UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 28, 2020 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD FROM TO Commission File Number 001-04714 Skyline Champion Corporation (Exact name of registrant as specified in its charter) Indiana 35-1038277 (State of Incorporation) (I.R.S. Employer Identi ...

Skyline Champion Corporation (NYSE:SKY) Q4 2020 Earnings Conference Call May 21, 2020 8:00 AM ET Company Participants Sarah Janowicz - Investor Relations Mark Yost - President and Chief Executive Officer Laurie Hough - Executive Vice President and Chief Financial Officer Conference Call Participants Mike Dahl - RBC Capital Markets Greg Palm - Craig-Hallum Daniel Moore - CJS Securities Matthew Bouley - Barclays Collin Verron - Jefferies Rohit Seth - SunTrust Operator Good morning and welcome to Skyline Champ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 28, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-04714 Skyline Champion Corporation (Exact name of registrant as specified in its charter) Indiana 35-1038277 (State of Incor ...

Financial Data and Key Metrics Changes - Revenue decreased by 3.5% to $342 million compared to the same quarter last year [8][18] - Operating income increased nearly 50% year-over-year, with adjusted EBITDA growing by 13% to $29.7 million [8][24] - Adjusted EBITDA margin improved by 130 basis points to 8.7% [8][24] - Net income for the quarter was $17 million, or $0.30 per share, compared to $10.5 million, or $0.19 per share in the prior year [22] Business Line Data and Key Metrics Changes - U.S. factory-built housing segment revenue declined by $4.7 million, while Canadian revenue decreased by 16% to $23 million [18][19] - Average selling price per U.S. home sold decreased by 2% to $60,600 due to a shift in product mix towards single-section homes [18] - Canadian units sold decreased to 276 homes from 329 homes in the prior year [19] Market Data and Key Metrics Changes - HUD industry volumes increased by approximately 6.7% year-over-year, with strong growth in the South-Central region [11] - The broader housing market showed signs of strong growth, particularly for affordable housing [12] Company Strategy and Development Direction - The company is focused on operational improvements and product rationalization initiatives to achieve a 10% adjusted EBITDA margin target within 18 to 24 months [26] - The company anticipates continued growth driven by favorable demographic and economic factors, particularly in affordable housing [10][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market's health, driven by increased demand for affordable housing and improvements in the financing environment [31] - The company expects HUD industry volume growth to continue at a mid-single-digit rate for the remainder of the calendar year [11][31] Other Important Information - Consolidated backlog decreased to $133 million from $181 million year-over-year, with an average U.S. plant backlog of five weeks of production [25] - The company had $171 million in cash and cash equivalents, with $44 million of unused borrowing capacity under its revolving credit facility [27][28] Q&A Session Summary Question: Can you discuss underlying demand trends and expectations for backlog? - Management noted good traffic at the dealership level and expects backlog to build into the fourth quarter [34] Question: What are your thoughts on average selling prices and product mix? - Management anticipates a gradual uptick in average selling prices as the year progresses, particularly towards multi-section homes [35] Question: Can you elaborate on the Genesis and builder developer channel? - Management reported strong interest and activity from builders and developers, with some orders already in production [37] Question: What trends are you seeing in January? - Management indicated good year-over-year order activity in January [41] Question: Can you discuss the M&A pipeline? - Management is actively looking at M&A opportunities, with a pipeline of potential near-term and long-term activity [44] Question: What is your outlook for the near-term revenue? - Management expects softness in the RV market and Canadian revenues but anticipates good growth in the U.S. [50] Question: What is your expectation for HUD market growth in 2020? - Management expects mid-single-digit growth for the HUD industry, with the company likely to perform similarly [55] Question: Can you provide insights on financing trends? - Management noted that GSEs have not yet moved on the duty-to-serve chattel program but expressed optimism about private placements and interest rate drops [90]

Financial Data and Key Metrics Changes - Consolidated quarterly revenue was flat at $355 million compared to the prior year period, despite soft HUD industry shipments [7][19] - Gross profit increased by 25% year-over-year to $74 million, driven by improved material costs and synergies from the merger [7][22] - Adjusted EBITDA grew by 36% year-over-year to $32.5 million, with an adjusted EBITDA margin of 9.2%, a 250 basis point improvement [7][26] - Net income for the quarter was $17.7 million or $0.31 per share, compared to a net loss of $77 million or a loss of $1.42 per share in the prior year [24] Business Line Data and Key Metrics Changes - U.S. factory-built segment revenue grew by 2%, driven by a 2% increase in average selling price to $62,200 [20] - Canadian revenue increased by 4% to $26 million, with stable home sales volume at 311 homes [21] - The factory-built housing segment comprised 96% of total revenue, up from 93% in the prior year [19] Market Data and Key Metrics Changes - HUD industry shipments declined by approximately 2.6% year-over-year, with Texas being a primary driver of the decrease [8][9] - Backlog decreased by 32% year-over-year to $172 million, but grew 12% sequentially from the June quarter [12][13] - Retailers have normalized their ordering patterns, keeping inventory levels lower than last year [12] Company Strategy and Development Direction - The company remains positive on the outlook for the manufactured housing industry, driven by strong demand for affordable housing [8][10] - The launch of the Genesis Home brand aims to serve builder developers and retailers, with a focus on off-site construction options [16][40] - The company is investing in technology and automation to improve production efficiency and reduce reliance on subcontractors [18][99] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand environment is strong, with placements up 7% through August [36] - The company expects continued growth in the HUD industry volumes for the remainder of the fiscal year [10] - Management anticipates that EBITDA margins can reach around 10% over the next 18 to 24 months, driven by operational improvements [80] Other Important Information - The company completed a securitization of a $0.5 billion portfolio of manufactured housing home loans, marking a significant milestone in the market [14][86] - The effective tax rate for the quarter was 29.8%, compared to a negative 8.2% in the prior year [25] Q&A Session Summary Question: Can you provide insights on geographic areas outperforming in demand? - Management indicated that while Texas has been a drag, overall demand remains strong, with placements up 7% [36] Question: What are the biggest levers for continued improvement in margins? - Management highlighted operational improvements and margin enhancements as key drivers, with significant upside potential remaining [38] Question: Can you elaborate on the Genesis brand and its impact? - The Genesis brand is aimed at builder developers, focusing on off-site solutions that improve returns and reduce construction time [40][98] Question: What are the expectations for volume growth and ASPs for the remainder of the year? - Management expects mid-single-digit volume growth, with stronger performance anticipated in the fourth quarter [62] Question: How is the automation initiative progressing at the Leesville plant? - Management reported positive progress with automation, indicating it could be rolled out to other facilities in the future [68]

