SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Under Section 13 or 15(d) of
the Securities and Exchange Act of 1934
For the fiscal year ended November 1, 1997
Commission file number 0-6506
NOBILITY HOMES, INC.
(Name of small business issuer in its charter)
Florida 59-1166102
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3741 S.W. 7th Street
Ocala, Florida 34474
(Address of principal executive offices) (Zip Code)
(352) 732-5157
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 par value
(Title of Class)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X]; No ____.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant on January 16, 1998, computed by reference to
the average bid and asked prices on that date: $26,957,607
(APPLICABLE ONLY TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of January 16, 1998: 2,970,954 shares of
common stock
DOCUMENTS INCORPORATED BY REFERENCE Incorporated at
Nobility Homes, Inc. Proxy Statement for the 1998 Part III, Items 10,
Annual Meeting of Shareholders 11, 12 and 13
PART I
Item 1. Description of Business
Nobility Homes, Inc. (the "Registrant or the "Company"), a
corporation organized under the laws of Florida in 1967, designs,
manufactures and sells a broad line of manufactured homes through a
network of retail sales centers throughout north and central Florida. The
Registrant also sells its manufactured homes on a wholesale basis to
manufactured home dealers and manufactured home parks.
Manufactured Homes
Homes manufactured by the Registrant are available in approximately
100 active models, ranging in size from 636 to 2,153 square feet and
contain from one to five bedrooms. The Registrant's manufactured homes
("homes") are available in single-wide widths of 14 and 16 feet ranging
from 48 to 72 feet in length, double-wide widths of 24, 26, 28 and 32 feet
ranging from 36 to 76 feet in length and triple-wide widths of 36, 38 and
42 feet ranging from 44 to 68 feet in length. During the last four months
of fiscal 1997, the Registrant introduced its commemorative 30th
Anniversary model, a three bedroom, 2 bath home containing 1,272 square
feet. In addition, during 1997 the Registrant introduced a four section
model referred to as a quad. Quads are T-shaped and have a total of 2,128
square feet. The Registrant's homes are sold under the trade names
"Kingswood,""Richwood," "Springwood," "Tropic Isle," "Regency Manor,"
"Regency Manor Special," and "Tropic Manor."
The homes are sold primarily as unfurnished dwellings ready for
permanent occupancy. Interiors are designed and color coordinated in a
range of decors. Depending on the size of the unit and quality of
appliances and other appointments, retail prices for the Registrant's
homes typically range from approximately $14,000 to $60,000. Most of the
prices of the Registrant's homes are considered by it to be within the low
to medium price range of the industry.
Both of the Registrant's manufacturing plants utilize assembly line
techniques in manufactured home production. Both plants manufacture and
assemble the floors, sidewalls, end walls, roofs and interior cabinets for
their homes. The Registrant purchases from outside suppliers various
other components that are built into its homes including the axles,
frames, tires, doors, windows, pre-finished sidings, plywood, ceiling
panels, lumber, rafters, insulation, paneling, appliances, heating units,
lighting and plumbing fixtures, carpeting and drapes. The Registrant is
not dependent upon any one particular supplier for its raw materials or
component parts, nor is it required to carry significant amounts of
inventory to assure itself of a continuous allotment of goods from
suppliers.
The Registrant's two manufacturing plants continued to operate at an
average of approximately 55% of their single shift capacity in fiscal
1997, representing no change from fiscal 1996.
The Registrant generally does not manufacture its homes to be held by
it as inventory (except for model home inventory of its retail network
subsidiary, Prestige Home Centers, Inc.), but, rather, manufactures its
homes after receipt of dealer orders. Although the Registrant attempts to
maintain a consistent level of production of homes throughout the fiscal
year, seasonal fluctuations do occur, with sales of homes generally lower
during the first quarter due to the holiday season.
