Press Release Details

View all news

Skyline Champion Announces First Quarter Fiscal 2024 Results

August 01, 2023

Skyline Champion Corporation (NYSE: SKY) (“Skyline Champion”) today announced financial results for its first quarter ended July 1, 2023 (“fiscal 2024”).

First Quarter Fiscal 2024 Highlights (compared to First Quarter Fiscal 2023)

  • Net sales decreased 36.0% to $464.8 million
  • U.S. homes sold decreased 29.3% to 4,817
  • Total backlog decreased 15.7% to $260 million from the sequential fourth quarter
  • Average selling price (“ASP”) per U.S. home sold decreased 8.2% to $89,000
  • Gross profit margin contracted by 370 basis points to 27.9%
  • Net income decreased by 56.2% to $51.3 million
  • Earnings per share (“EPS”) decreased 56.4% to $0.89
  • Adjusted EBITDA decreased 58.9% to $66.8 million
  • Adjusted EBITDA margin contracted by 800 basis points to 14.4%
  • Net cash generated by operating activities of $74.9 million during the quarter

“Skyline Champion’s results for the first quarter of fiscal 2024 met expectations, reflecting continued execution on our operational initiatives as we navigate the current environment and shifts in demand” said Mark Yost, Skyline Champion’s President, and Chief Executive Officer. “On a sequential basis we are seeing orders increase and backlogs return to historically normal levels, while managing production to align with current demand trends. Skyline Champion continues to drive our strategic initiatives to transform homebuilding, generating value for shareholders now and in years to come.”

First Quarter Fiscal 2024 Results

Net sales for the first quarter fiscal 2024 decreased 36.0% to $464.8 million compared to the prior-year period. The number of U.S. homes sold in the first quarter fiscal 2024 decreased 29.3% to 4,817. Volume levels during the quarter were adversely impacted by the timing of community orders and the absence of FEMA-related sales which totaled $82.5 million in the first quarter of last year. The ASP per U.S. home sold decreased 8.2% to $89,000 due to the impact of product mix and the decrease in material surcharges. The number of Canadian factory-built homes sold in the quarter decreased to 221 homes compared to 352 homes in the prior-year period due to softening demand in certain markets.

Gross profit decreased by 43.5% to $129.7 million in the first quarter fiscal 2024 compared to the prior-year period. Gross profit margin was 27.9% of net sales, a 370-basis point contraction compared to 31.6% in the first quarter fiscal 2023. Gross margin contraction is being driven by lower volumes and changes in product mix including the absence of FEMA unit sales versus last year’s first quarter. Improvements in operational capabilities helped maintain the margin profile on a sequential basis despite lower production rates and consumer shifts to smaller less optioned homes.

Selling, general, and administrative expenses (“SG&A”) in the first quarter fiscal 2024 decreased to $70.4 million from $72.3 million in the same period last year. SG&A as a percentage of net sales was 15.2%, compared to 10.0% in the prior year period. SG&A during the quarter reflects lower sales volumes and variable compensation, partially offset by expenses related to acquisitions closed in fiscal 2023 and investments in new capacity.

Net income decreased by 56.2% to $51.3 million for the first quarter fiscal 2024 compared to the prior-year period. The decrease in net income was driven by lower sales in the quarter.

Adjusted EBITDA for the first quarter fiscal 2024 decreased by 58.9% to $66.8 million compared to the first quarter fiscal 2023. Adjusted EBITDA margin for the quarter was 14.4%, compared to 22.4% in the prior-year period.

As of July 1, 2023, Skyline Champion had $797.7 million of cash and cash equivalents, an increase of $50.3 million in the current quarter.

Conference Call and Webcast Information:

Skyline Champion management will host a conference call tomorrow, August 2, 2023, 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 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 13739924. The replay will be available until 11:59 P.M. Eastern Time on August 16, 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.

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 expenses or minus income, (a) the provision for income taxes, (b) interest income or expense, net, (c) depreciation and amortization, (d) gain or loss from discontinued operations, (e) non-cash restructuring charges and impairment of assets, (f) other non-operating income and costs, including but not limited to those costs for the acquisition and integration or disposition of businesses and idle facilities. 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 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.

