Champion Home Builders and Champion Retail Housing, subsidiaries
of Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”)
today announced a definitive agreement to acquire Regional
Enterprises LLC, and related companies (collectively, “Regional
Homes”). Regional Homes is the fourth largest HUD manufacturer in
the United States and operates three manufacturing facilities in
Alabama and 43 retail sales centers across the southeast. They sold
approximately 5,000 new homes and had estimated revenue of
approximately $523 million for the year ended December 31, 2022,
and generated estimated EBITDA of approximately $84 million for the
same period.
“We are excited to welcome Regional Homes and its 1,200
employees to the Skyline Champion family,” said Mark Yost, Skyline
Champion’s President and Chief Executive Officer. “We believe
Regional Homes is an excellent fit given their customer-centric
selling approach which goes hand-in-hand with our on-going efforts
to enhance our customers’ buying experience. The transaction is
expected to accomplish several objectives within our strategic
framework for profitable growth. Notably, Regional Homes’ strong
presence in the large markets of Alabama and Mississippi helps
expand our captive retail and manufacturing distribution in that
region. We expect this transaction to generate solid returns over
time with meaningful stakeholder value creation from day one,
supported by Regional Homes’ attractive margin profile, its
talented team, as well as available synergy capture.”
Heath Jenkins, owner of Regional Homes commented, “We couldn't
be more excited to partner with a company that not only has a
reputation of excellence in our industry, but one that perfectly
complements our business model and strategic goals. And with
Skyline Champion's recent announcement of their partnership with
ECN Capital Corporation, our capacity to provide tangible value to
our customers has increased exponentially. This transaction
provides a significant opportunity to make a positive impact for
our customers and employees. The team at Skyline Champion has been
able to witness the unique culture we have developed at Regional
Homes firsthand. Their leadership has shown tremendous support in
our abilities, but most of all, our people – who are what make this
company so special. I’m confident that with these alliances, we are
on the path to something great.”
The purchase price will be approximately $328 million plus
assumed debt, primarily related to inventory floor plan
liabilities, of $130 million. In addition to the purchase price,
the transaction is subject to an earnout provision as well as
customary net working capital adjustments. Skyline Champion expects
to fund the acquisition with cash on hand and $30 million of the
Company’s common stock, which is subject to certain restrictions.
The transaction is subject to regulatory approval and is expected
to close during the Company’s fiscal 2024 third quarter.
Conference Call and Webcast Information:
Skyline Champion management will host a conference call on
August 28, 2023, at 9:00 a.m. Eastern Time, to discuss this
transaction. A slide presentation discussing the transaction has
been published in the Events & Presentations section of Skyline
Champion’s website.
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
13740908. The replay will be available until 11:59 P.M. Eastern
Time on September 11, 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.
About Regional Homes:
Headquartered in Flowood, MS, Regional Homes is a manufactured
and modular housing company. With over 1,200 employees, three
manufacturing facilities, and 43 retail locations throughout the
Southeast, Regional Homes is the 4th largest company in the
industry, with the largest independent retail footprint. Since its
founding in 2006, Regional Homes has sold over 30,000 manufactured
homes and has built a reputation of exemplary service and customer
satisfaction. In addition to manufacturing and retailing, other
turnkey services provided with home purchases include site
preparation, installation, furnishing, servicing, and maintenance.
Regional Homes also maintains strong relationships with federal and
state agencies by providing disaster relief housing programs in
Texas, Mississippi, Florida, Alabama, and Louisiana.
With a distinguished company culture, Regional Homes strikes a
balance of teamwork, competitiveness, and discipline that creates a
cohesive and supportive environment. It is dedicated to the
continued development of a collaborative and thriving environment
for our staff, as well as to producing an exceptional home-buying
experience for our customers.
Forward-Looking Statements
Certain statements made in this press release and in other
written or oral statements made by us or on our behalf are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 (“PSLRA”). A
forward-looking statement is a statement that is not a historical
fact and, without limitation, includes any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, including without limitation, statements relating to
the planned acquisition of Regional Homes and timing thereof,
projected accretion to financial and production results, estimates
of Regional Homes’ revenue and EBITDA, our earnings growth, and
expected synergies related to the acquisition. Skyline Champion’s
strategic initiatives, and future market demand are also intended
to be covered by the safe harbor for “forward-looking statements”
provided by the PSLRA. 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.
Non-GAAP Financial Measures
In addition to disclosing financial measures that are determined
in accordance with GAAP, we present and discuss certain non-GAAP
financial measures, as supplemental measures to help investors
evaluate our operational performance. EBITDA is defined as net
income before taxes attributable to Regional Homes before interest
income, interest expense, and depreciation and amortization. See
below for a reconciliation of EBITDA of Regional Homes to the most
directly comparable GAAP measure of net income before taxes.
Measures related to Regional Homes’ financial results are
unaudited.
SKYLINE CHAMPION
CORPORATION
RECONCILIATION OF REGIONAL
HOMES NET INCOME BEFORE TAXES TO EBITDA
(Unaudited, dollars in
thousand)
For the Year Ended December
31, 2022
Net income before taxes
$
70,698
Interest expense, net
9,262
Depreciation and amortization
3,901
EBITDA
$
83,861
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230824394739/en/
Investor contact information: Name: Kevin Doherty Email:
investorrelations@championhomes.com Phone: (248) 614-8211
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