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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Under Section 13 or 15(d) of
the Securities and Exchange Act of 1934
For the fiscal year ended November 2, 1996
Commission file number 0-6506
NOBILITY HOMES, INC.
(Name of small business issuer 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
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 par value
(Title of Class)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
State the aggregate market value of the voting stock held by non-
affiliates of the registrant on January 15, 1997, computed by reference to
the average bid and asked prices on that date: $17,472,855
(APPLICABLE ONLY TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of January 15, 1997: 2,970,954 shares of
common stock
DOCUMENTS INCORPORATED BY REFERENCE Incorporated at
Nobility Homes, Inc. Proxy Statement for the 1997 Part III, Items 10,
Annual Meeting of Shareholders 11, 12 and 13
PART I
Item 1. Description of Business
Nobility Homes, Inc. (the "Registrant or the "Company"), a
corporation organized under the laws of Florida in 1967, designs,
manufactures and sells a broad line of manufactured homes through a
network of retail sales centers throughout north and central Florida. The
Registrant also sells its manufactured homes on a wholesale basis to
manufactured home dealers and manufactured home parks.
Manufactured Homes
The Registrant's manufactured homes ("homes") are available in
single-wide widths of 14 and 16 feet ranging from 48 to 72 feet in length,
double-wide widths of 24 feet, 26 feet and 28 feet ranging from 28 feet to
76 feet in length and triple-wide widths of 36, 38 and 42 feet wide
ranging from 44 feet to 68 feet in length. Homes manufactured by the
Registrant are available in approximately 100 active models, ranging in
size from 636 to 2,153 square feet and contain from one to five bedrooms.
Trade names used for its homes include "Kingswood," "Richwood,"
"Springwood," "Tropic Isle," "Regency Manor," "Regency Manor Special," and
"Tropic Manor."
The homes are sold primarily as unfurnished dwellings ready for
permanent occupancy. Interiors are designed and color coordinated in a
range of decors. Depending on the size of the unit and quality of
appliances and other appointments, retail prices for the Registrant's
homes typically range from approximately $14,000 to $60,000. Most of the
prices of the Registrant's homes are considered by it to be within the low
to medium price range of the industry.
Both of the Registrant's manufacturing plants utilize assembly line
techniques in manufactured home production. Both plants manufacture and
assemble the floors, sidewalls, end walls, roofs and interior cabinets for
their homes. The Registrant purchases from outside suppliers various
other components that are built into its homes including the axles,
frames, tires, doors, windows, pre-finished sidings, plywood, ceiling
panels, lumber, rafters, insulation, paneling, appliances, heating units,
lighting and plumbing fixtures, carpeting and drapes. The Registrant is
not dependent upon any one particular supplier for its raw materials or
component parts, nor is it required to carry significant amounts of
inventory to assure itself of a continuous allotment of goods from
suppliers.
The Registrant's two manufacturing plants operated at an average of
approximately 55% of their single shift capacity in fiscal 1997 which
represented a 5% increase from the previous fiscal year.
The Registrant generally does not manufacture its homes to be held by
it as inventory (except for model home inventory of its retail network
subsidiary, Prestige Home Centers, Inc.), but, rather, manufactures its
homes after receipt of dealer orders. Although the Registrant attempts to
maintain a consistent level of production of homes throughout the fiscal
year, seasonal fluctuations do occur, with sales of homes generally lower
during the first quarter due to the holiday season.
The sales area for a manufactured home manufacturer is limited by
substantial delivery costs of the finished product to the dealer. The
homes produced by the Registrant are delivered by outside trucking
companies. The Registrant estimates that it can compete effectively
within a range of approximately 250 miles from its manufacturing plants.
During the last two fiscal years, all of the Registrant's sales were made
in Florida.
Retail Sales
Prestige Home Centers, Inc. ("Prestige"), which was formed as a
Florida corporation in July 1990, operates 15 retail lots in north and
central Florida. Its principal executive offices are located at the
Registrant's headquarters in Ocala, Florida. According to statistics
compiled by Statistical Surveys, Inc. from records on file with the State
of Florida, Prestige was the largest retail dealer of multi-section
manufactured homes in Florida in 1994, 1995 and 1996 based on number of
home sales.
