Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2021August 6, 2022
Commission File number
000-06506
 
 
NOBILITY HOMES, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Florida
(State or other jurisdiction
of incorporation or organization)
 
59-1166102
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3741 S.W. 7th Street
Ocala, Florida
34474
(Address of principal executive offices)
 
34474
(Zip Code)
(
(352)
352
)
732-5157
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the 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 was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒;☒ ;    No  ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒;☒ ;    No  ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
Non-accelerated
filer		 ☒  Smaller reporting company ☒
   Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended 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 is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐;☐ ;    No  ☒.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
 
Shares Outstanding on
Title of Class
 
Shares Outstanding
on September 10, 2021
19
, 2022
Common Stock
 
3,532,1003,370,912
 
 
 
Table of Contents
NOBILITY HOMES, INC.
INDEX
 
     
Page
Number
 
PART I.
 Financial Information  
Item 1.
 Financial Statements (Unaudited)  3
 Condensed Consolidated Balance Sheets as of July 31, 2021August 6, 2022 (Unaudited) and October 31, 2020November 6, 2021   32 
 Condensed Consolidated Statements of Income for the three and nine months ended August 6, 2022 (Unaudited) and July 31, 2021 (Unaudited) and August 1, 2020 (Unaudited)   43 
 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended August 6, 2022 (Unaudited) and July 31, 2021 (Unaudited) and August 1, 2020 (Unaudited)   54 
 Condensed Consolidated Statements of Cash Flows for the nine months ended August 6, 2022 (Unaudited) and July 31, 2021 (Unaudited) and August 1, 2020 (Unaudited)   65 
 Notes to Condensed Consolidated Financial Statements (Unaudited)   76 
Item 2.
 Management’s Discussion and Analysis of Financial Condition and Results of Operations   1210 
Item 4.
 Controls and Procedures   1614 
PART II.
 Other Information  
Item 2.
 Unregistered Sales of Equity Securities and Use of Proceeds   1715 
Item 6.
 Exhibits   1715 
Signatures
 1816 
 
21
Table of Contents
NOBILITY HOMES, INC.
Condensed Consolidated Balance Sheets
 
   July 31, 2021  October 31, 2020 
   (Unaudited)    
Assets
         
Current assets:
         
Cash and cash equivalents
  $33,720,078  $30,305,902 
Certificates of
deposit
   2,090,910   4,602,307 
Short-term investments
   562,270   358,960 
Accounts receivable—trade
   1,134,675   790,046 
Note receivable
   41,636   35,997 
Mortgage notes receivable
   22,217   20,162 
Income taxes receivable
   81,262   105,676 
Inventories
   9,428,923   9,294,677 
Pre-owned
homes, net
   678,303   441,937 
Prepaid expenses and other current assets
   1,370,339   1,014,849 
   
 
 
  
 
 
 
Total current assets
   49,130,613   46,970,513 
Property, plant and equipment, net
   6,916,778   5,142,714 
Pre-owned
homes, net
   716,582   1,077,240 
Note receivable, less current portion
   44,595   6,573 
Mortgage notes receivable, less current portion
   223,762   227,509 
Mobile home park note receivable
   72,731   —   
Other investments
   1,775,323   1,729,364 
Deferred income taxes
   0   3,598 
Operating lease right of use assets
   684,142   715,368 
Cash surrender value of life insurance
   3,929,552   3,795,902 
Other assets
   156,287   156,287 
   
 
 
  
 
 
 
Total assets
  $63,650,365  $59,825,068 
   
 
 
  
 
 
 
Liabilities and Stockholders’ Equity
         
Current liabilities:
         
Accounts payable
  $818,230  $928,095 
Accrued compensation
   441,760   670,520 
Accrued expenses and other current liabilities
   1,427,862   1,383,833 
Operating lease obligation
   33,039   24,192 
Customer deposits
   12,350,225   5,098,633 
   
 
 
  
 
 
 
Total current liabilities
   15,071,116   8,105,273 
   
 
 
  
 
 
 
Deferred income taxes
   86,413   —   
Operating lease obligation, less current portion
   752,300   778,519 
   
 
 
  
 
 
 
Total liabilities
   15,909,829   8,883,792 
   
 
 
  
 
 
 
Commitments and contingencies
   0    0  
Stockholders’ equity:
         
Preferred stock, $.10 par value, 500,000 shares authorized; NaN issued and outstanding
   0—   0—   
Common stock, $.10 par value, 10,000,000 shares authorized; 5,364,907 shares issued; 3,532,100 and
3,631,196 outstanding, respectively
   536,491   536,491 
Additional paid in capital
   10,749,843   10,694,554 
Retained earnings
   58,185,400   57,976,051 
Less treasury stock at cost, 1,832,807 shares in 2021 and 1,733,711 shares in 2020
   (21,731,198)   (18,265,820) 
   
 
 
  
 
 
 
Total stockholders’ equity
   47,740,536   50,941,276 
   
 
 
  
 
 
 
Total liabilities and stockholders’ equity
  $63,650,365  $59,825,068 
   
 
 
  
 
 
 
   August 6,
2022
(Unaudited)		  November 6,
2021		 
Assets         
Current assets:         
Cash and cash equivalents  $20,437,309  $36,126,059 
Certificates of deposit   1,946,429   2,093,015 
Short-term investments   541,132   621,928 
Accounts receivable - trade   775,596   680,228 
Note receivable   23,905   32,825 
Mortgage notes receivable   15,566   22,589 
Inventories   20,385,622   10,394,288 
Pre-owned
homes, net
   662,453   542,081 
Prepaid expenses and other current assets   2,314,540   1,821,267 
          
Total current assets   47,102,552   52,334,280 
Property, plant and equipment, net   7,569,386   6,847,780 
Pre-owned
homes, net
   —     755,394 
Note receivable, less current portion   22,243   38,895 
Mortgage notes receivable, less current portion   132,184   222,459 
Mobile home park note receivable   201,464   72,731 
Other investments   1,829,146   1,788,436 
Operating lease right of use assets   —     1,597 
Cash surrender value of life insurance   4,095,216   3,966,939 
Other assets   156,287   156,287 
          
