Wednesday, August 29, 2007
ARE SHAREHOLDERS GOING TO FORCE FLEETWOOD TO BE SOLD?
SLS Management LLC said in a letter to Fleetwood's board Monday that a sale to Champion is the company's best available alternative to maximize shareholder value. The investor said Chief Executive Elden Smith has taken some steps to improve value since replacing Ed Caudill in 2005, but the company remains unprofitable and hasn't reduced its cost structure enough.
In the Securities and Exchange Commission filing, SLS Management reported owning 7.6 million shares, representing an 11.8 percent stake in the Riverside, Calif.-based company.
SLS Managing Member Scott L. Swid argued that a combination with Champion could benefit from the "ideal overlap" of their manufacturing facilities by allowing the closure of at least 11 plants without exiting any market.
"We believe a strategic combination between Fleetwood and Champion Enterprise would create more than $600 million in value for shareholders of both companies," Swid wrote. "We think the value creation for Fleetwood shareholders alone would be approximately $3 per share, a more than 30 percent increase from where the stock is trading today."
Swid also urged the company to do more to reduce its cost structure at its Folding Trailers and Travel Trailers units.
Fleetwood shares fell 20 cents, ro 2.2 percent, to $9.07 in afternoon trading.
WHAT DID YOU EXPECT? THE HOUSING MARKET IS DOWN!
According to Avondale Partners analyst Kathryn I. Thompson, total RV shipments were off 8.5 percent for the month, the smallest decline since September.Shipments represent wholesale sales to dealers.
Motorhome shipments fell 10 percent from July 2006, reversing a gain in June. July was the twelfth consecutive month for declines in towables, but Thomson noted shipments were down 8.3 percent, the first month since September that the decline was below double digits.
"We continue to believe that dealer inventory levels are reaching reasonable levels, and the continued decline in wholesale shipments on a year-over-year basis reduces the inventory further," she wrote in a note to clients, adding that retail sales have outpaced shipments for the past 10 months.
"However, this month leaves us with mixed feelings about the industry," Thompson said. "While we are encouraged by the softening decline in towable shipments, a decline in motorhome shipments is somewhat disappointing (but not surprising given the current consumer environment)."
Separately, Coachmen Industries late Monday suspended its dividend program, news which hit the Elkhart, Ind., company's stock particularly hard in Tuesday.
Here's how recreational vehicle makers fared on Tuesday:
Winnebago Industries Inc., down 86 cents, or 3.2 percent, to close at $26.36.
Thor Industries Inc., down $1.25, or 2.9 percent, to $41.45.
Drew Industries Inc., down $2.19, or 5.4 percent, to $38.06.
Fleetwood Enterprises Inc., down 26 cents to $8.84.
Monaco Coach Group, down 48 cents, or 3.5 percent, to $13.15.
Coachmen Industries, down 62 cents, or 8.3 percent, to $6.86.
IS NATIONAL RV HISTORY?
Tuesday, August 28, 2007
Officials for Perris, Calif.-based motorhome builder National RV Holdings Inc. hope a four-part plan will revive the struggling company, according to a report in the Press Enterprise, Riverside.
Last week, CEO Brad Albrechtsen resigned, the same day the company announced it had lost $8 million in its second quarter. David Humphreys has been named interim CEO while Len Southwick, president of subsidiary National RV Inc. since September 2005, will oversee day-to-day operations as COO.
"It's clearly time for a change at National RV, thus my resignation," Albrechtsen said during a Tuesday (Aug. 28) conference call with analysts.
During the call, Southwick said the company plans to build seven vehicles per day in an effort to increase revenue. National RV also intends to launch two new products at the National RV Trade Show in Louisville, Southwick said.
Humphreys said four steps involving revenue growth, reducing costs, modifying the company's financing and divvying out financial incentives to members of management would make the company profitable once again.
"I wish we could say we were going to be profitable next quarter, but it will take many quarters," he said.
The company's stock hit a 52-week low on Aug. 18 of 70 cents per share. In Tuesday afternoon trading, it was up 4 cents at 90 cents per share.
WHY IS THE FED WAITING?
Tuesday, August 28, 2007
Federal Reserve policymakers meeting in early August acknowledged that they might have to take action to ease a growing credit crunch, even as they held out hope for "a return to more normal market conditions" without any intervention.