PART I [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements present Skyline Champion Corporation's financial position as of September 28, 2019, and its performance for the three and six months then ended [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 28, 2019, the company's total assets were $731.6 million, an increase from $700.0 million as of March 30, 2019, primarily driven by an increase in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 28, 2019 (unaudited) | Mar 30, 2019 | | :--- | :--- | :--- | | **Total current assets** | $340,067 | $318,290 | | **Total assets** | $731,550 | $699,954 | | **Total current liabilities** | $200,600 | $206,303 | | **Total liabilities** | $281,400 | $287,982 | | **Total stockholders' equity** | $450,150 | $411,972 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended September 28, 2019, net sales were flat at $354.5 million, but net income swung to $17.7 million from a net loss of $77.0 million in the prior-year quarter, largely due to the absence of significant one-time expenses Statement of Operations Summary (in thousands, except per share amounts) | Metric | Three Months Ended Sep 28, 2019 | Three Months Ended Sep 29, 2018 | Six Months Ended Sep 28, 2019 | Six Months Ended Sep 29, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $354,458 | $355,436 | $726,346 | $677,697 | | **Gross profit** | $74,055 | $59,000 | $150,090 | $114,160 | | **Operating income (loss)** | $25,653 | $(69,069) | $49,973 | $(58,997) | | **Net income (loss)** | $17,745 | $(77,025) | $35,125 | $(77,878) | | **Diluted EPS** | $0.31 | $(1.42) | $0.62 | $(1.53) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended September 28, 2019, net cash provided by operating activities was $52.2 million, a significant increase from $29.0 million in the prior-year period, resulting in a net increase in cash of $28.1 million Cash Flow Summary for Six Months Ended (in thousands) | Cash Flow Activity | Sep 28, 2019 | Sep 29, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $52,158 | $29,018 | | **Net cash (used in) provided by investing activities** | $(9,392) | $5,181 | | **Net cash used in financing activities** | $(14,829) | $(67,904) | | **Net increase (decrease) in cash** | $28,105 | $(33,743) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the basis of presentation, including reverse acquisition accounting, adoption of the new lease standard, debt facilities, revenue disaggregation, segment performance, and contingent liabilities - The June 1, 2018 combination with Champion Holdings was treated as a reverse acquisition, with Champion Holdings as the accounting acquirer, and prior year results include significant one-time costs related to this transaction[19](index=19&type=chunk)[33](index=33&type=chunk) - The company adopted the new lease accounting standard ASC 842 on March 31, 2019, resulting in the recognition of lease-related assets and liabilities of **$13.7 million** on the balance sheet[26](index=26&type=chunk)[29](index=29&type=chunk) - The company operates in two reportable segments: U.S. Factory-built Housing and Canadian Factory-built Housing, with the U.S. segment being the primary driver of revenue and operating income[77](index=77&type=chunk) - The company is contingently liable under repurchase agreements with lenders for retailer floor plan financing, with an estimated obligation of **$157.4 million** as of September 28, 2019, though actual losses have been immaterial[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant improvement in profitability for the second quarter and first half of fiscal 2020 to improved gross margins and the absence of prior-year one-time costs related to the business combination [Results of Operations - Q2 Fiscal 2020 vs. 2019](index=26&type=section&id=Results%20of%20Operations%20-%20Q2%20Fiscal%202020%20vs.%202019) In the second quarter of fiscal 2020, net sales were nearly flat at $354.5 million, but gross profit increased 25.5% to $74.1 million, and the company reported operating income of $25.7 million compared to a loss of $69.1 million in the prior-year quarter Q2 Fiscal 2020 vs. 2019 Performance (in thousands) | Metric | Q2 FY2020 | Q2 FY2019 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $354,458 | $355,436 | (0.3%) | | **Gross profit** | $74,055 | $59,000 | 25.5% | | **Operating income (loss)** | $25,653 | $(69,069) | N/A | | **Net income (loss)** | $17,745 | $(77,025) | N/A | | **Adjusted EBITDA** | $32,482 | $23,799 | 36.5% | - U.S. Factory-built Housing sales increased **2.0%** to **$312.8 million**, driven by a **2.3%** increase in average selling price, with gross margin expanding significantly to **20.9%** from **16.5%** due to lower material costs, synergy capture, and operational improvements[99](index=99&type=chunk)[100](index=100&type=chunk)[104](index=104&type=chunk) - SG&A expenses decreased by **$79.7 million**, primarily because the prior-year quarter included **$85.8 million** in stock compensation expense triggered by secondary offerings[107](index=107&type=chunk)[110](index=110&type=chunk) [Results of Operations - First Half Fiscal 2020 vs. 2019](index=33&type=section&id=Results%20of%20Operations%20-%20First%20Half%20Fiscal%202020%20vs.%202019) For the first six months of fiscal 2020, net sales increased 7.2% to $726.3 million, driven by a 12.5% increase in the U.S. Factory-built Housing segment, and the company posted net income of $35.1 million, a reversal from a $77.9 million net loss in the prior year H1 Fiscal 2020 vs. 2019 Performance (in thousands) | Metric | H1 FY2020 | H1 FY2019 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $726,346 | $677,697 | 7.2% | | **Gross profit** | $150,090 | $114,160 | 31.5% | | **Operating income (loss)** | $49,973 | $(58,997) | N/A | | **Net income (loss)** | $35,125 | $(77,878) | N/A | | **Adjusted EBITDA** | $64,567 | $46,534 | 38.8% | - U.S. Factory-built Housing sales grew by **$71.7 million (12.5%)**, with **$50.3 million** of the increase attributable to the inclusion of Skyline operations for the full six-month period, compared to only four months in the prior-year period[120](index=120&type=chunk) - Canadian Factory-built Housing sales decreased **5.0%** due to an **11.6%** decline in the number of homes sold, reflecting weaker demand in British Columbia and Alberta[121](index=121&type=chunk) - SG&A expenses decreased by **$73.0 million**, mainly due to **$93.9 million** in stock compensation expense recognized in the prior year related to the Exchange and secondary offerings[127](index=127&type=chunk)[130](index=130&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with cash and cash equivalents increasing by $28.1 million during the first six months of fiscal 2020 to a total of $154.7 million, and $39.4 million of unused borrowing capacity under its revolving credit facility Liquidity Position (in thousands) | Metric | Sep 28, 2019 | Mar 30, 2019 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $154,739 | $126,634 | | **Working Capital (Current Assets - Current Liabilities)** | $139,467 | $111,987 | - Cash from operations increased to **$52.2 million** for the six months ended Sep 28, 2019, up from **$29.0 million** in the prior year, driven by higher operating income and the absence of prior-year transaction expenses[145](index=145&type=chunk) [BACKLOG](index=42&type=section&id=BACKLOG) The company's unfilled manufacturing orders for homes decreased to $172.0 million at September 28, 2019, compared to $252.4 million at the same time last year, attributed to a decrease in order rates and continued softness in western Canada housing markets - Unfilled U.S. and Canadian manufacturing orders totaled **$172.0 million** at September 28, 2019, a decrease from **$252.4 million** at September 29, 2018[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there were no significant changes in its market risk, including interest rate and foreign exchange risks, from the information disclosed in its Annual Report on Form 10-K for fiscal year 2019 - There were no significant changes to the company's market risk disclosures regarding interest rates and foreign exchange compared to the Fiscal 2019 Annual Report[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 28, 2019, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of September 28, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[155](index=155&type=chunk) - No changes occurred in the company's internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[156](index=156&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings and claims in the ordinary course of business, but management does not believe the ultimate liability will have a material adverse effect on the company's financial condition or results of operations - The company is subject to various legal proceedings and claims arising in the ordinary course of business but does not expect them to have a material adverse effect[85](index=85&type=chunk)[159](index=159&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year 2019 - No material changes have been made to the risk factors disclosed in the Fiscal 2019 Annual Report[160](index=160&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and Inline XBRL data files - The report includes required CEO and CFO certifications and interactive data files (XBRL) as exhibits[162](index=162&type=chunk)

SKYLINE感 CHAMPION Investor Presentation August 2019 DISCLAIMER FORWARD-LOOKING STATEMENTS Statements in this presentation and discussions that follow, including those about the industry shipments, demographic trends, financing availability, the potential results of operational improvements, synergies resulting from the combination of the operations of Skyline Champion Corporation (f/k/a Skyline Corporation) ("Skyline") and Champion Enterprises Holdings, LLC ("Champion") (the "Transaction") and future growth ...

