FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
X OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 25, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
______ OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ______
Commission File Number 1-7699
FLEETWOOD ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1948322
_______________________ __________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3125 Myers Street, Riverside, California 92503-5527
______________________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (909) 351-3500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's
classes of Common stock as of the close of the period covered by this
report.
Class Outstanding at January 25, 1998
_________________________ __________________________________
Common stock, $1 par value 36,475,399 shares
Preferred share purchase rights --
CONDENSED FINANCIAL STATEMENTS
The following unaudited interim condensed financial statements
have been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. Such financial statements
have been reviewed by Arthur Andersen LLP in accordance with standards
established by the American Institute of Certified Public Accountants.
As indicated in their report included herein, Arthur Andersen LLP does
not express an opinion on these statements.
Certain information and note disclosures normally included in
annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not
misleading. In the Company's opinion, the statements reflect all
adjustments (which include only normal recurring adjustments) necessary
to present fairly the results of operations for the periods ending
January 25, 1998 and January 26, 1997 and the balances as of January 25,
1998 and April 27, 1997. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Company's latest annual report on Form
10-K.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the board of directors and shareholders of Fleetwood Enterprises,
Inc.:
We have reviewed the accompanying condensed consolidated balance
sheet of FLEETWOOD ENTERPRISES, INC. (a Delaware Corporation) and
subsidiaries as of January 25, 1998, and the related condensed
consolidated statements of income for the thirteen and thirty-nine week
periods ended January 25, 1998 and January 26, 1997, the condensed
consolidated statements of cash flows for the thirty-nine week periods
ended January 25, 1998 and January 26, 1997, and the condensed
consolidated statement of changes in shareholders' equity for the
thirty-nine week period ended January 25, 1998. These financial
statements are the responsibility of the company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to the financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Fleetwood
Enterprises, Inc. and subsidiaries as of April 27, 1997, and the related
consolidated statements of income, cash flows and changes in
shareholders' equity for the year then ended (not presented herein) and,
in our report dated June 23, 1997, we expressed an unqualified opinion
on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of April 27, 1997, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been
derived.
ARTHUR ANDERSEN LLP
Orange County, California
February 24, 1998
FLEEEWOOD ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (CONDENSED)
(Amounts in thousands except per share data)
(UNAUDITED)
<TABLE>
13 13 39 39
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Sales $710,620 $627,961 $2,208,163 $2,127,986
Cost of products
sold 571,940 516,137 1,784,634 1,728,746
-------- -------- ---------- ---------
Gross profit 138,680 111,824 423,529 399,240
Operating expenses 106,607 90,559 314,112 292,370
-------- -------- ---------- ---------
Operating income 32,073 21,265 109,417 106,870
Other income (expense):
Investment income 3,425 2,151 8,298 10,205
Interest expense (903) (703) (2,677) (3,177)
Other 69 (32) 15,832 (239)
--------- --------- -------- ----------
2,591 1,416 21,453 6,789
--------- --------- -------- ----------
Income from continuing
operations before
income taxes 34,664 22,681 130,870 113,659
Provision for
income taxes (13,515) (8,902) (50,655) (44,776)
-------- ------- -------- --------
Income from
continuing
operations 21,149 13,779 80,215 68,883
Income from discontinued operations:
Income from operations of
finance subsidiary (net of $511
for income taxes) -- -- -- 887
Gain on sale of finance subsidiary
(net of $19,607 for
income taxes) -- -- -- 33,891
------- ------- -------- ------
-- -- -- 34,778
------- ------- -------- ------
Net income $21,149 $13,779 $80,215 $103,661
======= ======= ======== ========
</TABLE>
<TABLE>
Basic Diluted Basic Diluted Basic Diluted Basic Diluted
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net income per Common share:
Continuing
operations $.58 $.57 $.39 $.38 $2.23 $2.19 $1.76 $1.72
Discontinued operations:
Income from operations
of finance
subsidiary -- -- -- -- -- -- .02 .02
Gain on sale of
finance
subsidiary -- -- -- -- -- -- .87 .84
----- ---- ----- ---- ----- ----- ----- ----
Total $.58 $.57 $.39 $.38 $2.23 $2.19 $2.65 $2.58
==== ==== ==== ==== ==== ==== ===== ====
Dividends declared per
share of Common stock
outstanding $.17 $.16 $.51 $.48
==== ===== ==== ====
Weighted average Common
shares - basic 36,256 35,562 36,016 39,092
====== ====== ====== ======
Weighted average Common
shares - diluted 36,884 36,556 36,587 40,103
====== ====== ====== ======
</TABLE>
See accompanying notes to financial statements.
