Nobility Homes Inc. (NOBH, Financial) filed Quarterly Report for the period ended 2009-05-02.
NOBILITY HOMES INC. designs manufactures and sells a broad line of manufactured homes on a wholesale basis to manufactured home dealers and manufactured home parks. Nobility Homes Inc. has a market cap of $35.6 million; its shares were traded at around $8.75 with a P/E ratio of 437.5 and P/S ratio of 1.2. The dividend yield of Nobility Homes Inc. stocks is 2.9%. Nobility Homes Inc. had an annual average earning growth of 4.2% over the past 5 years.
The construction lending operation provides financing to buyers who are purchasing a home through the Companys retail sales centers. The loan provides the homeowner with enough money to pay for the land, land improvements, construction and installation of the home, impact fees and permits. The loan is disbursed in draws as construction progresses and is secured by a first mortgage on the land, home and all of the improvements. The term is typically for one year, with interest only payable monthly. There is also a finance charge which is added to the loan at closing. The construction loan is paid off when the homeowner closes on the permanent financing, typically a 30 year fixed mortgage. The prepaid finance charge in the second quarter of 2009 was $19,051 compared to $21,999 in the second quarter of 2008 and was $31,296 for the first six months of 2009 compared to $59,144 for the first six months of 2008. The construction interest in second quarter of 2009 was $5,794 compared to $21,731 in the second quarter of 2008 and was $8,975 for the first six months of 2009 compared to $41,867 for the first six months of 2008. The decline resulted from the decrease in the number of homes sold through the Prestige sales centers.
During fiscal year 2008, the Company invested $6,390,000 to become a limited partner in two new Florida retirement manufactured home communities. The Company reported losses from investments in these retirement community limited partnerships in the amount $121,126 for the second quarter of 2009 compared to $178,842 for the second quarter of 2008. For the first six months of 2009 the Company reported losses of $188,037 compared to $178,842 in the first six months of 2008. Although these investments will report losses in the initial fill-up stage, management believes that new attractive and affordable manufactured home communities for senior citizens will be a significant growth area for Florida in the future.
As a result of the factors discussed above, losses for the second quarter of 2009 were $506,440 or $0.12 per diluted share compared to earnings of $587,738 or $0.14 per diluted share for the second quarter of 2008. For the first six months of 2009 losses were $629,588 or $0.15 per diluted share compared to earnings of $1,208,723 or $0.30 per diluted share in the second quarter 2008.
Liquidity and Capital Resources Cash and cash equivalents were $3,387,184 at May 2, 2009 compared to $8,649,724 at November 1, 2008. The decrease in cash and cash equivalents was primarily due to (i) repurchase of $4,768,710 in defaulted loans which were collateralized from loans that were financed under the finance revenue sharing agreement, and (ii) the payment of cash dividends of $1,018,669. Short and long-term investments were $7,952,834 at May 2, 2009 compared to $8,308,436 at November 1, 2008. Working capital was $20,002,913 at May 2, 2009 as compared to $21,232,995 at November 1, 2008. Nobility owns the entire inventory for its Prestige retail sales centers and does not incur any third party floor plan financing expenses. Customer deposits continued to decrease to a below normal historic level due to the deteriorating housing and financial markets resulting in a decrease in the number of sold retail homes.
Nobility paid an annual cash dividend of $0.25 per common share for fiscal year 2008 on January 12, 2009 in the amount of $1,018,669. On January 11, 2008, the Company paid an annual cash dividend of $0.50 per common share for fiscal year 2007 in the amount of $2,043,572.
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NOBILITY HOMES INC. designs manufactures and sells a broad line of manufactured homes on a wholesale basis to manufactured home dealers and manufactured home parks. Nobility Homes Inc. has a market cap of $35.6 million; its shares were traded at around $8.75 with a P/E ratio of 437.5 and P/S ratio of 1.2. The dividend yield of Nobility Homes Inc. stocks is 2.9%. Nobility Homes Inc. had an annual average earning growth of 4.2% over the past 5 years.
