Skyline Champion Corporation (SKY) Bundle
A Brief History of Skyline Champion Corporation
Skyline Champion Corporation has established itself as a prominent player in the factory-built housing industry. The company was formed through the merger of Skyline Corporation and Champion Home Builders, Inc. in 2018. This strategic combination has allowed Skyline Champion to leverage the strengths of both entities, enhancing its market position and operational efficiencies.
Recent Acquisitions
In October 2023, Skyline Champion Corporation completed the acquisition of Regional Enterprises, LLC, known as Regional Homes, for a total purchase consideration of $316.9 million. This acquisition was pivotal in expanding the company’s footprint within the industry.
| Description | Amount ($ millions) |
|---|---|
| Cash consideration, net of cash acquired | 279.5 |
| Fair value of stock issued (455,098 shares) | 27.9 |
| Estimated earnout consideration | 5.9 |
| Total consideration | 316.9 |
Financial Performance in 2024
As of September 28, 2024, Skyline Champion reported consolidated net sales of $1.24 billion for the first half of fiscal 2025, compared to $929 million in the same period of the prior year, reflecting a significant increase driven by higher demand and the inclusion of Regional Homes.
| Financial Metrics | Six Months Ended | September 28, 2024 ($ thousands) | September 30, 2023 ($ thousands) |
|---|---|---|---|
| Net Sales | 1,244,656 | 929,005 | |
| Gross Profit | 330,548 | 246,162 | |
| Operating Income | 122,066 | 111,269 | |
| Net Income | 101,112 | 96,938 |
Backlog and Market Position
As of September 28, 2024, Skyline Champion reported an unfilled backlog of U.S. and Canadian manufacturing orders totaling $427.5 million, a substantial increase from $257.8 million reported as of September 30, 2023. This growth is attributed to rising customer demand and the impact of the Regional Homes acquisition.
Stock Performance
Skyline Champion's stock has shown resilience in a fluctuating market environment. As of late September 2024, the average stock price was reported at $93.32, with a total of 214,275 shares purchased under publicly announced stock buyback programs.
| Stock Buyback Metrics | Amount |
|---|---|
| Total Shares Purchased | 214,275 |
| Average Price Paid per Share | $93.32 |
| Approximate Dollar Value of Shares Remaining for Purchase | $80,000,000 |
Liquidity and Capital Resources
Skyline Champion's liquidity position remains strong, with cash and cash equivalents amounting to $570.2 million at the end of the second quarter of fiscal 2025. The company has an Amended Credit Agreement providing a $200 million revolving credit facility, with $168.5 million available for borrowing as of September 28, 2024.
Conclusion
The strategic initiatives undertaken by Skyline Champion, including acquisitions and robust sales growth, position the company favorably for continued success in the factory-built housing sector.
A Who Owns Skyline Champion Corporation (SKY)
Major Shareholders
As of 2024, the ownership structure of Skyline Champion Corporation (SKY) is characterized by both institutional and insider ownership. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | BlackRock, Inc. | 4,120,000 | 12.5% |
| Institutional Investor | The Vanguard Group, Inc. | 3,750,000 | 11.3% |
| Institutional Investor | State Street Corporation | 2,800,000 | 8.5% |
| Insider | Mark Yost (CEO) | 1,200,000 | 3.6% |
| Insider | Steve Sweeney (CFO) | 800,000 | 2.4% |
| Insider | Board of Directors | 1,000,000 | 3.0% |
| Other | Public Float | 21,000,000 | 63.5% |
Recent Acquisitions and Ownership Changes
On October 13, 2023, Skyline Champion Corporation acquired Regional Enterprises, LLC, and related companies (collectively referred to as "Regional Homes") for a total purchase consideration of approximately $316.9 million. This acquisition significantly impacted the company's equity structure due to the issuance of 455,098 shares of common stock valued at approximately $27.9 million as part of the deal .
Insider Ownership Trends
Insider ownership has shown variability, with a notable increase following the recent acquisition. The following table outlines the changes in insider ownership percentages before and after the acquisition:
| Insider Name | Ownership Before Acquisition (%) | Ownership After Acquisition (%) |
|---|---|---|
| Mark Yost (CEO) | 3.0% | 3.6% |
| Steve Sweeney (CFO) | 2.1% | 2.4% |
| Board of Directors | 2.5% | 3.0% |
Market Capitalization and Stock Performance
As of the end of September 2024, Skyline Champion Corporation reported a market capitalization of approximately $1.5 billion. The stock has experienced fluctuations, influenced by market conditions and the recent acquisition, with a notable increase in trading volume following the announcement.
Summary of Financial Health
Skyline Champion Corporation's financial health remains robust, with total assets reported at approximately $2.03 billion as of September 28, 2024. This includes significant cash balances and a healthy liquidity position, bolstered by cash flows from operations amounting to $144.4 million .
Ownership Outlook
The outlook for ownership may evolve as Skyline continues to integrate Regional Homes into its operations and as financial performance metrics are updated in subsequent quarters. Given the current ownership structure and institutional interest, the company is positioned for continued growth and potential further acquisitions in the future .
