☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the ~~registrant~~Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ~~registrant~~Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☒ No ☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ☑ Yes ☒ No ☐ No

Indicate by check mark whether the ~~registrant~~Registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated ~~filer,~~filers,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange ~~Act.~~Act:):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the ~~registrant~~Registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ ~~Yes ☑~~ No☒

~~Indicate the number~~Number of shares ~~outstanding of each of the registrant’s classes~~ of common stock outstanding as of ~~the latest practicable date.~~July 24, 2023: 57,133,392

See accompanying ~~notes are an integral part of the consolidated financial statements.~~

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

See accompanying ~~notes are an integral part~~Notes to Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of ~~the consolidated financial statements.~~Comprehensive Income

~~Item 1.~~

~~Financial Statements — (Continued).~~

(Unaudited, dollars in thousands)

~~For the Three-Months andSix-Months~~ ~~Ended December 3, 2017 and November 30, 2016~~

~~The accompanying notes are an integral part of the consolidated financial statements.~~

See accompanying ~~notes are an integral part of the consolidated financial statements.~~

1.Basis of Presentation and Business

Nature of Operations: Skyline Champion Corporation's (the “Company”) operations consist of manufacturing, retail, construction services, and transportation activities. At July 1, 2023, the Company operated 39 manufacturing facilities throughout the United States (“U.S.”) and five manufacturing facilities in western Canada that primarily construct factory-built, timber-framed manufactured and modular houses that are sold primarily to independent retailers, builders/developers, and manufactured home community operators. In addition to its core home building business, the Company provides construction services to install and set-up factory-built homes. The Company’s retail operations consist of 31 sales centers that sell manufactured houses to consumers across the U.S. The Company’s transportation business engages independent owners/drivers to transport recreational vehicles throughout the U.S. and Canada and manufactured houses in certain regions of the U.S. The Company also has a holding company located in the Netherlands.

Basis of Presentation: The accompanying unaudited ~~interim~~condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position as of December 3, 2017, in addition to the consolidated results of operations and cash flows for the three-month and~~six-month~~ ~~periods ended December 3, 2017 and November 30, 2016. Due to the seasonal nature~~ of the ~~Corporation’s business, interim results are not necessarily indicative of results for the entire year. Effective June 1, 2017, the Corporation adopted a52-53~~ week fiscal year ending on the Sunday which is nearest to the last day of May in each year. Consequently, there were 91 days in the three-month periods ended December 3, 2017 and November 30, 2016, respectively. In addition, there were 186 and 183 days in the~~six-month~~ ~~periods ended December 3, 2017 and November 30, 2016, respectively.~~

~~The unaudited interim consolidated financial statements included herein~~Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for ~~reporting~~Quarterly Reports on Form~~10-Q.~~ 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote disclosures normally ~~accompanying the annual~~included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations.

The condensed consolidated financial statements ~~have been omitted.~~include the accounts of the Company and its majority-owned subsidiaries after elimination of intercompany balances and transactions. In the opinion of management, these statements include all normal recurring adjustments necessary to fairly state the Company’s consolidated results of operations, cash flows, and financial position. The ~~audited consolidated~~Company has evaluated subsequent events after the balance sheet asdate through the date of ~~May 31, 2017, and~~ the ~~unaudited interim~~filing of this report with the SEC. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes ~~thereto~~to the audited consolidated financial statements included in the ~~Corporation’s latest annual report~~Company’s Annual Report on Form~~10-K.~~ 10-K, which was filed with the SEC on May 30, 2023 (the “Fiscal 2023 Annual Report”).

~~Recently issued accounting pronouncements~~— ~~In May 2014,~~The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the ~~Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)No. 2014-09,~~~~Revenue~~amounts reported in the condensed consolidated financial statements and the accompanying notes thereto. Actual results could differ from ~~Contracts with Customers (Topic 606)~~~~. Subsequent~~those estimates. The condensed consolidated income statements, condensed consolidated statements of comprehensive income, and condensed consolidated statements of cash flows for the interim periods are not necessarily indicative of the results of operations or cash flows for the full year.

The Company’s fiscal year is a 52- or 53-week period that ends on the Saturday nearest to March 31. The Company’s current fiscal year, “fiscal 2024,” will end on March 30, 2024 and will include 52 weeks. References to “fiscal 2023” refer to the ~~issuance~~Company’s fiscal year ended April 1, 2023. The three months ended July 1, 2023 and July 2, 2022 each included 13 weeks.

The Company’s allowance for credit losses on financial assets measured at amortized cost reflects management’s estimate of ~~ASUNo. 2014-09,~~ ~~FASB issued ASUNo. 2015-14,~~ ~~which deferred~~credit losses over the ~~effective date~~remaining expected life of ~~ASU2014-09~~ ~~by one year. In addition, FASB subsequently issued several ASU’s~~such assets, measured primarily using historical experience, as well as current economic conditions and forecasts that ~~update or clarify~~affect the ~~new rules. For a public entity, this guidance is effective~~collectability of the reported amount. Expected credit losses for ~~annual reporting periods after December 15, 2017, including interim periods within that reporting period. Early application is permitted.~~newly recognized financial assets, as well as changes to expected credit losses during the period, are recognized in earnings. Accounts receivable are reflected net of reserves of $2.8 million and $1.7 million at July 1, 2023 and April 1, 2023, respectively.

~~The core principal~~Floor plan receivables consist of ~~ASU2014-09~~ ~~is that~~$18.5 million of loans the Company purchased from an ~~entity should recognize revenue to depict~~independent financial institution in the ~~transfer~~first quarter of ~~promised goods or services to customers in an amount that reflects the consideration to~~fiscal 2024, which the ~~entity expects~~Company intends to ~~be entitled in exchange~~hold until maturity or payoff, and amounts loaned by the Company through the independent financial institution to certain independent retailers for ~~those goods or services. Using this principle,~~purchases of homes manufactured and sold by the Company, both of which are carried net of payments received and recorded at amortized cost. These loans are serviced by the financial institution for which we pay a ~~comprehensive framework was established for determining how much revenue to recognize and when it should be recognized. To be consistent with this core principle, an entity is required to apply~~servicing fee. Upon execution of the ~~following five-step approach:~~

~~Identify~~financing arrangement, the ~~contract(s) with a customer;~~

~~Identify each performance obligation in~~loans are generally payable at the ~~contract;~~

~~Determine the transaction price;~~

~~Allocate the transaction price to each performance obligation; and~~

~~Recognize revenue when or as each performance obligation is satisfied.~~

~~The Corporation’s revenue comes substantially from~~earlier of the sale of ~~manufactured housing, modular housing~~the underlying home or two years from the origination date. At July 1, 2023, Floor Plan Receivables are included in Other Current Assets and ~~park models, along~~Other Noncurrent Assets in the Condensed Consolidated Balance Sheets.

The floor plan receivables are collateralized by the related homes, mitigating loss exposure. The Company and the financial institution evaluate the credit worthiness of each independent retailer prior to credit approval, including reviewing the independent retailer’s payment history, financial condition, and overall economic environment. We evaluate the risk of credit loss in aggregate on existing loans with ~~freight billed~~similar terms, based on historic experience and current economic conditions, as well as individual retailers with past due balances or other indications of heightened credit risk. The allowance for credit losses related to ~~customers, parts sold~~floor plan receivables was not material as of July 1, 2023. Loans are considered past due if any required interest or curtailment payment remains unpaid 30 days after the due date. Receivables are placed on non-performing status if any interest or installment payments are past due over 90 days. Loans are placed on nonaccrual status when interest payments are past due over 90 days. At July 1, 2023, there were no floor plan receivables on nonaccrual status and ~~aftermarket services.~~the weighted-average age of the floor plan receivables was nine months.

~~Item 1.~~ ~~Financial Statements — (Continued).~~

Skyline Champion Corporation ~~and Subsidiary Companies~~

Notes to Condensed Consolidated Financial Statements ~~(Unaudited)~~ —~~(Continued)~~

- Continued

~~NOTE 1 Basis of Presentation~~—~~(Continued).~~

~~Recently issued accounting pronouncements~~—~~(continued)~~ ~~The Corporation~~Interest income from floor plan receivables is ~~currently evaluating how the adoption of ASU2014-09~~ ~~will impact its financial position~~recognized on an accrual basis and result of operations by applying the five-step approach to each revenue stream. At this time, material changes resulting from this adoption are not anticipated with the modified retrospective method being utilized.

~~The Corporation, however, does expect to greatly increase the amount of required disclosures, including but not limited to:~~

~~Disaggregation of revenue~~is included in ~~to categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;~~

~~The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if not otherwise separately presented or disclosed;~~

~~Revenue recognized~~Interest Income in the ~~reporting period that~~accompanying Condensed Consolidated Income Statements. Interest income for the three months ended July 1, 2023 was ~~included in~~$0.3 million. There were no floor plan receivables as of July 2, 2022 or interest income for the ~~contract liability balance at~~three months then ended.

In May 2022, the ~~beginning of~~Company acquired certain operating assets from Manis Custom Builders, Inc. ("Manis"). In July 2022, the ~~period;~~

~~Information about performance obligations in contracts with customers; and~~

~~Judgements that significantly affect the determination of the amount and timing of revenue~~Company acquired 12 Factory Expo retail sales centers from ~~contracts with customers, including the timing of satisfaction of performance obligation, and the transaction~~Alta Cima Corporation. The purchase price and net assets acquired for both transactions were not material to the ~~amounts allocation~~accompanying condensed consolidated financial statements.

There were no accounting standards recently issued that are expected to ~~performance obligations.~~

~~NOTE 2 Inventories~~

~~Total inventories consist of the following:~~

   December 3, 2017    May 31, 2017
   (Unaudited)
   (Dollars in thousands)
Raw materials
   $ 8,206    $ 7,734
Work in process
   3,807    4,030
Finished goods
   916    469




   $ 12,929    $ 12,233

~~NOTE 3 Other Assets~~

Other assets consist primarily of the cash surrender value of life insurance policies which totaled $7,129,000 and $7,093,000 at December 3, 2017 and May 31, 2017, respectively. Subsequent to December 3, 2017, life insurance policies with cash surrender value of approximately $2,546,000 were cancelled. Proceeds from the cash surrender value were used to repay all outstanding life insurance loans.

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 4 Warranty~~

~~A reconciliation of accrued warranty is as follows:~~

   Six-Months Ended
   December 3, 2017    November 30, 2016
   (Unaudited)
   (Dollars in thousands)
Balance at the beginning of the period
   $ 7,557    $ 7,317
Accruals for warranties
   3,030    3,842
Settlements made during the period
   (3,871 )    (3,280 )




Balance at the end of the period
   6,716    7,879
Non-current balance
   2,800    2,500




Accrued warranty
   $ 3,916    $ 5,379

~~NOTE 5 Life Insurance Loans~~

Life insurance loans have no fixed repayment schedule, and have interest rates ranging from 4.2 percent to 4.8 percent. The weighted average interest rate is 4.5 percent. In the second quarter of fiscal 2018, $1,605,000 in life insurance loans with a weighted average interest rate of 6.3 percent were repaid in order to reduce debt and corresponding interest expense. Subsequent to December 3, 2017, all remaining loan balances were repaid as referenced in Note 3.

~~NOTE 6 Income Taxes~~

At December 3, 2017, the Corporation’s gross deferred tax assets of approximately $46.7 million consist of approximately $32.4 million in federal net operating loss and tax credit carryforwards, $7.2 million in state net operating loss carryforwards and $7.1 million resulting from temporary differences between financial and tax reporting. The federal net operating loss and tax credit carryforwards have a ~~life expectancy of between eleven and eighteen years. The state net operating loss carryforwards have a life expectancy, depending~~material impact on the state where a loss was incurred, between one and twenty years. The Corporation has recorded a full valuation allowance against this asset. If the Corporation, after considering future negative and positive evidence regarding the realization of deferred tax assets, determines that a lesser valuation allowance is warranted, it would record a reduction to income tax expense and the valuation allowance in the period of determination. The Corporation is currently evaluating the new tax law that was enacted on December 22, 2017 and its impact on future estimates of the valuation of the Corporation’s deferred income taxes.

