Champion Enterprises, Inc. Reports First Quarter Results

Conference Call Scheduled for Today, 11 a.m. Eastern Time;

Call-in Number 973-633-6740; Replay Number 888-306-8690



Apr 18, 2001, 01:00 ET from Champion Enterprises, Inc.

    AUBURN HILLS, Mich., April 18 /PRNewswire/ -- Champion Enterprises, Inc.
 (NYSE:   CHB), the nation's leading housing manufacturer, today reported results
 for the first quarter ended March 31, 2001.  For the quarter, the company had
 revenues of $326 million and a net loss of $26 million, or $0.55 per share.
 Before costs related to the closing of two manufacturing facilities and 30
 sales centers, the loss was $21 million, or $0.45 per share.  Closing-related
 expenses were $3.4 million after tax, or $0.07 per share, for non-cash fixed
 asset impairment charges and $1.4 million after tax, or $0.03 per share, for
 lease termination and other costs.  In the first quarter of 2000, Champion had
 revenues of $535 million and net income of $1.3 million, or $0.03 per share.
     Champion's Chairman, President, and Chief Executive Officer, Walter R.
 Young, commented, "Our results were affected by challenging market conditions,
 with year-to-date industry wholesale shipments down more than 40 percent and
 retail sales of new homes off an estimated 30 percent.  Although industry
 sales have declined, I am encouraged that industry retail inventory levels
 have dropped by more than 10,000 new homes this year and by over 50,000 homes
 since mid-1999.  Recently, consumer repossessions appear to have leveled off,
 interest rates charged to consumers have dropped and retail traffic has
 increased."
 
     Operations
     For the quarter, manufacturing revenues totaled $261 million, down 40
 percent from a year ago on a 47 percent decrease in homes sold.  As a result
 of lower sales volume, the manufacturing segment reported a loss of $8.2
 million, excluding $2.3 million for fixed asset impairment charges for the
 closing of two manufacturing facilities.  The company is now operating 51
 homebuilding facilities, compared to 59 last March.  Unfilled wholesale orders
 for housing at quarter end totaled approximately $19 million, compared to $15
 million at year end and $36 million a year ago.
     Retail operations in the quarter had revenues of $108 million and a loss
 of $9.4 million, excluding $3.2 million for fixed asset impairment charges and
 $2.2 million for lease termination and other costs.  For the first three
 months of 2001, total homes sold by Champion's retail operations were down 45
 percent.  At quarter end the company was operating 230 retail locations,
 compared to 260 at year end and 285 at April 1, 2000.
 
     Focus on cash flow
     Champion continues to closely monitor expenditures, inventory levels and
 cash flows.  In the quarter the company spent $1.4 million on capital
 expenditures, down from $4.9 million a year ago.  Capital expenditures for
 2001 are expected to be less than the $15 million spent in 2000.  As a result
 of the company's efforts to diversify its floor plan payables, Champion
 currently has approximately $71 million outstanding with Conseco Finance and
 $32 million with other finance sources.
 
     Outlook
     Young continued, "The industry has made substantial progress to get back
 in balance with reduced inventory levels and improved practices.  The overall
 economy, consumer confidence levels and job losses remain a concern.  We also
 continue to be concerned about financing availability and consumer
 repossessions, but are pleased that finance companies have recently reported
 lower delinquency rates.
     "In our second quarter we expect higher revenues than this quarter, which
 would be our first increase after seven consecutive quarterly declines," said
 Young.  "Despite this upturn, we will probably have a slight loss for the
 period before costs for the potential closing of additional manufacturing
 facilities as we continue to keep capacity and inventory levels in line with
 demand.
     "We are encouraged by improved retail traffic levels, reduced inventories
 and the spring selling season.  In addition, our Genesis division continues to
 expand and be well received by builders and developers.  Through Genesis we
 look to capture a larger share of the overall housing market.  In the short-
 term we are managing the company for liquidity, reducing expenses and
 inventories, and lowering our breakeven point.  As a result, we should benefit
 quickly when the economy and industry improve," Young concluded.
     Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is
 the industry's leading manufacturer and has produced more than 1.5 million
 homes since the company was founded.  The company operates 51 homebuilding
 facilities and 230 retail locations.  Champion's homes are also sold by more
 than 1,000 independent retail locations that have joined either the Champion
 Home Center or the Alliance of Champions retail distribution networks.
 Further information can be found using the company's website,
 www.championhomes.net .
     This news release contains certain statements, including forecasts,
 assessments of current industry conditions, short-term and long-term goals,
 initiatives to implement change, and marketing and expansion strategies, which
 could be construed to be forward looking statements within the meaning of the
 Securities and Exchange Act of 1934.  These statements reflect the company's
 views with respect to future plans, events and financial performance.  The
 company does not undertake any obligation to update the information contained
 herein, which speaks only as of the date of this press release.  The company
 has identified certain risk factors which could cause actual results and plans
 to differ substantially from those included in the forward looking statements.
 These factors are discussed in the company's most recently filed Form 10-K,
 and that discussion regarding risk factors is incorporated herein by
 reference.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     SALES AND INCOME SUMMARY
     (In thousands, except per share amounts)
 
