Press Release Details

View all news

Skyline Champion Announces Third Quarter Fiscal 2022 Results

February 02, 2022

TROY, Mich.--(BUSINESS WIRE)-- 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

 

 

 

Investor contact information:
Name: Kevin Doherty
Email: investorrelations@championhomes.com
Phone: (248) 614-8211

Source: Skyline Champion Corporation

Categories: Press Releases
View all news