Skyline Champion Corporation (NYSE:SKY) Q2 2019 Earnings Conference Call August 1, 2019 8:00 AM ET Company Participants Mark Yost - CEO Laurie Hough - EVP and CFO Conference Call Participants Daniel Moore - CJS Securities Greg Palm - Craig-Hallum Capital Group Phil Ng - Jefferies Matthew Bouley - Barclays Mike Dahl - RBC Capital Markets Operator Good morning, and welcome to Skyline Champion Corporation's First Quarter Fiscal Year 2020 Earnings Call. The company issued an earnings press release yesterday aft ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 29, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-04714 Skyline Champion Corporation (Exact name of registrant as specified in its charter) Indiana 35-1038277 (State of Incorpora ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Skyline Champion, North America's largest factory-built housing company, offers diverse homes and aims for growth through strategic initiatives - Skyline Champion Corporation was formed on **June 1, 2018**, through the combination of Skyline Corporation and Champion Enterprises Holdings, LLC, with Champion Holdings as the accounting acquirer[12](index=12&type=chunk)[133](index=133&type=chunk) - The company is North America's largest independent publicly traded factory-built housing company, with pro forma net sales of **$1.4 billion** in fiscal year 2019[13](index=13&type=chunk) - The company operates **36 manufacturing facilities** across 17 U.S. states and three Canadian provinces, **21 factory-direct retail sales centers**, and a logistics business[13](index=13&type=chunk)[14](index=14&type=chunk)[128](index=128&type=chunk) - Strategic initiatives include capitalizing on favorable demographic trends, expanding sales in existing and new geographies, enhancing margins through operational initiatives, and expanding quality products through innovation[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) Market Position (2018 Units Produced) | Position | Market Segment | | :------- | :------------- | | Number two | Manufactured housing (U.S.) | | Top three | Most major U.S. regional markets | | Leading | Western Canada | | Leading | Park model RV sales and modular home sales | [Item 1A. Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from cyclical housing demand, economic sensitivity, supply chain, labor shortages, integration, and compliance - The factory-built housing industry is cyclical and seasonal, with sales typically higher from **March to November**, making results subject to fluctuations[62](index=62&type=chunk) - Demand is sensitive to economic conditions like employment rates, consumer confidence, and interest rates, with increases potentially limiting purchasing power[63](index=63&type=chunk)[65](index=65&type=chunk) - The company relies heavily on independent distributors (over **90% of fiscal 2019 shipments**), and relationship issues could lead to sales declines[71](index=71&type=chunk) - Material prices (e.g., lumber, insulation, steel) can fluctuate significantly, potentially affecting production and profit margins if costs cannot be passed to customers[72](index=72&type=chunk) - Labor shortages and high turnover rates in the homebuilding industry can increase production costs and cause construction delays[74](index=74&type=chunk) - The integration of Skyline and Champion Holdings operations may not be successful, potentially leading to operational disruptions and failure to realize anticipated synergies[98](index=98&type=chunk)[101](index=101&type=chunk) - The company does not anticipate paying cash dividends for the foreseeable future, intending to retain earnings for business development and growth[105](index=105&type=chunk) [Item 1B. Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) No unresolved staff comments were reported - No unresolved staff comments were reported[108](index=108&type=chunk) [Item 2. Properties](index=18&type=section&id=Item%202.%20Properties) As of March 30, 2019, the company operates 36 manufacturing facilities, 21 retail centers, and 9 logistics terminals, with most manufacturing facilities owned Operating Facilities as of March 30, 2019 | Location | Owned/Leased | | :------- | :----------- | | **United States** | | | Chandler, Arizona | Leased * | | Corona, California | Leased | | Lindsay, California | Owned | | San Jacinto, California | Owned | | Woodland, California | Owned | | Lake City, Florida (two facilities) | Leased * | | Ocala, Florida | Owned | | Weiser, Idaho | Owned | | Topeka, Indiana (three facilities) | Owned | | Arkansas City, Kansas | Owned | | Benton, Kentucky | Leased | | Worthington, Minnesota | Owned | | Lillington, North Carolina | Owned | | York, Nebraska | Owned | | Sangerfield, New York | Owned | | Sugar Creek, Ohio | Owned | | McMinnville, Oregon | Owned | | Claysburg, Pennsylvania | Owned | | Ephrata, Pennsylvania | Owned | | Leola, Pennsylvania | Owned | | Liverpool, Pennsylvania | Owned | | Strattanville, Pennsylvania | Owned | | Dresden, Tennessee | Leased | | Athens, Texas | Owned | | Burleson, Texas (two facilities) | Owned | | Mansfield, Texas | Owned | | Lancaster, Wisconsin | Owned | | **Canada** | | | Lethbridge, Alberta | Leased * | | Medicine Hat, Alberta | Owned | | Penticton, British Columbia | Owned | | Kelowna, British Columbia | Leased | | Estevan, Saskatchewan | Owned | * -- land only leased; facility owned - The company maintains corporate offices in Elkhart, Indiana, and Troy, Michigan, along with **21 retail sales centers** and **nine logistics terminals**, all leased properties[110](index=110&type=chunk) - As of March 30, 2019, the company owns or leases **five idle manufacturing facilities** for potential additional production capacity[111](index=111&type=chunk) [Item 3. Legal Proceedings](index=19&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with management believing no material adverse effect on financial position or operations - The company is party to legal proceedings, including claims alleging breach of warranties and governmental agency proceedings related to occupational safety and employment regulations[112](index=112&type=chunk) - Management does not believe that current litigation will have a material adverse effect on the company's consolidated financial position, liquidity, or results of operations[112](index=112&type=chunk) [Item 4. Mine Safety Disclosures](index=19&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[113](index=113&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=20&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Skyline Champion's common stock trades on NYSE (SKY), with 556 record holders as of May 2019; no future dividends are planned - The company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol **SKY**[116](index=116&type=chunk) - As of **May 17, 2019**, there were approximately **556 holders of record** of the common stock[117](index=117&type=chunk) - The company does not currently pay dividends, planning to retain future earnings for growth, though a special cash dividend of **$0.62381 per share** was paid on **May 31, 2018**[118](index=118&type=chunk)[119](index=119&type=chunk) Cumulative Total Stockholder Return (March 31, 2014 - March 31, 2019) | | March 31, 2014 | March 31, 2015 | March 31, 2016 | March 31, 2017 | March 31, 2018 | March 31, 2019 | | :--------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | Skyline Champion Corporation | $100.00 | $58.51 | $153.06 | $155.70 | $363.64 | $314.05 | | Russell 3000 | 100.00 | 112.37 | 111.98 | 132.21 | 150.48 | 163.67 | | Cavco Industries, Inc. | 100.00 | 95.68 | 119.13 | 148.37 | 221.48 | 149.82 | [Item 6. Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents selected consolidated financial data for fiscal years 2015-2019, reflecting key operational, balance sheet, and cash flow items Selected Consolidated Financial Data (Fiscal Years Ended March 2015-2019) | Statement of Operations Data (Dollars in thousands) | March 30, 2019 | March 31, 2018 | April 1, 2017 | April 2, 2016 | March 28, 2015 | | :---------------------------------- | :------------- | :------------- | :------------ | :------------ | :------------- | | Net Sales | $1,360,043 | $1,064,722 | $861,319 | $751,703 | $737,230 | | Cost of sales | 1,114,684 | 887,611 | 717,364 | 638,571 | 649,798 | | Gross Margin | 245,359 | 177,111 | 143,955 | 113,132 | 87,432 | | Selling, general and administrative expenses | 270,158 | 122,582 | 105,175 | 92,394 | 87,279 | | Operating (loss) income | (29,742) | 54,589 | 34,650 | 17,158 | (11,600) | | Net (loss) income | $(58,208) | $15,800 | $51,910 | $(20) | $(17,367) | | Other financial information (Dollars in thousands) | | | | | | | Cash flows provided by continuing operations | $65,228 | $31,623 | $34,289 | $37,258 | $13,595 | | Total assets | $699,954 | $395,398 | $328,021 | $255,349 | $284,348 | | Long-term debt | $54,330 | $58,927 | $59,331 | $59,749 | $60,287 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operations, covering formation, acquisitions, industry outlook, performance, liquidity, and accounting policies [Overview](index=24&type=section&id=Overview) Skyline Champion Corporation, formed on June 1, 2018, is a leading North American factory-built housing producer with integrated operations - Skyline Champion Corporation was formed on **June 1, 2018**, by combining Skyline Corporation and Champion Enterprises Holdings, LLC[127](index=127&type=chunk) - The company is a leading provider of factory-built housing solutions in North America, with vertically integrated manufacturing, retail, and transportation logistics businesses[128](index=128&type=chunk) - As of **March 30, 2019**, the company operates **31 U.S. and 5 Canadian manufacturing facilities**, **21 retail sales centers**, and a