GuruFocus and Yahoo Finance were both among those in the financial media which reported the following information for Skyline Champion (SKY) most recent quarterly report for that organization’s “Q2 Fiscal 2024.” For regular people, that corporate lingo by SKY means the period ending September 30, 2023. According to Mark Yost, President and CEO for Skyline Champion: “We continued to see a healthy increase in order volumes sequentially. In addition, we have recently closed two transformational strategic opportunities – our investment in ECN Capital including the formation of Champion Financing, and the acquisition of Regional Homes.” But despite that bluster, their own performance metrics of net sales volume or net profits for the quarter reveal that the firm has suffered along with the downturn in manufactured housing that is often downplayed or overlooked by the Manufactured Housing Institute (MHI), of which Skyline Champion is a prominent member and have a seat on the MHI board of directors.

Part I

Skyline Champion Corp (SKY) Reports 42.5% Decrease in Net Sales for Q2 Fiscal 2024

GuruFocus Research

October 31, 2023

In this article:

• Net sales for Q2 Fiscal 2024 decreased by 42.5% to $464.2 million
• Net income declined by 68.3% to $45.7 million
• Adjusted EBITDA decreased by 70.2% to $58.8 million
• Cash and cash equivalents stood at $701.2 million as of September 30, 2023

On October 31, 2023, Skyline Champion Corp (NYSE: SKY) announced its financial results for the second quarter ended September 30, 2023. The company reported a significant decrease in net sales and net income compared to the same period last year.

Financial Highlights

Net sales for the second quarter fiscal 2024 decreased by 42.5% to $464.2 million compared to the prior-year period. The number of U.S. homes sold in the second quarter fiscal 2024 decreased by 33.4% to 4,842. The average selling price (ASP) per U.S. home sold decreased by 14.8% to $88,400. Gross profit margin contracted by 890 basis points to 25.1%. Net income decreased by 68.3% to $45.7 million. Adjusted earnings per share (EPS) decreased by 67.3% to $0.82. Adjusted EBITDA decreased by 70.2% to $58.8 million. Adjusted EBITDA margin contracted by 1,170 basis points to 12.7%.

Company’s Commentary

Skyline Champion continued to demonstrate our commitment to the customer and our ability to execute our strategy in an evolving economic environment, said Mark Yost, Skyline Champions President, and Chief Executive Officer. We continued to see a healthy increase in order volumes sequentially. In addition, we have recently closed two transformational strategic opportunities – our investment in ECN Capital including the formation of Champion Financing, and the acquisition of Regional Homes. We are excited by these new developments and remain confident that execution of our strategic initiatives will continue to position us to better serve our customers for years to come.

Financial Position

As of September 30, 2023, Skyline Champion had $701.2 million of cash and cash equivalents, a decrease of $96.6 million in the current quarter, due to the strategic investment in ECN Capital partially offset by cash flows from operations.

Looking Ahead

Despite the challenges faced in the second quarter, Skyline Champion remains committed to its strategic initiatives and confident in its ability to better serve its customers in the future. The company’s recent investment in ECN Capital and the acquisition of Regional Homes are expected to contribute positively to its future performance.

Explore the complete 8-K earnings release (here) from Skyline Champion Corp for further details.

This article first appeared on GuruFocus. ##

 

As the 8K from Skyline Champion from the link above reflects, much of what GuryFocus and Yahoo Finance reported was a repackaged version of information provided by Skyline Champion.  More from the SKY 8-K is provided below.

 

Part II

Skyline Champion 8-K information:

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SKYLINE CHAMPION CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited, dollars and shares in thousands)

 

		September 30, 2023				April 1, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	701,155			$	747,453
Trade accounts receivable, net			55,097				67,296
Inventories, net			182,239				202,238
Other current assets			39,447				26,479
Total current assets			977,938				1,043,466
Long-term assets:
Property, plant, and equipment, net			191,766				177,125
Goodwill			196,574				196,574
Amortizable intangible assets, net			40,299				45,343
Deferred tax assets			19,798				17,422
Other noncurrent assets			242,800				82,794
Total assets		$	1,669,175			$	1,562,724
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	50,829			$	44,702
Other current liabilities			192,322				204,215
Total current liabilities			243,151				248,917
Long-term liabilities:
Long-term debt			12,430				12,430
Deferred tax liabilities			6,417				5,964
Other liabilities			66,984				62,412
Total long-term liabilities			85,831				80,806
Stockholders’ Equity:
Common stock			1,587				1,585
Additional paid-in capital			530,645				519,479
Retained earnings			821,628				725,672
Accumulated other comprehensive loss			(13,667	)			(13,735	)
Total stockholders’ equity			1,340,193				1,233,001
Total liabilities and stockholders’ equity		$	1,669,175			$	1,562,724