Total assets  $61,108,478  $66,184,798 
          
Liabilities and Stockholders’ Equity         
Current liabilities:         
Accounts payable  $1,329,275  $939,964 
Accrued compensation   832,632   555,222 
Accrued expenses and other current liabilities   1,571,351   1,513,967 
Income taxes payable   156,918   89,083 
Operating lease obligation   —     1,597 
Customer deposits   11,984,065   13,671,092 
          
Total current liabilities   15,874,241   16,770,925 
Deferred income taxes   65,496   99,568 
          
Total liabilities   15,939,737   16,870,493 
          
Commitments and contingencies         
Stockholders’ equity:         
Preferred stock, $.10 par value, 500,000 shares authorized; none issued and outstanding
   —     —   
Common stock, $.10 par value, 10,000,000 shares authorized; 5,364,907 shares issued; 3,370,912 and 3,532,100 shares outstanding, respectively
   536,491   536,491 
Additional paid in capital   10,828,305   10,766,253 
Retained earnings   60,708,402   59,742,759 
Less treasury stock at cost, 1,993,995 and 1,832,807 shares, respectively   (26,904,457)   (21,731,198) 
          
Total stockholders’ equity   45,168,741   49,314,305 
          
Total liabilities and stockholders’ equity  $61,108,478  $66,184,798 
          
The accompanying notes are an integral part of these condensed consolidated financial statements
 
3
2
Table of Contents
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
 
   Three Months Ended  Nine Months Ended 
   July 31,  August 1,  July 31,  August 1, 
   2021  2020  2021  2020 
Net sales
  $11,778,120  $8,800,410  $35,592,531  $28,446,764 
Cost of sales
   (9,265,376)   (6,361,500)   (26,969,655)   (19,980,510) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Gross profit
   2,512,744   2,438,910   8,622,876   8,466,254 
Selling, general and administrative expenses
   (1,320,456)   (1,107,850)   (4,144,350)   (3,586,622) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Operating income
   1,192,288   1,331,060   4,478,526   4,879,632 
   
 
 
  
 
 
  
 
 
  
 
 
 
Other income (loss):
                 
Interest income
   62,491   53,209   145,621   239,365 
Undistributed earnings in joint venture - Majestic 21
   20,202   20,855   45,959   61,125 
Proceeds received under escrow arrangement
   75,156   64,053   121,024   336,447 
(Decrease) increase market value of equity investment
   (449)   21,475   203,310   (159,051) 
Gain on sale of assets
   —   32,041   —   32,041 
Miscellaneous
   48,169   12,910   73,434   32,504 
   
 
 
  
 
 
  
 
 
  
 
 
 
Total other income
   205,569   204,543   589,348   542,431 
   
 
 
  
 
 
  
 
 
  
 
 
 
Income before provision for income taxes
   1,397,857   1,535,603   5,067,874   5,422,063 
Income tax expense
   (347,111)   (375,465)   (1,226,425)   (1,311,780) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income
  $1,050,746  $1,160,138  $3,841,449  $4,110,283 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average number of shares outstanding:
                 
Basic
   3,599,133   3,631,089   3,621,084   3,641,048 
Diluted
   3,613,187   3,632,420   3,630,216   3,642,397 
Net income per share:
                 
Basic
  $0.29  $0.32  $1.06  $1.13 
Diluted
  $0.29  $0.32  $1.06  $1.13 
   Three Months Ended  Nine Months Ended 
   August 6,
2022		  July 31,
2021		  August 6,
2022		  July 31,
2021		 
Net sales  $13,846,698  $11,778,120  $35,300,014  $35,592,531 
Cost of sales   (9,948,638)   (9,265,376)   (25,651,808)   (26,969,655) 
                  
Gross profit   3,898,060   2,512,744   9,648,206   8,622,876 
Selling, general and administrative expenses   (1,653,200)   (1,320,456)   (4,448,349)   (4,144,350) 
                  
Operating income   2,244,860   1,192,288   5,199,857   4,478,526 
                  
Other income (loss):                 
Interest income   62,449   62,491   176,706   145,621 
Undistributed earnings in joint venture - Majestic 21   15,488   20,202   40,710   45,959 
Proceeds received under escrow arrangement   52,140   75,156   285,639   121,024 
(Decrease) increase in fair value of equity investment   (57,022)   (449)   (80,796)   203,310 
Gain on disposal of property, plant and equipment   —     —     88,936   —   
Miscellaneous   161,157   48,169   187,065   73,434 
                  
Total other income   234,212   205,569   698,260   589,348 
                  
Income before provision for income taxes   2,479,072   1,397,857   5,898,117   5,067,874 
Income tax expense   (594,313)   (347,111)   (1,399,498)   (1,226,425) 
                  
Net income   1,884,759   1,050,746   4,498,619   3,841,449 
                  
Weighted average number of shares outstanding:                 
Basic   3,370,912   3,599,133   3,460,074   3,621,084 
Diluted   3,376,711   3,613,187   3,469,769   3,630,216 
Net income per share:                 
Basic  $0.56  $0.29  $1.30  $1.06 
Diluted  $0.56  $0.29  $1.30  $1.06 
The accompanying notes are an integral part of these condensed consolidated financial statements
 
43
Table of Contents
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the three and nine months ended August 6, 2022 and July 31, 2021 and August 1, 2020
(Unaudited)
 
   
Common
Stock
Shares
  Common
Stock		   Additional
Paid-in-Capital
  Retained
Earnings		  Treasury
Stock		  Total 
Balance at November 6, 2021   3,532,100  $536,491   $10,766,253  $59,742,759  $(21,731,198)  $49,314,305 
Stock-based compensation   180   —      33,218   —     2,135   35,353 
Exercise of employee stock options   966   —      (17,452)   —     17,452   —   
Treasury stock purchase   (270)   —      —     —     (9,197)   (9,197) 
Net income   —     —      —     1,157,034   —     1,157,034 
                           
Balance at February 5, 2022   3,532,976   536,491    10,782,019   60,899,793   (21,720,808)   50,497,495 
Cash dividend   —     —      —     (3,532,976)   —     (3,532,976) 
Purchase of treasury stock   (162,300)   —      —     —     (5,186,070)   (5,186,070) 
Stock-based compensation   236   —      24,904   —     2,421   27,325 
Net income   —     —      —     1,456,826   —     1,456,826 
                           
