Champion Enterprises Inc. (CHB) filed Quarterly Report for the period ended 2009-07-04.
CHAMPION ENTERPRISES INC. is a leading producer of manufactured housing and mid-size commercial vehicles. Co.\'s manufactured housing operations and markets are located throughout the U.S. and in western Canada. Co.\'s commercial vehicles are marketed throughout the U.S. and Canada. Champion Enterprises Inc. has a market cap of $44.3 million; its shares were traded at around $0.57 .
Highlight of Business Operations:
Pretax loss for the quarter ended July 4, 2009 was $13.3 million, compared to a pretax income of $3.6 million in the second quarter of 2008. Pretax loss for the quarter ended July 4, 2009 included foreign currency transaction gains of $2.0 million on intercompany loans and restructuring and other plant closing charges of $2.7 million. Pretax loss for the quarter ended June 28, 2008 included foreign currency transaction gains of $0.6 million on intercompany loans.
Pretax loss for the six months ended July 4, 2009 was $31.9 million, and included a $4.3 million gain from the final settlement of insurance claims, foreign currency transaction gains of $1.3 million on intercompany loans and restructuring and other plant closing charges of $2.9 million. Pretax loss for the six months ended June 28, 2008 was $17.3 million and included restructuring and other plant closing charges totaling $9.8 million, primarily from the closure of two manufacturing plants, foreign currency transaction losses
$4.3 million gain resulting from settling the insurance claim for the February 2008 Henry, TN plant fire and the idling of one of the two manufacturing plants at our complex in Indiana that resulted in no significant charges. The second quarter of 2009 included charges of $2.7 million resulting from the closure of one plant in Florida and the announced closure of one plant in Colorado and idling of one plant in California. The first quarter of 2008 included charges totaling $9.3 million for the closure of two manufacturing facilities and the elimination of two regional offices. These conditions resulted in a 55% reduction in headcount in the segment since the beginning of 2008.
The plant closures announced in the quarter ended July 4, 2009 resulted in restructuring and other plant closing charges totaling $2.7 million, consisting of fixed asset impairment charges of $1.5 million, severance costs totaling $0.7 million and an inventory write-down of $0.5 million. The plant closings and idling will result in the termination of substantially all 215 employees at the three plants. Severance costs are related to approximately 50 employees that were covered under the Company’s severance program.
The plant closures announced in the first quarter of 2008 included one in Oregon and one in Indiana. The operations at the closed Indiana plant were consolidated at our other Indiana homebuilding complex. The Indiana closure was the final of four plants at a complex where the other three plants had been previously idled. Therefore, impairment charges in the quarter related to the four plant Indiana complex and the Oregon plant. Charges in the first quarter of 2008 totaling $9.3 million consisted of fixed asset impairment charges of $7.0 million, severance costs totaling $2.0 million and an inventory write-down of $0.3 million. Severance costs included certain payments required under the Worker Adjustment and Retraining Notification Act and were related to the termination of approximately 330 employees consisting of substantially all employees at the Oregon plant and those terminated as a result of the Indiana plant closure and consolidation of operations.
Firm contracts and orders pending contracts under framework agreements totaled approximately $165 million at the end of the quarter, compared to approximately $150 million at the end of 2008 and $155 million at the end of last quarter. Included in orders at July 4, 2009, are orders totaling $46 million that are scheduled to be produced after 2010 under long-term agreements.
CHB is in the portfolios of Robert Rodriguez of FPA Capital.
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