ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of ea/Exchange on Which Registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Title of Class |
Shares Outstanding on February 4, 2022 | |
Common Stock |
Title |
Form 10-K | |
Definitive proxy statement for Annual Meeting of Shareholders to be held March 4, 2022 |
Part III, Items 10-14 |
Form 10-K |
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Item 1. |
2 | |||||
Item 1A. |
4 | |||||
Item 1B. |
4 | |||||
Item 2. |
4 | |||||
Item 3. |
5 | |||||
Item 4. |
5 | |||||
Item 5. |
6 | |||||
Item 6. |
6 | |||||
Item 7. |
7 | |||||
Item 7A. |
11 | |||||
Item 8. |
12 | |||||
12 | ||||||
13 | ||||||
14 | ||||||
15 | ||||||
16 | ||||||
17 | ||||||
18 | ||||||
Item 9. |
30 | |||||
Item 9A. |
30 | |||||
Item 9B. |
30 | |||||
Item 9C. |
30 | |||||
Item 10. |
31 | |||||
Item 11. |
31 | |||||
Item 12. |
31 | |||||
Item 13. |
31 | |||||
Item 14. |
31 | |||||
Item 15. |
32 | |||||
32 | ||||||
32 | ||||||
Item 16. |
33 | |||||
34 |
Item 1. |
Business |
• | Single-wide widths of 14 and 16 feet ranging from 35 to 72 feet in length; |
• | Double-wide widths of 20, 24, 26, 28 and 32 feet ranging from 32 to 72 feet in length; |
• | Triple-wide widths of 42 feet ranging from 60 to 72 feet in length; and |
• | Quad-unit with 2 sections 28 feet wide from 40 to 48 feet long and 2 sections 28 feet wide by 52 feet long. |
Item 1A. |
Risk Factors |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Location |
Approximate Size | |
3741 SW 7th Street Ocala, Florida |
72,000 sq. ft. |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Equity Compensation Plan Information | ||||||||||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) |
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(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders |
47,300 | $ | 24.41 | N/A | * | |||||||
Equity compensation plans not approved by security holders |
N/A | N/A | 252,700 | * | ||||||||
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Total |
47,300 | $ | 24.41 | 252,700 |
* | The Nobility Homes, Inc. 2011 Stock Incentive Plan was amended by the Board of Directors to extend the termination date from June 2021 until June 1, 2026. |
Item 6. |
Reserved |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
2021 | 2020 | |||||||
New homes sold through Company owned sales centers |
394 | 343 | ||||||
Pre-owned homes sold through Company owned sales centers |
15 | 12 | ||||||
Homes sold to independent dealers |
139 | 225 | ||||||
Total new factory built homes produced |
557 | 547 | ||||||
Average new manufactured home price - retail |
$ | 93,824 | $ | 91,161 | ||||
Average new manufactured home price - wholesale |
$ | 50,183 | $ | 43,758 | ||||
As a percent of net sales: |
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Gross profit from the Company owned retail sales centers |
17 | % | 19 | % | ||||
Gross profit from the manufacturing facilities - including intercompany sales |
15 | % | 22 | % |
• | Its receipt of a down payment, |
• | Construction of the home is complete, |
• | Home has been delivered and set up at the retail home buyer’s site and title has been transferred to the retail home buyer, |
• | Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and |
• | Completion of any other significant obligations. |
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
13 | ||||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 |
November 6, 2021 | October 31,2020 | |||||||
Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Certificates of deposit |
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Short-term investments |
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Accounts receivable—trade |
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Note receivable |
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Mortgage notes receivable |
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Income taxes receivable |
— | |||||||
Inventories |
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Pre-owned homes, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Pre-owned homes, net |
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Note receivable, less current portion |
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Mortgage notes receivable, less current portion |
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Mobile home park note receivable |
— | |||||||
Other investments |
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Deferred income taxes |
— | |||||||
Operating lease right of use asset |
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Cash surrender value of life insurance |
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Other assets |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued compensation |
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Accrued expenses and other current liabilities |
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Income taxes payable |
— | |||||||
Operating lease obligation |
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Customer deposits |
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Total current liabilities |
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Deferred income taxes |
— | |||||||
Operating lease obligation, less current portion |
— | |||||||
Total liabilities |
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Commitments and contingent liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid in capital |
