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Skyline Champion Corp - Quarter Report: 2004 February (Form 10-Q)

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
 
For the Quarter Ended February 29, 2004
Commission File No. 1-4714

     
SKYLINE CORPORATION

(Exact name of registrant as specified in its charter)
     
INDIANA   35-1038277

 
(State of Incorporation)   (IRS Employee Identification No.)
     
P. O. Box 743,   2520 By-Pass Road    Elkhart, IN 46515

(Address of principal executive offices)         (Zip)
     
294-6521   (574)

 
(Registrant’s telephone number)   (Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x   No o

Securities registered pursuant to Section 12 (b) of the Act:

           
      Shares Outstanding  
Title of Class   April 14, 2004  

 
 
       
 
Common stock
  8,391,244  

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes x   No o

 


SKYLINE CORPORATION

Form 10-Q Quarterly Report

INDEX

                 
            Page No.  
           
 
Financial Information
 
 
 
 
 
       
    Financial Statements:      
 
 
 
 
 
 
     
 
 
  Consolidated Balance Sheets as
of February 29, 2004 and May 31, 2003
  2-3  
 
 
 
 
 
 
       
 
  Consolidated Statements of Earnings and
Retained Earnings for the three-month and
nine-month periods ended February 29, 2004
and February 28, 2003
  4  
 
 
 
 
 
 
     
 
  Consolidated Statements of Cash Flows
for the nine-month periods ended
February 29, 2004 and February 28, 2003
  5-6  
 
 
 
 
 
 
     
 
  Notes to the Consolidated Financial
Statements for the nine-month period
ended February 29, 2004
  7-9  
 
 
 
 
 
 
     
 
  Report of Independent Accountants   10  
 
 
 
 
 
 
     
    Management’s Discussion and Analysis
of Financial Condition and Results of
Operations
  11-13  
 
 
 
 
 
 
     
    Controls and Procedures   14  
 
 
 
 
 
 
     
Other Information        
 
 
 
 
 
 
     
    Legal Proceedings   14  
 
 
 
 
 
 
     
    Exhibits and Reports on Form 8-K   14  
 
 
 
 
 
 
     
            15  
 
 
 
 
 
 
     
            16-19  
 Sec. 302 Certification of Chief Executive Officer
 Sec. 302 Certification of Chief Financial Officer
 Sec. 906 Certification of Chief Executive Officer
 Sec. 906 Certification of Chief Financial Officer

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Table of Contents

Part I.

Item 1. Financial Statements

Skyline Corporation and Subsidiary Companies

Consolidated Balance Sheets
Dollars in thousands

                 
    February 29, 2004     May 31, 2003
   
   
 
    (Unaudited)          
ASSETS
               
 
Current Assets
               
Cash
  $ 8,429     $ 8,736  
Treasury Bills, at cost plus accrued interest
    146,628       145,721  
Accounts receivable, trade, less allowance
for doubtful accounts of $150
    23,222       22,292  
Inventories
    9,766       9,414  
Other current assets
    9,912       8,808  
 
 
 
   
 
 
Total Current Assets
    197,957       194,971  
 
 
 
   
 
 
Property, Plant and Equipment, At Cost
               
Land
    6,572       6,637  
Buildings and improvements
    63,143       64,806  
Machinery and equipment
    26,935       26,937  
 
 
 
   
 
 
 
    96,650       98,380  
Less accumulated depreciation
    59,276       59,249  
 
 
 
   
 
 
Net Property, Plant and Equipment
    37,374       39,131  
 
 
 
   
 
 
Other Assets
    5,199       5,039  
 
 
 
   
 
 
 
  $ 240,530     $ 239,141  
 
 
 
   
 
 

     The accompanying notes are a part of the consolidated financial statements.

