-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U6vsrY+Lt6o6PfAPRw08USWKhDMrH+xXoyGIao3Ex972T1HTife6dy3An0bzp54y gHNq0XUBo+ckmF+TdM92pw== 0000314132-98-000011.txt : 19980304 0000314132-98-000011.hdr.sgml : 19980304 ACCESSION NUMBER: 0000314132-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980125 FILED AS OF DATE: 19980302 SROS: NYSE SROS: PCX 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: SEC FILE NUMBER: 001-07699 FILM NUMBER: 98553495 BUSINESS ADDRESS: STREET 1: 3125 MYERS ST STREET 2: P O BOX 7638 CITY: RIVERSIDE STATE: CA ZIP: 92523 BUSINESS PHONE: 9093513500 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 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) 13 13 39 39 Weeks Weeks Weeks Weeks Ended Ended Ended Ended Jan. 25, Jan. 26, Jan. 25, Jan. 26, 1998 1997 1998 1997 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 ======= ======= ======== ========
Basic Diluted Basic Diluted Basic Diluted Basic Diluted 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 ====== ====== ====== ======
See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. CONSOLIDATED BALANCE SHEETS (CONDENSED) (Amounts in thousands) ASSETS January 25, April 27, 1998 1997 (Unaudited) 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 ========= =======
See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED) (Amounts in thousands) (UNAUDITED) Thirty-nine Thirty-nine Weeks Ended Weeks Ended January 25, January 26, 1998 1997 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
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 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.
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): 13 Weeks 13 Weeks 39 Weeks 39 Weeks Ended Ended Ended Ended Jan. 25, Jan. 26, Jan. 25, Jan. 26, 1998 1997 1998 1997 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.
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): 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 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 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.
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. 13 Weeks Ended 39 Weeks Ended January 25, 1998 January 25, 1998 ---------------- ---------------- Increase % Increase % (Decrease) Change (Decrease) Change -------- ------ -------- ----- 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% ====== ==== ======= ====
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 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS APR-26-1998 JAN-25-1998 21,805 146,121 190,092 0 162,512 0 459,987 183,141 956,341 0 0 36,475 0 0 488,223 956,341 2,208,163 2,208,163 1,784,634 2,098,746 348 0 2,677 130,870 50,655 80,215 0 0 0 80,215 2.23 2.19 Amounts for current assets and current liabilities are not shown since balance sheet is presented in nonclassified format.
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