Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
May 04, 2019 | Jun. 14, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 4, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | NOBILITY HOMES INC | |
Entity Central Index Key | 0000072205 | |
Current Fiscal Year End Date | --11-03 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | NOBH | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 3,844,320 | |
Entity Small Business | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 04, 2019 | Nov. 03, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 23,066,346 | $ 28,364,861 |
Certificates of Deposit | 8,079,072 | 6,034,093 |
Short-term investments | 578,250 | 537,767 |
Accounts receivable - trade | 2,097,164 | 1,783,073 |
Note receivable | 67,900 | 46,444 |
Mortgage notes receivable | 16,706 | 15,664 |
Inventories | 8,227,752 | 7,270,550 |
Pre-owned homes, net | 821,781 | 933,640 |
Prepaid expenses and other current assets | 1,573,860 | 1,090,152 |
Total current assets | 44,528,831 | 46,076,244 |
Property, plant and equipment, net | 4,844,129 | 4,763,566 |
Pre-owned homes, net | 457,577 | 473,191 |
Note receivable, less current portion | 59,600 | 46,265 |
Mortgage notes receivable, less current portion | 234,322 | 236,402 |
Other investments | 1,611,921 | 1,571,166 |
Property held for sale | 213,437 | 213,437 |
Deferred income taxes | 40,156 | |
Cash surrender value of life insurance | 3,527,974 | 3,437,974 |
Other assets | 156,287 | 156,287 |
Total assets | 55,634,078 | 57,014,688 |
Current liabilities: | ||
Accounts payable | 1,052,935 | 1,085,095 |
Accrued compensation | 788,187 | 869,657 |
Accrued expenses and other current liabilities | 1,754,245 | 1,349,381 |
Income taxes payable | 618,363 | 579,786 |
Customer deposits | 3,069,439 | 4,064,268 |
Total current liabilities | 7,283,169 | 7,948,187 |
Deferred income taxes | 28,017 | |
Total liabilities | 7,311,186 | 7,948,187 |
Commitments and contingent liabilities | ||
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; 3,860,513 and 3,873,731 outstanding | 536,491 | 536,491 |
Additional paid in capital | 10,678,137 | 10,670,848 |
Retained earnings | 49,843,861 | 50,352,546 |
Accumulated other comprehensive income | 446,119 | 390,407 |
Less treasury stock at cost, 1,504,394 shares in 2019 and 1,491,176 shares in 2018 | (13,181,716) | (12,883,791) |
Total stockholders' equity | 48,322,892 | 49,066,501 |
Total liabilities and stockholders' equity | $ 55,634,078 | $ 57,014,688 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 04, 2019 | Nov. 03, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 5,364,907 | 5,364,907 |
Common Stock, shares outstanding | 3,860,513 | 3,873,731 |
Treasury stock, shares | 1,504,394 | 1,491,176 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 04, 2019 | May 05, 2018 | May 04, 2019 | May 05, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 12,742,688 | $ 8,922,264 | $ 23,782,462 | $ 18,568,082 |
Cost of goods sold | (9,296,276) | (6,610,958) | (17,367,047) | (14,039,837) |
Gross profit | 3,446,412 | 2,311,306 | 6,415,415 | 4,528,245 |
Selling, general and administrative expenses | (1,310,686) | (1,119,359) | (2,507,858) | (2,246,141) |
Operating income | 2,135,726 | 1,191,947 | 3,907,557 | 2,282,104 |
Other income: | ||||
Interest income | 145,026 | 81,446 | 297,469 | 117,383 |
Undistributed earnings in joint venture - Majestic 21 | 21,231 | 27,266 | 40,755 | 50,315 |
Proceeds received under escrow arrangement | 108,119 | 55,640 | 212,607 | 55,640 |
Gain on sale of assets | 15,242 | 203,512 | 15,242 | 203,512 |
Miscellaneous | 13,962 | 6,850 | 22,880 | 12,584 |
Total other income | 303,580 | 374,714 | 588,953 | 439,434 |
Income before provision for income taxes | 2,439,306 | 1,566,661 | 4,496,510 | 2,721,538 |
Income tax expense | (619,581) | (431,056) | (1,140,979) | (569,697) |
Net income | 1,819,725 | 1,135,605 | 3,355,531 | 2,151,841 |
Other comprehensive income (loss) | ||||
Unrealized investment gain (loss), net of tax effect | 39,172 | (67,857) | 55,712 | (45,510) |
Comprehensive income | $ 1,858,897 | $ 1,067,748 | $ 3,411,243 | $ 2,106,331 |
Weighted average number of shares outstanding: | ||||
Basic | 3,865,588 | 3,903,904 | 3,869,726 | 3,950,638 |
Diluted | 3,867,802 | 3,906,077 | 3,871,943 | 3,952,650 |
Net income per share: | ||||
Basic | $ 0.47 | $ 0.29 | $ 0.87 | $ 0.54 |
Diluted | $ 0.47 | $ 0.29 | $ 0.87 | $ 0.54 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] |
Balance at Nov. 04, 2017 | $ 47,414,297 | $ 536,491 | $ 10,669,231 | $ 46,167,528 | $ 412,233 | $ (10,371,186) |
Balance, shares at Nov. 04, 2017 | 3,997,569 | |||||
