
Non-current assets (liabilities): |
||||||||
Deferred tax assets |
||||||||
Deferred tax liabilities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net non-current deferred tax assets (liabilities) |
( |
) | ||||||
Net deferred tax assets (liabilities) |
$ | $ | ( |
) | ||||
|
|
|
|
Number of Shares |
Stock Oprtion Price Range |
Weighted Average Exercies Price |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at October 31, 2020 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Canceled |
||||||||||||||||
Outstanding at November 6, 2021 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
* | |||||||||||||||
Canceled |
||||||||||||||||
Outstanding at November 5, 2022 |
$ | $ | $ | |||||||||||||
* |
Options for the exercise of |
Options Outstanding |
Options Exercisable | |||||||||||||||||||
Exercise Price |
Shares Outstanding |
Weighted Average Remaining Contractual Life (years) |
Weighted Average Exercise Price |
Number Exercisable |
Weighted Average Exercise Price |
|||||||||||||||
$ |
$ | $ | $ | |||||||||||||||||
$ |
$ | |||||||||||||||||||
$ |
$ | |||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
There were no disagreements with accountants on accounting and financial disclosure matters.
Item 9A. | 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 the Evaluation Date.
Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate and effective internal control over financial reporting in order to provide reasonable assurance of the reliability of the Company’s financial reporting and preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting involves policies and procedure that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of assets of the issuer; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer Company assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of its internal control over financial reporting as of November 5, 2022 based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and determined that its internal controls were effective.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Changes in internal control over financial reporting. There were no changes in our internal controls over financial reporting that occurred during the fourth quarter of fiscal 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Item 9B. | Other Information |
None.
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Not applicable.
The accompanying notes are an integral part of these financial statements.
30
PART III
Item 10. | Directors, Executive Officers and Corporate Governance |
Information is incorporated by reference pursuant to Instruction G of Form 10-K from its definitive proxy statement for the 2023 annual meeting of shareholders.
The following table provides the names, ages and business experience for the past five years for each of Nobility’s executive officers. Executive officers are each elected for one-year terms.
Executive Officers
Terry E. Trexler (83) | Chairman of the Board and President of Nobility since 1967; Mr. Trexler is also President of TLT, Inc. | |
Thomas W. Trexler (59) | Executive Vice President and Chief Financial Officer of Nobility since December 1994; President of Prestige Home Centers, Inc. since June 1995; Director of Prestige since 1993 and Vice President from 1991 to June 1995; President of Mountain Financial, Inc. since August 1992; Vice President of TLT, Inc. since September 1991. | |
Jean Etheredge (77) | Secretary since 1967. | |
Lynn J. Cramer, Jr. (77) | Treasurer since 1980. |
Thomas W. Trexler, Executive Vice President, Chief Financial Officer and a director, is the son of Terry E. Trexler, Nobility’s President and Chairman of the Board. There are no other family relationships between any directors or executive officers.
Code of Ethics
We have adopted a code of ethics that applies to the principal executive officer, principal financial officer, executive vice presidents and controller. The code has been designed in accordance with the provisions of the Sarbanes-Oxley Act of 2002, to promote honest and ethical conduct.
Our code of ethics is available on our website at www.nobilityhomes.com. You may also obtain a copy of the Nobility Homes, Inc. Code of Ethics, at no cost, by forwarding a written request to the Secretary, Nobility Homes, Inc., 3741 SW 7th Street, Ocala, Florida 34474.
Item 11. | Executive Compensation |
Information concerning executive compensation is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2023 annual meeting of shareholders.
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Information concerning security ownership of certain beneficial owners and management is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2023 annual meeting of shareholders.
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Information concerning certain relationships and related transactions is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2023 annual meeting of shareholders.
Item 14. | Principal Accounting Fees and Services |
Information concerning principal accountant fees and services is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2023 annual meeting of shareholders.
The accompanying notes are an integral part of these financial statements.
31
PART IV
Item 15. | Exhibits and Financial Statement Schedules |
(a) | Consolidated Financial Statements and Schedules |
Report of Daszkal Bolton LLP
Consolidated Balance Sheets at November 5, 2022 and November 6, 2021
Consolidated Statements of Comprehensive Income for the Years Ended November 5, 2022 and November 6, 2021
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended November 5, 2022 and November 6, 2021
Consolidated Statements of Cash Flows for the Years Ended November 5, 2022 and November 6, 2021
Notes to Consolidated Financial Statements
(b) | Exhibits: |
In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate. |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement. |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this report and the Company’s other public files, which are available without charge through the SEC’s website at http://www.sec.gov.
The accompanying notes are an integral part of these financial statements.
32
(f) | Amendment No.1 to 2011 Stock Plan (Filed as an exhibit to Nobility’s Form 10-K for the fiscal year ended November 6, 2021 and incorporated herein by reference). | |
21.1 | Subsidiaries of Nobility. | |
23.1 | Consent of Daszkal Bolton LLP. | |
31.(a) | Written Statement 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) | Written Statement 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. | |
104. | Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101). |
Item 16. | Form 10-K Summary |
None.
The accompanying notes are an integral part of these financial statements.
33
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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: February 1, 2023 | By: /s/ Terry E. Trexler | |
Terry E. Trexler, Chairman, | ||
President and Chief Executive Officer (Principal Executive Officer) | ||
DATE: February 1, 2023 | By: /s/ Thomas W. Trexler | |
Thomas W. Trexler, Executive Vice President | ||
and Chief Financial Officer (Principal Financial Officer) | ||
DATE: February 1, 2023 | By: /s/ Lynn J. Cramer, Jr. | |
Lynn J. Cramer, Jr., Treasurer | ||
and Principal Accounting Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
DATE: February 1, 2023 | By: /s/ Terry E. Trexler | |
Terry E. Trexler, Director | ||
DATE: February 1, 2023 | By: /s/ Thomas W. Trexler | |
Thomas W. Trexler, Director | ||
DATE: February 1, 2023 | By: /s/ Robert P. Saltsman | |
Robert P. Saltsman, Director | ||
DATE: February 1, 2023 | By: /s/ Arthur L. Havener | |
Arthur L. Havener, Director |
The accompanying notes are an integral part of these financial statements.
34
Exhibit 3(b)
NOBILITY HOMES, INC.
CORPORATE BYLAWS
MARCH 28, 1994
TABLE OF CONTENTS
Page | ||||
ARTICLE 1 | ||||
Definitions | ||||
Section 1.1 Definitions |
1 | |||
ARTICLE 2 | ||||
Offices | ||||
Section 2.1 Principal and Business Offices |
1 | |||
Section 2.2 Registered Office |
1 | |||
ARTICLE 3 | ||||
Shareholders | ||||
Section 3.1 Annual Meeting |
2 | |||
Section 3.2 Special Meetings |
2 | |||
Section 3.3 Place of Meeting |
2 | |||
Section 3.4 Notice of Meeting |
3 | |||
Section 3.5 Waiver of Notice |
3 | |||
Section 3.6 Fixing of Record Date |
4 | |||
Section 3.7 Shareholders List for Meetings |
5 | |||
Section 3.8 Quorum |
6 | |||
Section 3.9 Voting of Shares |
6 | |||
Section 3.10 Vote Required |
6 | |||
Section 3.11 Conduct of Meeting |
7 | |||
Section 3.12 Inspectors of Election |
7 | |||
Section 3.13 Proxies |
7 | |||
Section 3.14 Shareholder Nominations and Proposals |
8 | |||
Section 3.15 Action by Shareholders Without Meeting |
8 | |||
Section 3.16 Acceptance of Instruments Showing Shareholder Action |
9 |
Page | ||||
ARTICLE 4 | ||||
Board of Directors | ||||
Section 4.1 General Powers and Number |
10 | |||
Section 4.2 Qualifications |
10 | |||
Section 4.3 Term of Office |
10 | |||
Section 4.4 Removal |
10 | |||
Section 4.5 Resignation |
10 | |||
Section 4.6 Vacancies |
11 | |||
Section 4.7 Compensation |
11 | |||
Section 4.8 Regular Meetings |
11 | |||
Section 4.9 Special Meetings |
11 | |||
Section 4.10 Notice |
11 | |||
Section 4.11 Waiver of Notice |
12 | |||
Section 4.12 Quorum and Voting |
12 | |||
Section 4.13 Conduct of Meetings |
12 | |||
Section 4.14 Committees |
13 | |||
Section 4.15 Action Without Meeting |
13 | |||
ARTICLE 5 | ||||
Officers | ||||
Section 5.1 Number |
14 | |||
Section 5.2 Election and Term of Office |
14 | |||
Section 5.3 Removal |
14 | |||
Section 5.4 Resignation |
14 | |||
Section 5.5 Vacancies |
15 | |||
Section 5.6 President |
15 | |||
Section 5.7 Vice Presidents |
15 | |||
Section 5.8 Secretary |
16 | |||
Section 5.9 Treasurer |
16 | |||
Section 5.10 Assistant Secretaries and Assistant Treasurers |
16 | |||
Section 5.11 Other Assistants and Acting Officers |
17 | |||
Section 5.12 Salaries |
17 |
Page | ||||
ARTICLE 6 |
| |||
Contracts, Checks and Deposits; Special Corporate Acts |
| |||
Section 6.1 Contracts |
17 | |||
Section 6.2 Checks, Drafts, etc. |
17 | |||
Section 6.3 Deposits |
17 | |||
Section 6.4 Voting of Securities Owned by Corporation |
18 | |||
ARTICLE 7 |
| |||
Certificates for Shares; Transfer of Shares |
| |||
Section 7.1 Consideration for Shares |
18 | |||
Section 7.2 Certificates for Shares |
19 | |||
Section 7.3 Transfer of Shares |
19 | |||
Section 7.4 Restrictions on Transfer |
19 | |||
Section 7.5 Lost, Destroyed, or Stolen Certificates |
20 | |||
Section 7.6 Stock Regulations |
20 | |||
ARTICLE 8 |
| |||
Seal |
| |||
Section 8.1 Seal |
20 | |||
ARTICLE 9 |
| |||
Books and Records |
| |||
Section 9.1 Books and Records |
20 | |||
Section 9.2 Shareholders Inspection Rights |
21 | |||
Section 9.3 Distribution of Financial Information |
21 | |||
Section 9.4 Other Reports |
21 |
Page | ||||
ARTICLE 10 |
| |||
Indemnification |
| |||
Section 10.1 Provision of Indemnification |
21 | |||
ARTICLE 11 |
| |||
Amendments |
| |||
Section 11.1 Power to Amend |
22 | |||
Section 11.2 Implied Amendments |
22 |
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ARTICLE 1
Definitions
Section 1.1 Definitions. The following terms shall have the following meanings for purposes of these bylaws:
Act means the Florida Business Corporation Act, as it may be amended from time to time, or any successor legislation thereto.
