RIVERSIDE, Calif., March 8 /PRNewswire-FirstCall/ -- Fleetwood
Enterprises, Inc. (NYSE:FLE) announced today its results for the
fiscal 2007 third quarter and first nine months ended January 28,
2007. Consolidated revenues for the quarter were $443.2 million,
down 24 percent from $583.9 million in last year's third quarter.
The loss from continuing operations totaled $29.7 million, or $0.46
per diluted share, compared to income from continuing operations of
$4.7 million, or $0.08 per diluted share, in the third quarter of
the prior year. The current year's third quarter operating results
included $4.1 million of impairment and severance charges, while
last year's third quarter included $0.6 million of impairment
charges. The net loss, which included discontinued operations,
totaled $29.9 million, or $0.47 per diluted share, compared to net
income of $1.4 million, or $0.02 per diluted share, in last year's
third quarter. "The negative results for the quarter reflect normal
seasonal weakness, which was intensified by relatively sharp
year-over-year declines in manufactured housing and travel trailer
industry shipments at the end of the calendar year," said Elden L.
Smith, Fleetwood's president and chief executive officer. "Last
year's third quarter benefited from $129 million of sales of
FEMA-specified homes and trailers, as well as demand for
conventional units as post-hurricane living accommodations. Our
progress in improving operational efficiencies and reducing costs
is masked by this quarter's low level of revenues, which were below
any quarter since the third quarter of fiscal 2003." For the first
nine months of fiscal 2007, consolidated revenues were down 18
percent to $1.50 billion from $1.83 billion in the same period last
year. The loss from continuing operations for the first nine months
of fiscal 2007 was $48.8 million, or $0.76 per diluted share,
compared with a loss from continuing operations of $8.9 million, or
$0.15 per diluted share, in the same period of fiscal 2006. The net
loss in the first nine months of fiscal 2007 was $50.7 million, or
$0.79 per diluted share, compared with a net loss of $30.1 million,
or $0.52 per diluted share, for the same period last year. RV Group
Results The RV Group incurred an operating loss of $15.8 million
for the third quarter, compared to operating income of $3.8 million
in the comparable period of the prior year. Revenues for the Group
declined 11 percent to $324.0 million in the quarter compared with
$365.3 million in the same period of the prior year. Sales of
FEMA-specified emergency living units in the prior year's third
quarter were $72 million. The motor home division earned $5.3
million in the quarter compared to an operating loss of $4.1
million in the third quarter last year, primarily due to a 26
percent increase in revenues. The travel trailer division incurred
an operating loss of $17.5 million compared to operating income of
$11.2 million in the prior year, with revenues dropping 52 percent
to $81.8 million. Travel trailer revenues, excluding those
generated by the sale of FEMA units, were down 16 percent. The
operating loss for the folding trailer division was slightly higher
at $3.5 million compared to $3.3 million last year, on revenues
that were down 7 percent. The RV Group reported an operating loss
of $44.0 million for the first nine months of fiscal 2007 on
revenues of $1.1 billion, compared with an operating loss of $2.0
million on revenues of $1.18 billion in the comparable period last
year. "Results from our travel trailer operations were
disappointing, but we are in a transition period," Smith said. "We
have made substantial progress in the realignment of our product
mix across manufacturing facilities, resulting in higher labor
efficiencies since implementation in early January 2007. The next
phase of this improvement process was to evaluate our capacity
needs, particularly in light of the recent softening of the travel
trailer market, and in early March we began the process of
discontinuing production in three travel trailer facilities. There
will be some transition costs in connection with these changes, but
the longer-term benefits will far outweigh them. "On the positive
side, revenues in our motor home business were up significantly,
leading to a profitable quarter," Smith continued. "Our unit
shipments increased 13 percent, while industry shipments of Class A
and Class C units for approximately the same three-month period
were down slightly. In addition, as of the end of the quarter, the
motor home division had its highest backlog since April 2004.