Purchase of treasury stock | (94,500) | (94,500) | ||||
Purchase of treasury stock, shares | (4,500) | |||||
Stock-based compensation | 441 | 441 | ||||
Unrealized investment loss, net of tax effect | 22,347 | 22,347 | ||||
Net income | 1,016,236 | 1,016,236 | ||||
Balance at Feb. 03, 2018 | 48,358,821 | $ 536,491 | 10,669,672 | 47,183,764 | 434,580 | (10,465,686) |
Balance, shares at Feb. 03, 2018 | 3,993,069 | |||||
Balance at Nov. 04, 2017 | 47,414,297 | $ 536,491 | 10,669,231 | 46,167,528 | 412,233 | (10,371,186) |
Balance, shares at Nov. 04, 2017 | 3,997,569 | |||||
Unrealized investment loss, net of tax effect | (45,510) | |||||
Net income | 2,151,841 | |||||
Balance at May. 05, 2018 | 46,237,897 | $ 536,491 | 10,670,113 | 47,540,755 | 366,724 | (12,876,186) |
Balance, shares at May. 05, 2018 | 3,874,069 | |||||
Balance at Feb. 03, 2018 | 48,358,821 | $ 536,491 | 10,669,672 | 47,183,764 | 434,580 | (10,465,686) |
Balance, shares at Feb. 03, 2018 | 3,993,069 | |||||
Cash dividend | (778,614) | (778,614) | ||||
Purchase of treasury stock | (2,410,500) | (2,410,500) | ||||
Purchase of treasury stock, shares | (119,000) | |||||
Stock-based compensation | 441 | 441 | ||||
Unrealized investment loss, net of tax effect | (67,857) | (67,856) | ||||
Net income | 1,135,605 | 1,135,605 | ||||
Balance at May. 05, 2018 | 46,237,897 | $ 536,491 | 10,670,113 | 47,540,755 | 366,724 | (12,876,186) |
Balance, shares at May. 05, 2018 | 3,874,069 | |||||
Balance at Nov. 03, 2018 | 49,066,501 | $ 536,491 | 10,670,848 | 50,352,546 | 390,407 | (12,883,791) |
Balance, shares at Nov. 03, 2018 | 3,873,731 | |||||
Stock-based compensation | 750 | 750 | ||||
Unrealized investment loss, net of tax effect | (16,540) | (16,540) | ||||
Net income | 1,535,806 | 1,535,806 | ||||
Balance at Feb. 02, 2019 | 50,586,516 | $ 536,491 | 10,671,598 | 51,888,351 | 373,867 | (12,883,791) |
Balance, shares at Feb. 02, 2019 | 3,873,731 | |||||
Balance at Nov. 03, 2018 | 49,066,501 | $ 536,491 | 10,670,848 | 50,352,546 | 390,407 | (12,883,791) |
Balance, shares at Nov. 03, 2018 | 3,873,731 | |||||
Unrealized investment loss, net of tax effect | 55,712 | |||||
Net income | 3,355,531 | |||||
Balance at May. 04, 2019 | 48,322,892 | $ 536,491 | 10,678,137 | 49,843,861 | 446,119 | (13,181,716) |
Balance, shares at May. 04, 2019 | 3,860,513 | |||||
Balance at Feb. 02, 2019 | 50,586,516 | $ 536,491 | 10,671,598 | 51,888,351 | 373,867 | (12,883,791) |
Balance, shares at Feb. 02, 2019 | 3,873,731 | |||||
Cash dividend | (3,864,216) | (3,864,216) | ||||
Purchase of treasury stock | (302,115) | (302,115) | ||||
Purchase of treasury stock, shares | (13,703) | |||||
Stock-based compensation | 10,729 | 6,539 | 4,190 | |||
Stock-based compensation, shares | 485 | |||||
Unrealized investment loss, net of tax effect | 39,172 | 72,252 | ||||
Net income | 1,819,725 | 1,819,725 | ||||
Balance at May. 04, 2019 | $ 48,322,892 | $ 536,491 | $ 10,678,137 | $ 49,843,861 | $ 446,119 | $ (13,181,716) |
Balance, shares at May. 04, 2019 | 3,860,513 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
May 04, 2019 | May 05, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 3,355,531 | $ 2,151,841 |
Adjustments to reconcile net income to net cash provide by operating activities: | ||
Depreciation | 74,438 | 59,261 |
Deferred income taxes | 83,402 | (388,266) |
Undistributed earnings in joint venture - Majestic 21 | (40,755) | (50,315) |
Gain on property held for sale | (15,242) | (203,512) |
Gain on disposal of property, plant and equipment | (15,242) | 0 |
Inventory impairment | 0 | 105,000 |
Stock-based compensation | 11,479 | 882 |
Decrease (increase) in: | ||
Accounts receivable | (314,091) | 1,152,052 |
Inventories | (957,202) | (383,723) |
Pre-owned homes | 127,473 | 301,083 |
Prepaid expenses and other current assets | (483,708) | (587,918) |
Interest receivable | (44,979) | 0 |
(Decrease) increase in: | ||
Accounts payable | (32,160) | 113,980 |
Accrued compensation | (81,470) | 11,550 |
Accrued expenses and other current liabilities | 404,864 | 35,960 |
Income taxes payable | 38,577 | 187,963 |
Customer deposits | (994,829) | 947,996 |
Net cash provided by operating activities | 1,127,138 | 3,453,834 |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (197,259) | (469,007) |
Purchase of certificates of deposit | (2,000,000) | 0 |
Proceeds from property held for resale | 0 | 589,530 |
Collections on note receivable | 0 | 1,530,000 |
Collections on interest receivable | 0 | 101,301 |
Collections on mortgage notes receivable | 1,038 | 1,000 |
Collections on equipment notes receivable | 22,709 | 19,602 |