Deliver or delivery includes delivery by hand; United States mail; facsimile, telegraph, teletype or other form of electronic transmission; and private mail carriers handling nationwide mail services.
Distribution means a direct or indirect transfer of money or other property (except shares in the corporation) or an incurrence of indebtedness by the corporation to or for the benefit of shareholders in respect of any of the corporations shares. A distribution may be in the form of a declaration or payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; or otherwise.
Principal office means the office (within or without the State of Florida) where the corporations principal executive offices are located, as designated in the articles of incorporation or other initial filing until an annual report has been filed with the Florida Department of State, and thereafter as designated in the annual report.
ARTICLE 2
Offices
Section 2.1 Principal and Business Offices. The corporation may have such principal and other business offices, either within or without the State of Florida, as the Board of Directors may designate or as the business of the corporation may require from time to time.
Section 2.2 Registered Office. The registered office of the corporation required by the Act to be maintained in the State of Florida may but need not be identical with the principal office if located in the State of Florida, and the address of the registered office may be changed from time to time by the Board of Directors or by the registered agent. The business office of the registered agent of the corporation shall be identical to such registered office.
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ARTICLE 3
Shareholders
Section 3.1 Annual Meeting. The annual meeting of shareholders shall be held within four months after the close of each fiscal year of the corporation on a date and at a time and place designated by the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors shall not be held on the day fixed as herein provided for any annual meeting of shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of shareholders as soon thereafter as is practicable.
Section 3.2 Special Meetings.
(a) Call by Directors or President. Special meetings of shareholders, for any purpose or purposes, may be called by the Board of Directors, the Chairman of the Board (if any) or the President.
(b) Call by Shareholders. The corporation shall call a special meeting of shareholders in the event that the holders of at least ten percent of all of the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the Secretary one or more written demands for the meeting describing one or more purposes for which it is to be held. The corporation shall give notice of such a special meeting within sixty days after the date that the demand is delivered to the corporation.
Section 3.3 Place of Meeting. The Board of Directors may designate any place, either within or without the State of Florida, as the place of meeting for any annual or special meeting of shareholders. If no designation is made, the place of meeting shall be the principal office of the corporation.
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Section 3.4 Notice of Meeting.
(a) Content and Delivery. Written notice stating the date, time, and place of any meeting of shareholders and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten days nor more than sixty days before the date of the meeting by or at the direction of the President or the Secretary, or the officer or persons duly calling the meeting, to each shareholder of record entitled to vote at such meeting and to such other persons as required by the Act. Unless the Act requires otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called. If mailed, notice of a meeting of shareholders shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his or her address as it appears on the stock record books of the corporation, with postage thereon prepaid.
(b) Notice of Adjourned Meetings. If an annual or special meeting of shareholders is adjourned to a different date, time, or place, the corporation shall not be required to give notice of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment; provided, however, that if a new record date for an adjourned meeting is or must be fixed, the corporation shall give notice of the adjourned meeting to persons who are shareholders as of the new record date who are entitled to notice of the meeting.
(c) No Notice Under Certain Circumstances. Notwithstanding the other provisions of this Section, no notice of a meeting of shareholders need be given to a shareholder if: (1) an annual report and proxy statement for two consecutive annual meetings of shareholders, or (2) all, and at least two checks in payment of dividends or interest on securities during a twelve-month period, have been sent by first-class, United States mail, addressed to the shareholder at his or her address as it appears on the share transfer books of the corporation, and returned undeliverable. The obligation of the corporation to give notice of a shareholders meeting to any such shareholder shall be reinstated once the corporation has received a new address for such shareholder for entry on its share transfer books.
Section 3.5 Waiver of Notice.
(a) Written Waiver. A shareholder may waive any notice required by the Act or these bylaws before or after the date and time stated for the meeting in the notice. The waiver shall be in writing and signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice.
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(b) Waiver by Attendance. A shareholders attendance at a meeting, in person or by proxy, waives objection to all of the following: (1) lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (2) consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
Section 3.6 Fixing of Record Date.
(a) General. The Board of Directors may fix in advance a date as the record date for the purpose of determining shareholders entitled to notice of a shareholders meeting, entitled to vote, or take any other action. In no event may a record date fixed by the Board of Directors be a date preceding the date upon which the resolution fixing the record date is adopted or a date more than seventy days before the date of meeting or action requiring a determination of shareholders.
(b) Special Meeting. The record date for determining shareholders entitled to demand a special meeting shall be the close of business on the date the first shareholder delivers his or her demand to the corporation.
(c) Shareholder Action by Written Consent. If no prior action is required by the Board of Directors pursuant to the Act, the record date for determining shareholders entitled to take action without a meeting shall be the close of business on the date the first signed written consent with respect to the action in question is delivered to the corporation, but if prior action is required by the Board of Directors pursuant to the Act, such record date shall be the close of business on the date on which the Board of Directors adopts the resolution taking such prior action unless the Board of Directors otherwise fixes a record date.
(d) Absence of Board Determination for Shareholders Meeting. If the Board of Directors does not determine the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders meeting, such record date shall be the close of business on the day before the first notice with respect thereto is delivered to shareholders.
(e) Adjourned Meeting. A record date for determining shareholders entitled to notice of or to vote at a shareholders meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
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(f) Certain Distributions. If the Board of Directors does not determine the record date for determining shareholders entitled to a distribution (other than one involving a purchase, redemption, or other acquisition of the corporations shares or a share dividend), such record date shall be the close of business on the date on which the Board of Directors authorizes the distribution.
Section 3.7 Shareholders List for Meetings.
(a) Preparation and Availability. After a record date for a meeting of shareholders has been fixed, the corporation shall prepare an alphabetical list of the names of all of the shareholders entitled to notice of the meeting. The list shall be arranged by class or series of shares, if any, and show the address of and number of shares held by each shareholder. Such list shall be available for inspection by any shareholder for a period of ten days prior to the meeting or such shorter time as exists between the record date and the meeting date, and continuing through the meeting, at the corporations principal office, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the corporations transfer agent or registrar, if any. A shareholder or his or her agent may, on written demand, inspect the list, subject to the requirements of the Act, during regular business hours and at his or her expense, during the period that it is available for inspection pursuant to this Section. The corporation shall make the shareholders list available at the meeting and any shareholder or his or her agent or attorney may inspect the list at any time during the meeting or any adjournment thereof.
(b) Prima Facie Evidence. The shareholders list is prima facie evidence of the identity of shareholders entitled to examine the shareholders list or to vote at a meeting of shareholders.