The sales area for a manufactured home manufacturer is limited by
substantial delivery costs of the finished product to the dealer. The
homes produced by the Registrant are delivered by outside trucking
companies. The Registrant estimates that it can compete effectively
within a range of approximately 300 miles from its manufacturing plants.
During the last two fiscal years, all of the Registrant's sales were made
in Florida.
Retail Sales
Prestige Home Centers, Inc. ("Prestige") operates 15 retail lots in
north and central Florida. Its principal executive offices are located at
the Registrant's headquarters in Ocala, Florida. According to statistics
compiled by Statistical Surveys, Inc. from records on file with the State
of Florida, Prestige has been the largest retail dealer of multi-section
manufactured homes in Florida since 1994, based on number of home sales.
Each of Prestige's retail lots is located within 200 miles of one of
the Registrant's two manufacturing facilities. Prestige leases its retail
lots from unaffiliated parties under leases with terms of between one and
three years with renewal options.
The primary customers of Prestige are young, first-time home buyers
who generally purchase manufactured homes to place on their own homesites.
Prestige operates its retail sales centers with a model home concept.
Each of the homes displayed at its retail sales centers is furnished and
decorated as a model home. Although the model homes may be purchased from
Prestige's model home inventory, generally, customers order homes which
are shipped directly from the factory to their homesite. Prestige sales
generally are to purchasers living within a radius of approximately 100
miles from the selling retail lot.
The Registrant has entered into a joint venture agreement with 21st
Century Mortgage Corporation to provide financing to retail customers
purchasing the Registrant's manufactured homes from Prestige.
Additionally, financing for home purchases is provided by nine other
independent sources that specialize in manufactured housing lending, and
numerous banks which finance manufactured home purchases. Prestige is not
required to sign any recourse agreements with any of these retail
financing sources, nor does Prestige itself finance customers' new home
purchases.
The retail sale of manufactured homes is a highly competitive
business. Because of the large number of retail sales centers located
throughout the Registrant's market area, potential customers typically can
find a sales center within a 100 mile radius of their present home.
Prestige competes with over 100 other retailers in its primary market
area, some of which may have greater financial resources than Prestige.
In addition, manufactured homes offered by Prestige compete with
conventional site-built housing.
Prestige also provides, through its wholly-owned subsidiary, Prestige
Insurance Services, Inc., an independent insurance agent, credit life and
property and casualty insurance to Prestige customers in connection with
their purchase and financing of manufactured homes. Prestige Insurance
Services, Inc. receives a commission on the insurance premium collected at
the time an insurance policy is written and in future years if the
homeowner renews the policy. Its revenues were approximately $34,000,
$16,000 and $24,000 in fiscal 1997, 1996 and 1995, respectively.
Sales to Independent Dealers and Manufactured Home Communities
The Registrant sells its homes on a wholesale basis exclusively
through 3 full-time salespersons to approximately 60 independent dealers.
The Registrant attempts continuously to seek new dealers in the areas in
which it operates as there is ongoing turnover in the dealers with which
it deals at any one time, especially with manufactured home communities as
they achieve full occupancy levels. As is common in the industry, most of
the Registrant's dealers other than its subsidiary, Prestige, are
independent dealers that sell products produced by several manufacturers.
No one dealer accounted for more than 10.0% of the Registrant's total
sales in fiscal 1997.
Dealers generally obtain inventory financing from financial
institutions (usually banks and finance companies) on a "floor plan" basis
whereby the financial institution obtains a security interest in all or
part of the dealer's manufactured home inventory. The Registrant, upon
request of the lending institution, enters into repurchase agreements with
the lending institutions which provide that, in the event of a dealer's
default, the Registrant will, at the lender's request, repurchase the home
provided that the Registrant's liability will not exceed the
manufacturer's invoice price and that the repurchased home is new and
unused. Generally, the repurchase agreement expires within one year after
a home is sold to the dealer, and the repurchase price is limited to
between 70% to 100% of the original invoice price to the dealer, depending
on the length of time that has expired since the original sale.
