Fleetwood Reports Results for Second Quarter and First Six Months
RIVERSIDE, Calif., Dec. 10 -- Fleetwood Enterprises, Inc. , the nation's largest manufacturer of recreational vehicles and a leading producer and retailer of manufactured housing, today announced results for the second quarter and six months ended October 28, 2001. The Company reported a second quarter net loss of $12.3 million or $0.38 per diluted share, which included an accrual of $8.3 million for the pending settlements of two class-action lawsuits. The loss also reflects reduced sales volume in both of the Company's core businesses. The Company lost $3.4 million or 10 cents per diluted share in last year's second quarter.
``Although we had hoped early in the quarter to reach break even,'' said Nelson W. Potter, Fleetwood's president and chief executive officer, ``that was changed by the events of September 11th and the opportunity to settle these lawsuits. The drop in consumer confidence in September particularly affected our RV sales. In recent weeks, however, orders for our travel trailer and motor home products have increased compared to the previous two months. As for the settlements, we believe that the alternative of additional attorney fees, consumption of management time and risks of litigation generally -- regardless of the merit of the cases -- justifies the cost.''
For the first six months of fiscal 2001, the Company incurred a net loss of $23.5 million or $0.72 per diluted share. This compares with a loss of $34.5 million or $1.05 per diluted share for the corresponding period in the prior year, which included a one-time cumulative charge to earnings of $11.2 million after taxes or 34 cents per diluted share related to a change in accounting for retail housing credit sales.
Consolidated revenues for the second quarter totaled $591 million, down 21 percent from $749 million in last year's second quarter. Six-month revenues also fell 21 percent to $1.15 billion from $1.47 billion for the first half of last year.
``The manufacturing side of our Housing Group continues to improve its gross profit margin even under current market conditions,'' Potter said. ``Manufacturing profits were $16.6 million during the quarter, up 11 percent from the prior year. The retail division lost $8.9 million, compared with $6.1 million last year, due to a 51 percent drop in sales. The sales decline is largely due to our actions to rightsize this division by closing stores, selling them or transferring management responsibility to a third party. We are now down from a high of 244 stores to approximately 150 stores, which is the number of stores that we had been targeting for the current industry environment.''
Manufactured housing revenues in the second quarter fell 27 percent to $285.6 million from $391.0 million last year. Housing revenues included $198.0 million of wholesale factory sales and $87.6 million of retail sales from Company-owned sales centers. This compares with $211.4 million and $179.6 million, respectively, last year. Gross manufacturing revenues declined to $240.1 million from $284.3 million last year, and included $42.1 million of intercompany sales to Company-owned stores. Manufacturing unit volume was off 18 percent to 8,703 homes and homes sold at Fleetwood retail stores dropped 45 percent to 2,212.
For the first half of the fiscal year, manufactured housing revenues were down 27 percent to $575.6 million from $785.1 million in the prior year. Revenues included $379.5 million of wholesale factory sales and $196.1 million of sales to Company-owned stores, down from $448.0 million and $337.1 million respectively last year. Gross manufacturing revenues, including intercompany sales, were $456.3 million this year compared with $601.8 million last year. Unit shipments from manufacturing plants declined 27 percent to 16,472, while Fleetwood retail store sales dropped by 37 percent to 4,858.
``Our RV Group sales also declined, mostly reflecting weakened sales in our travel trailer division,'' Potter said. ``This contributed to an RV operating loss of $10.1 million for the second quarter. We are encouraged, however, by the recent success of our promotional programs, as well as the high level of interest in our product line displayed two weeks ago at the industry's largest show in Louisville, Kentucky. We were pleased with the enthusiasm of our dealers, the positive reception of our new motor home and travel trailer products and the number of orders written at the show.''
Quarterly revenues in the RV group were down 15 percent from $349 million to $297 million. Motor home sales for the quarter declined to $172 million from $189 million last year. In the towable category, travel trailer and folding trailer sales declined to $93 million and $32 million, respectively, compared to $128 million and $33 million in the prior year.
Six-month RV sales were off 16 percent to $563.2 million compared to last year's $666.8 million. Motor home revenues fell to $306 million versus $336 million last year. Travel trailer sales declined to $200 million from $270 million a year ago, while folding trailer revenues dropped slightly to $58 million from last year's $62 million.
``Fleetwood is definitely making progress toward profitability, although we will not reach that point in the seasonally weak third quarter,'' Potter said. ``Besides the Housing Group's manufacturing operations, our motor home, folding trailer and supply operations were also in the black. All of us are very aware of and are focused on what needs to be done to turn around travel trailers and continue the improvements in our housing retail division.''