(c) Failure to Comply. If the requirements of this Section have not been substantially complied with, or if the corporation refuses to allow a shareholder or his or her agent or attorney to inspect the shareholders list before or at the meeting, on the demand of any shareholder, in person or by proxy, who failed to get such access, the meeting shall be adjourned until such requirements are complied with.
(d) Validity of Action Not Affected. Refusal or failure to prepare or make available the shareholders list shall not affect the validity of any action taken at a meeting of shareholders.
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Section 3.8 Quorum.
(a) What Constitutes a Quorum. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. If the corporation has only one class of stock outstanding, such class shall constitute a separate voting group for purposes of this Section. Except as otherwise provided in the Act, a majority of the votes entitled to be cast on the matter shall constitute a quorum of the voting group for action on that matter.
(b) Presence of Shares. Once a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, it is considered present for purposes of determining whether a quorum exists for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting.
(c) Adjournment in Absence of Quorum. Where a quorum is not present, the holders of a majority of the shares represented and who would be entitled to vote at the meeting if a quorum were present may adjourn such meeting from time to time.
Section 3.9 Voting of Shares. Each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a meeting of shareholders.
Section 3.10 Vote Required.
(a) Matters Other Than Election of Directors. If a quorum exists, except in the case of the election of directors, action on a matter shall be approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the Act requires a greater number of affirmative votes.
(b) Election of Directors. Each director shall be elected by a plurality of the votes cast by the shares entitled to vote in the election of directors at a meeting at which a quorum is present. Each shareholder who is entitled to vote at an election of directors has the right to vote the number of shares owned by him or her for as many persons as there are directors to be elected. Shareholders do not have a right to cumulate their votes for directors.
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Section 3.11 Conduct of Meeting. The Chairman of the Board of Directors, and if there be none, or in his or her absence, the President, and in his or her absence, a Vice President in the order provided under the Section of these bylaws titled Vice Presidents, and in their absence, any person chosen by the shareholders present shall call a shareholders meeting to order and shall act as presiding officer of the meeting, and the Secretary of the corporation shall act as secretary of all meetings of the shareholders, but, in the absence of the Secretary, the presiding officer may appoint any other person to act as secretary of the meeting. The presiding officer of the meeting shall have broad discretion in determining the order of business at a shareholders meeting. The presiding officers authority to conduct the meeting shall include, but in no way be limited to, recognizing shareholders entitled to speak, calling for the necessary reports, stating questions and putting them to a vote, calling for nominations, and announcing the results of voting. The presiding officer also shall take such actions as are necessary and appropriate to preserve order at the meeting. The rules of parliamentary procedure need not be observed in the conduct of shareholders meetings; however, meetings shall be conducted in accordance with accepted usage and common practice with fair treatment to all who are entitled to take part.
Section 3.12 Inspectors of Ejection. Inspectors of election may be appointed by the Board of Directors to act at any meeting of shareholders at which any vote is taken. If inspectors of election are not so appointed, the presiding officer of the meeting may, and on the request of any shareholder shall, make such appointment. The inspectors of election shall determine the number of shares outstanding, the voting rights with respect to each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; receive votes, ballots, consents, and waivers; hear and determine all challenges and questions arising in connection with the vote; count and tabulate all votes, consents, and waivers; determine and announce the result; and do such acts as are proper to conduct the election or vote with fairness to all shareholders. No inspector, whether appointed by the Board of Directors or by the person acting as presiding officer of the meeting, need be a shareholder.
Section 3.13 Proxies.
(a) Appointment. At all meetings of shareholders, a shareholder may vote his or her shares in person or by proxy. A shareholder may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form, either personally or by his or her attorney-in-fact. If an appointment form expressly provides, any proxy holder may appoint, in writing, a substitute to act in his or her place. A telegraph, telex, or a cablegram, a facsimile transmission of a signed appointment form, or a photographic, photostatic, or equivalent reproduction of a signed appointment form is a sufficient appointment form.
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(b) When Effective. An appointment of a proxy is effective when received by the Secretary or other officer or agent of the corporation authorized to tabulate votes. An appointment is valid for up to eleven months unless a longer period is expressly provided in the appointment form. An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest.
Section 3.14 Shareholder Nominations and Proposals. Any shareholder nomination or proposal for action at a forthcoming meeting of shareholders must be delivered to the corporation no later than the deadline for submitting shareholder proposals pursuant to Securities Exchange Commission Regulations Section 240.14a8. The presiding officer at any meeting of shareholders shall not be required to recognize any proposal or nomination which did not comply with such deadline.
Section 3.15 Action by Shareholders Without Meeting.
(a) Requirements for Written Consents. Any action required or permitted by the Act to be taken at any annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote if one or more written consents describing the action taken shall be signed and dated by the holders of outstanding stock entitled to vote thereon having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Such consents must be delivered to the principal office of the corporation in Florida, the corporations principal place of business, the Secretary, or another officer or agent of the corporation having custody of the books in which proceedings of meetings of shareholders are recorded. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the date of the earliest dated consent delivered in the manner required herein, written consents signed by the number of holders required to take action are delivered to the corporation by delivery as set forth in this Section.
(b) Revocation of Written Consents. Any written consent may be revoked prior to the date that the corporation receives the required number of consents to authorize the proposed action. No revocation is effective unless in writing and until received by the corporation at its principal office in Florida or its principal place of business, or received by the Secretary or other officer or agent having custody of the books in which proceedings of meetings of shareholders are recorded.
(c) Notice to Nonconsenting Shareholders. Within ten days after obtaining such authorization by written consent, notice must be given in writing to those shareholders who have not consented in writing or who are not entitled to vote on the action. The notice shall fairly summarize the material features of the authorized action and, if the action be such for which dissenters rights are provided under the Act, the notice shall contain a clear statement of the right of shareholders dissenting therefrom to be paid the fair value of their shares upon compliance with the provisions of the Act regarding the rights of dissenting shareholders.
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(d) Sam? Effect as Vote at Meeting. A consent signed under this Section has the effect of a meeting vote and may be described as such in any document. Whenever action is taken by written consent pursuant to this Section, the written consent of the shareholders consenting thereto or the written reports of inspectors appointed to tabulate such consents shall be filed with the minutes of proceedings of shareholders.
Section 3.16 Acceptance of Instruments Showing Shareholder Action. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation, if acting in good faith, may accept the vote, consent, waiver, or proxy appointment and give it effect as the act of a shareholder. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of a shareholder, the corporation, if acting in good faith, may accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;
(b) The name signed purports to be that of an administrator, executor, guardian, personal representative, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation is presented with respect to the vote, consent, waiver, or proxy appointment;
(c) The name signed purports to be that of a receiver or trustee in bankruptcy, or assignee for the benefit of creditors of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation is presented with respect to the vote, consent, waiver, or proxy appointment;
(d) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatorys authority to sign for the shareholder is presented with respect to the vote, consent, waiver, or proxy appointment; or
(e) Two or more persons are the shareholder as cotenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners.
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The corporation may reject a vote, consent, waiver, or proxy appointment if the Secretary or other officer or agent of the corporation who is authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatorys authority to sign for the shareholder.
ARTICLE 4
Board of Directors
Section 4.1 General Powers and Number. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, the Board of Directors. The corporation shall have five directors. The number of directors may be increased or decreased from time to time by vote of a majority of the full Board of Directors, but shall never be less than one nor more than ten.
Section 4.2 Qualifications. Directors must be natural persons who are eighteen years of age or older but need not be residents of this state or shareholders of the corporation.
Section 4.3 Term of Office. Each director shall hold office until the next annual meeting of shareholders and until his or her successor shall have been elected and, if necessary, qualified, or until there is a decrease in the number of directors which takes effect after the expiration of his or her term, or until his or her prior death, resignation or removal.
Section 4.4 Removal. The shareholders may remove one or more directors with or without cause. A director may be removed by the shareholders at a meeting of shareholders, provided that the notice of the meeting states that the purpose, or one of the purposes, of the meeting is such removal.
Section 4.5 Resignation. A director may resign at any time by delivering written notice to the Board of Directors or its Chairman (if any) or to the corporation. A directors resignation is effective when the notice is delivered unless the notice specifies a later effective date.
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Section 4.6 Vacancies.
(a) Who May Fill Vacancies. Whenever any vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, it may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors, or by the shareholders. If the directors first fill a vacancy, the shareholders shall have no further right with respect to that vacancy, and if the shareholders first fill the vacancy, the directors shall have no further rights with respect to that vacancy.
(b) Prospective Vacancies. A vacancy that will occur at a specific later date, because of a resignation effective at a later date or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.
