Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced financial results for its first quarter ended July
1, 2023 (“fiscal 2024”).
First Quarter Fiscal 2024 Highlights (compared to First
Quarter Fiscal 2023)
- Net sales decreased 36.0% to $464.8 million
- U.S. homes sold decreased 29.3% to 4,817
- Total backlog decreased 15.7% to $260 million from the
sequential fourth quarter
- Average selling price (“ASP”) per U.S. home sold decreased 8.2%
to $89,000
- Gross profit margin contracted by 370 basis points to
27.9%
- Net income decreased by 56.2% to $51.3 million
- Earnings per share (“EPS”) decreased 56.4% to $0.89
- Adjusted EBITDA decreased 58.9% to $66.8 million
- Adjusted EBITDA margin contracted by 800 basis points to
14.4%
- Net cash generated by operating activities of $74.9 million
during the quarter
“Skyline Champion’s results for the first quarter of fiscal 2024
met expectations, reflecting continued execution on our operational
initiatives as we navigate the current environment and shifts in
demand” said Mark Yost, Skyline Champion’s President, and Chief
Executive Officer. “On a sequential basis we are seeing orders
increase and backlogs return to historically normal levels, while
managing production to align with current demand trends. Skyline
Champion continues to drive our strategic initiatives to transform
homebuilding, generating value for shareholders now and in years to
come.”
First Quarter Fiscal 2024 Results
Net sales for the first quarter fiscal 2024 decreased 36.0% to
$464.8 million compared to the prior-year period. The number of
U.S. homes sold in the first quarter fiscal 2024 decreased 29.3% to
4,817. Volume levels during the quarter were adversely impacted by
the timing of community orders and the absence of FEMA-related
sales which totaled $82.5 million in the first quarter of last
year. The ASP per U.S. home sold decreased 8.2% to $89,000 due to
the impact of product mix and the decrease in material surcharges.
The number of Canadian factory-built homes sold in the quarter
decreased to 221 homes compared to 352 homes in the prior-year
period due to softening demand in certain markets.
Gross profit decreased by 43.5% to $129.7 million in the first
quarter fiscal 2024 compared to the prior-year period. Gross profit
margin was 27.9% of net sales, a 370-basis point contraction
compared to 31.6% in the first quarter fiscal 2023. Gross margin
contraction is being driven by lower volumes and changes in product
mix including the absence of FEMA unit sales versus last year’s
first quarter. Improvements in operational capabilities helped
maintain the margin profile on a sequential basis despite lower
production rates and consumer shifts to smaller less optioned
homes.
Selling, general, and administrative expenses (“SG&A”) in
the first quarter fiscal 2024 decreased to $70.4 million from $72.3
million in the same period last year. SG&A as a percentage of
net sales was 15.2%, compared to 10.0% in the prior year period.
SG&A during the quarter reflects lower sales volumes and
variable compensation, partially offset by expenses related to
acquisitions closed in fiscal 2023 and investments in new
capacity.
Net income decreased by 56.2% to $51.3 million for the first
quarter fiscal 2024 compared to the prior-year period. The decrease
in net income was driven by lower sales in the quarter.
Adjusted EBITDA for the first quarter fiscal 2024 decreased by
58.9% to $66.8 million compared to the first quarter fiscal 2023.
Adjusted EBITDA margin for the quarter was 14.4%, compared to 22.4%
in the prior-year period.
As of July 1, 2023, Skyline Champion had $797.7 million of cash
and cash equivalents, an increase of $50.3 million in the current
quarter.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call
tomorrow, August 2, 2023, at 9:00 a.m. Eastern Time, to discuss
Skyline Champion’s financial results and an update on current
operations.
Investors and other interested parties can listen to a webcast
of the live conference call by logging onto the Investor Relations
section of Skyline Champion’s website at skylinechampion.com. The
online replay will be available on the same website immediately
following the call.
The conference call can also be accessed by dialing (877)
407-4018 (domestic) or (201) 689-8471 (international). A telephonic
replay will be available approximately two hours after the call by
dialing (844) 512-2921, or for international callers, (412)
317-6671. The passcode for the live call and the replay is
13739924. The replay will be available until 11:59 P.M. Eastern
Time on August 16, 2023.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) is a leading producer
of factory-built housing in North America and employs approximately
7,600 people. With more than 70 years of homebuilding experience
and 44 manufacturing facilities throughout the United States and
western Canada, Skyline Champion is well positioned with an
innovative portfolio of manufactured and modular homes, ADUs,
park-models and modular buildings for the single-family,
multi-family, and hospitality sectors.
In addition to its core home building business, Skyline Champion
provides construction services to install and set-up factory-built
homes, operates a factory-direct retail business with 31 retail
locations across the United States, and operates Star Fleet
Trucking, providing transportation services to the manufactured
housing and other industries from several dispatch locations across
the United States.