 
                                                   Three Months Ended
                                           March 31,                   April 1,
                                             2001                       2000
 
 
     Net sales (1)                         $326,312                   $535,309
 
 
     Operating income (loss) before
       fixed asset impairment charges      ($29,255)                    $9,170
 
     Fixed asset impairment charges (2)      (5,500)                         -
 
     Operating income (loss) (3)           ($34,755)                    $9,170
 
 
     Net income (loss) before
       fixed asset impairment charges      ($22,683)                    $1,301
 
     Fixed asset impairment charges (2)      (3,400)                         -
 
     Net income (loss)                     ($26,083)                    $1,301
 
 
     Per diluted share:
 
     Net income (loss) before
       fixed asset impairment charges        ($0.48)                     $0.03
 
     Fixed asset impairment charges (2)       (0.07)                         -
 
     Net income (loss)                       ($0.55)                     $0.03
 
 
     Weighted shares for diluted EPS         47,496                     47,354
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     CONSOLIDATED FINANCIAL SUMMARY
     (Dollars and weighted shares in thousands, except per share amounts)
 
 
                                           Three Months Ended
                                           March 31,  April 1,              %
                                             2001      2000              Change
 
     Net sales (1):
     Manufacturing                         $260,510  $435,802             -40%
     Retail                                 108,402   167,507             -35%
     Less: intercompany                     (42,600)  (68,000)
     Total net sales                        326,312   535,309             -39%
 
     Cost of sales (1)                      281,504   451,338             -38%
 
     Gross margin                            44,808    83,971             -47%
 
     Selling, general and
         administrative expenses (2)         74,063    74,801              -1%
 
     Operating income (loss) before
         fixed asset impairment charges     (29,255)    9,170
 
     Fixed asset impairment charges (2)      (5,500)        -
 
     Operating income (loss) (3)            (34,755)    9,170
 
     Interest expense, net                    6,428     6,969              -8%
 
     Income (loss) before income taxes      (41,183)    2,201
 
     Income taxes (benefits) (4)            (15,100)      900
 
     Net income (loss)                     ($26,083)   $1,301
 
 
 
     Basic earnings (loss) per share         ($0.55)    $0.03
 
     Weighted shares for basic EPS           47,496    47,247
 
 
     Diluted earnings (loss) per share       ($0.55)    $0.03
 
     Weighted shares for diluted EPS         47,496    47,354
 
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     OTHER STATISTICAL INFORMATION
 
                                                Three Months Ended
                                            March 31,           April 1,   %
                                              2001                2000   Change
 
     Manufacturing
 
     Homes sold                               8,210               15,351  -47%
        Less: intercompany                    1,239                2,309  -46%
     Homes sold to
        independent retailers                 6,971               13,042  -47%
 
     Floors sold                             14,696               25,701  -43%
 
     Multi-section mix                           76%                  66%
 
     Average home price                     $30,500              $27,200   12%
 
     Manufacturing facilities at period
      end                                        51                   59  -14%
 
 
     Retail
 
     Homes sold
        New homes                             1,824                3,315  -45%
        Pre-owned homes                         513                  906  -43%
        Total homes sold                      2,337                4,221  -45%
 
     % Champion-produced new
        homes sold                               84%                  68%
 
     New multi-section mix                       69%                  58%
 
     Average new home price                 $55,500              $47,300   17%
 
     Average number of new homes in
      inventory
        per sales center at period end           18                   19   -5%
 
     Sales centers at period end                230                  285  -19%
 
 
     Consolidated (in thousands)
 
     Contingent repurchase obligations     $360,000             $640,000  -44%
     Champion-produced field inventories   $713,000             $915,000  -22%
     Shares issued and outstanding           47,544               47,242
 
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     CONSOLIDATED CONDENSED BALANCE SHEETS
     (In thousands)
 
 
                                            March 31,  December 30,  April 1,
     ASSETS                                   2001        2000        2000
 