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Retained earnings |
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Less treasury stock at cost, |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
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Year Ended |
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November 6, 2021 |
October 31, 2020 |
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Net sales |
$ | $ | ||||||
Cost of sales |
( |
) | ( |
) | ||||
Gross profit |
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Selling, general and administrative expenses |
( |
) | ( |
) | ||||
Operating income |
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Other income (loss): |
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Interest income |
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Undistributed earnings in joint venture—Majestic 21 |
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Proceeds received under escrow arrangement |
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Increase (decrease) in fair value of equity investment |
( |
) | ||||||
Gain on sale of assets |
— | |||||||
Miscellaneous |
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Total other income |
||||||||
Income before provision for income taxes |
||||||||
Income tax expense |
( |
) | ( |
) | ||||
Net income |
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Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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Net income per share: |
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Basic |
$ | $ | ||||||
Diluted |
$ | $ |
Common Stock Shares |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income |
Treasury Stock |
Total | ||||||||||||||||||||||
Balance at October 31, 2020 |
$ | $ | $ | $ | — | $ | ( |
) | $ | |||||||||||||||||||
Cash dividend |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Purchase of treasury stock |
( |
) | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||
Exercise of employee stock options |
— | — | — | |||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance at November 6, 2021 |
$ | $ | $ | $ | — | $ | ( |
) | $ | |||||||||||||||||||
Balance at November 2, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
Adoption of ASU 2016-01 |
— | — | — | ( |
) | — | — | |||||||||||||||||||||
Adoption of ASU 2016-02 |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Balance at November 2, 2019 as adjusted |
— | ( |
) | |||||||||||||||||||||||||
Cash dividend |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Purchase of treasury stock |
( |
) | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||
Stock-based compensation |
— | — | — | |||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance at October 31, 202 0 |
$ | $ | $ | $ | — | $ | ( |
) | $ | |||||||||||||||||||
Year Ended | ||||||||
November 6, 2021 |
October 31, 2020 |
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Cash flows from operating activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
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Deferred income taxes |
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Undistributed earnings in joint venture—Majestic 21 |
( |
) | ( |
) | ||||
Gain on disposal of property, plant and equipment |
— | ( |
) | |||||
(Increase) decrease in fair value of equity investments |
( |
) | ||||||
Stock-based compensation |
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Amortization of operating lease right of use assets |
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Decrease (increase) in: |
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Accounts receivable—trade |
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Inventories |
( |
) | ||||||
Pre-owned homes |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ||||||
Interest receivable |
( |
) | ( |
) | ||||
Income taxes receivable |
— | ( |
) | |||||
(Decrease) increase in: |
||||||||
Accounts payable |
( |
) | ||||||
Accrued compensation |
( |
) | ( |
) | ||||
Accrued expenses and other current liabilities |
( |
) | ||||||
Income taxes payable |
( |
) | ||||||
Customer deposits |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
Purchase of certificates of deposit |
— | ( |
) | |||||
Proceeds from certificates of deposit |
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Proceeds from disposal of property, plant and equipment |
— | |||||||
Collections on interest receivable |
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Collections on mortgage notes receivable |
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Collections on equipment and other notes receivable |
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Issuance of equipment note receivable |
( |
) | ||||||
Issuance of mobile home park not receivable |
( |
) | — | |||||
Increase in cash surrender value of life insurance |
( |
) | ( |
) | ||||
Net cash provided by investing activities |
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Cash flows from financing activities: |
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Payment of cash dividend |
( |
) | ( |
) | ||||
Proceeds from exercise of employee stock options |
— | |||||||
Proceeds from paycheck protection program |
— |
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Return of proceeds from paycheck protection program |
— |
( |
) | |||||
Purchase of treasury stock |
( |
) | ( |
) | ||||
Reduction of operating lease obligation |
