Fleetwood Enterprises — Investor Presentation (November 2006)
41 slides from Fleetwood Enterprises's investor presentation, Nov 13, 2006
Slide 1: Fleetwood Enterprises (NYSE:FLE) November 2006
(NYSE:FLE) November 2006
Slide 2: Safe Harbor Statement
This presentation contains certain forward-looking statements and information based on the beliefs of Fleetwood’s management as well as assumptions made by, and information currently available to, Fleetwood’s management. Such statements reflect the current views of Fleetwood with respect to future e
Slide 3: Fleetwood Enterprises, Inc.
Fleetwood Enterprises, Inc.
Slide 4: Leading Producer of Recreational Vehicles & Manufactured Housing
Leading Producer of Recreational Vehicles & Manufactured Housing 1. Percentage of preliminary first half FY 2007 sales Revenue Distribution¹ Motor Homes 43% Travel Trailers 21% Mfd. Hsg. 28% Folding Trailers 5% Supply 3%
Slide 5: Fleetwood's Facilities Are Strategically Located
Fleetwood’s Facilities Are Strategically Located Plants Producing Manufactured Housing 21 Facilities Plants Producing Recreational Vehicles 9 Travel Trailer, 3 Motor Home, 1 Folding Trailer Plants Producing Components 2 Facilities Corporate Office 11,000 employees
Slide 6: Company Highlights
Company Highlights Recognized leader in both recreational vehicle (RV) and manufactured housing industries More than 50 years of successful operating history in core manufacturing businesses Experienced senior management team
Slide 7: Operating Strategy
Operating Strategy Focus on core businesses Manufacturing high-quality, high-value RVs & homes Decentralize operations Empowering those closest to the customer Improve market share Targeting areas of greatest sales & profit potential Concentrate energy & resources Returning to consistent profitabili
Slide 8: Restructuring, Fiscal '06 – '07
Restructuring, Fiscal ’06 – ’07 Reduced corporate officers: 24 to 10 Reduced employment: 13,900 (2/05) to 10,500 (11/06) Divested non-core businesses Housing retail & finance; RV parts; chassis program Stemmed losses and eliminated distractions Consolidated/reduced departments & plants throughout th
Slide 9: Restructuring Actions
Restructuring Actions Sales force reorganized RV Group district sales managers more narrowly focused by product brand Housing Group district sales managers represent products from specific plants Service and warranty decentralized RV Group created division-based customer service groups and reinstate
Slide 10: Housing Group
Housing Group Single-Section Multi-Section Multi-Section, Two-Story Designer Interiors
Slide 11: Industry-Leading Position
Industry-Leading Position 15.8% retail market share YTD in calendar 2006 1 22,681 homes shipped in FY ’06 FY ’06 sales of $796 million 2 More than 1.3 million Fleetwood homes sold since Company’s inception #2 Manufactured Housing Builder Source: Statistical Surveys, Inc. through August Includes inte
Slide 12: Manufactured Housing Leaders
Manufactured Housing Leaders *Clayton’s market share now includes Southern Energy/Giles Source: Statistical Surveys, Inc. Through August 2006 2006 YTD Retail Market Share 27.4% 15.8% 13.0% 5.7% 5.5% 0% 5% 10% 15% 20% 25% 30% Clayton* FLE CHB PHHM SKY
Slide 13: Manufactured Vs. Site-Built Homes
Manufactured Vs. Site-Built Homes * Source: Manufactured Housing Institute; Average price of homes excludes the cost of land Up to 35% lower cost per square foot for comparable home compared to site-built* Controlled manufacturing environment Environmentally friendly Availability of labor Speed of d
Slide 14: Manufactured Housing Shipments
Manufactured Housing Shipments Source: Manufactured Housing Institute; Oppenheimer & Co. Inc. projection for 2006 shipments Total Homes Shipped (000’s) 2006 shipments up in Gulf Coast Increase due primarily to replacement housing needs in Gulf area Other markets remain soft Rebuilding in Gulf Coast
Slide 15: Foundation Set for Industry Recovery
Foundation Set for Industry Recovery Reduced industry manufacturing capacity, retailer locations and retail inventory Repossession inventories peaked in 2003 High of 100,000+ Currently approximately 40,000 Solid demand for affordable housing Lenders gradually re-entering market
Slide 16: "Channel Marketing" Opportunities
“Channel Marketing” Opportunities Gulf Coast rebuilding Tens of thousands of homes must be replaced Factory-built housing is quick and cost-effective Labor availability favors factory-built housing Fleetwood’s plant distribution is a significant competitive advantage Gulf Region has higher-than-aver
Slide 17: Competitive Advantages
Competitive Advantages Long-standing reputation for excellence 21 strategically located facilities Highly efficient labor force and procurement operations Ample capacity (currently at 43% utilization) 1,200 strong, independent retailers Market diversification Strong in both multi-section and single-
Slide 18: Competitive Advantages, Cont'd
Competitive Advantages, Cont’d Decentralization improves responsiveness and ability to meet regional needs Numerous new floor plans and features targeted for specific regions Plant-level focus lowering warranty costs Sales and service geared to local markets
Slide 19: RV Group
Folding Trailer Conventional Travel Trailer Fifth-Wheel Travel Trailer Class A Gas Motor Home Class C Motor Home Class A Diesel Motor Home RV Group
Slide 20: Industry-Leading Position
Industry-Leading Position FY 2006 sales of $1.60 billion (second largest manufacturer in revenues); 54,574 units shipped More than 1.7 million Fleetwood RVs sold since Company’s inception Strong, well-established dealer networks More than 1,000 independent dealers Source: Publicly available financia
Slide 21: Industry-Leading Position, Cont'd
Industry-Leading Position, Cont’d #1 Class A motor home manufacturer (20.2% retail market share) #5 Class C motor home manufacturer (9.9% retail market share) #4 travel trailer manufacturer (6.8% retail market share) #1 folding trailer manufacturer (39.3% retail market share) Source: Statistical Sur
Slide 22: Favorable Industry Trends
Favorable Industry Trends Travel data continues to be positive RVing remains relatively inexpensive mode of vacation travel Fuel prices not a significant factor in total cost of RVing Source: Recreational Vehicle Industry Association (www.RVIA.org) and RV Rental Association Survey 2005 RV rental act
Slide 23: Favorable Industry Trends, Cont'd
Favorable Industry Trends, Cont’d Demographics support promising long-term outlook Baby boomers entering typical customer age range Expanding RV market People living longer; entering RV market at younger age Higher disposable income trends ___________________________ Source: University of Michigan 2
Slide 24: %= FLEETWOOD.
