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Boosted by $72 million in sales of hurricane relief trailers for the Federal Emergency Management Agency (FEMA), Fleetwood Enterprises Inc. reported a profitable third quarter on a 15% increase in revenues.
“Travel trailer operations benefited significantly from producing a large number of nearly identical units for FEMA,” said Elden L. Smith, Fleetwood’s president and CEO. “Efficiencies associated with the increased volume and consistency of production provided the improvement in overall margins.
“We had begun to see the positive impact during the second quarter, but realized the full advantage in the third quarter. We will build approximately 2,500 more FEMA trailers during the fourth quarter.”
During its fiscal 2006 third quarter, ended Jan. 29, Fleetwood posted sales of $583.9 million compared with $509.2 million a year ago. Net income, including the firm’s discontinued manufactured housing finance and retail operations, was $1.4 million versus a net loss of $54.7 million in the previous year.
For the first nine months sales edged up 1% to $1.83 billion compared with $1.81 billion for the same period the year prior while the company’s net loss, including discontinued operations, narrowed to $30.1 million from $41 million.
Results from continuing operations yielded a net income of $4.7 million for the quarter and a loss of $8.9 million for the nine months.
Third-quarter revenues from Fleetwood’s RV Group increased 7% to $365.3 million compared to $342.6 million a year ago. Spurred by profits in the travel trailer division, which partially offset losses in the motorhome and folding camping trailer divisions, the division earned $3.8 million in operating income compared to an operating loss of $33.5 million the previous year.
Smith said the company was “cautiously optimistic” regarding the spring selling season.
“We continue to see relatively soft motorhome sales, but good traffic at most of the early RV shows,” Smith said. “Travel trailers are moving at a faster clip, which leads us to believe that the primary concern among potential RV buyers continues to be fuel prices. If history is any indication, we anticipate that as fuel prices stabilize, we will see a rebound in motorhome sales.”