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ELKHART, Ind. — Skyline Champion Corporation announced financial results for its third quarter ended Dec. 29, of the fiscal year ending March 30, 2019.
On June 1, 2018, Skyline Corporation and Champion Enterprises Holdings, the parent company of Champion Home Builders, Inc., completed the combination of their operations. The combined company operates as Skyline Champion Corporation and is traded on the New York Stock Exchange under the ticker symbol “SKY”. The third quarter of fiscal 2019 includes a full quarter of results for both the Skyline and Champion businesses. Results for the three months ended Dec. 30, 2017 of the fiscal year ended March 31, 2018 include only the results of Champion.
Third Quarter Fiscal 2019 Highlights (compared to Third Quarter Fiscal 2018)
- Net sales increased 20% to $354.7 million
- Total homes sold increased 16% to 5,348
- Gross profit as a percent of sales of 18.3%
- Net income increased 95% to $10.5 million
- EPS of $0.19; excluding non-recurring expenses, Adjusted EPS of $0.27
- Adjusted EBITDA increased 3% to $26.4 million
“I am pleased to report another solid quarter for Skyline Champion. In the third quarter fiscal 2019 the company was successful in growing the topline and realizing merger synergies from its combined businesses,” said Keith Anderson, Skyline Champion’s chief executive officer. “During the quarter we also made important growth investments as we completed the expansion of our Corona, California facility and made progress toward opening a new manufacturing facility in Leesville, La. The Leesville opening remains on schedule and will increase our capacity and help drive market share in the surrounding region. We remain excited about the progress we made during the quarter and the opportunities ahead for Skyline Champion.”
Third quarter fiscal 2019 results
Net sales for the third quarter fiscal 2019 increased by 20% to $354.7 million compared to the prior-year period. The increase in net sales was driven primarily by an increase in the number of homes sold as well as a higher average selling price per home sold, which increased due to market demand and product mix. The number of U.S. factory-built homes sold by Skyline Champion in the third quarter fiscal 2019 increased by 17% to 5,019 with U.S. ASPs increasing by 9% to $61,700. Average home sales prices rose in response to increased market demand for higher priced models. The number of Canadian factory-built homes sold increased by 2% to 329 homes compared to 323 homes in the prior-year period. Looking forward Skyline Champion is well positioned with $181 million in backlog as of Dec. 29.
Gross profit increased by 15% to $64.7 million compared to the prior-year period. Gross profit was 18.3% of sales for the third quarter fiscal 2019 compared to 19.1% in the third quarter fiscal 2018. During the quarter ended Dec. 30, 2017, the Company produced over 900 disaster relief homes for the Federal Emergency Management Agency (“FEMA”). These standard FEMA floor plans allowed Skyline Champion to achieve higher than typical production efficiencies and resulting margins.
Selling, general and administrative expenses (“SG&A”) in the third quarter fiscal 2019 increased to $48.8 million from $32.9 million in the same period last year, primarily due to inclusion of expenses related to the Skyline operations, and integration costs associated with the combination.
Net income for the third quarter fiscal 2019 was $10.5 million, compared to $5.4 million during the same period from the prior year. The increase in net income was driven by higher sales and a lower income tax expense partially offset by the increase in SG&A expenses.
Adjusted EBITDA for the third quarter fiscal 2019 increased by 3% to $26.4 million compared to the third quarter fiscal 2018. The increase was primarily driven by higher sales volumes and increased ASPs. The Adjusted EBITDA margin declined by 126 basis points to 7.4% due to higher SG&A expenses and FEMA production efficiencies in last year’s third quarter.
As of December 29, 2018, Skyline Champion had $129.0 million of cash and cash equivalents and $32.1 million of unused borrowing capacity under its revolving credit facility.
SOURCE: Skyline press release