CHAMPION ENTERPRISES INC
10-Q, 1997-08-08
MOBILE HOMES
Previous: HARRIS ASSOCIATES L P, SC 13G/A, 1997-08-08
Next: DRY DAIRY INTERNATIONAL INC, 10QSB, 1997-08-08




                                FORM 10-Q


                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

(Mark one)

    X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
       THE SECURITIES EXCHANGE ACT OF 1934.


  For Quarter Ended June 28, 1997

                               OR

       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 1-9751



                       CHAMPION ENTERPRISES, INC.
        (Exact name of registrant as specified in its charter)


            MICHIGAN                           38-2743168    
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)


         2701 University Drive, Suite 320, Auburn Hills, MI 48326
           (Address of principal executive offices)       (Zip Code)


Registrant's telephone number, including area code: (248) 340-9090


     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 latest practicable date.

     46,943,253 shares of the registrant's $1.00 par value Common Stock
were outstanding as of August 1, 1997.  





                     PART I. FINANCIAL INFORMATION

                       CHAMPION ENTERPRISES, INC.

                     Consolidated Income Statements            
                (In Thousands, Except Per Share Amounts)


                    Three Months Ended      Six Months Ended
                   June 28,    June 29,    June 28,   June 29,
                     1997       1996        1997        1996 

 Net sales        $456,022    $428,625    $834,882      $771,390

 Cost of sales     390,509     360,392     713,596       651,186
 
 Gross margin       65,513      68,233     121,286       120,204

 Selling, general,
   and 
   administrative
   expenses         35,165      36,541      68,001        65,798
                                    
 Operating income   30,348      31,692      53,285        54,406

 Other income
   (expense):
   Interest income     407         625         823         1,301
  Interest expense    (355)       (770)       (769)       (1,230)

 Income before 
   income taxes     30,400      31,547      53,339        54,477

 Income taxes       12,200      12,401      21,300        21,589

 Net income       $ 18,200    $ 19,146    $ 32,039      $ 32,888
 

 Net income
   per share      $   0.37    $   0.39    $   0.65      $   0.67
                                 

 Weighted average
  shares
  outstanding     49,487      49,408        49,580        49,325




See accompanying Notes to Consolidated Financial Statements.







                      CHAMPION ENTERPRISES, INC.

                      Consolidated Balance Sheets
                (In Thousands, Except Par Value Amount)


                                 ASSETS                      

                                    June 28,    December 28,
                                     1997           1996   
CURRENT ASSETS
  Cash and cash equivalents        $  5,824      $ 19,357
  Accounts receivable, trade        109,692        75,776
  Inventories                        83,389        80,920
  Deferred taxes and other
      current assets                 41,979        40,598
      Total current assets          240,884       216,651

PROPERTY AND EQUIPMENT
  Cost                              193,672       175,876
  Less-accumulated depreciation      57,680        53,274
                                    135,992       122,602

GOODWILL
  Cost                              135,912       135,912
  Less-accumulated amortization      13,290        11,423 
                                    122,622       124,489

OTHER ASSETS                          7,010         8,608

      Total assets                 $506,508      $472,350

                                              

                  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                 $ 69,755      $ 41,025
  Accrued dealer discounts           30,422        42,523
  Accrued warranty obligations       37,034        35,146
  Accrued compensation and
      payroll taxes                  28,630        24,478  
  Accrued insurance                  14,772        14,682
  Other current liabilities          31,938        37,318
      Total current liabilities     212,551       195,172

LONG-TERM LIABILITIES  
  Long-term debt                      1,961         1,158
  Deferred portion of
      purchase price                  8,520        10,927
  Other long-term liabilities        38,162        38,459
                                     48,643        50,544
                

SHAREHOLDERS' EQUITY
  Preferred stock, no par value, 
    5,000 authorized, none issued         -             -
  Common stock, $1 par value, 
    1997-120,000 authorized, 
    47,057 issued and 
    outstanding; 1996-75,000 
    authorized, 47,695 issued
    and outstanding                  47,057        47,695
  Capital in excess of par value     21,808        34,465
  Retained earnings                 177,510       145,471
  Foreign currency translation
    adjustments                      (1,061)         (997)
      Total shareholders' equity    245,314       226,634

      Total liabilities and 
        shareholders' equity       $506,508      $472,350
                                              


See accompanying Notes to Consolidated Financial Statements.







