Nobility Homes Inc 10-Q for FY2024 Q3
Nobility Homes Inc (NOBH)
About this 10-Q
Nobility Homes Inc filed this 10-Q on September 16, 2024, covering the quarter ended August 3, 2024 (FY2024 Q3).
Headline figures
Quarter ended August 3, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $13.8M
- down 5.8% from $14.65M a year earlier
- Net income
- $2.19M
- down 18.0% from net income of $2.67M a year earlier
- Diluted EPS
- $0.67
- down 16.3% from $0.80 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended
Commission File number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐; No
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Title of Class |
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Shares Outstanding on September 13, 2024 |
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NOBILITY HOMES, INC.
INDEX
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PART I. |
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Financial Information |
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Item 1. |
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Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets as of August 3, 2024 (Unaudited) and November 4, 2023 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. |
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PART II. |
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Item 2. |
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Item 5. |
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Item 6. |
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2
NOBILITY HOMES, INC.
Condensed Consolidated Balance Sheets
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August 3, |
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November 4, |
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2024 |
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2023 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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Certificates of deposit |
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Short-term investments at fair value |
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Accounts receivable - trade |
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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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Mortgage notes receivable, less current portion |
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Other investments |
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Property held for resale |
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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 |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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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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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 |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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August 3, |
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August 5, |
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August 3, |
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August 5, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
$ |
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$ |
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$ |
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$ |
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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 (expense): |
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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) increase in fair value of equity investment |
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Gain on disposal of property, plant and equipment |
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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 |
$ |
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$ |
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$ |
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$ |
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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 |
$ |
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$ |
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$ |
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$ |
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Diluted |
$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the three and nine months ended August 3, 2024 and August 5, 2023
(Unaudited)
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Common |
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Common |
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Additional |
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Retained |
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Treasury |
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Total |
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Balance at November 4, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at February 3, 2024 |
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Cash dividend $ |
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common share |
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— |
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— |
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— |
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( |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at May 4, 2024 |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at August 3, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Common |
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Common |
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Additional |
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Retained |
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Treasury |
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Total |
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Balance at November 5, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at February 4, 2023 |
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Cash dividend $ |
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common share |
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— |
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— |
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— |
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— |
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Purchase of treasury stock |
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— |
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— |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at May 6, 2023 |
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Purchase of treasury stock |
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— |
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— |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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Balance at August 5, 2023 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Nine Months Ended |
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August 3, |
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August 5, |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating |
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Depreciation |
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Deferred income taxes |
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Undistributed earnings in joint venture - Majestic 21 |
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Return on investment in joint venture-Majestic 21 |
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Gain on disposal of property, plant and equipment |
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(Increase) decrease in fair market value of equity investments |
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Stock-based compensation |
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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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Income tax receivable |
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(Decrease) increase in: |
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Accounts payable |
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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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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 |
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Purchase of certificates of deposit |
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Purchase of property held for resale |
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Proceeds from certificates of deposit |
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Proceeds from disposal of property, plant and equipment |
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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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Increase in cash surrender value of life insurance |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Payment of cash dividend |
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Purchase of treasury stock |
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Net cash used in financing activities |
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Decrease in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental disclosure of cash flows information: |
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Income taxes paid |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Nobility Homes, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 Basis of Presentation and Accounting Policies
The accompanying unaudited condensed consolidated financial statements for the three and nine months ended August 3, 2024 and August 5, 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q.
Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the nine months ended August 3, 2024, are not necessarily indicative of the results of the full fiscal year.
Note 2 Recently Issued Accounting Standards
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016 - 13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments. This standard was effective for the Company as of November 5, 2023. There was no impact on our financial statements at adoption.
Note 3 Inventories
New home inventory is carried at a lower of cost or net realizable value. The cost of finished home inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. In addition, an allocation of depreciation and amortization is included in the cost of goods sold. Under the specific identification method, if finished home inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or net realizable value.
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. The Company acquired this inventory at the amount of the uncollected balance of the financing at the time of the 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 condensed consolidated balance sheets.
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.
