Skyline Champion(US:SKY)2024-08-07 20:15Financial Performance - Net sales for the three months ended June 29, 2024, increased to $627,779,000, up 35.1% from $464,769,000 for the same period in 2023[8] - Gross profit for the same period was $164,215,000, representing a gross margin of 26.2%, compared to $129,673,000 in 2023[8] - Operating income decreased to $55,388,000, down 6.9% from $59,234,000 year-over-year[8] - Net income for the three months ended June 29, 2024, was $45,794,000, a decrease of 10.5% from $51,269,000 in the prior year[8] - For the three months ended June 29, 2024, the total revenue was $627.8 million, compared to $401.1 million for the same period in 2023, reflecting a significant increase[47] - The net income attributable to the Company's common shareholders for the three months ended June 29, 2024, was $45.8 million, down from $51.3 million in the prior year[49] - The Company recorded an effective tax rate of 22.5% for the three months ended June 29, 2024, compared to 25.2% for the same period in 2023[48] - Adjusted EBITDA for the three months ended June 29, 2024, was $75.0 million, compared to $66.8 million in the same period of 2023[74] - Selling, general, and administrative expenses rose to $108.8 million, an increase of $38.4 million, or 54.5%, compared to $70.4 million in the prior year[78] Assets and Liabilities - Total current assets increased to $975,928,000, up 6.3% from $918,302,000 as of March 30, 2024[7] - Total assets reached $1,987,130,000, reflecting a growth of 3.3% from $1,923,341,000[7] - Cash and cash equivalents at the end of the period were $548,933,000, an increase of 10.9% from $495,063,000 at the beginning of the period[12] - Total stockholders' equity increased to $1,450,747,000, up 2.0% from $1,422,370,000[7] - The company reported a net cash provided by operating activities of $84,616,000, compared to $74,857,000 in the same period last year[12] - The company had outstanding borrowings on floor plan financing agreements of $92.9 million as of June 29, 2024, with a total credit line capacity of $223.0 million[46] - The accrued warranty obligations increased to $54.1 million as of June 29, 2024, from $35.1 million at the end of the same period in 2023[41] - The average cash balance decreased to $521.998 million for the three months ended June 29, 2024, down from $772.585 million in the same period of the prior year[82] Acquisitions and Investments - The company acquired Regional Enterprises, LLC for a total consideration of $316.9 million, including $279.5 million in cash and 455,098 shares valued at approximately $27.9 million[25] - The Company completed the acquisition of Regional Homes in October 2023, which constituted approximately 26% of total assets and 24% of net sales for the three months ended June 29, 2024[104] - The investment in ECN Capital Corporation totaled $70.1 million as of June 29, 2024, with the Company owning approximately 19.9% of the voting shares[37] - The Company made an equity investment in ECN to facilitate the creation of a captive finance company, Champion Financing, to provide financing solutions[64] Manufacturing and Sales - Champion Homes, Inc. operates 43 manufacturing facilities in the U.S. and 5 in Canada, focusing on factory-built homes and retail sales through 72 sales centers[15] - U.S. Factory-built Housing segment net sales reached $599.5 million, up 39.8% from $428.8 million year-over-year[52] - The Company's backlog increased to $404.8 million as of June 29, 2024, compared to $260.0 million as of July 1, 2023[67] - Approximately 88% of the Company's U.S. manufacturing sales were generated from homes complying with HUD code standards[68] - U.S. manufacturing and retail net sales increased by $170.7 million, or 39.8%, primarily due to the inclusion of $151.5 million from Regional Homes[71] Expenses and Costs - Depreciation expense for the three months ended June 29, 2024, was $7.7 million, an increase from $4.6 million in the same period of 2023[31] - Amortization of intangible assets for the three months ended June 29, 2024, was $2.9 million, slightly down from $3.0 million in the prior year[34] - Interest income, net was $(4.2) million for the three months ended June 29, 2024, compared to $(9.3) million in the same period of the prior fiscal year, a change of $5.1 million or 54.3%[82] Legal and Compliance - The company is involved in various legal proceedings, including commercial disputes and product liability claims[105] - The company has excluded the acquired operations of Regional Homes from its assessment of internal control over financial reporting for the first year following the acquisition[104] - The company's disclosure controls and procedures were evaluated as effective as of June 29, 2024, by the CEO and CFO[103] - The company maintains reasonable assurance that required information is disclosed in compliance with the Securities Exchange Act of 1934[103] Risks and Future Outlook - The company is assessing the impact of new accounting standards updates on its financial statement disclosures, effective for fiscal 2025 and fiscal 2026[23][24] - The company is exposed to risks related to public health issues, such as epidemics or pandemics, which could disrupt business operations[100] - There have been no significant changes in interest rate and foreign exchange risks since March 30, 2024[102] - The company assumes no obligation to update forward-looking statements unless required by law[101]