The Corporation had no federal and state income tax benefit or expense for the quarters ended December 3, 2017 and November 30, 2016. For the first half of fiscal 2018, the Corporation reported the utilization of previously fully-reserved federal net operating loss carryforwards of $1,582,000 and state operating loss carryforwards of $326,000 and released corresponding amounts of the valuation allowance to offset federal and state income tax expense.

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 7 Commitments and Contingencies~~

The Corporation was contingently liable at December 3, 2017 and May 31, 2017, under repurchase agreements with certain financial institutions providing inventory financing for dealers of its products. Under these arrangements, which are customary in the manufactured housing and park model industries, the Corporation agrees to repurchase units in the event of default by the dealer at declining prices over the term of the agreement. The period to potentially repurchase units is between 12 to 24 months. The maximum repurchase liability is the total amount that would be paid upon the default of the Corporation’s independent dealers.

The maximum potential repurchase liability, without reduction for the resale value of the repurchased units, was approximately $26 million at December 3, 2017 and $30 million at May 31, 2017. As a result of the Corporation’s favorable experience regarding repurchased units, which is largely due to the strength of dealers selling the Corporation’s products, the Corporation maintained at December 3, 2017 and May 31, 2017, a $100,000 loss reserve that is a component of other accrued liabilities. The risk of loss under these agreements is spread over many dealers and financial institutions. The loss, if any, under these agreements is the difference between the repurchase cost and the resale value of the units. The Corporation estimates the fair value of this commitment considering both the contingent losses and the value of the guarantee. This amount has historically been insignificant. The Corporation believes that any potential loss under the agreements in effect at December 3, 2017 will not be material to itsCompany’s financial position or results of operations. ~~There~~

2.Inventories, net

The components of inventory, net of reserves for obsolete inventory, were as follows:


(Dollars in thousands)	July 1, 2023		April 1, 2023
Raw materials	$	95,137	$	100,379
Work in process		24,715		23,157
Finished goods and other		76,658		78,702
Total inventories, net	$	196,510	$	202,238

At July 1, 2023 and April 1, 2023, reserves for obsolete inventory were $9.1 million and $7.9 million, respectively.

3.Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation is calculated primarily on a straight-line basis, generally over the following estimated useful lives: land improvements – 3 to 10 years; buildings and improvements – 8 to 25 years; and vehicles and machinery and equipment – 3 to 8 years. Depreciation expense for the three months ended July 1, 2023 and July 2, 2022 was $4.6 million and $3.7 million, respectively.

The components of property, plant, and equipment were as follows:


(Dollars in thousands)	July 1, 2023			April 1, 2023
Land and improvements	$	42,079		$	41,749
Buildings and improvements		123,799			119,226
Machinery and equipment		96,094			91,007
Construction in progress		31,896			30,010
Property, plant, and equipment, at cost		293,868			281,992
Less: accumulated depreciation		(109,609	)		(104,867	)
Property, plant, and equipment, net	$	184,259		$	177,125

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements - Continued

4.Goodwill, Intangible Assets, and Cloud Computing Arrangements

Goodwill

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. At both July 1, 2023 and April 1, 2023, the Company had goodwill of $196.6 million. At July 1, 2023, there were no ~~obligations or incurred~~ accumulated impairment losses related to goodwill.

Intangible Assets

The components of amortizable intangible assets were as follows:


(Dollars in thousands)	July 1, 2023									April 1, 2023
	Customer Relationships & Other			Trade Names			Total			Customer Relationships & Other			Trade Names			Total
Gross carrying amount	$	66,129		$	21,543		$	87,672		$	66,013		$	21,497		$	87,510
Accumulated amortization		(34,702	)		(10,587	)		(45,289	)		(32,103	)		(10,064	)		(42,167	)
Amortizable intangibles, net	$	31,427		$	10,956		$	42,383		$	33,910		$	11,433		$	45,343

During the three months ended July 1, 2023 and July 2, 2022, amortization of intangible assets was $3.0 million and $1.9 million, respectively.

Cloud Computing Arrangements

The Company capitalizes costs associated with the development of cloud computing arrangements in a manner consistent with internally developed software. At July 1, 2023 and April 1, 2023, the Company had capitalized cloud computing costs, net ~~losses from repurchased units for thesix-month~~ ~~periods ended December 3, 2017~~of amortization of $24.9 million and ~~November 30, 2016.~~

~~The Corporation is a party to various pending legal proceedings~~$25.0 million, respectively. Cloud computing costs are included in other noncurrent assets in the ~~normal course~~accompanying condensed consolidated balance sheets. Amortization of ~~business. Management believes that any losses resulting from such proceedings would not have a material adverse effect on~~capitalized cloud computing costs for both the ~~Corporation’s results~~three months ended July 1, 2023 and July 2, 2022 was $0.2 million.

5.Other Current Liabilities

The components of ~~operations or financial position.~~other current liabilities were as follows:

~~The~~


(Dollars in thousands)	July 1, 2023		April 1, 2023
Customer deposits	$	64,768	$	69,285
Accrued volume rebates		25,080		25,084
Accrued warranty obligations		27,705		28,576
Accrued compensation and payroll taxes		31,172		41,422
Accrued insurance		15,973		15,075
Other		34,028		24,773
Total other current liabilities	$	198,726	$	204,215

6.Accrued Warranty Obligations

Changes in the accrued warranty obligations were as follows:


	Three months ended
(Dollars in thousands)	July 1, 2023			July 2, 2022
Balance at beginning of period	$	35,961		$	32,832
Warranty expense		12,856			11,921
Cash warranty payments		(13,727	)		(11,598	)
Balance at end of period		35,090			33,155
Less: noncurrent portion in other long-term liabilities		(7,385	)		(7,026	)
Total current portion	$	27,705		$	26,129

7.Debt

Long-term debt consisted of insurance coverage and self-insurance for certain items, including workers’ compensation and group health benefits. Liabilities for workers’ compensation are recognized for estimated future medical costs and indemnity costs. Liabilities for group health benefits are recognized for claims incurred but not paid. Insurance reserves are estimated based upon a combination of historical data and actuarial information. Actual results could differ from these estimates.the following:

~~NOTE 8 Secured Revolving Credit Facility~~


(Dollars in thousands)	July 1, 2023		April 1, 2023
Obligations under industrial revenue bonds due 2029	$	12,430	$	12,430
Revolving credit facility maturing in 2026		—		—
Total long-term debt	$	12,430	$	12,430

On ~~March 20, 2015,~~July 7, 2021, the ~~Corporation (“Borrower(s)”)~~Company entered into an Amended and Restated Credit Agreement with a ~~Loan and Security Agreement (the “Loan Agreement”) with First Business Capital Corp. (“First Business Capital”). Under the Loan Agreement, First Business Capital provided~~syndicate of banks that provides for a ~~secured~~ revolving credit facility ~~to the Borrowers for a term~~ of ~~three years, renewable on an annual basis thereafter with each renewal for a successiveone-year~~ ~~term. The Corporation was able to obtain loan advances~~ up to $200.0 million, including a ~~maximum~~$45.0 million letter of ~~$10,000,000~~credit sub-facility ("Amended Credit Agreement"). The Amended Credit Agreement replaced the Company's previously existing $100.0 million revolving credit facility. The Amended Credit Agreement allows the Company to draw down, repay and re-draw loans on the available facility during the term, subject to certain ~~collateral-obligation ratios.~~ terms and conditions, matures in July 2026, and has no scheduled amortization.

On ~~July 21, 2017,~~May 18, 2023, the ~~Corporation terminated~~Company further amended the ~~Loan Agreement in connection with its entry into a new~~Amended Credit Agreement, ~~with JPMorgan Chase Bank, N.A. (“Chase”) having terms more favorable~~which removed references to the ~~Corporation.~~

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation~~London Interbank Offer Rate ("LIBOR") and ~~Subsidiary Companies~~

~~Notes~~clarified language pertaining to ~~Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 8~~the Secured ~~Revolving~~Overnight Financing Rate ("SOFR") in regards to the interest rate on borrowings. The interest rate on borrowings under the Amended Credit ~~Facility~~—~~(Continued)~~

AsAgreement is based on SOFR plus a SOFR adjustment, plus an interest rate spread. The interest rate spread adjusts based on the consolidated total net leverage of the ~~date~~Company from a high of ~~termination,~~1.875% when the Corporation did not have any borrowings outstanding under the Loan Agreement. In addition, the Corporation did not incur any early termination penalties in connection with the termination of the Loan Agreement.

As previously referenced, the Corporation (the “Loan Parties,” and Skyline Corporation and Skyline Homes, Inc., the “Borrowers” and each a “Borrower”) entered into a Credit Agreement (the “Agreement”) with Chase and other ancillary agreements and documents, including a Security Agreement and Patent and Trademark Security Agreement (collectively referred to along with the Agreement as the “Loan Documents”). Under the Agreement, Chase will provide a three-year revolving credit facility with loan advances to the Borrowers of up to a maximum of $10,000,000, subject to a borrowing base set forth in the Agreement (the “New Facility”). Loan advances bear interest at either 50 basis points above Chase’s floating prime rate (“CBFR”) or 150 basis points in excess of the LIBOR rate for the applicable period (the “Adjusted LIBO Rate”). Loans are secured by the Loan Parties’ assets, now owned or hereafter acquired, except for real property and any life insurance policies owned by any Borrower on the effective date of the Agreement. Interestconsolidated total net leverage ratio is payable in arrears on a monthly basis in the case of the CBFR or at the end of the applicable interest rate in the case of the Adjusted LIBO Rate, and all principal and accrued but unpaid interest is due and payable at the maturity of the New Facility. Borrowers may at any time prepay in whole or in part any loan amounts, subject to minimum amounts and breakage costs.

~~Also under the Agreement, Chase agreed to issue letters of credit for the account of the Borrowers not to exceed $500,000. No advances have yet been made in connection with such letters of credit.~~

As part of the closing of the financing, the Company paid Chase a closing fee of $25,000 plus legal and due diligence costs. The Loan Parties also agreed to pay the following fees to Chase during the term of the New Facility: (i) a commitment fee payable in arrears at a rate of .25% per annum on the average daily amount of the available revolving commitment under the New Facility during the prior calendar month; and (ii) monthly letter of credit fees payable in arrears at the applicable Adjusted LIBO Rate on the outstanding amount of letters of credit issued and outstanding during the prior month.

The Loan Documents contain covenants that limit the ability of the Loan Parties to, among other things: (i) incur other indebtedness; (ii) create or incur liens on their assets; (iii) consummate asset sales, acquisitions, or mergers; (iv) pay dividends; (v) make certain investments; (vi) enter into certain transactions with affiliates; and (vii) amend a Loan Party’s articles of incorporation or bylaws.

The Agreement also requires compliance with a financial covenant involving a fixed charge coverage ratio as set forth in the Agreement, which becomes effective when borrowing on the revolving credit facility is outstanding.

~~If the Borrowers default in their obligations under the Agreement, then the unpaid balances will bear interest at 2.0% per annum in excess of the rate that would apply in the absence of a default.~~

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 8 Secured Revolving Credit Facility~~—~~(Continued)~~

Other remedies available to Chase upon an event of default include the right to accelerate the maturity of all obligations, the right to foreclose on and otherwise repossess the collateral securing the obligations, and all other rights set forth in the Loan Documents.

The events of default under the Agreement include, but are not limited to, the following: (i) certain events of bankruptcy and insolvency; (ii) failure to make required payments; (iii) misrepresentations to Chase; (iv) failure to comply with certain covenants and agreements; (v) changes in control; and (vi) a material adverse change occurs.

