Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced financial results for its first quarter ended July
2, 2022 (“fiscal 2023”).
First Quarter Fiscal 2023 Highlights (compared to First
Quarter Fiscal 2022)
- Net sales increased 42.3% to $725.9 million
- U.S. homes sold increased 6.9% to 6,813
- Total backlog increased 14.1% to $1.4 billion
- Average selling price (“ASP”) per U.S. home sold increased
35.1% to $97,000
- Gross profit margin expanded by 970 basis points to 31.6%
- Net income increased by 173.1% to $117.2 million
- Earnings per share (“EPS”) increased to $2.04 from $0.75
- Adjusted EBITDA increased 159.4% to $162.7 million
- Adjusted EBITDA margin expanded by 1,010 basis points to
22.4%
- Net cash provided by operating activities of $47.4 million
during the quarter
“I am excited to report another strong quarter of sales and
earnings growth,” said Mark Yost, Skyline Champion’s President and
Chief Executive Officer. “Our growth and improved profitability
levels continue to be driven by the demand for our homes and our
team’s ability to increase production levels. The ongoing efforts
to deliver better homes faster through streamlining product
offerings and investments in capacity and people are paying off as
we sequentially reduced our backlog and improved delivery times to
our customers. We expect awareness of our housing solutions to
continue to increase given the tighter economic environment and
challenges within the traditional site-built home market.
Innovation is a priority as we continue to improve the process of
building and buying a home for our customers, reinforcing our
ability to capture the new growth opportunities that are
emerging.”
First Quarter Fiscal 2023 Results
Net sales for the first quarter fiscal 2023 increased 42.3% to
$725.9 million compared to the prior-year period. The number of
U.S. homes sold in the first quarter fiscal 2023 increased 6.9% to
6,813. Volume growth during the quarter was driven by increased
shipments from improved production levels. The ASP per U.S. home
sold increased 35.1% to $97,000 due to the mix of units sold and
price increases to offset inflation in materials, labor and
transportation costs. The number of Canadian factory-built homes
sold in the quarter decreased to 352 homes compared to 385 homes in
the prior-year period due to the timing of home shipments. Total
backlog for Skyline Champion was $1.4 billion as of July 2, 2022,
compared to $1.2 billion as of July 3, 2021. Backlog increased
primarily due to higher average selling prices per home, partially
offset by increased production and moderation of order rates.
Gross profit increased by 105.6% to $229.3 million in the first
quarter fiscal 2023 compared to the prior-year period. Gross profit
margin was 31.6% of net sales, a 970-basis point expansion compared
to 21.9% in the first quarter fiscal 2022. The ongoing improvement
in gross profit margin is being driven by higher volumes, pricing,
operational efficiencies, and product mix, including sales to the
Federal Emergency Management Agency during the quarter.
Selling, general, and administrative expenses (“SG&A”) in
the first quarter fiscal 2023 increased to $72.3 million from $54.0
million in the same period last year. SG&A as a percentage of
net sales decreased 60 basis points to 10.0%. Higher volumes,
increased profitability, and fixed cost leverage during the quarter
more than offset higher compensation expenses, additional
investments in capacity and the ongoing investments in the enhanced
customer buying experience.
Net income increased by 173.1% to $117.2 million for the first
quarter fiscal 2023 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 first quarter fiscal 2023 increased by
159.4% to $162.7 million compared to the first quarter fiscal 2022
driven by an increase in net sales and improved profitability.
Adjusted EBITDA margin expanded by 1,010 basis points to 22.4% due
to higher sales and continued operational improvements increasing
the leverage of fixed costs.
