8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported): July 23, 2004

CHAMPION ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Michigan	1-9751	38-2743168
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2701 Cambridge Court, Suite 300
Auburn Hills, Michigan 48326

(Address of principal executive offices)

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

N/A

(Former name or former address, if changed since last report.)

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits
	Item 12. Results of Operations and Financial Condition
SIGNATURES
INDEX TO EXHIBITS
Press Release dated July 23, 2004

Item 7. Financial Statements and Exhibits.

     (c) Exhibits.

Exhibit
Number
99.1	Press Release dated July 23, 2004.

Item 12. Results of Operations and Financial Condition.

     On July 23, 2004, Champion Enterprises, Inc. issued a press release announcing its financial results for the second quarter ended July 3, 2004. This press release is being furnished pursuant to Item 12 of Form 8-K. The full text of the press release is filed as Exhibit 99.1 to this Report and is incorporated herein by reference.

     The registrant’s press release issued July 23, 2004 contains a table that reconciles net income (loss) includes a subtotal of pretax internal operating results, which excludes a mark-to-market credit (charge) for stock warrant, debt retirement gain (loss), income tax benefit (expense), and income (loss) from discontinued operations. Management believes that pretax internal operating results, which exclude non-cash capital structure related items, income taxes, and discontinued operations, is useful in understanding the results of its core operations of producing and selling manufactured housing.

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 hereunto duly authorized.

CHAMPION ENTERPRISES, INC.
 

/s/ Phyllis A. Knight  

Phyllis A. Knight, 

Executive Vice President and Chief Financial Officer

Date: July 23, 2004

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release dated July 23, 2004

EX-99.1

Exhibit 99.1

Investor and Media Contacts:
Phyllis A. Knight	Colleen T. Bauman
Chief Financial Officer	Investor Relations
(248) 340-9090	(248) 340-7731

CHAMPION ENTERPRISES, INC.
REPORTS PROFITABLE SECOND QUARTER

Net income of $0.30 per diluted share reported

          Auburn Hills, Mich., July 23, 2004—Champion Enterprises, Inc. (NYSE: CHB), one of the nation’s leading housing manufacturers, today reported results for its second quarter and six months ended July 3, 2004. For the quarter, net income was $23.4 million, or $0.30 per diluted share, compared to $3.0 million, or $0.04 per diluted share, in the second quarter of 2003. Revenues for the quarter were $306 million, up from $296 million in the comparable 2003 period. Champion’s improved results reflect the company’s focus on strengthening operations in both its manufacturing and retail segments despite difficult market conditions in certain geographic regions. The current quarter’s results were helped by a $12 million income tax benefit and a $3.9 million credit for valuation of common stock warrants. Comparisons of year-over-year net sales, income from continuing operations and net income are shown below:

	Three months ended				Six months ended
	July 3,		June 28,		July 3,		June 28,
(In millions, except EPS)	2004		2003		2004		2003
Net sales	$	306.1	$	295.7	$	543.2	$	538.5
Income (loss)-cont. operations	$	23.5	$	6.0	$	8.0	($	8.1	)
Per diluted share	$	0.30	$	0.09	$	0.10	($	0.22	)
Net income (loss)	$	23.4	$	3.0	$	9.1	($	18.4	)
Per diluted share	$	0.30	$	0.04	$	0.11	($	0.40	)

2004 Second Quarter Highlights

• Pretax internal operating results improved year-over-year by $8.5 million for the quarter and $25.2 million year-to-date;

• For the second quarter, a 6.5% margin was reported by the manufacturing segment on net sales of $269 million, representing the highest profitability level since the third quarter of 2001;

• Retail operations earned segment income of $2.0 million — the first profitable quarter in four years and enough to bring year-to-date segment income to $1.8 million;

• Modular homes sold increased 32% and now represent more than 13% of Champion’s total manufacturing home shipments;

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• Based on the most recently available MHI data, Champion’s HUD Code wholesale market share expanded for the April through May period to 16.2%, bringing year-to-date market share to 15.1% from 14.3% at the end of March; and

• During the quarter, operations generated $2.3 million in cash flow and debt was further reduced through the repurchase of $10.9 million of Senior Notes due 2009 for $10.4 million of cash.

Management Comments and Outlook

          Al Koch, Chairman, President and Chief Executive Officer, commented, “Champion’s manufacturing and retail operations continued to make meaningful progress to drive better results. We are encouraged by improving conditions in many of our key markets. Champion’s broad geographic footprint and range of product offerings are real strengths when our industry recovery begins to take hold. We again saw significant sales growth in our modular business, which is a positive trend for our company.

