It has never been the intention of this newsletter to either focus on or promote any particular company (s) or person (s), but rather to report those items we feel you need to know to stay informed and help you make good business decisions.  And knowing what’s going on at the biggest companies in the industry is part of that.

Having said that, Fleetwood Enterprises has been a fascinating company to follow the past 6-7 years while they have dramatically changed their style, focus and structure.  The company that said they’d never get into retail got into it in a big way, and the Fleetwood founding family sued.  The “old guard” at the top was largely replaced by notable outsiders reportedly bringing with them a myriad of talented people, fresh ideas and a wealth of knowledge.  It some ways it made perfect sense to bring in fresh blood during a period of unprecedented change in the manufactured housing industry.  But given the results of the decisions made by this brain trust you’ve got to wonder if these folks really understand our business and the challenges we face. 

Fleetwood was for decades an industry leader in every category.  And if you know any of the middle and upper management personnel within Fleetwood on the West Coast, most who have been with the company or in the industry for a long, long time and are amongst the sharpest people around, you can’t help but wonder if the guys at the top ever took the time to listen to the people in the field and learn that these people, given the tools and support, are the key to their success.  These people are smart, they are out in the field and on the street, and they really do know what they’re talking about. 
 
But Fleetwood’s board took a much larger and broader corporate approach, bringing in a CEO from PACCAR / Kenworth Truck 2 1⁄2 years ago named Edward Caudill who promised to turn things around.  He brought in many other high-powered folks and (rumor has it) tackled such critical tasks as redecorating the corporate conference room with expensive artwork.  Things clearly were headed in the right direction.  Apparently all of us who thought they should promote from within and persevere through this difficult stretch with their long-term key people in charge didn’t know what we were talking about.

The results speak for themselves.  Let’s see how it turned out: 

(THESE EXERPTS WERE CUT AND PASTED FROM WWW.THESTREET.COM LATEST NEWS ON TICKER SYMBOL: FLE)

Fleetwood Updates Expectations for Third Quarter
PR Newswire

RIVERSIDE, Calif., Jan 18, 2005 /PRNewswire-FirstCall via COMTEX/ -- Fleetwood Enterprises, Inc. announced that the previously reported $5.2 million judgment in the case between Fleetwood Folding Trailers, Inc. and The Coleman Company, Inc., combined with slower-than-anticipated RV sales, have caused the Company to revise its prior expectations for its third quarter ending January 23, 2005. Management now expects the net loss for the quarter will significantly exceed last year's loss. Previously, the Company had said the third-quarter loss would likely be less than in fiscal 2004. The Company also indicated that it expects to be solidly profitable in the fourth quarter, but the results for the third quarter now make it uncertain whether the Company will attain profitability for the full fiscal year.

Fleetwood Reports Results for the Third Quarter and First Nine Months of Fiscal 2005
PR Newswire

RIVERSIDE, Calif., March 3, 2005 /PRNewswire-FirstCall via COMTEX/ -- Fleetwood Enterprises, Inc. , one of the nation's largest manufacturers of recreational vehicles and a leading producer and retailer of manufactured housing, today announced results for the third quarter and first nine months of fiscal 2005, ended January 23, 2005. The Company reported a third quarter net loss of $54.7 million or 99 cents per share, compared with a net loss of $10.2 million or 26 cents per share for the third quarter of fiscal 2004. Revenues decreased 6 percent to $564.9 million compared with $597.8 million in the prior year's third quarter.

At the same time, the Company and its bank syndicate also announced the expansion of its secured credit facility, described below. The changes provide Fleetwood with additional borrowing capacity throughout the year and amend the EBITDA covenant to enable the Company to remain in compliance.

Many of us have wondered how long industry stalwart Fleetwood would continue struggling, and it appears that in the corporate world, just like in the NBA, the coach just got the axe.  AND FINALLY, Fleetwood has taken the first step toward meaningful recovery.  Keep reading…

RIVERSIDE, Calif., March 9, 2005 /PRNewswire-FirstCall via COMTEX/ -- The board of directors of Fleetwood Enterprises, Inc. today announced Elden L. Smith has been named president and chief executive officer, succeeding Edward B. Caudill who has stepped down.

Smith, 64, previously served as senior vice president of Fleetwood's recreational vehicle group until his retirement in 1997. He joined the Company in 1968 and held positions of increasing responsibility within the Company's recreational vehicle group. He served as the executive in charge of the RV Group from 1973 until his retirement. Under his guidance the RV Group's revenues grew from $39 million to more than $1.3 billion.

Smith has also been appointed as a member of the board of directors of Fleetwood, with a term expiring at the September 2007 annual meeting of shareholders. Thomas B. Pitcher will continue as the non-executive chairman of the board.

Pitcher said, "Elden is a well known and respected leader in the RV industry, and he possesses a solid understanding of the manufactured housing business. He brings a wealth of knowledge back to Fleetwood, and we believe his experience and strong dealer relationships will enable him to make an immediate positive impact. During his nearly 30 years with the Company, Elden was appreciated as an exemplary team builder. Many of us on the board had the opportunity to work with Elden when he was with Fleetwood previously; we have tremendous respect for him. We were pleased to discover his readiness to rejoin this fine company."

Smith is a past chairman of the Recreation Vehicle Industry Association (RVIA) and served on the association's board for more than 20 years. He holds a bachelor's degree in business administration and economics from Whittier College.

"The entire board of directors thanks Ed Caudill for his contributions over the past two and a half years," Pitcher added. "His efforts in building a deeper executive team will serve Fleetwood well as we implement our strategies to improve performance and build shareholder value."

Hundreds of millions of dollars in losses and a chunk of market share later, Fleetwood now has the brilliant idea of putting someone in charge who is a respected insider, started with the company in 1968 and led his division from $39 Million to more that $1.3 Billion in sales.  And there he was, the whole time, right there in the family.  “…an exemplary team builder…”  has been lured out of retirement.

What a great idea!  

Their stock is near a 52-week low.  I think I’ll buy some.

Greg Harmon - President
Commonwealth Real Estate Services
E-mail: greg@cwres.com
Telephone 503.244.2300 Ext. 101