Fleetwood Reports Preliminary Revenues for Fiscal 2009 First Quarter

RIVERSIDE, Calif., July 31 -- Fleetwood Enterprises, Inc. announced today preliminary sales for the fiscal 2009 first quarter of approximately $287 million, a 41 percent drop from $488 million last year. Sales for the RV Group fell 52 percent, while Housing Group revenues were off 15 percent in the quarter, which ended July 27, 2008.

"As we have previously reported, we continue to see market challenges in all of our business units, particularly in motor homes," said Elden L. Smith, president and chief executive officer. "We have been responding aggressively to these challenges by taking down production to more closely match demand, selling non-core businesses and idle real estate assets, and introducing new product offerings to address changes in consumer preferences and economic conditions. As the first quarter progressed, however, we saw an acceleration of the negative trends caused by volatile fuel prices, the housing crisis, a tighter lending environment, and declining consumer confidence. As a result, RV dealers responded by making significant adjustments to reduce their inventories. As a leader in the industry, we expect to be well positioned when the market stabilizes, although we believe we must be prepared for the likelihood that this will not occur until the spring of 2009 or later. We have strong liquidity at the present time as a result of recent asset sales, an equity offering, and availability under our revolving credit facility. However, as we now anticipate negative cash flow from operations over the balance of fiscal 2009, we believe it is prudent that we aggressively manage liquidity. The holders of our $100 million 5% convertible senior subordinated debentures have the right to require Fleetwood to repurchase them at par on December 15, 2008. We have the right to satisfy the obligation with common stock, with cash, or through some combination of the two, and we may also explore alternative instruments with the holders of the debentures."

In the future, Fleetwood intends to accelerate the release of its quarterly results from the release date that previously coincided with the filing of our quarterly SEC reports. As a result, we will discontinue the release of preliminary sales information. The release and conference call for the first quarter are scheduled for Thursday, August 28, 2008, whereas last year the results were released after Labor Day. The 10-Q is expected to be filed on September 4, 2008.