Skyline Champion(US:SKY)2019-05-22 17:28Financial Data and Key Metrics Changes - For fiscal year 2019, the company reported a total revenue of $1.4 billion, reflecting a strong revenue growth of 28% compared to the previous year [7] - Adjusted EBITDA for the year increased by 50% to $97 million, indicating strong operational performance [7] - In Q4, revenue grew by 23% year-over-year, with adjusted EBITDA reaching $24.2 million, an 86% increase from the prior year [8][9] Business Line Data and Key Metrics Changes - U.S. sales increased by 35% to $295 million, with a 15% increase in the number of homes sold and an average selling price of $61,100, up 17% [25][26] - Canadian sales declined by 17% to $18.7 million, attributed to a decrease in the number of homes sold, although average selling prices increased slightly to $81,600 [26] Market Data and Key Metrics Changes - The manufactured housing industry is expected to continue growing, with industry volumes remaining below long-term averages [10] - In Canada, orders were down 25% during the March quarter, particularly in British Columbia, Alberta, and Saskatchewan, with expectations for continued softness in the short term [15] Company Strategy and Development Direction - The company is focused on organic growth initiatives and evaluating potential acquisition opportunities to enhance its market position [40] - The integration of Skyline and Champion is progressing well, with a target to achieve synergies of $12 million to $16 million by December 2019 [36][37] Management's Comments on Operating Environment and Future Outlook - Management remains positive about the outlook for the manufactured housing industry, citing increasing demand for affordable housing and improving financing options [10][39] - The company is closely monitoring economic conditions and trends in the housing market while expecting continued growth in U.S. orders [13][39] Other Important Information - The company ended Q4 with a consolidated backlog of $143 million, down from $155 million a year ago, indicating a more normalized production level [17] - The effective tax rate for Q4 was 25.9%, a significant decrease from 176.4% in the prior year, primarily due to changes in equity-based compensation [31] Q&A Session Summary Question: Impact of weather on shipments - Management noted that weather conditions primarily affected regions between Texas and North Carolina, causing delays in shipments [47] Question: Order rates and regional performance - Management indicated that while some regions experienced softness, overall customer demand remains strong, with double-digit order growth in April [49] Question: Fannie and Freddie's programs - Management expects traction from Fannie and Freddie's programs in the latter half of the year, which could attract more lenders to the manufactured housing space [51] Question: Canadian market outlook - The Canadian operations are expected to remain soft for the next quarter or two, with approximately 8% of overall sales coming from Canada [53] Question: Sustainability of gross margins - Management confirmed that the strong gross margins in the U.S. are sustainable, with no one-time adjustments affecting the quarter [54] Question: Long-term EBITDA margin targets - Management expects long-term EBITDA margins to reach around 10%, with some deceleration in growth due to ongoing investments [76] Question: Impact of tariffs on costs - Management indicated that tariffs could impact costs by 1% to 3%, primarily affecting plumbing and cabinetry products [80] Question: Future M&A opportunities - Management is exploring M&A opportunities in both manufacturing capacity expansion and distribution channels [91]