Section 4.7 Compensation. The Board of Directors, irrespective of any personal interest of any of its members, may establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise, or may delegate such authority to an appropriate committee. The Board of Directors also shall have authority to provide for or delegate authority to an appropriate committee to provide for reasonable pensions, disability or death benefits, and other benefits or payments, to directors, officers, and employees and to their families, dependents, estates, or beneficiaries on account of prior services rendered to the corporation by such directors, officers, and employees.
Section 4.8 Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this bylaw immediately after the annual meeting of shareholders and each adjourned session thereof. The place of such regular meeting shall be the same as the place of the meeting of shareholders which precedes it, or such other suitable place as may be announced at such meeting of shareholders. The Board of Directors may provide, by resolution, the date, time, and place, either within or without the State of Florida, for the holding of additional regular meetings of the Board of Directors without other notice than such resolution.
Section 4.9 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board (if any) the President or one-third of the members of the Board of Directors. The person or persons calling the meeting may fix any place, either within or without the State of Florida, as the place for holding any special meeting of the Board of Directors, and if no other place is fixed, the place of the meeting shall be the principal office of the corporation in the State of Florida.
Section 4.10 Notice. Special meetings of the Board of Directors must be preceded by at least two days notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting.
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Section 4.11 Waiver of Notice. Notice of a meeting of the Board of Directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.
Section 4.12 Quorum and Voting. A quorum of the Board of Directors consists of a majority of the number of directors prescribed by these bylaws. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors. A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (a) he or she objects at the beginning of the meeting (or promptly upon his or her arrival) to holding it or transacting specified business at the meeting; or (b) he or she votes against or abstains from the action taken.
Section 4.13 Conduct of Meetings.
(a) Presiding Officer. The Board of Directors may elect from among its members a Chairman of the Board of Directors, who shall preside at meetings of the Board of Directors. The Chairman, and if there be none, or in his or her absence, the President, and in his or her absence, a Vice President in the order provided under the Section of these bylaws titled Vice Presidents, and in their absence, any director chosen by the directors present, shall call meetings of the Board of Directors to order and shall act as presiding officer of the meeting.
(b) Minutes. The Secretary of the corporation shall act as secretary of all meetings of the Board of Directors but in the absence of the Secretary, the presiding officer may appoint any other person present to act as secretary of the meeting. Minutes of any regular or special meeting of the Board of Directors shall be prepared and distributed to each director.
(c) Adjournments. A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who are not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.
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(d) Participation by Conference Call or Similar Means. The Board of Directors may permit any or all directors to participate in a regular or a special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
Section 4.14 Committees. The Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution, shall have and may exercise all the authority of the Board of Directors, except that no such committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required by the Act to be approved by shareholders;
(b) fill vacancies on the Board of Directors or any committee thereof;
(c) adopt, amend, or repeal these bylaws;
(d) authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the Board of Directors; or
(e) authorize or approve the issuance or sale or contract for the sale of shares, or determine the designation and relative rights, preferences, and limitations of a voting group except that the Board of Directors may authorize a committee (or a senior executive officer of the corporation) to do so within limits specifically prescribed by the Board of Directors.
Each committee must have two or more members, who shall serve at the pleasure of the Board of Directors. The Board of Directors, by resolution adopted in accordance with this Section, may designate one or more directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee. The provisions of these bylaws which govern meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors apply to committees and their members as well.
Section 4.1 5 Action Without Meeting. Any action required or permitted by the Act to be taken at a meeting of the Board of Directors or a committee thereof may be taken without a meeting if the action is taken by all members of the Board or of the committee. The action shall be evidenced by one or more written consents describing the action taken, signed by each director or committee member and retained by the corporation. Such action shall be effective when the last director or committee member signs the consent, unless the consent specifies a different effective date. A consent signed under this Section has the effect of a vote at a meeting and may be described as such in any document.
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ARTICLE 5
Officers
Section 5.1 Number. The principal officers of the corporation shall be a President, the number of Vice Presidents, if any, as authorized from time to time by the Board of Directors, a Secretary, and a Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. The Board of Directors may also authorize any duly appointed officer to appoint one or more officers or assistant officers. The same individual may simultaneously hold more than one office.
Section 5.2 Election and Term of Office. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as is practicable. Each officer shall hold office until his or her successor shall have been duly elected or until his or her prior death, resignation, or removal.
Section 5.3 Removal. The Board of Directors may remove any officer and, unless restricted by the Board of Directors, an officer may remove any officer or assistant officer appointed by that officer, at any time, with or without cause and notwithstanding the contract rights, if any, of the officer removed. The appointment of an officer does not of itself create contract rights.
Section 5.4 Resignation. An officer may resign at any time by delivering notice to the corporation. The resignation shall be effective when the notice is delivered, unless the notice specifies a later effective date and the corporation accepts the later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, the pending vacancy may be filled before the effective date but the successor may not take office until the effective date.
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Section 5.5 Vacancies. A vacancy in any principal office because of death, resignation, removal, disqualification, or otherwise, shall be filled as soon thereafter as practicable by the Board of Directors for the unexpired portion of the term.
Section 5.6 President. The President shall be the chief executive officer of the corporation and, subject to the direction of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. The President shall, when present, preside at all meetings of the shareholders and, if no Chairman of the Board has been elected, shall preside at all meetings of the Board of Directors. The President shall have authority, subject to such rules as may be prescribed by the Board of Directors, to appoint such agents and employees of the corporation as he or she shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the President. The President shall have authority to sign certificates for shares of the corporation the issuance of which shall have been authorized by resolution of the Board of Directors, and to execute and acknowledge, on behalf of the corporation, all deeds, mortgages, bonds, contracts, leases, reports, and all other documents or instruments necessary or proper to be executed in the course of the corporations regular business, or which shall be authorized by resolution of the Board of Directors; and, except as otherwise provided by law or the Board of Directors, the President may authorize any Vice President or other officer or agent of the corporation to execute and acknowledge such documents or instruments in his or her place and stead. In general he or she shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.
Section 5.7 Vice Presidents. In the absence of the President or in the event of the Presidents death, inability or refusal to act, or in the event for any reason it shall be impracticable for the President to act personally, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign certificates for shares of the corporation the issuance of which shall have been authorized by resolution of the Board of Directors; and shall perform such other duties and have such authority as from time to time may be delegated or assigned to him or her by the President or by the Board of Directors. The execution of any instrument of the corporation by any Vice President shall be conclusive evidence, as to third parties, of his or her authority to act in the stead of the President.
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Section 5.8 Secretary. The Secretary shall: (a) keep, or cause to be kept, minutes of the meetings of the shareholders and of the Board of Directors (and of committees thereof) in one or more books provided for that purpose (including records of actions taken by the shareholders or the Board of Directors (or committees thereof) without a meeting); (b) be custodian of the corporate records and of the seal of the corporation, if any, and if the corporation has a seal, see that it is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (c) authenticate the records of the corporation; (d) maintain a record of the shareholders of the corporation, in a form that permits preparation of a list of the names and addresses of all shareholders, by class or series of shares and showing the number and class or series of shares held by each shareholder; (e) have general charge of the stock transfer books of the corporation; and (f) in general perform all duties incident to the office of Secretary and have such other duties and exercise such authority as from time to time may be delegated or assigned by the President or by the Board of Directors.
Section 5.9 Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) maintain appropriate accounting records; (c) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies, or other depositaries as shall be selected in accordance with the provisions of these bylaws; and (d) in general perform all of the duties incident to the office of Treasurer and have such other duties and exercise such other authority as from time to time may be delegated or assigned by the President or by the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his or her duties in such sum and with such surety or sureties as the Board of Directors shall determine.
Section 5.10 Assistant Secretaries and Assistant Treasurers. There shall be such number of Assistant Secretaries and Assistant Treasurers as the Board of Directors may from time to time authorize. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties and have such authority as shall from time to time be delegated or assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.
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Section 5.11 Other Assistants and Acting Officers. The Board of Directors shall have the power to appoint, or to authorize any duly appointed officer of the corporation to appoint, any person to act as assistant to any officer, or as agent for the corporation in his or her stead, or to perform the duties of such officer whenever for any reason it is impracticable for such officer to act personally, and such assistant or acting officer or other agent so appointed by the Board of Directors or an authorized officer shall have the power to perform all the duties of the office to which he or she is so appointed to be an assistant, or as to which he or she is so appointed to act, except as such power may be otherwise defined or restricted by the Board of Directors or the appointing officer.
Section 5.12 Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors or by a duly authorized committee thereof, and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation.
