Recreational vehicle and manufactured housing builder Skyline Corp. reported a net loss on increased revenue for its fiscal third quarter, ended Feb. 29.
Total net sales in the period were $36.8 million, a 16% increase from the $31.8 million reported in the same period a year ago. RV sales rose 34% to $17.7 million from $13.3 million in the previous year while housing revenue edged up 3% to $19 million.
Net loss for the third quarter of fiscal 2012 was nearly $7.4 million as compared to a loss of $8.7 million for the third quarter of fiscal 2011. On a per share basis, net loss was 88 cents compared to $1.04 for the same period a year ago.
Elkhart, Ind.-based Skyline announced the closure of its recreational vehicle facility in Hemet, Calif., due to weak demand in its market area – primarily states in the Pacific and Rocky Mountain regions. Operations are expected to conclude in April. The company said dealers that purchased recreational vehicles from this facility will have their product needs met by the facilities in Bristol and Elkhart.
Other highlights included:
• The board approved a resolution to suspend dividend payments on the outstanding shares of the corporation’s common stock until further notice. The suspension was for cash preservation purposes. The Board will evaluate financial performance and liquidity needs in determining the timing and amount of future dividend payments.
• Skyline reached a settlement in the case of FEMA formaldehyde product liability litigation. The settlement resulted in the corporation incurring a charge of approximately $400,000. The total settlement of $737,000 was remitted to the United States District Court, Eastern District of Louisiana subsequent to Feb. 29.
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Manufactured housing and recreational vehicle builder Skyline Corp. will be replaced by Exterran Holdings Inc. in the S&P SmallCap 600 index after the close of trading on Dec. 30. Skyline is ranked No. 600 in the SmallCap 600 index.
SmartTrend reported that it identified a “downtrend” for Skyline on July 18 when the stock was $15.76 per share. Since then, Skyline share prices have moved between a 52-week high of $27.69 and a 52-week low of $4.25, and started today’s trading at $4.69.
Skyline, based in Elkhart, Ind., filed its financial report on Oct. 7 for the fiscal 2012 first quarter, ended Aug. 31. The company reported sales of $50.3 million compared with $45.8 million the previous year while posting a net loss of $6.8 million versus a net loss of $6 million.
Skyline Corp. posted an increase in recreational vehicle sales for its fiscal 2012 first quarter while reporting a net loss for the period, as the manufactured housing market remained soft.
RV sales were up 39%, growing from $15.2 million a year ago to $21.1 million. Unit shipments for travel trailers and fifth-wheels increased approximately 44% from the year prior while industry shipments for these products during the period decreased approximately 2%. Housing sales were down 5%, slipping to $29.1 million from $30.6 million.
The Elkhart, Ind.-based builder reported a net loss of $6.8 million compared to $6 million last year.
To keep in line with demand, on May 31 Skyline ceased housing production at its Bristol, Ind., facility to produce RVs. The conversion is scheduled to be completed Oct. 31. The company also closed a housing facility in Fair Haven, Vt.
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The National Association of RV Parks and Campgrounds (ARVC) and Skyline Corp. have negotiated an agreement that gives Skyline “preferred provider” status on park model and travel trailer sales to ARVC-member parks in the U.S. and Canada.
“I am very excited to have Skyline as a preferred provider,” said David L. Berg, ARVC chairman, adding that savings from a single park model purchase could offset the cost of ARVC dues for as much as 20 years.
“This agreement does not just cover rental units,” Berg said. “It covers all products that Skyline manufactures, including park models of all widths, towable travel trailers, park model cabins which they are designing specifically for ARVC members and mobile homes. The only restriction is that the member must use the units as rentals or sell them directly to their customers for use in their park.”
According to a press release, Skyline said the preferred provider agreement with ARVC should help boost sales for the Elkhart, Ind.-based company in an increasingly competitive market. “We’re looking forward to displaying some of our units at the upcoming Outdoor Hospitality Conference and Expo in Savannah,” said Terry Decio, Skyline’s vice president of sales and marketing.
Skyline has manufacturing facilities in Indiana, Vermont, Pennsylvania, Florida, Oregon and California.
“With Skyline plans from New England to California, this will be a far reaching member benefit that the vast majority of our membership can enjoy,” Berg said.
ARVC is the national trade association that represents the outdoor hospitality industry. Based in Denver, Colo., membership includes over 3,300 campgrounds, RV parks and resorts throughout the United States. ARVC’s consumer website is www.GoCampingAmerica.com, while its industry website is www.ARVC.org.
Skyline Corp.’s sales for the third quarter of fiscal year 2011 were $31,776,000 as compared to $25,415,000 in the third quarter of fiscal 2010, the company reported.
For the first nine months of fiscal 2011, sales were $114,224,000 as compared to $95,535,000 in the first nine months of fiscal 2010.
Sales for Skyline’s recreational vehicle segment were $13,279,000 in fiscal 2011’s third quarter as compared to $10,063,000 for the third quarter of fiscal 2010. For the nine months ending Feb. 28, 2011, sales were $40,541,000 as compared to $29,480,000 for the same period a year ago.
Sales for Skyline’s manufactured and modular housing segment were $18,497,000 in the third quarter of fiscal 2011 as compared to $15,352,000 in the third quarter of fiscal 2010. For the first three quarters of fiscal 2011, sales were $73,683,000 as compared to $66,055,000 for the first three quarters of fiscal 2010.
Fiscal 2011’s third quarter loss before income taxes was $8,742,000 as compared to fiscal 2010’s third quarter loss before income taxes of $5,554,000. The loss before income taxes for the first nine months of fiscal 2011 was $22,563,000 as compared to $17,789,000 in the first nine months of fiscal 2010. Included in prior year’s pretax loss for the third quarter and first nine months was a $1,544,000 gain on the sale of idle property, plant and equipment. In addition, prior year’s pretax loss for the first nine months included $412,000 of income from life insurance proceeds.
Skyline established in the fourth quarter of fiscal 2010 a full valuation allowance against its deferred tax assets, and continued to maintain a full valuation allowance during the third quarter of fiscal 2011. As a result, Skyline has not recognized any benefit from income taxes in fiscal 2011.
Skyline, however, did recognize in prior year’s third quarter and first nine months a benefit from income taxes of $1,857,000 and $6,377,000, respectively. If the corporation, after considering future negative and positive evidence regarding the realization of deferred tax assets, determines that a lesser valuation allowance is warranted, it would record a reduction to income tax expense and the valuation allowance in the period of determination.
Shares of Skyline Corp. saw unusually high trading volume on Monday (Jan. 10). Approximately 74,414 shares changed hands during mid-day trading. During the most recent quarter, the stock had an average daily volume of 28,329 shares. The stock last traded at $24.39, American Banking & Market News reported.
Skyline traded down 4.58% during mid-day trading on Monday. The stock has a 52-week low of $16.50 and a 52-week high of $29.39. Its 50-day moving average is $23.43 and its 200-day moving average is $20.18. The company has a market cap of $204.7 million.
Elkhart, Ind.-based Skyline designs, produces and distributes manufactured housing and recreational vehicles (travel trailers, fifth-wheels and park models) to independent dealers and manufactured housing communities located throughout the United States and Canada.
In the fiscal year ending May 31, 2010, the company sold a total of 3,100 recreational vehicles.
Last week, Skyline reported consolidated sales of $37.2 million for the three-month period ending Nov. 30 and a total operating loss of $7.77 million.
The company shipped 936 RVs during the quarter, 691 to U.S. dealers and 245 to Canadian dealers. Total value of the RV shipments was $12.15 million.
The total was well above the 629 valued at $9.35 million shipped to U.S. and Canadian dealers in the same quarter in 2009.
Editor’s Note: Wall Street Cheat Sheet, a newsletter for investors and entrepreneurs, filed comments on Sunday (Dec. 19) following last week’s quarterly report by Winnebago Industries Inc. Excerpts of the newsletter follow.
Winnebago Industries Inc. sports a $443 million market cap and has beaten estimates in six of the past 12 quarters.
The company’s balance sheet remains very strong with no debt and about $3 per share in cash.
Operating margins were 3.5% excluding a $644,000 asset sale gain.
Gross margins rose from 0.6% all the way to 9.1%.
Did You Hear That? CEO Bob Olson said on the call that “the outlook for 2011 looks good and labor availability is the one possible constraint the company could have later in fiscal 2011.”
Analysts at Morningstar noted that they “think Winnebago can be successful if it does not leverage up the company over time to make deals and only pursues acquisitions with a high probability of sufficient return. We will reduce our fair value if management starts to constantly make acquisitions simply to bring in more revenue without sufficient regard to long-term profitability.”
Competitors to Watch: Thor Industries, Skyline Corp. and Cavco Industries Inc.
Technicals: After last week’s rise, shares of WGO are not far from completing a cup-shaped base dating back to this past May. The stock’s 50-day moving average is poised to break above its 200-day line in the coming days, and volume has been steadily increasing for the past four weeks. All are bullish signals, and a breakout above $17.43 may be the beginning of the company’s next move higher. However, understand that cup-shaped bases often have handles, meaning that initial breakouts often fail, with the following “handle” breakout being the move that augurs in favor of future gains.
Commentary: WGO swung to a fiscal first-quarter profit that handily topped analysts estimates. Higher deliveries and a rise in average selling prices were behind the gain. The RV maker has returned to profitability in recent quarters, recovering from an industry crisis that saw some competitors file for bankruptcy. Still, it faces consumers who are reluctant to make big purchases due to persistent high unemployment and housing woes. The company is an interesting play for those seeking exposure to large-scale consumer purchases.
Skyline Corp. stock jumped 14.01% to a 52-week high of $27.50 on Wall Street Friday (Dec. 17).
Volume soared to 303,637 million shares traded, many times over its average daily volume of 19,145 shares.
Skyline stock has appreciated nearly 50% year-to-date.
Based in Elkhart, Ind., Skyline is a manufacturer of RVs and manufactured housing.
The stock’s price over the past year has ranged from a low of $16.25 to Friday’s high.
The company, which closed its second fiscal quarter on Nov. 30, is in its “quiet period” and is required by the Securities and Exchange Commission (SEC) not to comment on matters. In fact, Skyline routinely does not comment on its stock trading.
Skyline will be reporting its second quarter results no later than Jan. 9.
The company’s last public comment was its 8-K, filed on Oct. 8 with the SEC for its first quarter of fiscal 2011. Sales for the quarter were $45,827,000 as compared to $35,874,000 in the first quarter of fiscal 2010.
Sales for Skyline’s manufactured housing segment were $30,629,000 as compared to $25,782,000 for the first quarter a year ago. Sales for Skyline’s recreational vehicle segment were $15,198,000 for the first three months of fiscal 2011 as compared to prior year’s total of $10,092,000.
Fiscal 2011’s first quarter loss before income taxes was $6,065,000 as compared to fiscal 2010’s first quarter loss before income taxes of $6,113,000. Included in prior year’s pretax loss is $412,000 of income from life insurance proceeds.
Investors were active on Wall Street Monday (Dec. 13), sending the price of stock in Skyline Corp., an Elkhart, Ind.-based manufacturer of travel trailers, park models and manufactured housing, up 6.95% from the previous day’s close on more than triple the normal trading volume.
The stock closed Monday at $24.76, up 6.27% from its morning opening.
Volume exceeded 96,000 shares, compared to normal trading volume of 28,522.
The 52-week trading price ranges from a low of $16.25 to a high of $25.69.
Retail sales of RVs in Canada in June continued their strong, year-long rebound.
Statistical Surveys Inc. has reported that towable sales rose 29.1% in June, while motorized sales rose 35.4%.
Year-to-date, towable sales are up 27.8% while all motorhome sales are up 40.1%, Grand Rapids, Mich.based SSI reported.
By segment with comparisons to June 2009, the results were as follows:
- Travel trailers increased 34.5%.
- Fifth-wheels rose 26.9%.
- Folding camping trailers were up 1.3%.
- Park Models increased 21.9%.
Thor Industries Inc. was the towable leader in June with a 26.6% market share, followed by Forest River Inc. with a 20.2% share.
Year-to-date, Thor led with a 27.1%. Forest River was next with 20%.
Thor was No. 1 in travel trailer sales with a 28.4% share in June. Forest River had a 19.3% share and Jayco Inc. with 17.3%.
Thor was the fifth-wheel leader with a 30.4% share, Forest River was No. 2 with a 20.1% share and Heartland RV with 14% share.
Forest River was the folding camping trailer leader in June with a 29.2% share, followed by Jayco with a 28.1% share.
Thor was the park model leader in June with a 44.9% share. Skyline Corp. was No. 2 with a 24.4% share.
Year-to-date, Thor led in travel trailers (28.3%), fifth-wheels (33.6%) and park models (53.9%).
Forest River led in folding camping trailer sales with a 30.5% share.
Meanwhile, in the motorized area, Class A sales were up 10.6% in June and 20.1% year-to-date.
Class C sales were up 54.3% in June and 57% year-to-date.
Thor was the clear leader in all motorhome sales in June with a 40.7% market share. Forest River Inc. was a distant second with an 18.7% share.
Year-to-date, the competition is much closer with Thor leading with 26% and Forest River with 20.1% shares.
The June towables report was incomplete, as the province of Quebec, Canada’s second largest province, was experiencing delays in reporting data to SSI.
To subscribe to this or other SSI RV reports, contact Scott Stropkai, national RV sales manager, at (616) 281-9898 ext. 128, or (61) 446-8179 (cell).