Skyline Champion Announces Second Quarter Fiscal 2024 Results

Skyline Champion Corporation (“Skyline Champion”) announced financial results for its second quarter ended September 30, 2023 (“fiscal 2024”).

Second Quarter Fiscal 2024 Highlights (compared to Second Quarter Fiscal 2023 unless otherwise noted)

• Net sales decreased 42.5% to $464.2 million
• U.S. homes sold decreased 33.4% to 4,842
• Total backlog decreased 0.7% to $257.8 million compared to the sequential first quarter
• Average selling price (“ASP”) per U.S. home sold decreased 14.8% to $88,400
• Gross profit margin contracted by 890 basis points to 25.1%
• Net income decreased by 68.3% to $45.7 million
• Adjusted earnings per share (“EPS”) decreased 67.3% to $0.82
• Adjusted EBITDA decreased 70.2% to $58.8 million
• Adjusted EBITDA margin contracted by 1,170 basis points to 12.7%
• Net cash generated by operating activities was $54.3 million during the quarter
• Announced closing of strategic investment in ECN Capital and formation of Champion Financing
• Closed on the acquisition of Regional Homes post quarter end

“Skyline Champion continued to demonstrate our commitment to the customer and our ability to execute our strategy in an evolving economic environment,” said Mark Yost, Skyline Champion’s President, and Chief Executive Officer. “We continued to see a healthy increase in order volumes sequentially. In addition, we have recently closed two transformational strategic opportunities – our investment in ECN Capital including the formation of Champion Financing, and the acquisition of Regional Homes. We are excited by these new developments and remain confident that execution of our strategic initiatives will continue to position us to better serve our customers for years to come.”

Second Quarter Fiscal 2024 Results

Net sales for the second quarter fiscal 2024 decreased 42.5% to $464.2 million compared to the prior-year period. The number of U.S. homes sold in the second quarter fiscal 2024 decreased 33.4% to 4,842. The lower volume output compared to the prior year period primarily reflects the decrease in order volumes from the larger community REITs as well as the absence of FEMA-related sales which totaled $117.8 million last year. The ASP per U.S. home sold decreased 14.8% to $88,400. The decline in ASPs is a result of higher-priced FEMA unit sales in the prior-year period, changes to core product mix, and a decrease in material surcharges. The number of Canadian factory-built homes sold in the quarter decreased to 232 homes compared to 303 homes in the prior-year period due to the higher interest rate environment and softening demand.

Gross profit decreased by 57.5% to $116.5 million in the second quarter fiscal 2024 compared to the prior-year period. Gross profit margin was 25.1% of net sales, a contraction of 890 basis points compared to 34.0% in the second quarter fiscal 2023. The change in gross profit margin was driven by lower ASPs due to the higher-priced FEMA unit sales in the prior-year period and a shift in product mix to homes with fewer options. Gross margins were also impacted by softer demand and recently opened plants.

Selling, general, and administrative expenses (“SG&A”) in the second quarter fiscal 2024 decreased to $64.5 million from $83.9 million in the same period last year. SG&A during the quarter decreased due to less variable compensation expense from lower sales volumes. SG&A as a percentage of net sales was 13.9%, compared to 10.4% in the prior year period.

Net income decreased by 68.3% to $45.7 million for the second quarter fiscal 2024 compared to the prior-year period. The decrease in net income was driven by lower sales and gross profit in the quarter.

Adjusted EBITDA for the second quarter fiscal 2024 decreased by 70.2% to $58.8 million compared to the second quarter fiscal 2023. Adjusted EBITDA margin for the quarter was 12.7%, compared to 24.4% in the prior-year period.

As of September 30, 2023, Skyline Champion had $701.2 million of cash and cash equivalents, a decrease of $96.6 million in the current quarter, due to the strategic investment in ECN Capital partially offset by cash flows from operations.

For the full second quarter results, click here.

About Skyline Champion Corporation

Skyline Champion Corporation (NYSE: SKY) is a leading producer of factory-built housing in North America and employs approximately 8,600 people subsequent to the closing of the acquisition of Regional Homes in October 2023. With more than 70 years of homebuilding experience and 47 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with an innovative portfolio of manufactured and modular homes, ADUs, park-models and modular buildings for the single-family, multi-family, and hospitality sectors. In addition to its core home building business, Skyline Champion provides construction services to install and set-up factory-built homes, operates a factory-direct retail business with 74 retail locations across the United States, and operates Star Fleet Trucking, providing transportation services to the manufactured housing and other industries from several dispatch locations across the United States. Skyline Champion builds homes under some of the most well-known brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Regional Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, Titan Homes in the U.S. and Moduline and SRI Homes in western Canada.

Contact:

Kevin Doherty – Investor Relations – investorrelations@championhomes.com – (248) 614-8211

Source: Skyline Champion Corporation