According to the Associated Press, a cut in one interest rate came 10 days later, and analysts are expecting a broader rate cut when Chairman Ben Bernanke and his Fed colleagues meet in September.
The Fed, however, didn't feel an immediate need to step in at its Aug. 7 meeting. Instead, the Fed left a key interest rate at 5.25%, where it has stood for more than a year. Policymakers left rates alone even as they acknowledged that the worsening housing slump, credit problems and turbulence on Wall Street had increased risks to the economy.
Bernanke and his central bank colleagues "expected a return to more normal market conditions," but they recognized that might not be the case, according to minutes of the closed-door meeting released today (Aug. 28).
"A further deterioration in financial conditions could not be ruled out, and to the extent such a development could have an adverse effect on growth prospects, might require a policy response," the minutes stated. The minutes didn't say what that response might entail.
"Policymakers would need to watch the situation carefully," the minutes stated.
Economists and investors believe the odds are rising that the Fed will move to lower its key interest rate by at least one-quarter percentage point on or before Sept. 18, its next regularly scheduled meeting.
This rate, called the federal funds rate, is the interest banks charge each other on overnight loans and is the Fed main tool for influencing overall economic activity. A reduction to the funds rate would mean lower interest rates for millions of consumers and businesses.
Monday, August 27, 2007
IS THIS FOR REAL, OR JUST FOR PUBLICITY?
Monday, August 27, 2007
Zimmerman, Minn.-based Kingsley Coach Inc. is considering the development of a hybrid version of its K-3 custom coach.
The company, which manufactures luxury motorhomes, SURVs and specialty vehicles on semi-truck chassis, said that the initiative represents “part of an environmental and fuel economy push designed to make Kingsley's K-3 the first hybrid RV model on the market.”
Kingsley said the proposed hybrid coach would be equipped with a regular petrol engine married to an electric motor, or would use a hydrogen injection system to help improve gas mileage and reduce emissions.
Kingsley is also pursuing the use of solar panels on their coaches as an alternate source of power for convenience items within the coach.
"We have started discussions with several manufacturing companies about the concept of a hybrid RV and are excited about the possibilities," stated Allan Smethers, CEO. "With the current high cost of fuels, it clearly makes sense for us to explore the possibilities of a hybrid technology.
“Preliminary research indicates that fuel savings can amount to 35% on electric hybrids and 15% on hydrogen injection systems.”
DOES THE RV INDUSTRY NEED TO PAY THE TAXPAYERS BACK?
Friday, August 24, 2007
About 1,000 Louisiana families have asked the Federal Emergency Management Agency (FEMA) to move them out of government-issued trailers and mobile homes over concerns that the shelters are contaminated, FEMA officials said Thursday (Aug. 23).
The Associated Press reported that Jim Stark, director of FEMA's Louisiana Transitional Recovery Office, said the agency already has moved - or is moving - about 140 of the families into apartments at the agency's expense.
To accommodate others, FEMA has identified roughly 6,500 apartment units across the state that meet the agency's “fair-market value guidelines,” according to Stark.
“We're going to try to move people where they can fit,'' he said.
With roughly 43,000 Louisiana families still living in FEMA trailers and mobile homes following hurricanes Katrina and Rita, officials are investigating complaints that the units are exposing occupants to higher levels of formaldehyde, which can cause respiratory problems.
The Centers for Disease Control and Prevention (CDC) is developing plans to test the air quality inside FEMA trailers, but those tests haven't started yet, a CDC spokesman said Thursday.
Gil Jamieson, FEMA's associate administrator for Gulf Coast recovery, said one problem with conducting air-quality tests is the absence of national standards for acceptable levels of formaldehyde in trailers.
“FEMA is a consumer of these products just as, quite frankly, anyone else is,” he said. “We bear responsibility because we're putting disaster victims in them, but it's really not our place or our mission to be a standard-setting organization.”
In Mississippi, 461 households have asked to be moved to an apartment or other housing because of the formaldehyde concerns, said FEMA spokesman Robert Josephson. To date, he said, 83 had been relocated but about 25 more households are scheduled to move at the beginning of September when apartments become available.
There are 17,382 families living in trailers and mobile homes in Mississippi, down from 45,818, Josephson said.
FEMA has temporarily suspended the sale of its trailers and said it won't be using them to house victims of future disasters until safety concerns are addressed.