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EXHIBIT 99
[CHAMPION ENTERPRISES, INC. LETTERHEAD] NEWS
FOR IMMEDIATE RELEASE
INVESTOR AND MEDIA CONTACTS:
Anthony S. Cleberg Colleen T. Bauman
Chief Financial Officer Investor Relations
(248) 340-9090 (248) 340-7731
CHAMPION ENTERPRISES, INC.
REPORTS FIRST QUARTER RESULTS
CONFERENCE CALL SCHEDULED FOR TODAY
11:00 A.M. EASTERN TIME
CALL-IN NUMBER (973) 633-6740
REPLAY NUMBER (888) 306-8690
AUBURN HILLS, MICH., APRIL 18, 2001--CHAMPION ENTERPRISES, INC. (NYSE:
CHB), the nation's leading housing manufacturer, today reported results for the
first quarter ended March 31, 2001. For the quarter, the company had revenues of
$326 million and a net loss of $26 million, or $0.55 per share. Before costs
related to the closing of two manufacturing facilities and 30 sales centers, the
loss was $21 million, or $0.45 per share. Closing-related expenses were $3.4
million after tax, or $0.07 per share, for non-cash fixed asset impairment
charges and $1.4 million after tax, or $0.03 per share, for lease termination
and other costs. In the first quarter of 2000, Champion had revenues of $535
million and net income of $1.3 million, or $0.03 per share.
Champion's Chairman, President, and Chief Executive Officer, Walter R.
Young, commented, "Our results were affected by challenging market conditions,
with year-to-date industry wholesale shipments down more than 40 percent and
retail sales of new homes off an estimated 30 percent. Although industry sales
have declined, I am encouraged that industry retail inventory levels have
dropped by more than 10,000 new homes this year and by over 50,000 homes since
mid-1999. Recently, consumer repossessions appear to have leveled off, interest
rates charged to consumers have dropped and retail traffic has increased."
OPERATIONS
For the quarter, manufacturing revenues totaled $261 million, down 40
percent from a year ago on a 47 percent decrease in homes sold. As a result of
lower sales volume, the manufacturing segment reported a loss of $8.2 million,
excluding $2.3 million for fixed asset impairment charges for the closing of two
manufacturing facilities. The company is now operating 51 homebuilding
facilities, compared to 59 last March. Unfilled wholesale orders for housing at
quarter end totaled approximately $19 million, compared to $15 million at year
end and $36 million a year ago.
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Retail operations in the quarter had revenues of $108 million and a loss of
$9.4 million, excluding $3.2 million for fixed asset impairment charges and $2.2
million for lease termination and other costs. For the first three months of
2001, total homes sold by Champion's retail operations were down 45 percent. At
quarter end the company was operating 230 retail locations, compared to 260 at
year end and 285 at April 1, 2000.
FOCUS ON CASH FLOW
Champion continues to closely monitor expenditures, inventory levels and
cash flows. In the quarter the company spent $1.4 million on capital
expenditures, down from $4.9 million a year ago. Capital expenditures for 2001
are expected to be less than the $15 million spent in 2000. As a result of the
company's efforts to diversify its floor plan payables, Champion currently has
approximately $71 million outstanding with Conseco Finance and $32 million with
other finance sources.
OUTLOOK
Young continued, "The industry has made substantial progress to get back in
balance with reduced inventory levels and improved practices. The overall
economy, consumer confidence levels and job losses remain a concern. We also
continue to be concerned about financing availability and consumer
repossessions, but are pleased that finance companies have recently reported
lower delinquency rates.
"In our second quarter we expect higher revenues than this quarter, which
would be our first increase after seven consecutive quarterly declines," said
Young. "Despite this upturn, we will probably have a slight loss for the period
before costs for the potential closing of additional manufacturing facilities as
we continue to keep capacity and inventory levels in line with demand.
"We are encouraged by improved retail traffic levels, reduced inventories
and the spring selling season. In addition, our Genesis division continues to
expand and be well received by builders and developers. Through Genesis we look
to capture a larger share of the overall housing market. In the short-term we
are managing the company for liquidity, reducing expenses and inventories, and
lowering our breakeven point. As a result, we should benefit quickly when the
economy and industry improve," Young concluded.
Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is the
industry's leading manufacturer and has produced more than 1.5 million homes
since the company was founded. The company operates 51 homebuilding facilities
and 230 retail locations. Champion's homes are also sold by more than 1,000
independent retail locations that have joined either the Champion Home Center or
the Alliance of Champions retail distribution networks. Further information can
be found using the company's website, www.championhomes.net.
This news release contains certain statements, including forecasts,
assessments of current industry conditions, short-term and long-term goals,
initiatives to implement change, and marketing and expansion strategies, which
could be construed to be forward looking statements within the meaning of the
Securities and Exchange Act of 1934. These statements reflect the company's
views with respect to future plans, events and financial performance. The
company does not undertake any obligation to update the information contained
herein, which speaks only as of the date of this press release. The company has
identified certain risk factors which could cause actual results and plans to
differ substantially from those included in the forward looking statements.
These factors are discussed in the company's most recently filed Form 10-K, and
that discussion regarding risk factors is incorporated herein by reference.
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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
SALES AND INCOME SUMMARY
(In thousands, except per share amounts)
Three Months Ended
----------------------
March 31, April 1,
2001 2000
--------- ---------
Net sales (1) $326,312 $535,309
========= =========
Operating income (loss) before
fixed asset impairment charges ($29,255) $9,170
Fixed asset impairment charges (2) (5,500) -
--------- ---------
Operating income (loss) (3) ($34,755) $9,170
========= =========
Net income (loss) before
fixed asset impairment charges ($22,683) $1,301
Fixed asset impairment charges (2) (3,400) -
--------- ---------
Net income (loss) ($26,083) $1,301
========= =========
Per diluted share:
Net income (loss) before
fixed asset impairment charges ($0.48) $0.03
Fixed asset impairment charges (2) (0.07) -
--------- ---------
Net income (loss) ($0.55) $0.03
========= =========
Weighted shares for diluted EPS 47,496 47,354
========= =========
See accompanying Notes to Financial information.
