Champion Enterprises 8-K Champion Enterprises Reports 8 Percent Increase in Revenues and $44 Million Increase in Cash from Operations for the Fourth Quarter of 2007

Investor Contact:
Phyllis Knight
Executive Vice President and CFO
(248) 614-8200

or

Media Contact:
Christine Fisher
pushtwentytwo
(248) 335-9500 ext. 30
cfisher@pushtwentytwo.com

Champion Enterprises Reports 8 Percent Increase in Revenues and $44 Million
Increase in Cash from Operations for the Fourth Quarter of 2007

Earn Out Accrual on Strong Performance of International Segment Acquisition, Debt and Restructuring
Charges Drive Net Loss of $0.08 Per Diluted Share for the Quarter

TROY, Mich., Feb. 19, 2008– Champion Enterprises, Inc. (NYSE: CHB), a leader in factory-built construction, today announced results for its fourth quarter and fiscal year ended Dec. 29, 2007. Revenues for the quarter increased 8.2 percent to $325.6 million compared to $300.9 million for the fourth quarter of 2006. The Company reported a net loss for the quarter of $6.0 million, or $0.08 per diluted share, compared to net income of $3.6 million, or $0.05 per diluted share, for the same period of the prior year.

The loss before income taxes in the fourth quarter of 2007 included the following items: $6.4 million of expense recorded in connection with the earn out provisions of the 2006 acquisition of Calsafe Group (Holdings) Ltd., loss on debt retirement of $4.5 million as a result of the Company’s previously announced changes to its debt structure, and charges totaling $3.6 million related to the previously announced closure of a manufacturing facility. Pre-tax income for the fourth quarter of 2006 was reduced by a $0.4 million loss on debt retirement.

Revenues for the full year 2007 decreased 6.7 percent to $1.27 billion compared to $1.36 billion reported for 2006. Net income for 2007 totaled $7.2 million, or $0.09 per diluted share, compared to net income of $138.3 million, or $1.78 per diluted share, in 2006. Net income in 2006 included $101.9 million of income from the reversal of the previously recorded deferred tax valuation allowance and $4.7 million of pre-tax gains from property sales.

“While our earnings continue to be pressured by deteriorating conditions in the U.S. housing markets, our efforts to diversify and build a strong international platform continue to mitigate these pressures” stated William Griffiths, chairman, president and chief executive officer of Champion Enterprises, Inc. “Our non-U.S. revenues increased 135 percent in 2007, contributing over 30 percent of our total revenues and strong cash returns.

755 West Big Beaver Road, Suite 1000 | Troy, Michigan 48084
(248) 614-8200 | www.championhomes.com

Champion Enterprises Reports 8 Percent Increase in Revenues and $44 million
Increase in Cash from Operations for the Fourth Quarter of 2007
Page 2

“Thanks to the focused work of our operations both in North America and internationally, our free cash flow improved over 60 percent to $69 million in 2007 despite a decline in reported earnings for the year. As a result our cash position continued to improve, ending 2007 at $135 million. This, coupled with the successful refinancing we completed during the fourth quarter, leaves Champion well positioned to continue to execute its growth and diversification strategies.”

North American Manufacturing Segment

• Manufacturing segment net sales for the fourth quarter decreased 10.7 percent to $224.0 million compared to $250.8 million in the same period of the prior year.

• Revenues from the sale of modular homes in the quarter totaled $71 million, representing approximately 32 percent of manufacturing segment sales, down from $86 million in the fourth quarter of 2006.

• Manufacturing segment income for the fourth quarter decreased to $3.4 million compared to $15.0 million in the fourth quarter of 2006. Segment income for the quarter ended Dec. 29, 2007 was reduced by $3.6 million of pretax restructuring charges related to the closure of the Company’s manufacturing facility in Alabama, including a pretax non-cash fixed asset impairment charge of $1.8 million.

• Manufacturing segment backlogs ended the year at $56 million, inclusive of the previously announced acquisition of western Canada based SRI Homes (SRI), compared to $36 million at the end of 2006 and $64 million at the end of the third quarter. Backlogs in the U.S. increased 18 percent as compared to the end of 2006.