~~The Corporation was in compliance as of December 3, 2017 with covenants associated with the Agreement.~~

~~NOTE 9 Stock-Based Compensation~~

In fiscal 2016, the Corporation’s Board of Directors and shareholders approved the 2015 Stock Incentive Plan (“Plan”), which allows the granting of stock options and other equity awards to directors, officers, employees, and eligible independent contractors of the Corporation and is intended to retain and reward key employees’ performance and efforts as they relate to the Corporation’s long-term objectives and strategic plan. A total of 700,000 shares of Common Stock have been reserved for issuance under the Plan. Stock option awards are granted with an exercise price equal to or greater than 2.25:1.00, to a low of 1.125% when the ~~market price~~consolidated total net leverage ratio is below 0.50:1.00. Alternatively for same day borrowings, the interest rate is based on an Alternative Base Rate ("ABR") plus an interest rate spread that ranges from a high of 0.875% to a low of 0.125% based on the ~~Corporation’s stock~~consolidated total net leverage ratio. In addition, the Company is obligated to pay an unused line fee ranging between 0.15% and 0.3% depending on the consolidated total net leverage ratio, in respect of unused commitments under the Amended Credit Agreement. At July 1, 2023 the interest rate under the Amended Credit Agreement was 6.36% and letters of credit issued under the Amended Credit Agreement totaled $34.0 million. Available borrowing capacity under the Amended Credit Agreement as of July 1, 2023 was $166.0 million.

Obligations under industrial revenue bonds are supported by letters of credit and bear interest based on a municipal bond index rate. The weighted-average interest rate at ~~the date~~July 1, 2023, including related costs and fees, was 5.61%. The industrial revenue bonds require lump-sum payments of ~~grant~~principal upon maturity in 2029 and ~~vest over a period of time as determined~~are secured by the ~~Corporation at the date~~assets of ~~grant up~~certain manufacturing facilities.

Skyline Champion Corporation

Notes to ~~the contractualten-year~~ life at which time the options expire. Restricted stock awards are priced no less than 100 percent of market price of the Corporation’s stock at the date of grant, and the awards made to date fully vest after five years. Stock options and restricted stock awards immediately vest upon the closing of change in control events (See Note 12).

~~Stock Options – The following unaudited tables summarize option activity for thesix-months~~ ~~ended December 3, 2017.~~

   Number
of
Shares    Weighted
Average
Exercise
Price    Weighted
Average
Remaining
Contractual
Term
(years)    Aggregate
Intrinsic
Value
(in
thousands)
Options outstanding at May 31, 2017
   274,000    $ 4.79    8.40    $ 128




Granted
   57,000    6.15





Options outstanding at December 3, 2017
   331,000    $ 5.03    8.19    $ 2,470








Vested and exercisable options at December 3, 2017
   90,000    $ 3.54    7.66    $ 805

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~

~~Notes to~~Condensed Consolidated Financial Statements ~~(Unaudited)~~ —~~(Continued)~~

- Continued

~~NOTE 9 Stock-Based Compensation — (Continued).~~The Amended Credit Agreement contains covenants that restrict the amount of additional debt, liens and certain payments, including equity buybacks, investments, dispositions, mergers and consolidations, among other restrictions as defined. The Company was in compliance with all covenants of the Amended Credit Agreement as of July 1, 2023.

8.Revenue Recognition

The following tables disaggregate the Company’s revenue by sales category:

   Number of
Shares    Weighted
Average
Grant-Date
Fair Value
Non-vested options at May 31, 2017
   229,000    $ 3.34
Granted
   57,000    3.86
Vested
   (45,000 )    2.55




Non-vested options at December 3, 2017
   241,000    $ 3.61




	Three months ended July 1, 2023
(Dollars in thousands)	U.S. Factory-Built Housing		Canadian Factory-Built Housing		Corporate/ Other		Total
Manufacturing and retail	$	428,785	$	26,120	$	—	$	454,905
Transportation		—		—		9,864		9,864
Total	$	428,785	$	26,120	$	9,864	$	464,769



	Three months ended July 2, 2022
(Dollars in thousands)	U.S. Factory-Built Housing		Canadian Factory-Built Housing		Corporate/ Other		Total
Manufacturing and retail	$	660,811	$	45,062	$	—	$	705,873
Commercial		270		—		—		270
Transportation		—		—		19,738		19,738
Total	$	661,081	$	45,062	$	19,738	$	725,881

9.Income Taxes

For the three months ended July 1, 2023 and July 2, 2022, the Company recorded $17.3 million and $40.4 million of income tax expense and had an effective tax rate of 25.2% and 25.7%, respectively.

The Company’s effective tax rate for the ~~second quarter~~three months ended July 1, 2023 differs from the federal statutory income tax rate of ~~fiscal 2018~~21.0% due primarily to the effect of state and ~~2017 was approximately $55,000~~local income taxes, non-deductible expenses, tax credits, and ~~$31,000, respectively. Stock-based compensation~~results in foreign jurisdictions. The Company’s effective tax rate for the ~~first half~~three months ended July 2, 2022 differs from the federal statutory income tax rate of fiscal 2018 and 2017 was approximately $105,000 and $62,000, respectively. Total unrecognized compensation expense related to stock options outstanding at December 3, 2017 was approximately $753,000 and is to be recorded over a weighted-average life of 3.15 years.

The Corporation records all stock-based payments, including grants of stock options, in the consolidated statements of operations based on their fair values at the date of grant. The Corporation currently uses the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of stock options on the date of grant using an option-pricing model is affected by stock price as well as assumptions that include expected stock price volatility over the term of the awards, expected life of the awards, risk-free interest rate, and expected dividends.

~~The fair value of the options granted during the first half of fiscal 2018 and 2017 were estimated at the date of grant using the following weighted average assumptions:~~

   2018 2017
Volatility
   65.9 % 66.0 %
Risk-free interest rate
   2.13 % 1.47 %
Expected option life in years
   7.50 7.50
Dividend yield
   0 % 0 %

~~Volatility is estimated based on historical volatility measured monthly for a time period equal~~21.0% due primarily to the ~~expected life~~effect of state and local income taxes, non-deductible expenses, tax credits, and results in foreign jurisdictions.

At July 1, 2023, the ~~option ending on the date of grant. The risk-free interest rate is determined based on observed U.S. Treasury yields in effect at the time of the grant for maturities equivalent~~Company had no unrecognized tax benefits.

10.Earnings Per Share

Basic net income per share attributable to the ~~expected life of~~Company was computed by dividing net income attributable to the ~~options. The expected option life (estimated~~Company by the average period of time the options will be outstanding) is estimated based on the expected exercise date of the options. The expected dividend yield of zero is estimated based on the dividend yield at the time of grant as adjusted for any expected changes during the life of the options.

Restricted Stock – In the first quarter of fiscal 2018 and third quarter of fiscal 2017, the Corporation issued 36,000 shares and 15,000 shares of restricted stock valued at approximately $221,000 and $216,000, respectively. No restricted stock was vested at December 3, 2017, and the~~non-vested~~ ~~shares had a weighted average grant date fair value of $8.58 per share. The value was determined using the market price of the Corporation’s common stock at the date of grant.~~

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 9 Stock-Based Compensation~~—~~(Continued)~~

The restricted stock’s value is to be expensed over a five-year vesting period using a straight-line method. Compensation expense for the second quarter and first half of fiscal 2018 was approximately $22,000 and $40,000, respectively. Unrecognized compensation expense at December 3, 2017 was approximately $380,000.

~~NOTE 10 Earnings Per Share~~

~~Basic earnings per common share is computed based on the weighted-average~~ number of common shares outstanding during the ~~reporting~~ period. Diluted earnings per ~~common~~ share is ~~computed based on the combination of dilutive common share equivalents, comprised of shares issuable under the Corporation’s Stock Incentive Plan and the~~calculated using our weighted-average ~~number of~~outstanding common shares, ~~outstanding during the reporting period. Dilutive common share equivalents include~~including the dilutive effect of~~in-the-money~~ ~~options to purchase shares, which is calculated based on the average share price for each period using~~ stock awards as determined under the treasury stock method.

Skyline Champion Corporation

Notes to Condensed Consolidated Financial Statements - Continued

The following table sets forth the computation of basic and diluted earnings per ~~share (dollars in thousands, except per share amounts):~~common share:

   Three-Months Ended    Six-Months Ended
   December 3,
2017    November 30,
2016    December 3,
2017    November 30,
2016
   (Unaudited)
Net income (loss)
   $ 2,964    $ (595 )    $ 4,571    $ 149








Weighted average share outstanding:

Basic
   8,391,244    8,391,244    8,391,244    8,391,244
Common stock equivalents— treasury stock method
   171,655    —      139,947    121,659








Diluted
   8,562,899    8,391,244    8,531,191    8,512,903
Net income (loss) per share:

Basic
   $ .35    $ (.07 )    $ .54    $ .02








Diluted
   $ .35    $ (.07 )    $ .54    $ .02


	Three months ended
(Dollars and shares in thousands, except per share data)		July 1, 2023		July 2, 2022
Numerator:
Net income attributable to the Company's common shareholders		$	51,269	$	117,151
Denominator:
Basic weighted-average shares outstanding			57,183		56,910
Dilutive securities			475		387
Diluted weighted-average shares outstanding			57,658		57,297

Basic net income per share		$	0.90	$	2.06
Diluted net income per share		$	0.89	$	2.04

~~There were 23,417 and 139,532 anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share~~

11.Segment Information

Financial results for the ~~three-months ended December 3, 2017~~Company's reportable segments have been prepared using a management approach, which is consistent with the basis and ~~November 30, 2016, respectively. There were 46,168~~manner in which financial information is evaluated by the Company's chief operating decision maker in allocating resources and ~~8,727 anti-dilutive common stock equivalents excluded from~~in assessing performance. The Company’s chief operating decision maker, the ~~computation~~Chief Executive Officer, evaluates the performance of ~~diluted~~the Company’s segments primarily based on net sales, before elimination of inter-company shipments, earnings ~~per share~~before interest, taxes, depreciation, and amortization (“EBITDA”) and operating assets.

The Company operates in two reportable segments: (i) U.S. Factory-built Housing, which includes manufacturing and retail housing operations and (ii) Canadian Factory-built Housing. Corporate/Other includes the Company’s transportation operations, corporate costs directly incurred for ~~thesix-months~~ ~~ended December 3, 2017~~all segments and ~~November 30, 2016.~~intersegment eliminations. Segments are generally determined by geography. Segment data includes intersegment revenues and corporate office costs that are directly and exclusively incurred for each segment. Total assets for Corporate/Other primarily include cash and certain U.S. deferred tax items not specifically allocated to another segment.

~~Item 1.~~ ~~Financial Statements — (Continued).~~

Skyline Champion Corporation ~~and Subsidiary Companies~~

Notes to Condensed Consolidated Financial Statements ~~(Unaudited)~~ —~~(Continued)~~

- Continued

~~NOTE 11 Net Gain on Sale of Property, Plant and Equipment~~Selected financial information by reportable segment was as follows:


	Three months ended
(Dollars in thousands)	July 1, 2023			July 2, 2022
Net sales:
U.S. Factory-built Housing	$	428,785		$	661,081
Canadian Factory-built Housing		26,120			45,062
Corporate/Other		9,864			19,738
Consolidated net sales	$	464,769		$	725,881
Operating income:
U.S. Factory-built Housing EBITDA	$	74,233		$	161,565
Canadian Factory-built Housing EBITDA		4,764			11,327
Corporate/Other EBITDA		(12,171	)		(9,589	)
Other (income)		—			(634	)
Depreciation		(4,633	)		(3,670	)
Amortization		(2,959	)		(1,946	)
Consolidated operating income	$	59,234		$	157,053
Depreciation:
U.S. Factory-built Housing	$	4,128		$	3,037
Canadian Factory-built Housing		356			281
Corporate/Other		149			352
Consolidated depreciation	$	4,633		$	3,670
Amortization of U.S. Factory-built Housing intangible assets:	$	2,959		$	1,946
Capital expenditures:
U.S. Factory-built Housing	$	9,678		$	8,933
Canadian Factory-built Housing		466			361
Corporate/Other		197			141
Consolidated capital expenditures	$	10,341		$	9,435

(Dollars in thousands)	July 1, 2023			April 1, 2023
Total Assets:
U.S. Factory-built Housing (1)	$	691,008		$	708,573
Canadian Factory-built Housing (1)		129,233			124,673
Corporate/Other (1)		797,418			729,478
Consolidated total assets	$	1,617,659		$	1,562,724

~~On November 22, 2017,~~

(1)

Deferred tax assets for the ~~Corporation sold anon-income~~ ~~producing parcel of land located in McMinnville, Oregon. Proceeds of $1,231,000 were received, and a gain of $762,000 was recognized~~Canadian operations are reflected in the ~~second quarter.~~Canadian Factory-built Housing segment. U.S. deferred tax assets are presented in Corporate/Other because an allocation between segments is not practicable.