transportation business[128](index=128&type=chunk) [Acquisitions and Expansions](index=24&type=section&id=Acquisitions%20and%20Expansions) Skyline Champion expanded its manufacturing and retail footprint through strategic acquisitions and facility expansions to meet increasing demand - The company increased capacity through strategic acquisitions and expansions, including adding a second production line at its Corona, California facility in **fiscal 2019**[130](index=130&type=chunk) - New plants were opened or are expected to open in Leesville, Louisiana (**June 2019**) and Leola, Pennsylvania (**April 2019**)[130](index=130&type=chunk) - Acquisitions include Innovative Building Systems, LLC (IBS) in **September 2016**, adding **five modular manufacturing facilities** and **two retail sales centers**[130](index=130&type=chunk) - Retail operations expanded with **three new sales centers in fiscal 2018** and **five in fiscal 2017**, aiming to increase market presence and manufacturing utilization[131](index=131&type=chunk) [Combination with Skyline](index=25&type=section&id=Combination%20with%20Skyline) The Champion Holdings and Skyline Exchange, completed on June 1, 2018, was a reverse acquisition, with fiscal 2019 results reflecting the combined entity - The Exchange was completed on **June 1, 2018**, and treated as a reverse acquisition, with Champion Holdings identified as the accounting acquirer[133](index=133&type=chunk) - Fiscal 2019 financial results include Champion Holdings' pre-Exchange results and the combined operations post-Exchange, while prior periods reflect solely Champion Holdings' results[133](index=133&type=chunk) - The preliminary purchase price allocation resulted in goodwill primarily from expected synergies in procurement and operational improvements[345](index=345&type=chunk) [Industry and Company Outlook](index=25&type=section&id=Industry%20and%20Company%20Outlook) In fiscal 2019, HUD-code homes comprised 76% of U.S. manufacturing sales, with market share growing to 16.6% due to Skyline operations - For **fiscal 2019**, **76%** of the company's U.S. manufacturing sales were HUD-code homes[134](index=134&type=chunk) HUD-Code Home Shipments and Market Share | Metric | Fiscal Year 2019 | Fiscal Year 2018 | | :----- | :--------------- | :--------------- | | Industry Shipments (units) | 93,377 (93,265 excl. FEMA) | 95,044 (90,629 excl. FEMA) | | Company's HUD Market Share | 16.6% | 13.9% | U.S. Modular Home Shipments and Market Share | Metric | 12 Months Ended Dec 31, 2018 | 12 Months Ended Dec 31, 2017 | | :----- | :--------------------------- | :--------------------------- | | Industry Shipments (units) | 15,530 | 14,149 | | Company's Modular Market Share | 13.1% | 11.1% | - Approximately **18%** of the company's U.S. manufacturing sales in **fiscal 2019** were modular homes, with market presence improving due to the IBS Acquisition[135](index=135&type=chunk) [Results of Operations for Fiscal Year 2019 vs. 2018](index=26&type=section&id=Results%20of%20Operations%20for%20Fiscal%20Year%202019%20vs.%202018) In fiscal 2019, net sales increased by 27.7% to $1.36 billion, but operating and net income shifted to losses due to higher SG&A expenses Key Financial Highlights (FY2019 vs. FY2018) | Metric (Dollars in thousands) | FY2019 | FY2018 | Change ($) | Change (%) | | :---------------------------- | :----- | :----- | :--------- | :--------- | | Net sales | $1,360,043 | $1,064,722 | $295,321 | 27.7% | | Gross profit | $245,359 | $177,111 | $68,248 | 38.5% | | Gross profit as % of net sales | 18.0% | 16.6% | 1.4 pp | | | Selling, general and administrative expenses | $275,101 | $122,522 | $152,579 | 124.5% | | Operating (loss) income | $(29,742) | $54,589 | $(84,331) | -154.5% | | Net (loss) income | $(58,208) | $15,800 | $(74,008) | -468.4% | | Adjusted EBITDA | $97,091 | $64,608 | $32,483 | 50.3% | - U.S. Factory-built Housing net sales increased by **$317.2 million (36.9%)**, driven by Skyline operations inclusion (**$218.8 million**) and a **13.6%** increase in average home selling price[139](index=139&type=chunk) - Selling, general and administrative expenses surged by **$152.6 million (124.5%)**, primarily due to **$101.4 million** in non-cash equity-based compensation and **$7.6 million** in Skyline integration costs[148](index=148&type=chunk)[151](index=151&type=chunk) - Adjusted EBITDA increased by **$32.5 million (50.3%)** to **$97.1 million**, reflecting increased operating income after adjusting for non-cash and integration costs[157](index=157&type=chunk) [Pro Forma Results of Operations](index=31&type=section&id=Pro%20Forma%20Results%20of%20Operations) Unaudited pro forma fiscal 2019 results show net sales of $1.41 billion, with gross profit at 18.0%, but a net loss of $(43.5) million due to higher SG&A - Pro forma net sales for **fiscal 2019** were **$1.41 billion**, an increase of **$108.6 million** over the prior year, driven by increased units and higher average home selling prices[162](index=162&type=chunk) - Pro forma gross profit increased by **$46.3 million** in **fiscal 2019**, with gross profit as a percent of net sales improving to **18.0%** from **15.9%**, due to synergy capture and operational improvements[163](index=163&type=chunk) - Pro forma selling, general and administrative expenses rose to **$272.3 million** in **fiscal 2019**, primarily due to a **$92.2 million** increase in non-cash equity-based compensation and **$7.6 million** in Skyline integration costs[164](index=164&type=chunk) Pro Forma Financial Highlights (FY2019 vs. FY2018) | Metric (Dollars in thousands) | FY2019 (unaudited) | FY2018 (unaudited) | | :---------------------------- | :----------------- | :----------------- | | Net sales | $1,405,847 | $1,297,159 | | Gross profit | $253,075 | $206,810 | | Selling, general and administrative expenses | $272,277 | $148,475 | | Operating (loss) income | $(19,202) | $58,335 | | Net (loss) income | $(43,460) | $25,655 | | Adjusted EBITDA | $100,903 | $75,953 | [Backlog](index=33&type=section&id=Backlog) As of March 30, 2019, home order backlog decreased to $142.7 million from $154.8 million, influenced by prior FEMA demand and a softer Canadian economy Home Order Backlog | Metric | March 30, 2019 | March 31, 2018 | | :----- | :------------- | :------------- | | Backlog (wholesale sales values) | $142.7 million | $154.8 million | - The decrease in backlog was attributed to higher prior-year backlog from FEMA unit production and a softening Canadian economy affecting Canadian operations[167](index=167&type=chunk) [Results of Operations for Fiscal Year 2018 vs. 2017](index=34&type=section&id=Results%20of%20Operations%20for%20Fiscal%20Year%202018%20vs.%202017) In fiscal 2018, net sales increased by 23.6% to $1.06 billion, and operating income rose by 57.5%, but net income decreased to $15.8 million due to higher tax expense Key Financial Highlights (FY2018 vs. FY2017) | Metric (Dollars in thousands) | FY2018 | FY2017 | Change ($) | Change (%) | | :---------------------------- | :----- | :----- | :--------- | :--------- | | Net sales | $1,064,722 | $861,319 | $203,403 | 23.6% | | Gross profit | $177,111 | $143,955 | $33,156 | 23.0% | | Gross profit as % of net sales | 16.6% | 16.7% | -0.1 pp | | | Selling, general and administrative expenses | $122,522 | $109,305 | $13,217 | 12.1% | | Operating income | $54,589 | $34,650 | $19,939 | 57.5% | | Net income | $15,800 | $51,910 | $(36,110) | -69.6% | | Adjusted EBITDA | $64,608 | $45,447 | $19,161 | 42.2% | - U.S. Factory-built Housing net sales increased by **$182.2 million (26.9%)**, driven by a **22.4%** increase in homes sold and a **3.7%** increase in average home selling price[171](index=171&type=chunk) - Income tax expense increased significantly to **$27.3 million** in **fiscal 2018** from a benefit of **$(23.3) million** in **fiscal 2017**, primarily due to deferred tax re-measurement at the new **21%** corporate income tax rate[186](index=186&type=chunk) - Adjusted EBITDA increased by **$19.2 million (42.2%)** to **$64.6 million**, primarily due to a **$19.9 million** increase in operating income[190](index=190&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity stems from operations, cash, and a $100 million revolving credit facility; fiscal 2019 operating cash flow increased to $65.2 million - Primary liquidity sources are cash flows from operations, existing cash balances, and a **$100.0 million** revolving credit facility[191](index=191&type=chunk)[195](index=195&type=chunk) Summary Cash Flow Information (FY2017-FY2019) | Cash Flow Category (Dollars in thousands) | FY2019 | FY2018 | FY2017 | | :---------------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $65,228 | $31,623 | $33,459 | | Net cash used in investing activities | $(2,030) | $(8,621) | $(18,737) | | Net cash (used in) provided by financing activities | $(72,518) | $10,336 | $3,694 | | Net (decrease) increase in cash and cash equivalents | $(9,982) | $33,924 | $17,830 | | Cash, cash equivalents and restricted cash at end of period | $126,634 | $136,616 | $102,692 | - Cash provided by operating activities increased to **$65.2 million** in **fiscal 2019** from **$31.6 million** in **fiscal 2018**, driven by higher operating income and non-cash expenses[192](index=192&type=chunk) - Cash used in financing activities in **fiscal 2019** was mainly due to a **$65.2 million** capital distribution to Champion Holdings members and a **$5.0 million** paydown on revolving debt[194](index=194&type=chunk) [Contractual Obligations and Commitments](index=41&type=section&id=Contractual%20Obligations%20and%20Commitments) As of March 30, 2019, contractual obligations include $41.9 million in credit facility debt and $18.5 million in operating leases, with