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
Section 6.1 Contracts. The Board of Directors may authorize any officer or officers, or any agent or agents to enter into any contract or execute or deliver any instrument in the name of and on behalf of the corporation, and such authorization may be general or confined to specific instances. In the absence of other designation, all deeds, mortgages, and instruments of assignment or pledge made by the corporation shall be executed in the name of the corporation by the President or one of the Vice Presidents; the Secretary or an Assistant Secretary, when necessary or required, shall attest and affix the corporate seal, if any, thereto; and when so executed no other party to such instrument or any third party shall be required to make any inquiry into the authority of the signing officer or officers.
Section 6.2 Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by or under the authority of a resolution of the Board of Directors.
Section 6.3 Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositaries as may be selected by or under the authority of a resolution of the Board of Directors.
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Section 6.4 Voting of Securities Owned by Corporation. Subject always to the specific directions of the Board of Directors, (a) any shares or other securities issued by any other corporation and owned or controlled by this corporation may be voted at any meeting of security holders of such other corporation by the President of this corporation if he or she be present, or in his or her absence by any Vice President of this corporation who may be present, and (b) whenever, in the judgment of the President, or in his or her absence, of any Vice President, it is desirable for this corporation to execute a proxy or written consent in respect of any such shares or other securities, such proxy or consent shall be executed in the name of this corporation by the President or one of the Vice Presidents of this corporation, without necessity of any authorization by the Board of Directors, affixation of corporate seal, if any, or countersignature or attestation by another officer. Any person or persons designated in the manner above stated as the proxy or proxies of this corporation shall have full right, power, and authority to vote the shares or other securities issued by such other corporation and owned or controlled by this corporation the same as such shares or other securities might be voted by this corporation.
ARTICLE 7
Certificates for Shares; Transfer of Shares
Section 7.1 Consideration for Shares. The Board of Directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, promises to perform services evidenced by a written contract, or other securities of the corporation. Before the corporation issues shares, the Board of Directors shall determine that the consideration received or to be received for the shares to be issued is adequate. The determination of the Board of Directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable. The corporation may place in escrow shares issued for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits are received. If the services are not performed, the note is not paid, or the benefits are not received, the corporation may cancel, in whole or in part, the shares escrowed or restricted and the distributions credited.
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Section 7.2 Certificates for Shares. Every holder of shares in the corporation shall be entitled to have a certificate representing all shares to which he or she is entitled unless the Board of Directors authorizes the issuance of some or all shares without certificates. Any such authorization shall not affect shares already represented by certificates until the certificates are surrendered to the corporation. If the Board of Directors authorizes the issuance of any shares without certificates, within a reasonable time after the issue or transfer of any such shares, the corporation shall send the shareholder a written statement of the information required by the Act to be set forth on certificates, including any restrictions on transfer. Certificates representing shares of the corporation shall be in such form, consistent with the Act, as shall be determined by the Board of Directors. Such certificates shall be signed (either manually or in facsimile) by the President or any Vice President or any other persons designated by the Board of Directors and may be sealed with the seal of the corporation or a facsimile thereof. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. Unless the Board of Directors authorizes shares without certificates, all certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except as provided in these bylaws with respect to lost, destroyed, or stolen certificates. The validity of a share certificate is not affected if a person who signed the certificate (either manually or in facsimile) no longer holds office when the certificate is issued.
Section 7.3 Transfer of Shares. Prior to due presentment of a certificate for shares for registration of transfer, the corporation may treat the registered owner of such shares as the person exclusively entitled to vote, to receive notifications, and otherwise to have and exercise all the rights and power of an owner. Where a certificate for shares is presented to the corporation with a request to register a transfer, the corporation shall not be liable to the owner or any other person suffering loss as a result of such registration of transfer if (a) there were on or with the certificate the necessary endorsements, and (b) the corporation had no duty to inquire into adverse claims or has discharged any such duty. The corporation may require reasonable assurance that such endorsements are genuine and effective and compliance with such other regulations as may be prescribed by or under the authority of the Board of Directors.
Section 7.4 Restrictions on Transfer. The face or reverse side of each certificate representing shares shall bear a conspicuous notation as required by the Act of any restriction imposed by the corporation upon the transfer of such shares.
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Section 7.5 Lost. Destroyed. or Stolen Certificates. Unless the Board of Directors authorizes shares without certificates, where the owner claims that certificates for shares have been lost, destroyed, or wrongfully taken, a new certificate shall be issued in place thereof if the owner (a) so requests before the corporation has notice that such shares have been acquired by a bona fide purchaser, (b) files with the corporation a sufficient indemnity bond if required by the Board of Directors or any principal officer, and (c) satisfies such other reasonable requirements as may be prescribed by or under the authority of the Board of Directors.
Section 7.6 Stock Regulations. The Board of Directors shall have the power and authority to make all such further rules and regulations not inconsistent with law as they may deem expedient concerning the issue, transfer, and registration of shares of the corporation.
ARTICLE 8
Seal
Section 8.1 Seal. The Board of Directors may provide for a corporate seal for the corporation.
ARTICLE 9
Books and Records
Section 9.1 Books and Records.
(a) The corporation shall keep as permanent records minutes of all meetings of the shareholders and Board of Directors, a record of all actions taken by the shareholders or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the corporation.
(b) The corporation shall maintain accurate accounting records.
(c) The corporation or its agent shall maintain a record of the shareholders in a form that permits preparation of a list of the names and addresses of all shareholders in alphabetical order by class of shares showing the number and series of shares held by each.
(d) The corporation shall keep a copy of all written communications within the preceding three years to all shareholders generally or to all shareholders of a class or series, including the financial statements required to be furnished by the Act, and a copy of its most recent annual report delivered to the Department of State.
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Section 9.2 Shareholders Inspection Rights. Shareholders are entitled to inspect and copy records of the corporation as permitted by the Act.
Section 9.3 Distribution of Financial Information. The corporation shall prepare and disseminate financial statements to shareholders as required by the Act.
Section 9.4 Other Reports. The corporation shall disseminate such other reports to shareholders as are required by the Act, including reports regarding indemnification in certain circumstances and reports regarding the issuance or authorization for issuance of shares in exchange for promises to render services in the future.
ARTICLE 10
Indemnification
Section 10.1 Provision of Indemnification. The corporation shall, to the fullest extent permitted or required by the Act, including any amendments thereto (but in the case of any such amendment, only to the extent such amendment permits or requires the corporation to provide broader indemnification rights than prior to such amendment), indemnify its Directors against any and all Liabilities, and advance any and all reasonable Expenses incurred in any Proceeding to which any such Director is or is threatened to be made a Party or a witness because he or she is or was a Director. The rights to indemnification granted hereunder shall not be deemed exclusive of any other rights to indemnification against Liabilities or the advancement of Expenses which a Director may be entitled under any written agreement, Board resolution, vote of shareholders, the Act, or otherwise. The corporation may, but shall not be required to, supplement the foregoing rights to indemnification against Liabilities and advancement of Expenses by the purchase of insurance on behalf of any one or more of its Directors whether or not the corporation would be obligated to indemnify or advance Expenses to such Director under this Article. For purposes of this Article, the term Directors includes former directors and any directors who are or were serving at the request of the corporation as directors, officers, employees, or agents of another corporation, partnership, joint venture, trust, or other enterprise, including, without limitation, any employee benefit plan (other than in the capacity as agents separately retained and compensated for the provision of goods or services to the enterprise, including, without limitation, attorneys-at-law, accountants, and financial consultants). All other capitalized terms used in this Article and not otherwise defined herein shall have the meaning set forth in Section 607.0850, Florida Statutes (1993). The provisions of this Article are intended solely for the benefit of the indemnified parties described herein, their heirs and personal representatives and shall not create any rights in favor of third parties. No amendment to or repeal of this Article shall diminish the rights of indemnification provided for herein prior to such amendment or repeal.
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ARTICLE 11
Amendments
Section 11.1 Power to Amend. These bylaws may be amended or repealed by either the Board of Directors or the shareholders, unless the Act reserves the power to amend these bylaws generally or any particular bylaw provision, as the case may be, exclusively to the shareholders or unless the shareholders, in amending or repealing these bylaws generally or any particular bylaw provision, provide expressly that the Board of Directors may not amend or repeal these bylaws or such bylaw provision, as the case may be.
Section 11.2 Implied Amendments. Any action taken or authorized by the shareholders or by the Board of Directors which would be inconsistent with the bylaws then in effect but which is taken or authorized by affirmative vote of not less than the number of shares or the number of directors required to amend the bylaws so that the bylaws would be consistent with such action shall be given the same effect as though the bylaws had been temporarily amended or suspended so far, but only so far, as is necessary to permit the specific action so taken or authorized.