Balance at May 7, 2022   3,370,912   536,491    10,806,923   58,823,643   (26,904,457)   43,262,600 
Stock-based compensation   —     —      21,382   —     —     21,382 
Net income   —     —      —     1,884,759   —     1,884,759 
                           
Balance at August 6, 2022  
3,370,912  $536,491   $10,828,305  $60,708,402  $(26,904,457)  $45,168,741 
                           
                 Accumulated       
                 Other       
   Common  Common   Additional   Retained  Comprehensive  Treasury    
   Stock Shares  Stock   
Paid-in-Capital
   Earnings  Income  Stock  Total 
Balance at October 31, 2020
   3,631,196  $536,491   $10,694,554   $57,976,051  $—    $(18,265,820)  $50,941,276 
Stock-based compensation
   —     —      20,521    —     —     —     20,521 
Exercise of employee stock
                               
options
   1,250   —      1,950    —     —     13,175   15,125 
Net income
   —     —      —      1,065,765   —     —     1,065,765 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at January 30, 2021
   3,632,446   536,491    10,717,025    59,041,816   —     (18,252,645)   52,042,687 
Cash dividend
   —     —      —      (3,632,100)   —     —     (3,632,100) 
Purchase of treasury stock
   (346)   —      —      —     —     (10,553)   (10,553) 
Stock-based compensation
   —     —      16,409    —     —     —     16,409 
Net income
   —     —      —      1,724,938   —     —     1,724,938 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at May 1, 2021
   3,632,100   536,491    10,733,434    57,134,654   —     (18,263,198)   50,141,381 
Purchase of treasury stock
   (100,000)   —      —      —     —     (3,468,000)   (3,468,000) 
Stock-based compensation
   —     —      16,409    —     —     —     16,409 
Net income
   —     —      —      1,050,746   —     —     1,050,746 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at July 31, 2021
   3,532,100  $536,491   $10,749,843   $58,185,400  $—    $(21,731,198)  $47,740,536 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at November 2, 2019
   3,664,070  $536,491   $10,687,662   $55,298,750  $389,164  $(17,445,752)  $49,466,315 
Adoption of ASU
2016-01
   —     —      —      389,164   (389,164)   —     —   
Adoption of ASU
2016-02
   —     —      —      (64,591)   —     —     (64,591) 
Balance at November 2, 2019
   —     —      —      —     —     —     —   
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
as adjusted
   3,664,070   536,491    10,687,662    55,623,323   —     (17,445,752)   49,401,724 
Purchase of treasury stock
   (14,400)   —      —      —     —     (345,600)   (345,600) 
Stock-based compensation
   —     —      906    —     —     —     906 
Net income
   —     —      —      1,400,141   —     —     1,400,141 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at February 1, 2020
   3,649,670   536,491    10,688,568    57,023,464   —     (17,791,352)   50,457,171 
Cash dividend
   —     —      —      (3,630,970)   —     —     (3,630,970) 
Purchase of treasury stock
   (18,700)   —      —      —     —     (476,850)   (476,850) 
Stock-based compensation
   —     —      906    —     —     —     906 
Net income
   —     —      —      1,550,004   —     —     1,550,004 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at May 4, 2020
   3,630,970   536,491    10,689,474    54,942,498   —     (18,268,202)   47,900,261 
Stock-based compensation
   226   —      4,174    —     —     2,382   6,556 
Net income
   —     —      —      1,160,138   —     —     1,160,138 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance at August 1, 2020
   3,631,196  $536,491   $10,693,648   $56,102,636  $—    $(18,265,820)  $49,066,955 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
 
   Common
Stock Shares		  Common
Stock		   Additional
Paid-in-Capital
   Retained
Earnings		  Treasury
Stock		  Total 
Balance at October 31, 2020   3,631,196  $536,491   $10,694,554   $57,976,051  $(18,265,820)  $50,941,276 
Stock-based compensation   —     —      20,521    —     —     20,521 
Exercise of employee stock options   1,250   —      1,950    —     13,175   15,125 
Net income   —     —      —      1,065,765   —     1,065,765 
                            
Balance at January 30, 2021   3,632,446   536,491    10,717,025    59,041,816   (18,252,645)   52,042,687 
Cash dividend   —     —      —      (3,632,100)   —     (3,632,100) 
Purchase of treasury stock   (346)   —      —      —     (10,553)   (10,553) 
Stock-based compensation   —     —      16,409    —     —     16,409 
Net income   —     —      —      1,724,938   —     1,724,938 
                            
Balance at May 1, 2021   3,632,100   536,491    10,733,434    57,134,654   (18,263,198)   50,141,381 
Purchase of treasury stock   (100,000)   —      —      —     (3,468,000)   (3,468,000) 
Stock-based compensation   —     —      16,409    —     —     16,409 
Net income   —     —      —      1,050,746   —     1,050,746 
                            
Balance at July 31, 2021   3,532,100  $536,491   $10,749,843   $58,185,400  $(21,731,198)  $47,740,536 
                            
The accompanying notes are an integral part of these condensed consolidated financial statements
 
5
4
Table of Contents
NOBILITY HOMES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
   Nine Months Ended 
   July 31,
2021		  August 1,
2020		 
Cash flows from operating activities:
         
Net income
  $3,841,449  $4,110,283 
Adjustments to reconcile net income to net cash provide by operating activities:
         
Depreciation
   142,224   118,179 
Deferred income taxes
   90,011   60,055 
Undistributed earnings in joint venture - Majestic 21
   (45,959)   (61,125) 
Gain on disposal of property, plant and equipment
   —   (32,041) 
(Increase) decrease in fair market value of equity investments
   (203,310)   159,051 
Stock-based compensation
   53,340   8,368 
Amortization of operating lease right of use assets
   31,226   26,862 
Decrease (increase) in:
         
Accounts receivable - trade
   (344,629)   638,480 
Inventories
   (134,246)   (20,842) 
Pre-owned
homes
   124,292   (385,597) 
Prepaid expenses and other current assets
   (355,490)   155,518 
Interest receivable
   (16,223)   (130,097) 
Income tax receivables
   24,414   —   
(Decrease) increase in:
         
