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Fleetwood Enterprises Posts Loss in Quarter

Mobile homes: The growth in its RV sales is not enough to offset a slump in prefab housing.

July 16, 2002|From Reuters

Fleetwood Enterprises Inc. posted a narrower quarterly loss Monday after higher sales of recreational vehicles helped mitigate a slumping prefab housing business.

But the loss was still worse than some analysts' estimates, and the Riverside-based company said it does not expect to post a profit in the current quarter. Fleetwood shares fell more than 11% to their lowest level in more than five years.

"They just missed by a mile," said Robert Marshall, an analyst at Wachovia Securities.

Fleetwood reported a net loss for its fiscal fourth quarter ended April 28 of $40.5 million, or $1.15 a share, including $14.1 million in charges related to restructuring and impairment of assets due to a bleak industry outlook for 2003.

In the year-earlier quarter, the company posted a loss of $44.5 million, or $1.36 a share, including $9.2 million in goodwill and restructuring impairment charges.

Revenue rose 10% to $603.2 million, largely because of a substantial improvement in recreational vehicle sales. Sales of RVs jumped 28% to $371.4 million, with motor home sales up 46%.

But manufactured housing revenue fell 11% to $222 million, with retail sales down 37% to $59 million because of tighter credit and competition from repossessed houses, the company said.

While saying there is an industrywide "lack of visibility" regarding 2003 earnings, the company said it thinks the tight lending environment and continuing competition from repossessed homes will "delay any meaningful recovery well into calendar year 2003."

That led the company to book charges to boost reserves and reduce the value of its assets, Chief Executive David Engelman said.

Fleetwood expects to report improved results in the first quarter of fiscal 2003, but management does not expect a profit, the company said.

The company does expect to post positive operating income in fiscal 2003, helped by new and revamped RVs.

Fleetwood also said it has revised agreements with its creditors to reflect market conditions, which should help provide adequate liquidity for at least a year.

The company replaced outside auditor Arthur Andersen with Ernst & Young in April and delayed fiscal fourth-quarter results to complete a new audit.

Fleetwood shares closed down 78 cents, or 11%, at $6.16 on the New York Stock Exchange after hitting a low of $6.10.

*

Bloomberg News was used in compiling this report.

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