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0000912057-00-030887.hdr.sgml : 20000920
ACCESSION NUMBER: 0000912057-00-030887
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 20000430
FILED AS OF DATE: 20000706
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FLEETWOOD ENTERPRISES INC/DE/
CENTRAL INDEX KEY: 0000314132
STANDARD INDUSTRIAL CLASSIFICATION: [2451
] IRS NUMBER: 951948322
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0425
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-07699
FILM NUMBER: 668028
BUSINESS ADDRESS:
STREET 1: 3125 MYERS ST
STREET 2: P O BOX 7638
CITY: RIVERSIDE
STATE: CA
ZIP: 92523
BUSINESS PHONE: 9093513500
10-K405
1
a10-k405.txt
10-K405
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(MARK ONE) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
/X/ OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER 1-7699
FLEETWOOD ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1948322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3125 MYERS STREET, RIVERSIDE, CALIFORNIA 92503-5527
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (909) 351-3500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
PACIFIC EXCHANGE, INC.
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE, INC.
PACIFIC EXCHANGE, INC.
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES __X__ NO _____
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION 8-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. /X/
AGGREGATE MARKET VALUE OF COMMON STOCK HELD BY NON-AFFILIATES ON JUNE 23,
2000: $461,071,000 (32,642,195 SHARES AT CLOSING PRICE ON NEW YORK STOCK
EXCHANGE OF $14.125). FOR THIS PURPOSE ALL SHARES HELD BY OFFICERS AND DIRECTORS
ARE CONSIDERED TO BE HELD BY AFFILIATES, BUT NEITHER THE REGISTRANT NOR SUCH
PERSONS CONCEDE THAT THEY ARE AFFILIATES OF THE REGISTRANT.
COMMON STOCK OUTSTANDING ON JUNE 23, 2000: 32,712,151 SHARES
DOCUMENTS INCORPORATED BY REFERENCE:
INFORMATION REQUIRED BY PART III IS INCORPORATED BY REFERENCE TO PORTIONS OF
THE REGISTRANT'S PROXY STATEMENT WITH RESPECT TO ITS 2000 ANNUAL MEETING, WHICH
WILL BE FILED NO LATER THAN 120 DAYS AFTER THE CLOSE OF THE REGISTRANT'S FISCAL
YEAR ENDED APRIL 30, 2000.
FLEETWOOD ENTERPRISES, INC.
PART I
ITEM 1. BUSINESS
GENERAL
Fleetwood Enterprises, Inc. is the nation's largest manufacturer of
recreational vehicles (motor homes, travel trailers, folding trailers and
slide-in truck campers) and one of the nation's largest producers and retailers
of manufactured housing. Fleetwood had a 3.7 percent share of the single-family
housing market in 1999 and a 17.9 percent share of the manufactured housing
market. In its fiscal year ended April 30, 2000, Fleetwood sold 59,458
manufactured homes and was the second largest producer of HUD-Code homes in the
United States in terms of units sold. In 1999, Fleetwood had a 24.6 percent
share of the overall recreational vehicle market, a 24.6 percent share of the
motor home market, a 20.5 percent share of the travel trailer market and a
36.9 percent share of the folding trailer market. In its fiscal year ended April
2000, Fleetwood sold 80,120 recreational vehicles and held the leading market
share in each of these three product categories.
The Company's manufacturing activities are conducted in 18 states within the
U.S., and to a much lesser extent in Canada. In addition, the Company operates
five supply companies which provide components for its manufactured housing and
recreational vehicle operations, while also generating outside sales.
The Company entered the manufactured housing retail business in fiscal 1999
through a combination of key acquisitions and internal development of new retail
sales centers. At the end of fiscal 2000, the Company was operating 243 retail
sales locations in 26 states, and was the fourth largest retailer of
manufactured homes in the U.S.
Fleetwood's business began in 1950 through the formation of a California
corporation. The present company was incorporated in Delaware in
September 1977, and succeeded by merger to all the assets and liabilities of the
predecessor company. The Company's principal executive offices are located in
Riverside, California. As used herein, the terms "Fleetwood" or "Company" mean
Fleetwood Enterprises, Inc. and its subsidiaries, unless otherwise indicated by
the context.
The following table sets forth revenues by business segment and the relative
contribution of such revenues to total revenues for the past three fiscal years.
