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EXHIBIT 99
[CHAMPION ENTERPRISES, INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
INVESTOR AND MEDIA CONTACTS:
Steven Benrubi Colleen T. Bauman
Treasurer Investor Relations
(248) 340-9090 (248) 340-7731
CHAMPION ENTERPRISES, INC.
COMMENTS ON OUTLOOK
AUBURN HILLS, MICH., SEPTEMBER 18, 2000--CHAMPION ENTERPRISES, INC.
(NYSE: CHB), the nation's leading housing manufacturer, today announced that it
expects a net loss in the range of $0.08 to $0.10 per diluted share for the
third quarter ending September 30, 2000. Revenues are expected to be
approximately $450 million for the three-month period. In the third quarter of
1999, the company had revenues of $631 million and a net loss of $0.12 per
diluted share, which included an after-tax charge of $0.42 per diluted share
related to the bankruptcy of the company's former largest independent retailer.
Chairman, President, and Chief Executive Officer, Walter R. Young,
commented, "Margins continue to be negatively impacted by low volume, with
industry wholesale shipments down 24.8 percent year-to-date through July and
retail homes sold off 14.2 percent for the first six months of the year.
Industry-wide, retailers appear to be reducing inventories quickly, which helps
get inventory levels back in balance faster but hurts short-term wholesale
sales.
Young continued, "In our ongoing efforts to keep capacity in line with
demand, we expect further manufacturing facility closings and consolidations in
the last half of 2000. In addition, 41 sales centers are expected to be closed.
Adjustments to capacity will result in pretax restructuring charges
approximating $7.3 million in the third quarter, consisting of $2.8 million for
plant closing costs, $3.0 million for retail closing costs, and $1.5 million to
consolidate development operations. Of the total restructuring charges, $4.5
million are noncash charges to record asset impairments. Also, included in the
third quarter will be higher marketing costs and a $2.5 million gain from a
casualty insurance settlement.
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CHB/2
"Excluding these restructuring charges and the insurance gain, third
quarter segment margins as a percent of related revenues are expected to be
approximately 3.0 percent for manufacturing and 1.0 percent for retail, down
from 5.3 percent and 6.6 percent, respectively, one year earlier. As a result of
market conditions, higher marketing costs, and the seasonally slow winter
months, this year's fourth quarter is not expected to compare favorably to the
prior year or to this year's third quarter. Additional restructuring charges
related to manufacturing and retail closings and consolidations are expected to
be recorded in the fourth quarter, but to a lesser extent than those recorded in
the third quarter," said Young.
"Despite this challenging environment, we are pleased to be gaining
consumer market share, improving our distribution network, and reducing field
inventories," continued Young. "Champion's retail market share, including
company stores and independent retailers, is now 19.8 percent, up from 18.5
percent a year ago. Our wholesale market share for the first six months of 2000
improved to 20.6 percent from 19.7 percent in 1999.
"By closing under performing locations, we improve our ongoing
profitability and reduce our working capital needs and floor plan borrowings. We
are carefully monitoring inventory levels at our company-owned stores and
independent retailers, and keeping tight controls on our cash flows," Young
concluded.
Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is
the industry's leading manufacturer and has produced more than 1.5 million homes
since the company was founded. Champion homes are sold through its company-owned
retail stores and by over 1,000 locations that have joined the Alliance of
Champions retail distribution network. Further information can be found using
the company's website at championhomes.net.
This news release contains certain statements, including earnings,
revenues, and cash flow forecasts, assessments of current industry conditions,
long-term prospects, initiatives to implement change, and marketing and
expansion strategies, which could be construed to be forward looking statements
within the meaning of the Securities and Exchange Act of 1934. These statements
reflect the company's views with respect to future plans, events and financial
performance. The company does not undertake any obligation to update the
information contained herein, which speaks only as of the date of this press
release. The company has identified certain risk factors which could cause
actual results and plans to differ substantially from those included in the
forward looking statements. These factors are discussed in the company's most
recently filed Form 10-K, and this discussion regarding risk factors is
incorporated herein by reference.
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