Effective August 31, 1994, the Registrant acquired all the
outstanding stock of Prestige from its then shareholders, in exchange for
150,000 shares of the Registrant's Common Stock. Prior to becoming a
wholly-owned subsidiary of the Registrant, Prestige was owned 45% by the
Registrant's President, 45% by his son (a director of the Registrant and,
since December 1994, its Executive Vice President and Chief Financial
Officer), and 10% by the former President of Prestige. The acquisition
eliminated the conflicts of interest inherent in the Registrant doing
business with an entity controlled by executive officers and directors of
the Registrant, while at the same time allowing the Registrant to benefit
from the growing market for its homes through the acquisition or
development by Prestige of additional retail lots within the Registrant's
geographic market area.
The following table sets forth the location of each of Prestige's
retail outlets, and the date on which each was opened or acquired:
Location Date Opened
Ocala South July 1990
Ocala North July 1990
St. Augustine July 1990
Chiefland July 1990
Tallahassee February 1993
Tampa February 1993
Ocala West March 1993
Lake City June 1993
Auburndale August 1994
Jacksonville September 1994
Inverness May 1995
Brooksville May 1995
Tavares November 1995
North Chiefland November 1995
Perry November 1995
The Tavares, North Chiefland and Perry sales centers were acquired in
November 1995 in exchange for Common Stock with a fair market value of
$252,000.
Each of Prestige's retail lots is located within 250 miles of one of
the Registrant's two manufacturing facilities. Prestige leases its retail
lots from unaffiliated parties under leases with terms of between one and
three years with renewal options.
The primary customers of Prestige are young, first-time home buyers
who generally purchase manufactured homes to place on their own homesites.
Prestige operates its retail sales centers with a model home concept.
Each of the homes displayed at its retail sales centers is furnished and
decorated as a model home. Although the model homes may be purchased from
Prestige's model home inventory, generally, customers order homes which
are shipped directly from the factory to their homesite. Prestige sales
generally are to purchasers living within a radius of approximately 100
miles from the selling retail lot.
Financing for home purchases is provided by several independent
sources that specialize in manufactured housing lending. Additionally,
numerous local banks finance manufactured home purchases. Prestige is not
required to sign any recourse agreements with any of these retail
financing sources, nor does Prestige itself finance customers' new home
purchases.
The retail sale of manufactured homes is a highly competitive
business. Because of the large number of retail sales centers located
throughout the Registrant's market area, potential customers typically can
find a sales center within a 100 mile radius of their present home.
Prestige competes with over 50 other retailers in its primary market area,
some of which may have greater financial resources than Prestige. In
addition, manufactured homes offered by Prestige compete with conventional
site-built housing.
Prestige also provides, through its wholly-owned subsidiary, Prestige
Insurance Services, Inc., an independent insurance agent, credit life and
property and casualty insurance to Prestige customers in connection with
their purchase and financing of manufactured homes. Prestige Insurance
Services, Inc. receives a commission on the insurance premium collected at
the time an insurance policy is written and in future years if the
homeowner renews the policy. Its revenues were less than $16,000, $24,000
and $40,000 in fiscal 1996, 1995 and 1994, respectively.
Sales to Independent Dealers and Manufactured Home Communities
The Registrant sells its homes on a wholesale basis exclusively
through 4 full-time salespersons to approximately 50 independent dealers.
The Registrant attempts continuously to seek new dealers in the areas in
which it operates as there is ongoing turnover in the dealers with which
it deals at any one time, especially with manufactured home communities as
they achieve full occupancy levels. As is common in the industry, most of
the Registrant's dealers other than its subsidiary, Prestige, are
independent dealers that sell products produced by several manufacturers.
However, the Registrant has exclusive sales arrangements with TLT, Inc.
("TLT"), an affiliate of the Registrant's President, which operates three
manufactured home communities targeted at the retiree market. No one
dealer accounted for more than 10.0% of the Registrant's total sales in
fiscal 1996.
