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Nobility Homes, Inc.
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Controlling Our Future Through Vertical Integration
NOBILITY HOMES ANNOUNCES INCREASED SALES
AND EARNINGS FOR ITS THIRD QUARTER 2004
Ocala, FL...September 9, 2004-- Today Nobility Homes, Inc. (NASDAQ:
NOBH) announced sales and earnings results for its third quarter ended July 31,
2004. Sales for the third quarter were up 30% to $12,310,878 as compared to
$9,465,179 recorded in third quarter of 2003. Income from operations increased
107% to $1,670,160 versus $808,164 in the same period a year ago. Net income
after taxes was up 93% to $1,220,138 as compared to $633,730 for the same period
last year. Diluted earnings per share for the third quarter improved 88% to
$0.30 per share compared to $0.16 per share last year.
For the first nine months of fiscal 2004, sales increased 35% to
$35,621,719 as compared to sales of $26,302,356 in the first nine months of last
fiscal year. Income from operations for the first nine months improved 68% to
$4,276,005 versus $2,542,522 in the same period last year. Net income increased
52% to $3,157,376 versus last year's results of $2,079,092. Diluted earnings per
share were up 48% to $0.77 per share versus last year's nine months results of
$0.52 per share.
Nobility's financial position continued to improve during the third
quarter of 2004 and remains very strong with cash and cash equivalents, short
and long-term investments of $17,358,976 and no outstanding debt. Working
capital is $14,567,824 and our ratio of current assets to current liabilities is
3.8:1. Stockholders' equity increased to $29,716,464 and the book value per
share of common stock increased to $7.40. The Company did not purchase any
shares of its common stock during the third quarter of 2004 but is authorized by
the Company's Board of Directors to purchase up to 100,000 additional shares of
the Company's stock in the open market.
"Third quarter sales of fiscal 2004 were strong even with tight retail
credit standards still evident; improving, but high unemployment; and uncertain
economic conditions present in our country. Latest three-month manufactured
housing industry shipments nationwide, declined an estimated 6%, and industry
shipments in Florida, our primary market, were up an estimated 16%", President
Terry Trexler said.
Trexler continued, "Although Nobility continues to out-perform the
industry, in the near term we anticipate continued pressure on both sales and
earnings resulting from these factors, plus continuous price increases in
lumber, OSB, sheetrock, steel and oil related products and services. Management
is optimistic for the remainder of fiscal 2004, convinced that our specific
geographic market is one of the best long-term growth areas in the country and
because of the strong operating leverage inherent in the Company. With an
improving economy, better consumer confidence, declining unemployment claims,
and increasing but still low interest rates in 2004, management expects the
demand for our homes to improve. Increase demand also could result from building
replacement homes due to the recent hurricanes in Florida. The Company is well
positioned to capitalize on the demand in the future by controlling the retail
distribution, financing, and insuring of our homes and by being financially
sound to take advantage of opportunities as they develop."
Nobility Homes, Inc. has specialized for the past 37 years in the
design and production of quality, affordable manufactured homes at its two
plants located in central Florida. With 17 Company owned retail sales centers, a
finance company joint venture, and an insurance subsidiary, Nobility is the only
vertically integrated manufactured home company headquartered in Florida.
MANAGEMENT WILL HOLD A CONFERENCE CALL ON THURSDAY, SEPTEMBER 9, 2004,
AT 4:30 PM EASTERN TIME. TO PARTICIPATE, PLEASE DIAL 800-967-7188. THE
CONFIRMATION CODE FOR THE CALL IS 854714 YOU MAY ALSO ACCESS THE CALL AT
www.nobilityhomes.com OR
http://phx.corporate-ir.net/playerlink.zhtml?c=60939&s=wm&e=940307
Certain statements in this report are forward-looking statements within the
meaning of the federal securities laws, including our statement that working
capital requirements will be met with internal sources. Although Nobility
believes that the 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, competitive pricing pressures at
both the wholesale and retail levels, increasing material costs, continued
excess retail inventory, increase in repossessions, changes in market demand,
changes in interest rates, availability of financing for retail and wholesale
purchases, consumer confidence, adverse weather conditions that reduce sales at
retail centers, the risk of manufacturing plant shutdowns due to storms or other
factors, and the impact of marketing and cost-management programs.
