What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-01-29 compared with 2020-01-31 · 141 added, 132 removed, 120 unchanged (69% of the section changed)

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The Board of Directors

declared a one-time cash dividend of $1.00 per common share in fiscal 2019 paid to stockholders of record as of March 29, 2019 and a one-time cash dividend of $0.20

per common share in fiscal 2018 paid to stockholders of record as of March 26, 2018.

Any future determination to pay dividends will be at the discretion of our Board of Directors.

declared a one-time cash dividend of $1.00 per common share in fiscal 2020 paid to stockholders of record as of March 27, 2020.

Any future determination to pay dividends will be at the discretion of our

Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table displays equity compensation plan information as of the end of the fiscal year ended November 2, 2019 (see Note 13 to the

The following table displays equity compensation plan information as of the end of the fiscal year ended October 31, 2020 (see Note 13 to the

Companys financial statement included herein).

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Issuer Repurchases of Equity Securities

The following table represents information with respect to purchases by the Company of its common stock during the three months ended November 2, 2019.

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*

Aug 4 Nov 2, 2019

In March 2019 the Companys Board of Directors authorized management to repurchase up to 200,000 shares of

the Companys common stock or less each fiscal year in the open market.

During the twelve months ended November 2, 2019, management has repurchased an aggregate of 212,396 shares of common stock.

In December 2019 the Companys Board

of Directors authorized an additional 200,000 shares.

The Company did not repurchase any shares of its common stock during the fourth quarter ended October 31, 2020.

In September 2019, the Companys Board of Directors authorized management to repurchase up to 200,000 shares of the Companys common stock each

fiscal year in the open market.

During the twelve months ended October 31, 2020 management has repurchased an aggregate of 33,100 shares of common stock.

In September 2020 the Companys Board of Directors authorized 200,000 shares to be

repurchased during fiscal year 2021.

Selected Financial Data

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basis, the manufacturing process is such that Nobility can alter its product mix relatively quickly in response to changes in the market.

During fiscal years 2019 and 2018, Nobility continued to experience increased consumer demand for affordable

manufactured homes in Florida.

Our three, four and five bedroom manufactured homes are favored by families, compared with the one, two and three-bedroom homes that typically appeal to the retirement buyers who reside in the manufactured housing

In an effort to make manufactured homes more competitive with site-built housing, financing packages are available to provide (1) 30-year financing, (2) an interest rate reduction program, (3) combination land/manufactured home loans, and (4) a 5% down payment program for qualified buyers.

In the third quarter of fiscal year 2009, Majestic 21, a joint venture that the Company owns 50% of, secured $5,000,000 in financing from a commercial bank to

support loan originations.

The Company guaranteed 50% of this financing.

The outstanding principal balance of $94,694 on the note was repaid on February 1, 2019, at which time the Company was relieved of its guarantee obligation.

Prestige maintains several other outside financing sources that provide financing to retail homebuyers for its manufactured homes.

The Company continually

tries to develop relationships with new lenders, since established lenders will occasionally leave manufactured home lending.

wholly-owned subsidiary, Mountain Financial, Inc., is an independent insurance agent and licensed loan originator.

Mountain Financial provides automobile insurance, extended warranty coverage and property and casualty insurance to Prestige customers

in connection with their purchase and financing of manufactured homes.

The Companys fiscal year ends on the first Saturday on or after

The year ended November 2, 2019 (fiscal year 2019) and the year ended November 3, 2018 (fiscal year 2018) each consisted of a fifty-two week period.

During fiscal years 2020 and 2019, Nobility continued to experience consumer demand for affordable manufactured

homes in Florida.

In an effort to make manufactured homes more competitive with site-built housing, financing packages are available to provide

(1) 30-year financing, (2) an interest rate reduction program (buy-down), (3) combination land/manufactured home loans, and (4) a 5% down payment

program for qualified buyers.

Prestige maintains several other outside financing sources that provide financing to retail homebuyers for its manufactured

The Company continually tries to develop relationships with new lenders, since established lenders will occasionally leave manufactured home lending.

Prestiges wholly-owned subsidiary, Mountain Financial, Inc., is an independent insurance agent and licensed loan originator.

Mountain Financial provides

automobile insurance, extended warranty coverage and property and casualty insurance to Prestige customers in connection with their purchase and financing of manufactured homes.