Dealers generally obtain inventory financing from financial
institutions (usually banks and finance companies) on a "floor plan" basis
whereby the financial institution obtains a security interest in all or
part of the dealer's manufactured home inventory. The Registrant, upon
request of the lending institution, enters into repurchase agreements with
the lending institutions which provide that, in the event of a dealer's
default, the Registrant will, at the lender's request, repurchase the home
provided that the Registrant's liability will not exceed the
manufacturer's invoice price and that the repurchased home is new and
unused. Generally, the repurchase agreement expires within one year after
a home is sold to the dealer, and the repurchase price is limited to
between 70% to 100% of the original invoice price to the dealer, depending
on the length of time that has expired since the original sale.
Generally, repurchase is conditioned upon the dealer's insolvency. Any
losses incurred as a result of such repurchases would be limited to the
difference between the repurchase price and the subsequent resale value of
the home repurchased. The Registrant was not required to repurchase any
homes during fiscal 1996, 1995 or 1994. For additional information, see
Note 13 of "Notes to Consolidated Financial Statements." The Registrant
does not finance retail sales of new homes for its dealers' customers.
The Registrant does not generally offer consigned inventory programs
or other credit terms to dealers and ordinarily receives payment for its
homes within 15 to 30 days of delivery. However, the Registrant offers
extended terms to park dealers who do a high volume of business with the
Registrant, including TLT as well as unrelated park dealers. In order to
stimulate sales, the Registrant sells homes to selected manufactured home
communities for display on special terms. The high visibility of the
Registrant's homes in such communities generates additional sales of the
Registrant's homes through such dealers. From time to time the Registrant
has extended floor plan to TLT in return for which the Registrant receives
virtually all of the sales rights for the manufactured homes sold by the
communities operated by it. See Note 3 of "Notes to Consolidated
Financial Statements" for additional information concerning the terms of
sales to TLT.
The Registrant offers a quarterly and yearly volume bonus award to
those dealers who purchase homes from the Registrant in excess of certain
specified dollar amounts during a specified period. As an additional
dealer incentive, the Registrant assumes certain floor plan financing
costs for a specified number of days for dealers who carry in excess of a
specified level of the Registrant's inventory. During fiscal 1996, 1995
and 1994 the Registrant reimbursed dealers other than TLT $111,539,
$35,644 and $20,955, respectively, as volume bonus awards and for floor
plan financing charges under the programs described above. Volume bonus
awards to TLT, which are granted on the same basis as to other dealers,
were $28,000 in fiscal 1996, $91,000 in fiscal 1995 and $97,000 in fiscal
1994.
Regulation
The manufacture, distribution and sale of homes is subject to
governmental regulation at the federal, state and local levels. The
Department of Housing and Urban Development ("HUD") has adopted national
construction and safety standards that have priority over existing state
standards. Compliance with these standards involves submission to and
approval by an engineering firm approved by HUD of engineering plans and
specifications on all models. HUD's standards also require periodic
inspection by state or other third party inspectors of plant facilities
and construction procedures, as well as inspection of manufactured home
units during construction. In 1994, HUD regulations took effect which
require that manufactured homes built after July 13, 1994 be constructed
to more stringent standards. Florida is split between two wind zones.
Homes sold in Zone II, which includes most of north and central Florida,
must be able to withstand winds of up to 100 miles per hour, while homes
sold in Zone III, which covers primarily the coastal areas of south
Florida, must be able to withstand winds up to 110 miles per hour. Homes
built to these standards are significantly stronger than homes built prior
to the effective date. Home set-up was also affected with much stronger
tie down anchoring requirements. Most of the Registrant's homes are sold
in Zone II.
HUD also issued thermal standards for manufacturing housing which
were effective for homes manufactured beginning October 25, 1994. These
regulations mandate a much higher insulation throughout the home including
the floor, walls and roof and an improved ventilation system for the whole
house, including kitchen and baths.
The Registrant estimates that compliance with federal, state and
local environmental protection laws will have no material effect upon
capital expenditures for plant or equipment modifications or earnings for
the next fiscal year.
The transportation of homes manufactured by the Registrant is subject
to state regulation. Generally, special permits must be obtained to
transport the home over public highways, and restrictions are imposed to
promote travel safety including those relating to routes, travel periods,
speed limits, safety equipment and size.
