Nobility Homes Inc., a Florida-based company specializing in the design and production of quality, affordable manufactured homes, finished the fiscal year of 2010 with increased sales and improved losses from operation.
Sales for manufactured homes in Florida were up 25% from the previous year to $14.8 million. During the fiscal year, losses from operations were also down by about $1.4 million.
“Sales and operations for fiscal year 2010, although improved, continued to be adversely impacted by our country’s economic uncertainty and the low manufactured housing shipments in Florida, plus the overall weakness in Florida and the nation’s housing market,” said Terry Trexler, president of Nobility Homes.
Due to the number of repurchased homes the company has experienced in fiscal year 2010 and 2009 under the finance revenue sharing agreement, the company increased the reserve last year to $402,994 from $300,000 in 2009 for potential losses associated with the refurbishing and reselling of the repurchased homes.
Despite not experiencing any losses in disposing of the repossessions, the company is thinking about using aggressive pricing which could lead to some repossessions being sold for loss.
Trexler said Florida had an increase in industry shipments between November 2009 and December 2010 by 11% compared to the same time period the previous year, but he is still skeptical about the yearly results.
“Even though Nobility’s sales, gross profit as a percentage of net sales, selling, general and administrative expenses improved, the company’s low sales volume made it difficult to report meaningful results for fiscal 2010,” Trexler said. “Continued lack of retail and wholesale financing, very high unemployment and home foreclosures, slow sales of existing site-built homes, low consumer confidence and a poor economic outlook for the U.S. and Florida’s economy are just a few of the ongoing challenges the company faced. While the management has not seen decisive improvement in these challenges brought about by the tumultuous events of 2008 and 2009, some slight progress has emerged for the nation’s economy.”
Nobility is hopeful that long-term demographic trends including job formation, immigration rates rising, migration movement and consumers returning to more affordable homes will stimulate growth in the future for the Florida market.