Fleetwood Enterprises Inc. reported a 41% drop in sales for its fiscal 2009 first quarter, pulled down by a 52% decline in RV revenue from a year ago.
Revenue fell to o $287 million from $488 million a year ago as the he company’s Housing Group also incurred a 15% drop in sales for the quarter, ended July 27.
“As we have previously reported, we continue to see market challenges in all of our business units, particularly in motor homes,” Elden L. Smith, president and CEO for the Riverside, Calif.-based builder, said in the preliminary report. “We have been responding aggressively to these challenges by taking down production to more closely match demand, selling non-core businesses and idle real estate assets, and introducing new product offerings to address changes in consumer preferences and economic conditions.
“As the first quarter progressed, however, we saw an acceleration of the negative trends caused by volatile fuel prices, the housing crisis, a tighter lending environment, and declining consumer confidence. As a result, RV dealers responded by making significant adjustments to reduce their inventories.”
Smith added that although Fleetwood has strong liquidity, it expects “negative cash flow from operations” over the balance of fiscal 2009.
“We believe it is prudent that we aggressively manage liquidity,” Smith said. “The holders of our $100 million 5% convertible senior subordinated debentures have the right to require Fleetwood to repurchase them at par on Dec. 15, 2008. We have the right to satisfy the obligation with common stock, with cash, or through some combination of the two, and we may also explore alternative instruments with the holders of the debentures.”