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (CONDENSED)
(Amounts in thousands)
ASSETS
<TABLE>
January 25, April 27,
1998 1997
(Unaudited)
<S> <C> <C>
Cash $21,805 $37,890
Investments 146,121 72,544
Receivables 190,092 181,085
Inventories:
Raw materials 106,255 101,794
Work in process and
finished products 56,257 43,719
Property, plant and equipment 276,846 278,331
Deferred tax benefits 70,090 71,285
Cash value of Company-owned
life insurance 47,263 46,834
Other assets 41,612 38,065
----------- ---------
$956,341 $871,547
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $103,693 $106,749
Employee compensation and benefits 122,824 114,983
Federal and state taxes on income 4,598 4,046
Insurance reserves 23,216 44,381
Long-term debt 55,000 55,000
Other liabilities 122,312 103,293
-------- -------
431,643 428,452
-------- -------
Contingent liabilities
Shareholders' equity
Preferred stock, $1 par value, authorized
10,000,000 shares, none outstanding -- --
Common stock, $1 par value, authorized
75,000,000 shares, outstanding 36,475,000
at January 25, 1998 and 35,747,000
at April 27, 1997 36,475 35,747
Capital surplus 57,539 37,684
Retained earnings 432,458 370,653
Foreign currency translation
adjustment (2,064) (1,163)
Investment securities valuation
adjustment 290 174
-------- --------
524,698 443,095
--------- -------
$956,341 $871,547
========= =======
</TABLE>
See accompanying notes to financial statements.
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED)
(Amounts in thousands)
(UNAUDITED)
<TABLE>
Thirty-nine Thirty-nine
Weeks Ended Weeks Ended
January 25, January 26,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $80,215 $103,661
Adjustments to reconcile net income to net
cash provided by operations activities:
Depreciation expense 20,586 18,936
Amortization of intangibles
and goodwill 197 1,420
Losses on sales of property, plant
and equipment 348 239
Gain on sale of finance subsidiary -- (33,891)
Changes in assets and liabilities:
(Increase) decrease in receivables (9,007) 100
Increase in inventories (16,999) (27,261)
(Increase) decrease in deferred
tax benefits 1,195 (5,948)
(Increase) decrease in cash value
of Company-owned life insurance (429) 107
(Increase) decrease in other assets (3,744) 7,461
Decrease in accounts payable (3,056) (17,373)
Increase (decrease) in other
liabilities 6,247 (2,073)
------- -------
Net cash provided by operating
activities 75,553 45,378
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities:
Held-to-maturity (5,130,353) (3,328,812)
Available-for-sale (41,996) (1,531,739)
Proceeds from maturity of investment securities:
Held-to-maturity 5,053,096 3,345,024
Available-for-sale 15,480 1,461,352
Proceeds for sale of available-for-sale
investment securities 30,312 245,288
Purchases of property, plant and
equipment, net (19,449) (30,776)
Proceeds from sale of finance subsidiary, net
of income taxes -- 132,222
Change in net assets of discontinued
operation -- (887)
--------- ---------
Net cash provided by (used in) investing
activities (92,910) 291,672
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings -- 21,000
Retirement of long-term debt -- (25,000)
Dividends to shareholders (18,410) (18,675)
Proceeds from exercise of
stock options 20,583 3,810
Repurchase of Common stock -- (311,738)
-------- --------
Net cash provided by (used in)
financing activities 2,173 (330,603)
--------- --------
Foreign currency translation adjustment (901) 439
-------- --------
Increase (decrease) in cash (16,085) 6,886
Cash at beginning of period 37,890 15,792
-------- --------
Cash at end of period $21,805 $22,678
======== ========
Supplementary disclosures:
Income taxes paid $42,069 $52,499
Interest paid 2,829 3,534
</TABLE>
See accompanying notes to financial statements.
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY (CONDENSED)
(Amounts in thousands)
(UNAUDITED)
Foreign Investment Total
Common Stock Currency Securities Share-
Number of Capital Retained Translation Valuation holders'
Shares Amount Surplus Earnings Adjustment Adjustment Equity
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Balance April 27,
1997 35,747 $35,747 $37,684 $370,653 $(1,163) $174 $443,095
Add (deduct)-
Net
income -- -- -- 80,215 -- -- 80,215
Cash dividends
declared on
Common
stock -- -- -- (18,410) -- -- 18,410)
Stock options
exercised 728 728 19,855 -- -- -- 20,583
Foreign currency
translation
adjustment -- -- -- -- (901) -- (901)
Investment securities
valuation
adjustment -- -- -- -- -- 116 116
------ ----- ------- ------ ----- ------ ----
Balance January 25,
1998 36,475 $36,475 $57,539 $432,458 $(2,064) $290 $524,698
======= ====== ====== ======= ====== ==== =======
See accompanying notes to financial statements.
</TABLE>
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 25, 1998
1) Reference to Annual Report
Reference is made to the Notes to Consolidated Financial Statements
included in the Company's Form 10-K annual report for the year ended
April 27, 1997.
2) Industry Segment Information
Information with respect to industry segments for the
periods ending
January 25, 1998 and January 26, 1997 is shown below (amounts
in
thousands):
<TABLE>
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
Jan. 25, Jan. 26, Jan. 25, Jan. 26,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Manufactured housing $354,872 $324,449 $1,112,173 $1,087,091
Recreational vehicles 345,293 293,721 1,062,640 1,000,410
Supply operations 10,455 9,791 33,350 40,485
--------- -------- ---------- ---------
$710,620 $627,961 $2,208,163 $2,127,986
========= ======== ========== ==========
OPERATING INCOME:
Manufactured housing $18,159 $8,355 $59,298 $62,363
Recreational vehicle 13,519 14,142 47,576 52,955
Supply operations 4,037 (390) 11,289 1,081
Corporate and other* (3,642) (842) (8,746) (9,529)
-------- ------ -------- -------
$32,073 $21,265 $109,417 $106,870
======== ======== ======== ========
* Including adjustments and eliminations.
</TABLE>
3) Basic and Diluted Earnings Per Share
The reconciliations for income (numerator) and shares (denominator)
between Basic EPS and Diluted EPS are shown below (amounts and
shares in thousands):
<TABLE>
Quarter Ended January 25, 1998 Year to Date January 25, 1998
Per- Per-
Income Shares Share Income Shares Share
(Numerator)(Denominator)Amount (Numerator)(Denominator)Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income from continuing
operations available to
Common stock-
holders $21,149 36,256 $0.58 $80,215 36,016 $2.23
Effect of Dilutive Securities
Stock options -- 628 -- 571
Diluted EPS
Income available to
Common stockholders
plus assumed con-
versions $21,149 36,884 $0.57 $80,215 36,587 $2.19
============================= ===========================
Quarter Ended January 25, 1998 Year to Date January 25, 1998
Per- Per-
Income Shares Share Income Shares Share
(Numerator)(Denominator)Amount (Numerator)(Denominator)Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income from continuing
operations available to
Common stock-
holders $13,779 35,562 $0.39 $68,883 39,092 $1.76
Effect of Dilutive Securities
Stock options -- 994 -- 1,011
Diluted EPS
Income available to
Common stockholders
plus assumed con-
versions $13,779 36,556 $0.38 $68,883 40,103 $1.72
============================= ============================
All stock options outstanding are dilutive as of January 25, 1998;
therefore, there is no anti-dilutive effect.
</TABLE>
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Amounts in thousands)
The following is an analysis of changes in key items included in the
consolidated statements of income for the 13-week and 39-week periods
ended January 25, 1998. The amounts shown below apply only to continuing
operations.
<TABLE>
13 Weeks Ended 39 Weeks Ended
January 25, 1998 January 25, 1998
---------------- ----------------
Increase % Increase %
(Decrease) Change (Decrease) Change
-------- ------ -------- -----
<S> <C> <C> <C> <C>
Sales $82,659 13.2% $80,177 3.8%
Cost of products sold 55,803 10.8 55,888 3.2
--------- ----- ------- ----
Gross profit 26,856 24.0 24,289 6.1
Selling expenses 8,742 20.4 18,149 13.9
General and administrative
expenses 7,306 15.3 3,593 2.2
------- ---- -------- -----
Operating expenses 16,048 17.7 21,742 7.4
------- ---- ------- ----
Operating income 10,808 50.8 2,547 2.4
Other income (expense) 1,175 83.0 14,664 216.0
Income before taxes 11,983 52.8 17,211 15.1
Provision for income taxes 4,613 51.8 5,879 13.1
Net income $7,370 53.5% $11,332 16.5%
====== ==== ======= ====
</TABLE>
Current Quarter Compared to Same Quarter Last Year
Net income for the third quarter ended January 25, 1998 increased 53
percent to a record $21.1 million or 57 cents per share on a diluted
basis. This compares with $13.8 million or 38 cents per share for the
similar period last year. The improved results were mainly driven by a
rebound in manufactured housing profits.
Consolidated sales for the third quarter rose 13 percent to a record
$710.6 million versus $628.0 million for last year's comparable period.
Sales gains were recorded for both manufactured housing and recreational
vehicles.
Manufactured housing sales reached a new high for the third quarter,
increasing nine percent to $354.9 million on a five percent rise in
volume to 15,368 units. The continuing growth in sales of multi-section
homes resulted in an eight percent gain in manufactured housing sections.
Multi-section homes represented nearly 58 percent of homes sold in the
third quarter, up from 54 percent a year ago. Housing group sales
represented 50 percent of Company revenues compared to 52 percent for the
similar period a year ago.
Recreational vehicle sales were up 18 percent to $345.3 million, an all-
time high for the January quarter, compared to last year's $293.7
million, as all RV segments posted record third quarter sales. Motor
home revenues of $211.7 million were up 20 percent on an 11 percent
increase in volume to 3,055 units, primarily due to higher sales of
upscale Class A products. Travel trailer sales rose 13 percent to $107.8
million, while unit shipments increased 14 percent to 7,388. Third
quarter folding trailer sales increased 18 percent to $25.8 million on a
three percent rise in unit volume to 5,018. Recreational vehicle sales
accounted for 49 percent of total Company revenues, up from 47 percent
last year.
The Company's supply group contributed third quarter revenues of $10.4
million compared to $9.8 million a year ago.
Gross profit increased as a percentage of sales from 17.8 percent to 19.5
percent, largely as a result of improved manufactured housing margins.
Housing margins benefited from raw material cost reductions and selective
increases in product selling prices.
Operating expenses increased 18 percent to $106.6 million, and rose as a
percentage of sales from 14.4 percent to 15.0 percent. Selling expenses
rose 20 percent to $51.7 million mainly due to higher advertising and
product warranty costs. As a percentage of sales, selling expenses rose
from 6.8 percent to 7.3 percent. General and administrative expenses
were up 15 percent to $54.9 million, and rose as a percentage of sales
from 7.6 percent to 7.7 percent. The increase was largely the result of
higher compensation and benefit costs, most of which was related to
management incentive compensation stemming from improved profits.
Non-operating income of $2.6 million was 83 percent ahead of last year's
$1.4 million, mainly due to a $1.3 million increase in investment income
earned on higher invested balances.
Current Year-to-Date Compared to Same Period Last Year
Earnings from continuing operations for the nine-month period ending
January 25, 1998 rose 16 percent to $80.2 million or $2.19 per share on
a diluted basis. This compares to $68.9 million and $1.72 per share for
the first nine months of fiscal 1997. Current year earnings for nine
months included a non-recurring gain of $10.4 million or 28 cents per
share recognized in the first quarter from a significant reinsurance
transaction involving the Company's captive insurance operation. Last
year's nine-month period included income from discontinued operations of
$34.8 million or 86 cents per share which, when added to income from
continuing operations, resulted in total earnings of $103.7 million or
$2.58 per share on a diluted basis. Income from discontinued operations
included a gain of $33.9 million or 84 cents per share on the sale of
the Company's RV finance subsidiary.
For the first nine months of fiscal 1998, sales rose four percent to
$2.21 billion compared to $2.13 billion for the similar period last year,
with both manufactured housing and recreational vehicles recording
revenue increases.
Nine-month housing sales were up two percent to a record $1.11 billion,
despite a two percent unit volume decline to 48,975 homes sold. A
heavier mix of multi-section homes, which rose from 49 percent to 56
percent of sales for the nine months, resulted in a three percent gain in
housing sections. Housing revenues represented 50 percent of total
Company sales compared to 51 percent last year.
RV sales for the first nine months of fiscal 1998 rose six percent to
$1.06 billion compared to $1.0 billion a year ago. Motor home sales
increased three percent to a record $634.4 million, despite a nine
percent decline in unit shipments to 9,516, reflecting the continuing
shift to higher-priced Class A products. Travel trailer sales were up
eight percent to $349.8 million on a five percent rise in unit volume to
24,261 units. Folding trailers rose a strong 29 percent to a record
$78.5 million, as unit shipments rose 16 percent to 15,210. RV revenues
increased from 47 percent of total Company revenues a year ago to 48
percent in the current year.
Nine-month revenues from supply operations were $33.4 million versus
$40.5 million for the comparable period last year.
Gross profit margin for the first nine months of fiscal 1998 rose to 19.2
percent from 18.8 percent last year. Improved housing margins more than
offset the effect of lower RV margins, which were impacted by higher
motor home production costs.
Operating expenses rose seven percent to $314.1 million, and also
increased as a percentage of sales from 13.7 percent to 14.2 percent. As
a percentage of sales, selling expenses were up from 6.1 percent a year
ago to 6.7 percent, while general and administrative expenses fell from
7.6 percent to 7.5 percent this year. Selling expenses increased 14
percent to $148.6 million, primarily due to increased sales promotion and
advertising efforts and higher costs for product warranties and service.
General and administrative expenses were up two percent to $165.5
million, primarily reflecting higher management incentive compensation
which is directly related to the rise in profits.
Non-operating income of $21.5 million included $16.2 million for the
reinsurance transaction mentioned previously. Investment income for the
nine months was down 19 percent to $8.3 million, primarily reflecting
higher cash balances available for investment in the early part of the
prior year, largely as a result of the sale of Fleetwood Credit Corp.
The effective tax rate for the first nine months of fiscal 1998 was 38.7
percent, down from 39.4 percent last year.
Liquidity and Capital Resources
The Company generally relies upon internally generated cash flows to
satisfy working capital needs and to fund capital expenditures. Cash
generated from operations improved to $75.6 million compared to $45.4
million last year.
Last year's cash flows included $132.2 million, net of income taxes,
received from the sale of Fleetwood Credit Corp. These proceeds along
with the sale of investment securities yielded net cash from investing
activities of $291.7 million last year compared to net cash used in the
current year of $92.9 million.
During the first half of last year, the Company purchased approximately
22.5 percent of its outstanding Common stock at a cost of $311.7 million.
Also, $25.0 million in long term debt was retired last year.
Cash outlays in the current year included $18.4 million in dividends to
shareholders and $19.4 million for capital expenditures. This compares
with $18.7 million and $30.8 million, respectively, last year.
Subsequent to January 25, 1998, the Company purchased all of the shares
of Common stock owned by its retiring Chairman of the Board and founder.
The approximate 5.2 million shares were acquired at a cost of $176.9
million. On February 10, 1998, a $287.5 million convertible preferred
stock offering was completed to fund the share repurchase. Proceeds from
the preferred stock offering not required for the share repurchase are
expected to be used to fund the Company's planned entry into the
manufactured housing retail business. (See Item 5 included in this Form
10-Q for information regarding a proposed acquisition by the Company.)
Year 2000 Project
The Company is dependent on a cluster of centralized computers to provide
data in support of vital company-wide operational and accounting
functions. Many of the computer routines used to generate this data were
programmed in-house, following the common practice of using only two
digits to designate a year. As a consequence, as we approach the year
2000, programs with date-related logic will not be able to distinguish
between the years 1900 and 2000, potentially causing software and
hardware to fail, generate erroneous calculations or present information
in an unusable form. In recognition of this potential, the Company
launched a "Year 2000" conversion project in February 1996 to correct and
fully test all offending computer code by mid-1998. At this date, the
project is progressing as planned and is expected to be completed on
schedule. Given these efforts, management does not anticipate any
appreciable impact on company operations consequent to the use of the
Company's computer systems in the new millennium. The estimated amount
the Company plans to spend on the year 2000 project, which is being
expensed as incurred, will not have a material effect on results of
operations, liquidity and capital resources.
PART II OTHER INFORMATION
Item 5. Other Information
On February 19, 1998, the Company filed a Form 8-K relating to its
definitive agreement to acquire HomeUSA, Inc., the leading independent
national retailer of manufactured homes. Under the agreement, each share
of HomeUSA Common stock will be converted into the right to receive
$10.25, payable at the election of the holder in cash or Fleetwood Common
stock, for an aggregate purchase price of approximately $162 million.
The aggregate cash payment by Fleetwood will not exceed 49 percent of the
total purchase price. The acquisition is expected to close in
Fleetwood's fiscal quarter ending July 31, 1998, subject to certain
conditions including approval by HomeUSA shareholders.
On or about February 18, 1998, a lawsuit was filed in Delaware
purportedly on behalf of a HomeUSA stockholder, seeking class action
status and alleging that the HomeUSA board of directors failed to comply
with their fiduciary duties in approving the sale to Fleetwood. The
action seeks, inter alia, declaratory relief, that the acquisition be
enjoined and unspecified "rescissory and/or compensatory damages" and
costs, including attorneys' and experts' fees. Fleetwood has not been
served with the action and expects that HomeUSA and it will vigorously
oppose the action if it is pursued.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLEETWOOD ENTERPRISES, INC.
_______________________________
Paul M. Bingham
Senior Vice President - Finance
and Chief Financial Officer
February 27, 1998
FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED FINANCIAL INFORMATION
FINANCIAL DATA SCHEDULE
[SROS] NYSE
[SROS] PCX
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-26-1998
<PERIOD-END> JAN-25-1998
<CASH> 21,805
<SECURITIES> 146,121
<RECEIVABLES> 190,092
<ALLOWANCES> 0
<INVENTORY> 162,512
<CURRENT-ASSETS> 0
<PP&E> 459,987
<DEPRECIATION> 183,141
<TOTAL-ASSETS> 956,341
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 36,475
0
0
<OTHER-SE> 488,223
<TOTAL-LIABILITY-AND-EQUITY> 956,341
<SALES> 2,208,163
<TOTAL-REVENUES> 2,208,163
<CGS> 1,784,634
<TOTAL-COSTS> 2,098,746
<OTHER-EXPENSES> 348
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,677
<INCOME-PRETAX> 130,870
<INCOME-TAX> 50,655
<INCOME-CONTINUING> 80,215
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,215
<EPS-PRIMARY> 2.23
<EPS-DILUTED> 2.19
<FN> Amounts for current assets and current
liabilities are not shown since balance sheet
is presented in nonclassified format.
</TABLE>