Generally, repurchase is conditioned upon the dealer's insolvency. Any
losses incurred as a result of such repurchases would be limited to the
difference between the repurchase price and the subsequent resale value of
the home repurchased. The Registrant was not required to repurchase any
homes during fiscal 1997, 1996 or 1995. For additional information, see
Note 13 of "Notes to Consolidated Financial Statements." The Registrant
does not finance retail sales of new homes for its dealers' customers.
The Registrant does not generally offer consigned inventory programs
or other credit terms to dealers and ordinarily receives payment for its
homes within 15 to 30 days of delivery. However, the Registrant offers
extended terms to unrelated park dealers who do a high volume of business
with the Registrant. From time to time, the Registrant has offered
extended terms to TLT, Inc. ("TLT"), an affiliate of the Registrant's
President, which operates three manufactured home communities targeted at
the retiree market, in return for which TLT has granted the Registrant
exclusive sales rights for the manufactured homes sold by the communities
operated by it. See Note 3 of "Notes to Consolidated Financial
Statements" for additional information concerning the terms of sales to
TLT. In order to stimulate sales, the Registrant sells homes to selected
manufactured home communities for display on special terms. The high
visibility of the Registrant's homes in such communities generates
additional sales of the Registrant's homes through such dealers.
The Registrant offers a quarterly or yearly volume bonus award to
those dealers who purchase homes from the Registrant in excess of certain
specified dollar amounts during a specified period. As an additional
dealer incentive, the Registrant may assume certain floor plan financing
costs for a specified number of days for dealers who carry in excess of a
specified level of the Registrant's inventory. During fiscal 1997, 1996
and 1995 the Registrant reimbursed dealers other than TLT $151,920,
$111,539 and $35,644, respectively, as volume bonus awards and for floor
plan financing charges under the programs described above. Volume bonus
awards to TLT, which are granted on the same basis as to other dealers,
were $8,000 in fiscal 1997, $28,000 in fiscal 1996 and $91,000 in fiscal
1995.
Regulation
The manufacture, distribution and sale of homes is subject to
governmental regulation at the federal, state and local levels. The
Department of Housing and Urban Development ("HUD") has adopted national
construction and safety standards that have priority over existing state
standards. Compliance with these standards involves submission to and
approval by an engineering firm approved by HUD of engineering plans and
specifications on all models. HUD's standards also require periodic
inspection by state or other third party inspectors of plant facilities
and construction procedures, as well as inspection of manufactured home
units during construction. In 1994, HUD regulations took effect which
require that manufactured homes be constructed to more stringent
standards. Florida is split between two wind zones. Homes sold in Zone
II, which includes most of north and central Florida, must be able to
withstand winds of up to 100 miles per hour, while homes sold in Zone III,
which covers primarily the coastal areas of south Florida, must be able to
withstand winds up to 110 miles per hour. Homes built to these standards
are significantly stronger than homes built prior to the effective date.
Home set-up was also affected with much stronger tie down anchoring
requirements. Most of the Registrant's homes are sold in Zone II.
HUD also issued thermal standards for manufacturing housing in 1994.
These regulations mandate a much higher insulation throughout the home
including the floor, walls and roof and an improved ventilation system for
the whole house, including kitchen and baths.
The Registrant estimates that compliance with federal, state and
local environmental protection laws will have no material effect upon
capital expenditures for plant or equipment modifications or earnings for
the next fiscal year.
The transportation of homes manufactured by the Registrant is subject
to state regulation. Generally, special permits must be obtained to
transport the home over public highways, and restrictions are imposed to
promote travel safety including those relating to routes, travel periods,
speed limits, safety equipment and size.
Homes manufactured by the Registrant are subject to the requirements
of the Magnuson-Moss Warranty Act and Federal Trade Commission rulings
which regulate warranties on consumer products. The Registrant provides a
limited warranty of one year on the structural components of the homes it
manufactures.
