Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Feb. 28, 2015 | Apr. 03, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 28-Feb-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SKY | |
Entity Registrant Name | SKYLINE CORP | |
Entity Central Index Key | 90896 | |
Current Fiscal Year End Date | -26 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,391,244 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash | $4,933 | $6,031 |
Accounts receivable | 13,089 | 16,259 |
Note receivable, current | 50 | |
Inventories | 9,307 | 8,627 |
Workers' compensation security deposit | 2,137 | 2,688 |
Other current assets | 753 | 542 |
Assets of discontinued operations | 492 | 7,473 |
Total Current Assets | 30,711 | 41,670 |
Note Receivable, non-current | 1,581 | |
Property, Plant and Equipment, at Cost: | ||
Land | 3,586 | 3,586 |
Buildings and improvements | 39,720 | 39,254 |
Machinery and equipment | 16,976 | 17,238 |
Property, Plant and Equipment gross | 60,282 | 60,078 |
Less accumulated depreciation | 47,019 | 46,036 |
Property, Plant and Equipment | 13,263 | 14,042 |
Assets of discontinued operations, net of accumulated depreciation | 1,911 | |
Net Property, Plant and Equipment | 13,263 | 15,953 |
Other Assets | 6,892 | 6,550 |
Total Assets | 50,866 | 65,754 |
Current Liabilities: | ||
Accounts payable, trade | 1,640 | 3,050 |
Accrued salaries and wages | 1,594 | 2,255 |
Accrued marketing programs | 3,606 | 2,526 |
Accrued warranty and related expenses | 3,722 | 3,697 |
Other accrued liabilities | 2,888 | 3,695 |
Liabilities of discontinued operations | 338 | 3,024 |
Total Current Liabilities | 13,788 | 18,247 |
Long-Term Liabilities: | ||
Other deferred liabilities | 7,171 | 7,386 |
Life insurance loans | 6,334 | 6,334 |
Total Long-Term Liabilities | 13,505 | 13,720 |
Commitments and Contingencies - See Note 9 | ||
Shareholders' Equity: | ||
Common stock, $.0277 par value, 15,000,000 shares authorized; issued 11,217,144 shares | 312 | 312 |
Additional paid-in capital | 4,928 | 4,928 |
Retained earnings | 84,077 | 94,291 |
Treasury stock, at cost, 2,825,900 shares | -65,744 | -65,744 |
Total Shareholders' Equity | 23,573 | 33,787 |
Total Liabilities and Shareholders' Equity | $50,866 | $65,754 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Feb. 28, 2015 | 31-May-14 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $0.03 | $0.03 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 11,217,144 | 11,217,144 |
Treasury stock, shares | 2,825,900 | 2,825,900 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Retained Earnings (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
OPERATIONS: | ||||
Net sales | $38,109 | $30,169 | $137,380 | $107,040 |
Cost of sales | 35,771 | 29,390 | 125,843 | 98,851 |
Gross profit | 2,338 | 779 | 11,537 | 8,189 |
Selling and administrative expenses | 5,159 | 5,010 | 15,347 | 14,361 |
Gain on sale of idle property,plant and equipment | 300 | 462 | ||
Operating loss | -2,821 | -3,931 | -3,810 | -5,710 |
Interest expense | -92 | -279 | ||
Interest income | 2 | 25 | 50 | 75 |
Loss from continuing operations before income taxes | -2,911 | -3,906 | -4,039 | -5,635 |
Benefit from income taxes | 0 | 0 | 0 | 0 |
Loss from continuing operations | -2,911 | -3,906 | -4,039 | -5,635 |
Loss from discontinued operations, net of income taxes | -86 | -1,806 | -6,175 | -3,669 |
Net loss | -2,997 | -5,712 | -10,214 | -9,304 |
Basic loss per share | ($0.36) | ($0.68) | ($1.22) | ($1.11) |
Loss per share from continuing operations | ($0.35) | ($0.47) | ($0.48) | ($0.67) |
Loss per share from discontinued operations | ($0.01) | ($0.21) | ($0.74) | ($0.44) |
Weighted average number of common shares outstanding | 8,391,244 | 8,391,244 | 8,391,244 | 8,391,244 |
RETAINED EARNINGS: | ||||
Balance at beginning of period | 87,074 | 102,563 | 94,291 | 106,155 |
Net loss | -2,997 | -5,712 | -10,214 | -9,304 |
Balance at end of period | $84,077 | $96,851 | $84,077 | $96,851 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($10,214) | ($9,304) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 1,034 | 1,304 |
Reduction in inventory value of discontinued operations | 901 | |
Gain on sale of assets associated with discontinued operations | -670 | |
Gain on sale of idle property, plant and equipment | -462 | |
Change in assets and liabilities: | ||
Restricted cash | 600 | |
Accrued interest receivable | 1 | |
Accounts receivable | 7,642 | -1,723 |
Inventories | 928 | -2,502 |
Workers' compensation security deposit | 551 | |
Other current assets | -211 | -32 |
Accounts payable, trade | -3,382 | 118 |
Accrued liabilities | -1,077 | 3,400 |
Other, net | -516 | -527 |
Net cash used for operating activities | -5,014 | -9,127 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from principal payments of U.S. Treasury Bills | 30,998 | |
Purchase of U.S. Treasury Bills | -28,999 | |
Proceeds from note receivable | 1,631 | 35 |
Proceeds from sale of assets associated with discontinued operations | 2,331 | |
Proceeds from sale of idle property, plant and equipment | 958 | |
Purchase of property, plant and equipment | -178 | -649 |
Other, net | 132 | 221 |
Net cash from investing activities | 3,916 | 2,564 |
Net decrease in cash | -1,098 | -6,563 |
Cash at beginning of period | 6,031 | 11,838 |
Cash at end of period | $4,933 | $5,275 |
Nature_of_Operations_Accountin
Nature of Operations, Accounting Policies of Consolidated Financial Statements | 9 Months Ended | |||
Feb. 28, 2015 | ||||
Accounting Policies [Abstract] | ||||
Nature of Operations, Accounting Policies of Consolidated Financial Statements | NOTE 1 | Nature of Operations, Accounting Policies of Consolidated Financial Statements | ||
The accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position as of February 28, 2015, in addition to the consolidated results of operations and consolidated cash flows for the three-month and nine-month periods ended February 28, 2015 and 2014. Due to the seasonal nature of the Corporation’s business, interim results are not necessarily indicative of results for the entire year. | ||||
The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally accompanying the annual consolidated financial statements have been omitted. The audited consolidated balance sheet as of May 31, 2014 and the unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s latest annual report on Form 10-K. | ||||
Certain prior year amounts related to discontinued operations have been reclassified to conform to current year presentation. | ||||
The following is a summary of the accounting policies that have a significant effect on the Consolidated Financial Statements. | ||||
Accounting Estimates — The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Key estimates would include accruals for warranty, workers’ compensation, marketing programs and health insurance as well as valuations for long-lived assets and deferred tax assets. | ||||
Revenue recognition — Substantially all of the Corporation’s products are made to order. Revenue is recognized upon completion of the following: an order for a unit is received from a dealer or community (customer); written or verbal approval for payment is received from a customer’s financial institution or payment is received; a common carrier signs documentation accepting responsibility for the unit as agent for the customer; and the unit is removed from the Corporation’s premises for delivery to a customer. Freight billed to customers is considered sales revenue, and the related freight costs are cost of sales. Volume based rebates paid to dealers are classified as a reduction of sales revenue. Sales of parts are classified as revenue. | ||||
Accounts Receivable — Trade receivables are based on the amounts billed to dealers and communities. The Corporation does not accrue interest on any of its trade receivables, nor does it have an allowance for credit losses due to favorable collections experience. If a loss occurs, the Corporation’s policy is to recognize it in the period when collectability cannot be reasonably assured. | ||||
Inventories — Inventories are stated at the lower of cost or market. Cost is determined under the first-in, first-out method. Physical inventory counts are taken at the end of each reporting quarter. | ||||