          “Based on shipments reported to date, we expect HUD Code industry wholesale shipments in 2004 will most likely trend toward the low end of our original forecast, which was 135,000 homes. We remain optimistic, however, that a stronger consumer financing environment will begin to emerge later this year and that repossessions will continue to trend downward. Based on Champion’s results in the first half of this year, our goal of achieving profitability for 2004, excluding possible capital structure related items, appears likely to be reached despite relatively flat HUD Code industry shipments. Champion’s improved operations and balance sheet position us well for when the industry rebounds.” Koch concluded.

Operating Results

          Below is a summary of Champion’s pretax internal operating results, which management regards as a useful measure in evaluating its core operations of producing and selling manufactured housing because non-cash capital structure related items and income taxes are excluded:

	Three months ended									Six months ended
	July 3,			June 28,			Better/			July 3,			June 28,			Better/
(In millions)	2004			2003			(worse)			2004			2003			(worse)
Manufacturing segment income	$	17.6		$	13.0		$	4.6		$	22.2		$	6.2		$	16.0
Retail segment income (loss)		2.0			(0.7	)		2.7			1.8			(3.4	)		5.2
General corporate expenses		(6.8	)		(6.4	)		(0.4	)		(12.8	)		(13.7	)		0.9
Intercompany eliminations		(0.5	)		0.1			(0.6	)		(0.7	)		0.6			(1.3	)
Interest expense, net		(4.6	)		(6.8	)		2.2			(9.6	)		(14.0	)		4.4
Pretax internal operating results		7.7			(0.8	)		8.5			0.9			(24.3	)		25.2
Mark-to-market credit (charge) for stock warrants		3.9			—			3.9			(1.2	)		—			(1.2	)
Debt retirement gain (loss)		0.5			7.1			(6.6	)		(2.8	)		13.8			(16.6	)
Income tax (expense) benefits		11.4			(0.3	)		11.7			11.1			2.4			8.7
Income (loss)-cont. operations		23.5			6.0			17.5			8.0			(8.1	)		16.1
Income (loss)-discont. operations		(0.1	)		(3.0	)		2.9			1.1			(10.3	)		11.4
Net income	$	23.4		$	3.0		$	20.4		$	9.1		($	18.4	)	$	27.5

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Manufacturing- In the second quarter of 2004, manufacturing net sales increased slightly to $269 million from $263 million in the year earlier period and segment income rose to 6.5% of revenues from 4.9% a year ago. The manufacturing segment had earnings before interest, income taxes and general corporate expenses of $17.6 million for the second quarter of the year, which included $0.8 million of costs related to closed manufacturing facilities. During the quarter a homebuilding facility in Alabama was consolidated at minimal closing costs. At the end of the second quarter of 2004, the company had unfilled manufacturing orders totaling $90 million, an 88% improvement from $48 million a year earlier when five additional manufacturing facilities were operating.

Retail- For the quarter ended July 3, 2004, Champion’s retail operations reported $2.0 million of segment income, consisting of $1.6 million at ongoing locations and $0.4 million at closed locations, which included a $0.6 million gain on the sale of a sales center. The quarter’s results were significantly improved from the loss of $0.7 million in the second quarter of 2003. Revenues for the quarter were off 5% year-over-year although the company was operating an average of 33% fewer locations. The average new home retail sales price increased 27% to $95,500 and the average number of homes sold per store per month rose 13% for new homes and 22% for total homes.

Other- Results in the second quarter of 2004 included a mark-to-market credit of $3.9 million related to the company’s outstanding common stock warrants for 2.2 million shares as a result of the decrease in Champion’s common stock price during the quarter. Year-to-date, the company recorded a net charge of $1.2 million to value these warrants. A gain on debt retirement of $0.5 million was recorded in this year’s second quarter and a net loss of $2.8 million was recorded in the year-to-date period. Net interest expense decreased 33% versus the year earlier quarter as a result of debt reduction completed in 2003 and 2004. A $12 million income tax benefit was recorded in this year’s second quarter as a result of decreasing the allowance for tax adjustments. Income from discontinued operations of $1.1 million for the year-to-date period ended July 3, 2004 resulted from the settlement of contractual obligations.