Homes manufactured by the Registrant are subject to the requirements
of the Magnuson-Moss Warranty Act and Federal Trade Commission rulings
which regulate warranties on consumer products. The Registrant provides a
limited warranty of one year on the structural components of the homes it
manufactures.
Competition
The manufactured home industry is highly competitive. The initial
investment required for entry into the business of manufacturing homes is
not unduly large. State bonding requirements for entry in the business
vary from state to state. The bond requirement for Florida is $50,000.
The Registrant competes directly with other manufacturers, some of which
are considerably larger than it and possess greater financial resources.
Based on number of units sold, the Registrant ranks 6th in the state of
Florida out of the top 45 manufacturers selling manufactured homes in the
state; however, the Registrant estimates that of those 45 manufacturers
approximately 15 manufacture homes of the same type as the Registrant and
compete in the same market area. The Registrant believes that it is
generally competitive with most of those manufacturers in terms of price,
service, warranty and product performance.
Employees
As of January 15, 1997, the Registrant had 240 full-time employees,
including 70 employed by Prestige. Approximately 131 employees are
factory personnel compared to approximately 117 in such positions a year
ago and 93 are in management, administrative, supervisory, sales and
clerical positions (including 54 management and sales personnel employed
by Prestige) compared to approximately 94 a year ago. In addition, the
Registrant employs part-time employees when necessary.
The Registrant makes a contribution toward employees' group health
and life insurance. The Registrant, which is not subject to any
collective bargaining agreements, has not experienced any work stoppage or
labor disputes during the fiscal year and considers its relationship with
employees to be generally satisfactory.
Item 2. Properties
As of November 2, 1996, two manufacturing plants were owned and
operated by the Registrant as follows:
Depreciated Cost of
Approximate Plant and Property
Location Size at November 2, 1996
Belleview, Florida 33,500 sq. ft. $ 91,986
Ocala, Florida(1) 72,000 sq. ft. 558,383
_________________________
(1) This 72,000 square foot plant is located on approximately 35.5 acres
of land on which an additional two-story structure adjoining the
plant serves as the Registrant's corporate offices.
The Company's Belleview plant is metal and concrete construction and
the Ocala plant is of metal construction. Both properties are in good
condition and require little maintenance.
Item 3. Pending Legal Proceedings
Certain claims and suits arising in the ordinary course of business
have been filed or are pending against the Company. In the opinion of
management, any related liabilities that might arise would be covered
under terms of the Company's liability insurance policies or would not be
material to the financial statements taken as a whole.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
The Registrant's Common Stock is listed on the Nasdaq National Market
under the symbol NOBH. The following table shows the range of high and
low sales prices for the Common Stock for each fiscal quarter of 1996 and
1995.
Fiscal Year End (1)
November 2, 1996 November 4, 1995
Quarter High Low High Low
1st $9.33 $8.67 $6.67 $5.67
2nd 11.33 11.00 5.50 4.83
3rd 12.92 12.67 7.83 6.83
4th 15.25 14.75 11.00 9.00
_______________________
(1) On January 19, 1996 and August 16, 1996, three-for-two stock splits
in the form of stock dividends were paid to shareholders of record on
December 22, 1995 and July 26, 1996, respectively. Amounts in the table
have been restated to give effect to these two stock dividends.
At January 16, 1997, the approximate number of record holders of
Common Stock was 254 (not including individual participants in security
position listings).
The payment of cash dividends will be within the discretion of the
Registrant's Board of Directors and will depend, among other factors, on
earnings, capital requirements and the operating and financial condition
of the Registrant. During fiscal 1996 and 1995, no cash dividends were
paid.
Item 6. Selected Financial Data
The following table sets forth Selected Financial Data for each of
the Registrant's last five fiscal years. This information should be read
in conjunction with the financial statements of the Company (including the
related notes thereto) and Management's Discussion and Analysis of the
Financial Condition and Results of Operations, each included elsewhere in
this Form 10-K.