International Manufacturing Segment

• International segment sales grew 182 percent to $92.1 million for the quarter, up from $32.6 million in the same period of the prior year, and increased 8 percent compared to $85.3 million last quarter. For the year, international segment revenues totaled $280.8 million, a substantial increase compared to sales of $90.7 million reported for the approximately nine months in 2006.

• Segment income for the fourth quarter of 2007, before expenses related to earn out provisions, totaled $9.9 million compared to $2.5 million in the fourth quarter of 2006 and $6.4 million in the third quarter. Segment income for the fourth quarter of 2007 was reduced by $6.4 million as a result of earn out provisions, resulting in reported segment income of $3.4 million for the quarter.

• Segment margins before expenses related to earn out provisions for the quarter were 10.7 percent compared to 7.6 percent in the same period last year and 7.5 percent last quarter, and for the year were 8.5 percent compared to 6.2 percent last year.

• International segment order backlogs remain strong, with firm contracts and orders pending contracts under framework agreements totaling approximately $250 million at the end of the year, compared to approximately $225 million at the end of 2006 and approximately $275 million at the end of the third quarter.

Champion Enterprises Reports 8 Percent Increase in Revenues and $44 million
Increase in Cash from Operations for the Fourth Quarter of 2007
Page 3

Retail Segment

• The retail segment reported fourth quarter 2007 revenues of $15.7 million compared to $23.7 million for the same period last year, a reflection of continuing tightness in California housing markets.

• The retail segment reported a loss of $0.3 million for the quarter, down from $1.3 million of segment income in the fourth quarter of 2006.

Other Highlights

• As previously announced, during the fourth quarter of 2007 the Company issued $180 million of 2.75 percent Convertible Senior Notes due 2037, repurchased $75.6 million of its 7 5/8 percent Senior Notes due 2009 for cash totaling $79.7 million and repaid $14.5 million of its term loan due 2012, resulting in a pretax loss on debt retirement of $4.5 million.

• Cash flow from operations totaled $44.3 million for the quarter ended Dec. 29, 2007 compared to $0.5 million for the same period last year and totaled $79.5 million for the full year compared to $59.9 million in the prior year.

• Cash and cash equivalents increased to $135.4 million as of Dec. 29, 2007 compared to $111.3 million at the end of the third quarter of 2007 and $70.2 million at the end of last year. During the quarter, the Company increased its cash position by approximately $78 million as a result of the aforementioned changes to its debt structure, and used $95.4 million of cash to complete the SRI acquisition.

• Available U.S. federal tax loss carry-forwards increased in 2007 and now total approximately $233 million at Dec. 29, 2007.

In conclusion Griffiths stated, “We are upbeat about 2008. Even though predictions for the U.S. housing market are negative, our non-U.S. operations remain strong, and the addition of SRI will be accretive to our results. Further, we continue to believe that conditions in the U.S. favor an eventual turn in the traditional manufactured housing business. When this market improves, our operations are well positioned to generate even stronger cash returns as backlogs and capacity utilization increase.”

Fourth Quarter 2007 Conference Call

Champion Enterprises will host a conference call on Wednesday, Feb. 20, 2008 at 11 a.m. EST to discuss these results and current business trends. To listen to the call, please call (800) 591-6942 for domestic callers or (617) 614-4909 for international callers. The passcode is 18460456. The call may also be heard live at www.championhomes.com under the “Investors” link.

Champion Enterprises Reports 8 Percent Increase in Revenues and $44 million
Increase in Cash from Operations for the Fourth Quarter of 2007
Page 4

A telephone replay of the call will be available approximately one hour after the call’s conclusion through Wednesday, March 5, 2008. To access the telephone replay, please call (888) 286-8010 for domestic callers or (617) 801-6888 for international callers. The passcode is 78176789. The web-cast replay will be available on the Company’s web site for 90 days under the “Investors” link.

About Champion

Troy, Michigan-based Champion Enterprises, Inc., a leader in factory-built construction, operates 33 manufacturing facilities in North America and the United Kingdom working with independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. For more information, please visit www.championhomes.com.