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Exhibit 4.1
DESCRIPTION OF THE REGISTRANTS SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of November 5, 2022, Nobility Homes, Inc. (we or our) had one class of securities, common stock, par value $0.10 per share (Common Stock), registered under Section 12 of the Securities Exchange Act of 1934, as amended. The following description of our Common Stock is a summary and is subject to, and is qualified in its entirety by reference to, the provisions of our Articles of Incorporation and our Bylaws, copies of which are attached as Exhibits 3. (a) and 3. (b), respectively, to our Annual Report on Form 10-K for the year ended November 5, 2022 of which Exhibit 4.1 is a part.
Our authorized capital stock consists of 10,000,000 shares of Common Stock, $.10 par value per share, and 500,000 shares of preferred stock, $0.10 par value per share. As of November 5, 2022, 3,370,912 shares of Common Stock were issued and outstanding and no shares of preferred stock were issued and outstanding.
Our Common Stock is traded on the OTCQX market under the symbol NOBH. Holders of our Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Holders of Common Stock are entitled to receive at least such dividends, if any, as may be declared by the board of directors out of funds legally available therefore, subject to a preferential dividend right of outstanding preferred stock. Upon the liquidation, dissolution or our winding up, the holders of Common Stock are entitled to receive ratably our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. The rights, preferences and privileges of holders of Common Stock are subject to and may be adversely affected by the rights of the holders of any series of preferred stock that we may designate and issue in the future.
The accompanying notes are an integral part of these financial statements.
Exhibit 21.1
Subsidiaries of Registrant
Prestige Home Centers | Florida | |
Mountain Financial, Inc. (a subsidiary of Prestige Home Centers, Inc.) | Florida | |
Majestic Homes, Inc. (a subsidiary of Prestige Home Centers, Inc.) | Florida |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Nobility Homes, Inc.
Ocala, Florida
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-102919 and No. 333-193608) of Nobility Homes, Inc., of our report dated February 1, 2023, relating to the consolidated financial statements of Nobility Homes, Inc. at and for the years ended November 5, 2022 and November 6, 2021 which appear in this Form 10-K.
/s/ Daszkal Bolton
Jupiter, Florida
February 1, 2023
Exhibit 31(a)
Certifications 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 Annual Report on Form 10-K 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 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 registrants 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 our 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
DATE: February 1, 2023 | By: | /s/ Terry E. Trexler | ||||
Terry E. Trexler, Chairman, | ||||||
President and Chief Executive Officer | ||||||
(Principal Executive Officer) |
Exhibit 31(b)
Certifications 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 Annual Report on Form 10-K 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 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 registrants 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 our 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
DATE: February 1, 2023 | By: | /s/ Thomas W. Trexler | ||||
Thomas W. Trexler, Executive Vice President | ||||||
and Chief Financial Officer | ||||||
(Principal Financial Officer) |
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 Annual Report on Form 10-K of the Company for the year ended November 5, 2022 (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: February 1, 2023 | By: | /s/ Terry E. Trexler | ||||
Terry E. Trexler, Chairman, | ||||||
President and Chief Executive Officer |
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 Annual Report on Form 10-K of the Company for the year ended November 5, 2022 (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: February 1, 2023 | By: | /s/ Thomas W. Trexler | ||||
Thomas W. Trexler, Executive Vice President | ||||||
and Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
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 | 3,370,912 | 3,532,100 |
Treasury stock, shares | 1,993,995 | 1,832,807 |
Consolidated Statements of Income - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Income Statement [Abstract] | ||
Net sales | $ 51,522,054 | $ 45,062,558 |
Cost of sales | (36,618,616) | (33,630,362) |
Gross profit | 14,903,438 | 11,432,196 |
Selling, general and administrative expenses | (6,477,988) | (5,286,172) |
Operating income | 8,425,450 | 6,146,024 |
Other income (loss): | ||
Interest income | 234,804 | 180,635 |
Undistributed earnings in joint venture - Majestic 21 | 60,457 | 59,072 |
Proceeds received under escrow arrangement | 364,520 | 246,216 |
(Decrease) increase in fair value of equity investment | (32,857) | 262,968 |
Gain on disposal of property, plant and equipment | 88,936 | |
Miscellaneous | 295,224 | 223,818 |
Total other income | 1,011,084 | 972,709 |
Income before provision for income taxes | 9,436,534 | 7,118,733 |
Income tax expense | (2,204,505) | (1,719,925) |
Net income | $ 7,232,029 | $ 5,398,808 |
Net income per share: | ||
Basic | 3,437,784 | 3,597,756 |
Diluted | 3,445,498 | 3,607,448 |
Basic | $ 2.1 | $ 1.5 |
Diluted | $ 2.1 | $ 1.5 |
Consolidated Statements of Changes in Stockholders' Equity - USD ($) |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
---|---|---|---|---|---|
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 | ||||
Cash dividend | (3,632,100) | (3,632,100) | |||
Purchase of treasury stock | $ (3,478,553) | (3,478,553) | |||
Purchase of treasury stock, shares | (100,346) | (100,346) | |||
Stock-based compensation | $ 69,749 | 69,749 | |||
Exercise of employee stock options | $ 15,125 | 1,950 | 13,175 | ||
Exercise of employee stock options, shares | 1,250 | 1,250 | |||
Net income | $ 5,398,808 | 5,398,808 | |||
Balance at Nov. 06, 2021 | 49,314,305 | $ 536,491 | 10,766,253 | 59,742,759 | (21,731,198) |
Balance, shares at Nov. 06, 2021 | 3,532,100 | ||||
Cash dividend | (3,532,976) | (3,532,976) | |||
Purchase of treasury stock | $ (5,195,267) | (5,195,267) | |||
Purchase of treasury stock, shares | (162,570) | (162,570) | |||
Stock-based compensation | $ 105,442 | 100,886 | 4,556 | ||
Stock-based compensation, shares | 416 | ||||
Exercise of employee stock options | (17,452) | 17,452 | |||
Exercise of employee stock options, shares | 1,500 | 966 | |||
Net income | $ 7,232,029 | 7,232,029 | |||
Balance at Nov. 05, 2022 | $ 47,923,533 | $ 536,491 | $ 10,849,687 | $ 63,441,812 | $ (26,904,457) |
Balance, shares at Nov. 05, 2022 | 3,370,912 |
Reporting Entity and Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Entity and Significant Accounting Policies | NOTE 1 Reporting Entity and Significant Accounting Policies Description of Business and Principles of Consolidation – All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Use of Estimates – pre-owned homes, the allowance for doubtful accounts, the carrying value of long-lived assets, the provision for income taxes and related deferred tax accounts, certain accrued expenses and contingencies, warranty reserve and stock-based compensation. Fiscal Year – fifty-two-week Revenue Recognition – The Company recognizes revenue following the comprehensive framework of Financial Accounting Standards Board ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09), which established a methodology for determining how much revenue to recognize and when it should be recognized through application of the following five-step approach:
The Company recognizes revenue from its retail sales of new manufactured homes upon the occurrence of the following:
The Company recognizes revenue from the sale of the repurchased homes upon transfer of title to the new purchaser. The Company recognizes revenues from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home, and transferring title and risk of loss to the independent dealer. For wholesale shipments to independent dealers, the Company has no obligation to set up the home or to complete any other significant obligations. The Company recognizes revenues from its wholly owned subsidiary, Mountain Financial, Inc., as follows: commission income (and fees in lieu of commissions) is recorded as of the effective date of insurance coverage or the billing date, whichever is later. Commissions on premiums billed and collected directly by insurance companies are recorded as revenue when received which, in many cases, is the Company’s first notification of amounts earned due to the lack of policy and renewal information. Contingent commissions are recorded as revenue when received. Contingent commissions are commissions paid by insurance underwriters and are based on the estimated profit and/or overall volume of business placed with the underwriter. The data necessary for the calculation of contingent commissions cannot be reasonably obtained prior to the receipt of the commission which, in many cases, is the Company’s first notification of amounts earned. The Company provides 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 November 5, 2022 and November 6, 2021. Sales of homes to affiliated entities that are subject to contingent payment terms are considered inventory consignment arrangements. Revenue from such arrangements is recognized when the homes are sold to the end users and payment is collected by the affiliated entity. See Note 4 “Related Party Transactions”. Revenues by Products and Services pre-owned homes, and insurance agent commissions for the years ended November 5, 2022 and November 6, 2021 are as follows:
Cash and Cash Equivalents – Certificates of Deposit Accounts Receivable – Accounts receivable fluctuate due to the number of homes sold to independent dealers. The Company recognizes revenues from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home, and transferring title and risk of loss to the independent dealer. Investments – “available-for-sale” available-for-sale 2016-01, unrealized gains and losses on these available-for-sale Inventories – 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 a cost determined by 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 repossessions inventory. Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s consolidated balance sheets. Consigned inventory was $318,590 and $794,766 as of November 5, 2022 and November 6, 2021, 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 net realizable value. Other inventory costs are determined on a first-in, first-out basis. See Note 6 “Inventories”. Property, Plant and Equipment – Investment in Majestic 21 – st Mortgage Corporation (“21st Mortgage”). We have been allocated our share of net income and distributions on a 50/50 basis since Majestic 21’s formation. While Majestic 21 has been deemed to be a variable interest entity, the Company only holds a 50% interest in this entity and all allocations of profit and loss are on a 50/50 basis. Since all allocations are to be made on a 50/50 basis and joint decisions with the joint venture partner are made which most significantly impact Majestic 21 economic performance therefore, the Company is not required to consolidate Majestic 21 with the accounts of Nobility Homes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) No. 810, “Consolidations” (ASC 810). Management believes that the Company’s maximum exposure to loss as a result of its involvement with Majestic 21 is its investment in the joint venture. Based on management’s evaluation, there was no impairment of this investment at November 5, 2022 or November 6, 2021. The Company entered into an arrangement in 2002 with 21 st Mortgage to repurchase certain pre-owned homes. Under this arrangement or any other arrangement, the Company is not obligated to repurchase any foreclosed/repossessed units of Majestic 21 as it does not have a repurchase agreement or any other guarantees with Majestic 21. However, the Company buys from 21st Mortgage foreclosed/repossessed units from the Majestic 21 portfolio and acts as a remarketing agent. It resells those units through the Company’s network of retail centers which management believes benefits the historical loss experience of the joint venture. The only impact on the Company’s operations from this arrangement are commissions earned on the resale of these units and interest earned for the Company’s carrying costs of the units while in inventory. See Note 14 “Commitments and Contingent Liabilities”. Impairment of Long-Lived Assets – Customer Deposits – Company Owned Life Insurance Warranty Costs –