~~Likewise, on August 31, 2017, the Corporation sold anon-income~~ ~~producing parcel~~

12.Commitments, Contingencies, and Legal Proceedings

Repurchase Contingencies and Guarantees

The Company is contingently liable under terms of ~~land located in Elkhart, Indiana. Proceeds of $420,000 were received, and a loss of $60,000 was recognized~~repurchase agreements with lending institutions that provide wholesale floor plan financing to retailers. These arrangements, which are customary in the ~~first quarter.~~manufactured housing industry, provide for the repurchase of products sold to retailers in the event of default by the retailer on its agreement to pay the financial institution. The risk of loss from these agreements is significantly reduced by the potential resale value of any products that are subject to repurchase and is spread over numerous retailers. The repurchase price is generally determined by the original sales price of the product less contractually defined curtailment payments. Based on these repurchase agreements and our historical loss experience, we established an associated loss reserve which was $2.2 million and $2.5 million at July 1, 2023 and April 1, 2023, respectively. Excluding the resale value of the homes, the contingent repurchase obligation as of July 1, 2023 was estimated to be $333.7 million. Losses incurred on homes repurchased were immaterial during the three months ended July 1, 2023 and July 2, 2022.

~~NOTE 12 Subsequent Event~~

Skyline Champion Corporation
Notes to Condensed Consolidated Financial Statements - Continued

At July 1, 2023, the Company was contingently obligated for $34.0 million under letters of credit, consisting of $12.6 million to support long-term debt, $21.1 million to support the casualty insurance program, and $0.3 million to support bonding agreements. The ~~Exchange~~letters of credit are issued from a sub-facility of the Amended Credit Agreement. The Company was also contingently obligated for $31.2 million under surety bonds, generally to support performance on long-term construction contracts and license and service bonding requirements.

~~On January 5, 2018,~~The Company has received claims for damage related to water intrusion in homes built in one of its manufacturing facilities. The Company is investigating the ~~Corporation (“~~~~Skyline~~”cause of the damage and assessing its responsibility to remediate. While it is reasonably possible that the Company will receive future claims that could result in additional costs to repair that could be significant in the aggregate, the Company is unable to estimate the number of such claims or the “~~Company~~~~”) and Champion Enterprises Holdings, LLC (“~~~~Champion Holdings~~~~”) entered into a Share Contribution & Exchange Agreement (the “~~~~Exchange Agreement~~~~”) pursuant to which~~amount or range of any potential losses associated with such claims at this time.

In the ~~two companies will combine their operations. Under~~normal course of business, the ~~Exchange Agreement, (i) Champion Holdings will contribute to Skyline all of the issued and outstanding shares of common stock of Champion Holdings’ wholly-owned operating~~Company’s former subsidiaries ~~through the contribution of all of the issued and outstanding equity interests of each of Champion Home Builders, Inc., a Delaware corporation (“~~~~CHB~~~~”), and CHB International B.V., a Dutch private limited liability company (“~~~~CIBV~~~~”) (the shares of stock of CHB and CIBV to be contributed to Skyline, the “~~~~Contributed Shares~~~~”), and (ii) in exchange for the Contributed Shares, Skyline will issue to Champion Holdings~~ that number of shares of Skyline common stock, $0.0277 par value per share, such that at the closing, Champion Holdings (or its members) will hold 84.5%, and Skyline’s shareholders will hold 15.5%, of the common stock of the combined company on a fully-diluted basis (the “~~Shares Issuance~~~~”). The contribution of the Contributed Shares by Champion Holdings to Skyline, and the Shares Issuance by Skyline to Champion Holdings, are collectively referred to herein as the “~~~~Exchange~~~~.” In connection with the closing of the Exchange, Skyline will file the Company Charter Amendment (described below) and will change its name to “Skyline Champion Corporation.”~~

~~Immediately prior to the closing of the Exchange, Skyline will amend and restate its articles of incorporation to provide for, among other things, (i) the change~~operated in the ~~name~~United Kingdom historically provided certain guarantees to two customers. Those guarantees provide contractual liability for proven construction defects up to 12 years from the date of delivery of certain products. The guarantees remain a contingent liability of the Company ~~as described above; (ii) an increase in the number of authorized shares of common stock~~which declines over time through October 2027. As of the date of this report, the Company from 15,000,000 to 115,000,000 shares; (iii) a provision stating that the number of directors shall be as specified in the Company’s bylaws; and (iv) certain other ministerial revisions to update and modernize the articles of incorporation and remove various extraneous provisions (collectively, the “~~Company Charter Amendment~~~~”).~~

~~The Exchange is expected to close as soon as practicable after the satisfaction or waiver of all the conditions to the closing in the Exchange Agreement, which is currently expected~~expects few, if any, claims to be inreported under the ~~first half~~terms of ~~2018.~~the guarantees.

~~Item 1.~~ ~~Financial Statements — (Continued).~~

~~Skyline Corporation and Subsidiary Companies~~Legal Proceedings

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

~~NOTE 12 Subsequent Event~~—~~(Continued)~~

~~Representations and Warranties; Covenants~~

~~Each of Skyline and Champion Holdings makes customary representations and warranties in the Exchange Agreement. Skyline also~~The Company has agreed to ~~various covenants~~indemnify counterparties in the ~~Exchange Agreement, including, without limitation,~~ordinary course of its business in agreements to ~~cause a special meeting of Skyline’s shareholders to be held as promptly as practicable to consider~~acquire and ~~approve the~~sell business assets and in financing arrangements. The Company ~~Charter Amendment and the Shares Issuance (the “~~~~Company Shareholder Approval Matters~~~~”), and to file a proxy statement with the Securities and Exchange Commission (“~~~~SEC~~~~”) relating to such special meeting.~~

The Exchange Agreement contains customary covenants governing the conduct of Skyline’s and Champion Holdings’ respective businesses, access to information pertaining to the parties’ businesses, and notification of certain events, among other things, between the date of the Exchange Agreement and the closing. Pursuant to the Exchange Agreement, Skyline is subject to~~customary “no-shop” restrictions~~ which restrict its ability to solicit alternative acquisition proposals from third parties and to provide information to and engage in discussions with third parties regarding alternative acquisition proposals. However, prior to receiving approval of the Company Shareholder Approval Matters by Skyline’s shareholders, Skyline may, under certain circumstances, provide information to and participate in discussions with third parties with respect to certain unsolicited alternative acquisition proposals as provided in the Exchange Agreement.

The Exchange Agreement provides that, prior to the closing of the Exchange, Skyline may declare and pay a special cash dividend to its shareholders in the aggregate amount of Skyline’s “net cash” (generally defined in the Exchange Agreement as Skyline’s aggregate cash and cash equivalents, less the aggregate amount of Skyline’s indebtedness and debt-like items, and less Skyline’s aggregate transaction expenses incurred in connection with the Exchange, each as determined as of the close of business on the last business day immediately prior to the date Skyline gives notice of the special dividend to the NYSE American), if any. If declared, Skyline must pay the special dividend at least one business day prior to the closing date.

~~Closing Conditions~~

~~Consummation of the Exchange~~ is subject to various ~~conditions, including, without limitation, (i) approval by Skyline’s shareholders~~legal proceedings and claims that arise in the ordinary course of its business. As of the date of this filing, the Company ~~Shareholder Approval Matters; (ii)~~believes the ~~receipt of all required regulatory approvals (without the imposition of any burdensome divestiture condition on the parties, as described~~ultimate liability with respect to these contingent obligations will not have, either individually or in the Exchange Agreement); (iii) the absence of any law, order, or legal injunction which prohibits the consummation of the Exchange and the absence of certain other litigation matters; (iv) the NYSE American listing application for the Company’s shares to be issued in the Shares Issuance shall have been conditionally approved; (v) the accuracy of the parties’ respective representations and warranties and the performance of their respective obligations; (vi) the absence of the occurrence ofaggregate, a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following should be read in conjunction with ~~respect to each~~Skyline Champion Corporation’s condensed consolidated financial statements and the related notes that appear in Item 1 of this Report.

Skyline Champion Corporation (the “Company”) is a leading producer of factory-built housing in the U.S. and ~~Champion Holdings, and their subsidiaries, each taken~~Canada. The Company serves as a ~~whole, between~~complete solutions provider across complementary and vertically integrated businesses including manufactured construction, company-owned retail locations, construction services, and transportation logistics services. The Company markets its homes under several nationally recognized brand names 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, and Titan Homes in the ~~date~~U.S., and Moduline and SRI Homes in western Canada. The Company operates 39 manufacturing facilities throughout the U.S. and five manufacturing facilities in western Canada that primarily construct factory-built, timber-framed, manufactured and modular houses that are sold primarily to independent retailers, builders/developers, and manufactured home community operators. The Company’s retail operations consist of 31 sales centers that sell manufactured homes to consumers across the U.S. The Company’s transportation business engages independent owners/drivers to transport manufactured homes, recreational vehicles, and other products throughout the U.S. and Canada.

Over the last several years, demand for affordable housing in the U.S. has increased. As a result, the Company focused on operational improvements to increase capacity utilization and profitability at its existing manufacturing facilities as well as executed measured expansion of its manufacturing footprint through facility and equipment investments and acquisitions. During fiscal 2023, robust demand began to slow as inflation and higher interest rates made housing less affordable. Even though demand in the housing markets has normalized, the Company continues to focus on growing in strong housing markets across the U.S. and Canada, as well as expanding products and services to provide more holistic solutions to homebuyers.

In July 2022, the Company acquired 12 Factory Expo retail sales centers from Alta Cima Corporation, which expanded the internal retail network across a broader portion of the ~~Exchange Agreement~~U.S. In May 2022, the Company acquired Manis Custom Builders, Inc. ("Manis") in order to expand its manufacturing footprint and ~~closing;~~further streamline its product offering in the Southeast U.S. In February 2021, the Company acquired ScotBilt Homes, LLC and ~~(vii) certain other customary conditions.~~related companies (collectively, "Scotbilt"), which operated two manufacturing facilities in Georgia providing affordable housing throughout Alabama, Florida, Georgia and the Carolinas. The ScotBilt acquisition complemented the Company’s prior manufacturing footprint in the attractive mid-south region.

~~Notes to Consolidated Financial Statements (Unaudited)~~ —~~(Continued)~~

The Exchange Agreement contains certain termination rights in favor of Skyline and Champion Holdings, as set forth therein. Upon the termination of the Exchange Agreement under specified circumstances, and upon Skyline entering into or closing another acquisition transaction within 12 months after termination of the Exchange Agreement, Skyline may be required to pay Champion Holdings a termination fee of $10 million. Any termination fee triggered under the Exchange Agreement will accrue upon Skyline entering into or closing another acquisition transaction within 12 months after termination, but the fee is not payable by Skyline to Champion Holdings until two business days after the date that the other acquisition closes or is terminated unless the board of directors of Skyline adversely changes its favorable recommendation of the Exchange to its shareholders and Champion Holdings terminates the Exchange Agreement as a result of such change in recommendation, in which case, a termination fee of $3 million in cash is immediately due and payable by Skyline to Champion Holdings upon such termination, and if Skyline subsequently enters into or closes another acquisition transaction within 12 months after termination, an additional $7 million cash termination fee would accrue and would become payable two business days after the date that the other acquisition closes or is terminated.

In addition to ~~the termination fee, if the Exchange Agreement is terminated by either Skyline or Champion Holdings because of Skyline’s shareholders do not approve~~those acquisitions, the Company ~~Shareholder Approval Matters, then Skyline must pay Champion Holdings $2~~is also focused on growing its U.S. manufacturing production capacity through various plant start-ups. The Company began production in a previously idled facility in Decatur, Indiana in the first quarter of fiscal 2024. In January 2021, the Company acquired two idle facilities in Pembroke, North Carolina, one of which began production in the fourth quarter of fiscal 2023. In June 2021, the Company acquired two idle facilities in Navasota, Texas and began production at one of those facilities during the fourth quarter of fiscal 2022. The Company is also in the process of opening a previously idled facility in Bartow, Florida, which is expected to begin production in fiscal 2024.

