Fleetwood Posts Losses, Plans to Sell Retail Assets

Fleetwood Enterprises Inc. on Thursday reported losses for its fourth quarter and fiscal year and predicted another loss in the current quarter.

The maker of recreational vehicles and manufactured homes also said it had agreed to sell its retailing business and its retail loan portfolio as part of an effort to focus more on the company’s core manufacturing operations.

The buyer of the retailing business is Clayton Homes Inc., a subsidiary of billionaire Warren Buffett’s Berkshire Hathaway Inc.

Fleetwood said it lost $55.8 million from continuing operations, or $1 a share, in the quarter ended April 24, compared with a loss of $5.4 million, or 13 cents, a year earlier.

The net loss for the latest quarter totaled $120.5 million, or $2.16 a share, which included a loss of $64.6 million from discontinued operations. The discontinued operations in its latest quarter included asset impairment charges of $51.1 million related to the sale of the retail businesses.

It was Riverside-based Fleetwood’s second consecutive quarterly loss. The company cited overproduction in the previous six months, higher labor costs and an overall slowdown in the motor home industry. Fleetwood said it expected to post a loss for its fiscal first quarter.

Revenue from continuing operations fell 12% in the latest quarter to $560 million.

Analysts, on average, had expected Fleetwood to lose 30 cents a share in the fiscal fourth quarter on sales of $603 million, according to Reuters Estimates.

As part of a restructuring, the company said it had eliminated 11 corporate vice president positions and cut 1,200 jobs, or 9% of its workforce, since the end of its third quarter.

“Implementing a lot of change is always difficult and usually costly,” Chief Executive Elden Smith said on a conference call with analysts.

Smith, who was named CEO in March, said he was optimistic about improving performance in 2006.

He said that Fleetwood’s exit from its retail and financing businesses was the major factor behind the poor results.

Clayton Homes agreed to pay $74 million for Fleetwood Retail Corp.’s inventory, fixed assets and prepaid rent.

But Fleetwood will retain ownership of other assets with an estimated value of $41.7 million, including 22 stores sublet to an independent dealer.

Fleetwood also said it expected to sell the retail loan portfolio of HomeOne Credit Corp. for about $70 million to Vanderbilt Mortgage, a Clayton affiliate. Both transactions are expected to close in the first half of the current fiscal year.

For all of last fiscal year, Fleetwood posted a loss on continuing operations of $72.6 million, or $1.31 a share, compared with a profit of $17.4 million, or 44 cents a share, in 2004.

Shares of Fleetwood fell a dime Thursday to $10.10.