Competition
The manufactured home industry is highly competitive. The initial
investment required for entry into the business of manufacturing homes is
not unduly large. State bonding requirements for entry in the business
vary from state to state. The bond requirement for Florida is $50,000.
The Registrant competes directly with other manufacturers, some of which
are considerably larger than it and possess greater financial resources.
Based on number of units sold, the Registrant ranks 6th in the state of
Florida out of the top 45 manufacturers selling manufactured homes in the
state; however, the Registrant estimates that of those 45 manufacturers
approximately 15 manufacture homes of the same type as the Registrant and
compete in the same market area. The Registrant believes that it is
generally competitive with most of those manufacturers in terms of price,
service, warranty and product performance.
Employees
As of January 2, 1998, the Registrant had 218 full-time employees,
including 64 employed by Prestige. Approximately 116 employees are
factory personnel compared to approximately 131 in such positions a year
ago, and 88 are in management, administrative, supervisory, sales and
clerical positions (including 50 management and sales personnel employed
by Prestige) compared to approximately 93 a year ago. In addition, the
Registrant employs part-time employees when necessary.
The Registrant makes a contribution toward employees' group health
and life insurance. The Registrant, which is not subject to any
collective bargaining agreements, has not experienced any work stoppage or
labor disputes and considers its relationship with employees to be
generally satisfactory.
Item 2. Properties
As of November 1, 1997, two manufacturing plants were owned and
operated by the Registrant as follows:
Depreciated Cost of
Approximate Plant and Property
Location Size at November 1, 1997
Belleview, Florida 33,500 sq. ft. $ 90,535
Ocala, Florida(1) 72,000 sq. ft. 550,448
_________________________
(1) This 72,000 square foot plant is located on approximately 35.5 acres
of land on which an additional two-story structure adjoining the
plant serves as the Registrant's corporate offices.
The Company's Belleview plant is of metal and concrete construction
and the Ocala plant is of metal construction. Both properties are in good
condition and require little maintenance.
Item 3. Pending Legal Proceedings
Certain claims and suits arising in the ordinary course of business
have been filed or are pending against the Company. In the opinion of
management, any related liabilities that might arise would be covered
under terms of the Company's liability insurance policies or would not be
material to the financial statements taken as a whole.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
The Registrant's Common Stock is listed on the Nasdaq National Market
under the symbol NOBH. The following table shows the range of high and
low sales prices for the Common Stock for each fiscal quarter of 1997 and
1996.
Fiscal Year End (1)
Fiscal November 1, 1997 November 2, 1996
Quarter High Low High Low
1st $15.25 $11.00 $ 9.33 $8.67
2nd 14.75 11.25 11.33 11.00
3rd 13.75 10.50 12.92 12.67
4th 13.62 11.50 15.25 14.75
_______________________________
(1) On January 19, 1996 and August 16, 1996, three-for-two stock splits
in the form of 50% stock dividends were paid to shareholders of
record on December 22, 1995 and July 26, 1996, respectively. Amounts
in the table have been restated to give effect to these two stock
dividends.
At January 23, 1998, the approximate number of record holders of
Common Stock was 262 (not including individual participants in security
position listings).
The payment of cash dividends will be within the discretion of the
Registrant's Board of Directors and will depend, among other factors, on
earnings, capital requirements and the operating and financial condition
of the Registrant. During fiscal 1997 and 1996, no cash dividends were
paid.
On January 5, 1998, the Registrant's Board of Directors authorized a
three-for-two stock split to be effected in the form of a 50% stock
dividend payable on February 20, 1998 to shareholders of record on January
30, 1998. The per share information presented in this report has not been
restated to give effect to this dividend.
Item 6. Selected Financial Data
The following table sets forth Selected Financial Data for each of
the Registrant's last five fiscal years. This information should be read
in conjunction with the financial statements of the Company (including the
related notes thereto) and Management's Discussion and Analysis of the
Financial Condition and Results of Operations, each included elsewhere in
this Form 10-K.