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. Accrued Home Setup Costs hook-ups, furniture, insurance, impact/permit fees, land/home fees, extended service plan, freight, skirting, steps, well, septic tanks and other setup costs and are included in accrued expenses in the accompanying consolidated balance sheets. Stock-Based Compensation – Rebate Program – Advertising – Income Taxes – Net Income per Share – Shipping and Handling Costs – Segments – Major Customers – Concentration of Credit Risk – Concentration of Retail Financing Sources – |
Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | NOTE 2 Investments The following is a summary of short-term investments (available for sale):
The fair values were estimated based on unadjusted quoted prices at each respective period end. |
Fair Values of Financial Investments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Financial Investments | NOTE 3 Fair Values of Financial Investments The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses are approximate fair value because of the short maturity of those instruments. The Company accounts for the fair value of financial investments in accordance with FASB 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:
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Related Party Transactions |
12 Months Ended |
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Nov. 05, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 4 Related Party Transactions Affiliated Entities TLT, Inc. – Repurchase of Common Stock |
Other Investments |
12 Months Ended |
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Nov. 05, 2022 | |
Text Block [Abstract] | |
Other Investments | NOTE 5 Other Investments Investment in Joint Venture – Majestic 21 – While Majestic 21 has been deemed to be a variable interest entity, the Company only holds a 50% interest in this entity and all allocations of profit and loss are on a 50/50 basis. Since all allocations are to be made on a 50/50 basis and the Company’s maximum exposure is limited to its investment in Majestic 21, management has concluded that the Company would not absorb a majority of Majestic 21’s expected losses nor receive a majority of Majestic 21’s expected residual returns; therefore, the Company is not required to consolidate Majestic 21 with the accounts of Nobility Homes in accordance with ASC 810. See Note 14 “Commitments and Contingent Liabilities”. We received no distributions from the joint venture in fiscal year 2022 or 2021. With regard to our investment in Majestic 21, there are no differences between our investment balance and the amount of underlying equity in net assets owned by Majestic 21. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | NOTE 6 Inventories A breakdown of the elements of inventory at November 5, 2022 and November 6, 2021 is as follows:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | NOTE 7 Property, Plant and Equipment Property, plant and equipment, along with their estimated useful lives and related accumulated depreciation are summarized as follows:
Depreciation expenses during the years ended November 5, 2022 and November 6, 2021 totaled $169,661 and $186,320, respectively. |
Accrued Expenses and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | NOTE 8 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are comprised of the following:
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Proceeds Received Under Escrow Arrangement |
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Nov. 05, 2022 | |
Text Block [Abstract] | |
Proceeds Received Under Escrow Arrangement | NOTE 9 Proceeds Received Under Escrow Arrangement The Company received $364,520 in fiscal year 2022 and $246,216 in fiscal year 2021 under an escrow arrangement related to a Finance Revenue Sharing Agreement between 21 st Mortgage Corporation and the Company. The distributions from the escrow account, related to certain loans financed by 21st Mortgage Corporation, are recorded in income by the Company when received, which has been the Company’s past practice. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | NOTE 10 Income Taxes The Company computes income tax expense using the liability method. Under this method, deferred income taxes are provided, to the extent considered realizable by management, for basis differences of assets and liabilities for financial reporting and income tax purposes. The Company follows guidance issued by the FASB with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded. The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of the state of Florida. The Company’s income tax returns for the past three years are subject to examination by tax authorities and may change upon examination. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company did not reflect any amounts for interest and penalties in its 2022 or 2021 statements of operations, nor are any amounts accrued for interest and penalties at November 5, 2022 and November 6, 2021. The provision for income taxes for the years ended consists of the following:
The following table shows the reconciliation between the statutory federal income tax rate and the actual provision for income taxes for the years ended:
The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts and the related deferred tax assets and deferred tax liabilities are as follows:
These amounts are included in the accompanying consolidated balance sheets under the following captions:
In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. For fiscal years 2022 and 2021, the Company determined that a valuation reserve for the Company’s deferred tax assets was not considered necessary as the deferred tax assets were fully realizable. |
Stockholders' Equity |
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Equity [Abstract] | |
Stockholders' Equity | NOTE 11 Stockholders’ Equity Authorized preferred stock may be issued in series with rights and preferences designated by the Board of Directors at the time it authorizes the issuance of such stock. The Company has never issued any preferred stock. Treasury stock is recorded at cost and is presented as a reduction of stockholders’ equity in the accompanying consolidated financial statements. The Company repurchased 162,570 and 100,346 shares of its common stock during fiscal years 2022 and 2021, respectively. |
Stock Option Plan |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Plan | NOTE 12 Stock Option Plan In June 2011, the Company’s Board of Directors adopted, and the Company’s shareholders later approved, the Nobility Homes, Inc. 2011 Stock Incentive Plan (the “Plan”), providing for the issuance of options to purchase shares of common stock, stock appreciation rights and other stock-based awards to employees and non-employee directors. A total of 300,000 shares were reserved for issuance under the Plan, all of which may be issued pursuant to the exercise of incentive stock options. The Plan was amended by the Board of Directors to extend the termination date from June 2021 until June 1, 2026. At November 5, 2022, 233,800 options were available for future grant under the Plan and 66,200 options were outstanding. The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is to be recognized over the period during which an employee is required to provide a service in exchange for the award (usually the vesting period). The grant date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. During fiscal years 2022 and 2021, the Company recognized compensation costs related to the vesting of stock options of approximately $105,442 and $69,750 respectively. A summary of information with respect to options granted is as follows:
The aggregate intrinsic value in the table above represents total intrinsic value (of options in the money), which is the difference between the Company’s closing stock price on the last trading day of fiscal year 2022 and the exercise price times the number of shares, that would have been received by the option holder had the option holder exercised their options on November 5, 2022. The following table summarizes information about the outstanding stock options at November 5, 2022:
The fair value of each option is determined using the Black-Scholes option-pricing model which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, expected dividend payments, and the risk-free interest rate over the expected life of the option. The dividend yield was calculated by dividing the current annualized dividend by the option exercise price for each grant. The expected volatility was determined considering the Company’s historical stock prices for the fiscal year the grant occurred and prior fiscal years for a period equal to the expected life of the option. The risk-free interest rate was the rate available on zero coupon U.S. government obligations with a term equal to the expected life of the option. The expected life of the option was estimated based on the exercise history from previous grants. |
Employee Benefit Plan |
12 Months Ended |
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Nov. 05, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | NOTE 13 Employee Benefit Plan The Company has a defined contribution retirement plan (the “Plan”) qualifying under Section 401(k) of the Internal Revenue Code. The Plan covers employees who have met certain service requirements. The Company makes a discretionary matching contribution, up to a maximum of 6% of an employee’s compensation. The contribution expense charged to operations amounted to approximately $220,100 and $219,900 in fiscal years 2022 and 2021, respectively. |
Commitments and Contingent Liabilities |
12 Months Ended |
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Nov. 05, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | NOTE 14 Commitments and Contingent Liabilities Operating Leases – Other Contingent Liabilities – The Company does not maintain casualty insurance on some of its property, including the inventory at our retail centers, our plant machinery and plant equipment and is at risk for those types of losses. |
Reporting Entity and Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues by Products and Services | Revenues by Products and Services pre-owned homes, and insurance agent commissions for the years ended November 5, 2022 and November 6, 2021 are as follows:
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Summary of Amounts Related to Limited Warranty | Amounts related to these warranties for fiscal years 2022 and 2021 are as follows:
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Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Short-term Investments | The following is a summary of short-term investments (available for sale):
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Fair Values of Financial Investments (Tables) |
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value | The following table represents the Company’s financial assets and liabilities which are carried at fair value at November 5, 2022 and November 6, 2021.