Information with respect to operating profit (loss) and identifiable assets by
industry segment is shown in the Notes to Consolidated Financial Statements in
Part II of this Form 10-K.
YEARS ENDED APRIL
---------------------------------------------------------------------------
2000 % 1999 % 1998 %
---------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Manufactured housing:
Manufacturing......................... $1,454,821 39% $1,563,966 45% $1,487,650 49%
Retail................................ 591,895 16 332,309 9 -- --
Less intercompany..................... (298,224) (8) (178,764) (5) -- --
---------- --- ---------- --- ---------- ---
1,748,492 47 1,717,511 49 1,487,650 49
Recreational vehicles:
Motor homes........................... 1,200,383 32 1,064,465 31 904,574 30
Travel trailers....................... 589,919 16 548,910 16 503,762 16
Folding trailers...................... 124,214 4 115,659 3 109,827 4
---------- --- ---------- --- ---------- ---
1,914,516 52 1,729,034 50 1,518,163 50
---------- --- ---------- --- ---------- ---
Supply operations....................... 49,957 1 43,618 1 44,754 1
---------- --- ---------- --- ---------- ---
$3,712,965 100% $3,490,163 100% $3,050,567 100%
========== === ========== === ========== ===
1
MANUFACTURED HOUSING
Fleetwood is the second largest producer of HUD-Code manufactured housing in
the United States, and distributes its products through a network of
approximately 1,450 retailers in 48 states. Approximately 1,200 of the Company's
retailers are independent and 243 at fiscal year end were Company-owned stores.
Fleetwood's share of the manufactured housing market, based upon shipments to
retailers, was 17.9 percent in calendar year 1999. A manufactured home is a
single-family house constructed entirely in a factory environment rather than at
the home site, and is constructed in accordance with HUD construction and safety
standards. There are two basic categories of manufactured
housing--single-section and multi-section--and Fleetwood is a leading producer
of both types. Fleetwood produces manufactured housing using efficient,
assembly-line techniques and generally the same materials as are found in
site-built homes.
About 65 percent of the manufactured homes produced in the United States are
placed on individually owned lots; the balance are located on leased sites in
manufactured housing communities. Most manufactured housing is sold in rural
regions and towns outside of major urban areas.
Today's manufactured homes offer customers similar quality to many
site-built homes at a much more affordable price. Manufactured homes are
constructed in a factory environment utilizing assembly line techniques, which
allows for volume purchases of materials and components and more efficient use
of labor. The quality of manufactured homes has increased significantly over the
past 20 years, as manufactured home producers offer most of the amenities of
site-built housing and generally build homes with the same materials as
site-built homes. Many features associated with new site-built homes are
included in manufactured homes, such as central heating, name brand appliances,
carpeting, cabinets, walk-in closets, vaulted ceilings, wall coverings and
porches. In addition, optional features include such amenities as fireplaces,
wet bars, spa tubs and garages, as well as retailer-installed options such as
central air conditioning and furniture packages.
The manufactured housing industry has grown significantly since 1991.
According to the Manufactured Housing Institute, domestic shipments increased
from 170,713 homes in 1991 to 372,843 homes in 1998, before declining to 348,671
in 1999. Total retail sales increased from approximately $4.7 billion in 1991 to
more than $16.0 billion in 1998. In addition, the manufactured housing
industry's share of new single-family housing has increased significantly in
recent years, from about 17 percent in 1991 to 23 percent in 1998, before
declining to 21 percent in 1999. The Company believes that this growth has
resulted from increasing consumer acceptance of and preference for manufactured
housing, which has been driven by the following: (i) improved product quality
and design and enhanced features; (ii) the significant disparity in the average
price per square foot between site-built housing and manufactured housing;
(iii) favorable demographic and regional economic trends; (iv) improving
business practices in the manufactured home retail industry; and (v) increased
attractiveness of financing terms available to manufactured housing retailers
and consumers. As acceptance of manufactured housing has increased among higher
income buyers, demand has shifted toward larger, multi-section homes, which
accounted for 65 percent of industry shipments in 1999, up from 47 percent in
1991. The industry decline in 1999 reflects excessive retail inventories and
constricted availability of retail financing.