Years Ended(1)
November 1, November 2, November 4, October 29, October 30,
1997 1996 1995 1994 1993
(In thousands except per share data)
Total net sales $41,696 $36,455 $30,806 $23,082 $19,438
Income from
operations 4,759 3,839 2,710 1,585 1,846
Other income 206 47 1,340 374 177
Net income 3,038 2,395 2,957 1,769 1,867
Net income per
share(2) 1.02 .81 1.03 .61 .64
Total assets 18,941 14,871 12,896 11,355 11,438
Long term
obligations -0- -0- 659 764 936
Stockholders
equity 15,294 12,256 9,479 6,481 4,820
_____________________________
(1) The Company's fiscal year ends on the first Saturday on or after
October 31. Prior to 1995, the Company's fiscal year ended on the
Saturday closest to October 31. The years ended November 2, 1996 and
November 4, 1995 consisted of a fifty-three week period and the years
ended November 1, 1997, October 29, 1994 and October 30, 1993
consisted of a fifty-two week period.
(2) On January 19, 1996 and August 16, 1996, three-for-two stock splits
in the form of 50% stock dividends were paid to shareholders of
record on December 22, 1995 and July 26, 1996, respectively. Amounts
in the table have been restated to give effect to these two stock
dividends.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The Registrant's primary focus is young, first time home buyers who
generally purchase their manufactured homes from retail sales centers to
locate on property they own. The Registrant has aggressively pursued this
market through its Prestige retail sales centers, which have become the
principal focus of its business strategy. While the Registrant actively
seeks to make wholesale sales to independent retail dealers, the
Registrant's presence as a competitor limits potential sales to dealers
located in the same geographic areas serviced by its Prestige sales
centers.
The Registrant continues to make sales to the retirement community
market, which is made up of retirees from the north who move to Florida to
enjoy its milder winters and who typically purchase homes to be located on
sites leased from park communities that offer a variety of amenities.
While a portion of the Registrant's sales in this market are made to
communities owned by the Registrant's affiliate, TLT, the importance to
the Registrant of the retirement market continues to diminish, both as a
focus of its efforts and in dollars and as percentage of total sales.
The Company sold 1,190 homes in fiscal 1997, of which 361 homes were
sold to independent dealers, representing sales of $7,466,046, and 17
homes were sold to TLT communities, representing sales of $399,853. In
fiscal 1996, the Company sold 1,087 homes, of which 237 homes were sold to
independent dealers, representing sales of $5,203,547, and 28 homes were
sold to TLT communities, representing sales of $708,196. In fiscal 1995,
the Company sold 1,030 homes, of which 181 homes were sold to independent
dealers, representing sales of $3,874,817, and 55 homes were sold to TLT
communities, representing sales of $1,295,209. The balance of the
Registrant's sales in fiscal 1997, 1996 and 1995, representing 81.1%,
83.8% and 83.2% of net sales, respectively, were made on a retail basis
through Prestige's retail centers.
The Registrant has a product line of approximately 100 active models.
Market demand can fluctuate on a fairly short-term basis; however, the
manufacturing process is such that the Registrant can alter its product
mix relatively quickly in response to changes in the market. During
fiscal 1997, the Registrant's product mix was positively affected by
larger, more expensive multi-wide homes resulting from greater consumer
confidence and the availability of varied types of financing at
competitive rates. Many family buyers today purchase three-, four- or
five-bedroom manufactured homes, compared with the two-bedroom home that
typically appeals to the retirement community market.