Issurance of equipment note receivable | 0 | (25,451) |
Increase in cash surrender value of life insurance | (90,000) | (90,000) |
Net cash (used in) provided by investing activities | (2,263,512) | 1,656,975 |
Cash flows from financing activities: | ||
Payment of cash dividend | (3,864,216) | (778,614) |
Purchase of treasury stock | (302,115) | (2,505,000) |
Net cash used in financing activities | (4,162,141) | (3,283,614) |
(Decrease) increase in cash and cash equivalents | (5,298,515) | 1,827,195 |
Cash and cash equivalents at beginning of year | 28,364,861 | 27,910,504 |
Cash and cash equivalents at end of quarter | 23,066,346 | 29,737,699 |
Supplemental disclosure of cash flows information: | ||
Income taxes paid | $ 1,019,000 | $ 770,000 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 6 Months Ended |
May 04, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policies | Note 1 Basis of Presentation and Accounting Policies The accompanying unaudited consolidated financial statements for the three and six months ended May 4, 2019 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 six months ended May 4, 2019 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 November 3, 2018. Recently Issued or Adopted Accounting Pronouncements – Effective November 4, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of November 4, 2018 did not change our revenue recognition as the majority of our revenues continue to be recognized when the customer takes control of our product. As we did not identify any accounting changes that impacted the amount of reported revenues with respect to our product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, revenues are recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Product revenues We sell our products to the end user or wholesale distributors. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers. The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation. Reserves for Discounts and Allowances Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers and distributors. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of options, discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. For additional information on our revenues, please read Note 7, Revenues by Products and Services, to these condensed consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that lessees should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company expects the adoption of ASU 2016-02 will result in the recognition of the right-of-use assets and related obligations on its consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
May 04, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 2 Inventories New home inventory is carried at the lower of cost or market 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 fair market 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 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 st st st st st Other inventory costs are determined on a first-in, first-out basis. A breakdown of the elements of inventory is as follows: May 4, 2019 November 3, 2018 Raw materials $ 925,897 $ 904,399 Work-in-process 101,071 113,220 Finished homes 7,080,860 6,138,985 Model home furniture and others 119,924 113,946 Inventories $ 8,227,752 $ 7,270,550 Pre-owned homes $ 1,657,932 $ 1,956,265 Inventory impairment reserve (378,574 ) (549,434 ) 1,279,358 1,406,831 Less homes expected to sell in 12 months (821,781 ) (933,640 ) Pre-owned homes, long-term $ 457,577 $ 473,191 |
Short-term Investments
Short-term Investments | 6 Months Ended |
May 04, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | Note 3 Short-term Investments The following is a summary of short-term investments (available for sale): May 4, 2019 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Equity securities in a public company $ 167,930 $ 410,320 $ — $ 578,250 November 3, 2018 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Equity securities in a public company $ 167,930 $ 369,837 $ — $ 537,767 The fair values were estimated based on quoted market prices in active markets at each respective period end. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
May 04, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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). 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. May 4, 2019 Level 1 Level 2 Level 3 Equity securities in a public company $ 578,250 $ — $ — November 3, 2018 Level 1 Level 2 Level 3 Equity securities in a public company $ 537,767 $ — $ — |
Investment in Retirement Commun
Investment in Retirement Community Limited Partnership | 6 Months Ended |