 

 

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SKYLINE CHAMPION CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

		Three months ended								Six months ended
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Net sales		$	464,236			$	806,825			$	929,005			$	1,532,706
Cost of sales			347,747				532,719				682,843				1,029,265
Gross profit			116,489				274,106				246,162				503,441
Selling, general, and administrative expenses			64,454				83,915				134,893				156,197
Operating income			52,035				190,191				111,269				347,244
Interest (income), net			(10,480	)			(1,974	)			(19,781	)			(1,884	)
Other expense (income)			2,065				—				2,065				(634	)
Income before income taxes			60,450				192,165				128,985				349,762
Income tax expense			14,781				48,073				32,047				88,519
Net income		$	45,669			$	144,092			$	96,938			$	261,243
Net income per share:
Basic		$	0.80			$	2.53			$	1.69			$	4.59
Diluted		$	0.79			$	2.51			$	1.68			$	4.55

 

 

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SKYLINE CHAMPION CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, dollars in thousand)

 

		Six months ended
		September 30, 2023				October 1, 2022
Cash flows from operating activities
Net income		$	96,938			$	261,243
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			14,378				12,557
Amortization of deferred financing fees			162				175
Equity-based compensation			10,943				7,753
Deferred taxes			(1,919	)			3,318
Loss (gain) on disposal of property, plant, and equipment			96				(85	)
Foreign currency transaction loss			76				974
Change in assets and liabilities:
Accounts receivable			12,101				7,633
Floor plan receivables			(2,521	)			—
Inventories			20,059				11,540
Other assets			(13,434	)			(14,489	)
Accounts payable			4,387				(21,000	)
Accrued expenses and other liabilities			(12,128	)			8,947
Net cash provided by operating activities			129,138				278,566
Cash flows from investing activities
Additions to property, plant, and equipment			(22,847	)			(25,613	)
Cash paid for equity method investment			(1,000	)			—
Cash paid for investment in ECN common stock			(78,858	)			—
Cash paid for investment in ECN preferred stock			(64,520	)			—
Investment in floor plan loans			(18,466	)			—
Proceeds from floor plan loans			10,528				—
Acquisitions, net of cash acquired			—				(6,810	)
Proceeds from disposal of property, plant, and equipment			524				132
Net cash used in investing activities			(174,639	)			(32,291	)
Cash flows from financing activities
Changes in floor plan financing, net			—				3,027
Stock option exercises			224				596
Tax payments for equity-based compensation			(982	)			(1,363	)
Net cash (used in) provided by financing activities			(758	)			2,260
Effect of exchange rate changes on cash and cash equivalents			(39	)			(6,944	)
Net (decrease) increase in cash and cash equivalents			(46,298	)			241,591
Cash and cash equivalents at beginning of period			747,453				435,413
Cash and cash equivalents at end of period		$	701,155			$	677,004

 

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SKYLINE CHAMPION CORPORATION

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited, dollars in thousand)

 

		Three months ended												Six months ended
		September 30, 2023				October 1, 2022				Change				September 30, 2023				October 1, 2022				Change
Reconciliation of Adjusted EBITDA:
Net income		$	45,669			$	144,092			$	(98,423	)		$	96,938			$	261,243			$	(164,305	)
Income tax expense			14,781				48,073				(33,292	)			32,047				88,519				(56,472	)
Interest (income), net			(10,480	)			(1,974	)			(8,506	)			(19,781	)			(1,884	)			(17,897	)
Depreciation and amortization			6,786				6,941				(155	)			14,378				12,557				1,821
EBITDA			56,756				197,132				(140,376	)			123,582				360,435				(236,853	)
Transaction costs			2,065				—				2,065				2,065				338				1,727
Other			—				—				—				—				(973	)			973
Adjusted EBITDA		$	58,821			$	197,132				(138,311	)		$	125,647			$	359,800				(234,153	)

 

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SKYLINE CHAMPION CORPORATION

RECONCILIATION OF NET INCOME TO ADJUSTED EARNINGS PER SHARE

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

(Certain amounts shown net of tax, as applicable)

		Three months ended								Six months ended
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Net income		$	45,669			$	144,092			$	96,938			$	261,243
Adjustments:
Transaction costs			1,555				—				1,555				252
Other			—				—				—				(727	)
Adjusted net income attributable to the Company’s common shareholders		$	47,224			$	144,092			$	98,493			$	260,768
Adjusted basic net income per share		$	0.83			$	2.53			$	1.72			$	4.58
Adjusted diluted net income per share		$	0.82			$	2.51			$	1.71			$	4.55
Average basic shares outstanding			57,232				56,956				57,224				56,933
Average diluted shares outstanding			57,724				57,406				57,695				57,364

 

Part III – Additional Information via Linked Reports with Analysis

 

 

 

 

 

Note: to expand this image and others below to a larger or full size,
see the instructions
below the graphic below or click the image and follow the prompts.

