EDGAR 10-K Filing

Company CIK: 72205
Filing Year: 2025
Filename: 72205_10-K_2025_0000950170-25-011000.json

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ITEM 1. BUSINESS
Item 1. Business
Nobility Homes, Inc., a Florida corporation incorporated in 1967, designs, manufactures and sells a broad line of manufactured and modular homes through its own retail sales centers throughout Florida. Nobility also sells its manufactured homes on a wholesale basis to independent manufactured home retail dealers and manufactured home communities. All references in this annual report on Form 10-K to “Nobility,” “Company,” “we,” “us,” or “our” refer to Nobility Homes, Inc. and its consolidated subsidiaries unless the context otherwise suggests.
Manufactured Homes
Nobility’s homes are available in approximately 100 active models sold under the trade names “Kingswood,” “Richwood,” “Tropic Isle,” “Regency Manor,” and “Tropic Manor.” The homes, ranging in size from 464 to 2,800 square feet and containing from one to five bedrooms, are available in:
•Single-wide widths of 14 and 16 feet ranging from 35 to 72 feet in length.
•Double-wide widths of 20, 24, 26, 28 and 32 feet ranging from 32 to 72 feet in length.
•Triple-wide widths of 42 feet ranging from 60 to 72 feet in length.
•Quad unit with 2 sections 28 feet wide from 40 to 48 feet long and 2 sections 28 feet wide by 52 feet long.
Our floor plans can be built as an on-frame modular home. We have been approved to build A.N.S.I. (American National Standards Institute) Park models less than 400 square feet and exposure D homes.
Nobility’s homes are sold primarily as unfurnished dwellings ready for permanent occupancy. Interiors are designed and color coordinated in a range of decors. Depending on the size of the unit and quality of appliances and other appointments, retail prices for Nobility’s homes typically range from approximately $90,000 to $250,000. Most of the prices of Nobility’s homes are considered by it to be within the low to medium price range of the industry.
Nobility’s manufacturing plant utilizes assembly line techniques in manufactured home production. The plant manufactures and assembles the floors, sidewalls, end walls, roofs and interior cabinets for their homes. Nobility purchases, from outside suppliers, various other components that are built into its homes including the axles, frames, tires, doors, windows, pre-finished sidings, plywood, ceiling panels, lumber, rafters, insulation, gypsum board, appliances, lighting and plumbing fixtures, carpeting and draperies. Nobility is not dependent upon any one particular supplier for its raw materials or component parts and is not required to carry significant amounts of inventory to assure itself of a continuous allotment of goods from suppliers. Nobility continues to experience limitations being placed on certain key production materials from suppliers, the delay or lack of key components from vendors as well as back orders, delayed shipments, price increases and labor shortages.
Nobility generally does not manufacture its homes to be held by it as inventory (except for model home inventory of its wholly owned retail network subsidiary, Prestige Home Centers, Inc. ("Prestige")), but, rather, manufactures its homes after receipt of orders. Although Nobility attempts to maintain a consistent level of production of homes throughout the fiscal year, seasonal fluctuations do occur, with sales of homes generally lower during the first fiscal quarter due to the holiday season.
The sales area for a manufactured home manufacturer is limited by substantial delivery costs of the finished product. Nobility’s homes are delivered by outside trucking companies. Nobility estimates that it can compete effectively within a range of approximately 350 miles from its manufacturing plant in Ocala, Florida. Substantially all of Nobility’s sales are made in Florida.
Retail Sales
Prestige, our wholly owned subsidiary, operates ten retail sales centers in north and central Florida. Sales by Prestige accounted for 88% of Nobility’s sales during fiscal years 2024 and 2023, respectively.
Each of Prestige’s retail sales centers are located within 350 miles of Nobility’s Ocala manufacturing facility. Prestige owns the real estate at eight of its retail sales centers and leases the remaining two retail sales centers from unaffiliated parties.
The primary customers of Prestige are home buyers who generally purchase manufactured homes to place on their own home sites. Prestige operates its retail sales centers with a model home concept. Each of the homes displayed at its retail sales centers is furnished
and decorated as a model home. Although the model homes may be purchased from Prestige’s model home inventory, generally, customers order homes which are shipped directly from the factory to their home site. Prestige sales generally are to purchasers living within a radius of approximately 100 miles from the selling retail lot. The Company’s internet-based marketing program generates numerous leads which are directed to the Prestige retail sales centers to assist a potential buyer in purchasing a home.
The retail sale of manufactured homes is a highly competitive business. Because of the number of retail sales centers located throughout Nobility’s market area, potential customers typically can find several sales centers within a 100-mile radius of their present home. Prestige competes with over 80 other retailers in its primary market area, some of which may have greater financial resources than Prestige. In addition, manufactured homes offered by Prestige compete with site-built housing.
Prestige does not itself finance customers’ new home purchases. Financing for home purchases has historically been available from other independent sources that specialize in manufactured housing lending and banks that finance manufactured home purchases. Prestige and Nobility are not required to sign any recourse agreements with any of these retail financing sources.
Insurance and Financial Services
Mountain Financial, Inc., a wholly owned subsidiary of Prestige, is an independent insurance agent and licensed mortgage loan originator. Its principal activity is providing retail insurance services, which involves placing various types of insurance, including property and casualty, automobile and extended home warranty coverage, with insurance underwriters on behalf of its Prestige customers in connection with their purchase and financing of manufactured homes. As agent, we solely assist our customers in obtaining various types of insurance and extended warranty coverage with insurance underwriters. As such, we have no agreements with homeowners and/or third-party insurance companies other than agency agreements with various insurance carriers. 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 for fiscal years 2024 and 2023.
Wholesale Sales to Manufactured Home Communities
Nobility also sells its homes on a wholesale basis through two full-time salespersons to approximately 30 manufactured home communities and independent dealers. Nobility continues to seek new opportunities in the areas in which it operates, as there is ongoing turnover in the manufactured home communities as they achieve full occupancy levels. As is common in the industry, most of Nobility’s independent dealers sell homes produced by several manufacturers.
Nobility does not generally offer consigned inventory programs or other credit terms to its independent dealers and ordinarily receives payment for its homes within 15 to 30 days of delivery. However, Nobility may offer extended terms to manufactured home community dealers who do a high volume of business with Nobility. In order to stimulate sales, Nobility sells homes for display to related party manufactured home communities on extended terms and recognizes revenue when the homes are sold to the end users. The high visibility of Nobility’s homes in such communities generates additional sales of its homes through such dealers.
Regulation
The manufacture, distribution and sale of homes are subject to governmental regulation at the federal, state and local levels. The Department of Housing and Urban Development (HUD) has adopted national construction and safety standards that preempt state standards. HUD regulations require that manufactured homes be constructed to more stringent wind load and thermal standards. Compliance with these standards involves approval by a HUD approved engineering firm of engineering plans and specifications on all models. HUD has also promulgated rules requiring producers of manufactured homes to utilize wood products certified by their suppliers to meet HUD’s established limits on formaldehyde emissions. HUD’s standards also require periodic inspection by state or other third-party inspectors of plant facilities and construction procedures, as well as inspection of manufactured home units during construction. In addition, some components of manufactured homes may also be subject to Consumer Product Safety Commission standards and recall requirements. Modular homes manufactured by Nobility are required to comply with the Florida Building Code established by the Florida Department of Business and Professional Regulations.
Nobility estimates that compliance with federal, state and local environmental protection laws will have no material effect upon capital expenditures for plant or equipment modifications or earnings for the next fiscal year.
The transportation of manufactured homes is subject to state regulation. Generally, special permits must be obtained to transport the home over public highways and restrictions are imposed to promote travel safety including restrictions relating to routes, travel periods, speed limits, safety equipment and size.
Nobility homes are subject to the requirements of the Magnuson-Moss Warranty Act and Federal Trade Commission rulings which regulate warranties on consumer products. Nobility provides a limited warranty of one year on the structural components of its homes.