The Company has scheduled a conference call with analysts and investors to discuss quarterly results. The call is scheduled for 10:00 a.m. PST on Monday, December 10, 2001, and will be broadcast live over the Internet at www.streetevents.com and www.companyboardroom.com, and will be accessible from the Company's Website, www.fleetwood.com .
This press release contains certain forward-looking statements and
information based on the beliefs of the Company's management as well as
assumptions made by, and information currently available to, the Company's
management.
Such statements reflect the current views of the Company with
respect to future events and are subject to certain risks, uncertainties, and
assumptions, including risk factors identified in this press release, the
Company's 10-K and other SEC filings.
These risk factors include, without
limitation, continued weakness in the manufactured housing and recreational
vehicle markets, the Company's ability to secure additional financing on
favorable terms and in a timely manner, the availability of wholesale and
retail financing in the future and changes in retail inventory levels in the
manufactured housing and recreational vehicle industries.
Actual results,
events and performance may differ materially.
Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date hereof.
The Company undertakes no obligation to release publicly
the result of any revisions to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
FLEETWOOD ENTERPRISES, INC.
Consolidated Summaries of Operations
(Unaudited)
(Amounts in thousands except per share data)
13 Weeks Ended 26 Weeks Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2001 2000 2001 2000
Sales $590,756 $749,130 $1,154,888 $1,469,251
Operating income
(loss) before
other charges $(11,327) $9,969 $(20,940) $(640)
Restructuring and
impairment charges (1,000) (3,933) (1,000) (17,402)
Operating income
(loss) $(12,327) $6,036 $(21,940) $(18,042)
Income (loss)
before income taxes,
minority interest
and cumulative
effect of accounting
change $(15,200) $1,268 $(29,364) $(25,299)
Benefit (provision)
for income taxes 5,555 (1,886) 11,381 7,527
Minority interest
in Fleetwood Capital
Trust, net of taxes (2,704) (2,792) (5,493) (5,579)
Loss before cumulative
effect of accounting
change (12,349) (3,410) (23,476) (23,351)
Cumulative effect
of accounting change,
net of taxes -- -- -- (11,176)
Net loss for basic
and diluted
earnings per share $(12,349) $(3,410) $(23,476) $(34,527)
Basic and diluted
loss per share:
Loss before
cumulative effect
of accounting change $(.38) $(.10) $(.72) $(.71)
Cumulative effect of
accounting change,
net of tax -- -- -- (.34)
Basic and diluted net
loss per share $(.38) $(.10) $(.72) $(1.05)
Weighted average
Common shares:
Basic and diluted 32,832 32,758 32,794 32,758
FLEETWOOD ENTERPRISES, INC.
Business Segment and Unit Shipment Information
(Dollars in thousands)
13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2001 2000 2001 2000
OPERATING REVENUES:
Manufactured housing
Manufacturing $240,065 $284,257 $456,297 $601,756
Retail 87,635 179,562 196,146 337,116
Less intercompany (42,139) (72,813) (76,865) (153,739)
285,561 391,006 575,578 785,133
Recreational vehicles 296,855 349,314 563,163 666,828
Supply operations 8,340 8,810 16,147 17,290
$590,756 $749,130 $1,154,888 $1,469,251
OPERATING INCOME/(LOSS):
Manufactured housing* $16,580 $15,002 $37,609 $12,996
Housing - retail** (8,947) (6,078) (20,966) (11,515)
Recreational vehicles (10,076) (139) (27,886) (13,420)
Supply operations 1,964 2,160 4,171 4,316
Corporate and other (11,848) (4,909) (14,868) (10,419)
$(12,327) $6,036 $(21,940) $(18,042)
UNITS SOLD:
Manufactured housing
Factory shipments 8,703 10,550 16,472 22,439
Retail sales 2,212 4,036 4,858 7,747
Less intercompany (1,514) (2,577) (2,743) (5,563)
9,401 12,009 18,587 24,623
Recreational vehicles
Motor homes 1,999 2,307 3,732 4,366
Travel trailers 6,495 8,757 14,074 19,234
Folding trailers 5,062 5,536 8,756 10,075
13,556 16,600 26,562 33,675
* After deduction (addition) for intercompany profit in inventory as
follows:
FY 2002: $(1,671) QTD and $(6,509) YTD; FY 2001: $(3,605) QTD and
$484 YTD.
** Operating income before deduction of interest expense on inventory
floor plan financing as follows:
FY 2002: $864 QTD and $2,359 YTD; FY 2001: $3,405 QTD and $6,441 YTD.
