EXHIBIT 99.2
WWW.CENTEX.COM
P.O. Box 199000
Dallas, Texas 75219-9000
(CENTEX LOGO)
2728 North Harwood
Dallas, Texas 75201-1516
Phone: (214) 981-5000
NEWS RELEASE
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FOR IMMEDIATE RELEASE
For more information, contact at 214/981-5000:
LAURENCE E. HIRSCH, Chairman and Chief Executive Officer
LELDON E. ECHOLS, Executive Vice President and Chief Financial Officer
MATTHEW G. MOYER, Vice President--Investor Relations
HTTP://WWW.CENTEX.COM
CENTEX CORPORATION ANNOUNCES TAX-FREE SPIN-OFF OF
MANUFACTURED HOUSING OPERATION TO CENTEX STOCKHOLDERS
(DALLAS, TX April 22, 2003): Centex Corporation (NYSE: CTX) announced
today that its Board of Directors has approved the tax-free distribution to
Centex Corporation stockholders of 100% of the outstanding shares of common
stock of Cavco Industries, Inc., the major component of Centex's Manufactured
Housing Group.
All of the Cavco shares are currently held by Centex. Shareholders of
Centex common stock as of the record date, estimated to be in early to mid-June,
will receive 0.05 shares of Cavco common stock for each Centex share held as of
that date. The actual number of shares distributed will depend on the number of
shares of Centex common stock outstanding on the record date.
Centex has received a ruling from the Internal Revenue Service to the
effect that its stockholders will not be subject to federal income taxes as the
result of receiving Cavco shares. The transaction is still subject to the
approval of the disclosure filing to be made with the Securities and Exchange
Commission. Stockholder approval is not required for the distribution.
Based on Cavco's recent operating results and earnings per share
multiples of public manufactured housing companies, and assuming no further
significant deterioration in the manufactured housing market, Centex estimates
that the value of this tax-free dividend will be $.50 to $.70 per Centex share,
although the actual value will depend on the trading price of Cavco's stock. The
spin-off will not have a material impact on Centex's future earnings or debt
coverage ratios.
Once the spin-off is complete, Cavco will be a separately traded public
company. Cavco intends to file an application for its common stock to be
admitted to trading on the Nasdaq National Market under the symbol "CVCO."
Joseph H. Stegmayer, who has been Chairman and Chief Executive Officer
(CEO) of Centex's Manufactured Housing Group since 2000, and has extensive
experience in the manufactured housing industry, will be Chairman and CEO of the
new entity. Cavco, which will continue to be headquartered in Phoenix, is the
largest manufactured housing company in Arizona.
(more)
CENTEX MANUFACTURED HOUSING OPERATION TO BE SPUN OFF, Page 2 of 2
Centex said it believes the distribution is in the best interests of
Centex, its stockholders and Cavco. Among other considerations, it will
eliminate competition for capital between Cavco's business and the other
businesses of Centex and will allow the management of each company to focus
solely on the opportunities and challenges specific to its respective business.
"We think this new ownership structure will enable Cavco to reach its
full potential and is in the best interests of our stockholders," said Larry
Hirsch, Chairman and CEO of Centex. "We are confident that Joe and his
management team have the capabilities to position this business to take
advantage of the inevitable recovery of the manufactured housing industry."
"We at Cavco are truly excited about the opportunities we will have as
an independent public entity," said Mr. Stegmayer. "We believe that we are
well-positioned to confront the difficult conditions currently facing the
industry and to thrive as the outlook improves."
For fiscal 2003, the operations to be included in the spin-off had
income from continuing operations of $6.8 million versus $3.1 million in fiscal
2002. Losses associated with discontinued operations, related to certain retail
operations and idled plants, were $11.4 million in fiscal 2003 and $4.5 million
in fiscal 2002. These results are after interest expense but before income
taxes. Revenues from continuing operations were $110 million in fiscal 2003
versus $96 million in 2002. Revenues for discontinued operations were $28
million in 2003 as compared to $29 million in fiscal 2002. The Company's
continuing operations delivered 3,631 units in fiscal 2003 compared to 3,370
units last year.
Centex stockholders are not required to take any action in connection
with the distribution.
# # #
Forward-Looking Statements. This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the context of the statement and generally arise when the Company is discussing
its beliefs, estimates or expectations. These statements are not guarantees of
future performance and involve a number of risks and uncertainties. Actual
results and outcomes may differ materially from what is expressed or forecast in
such forward-looking statements. The principal risks and uncertainties that may
affect the Company's actual performance and results of operations include the
following: general economic conditions and interest rates; the cyclical and
seasonal nature of the Company's businesses; adverse weather; changes in
property taxes and energy costs; changes in federal income tax laws and federal
mortgage financing programs; governmental regulations; changes in governmental
and public policy; changes in economic conditions specific to any one or more of
the Company's markets and businesses; competition; availability of raw
materials; and unexpected operations difficulties. These and other factors are
described in the Company's most recent Annual Report on Form 10-K for the fiscal
year ended March 31, 2002 and in its Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 2002 and September 30, 2002, and December 31,
2002, each of which is filed with the Securities and Exchange Commission.