We have experienced unprecedented inflation and shortages in many material products, and difficulty in hiring additional and retaining production workers, with no immediate relief in sight, that have resulted in corresponding increases to our material and labor costs. The Company is monitoring these issues and has adjusted our selling prices accordingly to help offset the higher costs.
Competition
The manufactured home industry is highly competitive. The initial investment required for entry into the business of manufacturing homes is not unduly large. State bonding requirements for entry into the business vary from state to state. The bond requirement for Florida is $50,000. Nobility competes directly with other manufacturers, some of whom are both considerably larger and possess greater financial resources than Nobility. Nobility estimates that of the 18 manufacturers selling in the state, approximately 9 manufacture homes of the same type as Nobility and compete in the same market area. Nobility believes that it is generally competitive with most of those manufacturers in terms of price, service, warranties and product performance.
Employees
As of January 6, 2025, the Company had 144 full-time employees, including 35 employed by Prestige. 88 employees are factory personnel compared to 85 in such positions a year ago and 62 are in management, administrative, supervisory, sales and clerical positions compared to 57 a year ago. In addition, Nobility employs part-time employees when necessary.
The Company has managerial, administrative, supervisory, sales and manufacturing employees. We have a focus on safety and being drug free in our manufacturing operations.
Historically, we have had low turnover rates with our non-manufacturing employees. It is currently difficult for us to attract long-term quality employees for our manufacturing operations. We have experienced disruption in production as a result of our inability to find and retain manufacturing labor. We are using different hiring practices such as work release programs and employment services to reduce the turnover. However, we are still experiencing a shortage of new qualified factory production employees and continue to incur turnover of existing employees.
Nobility makes contributions toward employees’ group health and life insurance. Nobility, which is not subject to any collective bargaining agreements, has not experienced any work stoppage or labor disputes and considers its relationship with employees to be generally satisfactory.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide the information required by this item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Properties
As of January 30, 2025, Nobility owned one manufacturing plant as follows:
Location
Approximate Size
3741 SW 7th Street Ocala, Florida
72,000 sq. ft.
Nobility’s Ocala facility is located on approximately 35.5 acres of land on which an additional two-story structure adjoining the plant serves as Nobility’s corporate offices. The plant, which is of metal construction, is in good condition and requires little maintenance. The Company in 2024 completed an 11,900 square foot frame shop constructed of concrete block and metal to manufacture steel frames for our homes, on our current manufacturing plant property in Ocala, Florida.
Prestige owns the real estate on which it’s Ocala South, Ocala North, Auburndale, Inverness, Tavares, Panama City, Yulee and Punta Gorda, Florida retail sales centers are located. Prestige leases the property for its other two retail sales centers located in Chiefland and Hudson, Florida.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
Certain claims and suits arising in the ordinary course of business have been filed or are pending against the Company. In the opinion of management, the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
The Company does not maintain casualty insurance on some of its property, including the inventory at its retail centers, its plant machinery and plant equipment and is at risk for those types of losses.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
None.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
The Company’s common stock currently trades under the symbol NOBH on the OTCQX market. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Holders
At January 30, 2025 the approximate number of holders on record of common stock was 84 (not including individual participants in security position listings).
Dividends
The Board of Directors declared a one-time cash dividend of $1.50 per common share for fiscal year 2023 paid to stockholders of record as of March 25, 2024, and a one-time cash dividend of $1.00 per common share for fiscal year 2022 paid to stockholders of record as of March 20, 2023. Any future determination to pay dividends will be at the discretion of our Board of Directors.
Recent Sales of Unregistered Securities
None.
Issuer Repurchases of Equity Securities
The Company did not repurchase any shares of its common stock during the fourth quarter ended November 2, 2024.
In December 2023, the Company’s Board of Directors authorized the Company to repurchase up to 200,000 shares of the Company’s common stock during fiscal year 2024 on the open market. There was no shares of its common stock purchased in fiscal year 2024.
The Company’s Board of Directors authorized the Company to repurchase up to 200,000 shares of the Company’s common stock during fiscal year 2023 on the open market. During the twelve months ended November 4, 2023, the Company repurchased an aggregate of 102,083 shares of common stock including 100,000 shares of common stock from its President. See note 4 "Related Party Transactions" to the Company’s financial statements included herein.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
Nobility focuses on home buyers who generally purchase their manufactured homes from retail sales centers to locate on property they own. Nobility has aggressively pursued this market through its Prestige retail sales centers. While Nobility actively seeks to make wholesale sales to independent retail dealers, its presence as a competitor limits potential sales to dealers located in the same geographic areas serviced by its Prestige retail sales centers.
Nobility has aggressively targeted the retirement community market, which is made up of retirees moving to Florida and typically purchasing homes to be located on sites leased from park communities offering a variety of amenities. Sales are not limited by the presence of the Company’s Prestige retail sales centers in this type of arrangement, as the retirement community sells homes only within their community.
Nobility has a product line of approximately 100 active models. Although market demand can fluctuate on a fairly short-term 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 2024 and 2023, Nobility continued to experience 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 communities.
In an effort to make manufactured homes more competitive with site-built housing, financing packages are available through third-party lenders 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 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. 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. In addition, rising interest rates have slowed the demand for retail homebuyers.
Prestige’s 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 as well as to other non-Prestige customers.
The interest rate environment’s future impact on the overall housing market and other factors impacting the Company, such as production work force and supply of certain building products are difficult to forecast for fiscal year 2025. These factors have had a negative impact on customer traffic (and corresponding sales) within our sales centers, operations of the manufacturing facility and our business partners throughout fiscal years 2024 and 2023.
In fiscal year 2024, Prestige purchased from other manufacturers 18 new homes for an aggregate of ($1,859,175) for custom ordered presold homes and in fiscal year 2023 purchased 44 new homes from other manufacturers for an aggregate of ($4,432,483) to help eliminate the backlog from Nobility. Prestige has 73 new homes purchase for an aggregate of ($5,969,523) from Nobility and outside manufacturers, that are included in inventory and are in the field, waiting to be completed and closed as of November 2, 2024.
Nobility believes that being located in Florida offers a number of advantages such as an increasing population, a low-tax and business friendly state government. However, Nobility is also aware of climate-related risks such as hurricanes, tornados, sea-level rise, flooding and wildfires which are prone to occur in Florida. To date, management does not believe these climate-related risks have adversely impacted the Company. However, if such climate-related events impacted the Company’s manufacturing or sales facilities or deter future population growth in Florida, the Company would be adversely impacted.
The Company’s fiscal year ends on the first Saturday on or after October 31. The year ended November 2, 2024 (fiscal year 2024) consisted of a fifty-two-week period and the year ended November 4, 2023 (fiscal year 2023) consisted of a fifty-two-week period.
Results of Operations
Total net sales in fiscal year 2024 were $51,933,622 compared to $63,318,392 in fiscal year 2023. The Company reported net income of $8,611,262 in fiscal year 2024, compared to a net income of $10,898,864 in fiscal year 2023. Net sales decreased in fiscal year 2024 as compared to the prior year because of the decrease in the number of retail homes sold and manufactured. In addition, we are building and selling lower-priced homes due to the higher interest rates on mortgages that we believe are negatively impacting sales as compared to the prior years. There also remain delays in the receipt of certain key production materials from suppliers, back orders,
price increases and labor shortages which continue to cause delays in the completion of the homes at our manufacturing facility and the set-up process of retail homes in the field. Our inability to timely deliver and set up homes to customers has negatively impacted sales and earnings. We expect these challenges will continue into fiscal year 2025. The Company also continues to experience inflation in several building products resulting in increases in our material and labor costs which may increase the wholesale and retail selling prices of our homes. We believe that potential customers have delayed or deferred purchasing decisions when considering the interest rate environment.
The current demand for affordable manufactured housing in Florida and the U.S. is slowing, which we believe is because of the increased interest rate environment. According to the Florida Manufactured Housing Association, shipments for the industry in Florida for the period from November 2023 through October 2024 declined by approximately 3% from the same period last year.