Forward-Looking Statements

This news release contains certain statements, including statements regarding backlogs and pending orders, future market conditions, areas of management focus, the execution of Champion’s growth and diversification strategy, and cash flow projections, each of which could be construed to be forward-looking statements within the meaning of the Securities 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 filings with the Securities and Exchange Commission, in each case under the section entitled “Forward-Looking Statements,” and those discussions regarding risk factors are incorporated herein by reference.

–Tables Follow –

CHB/ 5
CHAMPION ENTERPRISES, INC.
CONSOLIDATED FINANCIAL SUMMARY
(Dollars and weighted shares in thousands, except per share amounts)

	(UNAUDITED)
	Three Months Ended									Twelve Months Ended
	December 29,			December 30,			%			December 29,			December 30,			%
	2007			2006			Change			2007			2006			Change
Net sales:
Manufacturing segment	$	223,951		$	250,823			(10.7	%)	$	941,945		$	1,195,834			(21.2	%)
International segment		92,110			32,640			182.2	%		280,814			90,717			209.5	%
Retail segment		15,749			23,685			(33.5	%)		73,406			117,397			(37.5	%)
Less: intercompany		(6,200	)		(6,200	)					(22,700	)		(39,300	)
Total net sales		325,610			300,948			8.2	%		1,273,465			1,364,648			(6.7	%)
Cost of sales		280,527			251,355			11.6	%		1,083,601			1,147,032			(5.5	%)
Gross margin		45,083			49,593			(9.1	%)		189,864			217,616			(12.8	%)
Selling, general and administrative expenses		44,526			38,549			15.5	%		157,134			154,534			1.7	%
Restructuring charges		2,659			—			—			3,780			1,200			215.0	%
Amortization of intangible assets		1,454			1,428			1.8	%		5,727			3,941			45.3	%
Operating (loss) income		(3,556	)		9,616			(137.0	%)		23,223			57,941			(59.9	%)
Loss on debt retirement		4,543			398			1041.5	%		4,543			398			1041.5	%
Interest expense, net		3,115			4,151			(25.0	%)		14,731			14,446			2.0	%
(Loss) Income from operations before income taxes		(11,214	)		5,067			(321.3	%)		3,949			43,097			(90.8	%)
Income tax (benefit) expense		(5,262	)		1,503			(450.1	%)		(3,243	)		(95,211	)		96.6	%
Net (loss) income	$	(5,952	)	$	3,564			(267.0	%)	$	7,192		$	138,308			(94.8	%)
Basic (loss) income per share:	$	(0.08	)	$	0.05			(260.0	%)	$	0.09		$	1.81			(95.0	%)
Weighted shares for basic EPS		77,248			76,454						76,916			76,334
Diluted (loss) income per share:	$	(0.08	)	$	0.05			(260.0	%)	$	0.09		$	1.78			(94.9	%)
Weighted shares for diluted EPS		77,248			77,708						77,719			77,578

See accompanying Notes to Consolidated Financial Information.

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CHB/ 6
CHAMPION ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)

			(UNAUDITED)
	December 29,		September 29,		December 30,
	2007		2007		2006
Assets:
Cash and cash equivalents	$	135,408	$	111,282	$	70,208
Accounts receivable, trade		89,710		102,456		47,645
Inventories		90,782		81,961		102,350
Deferred tax assets		29,746		29,145		32,303
Other current assets		14,827		10,735		10,677
Total current assets		360,473		335,579		263,183
Property, plant and equipment, net		116,984		105,182		112,527
Goodwill and other intangible assets, net		432,593		336,181		335,464
Deferred tax assets		87,983		80,586		71,600
Other non-current assets		23,697		15,967		17,841
Total assets	$	1,021,730	$	873,495	$	800,615
Liabilities and Shareholders’ Equity:
Short-term debt	$	25,884	$	2,125	$	2,168
Accounts payable		119,628		110,380		54,607
Other accrued liabilities		172,321		140,258		146,428
Total current liabilities		317,833		252,763		203,203
Long-term debt		342,897		254,090		252,449
Deferred tax liabilities		7,065		9,621		10,600
Other long-term liabilities		34,089		32,581		32,601
Shareholders’ equity		319,846		324,440		301,762
Total liabilities and shareholders’ equity	$	1,021,730	$	873,495	$	800,615

See accompanying Notes to Consolidated Financial Information.