Financial Position

          At the end of June 2004, cash and cash equivalents totaled $116 million and long-term debt was $202 million. Net debt (total debt less cash and cash equivalents) was $100 million at quarter end, an improvement from $114 million at the start of the year and from $198 million a year ago. During the quarter, the company generated $2.3 million in cash flow from continuing operations and used $10.4 million to repurchase $10.9 million of Senior Notes. Cash flow from operations in the second quarter of 2003 totaled $61.9 million, which included a $60.7 million income tax refund.

Conference Call

          Koch and other executive officers of the company will review results in a conference call for investors and analysts beginning at 11:00 am eastern time today. To participate in the conference call, please call the number below:

Dial-in #:	(866) 800-8648
Pass code #:	97792623

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          A replay of the conference call will be available after 1:00 pm eastern time today through midnight on Friday, July 30, 2004. The recording may be heard by dialing the number below:

Dial-in #:	(888) 286-8010
Pass code #:	61880346

About Champion

          Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is one of the industry’s leading manufacturers and has produced over 1.6 million homes since the company was founded. The company operates 29 homebuilding facilities in 14 states and two Canadian provinces and 79 retail locations in 21 states. Independent retailers, including more than 800 Champion Home Center locations, and approximately 500 builders and developers also sell Champion-built homes. Further information can be found at the company’s website, www.championhomes.net.

Forward Looking Statements

          This news release contains certain statements, including statements regarding industry shipments, consumer financing, and repossessions, and statements regarding the company’s financial position, expected results, improved operations, balance sheet strength and unfilled manufacturing orders, that 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 other SEC filings, in each case under the section entitled “Forward Looking Statements, and those discussions regarding risk factors are incorporated herein by reference.

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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(Dollars and weighted shares in thousands, except per share amounts)

	Three Months Ended									Six Months Ended
	July 3,			June 28,			%			July 3,			June 28,			%
	2004			2003			Change			2004			2003			Change
Net sales:
Manufacturing	$	269,083		$	263,067			2	%	$	478,939		$	472,264			1	%
Retail		63,923			67,040			(5	%)		113,752			128,161			(11	%)
Less: intercompany		(26,900	)		(34,454	)					(49,500	)		(61,975	)
Total net sales		306,106			295,653			4	%		543,191			538,450			1	%
Cost of sales		252,495			246,471			2	%		454,979			456,927			0	%
Gross margin		53,611			49,182			9	%		88,212			81,523			8	%
Selling, general and administrative expenses		41,357			43,219			(4	%)		77,780			91,882			(15	%)
Mark-to-market (credit) charge for common stock warrants (1)		(3,900	)		—						1,200			—
(Gain) loss on debt retirement (2)		(450	)		(7,130	)					2,776			(13,833	)
Operating income		16,604			13,093			27	%		6,456			3,474			86	%
Interest expense, net		4,552			6,840			(33	%)		9,583			13,977			(31	%)
Income (loss) from continuing operations before income taxes (3)		12,052			6,253			93	%		(3,127	)		(10,503	)		70	%
Income tax expense (benefits) (4)		(11,400	)		300						(11,100	)		(2,400	)
Income (loss) from continuing operations		23,452			5,953			294	%		7,973			(8,103	)		198	%
Income (loss) from discontinued operations net of taxes (5)		(20	)		(2,926	)					1,136			(10,295	)
Net income (loss)	$	23,432		$	3,027			674	%	$	9,109		$	(18,398	)		150	%
Income (loss) from continuing operations	$	23,452		$	5,953					$	7,973		$	(8,103	)
Less: preferred stock dividends		(259	)		(169	)					(419	)		(455	)
Less: amount allocated to participating securities (6)		(1,618	)		(217	)					(489	)		—
Less: charge to retained earnings for induced preferred stock conversion (1)		—			—						—			(3,488	)
Income (loss) from continuing operations available to common shareholders	$	21,575		$	5,567			288	%	$	7,065		$	(12,046	)		159	%
Basic income (loss) per share (6):
Income (loss) from continuing operations	$	0.31		$	0.10			210	%	$	0.10		$	(0.22	)		145	%
Income (loss) from discontinued operations		—			(0.05	)					0.02			(0.18	)
Net income (loss)	$	0.31		$	0.05			520	%	$	0.12		$	(0.40	)		130	%
Weighted shares for basic EPS		70,657			56,757						69,380			55,641
Diluted income (loss) per share (6):
Income (loss) from continuing operations	$	0.30		$	0.09			233	%	$	0.10		$	(0.22	)		145	%
Income (loss) from discontinued operations		—			(0.05	)					0.01			(0.18	)
Net income (loss)	$	0.30		$	0.04			650	%	$	0.11		$	(0.40	)		128	%
Weighted shares for diluted EPS		72,253			61,624						71,152			55,641

See accompanying Notes to Financial Information.