                          CHAMPION ENTERPRISES, INC.

                    Consolidated Statements of Cash Flows 
                                (In Thousands)

                                         Six Months Ended
                                         June 28,   June 29,
                                         1997        1996  

CASH FLOWS FROM CONTINUING
 OPERATING ACTIVITIES:
Net income                             $ 32,039    $ 32,888 
Adjustments to reconcile net income
   to net cash provided by 
   operating activities:           
  Depreciation and amortization           8,382       6,806 
  Deferred income taxes                  (5,602)       (538)
  Increase/decrease:       
    Accounts receivable                 (33,916)    (40,865)
    Inventories                          (2,469)    (13,752)
    Accounts payable                     28,730      31,351 
    Accrued liabilities                  (5,617)       (546)
    Merger reserve                       (5,329)          - 
    Other, net                            3,595       3,641 
    Total adjustments                   (12,226)    (13,903)

Net cash provided by operating 
   activities                            19,813      18,985 


CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment     (21,355)    (27,298)
Acquisitions                                  -     (15,969)
Deferred purchase price payments         (4,200)     (8,900)
Proceeds from note payoff                 1,347           -
Proceeds on disposal of property 
  and equipment                           1,818         487
Short-term investments, net                   -         262
Other                                         -         550

Net cash used for investing 
   activities                           (22,390)    (50,868)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in notes payable to bank             -      30,100
Net increase (decrease) in 
   long-term debt                           693      (2,088)
Common stock issued, net                  4,686         703
Common stock repurchased                (18,835)    (11,284)
Tax benefit of stock options              2,500       1,000
 
Net cash provided by (used for) 
 financing activities                   (10,956)     18,431 


NET DECREASE IN CASH AND 
   CASH EQUIVALENTS                     (13,533)    (13,452)

CASH AND CASH EQUIVALENTS AT BEGINNING
  OF PERIOD                              19,357      27,334 

CASH AND CASH EQUIVALENTS AT END
  OF PERIOD                            $  5,824    $ 13,882 

                                                         
ADDITIONAL CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                             $    659    $  1,350 
  Income taxes, net                    $ 20,952    $ 16,741 


SCHEDULE OF CASH USED FOR ACQUISITIONS: 
Purchase price                                     $ 35,500 
Less:  Deferred portion of purchase price           (17,000)
       Cash acquired, net                            (4,444)
Plus:  Acquisition costs and mortgage payoffs         1,913
                                                  $  15,969

See accompanying Notes to Consolidated Financial Statements.





                       CHAMPION ENTERPRISES, INC.

               Notes to Consolidated Financial Statements

1. On October 24, 1996 Redman Industries, Inc. ("Redman") was merged with the
registrant.  The merger was accounted for as a pooling of interests;
accordingly, 1996 restated information includes Redman.  

2. For each of the dates indicated, inventories consisted of the following 
(in thousands):

                                  June 28,        December 28,
                                   1997              1996  

      Raw materials              $49,490           $50,847
      Work-in-process              7,855             8,048
      Finished goods              26,044            22,025
                                 $83,389           $80,920

3. The difference between income taxes provided for financial reporting
purposes and expected charges at the U.S. federal statutory rate is
principally due to state tax charges. 

The components of the income tax provisions for the six months ended June 28,
1997 and June 29, 1996 follows (dollars in thousands):

                                        June 28,      June 29,
                                          1997          1996 

      Statutory U.S. tax rate           $18,669       $19,067
      Increase in rate resulting from:
      State taxes, net of 
        federal benefit                   1,800         1,850
      Higher rates on earnings
        of foreign operations               100           100
      Other                                 731           572
   
   Total provision                      $21,300       $21,589

   Effective tax rates                  39.9%         39.6%


4. The per share amounts are calculated using the weighted average number of
shares outstanding for each of the periods presented and includes common stock
equivalents.  Earnings per share amounts and weighted average shares
outstanding for all periods presented have been adjusted for the two-for-one
stock split on May 31, 1996. 

5. The Consolidated Financial Statements are unaudited, but in the opinion of
management include all adjustments necessary for a fair presentation of the
results of the interim period.  Such adjustments consisted of normal recurring
items except for the restructuring charge recorded during 1996 as discussed on
page 7 of this Form 10-Q.  Financial results of the interim period are not
necessarily indicative of results that may be expected for any other interim
period or for the fiscal year.

6. On April 29, 1997 the shareholders approved a proposal to increase the
number of authorized shares of common stock to 120 million from 75 million. 
On that date the Board of Directors also authorized a stock repurchase program
for up to 2.5 million shares of the registrant's common stock.  The program
was increased on July 24, 1997 for an additional 1.5 million shares, bringing
the total which can be repurchased to 4 million shares.  Through August 1,
1997 the registrant had repurchased 1.67 million shares at a total cost of $26
million under this program.

7. Certain amounts in the prior periods' statements have been reclassified to
conform to the current periods' presentation.



                      CHAMPION ENTERPRISES, INC.

                  Management's Discussion and Analysis
                                   of
             Financial Condition and Results of Operations

                  Three and six months ended June 28, 1997
               versus three and six months ended June 29, 1996

Champion Enterprises, Inc. ("Champion" or "registrant") achieved record second
quarter revenues for the quarter ended June 28, 1997, rising 6% to $456
million from $429 million last year.  Net income for the quarter was $18.2
million, or $0.37 per share, compared to $19.1 million, or $0.39 per share, in
1996. Last year's results have been restated to include Redman Industries,
Inc. ("Redman"), which was merged with Champion on October 24, 1996, and was
accounted for as a pooling of interests.
 
For the year-to-date period, net income was $32.0 million, or $0.65 per share,
compared to $32.9 million, or $0.67 per share, reported last year.  Net sales
for the six months rose 8% to $835 million from $771 million through six
months a year ago. Earnings before interest, taxes, depreciation and
amortization for the six months was comparable to last year at $62 million.

Manufactured Housing

(Dollars in millions, except average home price)

                  Three Months Ended          Six Months Ended
               June 28,  June 29,   %      June 28,  June 29,   %
                1997      1996     Chg.     1997      1996     Chg.

Net sales     $442.4    $414.0     7%      $805.3    $742.6     8%
Gross margin    63.8      66.2    -4%       118.0     116.2     2%
SG&A            33.7      35.3    -4%        65.3      63.3     3%
Operating
 income        $30.1     $30.9    -3%       $52.7     $52.9     -
Operating
 margin         6.8%      7.5%               6.5%      7.1%
Homes sold    17,302    16,301     6%      31,549    29,263     8%
Floors 
  sold        27,052    25,541     6%      49,275    45,849     7%
Average 
  price per 
  home       $25,600   $25,400     1%     $25,500   $25,400     1%


For the three months ended June 28, 1997, housing revenues and homes sold
increased 7% and 6%, respectively, due to both internal growth and the 1996
acquisitions.  The 1996 acquisitions consist of Grand Manor, Inc., acquired
March 29, 1996 and Homes of Legend, Inc., acquired April 26, 1996.  Homes of
Legend added $7.4 million to revenues on sales of 368 homes in April 1997. 
The second quarter multi-section mix was 55.5%, comparable to last year.
Currently the registrant has 53 housing facilities in operation, up from 46
last year.    

During the year-to-date period, homes sold increased 8% and housing revenues
reached $805 million, also rising 8% due to internal growth and the 1996
acquisitions.  U.S. shipments were 31,000 homes, an increase of 7.7%, and the
U.S. multi-section mix was 56%, the same as it was a year ago.  According to
the Manufactured Housing Institute ("MHI"), an industry trade association,
industry unit shipments declined 2.9% in the first half of 1997.  U.S. market
share for the year based on homes sold was approximately 17.4%, up from 15.6%
a year ago.  Grand Manor for the first three months of 1997 and Homes of
Legend for the first four months of 1997 added $34.3 million to revenues from
the sale of 1,546 homes.

Operating margins as a percent of sales for the quarter and year-to-date
periods decreased due in part to plant start ups and higher manufacturing
costs caused generally by lower levels of unfilled orders.  During the current
second quarter, three new facilities began operations, bringing the year-to-
date total plant start-ups to five.  Year-to-date income for 1997 was also
lower due to the restructuring of the product line at Redman's Indiana
facilities and to inclement weather early in the year which affected demand. 
Homes of Legend added operating income of $0.2 million for April 1997.  Grand
Manor for the first three months of 1997 and Homes of Legend for the first
four months of 1997 added $2.2 million of operating income.  Last year's
second quarter selling, general and administrative expenses included a $1.5
million restructuring charge at one of the registrant's subsidiaries. 