( |
) | ( |
) | ||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
Increase cash and cash equivalents |
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Cash and cash equivalents at beginning of year |
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Cash and cash equivalents at end of year |
$ | $ | ||||||
Supplemental disclosure of cash flow information: |
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Income taxes paid |
$ | $ | ||||||
1. | Identify the contract(s) with a customer; |
2. | Identify each performance obligation in the contract; |
3. | Determine the transaction price; |
4. | Allocate the transaction price to each performance obligation; and |
5. | Recognize revenue when or as each performance obligation is satisfied. |
• | Its receipt of a down payment, |
• | Construction of the home is complete, |
• | Home has been delivered and set up at the retail home buyer’s site, and title has been transferred to the retail home buyer, |
• | Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and |
• | Completion of any other significant obligations. |
2021 | 2020 | |||||||
Manufactured housing |
$ | $ | ||||||
Pre-owned homes |
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Insurance agent commissions |
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Total net sales |
$ | $ | ||||||
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2021 | 2020 | |||||||
Beginning accrued warranty expense |
$ | $ | ||||||
Less: reduction for payments |
( |
) | ( |
) | ||||
Plus: additions to accrual |
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Ending accrued warranty expense |
$ | $ | ||||||
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|
November 6, 2021 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Equity securities in a public company |
$ | $ | $ | $ | ||||||||||||
October 31, 2020 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
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Equity securities in a public company |
$ | $ | $ | $ | ||||||||||||
• | Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. |
• | Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date. |
November 6, 2021 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Equity securities in a public company |
$ | $ | $ | |||||||||
October 31, 2020 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Equity securities in a public company |
$ | $ | $ | |||||||||
November 6, 2021 |
October 31, 2020 |
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Raw materials |
$ | $ | ||||||
Work-in-process |
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Inventory consigned to affiliated entities |
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Finished homes |
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Model home furniture |
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Inventories |
$ | $ | ||||||
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Pre-owned homes |
$ | $ | ||||||
Less homes expected to sell in 12 months |
( |
) | ( |
) | ||||
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Pre-owned homes, long-term |
$ | $ | ||||||
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Range of Lives in Years | November 6, 2021 | October 31, 2020 | ||||||||
Land |
$ | $ | ||||||||
Land improvements |
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Buildings and improvements |
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Machinery and equipment |
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Furniture and fixtures |
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Construction in progress |
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Less accumulated depreciation |
( |
) | ( |
) | ||||||
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|
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$ | $ | |||||||||
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|
November 6, 2021 | October 31, 2020 | |||||||
Accrued warranty expense |
$ | $ | ||||||
Accrued property and sales taxes |
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Other accrued expenses |
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Total accrued expenses and other current liabilities |
$ | $ | ||||||
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|
November 6, 2021 | October 31, 2020 | |||||||
Current tax expense: |
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Federal |
$ | $ | ||||||
State |
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Deferred tax (benefit) |
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Provision for income taxes |
$ | $ | ||||||
November 6, 2021 | October 31, 2020 | |||||||
Provision—federal statutory tax rate |
$ | $ | ||||||
Increase (decrease) resulting from: |
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State taxes, net of federal tax benefit |
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Permanent differences: |
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Stock option expirations |
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Decrease in FL corporate tax rate |
( |
) | ( |
) | ||||
Other comprehensive income |
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Other |
( |
) | ( |
) | ||||
Provision for income taxes |
$ | $ | ||||||
November 6, 2021 | October 31, 2020 | |||||||
Deferred tax assets: |
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Allowance for doubtful accounts |
$ | $ | ||||||
Inventories |