     Cash and cash equivalents               $19,029    $50,143      $25,909
     Accounts receivable, trade               50,579     31,132       84,920
     Inventories                             211,607    217,765      295,483
     Deferred taxes and other assets          89,900     77,493       80,971
       Total current assets                  371,115    376,533      487,283
     Property and equipment, net             193,760    207,277      219,952
     Goodwill, net                           271,061    273,970      470,328
     Deferred taxes and other assets          80,726     84,276       31,259
                                            $916,662   $942,056   $1,208,822
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Floor plan payable                     $102,923   $114,198     $170,131
     Accounts payable                         62,588     43,103       88,954
     Other accrued liabilities               180,678    185,552      194,673
       Total current liabilities             346,189    342,853      453,758
     Long-term debt                          225,496    225,634      223,994
     Notes payable to bank                     5,000          -        5,000
     Other long-term liabilities              68,656     76,760       80,801
     Shareholders' equity                    271,321    296,809      445,269
                                            $916,662   $942,056   $1,208,822
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     NOTES TO FINANCIAL INFORMATION
 
     (1) For the quarter ended April 1, 2000, net sales and cost of sales
 have been restated to reclassify delivery revenue to sales from cost of
 sales.
     (2) For the quarter ended March 31, 2001, costs related to closed
 operations includes $2.2 million ($1.4 million after tax or $0.03 per diluted
 share) in selling, general and administrative expenses for lease termination
 and other costs and $5.5 million ($3.4 million after tax or $0.07 per diluted
 share) for non-cash fixed asset impairment charges.
     (3) Segment EBITA consists of earnings (loss) before interest, taxes and
 goodwill amortization, and includes fixed asset impairment charges and other
 costs related to closed operations.  A reconciliation of operating income
 (loss) follows (dollars in thousands):
 
 
                                    Three        % of       Three        % of
                                 Months Ended   Related  Months Ended   Related
                                March 31, 2001   Sales   April 1, 2000   Sales
 
     Manufacturing EBITA           ($10,456)     -4.0%      $13,098       3.0%
     Retail EBITA                   (14,838)    -13.7%        5,255       3.1%
     General corporate expenses      (6,582)                 (5,754)
     Goodwill amortization           (2,879)                 (3,429)
        Operating income (loss)    ($34,755)    -10.7%       $9,170       1.7%
 
     (4) The difference between taxes at the 35% federal statutory rate and
 taxes provided is due to state income taxes and nondeductible items,
 primarily goodwill.
 
 

SOURCE Champion Enterprises, Inc.
    AUBURN HILLS, Mich., April 18 /PRNewswire/ -- Champion Enterprises, Inc.
 (NYSE:   CHB), the nation's leading housing manufacturer, today reported results
 for the first quarter ended March 31, 2001.  For the quarter, the company had
 revenues of $326 million and a net loss of $26 million, or $0.55 per share.
 Before costs related to the closing of two manufacturing facilities and 30
 sales centers, the loss was $21 million, or $0.45 per share.  Closing-related
 expenses were $3.4 million after tax, or $0.07 per share, for non-cash fixed
 asset impairment charges and $1.4 million after tax, or $0.03 per share, for
 lease termination and other costs.  In the first quarter of 2000, Champion had
 revenues of $535 million and net income of $1.3 million, or $0.03 per share.
     Champion's Chairman, President, and Chief Executive Officer, Walter R.
 Young, commented, "Our results were affected by challenging market conditions,
 with year-to-date industry wholesale shipments down more than 40 percent and
 retail sales of new homes off an estimated 30 percent.  Although industry
 sales have declined, I am encouraged that industry retail inventory levels
 have dropped by more than 10,000 new homes this year and by over 50,000 homes
 since mid-1999.  Recently, consumer repossessions appear to have leveled off,
 interest rates charged to consumers have dropped and retail traffic has
 increased."
 
     Operations
     For the quarter, manufacturing revenues totaled $261 million, down 40
 percent from a year ago on a 47 percent decrease in homes sold.  As a result
 of lower sales volume, the manufacturing segment reported a loss of $8.2
 million, excluding $2.3 million for fixed asset impairment charges for the
 closing of two manufacturing facilities.  The company is now operating 51
 homebuilding facilities, compared to 59 last March.  Unfilled wholesale orders
 for housing at quarter end totaled approximately $19 million, compared to $15
 million at year end and $36 million a year ago.
     Retail operations in the quarter had revenues of $108 million and a loss
 of $9.4 million, excluding $3.2 million for fixed asset impairment charges and
 $2.2 million for lease termination and other costs.  For the first three
 months of 2001, total homes sold by Champion's retail operations were down 45
 percent.  At quarter end the company was operating 230 retail locations,
 compared to 260 at year end and 285 at April 1, 2000.
 
