FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly period ended May 6, 1995
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)
(904) 732-5157
(Issuer's telephone number, including area code)
Securities registered pursuant to 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)
Check 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 .
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's
classes of common equity, as May 6, 1995. 1,270,102
<PAGE>
NOBILITY HOMES, INC.
INDEX
Page
PART I. Financial Information Number
Item 1. Financial Statements
Consolidated Balance Sheets as of May 6, 1995
and October 29, 1994 . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the
three and six months ended May 6, 1995 and
April 30, 1994 . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows for the
six months ended May 6, 1995 and April 30,
1994 . . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . 9
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Conditions . . . . . . . . . 10
PART II. Other Information and Signatures
Item 6. Exhibits and Reports of Form 8-K . . . . . . . . . . . . . 13
<PAGE>
PART I. FINANCIAL INFORMATION
NOBILITY HOMES, INC.
CONSOLIDATED BALANCE SHEETS
May 6, October 29,
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 371,993 $ 1,743,102
Accounts receivable - trade, net of
allowance for doubtful accounts of
$48,000 620,916 378,883
Accounts receivable - trade, from related
parties 1,428,227 792,011
Inventories 5,828,859 4,604,299
Notes receivable 38,771 47,500
Notes receivable from related parties
installment sales - 297,584
Income taxes receivable 225,269 225,269
Deferred income taxes 945,730 945,730
Other current assets 57,038 162,131
--------- ---------
Total current assets 9,516,803 9,196,509
Property, plant and equipment, net 991,080 929,773
Receivable from related party for life
insurance premiums 458,610 458,610
Other noncurrent assets - cash surrender
value 770,081 770,081
---------- -----------
Total assets $11,736,574 $11,354,973
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,065,840 $ 1,093,174
Accrued expenses 595,101 638,665
Floor plan financing 852,929 1,553,602
Revolving line of credit 403,711 -
Note payable to stockholders 100,000 133,333
Income taxes payable 382,000 -
Customer deposits 182,209 217,375
Deferred gain on related party
installment sales - 348,884
Deferred gross profit on related
party sales 84,633 84,633
Other liabilities 19,312 40,685
---------- ----------
Total current liabilities 3,685,735 4,110,351
---------- ----------
Notes payable - cash surrender value 620,965 620,965
Notes payable after one year 8,263 9,449
Notes payable to stockholders after
one year 100,000 133,333
---------- ----------
Total liabilities 4,414,963 4,874,098
---------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.10 par value, 500,000
shares authorized, none issued
Common stock, $.10 par value, 4,000,000
shares authorized, 1,724,738 shares
issued 172,473 172,473
Additional paid in capital 1,934,921 1,934,921
Retained earnings 6,802,083 5,894,361
Less treasury stock, at cost; 454,636
shares in 1995 and 446,236 in 1994 (1,587,866) (1,520,880)
----------- -----------
Total stockholders' equity 7,321,611 6,480,875
----------- -----------
Total liabilities and stockholders'
equity $11,736,574 $11,354,973
=========== ===========
<PAGE>
NOBILITY HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
May 6, April 30, May 6, April 30,
1995 1994 1995 1994
Net sales $7,224,122 $5,258,700 $12,556,975 $10,340,495
Net sales-related
parties 292,766 343,537 1,062,824 627,319
--------- -------- --------- --------
Total sales 7,516,888 5,602,237 13,619,799 10,967,814
Cost of goods sold 5,482,849 4,352,478 10,239,116 8,345,030
--------- -------- --------- --------
Gross profit 2,034,039 1,249,759 3,380,683 2,622,784
Selling, general and ad-
ministrative expenses 1,215,801 777,734 2,088,168 1,490,844
Interest expense on
floor plan financing 54,436 42,849 109,994 86,448
--------- -------- ---------- ---------
Operating income 763,802 429,176 1,182,521 1,045,492
--------- -------- --------- ---------
Other income (expenses):
Gain on sale of fixed
assets - - - 231,327
Gain on sale of
limited partnerships - - 348,884 80,418
Interest income 2,690 18,431 11,794 27,618
Interest expense (6,682) (5,128) (12,649) (5,128)
Miscellaneous income 4,683 3,726 4,172 3,726
--------- -------- -------- ---------
691 17,029 352,201 337,961
--------- -------- --------- ---------
Net income before pro-
vision for income taxes 764,493 446,205 1,534,722 1,383,453
Less provision for
income taxes 312,000 164,000 627,000 516,000
--------- -------- --------- --------
Income before cumulative
effect 452,493 282,205 907,722 867,453
Cumulative effect of a
change to FAS 109 - - - 664,000
--------- --------- -------- ---------
