2520 By-Pass Road
P.O. Box 743
Elkhart, Indiana 46515-0743
|Subject: FOURTH QUARTER REPORT
||Approved by: JON S. PILARSKI
INDIANA AUGUST 6, 2010
SKYLINE REPORTS FOURTH QUARTER AND YEAR-END RESULTS
Sales for Skylines fiscal 2010 fourth quarter were $40,695,000 compared to
$32,483,000 for the fourth quarter of fiscal 2009. For fiscal 2010, sales were
$136,230,000 versus $166,676,000 for fiscal 2009.
For Skylines manufactured housing segment, sales for the fourth quarter of fiscal
2010 were $24,496,000 compared to $22,578,000 for the fourth quarter of fiscal 2009. For
fiscal 2010, sales were $90,551,000 versus $123,930,000 for fiscal 2009.
For the recreational vehicle (RV) segment, sales were $16,199,000 for fiscal 2010s
fourth quarter compared to $9,905,000 for the fourth quarter of fiscal 2009. For fiscal
2010, sales were $45,679,000 versus $42,746,000 for the same period a year ago.
Fiscal 2010s fourth quarter loss before income taxes was $1,562,000 compared to
fiscal 2009s loss before income taxes of $4,332,000. For fiscal 2010, loss before income
taxes was $19,351,000 versus a loss before income taxes of $24,994,000 for a year ago.
Loss before income taxes for fiscal 2010 and 2009 includes a gain on the sale of idle
property, plant and equipment of $1,544,000 and $3,396,000, respectively.
As a result of an increase in the valuation allowance for deferred tax assets, income
tax provision (expense) was $16,019,000 in the fourth quarter of 2010, compared to benefit
of $1,967,000 for the fourth quarter of fiscal 2009. Income tax provision (expense) was
$9,642,000 for the year ended May 31, 2010 compared to a benefit of $9,560,000 for the
year ended May 31, 2009. Skylines deferred tax assets consist primarily of federal and
state net operating losses and tax credits that can be used to offset future tax
liabilities. The federal net operating loss carry forward and tax credits have a life
expectancy of twenty years, while the state net operating loss carry forwards have a life
expectancy between five and twenty years. Consistent with
generally accepted accounting principles, an additional valuation allowance of
approximately $16,867,000 was recorded in the fourth quarter of fiscal 2010 based on
Skyline having cumulative book taxable losses for the fiscal years 2008 to 2010. The
increase results in a non-cash charge in the fourth quarter. When economic conditions
improve Skyline may determine that a lesser valuation allowance is warranted; resulting in
a reduction to income tax provision (expense) and the valuation allowance in the period of
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