As of July 2, 2022, Skyline Champion had $463.8 million of cash
and cash equivalents.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call
tomorrow, August 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 (844)
826-3033 (domestic) or (412) 317-5185 (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
10169402. The replay will be available until 11:59 P.M. Eastern
Time on August 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 8,700 people. With more
than 70 years of homebuilding experience and 42 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 with 30 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) restructuring charges and impairment
of assets, (f) other non-operating income and costs, including
those for the acquisition and integration or disposition 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. 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 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 2, 2022 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 2, 2022
April 2, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
463,778
$
435,413
Trade accounts receivable, net
128,573
90,536
Inventories, net
292,158
241,334
Other current assets
22,917
14,977
Total current assets
907,426
782,260
Long-term assets:
Property, plant, and equipment, net
144,933
132,985
Goodwill
192,555
191,970
Amortizable intangible assets, net
50,026
51,283
Deferred tax assets
16,302
17,750
Other noncurrent assets
62,090
58,371
Total assets
$
1,373,332
$
1,234,619
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Floor plan payable
$
37,859
$
35,460
Accounts payable
76,133
92,159
Other current liabilities
256,243
222,493
Total current liabilities
370,235
350,112
Long-term liabilities:
Long-term debt
12,430
12,430
Deferred tax liabilities
5,384
5,124
Other
41,705
41,840
Total long-term liabilities
59,519
59,394
Stockholders' Equity:
Common stock
1,573
1,573
Additional paid-in capital
506,815
502,846
Retained earnings
444,702
327,902
Accumulated other comprehensive loss
(9,512)
(7,208)
Total stockholders' equity
943,578
825,113
Total liabilities and stockholders'
equity
$
1,373,332
$
1,234,619
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, dollars and shares in
thousands, except per share amounts)
Three Months Ended
July 2, 2022
July 3, 2021
Net sales
$
725,881
$
510,197
Cost of sales
496,546
398,667
Gross profit
229,335
111,530
Selling, general, and administrative
expenses
72,282
54,023
Operating income
157,053
57,507
Interest expense, net
90
649
Other income
(634)
(54)
Income before income taxes
157,597
56,912
Income tax expense
40,446
14,011
Net income
$
117,151
$
42,901
Net income per share:
Basic
$
2.06
$
0.76
Diluted
$
2.04
$
0.75
SKYLINE CHAMPION
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, dollars in
thousands)
Three Months Ended
July 2, 2022
July 3, 2021
Cash flows from operating
activities
Net income
$
117,151
$
42,901
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
5,616
5,145
Amortization of deferred financing
fees
95
127
Equity-based compensation
3,960
1,441
Deferred taxes
1,685
4,079
Loss on disposal of property, plant, and
equipment
6
6
Foreign currency transaction loss
(gain)
351
(84)
Change in assets and liabilities:
Accounts receivable
(38,141)
(3,097)
Inventories
(48,855)
(25,129)
Prepaids and other assets
(11,084)
(14,992)
Accounts payable
(15,931)
8,741
Accrued expenses and other liabilities
32,569
12,767
Net cash provided by operating
activities
47,422
31,905
Cash flows from investing
activities
Additions to property, plant, and
equipment
(9,435)
(9,221)
Cash paid for acquisition
(9,553)
—
Proceeds from disposal of property, plant,
and equipment
17
2
Net cash used in investing activities
(18,971)
(9,219)
Cash flows from financing
activities
Changes in floor plan financing, net
2,398
3,045
Stock option exercises
9
79
Tax payment for equity-based
compensation
(351)
(1,326)
Net cash provided by financing
activities
2,056
1,798
Effect of exchange rate changes on cash,
and cash equivalents
(2,142)
673
Net increase in cash and cash
equivalents
28,365
25,157
Cash and cash equivalents at beginning of
period
435,413
262,581
Cash and cash equivalents at end of
period
463,778
287,738
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(Unaudited, dollars in
thousands)
July 2, 2022
July 3, 2021
Reconciliation of Adjusted
EBITDA:
Net income
$
117,151
$
42,901
Income tax expense
40,446
14,011
Interest expense, net
90
649
Depreciation and amortization
5,616
5,145
EBITDA
163,303
62,706
Transaction costs
338
—
Other
(973)
—
Adjusted EBITDA
$
162,668
$
62,706
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802005840/en/
Investor contact information: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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