Fleetwood Enterprises Inc. reported a net loss for the company’s first quarter of fiscal 2006, citing the effects of a soft Class A motorhome marketplace and decreased market share in the travel trailer sector.
President and CEO Elden Smith, however, pointed to several factors that could result in “modest improvement in our operating results for the second quarter,” including: providing RV and manufactured housing units for Hurricane Katrina victims, the successful elimination of excess RV inventory and divestiture of the company’s manufactured housing retail and lending operations.
Net loss for the quarter totaled $29.6 million compared with net income of $5.6 million a year ago. The results reflect a $12.1 million loss from discontinued operations, which include the retail and finance services that were sold in July and August.
Revenues from continuing operations totaled $616.5 million in the first quarter, down 7% from $659.4 million in the prior year. The Housing Group’s revenues increased 4%, offset by a 13% decline in RV Group revenues.
Fleetwood also reported an operating loss of $0.9 million in the first quarter compared to an operating profit of $22.5 million in the prior year. The current quarter results include restructuring charges, primarily severance costs, of $4.3 million.
“Our operating results were virtually at breakeven, despite restructuring charges and incremental costs related to the successful elimination of excess RV inventory,” said Smith. “While our bottom-line results are not yet satisfactory, I am pleased with the progress we have made toward our objective of consistent profitability.”
Revenues from Fleetwood’s RV Group for the three-month period were $423.2 million compared with $485.7 million the year prior. Sales of motorhomes declined 6% to $297.8 million from $317.9 million last year while travel trailers fell 28% to $104.8 million from $146.4 million and folding trailer sales decreased by 4% to $20.6 million from $21.4 million.
“The negative comparison of this year’s first quarter RV results to those of the prior year partially reflects the recent deterioration in the strength of the RV market, particularly for Class A motorhomes,” Smith said. “In addition, market share losses in our travel trailer division over the past year and our successful efforts to complete the rightsizing of our in-house finished goods inventories during the quarter contributed to the unfavorable contrast.
“We are now, however, in a good position to resume more normal production schedules and to benefit from any uptick in retail sales. Further, in recent months we have been focusing on those areas where we have lost market penetration and on reacting more quickly to the market with the timely introduction of new products.”