significant contingent liabilities Contractual Obligations as of March 30, 2019 (Dollars in thousands) | Obligation | Total | <1 Year | 1 to 3 Years | 3 to 5 Years | >5 Years | | :----------------------------------- | :---- | :------ | :----------- | :----------- | :------- | | Revolving credit facility maturing in 2023 | $41,900 | $— | $— | $41,900 | $— | | Obligations under industrial revenue bonds due 2029 | 12,430 | — | — | — | 12,430 | | Operating leases | 18,455 | 5,302 | 6,842 | 3,313 | 2,998 | | **Total** | **$72,785** | **$5,302** | **$6,842** | **$45,213** | **$15,428** | - Contingent repurchase obligation with floor plan lenders was approximately **$173.4 million** as of **March 30, 2019**, without reduction for resale value[203](index=203&type=chunk) - The company had **$21.0 million** in letters of credit and **$23.6 million** in surety bonds outstanding as of **March 30, 2019**[203](index=203&type=chunk) - Guarantees for a portion of customers' floor plan obligations totaled **$0.8 million** as of **March 30, 2019**[206](index=206&type=chunk) [Non GAAP Measures - Adjusted EBITDA](index=42&type=section&id=Non%20GAAP%20Measures%20-%20Adjusted%20EBITDA) Adjusted EBITDA is a non-GAAP measure used for evaluating operating performance, planning, and stakeholder communication, excluding various non-operating items - Adjusted EBITDA is defined as net income or loss plus income taxes, net interest expense, depreciation and amortization, discontinued operations, foreign currency gains/losses, equity-based compensation, non-cash restructuring charges, and other non-operating costs[208](index=208&type=chunk) - Management uses Adjusted EBITDA for planning, internal budgeting, communication with stakeholders, incentive compensation, and evaluating operating performance for capital investments and acquisitions[210](index=210&type=chunk) - Adjusted EBITDA is considered useful to investors as it measures operating performance without regard to items that can vary substantially based on accounting methods, capital structure, and asset acquisition methods[209](index=209&type=chunk) [Critical Accounting Policies](index=42&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant estimates for acquisitions, revenue, self-insured risks, warranties, and asset impairment, with actual results potentially differing materially - Key accounting policies requiring significant estimates include business combinations, reserves for obsolete inventory, accrued warranty costs, asset impairment analyses, insurance reserves, repurchase reserves, and deferred tax valuation allowances[211](index=211&type=chunk) - Revenue from manufacturing shipments is generally recognized when wholesale financing is approved, the home is shipped, and title transfers; retail sales revenue is recognized upon delivery, setup, acceptance, and title transfer[213](index=213&type=chunk)[214](index=214&type=chunk) - The company is self-insured for a significant portion of its general, product liability, workers' compensation, auto, health, and property insurance, with estimated costs accrued based on historical experience[217](index=217&type=chunk) - Warranty costs are accrued as cost of sales at the time of sale, based on estimates of future claims considering the number of homes under warranty and historical service costs[218](index=218&type=chunk)[219](index=219&type=chunk) - Goodwill is tested for impairment annually or more frequently if circumstances indicate impairment, using a qualitative assessment or by comparing fair value to net book value[221](index=221&type=chunk) - The company maintains a reserve for estimated losses under repurchase agreements, which was **$1.0 million** at **March 30, 2019**, for contingent obligations totaling approximately **$173.4 million**[224](index=224&type=chunk) [Off Balance Sheet Arrangements](index=44&type=section&id=Off%20Balance%20Sheet%20Arrangements) As of March 30, 2019, off-balance sheet arrangements include a $173.4 million contingent repurchase obligation, $21.0 million in letters of credit, and $23.6 million in surety bonds - Off-balance sheet arrangements as of **March 30, 2019**, include a contingent repurchase obligation of approximately **$173.4 million**, letters of credit totaling **$21.0 million**, and surety bonds totaling **$23.6 million**[226](index=226&type=chunk) [Other Matters](index=44&type=section&id=Other%20Matters) Inflation has not materially affected profitability, with commodity price increases generally passed on; the housing industry is seasonal, with sales peaking from March to November - Inflation has not had a material effect on profitability over the past three years, as commodity price increases have generally been passed on to customers or mitigated[227](index=227&type=chunk) - The housing industry, including factory-built homes, is seasonal, with sales typically peaking from **March to November**[228](index=228&type=chunk) [Recently Issued Accounting Standards](index=44&type=section&id=Recently%20Issued%20Accounting%20Standards) This section refers to Note 1, 'Summary of Significant Accounting Policies,' for new accounting pronouncements - Information regarding new accounting pronouncements is detailed in Note 1, 'Summary of Significant Accounting Policies,' of the Consolidated Financial Statements[229](index=229&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on variable-rate debt (100 bps increase adds $0.8 million annual expense) and foreign exchange risk from Canadian operations (1.0% change impacts $1.0 million sales) - The company's debt obligations under the Credit Agreement, industrial revenue bonds, and floor plan financing arrangements are all at variable interest rates[233](index=233&type=chunk) Impact of 100 Basis Point Interest Rate Increase (as of March 30, 2019) | Debt Type | Outstanding Borrowings (Millions) | Additional Annual Interest Expense (Millions) | | :-------------------------------- | :------------------------------ | :------------------------------------------ | | Revolving credit facility | $41.9 | $0.4 | | Industrial revenue bonds | $12.4 | $0.1 | | Floor plan financing arrangements | $33.3 | $0.3 | | **Total** | **$87.6** | **$0.8** | - The company is exposed to foreign exchange risk from its Canadian operations, with **fiscal 2019 net sales of $98.6 million Canadian dollars**; a **1.0%** change in exchange rates would change consolidated sales by **$1.0 million**[234](index=234&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Financial statements and supplementary data are filed under Item 15 of this report - Financial statements and supplementary data are filed under Item 15 of this report[235](index=235&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=45&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure were reported - No changes in or disagreements with accountants on accounting and financial disclosure were reported[236](index=236&type=chunk) [Item 9A. Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of March 30, 2019, disclosure controls and internal control over financial reporting were effective, with a prior material weakness remediated - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of **March 30, 2019**, excluding Champion Holdings' operations[237](index=237&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **March 30, 2019**[238](index=238&type=chunk) - A material weakness in raw materials inventory accuracy and valuation, reported in **fiscal 2017**, was remediated in **fiscal 2019** through ERP implementation and enhanced inventory count procedures[104](index=104&type=chunk)[242](index=242&type=chunk) - The scope of management's assessment of internal control over financial reporting excluded Champion Holdings and its subsidiaries, representing **92% of total assets** and **84% of total revenues** for fiscal year ended **March 30, 2019**[240](index=240&type=chunk) [Item 9B. Other Information](index=46&type=section&id=Item%209B.%20Other%20Information) No other information is reported in this section - No other information is reported in this section[243](index=243&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2019 Proxy Statement; a Code of Conduct is also adopted - Information on directors, executive officers, and corporate governance is incorporated by reference from the **2019 Proxy Statement**[246](index=246&type=chunk) - The company has adopted a written Code of Business Conduct and Ethics, applicable to all directors, officers, and employees, available on its website[247](index=247&type=chunk) [Item 11. Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2019 Proxy Statement - Executive compensation information is incorporated by reference from the **2019 Proxy Statement**[248](index=248&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2019 Proxy Statement; as of March 30, 2019, 450,366 securities were issuable from outstanding options - Information on security ownership of certain beneficial owners and management is incorporated by reference from the **2019 Proxy Statement**[249](index=249&type=chunk) Equity Compensation Plan Information (as of March 30, 2019) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (A) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (B) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) (C) | | :-------------------------------------- | :------------------------------------------------------------------------------ | :------------------------------------------------------------------------------ | :---------------------------------------------------------------------------------------------------------------------------------------------------- | | Equity compensation plans approved by stockholders | 450,366 | $15.00 | 5,200,562 | | Equity compensation plans not approved by stockholders | — | — | — | | **Total** | **450,366** | **$15.00** | **5,200,562** | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=47&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related party transactions, and director independence is incorporated by reference from the 2019 Proxy Statement - Information on certain relationships, related party transactions, and director independence is incorporated by reference from the **2019 Proxy Statement**[252](index=252&type=chunk) [Item 14. Principal Accountant Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2019 Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the **2019 Proxy Statement**[253](index=253&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and a comprehensive list of exhibits filed with the Form 10-K, including key agreements and governance documents - Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this report[258](index=258&type=chunk) - Schedule II – Valuation and Qualifying Accounts is included, while other financial statement schedules are omitted as not required or information is presented elsewhere[255](index=255&type=chunk) - A comprehensive list of exhibits is provided, including the Share Contribution & Exchange Agreement, corporate governance documents, Credit Agreement, and various equity incentive plan documents[256](index=256&type=chunk)[259](index=259&type=chunk)[262](index=262&type=chunk) [Item 16. 10-K Summary](index=49&type=section&id=Item%2016.%2010-K%20Summary) A 10-K Summary is not applicable - A 10-K Summary is not applicable[262](index=262&type=chunk) SIGNATURES [Signatures Details](index=50&type=section&id=SIGNATURES_details) The report is signed by authorized representatives of Skyline Champion Corporation, including key officers and directors, on May 23, 2019 - The report is signed by Keith Anderson (CEO), Laurie Hough (EVP, CFO, and Treasurer), Tim Burkhardt (VP and Controller), and several Directors[264](index=264&type=chunk)[265](index=265&type=chunk) - All signatures are dated **May 23, 2019**[265](index=265&type=chunk) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS [Index to Consolidated Financial Statements Details](index=51&type=section&id=INDEX%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS_details) This section indexes consolidated financial statements, including auditor reports, balance sheets, statements of operations, cash flows, equity, and notes - The index lists Reports of Ernst & Young LLP, Consolidated Balance Sheets, Statements of Operations, Comprehensive (Loss) Income, Cash Flows, Equity, Notes to Consolidated Financial Statements, and Schedule II – Valuation and Qualifying Accounts[267](index=267&type=chunk) Reports of Independent Registered Public Accounting Firm [Opinion on the Financial Statements](index=52&type=section&id=Opinion%20on%20the%20Financial%20Statements) Ernst & Young LLP issued an unqualified opinion on the company's consolidated financial statements for fiscal years 2017-2019, affirming fair presentation in conformity with U.S. GAAP - Ernst & Young LLP provided an **unqualified opinion** on the consolidated financial statements for **fiscal years 2019, 2018, and 2017**[269](index=269&type=chunk) - The financial statements are deemed to present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with U.S. GAAP[269](index=269&type=chunk) [Opinion on Internal Control Over Financial Reporting](index=53&type=section&id=Opinion%20on%20Internal%20Control%20Over%20Financial%20Reporting) Ernst & Young LLP issued an unqualified opinion on the effectiveness of internal control over financial reporting as of March 30, 2019, excluding Champion Enterprise Holdings - Ernst & Young LLP issued an **unqualified opinion** on the effectiveness of Skyline Champion Corporation's internal control over financial reporting as of **March 30, 2019**[275](index=275&type=chunk) - The audit of internal control over financial reporting excluded Champion Enterprise Holdings, LLC and its subsidiaries, representing **92% of total assets** and **84% of total revenues**[276](index=276&type=chunk) Consolidated Financial Statements [Consolidated Balance Sheets](index=54&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets show total assets increased to **$699.9 million** and total equity to **$412.0 million** as of **March 30, 2019**, primarily due to the Exchange Consolidated Balance Sheet Highlights (Dollars in thousands) | Metric | March 30, 2019 | March 31, 2018 | | :-------------------------------- | :------------- | :------------- | | **ASSETS** | | | | Cash and cash equivalents | $126,634 | $113,731 | | Inventories | $122,638 | $98,022 | | Property, plant and equipment, net | $108,587 | $67,960 | | Goodwill | $173,406 | $3,179 | | Amortizable intangible assets, net | $48,936 | $1,542 | | Total assets | $699,954 | $395,398 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $206,303 | $167,114 | | Long-term debt | $54,330 | $58,927 | | Total equity | $411,972 | $153,297 | - Total assets increased by **$304.6 million (77.0%)** from **March 31, 2018**, to **March 30, 2019**, primarily due to the Exchange, which significantly increased goodwill and amortizable intangible assets[285](index=285&type=chunk) - Total equity increased by **$258.7 million (168.7%)** from **March 31, 2018**, to **March 30, 2019**, reflecting the impact of the Exchange[285](index=285&type=chunk) [Consolidated Statements of Operations](index=55&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations show fiscal 2019 net sales increased by **27.7%** to **$1.36 billion**, but a net loss of **$(58.2) million** resulted from increased SG&A expenses Consolidated Statements of Operations Highlights (Dollars in thousands) | Metric | FY2019 | FY2018 | FY2017 | | :---------------------------------------- | :----- | :----- | :----- | | Net sales | $1,360,043 | $1,064,722 | $861,319 | | Gross profit | $245,359 | $177,111 | $143,955 | | Selling, general, and administrative expenses | $270,158 | $122,582 | $105,175 | | Operating (loss) income | $(29,742) | $54,589 | $34,650 | | Net (loss) income | $(58,208) | $15,800 | $51,910 | | Basic net (loss) income per share | $(1.09) | $0.33 | $1.09 | | Diluted net (loss) income per share | $(1.09) | $0.33 | $1.09 | - Net sales increased by **$295.3 million (27.7%)** in **fiscal 2019** compared to **fiscal 2018**[288](index=288&type=chunk) - The company reported a net loss of **$(58.2) million** in **fiscal 2019**, a significant decrease from a net income of **$15.8 million** in **fiscal 2018**, largely due to increased selling, general, and administrative expenses[288](index=288&type=chunk) [Consolidated Statements of Comprehensive (Loss) Income](index=56&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) Consolidated Statements of Comprehensive (Loss) Income show a total comprehensive loss of **$(59.5) million** in **fiscal 2019**, primarily due to net loss and foreign currency adjustments Consolidated Statements of Comprehensive (Loss) Income (Dollars in thousands) | Metric | FY2019 | FY2018 | FY2017 | | :-------------------------------- | :----- | :----- | :----- | | Net (loss) income | $(58,208) | $15,800 | $51,910 | | Foreign currency translation adjustments | $(1,322) | $854 | $2,117 | | Amounts reclassified from accumulated other comprehensive income to discontinued U.K. operations | $— | $— | $(7,776) | | Pension related adjustments | $— | $— | $214 | | **Total comprehensive (loss) income** | **$(59,530)** | **$16,654** | **$46,465** | - Total comprehensive loss for **fiscal 2019** was **$(59.5) million**, compared to total comprehensive income of **$16.7 million** in **fiscal 2018**[291](index=291&type=chunk) - Foreign currency translation adjustments resulted in a loss of **$(1.3) million** in **fiscal 2019**, following gains in prior years[291](index=291&type=chunk) [Consolidated Statements of Cash Flows](index=57&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows show net cash from operations increased to **$65.2 million** in **fiscal 2019**, with financing activities using **$(72.5) million** for distributions and debt paydowns Consolidated Statements of Cash Flows (Dollars in thousands) | Cash Flow Category | FY2019 | FY2018 | FY2017 | | :---------------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $65,228 | $31,623 | $33,459 | | Net cash used in investing activities | $(2,030) | $(8,621) | $(18,737) | | Net cash (used in) provided by financing activities | $(72,518) | $10,336 | $3,694 | | Net (decrease) increase in cash and cash equivalents | $(9,982) | $33,924 | $17,830 | | Cash, cash equivalents and restricted cash at end of period | $126,634 | $136,616 | $102,692 | - Net cash provided by operating activities increased by **$33.6 million (106.3%)** from **fiscal 2018** to **fiscal 2019**[294](index=294&type=chunk) - Net cash used in financing activities in **fiscal 2019** was **$(72.5) million**, primarily due to a **$65.3 million** members' capital distribution and **$5.0 million** in revolving debt payments[294](index=294&type=chunk) [Consolidated Statements of Equity](index=58&type=section&id=Consolidated%20Statements%20of%20Equity) Consolidated Statements of Equity show total equity increased from **$153.3 million** to **$412.0 million**, driven by stock exchange and equity compensation, offset by net loss and distributions Consolidated Statements of Equity Highlights (Dollars in thousands) | Metric | Balance at April 2, 2016 | Balance at April 1, 2017 | Balance at March 31, 2018 | Balance at March 30, 2019 | | :---------------------------------------- | :----------------------- | :----------------------- | :------------------------ | :------------------------ | | Members' Contributed Capital | $139,714 | $140,322 | $140,076 | $— | | Common Stock Amount | $— | $— | $— | $1,569 | | Additional Paid in Capital | $— | $— | $— | $479,226 | | Retained Earnings (Accumulated Deficit) | $(45,196) | $6,714 | $22,514 | $(58,208) | | Accumulated Other Comprehensive Loss | $(4,702) | $(10,147) | $(9,293) | $(10,615) | | **Total Equity** | **$89,816** | **$136,889** | **$153,297** | **$411,972** | - Total equity increased by **$258.7 million** from **March 31, 2018**, to **March 30, 2019**[296](index=296&type=chunk) - Key drivers of equity changes in **fiscal 2019** include the exchange of membership interest for common stock (**$285.1 million**) and equity-based compensation (**$102.0 million**), offset by a net loss of **$(58.2) million** and members' capital distributions of **$(65.3) million**[296](index=296&type=chunk) Notes to Consolidated Financial Statements [1. Summary of Significant Accounting Policies](index=59&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including reverse acquisition basis, revenue recognition, asset valuation, and recently adopted and pending accounting pronouncements - The Exchange on **June 1, 2018**, was treated as a reverse acquisition, with Champion Holdings as the accounting acquirer; fiscal 2019 results combine pre-Exchange Champion Holdings with post-Exchange combined entity results[300](index=300&type=chunk) - Revenue is recognized when performance obligations are satisfied, typically at the point of transfer of control for products; for long-term construction contracts, revenue is recognized over time using the percentage-of-completion method[308](index=308&type=chunk)[375](index=375&type=chunk)[377](index=377&type=chunk) - Inventories are valued at the lower of cost or market using the first-in, first-out method[319](index=319&type=chunk) - Goodwill is not amortized but tested for impairment annually; in **fiscal 2019**, a qualitative assessment indicated no impairment risk[325](index=325&type=chunk)[326](index=326&type=chunk) - The company adopted **ASC 606 (Revenue from Contracts with Customers)** and **ASU 2016-18 (Restricted Cash)** on **April 1, 2018**, with no material impact on revenues from ASC 606[336](index=336&type=chunk)[337](index=337&type=chunk) - **ASU 2016-02 (Leases)** will be adopted on **March 31, 2019**, leading to recognition of lease-related assets and liabilities between **$12.0 million** and **$15.0 million** on the balance sheet, without material impact on results or cash flows[338](index=338&type=chunk)[340](index=340&type=chunk) [2. Business Combination and Acquisitions](index=64&type=section&id=2.%20Business%20Combination%20and%20Acquisitions) The Champion Holdings-Skyline Exchange on **June 1, 2018**, was a reverse acquisition, generating **$170.2 million** in goodwill; acquired Skyline operations contributed **$218.8 million** in **fiscal 2019** net sales - The Exchange was completed on **June 1, 2018**, and accounted for as a reverse acquisition, with Champion Holdings as the accounting acquirer[343](index=343&type=chunk) Preliminary Purchase Price Allocation (Dollars in thousands) | Asset/Liability | Preliminary Allocation at March 30, 2019 | | :-------------------------------- | :------------------------------------- | | Cash | $9,722 | | Trade accounts receivable | $13,876 | | Inventory | $19,028 | | Property, plant and equipment | $40,220 | | Deferred tax assets, net | $6,996 | | Intangibles | $52,218 | | Goodwill | $170,227 | | Accounts payable and accrued liabilities | $(36,027) | | **Total purchase price allocation** | **$285,052** | - The acquired Skyline operations contributed **$218.8 million** in net sales to **fiscal 2019**[348](index=348&type=chunk) - Prior acquisitions include a manufactured housing plant in Mansfield, Texas (**$2.2 million cash, 2017**) and Innovative Building Systems, LLC (IBS) (**$14.3 million cash, 2016**), which added modular manufacturing facilities and retail sales centers[351](index=351&type=chunk)[352](index=352&type=chunk) [3. Discontinued Operations](index=66&type=section&id=3.%20Discontinued%20Operations) The company disposed of its U.K. operations on **January 20, 2017**, recognizing a **$0.6 million** net gain in **fiscal 2017**, primarily from reclassified translation adjustments and pension losses - The company completed the disposition of its U.K. operations on **January 20, 2017**[355](index=355&type=chunk) Pretax Income of Discontinued Operations (FY2017, Dollars in thousands) | Major line items | Amount | | :------------------------------------------------ | :----- | | Revenue | $21,137 | | Cost of sales | $(18,306) | | Selling, general and administrative expenses | $(5,016) | | Reclassifications from accumulated other comprehensive income | $7,562 | | Other | $10 | | Pretax income of discontinued operations | $5,387 | | Pretax loss on sale of U.K. operations | $(4,803) | | Total pretax gain of U.K. operations | $584 | | Income tax expense | $(1) | | **Gain on discontinued operations, net of tax** | **$583** | - The net gain was primarily driven by the reclassification of **$7.6 million** in cumulative translation adjustment gains and defined benefit pension plan losses from accumulated other comprehensive loss[356](index=356&type=chunk) [4. Cash, Cash Equivalents and Restricted Cash](index=66&type=section&id=4.%20Cash%2C%20Cash%20Equivalents%20and%20Restricted%20Cash) As of **March 30, 2019**, total cash, cash equivalents, and restricted cash was **$126.6 million**, with restricted cash eliminated in **fiscal 2019** due to the Credit Agreement Cash, Cash Equivalents and Restricted Cash (Dollars in thousands) | Metric | March 30, 2019 | March 31, 2018 | April 1, 2017 | | :---------------------------------------- | :------------- | :------------- | :------------ | | Balance sheet - cash and cash equivalents | $126,634 | $113,731 | $81,012 | | Balance sheet - restricted cash | $— | $22,885 | $21,680 | | **Statement of cash flows - cash, cash equivalents and restricted cash** | **$126,634** | **$136,616** | **$102,692** | - Restricted cash, previously collateral for letters of credit, was reduced to zero in **fiscal 2019** due to the new Credit Agreement[317](index=317&type=chunk)[370](index=370&type=chunk) [5. Inventories](index=66&type=section&id=5.%20Inventories) Net inventory increased to **$122.6 million** at **March 30, 2019**, primarily in raw materials and finished goods; obsolete inventory reserves were **$4.1 million** Components of Net Inventory (Dollars in thousands) | Component | March 30, 2019 | March 31, 2018 | | :------------------ | :------------- | :------------- | | Raw materials | $48,531 | $37,852 | | Work in process | $13,973 | $10,004 | | Finished goods and other | $60,134 | $50,166 | | **Total inventories** | **$122,638** | **$98,022** | - Total inventories increased by **$24.6 million (25.1%)** from **March 31, 2018**, to **March 30, 2019**[358](index=358&type=chunk) - Reserves for obsolete inventory were **$4.1 million** at **March 30, 2019**, up from **$3.5 million** at **March 31, 2018**[358](index=358&type=chunk) [6. Property, Plant, and Equipment](index=67&type=section&id=6.%20Property%2C%20Plant%2C%20and%20Equipment) Net PP&E increased to **$108.6 million** at **March 30, 2019**, primarily due to the Exchange; depreciation was **$11.3 million**, and idle facilities had a **$9.6 million** net book value Components of PP&E (Dollars in thousands) | Component | March 30, 2019 | March 31, 2018 | | :-------------------------------- | :------------- | :------------- | | Land and improvements | $34,264 | $22,071 | | Buildings and improvements | $83,973 | $58,179 | | Machinery and equipment | $42,476 | $31,924 | | Construction in progress | $3,619 | $919 | | Property, plant and equipment, at cost | $164,332 | $113,093 | | Less accumulated depreciation | $(55,745) | $(45,133) | | **Property, plant, and equipment, net** | **$108,587** | **$67,960** | - Net PP&E increased by **$40.6 million (59.7%)** from **March 31, 2018**, to **March 30, 2019**, largely due to the Exchange[360](index=360&type=chunk) - Depreciation expense was **$11.3 million** in **fiscal 2019**, up from **$7.8 million** in **fiscal 2018**[359](index=359&type=chunk) - At **March 30, 2019**, the company owned **five idle manufacturing facilities** and **two idle retail sales centers** with a net book value of **$9.6 million**[322](index=322&type=chunk) [7. Goodwill and Intangible Assets](index=67&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) Goodwill increased to **$173.4 million** and amortizable intangible assets to **$48.9 million** at **March 30, 2019**, primarily due to the Exchange; amortization expense was **$4.8 million** in **fiscal 2019** Goodwill and Amortizable Intangible Assets (Dollars in thousands) | Metric | March 30, 2019 | March 31, 2018 | | :-------------------------------- | :------------- | :------------- | | Goodwill | $173,406 | $3,179 | | Amortizable intangibles, net | $48,936 | $1,542 | | Weighted average remaining amortization period (years) | 8.0 | 5.4 | - The increase in goodwill and intangible assets is primarily a result of the preliminary estimate recognized in the Exchange[361](index=361&type=chunk)[362](index=362&type=chunk) - Amortization expense for intangible assets was **$4.8 million** in **fiscal 2019**, significantly up from **$0.5 million** in **fiscal 2018**[363](index=363&type=chunk) [8. Other Current Liabilities](index=68&type=section&id=8.