%= FLEETWOOD.
Slide 25: Motor Homes
Motor Homes FY 2006 sales of $977 million 61% of RV Group sales Increased product offerings New floor plans; more multiple slide-outs offered Unique full-wall slide-out technology New entry-level Class A models New Class C models Introducing more fuel-efficient, affordable units Increased Class C pr
Slide 26: Motor Home Leaders (Class C)
Motor Home Leaders Retail Market Share (Class C) Source: Statistical Surveys, Inc. Data Through August 2006 25.1% 17.7% 10.9% 10.2% 10.0% 0% 5% 10% 15% 20% 25% 30% WGO T HO COA Forest River FLE
Slide 27: Motor Home Leaders (Class A)
Motor Home Leaders Retail Market Share (Class A) Source: Statistical Surveys, Inc. Data Through August 2006 20.3% 15.6% 15.0% 12.3% 7.9% 0% 5% 10% 15% 20% 25% FLE MNC WG O THO Tiffin
Slide 28: Travel Trailers
Travel Trailers %= FLEETWOOD.
Slide 29: Travel Trailers
Travel Trailers Division in turnaround mode Improved, more competitive products Expect improvements in market share, revenues, and operating income Challenging competitive market environment Restructuring initiatives yielding improvements Sustainable reductions in material, warranty and overhead cos
Slide 30: Travel Trailer Leaders
Travel Trailer Leaders Retail Market Share Source: Statistical Surveys, Inc. Data Through August 2006 32.1% 16.6% 9.3% 6.8% 4.5% 0% 5% 10% 15% 20% 25% 30% 35% THO< /font> Forest River Jayco FLE MNC
Slide 31: Folding Trailers
Folding Trailers New pictures coming from FFT
Slide 32: Folding Trailers
Folding Trailers Relatively small but important entry-level niche #1 market share position with 39% through August 2006 FY 2006 sales of $84 million (5% of RV sales) New product innovations Additional features and options More competitively priced, camping market-focused products Rationalized manufa
Slide 33: Financial Overview
Financial Overview
Slide 34: Revenues and Operating Income
Revenues and Operating Income (Adjusted for Discontinued Operations) Revenue Operating Income ($ in millions) ($ in billions) $0.0 $1.0 $2.0 $3.0 $4.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 ($250) ($200) ($150) ($100) ($50) $0 $50 $100 $150 $200 $250 Total Re
Slide 35: Financial Progress
Financial Progress Restructuring initiatives yielding improvements Operating costs reduced by $33.1 million during fiscal 2006 Focus on labor efficiencies, selling expenses, service and warranty costs, overheads, and inventory controls In fiscal 2007, operating costs are being reduced by an addition
Slide 36: Recent Results by Segment
Recent Results by Segment (Amounts in millions) FY ENDED FY ENDED Q1 FY07 Q1 FY06 APR 30, 2006 APR 24, 2005 JUL 30, 2006 JUL 31, 2005 (unaudited) (unaudited) REVENUES RV Group 1,612.2 $ 1,659.9 $ 371.2 $ 423.2 $ Housing Group 795.6 785.5 145.7 204.3 Supply 50.2 57.0 12.9 13.7 Interco. Hsg. Gp. Sales
Slide 37: Recent Revenues by Segment
Recent Revenues by Segment (Amounts in millions) * * Q2’06 revenues include $60 million in FEMA-specified units for disaster relief: $30 million in travel trailers and $30 million in manufactured housing. Q2 FY07 Q2 FY06 Oct 29, 2006 Oct 30, 2005 (preliminary) (rounded) REVENUES Motor Homes 230 $ 24
Slide 38: Condensed Balance Sheet
Condensed Balance Sheet (Amounts in thousands) ASSETS Cash and Investments 62,200 $ 51,479 $ Receivables 154,181 186,234 Inventories 207,622 188,303 Assets of Discontinued Operations -- 145,511 Other Assets 370,521 411,782 TOTAL ASSETS 794,524 $ 983,309 $ LIABILITIES AND SHAREHOLDERS' EQUITY Short-T
Slide 39: Stronger Balance Sheet
Stronger Balance Sheet Disposition of Housing retail and finance operations and six idle facilities $66 million from private placement of stock Payment of $58.8 million accrued interest on 6% CTPS Reduction in short-term borrowings Purchase of $50 million par value of 6% convertible debt for $31 mil
Slide 40: Summary
Summary A leader in both the RV and manufactured housing industries, each with favorable demographic trends Focus on product innovation; quality manufacturing Improving prospects for consistent profitability Strengthened liquidity and balance sheet Upside potential as manufactured housing and RV mar
Slide 41: Questions?
Questions?
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