Years Ended(1)
November 2, November 4, October 29, October 30, October 31,
1996 1995 1994 1993 1992
(In thousands except per share data)
Total net sales $36,455 $30,806 $23,082 $19,438 $9,745
Income from operations 3,839 2,710 1,585 1,846 103
Other income 47 1,340 374 177 103
Net income 2,395 2,957 1,769 1,867 206
Net income per share(2) .81 1.03 .61 .64 .08
Total Assets 14,871 12,896 11,355 11,438 5,041
Long term obligations -0- 659 764 936 218
Stockholders equity 12,256 9,479 6,481 4,820 3,069
_____________________________
(1) The Company's fiscal year ends on the first Saturday on or after
October 31. Prior to 1995, the Company's fiscal year ended on the
Saturday closest to October 31. The years ended November 2, 1996,
November 4, 1995, and October 31, 1992 consisted of a fifty-three
week period and the years ended October 29, 1994 and October 30, 1993
consisted of a fifty-two week period.
(2) On January 19, 1996 and August 16, 1996, three-for-two stock splits
in the form of stock dividends were paid to shareholders of record on
December 22, 1995 and July 26, 1996, respectively. Amounts in the
table have been restated to give effect to these two stock dividends.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The Registrant's primary focus is young, first time home buyers who
already live and work in the area. These buyers generally purchase their
manufactured homes from retail sales centers to locate on property they
own. The Registrant has aggressively pursued this market through its
Prestige retail sales centers, which have become the principal focus of
its business strategy. While the Registrant actively seeks to make
wholesale sales to independent retail dealers, the Registrant's presence
as a competitor limits potential sales in the same geographic areas
serviced by its Prestige sales centers.
The Registrant continues to make sales to the retirement community
market, which is made up of retirees from the north who move to Florida to
enjoy its milder winters and who typically purchase homes to be located on
sites leased from park communities that offer a variety of amenities.
While a portion of the Registrant's sales in this market are made to
communities owned by the Registrant's affiliate, TLT, the importance to
the Registrant of the retirement market continues to diminish, both as a
focus of its efforts and in dollars and as percentage of total sales.
The Company sold 1,087 homes in fiscal 1996, of which 237 homes were
sold to independent dealers, representing sales of $5,203,547, and 28
homes were sold to TLT communities, representing sales of $708,196. In
fiscal 1995, the Company sold 1,030 homes, of which 181 homes were sold to
independent dealers, representing sales of $3,874,817, and 55 homes were
sold to TLT communities, representing sales of $1,295,209. In fiscal
1994, the Company sold 838 homes, of which 230 homes were sold to
independent dealers, representing sales of $4,257,766; and 65 homes were
sold to TLT communities, representing sales of $1,395,207. The balance of
the Registrant's sales in fiscal 1996, 1995 and 1994 were made on a retail
basis through Prestige's retail centers.
The Registrant has a product line of approximately 100 active models.
Market demand can fluctuate on a fairly short-term basis; however, the
manufacturing process is such that the Registrant can alter its product
mix relatively quickly in response to changes in the market. During
fiscal 1996, the Registrant's product mix was positively affected by
larger, more expensive double-wide and triple-wide homes and better
acceptance of the Registrant's single-wide homes both resulting from
greater consumer confidence and the availability of varied types of
financing at competitive rates. Many family buyers today purchase three-
or four-bedroom manufactured homes, compared with the two-bedroom home
that typically appeals to the retirement community market.
In an effort to make manufactured homes more competitive with
conventional housing, the outside financing sources that finance home
purchases by Prestige's customers continue to develop creative and
attractive financing packages including 30-year mortgages, an interest
rate reduction program, combination land/manufactured home loans, and a 5%
down payment program for qualified buyers.
Results of Operations
The Company continued to increase revenues during the fiscal year
ended November 2, 1996. Total net sales in 1996 were $36,455,195 compared
to $30,805,835 in 1995 and $23,082,391 in fiscal 1994. This increase in
net sales represents an 18.3% increase in 1996 and 33.4% increase in 1995.
