Nobility Homes Inc 10-Q for FY2023 Q1
Nobility Homes Inc (NOBH)
About this 10-Q
Nobility Homes Inc filed this 10-Q on March 20, 2023, covering the quarter ended February 4, 2023 (FY2023 Q1).
Headline figures
Quarter ended February 4, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $17.16M
- up 58.8% from $10.81M a year earlier
- Net income
- $3.06M
- up 164.2% from net income of $1.16M a year earlier
- Diluted EPS
- $0.91
- up 175.8% from $0.33 a year earlier
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) | |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
| Title of Class |
Shares Outstanding on March 20 , 2023 | |
| February 4, 2023 |
November 5, 2022 |
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| (Unaudited) | ||||||||
Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Certificates of deposit |
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Short-term investments |
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Accounts receivable - trade |
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Note receivable |
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Mortgage notes receivable |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Note receivable, less current portion |
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Mortgage notes receivable, less current portion |
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Other investments |
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Deferred income taxes |
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Cash surrender value of life insurance |
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Other assets |
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Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued compensation |
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Accrued expenses and other current liabilities |
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Income taxes payable |
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Customer deposits |
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Total current liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $. |
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Common stock, $. |
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Additional paid in capital |
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Retained earnings |
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Less treasury stock at cost, |
( |
) | ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
| Three Months Ended | ||||||||
| February 4, 2023 |
February 5, 2022 |
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Net sales |
$ | $ | ||||||
Cost of sales |
( |
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) | ||||
Gross profit |
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Selling, general and administrative expenses |
( |
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Operating income |
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Other income (loss): |
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Interest income |
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Undistributed earnings in joint venture - Majestic 21 |
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Proceeds received under escrow arrangement |
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Decrease in fair value of equity investment |
( |
) | ( |
) | ||||
Miscellaneous |
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Total other income |
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Income before provision for income taxes |
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Income tax expense |
( |
) | ( |
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Net income |
$ | $ | ||||||
Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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Net income per share: |
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Basic |
$ | $ | ||||||
Diluted |
$ | $ | ||||||
| Common Stock Shares |
Common Stock |
Additional Paid-in-Capital |
Retained Earnings |
Treasury Stock |
Total | |||||||||||||||||||
Balance at November 5, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Stock-based compensation |
— | — | ||||||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Balance at February 4, 2023 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Common Stock Shares |
Common Stock |
Additional Paid-in-Capital |
Retained Earnings |
Treasury Stock |
Total | |||||||||||||||||||
Balance at November 6, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Stock-based compensation |
— | — | ||||||||||||||||||||||
Exercise of employee stock options |
— | ( |
) | — | — | |||||||||||||||||||
Treasury stock purchase |
( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Balance at February 5, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Three Months Ended | ||||||||
| February 4, 2023 |
February 5, 2022 |
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Cash flows from operating activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provide by operating activities: |
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Depreciation |
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Undistributed earnings in joint venture - Majestic 21 |
( |
) | ( |
) | ||||
Decrease in fair market value of equity investments |
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Stock-based compensation |
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Amortization of operating lease right of use assets |
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Decrease (increase) in: |
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Accounts receivable - trade |
( |
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Inventories |
( |
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Prepaid expenses and other current assets |
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Interest receivable |
( |
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(Decrease) increase in: |
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Accounts payable |
( |
) | ||||||
Accrued compensation |
( |
) | ||||||
Accrued expenses and other current liabilities |
( |
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Income taxes payable |
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Customer deposits |
( |
) | ( |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
Purchase of certificates of deposit |
( |
) | — | |||||
Proceeds from certificates of deposit |
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Collections on interest receivable |
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Collections on mortgage notes receivable |
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Collections on equipment and other notes receivable |