Fleetwood held a 19.4 percent share of the single-section manufactured
housing market in calendar 1999, as measured by shipments to retailers.
Fleetwood's single-section homes range in size from 550 square feet to 1,290
square feet. Fleetwood's average single-section home retailed for approximately
$23,000 (excluding land costs) in fiscal 2000. Single-section homes represented
approximately 36 percent of Fleetwood's manufactured housing unit shipments and
approximately 24 percent of manufactured housing sales in its fiscal year ended
April 2000. Fleetwood's single-section homes are designed for the affordable
housing market which includes first-time, retiree and value-oriented buyers.
Fleetwood held a 17.1 percent share of the multi-section manufactured
housing market in calendar 1999, as measured by shipments to retailers.
Fleetwood's multi-section homes range in size from 930 square feet to 2,340
square feet, and sold for an average retail price of approximately $43,000
(excluding
2
land costs) in fiscal 2000. Multi-section homes represented approximately
64 percent of Fleetwood's manufactured housing unit shipments and approximately
76 percent of manufactured housing sales in fiscal 2000.
MANUFACTURED HOUSING--RETAIL
With the exception of several vertically integrated entities, most companies
in the manufactured housing industry, including Fleetwood, traditionally
marketed their homes through independent retailers. In recent years, however,
certain manufactured housing producers began to acquire retailers. These
acquisitions occurred for a variety of reasons, including manufacturers' desire
to (i) control retail distribution; (ii) upgrade marketing and merchandising
efforts, including brand name development; and (iii) provide an exit vehicle for
family-owned retail businesses. Additionally, a number of financial
consolidators and residential developers have entered the manufactured housing
industry by acquiring retailers. In the first half of calendar 1998, certain
competing manufacturers announced acquisitions of several important Fleetwood
retailers, which collectively accounted for approximately $277 million in
purchases from Fleetwood. These developments created a risk that independent
distribution channels for Fleetwood homes may not be as readily available as
they had been in the past, which prompted the Company to modify the way it
markets its homes.
In order to protect its distribution channels and to take advantage of
business opportunities in the manufactured housing retail industry, Fleetwood
acquired HomeUSA, Inc. ("HomeUSA"), the nation's largest independent retailer of
manufactured homes. This entity had 65 retail locations and calendar 1997 pro
forma sales of $205 million. The HomeUSA acquisition was completed on
August 10, 1998. Concurrent with the announcement of the HomeUSA acquisition,
Fleetwood acquired the remaining interest in Expression Homes, Inc. ("Expression
Homes") that it did not already own. Expression Homes was jointly formed with
Pulte Corporation in 1997 for the purpose of entering the manufactured housing
retail business, initially through selected acquisitions and later through new
startup operations. In addition, Fleetwood completed several other acquisitions
of independent retailers during fiscal 1999 and fiscal 2000. Fleetwood also
expanded its Company-owned retail network through the development of new
"greenfield" locations. This latter strategy was Fleetwood's primary focus in
fiscal 2000 and will remain so in future years.
RECREATIONAL VEHICLES
Fleetwood has been the leading producer of recreational vehicles in the
United States since 1973 and distributes its products through a network of
approximately 1,200 independent retailers in 49 states. Recreational vehicles
are either driven or towed and are primarily used for vacations, camping trips
and other leisure activities. The general categories of recreational vehicles
are motor homes, travel trailers and folding trailers.
Fleetwood manufactures motor homes under the brand names Flair, Storm,
Bounder, Pace Arrow, Southwind, Pace Arrow Vision, Expedition, Bounder Diesel,
Discovery, American Tradition, American Dream, American Eagle, American
Heritage, Tioga and Jamboree. A motor home consists of a truck or bus chassis
with a living unit built onto it. The interior typically includes a driver area
and kitchen, bathroom, dining and sleeping areas. Fleetwood's conventional
("Class A") motor homes are fully self-contained, having sleeping accommodations
for four to eight people and such optional features as air conditioning, an
auxiliary power generator and home electronics such as a stereo, television and
VCR. Fleetwood's Class A motor homes are available in a variety of models
ranging in length from 27 to 45 feet and retail for an average price of
approximately $105,000. Fleetwood also manufactures more compact ("Class C")
motor homes built on a cut-away van chassis with basically the same features and
options as Class A products. These units are available in various models ranging
in length from 19 to 31 feet and retail for an average price of approximately
$50,000. Six of the industry's 12 top-selling Class A motor homes are
manufactured by Fleetwood, as well as two of the top five Class C motor homes.
