Skyline Champion Announces Q4, Full Year Fiscal 2024 Results – RVBusiness – Breaking RV Industry News
TROY, Mich. – Skyline Champion Corporation (NYSE: SKY) announced financial results for its fourth quarter and full year ended March 30, 2024.
Fourth Quarter Fiscal 2024 Highlights (compared to Fourth Quarter Fiscal 2023)1
- Net sales increased 9.1% to $536.4 million
- U.S. homes sold increased 15.3% to 5,652
- Total backlog increased 8.7% to $315.8 million from the sequential third quarter
- Average selling price (“ASP”) per U.S. home sold decreased 3.1% to $89,800
- Gross profit margin contracted by 1,040 basis points to 18.3%
- Recorded $34.5 million of estimated remediation costs for water intrusion issues
- Adjusted gross profit margin contracted by 390 basis points to 24.8%
- Net income of $2.8 million
- Adjusted net income decreased 37.7% to $36.0 million
- Adjusted Earnings per share (“Adjusted EPS”) decreased 38.6% to $0.62
- Adjusted EBITDA decreased 30.2% to $53.1 million
- Adjusted EBITDA margin contracted by 560 basis points to 9.9%
1 . This release includes references to non-GAAP financial measures. Refer to “Non-GAAP Financial Measures” later in this release for the definitions of the non-GAAP financial measures presented and a reconciliation of these measures to their closest comparable GAAP measures.
Full Year Fiscal 2024 Highlights (compared to Full Year Fiscal 2023)
- Net sales decreased 22.3% to $2.0 billion
- Gross profit margin contracted by 740 basis points to 24.0%
- Earnings per share (“EPS”) decreased 63.9% to $2.53
- Adjusted EBITDA decreased 55.0% to $245.3 million
- Adjusted EBITDA margin contracted by 880 basis points to 12.1%
- Net cash generated by operating activities of $222.7 million during the year
“Fiscal 2024 was a transformative year for our organization, marked by strategic investments and expanding our market presence,” said Mark Yost, Skyline Champion’s President and Chief Executive Officer. “Despite facing some significant market headwinds, including the prolonged destocking by our channel partners and considerable regional variability, we made substantial progress. We initiated the integration of our strategic investments, which broaden our retail and financing capabilities. We also took decisive actions to address production efficiencies while serving the expanding builder developer demand. As we move into fiscal 2025, we are better equipped with enhanced capabilities to capitalize on growth opportunities and deliver increased value to our customers and shareholders.”
Fourth Quarter Fiscal 2024 Results
Net sales for the fourth quarter fiscal 2024 increased 9.1% to $536.4 million compared to the prior-year period. The number of U.S. homes sold in the fourth quarter fiscal 2024 increased 15.3% to 5,652 driven by net sales of $108.1 million from the Regional Homes acquisition. The ASP per U.S. home sold decreased 3.1% to $89,800 due to changes in product mix and the decrease in material surcharges compared to the prior year. The number of Canadian factory-built homes sold in the quarter decreased to 189 homes compared to 246 homes in the prior-year period due to softer demand given the higher interest rate environment. Total backlog for Skyline Champion was $315.8 million as of March 30, 2024, compared to $290.4 million at the end of the third quarter, reflecting increased order volume.
Gross profit decreased by 30.3% to $98.4 million in the fourth quarter fiscal 2024 compared to the prior-year period. Gross profit margin was 18.3% of net sales, a 1,040-basis point contraction compared to 28.7% in the fourth quarter fiscal 2023. The change in gross profit and gross profit margin reflects the impact of an estimated liability of $34.5 million recorded in the fourth quarter of fiscal 2024 related to remediation costs for water intrusion issues in homes sold from one of our plants prior to fiscal 2022. Adjusted gross profit decreased by 5.9% to $132.9 million and was 24.8% of net sales, a 390-basis point contraction compared to 28.7% in the prior year period. Adjusted gross profit margin compared to the prior year period reflects lower ASPs, a shift in product mix, the ramping of previously idled facilities, and the impact of the Regional Homes acquisition.
Selling, general, and administrative expenses (SG&A) in the fourth quarter fiscal 2024 increased to $90.6 million from $72.4 million in the same period last year. SG&A as a percentage of net sales was 16.9%, a 220-basis point increase from prior year levels. The higher SG&A expense during the quarter was primarily due to the Regional Homes acquisition.
