Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced financial results for its third quarter ended
January 1, 2022 for the fiscal year ending April 2, 2022 (“fiscal
2022”).
Third Quarter Fiscal 2022 Highlights (compared to Third
Quarter Fiscal 2021)
- Net sales increased 41.6% to $534.7 million
- U.S. factory-built homes sold increased 9.2% to 5,832
- Total backlog increased to $1.5 billion
- Average selling price (“ASP”) per U.S. home sold increased
31.7% to $83,000
- Gross profit margin expanded by 1,040 basis points to
29.4%
- Net income increased by 213.1% to $67.6 million
- Earnings per share (“EPS”) increased to $1.18 from $0.38
- Adjusted EBITDA increased 201.4% to $96.7 million
- Adjusted EBITDA margin expanded by 960 basis points to
18.1%
- Net cash provided by operating activities of $75.5 million
during the quarter
“I am pleased to report another outstanding quarter of operating
and financial results,” said Mark Yost, Skyline Champion’s
President and Chief Executive Officer. “The overall fundamentals
remain as supportive as ever, while the near-term operating
environment remains challenging due to ongoing disruptions in our
supply chain and COVID-related labor headwinds. Our team continues
to execute, which enabled us to increase production and deliver
positive volume growth at higher profitability levels. The
investments we have made to increase capacity and efficiency have
enabled us to succeed in this challenging environment.”
Third Quarter Fiscal 2022 Results
Net sales for the third quarter fiscal 2022 increased 41.6% to
$534.7 million compared to the prior-year period. The number of
U.S. factory-built homes sold in the third quarter fiscal 2022
increased 9.2% to 5,832 compared to the prior year third quarter,
because of strong demand and increased production levels. The
average selling price per U.S. home sold increased 31.7% to $83,000
due to price increases in response to rising material costs and
labor. The number of Canadian factory-built homes sold in the
quarter increased to 336 homes compared to 318 homes in the
prior-year period due to stronger demand and improved production
levels. Total backlog for Skyline Champion was $1.5 billion as of
January 1, 2022 compared to $488.5 million as of December 26, 2020.
Backlog growth was driven by strong order levels that continue to
outpace production, which is operating at less than full capacity
in part due to supply chain availability as well as increased
pricing and the acquisition of ScotBilt Homes, LLC and related
companies.
Gross profit increased by 119.0% to $157.2 million in the third
quarter fiscal 2022 compared to the prior-year period. Gross profit
margin was 29.4% of net sales, a 1,040 basis point expansion
compared to 19.0% in the third quarter fiscal 2021. The increase in
the gross profit margin was driven by higher sales growth due to
higher volume, pricing, and operating efficiencies.
Selling, general, and administrative expenses (“SG&A”) in
the third quarter fiscal 2022 increased to $65.8 million from $44.3
million in the same period last year. SG&A as a percentage of
net sales increased 60 basis points to 12.3%. Improved operations
lead to higher production levels and fixed cost leverage during the
quarter, partially offsetting higher expenses from variable
compensation and the ongoing investments in the enhanced customer
buying experience and supporting digital platform.
Net income increased by 213.1% to $67.6 million for the third
quarter fiscal 2022 compared to the prior-year period. The increase
in net income was mainly driven by the increase in sales volume,
pricing, and operating leverage.
Adjusted EBITDA for the third quarter fiscal 2022 increased by
201.4% to $96.7 million compared to the third quarter fiscal 2021
primarily driven by an increase in net sales and improved
profitability. Adjusted EBITDA margin expanded by 960 basis points
to 18.1% due to higher sales growth, operational improvements, and
leverage of fixed costs.
Operating cash flow for the third quarter fiscal 2022 increased
88.9% to $75.5 million compared to the third quarter fiscal 2021.
