Fleetwood Enterprises Inc. on Thursday reported that its fiscal third-quarter loss deepened to $18.4 million as orders for manufactured housing fell sharply amid a scarcity of financing and a glut of repossessed homes.
The Riverside-based company also warned of a loss for the normally strong fourth quarter and for the full year, which would put the nation's largest recreation vehicle manufacturer in violation of loan agreements with its major lenders.
Company executives said they are in the process of renegotiating the agreements with a syndicate led by Bank of America.
The gloomy report prompted investors to unload Fleetwood shares Thursday as Fleetwood's stock dropped 8%, closing at $3.55, down 32 cents on the New York Stock Exchange. So far this year the stock has lost 55% of its value.
During the company's fiscal third quarter ended Jan. 26, Fleetwood reported a loss of $18.4 million, or 51 cents a share, compared with a loss of $17.3 million a year ago. Revenue in the latest quarter fell 6% to $493.2 million, from $522.4 million a year earlier.
Fleetwood blamed much of its poor performance on a 26% drop in manufactured-home sales during the third quarter. Manufactured-home sales at Fleetwood -- the second-largest player in the field -- and other companies have been on the decline for nearly three years after the failure and withdrawal of several key lenders. In addition, the sale of large numbers of repossessed homes has depressed demand for new units, according to analysts.
The company's RV division, meanwhile, posted a 12% gain in quarterly revenue. But Fleetwood executives noted that some dealers have cut back or postponed orders in response to economic uncertainty and the threat of war with Iraq.
During the third quarter, Fleetwood closed four manufactured-housing plants with about 800 workers in Texas and the southeast. The company said the closures would result in an estimated $5.2-million charge in the current quarter.
Fleetwood, which has cut employment to 12,000 from about 21,000 nearly three years ago, said more factory and sales office closures are possible if conditions do not improve.