-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BILSgWAF56+9bnPuTPspu/BSdCTO6YTX8Z7L/Z6Es/1DazSV1IKh79X+CUsf68wv abSqZ2WRySc9PhFumzjztA== 0000314132-95-000003.txt : 19950908 0000314132-95-000003.hdr.sgml : 19950908 ACCESSION NUMBER: 0000314132-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950730 FILED AS OF DATE: 19950907 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEETWOOD ENTERPRISES INC/DE/ CENTRAL INDEX KEY: 0000314132 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR HOMES [3716] IRS NUMBER: 951948322 STATE OF INCORPORATION: DE FISCAL YEAR END: 0428 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07699 FILM NUMBER: 95570793 BUSINESS ADDRESS: STREET 1: 3125 MYERS ST STREET 2: P O BOX 7638 CITY: RIVERSIDE STATE: CA ZIP: 92523 BUSINESS PHONE: 7143513500 10-Q 1 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 July 30, 1995 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 July 30, 1995 _________________________ _________________________________________ Common stock, $1 par value 46,061,542 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 July 30, 1995 and July 31, 1994, and the balances as of July 30, 1995 and April 30, 1995. 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 made a review of the accompanying condensed consolidated balance sheet of FLEETWOOD ENTERPRISES, INC. (a Delaware Corporation) and subsidiaries as of July 30, 1995, and the related condensed consolidated statements of income for the thirteen-week period ended July 30, 1995 and the fourteen-week period ended July 31, 1994, the condensed consolidated statements of cash flows for the thirteen-week period ended July 30, 1995 and the fourteen-week period ended July 31, 1994 and the condensed consolidated statement of changes in shareholders' equity for the thirteen-week period ended July 30, 1995, in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review 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 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 30, 1995, 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 26, 1995 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 30, 1995, 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 August 29, 1995 FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands except per share data) (UNAUDITED) Thirteen Fourteen Weeks Ended Weeks Ended July 30, 1995 July 31, 1994 OPERATING REVENUES: Manufacturing sales $704,717 $753,578 Finance interest income 13,849 10,720 718,566 764,298 COSTS AND EXPENSES: Cost of products sold 573,331 608,536 Operating expenses 102,433 103,889 Finance interest expense 6,567 4,645 682,331 717,070 Operating income 36,235 47,228 OTHER INCOME (EXPENSE): Investment income 2,909 2,334 Interest expense (894) (818) Other (112) (11) 1,903 1,505 Income before provision for income taxes 38,138 48,733 Provision for income taxes (15,427) (19,646) Minority interest in net loss of subsidiary 87 165 Net income $ 22,798 $ 29,252 Net income per Common and equivalent share $.49 $.63 Dividends declared per share of Common stock outstanding $.15 $.14 Common and equivalent shares outstanding 46,518 46,457 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONDENSED) (Amounts in thousands) ASSETS July 30, April 30, 1995 1995 (Unaudited) Cash $ 44,779 $ 40,560 Investments 199,518 157,685 Receivables: Manufacturing 157,243 152,210 Finance company 305,543 385,026 Inventories: Raw materials 111,004 133,379 Work in process and finished products 59,048 81,914 Land held for future development 6,868 6,868 Property, plant and equipment 265,342 263,108 Deferred tax benefits 67,156 66,237 Other assets 74,388 58,073 $1,290,889 $1,345,060 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 87,092 $ 96,428 Commercial paper borrowings and long-term debt 289,093 385,876 Employee compensation and benefits 103,168 103,516 Federal and state taxes on income 5,773 (11,043) Insurance reserves 46,133 44,367 Other liabilities 136,462 118,858 Total liabilities 667,721 738,002 Contingent liabilities Minority interest (1,171) (1,085) 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 46,062,000 at July 30, 1995 and April 30, 1995 46,062 46,062 Capital surplus 41,561 41,561 Retained earnings 535,830 519,941 Foreign currency translation adjustment 42 229 Investment securities valuation adjustment 844 350 624,339 608,143 $1,290,889 $1,345,060 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED) (Amounts in thousands) (UNAUDITED) Thirteen Fourteen Weeks Ended Weeks Ended July 30, 1995 July 31, 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $22,798 $29,252 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 6,236 5,108 Amortization of intangibles and goodwill 431 497 Provision for credit losses 1,397 1,387 Loss on sales of property, plant and equipment 112 11 Changes in assets and liabilities: Increase in manufacturing receivables (5,033) (348) Decrease in inventories 45,241 16,508 Increase in deferred tax benefits and other assets (17,665) (8,274) Increase (decrease) in accounts payable (9,336) 7,242 Increase (decrease) in employee compensation and benefits (348) 874 Increase in Federal and state income taxes 16,816 21,149 Increase in other liabilities 19,370 13,523 Foreign currency translation adjustment (187) 317 Net cash provided by operating activities 79,832 87,246 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of finance receivables (274,845) (310,504) Principal collected on finance receivables 265,214 267,624 Proceeds from sale of retail sales contracts 87,717 125,427 Purchases of investment