Nevertheless, our optimism about the near-term future is somewhat
tempered, due to recent stock market volatility, which has affected
RV sales in the past, as well as mixed attendance and sales results
from the retail shows so far in 2007." Housing Group Results The
Housing Group incurred an operating loss of $7.8 million in the
third quarter compared to generating operating income of $13.1
million in the same quarter of the prior year. This year's results
included impairment charges of $2.8 million incurred in connection
with an idle plant. Quarterly revenues for the Group fell 48
percent to $108.7 million from $208.8 million in last year's third
quarter, which included revenues of approximately $57 million from
the sale of homes for disaster relief. For the first nine months of
the fiscal year, Housing Group revenues declined 37 percent to
$401.3 million from $638.1 million in the prior-year period,
resulting in an operating loss of $4.3 million. During the same
period last year, the Group generated operating income of $32.2
million. "The manufactured housing industry experienced a further
decline in annual shipment numbers in 2006," Smith said. "To find a
lower number, one must look to 1961. While we believe that the case
for a manufactured housing rebound remains valid, it has proven to
be extremely difficult to estimate the timing of any recovery. That
uncertainty has led us to pursue new opportunities, resulting in
the recent formation of our modular division, Trendsetter Homes,
which will provide us with new channels for the sale of
factory-built housing. Although the rate of growth is difficult to
predict, the prospects for that business are very good and we are
making progress in implementing our strategy for penetrating the
Gulf Coast market. We believe that we bring unique strengths to the
table and look forward to expanding our reach in this market.
Meanwhile, we also continue to pursue military housing projects,
where we have met with some success. Both of these modular
initiatives involve significantly longer lead times than our
traditional manufactured housing business, so several projects in
their early stages are not yet reflected in our backlog."
Discontinued Operations Discontinued operations, which include the
manufactured housing retail and financial services businesses, the
majority of the assets of which were sold in the second fiscal
quarter of 2006, incurred a loss of $0.2 million or $0.01 per
diluted share in the third quarter, compared to a loss of $3.3
million or $0.06 per diluted share in the comparable period last
year. Corporate Outlook "Although it appears that the motor home
market will improve this spring, we have reason to believe that
this may not be the case for the markets of our other products,"
Smith said. "Signs seem to indicate that the travel trailer market
will be softer than last year for at least the first half of the
calendar year, and any potential upturn in lending for manufactured
housing that might be developing would not be immediately apparent
in our order backlog. In addition, significant results from our
modular housing marketing efforts are not expected to materialize
until later this calendar year. As a result of these factors and
additional restructuring charges incurred this month in connection
with the changes in our travel trailer division, we expect to
sustain a significant operating loss in the fourth quarter,
although we anticipate it will be less than the third quarter loss
due to seasonal improvements and the effect of our cost-cutting
measures. Despite difficult market conditions that have delayed our
return to sustainable profitability, we are confident that the
moves we have made position us well for the future." The Company
will host a conference call with interested parties at 10:30 a.m.
