NOBILITY HOMES INC

Previous wording

Total net sales in the first quarter of 2025 were $12,241,742 compared to $14,767,998 in the first quarter of 2024. The Company reported net income of $1,980,422 in the first quarter of 2025, compared to a net income of $2,338,437 in the first quarter of 2024. Net sales decreased in first quarter of 2025 as compared to the prior year because of the decrease in the number of retail homes sold and manufactured. We believe the higher interest rates on mortgages are negatively impacting sales as compared to the prior year. There also remain delays in the receipt of certain key production materials from suppliers, back orders, price increases and labor shortages which continue to cause delays in the completion of the homes at our manufacturing facility and the set-up process of retail homes in the field. Our inability to timely deliver and set up homes to customers has negatively impacted sales and earnings. We expect these challenges will continue into fiscal year 2025. The Company also continues to experience inflation in several building products resulting in increases in our material and labor costs which may increase the wholesale and retail selling prices of our homes. We believe that potential customers have delayed or deferred purchasing decisions when considering the interest rate environment.

Current wording

We believe that potential customers have delayed or deferred purchasing decisions when considering the higher interest rate environment and the uncertainty of the economy continue to negatively impact sales. There also remain delays in the receipt of certain key production materials from suppliers, as well as, back orders, price increases, tariffs and labor shortages which continue to cause delays in the completion of the homes at our manufacturing facility. We also continue to experience inflation in several building products resulting in increases in our material and labor costs. We expect these challenges will continue throughout fiscal year 2025.

Previous wording

The current demand for affordable manufactured housing in Florida and the U.S. has slowed due to the interest rate environment and increased costs associated with mortgages. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2024 through January 2025 declined by approximately 15% from the same period last year.

Current wording

The current demand for affordable manufactured housing in Florida and the U.S. has slowed due to the interest rate environment and increased costs associated with mortgages. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2024 through April 2025 declined by approximately 11% from the same period last year.

Previous wording

The following table summarizes certain key sales statistics and percentage of gross profit for the three months ended February 1, 2025 and February 3, 2024.

Current wording

The following table summarizes certain key sales statistics and percentage of gross profit for the three and six months ended May 3, 2025 and May 4, 2024.

Previous wording

On June 5, 2024, we celebrated our 57 thanniversary in business specializing in the design and production of quality, affordable manufactured and modular homes. With multiple retail sales centers in Florida for over 34 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.

Current wording

On June 5, 2025, we celebrated our 58 thanniversary in business specializing in the design and production of quality, affordable manufactured and modular homes. With multiple retail sales centers in Florida for over 35 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.

Previous wording

Insurance agent commission revenues in the first quarter of 2025 were $58,374 compared to $77,283 in the first quarter of 2024. Revenues are generated by new and renewal policies being written which affect agent commission earned. The Company establishes appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations at February 1, 2025 and November 2, 2024.

Current wording

Insurance agent commission revenues in the second quarter of 2025 were $77,430 compared to $93,896 in the second quarter of 2024. Total insurance agent commission revenues for the first six months of 2025 were $135,804 compared to $171,180 for the first six months of 2024. Revenues are generated by new and renewal policies being written which affect agent commission earned. The Company establishes appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations at May 3, 2025 and November 2, 2024.

Previous wording

Gross profit as a percentage of net sales was 32% in the first quarter of 2025 and in the first quarter of 2024. The gross profit in the first quarter of 2025 was $3,970,785 compared to $4,734,346 in the first quarter of 2024. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The gross profit as a percentage of net sales remained consistent due to increases in our selling prices to offset the higher inflation costs of building products and labor cost on each home and the increase in the average gross profit at our retail sales centers.

Current wording

Gross profit as a percentage of net sales was 31% in the second quarter of 2025 compared to 36% in the second quarter of 2024 and was 32% for the first six months of 2025 compared to 34% for the first six months of 2024. The gross profit in the second quarter of 2025 was $4,631,416 compared to $4,168,394 in the second quarter of 2024 and was $8,602,201 for the first six months of 2025 compared to $8,902,740 for the first six months of 2024. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The gross profit as a percentage of net sales decreased due to an increase in the number of homes sold to independent dealers and a decrease in the number of homes sold at our Company owned retail sales centers.

Previous wording

Selling, general and administrative expenses as a percentage of net sales was 14% in the first quarter of 2025 and in the first quarter of 2024. Selling, general and administrative expenses in the first quarter of 2025 were $1,676,650 compared to $2,032,330 in the first quarter of 2024.

Current wording

Selling, general and administrative expenses as a percent of net sales was 13% in the second quarter of 2025 compared to 17% for the second quarter of 2024 and was 13% for the first six months of 2025 compared to 15% in the first six months of 2024. Selling, general and administrative expenses in the second quarter of 2025 was $1,889,197 compared to $1,911,380 in the second quarter of 2024 and was $3,565,847 for the first six months of 2025 compared to $3,943,710 for the first six months of 2024. The dollar increase in expenses for the first six months of 2024 versus 2025 were due to increase in employee sales commission as a result of higher sales at our Company owned retail sales centers.

Previous wording

The Company earned interest income of $285,278 for the first quarter of 2025 compared to $297,999 for the first quarter of 2024. The decrease in interest income for the first three months of 2025 is primarily due to the lower interest rates.

Current wording

We earned interest income of $298,318 for the second quarter of 2025 compared to $219,861 for the second quarter of 2024. For the first six months of 2025, interest income was $583,596 compared to $517,860 in the first six months of 2024. The increase in interest income for the three and six months of 2025 is primarily due to the higher interest rates and an increase in the monies invested.

Previous wording

Our earnings from Majestic 21 in the first quarter of 2025 were $25,807 compared to $22,174 for the first quarter of 2024. The earnings from Majestic 21 represent the allocation of profit and losses which are owned 50% by 21st Mortgage Corporation and 50% by the Company. The earnings from the Majestic 21 loan portfolio vary quarter to quarter, but overall, the earnings will decrease due to the amortization, maturity and payoff of the loans.

Current wording

Our earnings from Majestic 21 in the second quarter of 2025 were $21,462 compared to $20,535, for the second quarter of 2024. The earnings for the first six months of 2025 were $47,269 compared to $42,709 for the first six months of 2024. The earnings from Majestic 21 represent the allocation of profit and losses which are owned 50% by 21st Mortgage Corporation and 50% by the Company. The Company received a one-time distribution of approximately $1.6 million in first quarter of 2024, representing our 50% of the excess capital in the portfolio. The earnings from the Majestic 21 loan portfolio vary quarter to quarter, but overall, the earnings will continue to decrease due to the amortization, maturity and payoff of the loans.

Previous wording

We received a distribution from 21 st Mortgage Corporation in the first quarter of 2025 in the amount of $38,152 and no distribution in the first quarter if 2024. The distributions are from an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21 st Mortgage Corporation and the Company. The distributions from the escrow arrangement, relating to certain loans financed by 21 st Mortgage Corporation, are recorded as income by the Company when received. The earnings from the FRSA loan portfolio will vary quarter to quarter but will continue to decrease due to the amortization and payoff of the loans.

Current wording

We received distributions from 21 st Mortgage Corporation in the second quarter of 2025 of $42,066 compared to $99,816 in the second quarter of 2024 and $80,218 for the first six months of 2025 compared to $99,816 for the first six months of 2024. The distributions are from an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21 st Mortgage Corporation and the Company. The distributions from the escrow arrangement, relating to certain loans financed by 21 st Mortgage Corporation, are recorded as income by the Company when received. The earnings from the FRSA loan portfolio will vary quarter to quarter, but will continue to decrease due to the amortization and payoff of the loans.

Previous wording

The Company realized pre-tax income in the first quarter of 2025 of $2,649,213 as compared to $3,123,529 in the first quarter of 2024.

Current wording

The Company realized pre-tax income in the second quarter of 2025 of $3,025,926 as compared to $2,722,557 in the second quarter of 2024. The pre-tax income for the first six months of 2025 was $5,675,139 as compared to $5,846,086 in the first six months of 2024.

Previous wording

The Company recorded an income tax expense in the amount of $668,791 in the first quarter of 2025 as compared to $785,092 in the first quarter 2024.

Current wording

The Company recorded an income tax expense in the amount of $733,606 in the second quarter of 2025 as compared to $696,598 in second quarter 2024. Income tax expense for the six months of 2025 was $1,402,397 compared to $1,481,690 for the six months of 2024.

Previous wording

Cash and cash equivalents were $16,291,084 at February 1, 2025 compared to $13,521,296 at November 2, 2024. Certificates of deposit were $12,648,261 at February 1, 2025 compared to $13,021,839 at November 2, 2024. Short-term investments were $677,101 at February 1, 2025 compared to $680,017 at November 2, 2024. Working capital was $44,796,398 at February 1, 2025 as compared to $42,927,149 at November 2, 2024. The Company received approximately $1.6 million in the first quarter of 2024, from 21 st Mortgage Corporation, representing our 50% of the excess capital in the portfolio. Prestige new home inventory was $17,586,945 at February 1, 2025 compared to $18,475,931 at November 2, 2024. Prestige has sixty six (66) ($5.2 million) compared to first quarter last year of sixty (60) ($4.7 million) new homes that are included in inventory and are in the field waiting to be completed and closed. We own the entire inventory for our Prestige retail sales centers, which includes new and pre-owned homes, and do not incur any third-party floor plan financing expenses.

Current wording

Cash and cash equivalents were $13,033,939 at May 3, 2025 compared to $13,521,296 at November 2, 2024. Certificates of deposit were $12,737,301 at May 3, 2025 compared to $13,021,839 at November 2, 2024. Short-term investments were $580,997 at May 3, 2025 compared to $680,017 at November 2, 2024. Working capital was $42,972,023 at May 3, 2025 as compared to $42,927,149 at November 2, 2024. A cash dividend was paid from our cash reserves in April 2025 in the amount of $1.25 per share ($4,086,247). The Company received approximately $1.6 million in the first quarter of 2024, from 21 st Mortgage Corporation, representing our 50% of the excess capital in the portfolio. Prestige new home inventory was $16,976,786 at May 3, 2025 compared to $18,475,931 at November 2, 2024. Prestige has fifty seven (57) ($5.5 million) new homes that are included in inventory and are in the field waiting to be completed and closed. We own the entire inventory for our Prestige retail sales centers, which includes new and pre-owned homes, and do not incur any third-party floor plan financing expenses.

Previous wording

The Company currently has no line of credit facility and no debt and does not believe that such a facility is currently necessary for its operations. The Company also has approximately $4.6 million of cash surrender value of life insurance which it would be able to access as an additional source of liquidity though the Company has not currently viewed this to be necessary. As of February 1, 2025, the Company continued to report a strong balance sheet which included total assets of approximately $67.3 million which was funded primarily by stockholders’ equity of approximately $58.6 million.

Current wording

The Company currently has no line of credit facility and no debt and does not believe that such a facility is currently necessary for its operations. The Company also has approximately $4.6 million of cash surrender value of life insurance which it would be able to access as an additional source of liquidity though the Company has not currently viewed this to be necessary. As of May 3, 2025, the Company continued to report a strong balance sheet which included total assets of approximately $65.5 million which was funded primarily by stockholders’ equity of approximately $56.9 million.