The following table summarizes certain key sales statistics and percent of gross profit for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
New homes sold through Company owned sales centers
Pre-owned homes sold through Company owned sales centers
Homes sold to independent dealers
Total new factory built homes produced
Average new manufactured home price - retail
$
150,219
$
147,583
Average new manufactured home price - wholesale
$
68,551
$
72,612
As a percent of net sales:
Gross profit from the Company owned retail sales centers
%
%
Gross profit from the manufacturing facilities - including intercompany sales
%
%
Maintaining our strong financial position is vital for future growth and success. 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, 2024, we celebrated our 57th 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 34 years and an insurance agency subsidiary, we are the only vertically integrated manufactured home company headquartered in Florida.
Insurance agent commissions in fiscal year 2024 were $342,254 compared to $340,565 in fiscal year 2023. Revenues are generated by new and renewal policies being written 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 November 2, 2024 and November 4, 2023.
Cost of goods sold includes manufacturing costs such as: (1) materials, material variance and discounts, freight-in (2) direct and indirect labor-factory production (3) manufacturing expenses: (a) factory occupancy; depreciation of building and equipment, equipment rental, factory supplies and tools, repair/maintenance of building and equipment, rubbish disposal and utilities (b) salary and salary related; supervision, maintenance, purchasing, payroll taxes, group insurance and workmen’s compensation (c) delivery costs (d) home service costs; salaries servicemen and office personnel, home repair contractors and materials, service vans expense for gas/maintenance and servicemen travel expenses (e) other manufacturing expenses; employee benefits, factory gas, oil, insurance, licenses and taxes and professional services. Post manufacturing cost of goods sold at our retail model centers may 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 34% in fiscal year 2024 and in fiscal year 2023. Our gross profit was $17,424,077 for fiscal year 2024 compared to $21,487,885 for fiscal year 2023. The gross profit is dependent on the sales mix of wholesale and retail homes and number of pre-owned homes sold. The gross profit as a percentage of net sales remained consistent due to increases in our selling prices to offset the higher inflation costs of building products and labor cost on each home and the increase in the average gross profit at our retail sales centers.
Selling, general and administrative expenses at our manufacturing facility include salaries, professional services, advertising and promotions, corporate expenses, 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. Selling, general and administrative expenses at the insurance company include advertising, professional fees and office supplies.
Selling, general and administrative expenses as a percentage of net sales was 15% in fiscal year 2024 compared to 13% in fiscal year 2023. Selling, general and administrative expenses were $7,842,626 for fiscal year 2024 compared to $8,087,534 for fiscal year 2023. Selling, general and administrative expenses as a percent of net sales increased due to additional costs incurred with respect to the Company's audit, the decrease in sales at the manufacturing plant and retail sales centers and the fixed costs associated with many of the expenses.
The Company earned interest in the amount of $1,126,951 in fiscal year 2024 compared to $803,622 in fiscal year 2023. Interest income is dependent on our cash balance and available rates of return. The increase during 2024 is primarily due to the increase in the monies invested.
The Company earned $96,323 from its joint venture, Majestic 21, in fiscal year 2024 compared to $104,306 in fiscal year 2023. 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 could vary year to year, but overall, the earnings will continue to decrease due to the amortization, maturity and payoff of the loans.
We received $147,155 in fiscal year 2024 and $239,736 in fiscal year 2023 under an escrow arrangement related to a Finance Revenue Sharing Agreement (FRSA) between 21st Mortgage Corporation and the Company. The distributions from the escrow account, related to certain loans financed by 21st Mortgage Corporation, are recorded in income by the Company as received, which has been the Company’s past practice due to the uncertainty of the receipts. The earnings overall from the FRSA loan portfolio will continue to decrease due to the amortization and payoff of the loans.
The Company realized pre-tax income of $11,471,949 in fiscal year 2024 compared to a pre-tax income of $14,579,429 in fiscal year 2023.
The Company recorded an income tax expense of $2,860,687 in fiscal year 2024 compared to $3,680,565 in fiscal year 2023.
Net income in fiscal year 2024 was $8,611,262 or $2.63 per basic and diluted share and net income in fiscal year 2023 was $10,898,864 or $3.27 per basic and diluted share.
Liquidity and Capital Resources
Cash and cash equivalents were $13,521,296 at November 2, 2024 compared to $13,879,358 at November 4, 2023. Certificates of deposit were $13,021,839 at November 2, 2024 compared to $10,204,287 at November 4, 2023. Short-term investments were $680,017 at November 2, 2024 compared to $527,899 at November 4, 2023. Working capital was $42,927,149 at November 2, 2024 compared to $37,746,552 at November 4, 2023. In the first quarter of fiscal 2024, the Company received a distribution of $1.6 million from 21st Mortgage Corporation, representing our share of excess capital in the portfolio. A cash dividend was paid from our cash reserves in April 2024 in the amount of $1.50 per share ($4,903,243) and in April 2023 in the amount of $1.00 per share ($3,370,912). During fiscal 2023, the Company repurchased an aggregate 102,083 shares of its common stock for ($2,853,981). In fiscal year 2024, Prestige purchased from other manufacturers 18 new homes for an aggregate of ($1,859,175) for custom ordered presold homes and in fiscal year 2023 purchased 44 new homes from other manufacturers for an aggregate of ($4,432,483) to help eliminate the backlog from Nobility. Prestige has 73 new homes purchase for an aggregate of ($5,969,523) from Nobility and outside manufacturers, that are included in inventory and are in the field, waiting to be completed and closed as of the year end 2024. Prestige new home inventory was $18,475,932 at November 2, 2024 compared to $18,961,131 at November 4, 2023. 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 built a 11,900 square foot building at our manufacturing facility with equipment to manufacture steel frames for our homes, which was completed in fiscal 2024 for an approximate cost of $1,752,600 for the building and equipment.
The Company currently has no line of credit facility and no debt and does not believe that such a facility is currently necessary for its operations. The Company also has approximately $4.5 million of cash surrender value of life insurance which it would 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,
2024, the Company continued to report a strong balance sheet which included total assets of approximately $66.6 million which was funded primarily by stockholders’ equity of approximately $56.6 million.
Looking ahead, the Company’s strong balance sheet and significant cash reserves 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
The Company applies judgment and estimates, which may have a material effect in the eventual outcome of assets, liabilities, revenues and expenses, accounts receivable, inventory and goodwill. The following explains the basis and the procedure where judgment and estimates are applied.
Revenue Recognition
The Company recognizes revenue from its retail sales of new manufactured homes upon the occurrence of the following:
•Its receipt of a down payment,
•Construction of the home is complete,
•Home has been delivered and set up at the retail home buyer’s site and title has been transferred to the retail home buyer,
•Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and
•Completion of any other significant obligations.
The Company recognizes revenue from the sale of the repurchased homes upon transfer of title to the new purchaser.
The Company recognizes revenue from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home and transferring title and risk of loss to the independent dealer. For wholesale shipments to independent dealers, the Company has no obligation to set up the home or to complete any other significant obligations.
Sales of homes to affiliated entities that are subject to contingent payment terms are considered inventory consignment arrangements. Revenue from such arrangements is recognized when the homes are sold to the end users and payment is collected by the affiliated entity.
See Note 4 “Related Party Transactions” to the Company’s 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 commission receipt 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 Company’s 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 Company’s 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 on November 2, 2024 or November 4, 2023.
Inventories - New home inventory is carried at a lower of cost or net realizable value. Capitalized manufacturing costs on retail manufactured homes built by the Company are valued at manufacturing cost, including materials, labor, and manufacturing overhead, or net purchase price if acquired from unaffiliated third parties. 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.
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.
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 21st 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 a cost determined by the specific identification method. All of the refurbishment costs are paid by 21st Mortgage Corporation. This arrangement assists 21st 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 21st 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 21st Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21st Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for repossessions inventory.
Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s consolidated balance sheets.
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. 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 net realizable value.
Other inventory costs are determined on a first-in, first-out basis.
See Note 6 "Inventories" to the Company’s financial statement included herein.
