Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced financial results for its third quarter ended
December 30, 2023 (“fiscal 2024”).
Third Quarter Fiscal 2024 Financial Highlights (compared
to Third Quarter Fiscal 2023 unless otherwise noted)
- Net sales decreased 3.9% to $559.5 million
- U.S. homes sold decreased 1.8% to 5,643
- Total backlog increased 12.6% to $290.4 million compared to the
sequential second quarter
- Average selling price (“ASP”) per U.S. home sold decreased 2.0%
to $92,300
- Gross profit margin contracted by 460 basis points to
25.3%
- Net income decreased by 43.3% to $47.0 million
- Earnings per share (“EPS”) decreased 43.8% to $0.81
- Adjusted EBITDA decreased 39.2% to $66.3 million
- Adjusted EBITDA margin contracted by 690 basis points to
11.8%
- Net cash generated by operating activities increased 4.7% to
$89.5 million
Third Quarter Fiscal 2024 Operational Highlights
- Closed the acquisition of Regional Homes
- Launched captive joint venture, Champion Financing
- Expanded Southeast capacity with the opening of a new facility
in Bartow, Florida
“I am really impressed with how the team handled our business
goals this quarter and their ability to execute on our operational
and strategic priorities,” said Mark Yost, Skyline Champion’s
President, and Chief Executive Officer. “Executing during a
seasonally slower period while making great progress on the
integration of Regional Homes and the rollout of Champion Financing
is a testament to our people and our partners. In addition, we
expanded our capacity during the quarter with the opening of a new
plant in Bartow, Florida to support our growing builder developer
channel in the region. The need for housing remains strong and
Skyline Champion continues to position itself to better serve the
needs of our customers.”
Third Quarter Fiscal 2024 Results
Net sales for the third quarter fiscal 2024 decreased 3.9% to
$559.5 million compared to the prior-year period. The number of
U.S. homes sold in the third quarter fiscal 2024 decreased 1.8% to
5,643. The ASP per U.S. home sold decreased 2.0% to $92,300, due to
changes to product mix and a decrease in material surcharges
compared to the prior year period. The decrease in net sales was
partially offset by net sales of $119.7 million from the Regional
Homes acquisition. The number of Canadian factory-built homes sold
in the quarter decreased to 249 homes compared to 273 homes in the
prior-year period due to softer demand given the higher interest
rate environment.
Gross profit decreased by 18.9% to $141.3 million in the third
quarter fiscal 2024 compared to the prior-year period. Gross profit
margin was 25.3% of net sales, a contraction of 460 basis points
compared to 29.9% in the third quarter fiscal 2023. The change in
gross profit margin was primarily due to lower ASPs, a shift in
product mix, the impact of the Regional Homes operations, and the
ramping of previously idled facilities.
Selling, general, and administrative expenses (“SG&A”) in
the third quarter fiscal 2024 increased to $85.1 million from $71.8
million in the same period last year. SG&A during the quarter
increased due to the Regional Homes acquisition. SG&A as a
percentage of net sales was 15.2%, compared to 12.3% in the prior
year period.
Net income decreased by 43.3% to $47.0 million for the third
quarter fiscal 2024 compared to the prior year period. The decrease
in net income was primarily driven by lower sales and gross profit
in the quarter.
Adjusted EBITDA for the third quarter fiscal 2024 decreased by
39.2% to $66.3 million compared to the third quarter fiscal 2023.
Adjusted EBITDA margin for the quarter was 11.8%, compared to 18.7%
in the prior-year period.
As of December 30, 2023, Skyline Champion had $497.9 million of
cash and cash equivalents, a decrease of $203.2 million in the
current quarter, due to the strategic acquisition of Regional
Homes, partially offset by operating cash flows of $89.5
million.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call
tomorrow, February 6, 2024, at 9:00 a.m. Eastern Time, to discuss
Skyline Champion’s financial results and an update on current
operations.
Interested investors and other 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
13743591. The replay will be available until 11:59 P.M. Eastern
Time on February 20, 2024.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) is a leading producer
of factory-built housing in North America and employs approximately
8,500 people. With more than 70 years of homebuilding experience
and 48 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 73 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, Regional 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)
December 30, 2023
April 1, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
497,907
$
747,453
Trade accounts receivable, net
48,659
67,296
Inventories, net
290,542
202,238
Other current assets
33,057
26,479
Total current assets
870,165
1,043,466
Long-term assets:
Property, plant, and equipment, net
287,708
177,125
Goodwill
359,260
196,574
Amortizable intangible assets, net
79,320
45,343
Deferred tax assets
22,255
17,422
Other noncurrent assets
250,711
82,794
Total assets
$
1,869,419
$
1,562,724
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Floorplan payable
$
80,389
$
-
Accounts payable
43,810
44,702
Other current liabilities
215,098
204,215
Total current liabilities
339,297
248,917
Long-term liabilities:
Long-term debt
24,663
12,430
Deferred tax liabilities
6,867
5,964
Other liabilities
76,634
62,412
Total long-term liabilities
108,164
80,806
Stockholders' Equity:
Common stock
1,600
1,585
Additional paid-in capital
563,019
519,479
Retained earnings
868,598
725,672
Accumulated other comprehensive loss
(11,259
)
(13,735
)
Total stockholders’ equity
1,421,958
1,233,001
Total liabilities and stockholders’
equity
$
1,869,419
$
1,562,724
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, dollars and shares in
thousands, except per share amounts)
Three months ended
Nine months ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
Net sales
$
559,455
$
582,322
$
1,488,460
$
2,115,028
Cost of sales
418,183
408,233
1,101,026
1,437,498
Gross profit
141,272
174,089
387,434
677,530
Selling, general, and administrative
expenses
85,091
71,820
219,984
228,017
Operating income
56,181
102,269
167,450
449,513
Interest (income), net
(4,309
)
(5,409
)
(24,090
)
(7,293
)
Other expense (income)
756
—
2,821
(634
)
Income before income taxes
59,734
107,678
188,719
457,440
Income tax expense
12,764
24,865
44,811
113,384
Net income
$
46,970
$
82,813
$
143,908
$
344,056
Net income per share:
Basic
$
0.81
$
1.45
$
2.51
$
6.04
Diluted
$
0.81
$
1.44
$
2.49
$
6.00
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, dollars in
thousand)
Nine months ended
December 30, 2023
December 31, 2022
Cash flows from operating
activities
Net income
$
143,908
$
344,056
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
24,017
19,341
Amortization of deferred financing
fees
255
266
Equity-based compensation
15,231
11,631
Deferred taxes
(3,115
)
3,581
Loss (gain) on disposal of property,
plant, and equipment
145
(143
)
Foreign currency transaction loss
(184
)
844
Loss on equity method investment
217
—
Change in assets and liabilities:
Accounts receivable
39,340
42,847
Floor plan receivables
(4,978
)
—
Inventories
47,696
30,470
Other assets
(10,756
)
(9,895
)
Accounts payable
(15,309
)
(52,663
)
Accrued expenses and other liabilities
(17,850
)
(26,291
)
Net cash provided by operating
activities
218,617
364,044
Cash flows from investing
activities
Additions to property, plant, and
equipment
(40,986
)
(38,177
)
Cash paid for equity method investment
(2,250
)
—
Cash paid for investment in ECN common
stock
(78,858
)
—
Cash paid for investment in ECN preferred
stock
(64,520
)
—
Investment in floor plan loans
(18,466
)
—
Proceeds from floor plan loans
14,646
—
Acquisitions, net of cash acquired
(284,545
)
(6,810
)
Proceeds from disposal of property, plant,
and equipment
556
224
Net cash used in investing activities
(474,423
)
(44,763
)
Cash flows from financing
activities
Changes in floor plan financing, net
4,474
(35,460
)
Payments on long term debt
(67
)
—
Stock option exercises
506
596
Tax payments for equity-based
compensation
(983
)
(1,363
)
Net cash provided by (used in) financing
activities
3,930
(36,227
)
Effect of exchange rate changes on cash
and cash equivalents
2,330
(6,019
)
Net (decrease) increase in cash and cash
equivalents
(249,546
)
277,035
Cash and cash equivalents at beginning of
period
747,453
435,413
Cash and cash equivalents at end of
period
$
497,907
$
712,448
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(Unaudited, dollars in
thousand)
Three months ended
Nine months ended
December 30, 2023
December 31, 2022
Change
December 30, 2023
December 31, 2022
Change
Reconciliation of Adjusted
EBITDA:
Net income
$
46,970
$
82,813
$
(35,843
)
$
143,908
$
344,056
$
(200,148
)
Income tax expense
12,764
24,865
(12,101
)
44,811
113,384
(68,573
)
Interest (income), net
(4,309
)
(5,409
)
1,100
(24,090
)
(7,293
)
(16,797
)
Depreciation and amortization
9,639
6,784
2,855
24,017
19,341
4,676
EBITDA
65,064
109,053
(43,989
)
188,646
469,488
(280,842
)
Transaction costs
1,188
—
1,188
3,253
338
2,915
Other
—
—
—
—
(973
)
973
Adjusted EBITDA
$
66,252
$
109,053
(42,801
)
$
191,899
$
468,853
(276,954
)
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EARNINGS PER SHARE
(Unaudited, dollars and shares in
thousands, except per share amounts)
(Certain amounts shown net of
tax, as applicable)
Three months ended
Nine months ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
Net income
$
46,970
$
82,813
$
143,908
$
344,056
Adjustments:
Transaction costs
934
—
2,481
255
Other
—
—
—
(733
)
Adjusted net income attributable to the
Company's common shareholders
$
47,904
$
82,813
$
146,389
$
343,578
Adjusted basic net income per share
$
0.83
$
1.45
$
2.55
$
6.03
Adjusted diluted net income per share
$
0.82
$
1.44
$
2.53
$
5.99
Average basic shares outstanding
57,644
56,971
57,364
56,946
Average diluted shares outstanding
58,136
57,377
57,842
57,390
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240205529816/en/
Investor information: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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