     Focus on cash flow
     Champion continues to closely monitor expenditures, inventory levels and
 cash flows.  In the quarter the company spent $1.4 million on capital
 expenditures, down from $4.9 million a year ago.  Capital expenditures for
 2001 are expected to be less than the $15 million spent in 2000.  As a result
 of the company's efforts to diversify its floor plan payables, Champion
 currently has approximately $71 million outstanding with Conseco Finance and
 $32 million with other finance sources.
 
     Outlook
     Young continued, "The industry has made substantial progress to get back
 in balance with reduced inventory levels and improved practices.  The overall
 economy, consumer confidence levels and job losses remain a concern.  We also
 continue to be concerned about financing availability and consumer
 repossessions, but are pleased that finance companies have recently reported
 lower delinquency rates.
     "In our second quarter we expect higher revenues than this quarter, which
 would be our first increase after seven consecutive quarterly declines," said
 Young.  "Despite this upturn, we will probably have a slight loss for the
 period before costs for the potential closing of additional manufacturing
 facilities as we continue to keep capacity and inventory levels in line with
 demand.
     "We are encouraged by improved retail traffic levels, reduced inventories
 and the spring selling season.  In addition, our Genesis division continues to
 expand and be well received by builders and developers.  Through Genesis we
 look to capture a larger share of the overall housing market.  In the short-
 term we are managing the company for liquidity, reducing expenses and
 inventories, and lowering our breakeven point.  As a result, we should benefit
 quickly when the economy and industry improve," Young concluded.
     Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is
 the industry's leading manufacturer and has produced more than 1.5 million
 homes since the company was founded.  The company operates 51 homebuilding
 facilities and 230 retail locations.  Champion's homes are also sold by more
 than 1,000 independent retail locations that have joined either the Champion
 Home Center or the Alliance of Champions retail distribution networks.
 Further information can be found using the company's website,
 www.championhomes.net .
     This news release contains certain statements, including forecasts,
 assessments of current industry conditions, short-term and long-term goals,
 initiatives to implement change, and marketing and expansion strategies, which
 could be construed to be forward looking statements within the meaning of the
 Securities and Exchange Act of 1934.  These statements reflect the company's
 views with respect to future plans, events and financial performance.  The
 company does not undertake any obligation to update the information contained
 herein, which speaks only as of the date of this press release.  The company
 has identified certain risk factors which could cause actual results and plans
 to differ substantially from those included in the forward looking statements.
 These factors are discussed in the company's most recently filed Form 10-K,
 and that discussion regarding risk factors is incorporated herein by
 reference.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     SALES AND INCOME SUMMARY
     (In thousands, except per share amounts)
 
 
                                                   Three Months Ended
                                           March 31,                   April 1,
                                             2001                       2000
 
 
     Net sales (1)                         $326,312                   $535,309
 
 
     Operating income (loss) before
       fixed asset impairment charges      ($29,255)                    $9,170
 
     Fixed asset impairment charges (2)      (5,500)                         -
 
     Operating income (loss) (3)           ($34,755)                    $9,170
 
 
     Net income (loss) before
       fixed asset impairment charges      ($22,683)                    $1,301
 
     Fixed asset impairment charges (2)      (3,400)                         -
 
     Net income (loss)                     ($26,083)                    $1,301
 
 
     Per diluted share:
 
     Net income (loss) before
       fixed asset impairment charges        ($0.48)                     $0.03
 
     Fixed asset impairment charges (2)       (0.07)                         -
 
     Net income (loss)                       ($0.55)                     $0.03
 
 
     Weighted shares for diluted EPS         47,496                     47,354
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     CONSOLIDATED FINANCIAL SUMMARY
     (Dollars and weighted shares in thousands, except per share amounts)
 
 
                                           Three Months Ended
                                           March 31,  April 1,              %
                                             2001      2000              Change
 
     Net sales (1):
     Manufacturing                         $260,510  $435,802             -40%
     Retail                                 108,402   167,507             -35%
     Less: intercompany                     (42,600)  (68,000)
     Total net sales                        326,312   535,309             -39%
 
     Cost of sales (1)                      281,504   451,338             -38%
 
     Gross margin                            44,808    83,971             -47%
 
     Selling, general and
         administrative expenses (2)         74,063    74,801              -1%
 
     Operating income (loss) before
         fixed asset impairment charges     (29,255)    9,170
 
     Fixed asset impairment charges (2)      (5,500)        -
 
     Operating income (loss) (3)            (34,755)    9,170
 
     Interest expense, net                    6,428     6,969              -8%
 
     Income (loss) before income taxes      (41,183)    2,201
 
     Income taxes (benefits) (4)            (15,100)      900
 
     Net income (loss)                     ($26,083)   $1,301
 
 
 