Income Taxes
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. 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
As part of our ongoing business, we generally do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities (“VIE’s”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of November 2, 2024, we are not involved in any material unconsolidated entities (other than the Company’s investments in Majestic 21).
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 competitive pricing pressures at both the wholesale and retail levels, inflation, increasing material costs (including forest based products) or availability of materials due to supply chain interruptions (such as current inflation with forest products and supply issues with vinyl siding and PVC piping), changes in market demand, increase 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, management’s ability to attract and retain executive officers and key personnel, increased global tensions, market disruptions resulting from terrorist attacks, or other events such as a pandemic, any armed conflict involving the United States and the impact of inflation.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to provide the information required by this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm-Hancock Askew & Co., LLP (Auditor ID#794)
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Nobility Homes, Inc.
Ocala, Florida
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Nobility Homes, Inc. (the Company) as of November 2, 2024 and November 4, 2023, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended November 2, 2024, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of November 2, 2024 and November 4, 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended November 2, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Capitalized manufacturing costs in new home inventory
Description of the Matter
As described in Note 1 to the consolidated financial statements, the Company accounts for new home inventory at the lower of cost or net realizable value. Capitalized manufacturing costs on retail manufactured homes built by the Company are valued at manufacturing cost, including materials, labor, and manufacturing overhead, or net purchase price if acquired from unaffiliated third parties. 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.
We identified the estimation of manufacturing cost on retail manufactured homes built by the Company that remain in inventory as a critical audit matter. The Company estimates manufacturing costs based on an original bill of materials which may or may not have
been recently updated. For those bills of materials that have not been recently updated, the Company estimates the cost based on inflation estimates of current material prices and labor and overhead rates since the last update of the standard cost. The estimates in calculating costs lead to a high level of estimation uncertainty related to inventory cost estimates, the inherent subjectivity in management’s judgment in estimating the total costs, and high degree of auditor judgment and an increased extent of effort to test the Company’s cost capitalization.
How we Addressed the Matter in our Audit
•We gained an understanding of internal controls in place over the estimation process and management’s process to evaluate assumptions used.
•We performed current inventory price testing on material purchases and the application of labor and overhead.
•We performed analytical procedures to validate capitalized costs based on comparison to the Company’s acquisition cost of comparable manufactured homes.
•We obtained audit evidence supporting gross margins for wholesale sales to independent dealers to support the inventory capitalized cost based on actual gross margins realized.
/s/ Hancock Askew & co., LLP
Jacksonville, Florida
January 30, 2025
PCAOBID # 794
We have served as the Company’s auditor since 2024
Nobility Homes, Inc.
Consolidated Balance Sheets
November 2, 2024 and November 4, 2023
November 2,
November 4,
Assets
Current assets:
Cash and cash equivalents
$
13,521,296
$
13,879,358
Certificates of deposit
13,021,839
10,204,287
Short-term investments
680,017
527,899
Accounts receivable - trade
2,935,517
2,864,808
Mortgage notes receivable
4,505
4,391
Inventories
21,039,344
21,518,098
Prepaid expenses and other current assets
1,727,034
1,733,179
Total current assets
52,929,552
50,732,020
Property, plant and equipment, net
8,280,695
8,268,976
Mortgage notes receivable, less current portion
141,728
142,761
Other investments
463,633
1,953,199
Property held for resale
26,590
26,590
Deferred income taxes
60,628
90,274
Cash surrender value of life insurance
4,539,813
4,331,659
Other assets
156,287
156,287
Total assets
$
66,598,926
$
65,701,766
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
753,317
$
819,143
Accrued compensation
800,013
992,622
Accrued expenses and other current liabilities
1,826,042
1,809,335
Income taxes payable
692,303
661,261
Customer deposits
5,930,728
8,703,107
Total current liabilities
10,002,403
12,985,468
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; 3,268,829 and 3,269,075 shares outstanding, respectively
536,491
536,491
Additional paid in capital
11,140,687
10,964,985
Retained earnings
74,677,783
70,969,764
Less treasury stock at cost, 2,096,078 and 2,095,832 shares, respectively
(29,758,438
)
(29,754,942
)
Total stockholders' equity
56,596,523
52,716,298
Total liabilities and stockholders' equity
$
66,598,926
$
65,701,766
The accompanying notes are an integral part of these financial statements.
Nobility Homes, Inc.
Consolidated Statements of Income
For the years ended November 2, 2024 and November 4, 2023
November 2,
November 4,
Net sales
$
51,933,622
$
63,318,392
Cost of sales
(34,509,545
)
(41,830,507
)
Gross profit
17,424,077
21,487,885
Selling, general and administrative expenses
(7,842,626
)
(8,087,534
)
Operating income
9,581,451
13,400,351
Other income (expense):
Interest income
1,126,951
803,622
Undistributed earnings in joint venture - Majestic 21
96,323
104,306
Proceeds received under escrow arrangement
147,155
239,736
Increase (decrease) in fair value of equity investment
152,118
(61,172
)
Gain on disposal of property
146,000
-
Miscellaneous
221,951
92,586
Total other income
1,890,498
1,179,078
Income before provision for income taxes
11,471,949
14,579,429
Income tax expense
(2,860,687
)
(3,680,565
)
Net income
$
8,611,262
$
10,898,864
Weighted average number of shares outstanding:
Basic
3,268,829
3,333,504
Diluted
3,279,479
3,337,649
Net income per share:
$
2.63
$
3.27
Basic
$
2.63
$
3.27
Diluted
The accompanying notes are an integral part of these financial statements.
Nobility Homes, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
For the years ended November 2, 2024 and November 4, 2023
Common
Common
Additional
Retained
Treasury
Stock Shares
Stock
Paid-in-Capital
Earnings
Stock
Total
Balance at November 4, 2023
3,269,075
$
536,491
$
10,964,985
$
70,969,764
$
(29,754,942
)
$
52,716,298
Cash dividend $1.50 per common share
-
-
-
(4,903,243
)
-
(4,903,243
)
Purchase of treasury stock
-
-
-
-
-
-
Stock-based compensation
(246
)
-
175,702
-
(3,496
)
172,206
Net income
-
-
-
8,611,262
-
8,611,262
Balance at November 2, 2024
3,268,829
$
536,491
$
11,140,687
$
74,677,783
$
(29,758,438
)
$
56,596,523
Common
Common
Additional
Retained
Treasury
Stock Shares
Stock
Paid-in-Capital
Earnings
Stock
Total
Balance at November 6, 2022
3,370,912
$
536,491
$
10,849,687
$
63,441,812
$
(26,904,457
)
$
47,923,533
Cash dividend $1.00 per common share
-
-
-
(3,370,912
)
-
(3,370,912
)
Purchase of treasury stock
(102,083
)
-
-
-
(2,853,981
)
(2,853,981
)
Stock-based compensation
-
115,298
-
3,496
118,794
Net income
-
-
-
10,898,864
-
10,898,864
Balance at November 4, 2023
3,269,075
$
536,491
$
10,964,985
$
70,969,764
$
(29,754,942
)
$
52,716,298
The accompanying notes are an integral part of these financial statements.
Nobility Homes, Inc.
Consolidated Statements of Cash Flows
For the years ended November 2, 2024 and November 4, 2023
November 2,
November 4,
Cash flows from operating activities:
Net income
$
8,611,262
$
10,898,864
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation
170,413
153,512
Deferred income taxes
29,646
(46,496
)
Undistributed earnings in joint venture - Majestic 21
(96,323
)
(104,306
)
Return on investment in joint venture-Majestic 21
1,600,889
-
Gain on disposal of property
(146,000
)
-
(Increase) Decrease in fair market value of equity investments
(152,118
)
61,172
Stock-based compensation
172,206
118,794
Decrease (increase) in:
Accounts receivable - trade
(70,709
)
(1,576,163
)
Inventories
478,754
1,939,395
Prepaid expenses and other current assets
6,145
439,496
Interest receivable
(573,146
)
(309,134
)
(Decrease) increase in:
Accounts payable
(65,826
)
(300,045
)
Accrued compensation
(192,609
)
(139,801
)
Accrued expenses and other current liabilities
16,707
66,639
Income taxes payable
31,042
432,061
Customer deposits
(2,772,379
)
(1,510,971
)
Net cash provided by operating activities
7,047,954
10,123,017
Cash flows from investing activities:
Purchase of property, plant and equipment
(182,132
)
(506,793
)
Purchase certificates of deposit
(14,304,000
)
(11,026,000
)
Purchase of property held for resale
-
(26,590
)
Purchase of LMC stock for membership in buyers group
(15,000
)
-
Proceeds from certificates of deposit
11,496,000
4,848,000
Proceeds from disposal of property
146,000
-
Collections on interest receivable
563,594
186,735
Collections on mortgage notes receivable
Collections on equipment and other notes receivable
-
40,504
Increase in cash surrender value of life insurance
(208,154
)
(188,624
)
Net cash used in investing activities
(2,502,773
)
(6,672,215
)
Cash flows from financing activities:
Payment of cash dividend
(4,903,243
)
(3,370,912
)
Purchase of treasury stock
-
(2,853,981
)
Net cash used in financing activities
(4,903,243
)
(6,224,893
)
Decrease in cash and cash equivalents
(358,062
)
(2,774,091
)
Cash and cash equivalents at beginning of year
13,879,358
16,653,449
Cash and cash equivalents at end of year
$
13,521,296
$
13,879,358
Supplemental disclosure of cash flows information:
Income taxes paid
$
2,800,000
$
3,000,000
The accompanying notes are an integral part of these financial statements.
NOTE 1 Reporting Entity and Significant Accounting Policies
Description of Business and Principles of Consolidation - The consolidated financial statements include the accounts of Nobility Homes, Inc. (“Nobility”), its wholly-owned subsidiaries, Prestige Home Centers, Inc. (“Prestige”), and Prestige’s wholly-owned subsidiaries, Mountain Financial, Inc., an independent insurance agency and licensed mortgage loan originator and Majestic Homes, Inc., (collectively the “Company”). The Company is engaged in the manufacture and sale of manufactured and modular homes to various dealerships, including its own retail sales centers, and manufactured housing communities throughout Florida. The Company has a manufacturing plant in operation that is located in Ocala, Florida. At November 2, 2024, Prestige operated ten Florida retail sales centers: Ocala (2), Chiefland, Auburndale, Inverness, Hudson, Tavares, Yulee, Panama City and Punta Gorda.
All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
Use of Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates and assumptions are based upon management’s best knowledge of current events and actions that the Company may take in the future. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported financial condition and results of operations; if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Significant estimates and assumptions by management affect: valuation of inventory homes, the allowance for doubtful accounts, the carrying value of long-lived assets, the provision for income taxes and related deferred tax accounts, certain accrued expenses and contingencies, warranty reserve and stock-based compensation.
Fiscal Year - The Company’s fiscal year ends on the first Saturday on or after October 31. The year ended November 2, 2024 (fiscal year 2024) consisted of a fifty-two-week period and the year ended November 4, 2023 (fiscal year 2023) consisted of a fifty-two-week period.
Revenue Recognition - The Company’s revenue comes substantially from the sale of manufactured housing, modular housing and park models, along with freight billed to customers, parts sold and aftermarket services.
The Company recognizes revenue following the comprehensive framework of Financial Accounting Standards Board ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09), which established a methodology for determining how much revenue to recognize and when it should be recognized through application of the following five-step approach:
1.Identify the contract(s) with a customer.
2.Identify each performance obligation in the contract.
3.Determine the transaction price.
4.Allocate the transaction price to each performance obligation; and
5.Recognize revenue when or as each performance obligation is satisfied.
The Company recognizes revenue from its retail sales of new manufactured homes upon the occurrence of the following:
•Its receipt of a down payment,
•Construction of the home is complete,
•Home has been delivered and set up at the retail home buyer’s site, and title has been transferred to the retail home buyer,
•Remaining funds have been released by the finance company (financed sales transaction), remaining funds have been committed by the finance company by an agreement with respect to financing obtained by the customer, usually in the form of a written approval for permanent home financing received from a lending institution, (financed construction sales transaction) or cash has been received from the home buyer (cash sales transaction), and
•Completion of any other significant obligations.
The Company recognizes revenue from the sale of the repurchased homes upon transfer of title to the new purchaser.
The Company recognizes revenues from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home, and transferring title and risk of loss to the independent dealer. For wholesale shipments to independent dealers, the Company has no obligation to set up the home or to complete any other significant obligations.
The Company recognizes revenues 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 commission receipt 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 Company’s 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 Company’s 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, 2024 and November 4, 2023.
Sales of homes to affiliated entities that are subject to contingent payment terms are considered inventory consignment arrangements. Revenue from such arrangements is recognized when the homes are sold to the end users and payment is collected by the affiliated entity.
See Note 4 “Related Party Transactions” to the Company’s financial statement included herein.
Revenues by Products and Services - Revenues by net sales from manufactured housing, pre-owned homes, and insurance agent commissions for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Manufactured housing
$
51,247,227
$
62,564,790
Pre-owned homes
344,141
413,037
Insurance agent commissions
342,254
340,565
Total net sales
$
51,933,622
$
63,318,392
Cash and Cash Equivalents - The Company considers all money market accounts and highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Certificates of Deposit - Certificates of deposits are recorded at cost plus accrued interest.
Accounts Receivable - Accounts receivable are stated at net realizable value. An allowance for credit losses is provided based on prior collection experiences and management’s analysis of specific accounts, as well as current economic conditions and forecasts that affect the collectability of the reported amount. At November 2, 2024 or November 4, 2023, in the opinion of management, no material accounts were considered uncollectible and, accordingly, no allowance was deemed necessary.
Accounts receivable fluctuate due to the number of homes sold to independent dealers. The Company recognizes revenues from its independent dealers upon receiving wholesale floor plan financing or establishing retail credit approval for terms, shipping of the home, and transferring title and risk of loss to the independent dealer.
Investments - The Company’s investments consist of equity securities of a public company. Investments with maturities of less than one year are classified as short-term investments. The Company’s equity investment in a public company is classified as “available-for-sale” and carried at fair value. Unrealized gains and losses on these available-for-sale securities are reflected in the statement of income.
Inventories - New home inventory is carried at a lower of cost or net realizable value. Capitalized manufacturing costs on retail manufactured homes built by the company are valued at manufacturing cost, including materials, labor, and manufacturing overhead, or net purchase price if acquired from unaffiliated third parties. 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.
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.
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 21st 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 a cost determined by the specific identification method. All of the refurbishment costs are paid by 21st Mortgage Corporation. This arrangement assists 21st 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 21st 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 21st Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21st Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for repossessions inventory.
Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s consolidated balance sheets. The Company had no consigned inventory as of November 2, 2024 and November 4, 2023.
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. 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 net realizable value.
Other inventory costs are determined on a first-in, first-out basis.
See Note 6 “Inventories” to the Company’s financial statement included herein.
Property, Plant and Equipment - Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Routine maintenance and repairs are charged to expense when incurred. Major replacements and improvements are capitalized. Gains or losses are credited or charged to earnings upon disposition.
Investment in Majestic 21 - Majestic 21 was formed in 1997 as a joint venture with our joint venture partner, an unrelated entity, 21st Mortgage Corporation (“21st Mortgage”). We have been allocated our share of net income and distributions on a 50/50 basis since Majestic 21’s formation. While Majestic 21 has been deemed to be a variable interest entity, the Company only holds a 50% interest in this entity and all allocations of profit and loss are on a 50/50 basis. Since all allocations are to be made on a 50/50 basis and joint decisions with the joint venture partner are made which most significantly impact Majestic 21 economic performance therefore, the Company is not required to consolidate Majestic 21 with the accounts of Nobility Homes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) No. 810, “Consolidations” (ASC 810). Management believes that the Company’s maximum exposure to loss as a result of its involvement with Majestic 21 is its investment in the joint venture. Based on management’s evaluation, there was no impairment of this investment at November 2, 2024 or November 4, 2023.
The Company entered into an arrangement in 2002 with 21st Mortgage to repurchase certain pre-owned homes. Under this arrangement or any other arrangement, the Company is not obligated to repurchase any foreclosed/repossessed units of Majestic 21 as it does not have a repurchase agreement or any other guarantees with Majestic 21. However, the Company buys from 21st Mortgage foreclosed/repossessed units from the Majestic 21 portfolio and acts as a remarketing agent. It resells those units through the Company’s network of retail centers which management believes benefits the historical loss experience of the joint venture. The only impact on the Company’s operations from this arrangement are commissions earned on the resale of these units and interest earned for the Company’s carrying costs of the units while in inventory.
See Note 14 “Commitments and Contingent Liabilities” to the Company’s financial statement included herein.
Impairment of Long-Lived Assets - In the event that facts and circumstances indicate that the carrying value of a long-lived asset may be impaired, an evaluation of recoverability is performed by comparing the estimated future undiscounted cash flows associated with the asset to the asset’s carrying amount to determine if a write-down is required. If such evaluations indicate that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values.
Customer Deposits - A retail customer is required to make a down payment ranging from $500 to 35% of the retail contract price based upon the creditworthiness of the customer. The retail customer receives the full down payment back when the customer is not
able to obtain retail financing. If the retail customer receives retail financing and decides not to go through with the retail sale, the Company can withhold 20% of the retail contract price. The Company does not typically receive any deposits from independent dealers.
Company Owned Life Insurance - The Company has purchased life insurance policies for a key executive. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.
Warranty Costs - The Company provides a warranty as the manufactured homes are sold. Amounts related to these warranties for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Beginning accrued warranty expense
$125,000
$125,000
Less: reduction for payments
(659,625)
(571,441)
Plus: additions to accrual
695,625
571,441
Ending accrued warranty expense
$161,000
$125,000
The Company’s limited warranty covers substantial defects in material or workmanship in specified components of the home including structural elements, plumbing systems, electrical systems, and heating and cooling systems which are supplied by the Company that may occur under normal use and service during a period of twelve (12) months from the date of delivery to the original homeowner, and applies to the original homeowner or any subsequent homeowner to whom this product is transferred during the duration of this twelve (12) month period.
The Company tracks the warranty claims per home. Based on the history of the warranty claims, the Company has determined that a majority of warranty claims usually occur within the first three months after the home is sold. The Company determines its warranty accrual using the last three months of home sales. Accrued warranty costs are included in accrued expenses in the accompanying consolidated balance sheets.
Accrued Home Setup Costs - Accrued home setup costs represent amounts due to vendors and/or independent contractors for various items related to the actual setup of the home on the retail home buyers’ site. These costs include appliances, air conditioners, electrical/plumbing hook-ups, furniture, insurance, impact/permit fees, land/home fees, extended service plan, freight, skirting, steps, well, septic tanks and other setup costs and are included in accrued expenses in the accompanying consolidated balance sheets.
Stock-Based Compensation - The Company has a stock incentive plan (the “Plan”) which authorizes the issuance of options to purchase common stock. Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the period during which an employee is required to provide service in exchange for the award (usually the vesting period).
Rebate Program - The Company has a rebate program for some dealers based upon the number and type of home 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. There were no rebates earned by dealers during fiscal years 2024 and 2023.
Advertising - Advertising for Prestige retail sales centers consists primarily of internet, newspaper, radio and television advertising. All costs are expensed as incurred. Advertising expenses amounted to approximately $188,516 and $125,067 for the fiscal years 2024 and 2023, respectively.
Income Taxes - 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
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.
Shipping and Handling Costs - Net sales include the revenue related to shipping and handling charges billed to customers. The related costs associated with shipping and handling is included as a component of cost of goods sold.
Segments - The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information on a company-wide or consolidated basis. Accordingly, the Company accounts for its operations in accordance with FASB ASC No. 280, “Segment Reporting.” No segment disclosures have been made as the Company considers its business activities as a single segment.
Major Customers -There were no customers that accounted for more than 10% of our total net sales in fiscal year 2024.
Concentration of Credit Risk - The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term investments and accounts receivable. At times, the Company’s deposits may exceed federally insured limits. However, the Company has not experienced any losses in such accounts and management believes the Company is not exposed to any significant credit risk in these accounts. The majority of the Company’s sales are credit sales which are made primarily to customers whose ability to pay is dependent upon the industry economics prevailing in the areas where they operate; however, concentrations of credit risk with respect to accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. The Company maintains reserves for potential credit losses when deemed necessary and such losses have historically been within management’s expectations.
Concentration of Retail Financing Sources -There are two national lenders that service the manufactured housing industry with several others who specialize in government insured loans (Fannie, Freddie, FHA, VA, etc.). With only a few lenders dedicated to our industry, the loss of any of them could adversely affect our retail sales.
Recently Adopted Accounting Standards - In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016 - 13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments. This standard was effective for the Company beginning November 5, 2023. There was no impact on our consolidated financial statements.
Recently Issued Accounting Standards - In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The update will be effective for annual periods beginning after December 15, 2023 (fiscal 2025). We are assessing the effect of this update on our consolidated financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid to the U.S. Government. The update will be effective for annual periods beginning after December 15, 2024 (fiscal 2026). We are assessing the effect of this update on our consolidated financial statement disclosures.
NOTE 2 Investments
The following is a summary of short-term investments for the years ended November 2, 2024 and November 4, 2023.
November 2, 2024
Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated Fair
Value
Equity securities in a public company
$
167,930
$
512,087
$
-
$
680,017
November 4, 2023
Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated Fair
Value
Equity securities in a public company
$
167,930
$
359,969
$
-
$
527,899
The fair values were estimated based on unadjusted quoted prices at each respective period end.
NOTE 3 Fair Values of Financial Instruments
The carrying amount of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of those instruments.
The Company accounts for the fair value of financial instruments in accordance with FASB 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 table represents the Company’s financial assets and liabilities which are carried at fair value for the years ended November 2, 2024 and November 4, 2023.
November 2, 2024
Level 1
Level 2
Level 3
Equity securities in a public company
$
680,017
$
-
$
-
November 4, 2023
Level 1
Level 2
Level 3
Equity securities in a public company
$
527,899
$
-
$
-
NOTE 4 Related Party Transactions
Affiliated Entities
TLT, Inc. - Our President and Chairman of the Board of Directors (“President”) and the Executive Vice President each own 50% of the stock of TLT, Inc. TLT, Inc. is the general partner of limited partnerships which are developing manufactured housing communities in Central Florida (the “TLT Communities”). Our President owns between a 24.75% and a 56.0% direct and indirect interest in each of these limited partnerships. Our Executive Vice President owns between a 23.0% and a 57.75% direct and indirect interest in each of these limited partnerships. The TLT Communities have purchased manufactured homes exclusively from the Company since 1990. Sales to TLT Communities were not significant during fiscal years 2024 and 2023.
Repurchase of Common Stock - In June 2023, the Company repurchased 100,000 shares of common stock from our President at $27.97 per share.
NOTE 5 Other Investments
Investment in Joint Venture - Majestic 21 - During fiscal 1997, the Company contributed $250,000 for a 50% interest in a joint venture engaged in providing mortgage financing on manufactured homes. This investment is accounted for under the equity method of accounting.
While Majestic 21 has been deemed to be a variable interest entity, the Company only holds a 50% interest in this entity and all allocations of profit and loss are on a 50/50 basis. Since all allocations are to be made on a 50/50 basis and the Company’s maximum exposure is limited to its investment in Majestic 21, management has concluded that the Company would not absorb a majority of Majestic 21’s expected losses nor receive a majority of Majestic 21’s expected residual returns; therefore, the Company is not required to consolidate Majestic 21 with the accounts of Nobility Homes in accordance with ASC 810.
See Note 14 “Commitments and Contingent Liabilities” to the Company’s financial statement included herein.
The Company received a one-time distribution of approximately $1.6 million in first quarter of 2024, from 21st Mortgage Corporation, representing our 50% of the excess capital in the portfolio. We received no distributions from the Majestic 21 joint venture in fiscal year 2023.
With regard to our investment in Majestic 21, there are no differences between our investment balance and the amount of underlying equity in net assets owned by Majestic 21.
NOTE 6 Inventories
A breakdown of the elements of inventory for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Raw materials
$1,180,659
$1,203,672
Work-in-process
144,959
146,969
Finished homes - Nobility manufactured
12,126,215
10,144,045
Finished homes - Other manufactures
6,349,717
8,817,086
Pre-owned homes
962,209
947,457
Model home furniture
275,585
258,869
Inventories
$21,039,344
$21,518,098
NOTE 7 Property, Plant and Equipment
Property, plant and equipment, along with their estimated useful lives and related accumulated depreciation are summarized for the years ended November 2, 2024 and November 4, 2023.
Range of Lives in
November 2,
November 4,
Years
Land
-
$4,872,382
$4,872,382
Land improvements
10-20
1,277,025
1,253,025
Buildings and improvements
15-40
2,587,645
2,584,852
Machinery and equipment
3-10
1,089,934
1,064,827
Furniture and fixtures
3-10
301,889
301,889
Frame shop
-
1,753,375
1,713,901
11,882,250
11,790,876
Less accumulated depreciation
(3,601,555)
(3,521,900)
$8,280,695
$8,268,976
Depreciation expenses during the years ended November 2, 2024 and November 4, 2023 totaled $170,413 and $153,512, respectively.
NOTE 8 Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities are comprised for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Accrued warranty expense
$161,000
$125,000
Accrued property and sales taxes
325,154
294,874
Other accrued expenses
1,339,888
1,389,461
Total accrued expenses and other current liabilities
$1,826,042
$1,809,335
NOTE 9 Proceeds Received Under Escrow Arrangement
The Company received $147,155 in fiscal year 2024 and $239,736 in fiscal year 2023 under an escrow arrangement related to a Finance Revenue Sharing Agreement between 21st Mortgage Corporation and the Company. The distributions from the escrow account, related to certain loans financed by 21st Mortgage Corporation, are recorded in income by the Company when received, which has been the Company’s past practice.
NOTE 10 Income Taxes
The Company computes income tax expense using the liability method. Under this method, deferred income taxes are provided, to the extent considered realizable by management, for basis differences of assets and liabilities for financial reporting and income tax purposes.
The Company follows guidance issued by the FASB with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded.
The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of the state of Florida. The Company’s income tax returns for the past three years are subject to examination by tax authorities and may change upon examination.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax laws and regulations. We
recognize interest and penalties relating to income taxes as components of income tax expense. At November 2, 2024 and November 4, 2023, management has determined there are no material uncertain tax positions, and does not anticipate any significant change within twelve months of this reporting date.
The provision for income taxes for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Current tax expense:
Federal
$
2,219,829
$
2,920,036
State
611,212
807,025
Deferred tax (benefit)
29,646
(46,496
)
Provision for income taxes
$
2,860,687
$
3,680,565
The following table shows the reconciliation between the statutory federal income tax rate and the actual provision for income taxes for the years ended at November 2, 2024 and November 4, 2023.
November 2,
November 4,
Provision-federal statutory tax rate
$
2,406,200
$
3,061,771
Increase (decrease) resulting from:
State taxes, net of federal tax benefit
497,854
633,495
Other
(43,367
)
(14,701
)
Provision for income taxes
$
2,860,687
$
3,680,565
The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts and the related deferred tax assets and deferred tax liabilities for the years ended November 2, 2024 and November 3, 2024.
November 2,
November 4,
Deferred tax assets:
Prepaid Expenses .
$
15,150
$
14,995
Accrued expenses
216,892
236,617
Other assets
24,611
34,399
Stock-based compensation
89,223
63,741
Total deferred tax assets
345,876
349,752
Deferred tax liabilities:
Depreciation
(105,190
)
(100,739
)
Carrying value of investments
(130,400
)
(90,908
)
Amortization
(39,610
)
(39,374
)
Prepaid expenses
(10,048
)
(28,457
)
Net deferred tax assets (liabilities)
$
60,628
$
90,274
These amounts are included in the accompanying consolidated balance sheets under the following captions for the years ended November 2, 2024 and November 4, 2023.
November 2,
November 4,
Non-current assets (liabilities):
Deferred tax assets
345,876
349,752
Deferred tax liabilities
(285,248
)
(259,478
)
Net non-current deferred tax assets (liabilities)
60,628
90,274
Net deferred tax assets (liabilities)
$
60,628
$
90,274
In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. For fiscal years 2024 and 2023, the Company determined that a valuation reserve for the Company’s deferred tax assets was not considered necessary as the deferred tax assets were fully realizable.
NOTE 11 Stockholders’ Equity
Authorized preferred stock may be issued in series with rights and preferences designated by the Board of Directors at the time it authorizes the issuance of such stock. The Company has never issued any preferred stock. Treasury stock is recorded at cost and is presented as a reduction of stockholders’ equity in the accompanying consolidated financial statements. The Company repurchased no shares of its common stock in fiscal year 2024, except we reclassed 246 shares of common stock to treasury stock due to a cancellation of a stock award. The Company repurchased 102,083 shares of its common stock during fiscal years 2023.
NOTE 12 Stock Option Plan
In June 2011, the Company’s Board of Directors adopted, and the Company’s shareholders later approved, the Nobility Homes, Inc. 2011 Stock Incentive Plan (the “Plan”), providing for the issuance of options to purchase shares of common stock, stock appreciation rights and other stock-based awards to employees and non-employee directors. A total of 300,000 shares were reserved for issuance under the Plan, all of which may be issued pursuant to the exercise of incentive stock options. The Plan was amended by the Board of Directors to extend the termination date from June 2021 until June 1, 2026. At November 2, 2024, 194,590 options were available for future grant under the Plan and 87,360 options were outstanding.
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is to be recognized over the period during which an employee is required to provide a service in exchange for the award (usually the vesting period). The grant date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. During fiscal years 2024 and 2023, the Company recognized compensation costs related to the vesting of stock options of approximately $172,206 and $118,794 respectively.
A summary of information with respect to options granted is as follows:
Number of Shares
Stock Option Price Range
Weighted Average Exercise Price
Weighted Average Grant Date Fair Value
Outstanding at November 5, 2022
66,200
$ 24.00 - 33.10
$
27.37
$
498,844
Granted
29,300
24.25
24.25
223,214
Exercised
-
-
-
-
Canceled
21,242
24.00 - 33.10
26.21
156,903
Outstanding at November 4, 2023
74,258
$ 24.00 - 33.10
$
26.46
$
565,155
Granted
29,850
32.00
32.00
308,649
Exercised
-
-
-
-
Canceled
16,748
24.00 - 33.10
25.41
117,613
Outstanding at November 2, 2024
87,360
$ 24.00 - 33.10
$
28.67
$
756,191
The aggregate intrinsic value of exercisable Company options was $81,611, and the aggregate intrinsic value of all outstanding in-the-money options was $266,145 at November 2, 2024, which is the difference between the Company’s closing stock price on the last trading day of fiscal year 2024 and the exercise price times the number of shares, that would have been received by the option holder had the option holder exercised their options on November 2, 2024.
The following table summarizes information about the outstanding stock options for the year ended November 2, 2024:
Options Outstanding
Options Exercisable
Exercise Price
Shares Outstanding
Weighted Average
Remaining Contractual Life (years)
Weighted Average Exercise Price
Number Exercisable
Weighted
Average
Exercise Price
$
24.00
7,560
$
24.00
5,292
$
24.00
$
25.75
12,650
25.75
5,693
25.75
$
33.10
15,550
33.10
3,888
33.10
$
24.25
21,750
24.25
2,175
24.25
$
32.00
29,850
32.00
-
32.00
87,360
3.61
$
28.67
17,048
$
28.67
The fair value of each option is determined using the Black-Scholes option-pricing model which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, expected dividend payments, and the risk-free interest rate over the expected life of the option. The expected volatility was determined considering the Company’s historical stock prices for the fiscal year the grant occurred and prior fiscal years for a period equal to the expected life of the option. The risk-free interest rate was the rate available on zero coupon U.S. government obligations with a term equal to the expected life of the option. The expected life of the option was estimated based on the exercise history from previous grants.
NOTE 13 Employee Benefit Plan
The Company has a defined contribution retirement plan (the “Plan”) qualifying under Section 401(k) of the Internal Revenue Code. The Plan covers employees who have met certain service requirements. The Company makes a discretionary matching contribution, up to a maximum of 6% of an employee’s compensation. The contribution expense charged to operations amounted to approximately $226,004 and $226,370 in fiscal years 2024 and 2023, respectively.
NOTE 14 Commitments and Contingent Liabilities
Operating Leases - The Company leases the property for two Prestige retail sales centers from various unrelated entities under operating lease agreements. One of the operating lease agreement is month to month and the other is a one year lease expiring in October 2025. The Company also leases certain equipment under unrelated operating leases.
Other Contingent Liabilities - Certain claims and suits arising in the ordinary course of business have been filed or are pending against the Company. In the opinion of management, the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. Accordingly, the Company has an accrual provision of $144,392 for litigation settlements in the accompanying consolidated financial statements.
The Company does not maintain casualty insurance on some of its property, including the inventory at our retail centers, our plant machinery and plant equipment and is at risk for those types of losses.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no disagreements with accountants on accounting and financial disclosure matters.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. 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 the Evaluation Date.
Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate and effective internal control over financial reporting in order to provide reasonable assurance of the reliability of the Company’s financial reporting and preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting involves policies and procedure that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of assets of the issuer; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer Company assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of its internal control over financial reporting as of November 2, 2024 based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and determined that its internal controls were effective.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Changes in internal control over financial reporting. There were no changes in our internal controls over financial reporting that occurred during the fourth quarter of fiscal 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Rule 10b5-1 Trading Plans and Insider Trading Policies and Procedures
Directors and Executive Officers. Our directors, executive officers and employees are required to comply with our Insider Trading Policy, which prohibits trading on the basis of material non-public information. Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”). During the three months ended November 1, 2024, no director or Section 16 officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K..

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Information is incorporated by reference pursuant to Instruction G of Form 10-K from its definitive proxy statement for the 2025 annual meeting of shareholders.
The following table provides the names, ages and business experience for the past five years for each of Nobility’s executive officers. Executive officers are each elected for one-year terms.
Executive Officers and Directors
Terry E. Trexler (85)
Chairman of the Board and President of Nobility since 1967; Mr. Trexler is also President of TLT, Inc.
Thomas W. Trexler (61)
Executive Vice President and Chief Financial Officer of Nobility since December 1994; President of Prestige Home Centers, Inc. since June 1995; Director of Prestige since 1993 and Vice President from 1991 to June 1995; President of Mountain Financial, Inc. since August 1992; Vice President of TLT, Inc. since September 1991.
Robert P. Saltsman (72)
Director since 1988. Mr. Saltsman is an attorney in private practice since 1983.
Arthur L. Havener, Jr. (58)
Director since 2019. Mr. Havener is and has been since 2007 principal of Stampede Capital LLC, a real
estate advisory and investment firm.
Jean Etheredge (79)
Secretary since 1967.
Lynn J. Cramer, Jr. (79)
Treasurer since 1980.
Thomas W. Trexler, Executive Vice President, Chief Financial Officer and a director, is the son of Terry E. Trexler, Nobility’s President and Chairman of the Board. There are no other family relationships between any directors or executive officers.
Code of Ethics
We have adopted a code of ethics that applies to the principal executive officer, principal financial officer, executive vice presidents and controller. The code has been designed in accordance with the provisions of the Sarbanes-Oxley Act of 2002, to promote honest and ethical conduct.
Our code of ethics is available on our website at www.nobilityhomes.com. You may also obtain a copy of the Nobility Homes, Inc. Code of Ethics, at no cost, by forwarding a written request to the Secretary, Nobility Homes, Inc., 3741 SW 7th Street, Ocala, Florida 34474.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
Information concerning executive compensation is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2025 annual meeting of shareholders.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information concerning security ownership of certain beneficial owners and management is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2025 annual meeting of shareholders.
Securities Authorized for Issuance under Equity Compensation Plans
The following table displays equity compensation plan information for the year ended November 2, 2024. See Note 12 "Stock Option Plan" to the Company’s financial statement included herein.
Equity Compensation Plan Information
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted-average exercise price of outstanding options, warrants and rights
Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a))
(a)
(b)
(c)
Equity compensation plans approved by security holders
87,360
$
28.67
194,590
Equity compensation plans not approved by security holders
N/A
N/A
N/A
Total
87,360
$
28.67
194,590

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information concerning certain relationships and related transactions is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2025 annual meeting of shareholders.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
Information concerning principal accounting fees and services is incorporated by reference pursuant to Instruction G of Form 10-K from Nobility’s definitive proxy statement for the 2025 annual meeting of shareholders.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a)Consolidated Financial Statements and Schedules
Report of Hancock Askew & Co., LLP
Consolidated Balance Sheets at November 2, 2024 and November 4, 2023
Consolidated Statements of Income for the Years Ended November 2, 2024 and November 4, 2023
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended November 2, 2024 and November 4, 2023
Consolidated Statements of Cash Flows for the Years Ended November 2, 2024 and November 4, 2023
Notes to Consolidated Financial Statements
(b)Exhibits:
In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate.
•have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement.
•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this report and the Company’s other public files, which are available without charge through the SEC’s website at http://www.sec.gov.
3.(a) Nobility’s Articles of Incorporation, as amended (filed as Exhibit 3(a) to Nobility’s Form 10-K for the fiscal year ended November 1, 1997 and incorporated herein by reference).
(b)Bylaws, as amended March 28, 1994 (filed herewith.)
4.1.Description of Securities (filed herewith)
10.(a) Joint Venture Agreement with 21st Century Mortgage Corporation (filed as Exhibit 10(a) to Nobility’s Form 10-K for the fiscal year ended November 1, 1997 and incorporated herein by reference).
(b)2011 Stock Incentive Plan (filed as part of Nobility’s definitive proxy statement filed on June 7, 2011 and incorporated herein by reference).
(c)Agreement dated September 7, 2001, between Nobility and Terry E. Trexler relating to use of life insurance proceeds (filed as an exhibit to Nobility’s Form 10-K for the fiscal year ended November 3, 2001 and incorporated herein by reference).
(d)Finance Revenue Sharing Agreement dated April 10, 2004, between 21st Mortgage Corporation, Prestige Home Centers, Inc. and Majestic Homes, Inc. (filed as an exhibit to Nobility’s Form 10-K for the fiscal year ended October 31, 2009 and incorporated herein by reference).
(e)Seventh Amendment to the Finance Revenue Sharing Agreement dated April 10, 2004, with 21st Mortgage Corporation (filed as an exhibit to Nobility’s Form 8-K filed November 14, 2011 and incorporated herein by reference).
(f)Amendment No.1 to 2011 Stock Plan (Filed as an exhibit to Nobility’s Form 10-K for the fiscal year ended November 6, 2021 and incorporated herein by reference).
19.1 Nobility Homes Insider Trading Policy (filed herewith)
21.1.Subsidiaries of Nobility.
23.1 Consent of Hancock Askew & Co., LLP
31.(a) Written Statement 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)Written Statement 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) Written Statement of Chief Executive Officer pursuant to 18 U.S.C. §1350.
(b)Written Statement of Chief Financial Officer pursuant to 18 U.S.C. §1350.
101.Interactive data filing formatted in XBRL.
104.Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101.