FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended February 1, 2003
Commission File number 0-6506
NOBILITY HOMES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-1166102
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3741 S.W. 7th Street
Ocala, Florida 34474
(Address of principal executive offices) (Zip Code)
(352) 732-5157 (Registrant's telephone number,
including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X ; No _____.
Indicate by check mark whether the Registrant is an acceleerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes _____; No X .
The number of shares outstanding of each of the issuer's classes of common
equity as of March 17, 2003 was 3,997,513
NOBILITY HOMES, INC.
INDEX
Page
Number
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of February 1, 2003
and November 2, 2002 3
Consolidated Statements of Income for the three months
ended February 1, 2003 and February 2, 2002 4
Consolidated Statements of Cash Flows for the three months
ended February 1, 2003 and February 2, 2002 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Conditions 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 13
PART II. Other Information and Signatures
Item 5. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits 14
Page 2
PART I. FINANCIAL INFORMATION
NOBILITY HOMES, INC.
CONSOLIDATED BALANCE SHEETS
February 1, 2003 November 2, 2002
------------------------- --------------------------
(Unaudited)
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 12,094,726 $ 12,481,711
Accounts receivable - trade 929,111 1,074,481
Inventories 7,172,194 6,589,076
Deferred income taxes 608,700 608,700
Prepaid expenses and other current assets 566,941 368,129
------------ -------------
Total current assets 21,371,672 21,122,097
Property, plant and equipment, net 2,953,347 2,948,096
Investment in joint venture - Majestic 21 1,041,622 1,020,056
Deferred income taxes - noncurrent 22,700 22,700
Other assets 2,398,425 2,383,425
------------ -------------
Total assets $ 27,787,766 $ 27,496,374
============ =============
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
Current liabilities:
Accounts payable $ 979,161 $ 1,178,395
Accrued expenses and other current liabilities 1,755,512 1,834,965
Accrued compensation 435,266 704,122
Income taxes payable 282,101 -
------------ -
Total current liabilities 3,452,040 3,717,482
------------ -------------
Commitments and contingencies liabilities
Stockholders' equity:
Preferred stock, $.10 par value, 500,000
shares authorized, none issued - -
Common stock, $.10 par value, 10,000,000
shares authorized; 5,364,907 shares issued 536,491 536,491
Additional paid in capital 8,629,144 8,629,144
Retained earnings 23,022,467 22,421,883
Less treasury stock at cost, 1,352,694 and
1,347,694 shares, respectively, in 2003 and 2002 (7,852,376) (7,808,626)
------------ -------------
Total stockholders' equity 24,335,726 23,778,892
------------ -------------
Total liabilities and stockholders' equity $ 27,787,766 $ 27,496,374
============ =============
The accompanying notes are in integal part of these financial statements
Page 3
NOBILITY HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
------------------
February 1, February 2,
2003 2002
-------------------------- ----------------------
Net sales $ 8,482,415 $ 8,244,123
Net sales - related parties - 44,325
------------ ------------
Total net sales 8,482,415 8,288,448
Cost of goods sold (6,258,985) (6,180,373)
------------ ------------
Gross profit 2,223,430 2,108,075
Selling, general and administrative expenses (1,385,043) (1,381,285)
------------ ------------
Operating income 838,387 726,790
------------ ------------
Other income:
Interest income 40,297 58,650
Undistributed earnings in joint venture - Majestic 21 21,567 105,384
Miscellaneous income 9,333 4,110
------------ ------------
71,197 168,144
------------ ------------
Income before provision for income taxes 909,584 894,934
Provision for income taxes (309,000) (302,000)
------------ ------------
Net income $ 600,584 $ 592,934
============ ============
Average shares outstanding
Basic 4,014,246 4,132,133
Diluted 4,036,337 4,149,232
Earnings per share
Basic $ .15 $ .14
Diluted $ .15 $ .14
The accompanying notes are in integal part of these financial statements
Page 4
NOBILITY HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
------------------
February 1, February 2,
2003 2002
----------------------- ----------------------
Cash flows from operating activities:
Net income $ 600,584 $ 592,934
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 49,569 46,113
Undistributed earnings in joint venture - Majestic 21 (21,566) (105,384)
Increase in cash surrender value of life insurance (15,000) (15,000)
Decrease (increase) in:
Accounts receivable - trade 145,370 (169,754)
Inventories (583,118) 375,705
Prepaid expenses and other current assets (198,812) (290,654)
(Decrease) increase in:
Accounts payable (199,234) (177,171)
Accrued expenses and other current liabilities (79,453) (320,425)
Accrued compensation (268,856) (93,575)
Income taxes payable 282,101 287,672
------------ -----------
Net cash provided by (used in) operating activities (288,415) 130,461
------------ -----------
Cash flows from investing activities:
Purchase of property, plant and equipment (54,820) (352,099)
------------ -----------
Net cash provided by (used in) investing activities (54,820) (352,099)
------------ -----------
Cash flows from financing activities:
Purchase of treasury stock (43,750) (163,473)
------------ -----------
Net cash used in financing activities (43,750) (163,473)
------------ -----------
Decrease in cash and cash equivalents (386,985) (385,111)
Cash and cash equivalents at beginning of quarter 12,481,711 11,005,012
------------ -----------
Cash and cash equivalents at end of quarter $ 12,094,726 $ 10,619,901
============ ===========
Supplemental disclosure of cash flow information
Interest Paid $ - $ -
============ ===========
Income taxes paid $ 333 $ 100,000
============ ===========
The accompanying notes are in integal part of these financial statements
Page 5
NOBILITY HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The unaudited financial information included in this report includes all
adjustments which are, in the opinion of management, necessary to
reflect a fair statement of the results for the interim periods. The
operations for the three months ended February 1, 2003 are not
necessarily indicative of the results of the full fiscal year.
Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission rules and regulations governing Form
10-Q. The condensed financial statements included in this report should
be read in conjunction with the financial statements and notes thereto
included in the Registrant's November 2, 2002 Form 10-K Annual Report.
2. Inventories
-----------
Inventories are carried at the lower of cost or market. Cost of finished
home inventories is determined on the specific identification method.
Other inventory costs are determined on a first-in, first-out basis.
Inventories at February 1, 2003 and November 2, 2002 are summarized as
follows:
February 1, November 2,
2003 2002
-------------- -----------
Raw materials $ 619,414 $ 555,231
Work-in-process 115,331 113,375
Finished homes 6,017,614 5,525,607
Pre-owned manufactured homes 337,829 320,564
Model home furniture and other 82,006 74,299
-------------- ------------
$ 7,172,194 $ 6,589,076
============== ============
Page 6
NOBILITY HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
3. Earnings Per Share
------------------
Three Months Ended
February 1, February 2,
2003 2002
-------------- ----------------
Net income $ 600,584 $ 592,934
=========== ===========
Weighted average shares outstanding:
Basic 4,014,246 4,132,133
Add: common stock equivalents 22,091 17,099
----------- -----------
Diluted 4,036,337 4,149,232
=========== ===========
Earnings per share:
Basic and Diluted $ 0.15 $ 0.14
=========== ===========
4. Affiliated Entities
-------------------
The amounts previously paid by TLT, Inc. to the Company have been
recorded as a gain on recovery of the fully reserved TLT, Inc. note
receivable in the consolidated financial statements. The balance of the
reserved advances at February 1, 2003 was approximately $232,000.
5. Critical Accounting Policies and Estimates
------------------------------------------
The Company currently only applies judgment and estimates, which may
have a material effect on the eventual outcome of assets, liabilities,
revenues and expenses, for accounts receivable, inventory and goodwill.
The following explains the basis and the procedure for each asset
account where judgment and estimates are applied.
Revenue Recognition
-------------------
The Company recognizes revenue for the majority of retail sales upon its
receipt of a down payment, completion of the home, title has passed to
the retail home buyer, funds have been deposited into the company's
account, delivery and setup of the home at the retail home buyer's site,
and completion of any other significant obligations. The Company
recognizes sales to independent dealers upon receiving wholesale floor
plan financing or establishing retail credit approval for terms,
shipping of the home, and transferring title and risk of loss to the
independent dealer.
Page 7
NOBILITY HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Goodwill
--------
The Company acquired in 1995, 1997 and 1998 retail sales center using
the purchase method. As a result, goodwill is reflected on the
consolidated balance sheets. A valuation based on the cash flow method
was performed and it was determined that the value of the goodwill and
the net assets in the accounts exceeded the estimated cash flow
valuation. There is no assurance that the value of the acquired company
will not decrease in the future due to changing business conditions.
Vendor Rebates
--------------
The Company receives a volume rebate based upon reaching a certain level
of purchased materials during a certain period of time. Volume rebates
are determined based upon annual purchases, and are adjusted quarterly
to determine if the accrued volume rebate is applicable.
Dealer Volume Rebates
---------------------
The Company pays a volume rebate to independent dealers based upon the
dollar volume of homes purchased and paid for by the dealer in excess of
a certain specfic dollar amount during a specific time period. Dealer
volume rebates are accrued when sales are recognized.
Page 8
NOBILITY HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
6. Accounting for Stock Based Compensation
---------------------------------------
At February 1, 2003, the Company had a stock incentive plan (the
"Plan"), which authorizes the issuance of options to purchase common
stock. The company accounts for those plans under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related Interpretations. No stock-based
employee compensation cost is reflected in net income, as all options
granted under those plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. The
following table illustrates the effect on net income and earnings per
share if the Company had applied the fair value recognition provisions
of FASB Statment No. 123, Accounting for Stock-Based Compensation, to
stock-based employee compensation.
Three Months Ended
February 1, February 2,
2003 2002
---- ----
Net Income, as reported $ 600,584.00 $ 592,934.00
Deduct: Total stock-based employee
compensation determined under fair value
based method for all awards, net of related
tax effects (2,533.00) (6,885.00)
------------- -------------
Pro forma net income $ 598,051.00 $ 586,049.00
============= =============
Earnings per share
Basic - as reported $ 0.15 $ 0.14
Basic - pro forma $ 0.15 $ 0.14
Earnings per share
Diluted - as reported $ 0.15 $ 0.14
Diluted - pro forma $ 0.15 $ 0.14
Page 9
NOBILITY HOMES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Results of Operations
- ---------------------
For the first quarter ended February 1, 2003 compared to first quarter ended
February 2, 2002 results of operations are as follows. Total net sales in first
quarter 2003 increased 2% to $8,482,415 compared to $8,288,448 in first quarter
2002. Sales in first quarter 2002 were affected by a one-time adjustment of
approximately $1.4 million primarily due to an increased sales to independent
dealers of 51 units and retail sales of 24 units as a result of the timing of
recognition of the sale as required under SAB 101.
Gross profit as a percentage of net sales was 26.2% in first quarter 2003
compared to 25.4% in first quarter 2002.
Selling, general and administrative expenses as a percent of net sales were
16.3% in first quarter 2003 compared to 16.7% in first quarter 2002.
The Company earned from interest on cash equivalents $40,297 in first quarter
2003 compared to $58,650 for same quarter last year. The decrease in interest
income was a result of lower interest rates.
Majestic 21 is a financing joint venture accounted for under the equity method
of accounting. The Company earned from Majestic 21 $21,567 in first quarter 2003
compared to $105,384 in first quarter 2002. The decrease in income in first
quarter 2003 was primarily due to a larger provision for loan losses and fewer
originations. Income reported for Majestic 21 results from the Company's 50%
share of the equity in the earnings of this joint venture. Income for the joint
venture fluctuates due to loan origination volume, foreclosure/repossession
frequency and the severity of loss on the re-sale of the foreclosed units. The
Company believes that its historical loss experience has been favorably affected
by its ability to resell foreclosed/repossessed units through its network of
retail sales centers.
As a result of the factors discussed above, earnings for first quarter 2003 were
$600,584 or $.15 per basic and diluted share compared to $592,934 or $.14 per
basic and diluted share for first quarter 2002.
Page 10
NOBILITY HOMES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents were $12,094,726 at February 1, 2003 compared to
$12,481,711 at November 2, 2002. Working capital was $17,919,632 at February 1,
2003, compared to $17,404,615 at November 2, 2002. Nobility owns the entire
inventory for the Prestige retail sales centers and does not incur any third
party floor plan financing expenses. Inventories increased to $7,172,194 at
February 1. 2003, from $6,589,076 at November 2, 2002 primarily due to an
increase in the numbers of homes in inventory at the Prestige retail sales
centers.
Nobility repurchased in the open market 5,000 shares of its common stock for
$43,750 during first quarter 2003.
Nobility maintains a revolving credit agreement with a major bank providing for
borrowings up to $2,500,000 with an option to increase the line to $4,000,000.
At February 1, 2003 and November 2, 2002, there were no amounts outstanding
under this agreement.
Consistent with normal practice, Nobility's operations are not expected to
require significant capital expenditures during fiscal 2003. Working capital
requirements for the home inventory for existing and any new retail sales
centers will be met with internal sources.
Critical Accounting Policies and Estimates
- ------------------------------------------
The Company applies judgment and estimates, which may have a material effect in
the eventual outcome of assets, liabilities, revenues and expenses, for accounts
receivable, inventory and goodwill. The following explains the basis and the
procedure for each asset account where judgment and estimates are applied.
Revenue Recognition
The Company recognizes revenue for the majority of retail sales upon the
occurrence of the following:
- its receipt of a down payment,
- completion of the home,
- title having passed to the retail homebuyer,
- funds having been deposited into the Company's account,
- the home having been delivered and set up at the retail home buyer's
site, and
- completion of any other significant obligations.
The Company recognizes sales to independent dealers upon receiving wholesale
floor plan financing or establishing retail credit approval for terms, shipping
of the home, and transferring title and risk of loss to the independent dealer.
Page 11
NOBILITY HOMES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Critical Accounting Policies and Estimates (Continued)
- ------------------------------------------------------
Goodwill
Between 1995 and 1998 the Company acquired retail sales centers using the
purchase method of accounting. As a result, goodwill is reflected on the
consolidated balance sheets. A valuation based on the cash flow method was
performed and it was determined that the value of the goodwill and the net
assets in the accounts exceeded the estimated cash flow valuation. There is no
assurance that the value of the acquired sales centers will not decrease in the
future due to changing business conditions.
Vendor Rebates
The Company receives volume rebates from its vendors based upon reaching a
certain level of purchased materials during a specified period of time. Volume
rebates are estimated based upon annual purchases, and are adjusted quarterly if
the accrued volume rebate is applicable.
Dealer Volume Rebates
The Company pays a volume rebate to independent dealers based upon the dollar
volume of homes purchased and paid for by the dealer in excess of a certain
specific dollar amount during a specific time period. Dealer volume rebates are
accrued when sales are recognized.
Recent Accounting Pronouncements
- --------------------------------
FASB Statement No. 142 (FAS 142)
In June 2001, the FASB issued Statement No. 142 (FAS 142), "Goodwill and Other
Intangible Assets". FAS 142 Primarily addresses the accounting for goodwill and
intangible assets subsequent to their acquisition (i.e., the post-acquisition
accounting) and supercedes APB 17, Intangible Assets. Under FAS 142, goodwill
and indefinite lived intangible asets will no longer be amortized and will be
tested for impairment at least annually at a reporting unit level. Additionally,
the amortization period of intangible assets with finite lives is no longer
limited to forty years. The Company implemented FAS 142, effective November 3,
2002, the beginning of its fiscal year. The Company performed the initial
impairment testing of goodwill and determined there was no impairment as of
February 1, 2003.
FASB Staement No. 144 (FAS 144)
In August 2001, the FASB issued Statement No. 144 (FAS 144), "Accounting for the
Impairment of Disposal of Long-Lived Assets". FAS 144 supersedes FAS 121 and
applies to all long-lived assets (including discontinued operations) and
consequently amends Accounting Principles Board opinion No. 30 (APB 30),
Reporting Results of Operations Reporting the Effects of Disposal of a Segment
of a Business. FAS 144 requires that long-lived assets that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to
sell. The Company implemented FAS 144, effective November 3, 2002, the beginning
of its fiscal year. The adoption of FAS 144 had no material impact on the
Company's reported results of operations, financial position or cash flows.
Page 12
NOBILITY HOMES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
FASB Statement No 148 (FAS 148)
In December 2002, the FASB issued Statement No. 148 (FAS 148), "Accounting for
Stock-Based Compensation-Transition and Disclosure". FAS 148 amends FAS 123,
Accouting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of FAS 123 to require prominent disclosures in both
annual and interim financial statments about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company implemented FAS 148, effective November 3, 2002, the
beginning of its fiscal year.
Forward Looking Statements
- --------------------------
Certain statements in this report are forward-looking statements within the
meaning of the federal securities laws. Although Nobility believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, there are risks and uncertainties that may cause actual
results to differ materially from expectations. These risks and uncertainties
include, but are not limited to, competitive pricing pressures at both the
wholesale and retail levels, continued excess retail inventory, increase in
repossessions, changes in market demand, changes in interest rates, availability
of financing for retail and wholesale purchasers, realization of deferred tax
assets, consumer confidence, adverse weather conditions that reduce sales at
retail centers, the risk of manufacturing plant shutdowns due to storms or other
factors, and the impact of marketing and cost-management programs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not engage in investing in or trading market risk sensitive instruments.
We also do not purchase, for investing, hedging, or for purposes "other than
trading", instruments that are likely to expose us to market risk, whether
interest rate, foreign currency exchange, commodity price or equity price risk.
We have not entered into any forward or futures contracts, purchased any options
or entered into any interest rate swaps.
We do not currently have any indebtedness as of November 2, 2002. If we were to
borrow from our revolving line of credit facility, we would be exposed to
changes in interest rates. Under our current policies, we do not use interest
rate derivative instruments to manage exposure to interest rate changes.
Item 4. Controls and Procedures
a. Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer and Chief Financial Officer have evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a - 14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"). Based on such evaluation,
such officers have concluded that, as of the Evaluation Date, the Company's
disclosure controls and procedures are effective in alerting them on a timely
basis to material information relating to the Company (including its
consolidated subsidiaries) requ8ired to be included in the Company's reports
filed or submitted under the Exchange Act.
b. Changes in Internal Controls. Since the Evaluation Date, there have not been
any significant changes in the Company's internal controls or in other factors
that could significantly affect such controls.
Page 13
Part II. OTHER INFORMATION AND SIGNATURES
There were no reportable events for Item 1 through Item 3 and Item 5
Item 5. Submission of Matters to a Vote of Securtiy Holders.
a) The annual Meeting of the Shareholders was held on February 28, 2003.
The only matter to come before the meeting was the election of
directors.
b) The vote to elect a board of five directors was as follows:
For Against Abstain Not Voted
--- ------- ------- ---------
Terry E. Trexler 3,766,310 0 49,557 197,322
Richard C. Barberie 3,809,950 0 5,917 197,322
Robert P. Holliday 3,809,950 0 5,917 197,322
Robert P. Saltsman 3,809,950 0 5,917 197,322
Thomas W. Trexler 3,766,310 0 49,557 197,322
Item 6. Exhibits
99.1 Written Statement of Chief Executive Officer Pursuant to 18
U.S.C. ss. 1350
99.2 Written Statement of Chief Executive Officer Pursuant to 18
U.S.C. ss. 1350
Page 14
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NOBILITY HOMES, INC.
DATE: March 17, 2002 By: /s/ Terry E. Trexler
----------------------------------
Terry E. Trexler, Chairman,
President and Chief
Executive Officer
DATE: March 17, 2002 By: /s/ Thomas W. Trexler
----------------------------------
Thomas W. Trexler, Executive
Vice President, Chief Financial
Officer
DATE: March 17, 2002 By: /s/ Lynn J. Cramer, Jr.
----------------------------------
Lynn J. Cramer, Jr., Treasurer
and Principal Accounting Officer
Page 15
CERTIFICATIONS
I, Terry E. Trexler, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nobility Homes, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 17, 2003
/s/ Terry E. Trexler
- --------------------
Terry E. Trexler
Chief Executive Officer
CERTIFICATIONS
I, Thomas W. Trexler, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nobility Homes, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 17, 2003
/s/ Thomas W. Trexler
- ---------------------
Thomas W. Trexler
Chief Financial Officer