Fleetwood Announces Q3 Earnings
25 February 1998
Fleetwood Announces Record Third Quarter Earnings
RIVERSIDE, Calif., Feb. 25 -- Fleetwood Enterprises, Inc.
, the nation's leading producer of manufactured housing and
recreational vehicles, today reported record earnings for the third quarter
which ended January 25, 1998. Third quarter earnings increased 53 percent to
$21.1 million or 57 cents per share on a diluted basis. This compares with
$13.8 million and 38 cents per share for the similar period last year.
Earnings from continuing operations for the nine-month period ending
January 25, 1998 rose 16 percent to $80.2 million or $2.19 per share on a
diluted basis. This compares with $68.9 million or $1.72 per share for the
first nine months of fiscal 1997.
Current year earnings for nine months include a non-recurring gain of
$10.4 million or 28 cents per share recognized in the first quarter from a
significant reinsurance transaction involving the Company's captive insurance
operation. Nine-month earnings in the prior year totaled $103.7 million or
$2.58 per share on a diluted basis, and included a gain of $33.9 million or 84
cents per share on the sale of the Company's discontinued RV finance
operation.
Consolidated sales for the third quarter were a record $710.6 million, 13
percent ahead of last year's $628.0 million. The higher third quarter volume
reflects improved sales of both manufactured housing and recreational
vehicles. For the first nine months of fiscal 1998, sales rose four percent
to $2.21 billion compared to $2.13 billion for the similar period last year.
Fleetwood President Nelson W. Potter said, "The record third quarter
results were largely driven by a strong recovery in manufactured housing
profits. An increase in sales and sharply higher gross margins led to the
outstanding housing group performance. Healthy demand for Fleetwood homes in
the eastern and central regions drove the housing group third quarter sales
increase. RV group profits did not measure up to our expectations considering
a sharp increase in sales volume. This primarily reflects motor home
production inefficiencies and higher product warranty costs. We expect
improvement in these areas in the fourth quarter," Potter concluded.
Manufactured housing sales reached a new high for the third quarter,
increasing nine percent to $354.9 million on a five percent rise in unit
volume. The continuing growth in sales of multi-section homes resulted in an
eight percent gain in manufactured housing sections. Multi-section homes
represented nearly 58 percent of homes sold in the third quarter, up from 54
percent a year ago. Nine-month housing sales were up two percent to a record
$1.11 billion despite a two percent decline in homes sold. A heavier mix of
multi-section homes, which rose from 49 percent to 56 percent of sales for the
nine months, resulted in a three percent gain in housing sections.
Recreational vehicle sales were up 18 percent to $345.3 million, an
all-time high for the January quarter, compared to last year's $293.7 million,
as all RV segments posted record third quarter sales. Motor home revenues of
$211.7 million were up 20 percent on an 11 percent increase in unit volume due
to growth in sales of upscale Class A products. Travel trailer sales rose 13
percent to $107.8 million, while unit shipments increased 14 percent. Third
quarter folding trailer sales increased 18 percent to $25.8 million on a three
percent rise in unit volume.
RV sales for the first nine months of fiscal 1998 rose six percent to
$1.06 billion compared to $1.0 billion a year ago. Motor home sales increased
three percent to a record $634.4 million, despite a nine percent decline in
unit shipments, reflecting the continuing shift to higher-priced Class A
products. Travel trailer sales were up eight percent to $349.8 million on a
five percent rise in unit volume. Folding trailers rose a strong 29 percent
to a record $78.5 million, as unit shipments rose 16 percent.
The Company's supply group contributed third quarter revenues of $10.5
million compared to $9.8 million a year ago. Nine-month revenues were $33.4
million versus $40.5 million for the comparable period last year.
FLEETWOOD ENTERPRISES, INC.
Consolidated Summaries of Earnings
(Unaudited)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
(Amounts in thousands except per share data)
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
1998 1997 1998 1997
Sales $710,620 $627,961 $2,208,163 $2,127,986
Income from continuing
operations before
income taxes $34,664 $22,681 $130,870 $113,659
Provision for income taxes (13,515) (8,902) (50,655) (44,776)
Income from continuing
operations 21,149 13,779 80,215 68,883
Income from discontinued operations:
Income from operations of
finance subsidiary -- -- -- 887
Gain on sale of
finance subsidiary -- -- -- 33,891
-- -- -- 34,778
Net income $21,149 $13,779 $80,215 $103,661
Earnings per share:
Continuing operations
Basic $.58 $.39 $2.23 $1.76
Diluted $.57 $.38 $2.19 $1.72
Discontinued operations:
Income from operations
of finance subsidiary
Basic -- -- -- .02
Diluted -- -- -- .02
Gain on sale of
finance subsidiary
Basic -- -- -- .87
Diluted -- -- -- .84
Total Earnings per share
Basic $.58 $.39 $2.23 $2.65
Diluted $.57 $.38 $2.19 $2.58
Weighted average Common
shares - basic 36,256 35,562 36,016 39,092
Weighted average Common
shares - diluted 36,884 36,556 36,587 40,103
Fleetwood Enterprises, Inc.
Business Segment and Unit Shipment Information
(Dollars in thousands)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
1998 1997 1998 1997
OPERATING REVENUES:
Manufactured housing $354,872 $324,449 $1,112,173 $1,087,091
Recreational vehicles 345,293 293,721 1,062,640 1,000,410
Supply operations 10,455 9,791 33,350 40,485
$710,620 $627,961 $2,208,163 $2,127,986
OPERATING INCOME:
Manufactured housing $18,159 $8,355 $59,298 $62,363
Recreational vehicles 13,519 14,142 47,576 52,955
Supply operations 4,037 (390) 11,289 1,081
Corporate and other (3,642) (842) (8,746) (9,529)
$32,073 $21,265 $109,417 $106,870
UNITS SHIPPED:
Manufactured housing 15,368 14,568 48,975 49,769
Recreational vehicles -
Motor homes 3,055 2,764 9,516 10,459
Travel trailers 7,388 6,477 24,261 23,203
Folding trailers 5,018 4,871 15,210 13,158
15,461 14,112 48,987 46,820
SOURCE Fleetwood Enterprises, Inc.