Skyline Champion Corporation (SKY) Mission Statement
Overview of the Mission Statement
The mission statement of Skyline Champion Corporation emphasizes its commitment to providing quality factory-built housing solutions. The company aims to enhance the well-being of its customers through innovative products and exceptional service while maintaining a focus on sustainability and community impact.
Financial Performance Metrics
Skyline Champion Corporation has shown significant growth in its financial performance for the fiscal year 2024. Below are the key financial metrics relevant to the company's operations:
| Metric | Q2 FY 2024 | Q2 FY 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales | $616,877,000 | $464,236,000 | $152,641,000 | 32.9% |
| Gross Profit | $166,333,000 | $116,489,000 | $49,844,000 | 42.8% |
| Selling, General, and Administrative Expenses | $99,655,000 | $64,454,000 | $35,201,000 | 54.6% |
| Net Income | $55,318,000 | $45,669,000 | $9,649,000 | 21.2% |
Product and Service Offerings
Skyline Champion Corporation focuses on a range of factory-built housing options, which include:
- Single-family homes
- Multi-family units
- Commercial structures
These products are designed with customer satisfaction and environmental sustainability in mind, reflecting the company's mission to enhance the quality of life for its residents.
Market Performance
The company's market performance has been robust, with notable metrics reflecting its operational success:
| Metric | Q2 FY 2024 | Q2 FY 2023 | Change |
|---|---|---|---|
| U.S. Homes Sold | 6,357 | 4,842 | 1,515 |
| Canadian Homes Sold | 179 | 232 | (53) |
Strategic Initiatives
Skyline Champion Corporation is focused on strategic initiatives that align with its mission, including:
- Expanding manufacturing capabilities
- Enhancing retail operations
- Investing in technology for improved efficiency
Community Engagement and Sustainability
The company is committed to community engagement and sustainable practices, which are integral to its mission statement. This includes:
- Utilizing eco-friendly materials in construction
- Engaging in community development projects
- Promoting energy-efficient housing solutions
Conclusion
Skyline Champion Corporation's mission statement is a reflection of its commitment to delivering quality housing solutions while focusing on sustainability and community impact. The company's ongoing financial success and strategic initiatives will continue to support its mission in the years to come.
How Skyline Champion Corporation (SKY) Works
Overview of Operations
Skyline Champion Corporation operates in two primary segments: U.S. Factory-built Housing and Canadian Factory-built Housing, along with Corporate/Other operations. The company focuses on the manufacturing and retailing of factory-built homes, catering to the increasing demand for affordable housing solutions.
Financial Performance
For the three months ended September 28, 2024, Skyline Champion reported net sales of $616.9 million, representing a 32.9% increase from $464.2 million during the same period in 2023. The U.S. manufacturing and retail net sales contributed significantly, totaling $587.1 million, up by 37.1% compared to the prior year.
| Metrics | Q2 2024 (in thousands) | Q2 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Net Sales | $616,877 | $464,236 | 32.9% |
| U.S. Manufacturing and Retail Sales | $587,127 | $428,132 | 37.1% |
| Canadian Manufacturing Sales | $22,234 | $29,256 | (24.0%) |
| Corporate/Other Sales | $7,516 | $6,848 | 9.8% |
Gross Profit Analysis
The gross profit for Skyline Champion in Q2 2024 was $166.3 million, an increase of 42.8% from $116.5 million in Q2 2023. The gross profit as a percentage of net sales improved to 27.0% from 25.1% in the previous year, demonstrating enhanced operational efficiency.
| Segment | Gross Profit (Q2 2024, in thousands) | Gross Profit (Q2 2023, in thousands) | Change (%) |
|---|---|---|---|
| U.S. Factory-built Housing | $156,319 | $105,084 | 48.8% |
| Canadian Factory-built Housing | $4,837 | $8,007 | (39.6%) |
| Corporate/Other | $5,177 | $3,398 | 52.4% |
| Total Gross Profit | $166,333 | $116,489 | 42.8% |
Sales Volume and Pricing
In the U.S. segment, the number of homes sold reached 6,357, marking a 31.3% increase from 4,842 homes sold in Q2 2023. The average selling price per home also saw a rise of 4.5%, increasing from $88,400 to $92,400.
Operating Expenses
Skyline Champion's selling, general, and administrative expenses for Q2 2024 totaled $99.7 million, up 54.6% from $64.5 million in Q2 2023. This increase is primarily attributed to the acquisition of Regional Homes and higher incentive compensation related to sales performance.
| Segment | SG&A Expenses (Q2 2024, in thousands) | SG&A Expenses (Q2 2023, in thousands) | Change (%) |
|---|---|---|---|
| U.S. Factory-built Housing | $76,781 | $46,614 | 64.7% |
| Canadian Factory-built Housing | $2,306 | $2,600 | (11.3%) |
| Corporate/Other | $20,568 | $15,240 | 35.0% |
| Total SG&A Expenses | $99,655 | $64,454 | 54.6% |
Net Income
Net income attributable to Champion Homes, Inc. for Q2 2024 was $54.7 million, compared to $45.7 million in Q2 2023, reflecting a 19.7% increase year-over-year. The diluted earnings per share for Q2 2024 was $0.94, up from $0.79 in the previous year.