Skyline Champion builds homes under some of the most well-known
brand names in the factory-built housing industry including Skyline
Homes, Champion Home Builders, Genesis Homes, Athens Park Models,
Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New
Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, Titan
Homes in the U.S. and Moduline and SRI Homes in western Canada.
Presentation of Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”) throughout
this press release, Skyline Champion has provided non-GAAP
financial measures, Adjusted EBITDA and Adjusted EBITDA Margin,
which present operating results on a basis adjusted for certain
items. Skyline Champion uses these non-GAAP financial measures for
business planning purposes and in measuring its performance
relative to that of its competitors. Skyline Champion believes that
these non-GAAP financial measures are useful financial metrics to
assess its operating performance from period-to-period by excluding
certain items that Skyline Champion believes are not representative
of its core business. These non-GAAP financial measures are not
intended to replace, and should not be considered superior to, the
presentation of Skyline Champion’s financial results in accordance
with U.S. GAAP.
Skyline Champion defines Adjusted EBITDA as net income or loss
plus expenses or minus income, (a) the provision for income taxes,
(b) interest income or expense, net, (c) depreciation and
amortization, (d) gain or loss from discontinued operations, (e)
non-cash restructuring charges and impairment of assets, (f) other
non-operating income and costs, including but not limited to those
costs for the acquisition and integration or disposition of
businesses and idle facilities. Adjusted EBITDA is not a measure of
earnings calculated in accordance with U.S. GAAP, and should not be
considered an alternative to, or more meaningful than, net income
or loss, net sales, operating income or earnings per share prepared
on a U.S. GAAP basis. Adjusted EBITDA does not purport to represent
cash flow provided by, or used in, operating activities as defined
by U.S. GAAP. Skyline Champion believes that Adjusted EBITDA is
commonly used by investors to evaluate its performance and that of
its competitors. However, Skyline Champion’s use of Adjusted EBITDA
may vary from that of others in its industry. Adjusted EBITDA is
reconciled from the respective measure under U.S. GAAP in the
tables below. Adjusted EBITDA Margin is calculated as Adjusted
EBITDA divided by net sales reported in the statement of
operations.
Forward-Looking Statements
Statements in this press release, including certain statements
regarding Skyline Champion’s strategic initiatives, and future
market demand are intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
generally can be identified by use of words such as "believe,"
"expect," "future," "anticipate," "intend," "plan," "foresee,"
"may," "could," "should," "will," "potential," "continue," or other
similar words or phrases. Similarly, statements that describe
objectives, plans, or goals also are forward-looking statements.
Such forward-looking statements involve inherent risks and
uncertainties, many of which are difficult to predict and are
generally beyond the control of Skyline Champion. We caution
readers that a number of important factors could cause actual
results to differ materially from those expressed in, implied, or
projected by such forward-looking statements. Risks and
uncertainties include regional, national and international
economic, financial, public health and labor conditions, and the
following: supply-related issues, including prices and availability
of materials; labor-related issues; inflationary pressures in the
North American economy; the cyclicality and seasonality of the
housing industry and its sensitivity to changes in general economic
or other business conditions; demand fluctuations in the housing
industry, including as a result of actual or anticipated increases
in homeowner borrowing rates; the possible unavailability of
additional capital when needed; competition and competitive
pressures; changes in consumer preferences for our products or our
failure to gauge those preferences; quality problems, including the
quality of parts sourced from suppliers and related liability and
reputational issues; data security breaches, cybersecurity attacks,
and other information technology disruptions; the potential
disruption of operations caused by the conversion to new
information systems; the extensive regulation affecting the
production and sale of factory-built housing and the effects of
possible changes in laws with which we must comply; the potential
impact of natural disasters on sales and raw material costs; the
risks associated with mergers and acquisitions, including
integration of operations and information systems; periodic
inventory adjustments by, and changes to relationships with,
independent retailers; changes in interest and foreign exchange
rates; insurance coverage and cost issues; the possibility that all
or part of our intangible assets, including goodwill, might become
impaired; the possibility that our risk management practices may
leave us exposed to unidentified or unanticipated risks; the
potential disruption to our business caused by public health
issues, such as an epidemic or pandemic, and resulting government
actions; and other risks set forth in the “Risk Factors” section,
the “Legal Proceedings” section, the “Management's Discussion and
Analysis of Financial Condition and Results of Operations” section,
and other sections, as applicable, in our Annual Reports on Form
10-K, including our Annual Report on Form 10-K for the fiscal year
ended April 1, 2023 previously filed with the Securities and
Exchange Commission (“SEC”), as well as in our Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K, filed with or furnished
to the SEC.
If any of these risks or uncertainties materializes or if any of
the assumptions underlying such forward-looking statements proves
to be incorrect, then the developments and future events concerning
Skyline Champion set forth in this press release may differ
materially from those expressed or implied by these forward-looking
statements. You are cautioned not to place undue reliance on these
statements, which speak only as of the date of this release. We
anticipate that subsequent events and developments will cause our
expectations and beliefs to change. Skyline Champion assumes no
obligation to update such forward-looking statements to reflect
events or circumstances after the date of this document or to
reflect the occurrence of unanticipated events, unless obligated to
do so under the federal securities laws.
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(Unaudited, dollars and shares in
thousands)
July 1, 2023
April 1, 2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
797,717
$
747,453
Trade accounts receivable, net
50,678
67,296
Inventories, net
196,510
202,238
Other current assets
34,123
26,479
Total current assets
1,079,028
1,043,466
Long-term assets:
Property, plant, and equipment, net
184,259
177,125
Goodwill
196,574
196,574
Amortizable intangible assets, net
42,383
45,343
Deferred tax assets
18,746
17,422
Other noncurrent assets
96,669
82,794
Total assets
$
1,617,659
$
1,562,724
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
47,218
$
44,702
Other current liabilities
198,726
204,215
Total current liabilities
245,944
248,917
Long-term liabilities:
Long-term debt
12,430
12,430
Deferred tax liabilities
6,305
5,964
Other liabilities
62,059
62,412
Total long-term liabilities
80,794
80,806
Stockholders' Equity:
Common stock, $0.0277 par value, 115,000
shares authorized, 57,133 and
57,108 shares issued as of July 1, 2023
and April 1, 2023, respectively
1,586
1,585
Additional paid-in capital
524,907
519,479
Retained earnings
775,980
725,672
Accumulated other comprehensive loss
(11,552
)
(13,735
)
Total stockholders’ equity
1,290,921
1,233,001
Total liabilities and stockholders’
equity
$
1,617,659
$
1,562,724
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, dollars and shares in
thousands, except per share amounts)
Three months ended
July 1, 2023
July 2, 2022
Net sales
$
464,769
$
725,881
Cost of sales
335,096
496,546
Gross profit
129,673
229,335
Selling, general, and administrative
expenses
70,439
72,282
Operating income
59,234
157,053
Interest (income) expense, net
(9,301
)
90
Other (income)
—
(634
)
Income before income taxes
68,535
157,597
Income tax expense
17,266
40,446
Net income
$
51,269
$
117,151
Net income per share:
Basic
$
0.90
$
2.06
Diluted
$
0.89
$
2.04
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, dollars in
thousand)
Three months ended
July 1, 2023
July 2, 2022
Cash flows from operating
activities
Net income
$
51,269
$
117,151
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
7,592
5,616
Amortization of deferred financing
fees
69
95
Equity-based compensation
5,428
3,960
Deferred taxes
(997
)
1,685
Loss on disposal of property, plant, and
equipment
1
6
Foreign currency transaction (gain)
loss
(207
)
351
Change in assets and liabilities:
Accounts receivable
16,676
(38,141
)
Inventories
6,173
(48,855
)
Other assets
(6,974
)
(11,084
)
Accounts payable
1,375
(15,931
)
Accrued expenses and other liabilities
(5,548
)
32,569
Net cash provided by operating
activities
74,857
47,422
Cash flows from investing
activities
Additions to property, plant, and
equipment
(10,341
)
(9,435
)
Investment in floor plan loans
(18,466
)
—
Proceeds from floor plan loans
3,184
—
Acquisitions, net of cash acquired
—
(9,553
)
Proceeds from disposal of property, plant,
and equipment
8
17
Net cash used in investing activities
(25,615
)
(18,971
)
Cash flows from financing
activities
Changes in floor plan financing, net
—
2,398
Stock option exercises
—
9
Tax payments for equity-based
compensation
(961
)
(351
)
Net cash (used in) provided by financing
activities
(961
)
2,056
Effect of exchange rate changes on cash
and cash equivalents
1,983
(2,142
)
Net increase in cash and cash
equivalents
50,264
28,365
Cash and cash equivalents at beginning of
period
747,453
435,413
Cash and cash equivalents at end of
period
$
797,717
$
463,778
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(Unaudited, dollars in
thousand)
Three Months Ended
July 1, 2023
July 2, 2022
Net income
$
51,269
$
117,151
Income tax expense
17,266
40,446
Interest (income) expense, net
(9,301
)
90
Depreciation and amortization
7,592
5,616
EBITDA
66,826
163,303
Transaction costs
-
338
Other
-
(973
)
Adjusted EBITDA
$
66,826
$
162,668
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801446323/en/
Investor: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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