 

For a fresh, deep dive into the issues that are keeping manufactured housing underperforming during an affordable housing crisis, grab your favorite beverage, a snack, and wade into the report linked below.

 

 

Part IV- is our Daily Business News on MHProNews stock market recap which features our business-daily at-a-glance update of over 2 dozen manufactured housing industry stocks.

This segment of the Daily Business News on MHProNews is the recap of yesterday evening’s market report, so that investors can see at glance the type of topics may have influenced other investors. Thus, our format includes our signature left (CNN Business) and right (Newsmax) ‘market moving’ headlines.

The macro market move graphics below provide context and comparisons for those invested in or tracking manufactured housing connected equities. Meaning, you can see ‘at a glance’ how manufactured housing connected firms do compared to other segments of the broader equities market.

In minutes a day readers can get a good sense of significant or major events while keeping up with the trends that are impacting manufactured housing connected investing.

 

Reminder: several of the graphics on MHProNews can be opened into a larger size. For instance: click the image and follow the prompts in your browser or device to OPEN In a New Window. Then, in several browsers/devices you can click the image and increase the size. Use the ‘x out’ (close window) escape or back key to return.

 

Headlines from left-of-center CNN Business – from the evening of 11.15.2023

• Brendan McDermid/Reuters
• Americans are getting ‘ripped off’ by big banks, Robinhood CEO says
• An employee checks packaged leafy greens before they are boxed at a Bowery farm in Nottingham, Maryland on April 14, 2023. – Bowery Farming operates three commercial farms and is the largest vertical-farming company in the United States, manipulating light, humidity, temperature, and other conditions to grow produce. The systems are designed to produce a sanitary crop, so there is little risk of contamination from bacteria like E. Coli. These huge farms grow produce in nutrient-rich water, not the healthy soil that many people believe is at the heart of both deliciousness and nutrition and they can consume vast amounts of electricity.
• Maryland has the lowest unemployment rate in American history, at just 1.6%
• Facebook, WhatsApp, Messenger and Instagram icons displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on April 6, 2022.
• Meta is now allowing 2020 election denialism in political ads
• House lawmakers press Apple CEO on reports Jon Stewart’s show was canceled over China concerns
• BEIJING, CHINA – NOVEMBER 15: A woman makes a video call with a friend as she waits at an intersection to cross during rush hour on November 15, 2023 in Beijing, China. Chinas President Xi Jinping is expected to meet U.S. President Joe Biden Wednesday during his visit to San Francisco for the APEC summit, where Chinas economy is expected to top the agenda for the leader of the worlds second largest economy.
• China says it’s built the world’s fastest internet network
• America’s top-selling car will soon come only as a hybrid
• Janet Yellen, US Treasury secretary, center right, and He Lifeng, China’s vice premier, center left, during a meeting in San Francisco, California, US, on Thursday, Nov. 9, 2023. Yellen said her two-day meeting with Chinese economic policy czar He Lifeng will include discussion of the increased use of security measures in commercial relations.
• 3 key sources of tension between the US and China
• A pedestrian carries a Sephora shopping bag in the SoHo neighborhood of New York, US on Wednesday, March 22, 2023.
• Sephora has locked up all its perfume. It says too many people were stealing
• Google, Meta, Snap and TikTok must face teen addiction claims, federal judge rules
• A customer uses a self-checkout kiosk at a Wal-Mart Stores Inc. location in Burbank, California, on Tuesday, Aug. 8, 2017.
• Walmart, Costco and other companies rethink self-checkout
• The US Postal Service lost $6.5 billion last year. It predicted it would break even
• UK inflation has halved this year but economic growth remains elusive
• FDIC Chair takes heat over stunning allegations of sexual harassment and discrimination at agency
• Snapchat users can now buy Amazon products without leaving the app
• This key US inflation gauge fell last month by the most since 2020
• US retail sales fell in October for the first time in seven months
• Target has a warning about the holidays
• Journalism professor’s six-word mantra is a blueprint for how news outlets should cover the 2024 race
• Formula 1 Las Vegas ticket prices continue to plunge a day before the Grand Prix
• Welcome to the (almost) red-hot bond market
• Biggest test of Credit Suisse rescue yet to come, says UBS
• Thanksgiving dinner will be less expensive this year. You can thank turkeys (and cooling inflation)
• Wooing business leaders and avoiding conflict: What’s on Xi’s agenda as the Chinese leader heads to California