Net income $ 452,493 $ 282,205 $ 907,722 $ 1,531,453
========== ========== ========== ==========
Weighted average shares
outstanding 1,275,306 1,290,502 1,275,568 1,290,502
========== ========== ========== ==========
Earnings per share
Income before cumula-
tive effect - - - .67
Cumulative effect - - - .52
Net income $ .35 $ .22 $ .71 $ 1.19
========== ========== ========== ==========
<PAGE>
NOBILITY HOME, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
May 6, April 30,
1995 1994
Cash flows from operating activities:
Net income $ 907,722 $ 1,531,453
Adjustments to reconcile net income to net
cash flows used in operating activities:
Depreciation and amortization 53,342 34,359
Gain on sale of idle facility - (231,327)
Deferred income taxes - noncurrent - (664,000)
(Increase) decrease in:
Accounts receivable-trade (242,033) (357,662)
Accounts receivable-trade from
related parties (636,216) 156,273
Inventories (1,224,560) (268,783)
Other current assets 113,822 (113,922)
Increase (decrease) in:
Accounts payable (27,334) 118,104
Accrued expenses (43,564) 19,749
Customer deposits (35,166) 142,454
Income taxes payable 382,000 (416,000)
Deferred gain on related party
sales (348,884) (80,418)
Other current liabilities (21,373) 20,564
----------- -----------
Net cash flows provided by
operating activities (1,122,244) (109,156)
----------- -----------
Cash flows from investing activities:
Purchase of equipment (114,649) (30,583)
Proceeds from sale of property and
equipment - 323,670
Collections of note receivable from related
party installment sale 297,584 183,418
----------- ----------
Net cash flows provided by
investing activities 182,935 476,505
----------- ----------
Cash flows from financing activities:
Decrease in floor plan financing (700,673) (369,611)
Increase in revolving line of credit 403,711 -
Principal payments on note payable to
stockholders (66,666) -
Principal payment on notes payable - other (1,186) (6,728)
Purchase of treasury stock (66,986)
----------- -----------
Net cash flows used in
financing activities (431,800) (376,339)
----------- -----------
Decrease in cash and cash equivalents (1,371,109) (8,990)
Cash and cash equivalents at beginning
of year 1,743,102 2,917,670
------------ -----------
Cash and cash equivalents at end of quarter $ 371,993 $ 2,908,680
========== ==========
Supplemental disclosure of cash flow
information
Interest paid $ 12,649 $ 5,128
========== ==========
Income taxes paid $ 245,000 $ 825,000
========== ==========
<PAGE>
NOBILITY HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
I. The unaudited financial information included in this report includes
all adjustments which are, in the opinion of management, necessary to
reflect a fair statement of the results for the interim periods. The
operations for the six months ended May 6, 1995 are not necessarily
indicative of the results of the full fiscal year.
Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the
Securities Exchange Commission rules and regulations governing form 10-
QSB. The condensed financial statements included in this report should be
read in conjunction with the financial statements and notes thereto
included in the Registrant's October 29, 1994 form 10-KSB annual report.
II. Inventories
Inventories are carried at the lower of cost or market. Cost of
finished home inventories is determined on the specific identification
method. Other inventory costs are determined on a first-in, first-out
basis. Cost components of inventories are material, labor and plant
overhead. The cost of goods sold for the six months ended May 6, 1995 and
April 30, 1994, reflects opening and closing inventories as follows:
May 6, October 29, April 30, October 30,
1995 1994 1994 1993
Raw materials $ 515,786 $ 534,292 $ 628,175 $ 473,074
Work-in-process 95,972 58,842 70,208 45,521
Finished homes 4,615,745 3,416,878 3,170,612 2,847,878
Pre-owned manufac-
tured homes 281,364 279,627 438,945 374,702
Model home furni-
ture and other 319,992 314,660 - 297,982
---------- ---------- --------- ----------
$5,828,859 $4,604,299 $4,307,940 $4,039,157
========== ========== ========== ==========
<PAGE>
NOBILITY HOMES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITIONS
Results of Operations
Because the Company's acquisition of Prestige Home Centers, Inc.
during fourth quarter of fiscal 1994 has been accounted for in a manner
similar to the pooling-of-interest method, the Company's financial
statements for the periods in fiscal 1994 prior to the acquisition have
been restated on a consolidated basis to include the results of Prestige
Home Centers, Inc. as if it had been a wholly-owned subsidiary throughout
the fiscal year. The consolidated financial statements also include
Prestige Insurance Services, Inc., an independent insurance agency and
subsidiary of Prestige Home Centers, Inc.
