Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced financial results for its fourth quarter and full
year ended April 2, 2022 (“fiscal 2022”). Last year’s results
included an extra week during the fourth quarter compared to fiscal
2022.
Fourth Quarter Fiscal 2022 Highlights (compared to Fourth
Quarter Fiscal 2021)
- Net sales increased 42.5% to $638.1 million
- U.S. homes sold increased 11.1% to 6,580
- Total backlog increased to $1.6 billion
- Average selling price (“ASP”) per U.S. home sold increased
30.7% to $87,800
- Gross profit margin expanded by 780 basis points to 29.9%
- Net income increased by 156.1% to $86.8 million
- Earnings per share (“EPS”) increased to $1.51 from $0.59
- Adjusted EBITDA increased 137.0% to $121.4 million
- Adjusted EBITDA margin expanded by 760 basis points to
19.0%
- Net cash provided by operating activities of $60.1 million
during the quarter
“I am very proud of Skyline Champion’s accomplishments in the
ever-evolving operating environment faced throughout fiscal 2022, a
true testament to our people and our partners.” said Mark Yost,
Skyline Champion’s President and Chief Executive Officer. “Our
extraordinary results were driven by the team’s ability to make
meaningful progress on streamlining our product offerings, which
allowed us to significantly increase production levels in response
to the market demand for our homes. With increased capacity, and
the investments we are making to enhance the customer’s home-buying
experience, we are confident and well positioned to continue to
deliver significant value to our customers and stakeholders,
especially as society’s need for attainable housing is magnified in
today’s environment.”
Fourth Quarter Fiscal 2022 Results
Net sales for the fourth quarter fiscal 2022 increased 42.5% to
$638.1 million compared to the prior-year period. The number of
U.S. homes sold in the fourth quarter fiscal 2022 increased 11.1%
to 6,580 despite the extra fiscal week in the prior year fourth
quarter. Volume growth during the quarter was driven by continued
strong demand and increased production levels. The ASP per U.S.
home sold increased 30.7% to $87,800 due to price increases to
offset inflation in materials, labor and transportation costs. The
number of Canadian factory-built homes sold in the quarter
decreased to 400 homes compared to 419 homes in the prior-year
period due to the extra week in the fourth quarter of last year.
Total backlog for Skyline Champion was $1.6 billion as of April 2,
2022, compared to $858.6 million as of April 3, 2021. Backlog
growth was driven by strong order activity and higher average
selling prices per home. The backlog at April 2, 2022 included
approximately $200 million of disaster relief housing for
production and delivery to FEMA.
Gross profit increased by 92.7% to $191.0 million in the fourth
quarter fiscal 2022 compared to the prior-year period. Gross profit
margin was 29.9% of net sales, a 780 basis point expansion compared
to 22.1% in the fourth quarter fiscal 2021. The ongoing improvement
in the gross profit margin is being driven by higher volumes,
pricing, and operational efficiencies.
Selling, general, and administrative expenses (“SG&A”) in
the fourth quarter fiscal 2022 increased to $75.0 million from
$52.5 million in the same period last year. SG&A as a
percentage of net sales increased 10 basis points to 11.8%. Higher
volumes, increased profitability, and fixed cost leverage during
the quarter partially offset higher variable compensation and the
ongoing investments in capacity expansion and the enhanced customer
buying experience.
Net income increased by 156.1% to $86.8 million for the fourth
quarter fiscal 2022 compared to the prior-year period. The increase
in net income was driven by the increase in sales volume, pricing,
and operating leverage.
Adjusted EBITDA for the fourth quarter fiscal 2022 increased by
137.0% to $121.4 million compared to the fourth quarter fiscal 2021
driven by an increase in net sales and improved profitability.
Adjusted EBITDA margin expanded by 760 basis points to 19.0% due to
higher sales and continued operational improvements increasing the
leverage of fixed costs.
As of April 2, 2022, Skyline Champion had $435.4 million of cash
and cash equivalents.
Full Year Fiscal 2022 Financial Highlights
For fiscal 2022, net sales were $2,207.2 million which
represents an increase of 55.3%, or $786.3 million, compared to
fiscal 2021, which had an extra fiscal week in the fourth quarter
compared to this year. Net sales growth was primarily driven by
strong demand, pricing to offset inflation, and increased
production.
Gross profit increased $301.4 million or 104.8% to $589.1
million in fiscal 2022, compared to $287.7 million in the prior
year period. Gross profit margin increased by 650 basis points to
26.7% of net sales for fiscal 2022, compared to fiscal 2021
primarily due to higher sales volumes and increased price levels
and operational efficiencies.
SG&A increased to $256.2 million for fiscal 2022, compared
to $178.9 million in the prior year period primarily due higher
variable compensation, the impact of the ScotBilt acquisition in
February 2021 and investments in the enhanced customer buying
experience.
Net income for fiscal 2022 was $248.0 million compared to net
income of $84.9 million for fiscal 2021, an increase of $163.1
million or 192.2% due to an increase net sales and improved
operating income.
