Sue Brooks writing for NewsRTS said on April 22, 2020 that “Sophisticated Investors Should Avoid: Skyline Champion Corporation (SKY)…”
Brooks provided an insider transactions summary of stock trades that states, “According to SEC data, total insider shares purchases at the company stands at 20 over the last 12 months, while SEC filings reveal that there have been 78 insider sales over the same period.”
Brooks further stated that “Anderson Keith A, a Director at the company, sold 9,439 shares worth $317056.0 at $33.59 per share on Jan 10. The Director had earlier sold another 100,561 SKY shares valued at $3.46 million on Jan 13. The shares were sold at $34.38 per share. LYALL JONATHAN WADE (EVP) sold 10,953 shares at $33.18 per share on Dec 13 for a total of $363421.0 while Yost Mark J., (CEO & President) sold 16,500 shares on Dec 02 for $537900.0 with each share fetching $32.60.”
NewsRTS’ about us page says that it has been publishing since 2001. While they make some bold claims, and appears to be a foreign news provider publishing in English, such websites nevertheless often harvest, aggregate, curate and organize data that can prove to be factually correct.
That noted, the same report stated on that date that “Skyline Champion Corporation (NYSE: SKY) shares are -51.04% down in the year-to-date (YTD) period and have moved -1.40% or -$0.22 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +43.44% lower. Comparatively, the stock is -58.09% down YTD and -55.27% over the trailing 3-month period. If we look at the shorter duration, its week performance is -8.71% and 8.08% over the month.”
Yahoo Finance’s overview reflects the following data, with MHProNews adding some recent headlines from other sources, including spotlighting GuruFocus for balance.
What has Skyline Champion Said Themselves During the COVID19 Pandemic?
On March 23, 2020, MarketWatch and others published the following press release from Skyline Champion (SKY). This segment will be followed by a brief analysis.
“Foremost, Skyline Champion is focused on the safety and well-being of our employees, distributors and customers we serve, and the communities in which we operate, while simultaneously ensuring business continuity across our operations,” said Mark Yost, President and Chief Executive Officer. “We are well-positioned to navigate the uncertainty of the current environment due to our strong liquidity position, highly flexible, low cash-cost operating model, as well as our diversified customer channels and geographic mix.”
The Company has 38 manufacturing facilities in the U.S. and Canada. Thirteen of those facilities are located in the states of California, Pennsylvania, Louisiana, Kentucky and New York that have ordered a suspension of operations for many businesses as part of their efforts to mitigate the spread of COVID-19. In compliance with orders from state officials, the Company has temporarily suspended operations of those thirteen facilities. In addition, Skyline Champion is closing its five Canadian manufacturing facilities due to reductions in demand. It is currently anticipated that these plant closures will continue until such time as the Company determines that it has qualified for an exemption to operate, or as COVID-19 and recent oil price impacts are mitigated to allow the Company and its suppliers to restart partial or full operations.
As part of the Company’s core principles to safeguard its communities, employees have been encouraged to work from home where possible, increase social distancing, and increase sanitation standards. In addition, the Company has enacted a relief program for employees impacted by COVID-19 to provide enhanced compensation and benefits on a limited basis. The Company will continue to assess the rapidly evolving situation to work through the potential production risks that may arise from lower employee attendance, material shortages, transportation challenges, lack of inspectors, emergency orders from governmental agencies, and other factors. With the Company’s broad footprint across North America, it is well-positioned to modify production levels across facilities as it continues to serve customers while at the same time protecting its employees in regions that require shutdowns.
The Company is taking proactive steps to safeguard its cash position while maintaining strategic flexibility. Skyline Champion has a strong balance sheet with no significant debt maturing until June 2023. Liquidity remains strong and, in order to maximize financial flexibility, the Company last week drew the remaining $38 million of its $100 million revolver, increasing cash availability to approximately $200 million. The incremental cash from these borrowings will be used to offset the temporary working capital impacts of production shutdowns and to preserve financial flexibility to continue to invest in strategic priorities. This will give the Company the ability to serve the need for attainable housing that will arise from the economic impacts of this environment.
Skyline Champion extends its sincerest gratitude to the first responders, medical teams, government officials and all people and organizations working together to make the world safer and contain COVID-19. Our thoughts are with everyone impacted.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding our expectations, hopes or intentions regarding the future. These forward looking statements can often be identified by their use of words such as “will”, “might”, “predict”, “continue”, “forecast”, “expect”, “believe”, “anticipate”, “outlook”, “could”, “would”, “target”, “project”, “intend”, “plan”, “seek”, “estimate”, “pursue”, “should”, “may” and “assume”, or the negative thereof, as well as variations of such words and similar expressions referring to the future. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ include (without limitation) the ongoing uncertainties about COVID-19, its duration, spread and impacts, the closure and length of closure of the Company’s facilities (including those which currently remain open), and other actions or costs incurred to comply with any mandated or prudential health requirements associated with the virus. Additional factors are discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019, and in the Company’s other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this document are made based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) was formed in June of 2018 as the result of the combination of Skyline Corporation and the operating assets of Champion Enterprises Holdings, LLC. The combined company employs approximately 7,000 people and is the largest independent, publicly traded, factory-built housing company in North America. With more than 65 years of homebuilding experience and 38 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with a leading portfolio of manufactured and modular homes, park-models and modular buildings for the multi-family, hospitality, senior and workforce housing sectors.
In addition to its core home building business, Skyline Champion operates a factory-direct retail business, Titan Factory Direct, with 21 retail locations spanning the southern United States, and 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 know brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, Shore Park, Silvercrest, Titan Homes in the U.S. and Moduline and SRI Homes in western Canada.”
MHProNews Analysis and Commentary
Fellow Manufactured Housing Institute (MHI) members have been pointing out to MHProNews for some time several of the facts noted above.
While all of the above has varying degrees of informative value, perhaps one of the key statements is this paragraph.
“The Company has 38 manufacturing facilities in the U.S. and Canada. Thirteen of those facilities are located in the states of California, Pennsylvania, Louisiana, Kentucky and New York that have ordered a suspension of operations for many businesses as part of their efforts to mitigate the spread of COVID-19. In compliance with orders from state officials, the Company has temporarily suspended operations of those thirteen facilities. In addition, Skyline Champion is closing its five Canadian manufacturing facilities due to reductions in demand. It is currently anticipated that these plant closures will continue until such time as the Company determines that it has qualified for an exemption to operate, or as COVID-19 and recent oil price impacts are mitigated to allow the Company and its suppliers to restart partial or full operations.”
Rephrased, on that date Skyline Champion stated that nearly half of their production centers were being shuttered – 47.37 percent.
While MHI is touting their COVID19 ‘response’ – which may be the subject of an upcoming report – what this evidence-based report reveals is something quite at variance with MHI’s self-congratulatory words. With their second largest producer-member – Skyline-Champion – self-reports that nearly half of their production centers are shut down and MHI is bragging about being on a conference call and teaming up with other associations? Can you spell tone-deaf?
Let it not be overlooked that among those states named by Skyline Champion – California and Pennsylvania – included other producers. See our prior report below dated 3.22.2020. So it is far from just SKY that has been impacted.
There is more that can and should be unpacked from the factoids in this report. For example, as MHProNews noted yesterday, the industry is at least theoretically poised for a silver lining from the dark cloud of the Wuhan or CCP Virus.
There are multiple reasons for concern, but also for hope, as the report linked below details.
Epic! Creating 200,000 New MH Homesites in 4 Years; Allegations of Corruption by Fannie, Freddie, Others in Duty to Serve Manufactured Housing Law Years; Allegations of Corruption by Fannie, Freddie, Others in Duty to Serve Manufactured Housing Law
Going along with the tide of MHI leadership has arguably cost investors in Skyline Champion, as well as other publicly traded companies involved at MHI, significantly. Of course, with prices depressed, revelations starting around mid-May will pull back the veil on who and which firms scooped up stocks at discounted valuations.
With the right message and strategies, manufactured housing should have been soaring instead of snoring. Now, because of ‘trust’ in MHI and their ‘leadership,’ the industry is in the midst of a serious short term hit.
What will arise out of that is as yet unknown. But what ought to be apparent to thinking people is that if even MHI defenders like Andy Gedo, partner in ManageAmerica can’t successfully defend the MHI track record – and he specifically named Skyline Champion among others – then there is not much to crow about regarding MHI performance, is there?
Once more for emphasis, fellow MHI members have been prompting a report by MHProNews on Skyline Champion. While management members were selling SKY stock at a comparatively higher price, why didn’t they prepare for what lied ahead? Is there a scandal hiding I plain sight? Isn’t the prior warning to investors from some 9 months ago becoming ever-more proven?
What comes next shouldn’t be a desire to return to the status quo ante-COVID19. The prior status quo led the industry into its current dilemma. Thus, a shakeup of the post-production side of manufactured housing, an investigation of allegations of corruption, and a stronger support for the years of efforts and warnings from the Manufactured Housing Association for Regulatory Reform (MHARR) are among the merited action items.
When Senators Elizabeth Warren, Bernie Sanders and President Donald J. Trump said that the system is rigged, it is highly unlikely that they thought about SKY. But if the shoe fits…
There are insiders at Skyline Champion and other companies that doubtlessly know more. Will some step up and speak out?
That’s a wrap on this report. But stay tuned for more from your #1 source for the most-read manufactured housing “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” © (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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