securities: Held-to-maturity (2,280,878) (1,684,253) Available-for-sale (66,683) (213,201) Proceeds from maturity of investment securities: Held-to-maturity 2,252,825 1,664,110 Available-for-sale 30,418 135,970 Proceeds from sale of available-for- sale investment securities 22,979 36,824 Purchases of property, plant and equipment, net (8,582) (19,912) Minority interest in subsidiary (86) (184) Net cash provided by investing activities 28,079 1,901 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of commercial paper 467,117 471,971 Principal payments on commercial paper (588,900) (558,685) Proceeds from issuance of long-term debt 25,000 -- Dividends to shareholders (6,909) (6,439) Proceeds from exercise of stock options -- 8 Net cash used in financing activities (103,692) (93,145) Increase (decrease) in cash 4,219 (3,998) Cash at beginning of period 40,560 37,267 Cash at end of period $44,779 $33,269 Supplementary disclosures: Income taxes paid $ 1,350 $ 2,434 Interest paid 8,409 6,330 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (CONDENSED) (Amounts in thousands) (UNAUDITED) Invest- ment Foreign Secu- Currency rities Trans- Valu- Total Common Stock lation ation Share- Number of Capital Retained Adjust- Adjust- holders' Shares Amount Surplus Earnings ment ment Equity Balance April 30, 1995 46,062 $46,062 $41,561 $519,941 $229 $350 $608,143 Add (deduct)- Net income -- -- -- 22,798 -- -- 22,798 Cash dividends declared on Common stock -- -- -- (6,909) -- -- (6,909) Foreign currency translation adjustment -- -- -- -- (187) -- (187) Investment securities valuation adjustment -- -- -- -- -- 494 494 Balance July 30, 1995 46,062 $46,062 $41,561 $535,830 $ 42 $ 844 $624,339 See accompanying notes to financial statements.
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JULY 30, 1995 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 30, 1995. 2) Industry Segment Information Information with respect to industry segments for the periods ending July 30, 1995 and July 31, 1994 is shown below: 13 Weeks Ended 14 Weeks Ended July 30, 1995 July 31, 1994 OPERATING REVENUES: Manufactured housing $361,537 $351,886 Recreational vehicles 332,313 389,923 Supply operations 10,867 11,769 Finance operations 13,849 10,720 $718,566 $764,298 OPERATING INCOME: Manufactured housing $27,947 $25,604 Recreational vehicles 6,081 19,701 Supply operations 56 2,092 Finance operations 4,061 3,505 Corporate and other* (1,910) (3,674) $36,235 $47,228 * Including adjustments and eliminations. 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 period ended July 30, 1995 compared to the 14-week period ended July 31, 1994. Thirteen Weeks Ended July 30, 1995 Increase % (Decrease) Change Manufacturing sales $(48,861) (6.5)% Cost of products sold (35,205) (5.8) Manufacturing gross profit (13,656) (9.4) Finance interest income 3,129 29.2 Finance interest expense 1,922 41.4 Net finance revenues 1,207 19.9 Selling expenses 4,714 10.9 General and administrative expenses (6,170) (10.2) Operating expenses (1,456) (1.4) Operating income (10,993) (23.3) Other income (expense) 398 26.4 Income before taxes (10,595) (21.7) Provision for income taxes (4,219) (21.5) Net income $(6,454) (22.1)%
Current Quarter Compared to Same Quarter Last Year Net income for the 13-week period ending July 30, 1995 declined 22 percent to $22,798,000 or 49 cents per share compared to $29,252,000 or 63 cents per share for the corresponding 14-week period a year ago. Revenues in the current quarter were off six percent to $718.6 million compared to $764.3 million for the one-week longer period in the prior year. The primary factors leading to the earnings decline were volume related. The loss of one week's sales in this year's first quarter was compounded by a weakness in recreational vehicle sales. A solid performance by the Company's housing group was not enough to offset these factors. In addition to volume, earnings were affected by reduced RV margins resulting from competitive pricing pressures and higher marketing and sales promotion costs, as well as production inefficiencies at several plant locations. The manufactured housing group generated record first quarter revenues of $361.5 million, a three percent increase over last year's $351.9 million. Unit volume of 17,634 homes was off four percent due to the shorter period. The Company's excellent housing sales reflects a strong market demand for manufactured housing as indicated by the growth in industry shipments which were up 12 percent in the first six months of calendar 1995. Housing group sales represented 50 percent of total Company revenues compared to 46 percent last year. The recreational vehicle group registered sales of $332.3 million in the July quarter, 15 percent below last year's $389.9 million. The RV decline was largely caused by shrinking demand for motor homes which fell 23 percent to $168.6 million on a 26 percent drop in shipments to 3,464 units. Travel trailer revenues were also below the prior year, falling nine percent to $123.4 million on an 11 percent decline in unit volume to 9,571. The Company's folding trailer and European divisions both recorded sales increases. Folding trailer sales of $22.0 million were up two percent on a two percent rise in shipments to 5,370 units. European RV sales rose 42 percent to $18.3 million. Recreational vehicle sales accounted for 46 percent of total Company revenues, down from 52 percent last year. Manufacturing gross profit declined 9 percent or $13.7 million, and also fell as a percentage of sales from 19.2 percent to 