During fiscal year 1997, the Company entered into a joint venture
agreement with 21st Century Mortgage Corporation to provide mortgage
financing to retail customers who purchase the Company's manufactured
homes. Through this joint venture which will originate and service loans,
the Company will have more control over the financing aspect of the retail
home sales process and will be able to offer better service to its retail
customers. Management believes that the joint venture will give the
Company an additional potential for profit by providing finance products
to retail customers. In addition, Management believes that the Company,
with more input in the design of unique finance programs for prospective
homebuyers, will be able to stimulate sales at its Prestige retail sales
centers. In an effort to make manufactured homes more competitive with
site-built housing, financing packages are available to provide 30-year
mortgages, an interest rate reduction program, combination
land/manufactured home loans, and a 5% down payment program for qualified
buyers. The Company also maintains outside financing sources that provide
financing for the Company's manufactured homes for retail homebuyers.
Results of Operations
The Company continued to increase revenues during the fiscal year
ended November 1, 1997. Total net sales in 1997 were $41,696,447 compared
to $36,455,195 in 1996 and $30,805,835 in fiscal 1995. Net sales
increased 14.4% in fiscal 1997 and 18.3% in 1996. The increase in sales
in fiscal 1997 over fiscal 1996 was primarily due to the increased
popularity of higher priced homes and increased sales to outside dealers.
The increase in sales in fiscal 1996 over fiscal 1995 was primarily due to
the Company having fifteen retail sales centers in full operation during
the majority of fiscal 1996 following the acquisition of three additional
existing retail sales centers in November 1995. The year ended November
1, 1997 consisted of a fifty-two (52) week period while the years ended
November 2, 1996 and November 4, 1995 each consisted of a fifty-three (53)
week period.
Industry-wide shipments of multi-section manufactured homes measured
in number of units continued to improve for the first eleven months of
1997, up 7% over 1996, while shipments of single section homes declined
approximately 18% for 1997. Combined industry shipments of multi-section
and single-section homes declined 3% in 1997 but were up 9.1% and 11.4%,
respectively, for 1996 and 1995. In fiscal year 1997, approximately 96%
of the Company's home sales were multi-section homes. Florida combined
industry shipments of multi-section and single-section homes increased 8%
in both 1997 and 1996 following a decline of approximately 8.6% for the
first eleven months of calendar 1995. The decline in 1995 followed an
increased demand in 1994 and 1993 for homes in South Florida during the
rebuilding following Hurricane Andrew. Nobility's sales increased by 14%
in fiscal 1997, 18% in fiscal 1996 and 33% in fiscal 1995.
Gross profit as a percentage of net sales was 25.8% in fiscal 1997
compared to 25.5% in 1996 and 23.4% in fiscal 1995. The increase in gross
profit in fiscal 1997 was primarily a result of improvements in the gross
margins at both the manufacturing plants and retail sales centers. The
increase in gross profit in fiscal 1996 was primarily due to increasing
home prices to offset lumber price increases and continuing improvements
in operating efficiency at the Registrants' manufacturing plants.
Selling, general and administrative expenses as a percent of net
sales was 14.4% in fiscal 1997 as compared to 15.0% in 1996 and 14.1% in
fiscal 1995. The decline in fiscal year 1997 selling, general and
administrative expenses as a percent of net sales was primarily due to
better operating efficiencies at the retail sales centers. The increase
in selling, general and administrative expenses in fiscal year 1996 was
primarily due to start-up expenses associated with the addition of the
three retail sales centers in November 1995, coupled with increased
newspaper, radio and television advertising expense.
Other income for fiscal 1997 was $205,665 of which $118,336 was from
interest on short term investments. Other income for fiscal 1996 was
$46,866, down from $1,339,743 for the 1995 fiscal year which consisted of:
(1) $1,000,000 in non-recurring income from the key-man insurance carried
on the former president of Prestige Homes who died in May, 1995 after a
lengthy illness; and (2) $348,884 gain from an installment sale.
As a result of the factors discussed above, earnings for fiscal year
1997 were $3,037,578 or $1.02 per share compared to $2,395,130 or $.81 per
share for fiscal 1996 and $2,957,438 or $1.03 per share for fiscal 1995
which included the non-recurring life insurance proceeds and the gain from
an installment sale discussed above. Earnings per share information for
1995 has been restated to give effect to two separate three-for-two stock
splits in the form of dividends payable on January 19, 1996 and August 16,
1996, respectively.
