TROY—Skyline Champion Corp. (NYSE:SKY) announced the closure of 13 of its 38 manufacturing plants in response to government orders to suspend non-essential production in response to the continued spread of COVID-19.
“Foremost, Skyline Champion is focused on the safety and well-being of our employees, distributors and customers we serve, and the communities in which we operate, while simultaneously ensuring business continuity across our operations,” said Mark Yost, president and CEO. “We are well-positioned to navigate the uncertainty of the current environment due to our strong liquidity position, highly flexible, low cash-cost operating model, as well as our diversified customer channels and geographic mix.”
The 13 closed plants are in California, Pennsylvania, Louisiana, Kentucky and New York, states that have ordered a suspension of operations for many businesses as part of their efforts to mitigate the spread of COVID-19. In addition, Skyline Champion is closing its five Canadian manufacturing plants due to reductions in demand. It is currently anticipated that these plant closures will continue until the company determines that it has qualified for an exemption to operate, or as COVID-19 and recent oil price impacts are mitigated to allow the Company and its suppliers to restart partial or full operations.
As part of the Company’s core principles to safeguard its communities, employees have been encouraged to work from home where possible, increase social distancing, and increase sanitation standards. In addition, the Company has enacted a relief program for employees impacted by COVID-19 to provide enhanced compensation and benefits on a limited basis. The Company will continue to assess the rapidly evolving situation to work through the potential production risks that may arise from lower employee attendance, material shortages, transportation challenges, lack of inspectors, emergency orders from governmental agencies, and other factors.
Company officials also noted that Skyline Champion has no significant debt maturing until June 2023. Liquidity remains strong and, in order to maximize financial flexibility, the company last week drew the remaining $38 million of its $100 million revolving credit line, increasing cash availability to approximately $200 million.
Skyline Champion, founded in 2018 by the merger of Skyline Corp. and the operating assets of Champion Enterprises Holdings LLC, employs approximately 7,000 people and is the largest independent publicly traded factory-built housing company in North America. In addition to its home building business, Skyline Champion operates a factory-direct retail business, Titan Factory Direct, with 21 retail locations in the southern United States, and Star Fleet Trucking, providing transportation services to the manufactured housing and other industries. Skyline Champion builds homes under the brand names Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, Shore Park, Silvercrest, Titan Homes in the United States and Moduline and SRI Homes in western Canada.