%20Other%20Current%20Liabilities) Total other current liabilities increased to **$129.6 million** at **March 30, 2019**, primarily due to higher customer deposits, accrued rebates, warranty obligations, and compensation Components of Other Current Liabilities (Dollars in thousands) | Component | March 30, 2019 | March 31, 2018 | | :---------------------------------------- | :------------- | :------------- | | Customer deposits and receipts in excess of revenues | $28,392 | $24,557 | | Accrued volume rebates | $21,020 | $17,037 | | Accrued warranty obligations | $17,886 | $12,530 | | Accrued compensation and payroll taxes | $32,075 | $24,100 | | Accrued insurance | $16,245 | $11,112 | | Other | $13,943 | $10,776 | | **Total other current liabilities** | **$129,561** | **$100,112** | - Total other current liabilities increased by **$29.4 million (29.4%)** from **March 31, 2018**, to **March 30, 2019**[364](index=364&type=chunk) [9. Accrued Warranty Obligations](index=68&type=section&id=9.%20Accrued%20Warranty%20Obligations) Accrued warranty obligations increased to **$23.3 million** at **March 30, 2019**, due to assumed warranty and expense, partially offset by cash payments Changes in Accrued Warranty Obligations (Dollars in thousands) | Metric | FY2019 | FY2018 | | :-------------------------------- | :----- | :----- | | Balance at the beginning of the period | $15,430 | $14,534 | | Warranty assumed in the Exchange | $6,259 | $— | | Warranty expense | $37,298 | $23,855 | | Cash warranty payments | $(35,641) | $(22,959) | | **Balance at end of period** | **$23,346** | **$15,430** | - Accrued warranty obligations increased by **$7.9 million (51.3%)** from **March 31, 2018**, to **March 30, 2019**[365](index=365&type=chunk) [10. Debt and Floor Plan Payable](index=68&type=section&id=10.%20Debt%20and%20Floor%20Plan%20Payable) Long-term debt decreased to **$54.3 million** at **March 30, 2019**, including a **$100.0 million** revolving credit facility; floor plan payable increased to **$33.3 million** Long-term Debt (Dollars in thousands) | Debt Type | March 30, 2019 | March 31, 2018 | | :-------------------------------- | :------------- | :------------- | | Revolving credit facility maturing in 2023 | $41,900 | $— | | Obligations under industrial revenue bonds due 2029 | $12,430 | $12,430 | | Term Loans due March 2020 | $— | $46,897 | | **Total debt** | **$54,330** | **$59,331** | - The company entered into a new **$100.0 million** revolving credit facility on **June 5, 2018**, replacing existing term loans and a cash-collateralized letter of credit facility[367](index=367&type=chunk) - As of **March 30, 2019**, **$41.9 million** was outstanding under the revolving credit facility, with **$37.1 million** available to borrow[368](index=368&type=chunk) - Floor plan payable for retail operations increased to **$33.3 million** at **March 30, 2019**, from **$29.8 million** at **March 31, 2018**, with financing arrangements allowing borrowings up to **$47.0 million**[373](index=373&type=chunk) [11. Revenue Recognition](index=69&type=section&id=11.%20Revenue%20Recognition) Revenue is recognized upon transfer of control for products or over time for long-term contracts; disaggregated by U.S. and Canadian Factory-Built Housing and Corporate/Other segments - Revenue for sales to independent retailers and builders/developers is recognized when wholesale financing is approved, the home is shipped, and title has transferred[375](index=375&type=chunk) - Retail sales to consumers are recognized when the home is delivered, set up, accepted, and title has transferred, with funds received from the finance company or buyer[376](index=376&type=chunk) - Commercial revenue for long-term construction contracts is recognized over time using the percentage-of-completion method[377](index=377&type=chunk) Disaggregated Revenue by Sales Category (Dollars in thousands) | Sales Category | FY2019 | FY2018 | FY2017 | | :----------------------- | :----- | :----- | :----- | | **U.S. Factory-Built Housing** | | | | | Manufacturing and retail | $1,166,245 | $841,354 | $660,984 | | Commercial | $11,442 | $19,134 | $17,312 | | **Canadian Factory-built Housing** | | | | | Manufacturing and retail | $98,567 | $96,603 | $92,631 | | **Corporate/Other** | | | | | Transportation | $83,789 | $107,631 | $90,392 | | **Total** | **$1,360,043** | **$1,064,722** | **$861,319** | [12. Income Taxes](index=71&type=section&id=12.%20Income%20Taxes) Fiscal 2019 income tax expense was **$16.9 million**, with an effective rate of **(40.9%)**, influenced by non-deductible expenses; deferred tax assets increased to **$60.9 million** Income Tax Expense (Benefit) (Dollars in thousands) | Metric | FY2019 | FY2018 | FY2017 | | :-------------------------------- | :----- | :----- | :----- | | Total income tax expense (benefit) | $16,905 | $27,316 | $(23,321) | | Effective tax rate | (40.9%) | 63.4% | (83.3%) | - The effective tax rate for **fiscal 2019** was **(40.9%)**, differing from the federal statutory rate due to non-deductible expenses from the Exchange, state/local taxes, and foreign results[156](index=156&type=chunk) - The **Tax Cuts and Jobs Act (2017)** reduced the corporate income tax rate from **35% to 21%**, leading to a provisional **$9.4 million** U.S. federal income tax expense in **fiscal 2018** for deferred tax re-measurement[381](index=381&type=chunk)[383](index=383&type=chunk) Deferred Tax Assets and Liabilities (Dollars in thousands) | Component | March 30, 2019 | March 31, 2018 | | :-------------------------------- | :------------- | :------------- | | Gross deferred tax assets | $60,910 | $37,853 | | Gross deferred tax liabilities | $22,981 | $4,504 | | Valuation allowance | $(7,293) | $(6,353) | | **Net deferred tax assets** | **$30,636** | **$26,996** | - As of **March 30, 2019**, the company has U.S. federal NOL carryforwards of **$67.7 million** and state NOL carryforwards in various jurisdictions[388](index=388&type=chunk) [13. Equity-Based Compensation](index=74&type=section&id=13.%20Equity-Based%20Compensation) Equity-based compensation expense surged to **$102.0 million** in **fiscal 2019**, primarily due to a **$95.1 million** incremental fair value from modified restricted share awards related to the Exchange Equity-Based Compensation Expense (Dollars in thousands) | Fiscal Year | Expense | | :---------- | :------ | | 2019 | $102,000 | | 2018 | $600 | | 2017 | $600 | - The significant increase in **fiscal 2019** expense includes **$6.0 million** related to former Skyline employees and **$95.1 million** from the incremental fair value of modified restricted share awards that vested due to public offerings[343](index=343&type=chunk)[392](index=392&type=chunk) - The company's **2018 Equity Incentive Plan** allows for grants of options, stock appreciation rights, restricted stock/units, and performance awards[392](index=392&type=chunk) - Total unrecognized equity-based compensation was **$8.4 million** at **March 30, 2019**, with **$6.1 million** expected to be recognized in **fiscal 2020**[391](index=391&type=chunk) Weighted-Average Grant Date Fair Value for Awards Granted in FY2019 | Award Type | Weighted Average Grant Date Fair Value Per Share/Unit | | :---------------------- | :---------------------------------------------------- | | Options | $3.93 | | Performance Share Units | $3.62 | | Restricted Share Units | $14.24 | | Restricted Share Awards | $29.77 | [14. Earnings Per Share](index=77&type=section&id=14.%20Earnings%20Per%20Share) Basic and diluted EPS are computed using the two-class method; **fiscal 2019** basic and diluted EPS from continuing operations was **$(1.09)**, reflecting the net loss - Basic and diluted net (loss) income per share are computed using the two-class method, as the company's time-vesting and performance-vesting restricted share awards are considered participating securities[399](index=399&type=chunk) - All common stock outstanding amounts are calculated as if the Shares Issuance occurred on **April 3, 2016**[399](index=399&type=chunk) Basic and Diluted Earnings Per Share (Dollars and shares in thousands, except per share data) | Metric | FY2019 | FY2018 | FY2017 | | :---------------------------------------- | :----- | :----- | :----- | | Net (loss) income from continuing operations | $(58,208) | $15,800 | $51,327 | | Basic weighted average shares outstanding | 53,491 | 44,491 | 44,489 | | Diluted weighted average shares outstanding | 53,491 | 44,491 | 44,489 | | Basic net (loss) income per share | $(1.09) | $0.33 | $1.09 | | Diluted net (loss) income per share | $(1.09) | $0.33 | $1.09 | - Securities that could potentially dilute basic EPS in the future but were considered antidilutive in **fiscal 2019** include **146 thousand options**, **158 thousand restricted share units**, and **146 thousand performance share units**, totaling **450 thousand dilutive securities**[401](index=401&type=chunk) [15. Retirement Plans](index=78&type=section&id=15.%20Retirement%20Plans) The company sponsors defined contribution savings plans for U.S. and Canadian employees, with U.S. matching **50% of the first 6% of pay**, incurring **$0.6 million** in expense for both in **fiscal 2019** - The U.S. subsidiary sponsors a defined contribution savings plan, matching **50% of the first 6% of pay** contributed, with an expense of **$0.6 million** in **fiscal 2019**[402](index=402&type=chunk) - Canadian subsidiaries also have employer-sponsored defined contribution plans, with expenses of **$0.6 million** in **fiscal 2019**[403](index=403&type=chunk) [16. Transactions with Related Parties](index=78&type=section&id=16.%20Transactions%20with%20Related%20Parties) Prior to the Exchange, the company incurred **$0.3 million** in management fees with Principal Shareholders; post-Exchange, it entered into registration and investor rights agreements with them and a transition services agreement with Champion Holdings - Prior to the Exchange, the company had a Management Advisory Services Agreement with Principal Shareholders, incurring **$0.3 million** in management fee expense in **fiscal 2019