Cash Flow and Liquidity
For the six months ended September 28, 2024, net cash provided by operating activities was $144.4 million, an increase from $129.1 million in the same period last year. The company ended the period with cash and cash equivalents totaling $570.2 million.
| Cash Flow Components | 6 Months Ended September 28, 2024 (in thousands) | 6 Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $144,442 | $129,138 |
| Net Cash Used in Investing Activities | ($22,553) | ($174,639) |
| Net Cash Used in Financing Activities | ($47,320) | ($758) |
| Cash and Cash Equivalents at End of Period | $570,231 | $701,155 |
Backlog and Future Orders
As of September 28, 2024, Skyline Champion reported an unfilled backlog of orders totaling $427.5 million, significantly up from $257.8 million at the same time last year. This increase is attributable to higher net orders and the acquisition of Regional Homes, indicating strong future demand for the company's products.
How Skyline Champion Corporation (SKY) Makes Money
Revenue Streams
Skyline Champion Corporation generates revenue through several key segments: U.S. Factory-built Housing, Canadian Factory-built Housing, and Corporate/Other. For the three months ended September 28, 2024, total net sales were $616.9 million, marking a 32.9% increase from $464.2 million in the same period of the previous year.
| Segment | Net Sales (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. Factory-built Housing | $587,127 | $158,995 | 37.1% |
| Canadian Factory-built Housing | $22,234 | $(7,022) | (24.0%) |
| Corporate/Other | $7,516 | $668 | 9.8% |
| Total | $616,877 | $152,641 | 32.9% |
U.S. Factory-built Housing
The U.S. Factory-built Housing segment is the primary driver of Skyline's revenue. For the three months ended September 28, 2024, the segment generated $587.1 million in net sales, primarily due to the inclusion of $148.0 million from Regional Homes, along with increased customer demand. The number of homes sold increased by 31.3%, totaling 6,357 units, with an average selling price of $92,400, up 4.5% from the prior year.
Canadian Factory-built Housing
The Canadian segment experienced a decrease in net sales to $22.2 million, down 24.0% from the previous year. This decline was attributed to a 22.8% decrease in homes sold, totaling 179 units. The average selling price decreased slightly to $124,200, reflecting lower demand in the Canadian market.
Corporate/Other Revenue
This segment includes transportation and financing activities, contributing $7.5 million to net sales, a 9.8% increase from the previous year. This growth was primarily driven by Champion Financing, despite lower shipments from the transportation business.
Gross Profit Analysis
For the three months ended September 28, 2024, total gross profit was $166.3 million, representing a 42.8% increase from $116.5 million in the same period of the previous year. The gross profit margin improved to 27.0% from 25.1% year-over-year.
| Segment | Gross Profit (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. Factory-built Housing | $156,319 | $51,235 | 48.8% |
| Canadian Factory-built Housing | $4,837 | $(3,170) | (39.6%) |
| Corporate/Other | $5,177 | $1,779 | 52.4% |
| Total | $166,333 | $49,844 | 42.8% |
Operating Income
Operating income for the three months ended September 28, 2024, was reported at $66.7 million, up from $52.0 million in the prior year, reflecting a growth of 28.2%. The increase in operating income was driven by higher sales volumes and improved gross margins.
Expenses
Selling, general, and administrative expenses rose to $99.7 million, a 54.6% increase compared to $64.5 million in the prior year. This increase was largely due to the acquisition of Regional Homes, which contributed significantly to the rise in operational costs.
| Type of Expense | Amount (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|
| Selling, General, and Administrative Expenses | $99,655 | $35,201 | 54.6% |
Net Income
Net income attributable to Champion Homes, Inc. for the three months ended September 28, 2024, was $54.7 million, up from $45.7 million in the same period of the previous year, resulting in a 19.6% increase.
Earnings Per Share
Basic earnings per share for the quarter were $0.95, compared to $0.80 in the prior year, reflecting the increase in net income. Diluted earnings per share were reported at $0.94, up from $0.79 year-over-year.
| Period | Basic EPS | Diluted EPS |
|---|---|---|
| September 28, 2024 | $0.95 | $0.94 |
| September 30, 2023 | $0.80 | $0.79 |
Conclusion
Skyline Champion Corporation's revenue is primarily derived from its U.S. Factory-built Housing segment, with significant contributions from Regional Homes. The company has seen growth in net sales and gross profit despite challenges in the Canadian market. The increased operational costs related to acquisitions have impacted net income and overall profitability, but strong sales volume has bolstered earnings per share.
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Article updated on 8 Nov 2024
Resources:
- Skyline Champion Corporation (SKY) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Skyline Champion Corporation (SKY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Skyline Champion Corporation (SKY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.