The coronavirus (COVID-19) pandemic of 2020 has resulted in government authorities implementing numerous

measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns.

Although we were deemed an essential business and never closed our manufacturing plant or retail sales centers, these

measures had a negative impact on customer traffic (and corresponding sales) within our centers and the operations of our business partners.

While our manufacturing operations have continued, an outbreak in our manufacturing facility would adversely

impact our ability to produce new homes.

There is considerable uncertainty regarding the impact, and expected duration, of such measures and potential future measures, which could cause disruptions to our business in the future.

In addition, since

May of 2020, we have experienced unprecedented inflation in forest products, with little immediate relief in sight that have resulted in increases to our material costs.

Hurricane Laura also damaged some of the plants that supply the resin used in

residential vinyl siding and PVC piping, causing shortages and price increases.

The Company is monitoring these issues and has adjusted our selling prices accordingly to help offset the higher costs.

The Companys fiscal year ends on the first Saturday on or after October 31.

The year ended October 31, 2020 (fiscal year 2020) and the year

ended November 2, 2019 (fiscal year 2019) each consisted of a fifty-two week period.

Results of Operations

Total net sales in fiscal year

2019 were $46,347,931 compared to $41,878,186 in fiscal year 2018.

The Company reported net income of $8,810,420 in fiscal year 2019, compared to a net income of $4,963,632 during fiscal year 2018.

The following table summarizes certain key sales statistics and percent of gross profit as of and for fiscal years ended November 2, 2019 and

Total net sales in fiscal year 2020 were $41,612,307 compared to $46,347,931 in fiscal year 2019.

The Company reported net income of $5,983,698 in fiscal year

2020, compared to a net income of $8,810,420 during fiscal year 2019.

The demand for affordable manufactured housing in Florida has been adversely impacted by COVID-19 and actions taken in response thereto.

According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2019 through October 2020 were down approximately 16% from the same period last year.

In addition, the lack of lenders in

our industry, partly as a result of an increase in government regulations, still adversely affects our results by limiting many affordable manufactured housing buyers from purchasing homes.

The following table summarizes certain key sales statistics and percent of gross profit as of and for fiscal years ended October 31, 2020 and

November 2, 2019.

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Gross profit from the manufacturing facilitiesincluding intercompany sales

The demand for affordable manufactured housing in Florida continues to improve.

According to the Florida

Manufactured Housing Association, shipments in Florida for the period from November 2018 through October 2019 were up approximately 17% from the same period last year.

Constrained consumer credit and the lack of lenders in our industry, partly as a

result of an increase in government regulations, still affects our results by limiting many affordable manufactured housing buyers from purchasing homes.

However, recent legislation may help improve this situation in the future.

Nobilitys fourth quarter sales showed significant improvement from the first three quarters of fiscal year 2020.

current strong backlog of orders should produce a good fiscal 2021 first quarter, if COVID-19 measures and supply price increases can be controlled.

Maintaining our strong financial position is vital for future growth and success.

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Management remains convinced that our specific geographic market is one of the best long-term growth areas in the country.

June 5, 2019 the Company celebrated its 52nd anniversary in business specializing in the design and production of quality, affordable manufactured homes.

With multiple retail sales centers, an insurance agency subsidiary, and an investment in a

retirement manufactured home community, we are the only vertically integrated manufactured home company headquartered in Florida.

Insurance agent

commissions in fiscal year 2019 were $272,366 compared to $273,747 in fiscal year 2018.

We have established 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 November 2, 2019 and November 3, 2018.

June 5, 2020 we celebrated our 53rd anniversary in business specializing in the design and production of quality, affordable manufactured and modular homes.

With multiple retail sales centers in Florida for over 30 years and an insurance agency

subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.

Insurance agent commissions in fiscal year 2020

were $283,999 compared to $272,366 in fiscal year 2019.

The increase in insurance agent commissions due to more new policies and renewals generated which affects agent commission earned.

We have established 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 October 31, 2020 and November 2, 2019.

Cost of goods sold at our manufacturing facilities include:

materials, direct and indirect labor and manufacturing expenses (which consists of factory

occupancy, salary and salary related, delivery costs, manufactured home service costs and other manufacturing expenses).