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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL SUMMARY
(Dollars and weighted shares in thousands, except per share amounts)
Three Months Ended
-----------------------
March 31, April 1, %
2001 2000 Change
--------- --------- --------
Net sales (1):
Manufacturing $ 260,510 $ 435,802 -40%
Retail 108,402 167,507 -35%
Less: intercompany (42,600) (68,000)
--------- ---------
Total net sales 326,312 535,309 -39%
Cost of sales (1) 281,504 451,338 -38%
--------- ---------
Gross margin 44,808 83,971 -47%
Selling, general and
administrative expenses (2) 74,063 74,801 -1%
--------- ---------
Operating income (loss) before
fixed asset impairment charges (29,255) 9,170
Fixed asset impairment charges (2) (5,500) -
--------- ---------
Operating income (loss) (3) (34,755) 9,170
Interest expense, net 6,428 6,969 -8%
--------- ---------
Income (loss) before income taxes (41,183) 2,201
Income taxes (benefits) (4) (15,100) 900
--------- ---------
Net income (loss) ($26,083) $1,301
========= =========
Basic earnings (loss) per share ($0.55) $0.03
========= =========
Weighted shares for basic EPS 47,496 47,247
========= =========
Diluted earnings (loss) per share ($0.55) $0.03
========= =========
Weighted shares for diluted EPS 47,496 47,354
========= =========
See accompanying Notes to Financial Information.
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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
OTHER STATISTICAL INFORMATION
Three Months Ended
---------------------
March 31, April 1, %
2001 2000 Change
---------- -------- ------
MANUFACTURING
Homes sold 8,210 15,351 -47%
Less: intercompany 1,239 2,309 -46%
Homes sold to
independent retailers 6,971 13,042 -47%
Floors sold 14,696 25,701 -43%
Multi-section mix 76% 66%
Average home price $30,500 $27,200 12%
Manufacturing facilities at period end 51 59 -14%
RETAIL
Homes sold
New homes 1,824 3,315 -45%
Pre-owned homes 513 906 -43%
Total homes sold 2,337 4,221 -45%
% Champion-produced new
homes sold 84% 68%
New multi-section mix 69% 58%
Average new home price $55,500 $47,300 17%
Average number of new homes in inventory
per sales center at period end 18 19 -5%
Sales centers at period end 230 285 -19%
CONSOLIDATED (IN THOUSANDS)
Contingent repurchase obligations $360,000 $640,000 -44%
Champion-produced field inventories $713,000 $915,000 -22%
Shares issued and outstanding 47,544 47,242
See accompanying Notes to Financial Information.
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CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31, December 30, April 1,
ASSETS 2001 2000 2000
---------- ------------- ------------
Cash and cash equivalents $ 19,029 $ 50,143 $ 25,909
Accounts receivable, trade 50,579 31,132 84,920
Inventories 211,607 217,765 295,483
Deferred taxes and other assets 89,900 77,493 80,971
---------- ---------- ----------
Total current assets 371,115 376,533 487,283
---------- ---------- ----------
Property and equipment, net 193,760 207,277 219,952
Goodwill, net 271,061 273,970 470,328
Deferred taxes and other assets 80,726 84,276 31,259
---------- ---------- ----------
$ 916,662 $ 942,056 $1,208,822
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Floor plan payable $ 102,923 $ 114,198 $ 170,131
Accounts payable 62,588 43,103 88,954
Other accrued liabilities 180,678 185,552 194,673
---------- ---------- ----------
Total current liabilities 346,189 342,853 453,758
---------- ---------- ----------
Long-term debt 225,496 225,634 223,994
Notes payable to bank 5,000 - 5,000
Other long-term liabilities 68,656 76,760 80,801
Shareholders' equity 271,321 296,809 445,269
---------- ---------- ----------
$ 916,662 $ 942,056 $1,208,822
========== ========== ==========
CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL INFORMATION
(1) For the quarter ended April 1, 2000, net sales and cost of sales have been
restated to reclassify delivery revenue to sales from cost of sales.
(2) For the quarter ended March 31, 2001, costs related to closed operations
includes $2.2 million ($1.4 million after tax or $0.03 per diluted share) in
selling, general and administrative expenses for lease termination and other
costs and $5.5 million ($3.4 million after tax or $0.07 per diluted share) for
non-cash fixed asset impairment charges.
(3) Segment EBITA consists of earnings (loss) before interest, taxes and
goodwill amortization, and includes fixed asset impairment charges and other
costs related to closed operations. A reconciliation of operating income (loss)
follows (dollars in thousands):
Three % of Three % of
Months Ended Related Months Ended Related
March 31, 2001 Sales April 1, 2000 Sales
-------------- -------- ------------- ---------
Manufacturing EBITA ($10,456) -4.0% $ 13,098 3.0%
Retail EBITA (14,838) -13.7% 5,255 3.1%
General corporate expenses (6,582) (5,754)
Goodwill amortization (2,879) (3,429)
---------- -----------
Operating income (loss) ($34,755) -10.7% $ 9,170 1.7%
========== ===========
(4) The difference between taxes at the 35% federal statutory rate and taxes
provided is due to state income taxes and nondeductible items, primarily
goodwill.
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