Fleetwood Announces Second Quarter and First Half Results
30 November 2000
Fleetwood Announces Second Quarter and First Half Results
RIVERSIDE, Calif., Nov. 30 Fleetwood Enterprises, Inc.
, the nation's largest manufacturer of recreational vehicles and a
leading producer and retailer of manufactured housing, announced today that it
incurred a net loss of $3.4 million or $.10 per diluted share for the second
fiscal quarter which ended October 29, 2000. The Company earned a profit of
$29.8 million or $.84 per diluted share in last year's second quarter. The
current quarter included 13 weeks of operations compared to 14 weeks for the
corresponding period last year.
Fleetwood President Nelson W. Potter said, "Second quarter results reflect
significantly reduced sales volume in both manufactured housing and
recreational vehicles, as compared to the same period last year. In addition,
we incurred $3.9 million of non-recurring costs related to plant closings and
downsizing actions, including employee severance benefits. Although we are
disappointed that we were not profitable for the quarter, we are encouraged by
recent progress we have made. The second quarter was significantly improved
over the previous quarter, and we have made key adjustments in our core
businesses that should posture us for a solid recovery when the RV and
manufactured housing markets improve."
For the first half of fiscal 2001, the Company incurred a net loss of
$34.5 million or $1.05 per diluted share compared to a profit of $56.2 million
or $1.56 per diluted share for the similar period last year. Current year
results were adversely affected by restructuring and impairment charges of
$17.4 million, which related to plant closings and downsizing initiatives.
Also in the current year, the Company recorded a one-time cumulative charge to
earnings of $11.2 million after taxes or 34 cents per share, which was related
to a change in accounting for retail housing credit sales.
During the second quarter, the Company announced the closing of four
manufactured housing plants and a travel trailer factory in Omaha, Nebraska.
This brings the total housing factory closings to 10 during the past
15 months.
Consolidated revenues fell 27 percent in the second quarter to
$741 million compared to $1.01 billion in last year's similar quarter.
Six-month revenues declined 26 percent to $1.45 billion compared to
$1.97 billion for the corresponding period last year.
"Our housing manufacturing business was solidly profitable in the second
quarter despite very challenging market conditions," Potter said. "Excluding
non-recurring restructuring costs of $2.0 million and intercompany profit
adjustments, the housing group achieved a respectable 4.9 percent operating
margin, even though revenues declined 34 percent year-over-year. Last year's
operating margin was 6.5 percent under much more favorable market conditions,"
Potter said.
"Fleetwood's RV group operated slightly below the breakeven point for the
quarter, largely due to lower motor home sales," Potter said. "Additionally,
the RV group incurred $1.9 million of restructuring charges, most of which was
related to the Omaha travel trailer plant closing."
Recreational vehicle sales declined 30 percent to $351 million, mainly due
to a falloff in motor home sales. Motor home revenues fell 38 percent to
$192 million on a 42 percent decrease in unit volume. Softening retail demand
and high dealer inventories led to the decline. Towable RV sales were also
weaker in the quarter with both travel trailers and folding trailers posting
lower revenues. Fleetwood's travel trailer division recorded 16 percent lower
revenues on a similar decrease in unit volume. The Company's folding trailer
operation experienced an 11 percent reduction in revenues due to a 15 percent
decline in unit sales.
Combined housing revenues from manufacturing and retail totaled
$382 million in the second quarter, off 23 percent from last year's
$497 million. The current quarter included net manufacturing revenues of
$202 million and retail sales from Fleetwood-owned stores of $180 million.
This compares with $334 million and $162 million, respectively, last year.
Gross manufacturing revenues from housing, including $69 million of sales to
Company-owned sales centers, totaled $272 million, down 34 percent from last
year's second quarter. Unit volume from manufacturing plants declined
37 percent in the second quarter to 10,550 homes. Homes sold at Fleetwood
retail stores rose 3 percent to 4,036.
"Market conditions in the manufactured housing industry have been
difficult for more than a year," Potter said. "Despite reductions in industry
manufacturing and retail capacity, a restrictive retail financing environment
has hampered retailers' efforts to reduce inventories. Slower retail activity
and competition from an industry over-supply of new and used homes has
constricted housing revenues. Although this is likely to continue for a
while, we remain optimistic about the longer term prospects for the industry,"
Potter said.
Despite an 11 percent increase in sales, the Company's retail housing
business posted a second quarter operating loss of $6.1 million before
interest expense. This reflects slimmer gross margins due to competitive
market conditions and the higher costs associated with an expanded number of
sales locations.
