Nobility Homes Inc. Annual Report: Your Essential Investor Snapshot

Considering an investment in Nobility Homes? This guide translates their latest annual report (fiscal year ended November 1, 2025) into a clear, concise overview. We've cut through the financial jargon to highlight key performance indicators, strategic initiatives, and potential risks, empowering you to make an informed decision. This summary covers all critical sections: Business Overview, Financial Performance, Risk Factors, Management Discussion, Financial Health, Future Outlook, and Competitive Position.

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1. Business Overview (What Nobility Homes Does)

Nobility Homes, founded in Florida in 1967, manufactures and retails manufactured and modular homes. The company builds homes in a factory and then transports them to their final locations, operating as a vertically integrated business.

How Nobility Homes Operates:

• Retail Sales: Its subsidiary, Prestige Home Centers, Inc., operates 10 retail sales centers across north and central Florida. Customers typically order homes directly from the factory after viewing models.
• Wholesale Sales: Nobility also sells homes to independent dealers and manufactured home communities.
• Ancillary Services: Through Mountain Financial, Inc., Nobility offers independent insurance agency services and originates mortgage loans, primarily for Prestige customers.

Nobility's homes range from 464 to 2,650 square feet, offering 1 to 5 bedrooms in various configurations (single, double, triple, and quad units). They sell homes under brands like "Kingswood" and "Regency Manor." Retail prices typically range from $90,000 to $250,000, positioning them in the industry's low to medium price segment. Operations are concentrated within approximately 350 miles of their Ocala, Florida manufacturing plant, meaning nearly all sales occur within Florida.

Fiscal Year 2025 Performance Snapshot:

• Revenue Growth: Total net sales increased 10% to $125.0 million in fiscal year 2025, up from $113.6 million in fiscal year 2024. Significant expansion in the wholesale segment primarily drove this growth.
• Sales Mix Shift: Prestige retail centers remained dominant, contributing 80% of total sales in FY2025, but this marked a notable shift from 88% in FY2024. This indicates strong growth in wholesale channels, which grew over 80% year-over-year and outpaced retail sales growth.
• Profitability: The company maintained healthy profitability despite ongoing cost pressures.

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2. Financial Performance (Revenue, Profit, Year-over-Year Changes)

Nobility Homes demonstrated resilience and growth in fiscal year 2025, successfully navigating a challenging economic environment.

Metric (in millions, except EPS)	FY2025 (Ended Nov 1)	FY2024 (Ended Nov 1)	FY2023 (Ended Nov 1)
Total Net Sales	$125.0	$113.6	$108.2
Gross Profit	$30.6	$26.1	$27.6
Gross Margin	24.5%	23.0%	25.5%
Net Income	$14.5	$13.5	$13.9
Diluted Earnings Per Share	$3.63	$3.38	$3.48

• Sales Growth: Strategic expansion in the wholesale segment and successful price adjustments to offset rising costs primarily fueled the 10% revenue increase in FY2025.
• Profitability: Net income grew 7% in FY2025, recovering from a slight dip in FY2024. The gross margin improved to 24.5% in FY2025, reflecting the company's effective pricing management in response to input cost inflation.

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3. Management's Discussion & Analysis (MD&A) Highlights

Management's Discussion & Analysis (MD&A) offers key insights into Nobility Homes' financial condition, operational results, and future prospects. This section, along with "Future Outlook" and "Market Trends & Regulatory Changes," provides management's perspective on the business.

Key Factors and Trends:

• Revenue Drivers: Strategic wholesale segment expansion and successful price adjustments primarily drove the 10% revenue increase in fiscal year 2025. The notable shift in sales mix, with wholesale growing significantly to account for 20% of total sales, reflects a deliberate and successful strategy to diversify revenue streams and reduce over-reliance on retail centers.
• Cost Management & Profitability: The company maintained healthy profitability despite persistent supply chain disruptions, escalating raw material (e.g., lumber, steel, appliances) and labor costs, and broader inflationary pressures. The 24.5% gross margin improvement in FY2025 indicates effective pricing strategies and cost management efforts that mitigated these rising input costs.
• Operational Challenges: Nobility continued to grapple with delays and back orders for critical production materials and components, impacting production schedules and delivery times. Difficulties in recruiting and retaining skilled production workers also led to higher labor costs, posing an ongoing challenge with "no immediate relief in sight" for these issues.
• Strategic Responses & Wins:
  • Effective Pricing Strategy: Nobility successfully implemented dynamic adjustments to selling prices, maintaining margins in an inflationary environment.
  • Wholesale Channel Expansion: The company achieved substantial growth in its wholesale business, demonstrating success in diversifying revenue streams.
  • Digital Marketing Success: Continued investment in internet marketing proved effective in generating leads for their retail centers, supporting consistent retail sales volumes.
  • Strong Balance Sheet: Nobility maintained a robust financial position, providing flexibility to navigate market volatility and support strategic initiatives.
• Liquidity and Capital Resources: As detailed in Section 4, the company's strong cash position and minimal debt provide significant liquidity and capital resources. This allows Nobility to support operations and strategic initiatives without significant external financing needs.

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4. Financial Health (Debt, Cash, Liquidity)

Nobility Homes maintains a very strong financial position, characterized by significant cash reserves and minimal debt. This provides a solid foundation for future operations and potential growth.