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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)

	Unaudited		Unaudited				Unaudited
	July 3,		April 3,		January 3,		June 28,
Assets	2004		2004		2004		2003
Cash and cash equivalents	$	115,868	$	117,580	$	145,868	$	129,436
Restricted cash		631		6,631		8,341		664
Accounts receivable, trade		30,673		32,153		13,773		46,090
Inventories		119,104		112,467		98,824		120,424
Current assets of discontinued operations (5)		—		—		—		19,196
Other current assets		19,381		18,047		18,325		16,149
Total current assets		285,657		286,878		285,131		331,959
Property, plant and equipment, net		93,524		94,564		95,821		119,120
Goodwill		126,516		126,522		126,537		160,944
Non-current assets of discontinued operations (5)		15		22		68		4,836
Other non-current assets		19,274		19,949		20,743		23,103
	$	524,986	$	527,935	$	528,300	$	639,962
Liabilities, Redeemable Convertible Preferred
Stock and Shareholders’ Equity
Floor plan payable	$	14,058	$	13,597	$	14,123	$	19,453
Accounts payable		33,806		33,278		26,724		45,333
Current liabilities of discontinued operations (5)		190		1,652		3,173		11,563
Other accrued liabilities		155,506		159,508		167,624		167,640
Total current liabilities		203,560		208,035		211,644		243,989
Long-term debt (2)		201,627		212,631		245,468		290,652
Other long-term liabilities		36,816		52,777		47,510		53,140
Redeemable convertible preferred stock (1)		20,750		20,750		8,689		13,568
Shareholders’ equity		62,233		33,742		14,989		38,613
	$	524,986	$	527,935	$	528,300	$	639,962

See accompanying Notes to Financial Information.

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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED CASH FLOW STATEMENTS (UNAUDITED)
(In thousands)

	Three Months Ended						Six Months Ended
	July 3,			June 28,			July 3,			June 28,
	2004			2003			2004			2003
Income (loss) from continuing operations	$	23,452		$	5,953		$	7,973		$	(8,103	)
Adjustments:
Depreciation and amortization		2,968			4,103			5,953			8,376
Mark-to-market (credit) charge for common stock warrants (1)		(3,900	)		—			1,200			—
(Gain) loss on debt retirement (2)		(450	)		(7,130	)		2,776			(13,833	)
Gains on fixed asset sales		(688	)		(844	)		(713	)		(1,834	)
Changes in cash collateral deposits (7)		—			—			—			9,600
Refundable income taxes		99			60,749			376			60,749
Changes in working capital		(4,629	)		(1,179	)		(30,098	)		(18,271	)
Changes in accrued liabilities		(3,072	)		(3,507	)		(10,485	)		(8,597	)
Decrease in allow. for tax adjustments (4)		(12,000	)		—			(12,000	)		—
Other		496			3,723			2,291			5,218
Cash provided by (used for) continuing operations		2,276			61,868			(32,727	)		33,305
Income (loss) from discontinued operations (5)		(20	)		(2,926	)		1,136			(10,295	)
(Increase) decrease in net assets of discontinued operations (5)		(1,462	)		8,824			(2,983	)		10,280
Cash provided by (used for) discontinued operations		(1,482	)		5,898			(1,847	)		(15	)
Additions to property, plant and equipment		(2,250	)		(1,855	)		(4,130	)		(3,055	)
Acquisition related deferred purchase price payments		—			(1,382	)		—			(3,882	)
Proceeds on disposal of fixed assets		1,017			1,234			1,240			5,076
Other		(51	)		(141	)		(109	)		(343	)
Cash used for investing activities		(1,284	)		(2,144	)		(2,999	)		(2,204	)
Increase (decrease) in floor plan payable, net		461			2,276			(65	)		2,306
Repayment of industrial revenue bond and other debt		(141	)		(180	)		(6,029	)		(326	)
Purchase of Senior Notes (2)		(10,395	)		(15,276	)		(10,395	)		(35,830	)
Decrease in restricted cash (7)		6,000			—			7,710			50,229
Preferred stock issued, net		—			—			12,000			—
Increase in short-term borrowings		—			7,000			—			7,000
Common stock issued, net		2,901			—			4,512			300
Dividends paid on preferred stock		(48	)		(286	)		(160	)		(768	)
Deferred financing costs		—			(159	)		—			(1,942	)
Cash provided by (used for) financing activities		(1,222	)		(6,625	)		7,573			20,969
Increase (decrease) in cash and cash equivalents		(1,712	)		58,997			(30,000	)		52,055
Cash and cash equivalents at beginning of period		117,580			70,439			145,868			77,381
Cash and cash equivalents at end of period	$	115,868		$	129,436		$	115,868		$	129,436

See accompanying Notes to Financial Information.