Cost of goods sold at our retail sales centers include:

appliances, air conditioners, electrical and plumbing hook-ups, furniture, insurance, impact and permit fees, land and home fees, manufactured home, service warranty, setup contractor, interior drywall finish, setup display, skirting, steps, well, septic tank and other

Gross profit as a percentage of net sales was 29% in fiscal year 2019 compared to 25% in fiscal year 2018.

Our gross profit of $13,653,000 for

2019 increased 28% compared to $10,680,027 for 2018.

The increase in gross profit percentage is primarily due to the increase in the average retail and wholesale selling price on each home sold.

Selling, general and administrative expenses at our manufacturing facility include salaries, professional services, advertising and promotions, corporate

expense, employee benefits, office equipment and supplies and utilities.

materials, direct and indirect labor and manufacturing expenses (which consists of factory occupancy, salary and salary related, delivery costs, manufactured home service costs and other manufacturing expenses).

Cost of goods sold at our retail

sales centers include:

appliances, air conditioners, electrical and plumbing hook-ups, furniture, insurance, impact and permit fees, land and home fees, manufactured home, service warranty, setup contractor,

interior drywall finish, setup display, skirting, steps, well, septic tank and other expenses.

Gross profit as a percentage of net sales was 29% in

fiscal year 2020 and in fiscal year 2019.

Our gross profit was $12,130,487 for fiscal year 2020 compared to $13,653,000 for fiscal year 2019.

The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold.

The fluctuations in gross profit as a percentage of net sales is primarily due to the decrease in sales and the increase in the material cost of each home manufactured.

Selling, general and administrative expenses at our manufacturing facility include salaries, professional

services, advertising and promotions, corporate expense, employee benefits, office equipment and supplies and utilities.

Selling, general and administrative expenses at our retail sales center include:

advertising, retail sales centers expenses, salary and salary related, professional fees,

corporate expense, employee benefit, office equipment and supplies, utilities and travel.

advertising, retail sales centers expenses,

salary and salary related, professional fees, corporate expense, employee benefit, office equipment and supplies, utilities and travel.

Selling, general and administrative expenses at the insurance company include:

advertising, professional fees and office supplies.

As a percent of net sales, selling, general and administrative expenses was 11% in fiscal year 2019 compared to 12% in fiscal 2018, which increased $395,118

from fiscal year 2018 to 2019.

The increase in selling, general and administrative expenses in 2019 resulted from the increase in compensation expenses directly related to our increased sales.

The Company earned interest in the amount of $556,142 in fiscal year 2019 compared to $362,121 in fiscal year 2018.

Interest income is dependent on our cash

balance and available rates of return.

The increase is primarily due to the increase in the balances and the interest rate in the money market accounts and certificates of deposit.

advertising, professional fees and

office supplies.

As a percent of net sales, selling, general and administrative expenses was 12% in fiscal year 2020 compared to 11% in fiscal year 2019.

Selling, general and administrative expenses were $4,984,318 for fiscal year 2020 compared to $5,352,319 for fiscal year 2019.

The dollar decrease in expenses in fiscal 2020 resulted from the decrease in variable and accrued compensation expenses

which were direct results of decreased sales.

The Company earned interest in the amount of $286,897 in fiscal year 2020 compared to $556,142 in fiscal

Interest income is dependent on our cash balance and available rates of return.

The decrease is primarily due to the decrease in the interest rate in the money market accounts and certificates of deposit.

The Company earned $80,091 from its joint venture, Majestic 21, in fiscal year 2020 compared to $78,107 in fiscal year 2019.

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pre-tax income of $11,779,529 in fiscal year 2019.

The Company recorded an income tax expense of $2,969,109 in fiscal year 2019 compared to $1,641,830 in

fiscal year 2018.

Net income in fiscal year 2019 was $8,810,420 or $2.32 per basic and diluted share and net income in fiscal year 2018 was $4,963,632 or

$1.27 per basic and diluted share.

The Company recorded an income tax expense of $1,885,387 in

fiscal year 2020 compared to $2,969,109 in fiscal year 2019.

Net income in fiscal year 2020 was $5,983,698 or $1.64 per basic and diluted share and net

income in fiscal year 2019 was $8,810,420 or $2.32 per basic and diluted share.

Liquidity and Capital Resources

Cash and cash equivalents were $22,533,965 at November 2, 2019 compared to $28,364,861 at November 3, 2018.

