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Fleetwood Enterprises Inc. reported positive cash flow during its fiscal year 2002 despite big net losses due to a sizable drop in the value of its manufactured home assets.
And continuing losses at Fleetwood’s travel trailer and fifth-wheel operations wiped out profits earned at its motorhome segment, although the loss incurred by Fleetwood’s RV Group was much smaller than was the case a year-earlier.
The Riverside, Calif.-based company reported a net loss of $40.5 million for its fourth fiscal quarter, which ended April 28, and a net loss of $161.9 million for its fiscal year 2002, which also ended on April 28.
During the fourth quarter of its fiscal year 2001, Fleetwood posted a net loss of $44.5 million and it recorded a net loss of $284 million during its full fiscal year 2001.
Fleetwood’s fiscal year 2002 net loss included $80.6 million in non-cash charges while its fiscal 2001 net loss included $200.7 million in non-cash charges.
The New York Stock Exchange-listed company’s fiscal year 2002 cash flow from operations was a positive $34.5 million, almost triple its positive cash flow of $11.8 million during its fiscal year 2001.
While Fleetwood does not see a “meaningful recovery” in the manufactured housing industry until “well into calendar year 2003,” its RV Group experienced “significantly improved results” during fiscal year 2002, according to David Engelman, interim president and CEO.
Fleetwood’s total RV sales revenue increased 28% during the February-through-April period to $371.4 million primarily due to improved motorhome sales. Its motorhome sales surged 46% higher to $227 million, and its folding camper sales climbed 16% higher to $34 million.
Meanwhile, its travel trailer and fifth-wheel sales revenue increased a modest 5% to $110 million, but continued losses in the travel trailer and fifth-wheel segment more than offset the profits from motorhomes. Consequently, Fleetwood’s RV Group reported an operating loss of $400,000 for the February-through-April period.
But during the February-through-April portion of 2001, Fleetwood’s RV Group lost a total of $29.9 million from operations.
During its full fiscal year 2002, sales revenue at Fleetwood’s RV Group increased by less than 1% to $1.21 billion. But its motorhome revenue was up 12% to $717 million, while its travel trailer and fifth-wheel sales declined 16% to $378 million. Folding camper sales increased 1% to $118 million.
“The fact that we were cash flow positive for the year demonstrates the magnitude and effectiveness of the cost-cutting adjustments we made in our operations, although we still face operating challenges and, of course, the non-cash charges decimated our results,” Engelman said. “We expect cash flow from operations to continue to be positive over the upcoming year as well.
“The new and refreshed products in our RV lineup have produced improved revenues and financial results, and we are similarly optimistic about the impact of several exciting introductions scheduled to be released over the next few months,” Engelman continued.
During the first quarter of this calendar year, Fleetwood was the retail market share leader in Class A motorhomes, with a 21.3% market share, Engelman said, citing Statistical Surveys Inc. data. Also, four Fleetwood Class A brands — Bounder, Southwind, Discovery and Pace Arrow — were among the Top 10 brands in terms of retail market share, during the first three months of this year, he said.
Fleetwood also signed “an agreement with its lenders to revise the covenants on its credit facility” which will provide the company with “adequate liquidity for at least the next 12 months,” Engelman reported.
However, although Fleetwood believes it will report “improved results” for the first quarter of its fiscal year 2003, which it end at the end of this month, “management does not foresee achieving profitability in the quarter.”