Skyline Champion (SKY) Reports Sharp Drop in Manufactured Housing Sales and Profits in Quarterly Report, Facts and Analysis – plus MHVille Markets Update


GuruFocus and Yahoo Finance were both among those in the financial media which reported the following information for Skyline Champion (SKY) most recent quarterly report for that organization’s “Q2 Fiscal 2024.” For regular people, that corporate lingo by SKY means the period ending September 30, 2023. According to Mark Yost, President and CEO for Skyline Champion: “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.” But despite that bluster, their own performance metrics of net sales volume or net profits for the quarter reveal that the firm has suffered along with the downturn in manufactured housing that is often downplayed or overlooked by the Manufactured Housing Institute (MHI), of which Skyline Champion is a prominent member and have a seat on the MHI board of directors.

Part I

Skyline Champion Corp (SKY) Reports 42.5% Decrease in Net Sales for Q2 Fiscal 2024

GuruFocus Research

October 31, 2023

In this article:

  • Net sales for Q2 Fiscal 2024 decreased by 42.5% to $464.2 million
  • Net income declined by 68.3% to $45.7 million
  • Adjusted EBITDA decreased by 70.2% to $58.8 million
  • Cash and cash equivalents stood at $701.2 million as of September 30, 2023

On October 31, 2023, Skyline Champion Corp (NYSE: SKY) announced its financial results for the second quarter ended September 30, 2023. The company reported a significant decrease in net sales and net income compared to the same period last year.

Financial Highlights

Net sales for the second quarter fiscal 2024 decreased by 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 by 33.4% to 4,842. The average selling price (ASP) per U.S. home sold decreased by 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 by 67.3% to $0.82. Adjusted EBITDA decreased by 70.2% to $58.8 million. Adjusted EBITDA margin contracted by 1,170 basis points to 12.7%.

Company’s Commentary

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 Champions 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.

Financial Position

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.

Looking Ahead

Despite the challenges faced in the second quarter, Skyline Champion remains committed to its strategic initiatives and confident in its ability to better serve its customers in the future. The company’s recent investment in ECN Capital and the acquisition of Regional Homes are expected to contribute positively to its future performance.

Explore the complete 8-K earnings release (here) from Skyline Champion Corp for further details.

This article first appeared on GuruFocus. ##


As the 8K from Skyline Champion from the link above reflects, much of what GuryFocus and Yahoo Finance reported was a repackaged version of information provided by Skyline Champion.  More from the SKY 8-K is provided below.


Part II

Skyline Champion 8-K information:




(Unaudited, dollars and shares in thousands)


September 30,
April 1,
Current assets:
Cash and cash equivalents $ 701,155 $ 747,453
Trade accounts receivable, net 55,097 67,296
Inventories, net 182,239 202,238
Other current assets 39,447 26,479
Total current assets 977,938 1,043,466
Long-term assets:
Property, plant, and equipment, net 191,766 177,125
Goodwill 196,574 196,574
Amortizable intangible assets, net 40,299 45,343
Deferred tax assets 19,798 17,422
Other noncurrent assets 242,800 82,794
Total assets $ 1,669,175 $ 1,562,724
Current liabilities:
Accounts payable $ 50,829 $ 44,702
Other current liabilities 192,322 204,215
Total current liabilities 243,151 248,917
Long-term liabilities:
Long-term debt 12,430 12,430
Deferred tax liabilities 6,417 5,964
Other liabilities 66,984 62,412
Total long-term liabilities 85,831 80,806
Stockholders’ Equity:
Common stock 1,587 1,585
Additional paid-in capital 530,645 519,479
Retained earnings 821,628 725,672
Accumulated other comprehensive loss (13,667 ) (13,735 )
Total stockholders’ equity 1,340,193 1,233,001
Total liabilities and stockholders’ equity $ 1,669,175 $ 1,562,724






(Unaudited, dollars and shares in thousands, except per share amounts)


Three months ended Six months ended
September 30,
October 1,
September 30,
October 1,
Net sales $ 464,236 $ 806,825 $ 929,005 $ 1,532,706
Cost of sales 347,747 532,719 682,843 1,029,265
Gross profit 116,489 274,106 246,162 503,441
Selling, general, and administrative expenses 64,454 83,915 134,893 156,197
Operating income 52,035 190,191 111,269 347,244
Interest (income), net (10,480 ) (1,974 ) (19,781 ) (1,884 )
Other expense (income) 2,065 2,065 (634 )
Income before income taxes 60,450 192,165 128,985 349,762
Income tax expense 14,781 48,073 32,047 88,519
Net income $ 45,669 $ 144,092 $ 96,938 $ 261,243
Net income per share:
Basic $ 0.80 $ 2.53 $ 1.69 $ 4.59
Diluted $ 0.79 $ 2.51 $ 1.68 $ 4.55






(Unaudited, dollars in thousand)


Six months ended
September 30,
October 1,
Cash flows from operating activities
Net income $ 96,938 $ 261,243
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 14,378 12,557
Amortization of deferred financing fees 162 175
Equity-based compensation 10,943 7,753
Deferred taxes (1,919 ) 3,318
Loss (gain) on disposal of property, plant, and equipment 96 (85 )
Foreign currency transaction loss 76 974
Change in assets and liabilities:
Accounts receivable 12,101 7,633
Floor plan receivables (2,521 )
Inventories 20,059 11,540
Other assets (13,434 ) (14,489 )
Accounts payable 4,387 (21,000 )
Accrued expenses and other liabilities (12,128 ) 8,947
Net cash provided by operating activities 129,138 278,566
Cash flows from investing activities
Additions to property, plant, and equipment (22,847 ) (25,613 )
Cash paid for equity method investment (1,000 )
Cash paid for investment in ECN common stock (78,858 )
Cash paid for investment in ECN preferred stock (64,520 )
Investment in floor plan loans (18,466 )
Proceeds from floor plan loans 10,528
Acquisitions, net of cash acquired (6,810 )
Proceeds from disposal of property, plant, and equipment 524 132
Net cash used in investing activities (174,639 ) (32,291 )
Cash flows from financing activities
Changes in floor plan financing, net 3,027
Stock option exercises 224 596
Tax payments for equity-based compensation (982 ) (1,363 )
Net cash (used in) provided by financing activities (758 ) 2,260
Effect of exchange rate changes on cash and cash equivalents (39 ) (6,944 )
Net (decrease) increase in cash and cash equivalents (46,298 ) 241,591
Cash and cash equivalents at beginning of period 747,453 435,413
Cash and cash equivalents at end of period $ 701,155 $ 677,004





(Unaudited, dollars in thousand)


Three months ended Six months ended
September 30,
October 1,
Change September 30,
October 1,
Reconciliation of Adjusted EBITDA:
Net income $ 45,669 $ 144,092 $ (98,423 ) $ 96,938 $ 261,243 $ (164,305 )
Income tax expense 14,781 48,073 (33,292 ) 32,047 88,519 (56,472 )
Interest (income), net (10,480 ) (1,974 ) (8,506 ) (19,781 ) (1,884 ) (17,897 )
Depreciation and amortization 6,786 6,941 (155 ) 14,378 12,557 1,821
EBITDA 56,756 197,132 (140,376 ) 123,582 360,435 (236,853 )
Transaction costs 2,065 2,065 2,065 338 1,727
Other (973 ) 973
Adjusted EBITDA $ 58,821 $ 197,132 (138,311 ) $ 125,647 $ 359,800 (234,153 )





(Unaudited, dollars and shares in thousands, except per share amounts)

(Certain amounts shown net of tax, as applicable)

Three months ended Six months ended
September 30,
October 1,
September 30,
October 1,
Net income $ 45,669 $ 144,092 $ 96,938 $ 261,243
Transaction costs 1,555 1,555 252
Other (727 )
Adjusted net income attributable to the
Company’s common shareholders
$ 47,224 $ 144,092 $ 98,493 $ 260,768
Adjusted basic net income per share $ 0.83 $ 2.53 $ 1.72 $ 4.58
Adjusted diluted net income per share $ 0.82 $ 2.51 $ 1.71 $ 4.55
Average basic shares outstanding 57,232 56,956 57,224 56,933
Average diluted shares outstanding 57,724 57,406 57,695 57,364


Part III – Additional Information via Linked Reports with Analysis












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Ironically, Skyline Champion’s own investor pitch-deck provides ample evidence for manufactured housing industry underperformance. That same pitch-deck further provides evidence that Mergers and Acquisitions are a key part of their business model. What is there in such revelations that Birch and Williams miss? Bear in mind, that they are mere stand-ins who voluntarily raised their hands in defense of Berkshire and MHI firms like Skyline Champion. Notice: Several of the illustrations shown in this report can be opened in many browsers to reveal a larger size. To open this picture, click the image once. When the window opens, click it again to reveal the larger size photo. Use your browsers back key to return to the article.


For a fresh, deep dive into the issues that are keeping manufactured housing underperforming during an affordable housing crisis, grab your favorite beverage, a snack, and wade into the report linked below.




Part IV- is our Daily Business News on MHProNews stock market recap which features our business-daily at-a-glance update of over 2 dozen manufactured housing industry stocks.

This segment of the Daily Business News on MHProNews is the recap of yesterday evening’s market report, so that investors can see at glance the type of topics may have influenced other investors. Thus, our format includes our signature left (CNN Business) and right (Newsmax) ‘market moving’ headlines.

The macro market move graphics below provide context and comparisons for those invested in or tracking manufactured housing connected equities. Meaning, you can see ‘at a glance’ how manufactured housing connected firms do compared to other segments of the broader equities market.

In minutes a day readers can get a good sense of significant or major events while keeping up with the trends that are impacting manufactured housing connected investing.


Reminder: several of the graphics on MHProNews can be opened into a larger size. For instance: click the image and follow the prompts in your browser or device to OPEN In a New Window. Then, in several browsers/devices you can click the image and increase the size. Use the ‘x out’ (close window) escape or back key to return.


Headlines from left-of-center CNN Business – from the evening of 11.15.2023

  • Brendan McDermid/Reuters
  • Americans are getting ‘ripped off’ by big banks, Robinhood CEO says
  • An employee checks packaged leafy greens before they are boxed at a Bowery farm in Nottingham, Maryland on April 14, 2023. – Bowery Farming operates three commercial farms and is the largest vertical-farming company in the United States, manipulating light, humidity, temperature, and other conditions to grow produce. The systems are designed to produce a sanitary crop, so there is little risk of contamination from bacteria like E. Coli. These huge farms grow produce in nutrient-rich water, not the healthy soil that many people believe is at the heart of both deliciousness and nutrition and they can consume vast amounts of electricity.
  • Maryland has the lowest unemployment rate in American history, at just 1.6%
  • Facebook, WhatsApp, Messenger and Instagram icons displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on April 6, 2022.
  • Meta is now allowing 2020 election denialism in political ads
  • House lawmakers press Apple CEO on reports Jon Stewart’s show was canceled over China concerns
  • BEIJING, CHINA – NOVEMBER 15: A woman makes a video call with a friend as she waits at an intersection to cross during rush hour on November 15, 2023 in Beijing, China. Chinas President Xi Jinping is expected to meet U.S. President Joe Biden Wednesday during his visit to San Francisco for the APEC summit, where Chinas economy is expected to top the agenda for the leader of the worlds second largest economy.
  • China says it’s built the world’s fastest internet network
  • America’s top-selling car will soon come only as a hybrid
  • Janet Yellen, US Treasury secretary, center right, and He Lifeng, China’s vice premier, center left, during a meeting in San Francisco, California, US, on Thursday, Nov. 9, 2023. Yellen said her two-day meeting with Chinese economic policy czar He Lifeng will include discussion of the increased use of security measures in commercial relations.
  • 3 key sources of tension between the US and China
  • A pedestrian carries a Sephora shopping bag in the SoHo neighborhood of New York, US on Wednesday, March 22, 2023.
  • Sephora has locked up all its perfume. It says too many people were stealing
  • Google, Meta, Snap and TikTok must face teen addiction claims, federal judge rules
  • A customer uses a self-checkout kiosk at a Wal-Mart Stores Inc. location in Burbank, California, on Tuesday, Aug. 8, 2017.
  • Walmart, Costco and other companies rethink self-checkout
  • The US Postal Service lost $6.5 billion last year. It predicted it would break even
  • UK inflation has halved this year but economic growth remains elusive
  • FDIC Chair takes heat over stunning allegations of sexual harassment and discrimination at agency
  • Snapchat users can now buy Amazon products without leaving the app
  • This key US inflation gauge fell last month by the most since 2020
  • US retail sales fell in October for the first time in seven months
  • Target has a warning about the holidays
  • Journalism professor’s six-word mantra is a blueprint for how news outlets should cover the 2024 race
  • Formula 1 Las Vegas ticket prices continue to plunge a day before the Grand Prix
  • Welcome to the (almost) red-hot bond market
  • Biggest test of Credit Suisse rescue yet to come, says UBS
  • Thanksgiving dinner will be less expensive this year. You can thank turkeys (and cooling inflation)
  • Wooing business leaders and avoiding conflict: What’s on Xi’s agenda as the Chinese leader heads to California


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mas kovach mhpronews shopping with soheyla .jp

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