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CHB/ 7
CHAMPION ENTERPRISES, INC.
CONSOLIDATED CONDENSED CASH FLOW STATEMENTS
(In thousands)

	(UNAUDITED)
	Three Months Ended						Twelve Months Ended
	December 29,			December 30,			December 29,			December 30,
	2007			2006			2007			2006
Net (loss) income	$	(5,952	)	$	3,564		$	7,192		$	138,308
Loss from discontinued operations		—			27			—			16
Adjustments:
Depreciation and amortization		5,027			5,011			20,063			17,943
Stock-based compensation		740			846			2,975			4,563
Change in deferred taxes		(13,217	)		(525	)		(17,637	)		(100,125	)
Fixed asset impairment charges		2,000			—			2,000			1,200
Gain on disposal of fixed assets		(566	)		(238	)		(1,199	)		(4,708	)
Loss on debt retirement		4,543			398			4,543			398
Increase/decrease:
Accounts receivable		24,695			16,782			(28,412	)		28,626
Inventories		3,045			9,860			24,024			13,129
Accounts payable		8,116			(20,675	)		61,230			(16,405	)
Accrued liabilities		14,781			(12,939	)		5,734			(24,753	)
Foreign exchange translation gain		(942	)		—			(942	)		—
Other, net		2,060			(1,639	)		(102	)		1,682
Cash provided by operating activities		44,330			472			79,469			59,874
Additions to property, plant and equipment		(4,707	)		(3,303	)		(10,201	)		(17,582	)
Acquisitions		(95,371	)		(555	)		(95,371	)		(153,845	)
Proceeds from disposal of fixed assets		847			1,836			4,487			7,566
Distributions from unconsolidated affiliates		—			—			884			—
Cash used for investing activities		(99,231	)		(2,022	)		(100,201	)		(163,861	)
Payments on long-term debt		(14,752	)		(28,236	)		(16,329	)		(29,612	)
Proceeds from term loan		—			—			—			78,561
Proceeds from convertible debt		180,000			—			180,000			—
Redemption of senior notes		(79,728	)		(6,901	)		(79,728	)		(6,901	)
Increase in deferred financing costs		(5,939	)		—			(5,939	)		(1,076	)
Decrease in restricted cash		—			—			15			698
Common stock issued, net		1,507			19			3,801			1,974
Cash provided by (used for) financing activities		81,088			(35,118	)		81,820			43,644
Cash (used for) provided by discontinued operations		(223	)		33			62			1,201
Effect of exchange rate changes on cash and cash equivalents		(1,838	)		404			4,050			2,371
Increase (decrease) in cash and cash equivalents		24,126			(36,231	)		65,200			(56,771	)
Cash and cash equivalents at beginning of period		111,282			106,439			70,208			126,979
Cash and cash equivalents at end of period	$	135,408		$	70,208		$	135,408		$	70,208

See accompanying Notes to Consolidated Financial Information.

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CHB/ 8
CHAMPION ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

(1) On December 21, 2007, the Company acquired substantially all of the assets and the business of SRI Homes, Inc., a producer of factory — built homes in western Canada. The purchase price was $114 million (CAD) plus the assumption of operating liabilities, and was funded through a combination of cash and a $24 million (CAD) seller note. Due to the timing of the acquisition, no results of SRI are included in the Company’s 2007 results, but SRI is included in the Company’s consolidated balance sheet at December 29, 2007.

(2) The results of operations for businesses acquired in 2006 are included in the Company’s results from continuing operations subsequent to the respective acquisition dates. Manufacturing segment acquisitions consisted of Highland Manufacturing which was acquired on March 31, 2006, and North American Housing which was acquired on July 31, 2006. The Company’s international segment consists of Caledonian Building Systems Limited, which was acquired on April 7, 2006.