The Company's acquisitions and investments are part of a strategy to grow and diversify revenue with a focus on increasing the Company’s homebuilding presence in the U.S. as well as improving the results of operations through streamlining production of similar product categories. These acquisitions and investments are included in the Company's consolidated results for periods subsequent to their respective acquisition dates.

Since July 2020, the U.S. and Canadian housing industry demand has generally been robust. The limited availability of existing homes for sale and the broader need for newly built affordable, single-family housing has driven demand for new homes in those markets. In recent years, manufactured home construction experienced revenue growth due to a number of favorable demographic trends and demand drivers in the U.S., including underlying growth trends in key homebuyer groups, such as the population over 55 years of age, the population of first-time homebuyers, and the population of households earning less than $60,000 per year. More recently, we have seen a number of market trends pointing to increased sales of accessory dwelling units ("ADUs") and urban-to-rural migration as customers accommodate working-from-home patterns, as well as people seeking rent-to-own single-family options.

The rise in interest rates in response to inflation have impacted the demand for the Company's products in both the U.S. and Canada. In addition, many of our community customers have reduced order rates in response to excess inventory in their sales channels. As a result, the Company's backlog was $260.0 million as ~~reimbursement for fees and expenses incurred by Champion Holdings in connection with~~of July 1, 2023 compared to $1.4 billion as of July 2, 2022. Cancellation of end-consumer orders, at the ~~Exchange Agreement. Any expense reimbursement paid by Skyline will be credited against, and thereby reduce, any termination fee that may become due and payable.~~retail level, have been minimal.

For the three months ended July 1, 2023, approximately 86% of the ~~Exchange Agreement,~~Company’s U.S. manufacturing sales were generated from the ~~Exchange, and the Shares Issuance are summaries, do not purport to be complete, and are qualified in their entirety by reference to the full text~~manufacture of ~~the Exchange Agreement, and the exhibits attached thereto, copies of which are attached as Exhibits 2.1 to the Current Report onForm 8-K filed~~homes that comply with ~~Securities and Exchange Commission on January 5, 2018.~~

Established in 1951 and headquartered in Elkhart, Indiana, the Corporation designs, produces and markets manufactured housing, modular housing and park models. The Company sells its products to independent dealers, developers, campgrounds and manufactured housing communities located throughout the United States and Canada.

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued)~~.

~~Manufactured housing products are built according to standards established by~~ the U.S. Department of Housing and Urban ~~Development. Modular~~Development ("HUD") code construction standard in the U.S. Industry shipments of HUD-code homes are ~~built according~~reported on a one-month lag. According to ~~state, provincial or local building codes. Park models are built according to specifications established~~data reported by the ~~American National Standards~~Manufactured Housing Institute, HUD-code industry home shipments were 22,217 and ~~are intended~~31,893 units during the three months ended May 31, 2023 and 2022, respectively. Based on industry data, the Company’s U.S. wholesale market share of HUD code homes sold was 17.9% and 18.0%, for the three months ended May 31, 2023 and 2022, respectively. Annual HUD-code industry shipments have generally increased since calendar year 2009 when only 50,000 HUD-coded manufactured homes were shipped, the lowest level since the industry began recording statistics in 1959. While shipments of HUD-coded manufactured homes have improved modestly in recent years, manufactured housing’s most recent annual shipment levels still operate at lower levels than the long-term historical average of over 200,000 units annually. Manufactured home sales represent approximately 11% of all of U.S. single family home starts. Our market share in the U.S. total housing market was approximately 2.2% for the twelve months ended July 1, 2023.

The following table summarizes net sales for the three months ended July 1, 2023 and July 2, 2022:

Net sales for the three months ended July 1, 2023 were $464.8 million, a decrease of $261.1 million, or 36.0%, compared to ~~provide temporary living accommodations~~the three months ended July 2, 2022. The following is a summary of the change by operating segment.

Net sales for ~~individuals seeking leisure travel~~the Company’s U.S. manufacturing and ~~outdoor recreation.~~

~~To better serve~~retail operations decreased by $232.3 million, or 35.1%, for the ~~needs of its dealers, developers, campgrounds and communities,~~three months ended July 1, 2023 compared to the ~~Corporation has eight manufacturing facilities located~~three months ended July 2, 2022. The decrease was primarily due to a 29.3% decrease in Leola, Pennsylvania, Sugarcreek, Ohio, Ocala, Florida, Lancaster, Wisconsin, Arkansas City, Kansas, San Jacinto, California, Woodland, California and McMinnville, Oregon. Manufactured and modular housing are marketed under athe number of ~~trademarks,~~homes sold during the period, as well as an 8.2% decrease in the average home selling price. The decrease in the number of homes sold was due to lower customer orders and ~~are available~~lower production volume compared to the prior-year. The average selling price decrease was due, in part, to the impact of disaster relief housing sales of $82.5 million to the Federal Emergency Management Agency ("FEMA") in the first quarter of fiscal 2023, as well as customers electing fewer and lower cost options on new homes and price decreases of certain products to respond to market dynamics. FEMA units generally have more specifications than our typical products and therefore drive a ~~variety~~higher average selling price per home. The decline in sales was partially offset by the fiscal 2023 acquisitions and plant start-up activities.

The Canadian Factory-built Housing segment net sales decreased by $18.9 million, or 42.0% for the three months ended July 1, 2023 compared to the same period in the prior fiscal year, primarily due to a 37.2% decrease in homes sold and a 7.7% decrease in average home selling price. The decrease in homes sold is due to slowing demand. We also reduced prices on certain models in order to respond to changes in demand. On a constant currency basis, net sales for the Canadian segment were unfavorably impacted by approximately $1.7 million due to fluctuations in the translation of ~~dimensions. Park models are marketed under~~ the ~~“Shore Park” trademark. Manufactured housing, modular housing and park models are sold~~Canadian dollar to ~~customers either through floor plan financing with various financial institutions, credit terms, or on a cash basis.~~the U.S. dollar during the three months ended July 1, 2023 as compared to the same period of the prior fiscal year.

~~Manufactured Housing, Modular Housing and Park Model Industry Conditions~~Corporate/Other:

~~New home~~Net sales for Corporate/Other includes the Company’s transportation business and the ~~overall housing market is subject~~elimination of intersegment sales. For the three months ended July 1, 2023, net sales decreased $9.9 million, or 50.0%, primarily attributable to ~~seasonal swings. Typically,~~ the ~~demand~~decrease in recreational vehicle shipments.

The following table summarizes gross profit for ~~our primary product, single family housing, is highest in~~ the ~~spring~~three months ended July 1, 2023 and ~~summer months and like the general housing market is lower in the winter months. Likewise, the production and sale~~July 2, 2022:

Gross profit as a percent of manufactured housing, modular housing and park models can be affected by winter weather conditions at the Corporation’s northern plants. Demand for park models, used primarily for vacation and retirement living often offsets slower single-family homes sales during the ~~winter months.~~three months ended July 1, 2023 was 27.9% compared to 31.6% during the three months ended July 2, 2022. The following is a summary of the change by operating segment.

Gross profit for the ~~overall demand for new homes is rising, our industry’s products still do not enjoy~~U.S. Factory-built Housing segment decreased by $91.2 million, or 43.5%, during the ~~favorable financing options afforded conventional site built homes. Industry trade associations at~~three months ended July 1, 2023 compared to the state and national level are working to improve legislation to make available more favorable financing options for affordable home buyers. Government Sponsored Enterprises’ Federal National Mortgage Association and Federal Home Loan Mortgage Corporation recently released their “Underserved Markets Plan” that describes specifically their three-year plan to meet the “Duty to Serve” obligations as outlinedsame period in the ~~Federal Housing Enterprises Financial Safety and Soundness Act~~prior fiscal year. Gross profit was 27.6% as a percent of ~~1992, as further amended by~~segment net sales for the Housing and Economic Recovery Act of 2008. The creation and expansion of a secondary chattel loan market could have a positive effect on the demand for affordable manufactured housing as more favorable finance options are made available.

Sales of manufactured housing, modular housing and park models are affected by the strength of the U.S. economy, interest rate and employment levels, consumer confidence and the availability of wholesale and retail financing. Recent trends regarding calendar year unit shipments of the Corporation’s products and their respective industries are as follows:

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Manufactured Housing, Modular Housing and Park Model Industry Conditions — (Continued)~~

~~The Corporation experienced the following results during the second quarter of fiscal 2018:~~

~~The Corporation experienced the following results during the first half of fiscal 2018:~~

~~Operating income~~

Selling, general, and administrative expenses include foreign currency transaction gains and losses, equity compensation, and intangible amortization expense. The following table summarizes selling, general, and administrative expenses for the three months ended July 1, 2023 and July 2, 2022:


	Three months ended
(Dollars in thousands)	July 1, 2023			July 2, 2022			$ Change			% Change
Selling, general, and administrative expenses:
U.S. Factory-built Housing	$	51,279		$	53,054		$	(1,775	)		(3.3	%)
Canadian Factory-built Housing		2,620			3,749			(1,129	)		(30.1	%)
Corporate/Other		16,540			15,479			1,061			6.9	%
Total selling, general, and administrative expenses	$	70,439		$	72,282		$	(1,843	)		(2.5	%)
Selling, general, and administrative expense as a percent of net sales		15.2	%		10.0	%

Selling, general, and administrative expenses were $70.4 million for the three months ended July 1, 2023, a decrease of $1.8 million, or 2.5%, compared to the same period in the prior fiscal ~~2018 was $4,755,000~~year. The following is a summary of the change by operating segment.

U.S. Factory-built Housing:

Selling, general, and administrative expenses for the U.S. Factory-built Housing segment decreased $1.8 million, or 3.3%, during the three months ended July 1, 2023 as compared to ~~operating income~~the same period in the prior fiscal year. Selling, general, and administrative expenses, as a percent of ~~$321,000~~segment net sales increased to 12.0% for ~~fiscal 2017. Current year operating income includes a $702,000 net gain on~~ the ~~sale of property, plant and equipment. Prior year’s operating income included a $2,517,000 loss, excluding corporate overhead allocation, attributable to the Elkhart and Mansfield facilities.~~

~~On March 20, 2015,~~Selling, general, and administrative expenses for the ~~Corporation (“Borrower(s)”) entered into a Loan and Security Agreement (the “Loan Agreement”) with First Business Capital Corp. (“First Business Capital”). Under~~Canadian Factory-built Housing segment decreased $1.1 million, or 30.1%, for the ~~Loan Agreement, First Business Capital provided a secured revolving credit facility~~three months ended July 1, 2023 when compared to the ~~Borrowers for a term of three years, renewable on an annual basis thereafter with each renewal for a successiveone-year~~ term. The Corporation was able to obtain loan advances up to a maximum of $10,000,000 subject to certain collateral-obligation ratios. On July 21, 2017, the Corporation terminated the Loan Agreement in connection with its entry into a new Credit Agreement with JPMorgan Chase Bank, N.A. (“Chase”) having terms more favorable to the Corporation. Assame period of the ~~date~~prior fiscal year. Selling, general, and administrative expenses as a

percent of termination, the Corporation did not have any borrowings outstanding under the Loan Agreement. In addition, the Corporation did not incur any early termination penalties in connection with the termination of the Loan Agreement.

~~Loan advances bear interest at either 50 basis points above Chase’s floating prime rate (“CBFR”) or 150 basis points in excess of the LIBOR rate~~10.0% for the applicable period (the “Adjusted LIBO Rate”). Loans are secured by the Loan Parties’ assets, now owned or hereafter acquired, except for real property and any life insurance policies owned by any Borrower on the effective date of the Agreement. Interest is payable in arrears on a monthly basis in the case of the CBFR or at the end of the applicable interest rate in the case of the Adjusted LIBO Rate, and all principal and accrued but unpaid interest is due and payable at the maturity of the New Facility. Borrowers may at any time prepay in whole or in part any loan amounts, subjectthree months ended July 1, 2023 compared to ~~minimum amounts and breakage costs.~~

~~As part of the closing of the financing, the Company paid Chase a closing fee of $25,000 plus legal and due diligence costs. The Loan Parties also agreed to pay the following fees to Chase~~8.3% during the term of the New Facility: (i) a commitment fee payable in arrears at a rate of .25% per annum on the average daily amount of the available revolving commitment under the New Facility during the prior calendar month; and (ii) monthly letter of credit fees payable in arrears at the applicable Adjusted LIBO Rate on the outstanding amount of letters of credit issued and outstanding during the prior month.

