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A profitable fourth quarter, including an 8% increase in revenues, helped Fleetwood Enterprises Inc. significantly narrow its net loss for fiscal 2006.
“Fleetwood’s improved results reflect many factors, not the least of which is our successful restructuring effort,” said Elden L. Smith, president and CEO. The company’s restructuring plan included the divestiture of its manufactured housing finance and retail arms.
The Riverside, Calif., builder also noted that it expects to post an operating loss in the current quarter, citing parts shortages and shipment delays.
“During the (2007) first quarter, the operating environments for most of our businesses have been challenging,” Smith said. “In addition, with some of our new travel trailer models, we have experienced temporary parts shortages that impacted efficiencies and will delay some shipments until the second quarter. As a result, we expect to be below break-even at the operating income line.”
Revenues for the 2006 fourth quarter, ended April 30, improved to $602.6 million from $560.2 million in the prior year. Net income for the three-month period, which included results from discontinued operations, was $1.7 million compared to a net loss of $120.5 million a year ago.
For fiscal year 2006, revenues increased 2% to $2.43 billion from $2.37 billion in the prior year. The year-end net loss was narrowed to $28.4 million from a net loss of $161.5 million the previous year.
Recreational vehicle sales for the fourth quarter improved 13% to $430.2 million from $381.3 million while the RV Group produced an operating profit of $2.2 million.
Fleetwood said that despite a softer market, fourth-quarter motorhome sales were up compared with the prior year partially because of reduced promotional activity. Travel trailer revenues were boosted by $34 million in sales of Emergency Living Units (ELUs) provided for hurricane relief efforts while folding trailer sales increased 18% during the quarter.
Recreational vehicle sales for the full fiscal year declined 3% to $1.61 billion from $1.66 billion in the prior year and the RV Group ended the year slightly above break-even with $0.2 million in operating income. Fleetwood noted, “This represents substantial progress from the operating loss of $39.2 million in fiscal 2005, primarily because of the same factors that affected the fourth quarter.”
Smith said that the combined effects of rising fuel costs and higher interest rates continued to impact the market, particularly motorhome sales.
“It is likely that we will continue to face reduced volume and low capacity utilization until consumer confidence stabilizes,” he said. “Although we are cautiously optimistic about demand for our travel trailers, many of which are new, we are closely monitoring market conditions in light of the continued slow motorhome market. Early indications are that these new travel trailer product lines are being well received, and this has resulted in stronger order backlogs.”