May 04, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Retirement Community Limited Partnership | Note 5 Investment in Retirement Community Limited Partnership The Company has a 31.3% limited partnership interest in Walden Woods South LLC (“Walden Woods”), which owns and operates a retirement community. The Company’s investment in Walden Woods is fully impaired at May 4, 2019 and November 3, 2018. |
Net Income per Share
Net Income per Share | 6 Months Ended |
May 04, 2019 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Note 6 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. |
Revenues by Products and Servic
Revenues by Products and Service | 6 Months Ended |
May 04, 2019 | |
Segment Reporting [Abstract] | |
Revenues by Products and Service | Note 7 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. for additional discussion. Revenues by net sales from manufactured housing, pre-owned homes and insurance agent commissions are as follows: Three Months Ended Six Months Ended May 4, 2019 May 5, 2018 May 4, 2019 May 5, 2018 Manufactured housing Homes sold through Company owned sales centers $ 10,092,761 $ 6,094,161 $ 18,529,718 $ 12,498,941 Homes sold to independent dealers 2,317,481 2,325,643 4,344,036 4,855,210 Homes sold through manufactured home parks 96,732 131,955 390,652 476,990 $ 12,506,974 $ 8,551,759 $ 23,264,406 $ 17,831,141 Pre-owned homes 159,080 301,096 381,195 609,457 Insurance agent commissions 76,634 69,409 136,861 127,484 Total net sales $ 12,742,688 $ 8,922,264 $ 23,782,462 $ 18,568,082 |
Subsequent Event
Subsequent Event | 6 Months Ended |
May 04, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 8 Subsequent Events The Company repurchased 16,193 shares of its common stock on May 20, 2019 at a price of $22.00. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 6 Months Ended |
May 04, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements – Effective November 4, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of November 4, 2018 did not change our revenue recognition as the majority of our revenues continue to be recognized when the customer takes control of our product. As we did not identify any accounting changes that impacted the amount of reported revenues with respect to our product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, revenues are recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. |
Product revenues | Product revenues We sell our products to the end user or wholesale distributors. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers. The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation. |
Reserves for Discounts and Allowances | Reserves for Discounts and Allowances Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers and distributors. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of options, discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. For additional information on our revenues, please read Note 7, Revenues by Products and Services, to these condensed consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that lessees should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company expects the adoption of ASU 2016-02 will result in the recognition of the right-of-use assets and related obligations on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
May 04, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Breakdown of Elements of Inventory | Other inventory costs are determined on a first-in, first-out basis. A breakdown of the elements of inventory is as follows: May 4, 2019 November 3, 2018 Raw materials $ 925,897 $ 904,399 Work-in-process 101,071 113,220 Finished homes 7,080,860 6,138,985 Model home furniture and others 119,924 113,946 Inventories $ 8,227,752 $ 7,270,550 Pre-owned homes $ 1,657,932 $ 1,956,265 Inventory impairment reserve (378,574 ) (549,434 ) 1,279,358 1,406,831 Less homes expected to sell in 12 months (821,781 ) (933,640 ) Pre-owned homes, long-term $ 457,577 $ 473,191 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 6 Months Ended |
May 04, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Short-term Investments | The following is a summary of short-term investments (available for sale): May 4, 2019 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Equity securities in a public company $ 167,930 $ 410,320 $ — $ 578,250 November 3, 2018 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Equity securities in a public company $ 167,930 $ 369,837 $ — $ 537,767 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