3
Fleetwood manufactures a variety of travel trailers under the Prowler,
Terry, Wilderness, Mallard, Avion, Savanna and Westport brand names. Fleetwood's
travel trailers are designed to be towed by pickup trucks, vans or other tow
vehicles, and are similar to motor homes in use and features. All of Fleetwood's
travel trailers include sleeping, eating and bathroom facilities and are
self-contained units with their own lighting, heating, refrigeration, fresh
water storage tanks and sewage holding tanks so that they can be used for short
periods without being attached to utilities. Most of Fleetwood's travel trailers
are 8 feet wide, vary in length from 17 to 39 feet (including trailer hitch) and
retail for an average price of approximately $18,000. Four of the industry's six
top-selling travel trailers are manufactured by Fleetwood. The Company also
produces slide-in truck campers at one of its travel trailer factories under the
brand names Caribou, Elkhorn and Angler. These products are similar to travel
trailers in terms of use and features, but are designed to fit in the bed of a
pickup truck.
Fleetwood is the largest manufacturer of folding trailers under the
industry-leading Coleman-Registered Trademark- brand. Folding trailers are a
lower cost alternative to travel trailers and are lighter and easier to tow.
Fleetwood's folding trailers have eating and sleeping facilities, range in
length from 17 to 25 feet and retail for an average price of approximately
$7,000.
SUPPLY OPERATIONS AND OTHER BUSINESSES
Fleetwood's supply operations include two fiberglass manufacturing
companies, a drapery operation and a lumber milling operation. These operations
provide a reliable source of quality components for Fleetwood's principal
manufacturing businesses, while also generating outside sales. In the fiscal
year ended April 2000, approximately 49 percent of the product volume of these
manufacturing operations was used by Fleetwood internally, and the remaining
51 percent was sold to third parties. The supply operations also include a
lumber brokerage and a component import business, each of which provides
Fleetwood's manufactured housing and recreational vehicle businesses with
reliable sources of quality raw materials and components.
SALES AND DISTRIBUTION
Fleetwood distributes its manufactured homes through a network of
approximately 1,200 independent retailers located in 48 states and 243
Company-owned stores in 26 states. In 1999, approximately 88 percent of
Fleetwood's manufactured homes were shipped to retailers in the 20 states with
the highest retail sales, including Texas, North Carolina, Georgia, South
Carolina and Alabama. Fleetwood sells its recreational vehicles through a
network of approximately 1,200 independent retailers located in 49 states and
Canada. In the calendar year ended 1999, approximately 80 percent of Fleetwood's
recreational vehicles were shipped to retailers in the 25 states with the
highest retail sales, including California, Texas, Michigan, Florida and Ohio.
In the same period, Fleetwood was the market share leader in terms of units sold
in all but one of the top 25 recreational vehicle states.
Consistent with industry practice, Fleetwood has historically marketed its
products through many independent retailers, none of which individually
accounted for a material part of Fleetwood's total sales. Fleetwood expects this
industry practice to continue with respect to recreational vehicles; however,
the acquisition activity in recent years in the retail sector of the
manufactured housing industry has prompted Fleetwood to modify its manufactured
housing sales and distribution strategies. The Company has responded to this
industry trend by upgrading its manufactured home retail distribution network,
developing alternatives to replace retailers purchased by competitors, and
promoting and expanding Fleetwood brand name recognition through exclusive
"Fleetwood Home Centers" and through its own retail strategies, including
acquisitions and the opening of Company-owned stores. The Company's entry into
the manufactured housing retail business required that the Company maintain an
inventory of finished homes for purposes of display and immediate sale to retail
homebuyers. This is a distinct departure from the Company's manufacturing policy
of building homes to order and not maintaining factory inventories of completed
homes. Largely as a result of the move into the retail business, inventories
increased sharply
4
during fiscal 1999 and fiscal 2000, rising from $154 million in April 1998 to
$257 million in April 1999 to $343 million in April 2000.
