Champion Enterprises, Inc. Announces First Quarter Results Should Exceed Prior Year and Analysts' Estimates
NEW YORK, April 1 /PRNewswire/ -- Champion Enterprises, Inc. (NYSE: CHB - news) announced today that sales and earnings for the first quarter ending April 4, 1998 are expected to improve significantly over the first quarter last year. Diluted earnings per share from continuing operations for the quarter are estimated to be in the range of $0.33 to $0.35, compared to $0.27 per share last year. Current analysts' estimates for the first quarter are $0.30 to $0.32 per share.
Champion's Chairman, President and Chief Executive Officer, Walter R. Young, Jr., commented, ''The momentum that was started in the fourth quarter of 1997 has carried over into the first quarter of 1998. Incoming order rates have significantly increased from last year, resulting in higher levels of production, shipments of homes and unfilled orders in many parts of the country. Higher levels of unfilled orders have improved production scheduling and enhanced production efficiency. Last year's first quarter earnings were impacted by start-up costs at three plants, low levels of unfilled orders, and the restructuring of the product line at Redman's Indiana facilities.
''We are extremely pleased that our new home designs and decors have been well received at this year's trade shows. In addition, all indications are that retail customer traffic and sales have improved and current retail inventory levels appear to be lower than they were a year ago. We believe that our manufacturing operations continue to outperform the industry,'' Young explained.
To date this year, Champion has announced the 1998 acquisitions of six retail organizations with 118 sales centers in 18 states. Together with existing retail locations, Champion now operates 141 sales centers in 20 states with aggregate 1997 retail sales of approximately $430 million. The total purchase price of the retail organizations acquired to date includes approximately $170 million in cash and $12 million in company common stock to be paid in 1998, and $108 million in payments to be paid out over the next five years, based on future performance.
''Champion's strategy is to acquire well-run retail businesses and to expand their operations. The company's goal is to reach at least $1 billion in retail sales by the year 2000. We have assembled a group of some of the most profitable, well-run organizations in the industry. Just as we consolidated operations in manufacturing, we plan to do the same in retail. Each of our retailers will continue to operate autonomously, but should benefit from efficiencies in purchasing, marketing, training and development, human resources and other administrative expenses,'' Young said.
''The acquisitions should generate significant cash flow in 1998, but are not expected to contribute materially to reported earnings until the beginning of next year. Earnings for 1998 will reflect accounting adjustments to eliminate the manufacturing profits in inventories of Champion produced homes at company operated retail locations. We remain committed to achieving our long-term goal of a minimum 15 percent compound annual growth in earnings per share,'' concluded Young. |