 

SKYLINE CHAMPION CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited, dollars and shares in thousands)

 

July 1,
2023

April 1,
2023

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

797,717

 

$

747,453

 

Trade accounts receivable, net

 

50,678

 

 

67,296

 

Inventories, net

 

196,510

 

 

202,238

 

Other current assets

 

34,123

 

 

26,479

 

Total current assets

 

1,079,028

 

 

1,043,466

 

Long-term assets:

Property, plant, and equipment, net

 

184,259

 

 

177,125

 

Goodwill

 

196,574

 

 

196,574

 

Amortizable intangible assets, net

 

42,383

 

 

45,343

 

Deferred tax assets

 

18,746

 

 

17,422

 

Other noncurrent assets

 

96,669

 

 

82,794

 

Total assets

$

1,617,659

 

$

1,562,724

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

47,218

 

$

44,702

 

Other current liabilities

 

198,726

 

 

204,215

 

Total current liabilities

 

245,944

 

 

248,917

 

Long-term liabilities:

Long-term debt

 

12,430

 

 

12,430

 

Deferred tax liabilities

 

6,305

 

 

5,964

 

Other liabilities

 

62,059

 

 

62,412

 

Total long-term liabilities

 

80,794

 

 

80,806

 

 

Stockholders' Equity:

Common stock, $0.0277 par value, 115,000 shares authorized, 57,133 and

57,108 shares issued as of July 1, 2023 and April 1, 2023, respectively

 

1,586

 

 

1,585

 

Additional paid-in capital

 

524,907

 

 

519,479

 

Retained earnings

 

775,980

 

 

725,672

 

Accumulated other comprehensive loss

 

(11,552

)

 

(13,735

)

Total stockholders’ equity

 

1,290,921

 

 

1,233,001

 

Total liabilities and stockholders’ equity

$

1,617,659

 

$

1,562,724

 

 

SKYLINE CHAMPION CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, dollars and shares in thousands, except per share amounts)

 

Three months ended

July 1,
2023

July 2,
2022

Net sales

$

464,769

 

$

725,881

 

Cost of sales

 

335,096

 

 

496,546

 

Gross profit

 

129,673

 

 

229,335

 

Selling, general, and administrative expenses

 

70,439

 

 

72,282

 

Operating income

 

59,234

 

 

157,053

 

Interest (income) expense, net

 

(9,301

)

 

90

 

Other (income)

 

 

 

(634

)

Income before income taxes

 

68,535

 

 

157,597

 

Income tax expense

 

17,266

 

 

40,446

 

Net income

$

51,269

 

$

117,151

 

Net income per share:

Basic

$

0.90

 

$

2.06

 

Diluted

$

0.89

 

$

2.04

  

 

SKYLINE CHAMPION CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, dollars in thousand)

 

Three months ended

July 1,
2023

July 2,
2022

Cash flows from operating activities

Net income

$

51,269

 

$

117,151

 

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

7,592

 

 

5,616

 

Amortization of deferred financing fees

 

69

 

 

95

 

Equity-based compensation

 

5,428

 

 

3,960

 

Deferred taxes

 

(997

)

 

1,685

 

Loss on disposal of property, plant, and equipment

 

1

 

 

6

 

Foreign currency transaction (gain) loss

 

(207

)

 

351

 

Change in assets and liabilities:

Accounts receivable

 

16,676

 

 

(38,141

)

Inventories

 

6,173

 

 

(48,855

)

Other assets

 

(6,974

)

 

(11,084

)

Accounts payable

 

1,375

 

 

(15,931

)

Accrued expenses and other liabilities

 

(5,548

)

 

32,569

 

Net cash provided by operating activities

 

74,857

 

 

47,422

 

Cash flows from investing activities

Additions to property, plant, and equipment

 

(10,341

)

 

(9,435

)

Investment in floor plan loans

 

(18,466

)

 

 

Proceeds from floor plan loans

 

3,184

 

 

 

Acquisitions, net of cash acquired

 

 

 

(9,553

)

Proceeds from disposal of property, plant, and equipment

 

8

 

 

17

 

Net cash used in investing activities

 

(25,615

)

 

(18,971

)

Cash flows from financing activities

Changes in floor plan financing, net

 

 

 

2,398

 

Stock option exercises

 

 

 

9

 

Tax payments for equity-based compensation

 

(961

)

 

(351

)

Net cash (used in) provided by financing activities

 

(961

)

 

2,056

 

Effect of exchange rate changes on cash and cash equivalents

 

1,983

 

 

(2,142

)

Net increase in cash and cash equivalents

 

50,264

 

 

28,365

 

Cash and cash equivalents at beginning of period

 

747,453

 

 

435,413

 

Cash and cash equivalents at end of period

$

797,717

 

$

463,778

  

 

SKYLINE CHAMPION CORPORATION

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited, dollars in thousand)

 

Three Months Ended

July 1,
2023

July 2,
2022

Net income

$

51,269

 

$

117,151

 

Income tax expense

 

17,266

 

 

40,446

 

Interest (income) expense, net

 

(9,301

)

 

90

 

Depreciation and amortization

 

7,592

 

 

5,616

 

EBITDA

 

66,826

 

 

163,303

 

Transaction costs

 

-

 

 

338

 

Other

 

-

 

 

(973

)

Adjusted EBITDA

$

66,826

 

$

162,668

 

 

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

Source: Skyline Champion Corporation
Categories: Press Releases
View all news