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Table of Contents

Skyline Corporation and Subsidiary Companies

Consolidated Balance Sheets
Dollars in thousands except per share data

                 
    February 29, 2004     May 31, 2003  
   
 
    (Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
Current Liabilities
               
Accounts payable, trade
  $ 6,038     $ 5,990
Accrued salaries and wages
    5,142       6,290  
Accrued profit sharing
    1,977       2,327  
Accrued marketing programs
    9,970       5,397  
Accrued warranty and related expenses
    11,022       10,609  
Other accrued liabilities
    4,433       3,777  
Income taxes payable
          1,786  
 
 
 
   
 
 
Total Current Liabilities
    38,582       36,176  
 
 
 
   
 
 
Other Deferred Liabilities
    4,708       4,580  
 
 
 
   
 
 
Commitments and Contingencies
           
 
 
 
   
 
 
Shareholders’ Equity
               
 
Common stock, $.0277 par value, 15,000,000 shares authorized; Issued 11,217,144 shares
    312       312  
Additional paid-in capital
    4,928       4,928  
Retained earnings
    257,744       258,889  
Treasury stock, at cost, 2,825,900 shares at
February 29, 2004 and May 31, 2003
    (65,744 )     (65,744 )
 
 
 
   
 
 
Total Shareholders’ Equity
    197,240       198,385  
 
 
 
   
 
 
 
  $ 240,530     $ 239,141  
 
 
 
   
 
 

     The accompanying notes are a part of the consolidated financial statements.

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Table of Contents

Skyline Corporation and Subsidiary Companies

Consolidated Statements of Earnings and Retained Earnings
For the three-month and nine-month periods ended February 29, 2004 and February 28, 2003
(Unaudited)
Dollars in thousands except per share data

                                 
    Three-Months Ended     Nine-Months Ended
    February 29/28,     February 29/28,
   
   
    2004     2003     2004     2003
   
   
   
   
Sales
  $ 90,995     $ 87,709     $ 315,257     $ 316,668
Cost of sales
    81,599       78,831       275,578       277,938
 
 
 
   
 
   
 
   
 
Gross profit
    9,396       8,878       39,679       38,730
Selling and administrative expenses
    10,854       10,690       34,923       35,407
 
 
 
   
 
   
 
   
 
Operating (loss) earnings
    (1,458 )     (1,812 )     4,756       3,323
Interest income
    314       465       940       1,605
 
 
 
   
 
   
 
   
 
(Loss) earnings before income taxes
    (1,144 )     (1,347 )     5,696       4,928
(Benefit) provision for income taxes:
                             
Federal
    (337 )     (419 )     1,923       1,700
State
    (89 )     (101 )     386       282
 
 
 
   
 
   
 
   
 
 
    (426 )     (520 )     2,309       1,982
 
 
 
   
 
   
 
   
 
Net (loss) earnings
  $ (718 )   $ (827 )   $ 3,387     $ 2,946
 
 
 
   
 
   
 
   
 
Basic (loss) earnings per share
  $ (.09 )   $ (.10 )   $ .40     $ .35
 
 
 
   
 
   
 
   
 
Cash dividends per share
  $ .18     $ .18     $ .54     $ .54
 
 
 
   
 
   
 
   
 
Weighted average common shares outstanding
    8,391,244       8,391,244       8,391,244       8,391,244
 
 
 
   
 
   
 
   
 
Retained earnings, beginning of period
  $ 259,973     $ 259,489     $ 258,889     $ 258,737
Add net (loss) earnings
    (718 )     (827 )     3,387       2,946
Less cash dividends paid
    1,511       1,510       4,532       4,531
 
 
 
   
 
   
 
   
 
Retained earnings, end of period
  $ 257,744     $ 257,152     $ 257,744     $ 257,152
 
 
 
   
 
   
 
   
 

     The accompanying notes are a part of the consolidated financial statements.