PST/1:30 p.m. EST on Thursday, March 8, 2007. The call will be
broadcast live over the Internet at http://www.streetevents.com/,
http://www.earnings.com/, and the Company's website,
http://www.fleetwood.com/ under Investor Relations. About Fleetwood
Fleetwood Enterprises, Inc. is a leading producer of recreational
vehicles and manufactured homes through its subsidiaries. This
Fortune 1000 company, headquartered in Riverside, Calif., is
dedicated to providing quality, innovative products that offer
exceptional value to its customers. Fleetwood operates facilities
strategically located throughout the nation, including recreational
vehicle, manufactured housing and supply subsidiary plants. For
more information, visit the Company's website at
http://www.fleetwood.com/. This press release contains certain
forward-looking statements and information based on the beliefs of
Fleetwood's management as well as assumptions made by, and
information currently available to, Fleetwood's management. Such
statements reflect the current views of Fleetwood with respect to
future events and are subject to certain risks, uncertainties, and
assumptions, including risk factors identified in Fleetwood's 10-K
and other SEC filings. These risks and uncertainties include,
without limitation, the lack of assurance that the Company will
regain sustainable profitability in the foreseeable future; the
Company's ability to comply with financial tests and covenants on
existing debt obligations and to obtain future financing needed in
order to execute its business strategies; the volatility of the
Company's stock price; the impact of ongoing weakness in the
manufactured housing market and more recent weakness in the
recreational vehicle market; the effect of global tensions, fuel
prices, interest rates, and other factors on consumer confidence,
which in turn may reduce demand for Fleetwood's products,
particularly RV products; the availability and cost of wholesale
and retail financing for the Company's products, especially
manufactured housing; the cyclical and seasonal nature of both the
manufactured housing and recreational vehicle industries; expenses
and uncertainties associated with the entry into new business
segments or the manufacturing, development and introduction of new
products; the potential for excessive retail inventory levels in
the Company's industries, especially the recreational vehicle
business; potential increases in the frequency of product
liability, wrongful death, class action, and other legal or
regulatory actions; the highly competitive nature of our
industries; lack of acceptance of Fleetwood's products; and
repurchase agreements with floorplan lenders, which could result in
increased costs. Contact: Lyle Larkin, Vice President-Treasurer
(951) 351-3535 Kathy A. Munson, Director-Investor Relations (951)
351-3650 (tables to follow) Fleetwood Enterprises, Inc. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in
thousands, except per share data) 39 Weeks 40 Weeks 13 Weeks Ended
Ended Ended January 28, January 29, January 28, January 29, 2007
2006 2007 2006 Net Sales: RV Group $323,976 $365,342 $1,059,793
$1,182,015 Housing Group 108,687 208,812 401,332 638,124 Supply
Group 10,509 9,712 38,391 35,330 Intercompany Housing Group sales
-- -- -- (25,627) 443,172 583,866 1,499,516 1,829,842 Cost of
products sold 384,597 472,635 1,294,172 1,506,531 Gross profit
58,575 111,231 205,344 323,311 Operating expenses 79,439 98,713
250,858 296,217 Other operating expenses, net 4,063 582 2,873 5,916
83,502 99,295 253,731 302,133 Operating income (loss) (24,927)
11,936 (48,387) 21,178 Other income (expense): Investment income
1,269 1,921 4,701 4,077 Interest expense (5,942) (8,142) (18,773)
(22,824) Other, net -- -- 18,530 -- (4,673) (6,221) 4,458 (18,747)
Income (loss) from continuing operations before income taxes
(29,600) 5,715 (43,929) 2,431 Provision for income taxes (70)
(1,007) (4,841) (11,345) Income (loss) from continuing operations
(29,670) 4,708 (48,770) (8,914) Loss from discontinued operations,
net (235) (3,332) (1,973) (21,185) Net income (loss) $(29,905)
$1,376 $(50,743) $(30,099) 39 Weeks 40 Weeks 13 Weeks Ended Ended
Ended January 28, January 29, January 28, January 29, 2007 2006
