On June 6, 2024, Nobility Homes Inc (NOBH, Financial) released its 8-K filing announcing the financial results for its first quarter ended February 3, 2024. Nobility Homes Inc focuses on designing, manufacturing, and selling manufactured and modular homes through its own retail sales centers across Florida. It also sells its manufactured homes on a wholesale basis to independent manufactured home retail dealers and manufactured home communities. The company's homes are sold as unfurnished dwellings ready for permanent occupancy. The company recognizes revenue from retail sales of new manufactured homes, the sale of the repurchased homes upon transfer of title to the new purchaser, and revenues from its independent dealers.
Performance Overview
For the first quarter of 2024, Nobility Homes Inc reported sales of $14.8 million, a decrease from $17.1 million in the same period last year. Income from operations also saw a decline, coming in at $2.7 million compared to $3.8 million in Q1 2023. Net income after taxes was $2.3 million, down from $3.0 million in the previous year. Diluted earnings per share were $0.71, a drop from $0.91 per share in Q1 2023.
Challenges and Financial Position
The company attributed the decline in sales primarily to higher interest rates on mortgages and ongoing supply chain issues. According to Terry Trexler, President of Nobility Homes Inc, "Net sales decreased in the first quarter of 2024 as compared to last year primarily because of the interest rates on mortgages, plus we continue to experience limitations on certain key production materials from suppliers." The company also faced delays in the completion and setup of homes due to back orders, price increases, and labor shortages.
Financial Achievements
Despite these challenges, Nobility Homes Inc maintained a strong financial position. The company reported cash and cash equivalents, certificates of deposit, and short-term investments totaling $27.4 million, with no outstanding debt. Working capital stood at $41.6 million, and the ratio of current assets to current liabilities was 5.2:1. Stockholders' equity was $55 million, with a book value per share of common stock increasing to $16.85.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Sales | $14.8 million | $17.1 million |
| Operating Income | $2.7 million | $3.8 million |
| Net Income | $2.3 million | $3.0 million |
| Diluted EPS | $0.71 | $0.91 |
Analysis
The decline in Nobility Homes Inc's earnings highlights the impact of macroeconomic factors such as interest rates and supply chain disruptions on the homebuilding industry. The company's ability to maintain a strong financial position despite these challenges is noteworthy and suggests resilience. However, the ongoing issues with material shortages and labor costs may continue to affect the company's performance in the near term.
For more detailed insights and to view the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Nobility Homes Inc for further details.
