Skyline Champion Announces 8.9% Spike in Q3 Net Sales

RV Business

TROY, Mich. – Skyline Champion Corporation (NYSE: SKY) announced financial results for its third quarter ended Dec. 31, 2022.

Third Quarter Fiscal 2023 Highlights (compared to Third Quarter Fiscal 2022)

Net sales increased 8.9% to $582.3 million
U.S. homes sold decreased 1.4% to 5,749
Total backlog decreased 34.6% to $532 million from the sequential second quarter
Average selling price (“ASP”) per U.S. home sold increased 13.5% to $94,200
Gross profit margin expanded by 50 basis points to 29.9%
Net income increased by 22.5% to $82.8 million
Earnings per share (“EPS”) increased 22.0% to $1.44
EBITDA increased 12.8% to $109.1 million
EBITDA margin expanded by 60 basis points to 18.7%
Net cash generated by operating activities of $85.5 million during the quarter

“We delivered solid sales and earnings growth in the third quarter,” said Mark Yost, Skyline Champion’s President and Chief Executive Officer. “While backlogs continue to trend toward historical levels due to retailer destocking, we saw positive demand in key channels and select markets during the quarter. The momentum in our business continues to be driven by our ability to increase engagement with a growing base of home buyers and highlights our unique offering of value-oriented home solutions. We are confident that Skyline Champion can continue to perform due to our attractive price points, differentiated product offering, and enhanced production capabilities.”

Third Quarter Fiscal 2023 Results

Net sales for the third quarter fiscal 2023 increased 8.9% to $582.3 million compared to the prior-year period. The number of U.S. homes sold in the third quarter fiscal 2023 decreased 1.4% to 5,749. Volume levels during the quarter were impacted by reduced production schedules and backlogs normalizing to meet current seasonal demand. The ASP per U.S. home sold increased 13.5% to $94,200 due to the mix of units sold and price increases to offset cost inflation. The number of Canadian factory-built homes sold in the quarter decreased to 273 homes compared to 336 homes in the prior-year period due to a shift in product mix to larger homes and reduced demand in certain markets. Total backlog for Skyline Champion was $532 million as of December 31, 2022, compared to $814 million as of October 1, 2022. Backlogs continued to decrease to more normal levels, following historical highs, due to moderating order rates as retailers continued to destock existing inventory.

Gross profit increased by 10.7% to $174.1 million in the third quarter fiscal 2023 compared to the prior-year period. Gross profit margin was 29.9% of net sales, a 50-basis point expansion compared to 29.4% in the third quarter fiscal 2022. Gross profit margin improvement is being driven by higher pricing and the increase in retail sales as a percentage of total U.S. sales, resulting from our expansion of retail operations. These increases were partially offset by lower volume and higher input costs.

Selling, general, and administrative expenses (“SG&A”) in the third quarter fiscal 2023 increased to $71.8 million from $65.8 million in the same period last year. SG&A as a percentage of net sales was 12.3%, consistent with prior year levels. The higher SG&A expense during the quarter was due to additional investments in new capacity and acquisitions as well as investments made to enhance our online customer buying experience partially offset by lower variable compensation expenses.

Net income increased by 22.5% to $82.8 million for the third quarter fiscal 2023 compared to the prior-year period. The increase in net income was driven by the increase in sales and profitability as well as net interest income versus expense last year.

EBITDA for the third quarter fiscal 2023 increased by 12.8% to $109.1 million compared to the third quarter fiscal 2022 driven by an increase in net sales and improved profitability. Adjusted EBITDA margin expanded by 60 basis points to 18.7% due to higher sales and profitability.

As of Dec. 31, 2022, Skyline Champion had $712.4 million of cash and cash equivalents, an increase of $277.0 million as compared to prior fiscal year end.

About Skyline Champion Corporation

Skyline Champion Corporation (NYSE: SKY) is the largest independent, publicly traded, factory-built housing company in North America and employs approximately 8,100 people. With more than 70 years of homebuilding experience and 42 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with a leading portfolio of manufactured and modular homes, ADUs, park-models and modular buildings for the single-family, multi-family, and hospitality sectors.

In addition to its core home building business, Skyline Champion provides construction services to install and set-up factory-built homes, operates a factory-direct retail business with 31 retail locations across the 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-known brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, Titan Homes in the U.S. and Moduline and SRI Homes in western Canada.

Source: https://rvbusiness.com/skyline-champion-announces-8-9-spike-in-q3-net-sales/