RV Maker Fleetwood Shows $31.1-Million Quarterly Loss

Fleetwood Enterprises Inc., the top U.S. manufacturer of recreational vehicles and the No. 2 producer of manufactured housing, posted a fiscal first-quarter loss of $31.1 million Wednesday, in line with a company forecast, and said it expects lower second-quarter earnings.

The Riverside-based company also said it closed five factories and fired more than 800 employees in the last four months. The lost jobs accounted for about 3% of Fleetwood’s work force. It now has about 20,000 employees and more than 50 factories, said Paul Bingham, senior vice president of finance.

Fleetwood’s first-quarter loss amounted to 95 cents per diluted share. In the year-earlier quarter Fleetwood reported a profit of $26.4 million, or 72 cents a share. It took a pretax charge of $13.5 million, or 27 cents a share, in the quarter ended July 30 to close four housing plants, including one in North Carolina and one in Mississippi, Bingham said.

The company said earlier this month that it expected a first-quarter loss because of restructuring costs and lower sales. The forecast came five days after two executives stepped down because of subpar performance in the RV business.

Though first-quarter operating revenue dropped most sharply in the RV business, falling to $318.7 million from $483.7 million a year earlier, it also dropped significantly in manufactured housing, to $303.7 million from $385.8 million.

Overall, net revenue fell 26% to $711 million from $957 million.

Shares of Fleetwood fell 38 cents to close at $13.56 on the New York Stock Exchange. The stock has a 52-week range of $12.13 to $23.13.

Looking ahead, Fleetwood said it expects second-quarter results to compare unfavorably with the year-ago earnings of 84 cents per share due to further restructuring costs of $3 million to $5 million for closing its travel-trailer plant in Omaha, coupled with weakness in the manufactured-housing market.

“The pressures in RVs and housing for the industry and for the company are going to continue through winter at least,” said Robert Curran, a Merrill Lynch analyst. The pressures include tightening credit and dealers’ unwillingness to carry large inventories.

“Frankly, there were too many sale centers out there,” Curran said. Fleetwood grew to 240 sales centers, compared with 184 a year ago.

“This expansion effort added costs at a time when market demand and revenues per store were declining,” Fleetwood Chief Executive Nelson Potter said in a statement. He said expansion had been scaled back.