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

If the Borrowers default in their obligations under the Agreement, then the unpaid balances will bear interest at 2.0% per annum in excess of the rate that would apply in the absence of a default. Other remedies available to Chase upon an event of default include the right to accelerate the maturity of all obligations, the right to foreclose on and otherwise repossess the collateral securing the obligations, and all other rights set forth in the Loan Documents.

~~The Corporation was in compliance as of December 3, 2017 with covenants associated with the Agreement.~~

~~On January 5, 2018, the Corporation (“~~~~Skyline~~~~” or the “~~~~Company~~~~”) and Champion Enterprises Holdings, LLC (“~~~~Champion Holdings~~~~”) entered into a Share Contribution & Exchange Agreement (the “~~~~Exchange Agreement~~”) pursuant to which the two companies will combine their operations. Under the Exchange Agreement, (i) Champion Holdings will contribute to Skyline all of the issued and outstanding shares of common stock of Champion Holdings’ wholly-owned operating subsidiaries through the contribution of all of the issued and outstanding equity interests of each of Champion Home Builders, Inc., a Delaware corporation (“~~CHB~~~~”), and CHB International B.V., a Dutch private limited liability company (“~~~~CIBV~~~~”) (the shares of stock of CHB and CIBV to be contributed to Skyline, the “~~~~Contributed Shares~~”), and (ii) in exchange for the Contributed Shares, Skyline will issue to Champion Holdings that number of shares of Skyline common stock, $0.0277 par value per share, such that at the closing, Champion Holdings (or its members) will hold 84.5%, and Skyline’s shareholders will hold 15.5%, of the common stock of the combined company on a fully-diluted basis (the “~~Shares Issuance~~~~”). The contribution of the Contributed Shares by Champion Holdings to Skyline, and the Shares Issuance by Skyline to Champion Holdings, are collectively referred to herein as the “~~~~Exchange~~~~.” In connection with the closing of the Exchange, Skyline will file the Company Charter Amendment (described below) and will change its name to “Skyline Champion Corporation.”~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

Immediately prior to the closing of the Exchange, Skyline will amend and restate its articles of incorporation to provide for, among other things, (i) the change in the name of the Company as described above; (ii) an increase in the number of authorized shares of common stock of the Company from 15,000,000 to 115,000,000 shares; (iii) a provision stating that the number of directors shall be as specified in the Company’s bylaws; and (iv) certain other ministerial revisions to update and modernize the articles of incorporation and remove various extraneous provisions (collectively, the “~~Company Charter Amendment~~”). The Exchange is expected to close as soon as practicable after the satisfaction or waiver of all the conditions to the closing in the Exchange Agreement, which is currently expected to be in the first half of 2018.

Each of Skyline and Champion Holdings makes customary representations and warranties in the Exchange Agreement. Skyline also has agreed to various covenants in the Exchange Agreement, including, without limitation, to cause a special meeting of Skyline’s shareholders to be held as promptly as practicable to consider and approve the Company Charter Amendment and the Shares Issuance (the “~~Company Shareholder Approval Matters~~~~”), and to file a proxy statement with the Securities and Exchange Commission (“~~~~SEC~~~~”) relating to such special meeting.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

Consummation of the Exchange is subject to various conditions, including, without limitation, (i) approval by Skyline’s shareholders of the Company Shareholder Approval Matters; (ii) the receipt of all required regulatory approvals (without the imposition of any burdensome divestiture condition on the parties, as described in the Exchange Agreement); (iii) the absence of any law, order, or legal injunction which prohibits the consummation of the Exchange and the absence of certain other litigation matters; (iv) the NYSE American listing application for the Company’s shares to be issued in the Shares Issuance shall have been conditionally approved; (v) the accuracy of the parties’ respective representations and warranties and the performance of their respective obligations; (vi) the absence of the occurrence of a material adverse effect with respect to each of Skyline and Champion Holdings, and their subsidiaries, each taken as a whole, between the date of the Exchange Agreement and closing; and (vii) certain other customary conditions.

In addition to the termination fee, if the Exchange Agreement is terminated by either Skyline or Champion Holdings because of Skyline’s shareholders do not approve the Company Shareholder Approval Matters, then Skyline must pay Champion Holdings $2 million as reimbursement for fees and expenses incurred by Champion Holdings in connection with the Exchange Agreement. Any expense reimbursement paid by Skyline will be credited against, and thereby reduce, any termination fee that may become due and payable.

The foregoing descriptions of the Exchange Agreement, the Exchange, and the Shares Issuance, are summaries, do not purport to be complete, and are qualified in their entirety by reference to the full text of the Exchange Agreement, and the exhibits attached thereto, copies of which are attached as Exhibits 2.1 to the Current Report on~~Form 8-K filed~~ ~~with Securities and Exchange Commission on January 5, 2018.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Results of Operations – Three-Month Period Ended December 3, 2017 Compared to Three-Month Period Ended November 30, 2016~~

Net sales decreased approximately 10.1 percent mainly due to prior period net manufactured housing sales including $8,092,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities which closed in the fourth quarter of fiscal 2017. Modular housing net sales partially offset the decrease as a result of multiple facilities experiencing increased customer demand for this product.

~~For the following three-month periods, the percentage increase or decrease in unit shipments from~~ the comparable period ~~last year are as follows:~~

~~Compared to~~of the prior year, the average net sales price for manufactured housing, modular housing and park models increased 13.0, 7.4 and 16.1 percent, respectively, primarily as a result of price increases and product sold with greater square footage and additional amenities.

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Results of Operations – Three-Month Period Ended December 3, 2017 Compared to Three-Month Period Ended November 30, 2016 — (Continued)~~

Cost of sales, in dollars, decreased primarily as a result of prior year costs including $8,966,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities that closed in the fourth quarter of fiscal ~~2017. As a percentage of net sales, cost of sales decreased primarily~~year due to ~~the adverse effect~~less absorption of fixed costs caused by lower sales. The decrease in prior year of the Elkhart and Mansfield facilities. Margins were also positively impacted by the company’s focus on higher margin, multi-section homes, and single section manufactured housing models being a smaller proportion of current year total net sales.

~~The increase in~~ selling, general, and administrative expenses is due primarily to incentive compensation which is based on sales volume and profitability.

Selling, general, and administrative expenses for Corporate/Other includes the Company’s transportation operations, corporate costs incurred for all segments, and intersegment eliminations. Selling, general, and administrative expenses for Corporate/Other increased $1.1 million, or 6.9%, during the three months ended July 1, 2023 as compared to the same period of the prior fiscal year due primarily to higher equity-based compensation.

The following table summarizes the components of interest (income) expense, net for the three months ended July 1, 2023 and July 2, 2022:

Interest income, net was $9.3 million for the three months ended July 1, 2023, compared to $0.1 million of expense in the same period of the prior fiscal year. The change was primarily due to ~~an increase in administrative salaries~~higher interest income from higher average invested cash balances, higher interest rates earned on those cash balances, and ~~wages, profit based compensation, and approximately $190,000 innon-recurring~~ ~~costs associated with~~ the merger with Champion Holdings. Administrative salaries and wages rose due to headcount additions and competitive market conditions. Profit based compensation increased due to improved financial results. Prior period expenses included $488,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities that closedrepayment of floor plan payables in the ~~fourth~~third quarter of fiscal ~~2017. As~~2023.

The following table summarizes other income for the three months ended July 1, 2023 and July 2, 2022:

During the first quarter of fiscal 2023, the Company received insurance proceeds for partial settlement of certain Champion Home Builders’ pre-bankruptcy workers' compensation claims, which was partially offset by transaction costs incurred for the acquisition of Manis.

The following table summarizes income tax expense for the three months ended July 1, 2023 and July 2, 2022:

Income tax expense for the three months ended July 1, 2023 was $17.3 million, representing an effective tax rate of 25.2%, compared to income tax expense of $40.4 million, representing an effective tax rate of 25.7% for the three months ended July 2, 2022.

The Company’s effective tax rate for the three months ended July 1, 2023 differs from the federal statutory income tax rate of 21.0% due primarily to the effect of state and local income taxes, non-deductible expenses, tax credits, and results in foreign jurisdictions. The Company’s effective tax rate for the three months ended July 2, 2022 differed from the federal statutory income tax rate of 21.0% due primarily to the effect of state and local income taxes, non-deductible expenses, tax credits, and results in foreign jurisdictions.

The following table reconciles net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA, a non-GAAP financial measure, for the three months ended July 1, 2023 and July 2, 2022:

Adjusted EBITDA for the three months ended July 1, 2023 was $66.8 million, a decrease of ~~net sales, selling and administrative expenses rose due to certain costs increasing amid declining sales.~~

~~Net gain on sale~~$95.8 million from the same period of ~~property, plant and equipment~~

~~On November 22, 2017,~~ the ~~Corporation sold anon-income~~ ~~producing parcel of land located in McMinnville, Oregon. Proceeds of $1,231,000 were received, and a gain of $762,000 was recognized in the second quarter.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Results of Operations – Three-Month Period Ended December 3, 2017 Compared to Three-Month Period Ended November 30, 2016 — (Continued)~~

~~Interest expense decreased as~~prior fiscal year. The decrease is primarily a result of lower operating income due to decreases in sales volume, average selling prices and gross margins, partially offset by lower SG&A expenses.

The Company defines Adjusted EBITDA as net income or loss plus expense or minus income: (a) the ~~repayment~~provision for income taxes; (b) interest (income) expense, net; (c) depreciation and amortization; (d) gain or loss from discontinued operations; (e) non-cash restructuring charges and impairment of ~~life insurance loans,~~assets; and (f) other non-operating income and costs, including but not limited to those costs for the acquisition and integration or disposition of businesses and idle facilities. Adjusted EBITDA is not a measure of earnings calculated in accordance with U.S. GAAP, and should not be considered an alternative to, or more meaningful than, net income or loss, net sales, operating income or earnings per share prepared on a U.S. GAAP basis. Adjusted EBITDA does not purport to represent cash flow provided by, or used in, operating activities as defined by U.S. GAAP, which is presented in the Statement of Cash Flows. In addition, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

Adjusted EBITDA is presented as a supplemental measure of the Company’s financial performance that management believes is useful to investors, because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company’s operating activities across reporting periods. Management believes Adjusted EBITDA is useful to an investor in evaluating operating performance for the following reasons: (i) Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest income and expense, taxes, depreciation and amortization and equity-based compensation, which can vary substantially from company to company depending upon accounting methods and the ~~refinancing~~book value of assets, capital structure and the method by which assets were acquired; and (ii) analysts and investors use Adjusted EBITDA as a ~~Credit Agreement with Chase.~~

~~Results~~supplemental measure to evaluate the overall operating performance of ~~Operations –Six-Month~~ ~~Period Ended December 3, 2017 Compared toSix-Month~~ ~~Period Ended November 30, 2016~~

Net sales decreased approximately 7.3 percent mainly due to prior period net manufactured housing sales including $13,293,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities which closedcompanies in the ~~fourth quarter~~industry.

Management uses Adjusted EBITDA for planning purposes, including the preparation of ~~fiscal 2017. Modular housing net sales partially offset~~internal annual operating budget and periodic forecasts: (i) in communications with the ~~decrease~~Board of Directors and investors concerning financial performance; (ii) as a ~~result of multiple facilities experiencing increased customer demand for this product. In addition, park model net sales rose~~factor in determining bonuses under certain incentive compensation programs; and (iii) as a ~~result~~measure of ~~management’s continuing initiative~~operating performance used to ~~increase this product’s exposure~~determine the ability to provide cash flows to support investments in capital assets, acquisitions and working capital requirements for operating expansion.