Cash and cash equivalents were $30,305,902 at October 31, 2020 compared to $22,533,965 at November 2, 2019.

Certificates of deposit were $4,602,307

at November 2, 2019 compared to $6,034,093 at November 3, 2018.

Short-term investments were $521,283 at November 2, 2019 compared to $537,767 at November 3, 2018.

Working capital was $37,872,687at November 2, 2019 as

at October 31, 2020 compared to $10,153,575 at November 2, 2019.

Short-term investments were $358,960 at October 31, 2020 compared to $521,283 at November 2, 2019.

Working capital was $38,865,240 at October 31, 2020 as

compared to $37,872,687 at November 2, 2019.

During fiscal 2019, the Company repurchased an aggregate of 212,396 shares of its common stock for an aggregate of $4,585,861.

In June 2019, the Company sold its former Pace retail sales center

property for net proceeds of $1,078,325.

On October 30, 2019, the Company sold its 31.3% investment interest in Walden Woods South LLC for $1,510,000 in cash.

A cash dividend was paid from the Companys cash reserves in March 2019 in

the amount of $3,864,216 .

We own the entire inventory for our Prestige retail sales centers which includes new, pre-owned and repossessed or foreclosed homes and do not incur any third party floor plan

financing expenses.

A cash dividend was paid from our cash reserves in March 2020 in the amount of $1.00 per share ($3,630,970).

During fiscal 2020, the Company repurchased an aggregate of 33,100 shares of its common

stock for an aggregate of $822,450.

In June 2019, the Company sold its former Pace, Florida retail sales center property for net proceeds of $1,078,325.

In October 2019, the Company sold its 31.3% investment interest in Walden Woods South

LLC for $1,510,000 in cash.

During fiscal 2019, the Company repurchased an aggregate of 212,396 shares of its common stock for an aggregate of $4,585,861.A cash dividend was paid from the Companys cash reserves in March 2019 in the amount of

$1.00 per share ($3,864,216) .

We own the entire inventory for our Prestige retail sales centers which includes new, pre-owned and repossessed or foreclosed homes and do not incur any third party floor

plan financing expenses.

The Company has no material commitments for capital expenditures.

The Company currently has no line of credit facility and does not

believe that such a facility is currently necessary to its operations.

The Company has no debt.

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 $3.8 million of cash surrender value of life insurance which it may be able to access as an additional source of

liquidity though the Company has not currently viewed this to be necessary.

As of November 2, 2019, the Company continued to report a strong balance sheet which included total assets of approximately $58 million which was funded primarily

As of October 31, 2020, the Company continued to report a strong balance sheet which included total assets of approximately $60 million which was funded primarily

by stockholders equity of approximately $51 million.

Looking ahead, the Companys strong balance sheet and significant cash reserves

accumulated in profitable years has allowed the Company to remain sufficiently liquid so as to allow continuation of operations and should enable the Company to take advantage of market opportunities when presented by an expected improvement in the

overall and the industry specific economy in fiscal 2020 and beyond.

Management believes it has sufficient levels of liquidity as of the date of the filing of this Form 10-K to allow the Company to operate

into the foreseeable future.

accumulated in profitable years has allowed the Company to remain sufficiently liquid to allow the continuation of operations and should enable the Company to take advantage of any market opportunities.

Management believes it has sufficient levels

of liquidity as of the date of the filing of this Form 10-K to allow the Company to operate into the foreseeable future.

Critical Accounting Policies and Estimates

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See Note 4 Related Party

Transactions.

The Company recognizes revenue from its wholly-owned subsidiary, Mountain Financial, Inc., as follows:

Transactions to the Companys financial statement included herein

The Company recognizes revenue from its wholly-owned subsidiary, Mountain

Financial, Inc., as follows:

commission income (and fees in lieu of commissions) is recorded as of the effective date of insurance coverage or the billing date, whichever is later.

Commissions on premiums billed and collected directly by insurance companies are recorded as

revenue when received which, in many cases, is the Companys first notification of amounts earned due to the lack of policy and renewal information.

Commissions on premiums billed and collected directly by insurance

companies are recorded as revenue when received which, in many cases, is the Companys first notification of amounts earned due to the lack of policy and renewal information.

Contingent commissions are recorded as revenue when received.