18.6 percent, primarily as a result of lower RV margins. Gross margins for the manufactured housing segment were improved over the prior year reflecting higher product selling prices and lower lumber costs. The Company's European RV operation continued to operate at a loss in the first quarter despite significantly higher sales volume. The loss from operations in the current period was $662,000, up from $396,000 a year ago. This operation has had persistent operating losses over the past 3 years reflecting inefficient production and high operating costs. The Company's finance subsidiary recorded revenues of $13.8 million, 29 percent ahead of the prior year, primarily due to higher interest earned on wholesale loan volume. Net finance revenues, however, rose just 20 percent or $1.2 million as borrowing costs increased at a faster rate than finance revenues due to the competitive rate environment for consumer lending on recreational vehicles. Operating expenses declined one percent to $102.4 million, but increased as a percentage of revenues from 13.6 percent to 14.3 percent on the lower sales volume. Selling expenses increased 11 percent to $48.1 million, and also rose as a percentage of sales from 5.7 percent to 6.7 percent. Most of the increase stemmed from higher product warranty costs in manufactured housing as a result of higher volume and increased focus on customer service, in addition to higher marketing and sales promotion costs for recreational vehicles. General and administrative expenses declined ten percent to $54.3 million, and also decreased as a percentage of sales from 7.9 percent to 7.6 percent. The reduction was primarily due to lower employee compensation and benefits, reflecting reduced management incentive compensation which is based on profitability. Non-operating income increased 26 percent and included $2.0 million of net interest income which was up 33 percent from the prior year. The increase primarily reflects the effect of higher yields on temporary investments during the current period. The combined Federal and state income tax rate was 40.4 percent compared to 40.3 percent for last year's first quarter. Liquidity and Capital Resources The Company generally relies upon internally generated cash flows to fund capital expenditures and to satisfy working capital needs for its manufacturing operations. Positive cash flows from operations in the first quarter improved the Company's liquidity as cash and investments rose $46.1 million to $244.3 million. Cash outflows during the July quarter included capital expenditures of $8.6 million and the quarterly shareholder dividend, which was increased from a per share rate of 14 cents to 15 cents, of $6.9 million. Cash outflows affecting operations included $11.9 million expended for the purchase of Company-owned life insurance (COLI) used to fund non-qualified benefit plans. The increase in cash surrender value of the COLI, which is included in "other assets" on the balance sheet, substantially offset the insurance premiums paid. Fleetwood Credit Corp., the Company's RV finance subsidiary, secured cash for lending operations primarily through the issuance of commercial paper and the sale to investors of securities backed by retail sales contracts on Fleetwood recreational vehicles. On July 31, 1995, Fleetwood Credit pre-sold $150 million of asset-backed securities which will become fully funded in September 1995. As of July 31, 1995, the sale was funded to the extent of $87.7 million. The finance subsidiary used the commercial paper market and long-term debt to fund both its wholesale receivables, which are prime rate based, and its fixed- rate retail installment sales contract receivables prior to their sale in the asset-backed securities market. To protect the value of the retail installment sale contract portfolio from unfavorable changes in interest rates, the finance subsidiary sometimes enters into interest rate exchange agreements or other interest rate hedging transactions during the period between origination of the receivables and their sale in the asset-backed securities market. During the July quarter, a hedging arrangement was in effect in the form of a forward sale agreement of U.S. Treasury securities. This agreement was closed out concurrent with the sale of retail receivables on July 31, 1995, and no other agreements were outstanding at the end of the quarter. A loss of $4.2 million was incurred on the aforementioned forward sale agreement, but this was offset by a corresponding increase in the value of retail receivables. The finance subsidiary maintains a committed revolving credit facility with a number of major banks to support the issuance of commercial paper. At July 30, 1995, these facilities totaled $350.0 million, none of which is being used. PART II OTHER INFORMATION There are no other items to be reported or exhibits to be filed. 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 Financial Vice President and Chief Financial Officer September 7, 1995 FLEETWOOD ENTERPRISES, INC. CONSOLIDATED FINANCIAL INFORMATION FINANCIAL DATA SCHEDULE [SROS] NYSE [SROS] PSE EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS APR-28-1996 JUL-30-1995 44,779 199,518 484,809 22,023 170,052 0 415,780 150,438 1,290,889 0 0 46,062 0 0 578,277 1,290,889 704,717 718,566 573,331 573,331 112 1,397 7,461 38,138 15,427 22,798 0 0 0 22,798 .49 .49 Amounts for current assets and current liabilities are not shown since balance sheet is presented in nonclassified format.
-----END PRIVACY-ENHANCED MESSAGE-----