     Basic earnings (loss) per share         ($0.55)    $0.03
 
     Weighted shares for basic EPS           47,496    47,247
 
 
     Diluted earnings (loss) per share       ($0.55)    $0.03
 
     Weighted shares for diluted EPS         47,496    47,354
 
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     OTHER STATISTICAL INFORMATION
 
                                                Three Months Ended
                                            March 31,           April 1,   %
                                              2001                2000   Change
 
     Manufacturing
 
     Homes sold                               8,210               15,351  -47%
        Less: intercompany                    1,239                2,309  -46%
     Homes sold to
        independent retailers                 6,971               13,042  -47%
 
     Floors sold                             14,696               25,701  -43%
 
     Multi-section mix                           76%                  66%
 
     Average home price                     $30,500              $27,200   12%
 
     Manufacturing facilities at period
      end                                        51                   59  -14%
 
 
     Retail
 
     Homes sold
        New homes                             1,824                3,315  -45%
        Pre-owned homes                         513                  906  -43%
        Total homes sold                      2,337                4,221  -45%
 
     % Champion-produced new
        homes sold                               84%                  68%
 
     New multi-section mix                       69%                  58%
 
     Average new home price                 $55,500              $47,300   17%
 
     Average number of new homes in
      inventory
        per sales center at period end           18                   19   -5%
 
     Sales centers at period end                230                  285  -19%
 
 
     Consolidated (in thousands)
 
     Contingent repurchase obligations     $360,000             $640,000  -44%
     Champion-produced field inventories   $713,000             $915,000  -22%
     Shares issued and outstanding           47,544               47,242
 
 
     See accompanying Notes to Financial Information.
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     CONSOLIDATED CONDENSED BALANCE SHEETS
     (In thousands)
 
 
                                            March 31,  December 30,  April 1,
     ASSETS                                   2001        2000        2000
 
     Cash and cash equivalents               $19,029    $50,143      $25,909
     Accounts receivable, trade               50,579     31,132       84,920
     Inventories                             211,607    217,765      295,483
     Deferred taxes and other assets          89,900     77,493       80,971
       Total current assets                  371,115    376,533      487,283
     Property and equipment, net             193,760    207,277      219,952
     Goodwill, net                           271,061    273,970      470,328
     Deferred taxes and other assets          80,726     84,276       31,259
                                            $916,662   $942,056   $1,208,822
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Floor plan payable                     $102,923   $114,198     $170,131
     Accounts payable                         62,588     43,103       88,954
     Other accrued liabilities               180,678    185,552      194,673
       Total current liabilities             346,189    342,853      453,758
     Long-term debt                          225,496    225,634      223,994
     Notes payable to bank                     5,000          -        5,000
     Other long-term liabilities              68,656     76,760       80,801
     Shareholders' equity                    271,321    296,809      445,269
                                            $916,662   $942,056   $1,208,822
 
 
     CHAMPION ENTERPRISES, INC. AND SUBSIDIARIES
     NOTES TO FINANCIAL INFORMATION
 
     (1) For the quarter ended April 1, 2000, net sales and cost of sales
 have been restated to reclassify delivery revenue to sales from cost of
 sales.
     (2) For the quarter ended March 31, 2001, costs related to closed
 operations includes $2.2 million ($1.4 million after tax or $0.03 per diluted
 share) in selling, general and administrative expenses for lease termination
 and other costs and $5.5 million ($3.4 million after tax or $0.07 per diluted
 share) for non-cash fixed asset impairment charges.
     (3) Segment EBITA consists of earnings (loss) before interest, taxes and
 goodwill amortization, and includes fixed asset impairment charges and other
 costs related to closed operations.  A reconciliation of operating income
 (loss) follows (dollars in thousands):
 
 
                                    Three        % of       Three        % of
                                 Months Ended   Related  Months Ended   Related
                                March 31, 2001   Sales   April 1, 2000   Sales
 
     Manufacturing EBITA           ($10,456)     -4.0%      $13,098       3.0%
     Retail EBITA                   (14,838)    -13.7%        5,255       3.1%
     General corporate expenses      (6,582)                 (5,754)
     Goodwill amortization           (2,879)                 (3,429)
        Operating income (loss)    ($34,755)    -10.7%       $9,170       1.7%
 
     (4) The difference between taxes at the 35% federal statutory rate and
 taxes provided is due to state income taxes and nondeductible items,
 primarily goodwill.
 
 SOURCE  Champion Enterprises, Inc.