Liquidity and Capital Resources
Cash and cash equivalents were $6,293,924 at November 1, 1997
compared to $2,049,184 at November 2, 1996. Working capital increased to
$11,338,575 in fiscal 1997 compared to $8,762,581 in 1996. In fiscal year
1997, the Company carried all the inventory for the Prestige retail sales
centers and did not incur third party floor plan financing expenses.
Inventories increased to $8,041,471 in 1997 from $7,820,908 at fiscal
year-end 1996. In 1997, accounts receivable declined to $386,019 from
$642,626 at fiscal year-end 1996, and accounts receivable trade, from
related parties declined to $0 at fiscal year-end 1997 from $350,379 at
fiscal year-end 1996.
During fiscal 1997 and 1996, the Company maintained a revolving
credit agreement with a major bank providing for borrowings up to $2.5
million. In July 1996, the Company entered into a second revolving line
of credit agreement with a major bank which provides for borrowings up to
$1,500,000. These two agreements provide the Company with an additional
$4.0 million of working capital for use in connection with its overall
operations. At November 1, 1997, there were no amounts outstanding under
these agreements.
In July 1997 the Company invested $250,000 in a joint venture with
21st Century Mortgage Corporation to provide additional mortgage financing
services to the Company's retail sales centers. The Company generally
does not have any additional capital contribution obligations with respect
to the joint venture, except to the extent the joint venture may be
required to invest in certain subordinated certificates issued in
connection with an asset-backed security. No such investment is
contemplated within the next 12 months.
The Company acquired one additional existing manufactured home retail
sales center in North Central Florida in March 1997 for $85,000 cash. In
January 1997 Prestige closed its sales center in Perry.
Consistent with normal practice, the Company's operations are not
expected to require significant capital expenditures during fiscal 1998.
Working capital requirements for the home inventory for new retail sales
centers will be met with internal sources.
Forward Looking Statements
Certain statements in this report are forward-looking statements
within the meaning of the federal securities laws. Although the Company
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,
changes in market demand, 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.
Item 8. Consolidated Financial Statements and Supplementary Data
Financial statements incorporated herein from the Registrant's 1997
Annual Report to Shareholders are attached as Exhibit 13 and are listed at
Part IV, Item 13(a), "Consolidated Financial Statements and Schedules."
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors of the Registrant is
incorporated by reference pursuant to Instruction G of Form 10-K from the
Registrant's definitive proxy statement for the 1998 annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A on
or before March 1, 1998.
The following table provides the names, ages and business experience
for the past five years for each of the Executive Officers of the
Registrant. Executive officers are each elected for one year terms.
Executive Officers
Terry E. Trexler (58) Chairman of the Board and President of
Registrant; Mr. Trexler is also President of TLT;
from April 1996 to March 1997, Mr. Trexler was a
director of Citizens National Bank and its
subsidiary, Citi-Bancshares, Inc. and was
Chairman of the Board of Citizens First
Bancshares, Inc. and its subsidiary, Citizens
First Bank of Ocala prior to its acquisition in
April 1996.
Thomas W. Trexler (34) Executive Vice President and Chief Financial
Officer of the Registrant since December 1994 and
a director of the Registrant since February 1993;
President of Prestige Insurance Services, Inc.
since August 1992; President of Prestige since
June 1995 and Vice President from 1991 to June
1995; director of Prestige and Vice President and
director of TLT since September 1991; prior to
September 1991, Mr. Trexler was Vice President of
NationsBank (formerly NCNB National Bank) in
Naples, Florida.
Edward C. Sims (51) Vice President of Engineering of the Registrant.
Jean Etheredge (52) Secretary of the Registrant.