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Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Breakdown of Elements of Inventory | A breakdown of the elements of inventory at November 5, 2022 and November 6, 2021 is as follows:
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Property, Plant and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant and Equipment with Estimated Useful Lives and Related Accumulated Depreciation | Property, plant and equipment, along with their estimated useful lives and related accumulated depreciation are summarized as follows:
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Accrued Expenses and Other Current Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities are comprised of the following:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Provision for Income Taxes | The provision for income taxes for the years ended consists of the following:
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Reconciliation Between Statutory Federal Income Tax Rate and Actual Provision for Income Taxes | The following table shows the reconciliation between the statutory federal income tax rate and the actual provision for income taxes for the years ended:
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Deferred Tax Assets and Deferred Tax Liabilities | The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts and the related deferred tax assets and deferred tax liabilities are as follows:
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Accompanying Deferred Current and Non current Tax Assets and Liabilities in Consolidated Balance Sheet | These amounts are included in the accompanying consolidated balance sheets under the following captions:
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Stock Option Plan (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 05, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options Granted | A summary of information with respect to options granted is as follows:
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Outstanding Stock Options | The following table summarizes information about the outstanding stock options at November 5, 2022:
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Reporting Entity and Significant Accounting Policies - Revenues by Products and Services (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Sales Information [Line Items] | ||
Total net sales | $ 51,522,054 | $ 45,062,558 |
Manufactured Housing [Member] | ||
Sales Information [Line Items] | ||
Total net sales | 50,264,637 | 43,963,239 |
Pre-Owned Homes [Member] | ||
Sales Information [Line Items] | ||
Total net sales | 957,745 | 816,165 |
Insurance Agent Commissions [Member] | ||
Sales Information [Line Items] | ||
Total net sales | $ 299,672 | $ 283,154 |
Reporting Entity and Significant Accounting Policies - Summary of Amounts Related to Limited Warranty (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Accounting Policies [Abstract] | ||
Beginning accrued warranty expense | $ 125,000 | $ 125,000 |
Less: reduction for payments | (428,031) | (465,549) |
Plus: additions to accrual | 428,031 | 465,549 |
Ending accrued warranty expense | $ 125,000 | $ 125,000 |
Investments - Summary of Short-term Investments (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost | $ 167,930 | $ 167,930 |
Available-for-sale Securities, Gross Unrealized Gains | 421,141 | 453,998 |
Available-for-sale Securities, Gross Unrealized Losses | 0 | 0 |
Available-for-sale Securities, Estimated Fair Value | $ 589,071 | $ 621,928 |
Fair Values of Financial Investments - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company | $ 589,071 | $ 621,928 |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company | 589,071 | 621,928 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company | ||
Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company |
Other Investments - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Distributions from joint venture - Majestic 21 | $ 0 | $ 0 |
Amount invested in joint venture - Majestic 21 | $ 250,000 | |
Majestic 21 [Member] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 50.00% | |
Profit and loss basis point | 50/50 basis |
Inventories - Summary of Breakdown of Elements of Inventory (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,119,372 | $ 2,225,532 |
Work-in-process | 135,513 | 97,021 |
Inventory consigned to affiliated entities | 318,590 | 794,766 |
Finished homes – Nobility | 9,583,095 | 7,140,880 |
Finished homes – Other | 10,432,998 | 0 |
Model home furniture | 185,671 | 136,089 |
Inventories | 22,775,239 | 10,394,288 |
Pre-owned homes | 682,254 | 1,297,475 |
Pre-owned homes, long-term | 0 | 755,394 |
Less homes expected to sell in 12 months | $ (682,254) | $ (542,081) |
Property Plant and Equipment - Additional Information (Detail) - USD ($) |
12 Months Ended | |
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Nov. 05, 2022 |
Nov. 06, 2021 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 169,661 | $ 186,320 |
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued warranty expense | $ 125,000 | $ 125,000 |
Accrued property and sales taxes | 407,968 | 351,784 |
Other accrued expenses | 1,209,728 | 1,037,183 |
Total accrued expenses and other current liabilities | $ 1,742,696 | $ 1,513,967 |
Proceeds Received Under Escrow Arrangement - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Related Party Transaction [Line Items] | ||
Proceeds received under escrow arrangement | $ 364,520 | $ 246,216 |
Majestic 21 [Member] | ||
Related Party Transaction [Line Items] | ||
Proceeds received under escrow arrangement | $ 364,520 | $ 246,216 |
Income Taxes - Additional Information (Detail) |
12 Months Ended |
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Nov. 05, 2022
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Percentage of tax benefit | 50.00% |
Tax benefit | $ 0 |
Income Taxes - Summary of Provision for Income Taxes (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Current tax expense: | ||
Federal | $ 2,009,567 | $ 1,327,166 |
State | 338,284 | 289,593 |
Deferred tax (benefit) | (143,346) | 103,166 |
Provision for income taxes | $ 2,204,505 | $ 1,719,925 |
Income Taxes - Reconciliation between Statutory Federal Income Tax Rate and Actual Provision for Income Taxes (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Provision—federal statutory tax rate | $ 1,981,672 | $ 1,494,934 |
Increase (decrease) resulting from: | ||
State taxes, net of federal tax benefit | 263,528 | 250,708 |
Permanent differences: | ||
Decrease in FL corporate tax rate | 0 | (135) |
Other | (40,695) | (25,582) |
Provision for income taxes | $ 2,204,505 | $ 1,719,925 |
Income Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 58,173 | $ 55,455 |
Prepaid Expenses | 14,995 | 14,295 |
Accrued expenses | 198,633 | 107,893 |
Other assets | 32,411 | 17,789 |
Lease right of use liability | 0 | 382 |
Stock-based compensation | 34,789 | 19,502 |
Total deferred tax assets | 339,001 | 215,316 |
Deferred tax liabilities: | ||
Depreciation | (123,033) | (135,466) |
Carrying value of investments | (106,253) | (109,146) |
Amortization | (39,206) | (37,374) |
Prepaid expenses | (26,731) | (32,516) |
Lease right of use asset | 0 | (382) |
Net deferred tax assets (liabilities) | $ 43,778 | $ (99,568) |
Income Taxes - Accompanying Deferred Current and Non-current Tax Assets and Liabilities in Consolidated Balance Sheet (Detail) - USD ($) |
Nov. 05, 2022 |
Nov. 06, 2021 |
---|---|---|
Current assets (liabilities): | ||
Deferred tax assets | ||
Deferred tax liabilities | ||
Net current deferred tax assets | ||
Non-current assets (liabilities): | ||
Deferred tax assets | 339,001 | 215,316 |
Deferred tax liabilities | (295,223) | (314,884) |
Net non-current deferred tax assets (liabilities) | 43,778 | (99,568) |
Net deferred tax assets (liabilities) | $ 43,778 | $ (99,568) |
Stockholders' Equity - Additional Information (Detail) - shares |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Equity [Abstract] | ||
Repurchased shares of common stock | 162,570 | 100,346 |
Stock Option Plan - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
Oct. 31, 2020 |
Jun. 30, 2011 |
|
Shares reserved for issuance | 233,800 | 300,000 | ||
Options outstanding, shares outstanding | 66,200 | 47,300 | 27,300 | |
Compensation cost related to the vesting of stock options | $ 105,442 | $ 69,750 |
Stock Option Plan - Option Granted (Parenthetical) (Detail) - shares |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise of employee stock options, shares | 1,500 | 1,250 |
Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise of employee stock options, shares | 966 | 1,250 |
Employee Benefit Plan - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Nov. 05, 2022 |
Nov. 06, 2021 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum employee compensation | 6.00% | |
Contribution expense charged to operations | $ 220,100 | $ 219,900 |
Commitments and Contingent Liabilities - Additional Information (Detail) |
12 Months Ended |
---|---|
Nov. 05, 2022
USD ($)
| |
Commitments And Contingencies [Line Items] | |
Accrual provision for litigation settlements | $ 150,000 |
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