Exhibit 99.1
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NEWS RELEASE | |
| Skyline Corporation 2520 By-Pass Road P.O. Box 743 Elkhart, Indiana 46515-0743 (574) 294-6521 | ||
| Subject: THIRD QUARTER REPORT | Approved by: JON S. PILARSKI | |
ELKHART, INDIANA — APRIL 14, 2017
SKYLINE REPORTS THIRD QUARTER AND FIRST NINE MONTHS RESULTS
For the third quarter of fiscal 2017, Skyline Corporation (NYSE MKT: SKY) (“Skyline” or the “Corporation”) reported the following results:
| • | Net sales from continuing operations of $51,640,000, an increase of 8.3% over net sales of $47,697,000 from continuing operations in the year ago quarter. In June 2016, Skyline commenced operation of a leased facility in Elkhart, Indiana which contributed $4,300,000 of net sales and incurred a loss of $323,000 in the current quarter. |
| • | Loss from continuing operations of $2,447,000 as compared to a loss of $514,000 from continuing operations in the third quarter of fiscal 2016. Operating results were adversely affected by increased manufacturing labor costs associated with hiring and training employees at facilities which are increasing production output. In addition, newly-hired, inexperienced employees contributed to an increase in higher workers’ compensation and warranty costs for the period. |
| • | No income or loss from discontinued operations as compared to a loss of $6,000 from discontinued operations in the third quarter of fiscal 2016. |
| • | Net loss of $2,447,000 or $0.29 per share as compared to a net loss of $520,000 or $0.06 per share in the third quarter of fiscal 2016. |
For the first nine months of fiscal 2017, the Corporation reported the following results:
| • | Net sales from continuing operations of $177,042,000, an increase of 14.1% over net sales of $155,123,000 from continuing operations in the year ago first three quarters. Net sales attributable to the Elkhart facility during this period were $10,554,000 while losses at the Elkhart operations were $1,605,000. |
| • | Losses from continuing operations of $2,298,000 as compared to income of $339,000 from continuing operations in the first nine months of fiscal 2016. Similar to the third quarter, operating results were adversely affected by increased manufacturing labor costs |
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|
NEWS RELEASE | |
| Skyline Corporation 2520 By-Pass Road P.O. Box 743 Elkhart, Indiana 46515-0743 (574) 294-6521 | ||
| Subject: THIRD QUARTER REPORT | Approved by: JON S. PILARSKI | |
| associated with hiring and training employees at facilities which are increasing production output. In addition, newly-hired, inexperienced employees contributed to an increase in higher workers’ compensation costs for the period. Net income in the year ago first three quarters included a $250,000 payment on an account that had been previously reserved. |
| • | No income or loss from discontinued operations as compared to income of $13,000 from discontinued operations in the first nine months of fiscal 2016. |
| • | Net loss of $2,298,000 or $0.27 per share as compared to a net income of $352,000 or $0.04 per share in the first three quarters of fiscal 2016. |
“While we are disappointed with our performance in the third quarter, our recent decision to close two underperforming plants will eliminate the persistent losses that they have incurred” said Richard W. Florea, President and Chief Executive Officer. “The closure of these facilities will permit us to reallocate resources to focus on improving the profitability of our remaining plants.”