Lynn J. Cramer, Jr. (52) Treasurer of the Registrant.
Thomas W. Trexler, Executive Vice President, Chief Financial Officer
and a director of the Registrant, is the son of Terry E. Trexler, the
Registrant's President and Chairman of the Board. There are no other
family relationships between any directors or executive officers of the
Registrant.
Item 11. Executive Compensation
Information concerning executive compensation is incorporated by
reference pursuant to Instruction G of Form 10-K from the Registrant's
definitive proxy statement for the 1998 annual meeting of shareholders to
be filed with the Commission pursuant to Regulation 14A on or before
March 1, 1998.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial
owners and management is incorporated by reference pursuant to Instruction
G of Form 10-K from the Registrant's definitive proxy statement for the
1998 annual meeting of shareholders to be filed with the Commission
pursuant to Regulation 14A on or before March 1, 1998.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions
is incorporated by reference pursuant to Instruction G of Form 10-K from
the Registrant's definitive proxy statement for the 1998 annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A on
or before March 1, 1998.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Consolidated Financial Statements and Schedules:
Report of Price Waterhouse LLP
Consolidated Balance Sheets at November 1, 1997 and November 2,
1996
Consolidated Statements of Income for the Years Ended November
1, 1997, November 2, 1996 and November 4, 1995
Consolidated Statements of Changes in Stockholders' Equity for
the Years Ended November 1, 1997, November 2, 1996 and November
4, 1995
Consolidated Statements of Cash Flows for the Years Ended
November 1, 1997, November 2, 1996 and November 4, 1995
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K:
None
(c) Exhibits:
3. (a) The Registrant's Articles of Incorporation, as
amended.
(b) Bylaws, as amended March 28, 1994, were attached as an
Exhibit to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended October 29, 1994 and
are incorporated herein by reference.
10. (a) Joint Venture Agreement with 21st Century Mortgage
Corporation.
(b) Stock Incentive Plan (filed as an Exhibit to the
Registrant's registration statement on Form S-8,
registration no. 333-44769) and incorporated herein by
reference.
13. Consolidated Financial Statements and Schedules from 1997
Annual Report to Shareholders.
21. Subsidiaries of Registrant.
27. Financial Data Schedule.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NOBILITY HOMES, INC.
DATE: January 26, 1998 By: /s/ Terry E. Trexler
Terry E. Trexler, Chairman, President
and Chief Executive Officer
DATE: January 26, 1998 By: /s/ Thomas W. Trexler
Thomas W. Trexler, Executive
Vice President and
Chief Financial Officer
DATE: January 26, 1998 By: /s/ Lynn J. Cramer, Jr.
Lynn J. Cramer, Jr., Treasurer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
DATE: January 26, 1998 /s/ Terry E. Trexler
Terry E. Trexler, Director
DATE: January 26, 1998 /s/ Richard C. Barberie
Richard C. Barberie, Director
DATE: January 15, 1998 /s/ Robert Holliday
Robert Holliday, Director
DATE: January 26, 1998 /s/ Robert P. Saltsman
Robert P. Saltsman, Director
DATE: January 26, 1998 /s/ Thomas W. Trexler
Thomas W. Trexler, Director
EXHIBIT INDEX
3. (a) The Registrant's Articles of Incorporation, as amended.
(b) Bylaws, as amended March 28, 1994, were attached as an
Exhibit to the Registrant's Annual Report on Form 10-KSB
for the fiscal year ended October 29, 1994 and are
incorporated herein by reference.
10. (a) Joint Venture Agreement with 21st Century Mortgage
Corporation.
(b) Stock Incentive Plan (filed as an Exhibit to the
Registrant's registration statement on Form S-8,
registration no. 333-44769) and incorporated herein by
reference.
13. Consolidated Financial Statements and Schedules from 1997 Annual
Report to Shareholders.
21. Subsidiaries of Registrant.
27. Financial Data Schedule.