Workers’ Compensation Security Deposit — Deferred workers’ compensation deposit represents funds placed with the Corporation’s worker’s compensation insurance carrier to offset future medical claims and benefits. | ||||
Note Receivable — The Corporation’s note receivable represents the amount owed for the sale of two idle recreational vehicle facilities in Hemet, California; less cash received on the date of closing and cash received from principal repayments. The note was fully repaid in December 2014. | ||||
Property, Plant and Equipment — Property, plant and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method for financial statement reporting and accelerated methods for income tax reporting purposes. Estimated useful lives for significant classes of property, plant and equipment, including idle property, are as follows: Building and improvements 10 to 30 years; machinery and equipment 5 to 8 years. At February 28, 2015, idle property consisted of an idle manufacturing facility in Ocala, Florida. At May 31, 2014, idle property consisted of the aforementioned facility, and two manufacturing facilities in Elkhart, Indiana. The Corporation has the Ocala facility, and undeveloped land in McMinnville, Oregon presently for sale. | ||||
Long-lived assets are reviewed for impairment whenever events indicate that the carrying amount of an asset may not be recoverable from projected future cash flows. If the carrying value of a long-lived asset is impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. The Company believes no impairment of long-lived assets exists at February 28, 2015. | ||||
Warranty — The Corporation provides the retail purchaser of its homes, park models and recreational vehicles with a full fifteen-month warranty against defects in design, materials and workmanship. The warranties are backed by service departments located at the Corporation’s manufacturing facilities and an extensive field service system. | ||||
Warranty (continued) — Estimated warranty costs are accrued at the time of sale based upon current sales, historical experience and management’s judgment regarding anticipated rates of warranty claims. The adequacy of the recorded warranty liability is periodically assessed and the amount is adjusted as necessary. | ||||
Income Taxes — The Corporation recognizes deferred tax assets based on differences between the carrying values of assets for financial and tax reporting purposes. The realization of the deferred tax assets is dependent upon the generation of sufficient future taxable income. | ||||
Generally accepted accounting principles require that an entity consider both negative and positive evidence in determining whether a valuation allowance is warranted. In comparing negative and positive evidence, continual losses in recent years is considered significant, negative, objective evidence that deferred tax assets may not be realized in the future, and generally is assigned more weight than subjective positive evidence of the realizability of deferred tax assets. As a result of its extensive evaluation of both positive and negative evidence, management maintains a full valuation allowance against its deferred tax assets. The Corporation reports a liability, if any, for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Corporation recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | ||||
Recently issued accounting pronouncements — In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 changes the requirements for reporting discontinued operations in that a discontinued operation may include a component of an entity, a group of components of an entity, or a business or non-profit activity. In addition, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results when certain conditions are met. For public business entities, ASU No. 2014-08 is effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. | ||||
The Corporation did not utilize early adoption of ASU No. 2014-08 regarding the sale of its recreational vehicle segment as referenced in Note 2. It will, however, adopt this pronouncement for any disposals (or classifications as held for sale) that may occur after May 31, 2015. | ||||
Management’s Plan — The Corporation’s consolidated financial statements were prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business. Due to recurring losses, the Corporation experienced negative cash flows from operating activities. The level of historical negative cash flows from operations and not having available funding from outside financing sources as of February 28, 2015 raise substantial doubt about the Corporation’s ability to continue as a going concern. To continue as a going concern, certain strategies need to be pursued to raise capital, increase sales and decrease costs. These strategies include but are not all inclusive: | ||||
• | Divest Non-Core Assets: Management is focused on driving profitable growth in the Corporation’s core housing business. | |||
Progress: | ||||
In October 2014, the Corporation sold its recreational vehicle segment to focus solely on its core housing business and to raise cash. Additional information regarding the sale is in Note 2 of Notes to Consolidated Financial Statements. | ||||
In addition to the sale of the RV business, the Corporation sold two idle housing facilities and one undeveloped parcel of land in fiscal 2014 and is currently seeking buyers for an idle housing facility and an undeveloped parcel of land to raise cash and eliminate carrying costs. | ||||
• | Optimize Manufacturing Footprint: Through an ongoing assessment of the strategic positioning of Skyline’s manufacturing facilities, Management has successfully executed initiatives to optimize financial performance by reducing costs and gaining efficiencies at each facility. | |||
Progress: | ||||
The Corporation continues to show improvement over fiscal 2014. In the third quarter, excluding the Mansfield facility which has not yet been operating for a full year, four of the Corporation’s eight housing facilities had operating profits for the third quarter of fiscal 2015. By comparison, two of the Corporation’s eight housing facilities had operating profits for the third quarter of fiscal 2014. | ||||
Similarly, in the first nine months of fiscal 2015, excluding Mansfield, seven of the Corporation’s eight housing facilities had operating profits. By comparison, in the first nine months of fiscal 2014, four of the eight housing facilities had operating profits. | ||||
• | Increase Sales: | |||
• | Working to increase sales at the Mansfield, Texas housing facility by gaining a greater presence on the properties of manufactured housing dealers and manufactured housing communities. | |||
• | Continuing to work with manufactured housing communities to identify opportunities for increasing sales. | |||
• | Increasing sales of modular homes and park models by cultivating relationships with modular housing developers and campground owners that are outside the Corporation’s historical distribution channels. | |||
• | Establishing additional distribution channels and forging new strategic relationships. | |||
Progress: | ||||
The Mansfield facility continues to build sales since commencing operations in the third quarter of fiscal 2014. In the third quarter, where sales are traditionally lowest for the year, sales decreased 7 percent from the second to third quarters as compared to an approximately 23 percent decline for all of the housing facilities. | ||||
For the first nine months of fiscal 2015, manufactured housing sales to the Corporation’s six largest communities increased approximately 40 percent compared with the first nine months of fiscal 2014. For the third quarter of fiscal 2015, sales to these communities increased approximately 41 percent compared with the third quarter of fiscal 2014. | ||||
In the third quarter of fiscal 2015, net sales for modular housing and park models increased approximately 22 percent and 45 percent, respectively, compared with the third quarter of fiscal 2014. | ||||
For the first nine months of fiscal 2015, net sales for modular housing and park models increased approximately 16 percent and 82 percent, respectively, compared with the first nine months of fiscal 2014. | ||||
During the second quarter, the Corporation established a relationship with a manufactured housing retailer that specializes in internet-based marketing and provides factory tours to potential customers. This retailer operates retail sales centers located at the Corporation’s housing facilities. This relationship is expected to help drive additional sales by more fully exploiting this increasingly important distribution channel for the Corporation’s products. This initiative began generating sales to four locations in the third quarter. The Corporation expects one or two additional locations to be operating by the end of fiscal 2015. | ||||
• | Decrease Costs: Skyline continues to streamline costs with a focus on maximizing efficiencies and resources. | |||
Progress: | ||||
The Corporation’s Purchasing Department has obtained significant price concessions from certain suppliers and anticipates further savings from this initiative in the fourth quarter of the fiscal year. | ||||
In addition, Management has continued to analyze staffing needs and make reductions when considered appropriate. In connection with the sale of the RV business, the Corporation also identified and implemented reductions in corporate personnel that should result in annualized savings of approximately $400,000. | ||||
• | Raise Additional Capital: | |||
Progress: | ||||
On March 20, 2015, the Corporation entered into a Loan and Security Agreement with First Business Capital Corp. providing for a renewable three-year secured revolving credit facility. Under the new credit facility, the Company may obtain loan advances up to a maximum of $10 million, subject to certain collateral-obligation ratios. Outstanding loan advances under the facility will bear interest at 3.75% in excess of The Wall Street Journal’s published one year LIBOR rate. The facility will be used to support the Company’s working capital needs and other general corporate purposes, and is secured by substantially all of the Company’s and its subsidiaries’ assets. Additional information regarding the revolving credit facility is in Note 11 of Notes to Consolidated Financial Statements. | ||||
Management believes that it will be able to execute their strategies as noted above. Management is prepared to modify these strategies as appropriate to meet prevailing business and market conditions. |
Discontinued_Operations
Discontinued Operations | 9 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||
Discontinued Operations | NOTE 2 | Discontinued Operations | |||||||||||||||
During September 2014, the Corporation made a strategic decision to exit the recreational vehicle industry in order to focus on its core housing business. | |||||||||||||||||
As a result, on October 7, 2014 (“Closing Date”), the Corporation completed the sale of certain assets associated with its recreational vehicle segment (the “Transaction”) to Evergreen Recreational Vehicles, LLC (“ERV”). The Transaction was completed pursuant to the terms of an Asset Purchase Agreement entered into between the Corporation and ERV on the Closing Date, as well as the terms of a Real Property Purchase Agreement entered into on that same date between the Corporation and an affiliate of ERV, Skyline RE Holding LLC (which, collectively with ERV, is referred to herein as “Evergreen”). The assets of the recreational vehicle segment disposed of in the Transaction include: A recreational vehicle manufacturing facility consisting of approximately 135,000 square feet situated on 18.2 acres located in Bristol, Indiana; | |||||||||||||||||
• | Intellectual properties such as trademarks, licenses, and product designs associated with the recreational vehicle segment; | ||||||||||||||||
• | Furniture, machinery, software, and equipment; | ||||||||||||||||
• | Raw material and work-in-process inventories; | ||||||||||||||||
• | Product designs, plans, and specifications; and | ||||||||||||||||
• | Customer purchase orders and contracts, customer lists, and supplier lists. | ||||||||||||||||
The amount and nature of the consideration received by the Corporation for the assets sold include: | |||||||||||||||||
• | A cash payment of $175,000; | ||||||||||||||||
• | A separate cash payment of approximately $806,000, less prorated property taxes of approximately $73,000 and selling expenses of approximately $2,000, for the Bristol, Indiana manufacturing facility; and | ||||||||||||||||
• | For six months following the Closing Date, Evergreen will pay the Corporation 50 percent of the Corporation’s cost for raw materials inventory purchased by the Corporation prior to the Closing Date within 10 days of Evergreen’s use of the raw material. After six months following the Closing Date, the Corporation will have the right to remove any remaining materials inventory from Evergreen’s possession. | ||||||||||||||||
In addition, under the Asset Purchase Agreement Evergreen will not assume or agree to pay, perform, or discharge any of the Corporation’s liabilities or obligations, which will remain the liabilities and obligations of the Corporation. | |||||||||||||||||
The Bristol facility, and assets other than raw material and finished goods inventories, was sold at approximately net book value. Evergreen has the right, but not the obligation, to purchase the raw material inventory at 50 percent of the Corporation’s cost of approximately $1,600,000. There can be no assurances as to how much of the raw material inventory Evergreen will purchase. | |||||||||||||||||
Consequently, the Corporation incurred an approximate $901,000 charge in the second quarter reflecting the reduction in value of the raw material inventory plus raw material inventory that will not be used by Evergreen. Through February 28, 2015, Evergreen has paid the Corporation approximately $596,000 for raw material inventory. In future periods, there may be additional charges that could be material related to the discontinued operations of the recreational vehicle segment disposed of in the Transaction. | |||||||||||||||||
The following table summarizes the results of discontinued operations: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||
Net Sales | $ | 52 | $ | 8,603 | $ | 9,767 | $ | 26,989 | |||||||||
Operating loss of discontinued operations | $ | (86 | ) | $ | (1,806 | ) | $ | (5,944 | ) | $ | (3,669 | ) | |||||
Loss on disposal of discontinued operations | — | — | (231 | ) | — | ||||||||||||
Loss before income taxes | (86 | ) | (1,806 | ) | (6,175 | ) | (3,669 | ) | |||||||||
Income tax benefit | — | — | — | — | |||||||||||||
Loss from discontinued operations, net of taxes | $ | (86 | ) | $ | (1,806 | ) | $ | (6,175 | ) | $ | (3,669 | ) | |||||
Loss on disposal of discontinued operations consisted of a $901,000 charge associated with the reduction in value of raw material inventory, less a gain of approximately $670,000 resulting from the sale of two idle recreational vehicle manufacturing facilities in Elkhart, Indiana to Forest River Manufacturing, LLC. | |||||||||||||||||
The Corporation’s park model business, which was formerly reported in the recreational vehicle segment, was not disposed as part of the transaction with Evergreen and is now reported in the housing segment because net sales do not warrant separate segment reporting. | |||||||||||||||||
The following is a summary of assets and liabilities of discontinued operations at February 28, 2015 and May 31, 2014: | |||||||||||||||||
February 28, 2015 | May 31, 2014 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Current Assets: | |||||||||||||||||
Accounts receivable | $ | 298 | $ | 4,770 | |||||||||||||
Inventories | 194 | 2,703 | |||||||||||||||
$ | 492 | $ | 7,473 | ||||||||||||||
Property, Plant and Equipment: | |||||||||||||||||
Property, plant and equipment, at cost | $ | — | $ | 9,812 | |||||||||||||
Less accumulated depreciation | — | 7,901 | |||||||||||||||
$ | — | $ | 1,911 | ||||||||||||||
Current Liabilities: | |||||||||||||||||
Accounts payable, trade | $ | 117 | $ | 2,089 | |||||||||||||
Accrued salaries and wages | — | 419 | |||||||||||||||
Accrued marketing programs | 64 | 330 | |||||||||||||||
Other accrued liabilities | 157 | 186 | |||||||||||||||
$ | 338 | $ | 3,024 | ||||||||||||||
In accordance with the Asset Purchase Agreement, the Corporation is responsible for the payment of product warranty claims associated with recreational vehicles sold by the Corporation. Consequently, this obligation is not included in the liabilities of discontinued operations on the Consolidated Balance Sheets at February 28, 2015 and May 31, 2014. |
Inventories
Inventories | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | NOTE 3 | Inventories | |||||||
Total inventories from continuing operations consist of the following: | |||||||||
February 28, 2015 | May 31, 2014 | ||||||||
(Dollars in thousands) | |||||||||
Raw materials | $ | 5,751 | $ | 5,135 | |||||
Work in process | 2,848 | 3,174 | |||||||
Finished goods | 708 | 318 | |||||||
$ | 9,307 | $ | 8,627 | ||||||
Note_Receivable
Note Receivable | 9 Months Ended | |
Feb. 28, 2015 | ||
Receivables [Abstract] | ||
Note Receivable | NOTE 4 | Note Receivable |
During fiscal 2013, the Corporation sold two idle recreational vehicle facilities in Hemet, California. The sale of the facilities included a promissory note of $1,700,000 to the Corporation. The note carried an interest rate of 6 percent per annum, required monthly payments following a 20 year amortization schedule, and provided for a final payment after 6 years. The two facilities were collateral for the note. The note was fully repaid in December 2014. |
Other_Assets
Other Assets | 9 Months Ended | |
Feb. 28, 2015 | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other Assets | NOTE 5 | Other Assets |
Other assets consist primarily of the cash surrender value of life insurance policies which totaled $6,511,000 and $6,452,000 at February 28, 2015 and May 31, 2014, respectively. |
Warranty
Warranty | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Guarantees [Abstract] | |||||||||
Warranty | NOTE 6 | Warranty | |||||||
A reconciliation of accrued warranty and related expenses is as follows: | |||||||||
Nine-Months Ended | |||||||||
February 28, | |||||||||
2015 | 2014 | ||||||||
(Dollars in thousands) | |||||||||
Balance at the beginning of the period | $ | 5,697 | $ | 5,882 | |||||
Accruals for warranties | 4,932 | 4,106 | |||||||
Settlements made during the period | (4,907 | ) | (3,867 | ) | |||||
Balance at the end of the period | 5,722 | 6,121 | |||||||
Non-current balance included in other deferred liabilities | 2,000 | 2,200 | |||||||
Accrued warranty and related expenses | $ | 3,722 | $ | 3,921 | |||||
At February 28, 2015, the total current obligation for warranty and related expenses associated with the recreational vehicle segment is estimated to be $965,000. At February 28, 2014, the total obligation for warranty and related expenses associated with the recreational vehicle segment was estimated to be $1,900,000; consisting of an estimated current obligation of $1,200,000 and non-current obligation of $700,000. | |||||||||
LongTerm_Liabilities
Long-Term Liabilities | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Liabilities | NOTE 7 | Long-Term Liabilities | |||||||
Long-term liabilities, consisting of other deferred liabilities and life insurance loans include the following: | |||||||||
February 28, 2015 | May 31, 2014 | ||||||||
(Dollars in thousands) | |||||||||
Other deferred liabilities: | |||||||||
Deferred compensation expense | $ | 5,171 | $ | 5,386 | |||||
Accrued warranty and related expenses | 2,000 | 2,000 | |||||||
Total other deferred liabilities | 7,171 | 7,386 | |||||||
Life insurance loans | 6,334 | 6,334 | |||||||
$ | 13,505 | $ | 13,720 | ||||||
Life insurance loans have no fixed repayment schedule, and have interest rates ranging from 4.2 percent to 7.4 percent. The weighted average interest rate is 5.9 percent. At February 28, 2015 and May 31, 2014, prepaid interest associated with the life insurance loans totaled approximately $217,000 and $165,000, respectively; which is recognized in Other current assets. |
Income_Taxes
Income Taxes | 9 Months Ended | |
Feb. 28, 2015 | ||
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE 8 | Income Taxes |
At February 28, 2015, the Corporation’s gross deferred tax assets of approximately $50 million consist of approximately $35 million in federal net operating loss carryforwards and tax credit carryforwards, $8 million in state net operating loss carryforwards, $7 million resulting from temporary differences between financial and tax reporting and $5 million in gross deferred tax assets pertaining to discontinued operations. The federal net operating loss and tax credit carryforwards have a life expectancy of between sixteen and twenty years. The state net operating loss carryforwards have a life expectancy, depending on the state where a loss was incurred, between five and twenty years. The Corporation has recorded a full valuation allowance against this asset. If the Corporation, after considering future negative and positive evidence regarding the realization of deferred tax assets, determines that a lesser valuation allowance is warranted, it would record a reduction to income tax expense and the valuation allowance in the period of determination. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Feb. 28, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 9 | Commitments and Contingencies |
The Corporation was contingently liable at February 28, 2015 and May 31, 2014 under repurchase agreements with certain financial institutions providing inventory financing for dealers of its products. Under these arrangements, which are customary in the manufactured housing and park models industries, the Corporation agrees to repurchase units in the event of default by the dealer at declining prices over the term of the agreement. The period to potentially repurchase units is between 12 to 24 months. | ||
The maximum repurchase liability is the total amount that would be paid upon the default of the Corporation’s independent dealers. The maximum potential repurchase liability for continuing and discontinued operations, without reduction for the resale value of the repurchased units, was approximately $62 million at February 28, 2015 and approximately $63 million at May 31, 2014. At February 28, 2015 and May 31, 2014, the maximum potential repurchase liability, without reduction for the resale value of the repurchased units, associated with discontinued operations was approximately $24 million and $33 million, respectively. As a result of favorable experience regarding repurchased units, which is largely due to the strength of dealers selling the Corporation’s products, the Corporation maintained at February 28, 2015 and May 31, 2014, a $100,000 loss reserve that is a component of other accrued liabilities. $9,000 of the $100,000 loss reserve pertains to discontinued operations, and Management believes that the Corporation’s exit from the recreational vehicle business will not further impact the loss reserve. | ||
The risk of loss under these agreements is spread over many dealers and financial institutions. The loss, if any, under these agreements is the difference between the repurchase cost and the resale value of the units. The Corporation estimates the fair value of this commitment considering both the contingent losses and the value of the guarantee. This amount has historically been insignificant. The Corporation believes that any potential loss under the agreements in effect at February 28, 2015 will not be material to its financial position or results of operations. | ||
In the first nine months of fiscal 2015, 11 recreational vehicles were repurchased for approximately $203,000; resulting in a loss of approximately $43,000. In the first nine months of fiscal 2014, there were no obligations or net losses from repurchased units. | ||
The Corporation is a party to various pending legal proceedings in the normal course of business. Management believes that any losses resulting from such proceedings would not have a material adverse effect on the Corporation’s results of operations or financial position. | ||
The Corporation utilizes a combination of insurance coverage and self-insurance for certain items, including workers’ compensation and group health benefits. Liabilities for workers’ compensation are recognized for estimated future medical costs and indemnity costs. Liabilities for group health benefits are recognized for claims incurred but not paid. Insurance reserves are estimated based upon a combination of historical data and actuarial information. Actual results could differ from these estimates. |
Gain_on_Sale_of_Idle_Property_