Forward-Looking Statements
Information contained in this press release contains “forward-looking statements,” including but not limited to statements related to the suspension of operations at the Elkhart and Mansfield facilities and the effects of such action, which are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, possible adverse consequences to the Corporation in connection with the suspension of operations at the facility, general business and economic conditions, and other factors, risks, and uncertainties contained in the Corporation’s other filings with the Securities and Exchange Commission. For a further list and description of such risks, see the reports and other filings made by the Corporation with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended May 31, 2016. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Skyline Corporation and Subsidiary Companies
Consolidated Balance Sheets
(Dollars in thousands)
| February 28, 2017 | May 31, 2016 | |||||||
| (Unaudited) | ||||||||
| Current Assets: |
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| Cash |
$ | 5,232 | $ | 7,659 | ||||
| Accounts receivable |
14,857 | 15,153 | ||||||
| Inventories |
13,619 | 11,381 | ||||||
| Workers’ compensation security deposit |
690 | 1,294 | ||||||
| Other current assets |
776 | 331 | ||||||
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| Total Current Assets |
35,174 | 35,818 | ||||||
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| Property, Plant and Equipment, at Cost: |
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| Land |
2,996 | 2,996 | ||||||
| Buildings and improvements |
37,279 | 36,624 | ||||||
| Machinery and equipment |
17,364 | 16,977 | ||||||
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| 57,639 | 56,597 | |||||||
| Less accumulated depreciation |
45,690 | 44,952 | ||||||
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| 11,949 | 11,645 | |||||||
| Other Assets |
7,241 | 7,515 | ||||||
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| Total Assets |
$ | 54,364 | $ | 54,978 | ||||
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| Current Liabilities: |
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| Accounts payable, trade |
$ | 3,776 | $ | 3,921 | ||||
| Accrued salaries and wages |
2,555 | 3,557 | ||||||
| Accrued marketing programs |
3,090 | 1,767 | ||||||
| Accrued warranty |
5,686 | 4,817 | ||||||
| Customer deposits |
1,664 | 1,521 | ||||||
| Other accrued liabilities |
2,918 | 2,448 | ||||||
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| Total Current Liabilities |
19,689 | 18,031 | ||||||
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| Long-Term Liabilities: |
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| Deferred compensation expense |
4,921 | 5,002 | ||||||
| Accrued warranty |
2,500 | 2,500 | ||||||
| Life insurance loans |
4,312 | 4,312 | ||||||
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| Total Long-Term Liabilities |
11,733 | 11,814 | ||||||
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| Shareholders’ Equity: |
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| Common stock, $.0277 par value, 15,000,000 shares authorized; issued 11,217,144 shares |
312 | 312 | ||||||
| Additional paid-in capital |
5,117 | 5,010 | ||||||
| Retained earnings |
83,257 | 85,555 | ||||||
| Treasury stock, at cost, 2,825,900 shares |
(65,744 | ) | (65,744 | ) | ||||
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| Total Shareholders’ Equity |
22,942 | 25,133 | ||||||
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| Total Liabilities and Shareholders’ Equity |
$ | 54,364 | $ | 54,978 | ||||
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Skyline Corporation and Subsidiary Companies
Consolidated Statements of Operations
For the Three-Months and Nine-Months Ended February 28, 2017 and February 29, 2016
(Dollars in thousands, except share and per share amounts)
| Three-Months Ended | Nine-Months Ended | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| OPERATIONS |
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| Net sales |
$ | 51,640 | $ | 47,697 | $ | 177,042 | $ | 155,123 | ||||||||
| Cost of sales |
48,421 | 42,887 | 162,013 | 138,443 | ||||||||||||
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| Gross profit |
3,219 | 4,810 | 15,029 | 16,680 | ||||||||||||
| Selling and administrative expenses |
5,581 | 5,246 | 17,070 | 16,105 | ||||||||||||
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| Operating (loss) income |
(2,362 | ) | (436 | ) | (2,041 | ) | 575 | |||||||||
| Interest expense |
(85 | ) | (78 | ) | (257 | ) | (236 | ) | ||||||||
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| (Loss) income from continuing operations before income taxes |
(2,447 | ) | (514 | ) | (2,298 | ) | 339 | |||||||||
| Income tax expense |
— | — | — | — | ||||||||||||
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| (Loss) income from continuing operations |
(2,447 | ) | (514 | ) | (2,298 | ) | 339 | |||||||||
| (Loss) income from discontinued operations,net of taxes |
— | (6 | ) | — | 13 | |||||||||||
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| Net (loss) income |
$ | (2,447 | ) | $ | (520 | ) | $ | (2,298 | ) | $ | 352 | |||||
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| Basic and diluted (loss) income per share |
$ | (.29 | ) | $ | (.06 | ) | $ | (.27 | ) | $ | .04 | |||||
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| Basic and diluted (loss) income per share from continuing operations |
$ | (.29 | ) | $ | (.06 | ) | $ | (.27 | ) | $ | .04 | |||||
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| Basic and diluted (loss) income per share from discontinued operations |
$ | — | $ | — | $ | — | $ | — | ||||||||
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| Weighted average number of common shares outstanding: |
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| Basic |
8,391,244 | 8,391,244 | 8,391,244 | 8,391,244 | ||||||||||||
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| Diluted |
8,391,244 | 8,391,244 | 8,391,244 | 8,391,244 | ||||||||||||
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