7
A breakdown of the elements of inventory at August 3, 2024 and November 4, 2023 is as follows:
|
|
August 3, |
|
|
November 4, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Unaudited) |
|
|
|
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished homes - Nobility |
|
|
|
|
|
|
||
Finished homes - Other |
|
|
|
|
|
|
||
Pre-owned homes |
|
|
|
|
|
|
||
Model home furniture |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
Note 4 Short-term Investments
The following is a summary of short-term investments (available for sale):
|
|
August 3, 2024 |
|
|||||||||||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
Equity securities in a public company |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
November 4, 2023 |
|
|||||||||||||
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
Equity securities in a public company |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The fair values were estimated based on quoted market prices in active markets at each respective period end.
Note 5 Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short maturity of those instruments.
The Company accounts for the fair value of financial instruments in accordance with FASB Accounting Standards Codification (ASC) No. 820 “Fair Value Measurements” (ASC 820).
ASC 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The ASC 820 fair value hierarchy is defined as follows:
8
The following tables represent the Company’s financial assets and liabilities which are carried at fair value.
|
|
August 3, 2024 |
|
|||||||||
|
|
(Unaudited) |
|
|||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Equity securities in a public company |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
November 4, 2023 |
|
|||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Equity securities in a public company |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Note 6 Net Income per Share
These condensed consolidated financial statements include “basic” and “diluted” net income per share information for all periods presented. The basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding. The diluted net income per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for dilutive common shares, which are the result of outstanding stock options.
Note 7 Revenues by Products and Services
The Company operates in one business segment, which is manufactured housing and ancillary services.
Revenues by net sales from manufactured housing homes and insurance agent commissions are as follows:
|
|
(Unaudited) |
|
|
(Unaudited) |
|
||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
August 3, |
|
|
August 5, |
|
|
August 3, |
|
|
August 5, |
|
||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Manufactured housing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Homes sold through Company owned sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Homes sold to independent dealers and |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance agent commissions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Total net sales in the third quarter of 2024 were $13,803,340 compared to $14,654,789 in the third quarter of 2023. Total net sales for the first nine months of 2024 were $40,099,316 compared to $48,599,139 for the first nine months of 2023. Net sales decreased in the first nine months of 2024 as compared to last year because of the decrease in the number of retail homes sold and manufactured. In addition, we are building and selling lower-priced homes due to the higher interest rates on mortgages that we believe are negatively impacting sales as compared to the prior years. There also remain delays in the receipt of certain key production materials from suppliers, back orders, price increases and labor shortages which continue to cause delays in the completion of the homes at our manufacturing facility and the set-up process of retail homes in the field. Our inability to timely deliver and set up homes to customers has negatively impacted sales and earnings. We expect these challenges will continue throughout fiscal year 2024 and potentially into 2025. The Company also continues to experience inflation in some building products resulting in increases to our material and labor costs which may increase the wholesale and retail selling prices of our homes. We believe that potential customers have delayed or deferred purchasing decisions when considering the interest rate environment.
The current demand for affordable manufactured housing in Florida and the U.S. has slowed due to the interest rate environment and increased costs associated with mortgages. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2023 through July 2024 declined by approximately 3% from the same period last year.
The following table summarizes certain key sales statistics and percentage of gross profit.
|
|
(Unaudited) |
|
|
(Unaudited) |
|
||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
August 3, |
|
|
August 5, |
|
|
August 3, |
|
|
August 5, |
|
||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
New homes sold through Company owned sales centers |
|
|
79 |
|
|
|
84 |
|
|
|
232 |
|
|
|
292 |
|
Pre-owned homes sold through Company owned sales |
|
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
5 |
|
Homes sold to independent dealers |
|
|
36 |
|
|
|
46 |
|
|
|
99 |
|
|
|
109 |
|
Total new factory built homes produced |
|
|
95 |
|
|
|
108 |
|
|
|
301 |
|
|
|
361 |
|
Average new manufactured home price - retail |
|
$ |
145,496 |
|
|
$ |
147,426 |
|
|
$ |
147,979 |
|
|
$ |
147,094 |
|
Average new manufactured home price - wholesale |
|
$ |
65,675 |
|
|
$ |
71,514 |
|
|
$ |
67,348 |
|
|
$ |
74,325 |
|
As a percent of net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit from the Company owned retail sales centers |
|
|
25 |
% |
|
|
24 |
% |
|
|
24 |
% |
|
|
23 |
% |
Gross profit from the manufacturing facilities -including |
|
|
25 |
% |
|
|
26 |
% |
|
|
23 |
% |
|
|
24 |
% |
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, 2024, the Company celebrated its 57th anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers in Florida for over 34 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.
Insurance agent commission revenues in the third quarter of 2024 were $88,703 compared to $86,255 in the third quarter of 2023. Total insurance agent commission revenues for the first nine months of 2024 were $259,883 compared to $255,052 for the first nine months of 2023. Revenues are generated by new and renewal policies being written which affects agent commission earned. The Company establishes appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations at August 3, 2024 and November 4, 2023.
Gross profit as a percentage of net sales was 33% in the third quarter of 2024 compared to 35% for the third quarter of 2023 and was 34% for the first nine months of 2024 compared to 35% for the first nine months of 2023. The gross profit in the third quarter of 2024 was $4,606,600 compared to $5,114,390 in the third quarter of 2023 and was $13,509,340 for the first nine months of 2024 compared to $16,939,297 for the first nine months of 2023. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. Higher inflation costs of building products and labor cost on each home, manufacturing
10
lower-costs homes and the decrease in the number of homes manufactured and sold at our retail sales centers has negatively impacted our gross profit.
Selling, general and administrative expenses as a percent of net sales was 15% in the third quarter of 2024 compared to 14% for the third quarter of 2023 and was 15% for the first nine months of 2024 compared to 13% for the first nine months of 2023. Selling, general and administrative expenses in the third quarter of 2024 was $2,032,973 compared to $1,987,782 in the third quarter of 2023 and was $5,976,683 for the first nine months of 2024 compared to $6,238,457 for the first nine months of 2023. Selling, general and administrative expenses as a percent of net sales increased due to additional costs incurred from the resignation of the Company's auditors, the decrease in sales at the manufacturing plant and retail sales centers and the fixed costs associated with many of the expenses.
We earned interest income of $318,253 for the third quarter of 2024 compared to $203,972 for the third quarter of 2023. For the first nine months of 2024, interest income was $836,113 compared to $513,987 in the first nine months of 2023. The increase in interest income for the three and nine months of 2024 is primarily due to an increase in the monies invested.
Our earnings from Majestic 21 in the third quarter of 2024 were $24,914 compared to $27,828, for the third quarter of 2023. The earnings for the first nine months of 2024 were $67,623 compared to $76,276 for the first nine months of 2023. The earnings from Majestic 21 represent the allocation of profit and losses which are owned 50% by 21st Mortgage Corporation and 50% by the Company. The Company received a one-time distribution of approximately $1.6 million in first quarter of 2024, representing our 50% of the excess capital in the portfolio. The earnings from the Majestic 21 loan portfolio vary quarter to quarter, but overall, the earnings will decrease due to the amortization, maturity and payoff of the loans.
We received distributions from 21st Mortgage Corporation in the third quarter of 2024 of $47,339 compared to $115,641 in the third quarter of 2023 and $147,155 for the first nine months of 2024 compared to $209,806 for the first nine months of 2023. The distributions are from an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21st Mortgage Corporation and the Company. The distributions from the escrow arrangement, relating to certain loans financed by 21st Mortgage Corporation, are recorded as income by the Company when received. The earnings from the FRSA loan portfolio will vary quarter to quarter, but will continue to decrease due to the amortization, maturity and payoff of the loans.
The Company realized pre-tax income in the third quarter of 2024 of $2,927,213 as compared to $3,571,531 in the third quarter of 2023. The pre-tax income for the first nine months of 2024 was $8,773,299 as compared to $11,495,736 in the first nine months of 2023.
The Company recorded an income tax expense in the amount of $741,901 in the third quarter of 2024 as compared to $905,203 in the third quarter of 2023. Income tax expense for the nine months of 2024 was $2,223,591 compared to $2,913,592 for the nine months of 2023.
We reported net income of $2,185,312 for the third quarter of 2024 or $0.67 per share, compared to $2,666,328 or $0.80 per share, for the third quarter of 2023. For the first nine months of 2024 net income was $6,549,708 or $2.00 per share compared to $8,582,144 or $2.56 per share in the first nine months of 2023.
Liquidity and Capital Resources
Cash and cash equivalents were $13,052,050 at August 3, 2024 compared to $13,879,358 at November 4, 2023. Certificates of deposit were $12,888,834 at August 3, 2024 compared to $10,204,287 at November 4, 2023. Short-term investments were $618,228 at August 3, 2024 compared to $527,899 at November 4, 2023. Working capital was $40,807,632 at August 3, 2024 as compared to $37,871,552 at November 4, 2023. A cash dividend was paid from our cash reserves in April 2024 in the amount of $1.50 per share ($4,903,243). The Company received a one-time distribution of approximately $1.6 million in first quarter of 2024, from 21st Mortgage Corporation, representing our 50% of the excess capital in the portfolio. Prestige new home inventory was $17.7 million at August 3, 2024 compared to $19 million at November 4, 2023. Prestige has sixty nine (69) ($5.6 million) new homes 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 and pre-owned homes, and do not incur any third-party floor plan financing expenses.
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 $4.5 million of cash surrender value of life insurance which can be accessed as an additional source of liquidity though the Company has not currently viewed this to be necessary. As of August 3, 2024, the Company continued to report a strong balance sheet which included total assets of approximately $64.3 million which was funded primarily by stockholders’ equity of approximately $54.5 million.
11
Critical Accounting Policies and Estimates
In Item 7 of our Form 10-K, under the heading “Critical Accounting Policies and Estimates,” we have provided a discussion of the critical accounting policies and estimates that management believes affect its more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. No significant changes have occurred since that time.
Forward-Looking Statements
Certain statements in this report are forward-looking statements within the meaning of the federal securities laws. Although Nobility believes that the 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 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 insulation, shingles, 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 attacks, or other events such as a pandemic, any armed conflict involving the United States and the impact of inflation.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of August 3, 2024.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal controls over financial reporting that occurred during the third quarter of fiscal 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
12
Part II. OTHER INFORMATION AND SIGNATURES
There were no reportable events for Item 1, 3 and 4.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In December 2023, 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 2024 on the open market. The Company did not purchase any shares of its common stock during the third quarter ended August 3, 2024.
Item 5. Other Information
During the three months ended August 3, 2024, no director or Section 16 officer of the Company
Item 6. Exhibits
|
|
|
|
|
|
31. |
(a) |
|
|
|
|
|||
|
|
(b) |
|
|
|
|
|||
|
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. |
13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
NOBILITY HOMES, INC. |
||
|
|
|
|
|||
DATE: September 16, 2024 |
|
|
|
By: |
|
/s/ Terry E. Trexler |
|
|
|
|
|
|
Terry E. Trexler, Chairman, |
|
|
|
|
|
|
President and Chief Executive Officer |
|
|
|
|
|||
DATE: September 16, 2024 |
|
|
|
By: |
|
/s/ Thomas W. Trexler |
|
|
|
|
|
|
Thomas W. Trexler, Executive Vice President, |
|
|
|
|
|
|
and Chief Financial Officer |
|
|
|
|
|||
DATE: September 16, 2024 |
|
|
|
By: |
|
/s/ Lynn J. Cramer, Jr. |
|
|
|
|
|
|
Lynn J. Cramer, Jr., Treasurer |
|
|
|
|
|
|
and Principal Accounting Officer |
14
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: September 16, 2024 |
|
|
|
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. |
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DATE: September 16, 2024 |
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By: |
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/s/ Thomas W. Trexler |
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Thomas W. Trexler, Executive Vice President, |
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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:
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1. |
The Quarterly Report on Form 10-Q of the Company for the quarter ended August 3, 2024 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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DATE: September 16, 2024 |
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By: |
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/s/ Terry E. Trexler |
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Terry E. Trexler, Chairman, |
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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:
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1. |
The Quarterly Report on Form 10-Q of the Company for the quarter ended August 3, 2024 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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DATE: September 16, 2024 |
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By: |
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/s/ Thomas W. Trexler |
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Thomas W. Trexler, Executive Vice President, |
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and Chief Financial Officer |