(3) The Company evaluates the performance of its manufacturing, international and retail segments based on income before amortization of intangible assets, interest, income taxes and general corporate expenses. A reconciliation of (loss) income from operations before income taxes for the three and twelve months ended are as follows (dollars in thousands):

	December 29,			Related			December 30,			Related
Three months ended:	2007			Sales			2006			Sales
Manufacturing segment income	$	3,383			1.5	%	$	15,042			6.0	%
International segment income		3,449			3.7	%		2,476			7.6	%
Retail segment (loss) income		(316	)		-2.0	%		1,319			5.6	%
General corporate expenses		(8,249	)					(8,066	)
Amortization of intangible assets		(1,454	)					(1,428	)
Loss on debt retirement		(4,543	)					(398	)
Intercompany eliminations		(369	)					300
Interest expense, net		(3,115	)					(4,151	)
(Loss) income from operations before income taxes	$	(11,214	)		(3.4	%)	$	5,094			1.7	%

	December 29,			Related			December 30,			Related
Twelve months ended:	2007			Sales			2006			Sales
Manufacturing segment income	$	40,924			4.3	%	$	81,600			6.8	%
International segment income		17,393			6.2	%		5,634			6.2	%
Retail segment income		1,911			2.6	%		7,636			6.5	%
General corporate expenses		(31,609	)					(32,472	)
Amortization of intangible assets		(5,727	)					(3,941	)
Loss on debt retirement		(4,543	)					(398	)
Intercompany eliminations		331						(500	)
Interest expense, net		(14,731	)					(14,446	)
Income from operations before income taxes	$	3,949			0.3	%	$	43,113			3.2	%

(4) In the second quarter of 2006 the Company reversed its deferred tax asset valuation allowance totaling $101.9 million. The Company’s earnings subsequent to this reversal are fully taxed for financial reporting purposes. Income tax benefit for 2007 is comprised primarily of deferred tax benefits and cash tax expense for foreign operations.

(5) Gains on disposal of fixed assets resulted primarily from the sale of two idle plants in 2007 and from the sale of an investment property in Florida and five idle plants in 2006.

(6) During the fourth quarter and year ended December 29, 2007 charges totaling $3.6 million and $4.9 million, respectively, were incurred in connection with the closure of a manufacturing facility in Alabama in the fourth quarter and a facility in Pennsylvania during the second quarter. A portion of these charges, totaling $0.9 million in the fourth quarter and $1.1 million for the year, were recorded in cost of sales, with the balance reported as restructuring charges.

(7) As a result of contingent purchase price or “earn out” provisions related to the Company’s acquisition of Caledonian in 2006, $13.3 million was accrued during the fourth quarter of 2007 in connection with Caledonian’s 2007 results. Approximately $6.9 million of the amount accrued was recorded as an increase to goodwill, while the remaining $6.4 million was recorded as compensation expense in the international segment.

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

	Three months ended									Twelve months ended
	December 29,			December 30,			%			December 29,			December 30,			%
	2007			2006			Change			2007			2006			Change
MANUFACTURING SEGMENT
Units sold:
HUD-Code		2,251			2,804			(20	%)		9,971			15,341			(35	%)
Modular		921			1,119			(18	%)		3,670			4,574			(20	%)
Canadian		422			275			53	%		1,637			1,132			45	%
Other		17			21			(19	%)		68			79			(14	%)
Total units sold		3,611			4,219			(14	%)		15,346			21,126			(27	%)
Less: intercompany		92			91			1	%		312			570			(45	%)
Units sold to independent retailers / builders		3,519			4,128			(15	%)		15,034			20,556			(27	%)
Floors sold		6,697			8,242			(19	%)		29,233			40,521			(28	%)
Multi-section mix		75	%		82	%					77	%		80	%
Average unit prices, excluding delivery
Total	$	55,700		$	54,600			2	%	$	55,100		$	51,800			6	%
HUD-Code	$	45,000		$	46,800			(4	%)	$	45,000		$	45,400			(1	%)
Modular	$	73,000		$	70,600			3	%	$	76,500		$	70,300			9	%

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