Although dealer orders can be cancelled at anytime without penalty, and
unfilled orders are not necessarily an indication of future business, the
registrant's unfilled housing orders at June 28, 1997 totaled approximately
$40 million.  This amount compares to an estimated $55 million as of early-
April 1997 and $110 million a year ago. The overall decline in unfilled orders
is due to increased capacity and incoming order rates that are down slightly
from last year due in part to higher retail inventory levels.

Other Matters

Consolidated sales and income include the results of the commercial vehicles
business.  Commercial vehicles revenues decreased 7% to $13.7 million for the
quarter on sales of 295 units.  For the six month period, revenues rose 3% to
$29.6 million from the sale of 591 units, a 4% increase from a year ago. 
Operating income was $253,000 and $752,000 in the quarters ended June 28, 1997
and June 29, 1996, respectively.  The change in income was due to higher
manufacturing and fixed costs and less sales in the current period.  For the
year-to-date periods, operating income was $606,000 in 1997 and $1.5 million
in 1996.  The change in income was due to higher manufacturing costs in 1997.

Interest income decreased due to lower average invested balances.  Interest
expense decreased as a result of no bank borrowing during 1997 and lower
amounts outstanding for deferred portions of purchase prices related to 
acquisitions.


                  Manufactured Housing Industry Outlook

According to the MHI, industry shipments decreased 2.9% through June 1997,
following annual increases of 7% in 1996, 12% in 1995 and 20% in 1994. 
Current industry analysts' consensus for 1997 range from a 2% decrease to
shipments flat with 1996, with some estimates as low as a 5% decrease and some
as high as a 3% increase.

Retail inventory levels are currently higher in certain regions than in prior
years due to higher stocking levels and inclement weather conditions in many
areas of the country, which slowed retail traffic and sales as well as home
placements. Management believes that moderate changes in interest rates will
not have a significant direct impact on demand for manufactured housing. 
Long-term industry growth and short-term sales may be affected by many
factors, which are discussed under Forward Looking Statements on page 8 of
this Form 10-Q.


                      Liquidity and Capital Resources

At June 28, 1997 cash and cash equivalents totaled $5.8 million, a reduction
of $13.5 million from December 28, 1996.   For the six-month period, $20
million of cash was generated from operations, $7.2 million was provided by
stock option exercises and related tax benefits and $1.8 million from the
disposal of property and equipment.  Cash of $18.8 million was used for common
stock repurchases, $21.4 million for capital improvements and $4.2 million for
deferred purchase price payments. The stock repurchases were part of a 4
million share repurchase program which began in May of 1997 and for which $26
million has been expended through August 1, 1997.  

Accounts receivable, accounts payable and inventories increased significantly
during the year-to-date period due to higher sales in June 1997 as compared to
December 1996 because of the seasonal nature of the manufactured housing
industry.   Increased production levels and plant start-ups also caused the
increases.  Accrued dealer discounts decreased due to payments made under
annual programs.

Champion has a $70 million unsecured bank line of credit, which expires in
1998 and includes $20 million of availability to cover letters of credit.  At
June 28, 1997 the registrant had no bank borrowing outstanding and $14 million
of letters of credit outstanding, generally to support insurance obligations
and licensing and service bonding required by various states.

Borrowing may be necessary during 1997 for the construction of new plants, 
for other planned plant expansions, for seasonal working capital needs and for
the current stock repurchase program which began in May 1997. During 1997 the
registrant plans to spend a total of up to $45 million on capital
expenditures.  Two new facilities, one each in Alabama and Texas, are
scheduled to open in late 1997 and an additional plant in North Carolina is
planned for opening in the spring of 1998.

The registrant believes that existing cash balances, cash flow from operations
and additional availability under its line of credit are adequate to meet its
anticipated financing needs, operating requirements, capital expenditures and
common stock repurchases in the foreseeable future.  However, management  may
explore other opportunities to raise capital to finance the registrant's
growth.  Consistent with its plan to improve shareholder value through
investments in sound operating businesses, the registrant does not plan to pay
cash dividends in the near term.  The registrant's three year goal is to
increase earnings per share at a 20% compound annual growth rate with 1995 as
the base year.


                        Forward Looking Statements 

Certain statements contained in this report, including the industry analysts'
estimates of industry shipments for 1997, the registrant's plans for capital
expenditures and the registrant's three year goal of compound annual growth in
earnings per share of 20%, could be construed as forward looking statements
within the meaning of the Securities Exchange Act of 1934.  In addition,
Champion may from time to time publish or communicate other items which could
also be construed to be forward looking statements.  Statements of this sort
are or will be based on the registrant's estimates, assumptions and
projections, and are subject to risks and uncertainties, including those
specifically listed below, that could cause actual results to differ
materially from those included in the forward looking statements.

Long term growth in the manufactured housing industry may be affected by:  (1)
the relative cost of manufactured housing versus other forms of housing; (2)
general economic trends, including inflation and unemployment rates, consumer
confidence, job growth and interest rates; (3) changes in demographics,
including new household formations and the number of Americans on fixed
income; (4) the availability and cost of financing for manufactured homes; (5)
changes in government regulations and policies, including HUD regulations,
local building codes and zoning regulations; and (6) changes in regional
markets and the U.S. economy as a whole.  Short term sales could be affected
by inclement weather and inventory levels of manufactured housing retailers. 
Fluctuations in interest rates may affect the demand for manufactured housing
to the extent that those changes reduce job growth, slow the U.S. economy, or
cause a loss in consumer confidence.  The profitability of the registrant may
also be affected by: (1) its ability to efficiently expand operations and
utilize production capacity; (2) its ability to pass increased raw material
costs, particularly lumber costs, on to its customers; (3) market share
position; (4) growth in the manufactured housing industry as a whole; (5) the
results of its acquisitions; and (6) strength of retail distribution.
PAGE
<PAGE>
                       PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

   On April 29, 1997 the registrant held its 1997 Annual Meeting of
Shareholders at which the following matters were submitted to a vote of
security holders and results of which were as follows:

   1.   Election of Directors

             Nominee                         Votes For   Votes Withheld

        Walter R. Young, Jr.                 43,624,332     206,957
        Robert W. Anestis                    43,625,192     206,097
        Frank J. Feraco                      43,625,252     206,037
        Selwyn Isakow                        43,625,327     205,962
        George R. Mrkonic                    43,619,968     211,321
        Johnson S. Savary                    43,625,084     206,205
        Robert W. Stark                      43,624,907     206,382
        Carl L. Valdiserri                   43,625,332     206,957

   2.   Proposal to Amend the Restated Articles of Incorporation to
        Increase the Number of Authorized Shares of Common Stock.

               Votes For - 40,019,371
               Votes Against - 3,714,426
               Votes Withheld/Abstentions - 97,491
               Nonvotes-None



Item 6. Exhibits and Reports on Form 8-K.

  (a) The following exhibits are filed as part of this report.

      Exhibit No.           Description

       3.1     Amendment to Restated Articles of Incorporation
               of the Registrant.
        
        11     Computation of Earnings Per Share.

        27     Financial Data Schedule.


  (b) No reports on Form 8-K were filed by the registrant during the quarter
ended June 28, 1997.  


PAGE
<PAGE>
                              SIGNATURES

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.



                                 CHAMPION ENTERPRISES, INC.

                                  By: /s/ A. JACQUELINE DOUT     

                                     A. Jacqueline Dout
                                     Executive Vice President
                                     and Chief Financial
                                     Officer (Principal Financial
                                     Officer)




                                  And: /s/ RICHARD HEVELHORST      

                                      Richard Hevelhorst
                                      Controller (Principal
                                      Accounting Officer)




Dated:  August 8, 1997

<PAGE>
                             INDEX TO EXHIBITS

EXHIBIT NO.                     DESCRIPTION

   3.1           Amendment to Restated Articles of Incorporation of 
                 the Registrant.

   11            Computation of Earnings Per Share

   27            Financial Data Schedule





          CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION


1.  The present name of the corporation is: Champion Enterprises, Inc.

2.  The identification number assigned by the Bureau is: 419-343

3.  The location of the registered office is:  30600 Telegraph Road, 
    Bingham Farms, Michigan 48025

4.  Article III of the Articles of Incorporation is hereby amended to
    read as follows:

                        As set forth on Exhibit A

6.  The forgoing amendment to the Articles of Incorporation was duly
    adopted on the 29th day of April, 1997 by the shareholders if a
    profit corporation, or by the shareholders or members if a nonprofit
    corporation, at a meeting.  The necessary votes were cast in favor
    of the amendment.


