Fleetwood Says Its Loss Will Widen

Fleetwood Enterprises Inc., a leading maker of recreational vehicles, said Tuesday that its quarterly net loss would widen significantly because of slower RV sales and an adverse court judgment, sending its shares down more than 19%.

The company also said it had begun talks with its lenders because the expected results would require it to obtain a waiver or modify existing loan covenants.

The Riverside-based company said it had sufficient cash and borrowing capacity, together with access to other sources of external funding, to meet its cash flow requirements.

Previously, Fleetwood had said its loss for the fiscal third quarter, which ends Sunday, would narrow from a year earlier. Analysts, on average, had expected a loss of 4 cents a share, compared with a year-earlier loss of 26 cents.

Although Fleetwood expects to be profitable in its fourth quarter, the company said the third-quarter results made it uncertain whether it would be profitable for the full fiscal year.

Fleetwood said it lowered its outlook after losing a ruling in the lawsuit between its Fleetwood Folding Trailers Inc. unit and American Household Inc.’s Coleman unit regarding a licensing agreement over the Coleman brand name. But Fleetwood said its loss would widen from a year earlier even before the $5.2-million judgment because of slower-than-anticipated RV shipments.

The company said the judge had set a hearing for Friday regarding possible punitive damages against Fleetwood. Although the ruling will happen later than Fleetwood had expected, any additional damages that may be levied by the court probably will be required to be reflected, along with the amount of the original judgment, in its third-quarter earnings.

Fleetwood said some of its dealers delayed orders in the belief the company would discount products at or near the end of the third quarter. A sharp decline in industrywide motor home shipments exacerbated the situation, contributing to an inventory buildup, it said.

Fleetwood shares fell $2.56 to $9.90 on the New York Stock Exchange.