Net income decreased by 95.2% to $2.8 million for the fourth quarter fiscal 2024 compared to the prior-year period. The decrease in net income was primarily driven by the impact of the $34.5 million water intrusion accrual, lower gross profit margins, an equity in net loss of affiliate of $7.0 million and increased SG&A spend.
Adjusted EBITDA for the fourth quarter fiscal 2024 decreased by 30.2% to $53.1 million compared to the fourth quarter fiscal 2023. Adjusted EBITDA margin contracted by 560 basis points to 9.9%.
Full Year Fiscal 2024 Financial Highlights
For fiscal 2024, net sales were $2.0 billion which represents a decrease of 22.3%, or $581.7 million, compared to fiscal 2023. The decrease in net sales was primarily driven by lower home sales and the absence of $200 million in FEMA-related sales that was recorded in the first half of fiscal 2023, partially offset by net sales from the acquisition of Regional Homes.
Gross profit decreased $332.9 million or 40.7% to $485.8 million in fiscal 2024, compared to $818.7 million in the prior year period. Gross profit margin contracted by 740 basis points to 24.0% of net sales for fiscal 2024, compared to fiscal 2023, reflecting the impact of the $34.5 million water intrusion accrual, lower home sales, the absence of FEMA-related sales, ramping of new plant operations and the acquisition of Regional Homes.
SG&A increased 3.4% to $310.6 million for fiscal 2024, compared to $300.4 million in the prior year period primarily due investments in new capacity and the Regional Homes acquisition. As a percentage of sales, SG&A increased 380 basis points to 15.3% compared to the prior year period.
Net income for fiscal 2024 was $146.7 million compared to net income of $401.8 million for fiscal 2023, a decrease of $255.1 million or 63.5% due to lower gross profit, an equity in net loss of affiliate of $7.0 million and increased SG&A spend.
Adjusted EBITDA for fiscal 2024 decreased 55.0% to $245.3 million, compared to $545.0 million for fiscal 2023. Adjusted EBITDA margin contracted 880 basis points to 12.1% in fiscal 2024.
As of March 30, 2024, Skyline Champion had $495.1 million of cash and cash equivalents, a decrease of $252.4 million as compared to prior fiscal year end, primarily the result of the acquisition of Regional Homes in fiscal 2024.
Share Repurchase Program
On May 16, 2024, Skyline Champion’s Board of Directors approved a new share repurchase program for up to $100 million of the Company’s common stock. Under this share repurchase program, the number of shares ultimately purchased, and the timing of purchases are at the discretion of management and subject to compliance with applicable laws and regulations. This share repurchase program may be amended, suspended or terminated by the Board of Directors at any time. The Company expects to fund the program from existing cash and future cash generation.
“We are excited to launch our inaugural share repurchase program, underscoring our dedication to enhancing shareholder value through our robust financial position,” said Mark Yost. “This initiative allows us to distribute capital to our shareholders, while continuing to prioritize the financial health of the organization and supporting ongoing investments and strategic growth opportunities. This balanced capital allocation strategy affirms our commitment to both returning capital to shareholders and fueling our future expansion.”
Conference Call and Webcast Information:
Skyline Champion management will host a conference call tomorrow, May 22, 2024, at 9:00 a.m. Eastern Time, to discuss Skyline Champion’s financial results and an update on current operations.
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of Skyline Champion’s website at skylinechampion.com. The online replay will be available on the same website immediately following the call.
The conference call can also be accessed by dialing (877) 407-4018 (domestic) or (201) 689-8471 (international). A telephonic replay will be available approximately two hours after the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 13745547. The replay will be available until 11:59 P.M. Eastern Time on June 5, 2024.
About Skyline Champion Corporation:
Skyline Champion Corporation (NYSE: SKY) is a leading producer of factory-built housing in North America and employs approximately 8,600 people. With more than 70 years of homebuilding experience and 48 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with an innovative portfolio of manufactured and modular homes, ADUs, park-models and modular buildings for the single and multi-family housing markets.
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 74 retail locations across the United States, and operates 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 Homes, Genesis Homes, Regional Homes, Athens Park, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, All American Homes, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, and Titan Homes in the U.S., and Moduline and SRI Homes in western Canada.