    Signed this 2nd day of May, 1997

    By:  /S/ JOHN J. COLLINS, JR.

        John J. Collins, Jr.
        Vice President, General Counsel and Secretary

PAGE
<PAGE>
                            EXHIBIT A


                           ARTICLE III

     The total number of shares of stock which the corporation shall have
authority to issue is 125,000,000 shares, of which 120,000,000 shares shall
be Common Stock of the par value of $1.00 each ("Common Stock"), and 
5,000,000 shares shall be Preferred Stock of no par value ("Preferred Stock").

                         Preferred Stock

     The Board of Directors is authorized at any time and from time to time
to provide for the issuance of shares of Preferred Stock in one or more series
with such voting powers, full or limited, or without voting powers, and with
such designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof as
shall be expressed in the resolution or resolutions establishing such series
and providing for the issuance thereof adopted by the Board of Directors and
as are not expressed in these Articles of Incorporation as hereafter amended,
including, without limiting the generality of the foregoing, the following:

     (1)  the designation and number of shares of such series; 

     (2)  the dividend rate of such series, the conditions and dates upon
          which such dividends shall be payable, the preference or relation
          of such dividends to dividends payable on any other class or
          classes of capital stock of the corporation, and whether such
          dividends shall be cumulative or noncumulative; 

     (3)  whether the shares of such series shall be subject to redemption
          by the corporation, and, if made subject to such redemption, the
          times, prices, rates, adjustments and other terms and conditions
          of such redemption; 

     (4)  the terms and amount of any sinking or similar fund provided for
          the purchase or redemption of the shares of such series; 

     (5)  whether the shares of such series shall be convertible into or
          exchangeable for shares of capital stock or other securities of
          the corporation or of any other corporation, and, if provision be
          made for conversion or exchange, the times, prices, rates,
          adjustments and other terms and conditions of such conversion or
          exchange; 

     (6)  the extent, if any, to which the holders of the shares of such
          series shall be entitled to vote as a class or otherwise with
          respect to the election of directors or otherwise;

     (7)  the restrictions and conditions, if any, upon the issue or reissue
          of any additional Preferred Stock ranking on a parity with or
          prior to such shares as to dividends or upon dissolution; 

     (8)  the rights of the holders of the shares of such series upon the
          dissolution of, or upon the distribution of assets of, the
          corporation, which rights may be different in the case of
          voluntary dissolution than the case of involuntary dissolution;
          and

     (9)  any other relative rights, preferences or limitations of shares of
          such series consistent with this Article and applicable law.

     The powers, preferences and relative participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.  All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of
such series, except that shares of any one series issued at different times
may differ as to the dates from which dividends thereon shall be cumulative. 
The terms of any series of Preferred Stock may be amended without consent of
the holders of any other series of Preferred Stock or of the Common Stock,
provided such amendment does not adversely affect the holders of such other
series of Preferred Stock or the Common Stock.

     Shares of any series of Preferred Stock which have been issued and
reacquired in any manner and are not held as treasury shares, including shares
redeemed by purchase (whether through the operation of a retirement or sinking
fund or otherwise), will have the status of authorized and unissued Preferred
Stock and may be reissued as a part of the series of which they were
originally a part or may be reclassified into and reissued as a part of a new
series.

     Series A Preferred Stock, No Par Value

     A.   Designation and Amount.  The shares of such series shall be
designated as "Series A Preferred Stock, no par value," and the number of
shares constituting such series shall be 300,000.

     B.   Dividends and Distributions.

          (1)  Subject to any prior and superior rights of the holders of
any series of Preferred Stock ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends that may be authorized by
the Articles of Incorporation, the holders of shares of Series A Preferred
Stock shall be entitled prior to the payment of any dividends on shares
ranking junior to the Series A Preferred Stock to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of January,
April, July and October in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock.  In the event the Corporation shall at any time after
February 5, 1996 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of 
shares of Series A Preferred Stock were entitled immediately prior to such 
event under clause (b) of the preceding sentence shall be adjusted by 
multiplying such amount by a fraction the numerator of which is the number 
of shares of Common Stock outstanding immediately after such event and the 
denominator of which is the number of shares of Common Stock that were 
outstanding immediately prior to such event.

            (2)  The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (1)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

            (3)  Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date.  Accrued but unpaid dividends shall not bear interest.  Dividends paid
on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding.  The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.

            (4)  Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full
have been declared or paid or set apart for payment on the Preferred Stock of
all series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective
dividend periods terminating on such dividend date.  When the dividends are
not paid in full on all series of the Preferred Stock, the shares of all
series shall share ratably in the payment of dividends, including
accumulations, if any, in accordance with the sums which would be payable on
said shares if all dividends were declared and paid in full.

       C.   Voting Rights.  The holders of shares of Series A Preferred
Stock shall have the following voting rights:

            (1)  Subject to the provision for adjustment hereinafter set
       forth, each share of Series A Preferred Stock shall entitle the
       holder thereof to 100 votes on all matters voted on at a meeting of
       the shareholders of the Corporation.  In the event the Corporation
       shall at any time after the Rights Declaration Date (i) declare any
       dividend on Common Stock payable in shares of Common Stock, or (ii)
       subdivide the outstanding Common Stock, or (iii) combine the
       outstanding Common Stock into a smaller number of shares, then in
       each such case the number of votes per share to which holders of
       shares of Series A Preferred Stock were entitled immediately prior
       to such event shall be adjusted by multiplying such number by a
       fraction the numerator of which is the number of shares of Common
       Stock outstanding immediately after such event and the denominator
       of which is the number of shares of Common Stock that were
       outstanding immediately prior to such event.

            (2)  Except as otherwise provided herein or by law, the
       holders of shares of Series A Preferred Stock and the holders of
       shares of Common Stock shall vote together as one voting group on
       all matters voted on at a meeting of shareholders of the
       Corporation.

            (3)  Except as set forth herein, holders of Series A
       Preferred Stock shall have no special voting rights and their
       consent shall not be required (except to the extent they are
       entitled to vote with holders of Common Stock as set forth herein)
       for taking any corporate action.

       D.   Certain Restrictions.

            (1)  Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section
B. are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

            (a)  declare or pay dividends on, make any other
       distributions on, or redeem or purchase or otherwise acquire for
       consideration any shares of stock ranking junior (either as to
       dividends or upon liquidation, dissolution or winding up) to the
       Series A Preferred Stock;

            (b)  declare or pay dividends on or make any other
       distributions on any shares or stock ranking on a parity (either as
       to dividends or upon liquidation, dissolution or winding up) with
       the Series A Preferred Stock, except dividends paid ratably on the
       Series A Preferred Stock and all such parity stock on which
       dividends are payable or in arrears in proportion to the total
       amounts to which the holders of all such shares are then entitled;

            (c)  redeem or purchase or otherwise acquire for
       consideration shares of any stock ranking on a parity (either as to
       dividends or upon liquidation, dissolution or winding up) with the
       Series A Preferred Stock, provided that the Corporation may at any
       time redeem, purchase or otherwise acquire shares of any such
       parity stock in exchange for shares of any stock of the Corporation
       ranking junior (either as to dividends or upon dissolution,
       liquidation or winding up) to the Series A Preferred Stock;

            (d)  purchase or otherwise acquire for consideration any
       shares of Series A Preferred Stock or any shares of stock ranking
       on a parity with the Series A Preferred Stock, except in accordance
       with a purchase offer made in writing or by publication (as
       determined by the Board of Directors) to all holders of such shares
       upon such terms as the Board of Directors, after consideration of
       the respective annual dividend rates and other relative rights and
       preferences of the respective series and classes, shall determine
       in good faith will result in fair and equitable treatment among the
       respective series or classes.

            (2)  The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.

       E.   Liquidation, Dissolution or Winding Up.

            (1)  Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $100.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference").  Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series A Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth
in subparagraph (3) below to reflect such events as stocks splits, stock
dividends and recapitalizations with respect to the Common Stock (such number
in clause (ii), the "Adjustment Number").  Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common
Stock, respectively, holders of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed.

            (2)  In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences.  In
the event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.

            (3)  In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

       F.   Merger, Consolidation. etc.  In case the Corporation shall
enter into any merger, consolidation, combination or other transaction in
which the shares of Common Stock are exchanged or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or
exchanged.  In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

       G.   Redemption.  The shares of Series A Preferred Stock shall not
be redeemable.

       H.   Ranking.  The Series A Preferred Stock shall rank on a parity
with all other series of the Corporation's Preferred Stock as to the payment
of dividends and other distribution of assets, unless, in accordance with
authorization in the Articles of Incorporation, the terms of any such series
shall provide otherwise.

       I.   Amendment.  The Articles of Incorporation of the Corporation
shall not be further amended in any manner which would alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series A Preferred Stock, voting
separately as one voting group.

       J.   Fractional Shares.  Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.


                           Common Stock

       Each holder of Common Stock shall be entitled to one vote for each
share of Common Stock held of record on all matters on which shareholders
generally are entitled to vote.  Subject to the provisions of law and the
rights of the Preferred Stock and any other class or series of stock having a
preference as to dividends over the Common Stock then outstanding, dividends
may be paid on the Common Stock at such times and in such amounts as the Board
of Directors shall determine.  Upon the dissolution, liquidation or winding up
of the corporation, after any preferential amounts to be distributed to the
holders of the Preferred Stock and any other class or series of stock having a
preference over the Common Stock then outstanding have been paid or declared
and set apart for payment, the holders of the Common Stock shall be entitled
to receive all the remaining assets of the corporation available for
distribution to its shareholders ratably in proportion to the number of shares
held by them, respectively.



Champion Enterprises, Inc.
Computation of Earnings Per Share

(in 000's, except per share amounts)

                               Three Months Ended    Six Months Ended
                               June 28,  June 29,   June 28,   June 29,
                                 1997      1996       1997      1996

EARNINGS

Net Income                     $18,200   $19,146     $32,039   $32,888
                               =======   =======     =======   =======  



SHARES USED FOR CALCULATING
   EARNINGS PER SHARE

Average Shares Outstanding      48,252    47,428     48,155    47,518

Additional Shares Resulting 
   from Assumed Exercise
   of Stock Options              1,235     1,980      1,425     1,807
                                ______    ______     ______    ______

Total                           49,487    49,408     49,580    49,325
                                ======    ======     ======    ======


PER SHARE AMOUNTS

Net Income                       $0.37     $0.39     $0.65     $0.67
                                 =====     =====     =====     =====




NOTE:  This calculation is submitted in accordance with Securities and
Exchange Act of 1934 Release No. 9083.


<TABLE> <S> <C>

<ARTICLE>          5
<LEGEND>           THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
                   INFORMATION EXTRACTED FROM THE 
                   COMPANY'S UNAUDITED FINANCIAL STATEMENTS
                   AS OF AND FOR THE PERIOD ENDING JUNE 28, 
                   1997, AND IS QUALIFIED IN ITS ENTIRETY BY 
                   REFERENCE TO SUCH FINANCIAL STATEMENTS 
<MULTIPLIER>       1,000
<FISCAL-YEAR-END>  JAN-3-1998
<PERIOD-END>       JUN-28-1997
<PERIOD-TYPE>      6-MOS


<CASH>                                              5,824
<SECURITIES>                                            0
<RECEIVABLES>                                     110,181
<ALLOWANCES>                                          489
<INVENTORY>                                        83,389
<CURRENT-ASSETS>                                  240,884
<PP&E>                                            193,672
<DEPRECIATION>                                     57,680
<TOTAL-ASSETS>                                    506,508
<CURRENT-LIABILITIES>                             212,551
<BONDS>                                                 0
<COMMON>                                           47,057
                                   0
                                             0
<OTHER-SE>                                        198,257
<TOTAL-LIABILITY-AND-EQUITY>                      506,508
<SALES>                                           834,882
<TOTAL-REVENUES>                                  834,882
<CGS>                                             713,596
<TOTAL-COSTS>                                     713,596
<OTHER-EXPENSES>                                        0
<LOSS-PROVISION>                                        0
<INTEREST-EXPENSE>                                    769
<INCOME-PRETAX>                                    53,339
<INCOME-TAX>                                       21,300
<INCOME-CONTINUING>                                32,039
<DISCONTINUED>                                          0
<EXTRAORDINARY>                                         0
<CHANGES>                                               0
<NET-INCOME>                                       32,039
<EPS-PRIMARY>                                        0.65
<EPS-DILUTED>                                        0.65



</TABLE>


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission