Skyline Reports Second Quarter And First Half Results

ELKHART, Ind., Jan. 11, 2018 /PRNewswire/ -- For the second quarter of fiscal 2018, Skyline Corporation (NYSE MKT: SKY) ("Skyline" or the "Corporation") reported the following results:

    --  Net sales of $57,765,000, a decrease of 10.1% over net sales of
        $64,226,000 from the year ago quarter.  The decrease is mainly due to
        prior period net manufactured housing sales including $8,092,000
        attributable to facilities in Elkhart, Indiana and Mansfield, Texas
        which closed in the fourth quarter of fiscal 2017.  Modular housing net
        sales partially offset the decrease as a result of multiple facilities
        experiencing increased customer demand for this product.
    --  Operating income for fiscal 2018 was $3,001,000 as compared to an
        operating loss of $509,000 for fiscal 2017.  Current year operating
        income includes a $762,000 net gain on the sale of property, plant and
        equipment.  Prior year's operating loss included a $1,362,000 loss,
        excluding corporate overhead allocation, attributable to the Elkhart and
        Mansfield facilities.
    --  Net income of $2,964,000 or $0.35 per share as compared to a net loss of
        $595,000 or $0.07 per share in the second quarter of fiscal 2017. 
        Included in current year income is a net gain on sale of property, plant
        and equipment of $762,000.

For the first half of fiscal 2018, the Corporation reported the following results:

    --  Net sales of $116,227,000, a decrease of 7.3% over net sales of
        $125,402,000 from the year ago first half.  The decrease is mainly due
        to prior period net manufactured housing sales including $13,293,000
        attributable to the Elkhart and Mansfield facilities.  Modular housing
        net sales partially offset the decrease as a result of multiple
        facilities experiencing increased customer demand for this product.  In
        addition, park model net sales rose as a result of management's
        continuing initiative to increase this product's exposure at
        substantially all of the Corporation's facilities.
    --  Operating income for fiscal 2018 was $4,755,000 as compared to operating
        income of $321,000 for fiscal 2017.  Current year operating income
        includes a $702,000 net gain on the sale of property, plant and
        equipment.  Prior year's operating income included a $2,517,000 loss,
        excluding corporate overhead allocation, attributable to the Elkhart and
        Mansfield facilities.
    --  Net income of $4,571,000 or $0.54 per share as compared to a net income
        of $149,000 or $0.02 per share in the six months of fiscal 2017. 
        Included in current year income is a net gain on sale of property, plant
        and equipment of $702,000.


                                                      Skyline Corporation and Subsidiary Companies

                                                               Consolidated Balance Sheets

                                                                 (Dollars in thousands)


                                                                     December 3, 2017               May 31, 2017
                                                                     ----------------               ------------

                                                                       (Unaudited)

    Current Assets:

    Cash                                                                                    $12,287                $11,384

    Accounts receivable                                                                      14,802                 12,751

    Inventories                                                                              12,929                 12,233

    Workers' compensation security
     deposit                                                                                    371                    371

    Other current assets                                                                        995                    563
                                                                                                ---                    ---


    Total Current Assets                                                                     41,384                 37,302
                                                                                             ------                 ------


    Property, Plant and Equipment, at Cost:

    Land                                                                                      2,016                  2,965

    Buildings and improvements                                                               35,615                 35,368

    Machinery and equipment                                                                  16,872                 16,364
                                                                                             ------                 ------

                                                                                             54,503                 54,697

    Less accumulated depreciation                                                            44,092                 43,721
                                                                                             ------                 ------

                                                                                             10,411                 10,976


    Other Assets                                                                              7,242                  7,366
                                                                                              -----                  -----


    Total Assets                                                                            $59,037                $55,644
                                                                                            =======                =======


    Current Liabilities:

    Accounts payable, trade                                                                  $4,056                 $3,861

    Accrued salaries and wages                                                                2,942                  3,530

    Accrued marketing programs                                                                3,220                  1,986

    Accrued warranty                                                                          3,916                  4,757

    Customer deposits                                                                         1,977                  1,880

    Other accrued liabilities                                                                 2,596                  2,371
                                                                                              -----                  -----


    Total Current Liabilities                                                                18,707                 18,385
                                                                                             ------                 ------


    Long-Term Liabilities:

    Deferred compensation expense                                                             4,808                  4,848

    Accrued warranty                                                                          2,800                  2,800

    Life insurance loans                                                                      2,707                  4,312
                                                                                              -----                  -----

    Total Long-Term Liabilities                                                              10,315                 11,960
                                                                                             ------                 ------


    Shareholders' Equity:

    Common stock, $.0277 par value, 15,000,000 shares

    authorized; issued 11,217,144
     shares                                                                                     312                    312

    Additional paid-in capital                                                                5,316                  5,171

    Retained earnings                                                                        90,131                 85,560

    Treasury stock, at cost,
     2,825,900 shares                                                                      (65,744)              (65,744)
                                                                                            -------                -------

    Total Shareholders' Equity                                                               30,015                 25,299
                                                                                             ------                 ------


    Total Liabilities and
     Shareholders' Equity                                                                   $59,037                $55,644
                                                                                            =======                =======


                                    Skyline Corporation and Subsidiary Companies

                                           Consolidated Income Statements

                  For the Three-Months and Six-Months Ended December 3, 2017 and November 30, 2016

                             (Dollars in thousands, except share and per share amounts)


                                                  Three-Months Ended                       Six-Months Ended

                                                      2017                      2016                      2017      2016
                                                      ----                      ----                      ----      ----

                                                    Unaudited)                          (Unaudited)

    OPERATIONS

    Net sales                                      $57,765                   $64,226                  $116,227  $125,402

    Cost of sales                                   49,394                    58,996                    99,930   113,592
                                                    ------                    ------                    ------   -------

    Gross profit                                     8,371                     5,230                    16,297    11,810

    Selling and
     administrative
     expenses                                        6,132                     5,739                    12,244    11,489

    Net gain on sale of property, plant and

    equipment                                          762                         -                      702         -
                                                       ---                       ---                      ---       ---

    Operating income
     (loss)                                          3,001                     (509)                    4,755       321

    Interest expense                                  (37)                     (86)                    (184)    (172)

    Income tax expense                                   -                        -                        -        -
                                                       ---                      ---                      ---      ---

    Net income (loss)                               $2,964                    $(595)                   $4,571      $149
                                                    ======                     =====                    ======      ====

    Basic and diluted
     income (loss) per
     share                                            $.35                    $(.07)                     $.54      $.02
                                                      ====                     =====                      ====      ====

    Weighted average number of common

    shares outstanding:

    Basic                                        8,391,244                 8,391,244                 8,391,244 8,391,244
                                                 =========                 =========                 ========= =========

    Diluted                                      8,562,899                 8,391,244                 8,531,191 8,512,903
                                                 =========                 =========                 ========= =========

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SOURCE Skyline Corporation