Fleetwood Enterprises Inc., Riverside, Calif., incurred a moderate net loss for the company’s fiscal second quarter, citing the ongoing effects of a soft motorhome market.
“Declining consumer confidence, driven by higher fuel prices and rising interest rates, has led to an industry decline of approximately 8% in motorhome retail sales so far in calendar 2005,” said Elden Smith, president and CEO. “In turn, this caused dealers to reduce their inventories, and both factors contributed to a slowing of the company’s sales. Last year, dealer inventories were still increasing, exaggerating the year-over-year decline in wholesale shipments.”
Revenues during the quarter, ended Oct. 30, were $629.5 million, down 2.5% from $645.9 million a year ago. The net loss for the three-month period was $1.9 million compared with net income of $8.1 million the previous year.
Fleetwood said the majority of the loss was attributed to discontinued operations, which include the company’s manufactured housing retail and financial services businesses that were recently sold.
“The quarter’s results show marked sequential improvement over the first quarter,” Smith said. “We are pleased with the progress in our restructuring plan and with the boost provided by significant orders for disaster relief shelter received by both our travel trailer and manufactured housing operations.”
For the first six months of fiscal 2006, revenues declined 4.5% to $1.25 billion compared with $1.31 billion for the first half of last year. RV Group sales were down 12.7% while Housing Group sales improved 4.8%.
The net loss in the first half of fiscal 2006 was $31.5 million compared with net income of $13.7 million in the first six months of fiscal 2005.
For the quarter, Fleetwood said operating performance in both travel trailers and folding trailers was significantly improved, but was more than offset by a marked decline in the motorhome division. The travel trailer division’s operating loss narrowed to $3.8 million compared with $6.7 million in the prior year period, while operating income for the folding trailer division improved to $0.3 million from $0.1 million. The motorhome division’s operating income dropped to $2.9 million compared with $15.1 million last year.
“Our travel trailer operations in the second quarter benefited from the sale of $30 million in FEMA units, which compares to $5 million in similar units last year,” Smith said. “…Due in large part to the FEMA orders, we expect that sales in our third quarter, which is usually seasonally weak, will approach second-quarter levels and will significantly outpace last year’s third quarter.”
Smith also said that the company’s new product offerings had been well received during the national RV trade show in Louisville, Ky.