Accounts payable
   (109,865)   (457,884) 
Accrued compensation
   (228,760)   (296,735) 
Accrued expenses and other current liabilities
   44,028   (883,146) 
Income taxes payable
   —   (2,016,132) 
Customer deposits
   7,251,592   69,067 
   
 
 
  
 
 
 
Net cash provided by operating activities
   10,164,094   1,062,264 
   
 
 
  
 
 
 
Cash flows from investing activities:
         
Purchase of property, plant and equipment
   (1,916,288)   (270,365) 
Purchase of certificates of deposit
   —   (20,000) 
Proceeds from certificates of deposit
   2,496,000   2,024,000 
Proceeds from disposal of property, plant and equipment
   —   33,139 
Collections on interest receivable
   31,620   87,358 
Collections on mortgage notes receivable
   1,692   1,596 
(Issuance of) collections
 
o
n
 equipment note receivable 
   (43,661)   66,218 
Issuance of mobile home park note receivable
   (72,731)   —   
Increase in cash surrender value of life insurance
   (133,650)   (144,000) 
   
 
 
  
 
 
 
Net cash provided by investing activities
   362,982   1,777,946 
   
 
 
  
 
 
 
Cash flows from financing activities:
         
Payment of cash dividend
   (3,632,100)   (3,630,970) 
Proceeds from exercise of employee stock option
   15,125   —   
Purchase of treasury stock
   (3,478,553)   (822,450) 
Reduction of operating lease obligation
   (17,372)   (9,507) 
   
 
 
  
 
 
 
Net cash used in financing activities
   (7,112,900)   (4,462,927) 
   
 
 
  
 
 
 
Increase (decrease) in cash and cash equivalents
   3,414,176   (1,622,717)
Cash and cash equivalents at beginning of year
   30,305,902   22,533,965 
   
 
 
  
 
 
 
Cash and cash equivalents at end of period
  $33,720,078  $20,911,248 
   
 
 
  
 
 
 
Supplemental disclosure of cash flows information:
         
Income taxes paid
  $1,112,000  $3,368,000 
   
 
 
  
 
 
 
   Nine Months Ended 
   August 6,
2022		  July 31,
2021		 
Cash flows from operating activities:         
Net income  $4,498,619  $3,841,449 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:         
Depreciation   129,681   142,224 
Deferred income taxes   (34,072)   90,011 
Undistributed earnings in joint venture - Majestic 21   (40,710)   (45,959) 
Gain on disposal of property, plant and equipment   (88,936)   —   
Decrease (increase) in fair market value of equity investments   80,796   (203,310) 
Stock-based compensation   84,060   53,340 
Amortization of operating lease right of use assets   1,597   31,226 
Decrease (increase) in:         
Accounts receivable - trade   (95,368)   (344,629) 
Inventories   (9,991,334)   (134,246) 
Pre-owned
homes
   635,022   124,292 
Prepaid expenses and other current assets   (493,273)   (355,490) 
Interest receivable   (2,429)   (16,223) 
Income tax receivable

   —     24,414 
(Decrease) increase in:         
Accounts payable   389,311   (109,865) 
Accrued compensation   277,410   (228,760) 
Accrued expenses and other current liabilities   57,384   44,028 
Income taxes payable   67,835   —   
Customer deposits   (1,687,027)   7,251,592 
          
Net cash (used in) provided by operating activities   (6,211,434)   10,164,094 
          
Cash flows from investing activities:         
Purchase of property, plant and equipment   (859,321)   (1,916,288) 
Purchase certificates of deposit   (1,944,000)   —   
Proceeds from certificates of deposit   2,087,936   2,496,000 
Proceeds from disposal of property, plant and equipment   96,970   —   
Collections on interest receivable   5,079   31,620 
Collections on mortgage notes receivable   97,298   1,692 
Collections (issuance of) on equipment and other notes receivable

   25,572   (43,661) 
Issuance of mobile home park note receivable   (128,733)   (72,731) 
Increase in cash surrender value of life insurance   (128,277)   (133,650) 
          
Net cash (used in) provided by investing activities   (747,476)   362,982 
          
Cash flows from financing activities:         
Payment of cash dividend   (3,532,976)   (3,632,100) 
Proceeds from exercise of employee stock option   —   15,125 
Purchase of treasury stock   (5,195,267)  (3,478,553) 
Reduction of operating lease obligation   (1,597)   (17,372) 
          
Net cash used in financing activities   (8,729,840)   (7,112,900) 
          
(Decrease) increase in cash and cash equivalents   (15,688,750)   3,414,176 
Cash and cash equivalents at beginning of year   36,126,059   30,305,902 
          
Cash and cash equivalents at end of quarter  $20,437,309  $33,720,078 
          
Supplemental disclosure of cash flows information:         
Income taxes paid  $1,365,735  $1,112,000 
          
Noncash exercise of employee stock options  $(9,197)  $—   
          
The accompanying notes are an integral part of these condensed consolidated financial statements
 
65
Table of Contents
Nobility Homes, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1
Note 1 Basis of Presentation and Accounting Policies
The accompanying unaudited condensed consolidated financial statements for the three and nine months ended July 31, 2021August 6, 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form
10-Q.
Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the three and nine months ended July 31, 2021August 6, 2022 are not necessarily indicative of the results of the full fiscal year.
The condensed consolidated financial statements included in this report should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on
Form 10-K
for the fiscal year ended October 31, 2020.
November 6, 2021.
Note 2
Note 2 Inventories
New home inventory is carried at the lower of cost or net realizable value. The cost of finished home inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. In addition, an allocation of depreciation and amortization is included in cost of goods sold. Under the specific identification method, if finished home inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or net realizable value.
The Company acquired certain repossessed
pre-owned
inventory (Buy Back Inventory) in 2011 as part of an Amendment of the Finance Revenue Sharing Agreement with 21
st
Mortgage Corporation. This inventory is valued at the Company’s cost to acquire determined on the specific identification method, plus refurbishment costs (any item on the home that needs to be repaired or replaced) incurred to date to bring the inventory to a more saleable state. The Buy Back Inventory amount is reduced where necessary on a unit specific basis by a valuation reserve which management believes results in inventory being valued at market.
Other
pre-owned
homes are acquired (Repossessions Inventory) as a convenience to the Company’s joint venture partner, 21st Mortgage Corporation. This inventory has been repossessed by 21
st
Mortgage Corporation or through mortgage foreclosure. The Company acquired this inventory at the amount of the uncollected balance of the financing at the time of the foreclosure/repossessions by 21st Mortgage Corporation. The Company records this inventory at cost determined on the specific identification method. All of the refurbishment costs are paid by 21
st
Mortgage Corporation. This arrangement assists 21
st
Mortgage Corporation with liquidation of their repossessed inventory. The timing of these repurchases by the Company is unpredictable as it is based on the repossessions 21
st
Mortgage Corporation incurs in the portfolio. When the home is sold, the Company retains the cost of the home, an interest factor on the cost of the home and a sales commission, from the sales proceeds. Any additional proceeds are paid to 21
st
Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21
st
Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for this inventory.
7
Table of Contents
New Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s condensed consolidated balance sheets. Consigned inventory was $382,279$915,683 and $1,277,681$794,766 as of July 31,August 6, 2022 and November 6, 2021, and October 31, 2020, respectively.
Pre-owned
homes are also taken as
trade-ins
on new home sales
(Trade-in
Inventory). This inventory is recorded at estimated actual wholesale value, which is generally lower than market value, determined on the specific identification method, plus refurbishment costs incurred to date to bring the inventory to a more saleable state.