2007 2006 Basic Diluted Basic Diluted Basic Diluted Basic Diluted
Earnings (loss) per common share: Income (loss) from conti- nuing
opera- tions $(0.46) $(0.46) $0.08 $0.08 $(0.76) $(0.76) $(0.15)
$(0.15) Loss from discon- tinued opera- tions (0.01) (0.01) (0.06)
(0.06) (0.03) (0.03) (0.37) (0.37) Net income (loss) per common
share $(0.47) $(0.47) $0.02 $0.02 $(0.79) $(0.79) $(0.52) $(0.52)
Weighted average common shares 63,937 63,937 61,838 62,622 63,933
63,933 58,103 58,103 Fleetwood Enterprises, Inc. CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands)
January 28, October 29, January 29, 2007 2006 2006 ASSETS Cash
$9,722 $55,172 $63,725 Marketable investments - available for sale
24,005 23,505 18,108 Receivables 139,131 136,306 227,632
Inventories 198,243 197,382 225,886 Deferred taxes benefits -
current 13,104 13,197 14,202 Other current assets 13,782 15,941
18,983 Total current assets 397,987 441,503 568,536 Property, plant
and equipment, net 198,059 204,874 220,790 Deferred taxes benefits
- non-current 52,367 52,274 50,061 Cash value of Company-owned life
insurance, net 23,113 29,722 30,400 Goodwill and intangible assets
6,316 6,316 6,316 Other assets 43,073 40,045 46,110 Total assets
$720,915 $774,734 $922,213 LIABILITIES & SHAREHOLDERS' EQUITY
Accounts payable $53,328 $59,411 $68,081 Employee compensation and
benefits 39,423 45,023 58,125 Federal and state income taxes 1,315
2,211 -- Product warranty reserves 45,015 44,997 45,622 Insurance
reserves 17,616 17,588 17,395 Other short-term borrowings 19,785
20,661 5,016 Accrued interest 6,689 6,356 63,702 Other current
liabilities 64,959 70,887 73,912 Total current liabilities 248,130
267,134 331,853 Deferred compensation and retirement benefits
28,703 34,637 33,776 Product warranty reserves 22,165 21,510 21,129
Insurance reserves 34,341 34,232 33,451 Convertible senior
subordinated debentures 100,000 100,000 100,000 Convertible
subordinated debentures 160,142 160,142 210,142 Other long-term
debt 3,880 4,360 25,249 Total liabilities 597,361 622,015 755,600
Commitments and contingencies Shareholders' equity: Common stock
64,041 63,969 63,616 Additional paid-in capital 492,034 490,863
487,041 Accumulated deficit (435,976) (406,071) (386,895)
Accumulated other comprehensive income 3,455 3,958 2,851 Total
shareholders' equity 123,554 152,719 166,613 Total liabilities and
shareholders' equity $720,915 $774,734 $922,213 Fleetwood
Enterprises, Inc. BUSINESS SEGMENT AND UNIT SHIPMENT INFORMATION
(Unaudited) (Amounts in thousands) 39 Weeks 40 Weeks 13 Weeks Ended
Ended Ended January 28, January 29, January 28, January 29, 2007
2006 2007 2006 REVENUES: Motor homes $227,851 $180,677 $683,724
$727,207 Travel trailers 81,786 169,256 307,585 393,425 Folding
trailers 14,339 15,409 68,484 61,383 RV Group 323,976 365,342
1,059,793 1,182,015 Housing Group 108,687 208,812 401,332 638,124
Supply Group 10,509 9,712 38,391 35,330 Intercompany Housing Group
sales -- -- -- (25,627) $443,172 $583,866 $1,499,516 $1,829,842
OPERATING INCOME (LOSS): Motor homes $5,252 $(4,054) $633 $3,983
Travel trailers (17,543) 11,169 (41,881) (1,347) Folding trailers
(3,532) (3,309) (2,726) (4,614) RV Group (15,823) 3,806 (43,974)
(1,978) Housing Group (7,770) 13,073 (4,319) 32,249 Supply Group
(727) (370) 1,392 2,229 Corporate and other (607) (4,573) (1,486)
(11,322) $(24,927) $11,936 $(48,387) $21,178 UNITS SOLD:
Recreational vehicles - Motor homes 1,838 1,622 6,110 6,873 Travel
trailers 4,350 10,711 17,469 25,062 Folding trailers 1,868 2,249
7,899 8,094 8,056 14,582 31,478 40,029 Manufactured housing -
Factory shipments 2,827 6,104 10,200 18,572 Less intercompany -- --
-- (673) Total shipments from continuing operations 10,883 20,686
41,678 57,928 Retail housing sales -- -- -- 1,393 Total Company
shipments 10,883 20,686 41,678 59,321 DATASOURCE: Fleetwood
Enterprises, Inc. CONTACT: Lyle Larkin, Vice President-Treasurer,
+1-951-351-3535, or Kathy A. Munson, Director-Investor Relations,
+1-951-351-3650, both of Fleetwood Enterprises, Inc. Web site:
http://www.streetevents.com/ Web site: http://www.earnings.com/ Web
site: http://www.fleetwood.com/
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