May 04, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value | The following tables represent the Company’s financial assets and liabilities which are carried at fair value. May 4, 2019 Level 1 Level 2 Level 3 Equity securities in a public company $ 578,250 $ — $ — November 3, 2018 Level 1 Level 2 Level 3 Equity securities in a public company $ 537,767 $ — $ — |
Revenues by Products and Serv_2
Revenues by Products and Service (Tables) | 6 Months Ended |
May 04, 2019 | |
Segment Reporting [Abstract] | |
Revenues by Net Sales | Revenues by net sales from manufactured housing, pre-owned homes and insurance agent commissions are as follows: Three Months Ended Six Months Ended May 4, 2019 May 5, 2018 May 4, 2019 May 5, 2018 Manufactured housing Homes sold through Company owned sales centers $ 10,092,761 $ 6,094,161 $ 18,529,718 $ 12,498,941 Homes sold to independent dealers 2,317,481 2,325,643 4,344,036 4,855,210 Homes sold through manufactured home parks 96,732 131,955 390,652 476,990 $ 12,506,974 $ 8,551,759 $ 23,264,406 $ 17,831,141 Pre-owned homes 159,080 301,096 381,195 609,457 Insurance agent commissions 76,634 69,409 136,861 127,484 Total net sales $ 12,742,688 $ 8,922,264 $ 23,782,462 $ 18,568,082 |
Inventories - Summary of Breakd
Inventories - Summary of Breakdown of Elements of Inventory (Detail) - USD ($) | May 04, 2019 | Nov. 03, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 925,897 | $ 904,399 |
Work-in-process | 101,071 | 113,220 |
Finished homes | 7,080,860 | 6,138,985 |
Model home furniture and others | 119,924 | 113,946 |
Inventories | 8,227,752 | 7,270,550 |
Pre-owned homes | 1,657,932 | 1,956,265 |
Inventory impairment reserve | (378,574) | (549,434) |
Pre-owned homes, net | 1,279,358 | 1,406,831 |
Less homes expected to sell in 12 months | (821,781) | (933,640) |
Pre-owned homes, long-term | $ 457,577 | $ 473,191 |
Short-term Investments - Summar
Short-term Investments - Summary of Short-term Investments (Detail) - USD ($) | May 04, 2019 | Nov. 03, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost | $ 167,930 | $ 167,930 |
Available-for-sale Securities, Gross Unrealized Gains | 410,320 | 369,837 |
Available-for-sale Securities, Gross Unrealized Losses | 0 | 0 |
Available-for-sale Securities, Estimated Fair Value | $ 578,250 | $ 537,767 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) | May 04, 2019 | Nov. 03, 2018 |
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company | $ 578,250 | $ 537,767 |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Equity securities in a public company | $ 578,250 | $ 537,767 |
Investment in Retirement Comm_2
Investment in Retirement Community Limited Partnership - Additional Information (Detail) | May 04, 2019 |
Walden Woods South LLC ("Walden Woods") [Member] | |
Investment [Line Items] | |
Percentage of limited partnership ownership interest | 31.30% |
Revenues by Products and Serv_3
Revenues by Products and Service - Revenues by Net Sales (Additional Information (Detail)) | 6 Months Ended |
May 04, 2019 | |
Revenue Concentration Risks Recognation terms | 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. |
Revenues by Products and Serv_4
Revenues by Products and Service - Revenues by Net Sales (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 04, 2019 | May 05, 2018 | May 04, 2019 | May 05, 2018 | |
Sales Information [Line Items] | ||||
Total net sales | $ 12,742,688 | $ 8,922,264 | $ 23,782,462 | $ 18,568,082 |
Manufactured Housing [Member] | ||||
Sales Information [Line Items] | ||||
Total net sales | 12,506,974 | 8,551,759 | 23,264,406 | 17,831,141 |
Manufactured Housing [Member] | Homes sold through Company owned sales centers | ||||
Sales Information [Line Items] | ||||
Total net sales | 10,092,761 | 6,094,161 | 18,529,718 | 12,498,941 |
Manufactured Housing [Member] | Homes sold to independent dealers | ||||
Sales Information [Line Items] | ||||
Total net sales | 2,317,481 | 2,325,643 | 4,344,036 | 4,855,210 |
Manufactured Housing [Member] | Homes sold through manufactured home parks | ||||
Sales Information [Line Items] | ||||
Total net sales | 96,732 | 131,955 | 390,652 | 476,990 |
Pre-Owned Homes [Member] | ||||
Sales Information [Line Items] | ||||
Total net sales | 159,080 | 301,096 | 381,195 | 609,457 |
Insurance Agent Commissions [Member] | ||||
Sales Information [Line Items] | ||||
Total net sales | $ 76,634 | $ 69,409 | $ 136,861 | $ 127,484 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Subsequent Event [Member] | 1 Months Ended |
May 20, 2019$ / sharesshares | |
Subsequent Event [Line Items] | |
Stock Repurchased During Period, Shares | shares | 16,193 |
Shares Issued, Price Per Share | $ / shares | $ 22 |