EXHIBIT 99.1
NEWS RELEASE
Contact: James Stariha
Chief Financial Officer
(256) 747-8589
SOUTHERN ENERGY HOMES, INC. REPORTS
FIRST QUARTER RESULTS
ADDISON, Ala. - April 28, 2003 -- Southern Energy Homes, Inc. (NASDAQ: SEHI)
today reported its results for the first quarter ended April 4, 2003.
"Our sales were lower in the first quarter due to the weak economy and reduced
financing options for our customers compared with last year," stated Keith O.
Holdbrooks, chief executive officer of Southern Energy Homes. "According to
Manufactured Housing Institute statistics, industry shipments for the first two
months of the quarter decreased 27.6% from 27,693 units to 20,056 units. Given
the current market conditions, we are taking measures that will reduce our
costs in the coming quarters to more closely match sales volume. In addition,
our financial position remains strong with an increased cash position and no
debt providing us with the resources to support our business and build
operations as the economy improves."
FIRST QUARTER RESULTS
Net revenues for the first quarter from continuing operations were $28.0
million compared with $31.1 million for the first quarter of last year, a
decline of 10.0%. Total homes sold declined to 883 compared with 1,028 in the
first quarter of 2002, a decline of 14.1%. Southern Energy experienced lower
home sales at both the retail and wholesale levels compared with last year.
Average selling prices increased 8.1% for retail homes sold and 4.8% for
wholesale sales, reflecting both price increases and increased customization of
homes produced for customers. The increase in selling prices was more than
offset by higher costs in the most recent quarter resulting in reduced gross
profit and margins compared with the first quarter of last year.
Gross profit was $3.8 million, or 13.6% of sales, in the first quarter of 2003
compared with $5.7 million, or 18.4% of sales, in the first quarter of 2002.
The reduction in gross profit and margin was due primarily to less favorable
sales mix and higher material costs compared with the first quarter of 2002. In
addition, margin was affected by the lower sales volume that resulted in an
unfavorable variance on fixed overhead, purchasing variances and higher labor
costs compared with the same quarter last year.
Loss from continuing operations was $1.5 million in the first quarter of 2003
compared with income from continuing operations of $105,000 in the first
quarter of 2002. Income from discontinued operations was $136,000 for the first
quarter of 2003 compared with a loss from discontinued operations of $903,000
in the first quarter of 2002. Net loss for the first quarter of 2003 was $1.4
million, or $0.12 per share, compared with the first quarter 2002 net loss of
$798,000, or $0.06 per share.
"Our restructuring program launched last year was very successful in
strengthening our balance sheet," continued Mr. Holdbrooks. "Since the first
quarter of last year, we increased our cash position by $4.6 million, reduced
accounts receivable by $1.9 million and reduced notes payable by $10.0 million.
At the quarter's end, we had zero in notes payable and Southern Energy is due a
$4.9 million federal tax refund that will build our cash position."
ABOUT SOUTHERN ENERGY HOMES, INC.
Southern Energy Homes, Inc. operates five home manufacturing facilities in
Alabama and Texas, three retail sales centers in Alabama and South Carolina and
three supply companies, all in Alabama. Currently marketed under four brand
names, the Company's homes are sold in 22 states. In addition to its
manufacturing, retail sales and component supply operations, the Company's
operations also include an insurance segment.
Forward-looking statements in this news release, including without limitation,
statements relating to the adequacy of the Company's resources, are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking
statements involve risks and uncertainties, which could cause actual results to
differ materially from those in any forward-looking statements, including
without limitation: the ultimate financial and operational effects of
discontinued operations being undertaken; general economic conditions; the
cyclical and seasonal nature of housing markets; competitive pricing pressures
at both the wholesale and retail levels; changes in market demand; the impact
of cost reduction programs and other management initiatives; availability of
financing for prospective purchasers of the Company's homes and availability of
floor plan financing for dealers; availability and pricing of raw materials;
concentration of the Company's business in certain regional markets; adverse
weather conditions that reduce retail sales; the possibility of plant shutdowns
from weather or other causes; availability of labor for the Company to meet
operating requirements; the highly competitive nature of the manufactured
housing industry; federal, state and local regulation of the Company's
business; the Company's contingent repurchase liabilities with respect to
dealer financing; the Company's reliance on independent dealers; and other
risks indicated from time to time in the Company's filings with the Securities
and Exchange Commission.
SOUTHERN ENERGY HOMES, INC.
UNAUDITED FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Thirteen Weeks Ended
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April 4, 2003 March 29, 2002
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Net revenues $ 28,044 $ 31,105
Gross Profit 3,808 5,718
Operating income (loss) (1,420) 291
Income (loss) from continuing operations (1,547) 105
Income (loss) from discontinued operations 136 (903)
Net loss (1,411) (798)
Basic and diluted earnings per share:
Income (loss) from continuing operations (0.13) 0.01
Income (loss) from discontinued operations 0.01 (0.07)
Net loss (0.12) (0.06)
Weighted average shares outstanding:
Basic and diluted 12,133,865 12,133,865
SOUTHERN ENERGY HOMES, INC.
SUMMARY OPERATING FACTS
(CONTINUING OPERATIONS)
Thirteen Weeks Ended
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April 4, 2003 March 29, 2002
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Number of company-owned retail centers at period end
(continuing operations) 3 3
Retail units sold:
New single-section -- 6
New multi-section 18 41
Used homes 24 24
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42 71
Wholesale units sold:
External customers 825 921
Intercompany 16 36
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841 957
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Total homes sold 883 1,028
Internalization 100% 100%
Average sales prices - retail (new) $ 50,357 $ 46,567
Average sales price - wholesale $ 30,040 $ 28,661
Floor sections sold 1,483 1,684
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