Highlight of Business Operations:
Insurance revenues in the second quarter of 2009 were $98,555 compared to $157,035 in the second quarter of 2008. Total insurance revenues for the first six months of 2009 were $160,902 compared to $238,886 for the first six months of 2008. The decline resulted from fewer new policies generated, because the decrease in the number of homes sold through the Prestige sales centers. Prestiges wholly-owned subsidiary, Mountain Financial, Inc., is an independent insurance agent, licensed mortgage lender and mortgage broker. Its principal activity is the performance of retail insurance services, which involves placing various types of insurance, including property and casualty, automobile and extended home warranty coverage, with insurance underwriters on behalf of its Prestige customers in connection with their purchase and financing of manufactured homes. As agent, Mountain Financial solely assists our customers in obtaining various insurance and extended warranty coverage with insurance underwriters. As such, we have no agreements with homeowners and/or third party insurance companies other than agency agreements with various insurance carriers and therefore, we have no material commitments or contingencies related to Mountain Financial, Inc. The Company provides appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve is deemed necessary for policy cancellations at May 2, 2009 and May 3, 2008.The construction lending operation provides financing to buyers who are purchasing a home through the Companys retail sales centers. The loan provides the homeowner with enough money to pay for the land, land improvements, construction and installation of the home, impact fees and permits. The loan is disbursed in draws as construction progresses and is secured by a first mortgage on the land, home and all of the improvements. The term is typically for one year, with interest only payable monthly. There is also a finance charge which is added to the loan at closing. The construction loan is paid off when the homeowner closes on the permanent financing, typically a 30 year fixed mortgage. The prepaid finance charge in the second quarter of 2009 was $19,051 compared to $21,999 in the second quarter of 2008 and was $31,296 for the first six months of 2009 compared to $59,144 for the first six months of 2008. The construction interest in second quarter of 2009 was $5,794 compared to $21,731 in the second quarter of 2008 and was $8,975 for the first six months of 2009 compared to $41,867 for the first six months of 2008. The decline resulted from the decrease in the number of homes sold through the Prestige sales centers.
During fiscal year 2008, the Company invested $6,390,000 to become a limited partner in two new Florida retirement manufactured home communities. The Company reported losses from investments in these retirement community limited partnerships in the amount $121,126 for the second quarter of 2009 compared to $178,842 for the second quarter of 2008. For the first six months of 2009 the Company reported losses of $188,037 compared to $178,842 in the first six months of 2008. Although these investments will report losses in the initial fill-up stage, management believes that new attractive and affordable manufactured home communities for senior citizens will be a significant growth area for Florida in the future.
As a result of the factors discussed above, losses for the second quarter of 2009 were $506,440 or $0.12 per diluted share compared to earnings of $587,738 or $0.14 per diluted share for the second quarter of 2008. For the first six months of 2009 losses were $629,588 or $0.15 per diluted share compared to earnings of $1,208,723 or $0.30 per diluted share in the second quarter 2008.
Liquidity and Capital Resources Cash and cash equivalents were $3,387,184 at May 2, 2009 compared to $8,649,724 at November 1, 2008. The decrease in cash and cash equivalents was primarily due to (i) repurchase of $4,768,710 in defaulted loans which were collateralized from loans that were financed under the finance revenue sharing agreement, and (ii) the payment of cash dividends of $1,018,669. Short and long-term investments were $7,952,834 at May 2, 2009 compared to $8,308,436 at November 1, 2008. Working capital was $20,002,913 at May 2, 2009 as compared to $21,232,995 at November 1, 2008. Nobility owns the entire inventory for its Prestige retail sales centers and does not incur any third party floor plan financing expenses. Customer deposits continued to decrease to a below normal historic level due to the deteriorating housing and financial markets resulting in a decrease in the number of sold retail homes.
Nobility paid an annual cash dividend of $0.25 per common share for fiscal year 2008 on January 12, 2009 in the amount of $1,018,669. On January 11, 2008, the Company paid an annual cash dividend of $0.50 per common share for fiscal year 2007 in the amount of $2,043,572.
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