As of January 1, 2022, Skyline Champion had $382.1 million of cash
and cash equivalents.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call
tomorrow, February 3, 2022, 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
http://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
13726128. The replay will be available until 11:59 P.M. Eastern
Time on February 17, 2022.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) is the largest
independent, publicly traded, factory-built housing company in
North America and employs approximately 8,100 people. With almost
70 years of homebuilding experience and 40 manufacturing facilities
throughout the United States and western Canada, Skyline Champion
is well positioned with a leading 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
operates a factory-direct retail business, Titan Factory Direct,
with 18 retail locations spanning the southern United States, and
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, 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 (a) the provision for income taxes, (b) interest expense, net,
(c) depreciation and amortization, (d) gain or loss from
discontinued operations, (e) equity-based compensation awards
granted before December 31, 2018, (f) restructuring charges, (g)
impairment of assets, and (h) other non-operating costs including
those for the acquisition and integration of businesses. 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. 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: the COVID-19 pandemic, which has had, and could continue
to have, significant adverse effects on us; the impact of recent
political instability and social unrest on economic conditions
generally; 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;
supply-related issues; labor-related issues; 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 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; the prices and availability of
materials; 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 goodwill might become impaired;
the possibility that our risk management practices may leave us
exposed to unidentified or unanticipated risks; 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 3, 2021
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)
January 1, 2022
April 3, 2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
382,133
$
262,581
Trade accounts receivable, net
46,184
57,481
Inventories, net
185,052
166,113
Other current assets
21,340
13,592
Total current assets
634,709
499,767
Long-term assets:
Property, plant, and equipment, net
127,196
115,140
Goodwill
191,970
191,803
Amortizable intangible assets, net
53,171
58,835
Deferred tax assets
14,304
19,914
Other noncurrent assets
46,801
32,443
Total assets
$
1,068,151
$
917,902
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Floor plan payable
$
34,315
$
25,733
Accounts payable
44,200
57,214
Other current liabilities
205,094
180,695
Total current liabilities
283,609
263,642
Long-term liabilities:
Long-term debt
12,430
39,330
Deferred tax liabilities
4,615
4,280
Other
34,119
42,039
Total long-term liabilities
51,164
85,649
Stockholders' Equity:
Common stock, $0.0277 par value, 115,000
shares authorized, 56,827 and 56,640 shares issued as of January 1,
2022 and April 3, 2021, respectively
1,572
1,569
Additional paid-in capital
498,898
491,668
Retained earnings
241,135
82,898
Accumulated other comprehensive loss
(8,227
)
(7,524
)
Total stockholders’ equity
733,378
568,611
Total liabilities and stockholders’
equity
$
1,068,151
$
917,902
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED INCOME
STATEMENTS
(Unaudited, dollars and shares in
thousands, except per share amounts)
Three Months Ended
Nine Months Ended
January 1, 2022
December 26, 2020
January 1, 2022
December 26, 2020
Net sales
$
534,690
$
377,581
$
1,569,112
$
973,232
Cost of sales
377,451
305,797
1,171,016
784,652
Gross profit
157,239
71,784
398,096
188,580
Selling, general, and administrative
expenses
65,825
44,286
181,188
126,466
Operating income
91,414
27,498
216,908
62,114
Interest expense, net
508
795
2,002
2,601
Other expense (income)
7
(180
)
(36
)
(6,993
)
Income before income taxes
90,899
26,883
214,942
66,506
Income tax expense
23,277
5,284
53,696
15,493
Net income
$
67,622
$
21,599
$
161,246
$
51,013
Net income per share:
Basic
$
1.19
$
0.38
$
2.84
$
0.90
Diluted
$
1.18
$
0.38
$
2.81
$
0.90
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, dollars in
thousands)
Nine Months Ended
January 1, 2022
December 26, 2020
Cash flows from operating
activities
Net income
$
161,246
$
51,013
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
9,869
8,994
Amortization of intangible assets
5,664
4,082
Amortization of deferred financing
fees
599
380
Equity-based compensation
6,134
4,625
Deferred taxes
5,942
3,251
Loss (gain) on disposal of property,
plant, and equipment
696
(75
)
Foreign currency transaction loss
(gain)
55
(421
)
Change in assets and liabilities:
Accounts receivable
11,419
4,577
Inventories
(19,133
)
(3,388
)
Prepaids and other assets
(22,954
)
(2,239
)
Accounts payable
(13,076
)
(284
)
Accrued expenses and other liabilities
17,945
33,301
Net cash provided by operating
activities
164,406
103,816
Cash flows from investing
activities
Additions to property, plant, and
equipment
(22,784
)
(4,235
)
Cash paid for acquisition
(207
)
—
Proceeds from maturity of Company owned
life insurance policy
—
1,186
Proceeds from disposal of property, plant,
and equipment
70
1,836
Net cash used in investing activities
(22,921
)
(1,213
)
Cash flows from financing
activities
Changes in floor plan financing, net
8,583
(8,318
)
Payments on deferred financing fees
(1,130
)
—
Payments on revolving debt facility
(26,900
)
(38,000
)
Stock option exercises
1,099
67
Tax payments for equity-based
compensation
(3,007
)
(1,687
)
Net cash used in financing activities
(21,355
)
(47,938
)
Effect of exchange rate changes on cash
and cash equivalents
(578
)
2,940
Net increase in cash and cash
equivalents
119,552
57,605
Cash and cash equivalents at beginning of
period
262,581
209,455
Cash and cash equivalents at end of
period
$
382,133
$
267,060
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(Unaudited, dollars in
thousands)
Three Months Ended
Nine Months Ended
January 1, 2022
December 26 2020
Change
January 1, 2022
December 26, 2020
Change
Reconciliation of Adjusted
EBITDA:
Net income
$
67,622
$
21,599
$
46,023
$
161,246
$
51,013
$
110,233
Income tax expense
23,277
5,284
17,993
53,696
15,493
38,203
Interest expense, net
508
795
(287
)
2,002
2,601
(599
)
Depreciation and amortization
5,250
4,386
864
15,533
13,076
2,457
EBITDA
96,657
32,064
64,593
232,477
82,183
150,294
Equity-based compensation (for awards
granted prior to December 31, 2018)
—
—
—
—
1,358
(1,358
)
Adjusted EBITDA
$
96,657
$
32,064
$
64,593
$
232,477
$
83,541
$
148,936
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220201006216/en/
Investor contact information: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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