"We do not expect to operate profitably during the fiscal 2001 third
quarter," Potter said. "The January quarter is our slowest period on a
seasonal basis and that will be compounded this year by weaker industry
conditions for both manufactured housing and recreational vehicles. We have
made some mid-year RV product changes designed to stimulate sales in the
second half of the fiscal year. These newly designed products have been very
well received this week by our dealers at the national RV show in Louisville
and should position us to achieve better results in the spring. Also, our
housing products are performing well in the marketplace and we believe we are
in a strong position to rebound as conditions improve in the manufactured
housing market."
FLEETWOOD ENTERPRISES, INC.
Consolidated Summaries of Earnings
(Unaudited)
(Amounts in thousands except per share data)
13 Weeks 14 Weeks 26 Weeks 27 Weeks
Ended Ended Ended Ended
Oct. 29, Oct. 31, Oct. 29, Oct. 31,
2000 1999 2000 1999
Sales $741,092 $1,010,103 $1,452,285 $1,966,817
Income (loss) before
income taxes $(3,113) $50,346 $(34,061) $95,555
Benefit (provision)
for income taxes (297) (20,554) 10,710 (39,403)
Income (loss) before
cumulative effect
of accounting change (3,410) 29,792 (23,351) 56,152
Cumulative effect of
accounting change,
net of taxes -- -- (11,176) --
Net income (loss)
for basic earnings
per share (3,410) 29,792 (34,527) 56,152
Effect of dilutive
preferred securities
(Note) -- 2,781 -- 5,568
Net income (loss)
for diluted earnings
per share ($3,410) $32,573 $(34,527) $61,720
Earnings (loss)
per share:
Basic Diluted Basic Diluted Basic Diluted Basic Diluted
Income (loss)
before
cumulative
effect of
accounting
change
$(.10) $(.10) $.91 $.84 $(.71) $(.71) $1.67 $1.56
Cumulative
effect of
accounting
change,
net of
taxes
-- -- -- -- (.34) (.34) -- --
Net income
(loss)
per share
$(.10) $(.10) $.91 $.84 $(1.05)$(1.05) $1.67 $1.56
Weighted average
Common shares:
Basic 32,758 32,917 32,758 33,628
Diluted (Note) 32,758 38,851 32,758 39,587
Note:The distribution on preferred securities in fiscal 2001 is
anti-dilutive and is therefore not added back to basic earnings
in computing dilutive earnings (loss) per share.
Fleetwood Enterprises, Inc.
Business Segment and Unit Shipment Information
(Dollars in thousands)
13 Weeks 14 Weeks 26 Weeks 27 Weeks
Ended Ended Ended Ended
Oct. 29, Oct. 31 Oct. 29, Oct. 31,
2000 1999 2000 1999
OPERATING REVENUES:
Manufactured housing -
Manufacturing $271,574 $409,264 $575,314 $795,067
Retail 179,562 162,253 337,116 319,969
Less intercompany (69,332) (74,836) (146,529) (156,434)
381,804 496,681 765,901 958,602
Recreational vehicles 350,560 497,965 669,236 981,699
Supply operations 8,728 15,457 17,148 26,516
$741,092 $1,010,103 $1,452,285 $1,966,817
OPERATING INCOME:
Manufactured housing* $15,002 $24,266 $12,996 $41,382
Housing - retail** (6,078) 3,021 (11,515) 9,723
Recreational vehicles (139) 29,061 (13,420) 60,028
Supply operations 2,160 6,506 4,316 11,369
Corporate and other (4,909) (8,112) (10,419) (17,804)
$6,036 $54,742 $(18,042) $104,698
UNITS SOLD:
Manufactured housing -
Factory shipments 10,550 16,752 22,439 32,567
Retail sales 4,036 3,928 7,747 7,669
Less intercompany (2,577) (2,953) (5,563) (5,921)
12,009 17,727 24,623 34,315
Recreational vehicles -
Motor homes 2,307 3,954 4,366 8,426
Travel trailers 8,757 10,466 19,234 21,485
Folding trailers 5,536 6,507 10,075 11,526
16,600 20,927 33,675 41,437
* After deduction (addition) for intercompany profit in inventory as
follows: FY 2001: $(3,605) QTD and $484 YTD; FY 2000: $2,463 QTD
and $6,018 YTD.
**Operating income before deduction of interest expense on inventory
floor plan financing as follows: FY 2001: $3,405 QTD and $6,441
YTD; FY 2000:$2,851 QTD and $5,688 YTD.