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Table of Contents

Skyline Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows
For the nine-month periods ended February 29, 2004 and February 28, 2003
Increase (Decrease) in Cash
(Unaudited)
Dollars in thousands

                 
    2004     2003
   
   
CASH FLOWS FROM OPERATING ACTIVITIES:
               
 
Net earnings
  $ 3,387     $ 2,946  
 
 
 
   
 
 
Adjustments to reconcile net earnings to net cash
provided by operating activities:
               
Interest income earned on U.S. Treasury Bills and Notes
    (940 )     (1,605 )
Depreciation
    2,562       2,811  
Working Capital Items:
               
Accounts receivable
    (930 )     4,791  
Inventories
    (352 )     118  
Other current assets
    (1,104 )     (498 )
Accounts payable, trade
    48       (1,123 )
Accrued liabilities
    4,144       3,468  
Income taxes payable
    (1,786 )     (1,156 )
Other assets
    (160 )     (201 )
Other deferred liabilities
    128       70  
 
 
 
   
 
 
Total Adjustments
    1,610       6,675  
 
 
 
   
 
 
Net cash provided by operating activities
    4,997       9,621  
 
 
 
   
 
 

     The accompanying notes are a part of the consolidated financial statements.

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Table of Contents

Skyline Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows, continued
For the nine-months periods ended February 29, 2004 and February 28, 2003
Increase (Decrease) in Cash
(Unaudited)
Dollars in thousands

                 
    2004     2003
   
   
CASH FLOWS FROM INVESTING ACTIVITIES:
               
 
Proceeds from sale or maturity of U. S. Treasury Bills
  $ 302,453     $ 274,922  
Purchase of U.S. Treasury Bills
    (302,420 )     (278,664 )
Proceeds from sale of property, plant and equipment
    663       76  
Purchase of property, plant and equipment
    (1,468 )     (1,293 )
 
 
 
   
 
 
Net cash used in investing activities
    (772 )     (4,959 )
 
 
 
   
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
 
Cash dividends paid
    (4,532 )     (4,531 )
 
 
 
   
 
 
Net cash used in financing activities
    (4,532 )     (4,531 )
 
 
 
   
 
 
Net (decrease) increase in cash
    (307 )     131  
Cash at beginning of year
    8,736       8,699  
 
 
 
   
 
 
Cash at end of quarter
  $ 8,429     $ 8,830  
 
 
 
   
 
 

     The accompanying notes are a part of the consolidated financial statements.

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Table of Contents

Skyline Corporation and Subsidiary Companies

Notes to the Consolidated Financial Statements
For the nine-month period ended February 29, 2004
(Unaudited)

NOTE 1 Nature of Operations and Accounting Policies

The accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position as of February 29, 2004, in addition to the consolidated results of operations and consolidated cash flows for nine-month periods ended February 29, 2004.

The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally accompanying the annual consolidated financial statements have been omitted. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s latest annual report on Form 10-K.

Inventories are stated at cost, determined under the first-in, first-out method, which is not in excess of market. Physical inventory counts are taken at the end of each reporting quarter. Total inventories for the periods presented consisted of (dollars in thousands):

                 
    February 29, 2004     May 31, 2003
   
   
Raw Materials
  $ 4,361     $ 4,132  
Work In Process
    5,289       5,282  
Finished Goods
    116        
 
 
 
   
 
 
 
  $ 9,766     $ 9,414  
 
 
 
   
 
 

The Corporation provides the retail purchaser of its manufactured homes with a 15-month warranty against defects in design, materials and workmanship. Recreational vehicles are covered by a two-year warranty.

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Skyline Corporation and Subsidiary Companies

Notes to the Consolidated Financial Statements (continued)
For the nine-month period ended February 29, 2004
(Unaudited)

NOTE 1 Nature of Operations and Accounting Policies (continued)

The warranties are backed by a corporate service department and an extensive field service system. Estimated warranty costs are accrued at the time of sale based upon current sales, historical experience and management’s judgment regarding anticipated rates of warranty claims. The adequacy of the recorded warranty liability is periodically assessed and the amount is adjusted as necessary. A reconciliation of accrued warranty and related expenses is as follows (dollars in thousands):

                 
    Nine-Months Ended     Year Ended
    February 29, 2004     May 31, 2003
   
   
Balance at the beginning of the period
  $ 10,609     $ 10,100  
Accruals for warranties
    8,446       11,425  
Settlements made during the period
    (8,033 )     (10,916 )
 
 
 
   
 
 
Balance at the end of the period
  $ 11,022     $ 10,609  
 
 
 
   
 
 