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Prepaid Expenses |
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Accrued expenses |
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Other assets |
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Lease right of use liability |
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Stock-based compensation |
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Total deferred tax assets |
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Deferred tax liabilities: |
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Depreciation |
( |
) | ( |
) | ||||
Carrying value of investments |
( |
) | ( |
) | ||||
Amortization |
( |
) | ( |
) | ||||
Prepaid expenses |
( |
) | ( |
) | ||||
Lease right of use asset |
( |
) | ( |
) | ||||
Net deferred tax assets (liabilities) |
$ | ( |
) | $ | ||||
November 6, 2021 | October 31, 2020 | |||||||
Current assets (liabilities): |
||||||||
Deferred tax assets |
$ | $ | ||||||
Deferred tax liabilities |
||||||||
Net current deferred tax assets |
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Non-current assets (liabilities): |
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Deferred tax assets |
||||||||
Deferred tax liabilities |
( |
) | ( |
) | ||||
Net non-current deferred tax assets (liabilities) |
( |
) | ||||||
Net deferred tax assets (liabilities) |
$ | ( |
) | $ | ||||
Number of Shares |
Stock Option Price Range |
Weighted Average Exercise Price |
Aggregate Intrinsic Value |
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Outstanding at November 2, 2019 |
$ | $ | ||||||||||||||
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Granted |
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Exercised |
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Canceled |
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Outstanding at October 3 1, 2020 |
$ | |||||||||||||||
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Granted |
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Exercised |
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Canceled |
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Outstanding at November 6, 2021 |
$ | $ | $ | |||||||||||||
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Options Outstanding | Options Exercisable | |||||||||||||||||||||
Exercise Price |
Shares Outstanding |
Weighted Average Remaining Contractual Life (years) |
Weighted Average Exercise Price |
Number Exercisable |
Weighted Average Exercise Price |
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$ | $ | $ | ||||||||||||||||||||
$ | ||||||||||||||||||||||
$ | ||||||||||||||||||||||
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$ | $ | |||||||||||||||||||||
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Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. |
Controls and Procedures |
Item 9B. |
Other Information |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 10. |
Directors, Executive Officers and Corporate Governance |
Terry E. Trexler (82) | Chairman of the Board and President of Nobility since 1967; Mr. Trexler is also President of TLT, Inc. | |
Thomas W. Trexler (58) | Executive Vice President and Chief Financial Officer of Nobility since December 1994; President of Prestige Home Centers, Inc. since June 1995; Director of Prestige since 1993 and Vice President from 1991 to June 1995; President of Mountain Financial, Inc. since August 1992; Vice President of TLT, Inc. since September 1991. | |
Jean Etheredge (76) | Secretary since 1967. | |
Lynn J. Cramer, Jr. (76) | Treasurer since 1980. |
Item 11. |
Executive Compensation |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
Item 14. |
Principal Accounting Fees and Services |
Item 15. |
Exhibits and Financial Statement Schedules |
(a) | Consolidated Financial Statements and Schedules |
(b) | Exhibits: |
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
3.(a) | Nobility’s Articles of Incorporation, as amended (filed as an exhibit to Nobility’s Form 10-K for the fiscal year ended November 1, 1997 and incorporated herein by reference).(P) |
(b) | Bylaws, as amended March 28, 1994 (filed as an exhibit to Nobility’s Form 10-KSB for the fiscal year ended October 29, 1994 and incorporated herein by reference.) (P) |
4.1 |
10.(a) | Joint Venture Agreement with 21st Century Mortgage Corporation (filed as an exhibit to Nobility’s For 10-K for the fiscal year ended November 1, 1997 and incorporated herein by reference).(P) |
(b) |
(c) |
(d) |
(e) |
(f) |
21.1 |
23.1 |
31.(a) |
(b) |
32.(a) |
(b) |
101. | Interactive data filing formatted in XBRL. |
Item 16. |
Form 10-K Summary |
DATE: February 4, 2022 | By: /s/ Terry E. Trexler | |||||
Terry E. Trexler, Chairman, | ||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||
DATE: February 4, 2022 | By: /s/ Thomas W. Trexler | |||||
Thomas W. Trexler, Executive Vice President | ||||||
and Chief Financial Officer (Principal Financial Officer) | ||||||
DATE: February 4, 2022 | By: /s/ Lynn J. Cramer, Jr. | |||||
Lynn J. Cramer, Jr., Treasurer | ||||||
and Principal Accounting Officer |
DATE: February 4, 2022 | By: /s/ Terry E. Trexler | |||||
Terry E. Trexler, Director | ||||||
DATE: February 4, 2022 | By: /s/ Thomas W. Trexler | |||||
Thomas W. Trexler, Director | ||||||
DATE: February 4, 2022 | By: /s/ Robert P. Saltsman | |||||
Robert P. Saltsman, Director | ||||||
DATE: February 4, 2022 | By: /s/ Arthur L. Havener | |||||
Arthur L. Havener, Director |