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 MANAGEMENT REPORT
AUBURN HILLS, MICHIGAN, APRIL 22, 2002 - The following Management Report from
Walter R. Young, Chairman, President and CEO of Champion Enterprises, Inc.
(NYSE: CHB), was posted to Champion's website and sent to interested parties
today.
These are exciting times at Champion! We've accomplished a lot and look
forward with much anticipation. We're happy to report that we completed the
acquisition of CIT's manufactured housing loan origination business and
completed our $150 million Senior Notes offering.
We thought it would be helpful to provide you with a pro forma balance
sheet as of March 30, 2002 reflecting these and other related transactions that
have been completed since quarter end. Thus, the attached pro forma balance
sheet reflects the following:
1. The purchase of CIT's manufactured housing loan origination
business for approximately $5 million;
2. The issuance of $150 million of Senior Notes due 2007;
3. The issuance of $25 million of preferred stock;
4. The repurchase of $25 million of Senior Notes due 2009 for
approximately $20 million and the recognition of an
extraordinary gain of $3 million after tax, or $0.05 per
diluted share; and
5. The cash collateralization of $17.5 million in letters of
credit upon the termination of our bank credit facility. The
total amount of letters of credit which will be cash
collateralized will increase to $35 million in the next few
weeks.
We hope you find this pro forma information helpful. In our efforts to
keep you informed, we look forward to reporting our progress as we start up our
finance platform, HomePride Finance Corp., within the next four to six weeks.
Walt
Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is
the industry's leading manufacturer and has produced nearly 1.6 million homes
since the company was founded. The company operates 47 homebuilding facilities
in 16 states and two western Canadian provinces and 214 retail locations in 27
states. Independent retailers, including 556 Champion Home Center locations, and
approximately 400 builders and developers also sell Champion-built homes.
Further information can be found at the company's website,
www.championhomes.net.
This Management Report contains certain statements, including
statements regarding the timing of the start up of HomePride Finance Corp., the
cash collateralizing of letters of credit and expected floor plan payable
reduction, 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 Management Report.
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, and those discussions regarding risk factors
are incorporated herein by reference.
CHAMPION ENTERPRISES, INC.
CONSOLIDATED PRO FORMA BALANCE SHEET (UNAUDITED)
(In thousands, except par value)
Pro forma
March 30, March 30,
2002 2002
--------- ----------
Assets
Current assets
Cash and cash equivalents $ 25,280 $ 151,504
Restricted cash -- 17,500 *
Accounts receivable, trade 42,472 42,472
Inventories 174,339 174,339
Deferred taxes and other current assets 90,204 88,306
--------- ---------
Total current assets 332,295 474,121
--------- ---------
Property, plant and equipment, net 172,836 172,836
Goodwill, net 258,964 263,964
Deferred taxes and other assets 76,603 81,685
--------- ---------
$ 840,698 $ 992,606
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Floor plan payable $ 63,713 $ 63,713 **
Accounts payable 59,648 59,648
Accrued warranty obligations 41,358 41,358
Accrued volume rebates 33,915 33,915
Accrued compensation and payroll taxes 16,625 16,625
Accrued insurance 21,705 21,705
Other current liabilities 50,527 50,527
--------- ---------
Total current liabilities 287,491 287,491
--------- ---------
Long-term liabilities
Long-term debt
Senior notes due 2007 -- 150,000
Senior notes due 2009 200,000 175,000
Other long-term debt 24,858 24,858
--------- ---------
Total long-term debt 224,858 349,858
Deferred portion of purchase price 14,000 14,000
Other long-term liabilities 31,697 31,697
--------- ---------
270,555 395,555
--------- ---------
Contingent liabilities
Redeemable convertible preferred stock,
no par value, 5,000 shares authorized, 20,000 20,000
20 and 25 issued, respectively -- 25,000
Shareholders' equity
Common stock, $1 par value, 120,000 authorized,
48,706 issued and outstanding 48,706 48,706
Capital in excess of par value 38,755 37,630
Retained earnings 177,166 180,199
Accumulated other comprehensive income (loss) (1,975) (1,975)
--------- ---------
Total shareholders' equity 262,652 264,560
--------- ---------
$ 840,698 $ 992,606
========= =========
*This amount will total $34,943 within the next few weeks.
**We expect to reduce floor plan payable by $20,000 during the second quarter.