6
Table of Contents
The
Trade-in
Inventory amount is reduced where necessary on a unit specific basis by a valuation reserve, which management believes results in inventory being valued at market.
Other inventory costs are determined on a
first-in,
first-out
basis. A breakdown of the elements of inventory is as follows:
   August 6,
2022		   November 6,
2021		 
Raw materials  $2,314,299   $2,225,532 
Work-in-process
   132,416    97,021 
Inventory consigned to affiliated entities   915,683    794,766 
Finished homes   16,869,501    7,140,880 
Model home furniture   153,723    136,089 
           
Inventories  $20,385,622   $10,394,288 
           
Pre-owned
homes
  $662,453   $1,297,475 
Less homes expected to sell in 12 months   (662,453)    (542,081) 
           
Pre-owned
homes, long term
  $—     $755,394 
           
   July 31,
2021		   October 31,
2020		 
Raw materials
  $1,854,317   $1,203,282 
Work-in-process
   136,723    107,651 
Inventory consigned to affiliated entities
   382,279    1,277,681 
Finished homes
   6,910,596    6,543,861 
Model home furniture
   145,008    162,202 
   
 
 
   
 
 
 
Inventories
  $9,428,923   $9,294,677 
   
 
 
   
 
 
 
Pre-owned
homes
  $1,510,484   $1,686,373 
Inventory impairment reserve
   (115,599)    (167,196) 
   
 
 
   
 
 
 
    1,394,885    1,519,177 
Less homes expected to sell in 12 months
   (678,303)    (441,937) 
   
 
 
   
 
 
 
Pre-owned
homes, long-term
  $716,582   $1,077,240 
   
 
 
   
 
 
 
Note 3
Note 3 Short-term Investments
The following is a summary of short-term investments (available for sale):
 
   July 31, 2021 
   Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		 
Equity securities in a public company
  $167,930   $394,340   $0   $562,270 
   
 
 
   
 
 
   
 
 
   
 
 
 
   August 6, 2022 
   Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		 
Equity securities in a public company  $167,930   $373,202   $—     $541,132 
                     
 
   October 31, 2020 
   Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		 
Equity securities in a public company
  $167,930   $191,030   $0     $358,960 
   
 
 
   
 
 
   
 
 
   
 
 
 
   November 6, 2021 
   Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		 
Equity securities in a public company  $167,930   $453,998   $—     $621,928 
                     
The fair values were estimated based on quoted market prices in active markets at each respective period end.
8
Table of Contents
Note 4
Note 4 Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses approximates fair value because of the short maturity of those instruments.
The Company accounts for the fair value of financial investments in accordance with FASB Accounting Standards Codification (ASC) No. 820 “Fair Value Measurements” (ASC 820).
7
Table of Contents
ASC 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e. inputs) used in the valuation. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The ASC 820 fair value hierarchy is defined as follows:
 
Level 1 - Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.
 
Level 2 - Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.
 
Level 3 - Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.
The following tables represent the Company’s financial assets and liabilities which are carried at fair value.
 
   July 31, 2021 
   Level 1   Level 2   Level 3 
Equity securities in a public company
  $562,270   $0—   $0— 
   
 
 
   
 
 
   
 
 
 
   August 6, 2022 
   Level 1   Level 2   Level 3 
Equity securities in a public company  $541,132   $—     $—   
 
   October 31, 2020 
   Level 1   Level 2   Level 3 
Equity securities in a public company
  $358,960   $—     $—   
   
 
 
   
 
 
   
 
 
 
   November 6, 2021 
   Level 1   Level 2   Level 3 
Equity securities in a public company  $621,928   $—     $—   
Note 5
Note 5 Net Income per Share
These financial statements include “basic” and “diluted” net income per share information for all periods presented. The basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding. The diluted net income per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for dilutive common shares.
Note 6
Note 6 Revenues by Products and Service
The Company operates in one business segment, which is manufactured housing and ancillary services. The Company considers there to be revenue concentration risks for distribution of its products where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s distribution net product revenues below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective distribution channels experience difficulties.
 
98
Table of Contents
Revenues by net sales from manufactured housing,
pre-owned
homes and insurance agent commissions are as follows:
   Three Months Ended   Nine Months Ended 
   August 6,
2022		   July 31,
2021		   August 6,
2022		   July 31,
2021		 
Manufactured housing                    
Homes sold through Company owned sales centers  $12,724,766   $10,128,706   $31,407,700   $30,033,265 
Homes sold to independent dealers   539,350    833,904    1,472,061    3,661,753 
Homes sold through manufactured home parks   249,760    458,955    1,240,110    1,108,600 
                     
   $13,513,876   $11,421,565   $34,119,871   $34,803,618 
Pre-owned
homes
   254,911    288,261    957,745    572,005 
Insurance agent commissions   77,911    68,294    222,398    216,908 
                     
Total net sales  $13,846,698   $11,778,120   $35,300,014   $35,592,531 
                     
 
   Three Months Ended   Nine Months Ended 
   July 31,
2021		   August 1,
2020		   July 31,
2021		   August 1,
2020		 
Manufactured housing
                    
