Skyline Champion(US:SKY)2021-02-02 21:21Financial Performance - Net sales for the three months ended December 26, 2020, were $377.581 million, an increase of 10.4% compared to $342.239 million for the same period in 2019[9] - Gross profit for the nine months ended December 26, 2020, was $188.580 million, down 13.9% from $218.991 million for the same period in 2019[9] - Operating income for the three months ended December 26, 2020, was $27.498 million, representing a 15.5% increase from $23.664 million in the prior year[9] - Net income for the nine months ended December 26, 2020, was $51.013 million, slightly down from $52.162 million in the same period of 2019[9] - For the three months ended December 26, 2020, the company reported a net income of $21.6 million, compared to a net income of $17.0 million for the same period in 2019, representing a year-over-year increase of 27.8%[20] - For the nine months ended December 26, 2020, total revenue reached $973.2 million, compared to $1,068.6 million for the same period in 2019, indicating a decline[48] - The Company reported net income of $51.0 million for the nine months ended December 26, 2020, compared to $52.2 million for the same period in 2019, reflecting a decrease of 2.3%[63] Cash Flow and Liquidity - Cash and cash equivalents increased to $267.060 million as of December 26, 2020, from $209.455 million at the end of March 2020, reflecting a 27.5% increase[7] - The company reported a net cash provided by operating activities of $103.816 million for the nine months ended December 26, 2020, compared to $73.077 million for the same period in 2019, an increase of 42.0%[15] - Cash provided by operating activities was $103.8 million for the nine months ended December 26, 2020, compared to $73.1 million for the same period in 2019, reflecting an increase of $30.7 million[139] - Cash used in investing activities decreased to $1.2 million for the nine months ended December 26, 2020, from $11.0 million in the prior year, primarily due to deferred non-essential spending[140] - Cash used in financing activities was $47.9 million for the nine months ended December 26, 2020, compared to $18.0 million in the same period of 2019, largely due to a $38.0 million repayment on the revolving credit facility[141] - The Company expects cash flows from operations and existing cash balances to be adequate to cover working capital requirements, capital expenditures, and debt payment obligations for the next year[138] Assets and Liabilities - Total assets rose to $825.865 million as of December 26, 2020, compared to $781.700 million as of March 28, 2020, indicating a growth of 5.6%[7] - Total current liabilities increased to $207.651 million as of December 26, 2020, from $186.647 million as of March 28, 2020, marking an increase of 11.0%[7] - The company’s total stockholders' equity increased to $532.195 million as of December 26, 2020, from $474.315 million as of March 28, 2020, reflecting an increase of 12.2%[7] - The total long-term debt was $39.3 million as of December 26, 2020, down from $77.3 million on March 28, 2020[41] - The Company had outstanding borrowings on floor plan financing agreements of $25.6 million as of December 26, 2020, compared to $33.9 million on March 28, 2020[47] Inventory and Production - The total inventories, net as of December 26, 2020, amounted to $131.1 million, an increase from $126.4 million as of March 28, 2020, reflecting a growth of 5.5%[31] - The Company’s unfilled U.S. and Canadian manufacturing orders totaled $488.5 million as of December 26, 2020, up from $133.1 million at December 28, 2019, indicating increased demand for single-family homes[135] - U.S. homes sold increased by 6.2% to 5,343 units, while the average home selling price rose by 4.0% to $63.0 thousand[87] - Production levels have surpassed last year's average production rates throughout the third quarter of fiscal 2021, although increasing production is limited by plant capacity and other factors[137] Expenses and Profitability - Selling, general, and administrative expenses decreased by $1.0 million, or 2.1%, to $44.3 million for the three months ended December 26, 2020, compared to $45.2 million in the prior year[98] - Total gross profit decreased by $30.4 million, or 13.9%, with gross profit as a percentage of net sales declining to 19.4% from 20.5%[117] - U.S. Factory-built Housing gross profit decreased by $29.0 million, or 14.9%, with gross profit as a percentage of segment net sales at 19.1%[118] - Selling, general, and administrative expenses decreased by $18.9 million, or 13.0%, totaling $126.5 million for the nine months ended December 26, 2020[122] - Adjusted EBITDA increased by $2.3 million, or 7.8%, to $32.1 million for the three months ended December 26, 2020, driven by higher operating income from increased sales volume[109] - Adjusted EBITDA decreased by $10.8 million, or 11.4%, totaling $83.5 million, primarily due to lower operating income and gross margin[130] Tax and Subsidies - The Company’s effective tax rate for the nine months ended December 26, 2020, was 23.3%, down from 28.2% in the same period of 2019[57] - Income tax expense decreased by $4.9 million, or 24.3%, totaling $15.5 million, with an effective tax rate of 23.3%[128] - The Company recognized $6.2 million in payroll subsidies under the Canada Emergency Wage Subsidy (CEWS) during the nine months ended December 26, 2020, contributing to its overall financial relief during the COVID-19 pandemic[21] - Other income of $7.0 million was primarily due to wage subsidies from government programs related to COVID-19, including $6.2 million from Canada and $0.8 million from the U.S.[127] Risks and Challenges - The Company is subject to various risks, including the impact of COVID-19, economic conditions, and competition, which could affect future performance[147] - The Company experienced intermittent closures due to COVID-19, but was able to increase daily production rates in the third quarter of fiscal 2021[82]