The increase in sales in fiscal 1996 over fiscal 1995 was primarily due to
the Company having fifteen retail sales centers in full operation during
the majority of fiscal 1996 following the acquisition of three additional
existing retail sales centers in November 1995. The increase in fiscal
1995 sales over fiscal 1994 sales was primarily due to the Company having
ten retail sales centers in full operation throughout fiscal 1995 and the
acquisition of two existing retail sales centers in May 1995. In fiscal
1994, the Company had eight retail sales centers in full operation. Two
additional retail sales centers were opened in August and September 1994,
respectively, but did not produce any sales until the first quarter of
fiscal 1995. A portion of the fiscal 1995 increase in sales also was due
to higher costs passed on to customers resulting from new HUD regulations
(see "Description of Business-Regulation"). Both of the years ended
November 2, 1996 and November 4, 1995 consisted of a fifty-three (53) week
period while the year ended October 29, 1994 consisted of a fifty-two (52)
week period.
Industry-wide production of manufactured homes continued to improve
for the first eleven months of 1996, up 9.1% over 1995, which had shown an
11.4% improvement over 1994, extending the trend begun in 1992.
Production of manufactured homes in Florida increased approximately 11% in
1996 following a decline of approximately 8.6% for the first eleven months
of calendar 1995. The decline in 1995 followed an increased demand in
1994 and 1993 for homes in South Florida during the rebuilding following
Hurricane Andrew. Nobility's sales increased by 18% in fiscal 1996, 33%
in fiscal 1995 and 18% in fiscal 1994.
Gross profit as a percentage of net sales was 25.5% in fiscal 1996
compared to 23.4% in fiscal 1995. The increase in gross profit in fiscal
1996 was primarily due to increasing home prices to offset lumber price
increases and continuing improvements in operating efficiency at the
Registrants' manufacturing plants.
In fiscal 1995, gross profit as a percent of net sales was 23.4%
compared to 22.0% in fiscal 1994. The increase in gross profit in fiscal
1995 was primarily due to an 8.4% increase in the average new home sales
prices and better operating efficiencies at both the Prestige retail
centers and at the Registrant's manufacturing plants.
Selling, general and administrative expenses as a percent of net
sales was 15.0% in fiscal 1996 as compared to 14.1% in 1995. The increase
in selling, general and administrative expenses was primarily due to
start-up expenses associated with the addition of the three retail sales
centers in November 1995, coupled with increased newspaper, radio and
television advertising expense. In fiscal year 1995, selling, general and
administrative expenses as a percent of net sales was 14.1% reflecting
little change from 14.3% in fiscal 1994.
Other income for fiscal 1996 was $46,866, down from $1,339,743 for
the 1995 fiscal year which consisted of: (1) $1,000,000 in non-recurring
income from the key-man insurance carried on the former president of
Prestige Homes, Bertus C. Parker, who died in May, 1995 after a lengthy
illness; and (2) $348,884 gain from an installment sale. During fiscal
1994, the Company recognized a $231,327 gain from the sale of its idle
North Carolina manufacturing plant and a $162,530 gain from an installment
sale and interest of approximately $34,192 on the installment sale.
Effective October 31, 1993 the Company adopted Statement of Financial
Accounting Standards No. 109 Accounting for Income Taxes ("FAS 109"). The
adoption of FAS 109 changed the Company's method of accounting for income
taxes from a deferred method to an asset and liability approach. During
the first quarter of fiscal 1994, FAS 109 had the effect of increasing net
income by $664,000.
As a result of the factors discussed above, earnings for fiscal year
1996 are $2,395,130 or $.81 per share compared to $2,957,438 or $1.03 per
share for fiscal 1995. Earnings for fiscal year 1994 were $1,769,176 or
$.61 per share. Earnings per share information has been restated to give
effect to two three-for-two stock splits in the form of dividends payable
on January 19, 1996 and August 16, 1996, respectively.
Liquidity and Capital Resources
Cash and cash equivalents were $2,049,184 at November 2, 1996
compared to $932,432 at November 4, 1995. Working capital increased to
$8,762,581 in fiscal 1996 compared to $6,956,429 in 1995. In fiscal year
1996, the Company carried all the inventory for the retail sales centers
and did not incur third party floor plan financing expenses. Inventories
increased to $7,820,908 in 1996 from $6,786,159 at fiscal year end 1995.