• Cash and Equivalents: As of November 1, 2025, the company held $45.0 million in cash and cash equivalents, up from $40.0 million in FY2024.
• Total Debt: Nobility Homes carries very little debt, reporting total long-term debt at just $5.0 million as of FY2025, a slight decrease from $5.5 million in FY2024. This low leverage represents a significant strength.
• Working Capital: The company reported healthy working capital of $60.0 million in FY2025, indicating strong short-term liquidity and operational flexibility.
• Debt-to-Equity Ratio: With substantial equity and minimal debt, the company's debt-to-equity ratio is exceptionally low, signaling financial stability and low risk.

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5. Risk Factors (Key Risks)

Investors should be aware of several factors that could affect Nobility Homes' performance:

• Intense Competition: The manufactured home industry is highly competitive. Nobility faces approximately 18 other manufacturers in Florida, many of whom are larger and have greater financial resources. Its retail arm, Prestige, competes with over 80 other retailers and the broader site-built housing market.
• Geographic Concentration: Almost all sales are concentrated within Florida and a 350-mile radius of their Ocala plant. This exposes the company to significant risks from regional economic downturns, severe weather events (e.g., hurricanes), or changes in local regulations.
• Ongoing Supply Chain & Cost Volatility: The company explicitly notes "no immediate relief in sight" for material shortages, price increases, and labor challenges. If Nobility cannot continue to effectively pass these costs onto customers or if supply issues worsen, profitability could suffer.
• Interest Rate Sensitivity: As a housing-related business, Nobility's sales are sensitive to interest rate fluctuations. Higher mortgage rates can reduce affordability and dampen demand for homes, including manufactured homes.
• Labor Availability: The difficulty in finding and retaining skilled production workers is an ongoing challenge. A worsening labor shortage could constrain production capacity and further increase costs.
• Regulatory Changes: The company operates under various federal (HUD), state (Florida building codes, transportation), and consumer protection (Magnuson-Moss Warranty Act) regulations. Changes to these rules could increase compliance costs or restrict operations.

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6. Competitive Position

Nobility Homes believes it competes effectively on price, service, warranties, and product performance. While acknowledging that some competitors possess greater financial resources, Nobility differentiates itself through:

• Vertical Integration: Owning both manufacturing and a significant retail presence allows the company greater control over quality, costs, and the customer experience.
• Regional Focus: Nobility possesses a deep understanding of the Florida market and customer preferences.
• Product Variety: The company offers a wide range of sizes and configurations to meet diverse customer needs.
• Ancillary Services: Providing financing and insurance options through Mountain Financial enhances the customer experience and potentially captures additional revenue.

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7. Future Outlook (Guidance, Strategy)

Nobility Homes anticipates that challenges related to inflation, material shortages, and labor availability will persist in the near term, with "no immediate relief in sight." Despite these headwinds, the company remains cautiously optimistic, driven by:

• Strategic Wholesale Expansion: Nobility expects continued focus on growing the wholesale business to be a key driver of future revenue.
• Resilient Demand: The demand for affordable housing, particularly in Florida, should remain strong, providing a foundational market for their products.
• Strong Financial Position: Their robust balance sheet provides the flexibility to navigate market uncertainties and invest in strategic initiatives.

Strategic Direction: Nobility Homes' strategic focus remains consistent, with no significant executive leadership changes reported this year. Key areas include:

• Dynamic Pricing: Continuously adjusting selling prices to maintain margins in an inflationary environment.
• Wholesale Growth: Actively seeking and expanding opportunities within the wholesale segment, particularly with manufactured home communities, to diversify sales channels and drive growth.
• Operational Efficiency: The company has demonstrated effective optimization of production and supply chain management, as evidenced by its ability to maintain profitability amidst rising costs.
• Customer Lead Generation: Leveraging digital marketing to sustain and grow retail sales.

The company will continue to monitor market conditions closely and adapt its strategies to maintain profitability and market share.

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8. Market Trends & Regulatory Changes Affecting Them

• Inflation & Supply Chain: These macroeconomic trends remain central to Nobility's operational costs and production capabilities. Effectively managing these factors will be crucial for future performance.
• Affordable Housing Demand: The increasing need for affordable housing solutions, especially in growing states like Florida, presents a long-term tailwind for manufactured home builders.
• Interest Rate Environment: Rising interest rates could impact consumer affordability and demand for homes, requiring Nobility to remain competitive on pricing and financing options.
• Regulatory Landscape:
  • Federal HUD Standards: Nobility must continuously comply with federal construction and safety standards for manufactured homes.
  • Florida Building Codes: The company adheres to Florida's specific building codes for modular homes.
  • State Transportation Regulations: Nobility ensures compliance with state rules for transporting oversized homes.
  • Consumer Protection: The company provides a one-year limited warranty on structural components as required by the Magnuson-Moss Warranty Act. Any changes to these regulations could impact costs or operations.

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Key Takeaways for Investors

Nobility Homes Inc. stands as a financially sound company with a strong regional presence in Florida's growing affordable housing market. While facing persistent industry-wide challenges like inflation and supply chain issues, the company has demonstrated an ability to adapt through strategic pricing and successful expansion into wholesale channels. Its minimal debt and substantial cash reserves provide a significant buffer against economic downturns and offer flexibility for future growth. However, investors should weigh the benefits of Nobility's strong financial health and strategic growth initiatives against the risks associated with geographic concentration, intense competition, and ongoing cost pressures.