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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL INFORMATION (UNAUDITED)

(1) As a result of fluctuations in the company’s common stock price, during the three and six months ended July 3, 2004 Champion recorded a $3.9 million credit and a $1.2 million net charge, respectively, for the change in estimated fair value of outstanding common stock warrants for 2.2 million shares issued in connection with the Series C preferred stock. During the first quarter of 2004, the preferred shareholder exercised its right to purchase $12 million of Series B-2 preferred stock. During the first quarter of 2003, the company agreed to accelerate the reduction in the conversion price for its Series C preferred stock. This amendment to the preferred stock terms was accounted for as an induced conversion, resulting in a charge directly to retained earnings of $3.5 million and an increase in the loss per share of $0.06 per diluted share.

(2) In the quarter ended July 3, 2004, the company recorded a gain of $0.5 million and used $10.4 million of cash to repurchase $10.9 million of Senior Notes due 2009. In the year-to-date period of 2004, the company also issued 3.9 million shares of its common stock in exchange for $27 million of its Senior Notes due 2007 and 2009, resulting in a pretax loss of $3.2 million. In the second quarter of 2003, the company recorded pretax gains of $7.1 million resulting from the purchase and retirement of $22.7 million of its Senior Notes for total cash payments of $15.3 million. In the year-to-date period of 2003, the company recorded pretax gains of $13.8 million resulting from the purchase and retirement of $50.5 million of Senior Notes for total payments of $35.8 million. As of the dates below, long-term debt consisted of the following (in thousands):

	July 3,		April 3,		Jan. 3,		June 28,		Reduction
	2004		2004		2004		2003		3 Months			6 Months			12 Months
Senior Notes due 2007	$	97,510	$	97,510	$	111,010	$	135,010	$	—		$	(13,500	)	$	(37,500	)
Senior Notes due 2009		89,273		100,215		113,715		134,450		(10,942	)		(24,442	)		(45,177	)
Industrial revenue bonds		12,430		12,430		18,145		18,145		—			(5,715	)		(5,715	)
Other		2,414		2,476		2,598		3,047		(62	)		(184	)		(633	)
	$	201,627	$	212,631	$	245,468	$	290,652	$	(11,004	)	$	(43,841	)	$	(89,025	)

(3) The company evaluates the performance of its manufacturing and retail segments based on earnings (loss) before interest, income taxes and general corporate expenses. A reconciliation of income (loss) from continuing operations before income taxes for the periods presented follows (dollars in thousands):

	July 3,			Related			June 28,			Related			%
Three months ended:	2004			Sales			2003			Sales			Change
Manufacturing segment income	$	17,567			6.5	%	$	13,003			4.9	%		35	%
Retail segment income (loss)		2,033			3.2	%		(737	)		(1.1	%)		376	%
General corporate expenses		(6,846	)					(6,449	)					(6	%)
Mark-to-market credit for stock warrants		3,900						—
Gain on debt retirement		450						7,130
Intercompany eliminations		(500	)					146
Interest expense, net		(4,552	)					(6,840	)					33	%
Income from continuing operations before income taxes	$	12,052			3.9	%	$	6,253			2.1	%		93	%

	July 3,			Related			June 28,			Related			%
Six months ended:	2004			Sales			2003			Sales			Change
Manufacturing segment income	$	22,221			4.6	%	$	6,157			1.3	%		261	%
Retail segment income (loss)		1,780			1.6	%		(3,420	)		(2.7	%)		152	%
General corporate expenses		(12,869	)					(13,721	)					6	%
Mark-to-market charge for stock warrants		(1,200	)					—
(Loss) gain on debt retirement		(2,776	)					13,833
Intercompany eliminations		(700	)					625
Interest expense, net		(9,583	)					(13,977	)					31	%
Loss from continuing operations before income taxes	$	(3,127	)		(0.6	%)	$	(10,503	)		(2.0	%)		70	%

For the quarter ended July 3, 2004, manufacturing segment results included costs of $0.8 million and retail segment results included income of $0.4 million related to closed locations. Retail segment income at closed locations included a $0.6 million gain from the sale of an idle sales center. For the six months ended July 3, 2004, manufacturing and retail segment income (loss) included net costs of $1.9 million and $0.1 million, respectively, related to closed locations.