The Corporation was contingently liable at February 29, 2004 under repurchase agreements with certain financial institutions providing inventory financing for retailers of its products. Under these arrangements, which are customary in the manufactured housing and recreational vehicle industries, the Corporation agrees to repurchase homes and recreational vehicles in the event of default by the retailer at declining prices over the term of the agreement, generally 12 months. The maximum repurchase liability is the total amount that would be paid upon the default of all the Corporation’s independent dealers. The maximum potential repurchase liability, without reduction for the resale value of the repurchased units, was approximately $103 million at February 29, 2004 and $100 million at May 31, 2003. The risk of loss under these agreements is spread over many retailers and financial institutions. The loss, if any, under these agreements is the difference between the repurchase cost and the resale value of the units. The amounts of obligations from repurchased units and incurred net losses for the periods presented are as follows (dollars in thousands):

                                 
    Three-Months Ended     Nine-Months Ended
    February 29/28,     February 29/28,
   
   
    2004     2003     2004     2003
   
   
   
   
Obligations from units repurchased
  $     $ 316     $     $ 630  
Net losses on repurchased units
          1             51  

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Table of Contents

Skyline Corporation and Subsidiary Companies

Notes to the Consolidated Financial Statements (continued)
For the nine-month period ended February 29, 2004
(Unaudited)

NOTE 1 Nature of Operations and Accounting Policies (continued)

The Corporation is a party to various pending legal proceedings in the normal course of business. Management believes that any losses resulting from such proceedings would not have a material adverse effect on the Corporation’s results of operations, financial position or cash flows.

NOTE 2 Industry Segment Information
Dollars in thousands

                                 
    Three-Months Ended     Nine-Months Ended
    February 29/28,     February 29/28,
   
   
    2004     2003     2004     2003
   
   
   
   
SALES
                               
Manufactured Housing
  $ 64,895     $ 62,355     $ 228,362     $ 222,061  
Recreational Vehicles
    26,100       25,354       86,895       94,607  
 
 
 
   
 
   
 
   
 
 
Total sales
  $ 90,995     $ 87,709     $ 315,257     $ 316,668  
 
 
 
   
 
   
 
   
 
 
(LOSS) EARNINGS BEFORE INCOME TAXES
                               
OPERATING EARNINGS (LOSS)
                               
Manufactured housing
  $ 108     $ (146 )   $ 8,030     $ 6,778  
Recreational vehicles
    (978 )     (1,269 )     (716 )     (1,028 )
General corporate expense
    (588 )     (397 )     (2,558 )     (2,427 )
 
 
 
   
 
   
 
   
 
 
Total operating (loss) earnings
    (1,458 )     (1,812 )     4,756       3,323  
Interest income
    314       465       940       1,605  
 
 
 
   
 
   
 
   
 
 
(Loss) earnings before income taxes
  $ (1,144 )   $ (1,347 )   $ 5,696     $ 4,928  
 
 
 
   
 
   
 
   
 
 

Operating (loss) earnings represent (loss) earnings before interest income and provision for income taxes with non-traceable operating expenses being allocated to industry segments based on percentages of sales.

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Table of Contents

Report of Independent Accountants

To The Board of Directors and Shareholders of Skyline Corporation:

We have reviewed the accompanying consolidated balance sheet of Skyline Corporation and its subsidiaries as of February 29, 2004 and the related consolidated statements of earnings and retained earnings for each of the three-month and nine-month periods ended February 29, 2004 and February 28, 2003 and the consolidated statements of cash flows for the nine-month periods ended February 29, 2004 and February 28, 2003. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of May 31, 2003, and the related consolidated statements of earnings and retained earnings, and of cash flows for the year then ended (not presented herein), and in our report dated June 17, 2003 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of May 31, 2003, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

PricewaterhouseCoopers LLP
Chicago, Illinois
March 19, 2004

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Skyline Corporation and Subsidiary Companies
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Current Quarter Compared to the Same Quarter Last Year and Fiscal Year-to-Date Compared to Last Year

Sales in the quarter ended February 29, 2004 were $90,995,000, an increase of $3,286,000 from $87,709,000 in the comparable quarter of the prior year. Fiscal 2004 sales through February 29, 2004 were $315,257,000, a decrease of $1,411,000 from prior year’s sales through February 28, 2003 of $316,668,000.