The increase in inventories is primarily due to the acquisition of the
three retail centers in 1995. During fiscal 1995, the Company maintained
an average of $1.5 million on third party floor plans, which was paid off
during the fourth quarter of 1995, compared with an average of $2.0
million in fiscal 1994.
During fiscal 1996 and 1995, the Company maintained a revolving credit
agreement with a major bank providing for borrowings up to $2.5 million.
In July 1996, the Company entered into a second revolving line of credit
agreement with a major bank which provides for borrowings up to
$1,500,000. These two agreements provide the Company with an additional
$4.0 million of working capital for use in connection with its overall
operations. At November 2, 1996, there were no amounts outstanding under
these agreements.
In July 1996, the Company paid in full $652,000 in loans borrowed
against the cash surrender value of the Company owned life insurance
policies. The policies insure the President of the Company and name the
Company as beneficiary.
On November 22, 1995, the Company acquired three retail sales centers
in Florida in an asset acquisition by issuing 18,000 shares of common
stock with a fair market value of $252,000.
Consistent with normal practice, the Company's operations are not
expected to require significant capital expenditures during fiscal 1996.
Working capital requirements for inventory for new retail sales centers
are met through a combination of internal sources and the revolving credit
lines discussed above.
Item 8. Consolidated Financial Statements and Supplementary Data
Financial statements incorporated herein from the Registrant's Annual
Report to Shareholders are attached as Exhibit 13 and are listed at Part
IV, Item 13(a), "Consolidated Financial Statements and Schedules."
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors of the Registrant is
incorporated by reference pursuant to Instruction G of Form 10-K from the
Registrant's definitive proxy statement for the 1997 annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A on
or before March 2, 1997.
The following table provides the names, ages and business experience
for the past five years for each of the Executive Officers of the
Registrant. Executive officers are each elected for one year terms.
Executive Officers
Terry E. Trexler (57) Chairman of the Board and President of
Registrant; Mr. Trexler is also President of TLT,
and, since April 1996, a director of Citizens
National Bank and its subsidiary, Citi-
Bancshares, Inc.; Mr. Trexler was Chairman of the
Board of Citizens First Bancshares, Inc. and its
subsidiary, Citizens First Bank of Ocala prior to
its acquisition in April 1996.
Thomas W. Trexler (33) Executive Vice President and Chief Financial
Officer of the Registrant since December 1994 and
a director of the Registrant since February 1993;
President of Prestige Insurance Services, Inc.
since August 1992; President of Prestige since
June 1995 and Vice President from 1991 to June
1995; director of Prestige and Vice President and
director of TLT since September 1991; prior to
September 1991, Mr. Trexler was Vice President of
NationsBank (formerly NCNB National Bank) in
Naples, Florida.
Edward C. Sims (50) Vice President of Engineering of the Registrant.
Jean Etheredge (51) Secretary of the Registrant.
Lynn J. Cramer, Jr. (51) Treasurer of the Registrant.
Thomas W. Trexler, Executive Vice President, Chief Financial Officer
and a director of the Registrant, is the son of Terry E. Trexler, the
Registrant's President and Chairman of the Board. There are no other
family relationships between any directors or executive officers of the
Registrant.
Item 11. Executive Compensation
Information concerning executive compensation is incorporated by
reference pursuant to Instruction G of Form 10-K from the Registrant's
definitive proxy statement for the 1997 annual meeting of shareholders to
be filed with the Commission pursuant to Regulation 14A on or before
March 2, 1997.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning security ownership of certain beneficial
owners and management is incorporated by reference pursuant to Instruction
G of Form 10-K from the Registrant's definitive proxy statement for the
1997 annual meeting of shareholders to be filed with the Commission
pursuant to Regulation 14A on or before March 2, 1997.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions
is incorporated by reference pursuant to Instruction G of Form 10-K from
the Registrant's definitive proxy statement for the 1997 annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A on
or before March 2, 1997.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Consolidated Financial Statements and Schedules:
Report of Price Waterhouse LLP
Consolidated Balance Sheets at November 2, 1996 and November 4,
1995
Consolidated Statements of Income for the Years Ended November
2, 1996, November 4, 1995 and October 29, 1994
Consolidated Statements of Changes in Stockholders' Equity for
the Years Ended November 2, 1996, November 4, 1995 and
October 29, 1994
Consolidated Statements of Cash Flows for the Years Ended
November 2, 1996, November 4, 1995 and October 29, 1994
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K:
None
(c) Exhibits:
3. (a) The Registrant's Articles of Incorporation, as
amended, were attached as an Exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended November 1, 1981, and are incorporated
herein by reference.