Homes sold through Company owned sales centers
  $ 10,128,706   $ 6,252,906   $ 30,033,265   $ 20,874,755 
Homes sold to independent dealers
   833,904    1,998,720    3,661,753    6,260,268 
Homes sold through manufactured home parks
   458,955    380,875    1,108,600    845,634 
   
 
 
   
 
 
   
 
 
   
 
 
 
   $ 11,421,565   $ 8,632,501   $ 34,803,618   $ 27,980,657 
Pre-owned
homes
   288,261    95,011    572,005    253,689 
Insurance agent commissions
   68,294    72,898    216,908    212,418 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total net sales
  $11,778,120   $8,800,410   $35,592,531   $28,446,764 
   
 
 
   
 
 
   
 
 
   
 
 
 
Note 7 Operating Leases
The Company leases the property for several Prestige retail sales centers from various unrelated entities under operating lease agreements expiring through December 2021. The Company also leases certain equipment under unrelated operating leases. These leases have varying renewal options. To offset expiring leases, The Company purchased the land for the Ocala South retail sales center in March 2021 for $500,000 and the Tavares retail sales center in January 2021 for $245,000.
Right of use assets are included as a
non-current
asset in the amount of $684,142,
net of amortization in the condensed consolidated Balance Sheet as of July 31, 2021. 
Based on the terms of the lease agreements, all of the Company’s leases are classified as operating leases. The weighted average remaining lease term and weighted average discount rate of the operating leases is 8.40 years and 3.0%, respectively.
Minimum rental payments under operating leases are recognized on a straight-line basis over the term of the lease. Individual components of the total lease cost incurred by the Company in the amount of $136,872 for the nine months ended July 31, 2021.
10
Table of Contents
The amount of future minimum lease payments under operating leases are as follows:
   Operating Lease 
Undiscounted future minimum lease payments:
     
2021 (3 months remaining)
  $16,106 
2022
   68,401 
2023
   74,322 
2024
   80,955 
2025
   88,388 
Thereafter
   458,175 
   
 
 
 
Total
   786,347 
Amount representing imputed interest
   (1,008) 
   
 
 
 
Total operating lease liability
   785,339 
Current portion of operating lease liability
   (33,039) 
   
 
 
 
Operating lease liability,
non-current
  $ 752,300 
   
 
 
 
Note 8 Stockholders’ Equity and Related Party Transaction
During the nine months ended July 31, 2021, the Company repurchased 100,346 shares of its common stock for per share prices ranging from $30.50—$34.68 for an aggregate total of $3,478,553. Of these repurchased shares, 100,000 were from a related party for which the Company paid $34.68 per share.
11
9
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Total revenuesnet sales in the third quarter of 2021 increased 34%2022 were up 18% to $13,846,698 compared to $11,778,120 compared to $8,800,410 in the third quarter of 2020.2021. Total net sales for the first nine months of 2021 increased 25%2022 was $35,300,014 compared to $35,592,531 compared to $28,446,764 for the first nine months of 2020.2021. The Company reported net income of $1,050,746$1,884,759 in the third quarter of 2021,2022, compared to a net income of $1,160,138 during the$1,050,746 in third quarter of 2020.2021. Net income for the first nine months of 20212022 was $3,841,449$4,498,619 compared to a net income of $4,110,283$3,841,449 for the first nine months of 2020.2021. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 20202021 through July 20212022 were up approximately 11%22% from the same period last year. TheAlthough net sales increased during the three months ended August 6, 2022 as compared to the same period last year, we continued to experience the negative impact of limitations being placed on certain key production materials from suppliers, the delay or lack of lenderskey components from vendors as well as back orders, delayed shipments, price increases and labor shortages. These supply chain issues have caused delays in our industry, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes. During third quarter of 2021, our production of homes was impacted due to the challenges in hiring additional factory workers and the unpredictable absenteeism of the
COVID-19
quarantine. These factors have continued in the fourth quarter of 2021. Also, production has incurred shortages in certain building products delaying the completion of the homes at the manufacturing facility and has continued to experience inflationthe set up process of retail homes in most building productsthe field, resulting in significant increasesdecreased net sales due to our material costsinability to timely deliver and a corresponding decrease in gross profits.setup homes to customers. We have continued to focus on increasing productionexpect that these challenges will continue for the remainder of homes due tofiscal year 2022 and potentially beyond until the above challenges.industry supply chain normalizes.
The following table summarizes certain key sales statistics and percent of gross profit.
 
   Three Months Ended  Nine Months Ended 
   July 31,
2021		  August 1,
2020		  July 31,
2021		  August 1,
2020		 
New homes sold through Company owned sales centers
   104   70   318   232 
Pre-owned
homes sold through Company owned sales centers
   6   3   12   7 
Homes sold to independent dealers
   26   51   115   159 
Total new factory built homes produced
   120   127   448   393 
Average new manufactured home price—retail
  $ 94,385  $ 91,017  $ 91,488  $ 91,644 
Average new manufactured home price—wholesale
  $51,919  $44,308  $48,720  $43,913 
As a percent of net sales:
     
Gross profit from the Company owned retail
     
sales centers
   17%   19%   17%   19% 
Gross profit from the manufacturing facilities -
     
including intercompany sales
   11%   20%   14%   22% 
   Three Months Ended  Nine Months Ended 
   August 6,  July 31,  August 6,  July 31, 
   2022  2021  2022  2021 
New homes sold through Company owned sales centers
  ��101   104   265   318 
Pre-owned
homes sold through Company owned sales centers
   4   6   13   12 
Homes sold to independent dealers
   9   26   24   115 
Total new factory built homes produced
   101   120   306   448 
Average new manufactured home price - retail
  $ 129,343  $ 94,385  $ 120,796  $ 91,488 
Average new manufactured home price - wholesale
  $74,747  $51,919  $71,012  $48,720 
As a percent of net sales:
     
Gross profit from the Company owned retail sales centers
   20%   17%   19%   17% 
Gross profit from the manufacturing facilities - including intercompany sales
   15%   11%   14%   14% 
Maintaining our strong financial position is vital for future growth and success. Because of very challenging business conditions during economic recessions in our market area, management will continue to evaluate all expenses and react in a manner consistent with maintaining our strong financial position, while exploring opportunities to expand our distribution and manufacturing operations.
Our many years of experience in the Florida market, combined with home buyers’ increased need for more affordable housing, should serve the Company well in the coming years. Management remains convinced that our specific geographic market is one of the best long-term growth areas in the country.
On June 5, 20212022 the Company celebrated its 54th55th anniversary in business specializing in the design and production of quality, affordable manufactured homes. With multiple retail sales centers in Florida for over 3031 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.
 