Adjusted EBITDA for fiscal 2022 increased by 162.6% to $353.9
million, compared to $134.8 million for fiscal 2022. Adjusted
EBITDA margin expanded 650 basis points to 16.0% in fiscal
2022.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call
tomorrow, May 24, 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
13729582. The replay will be available until 11:59 P.M. Eastern
Time on June 7, 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 8,400 people. With almost
70 years of homebuilding experience and 41 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
provides construction services to install and set-up factory built
homes, operates a factory-direct retail business, Titan Factory
Direct, with 18 retail locations spanning the southern United
States, and operates Star Fleet Trucking, which provides
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 (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: 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; 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; the COVID-19 pandemic, which has had, and
could continue to have, significant adverse effects on us; 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 in
thousands)
April 2, 2022
April 3, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
435,413
$
262,581
Trade accounts receivable, net
90,536
57,481
Inventories, net
241,334
166,113
Other current assets
14,977
13,592
Total current assets
782,260
499,767
Long-term assets:
Property, plant, and equipment, net
132,985
115,140
Goodwill
191,970
191,803
Amortizable intangible assets, net
51,283
58,835
Deferred tax assets
17,750
19,914
Other noncurrent assets
58,371
32,443
Total assets
$
1,234,619
$
917,902
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Floor plan payable
$
35,460
$
25,733
Accounts payable
92,159
57,214
Other current liabilities
222,493
180,695
Total current liabilities
350,112
263,642
Long-term liabilities:
Long-term debt
12,430
39,330
Deferred tax liabilities
5,124
4,280
Other
41,840
42,039
Total long-term liabilities
59,394
85,649
Stockholders' Equity:
Common stock
1,573
1,569
Additional paid-in capital
502,846
491,668
Retained earnings
327,902
82,898
Accumulated other comprehensive loss
(7,208
)
(7,524
)
Total stockholders' equity
825,113
568,611
Total liabilities and stockholders'
equity
$
1,234,619
$
917,902
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, dollars and shares in
thousands, except per share amounts)
Three Months Ended
Twelve Months Ended
April 2, 2022
April 3, 2021
April 2, 2022
April 3, 2021
Net sales
$
638,117
$
447,649
$
2,207,229
$
1,420,881
Cost of sales
447,090
348,534
1,618,106
1,133,186
Gross profit
191,027
99,115
589,123
287,695
Selling, general, and administrative
expenses
75,029
52,470
256,218
178,936
Operating income
115,998
46,645
332,905
108,759
Interest expense, net
511
647
2,512
3,248
Other expense (income)
—
1,104
(36
)
(5,889
)
Income before income taxes
115,487
44,894
330,429
111,400
Income tax expense
28,689
11,008
82,385
26,501
Net income
$
86,798
$
33,886
$
248,044
$
84,899
Net income per share:
Basic
$
1.53
$
0.60
$
4.37
$
1.50
Diluted
$
1.51
$
0.59
$
4.33
$
1.49
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, dollars in
thousands)
Twelve Months Ended
April 2, 2022
April 3, 2021
Cash flows from operating
activities
Net income
$
248,044
$
84,899
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
20,936
17,704
Amortization of deferred financing
fees
690
506
Equity-based compensation
9,777
6,037
Deferred taxes
3,019
3,588
Loss (gain) on disposal of property,
plant, and equipment
612
(61
)
Foreign currency transaction gain
(83
)
(519
)
Change in assets and liabilities:
Accounts receivable
(32,854
)
(9,305
)
Inventories
(75,019
)
(31,030
)
Prepaids and other assets
(28,217
)
967
Accounts payable
34,824
16,371
Accrued expenses and other liabilities
42,750
64,740
Net cash provided by operating
activities
224,479
153,897
Cash flows from investing
activities
Additions to property, plant, and
equipment
(31,979
)
(8,016
)
Cash paid for acquisition
(207
)
(52,548
)
Proceeds from life insurance policy
—
1,829
Proceeds from disposal of property, plant,
and equipment
219
1,927
Net cash used in investing activities
(31,967
)
(56,808
)
Cash flows from financing
activities
Changes in floor plan financing, net
9,728
(8,181
)
Payments on deferred financing fees
(1,130
)
—
Payments on revolving debt facility
(26,900
)
(38,000
)
Stock option exercises
1,405
55
Tax payment for equity-based
compensation
(3,039
)
(1,687
)
Net cash used in financing activities
(19,936
)
(47,813
)
Effect of exchange rate changes on cash,
and cash equivalents
256
3,850
Net increase in cash and cash
equivalents
172,832
53,126
Cash and cash equivalents at beginning of
period
262,581
209,455
Cash and cash equivalents at end of
period
$
435,413
$
262,581
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(Unaudited, dollars in
thousands)
Three Months Ended
Twelve Months Ended
April 2, 2022
April 3, 2021
Change
April 2, 2022
April 3, 2021
Change
Reconciliation of Adjusted
EBITDA:
Net income
$
86,798
$
33,886
$
52,912
$
248,044
$
84,899
$
163,145
Income tax expense
28,689
11,008
17,681
82,385
26,501
55,884
Interest expense, net
511
647
(136
)
2,512
3,248
(736
)
Depreciation and amortization
5,403
4,629
774
20,936
17,704
3,232
EBITDA
121,401
50,170
71,231
353,877
132,352
221,525
Transaction costs
—
1,044
(1,044
)
—
1,044
(1,044
)
Equity based compensation (for awards
granted prior to December 31, 2018)
—
—
—
—
1,359
(1,359
)
Adjusted EBITDA
$
121,401
$
51,214
$
70,187
$
353,877
$
134,755
$
219,122
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220519005789/en/
Investor contact information: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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