Manufactured housing sales for the third quarter totaled $64,895,000 compared to $62,355,000 at February 28, 2003. Quarterly unit sales decreased from 1,684 to 1,583. Fiscal year to date sales were $228,362,000 versus $222,061,000, while unit sales decreased from 6,078 to 5,784. Manufactured housing sales continue to be affected by difficult market conditions, restrictive retail financing, economic uncertainty and increased global tensions. During the third quarter sales were also negatively impacted by harsh winter weather conditions in certain regions of the United States.

Third quarter recreational vehicle sales increased to $26,100,000 in fiscal 2004 from $25,354,000 in fiscal 2003. Quarterly unit sales also increased from 1,730 to 1,811. Fiscal year to date sales were $86,895,000 versus $94,607,000 last year, while unit sales decreased from 6,579 to 5,977. There are primarily two reasons for the decreases. During the last twelve months consumer demand for towable metal sided recreational vehicles shifted toward product with price points lower than those historically offered by the Corporation. Recreational vehicle sales were affected by a timing issue in introducing the new 2004 product line which addressed this shift in demand. In addition, the market is dictating a higher priced bonded fiberglass exterior. The Corporation currently offers a limited number of models with similar exteriors. The following table shows the Corporation’s competitive position in the recreational vehicle product lines it sells.

                                 
    Units Produced     Units Produced
    Calendar Year 2003     Calendar Year 2002
   
   
    Industry     Skyline     Industry     Skyline
   
   
   
   
Travel Trailers
    137,000       5,943            119,700       6,886  
Fifth Wheels
    67,400       1,609       63,500       1,884  
Park Models
    7,000       471       7,700       391  

Cost of sales in the third quarter of fiscal 2004 was 89.7 percent of sales compared to 89.9 percent in fiscal 2003. Cost of sales for the first nine months of fiscal 2004 was 87.4 percent versus 87.8 percent in the prior year. The decrease is due to a product mix shift toward multi-section homes, representing 39.4 percent of total unit sales and 80.2 percent of manufactured housing unit sales in fiscal 2004, which was partially offset by an excessive increase in the cost of steel and lumber. In fiscal 2003, this product line amounted to 36.2 percent of total unit sales and 75.4 percent of manufactured housing unit sales. Gross margins for multi-section homes exceed those for single section homes and recreational vehicles.

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Skyline Corporation and Subsidiary Companies
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Current Quarter Compared to the Same Quarter Last Year and Fiscal Year-to-Date Compared to Last Year (continued)

Quarterly selling and administrative expenses as a percentage of sales decreased from 12.2 percent in fiscal 2003 to 11.9 percent in 2004. Selling and administrative expenses as a percentage of sales for fiscal 2004 totaled 11.1 percent versus 11.2 percent for fiscal 2003.

As a percentage of sales, third quarter operating earnings for manufactured housing were 0.2 percent in fiscal 2004 versus a loss of 0.2 percent in the prior year. Year to date operating earnings as a percentage of sales increased from 3.1 percent to 3.5 percent. The increase is due to a product mix shift towards multi-section homes noted above. Quarterly operating loss for recreational vehicles was 3.7 percent for fiscal 2004 versus 5.0 percent in fiscal 2003. The reduction in the loss is due to increased sales as noted above. Year to date recreational vehicle operating loss decreased slightly from 1.1 percent to 0.8 percent.

Interest income amounted to $314,000 for the third quarter compared to prior year’s $465,000. Interest income is directly related to the amount available for investment and the prevailing yields of U.S. Government securities.

Liquidity and Capital Resources

At February 29, 2004, cash and short-term investments in U. S. Treasury Bills totaled $155,057,000, an increase of $600,000 from $154,457,000 at May 31, 2003. Current assets exclusive of cash and investments in U.S. Treasury Bills totaled $42,900,000 at February 29, 2004, an increase of $2,386,000 from the May 31, 2003 balance of $40,514,000. The increase is due in part to a rise in accounts receivable of $930,000 caused by the timing of cash receipts. In addition, other assets increased $1,104,000 primarily from payments for state and federal income taxes exceeding the Corporation’s income tax liability at February 29, 2004.

