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Skyline Reports Higher FY 2010 RV Sales

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August 9, 2010 by   Leave a Comment

Skyline Corp. reported higher RV sales for the quarter and year ending May 31 over the previous year.

Sales for Skyline’s fiscal 2010 fourth quarter were $40,695,000 compared to $32,483,000 for the fourth quarter of fiscal 2009. For fiscal 2010, sales were $136,230,000 versus $166,676,000 for fiscal 2009.

For Skyline’s manufactured housing segment, sales for the fourth quarter of fiscal 2010 were $24,496,000 compared to $22,578,000 for the fourth quarter of fiscal 2009. For fiscal 2010, sales were $90,551,000 versus $123,930,000 for fiscal 2009.

For the recreational vehicle segment, sales were $16,199,000 for fiscal 2010’s fourth quarter compared to $9,905,000 for the fourth quarter of fiscal 2009. For fiscal 2010, sales were $45,679,000 versus $42,746,000 for the same period a year ago.

Fiscal 2010’s fourth quarter loss before income taxes was $1,562,000 compared to fiscal 2009’s loss before income taxes of $4,332,000. For fiscal 2010, loss before income taxes was $19,351,000 versus a loss before income taxes of $24,994,000 for a year ago. Loss before income taxes for fiscal 2010 and 2009 includes a gain on the sale of idle property, plant and equipment of $1,544,000 and $3,396,000, respectively.

As a result of an increase in the valuation allowance for deferred tax assets, income tax provision (expense) was $16,019,000 in the fourth quarter of 2010, compared to benefit of $1,967,000 for the fourth quarter of fiscal 2009. Income tax provision (expense) was $9,642,000 for the year ended May 31, 2010 compared to a benefit of $9,560,000 for the year ended May 31, 2009. Skyline’s deferred tax assets consist primarily of federal and state net operating losses and tax credits that can be used to offset future tax liabilities.

The federal net operating loss carry forward and tax credits have a life expectancy of 20 years, while the state net operating loss carry forwards have a life expectancy between five and 20 years. Consistent with generally accepted accounting principles, an additional valuation allowance of approximately $16,867,000 was recorded in the fourth quarter of fiscal 2010 based on Skyline having cumulative book taxable losses for the fiscal years 2008 to 2010. The increase results in a non-cash charge in the fourth quarter. When economic conditions improve Skyline may determine that a lesser valuation allowance is warranted, resulting in a reduction to income tax provision (expense) and the valuation allowance in the period of determination.

Resulting primarily from the increase in the valuation allowance for deferred tax assets, net loss for fiscal 2010’s fourth quarter was $17,581,000 compared to fiscal 2009’s fourth quarter net loss of $2,365,000. On a per share basis, net loss for the fourth quarter was $2.10 versus a net loss of 28 cents for a year ago. For fiscal 2010, net loss was $28,993,000 compared to a net loss of $15,434,000 for a year ago. Net loss per share for fiscal 2010 was $3.46 versus a net loss per share of $1.84 for fiscal 2009.

Due to the unique nature of the increase to the deferred tax assets valuation allowance, management believes in the importance of presenting proforma Consolidated Statements of Operations exclusive of the $16,867,000 non-cash charge. Net loss for fiscal 2010’s fourth quarter would be $714,000 compared to fiscal 2009’s fourth quarter net loss of $2,365,000. On a per share basis, net loss for the fourth quarter would be 9 cents versus a net loss of 28 cents for a year ago. For fiscal 2010, net loss would be $12,126,000 compared to a net loss of $15,434,000 for a year ago. Net loss per share for fiscal 2010 would be $1.45 versus a net loss per share of $1.84 for fiscal 2009.

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