Net sales in second quarter of 1995 increased 34 percent to
$7,516,888 as compared to $5,602,237 for the second quarter of 1994. The
Company sold 267 homes in second quarter 1995 of which 46 homes or
$946,661 were sold to independent dealers, 10 homes or $259,260 were sold
to communities owned and/or operated by the TLT, Inc. In second quarter
1994 the Company sold 202 homes, of which 56 homes or $970,647 were sold
to independent dealers, 9 homes or $169,494 were sold to TLT, Inc. The
balance of the Company's sales in second quarter of 1995 and 1994 were
made on a retail basis through Prestige Home Centers, Inc.
Gross profit in second quarter of 1995 as a percentage of net sales
was 27 percent compared to 22.3 percent for the same period last year.
The increase in gross profit in second quarter 1995 was primarily due to
higher margins on sales at the retail sales centers and as a percentage of
net sales the decrease in manufacturing expenses.
Selling, general and administrative expenses, as a percentage of net
sales, was 16.2 percent in the second quarter of 1995 compared to 13.8
percent in 1994. This increase was primarily due to the increased
advertising and other promotional expenses incurred at the retail sales
centers.
As a result of the factors discussed above, earnings for second
quarter of 1995 were $452,493 or $.35 per share compared to $ 282,205 or
$.22 per share in 1994.
Liquidity and Capital Resources
Cash and cash equivalents were $371,993 at May 6, 1995 compared to
$1,743,102 as of October 29, 1994. The decrease is primarily due to
management's decision to reduce third party floor plan financing expense
for the Prestige sales centers, with the Company carrying the additional
inventory to reduce floor plan interest cost. Accounts receivable from
related parties and inventory increased in first quarter of 1995 primarily
due to additional inventory of new models sold to TLT, Inc. Inventories
increased from $4,604,299 at October 29, 1994 to $5,828,859. This increase
is primarily due to the additional new models of singlewides at each sales
center.
As of May 6, 1995 the Company's revolving line of credit was
$403,711. This additional working capital is for use in connection with
its manufacturing operations and bears interest at the prime rate or
below.
Subsequent to the second quarter of 1995 the Company completed the
acquisition of two existing retail sales centers in North Central Florida
in exchange for 23,529 shares of the Company's stock.
Consistent with normal practice, the Company's operations are not
expected to require significant capital expenditures during fiscal 1995.
Working capital requirements for inventory for new sales centers are met
through a combination of internal sources and floor plan lines.
<PAGE>
PART II. OTHER INFORMATION AND SIGNATURES
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 Financial Data Schedule
SIGNATURES
In accordance with Section 13 of 15(d) of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.
NOBILITY HOMES, INC.
DATE: June 19,1995 By: /s/ Terry E. Trexler
____________________________________
Terry E. Trexler, Chairman,
President and Chief
Executive Officer
DATE: June 19,1995 By: /s/ Thomas W. Trexler
____________________________________
Thomas W. Trexler, Executive
Vice President, Chief
Financial Officer
DATE: June 19,1995 By: /s/ Lynn J. Cramer, Jr.
____________________________________
Lynn J. Cramer, Jr., Treasurer
and Principal Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF NOBILITY HOMES, INC. AS OF AND FOR
THE SIX MONTHS ENDED MAY 6, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-04-1995
<PERIOD-START> FEB-06-1995
<PERIOD-END> MAY-06-1995
<CASH> 371,993
<SECURITIES> 0
<RECEIVABLES> 2,087,914
<ALLOWANCES> 48,000
<INVENTORY> 5,828,859
<CURRENT-ASSETS> 9,516,803
<PP&E> 2,198,612
<DEPRECIATION> 1,207,532
<TOTAL-ASSETS> 11,736,574
<CURRENT-LIABILITIES> 3,685,735
<BONDS> 0
<COMMON> 172,473
0
0
<OTHER-SE> 7,149,138
<TOTAL-LIABILITY-AND-EQUITY> 11,736,574
<SALES> 0
<TOTAL-REVENUES> 7,516,888
<CGS> 5,482,849
<TOTAL-COSTS> 1,270,237
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 764,493
<INCOME-TAX> 312,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 452,493
<EPS-PRIMARY> .35
<EPS-DILUTED> 0
</TABLE>
