Fleetwood Reports Preliminary Revenues For First Quarter

RIVERSIDE, Calif., Aug. 1 Fleetwood Enterprises, Inc., the nation's largest manufacturer of recreational vehicles and a leading producer and retailer of manufactured housing, today announced preliminary sales for the first quarter of fiscal 2003, ended July 28, 2002.

Company revenues rose 8 percent in the first quarter to approximately $610 million compared with $564 million last year. Quarterly sales improved in the manufacturing operations of all three recreational vehicle divisions, but the sales for both manufactured housing divisions, manufacturing and retail, declined.

Recreational vehicle sales for the first quarter rose 39 percent to $369 million compared with $266 million a year ago. Sales in the motor home division reached $218 million, a 63 percent increase compared with the prior year, reflecting strong demand by both dealers and retail customers for the Company's refreshed product line. Travel trailer sales improved by 13 percent to $121 million, while folding trailer sales were up 19 percent to $30 million.

"We are extremely pleased with the sales increases across all three divisions, particularly the extraordinary improvement in the motor home division," Fleetwood's Interim President and CEO David S. Engelman said. "At the same time revenues have been increasing, we have successfully cut costs in many areas, and expect to report an operating profit in all three RV divisions. In addition, we have healthy backlogs as we enter the second quarter."

Manufactured housing sales in the first quarter were down 20 percent to approximately $231 million compared with $290 million a year ago. Housing revenues include wholesale factory sales of $159 million to independent retailers and retail sales of $72 million from Company-owned sales centers. This compares with $181 million and $109 million, respectively, last year. The 33 percent drop in housing retail sales was due to a substantial reduction in the number of Company-owned retail stores and an extremely tight retail financing environment. Gross manufacturing revenues declined 11 percent to approximately $192 million, including intercompany sales of $34 million to Company-operated retail stores.

"The manufactured housing industry continues to face the most difficult environment in memory," Engelman said. "We will continue to evaluate our manufacturing and retail capacity and make further adjustments where necessary. However, we will balance that decision with the prospect for a recovery in the manufactured housing market, which we anticipate will occur during calendar 2003."

While the Company expects to approach breakeven at the operating income line, there will be a net loss for the first quarter.

The Company also confirmed its intent, as it has indicated in SEC filings and to the extent permitted by the terms of the instruments, to continue indefinitely to defer distributions on its 6% preferred securities, including the distributions which would otherwise be payable on August 15, and to pay the distributions on the Company's recently issued 9.5% preferred securities in Common stock.

Final sales and results for the July quarter will be reported in about five weeks.