Palm Harbor Joins Manufactured Housing Peers With Weak Quarterly Report

 |  Includes: CVCO, NOBH, PHHMQ, SKY
by: Steve Ferris

Another manufactured housing company has reported lower earnings and sales. After the close yesterday, Palm Harbor Homes (PHHM) reported earnings for the third quarter of fiscal 2007, with a net loss of $2.6 million, or 11 cents a share. In the same quarter last year, the Dallas, Texas-based company had net income of $4.3 million, or 18 cents a share.

Palm Harbor CEO Larry Keener says,

"The results for the third fiscal quarter reflect the difficult market conditions that have plagued our industry over the past six months. While our sales were down over the prior year period, it is important to note that the third quarter of fiscal 2006 included $12.3 million in FEMA-related non-recurring revenues."

Tens of thousands of manufactured homes from various companies went to victims of hurricanes Katrina and Rita.

Net sales for Palm Harbor for the third quarter were $151 million, compared with $193 million a year earlier.

Keener says company officials are confident they can continue to keep managing their business effectively and keep building market share, even though these are knotty times for the industry. One segment of the company that may help them is their modular business, which saw revenue increase by about 45 percent for the first nine months of fiscal 2007; Keener says modular sales have added about a third of their recurring revenues. And CFO Kelly Tacke says they've cut their selling, general and administrative expenses by over ten percent for the third fiscal quarter, and as of the end of 2006 had over $47 million in cash and cash equivalents.

A few weeks ago, manufactured housing company Skyline Corp. (NYSE:SKY) came out with its numbers for its second fiscal quarter, and their EPS was seven cents, compared to 54 cents a year ago, while quarterly sales were $95 million, compared to $136 million a year earlier.

Skyline, based near South Bend, Indiana, also had an operating earnings loss of $470 thousand in the second quarter, compared to a gain of $6 million a year ago. Also last month, Nobility Homes of Florida (NASDAQ:NOBH) reported a fall in profit because of decreased fourth-quarter sales. And tomorrow, Phoenix, Arizona-based Cavco Industries (NASDAQ:CVCO) will report its earnings.