Nobility Homes, Inc. Announces Second Quarter 2011 Results

 

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Symbol	Price	Change
NOBH	7.95	-0.04

Press Release Source: Nobility Homes, Inc. On Friday June 17, 2011, 4:56 pm EDT

OCALA, Fla., June 17, 2011 /PRNewswire/ -- Today Nobility Homes, Inc. (NASDAQ:NOBH - News) announced sales and earnings results for its second quarter ended May 7, 2011.  Sales for the second quarter 2011 were $3,229,214 as compared to $3,708,529 recorded in the second quarter of 2010.  Loss from operations for the second quarter 2011 was $143,407 versus a loss of $236,928 in the same period a year ago.  Net loss after taxes was $57,044 as compared to net loss after taxes of $202,029 for the same period last year.  Due to the number of repurchased homes the Company has experienced under the finance revenue sharing agreement, the Company has increased the inventory valuation reserve to $461,208 at May 7, 2011 from $402,994 at November 6, 2010 for potential losses associated with the refurbishing and reselling of the repurchased homes.  Although the Company has currently not experienced any losses in disposing of the repossessions, the Company is concerned with the number of repossessions in inventory and may choose more aggressive pricing which could lead to some repossessions being sold for a loss. The net loss after taxes of $57,044 for the second quarter 2011 came after deducting $82,605 in non-cash losses for our investment in two retirement community limited partnerships and included a tax benefit of $100,469.  Loss for the second quarter 2011 was ($0.01) per share compared to a loss of ($0.05) per share in the same period a year ago.
For the first six months of fiscal 2011, sales were $6,461,903 as compared to sales of $7,001,403 in the first six months of 2010.  Loss from operations for the first six months of 2011 was $314,403 versus loss of $648,521 in the first six months of 2010.  Net loss after taxes was $173,430 compared to loss of $539,374 for the same six month period last year.  The net loss after taxes of $173,430 for the first six months of 2011 came after deducting $110,805 in non-cash losses for our investment in two retirement community limited partnerships.  Loss for the first six months of 2011 was ($0.04) per share compared to loss of ($0.13) per share last year.
Nobility's financial position during for the second quarter 2011 remains strong with cash and cash equivalents, short and long-term investments of $9,401,554 and no outstanding debt.  Working capital is $26,755,644 and our ratio of current assets to current liabilities is 22.3:1.   Stockholders' equity is $40,563,340 and the book value per share of common stock is $10.00.  The Company did not repurchase any shares of its common stock during the first six months of 2011.   The Company's Board of Directors has authorized the purchase of up to 200,000 shares of the Company's stock in the open market.
Terry Trexler, President stated, "Sales and operations for the second quarter of 2011, continued to be adversely impacted by our country's economic uncertainty and the low manufactured housing shipments in Florida, plus the overall weakness in Florida and the nation's housing market.  Industry shipments in Florida for the period November 2010 through April 2011 were down approximately 17% from the same period last year.  Even though Nobility's gross profit as a percentage of net sales, selling, general and administrative expenses improved for the first six months, the Company's low sales volume made it difficult to report meaningful results.  Continued lack of retail and wholesale financing, very high unemployment and home foreclosures, slow sales of existing site-built homes, low consumer confidence and a poor economic outlook for the U.S. and Florida's economy are just a few of the on-going challenges the Company faced.  While the management has not seen decisive improvement in these challenges brought about by the tumultuous events of 2008 and 2009, some slight progress has emerged for the nation's economy.  Although the overall housing picture, credit market and economy have not improved measurably during the past year and the immediate outlook for the manufactured housing industry in Florida and the nation is uncertain, the long-term demographic trends still favor future growth in the Florida market area we serve. Job formation, immigration growth and migration trends, plus consumers returning to more affordable housing should favor Florida. The Baby Boomer generation began to turn 65 in January 2011 and by 2030 the number of Americans 65 and over is predicted to almost double.  This trend coupled with the end of the free spending credit-driven years, Nobility's 44 years in the Florida market, and consumers' increased need for more affordable housing should serve the company well in the coming years.  Management remains convinced that our specific geographic market is one of the best long-term growth areas in the country. For the remainder of fiscal 2011, the country must experience a better economy with less uncertainty, improved sales in the existing home market, declining unemployment, continued low interest rates, improving credit markets, increased consumer confidence and more retail financing for the demand of our affordable homes to improve significantly.
Management understands that during this very complex economic environment, maintaining the Company's strong financial position is vital for future growth and success.   Because of the poor business conditions in our market area and the lack of any clarity when today's economic challenges will improve measurably, the Company will continue to evaluate Prestige's twelve retail model centers in Florida, along with all expenses within the Company and react in a manner consistent with maintaining our financial position.
The Company invested as a limited partner in two new Florida retirement manufactured home communities in fiscal year 2008.  Although these investments will report non-cash losses in the initial fill-up stage, management believes that the new attractive and affordable manufactured home communities for senior citizens will be a growth area for Florida in the future."
MANAGEMENT WILL NOT HOLD A CONFERENCE CALL.
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.