(4) The effective tax rates for the periods presented differ from the 35% federal statutory rate because the company has a 100% deferred tax asset valuation allowance. In addition, the company is in a federal tax loss carryforward position and tax benefits can only be recorded to the extent of current taxable income. The income tax benefit in 2004 included a $12 million decrease in the allowance for tax adjustments, partially offset by state and foreign income taxes. The income tax benefit for 2003 included $3.0 million recorded to reduce the deferred tax asset valuation allowance following the completion of the company’s 2002 federal income tax return, which resulted in a larger refund than previously estimated, partially offset by state and foreign income taxes.

(5) In 2003 the company exited its consumer finance business, HomePride Finance Corp. Related amounts are presented as discontinued operations. In the year-to-date period of 2004, the company recorded income from discontinued operations due to the settlement of contractual obligations.

(6) EPS for periods reported reflect the adoption of EITF 03-06, which requires the use of the two-class method for enterprises with participating securities. The company’s participating securities consist of its convertible preferred stock and common stock warrants, which may participate in dividends paid on common stock pursuant to the terms of the securities. The company has no plans to pay dividends on its common stock in the near term.

(7) During the first quarter of 2003, the company finalized a $75 million revolving credit facility, which was used to issue letters of credit to replace cash collateral and resulted in the release of $49.8 million of restricted cash and $9.6 million of cash deposits. At the end of June 2004, the company had $59.8 million of letters of credit issued and no borrowings outstanding under this facility.

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CHB/ 9
CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
OTHER STATISTICAL INFORMATION (UNAUDITED)

	Three Months Ended									Six Months Ended
	July 3,			June 28,			%			July 3,			June 28,			%
	2004			2003			Change			2004			2003			Change
MANUFACTURING
Homes sold
HUD Code
Multi-section		4,384			5,165			(15	%)		7,995			9,475			(16	%)
Single-section		880			874			1	%		1,391			1,577			(12	%)
Total HUD Code		5,264			6,039			(13	%)		9,386			11,052			(15	%)
Modular		838			636			32	%		1,532			1,085			41	%
Canadian		252			250			1	%		441			459			(4	%)
Total homes sold		6,354			6,925			(8	%)		11,359			12,596			(10	%)
Less: intercompany		556			838			(34	%)		1,002			1,568			(36	%)
Homes sold to independent retailers/builders		5,798			6,087			(5	%)		10,357			11,028			(6	%)
Total floors sold		12,037			13,131			(8	%)		21,761			23,849			(9	%)
Floors sold per average plant		408			375			9	%		732			667			10	%
Multi-section mix		83	%		85	%					85	%		84	%
Average home prices
Total	$	40,800		$	36,500			12	%	$	40,700		$	36,100			13	%
HUD Code	$	38,400								$	38,400
Modular	$	53,300								$	52,500
Manufacturing facilities at period end		29			34			(15	%)		29			34			(15	%)
RETAIL
Homes sold
New homes		623			821			(24	%)		1,105			1,598			(31	%)
Pre-owned homes		287			292			(2	%)		591			600			(2	%)
Total homes sold		910			1,113			(18	%)		1,696			2,198			(23	%)
% Champion-produced new homes sold		89	%		93	%					90	%		95	%
New multi-section mix		90	%		85	%					91	%		84	%
Average number of new homes in inventory per sales center at period end		13.3			14.7			(10	%)		13.3			14.7			(10	%)
Average new home retail price	$	95,500		$	75,400			27	%	$	94,600		$	73,900			28	%
Average number of new homes sold per sales center per month		2.6			2.3			13	%		2.3			2.3			0	%
Average number of total homes sold per sales center per month		3.9			3.2			22	%		3.6			3.1			16	%
Sales centers at period end		79			115			(31	%)		79			115			(31	%)
CONSOLIDATED AT PERIOD END (in thousands)
Contingent repurchase obligations (est.)	$	260,000		$	260,000					$	260,000		$	260,000
Champion-produced field inventories (est.)	$	510,000		$	580,000			(12	%)	$	510,000		$	580,000			(12	%)
Shares issued and outstanding		71,059			56,777			25	%		71,059			56,777			25	%

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