Gain on Sale of Idle Property, Plant and Equipment | 9 Months Ended | |
Feb. 28, 2015 | ||
Property, Plant and Equipment [Abstract] | ||
Gain on Sale of Idle Property, Plant and Equipment | NOTE 10 | Gain on Sale of Idle Property, Plant and Equipment |
In the second quarter of fiscal 2014, the Corporation sold its idle manufactured housing facility located in Fair Haven, Vermont. The gain on the sale of this facility was $162,000. Likewise, in the third quarter of fiscal 2014 an idle manufactured housing facility located in Halstead, Kansas was sold for a gain of $300,000. |
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Feb. 28, 2015 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 11 | Subsequent Events |
On March 20, 2015, the Corporation entered into a Loan and Security Agreement (the “Loan Agreement”) with First Business Capital Corp. (“First Business Capital”). Under the Loan Agreement, First Business Capital will provide a secured revolving credit facility to the Borrowers for a term of three years, renewable on an annual basis thereafter with each renewal for a successive one-year term. The Borrowers may obtain loan advances up to a maximum of $10,000,000 subject to certain collateral-obligation ratios. In addition, loan advances bear interest at 3.75% in excess of The Wall Street Journal’s published one year LIBOR rate, and are secured by substantially all of the Borrowers’ assets, now owned or hereafter acquired. Interest is payable monthly, in arrears, and all principal and accrued but unpaid interest is due and payable upon termination of the Loan Agreement. | ||
Also under the Loan Agreement, First Business Capital agreed to issue, or cause to be issued by a bank affiliate or other bank, letters of credit for the account of the Borrowers. However, no advances have yet been made in connection with such letters of credit. | ||
As part of the financing, the Company paid First Business Capital a facility fee of $150,000 at closing, and also agreed to pay the following fees to First Business Capital during the term of the facility: (i) annual facility fees of $50,000; (ii) an unused line fee payable in arrears at the rate of 0.25% per annum on the average daily unused amount of the facility during the prior calendar month; (iii) monthly bank assessment fees equal to 0.25% per annum of the maximum loan amount; (iv) certain overadvance fees (currently $1,000 per day) in the event outstanding obligations and letter of credit liabilities under the facility exceeds the amount permitted under the Loan Agreement; and (v) monthly letter of credit fees payable in arrears at the rate of 0.25% on the outstanding amount of letters of credit issued and outstanding during the prior month. | ||
The Loan Agreement contains covenants that limit the ability of the Borrowers to, among other things: (i) incur or guarantee other indebtedness; (ii) create or incur liens, mortgages, or security interests on their assets; (iii) expend more than $600,000 per year for the lease, purchase, or acquisition of any asset; (iv) consummate asset sales, acquisitions, or mergers; (v) pay dividends or repurchase stock; (vi) make certain investments; (vii) enter into certain transactions with affiliates; and (viii) amend a Borrower’s articles of incorporation or bylaws. | ||
The Loan Agreement also requires compliance with certain financial covenants (in each case calculated as set forth in the Loan Agreement), including: (i) minimum net worth; (ii) minimum net earnings; and (iii) maximum net loss. | ||
If the Borrowers default in their obligations under the Loan Agreement, then the unpaid balances under the facility will bear interest at 3.0% per annum in excess of the rate that would apply in the absence of a default. Other remedies available to First Business Capital upon an event of default include the right to accelerate the maturity of all obligations, the right to foreclose on and otherwise repossess the collateral securing the obligations, all rights of a secured creditor under applicable law, and all other rights set forth in the Loan Agreement. | ||
The events of default under the Loan Agreement include the following: (i) certain events of bankruptcy and insolvency; (ii) failure to make required payments; (iii) misrepresentations to First Business Capital; (iv) failure to comply with certain covenants and agreements; (v) termination or default under guarantees or subordination agreements; (vi) certain cross-default events; (vii) changes in control involving the Borrowers; (viii) certain injunctions or attachments are issued against a Borrower’s assets or restricting its business; and (ix) a material adverse change occurs with respect to the Borrowers. | ||
The foregoing description of the Loan Agreement is a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Loan Agreement and various other loan documents, copies of which are attached as exhibits to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 26, 2015. |
Nature_of_Operations_Accountin1
Nature of Operations, Accounting Policies of Consolidated Financial Statements (Policies) | 9 Months Ended | |||
Feb. 28, 2015 | ||||
Accounting Policies [Abstract] | ||||
Accounting Estimates | Accounting Estimates — The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Key estimates would include accruals for warranty, workers’ compensation, marketing programs and health insurance as well as valuations for long-lived assets and deferred tax assets. | |||
Revenue Recognition | Revenue recognition — Substantially all of the Corporation’s products are made to order. Revenue is recognized upon completion of the following: an order for a unit is received from a dealer or community (customer); written or verbal approval for payment is received from a customer’s financial institution or payment is received; a common carrier signs documentation accepting responsibility for the unit as agent for the customer; and the unit is removed from the Corporation’s premises for delivery to a customer. Freight billed to customers is considered sales revenue, and the related freight costs are cost of sales. Volume based rebates paid to dealers are classified as a reduction of sales revenue. Sales of parts are classified as revenue. | |||
Accounts Receivable | Accounts Receivable — Trade receivables are based on the amounts billed to dealers and communities. The Corporation does not accrue interest on any of its trade receivables, nor does it have an allowance for credit losses due to favorable collections experience. If a loss occurs, the Corporation’s policy is to recognize it in the period when collectability cannot be reasonably assured. | |||
Inventories | Inventories — Inventories are stated at the lower of cost or market. Cost is determined under the first-in, first-out method. Physical inventory counts are taken at the end of each reporting quarter. | |||
Workers' Compensation Security Deposit | Workers’ Compensation Security Deposit — Deferred workers’ compensation deposit represents funds placed with the Corporation’s worker’s compensation insurance carrier to offset future medical claims and benefits. | |||
Note Receivable | Note Receivable — The Corporation’s note receivable represents the amount owed for the sale of two idle recreational vehicle facilities in Hemet, California; less cash received on the date of closing and cash received from principal repayments. The note was fully repaid in December 2014. | |||
Property, Plant and Equipment | Property, Plant and Equipment — Property, plant and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method for financial statement reporting and accelerated methods for income tax reporting purposes. Estimated useful lives for significant classes of property, plant and equipment, including idle property, are as follows: Building and improvements 10 to 30 years; machinery and equipment 5 to 8 years. At February 28, 2015, idle property consisted of an idle manufacturing facility in Ocala, Florida. At May 31, 2014, idle property consisted of the aforementioned facility, and two manufacturing facilities in Elkhart, Indiana. The Corporation has the Ocala facility, and undeveloped land in McMinnville, Oregon presently for sale. | |||
Long-lived assets are reviewed for impairment whenever events indicate that the carrying amount of an asset may not be recoverable from projected future cash flows. If the carrying value of a long-lived asset is impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. The Company believes no impairment of long-lived assets exists at February 28, 2015. | ||||
Warranty | Warranty — The Corporation provides the retail purchaser of its homes, park models and recreational vehicles with a full fifteen-month warranty against defects in design, materials and workmanship. The warranties are backed by service departments located at the Corporation’s manufacturing facilities and an extensive field service system. | |||
Estimated warranty costs are accrued at the time of sale based upon current sales, historical experience and management’s judgment regarding anticipated rates of warranty claims. The adequacy of the recorded warranty liability is periodically assessed and the amount is adjusted as necessary. | ||||
Income Taxes | Income Taxes — The Corporation recognizes deferred tax assets based on differences between the carrying values of assets for financial and tax reporting purposes. The realization of the deferred tax assets is dependent upon the generation of sufficient future taxable income. | |||
Generally accepted accounting principles require that an entity consider both negative and positive evidence in determining whether a valuation allowance is warranted. In comparing negative and positive evidence, continual losses in recent years is considered significant, negative, objective evidence that deferred tax assets may not be realized in the future, and generally is assigned more weight than subjective positive evidence of the realizability of deferred tax assets. As a result of its extensive evaluation of both positive and negative evidence, management maintains a full valuation allowance against its deferred tax assets. The Corporation reports a liability, if any, for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Corporation recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | ||||
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements — In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 changes the requirements for reporting discontinued operations in that a discontinued operation may include a component of an entity, a group of components of an entity, or a business or non-profit activity. In addition, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results when certain conditions are met. For public business entities, ASU No. 2014-08 is effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. | |||
The Corporation did not utilize early adoption of ASU No. 2014-08 regarding the sale of its recreational vehicle segment as referenced in Note 2. It will, however, adopt this pronouncement for any disposals (or classifications as held for sale) that may occur after May 31, 2015. | ||||
Management's Plan | Management’s Plan — The Corporation’s consolidated financial statements were prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business. Due to recurring losses, the Corporation experienced negative cash flows from operating activities. The level of historical negative cash flows from operations and not having available funding from outside financing sources as of February 28, 2015 raise substantial doubt about the Corporation’s ability to continue as a going concern. To continue as a going concern, certain strategies need to be pursued to raise capital, increase sales and decrease costs. These strategies include but are not all inclusive: | |||
• | Divest Non-Core Assets: Management is focused on driving profitable growth in the Corporation’s core housing business. | |||
Progress: | ||||
In October 2014, the Corporation sold its recreational vehicle segment to focus solely on its core housing business and to raise cash. Additional information regarding the sale is in Note 2 of Notes to Consolidated Financial Statements. | ||||
In addition to the sale of the RV business, the Corporation sold two idle housing facilities and one undeveloped parcel of land in fiscal 2014 and is currently seeking buyers for an idle housing facility and an undeveloped parcel of land to raise cash and eliminate carrying costs. | ||||
• | Optimize Manufacturing Footprint: Through an ongoing assessment of the strategic positioning of Skyline’s manufacturing facilities, Management has successfully executed initiatives to optimize financial performance by reducing costs and gaining efficiencies at each facility. | |||
Progress: | ||||
The Corporation continues to show improvement over fiscal 2014. In the third quarter, excluding the Mansfield facility which has not yet been operating for a full year, four of the Corporation’s eight housing facilities had operating profits for the third quarter of fiscal 2015. By comparison, two of the Corporation’s eight housing facilities had operating profits for the third quarter of fiscal 2014. | ||||
Similarly, in the first nine months of fiscal 2015, excluding Mansfield, seven of the Corporation’s eight housing facilities had operating profits. By comparison, in the first nine months of fiscal 2014, four of the eight housing facilities had operating profits. | ||||
• | Increase Sales: | |||
• | Working to increase sales at the Mansfield, Texas housing facility by gaining a greater presence on the properties of manufactured housing dealers and manufactured housing communities. | |||
• | Continuing to work with manufactured housing communities to identify opportunities for increasing sales. | |||
• | Increasing sales of modular homes and park models by cultivating relationships with modular housing developers and campground owners that are outside the Corporation’s historical distribution channels. | |||
• | Establishing additional distribution channels and forging new strategic relationships. | |||
Progress: | ||||
The Mansfield facility continues to build sales since commencing operations in the third quarter of fiscal 2014. In the third quarter, where sales are traditionally lowest for the year, sales decreased 7 percent from the second to third quarters as compared to an approximately 23 percent decline for all of the housing facilities. | ||||
For the first nine months of fiscal 2015, manufactured housing sales to the Corporation’s six largest communities increased approximately 40 percent compared with the first nine months of fiscal 2014. For the third quarter of fiscal 2015, sales to these communities increased approximately 41 percent compared with the third quarter of fiscal 2014. | ||||
In the third quarter of fiscal 2015, net sales for modular housing and park models increased approximately 22 percent and 45 percent, respectively, compared with the third quarter of fiscal 2014. | ||||
For the first nine months of fiscal 2015, net sales for modular housing and park models increased approximately 16 percent and 82 percent, respectively, compared with the first nine months of fiscal 2014. | ||||
During the second quarter, the Corporation established a relationship with a manufactured housing retailer that specializes in internet-based marketing and provides factory tours to potential customers. This retailer operates retail sales centers located at the Corporation’s housing facilities. This relationship is expected to help drive additional sales by more fully exploiting this increasingly important distribution channel for the Corporation’s products. This initiative began generating sales to four locations in the third quarter. The Corporation expects one or two additional locations to be operating by the end of fiscal 2015. | ||||
• | Decrease Costs: Skyline continues to streamline costs with a focus on maximizing efficiencies and resources. | |||
Progress: | ||||
The Corporation’s Purchasing Department has obtained significant price concessions from certain suppliers and anticipates further savings from this initiative in the fourth quarter of the fiscal year. | ||||
In addition, Management has continued to analyze staffing needs and make reductions when considered appropriate. In connection with the sale of the RV business, the Corporation also identified and implemented reductions in corporate personnel that should result in annualized savings of approximately $400,000. | ||||
• | Raise Additional Capital: | |||
Progress: | ||||
On March 20, 2015, the Corporation entered into a Loan and Security Agreement with First Business Capital Corp. providing for a renewable three-year secured revolving credit facility. Under the new credit facility, the Company may obtain loan advances up to a maximum of $10 million, subject to certain collateral-obligation ratios. Outstanding loan advances under the facility will bear interest at 3.75% in excess of The Wall Street Journal’s published one year LIBOR rate. The facility will be used to support the Company’s working capital needs and other general corporate purposes, and is secured by substantially all of the Company’s and its subsidiaries’ assets. Additional information regarding the revolving credit facility is in Note 11 of Notes to Consolidated Financial Statements. | ||||
Management believes that it will be able to execute their strategies as noted above. Management is prepared to modify these strategies as appropriate to meet prevailing business and market conditions. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||
Results of Discontinued Operations and Summary of Assets and Liabilities of Discontinued Operations | The following table summarizes the results of discontinued operations: | ||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||
Net Sales | $ | 52 | $ | 8,603 | $ | 9,767 | $ | 26,989 | |||||||||
Operating loss of discontinued operations | $ | (86 | ) | $ | (1,806 | ) | $ | (5,944 | ) | $ | (3,669 | ) | |||||
Loss on disposal of discontinued operations | — | — | (231 | ) | — | ||||||||||||
Loss before income taxes | (86 | ) | (1,806 | ) | (6,175 | ) | (3,669 | ) | |||||||||
Income tax benefit | — | — | — | — | |||||||||||||
Loss from discontinued operations, net of taxes | $ | (86 | ) | $ | (1,806 | ) | $ | (6,175 | ) | $ | (3,669 | ) | |||||
The following is a summary of assets and liabilities of discontinued operations at February 28, 2015 and May 31, 2014: | |||||||||||||||||
February 28, 2015 | May 31, 2014 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Current Assets: | |||||||||||||||||
Accounts receivable | $ | 298 | $ | 4,770 | |||||||||||||
Inventories | 194 | 2,703 | |||||||||||||||
$ | 492 | $ | 7,473 | ||||||||||||||
Property, Plant and Equipment: | |||||||||||||||||
Property, plant and equipment, at cost | $ | — | $ | 9,812 | |||||||||||||
Less accumulated depreciation | — | 7,901 | |||||||||||||||
$ | — | $ | 1,911 | ||||||||||||||
Current Liabilities: | |||||||||||||||||
Accounts payable, trade | $ | 117 | $ | 2,089 | |||||||||||||
Accrued salaries and wages | — | 419 | |||||||||||||||
Accrued marketing programs | 64 | 330 | |||||||||||||||
Other accrued liabilities | 157 | 186 | |||||||||||||||
$ | 338 | $ | 3,024 | ||||||||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventories from Continuing Operations | Total inventories from continuing operations consist of the following: | ||||||||
February 28, 2015 | May 31, 2014 | ||||||||
(Dollars in thousands) | |||||||||
Raw materials | $ | 5,751 | $ | 5,135 | |||||
Work in process | 2,848 | 3,174 | |||||||
Finished goods | 708 | 318 | |||||||
$ | 9,307 | $ | 8,627 | ||||||
Warranty_Tables
Warranty (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Guarantees [Abstract] | |||||||||
Reconciliation of Accrued Warranty and Related Expenses | A reconciliation of accrued warranty and related expenses is as follows: | ||||||||
Nine-Months Ended | |||||||||
February 28, | |||||||||
2015 | 2014 | ||||||||
(Dollars in thousands) | |||||||||
Balance at the beginning of the period | $ | 5,697 | $ | 5,882 | |||||
Accruals for warranties | 4,932 | 4,106 | |||||||
Settlements made during the period | (4,907 | ) | (3,867 | ) | |||||
Balance at the end of the period | 5,722 | 6,121 | |||||||
Non-current balance included in other deferred liabilities | 2,000 | 2,200 | |||||||
Accrued warranty and related expenses | $ | 3,722 | $ | 3,921 | |||||
LongTerm_Liabilities_Tables
Long-Term Liabilities (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Summary of Long-Term Liabilities Consisting of Other Deferred Liabilities and Life Insurance Loans | Long-term liabilities, consisting of other deferred liabilities and life insurance loans include the following: | ||||||||
February 28, 2015 | May 31, 2014 | ||||||||
(Dollars in thousands) | |||||||||
Other deferred liabilities: | |||||||||
Deferred compensation expense | $ | 5,171 | $ | 5,386 | |||||
Accrued warranty and related expenses | 2,000 | 2,000 | |||||||
Total other deferred liabilities | 7,171 | 7,386 | |||||||
Life insurance loans | 6,334 | 6,334 | |||||||
$ | 13,505 | $ | 13,720 | ||||||
Nature_of_Operations_Accountin2
Nature of Operations, Accounting Policies of Consolidated Financial Statements - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Mar. 20, 2015 | |
Facility | Facility | Facility | Facility | Land | ||
Property | Vehicle | Facility | ||||
Community | Property | Property | ||||
Community | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of idle properties held for sale | 2 | |||||
Number of idle properties | 1 | 1 | 3 | |||
Impairment of long-lived assets | $0 | |||||
Number of idle facilities sold | 2 | |||||
Number of undeveloped land sold | 1 | |||||
Number of housing facilities with operating profits | 4 | 2 | 7 | 4 | ||
Number of housing facilities | 8 | 8 | 8 | 8 | ||
Percentage of decrease in sales | 23.00% | |||||
Number of largest communities | 6 | 6 | ||||
Percentage of increase in sales | 41.00% | 40.00% | ||||
Interest rate description | Loan advances bear interest at 3.75% in excess of The Wall Street Journal's published one year LIBOR rate | |||||
Employee Severance [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Savings on employee termination | 400,000 | |||||
Home Sales [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Product warranty | 15 months | |||||
Modular Housing [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Percentage of increase in sales | 22.00% | 16.00% | ||||
Park Models [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Percentage of increase in sales | 45.00% | 82.00% | ||||
Subsequent Event [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Maximum borrowing capacity | $10,000,000 | |||||
Secured revolving credit facility term | 3 years | |||||
Credit facility, interest rate | 3.75% | |||||
Mansfield, Texas [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Percentage of decrease in sales | 7.00% | |||||
Building and Improvements [Member] | Minimum [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of property, plant and equipment | 10 years | |||||
Building and Improvements [Member] | Maximum [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of property, plant and equipment | 30 years | |||||
Machinery and Equipment [Member] | Minimum [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of property, plant and equipment | 5 years | |||||
Machinery and Equipment [Member] | Maximum [Member] | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of property, plant and equipment | 8 years |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Oct. 07, 2014 | |
Vehicle | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on the sale of idle facilities | $300,000 | $462,000 | ||
Number of idle recreational vehicle manufacturing facilities for sale | 2 | |||
Evergreen Recreational Vehicles LLC [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Percent of Corporation's cost for raw materials inventory purchased | 50.00% | |||
Period of raw materials inventory purchased cost payment | 10 days | |||
Corporation's raw material cost | 1,600,000 | |||
Reduction in value of the raw material and payment | -901,000 | |||
Payment to acquire raw material inventory | 596,000 | |||
Recreational Vehicle Operations [Member] | Bristol [Member] | Manufacturing Facility [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash payment received as consideration for asset sold | 806,000 | |||
Prorated property taxes | 73,000 | |||
Selling expenses | 2,000 | |||
Bristol, Indiana Manufacturing Facility [Member] | Recreational Vehicle Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash payment received as consideration for asset sold | 175,000 | |||
Bristol, Indiana Manufacturing Facility [Member] | Recreational Vehicle Operations [Member] | Bristol [Member] | Manufacturing Facility [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Area of property | 135,000 | |||
Area of land | 18.2 | |||
Elkhart Indiana [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of idle recreational vehicle manufacturing facilities for sale | 2 | |||
Elkhart Indiana [Member] | Recreational Vehicles [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on the sale of idle facilities | 670,000 |
Discontinued_Operations_Result
Discontinued Operations - Results of Discontinued Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net Sales | $52 | $8,603 | $9,767 | $26,989 |
Operating loss of discontinued operations | -86 | -1,806 | -5,944 | -3,669 |
Loss on disposal of discontinued operations | -231 | |||
Loss before income taxes | -86 | -1,806 | -6,175 | -3,669 |
Income tax benefit | 0 | 0 | 0 | 0 |
Loss from discontinued operations,net of taxes | ($86) | ($1,806) | ($6,175) | ($3,669) |
Discontinued_Operations_Summar
Discontinued Operations - Summary of Assets and Liabilities of Discontinued Operations (Detail) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Accounts receivable | $298 | $4,770 |
Inventories | 194 | 2,703 |
Current Assets, Total | 492 | 7,473 |
Property, Plant and Equipment: | ||
Property, plant and equipment, at cost | 9,812 | |
Less accumulated depreciation | 7,901 | |
Property, Plant and Equipment, Total | 1,911 | |
Current Liabilities: | ||
Accounts payable, trade | 117 | 2,089 |
Accrued salaries and wages | 419 | |
Accrued marketing programs | 64 | 330 |
Other accrued liabilities | 157 | 186 |
Current Liabilities, Total | $338 | $3,024 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories from Continuing Operations (Detail) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $5,751 | $5,135 |
Work in process | 2,848 | 3,174 |
Finished goods | 708 | 318 |
Total inventories | $9,307 | $8,627 |
Note_Receivable_Additional_Inf
Note Receivable - Additional Information (Detail) (USD $) | 12 Months Ended | 9 Months Ended | 12 Months Ended |
31-May-14 | Feb. 28, 2015 | 31-May-13 | |
Facility | Facility | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of idle facilities sold | 2 | ||
Hemet California [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of idle facilities sold | 2 | ||
Note receivable from sale of idle property, plant and equipment | $1,700,000 | ||
Note receivable interest rate | 6.00% | ||
Facilities collateral for note | 2 | ||
Note receivable interest amortization period | 20 years | ||
Note receivable final payment period | 6 years | ||
Note receivable fully repaid date | 2014-12 |
Other_Assets_Additional_Inform
Other Assets - Additional Information (Detail) (USD $) | Feb. 28, 2015 | 31-May-14 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Cash surrender value of life insurance | $6,511,000 | $6,452,000 |
Warranty_Reconciliation_of_Acc
Warranty - Reconciliation of Accrued Warranty and Related Expenses (Detail) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 |
Guarantees [Abstract] | |||
Balance at the beginning of the period | $5,697 | $5,882 | |
Accruals for warranties | 4,932 | 4,106 | |
Settlements made during the period | -4,907 | -3,867 | |
Balance at the end of the period | 5,722 | 6,121 | |
Non-current balance included in other deferred liabilities | 2,000 | 2,200 | 2,000 |
Accrued warranty and related expenses | $3,722 | $3,921 | $3,697 |
Warranty_Additional_Informatio
Warranty - Additional Information (Detail) (USD $) | Feb. 28, 2015 | 31-May-14 | Feb. 28, 2014 | 31-May-13 |
Guarantor Obligations [Line Items] | ||||
Estimated warranty obligation | $5,722,000 | $5,697,000 | $6,121,000 | $5,882,000 |
Estimated warranty obligation current | 3,722,000 | 3,697,000 | 3,921,000 | |
Estimated warranty obligation noncurrent | 2,000,000 | 2,000,000 | 2,200,000 | |
Recreational Vehicles [Member] | ||||
Guarantor Obligations [Line Items] | ||||
Estimated warranty obligation | 965,000 | 1,900,000 | ||
Estimated warranty obligation current | 1,200,000 | |||
Estimated warranty obligation noncurrent | $700,000 |
LongTerm_Liabilities_Summary_o
Long-Term Liabilities - Summary of Long-Term Liabilities Consisting of Other Deferred Liabilities and Life Insurance Loans (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | 31-May-14 | Feb. 28, 2014 |
Other Liabilities Disclosure [Abstract] | |||
Deferred compensation expense | $5,171 | $5,386 | |
Accrued warranty and related expenses | 2,000 | 2,000 | 2,200 |
Total other deferred liabilities | 7,171 | 7,386 | |
Life insurance loans | 6,334 | 6,334 | |
Total | $13,505 | $13,720 |
LongTerm_Liabilities_Additiona
Long-Term Liabilities - Additional Information (Detail) (Life Insurance Loans [Member], USD $) | 9 Months Ended | |
Feb. 28, 2015 | 31-May-14 | |
Schedule Of Long Term Debt [Line Items] | ||
Weighted Average Interest Rate | 5.90% | |
Prepaid Interest | 217,000 | $165,000 |
Minimum [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
Interest Rate | 4.20% | |
Maximum [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
Interest Rate | 7.40% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Feb. 28, 2015 |
Income Tax Contingency [Line Items] | |
Deferred tax assets | 50 |
Federal net operating loss and tax credit carryforwards | 35 |
State net operating loss carryforwards | 8 |
Differences between financial and tax reporting | 7 |
Deferred tax assets pertain to discontinued operations | 5 |
Minimum [Member] | Federal [Member] | |
Income Tax Contingency [Line Items] | |
Net operating loss and tax credit carryforwards life expectancy | 16 years |
Minimum [Member] | State [Member] | |
Income Tax Contingency [Line Items] | |
Net operating loss and tax credit carryforwards life expectancy | 5 years |
Maximum [Member] | Federal [Member] | |
Income Tax Contingency [Line Items] | |
Net operating loss and tax credit carryforwards life expectancy | 20 years |
Maximum [Member] | State [Member] | |
Income Tax Contingency [Line Items] | |
Net operating loss and tax credit carryforwards life expectancy | 20 years |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | |
Vehicle | |||
Loss Contingencies [Line Items] | |||
Maximum potential repurchase liability | $62,000,000 | 63,000,000 | |
Other accrued liabilities | 100,000 | 100,000 | |
Discontinued Operations [Member] | |||
Loss Contingencies [Line Items] | |||
Maximum potential repurchase liability | 24,000,000 | 33,000,000 | |
Other accrued liabilities | 9,000 | 9,000 | |
Recreational Vehicles [Member] | |||
Loss Contingencies [Line Items] | |||
Recreational vehicles were repurchased | 11 | ||
Recreational vehicles were repurchased for approximately | 203,000 | ||
Losses from repurchased units | 43,000 | 0 | |
Obligations from repurchased units | $0 | ||
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Period to potentially repurchase units | 12 months | 12 months | |
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Period to potentially repurchase units | 24 months | 24 months |
Gain_on_Sale_of_Idle_Property_1
Gain on Sale of Idle Property, Plant and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended |
Feb. 28, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | |
Gain (Loss) on Investments [Line Items] | |||
Gain on sale of idle facilities | $300,000 | $462,000 | |
Fair Haven, Vermont [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Gain on sale of idle facilities | 162,000 | ||
Halstead, Kansas [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Gain on sale of idle facilities | $300,000 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended |
Feb. 28, 2015 | Mar. 20, 2015 | |
Subsequent Event [Line Items] | ||
Interest rate description | Loan advances bear interest at 3.75% in excess of The Wall Street Journal's published one year LIBOR rate | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | $10,000,000 | |
Credit facility, interest rate | 3.75% | |
Secured revolving credit facility term | 3 years | |
Secured revolving credit facility renewal term | 1 year | |
Facility fee amount | 150,000 | |
Annual facility fees | 50,000 | |
Unused line fee payable in arrears per annum | 0.25% | |
Percentage of monthly bank assessment fees per annum | 0.25% | |
Overadvance fees per day | 1,000 | |
Percentage of monthly letter of credit fees payable in arrears | 0.25% | |
Covenants limit on capital expenditures per year | $600,000 | |
Unpaid balances interest rate | 3.00% |