As part of the sales process, Fleetwood offers most purchasers of its
recreational vehicles comprehensive one-year warranties against defects in
materials and workmanship, excluding only certain components separately
warranted by a supplier. The warranty period for motor homes is one year or
until the unit has been driven 15,000 miles, whichever occurs first, except for
structural items, which are covered for three years. Fleetwood's RV group is
currently installing an electronic dealer communications network known as FDN
that facilitates the processing of product warranty claims and parts ordering.
With respect to manufactured homes, Fleetwood's warranty now covers a two-year
period, and includes coverage for factory-installed appliances. Prior to
March 1, 2000, Fleetwood's home warranty covered a one-year period, except for
structural, plumbing, heating and electrical systems, which were covered for
five years. Beginning in fiscal 2001, the Company is offering an optional
three-year extended warranty service contract under the name "Fleetguard" for
Fleetwood home buyers who wish to purchase it. Annual expenses for product
warranties and service were approximately $150.8 million in fiscal year 2000 and
$137.8 million in fiscal year 1999. Fleetwood believes that its warranty program
is an investment that enhances its reputation for quality and reliability.
As part of its overall business strategy, Fleetwood has emphasized and
focused on the following items.
COMMITMENT TO QUALITY AND CUSTOMER SATISFACTION. Fleetwood's quality
improvement process focuses on increasing customer satisfaction by improving the
quality and design of Fleetwood products and enhancing the customer's shopping
experience. In this regard, the Company has developed a number of ongoing
processes, including (i) designing its products with materials that frequently
exceed government requirements and industry standards, (ii) training both its
employees and its retailers' employees in customer satisfaction techniques and
quality improvement procedures, (iii) providing additional services, such as
comprehensive training of its retailers' employees and contractors regarding
proper installation techniques for manufactured homes, (iv) offering some of the
most extensive warranties in the manufactured housing and recreational vehicle
industries and (v) responding quickly and effectively to customer inquiries and
concerns.
Fleetwood's quality improvement process is facilitated by the use of
independent consumer surveys to determine whether retail customers are satisfied
with the quality of their Fleetwood product and the level of service provided by
Fleetwood and the retailer. An independent consumer research firm conducts
telephone surveys and communicates customer responses to Fleetwood's
manufacturing entities and retailers to reinforce quality performance and
eliminate customer problems. Each year, specific customer satisfaction goals are
established for Fleetwood's manufacturing operations and independent retailers.
Retailers who meet these performance standards are recognized with Fleetwood's
Circle of Excellence Award, and Fleetwood manufacturing centers are similarly
honored for meeting targeted levels of customer satisfaction. Fleetwood believes
that these efforts have resulted in increased awareness by Fleetwood employees
and retailers of the importance of product quality and service, which in turn
has significantly improved Fleetwood's customer satisfaction ratings.
PROVIDE THE BEST PRODUCT VALUE TO THE CUSTOMER. Fleetwood is committed to
offering the best product value in each of its market segments. Fleetwood
intends to achieve this by competitively pricing its products and by supplying
products superior to those of its competitors by maintaining high quality
control and product performance standards. To accomplish this, Fleetwood
(i) continuously improves its manufacturing processes, (ii) generates economies
of scale through high volume levels that reduce the impact of fixed costs and
(iii) purchases materials and components in large quantities to obtain volume
discounts.
UPGRADE AND EXPAND FLEETWOOD'S RETAIL DISTRIBUTION NETWORKS. Since 1991,
Fleetwood has reduced the number of independent retail distribution centers
approved to sell Fleetwood manufactured housing products from approximately
1,800 to approximately 1,450. Fleetwood believes that this action has allowed it
to focus its efforts on larger retailers that share Fleetwood's approach to
merchandising homes and
5
customer satisfaction. Historically, Fleetwood had not focused on exclusive
retailer arrangements and most retailers sold competitive lines; however, in
recent years, Fleetwood has developed exclusive retailer arrangements.
Currently, approximately 53 percent of Fleetwood's manufactured housing
retailers are exclusive, up from approximately 30 percent four years ago. During
fiscal 2000, Fleetwood's housing group introduced the Pinnacle Retailer Program,
which is designed to encourage more exclusive retailer relationships. This
program includes a number of attractive retailer incentives, including funding
for signage and additional marketing support not available to non-exclusive
retailers. Fleetwood has increased its efforts to develop and implement retail
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