Fleetwood issues preliminary revenue report
By Greg Gerber
May 1, 2008
RIVERSIDE, Calif. -- Fleetwood Enterprises announced today preliminary sales for its fourth quarter and fiscal year ended April 27, 2008.
Revenues for the fourth quarter were approximately $370 million, down 24 percent from $488 million last year. For the full fiscal year, consolidated sales were off 13 percent to $1.67 billion from $1.92 billion last year. These amounts exclude folding trailer division revenues, which now are accounted for as discontinued operations.
RV Group Revenues
The recreational vehicle industry was off significantly during the quarter. February and March motor home shipments were down 21 percent and 27 percent, respectively, from the prior-year period. Shipments of Class A motor homes were particularly affected, with a decrease of 36 percent each month.
"The RV industry was clearly being impacted by economic concerns and the resulting loss of consumer confidence," said Elden Smith, Fleetwood's president and chief executive officer. "Despite lower numbers overall, on a relative basis Fleetwood products continue to perform well. According to Statistical Surveys' most recent retail data for January and February, we are once again the number one motor home manufacturer.
"Sales in our travel trailer division were lower, but appear to have stabilized," Smith continued. "We have reduced the number of manufacturing plants to five, while for most of the fourth quarter last year we operated nine. As a result of our smaller geographic reach and dealer inventory adjustments, sales were down in the first three fiscal quarters by almost half, but more recently sales trends have begun to fall in line with the overall market. In addition, the reduction in capacity has had the desired effect of reducing costs and improving efficiencies in the remaining plants."
As a result of certain of the corporate developments and transactions announced on April 29, 2008, revenues for the RV Group now include outside sales from Fleetwood's Gold Shield facilities and Continental Import business, which were formerly part of the Supply Group. Prior-year revenues have been reclassified to conform.
Housing Group Revenues
"In the fourth quarter, sales through our relatively new modular division, Trendsetter Homes, increased significantly from a very small base," Smith said. "This increase largely offset the decline in our traditional manufactured housing business, which faced continued weakness in California, Arizona, and Florida, states with a strong component of retirement community business.
However, trends are improving in most of the South, especially in Texas. To take advantage of our success in the modular business, we have recently completed a reorganization of the Housing Group to place greater emphasis on Trendsetter Homes, with a particular focus on the military base housing opportunities. Going forward, we intend to allocate more resources to aggressively pursue military contracts on a national scale."
The Housing Group's revenues now also include the outside sales of Continental Lumber, a brokerage business that was formerly part of the Supply Group. Prior-year revenues have been reclassified to conform.
"The decline in revenues from last year made it difficult to maintain efficiencies in our plants during the quarter, particularly in motor homes," Smith said. "This was largely offset, however, by the positive effect of cost-cutting measures and lower overall operating expenses. As a result, we expect to see a loss from continuing operations (excluding real estate gains) that approaches a break-even level. And, with approximately $24 million of other operating income from real estate gains, we expect to generate a net profit for the quarter.
We believe that net income will be substantial enough that the 8.5 million shares underlying the 5 percent convertible debentures will be included in the calculation of diluted earnings per share," said Smith.
Source: RV Industry News