1210
Table of Contents
Insurance agent commission revenues in the third quarter of 20212022 were $68,294$77,911 compared to $72,898$68,294 in the third quarter of 2020.2021. Total insurance agent commission revenues for the first nine months of 20212022 were $216,908$222,398 compared to $212,418$216,908 for the first nine months of 2020. The increase in insurance agent commissions in the first nine months of 2021 were due to more new policies and renewals generated which affects agent commission earned.2021. The Company establishes appropriate reserves for policy cancellations based on numerous factors, including past transaction history with customers, historical experience and other information, which is periodically evaluated and adjusted as deemed necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations at July 31, 2021August 6, 2022 and October 31, 2020.November 6, 2021.
Gross profit as a percentage of net sales was 21%28% in the third quarter of 20212022 compared to 28%21% for the third quarter of 20202021 and was 27% for the first nine months of 2022 compared to 24% for the first nine months of 2021 compared to 30% for the first nine months of 2020.2021. The gross profit in the third quarter of 20212022 was $2,512,744$3,898,060 compared to $2,438,910$2,512,744 in the third quarter of 20202021 and was $9,648,206 for the first nine months of 2022 compared to $8,622,876 for the first nine months of 2021 compared to $8,466,254 for the first nine months of 2020.2021. The gross profit is dependent on the sales mix of wholesale and retail homes and number of
pre-owned
homes sold. The decreaseincrease in gross profit as a percentage of net sales is primarily due to the continued inflationincreases in most building products which increased the material cost of each home manufactured in all three quarters of 2021. We are continuing to monitoring this situation and will continue to adjust our selling prices to help offset some of the higher inflation costs of building products and labor on each home.home and increase in the average gross profit at our retail sales centers.
Selling, general and administrative expenses as a percent of net sales was 11%12% in third quarter of 20212022 compared to 13%11% in the third quarter of 20202021 and was 13% for the first nine months of 2022 compared to 12% for the first nine months of 2021 compared to 13% for the first nine months of 2020.2021. Selling, general and administrative expenses in third quarter of 20212022 was $1,320,456$1,653,200 compared to $1,107,850$1,320,456 in the third quarter of 20202021 and was $4,448,349 for the first nine months of 2022 compared to $4,144,350 for the first nine months of 20212021. The dollar increase in expenses in the three and nine months of 2022 compared to $3,586,622the same period last year were due to employee compensation expenses associated with increased sales at the retail sales centers.
We earned interest income of $62,449 for the third quarter of 2022 compared to $62,491 for the third quarter of 2021. For the first nine months of 2022, interest income was $176,706 compared to $145,621 in the first nine months of 2021. The increase in interest income for the first nine months of 2020. The increase in expenses in 2021 were due to the increase in variable expenses which were a direct result of employee benefits compensation due to the increase in sales.    
We earned interest income of $62,491 for the third quarter of 2021 compared to $53,209 for the third quarter of 2020. For the first nine months of 2021, interest income was $145,621 compared to $239,365 in the first nine months of 2020. The decrease during 20212022 is primarily due to the declineinterest earned from the sale of
pre-owned
(repossessed) inventory acquired from the Company’s joint venture partner, 21st Mortgage Corporation in the investment rates and the decrease in the monies invested.
first quarter of 2022.
Our earnings from Majestic 21 in the third quarter of 20212022 were $20,202$15,488 compared to $20,855,$20,202, for the third quarter of 2020.2021. Earnings from Majestic 21 for the first nine months of 20212022 were $45,959$40,710 compared to $61,125$45,959 for the first nine months of 2020.2021. The earnings from Majestic 21 represent the allocation of profit and losses which are owned 50% by 21st Mortgage Corporation and 50% by the Company. The earnings from the Majestic 21 loan portfolio will continue to decrease due to the amortization, maturity and payoff of the loans.
We received distributions from 21
st
Mortgage Corporation in the third quarter of 2022 of $52,140 compared to $75,156 in the third quarter of 2021 and $285,639 for the first nine months of $75,1562022 compared to $64,053 in the third quarter of 2020 and $121,024 for the first nine months of 2021 compared to $336,447 for the first nine months of 2020.2021. The distributions are from an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21
st
Mortgage Corporation and the Company. The distributions from the escrow arrangement, which relates to certain loans financed by 21
st
Mortgage Corporation, are recorded as income by the Company when received. The increase in distributions in the first nine months of 2022 is due to the timing of the reserve balances. The earnings from the FRSA loan portfolio will continue to decrease due to the amortization and payoff of the loans.
The Company realized
pre-tax
income in the third quarter of 20212022 of $1,397,857$2,479,072 as compared to $1,535,603$1,397,857 in the third quarter of 2020.2021. The
pre-tax
income for the first nine months of 20212022 was $5,067,874$5,898,117 as compared to $5,422,063$5,067,874 in first nine months of 2020.2021.
 
