Fleetwood files bankruptcy

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Fleetwood:

NEW YORK, March 10 (Reuters) - Fleetwood Enterprises Inc (FLTW.OB), a maker of recreational vehicles and manufactured housing, has filed for bankruptcy and will close its travel trailer business, the company said on Tuesday.

Fleetwood, which filed for Chapter 11 bankruptcy protection in California, will seek a buyer for its motor home and manufactured housing units and will continue to operate those businesses during the search process, the company said.

International operations are not included in the bankruptcy filing.

Fleetwood, hit by successive waves of higher fuel prices and a recession that has cut sales of its vehicles, has been trying to restructure its operations for three years.

"We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential buyers, and definitively resolve our debt issues," President and Chief Executive Officer Elden Smith said in a statement.

Fleetwood said it believes it has sufficient cash to operate in the immediate term. It is in "advanced discussions" with its senior secured lenders for new, debtor-in-possession financing to supplement existing working capital, it said.

On March 5, Coburg, Oregon-based Monaco Coach Corp (MCOAQ.PK), a maker of motorized and towable recreational vehicles, filed for Chapter 11 bankruptcy. (Reporting by Chelsea Emery; editing by John Wallace)



YIKES!
 
More detail...

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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
market.

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
economy.

"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
challenges.

"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
manufactured homes."

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
Consulting, Inc.

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 of
www.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
              [email protected]; [email protected]
            (213) 630-6550; (888) 477-4319 (24/7)
SOURCE: Fleetwood Enterprises, Inc.

Web site: http://www.fleetwood.com/
 
Major RV manufacturers are dropping like flies!

However somebody on the American Coach Owners group reported they were on the phone with the AC Parts Dept today and it is still business as usual there. It remains to be seen whether Fleetwood's motorhome divisions will come out of this alive, though perhaps part of another company.
 
I remember not long ago that someone here mentioned Fleetwood would likely ride out the economic storm, given their prominence in the marketplace.

Apparently not so.  :-\

There are a LOT of inconsistencies in RV design and manufacture, when comparing makes/models to other makes/models.  With any luck, these closings will eventually result in a more centralized RV industry that can do everything more efficiently (which includes serving the customer).  Similar to the 1970's snowmobile company meltdown recently mentioned in another thread.
 
Another sad day for the RV industry.  Thanks for letting us know.

ArdraF
 
Well, I am not worried about my small investment in Fleetwood stocks.  I am more worried about the men and women who are without jobs because of this.
 
It hurting all of us. People ask me how is business and all I can say is "the lights are still on, so I'm counting my blessings". I hope it turns around soon. (I own a remodeling firm)
 
Fleetwood has a huge debt load, which they recently had to refinance at highly expensive terms.  You may have been thinking of Winnebago which has no debt to speak of (according to their annual report).   Newmar, who is privately owned, is also reputed to have little or no debt.
 
"Fleetwood's motor home and manufactured housing businesses will continue to operate while the company seeks buyers for these business units."

Could Thor be a potential buyer?

Just a thought......
 
RV Roamer said:
Fleetwood has a huge debt load, which they recently had to refinance at highly expensive terms.  You may have been thinking of Winnebago which has no debt to speak of (according to their annual report).   Newmar, who is privately owned, is also reputed to have little or no debt.

I'm glad Winnebago lookd good to make it.....
 
The bad news for the 'survivors' (Winnebago, Thor, Newmar, Tiffen, ?) is the market will be flooded with bargain-basement units for sale.  They need revenue to survive.
 
wkndfun said:
It hurting all of us. People ask me how is business and all I can say is "the lights are still on, so I'm counting my blessings". I hope it turns around soon. (I own a remodeling firm)

I do computer consulting and repair for businesses.  We're closing the main office and switching to a home-based business model in a couple of months to cut back on as much overhead as possible.  The problems that we experience are that we stay very busy but customers are becoming extremely slow to pay.  That, and the new computer sales to businesses have dried up almost completely, which kills revenue from the labor involved in setting them up.  At least thus far I've managed to keep employees and closing up the office isn't really a problem since the work is more consulting and field service than a storefront, but yes, even with being busy everybody seems to be hurting.

I have a job and haven't been forced to cut staff, so I am not going to complain.
 
Yes I too am thankful for what I do have.....hope to be able to keep what I have.
 
Any one who has a roof over there head and is able to keep food on the table and pay all of the bills and still keep some toys are very lucky these days.
 
I feel for the employee's, but this seemed to be a foregone conclusion when the market dropped out.  Fleetwood is (was) carrying over $300MM in debt.  With that kind of debt to service, a loss of cash flow like all manufacturers are seeing is a death sentence.  I will be frankly surprised if Fleetwood is able to restructure and re-emerge as an ongoing concern.  Credit is insanely tight and no one is offering debtor in possession financing right now.  I am guessing they will liquidate on their own terms in order to consolidate and focus on manufactured homes.
 
RV Roamer said:
Major RV manufacturers are dropping like flies!

However somebody on the American Coach Owners group reported they were on the phone with the AC Parts Dept today and it is still business as usual there. It remains to be seen whether Fleetwood's motor-home divisions will come out of this alive, though perhaps part of another company.
The MH division will end up being purchased, But I do not see the Motor-home division being traded/bought.
There is no money out there, My manufacture (Thor) reported a 20% loss last quarter, As it sits they are the strongest in the market currently and in no way are they positioned to expand. :-\
Fleetwood going under will have a strong initial impact on the scene. As we all know, Banks will not loan on any manufactures product whom is not currently manufacturing.
I have been in the business for 11 years now and am getting more and more concerned about the immediate future of this life style. :mad:
 

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