NOBILITY HOMES, INC.
CONSOLIDATED BALANCE SHEETS
July 31, November 1,
2004 2003
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(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 8,111,110 $ 10,641,748
Short-term investments 886,225 342,550
Accounts receivable - trade 1,992,511 2,096,128
Inventories 7,854,469 6,557,659
Deferred income taxes 472,394 485,716
Prepaid expenses and other current assets 478,080 501,014
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Total current assets 19,794,789 20,624,815
Property, plant and equipment, net 3,339,858 3,136,506
Long-term investments 8,361,641 5,249,825
Investment in joint venture - Majestic 21 1,465,709 1,203,804
Deferred income taxes - noncurrent 15,050 15,050
Other assets 1,966,382 2,474,905
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Total assets $ 34,943,429 $ 32,704,905
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 919,425 $ 1,484,997
Accrued expenses and other current liabilities 342,082 757,498
Accrued compensation 643,540 524,784
Income taxes payable 343,675 890,675
Customer deposits 2,978,243 2,230,633
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Total current liabilities 5,226,965 5,888,587
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Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value, 500,000
shares authorized, none issued - -
Common stock, $.10 par value, 10,000,000
shares authorized; 5,364,907 shares issued 536,491 536,491
Additional paid in capital 8,654,385 8,613,640
Retained earnings 28,256,638 25,500,362
Accumulated other comprehensive income 66,602 35,516
Less treasury stock at cost, 1,346,096 and
1,354,663 shares, respectively, in 2004 and 2003 (7,794,652) (7,869,691)
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Total stockholders' equity 29,719,464 26,816,318
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Total liabilities and stockholders' equity $ 34,946,429 $ 32,704,905
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NOBILITY HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
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July 31, August 2, July 31, August 2,
2004 2003 2004 2003
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Net sales $ 12,280,293 $ 9,441,504 $ 35,538,767 $ 26,278,681
Net sales - related parties 30,585 23,675 82,952 23,675
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Total net sales 12,310,878 9,465,179 35,621,719 26,302,356
Cost of goods sold (9,070,731) (7,167,499) (26,461,090) (19,553,721)
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Gross profit 3,240,147 2,297,680 9,160,629 6,748,635
Selling, general and administrative expenses (1,569,987) (1,489,516) (4,884,624) (4,206,113)
----------- ----------- ------------ -----------
Operating income 1,670,160 808,164 4,276,005 2,542,522
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Other income:
Interest income 83,491 49,276 249,922 132,811
Undistributed earnings in joint venture - Majestic 21 90,640 48,160 261,705 158,723
Receipt of stock in connection with demutualization
of insurance company - - - 167,551
Miscellaneous income 39,847 52,130 72,744 69,485
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213,978 149,566 584,371 528,570
----------- ----------- ------------ -----------
Income before provision for income taxes 1,884,138 957,730 4,860,376 3,071,092
Provision for income taxes (664,000) (324,000) (1,703,000) (992,000)
----------- ----------- ------------ -----------
Net income 1,220,138 633,730 3,157,376 2,079,092
Other comprehensive income, net of tax
Unrealized investment gain 10,283 11,461 31,086 23,941
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Comprehensive income $ 1,230,421 $ 645,191 $ 3,188,462 $ 2,103,033
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Average shares outstanding
Basic 4,018,646 3,987,513 4,014,423 3,999,311
Diluted 4,137,460 4,015,417 4,108,026 4,020,333
Earnings per share
Basic $ 0.30 $ 0.16 $ 0.79 $ 0.52
Diluted $ 0.30 $ 0.16 $ 0.77 $ 0.52
Divdends per commom share $ - $ - $ 0.10 $ -