Contingent commissions are

commissions paid by insurance underwriters and are based on the estimated profit and/or overall volume of business placed with the underwriter.

The data necessary for the calculation of contingent commissions cannot be reasonably obtained prior to

the receipt of the commission which, in many cases, is the Companys first notification of amounts earned.

The Company provides 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 November 2, 2019 or

November 3, 2018.

Contingent commissions are commissions paid by insurance underwriters and are based on the estimated profit and/or overall volume of business placed with the underwriter.

The data necessary for the calculation of contingent commissions cannot be

reasonably obtained prior to the receipt of the commission which, in many cases, is the Companys first notification of amounts earned.

The Company provides 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

October 31, 2020 or November 2, 2019.

Inventory Impairment Reserve

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Investments in Retirement Communities

its divestiture on October 30, 2019, the Company owned a 31.3% investment interest in Walden Woods South LLC , a manufactured home community located in Homosassa, Florida.

its divestiture in October 2019, the Company owned a 31.3% investment interest in Walden Woods South LLC.

Following the divestiture, we currently own no investments in retirement communities.

Investment in Majestic 21

On May 20, 2009,

the Company became a 50% guarantor on a $5 million note payable entered into by Majestic 21, a joint venture in which the Company owns a 50% interest.

The outstanding principal balance of $94,694 on the note was repaid on February 1, 2019,

at which time the Company was relieved of its guarantee obligation.

The Company accounts for income taxes utilizing the asset and liability method.

This approach requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets are reduced by a valuation

allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

On May 20, 2009, the Company became a 50% guarantor on a $5 million note payable entered into by Majestic 21, a joint venture engaged in providing

mortgage financing on manufactured homes in which the Company owns a 50% interest.

The outstanding principal balance of $94,694 on the note was repaid in February 2019, at which time the company was relieved of its guarantee obligation.

The Company accounts for income

taxes utilizing the asset and liability method.

This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying

amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets

will not be realized.

Rebate Program

The Company has a rebate program

for some dealers, based upon the number and type of homes purchased, which pays rebates based upon sales volume to the dealers.

Volume rebates are recorded as a reduction of sales in the accompanying consolidated financial statements.

liability is calculated and recognized as eligible homes are sold based upon factors surrounding the activity and prior experience of specific dealers and is included in accrued expenses in the accompanying consolidated balance sheets.

Company has a rebate program for some dealers, based upon the number and type of homes purchased, which pays rebates based upon sales volume to the dealers.

Volume rebates are recorded as a reduction of sales in the accompanying consolidated

financial statements.

The rebate liability is calculated and recognized as eligible homes are sold based upon factors surrounding the activity and prior experience of specific dealers and is included in accrued expenses in the accompanying

consolidated balance sheets.

Off-Balance Sheet Arrangements

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sheet arrangements or other contractually narrow or limited purposes.

As of November 2, 2019, we are not involved in any material unconsolidated entities (other than the Companys investments in Majestic 21).

As of October 31, 2020, we are not involved in any material unconsolidated entities (other than the Companys investments in Majestic 21).

Forward Looking Statements

Certain statements in this

report are forward-looking statements within the meaning of the federal securities laws.

Although Nobility believes that the 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, competitive pricing pressures at both the wholesale and retail levels, increasing material costs,

uncertain economic conditions, changes in market demand, changes in interest rates, availability of financing for retail and wholesale purchasers, consumer confidence, adverse 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, possible labor shortages, possible materials shortages, increasing labor cost, cyclical nature of

the manufactured housing industry, impact of fuel costs, catastrophic events impacting insurance costs, availability of insurance coverage for various risks to Nobility, market demographics, managements ability to attract and retain executive

officers and key personnel, increased global tensions, impact of mandated tariffs on material prices, market disruptions resulting from terrorist or other attack and any armed conflict involving the United States and the impact of inflation.

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, competitive pricing pressures at both the wholesale and retail levels, increasing material costs 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), continued excess retail inventory, increase in repossessions, changes in market demand, changes in interest rates, availability of financing for

retail and wholesale purchasers, consumer confidence, adverse 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 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, managements ability to attract and retain executive officers and key personnel, increased global tensions, market disruptions resulting from terrorist or

other attack and any armed conflict involving the United States and the impact of inflation.

Quantitative and Qualitative Disclosures about Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity