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Skyline Champion Corporation Created as Skyline and Champion Home Builders Announce Closing of Business Combination, Exclusive Details

June 4th, 2018 Comments off

SkylineChampionLogoKeithAndersonCEOPhotoTitanDriveHomeManufacturedModularPrefabHousingINdustryDailyBusinessNewsMHProNews

Skyline Corporation (“Skyline”) and Champion Enterprises Holdings, LLC (“Champion”), the parent company of Champion Home Builders, Inc., publicized the closing of the previously announced combination of their operations.

 

Exclusive details will be found near the end of this report.

Via a press statement to the Daily Business News, carried by a Berkshire Hathaway affiliate – Business Wire – the newly combined company “will now operate as Skyline Champion Corporation and its common stock will trade on the New York Stock Exchange under the ticker symbol “SKY.” Skyline had previously traded on the NYSE American exchange under the same ticker symbol,” per the release.

KeithAndersonCEOSkylineChampionManufacturedModularHousingIndustryDailyBusinessNewsMHProNewsWe are very excited to close the transaction and look forward to operating as Skyline Champion Corporation,” said Keith Anderson, Skyline Champion’s Chief Executive Officer.

Skyline Champion is now the largest independent publicly traded factory-built housing company in the United States with combined revenue of more than $1.3 billion. The increased size and scale, coupled with a strong balance sheet and significant cash flow generation capability, has us well positioned to execute our long term growth strategy.”

The statement above reflects an adjustment to a prior claim spotlighted by the Daily Business News about the size of the company with respect to the balance of the industry at large.

There is a tremendous opportunity for Skyline Champion to take advantage of the attractive market dynamics in the industry given our broader geographic footprint across North America and our enhanced product offering. We will remain committed to providing quality products and outstanding customer service as we focus on executing our strategy on our newly enhanced platform,” Anderson said.

As we integrate the businesses, we continue to expect to achieve synergies of approximately $10 to $15 million, primarily driven by direct cost savings, reduced overhead costs and operational improvement opportunities,” the newly combined companies CEO said. Additional synergies are expected through cross-selling and distribution optimization through the combined company’s owned and independent dealer network.”

The complementary cultures and shared values of our legacy businesses are evident in the deep commitment to providing solutions to customers and delivering a broad range of quality products and value-added services. I am confident that this will translate into future success of Skyline Champion,” Anderson said, with the normal disclaimers about forward looking statements required by the SEC present. He thanked the employees for their hard work during the transition.

The closing ticker for the new stock tonight is as shown below.

SkylineChampionCombinationLogoAnnouncedCloseStock642018ManufacturedHousingINdustryDailyBusinessNewsMHProNews

Skyline (SKY) is traded on the NYSE, and is part of the MHProNews evening market report summary for tracked industry stocks.  Tonight’s report, is linked here.

As the Daily Business News recently and previously reported, certain plans were executed.

In conjunction with the closing of the transaction, Skyline issued approximately 47.8 million shares to Champion, representing 84.5% of the common stock of the combined company on a fully-diluted basis. Skyline also declared a special cash dividend of $0.62381 per share of Skyline’s common stock that was paid on May 31, 2018 to Skyline’s shareholders of record at the close of business on May 25, 2018,” per their release.

Jefferies LLC served as financial advisor to Skyline and Barnes & Thornburg LLP acted as Skyline’s legal counsel. Ice Miller LLP acted as legal counsel to Skyline’s Special Committee of the Board. RBC Capital Markets, LLC served as financial advisor to Champion and Ropes & Gray LLP acted as Champion’s legal counsel. Taft Stettinius & Hollister LLP acted as Indiana legal counsel to Champion,” their statement said.

Skyline Corp, Champion Home Builder M&A Updates, Stockholder Insights

The firm is one of the industry’s vertically integrated operations.

About Skyline Champion Corporation:

Skyline Champion Corporation (NYSE: SKY) was formed in June of 2018 as the result of the combination of Skyline Corporation and the operating assets of Champion Enterprises Holdings, LLC. The combined company employs more than 6,800 people and is the largest independent factory-built housing company in North America. With more than 65 years of homebuilding experience and 36 manufacturing facilities throughout the United States and western Canada, Skyline Champion is well positioned with a leading portfolio of manufactured and modular homes, park-models and modular buildings for the multi-family, hospitality, senior and workforce housing sectors,” their statement explained.

In addition to its core home building business, Skyline Champion operates a factory-direct retail business, Titan Factory Direct, with 21 retail locations spanning the southern United States, and Star Fleet Trucking, providing transportation services to the manufactured housing and other industries from 10 dispatch locations across the United States,” according to the media release.

Skyline Champion builds homes under some of the most well know brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, Shore Park, Silvercrest, Titan Homes in the U.S. and Moduline and SRI Homes in western Canada,” their release concluded.

 

Pecking Order – Industry Facts

The new Skyline Champion combination represents about 17 percent of the factory built housing industry’s total shipments.

Cavco weighs in at about 13 percent, per their recent quarterly statement.  Cavco’s president, Joe Stegmayer, is a former Clayton division president.

Berkshire Hathaway owned Clayton Homes has about 50 percent of the industry’s total production, according to various industry sources, and the recent Warren Buffett, Berkshire Hathaway annual shareholder letter.

ClaytonHomesSkylineChampionCavcoIndustriesBalanceofIndustryManufacturedHousingIndustryConsolidationGraphicPieChartMHProNews

So, the three firms now represent 80 percent of the industry’s production.

For related reports, see the below. MHProNews holds no position in any of the listed firms. “We Provide, You Decide.” © (News, analysis, and commentary.)

(Third party images, and content, are provided under fair use guidelines.)

Related Reports:

Skyline Corp, Champion Homebuilders Conference Call Presentation Facts, Figures, Forward-Looking Statements, Planned Merger Detail$

Clayton Homes, Top 25 Manufactured Housing Industry Report, Trend Lines

NAR’s Lawrence Yun Raises Alarm for New Housing Crisis, MH Import?

Rollohome, Creating 60,000 Factory-Built Homes in 2 Years

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

 

Study Predicts MH Market Share to Drop

March 13th, 2013 Comments off

MarketWire says The Freedonia Group, Inc. of Cleveland, Ohio in a new study projects that manufactured housing production will rise 13.6 percent annually to 90,000 units by 2017 as part of the overall production of 140,000 pre-fabricated homes. Similar to a report MHProNews posted Feb. 28, 2013, Freedonia states factory-built housing in general will expand as the demand for single-family homes increase, but manufactured housing’s share of the market will decline as conventional mortgages become more readily available and chattel loans become more difficult to obtain.

(Image credit: sfgate)

Drew Drew a Good Hand in Q1

May 3rd, 2012 Comments off

In its report of earnings for first quarter 2012, Drew Industries, Inc.’s manufactured housing division registered $3.1 million operating profit on sales of $28 million first quarter 2012, versus profit of $2.2 million on sales of $23 million for the same period 2011. The company marked an MH sales increase of 26 percent in the first quarter 2012 over the same period last year. Sales of aftermarket MH products increased 20 percent for the same quarter over quarter, as its MH division gained market share. MarketWatch says overall sales increased to $224 million in Q1 2012 (a record for this company in any quarter) over $169 million for the same period 2011. The RV division accounted for 87% of overall net sales. Consolidated net income of $11.1 million for 2012 bested 2011’s income of $9.4 million. Drew supplies the MH, RV, and industrial markets with components. MHProNews has written recently about the RV industry growth in Elkhart County, Indiana.

((Image credit: Drew Industries, Inc.)

MH Component Maker Adding Jobs

March 15th, 2012 Comments off

Drew Industries, Inc. subsidiaries Kinro, Inc. and Lippert Components, Inc. announce their employee base has grown to 4,541 nationwide, a 15 percent jump since Aug. 2011. Most of the new 750 jobs were in their home base Elkhart County in northern Indiana, according to RVBusiness. Last month alone they added 110 jobs. CEO of Lippert Jason Lippert attributes part of the growth to recent acquisitions, and part to garnering more market share in products such as specialty trailer components, entry doors, motorized chassis stretching, and awning and slide-out mechanisms. Drew Industries is one of the largest manufacturers of components for the manufactured housing and recreational vehicle (RV) markets. MHProNews.com has learned for the 12 months ending Dec. 31, 2011, the RV segment accounted for 84 percent of net sales, while manufactured housing was 16 percent. Drew has 31 production facilities across the nation.

(Graphic credit: Lippert Components Inc.)

CEOs Cautiously Optimistic for Growth in New Year

January 6th, 2012 Comments off

ChiefExecutive tells MHProNews.com 69 percent of chief executives in their CEO Confidence Index expect an increase in revenues in 2012, and 42 percent anticipate more capital expenses, although Berkshire Hathaway chairman Warren Buffett is ahead of the pack. The owner of Clayton Homes through Berkshire, with $40 billion in cash at the beginning of 2011, and his “trigger finger itching to buy” (as he told shareholders), in Q3 2011 he spent more than he has in any single quarter in 15 years. With nine billion he bagged chemical manufacturer Lubrizol, bought IBM shares to the tune of $11 billion, and infused the Bank of America with five billion in cash. He also completed the buyout of Wesco Financial, now chaired by Charlie Munger, his right-hand man, and purchased his hometown newspaper, the Omaha World-Herald. While other CEOs may not have the resources of Buffett, they are cautiously optimistic for 2012, and intend to invest in their businesses and make acquisitions. One CEO said, “Because the demand for our products/services is down or flat, the only way we are getting growth in revenue is by increasing market share through organic and acquisition growth. We manage our expenses well, so in spite of slow revenue growth, we will see better profit growth.”

(Photo credit: Warren Buffett by Yoshikazu Tsuno/Getty Images)

Patrick Industries Acquires Graphics Company

December 21st, 2011 Comments off

SacBee reports MH and RV component manufacturer and distributor Patrick Industries, Inc., has finalized its acquisition of Elkhart, Indiana-based Performance Graphics, a designer, producer, and installer of exterior graphics for the RV, marine, enclosed trailer, and racing industries. Todd Cleveland, President and CEO of Patrick, said, “The acquisition of Performance Graphics, along with the recent acquisitions of the Praxis Group and A.I.A. Countertops, LLC, will allow the Company to further expand its penetration into the RV and industrial market sectors and increase its market share and per unit content.” Through its facilities in 12 states, Patrick manufactures decorative vinyl and paper panels, countertops, wrapped profile mouldings, cabinet doors and components, interior passage doors, and slotwall components. Patrick Industries (NASDAQ: PATK) gained 3.11 percent in today’s trading.
(Graphic credit: Patrick Industries, Inc.)