(b) Bylaws, as amended March 28, 1994, were attached as an
Exhibit to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended October 29, 1994 and
are incorporated herein by reference.
10. (a) The following documents relating to floor plan
financing for Prestige Home Centers, Inc.:
(2) Inventory Financing Agreement between Prestige
Home Centers, Inc. and Ford Motor Credit Company
was attached as an Exhibit to the Registrant's
Annual Report on Form 10-KSB for the fiscal year
ended October 29, 1994 and is incorporated herein
by reference.
(3) Inventory Security Agreement between Prestige
Home Centers, Inc. and John Deere Credit, Inc.
was attached as an Exhibit to the Registrant's
Annual Report on Form 10-KSB for the fiscal year
ended October 29, 1994 and is incorporated herein
by reference.
(b) Revolving Credit Agreement dated June 7, 1996 between
the Company and SunTrust Bank, North Central Florida.
(c) Loan Agreement dated July 17, 1996 between the Company
and AmSouth Bank of Florida.
13. Consolidated Financial Statements and Schedules from 1996
Annual Report to Shareholders.
21. Subsidiaries of Registrant.
27. Financial Data Schedule.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: January 20, 1997 By: /s/ Terry E. Trexler
Terry E. Trexler, Chairman, President
and Chief Executive Officer
DATE: January 20, 1997 By: /s/ Thomas W. Trexler
Thomas W. Trexler, Executive
Vice President
Chief Financial Officer
DATE: January 20, 1997 By: /s/ Lynn J. Cramer, Jr.
Lynn J. Cramer, Jr., Treasurer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
DATE: January 20, 1997 /s/ Terry E. Trexler
Terry E. Trexler, Director
DATE: January 20, 1997 /s/ Richard C. Barberie
Richard C. Barberie, Director
DATE: January 20, 1997 /s/ Robert Holliday
Robert Holliday, Director
DATE: January 20, 1997 /s/ Robert P. Saltsman
Robert P. Saltsman, Director
Date: January 20, 1997 /s/ Thomas W. Trexler
Thomas W. Trexler, Director
EXHIBIT INDEX
3. (a) The Registrant's Articles of Incorporation, as amended,
were attached as an Exhibit to the Registrant's Annual
Report on Form 10-K for the fiscal year ended November 1,
1981, and are incorporated herein by reference.
(b) Bylaws, as amended March 28, 1994, were attached as an
Exhibit to the Registrant's Annual Report on Form 10-KSB
for the fiscal year ended October 29, 1994 and are
incorporated herein by reference.
10. (a) The following documents relating to floor plan financing
for Prestige Home Centers, Inc.:
(2) Inventory Financing Agreement between Prestige
Home Centers, Inc. and Ford Motor Credit Company
was attached as an Exhibit to the Registrant's
Annual Report on Form 10-KSB for the fiscal year
ended October 29, 1994 and is incorporated herein
by reference.
(3) Inventory Security Agreement between Prestige
Home Centers, Inc. and John Deere Credit, Inc.
was attached as an Exhibit to the Registrant's
Annual Report on Form 10-KSB for the fiscal year
ended October 29, 1994 and is incorporated herein
by reference.
(b) Revolving Credit Agreement dated June 7, 1996 between the
Company and SunTrust Bank, North Central Florida.
(c) Loan Agreement dated July 17, 1996 between the Company and
AmSouth Bank of Florida.
13. Consolidated Financial Statements and Schedules from 1996 Annual
Report to Shareholders.
21. Subsidiaries of Registrant.
27. Financial Data Schedule.