Current liabilities increased $2,406,000 from $36,176,000 at May 31, 2003 to $38,582,000 at February 29, 2004. Various factors contributed to the increase. Accrued marketing programs increased $4,573,000 due to the timing of payments for an ongoing marketing program. Income taxes payable decreased $1,786,000 due to the timing of tax payments at February 29 versus May 31. Accrued salaries and wages declined $1,148,000 due to the timing of payments to employees at February 29 versus May 31.

Working capital at February 29, 2004 amounted to $159,375,000 compared to $158,795,000 at May 31, 2003. Capital expenditures totaled $1,468,000 during the first nine months of fiscal 2004 compared to $1,293,000 in the previous year. Capital expenditures during this period were made primarily to replace or refurbish machinery, equipment and facilities in addition to improving manufacturing efficiencies.

The cash provided by operating activities, along with current cash and other short-term investments, is expected to be adequate to fund any capital expenditures and treasury stock purchases during the year. Historically, the Corporation’s financing needs have been met through funds generated internally.

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Skyline Corporation and Subsidiary Companies
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Other Matters

The provision for federal income taxes in each year approximates the statutory rate and for state income taxes reflects current state rates effective for the period based upon activities within the taxable entities.

The consolidated financial statements included in this report reflect transactions in the dollar values in which they were incurred and, therefore, do not attempt to measure the impact of inflation. However, the Corporation believes that inflation has not had a material effect on its operations during the past three years. On a long-term basis, the Corporation has demonstrated an ability to adjust the selling prices of its products in reaction to changing costs due to inflation.

Forward Looking Information

     Certain statements in this report are considered forward looking as indicated by the Private Securities Litigation Reform Act of 1995. These statements involve uncertainties that may cause actual results to materially differ from expectations as of the report date. These uncertainties include but are not limited to:

    Cyclical nature of the manufactured housing and recreational vehicle industries
 
    General or seasonal weather conditions affecting sales
 
    Potential periodic inventory adjustments by independent retailers
 
    Availability of wholesale and retail financing
 
    Interest rate levels
 
    Impact of inflation
 
    Cost of labor and raw materials
 
    Competitive pressures on pricing and promotional costs
 
    Catastrophic events impacting insurance costs
 
    Consumer confidence and economic uncertainty
 
    Market demographics
 
    Management’s ability to attract and retain executive officers and key personnel
 
    Increased global tensions, market disruption resulting from a terrorist attack and any armed conflict involving the United States.

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Item 4. Controls and Procedures

  (a)   Evaluation of disclosure controls and procedures: The Company’s Chief Executive Officer and its Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15-d-14(c)) as of a date within 90 days of filing date of the quarterly report (the “Evaluation Date”), have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company would be made known to them by others within the Company, particularly during the period in which this quarterly report was being prepared.
 
  (b)   Changes in internal controls: There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s internal controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such internal controls and procedures requiring corrective actions.

PART II

Item 1. Legal Proceedings

Information with respect to this Item for the period covered by this Form 10-Q has been previously reported in Item 3, entitled “Legal Proceedings” of the Form 10-K for the fiscal year ended May 31, 2003 heretofore filed by the registrant with the Commission.

Item 6. Exhibits and Reports on Form 8-K

     
Exhibit 31.1
  Certification of Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2
  Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1
  Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2
  Certification of Chief Financial Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

A report on Form 8-K was filed on December 17, 2003. The purpose of the filing was to publicize the Corporation’s earnings for both the quarter and six months ending November 30, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

         
        SKYLINE CORPORATION


DATE: April 14, 2004  

    /s/ James R. Weigand

        James R. Weigand 
V. P. Finance & Treasurer,
Chief Financial Officer
 
DATE: April 14, 2004

    /s/ Jon S. Pilarski

        Jon S. Pilarski
Corporate Controller 

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