Although orders from customers can be canceled at ~~substantially all~~any time without penalty, and unfilled orders are not necessarily an indication of future business, the ~~Corporation’s facilities.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Results of Operations –Six-Month~~ ~~Period Ended December 3, 2017 Compared~~Company’s unfilled U.S. and Canadian manufacturing orders at July 1, 2023 totaled $260.0 million compared to~~Six-Month~~ ~~Period Ended November 30, 2016~~

~~For the followingsix-month~~ ~~periods, the percentage increase or~~ $1.4 billion at July 2, 2022. The decrease in ~~unit shipments from the comparable period last year are as follows:~~

Compared to the prior year, the average net sales price for manufactured housing, modular housing and park models increased 11.1, 5.1 and 13.6 percent, respectively, primarily as a result of price increases and product sold with greater square footage and additional amenities.

Cost of sales, in dollars, decreased primarily as a result of prior year costs including $14,847,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities that closed in the fourth quarter of fiscal 2017. As a percentage of net sales, cost of sales decreased primarilybacklog is due to the ~~adverse effect~~reduction in ~~prior year~~demand and increased capacity to manufacture homes. In addition, many of our community customers have reduced order rates in response to excess inventory in their sales channels. Cancellation of end-customer orders, at the Elkhart and Mansfield facilities. Margins were also positively impacted by the company’s focus on higher margin, multi-section homes, and single section manufactured housing models being a smaller proportion of current year total net sales.retail level, has been minimal.

The increase in selling and administrative expenses is primarily due to an increase in administrative salaries and wages, health insurance costs, profit based compensation, and approximately $190,000 in~~non-recurring~~ costs associated with the merger with Champion Holdings. Administrative salaries and wages rose due to headcount additions and competitive market conditions. Health insurance costs increased as a result of adverse claim experience and fewer employees contributing to the Corporation’s health insurance plan. Profit based compensation increased due to improved financial results.

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~Results of Operations – Six Month Period Ended December 3, 2017 Compared toSix-Month~~ ~~Period Ended November 30, 2016 — (Continued)~~

Prior period expenses included $963,000 attributable to the Elkhart, Indiana and Mansfield, Texas facilities that closed in the fourth quarter of fiscal 2017. As a percentage of net sales, selling and administrative expenses rose due to certain costs increasing amid declining sales.

~~On November 22, 2017, the Corporation sold anon-income~~ producing parcel of land located in McMinnville, Oregon. Proceeds of $1,231,000 were received, and a gain of $762,000 was recognized in the second quarter. Likewise, on August 31, 2017, the Corporation sold a~~non-income~~ ~~producing parcel of land located in Elkhart, Indiana. Proceeds of $420,000 were received, and a loss of $60,000 was recognized in the first quarter.~~

~~Interest expense primarily increased as the result ofwrite-off~~ ~~of $69,000 in debt financing costs associated with the termination of the First Business Capital Loan Agreement in July 2017.~~

The following table presents summary cash flow information for the three months ended July 1, 2023 and July 2, 2022:

The Company’s primary sources of liquidity are cash flows from operations and existing cash balances. Cash balances and cash flows from operations for the next year are expected to be adequate to cover working capital requirements, capital expenditures, and strategic initiatives and investments. The Company has an Amended Credit Agreement which provides for a $200.0 million revolving credit facility, including a $45.0 million letter of credit sub-facility. At July 1, 2023, $166.0 million was available for borrowing under the Amended Credit Agreement. The Company’s revolving credit facility includes (i) a maximum consolidated total net leverage ratio of 3.25 to 1.00, subject to an upward adjustment upon the consummation of a material acquisition, and (ii) a minimum interest coverage ratio of 3.00 to 1.00. The Company anticipates compliance with its debt covenants and projects its level of cash availability to be in excess of cash needed to operate the ~~Consolidated Statements of Cash Flows~~business for the~~six-month~~ ~~period ended December 3, 2017,~~ next year and beyond. In the event operating cash ~~increased due~~flow and existing cash balances were deemed inadequate to ~~cash~~support the Company’s liquidity needs, and one or more capital resources were to become unavailable, the Company would revise its operating strategies.

Cash provided ~~from~~by operating activities of $1,694,000, cash provided from investing activities of $814,000, and cash used in financing activities of $1,605,000. Current assets, exclusive of cash, increased primarily due to a $2,051,000 increase in Accounts receivable, $432,000 increase in Other current assets, and a $696,000 increase in Inventories. Accounts receivable rose due to increased sales in November 2017 aswas $74.9 million for the three months ended July 1, 2023 compared to ~~May 2017. Other current assets increased as a result of annual insurance premiums paid~~$47.4 million for the three months ended July 2, 2022. Although net income during the first quarter of fiscal ~~2018. Inventories increased~~2023 was higher, cash provided by operating activities was lower than the current year due to anthe significant investment in working capital items to facilitate the sales to FEMA.

Cash used in investing activities was $25.6 million for the three months ended July 1, 2023 compared to $19.0 million for the three months ended July 2, 2022. The increase in ~~homes waiting~~cash used for investing activities was related to ~~be shipped to customers at December 3, 2017 as~~the Company's investment in floor plan loans in the first quarter of fiscal 2024, net of payments received.

Cash used in financing activities was $1.0 million for the three months ended July 1, 2023 compared to ~~May 31, 2017.~~

~~Current liabilities increased primarily as a result~~cash provided by financing activities of ~~a $841,000 decrease in Accrued warranty and a $588,000 decrease in Accrued salaries and wages; offset by a $1,234,000~~$2.1 million for the three months ended July 2, 2022. The increase in ~~Accrued volume rebates. Accrued warranty declined as a result of fewer unit sales. Accrued salaries and wages decreased~~cash used in financing activities was primarily due to ~~timing~~tax payments on equity-based compensation.

For a discussion of ~~payments to employees at December 3, 2017 as compared to May 31, 2017. Accrued volume rebates rose as a result~~our critical accounting policies that management believes affect its more significant judgments and estimates used in the preparation of ~~accruals for an ongoing marketing program for manufactured housing customers that approximately begins on March 1 and approximately ends on February 28~~our Consolidated Financial Statements, see Part II, Item 7 of the ~~following year. Accruals are made monthly, and the majority of payments are made during the Corporation’s fourth fiscal quarter.~~

Capital expenditures totaled $800,000 for the first half of fiscal 2018 as compared to $787,000 for the first half of fiscal 2017. The expenditures are for building improvements, and replacing equipment that had reached its full economic useful life.

~~The Corporation was in compliance as of December 3, 2017 with credit agreement covenants associated with the Secured Revolving Credit Facility with Chase.~~

~~At December 3, 2017, the Corporation had the ability to borrow approximately $3,973,000~~Fiscal 2023 Annual Report, under the ~~cash surrender value~~heading “Critical Accounting Policies.” There have been no significant changes in our significant accounting policies or critical accounting estimates discussed in the Fiscal 2023 Annual Report, other than those included in Note 1, "Basis of certain life insurance policies. Management believes sufficient liquidity exists to meet financial obligations that will occur for at least one year after the date of the filing of this periodic report.Presentation".

~~In May 2014,~~For information on the ~~Financial Accounting Standards Board (FASB)~~impact of recently issued ~~Accounting Standards Update (ASU)No. 2014-09,~~~~Revenue from Contracts with Customers (Topic 606)~~~~. Subsequent to the issuance~~accounting pronouncements, see Note 1, “Basis of ~~ASUNo. 2014-09,~~ ~~FASB issued ASUNo. 2015-14,~~ ~~which deferred the effective date of ASU2014-09~~ by one year. In addition, FASB subsequently issued several ASU’s that update or clarify the new rules. For a public entity, this guidance is effective for annual reporting periods after December 15, 2017, including interim periods within that reporting period. Early application is permitted.

~~The core principal of ASU2014-09~~ is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Using this principle, a comprehensive framework was established for determining how much revenue to recognize and when it should be recognized. To be consistent with this core principle, an entity is required to apply the following five-step approach:

~~The Corporation’s revenue comes substantially from the sale of manufactured housing, modular housing and park models, along with freight billed to customers, parts sold and aftermarket services.~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Continued).~~

~~The Corporation is currently evaluating how~~” to the ~~adoption of ASU2014-09~~ will impact its financial position and result of operations by applying the five-step approach to each revenue stream. At this time, material changes resulting from this adoption are not anticipated with the modified retrospective method being utilized.

~~The Corporation, however, does expect to greatly increase the amount of required disclosures, including but not limited to:~~

~~The~~condensed consolidated financial statements included in this ~~report reflect transactions~~Report.

Some of the statements in ~~the dollar values~~this Report are not historical in ~~which they were incurred~~nature and ~~therefore, do not attempt to measure the impact of inflation. On a long-term basis, the Corporation has adjusted selling prices in reaction to changing costs due to inflation.~~

~~The preceding Management’s Discussion and Analysis contains~~are forward-looking statements within the meaning of ~~The~~the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations regarding our future liquidity, earnings, expenditures, and financial condition. These statements are ~~also made elsewhere in this report. The Corporation publishes other forward-looking statements from time to time.~~

~~Statements that are not historical in nature, including those containing~~often identified by the words ~~such as~~“will,” “could”, “should,” “anticipate,” “believe,” “expect,” “intend,” “estimate,” ~~“should,~~“hope,” ~~“expect,” “believe,” “intend,” and~~or similar ~~expressions, are intended to identify forward-looking statements. We caution to be aware of the speculative nature of “forward-looking statements.” Although these~~expressions. These statements reflect ~~the Corporation’s good faith belief based on~~management’s current ~~expectations, estimates,~~views with respect to future events and ~~projections about (among other things) the industry and the markets in which the Corporation operates, they~~ are ~~not guarantees of future performance.~~

~~Whether actual results will conform to management’s expectations and predictions is~~ subject to ~~a number of known~~risks and ~~unknown~~uncertainties. There are risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in our forward-looking statements, including regional, national and international economic, financial, public health and labor conditions, and the following:

~~Consequently, all~~If any of the ~~Corporation’s~~risks or uncertainties referred to above materializes or if any of the assumptions underlying our forward-looking statements ~~are qualified by these cautionary statements. The Corporation~~proves to be incorrect, then differences may ~~not realize the~~arise between our forward-looking statements and our actual results, anticipated by management or, even if the Corporation substantially realizes the results management anticipates, the results may not have the consequences to, or effects on, the Corporation or its business or operations that management expects. Suchand such differences may be material. ~~Except~~Investors should not place undue reliance on our forward-looking statements, which speak only as of the date of this report. We assume no obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof, except as required by ~~applicable laws,~~law.

For a discussion of the ~~Corporation does not intend to publish updates or revisions~~Company’s interest rate and foreign exchange risks, see Part II, Item 7A of ~~any forward-looking statements management makes to reflect new information, future events or otherwise.~~

~~Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures~~

~~As of December 3, 2017,~~ the ~~Corporation conducted an evaluation,~~Fiscal 2023 Annual Report, under the ~~supervision~~heading "Quantitative and ~~with the participation~~Qualitative Disclosures about Market Risk." There have been no significant changes in such risks since April 1, 2023.

Evaluation of ~~management including the Chief Executive Officer~~disclosure controls and ~~Chief Financial Officer, of the effectiveness of the design and operation of the Corporation’s~~procedures

The Company maintains disclosure controls and procedures ~~(as defined~~designed to provide reasonable assurance that information required to be disclosed in ~~Rule13a-15(e)~~ ofreports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)~~). Based upon that evaluation,~~ is recorded, processed, summarized, and reported within the ~~Chief Executive Officer~~specified time periods and ~~Chief Financial Officer concluded that~~accumulated and communicated to management, including the ~~Corporation’s~~principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures ~~are not~~pursuant to Rule 13a-15(e) of the Exchange Act at July 1, 2023. Based upon this evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective ~~for the period ended December 3, 2017~~ as ~~a result~~ of a material weakness identified in the fourth quarter of fiscal 2017 related to the accuracy and valuation of raw materials and inventories. The Corporation is currently evaluating the effectiveness of improvementsJuly 1, 2023.

