Fleetwood Reports Preliminary Second Quarter and First Half Revenues
1 November 2000
Fleetwood Reports Preliminary Second Quarter and First Half Revenues
RIVERSIDE, Calif., Nov. 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 second quarter and six months ended October 29,
2000.
Slower sales of both recreational vehicles and manufactured housing
generated second quarter revenues of $741 million, a 27 percent decline from
last year's record $1.01 billion. Six-month revenues were also off last
year's record pace, down 26 percent to $1.5 billion. The current quarter and
six months included 13 weeks and 26 weeks, respectively, versus 14 weeks and
27 weeks in the prior year.
The Company also announced that it expects to post a loss for the second
quarter as a result of reduced revenues and some non-recurring costs related
to previously announced plant closings and restructuring efforts. "Continued
weakness in the manufactured housing market combined with the slowdown in RV
sales, especially in motor homes, will have an adverse impact on the quarter,"
said Fleetwood President Nelson W. Potter. "In addition, the cost of
continued downsizing efforts, including final expenses related to the closure
of four manufactured housing facilities and one travel trailer operation, will
further impact second quarter results."
Recreational vehicle sales fell 30 percent to $351 million compared to a
record $498 million a year ago. All RV divisions posted lower second quarter
revenues, with the motor home division posting the largest decline. Motor
home revenues of $192 million were off 38 percent from last year's record
quarter. This reflects lower retail sales and efforts by dealers to maintain
inventories at reduced levels. In the towable RV categories, travel trailer
sales declined 16 percent to $126 million and folding trailers were down
11 percent to $33 million.
Six-month RV sales were off 32 percent from last year's record
$982 million. Motor home revenues of $344 million were down 44 percent,
reflecting lower sales for both Class A and Class C products. Travel trailer
sales in the first six months fell 11 percent to $266 million, while folding
trailer revenues declined 10 percent to $59 million.
"The falloff in Fleetwood's RV sales reflects a softening in the RV market
from the record levels of the prior year," said Potter. "Higher interest
rates, high fuel costs and volatility in the stock market have negatively
impacted retail demand for RV products, especially motor homes, during the
first half of our fiscal year. In response to reduced demand and higher
inventory carrying costs, dealers have lowered inventories and curtailed
orders, impacting factory shipments," Potter said. "While these factors
constrain the recreational vehicle business in the short run, we believe that
they are temporary. We and our dealers have made significant progress in
bringing inventories into line with current demand. Further, we continue to
be encouraged that the strong underlying demographics and the appeal of the RV
lifestyle will bolster long-term demand."
Manufactured housing sales in the second quarter dropped 23 percent to
approximately $381 million compared to $497 million a year ago. The lower
revenues reflect a difficult market environment that has persisted for well
over a year, stemming from excessive retail inventories and restrictive retail
financing conditions. Housing revenues include wholesale factory sales of
$202 million to independent retailers and retail sales of $180 million from
Company-owned sales centers. This compares with $334 million and
$162 million, respectively, last year. Gross manufacturing revenues were off
34 percent to $271 million, including intercompany sales of $69 million to
Company-owned retail stores.
First half housing sales were $765 million, 20 percent lower than last
year's $959 million. Housing revenues in the first six months of fiscal 2001
included $428 million from manufacturing operations and $337 million from
retail stores. Sales for the comparable period last year were $639 million
and $320 million, respectively. Gross manufacturing revenues, including
intercompany sales of $147 million, were approximately $575 million compared
to $795 million for last year's first half.
Commenting further, Potter said, "Market conditions in the manufactured
housing industry continue to be difficult. Despite reductions in industry
manufacturing and retail capacity, a restrictive retail financing environment
has hampered dealers' efforts to reduce inventories. We believe that
inventories at both our independent retailers and Company-owned stores are at
reasonable levels. However, in the short run we expect that slower retail
activity and competition from an industry oversupply of new and used units
will constrain revenues. Long term, we believe industry prospects are
favorable," Potter said.
As previously reported, the Company changed its revenue recognition policy
on credit retail housing sales in accordance with SEC Staff Accounting
Bulletin 101. The new policy, which was effective at the beginning of the
current fiscal year, bases revenue recognition primarily on loan funding and
has the effect of deferring the point of revenue recognition compared to the
previous policy.
Final sales and earnings for the October quarter will be reported in about
four weeks.