News Release Issued: March 10, 2009 09:04 AM ET
Fleetwood Enterprises, Inc. Files Voluntary Petitions for Chapter 11
Protection; Motor Home, Housing Businesses Will Continue Operations
Travel Trailer Operations Will Close
RIVERSIDE, Calif., March 10 /PRNewswire-FirstCall/ -- Fleetwood Enterprises,
Inc. ("Fleetwood"), a leading producer of recreational vehicles and
manufactured housing, today filed voluntary Chapter 11 petitions for itself
and certain operating subsidiaries in the U.S. Bankruptcy Court for the
Central District of California in Riverside. The filings do not include any
of the company's foreign or non-operating entities.
Fleetwood's motor home and manufactured housing businesses will continue to
operate while the company seeks buyers for these business units. While
Fleetwood believes it has sufficient cash to operate its businesses in the
immediate term, the company is also in advanced discussions with its senior
secured lenders for new, debtor-in-possession (DIP) financing to supplement
existing working capital. As of Jan. 25, 2009, the company had bank cash of
approximately $23.0 million, excluding cash remaining in non-filing
entities, principally its captive insurance subsidiary.
Filing at this time preserves Fleetwood's right to revisit its Dec. 12, 2008
Exchange Offer, in which the company issued its 14% senior secured notes.
Under Chapter 11, the company has a 90-day period from the Offer's effective
date in which to revisit the terms; that period will expire shortly. Terms
of the senior notes effectively restricted the company from seeking
investment in its businesses in view of subsequent deterioration in the
The filing also facilitates the closing of Fleetwood's travel trailer
division, which the company has commenced. This division accounted for
losses of $65.3 million in 2007 and $16.8 million in 2008. The division
closing affects three manufacturing facilities and two service facilities
employing approximately 675 people. The company is also laying off an
additional 65 corporate associates.
"Although we made substantial progress in restructuring this division and
improved the product offering, current market conditions proved too severe
to continue the turnaround," stated Elden L. Smith, Fleetwood's president
and chief executive officer. "We appreciate the past support of the travel
trailer dealers and our associates."
Today's events follow three years of restructuring that management undertook
in the face of worsening market conditions and, more recently, unprecedented
credit restrictions affecting both dealers and customers. Management's
actions included selling two non-core businesses, restructuring and
decentralizing operations, reducing headcount company-wide by more than 70%,
and adding new distribution points and a modular division. Despite these
efforts, however, management determined that a Court reorganization would
offer the best means of addressing the company's existing debt structure and
ongoing losses in travel trailers, which cannot be supported in the current
"We will use the Chapter 11 process to more rapidly restructure our
overhead, pursue potential buyers, and definitively resolve our debt
issues," Mr. Smith said. "Fleetwood is one of the most widely recognized
names in our industries, with strong market share, an extensive dealer
network and enthusiastic customer support. As important as these assets are,
we must take additional steps in response to today's deepening economic
"We appreciate the support of our loyal dealers and customers. We want to
assure them that we intend to continue doing business in motor homes and
manufactured housing while we complete the processes before us. We will work
with our dealers to support the continued sales of Fleetwood motor homes and
Mr. Smith went on to say that "The RV industry has sound long-term
prospects, as RVers remain faithful to the lifestyle, and we anticipate a
strong rebound when the financing environment stabilizes and consumer
confidence improves. In our manufactured housing business, we see growth
opportunities that arise from positive demographic trends, the growing need
for affordable housing in this country, and commercial modular applications,
particularly for the military which represents an important segment of our
market. We will be able to compete more effectively now that financing
advantages of site-built homes over manufactured homes have narrowed. We are
taking steps to ensure our businesses will be ready when the current markets
turn up again."
Fleetwood has filed first-day motions that ask the Court to approve, among
other things, payment of employee wage and benefit charges that were
incurred before the petition was filed, and the continuation of certain
sales incentive programs, warranty service, cash collateral, and cash
management systems. The company is working with its largest national lender,
Bank of America, to continue to provide competitive RV dealer and consumer
financing during the reorganization period.
"The vast majority of our suppliers and dealers should see no disruption in
our business," Mr. Smith emphasized. "We will continue to support our
current and future product development and manufacturing."
The company's consolidated balance sheet as of Oct. 26. 2008, showed assets
of $558.3 million and liabilities of $518.0 million. For the last fiscal
year, the company showed annual revenues of approximately $1.7 billion. At
the time of the filing, there were no defaults and no outstanding borrowings
on the company's secured credit facility other than $61.7 million of undrawn
letters of credit to support the company's performance of certain contracts
and obligations. In addition, the company had structured debt consisting of
$81.4 million in aggregate principal amount of the 14% senior secured notes
and $151.3 million of 6% trust preferred securities, respectively.
The company expects to incorporate the impact of the filing on its fiscal
third quarter results and file its Form 10Q as soon as it is completed.
Fleetwood is being advised by its legal counsel, Gibson Dunn & Crutcher LLP;
its investment banker, Greenhill & Co., LLC; and its financial advisor, FTI
Founded in 1950, Fleetwood Enterprises, Inc. and its various subsidiaries
produce, distribute, and service recreational vehicles and manufactured
housing. The company is dedicated to providing high-quality, innovative
products that offer exceptional value to customers. Fleetwood continues to
employ more than 3,000 people in 15 plants located in 10 states. Fleetwood's
products are primarily marketed through extensive independent dealer
networks throughout the United States and Canada. The company is
headquartered in Riverside, Calif.
Additional information about the company's reorganization may be found
online at www.kccllc.net/fleetwood
or the Investor Relations/News section ofwww.fleetwood.com
. For the next few days, a call center will be open from
9:00 am to 5:00 pm, Pacific Time, at (888) 288-1501.
Contact: The Abernathy MacGregor Group
Rivian Bell or Sydney Rosencranz
(213) 630-6550; (888) 477-4319 (24/7)
SOURCE: Fleetwood Enterprises, Inc.
Web site: http://www.fleetwood.com/