[GRAPHIC OMITTED] NOBILITY HOMES, INC.
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Controlling Our Future through Vertical Integration
NOBILITY HOMES, INC. ANNOUNCES SALES
AND EARNINGS FOR ITS FIRST QUARTER 2006
Ocala, FL...March 9, 2006 NOBILITY HOMES, INC. (NASDAQ-NMS SYMBOL NOBH)
today announced sales and earnings results for its first quarter ended February
4, 2006. Sales for the first quarter of fiscal 2006 were up 19% to $13,750,595
as compared to $11,511,134 recorded in first quarter of 2005. Income from
operations for fiscal year 2006 was up 38% to $1,958,917 versus $1,418,563 in
the same period a year ago. Net income after taxes was up 39% to $1,490,437 as
compared to $1,072,780 last year. Diluted earnings per share for the first
quarter increased 38% to $0.36 per share compared to $0.26 per share last year.
Nobility's financial position continued to improve during the first
quarter of 2006 and remains very strong with cash and cash equivalents, short
and long-term investments of $24,601,677 and no outstanding debt. Working
capital is $17,777,947 and our ratio of current assets to current liabilities is
3.2:1. Stockholders' equity increased to $37,356,723 and the book value per
share of common stock increased to $9.20. The Company did not purchase any
shares of its common stock during the first quarter of 2006, but is authorized
by the Company's Board of Directors to purchase up to 100,000 shares of the
Company's stock in the open market. The Board of Directors declared an annual
cash dividend of $0.30 per common share for fiscal year 2005, an increase of 50%
over the $.20 per share declared last fiscal year. The cash dividend was paid on
January 13, 2006 to stockholders of record as of January 3, 2006.
Terry Trexler, President stated, "First quarter sales of fiscal 2006,
historically our weakest quarter, continued to be adversely impacted by the very
competitive and difficult environment in the manufacturing housing industry.
First quarter sales of fiscal year 2006, although a strong sales quarter for our
retail organization, were adversely impacted by the volatile pricing in lumber,
OSB, sheetrock, steel and oil related products and services. Overall, most
construction materials, including materials used in the set-up of our homes,
have increased or fluctuated widely in price over the past year with little
price stability in sight. Nobility continues to out-perform the industry,
however in the near term we anticipate continued pressure on both sales and
earnings resulting from these factors. Management remains optimistic for fiscal
2006, 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, declining unemployment
claims, and increasing but still low interest rates in 2006, management expects
the demand for our homes to grow. Increased demand should also result from
building replacement homes from the hurricanes in autumn of 2004. 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 38 years in the
design and production of quality, affordable manufactured homes at its two
plants located in central Florida. With nineteen Company 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, March 9, 2006 AT
4:30 PM EASTERN TIME. TO PARTICIPATE, PLEASE DIAL 800-311-6662. THE PASSCODE
FOR THE CALL IS 9028274. YOU MAY ALSO ACCESS THE CALL AT www.nobilityhomes.com
OR http://phx.corporate-ir.net/playerlink.zhtml?c=60939&s=wm&e=1226762
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
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 or other attack and any armed conflict involving the United States and
the impact of inflation.
NOBILITY HOMES, INC.
CONSOLIDATED BALANCE SHEETS
February 4, November 5,
2006 2005
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(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 12,382,331 $ 14,368,183
Short-term investments 418,394 414,526
Accounts receivable - trade 430,860 250,376
Inventories 11,389,545 9,549,486
Prepaid income taxes - 248,958
Prepaid expenses and other current assets 867,469 484,109
Deferred income taxes 224,085 225,245
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Total current assets 25,712,684 25,540,883
Property, plant and equipment, net 3,869,075 3,791,558
Long-term investments 11,800,952 11,833,065
Other investments 1,816,539 1,819,494
Other assets 2,094,362 2,071,862
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Total assets $ 45,293,612 $ 45,056,862
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Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 1,770,349 $ 1,390,218
Accrued compensation 829,429 1,311,854
Accrued expenses and other current liabilities 1,062,737 1,318,657
Income taxes payable 374,042 -
Customer deposits 3,898,180 3,964,519
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Total current liabilities 7,934,737 7,985,248
Deferred income taxes 2,152 2,152
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Total liabilities 7,936,889 7,987,400
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Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value, 500,000 shares
authorized; none issued and outstanding - -
Common stock, $.10 par value, 10,000,000 shares
authorized; 5,364,907 shares issued and
outstanding in 2006 and 2005 536,491 536,491
Additional paid in capital 9,008,535 9,005,610
Retained earnings 35,369,281 35,096,462
Accumulated other comprehensive income 176,735 174,027
Less treasury stock at cost, 1,305,142 and
1,306,182 shares, respectively, in 2006 and 2005 (7,734,319) (7,743,128)
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Total stockholders' equity 37,356,723 37,069,462
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Total liabilities and stockholders' equity $ 45,293,612 $ 45,056,862
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NOBILITY HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
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February 4, February 5,
2006 2005
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Net sales $ 13,750,595 $ 11,511,134
Cost of goods sold (9,637,560) (8,299,701)
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Gross profit 4,113,035 3,211,433
Selling, general and administrative expenses (2,154,118) (1,792,870)
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Operating income 1,958,917 1,418,563
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Other income:
Interest income 199,009 128,118
Undistributed earnings in joint venture - Majestic 21 101,545 84,579
Miscellaneous income 3,966 1,520
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Total other income 304,520 214,217
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Income before provision for income taxes 2,263,437 1,632,780
Provision for income taxes (773,000) (560,000)
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Net income 1,490,437 1,072,780
Other comprehensive income, net of tax:
Unrealized investment gain 2,708 26,650
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Comprehensive income $ 1,493,145 $ 1,099,430
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Weighted average number of shares outstanding
Basic 4,059,025 4,034,994
Diluted 4,155,131 4,147,145
Earnings per share
Basic $ 0.37 $ 0.27
Diluted $ 0.36 $ 0.26
Cash dividends paid per common share $ 0.30 $ 0.20