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Issuance of mobile home park note receivable |
( |
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Increase in cash surrender value of life insurance |
( |
) | ( |
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Net cash (used in) provided by investing activities |
( |
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Cash flows from financing activities: |
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Reduction of operating lease obligation |
( |
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Net cash (used in) financing activities |
( |
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Increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of year |
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Cash and cash equivalents at end of quarter |
$ | $ | ||||||
Supplemental financing activity: |
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Noncash exercise of employee stock options |
$ | $ | ( |
) | ||||
February 4, |
November 5, |
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2023 |
2022 |
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(unaudited) |
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| Raw materials |
$ | $ | ||||||
| Work-in-process |
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| Inventory consigned to affiliated entities |
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| Finished homes - Nobility |
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| Finished homes - Other |
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| Pre-owned homes |
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| Model home furniture |
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| Inventories |
$ | $ | ||||||
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February 4, 2023 |
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(unaudited) |
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Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
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| Equity securities in a public company |
$ | $ | $ | $ | ||||||||||||
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| November 5, 2022 | ||||||||||||||||
| Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
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| Equity securities in a public company |
$ | $ | $ | $ | ||||||||||||
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| • | 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. |
February 4, 2023 |
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(unaudited) |
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Level 1 |
Level 2 |
Level 3 |
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| Equity securities in a public company |
$ | $ | $ | |||||||||
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| November 5, 2022 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Equity securities in a public company |
$ | $ | $ | |||||||||
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(unaudited) |
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Three Months Ended |
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February 4, |
February 5, |
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2023 |
2022 |
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| Manufactured housing |
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| Homes sold through Company owned sales centers |
$ | $ | ||||||
| Homes sold to independent dealers and through manufactured home parks, net |
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| $ | $ | |||||||
| Insurance agent commissions |
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| Total net sales |
$ | $ | ||||||
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| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| February 4, | February 5, | |||||||
| 2023 | 2022 | |||||||
New homes sold through Company owned sales centers |
105 | 87 | ||||||
Pre-owned homes sold through Company owned sales centers |
2 | 6 | ||||||
Homes sold to independent dealers |
36 | 10 | ||||||
Total new factory built homes produced |
117 | 92 | ||||||
Average new manufactured home price - retail |
$ | 144,178 | $ | 107,281 | ||||
Average new manufactured home price - wholesale |
$ | 75,350 | $ | 63,781 | ||||
As a percent of net sales: |
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Gross profit from the Company owned retail sales centers |
23 | % | 18 | % | ||||
Gross profit from the manufacturing facilities -including intercompany sales |
26 | % | 13 | % | ||||
| 31. | (a) | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 | ||
| (b) | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 | |||
| 32. | (a) | Written Statement of Chief Executive Officer Pursuant to 18 U.S.C. §1350 | ||
| (b) | Written Statement of Chief Financial Officer Pursuant to 18 U.S.C. §1350 | |||
| 101. | Interactive data filing formatted in XBRL | |||
| 104. | Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101. | |||
| NOBILITY HOMES, INC. | ||||||
DATE: March 20, 2023 |
By: |
/s/ Terry E. Trexler | ||||
Terry E. Trexler, Chairman, | ||||||
President and Chief Executive Officer | ||||||
DATE: March 20, 2023 |
By: |
/s/ Thomas W. Trexler | ||||
Thomas W. Trexler, Executive Vice President, | ||||||
and Chief Financial Officer | ||||||
DATE: March 20, 2023 |
By: |
/s/ Lynn J. Cramer, Jr. | ||||
Lynn J. Cramer, Jr., Treasurer | ||||||
and Principal Accounting Officer | ||||||
Exhibit 31(a)
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Terry E. Trexler, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Nobility Homes, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| DATE: March 20, 2023 | By: | /s/ Terry E. Trexler | ||||
| Terry E. Trexler, Chairman, | ||||||
| President and Chief Executive Officer |
Exhibit 31(b)
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Thomas W. Trexler, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Nobility Homes, Inc; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| DATE: March 20, 2023 |
By: |
/s/ Thomas W. Trexler | ||||
| Thomas W. Trexler, Executive Vice President, | ||||||
| and Chief 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 Quarterly Report on Form 10-Q of the Company for the quarter ended February 4, 2023 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| DATE: March 20, 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 Quarterly Report on Form 10-Q of the Company for the quarter ended February 4, 2023 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| DATE: March 20, 2023 | By: | /s/ Thomas W. Trexler | ||||
| Thomas W. Trexler, Executive Vice President, | ||||||
| and Chief Financial Officer |