Skyline Champion Corp (NYSE:SKY) Q4 2019 Earnings Conference Call Transcript

May 22, 2019 • 08:30 am ET

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Skyline Champion Corp (NYSE:SKY) Q4 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning. Welcome to Skyline Champion Corporation's Fourth Quarter and Full-Year Fiscal 2019 Earnings Call.

The company issued an earnings press release yesterday after close. I would like to remind everyone that yesterday's press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission. Additionally, during today's call, the company will discuss non-GAAP measures, which they believe can be useful in evaluating their performance. A reconciliation of these measures can be found in the earnings release.

I would now like to turn the call over to Keith Anderson, Skyline Champions' Chief Executive Officer. Please go ahead.

Executive
Keith Anderson

Thank you for joining our earnings call to discuss our fourth quarter and full-year results for our fiscal 2019. Joining me on today's call is Laurie Hough, EVP and CFO, and Mark Yost, EVP and President of US operations.

As we announced on May 1st, Mark will be succeeding me as CEO upon my retirement next month. Mark is an exceptional leader and has been instrumental in driving the success of Skyline Champion. As part of this transition, Mark has joined our Board of Directors and I will remain on the Board as well.

I'll start off today's call with some highlights from our results, then provide updated commentary on the market, and finally discuss some of the progress with our operational and growth initiatives. As a reminder, the combination of Skyline and Champion closed on June 1st, which was during the first quarter of fiscal 2019. As a result, the results for the fourth quarter include three months, four months of operations for the combined company, Skyline Champion, while a year ago, comparables include only legacy Champion.

Our full-year 2019 results include 10 months for the combined company, while the 2018 comparables include only legacy Champion. I am proud of the results Skyline Champion delivered for our fiscal year 2019. We generated strong revenue growth of 28% for total revenue of $1.4 billion.

We grew adjusted EBITDA by 50% to $97 million for the year. These results demonstrate the strong momentum our company is realizing from the transaction. During the fourth quarter, we grew our revenue by 23% year-over-year. Our results were driven by core business gains and did not include any one-time or FEMA-related revenue benefits. We sold 15% more homes in the US at an average selling price of $61,100.

Gross profit increased by 53% year-over-year. Adjusted EBITDA for the quarter was $24.2 million, an 86% increase year-over-year. Adjusted EBITDA margin in the quarter was 7.4% compared to 4.9% a year ago. Strong margin improvement was driven by better pricing discipline and operational improvements. Also, we realized synergies during the quarter, driven by purchasing and