Changes in internal ~~controls~~control over ~~the accuracy and valuation of raw materials inventory.~~financial reporting

~~Changes~~There have been no changes in ~~Internal Control Over Financial Reporting~~

~~No change in the Corporation’s~~our internal control over financial reporting ~~(as such term is defined in Exchange Act Rule13a-15(f))~~ ~~occurred~~ during the ~~second~~ fiscal quarter ~~ended December 3, 2017~~to which this report relates that have materially affected, or isare reasonably likely to materially affect, the ~~Corporation’s~~Company’s internal control over financial ~~reporting, except as noted above with respect~~reporting.

We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims and other matters. For additional information on legal proceedings, see Note 12 “Commitments, Contingencies and Legal Proceedings – Legal Proceedings,” to the ~~accuracy and valuation of raw materials inventory.~~condensed consolidated financial statements included in this Report.

The Corporation is a party to various pending legal proceedings in the normal course of business. Management believes that any losses resulting from such proceedings would not have a material adverse effect on the Corporation’s results of operations or financial position.

Item ~~1A of the Corporation’s Form10-K~~ ~~for the year ended May 31, 2017.~~6.EXHIBITS

~~Exhibits (Numbered according to Item 601 of RegulationS-K,~~ ~~Exhibit Table)~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Indiana		35-1038277
(State ~~or other jurisdiction~~ of ~~incorporation or organization)~~ Incorporation)		(I.R.S. Employer Identification No.)

755 West Big Beaver Road, Suite 1000
Troy, Michigan		48084
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SKY	New York Stock Exchange


~~Title of Class~~PART I – FINANCIAL INFORMATION	~~Shares Outstanding~~ ~~January 11, 2018~~
~~Common Stock, $.0277 Par Value~~		~~8,391,244~~


				~~Page No.~~
Item 1.		Financial Statements

		Condensed Consolidated Balance Sheets as of ~~December 3, 2017~~July 1, 2023 (unaudited) and ~~May 31, 2017~~April 1, 2023			1
Condensed Consolidated Income Statements (unaudited) for the three months ended July 1, 2023 and July 2, 2022		2
		Condensed Consolidated Statements of ~~Operations~~Comprehensive Income (unaudited) for the ~~three-month~~three months ended July 1, 2023 and~~six-month~~ ~~periods ended December 3, 2017 and November 30, 2016~~ July 2, 2022			3

		Condensed Consolidated Statements of Cash Flows (unaudited) for the~~six-month~~ ~~periods~~ three months ended ~~December 3, 2017~~July 1, 2023 and ~~November 30, 2016~~July 2, 2022			4
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three months ended July 1, 2023 and July 2, 2022		5
		Notes to ~~the~~Condensed Consolidated Financial Statements			5
			6

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
			14

Item 3.		Quantitative and Qualitative Disclosures About Market Risk			29
			21
~~Item 4.~~		~~Controls and Procedures~~			29

		~~PART II~~—~~OTHER INFORMATION~~

~~Item 1.~~		~~Legal Proceedings~~			30

~~Item 1A.~~		~~Risk Factors~~			30

~~Item 6.~~		~~Exhibits~~			30

~~Signatures~~Item 4. Controls and Procedures	22

PART II – OTHER INFORMATION	31

Item 1. Legal Proceedings	*~~Financial Statements.~~* 23

Item 6. Exhibits	24

SIGNATURES	25


Large accelerated filer	☒	☐	Accelerated filer	☐	☑ Non-accelerated filer	☐

~~Non-accelerated filer~~		~~☐ (Do not check if a smaller reporting company)~~	Smaller reporting company	☐	☐

			Emerging growth company	☐	☐


	December 3, 2017		May 31, 2017
	(Unaudited)
ASSETS
Current Assets:
Cash	$	12,287	$	11,384
Accounts receivable		14,802		12,751
Inventories		12,929		12,233
Workers’ compensation security deposit		371		371
Other current assets		995		563

Total Current Assets		41,384		37,302

Property, Plant and Equipment, at Cost:
Land		2,016		2,965
Buildings and improvements		35,615		35,368
Machinery and equipment		16,872		16,364

		54,503		54,697
Less accumulated depreciation		44,092		43,721

		10,411		10,976
Other Assets		7,242		7,366

Total Assets	$	59,037	$	55,644


	Three-Months Ended						Six-Months Ended
	2017			2016			2017			2016
	(Unaudited)						(Unaudited)
OPERATIONS
Net sales	$	57,765		$	64,226		$	116,227		$	125,402
Cost of sales		49,394			58,996			99,930			113,592

Gross profit		8,371			5,230			16,297			11,810
Selling and administrative expenses		6,132			5,739			12,244			11,489
Net gain on sale of property, plant and equipment		762			—			702			—

Operating income (loss)		3,001			(509	)		4,755			321
Interest expense		(37	)		(86	)		(184	)		(172	)
Income tax expense		—			—			—			—

Net income (loss)	$	2,964		$	(595	)	$	4,571		$	149

Basic and diluted income (loss) per share	$	.35		$	(.07	)	$	.54		$	.02

Weighted average number of common shares outstanding:
Basic		8,391,244			8,391,244			8,391,244			8,391,244

Diluted		8,562,899			8,391,244			8,531,191			8,512,903


	Three months ended July 1, 2023
	Common Stock
	Shares		Amount		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance at April 1, 2023		57,108	$	1,585	$	519,479	$	725,672		$	(13,735	)	$	1,233,001
Net income		—		—		—		51,269			—			51,269
Equity-based compensation		—		—		5,428		—			—			5,428
Net common stock issued under equity-based compensation plans		25		1		—		(961	)		—			(960	)
Foreign currency translation adjustments		—		—		—		—			2,183			2,183
Balance at July 1, 2023		57,133	$	1,586	$	524,907	$	775,980		$	(11,552	)	$	1,290,921


	Six-Months Ended
	December 3, 2017			November 30, 2016
	(Unaudited)
	(Dollars in thousands)
Balance at the beginning of the period	$	7,557		$	7,317
Accruals for warranties		3,030			3,842
Settlements made during the period		(3,871	)		(3,280	)

Balance at the end of the period		6,716			7,879
Non-current balance		2,800			2,500

Accrued warranty	$	3,916		$	5,379


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Options outstanding at May 31, 2017		274,000	$	4.79		8.40	$	128

Granted		57,000		6.15

Options outstanding at December 3, 2017		331,000	$	5.03		8.19	$	2,470

Vested and exercisable options at December 3, 2017		90,000	$	3.54		7.66	$	805


	Number of Shares			Weighted Average Grant-Date Fair Value
Non-vested options at May 31, 2017		229,000		$	3.34
Granted		57,000			3.86
Vested		(45,000	)		2.55

Non-vested options at December 3, 2017		241,000		$	3.61


	2018			2017
Volatility		65.9	%		66.0	%
Risk-free interest rate		2.13	%		1.47	%
Expected option life in years		7.50			7.50
Dividend yield		0	%		0	%


	Three-Months Ended					Six-Months Ended
	December 3, 2017		November 30, 2016			December 3, 2017		November 30, 2016
	(Unaudited)
Net income (loss)	$	2,964	$	(595	)	$	4,571	$	149

Weighted average share outstanding:
Basic		8,391,244		8,391,244			8,391,244		8,391,244
Common stock equivalents— treasury stock method		171,655		—			139,947		121,659

Diluted		8,562,899		8,391,244			8,531,191		8,512,903
Net income (loss) per share:
Basic	$	.35	$	(.07	)	$	.54	$	.02

Diluted	$	.35	$	(.07	)	$	.54	$	.02


Manufactured Housing	2012		2013			2014			2015			2016
Industry		54,891		60,210			64,344			70,519			81,169
Percentage Increase				9.7	%		6.9	%		9.6	%		15.1	%
Corporation		1,848		2,205			2,678			2,872			3,606
Percentage Increase				19.3	%		21.5	%		7.2	%		25.6	%


Modular Housing	2012		2013			2014			2015			2016
*Industry		13,290		14,020			13,844			13,974			13,881
Percentage Increase (Decrease)				5.5	%		(1.3	%)		0.9	%		(0.7	%)
**Corporation		382		350			477			341			334
Percentage Increase (Decrease)				(8.4	%)		36.3	%		(28.5	%)		(2.1	%)

* Domestic shipment only. Canadian industry shipments not available. ** Includes domestic and Canadian unit shipments
Park Models
Industry		2,780		3,598			3,781			3,649			3,669
Percentage Increase (Decrease)				29.4	%		5.1	%		(3.5	%)		0.5	%
Corporation		138		171			307			380			419
Percentage Increase				23.9	%		79.5	%		23.8	%		10.3	%


	December 3, 2017		Percent		November 30, 2016		Percent		Increase (Decrease)
	(Unaudited) (Dollars in thousands)
Net Sales
Manufactured Housing	$	45,975		79.6	$	54,207		84.4	$	(8,232	)
Modular Housing		8,227		14.2		6,718		10.5		1,509
Park Models		3,563		6.2		3,301		5.1		262

Total Net Sales	$	57,765		100.0	$	64,226		100.0	$	(6,461	)

Unit Shipments
Manufactured Housing		778		80.1		1,037		84.8		(259	)
Modular Housing		114		11.7		100		8.2		14
Park Models		79		8.2		85		7.0		(6	)

Total Unit Shipments		971		100.0		1,222		100.0		(251	)


	December 3, 2017 Skyline			October 31, 2017 Industry
Manufactured Housing		(25.0	%)		13.0	%
Modular Housing		14.0	%		Not Available
Park Models		(7.1	%)		10.1	%
Total		(20.5	%)		Not Available


	December 3, 2017		Percent of Net Sales		November 30, 2016		Percent of Net Sales		Decrease
	(Unaudited) (Dollars in Thousands)
Cost of Sales	$	49,394		85.5	$	58,996		91.9	$	9,602


	December 3, 2017		May 31, 2017		Increase
	(Unaudited)		May 31, 2017		Increase
	(Dollars in thousands)
Cash	$	12,287	$	11,384	$	903
Current assets, exclusive of cash		29,097		25,918		3,179
Current liabilities		18,707		18,385		322

Working capital	$	22,677	$	18,917	$	3,760


~~2.1~~ Exhibit Number		Share Contribution & Exchange Agreement dated January 5, 2018 by and among Skyline Corporation and Champion Enterprises Holdings, LLC. (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form~~8-K~~ ~~filed on January 5, 2018).~~ Description

31.1		Certification of Chief Executive Officer ~~Pursuant~~pursuant to Exchange Act rules 13a-4 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 – Rule13a-14(a)/15d-14(a).~~2002. †

31.2		Certification of Chief Financial Officer ~~Pursuant~~pursuant to Exchange Act rules 13a-4 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 – Rule13a-14(a)/15d-14(a).~~2002. †

32		Certification of ~~Periodic~~Chief Executive Officer and Chief Financial ~~Reports Pursuant~~Officer pursuant to 18 U.S.C. ~~Section 1350~~§1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †

101 (INS)		~~The following materials from~~ Inline XBRL Instance Document - the ~~Corporation’s Form10-Q~~ ~~for~~instance document does not appear in the ~~fiscal quarter ended November 30, 2016 formatted in an XBRL~~ Interactive Data ~~File: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations~~File because its XBRL tags are embedded within the Inline XBRL document.
101(SCH)		Inline XBRL Taxonomy Extension Schema Document.
101(CAL)		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101(DEF)		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101(LAB)		Inline XBRL Taxonomy Extension Label Linkbase Document.
101(PRE)		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and ~~Retained Earnings; (iii) Consolidated Statements of Cash Flows; and (iv) Notes to Consolidated Financial Statements, with detailed tagging of notes and financial statement schedules.~~contained in Exhibit 101).


Signature	Title	Date
		~~SKYLINE CORPORATION~~
/s/ Mark Yost	President and Chief Executive Officer	August 2, 2023
~~DATE: January~~ ~~11, 2018~~ Mark Yost	(Principal Executive Officer)		~~/s/ Jon S. Pilarski~~
			~~Jon S. Pilarski~~
/s/ Laurie Hough			Executive Vice President, Chief Financial Officer and Treasurer	August 2, 2023
Laurie Hough	(Principal Financial Officer)

~~DATE: January~~ ~~11, 2018~~

~~/s/ Martin R. Fransted~~

~~Martin R. Fransted~~

~~Controller~~