1311
Table of Contents
The Company recorded an income tax expense in the amount of $347,111$594,313 in the third quarter of 20212022 as compared to $375,465$347,111 in third quarter 2020.2021. Income tax expense for the nine months of 20212022 was $1,226,425$1,399,498 compared to $1,311,780$1,226,425 for the nine months of 2020.2021.
We reported net income of $1,050,746$1,884,759 for the third quarter of 20212022 or $0.29$0.54 per share, compared to $1,160,138$1,050,746 or $0.32$0.29 per share, for the third quarter of 2020.2021. For the first nine months of 20212022 net income was $3,841,449$4,498,619 or $1.06$1.30 per share compared to $4,110,283$3,841,449 or $1.13$1.06 per share, in the first nine months of 2020.2021.
Liquidity and Capital Resources
Cash and cash equivalents were $33,720,078$20,437,309 at July 31, 2021August 6, 2022 compared to $30,305,902$36,126,059 at October 31, 2020.November 6, 2021, with the reduction primarily due to increases in inventory. Certificates of deposit were $2,090,910$1,946,429 at July 31, 2021August 6, 2022 compared to $4,602,307$2,093,015 at October 31, 2020.November 6, 2021. Short-term investments were $562,270$541,132 at July 31, 2021August 6, 2022 compared to $358,960$621,928 at October 31, 2020.November 6, 2021. Working capital was $34,059,497$31,228,311 at July 31, 2021August 6, 2022 as compared to $38,865,240$35,563,355 at October 31, 2020.November 6, 2021. During the first nine months of 2021,2022, the Company repurchased an aggregate of 100,346162,300 shares of its common stock for an aggregate of $3,478,553.$5,186,070. A cash dividend was paid from our cash reserves in April 2022 in the amount of $1.00 per share ($3,532,976). The Company purchased the land$4.6 million of new homes from two independent home manufactures for the Ocala SouthPrestige retail sales center in March 2021 for $500,000, the Tavares retail sales center in January 2021 for $245,000 and land in Ocala for a future retail sales center in February 2021 for $1,040,000. The Company paid a
one-time
cash dividendcenters during third quarter of $1.00 per common share in March 2021 for $3,632,100.2022. We own the entire inventory for our Prestige retail sales centers, which includes new and
pre-owned
repossessed or foreclosed homes, and do not incur any third party floor plan financing expenses. We have a material commitment for a significant capital expenditure. Depending upon whenAs of August 6, 2022 the Company receiveshas incurred approximately $834,269 of the building permit, we planestimated construction cost of the approximately $1.1 allocated to build an 11,900 square foot frame shop to manufacture our frames on our current manufacturing plantthe Company’s property on ourin Ocala, Florida property.Florida.
The Company currently has no line of credit facility and no debt and does not believe that such a facility is currently necessary to its operations. The Company also has approximately $3.9$4.1 million of cash surrender value of life insurance which it maycan be able to accessaccessed as an additional source of liquidity though the Company has not currently viewed this to be necessary. As of July 31, 2021,August 6, 2022, the Company continued to report a strong balance sheet which included total assets of approximately $64$61.1 million which was funded primarily by stockholders’ equity of approximately $48$45.2 million.
Critical Accounting Policies and Estimates
In Item 7 of our Form
10-K,
under the heading “Critical Accounting Policies and Estimates,” we have provided a discussion of the critical accounting policies and estimates that management believes affect its more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. No significant changes have occurred since that time.
Forward-Looking Statements
Certain statements in this report are unaudited or forward-looking statements within the meaning of the federal securities laws. Although Nobility believes that the amounts and expectations reflected in such forward-looking statements are based on reasonable assumptions, there are risks and uncertainties that may cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the potential adverse impact on our business caused by the
COVID-19
pandemic or other health pandemic,pandemics, competitive pricing pressures at both the wholesale and retail levels, inflation, increasing material costs (including forest based products) or availability of materials due to potential supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), changes in market demand, changesincrease in interest rates, availability of financing for retail and wholesale purchasers, consumer confidence, adverse
14
Table of Contents
weather conditions that reduce sales at retail centers, the risk of manufacturing plant shutdowns due to storms or other factors, the impact of marketing and cost-management programs, reliance on the Florida economy, impact of
12
Table of Contents
labor shortage, impact of materials shortage, increasing labor cost, cyclical nature of the manufactured housing industry, impact of rising fuel costs, catastrophic events impacting insurance costs, availability of insurance coverage for various risks to Nobility, market demographics, management’s ability to attract and retain executive officers and key personnel, increased global tensions, market disruptions resulting from terrorist or other attack, any armed conflict involving the United States and the impact of inflation.
 
1513
Table of Contents
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
. The Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a–15(e) and 15d–15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of July 31, 2021.August 6, 2022.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal controls over financial reporting that occurred during the third quarter of fiscal 20212022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
 
1614
Table of Contents
Part II. OTHER INFORMATION AND SIGNATURES
There were no reportable events for Item 1 and Items 3 through 5.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table represents information with respect to purchases by the Company did not repurchase any shares of its common stock during the threethird quarter ended August 6, 2022.
The Company’s Board of Directors authorized the repurchase of 200,000 shares in September 2021 and in June 2022 authorized an additional 62,300 shares to be repurchased during fiscal year 2022, in the open market. During the first nine months ended July 31, 2021.August 6, 2022 management has repurchased an aggregate of 162,300 shares of common stock and is authorized to purchase up to an additional 100,000 shares in fiscal year 2022.
Period
  Total
number of
shares
purchased		  Average
price paid
per share		  Total number of shares
purchased as part of
publicly announced plans
or programs*		  Maximum number of shares
that may yet
be purchased under the plans
or programs*		 
May 2 – May 29, 2021
  0  0  0   199,654 
May 30 – Jun 26, 2021
  0  0  0   199,654 
Jun 27 – Jul 31, 2021
  100,000  $34.68  100,000   99,654 
*
In September 2020 the Company’s Board of Directors authorized 200,000 shares to be repurchased during fiscal year 2021 in the open market. During the first nine months ended July 31, 2021 management has repurchased an aggregate of 100,346 shares of common stock and is authorized to purchase up to an additional 99,654 shares.
Item 6. Exhibits
 
 31. (a)
(a) Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
      (b)
(b) Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
 
 32. (a)
(a) Written Statement of Chief Executive Officer Pursuant to 18 U.S.C. §1350
      (b)
(b) Written Statement of Chief Financial Officer Pursuant to 18 U.S.C. §1350
 
 101.
Interactive data filing formatted in IXBRLXBRL
104.
Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101.
 
1715
Table of Contents
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  NOBILITY HOMES, INC.
DATE: September 10, 2021
19, 2022		  
By: /s/ Terry E. Trexler
  Terry E. Trexler, Chairman,
  President and Chief Executive Officer
DATE: September 10, 202119, 2022  
By: /s/ Thomas W. Trexler
  Thomas W. Trexler, Executive Vice President,
and Chief Financial Officer
DATE: September 10, 2021
19, 2022		  
By: /s/ Lynn J. Cramer, Jr.
  Lynn J. Cramer, Jr., Treasurer
and Principal Accounting Officer
 
1816