National Press Release

RIVERSIDE, Calif., June 26 /PRNewswire-FirstCall/ -- Fleetwood Enterprises, Inc. (NYSE: FLE) announced today financial results for its fiscal 2008 fourth quarter and full year ended April 27, 2008.

Consolidated Results

Consolidated revenues for the quarter declined 26 percent to $363.5 million from $488.3 million in last year's fourth quarter. Benefiting from profitable asset dispositions, the Company reported $18.0 million in consolidated operating income compared to a consolidated operating loss of $12.1 million in the fourth quarter of the prior year. Net income from continuing operations for the quarter totaled $21.7 million, or $0.30 per share, compared to a net loss from continuing operations of $32.0 million, or $0.50 per share, for the corresponding quarter of the prior year. Non-recurring asset dispositions during the quarter generated $24.1 million of gains on previously announced real estate sales, while the prior-year quarter included $9.6 million of expenses primarily related to restructuring of the travel trailer division, partially offset by real estate gains.

"Beyond the one-time events, our operating results reflect, in part, the work we've done to reduce overhead expenses in response to a lower revenue base in the face of continued weakness in manufactured housing and an increasingly challenging environment in recreational vehicles," said Elden L. Smith, Fleetwood's president and chief executive officer. "Our cost-containment initiatives yielded a 24 percent reduction in operating expenses for the most recent quarter to $55.4 million from $72.7 million in the prior-year period. Industry-wide sales for the motor home and travel trailer industries are down substantially calendar year to date. This is clearly the result of volatile and rising fuel prices and the crisis in the home mortgage market, which have driven consumer confidence to its lowest mark in 16 years. The drop in volume has been most notable in Class A motor homes, triggering a swing for the motor home division from a substantial operating profit last year to an operating loss this year."

Results for the full fiscal year were increasingly affected by these same issues as the year progressed. Consequently, consolidated revenues for fiscal year 2008 were down 14 percent to $1.66 billion from $1.92 billion in the same period last year. Operating income for the year, however, was $17.8 million, reflecting cost reductions and non-recurring gains, compared to an operating loss of $57.8 million in fiscal 2007. Net income from continuing operations for fiscal 2008 was $2.9 million, or $0.05 per share, compared to a net loss from continuing operations of $78.0 million, or $1.22 per share, for the same period last year.

RV Group Quarterly Results

The RV Group generated operating income of $5.6 million for the fourth quarter compared to a $12.1 million operating loss in the comparable period of the prior year. Current-year results included an $8.8 million gain on the previously announced sale of an RV supply plant.

The motor home division incurred an operating loss of $2.2 million in the quarter compared to operating income of $11.5 million in the same quarter last year, due to a 32 percent drop in revenues and a shift away from higher-margin Class A products. The travel trailer division generated operating income of $0.9 million, which included the benefit from a reduction to warranty reserves of $3.9 million, prompted by better-than-expected warranty experience and reduced volumes. In the prior year, the division incurred an operating loss of $23.4 million, including $10.2 million in restructuring costs, on revenues that were 27 percent higher.

"The travel trailer division has made progress in many of its key metrics," Smith said, "and we will continue to make further adjustments in that division until it achieves consistent profitability. In the motor home division, we have seen an improvement in shipments and market share of both the lower-priced and fuel-efficient Class C categories that we specifically targeted last year, as well as some of our Class A products. While it is our intention to engage in minimal discounting in this highly competitive environment, the outlook for the RV industry remains quite challenging, at least for the balance of this calendar year and into the spring of 2009. Accordingly, we will continue to carefully manage our production and overhead costs going forward, while working to maintain or improve our market share."

Housing Group Quarterly Results

The Housing Group remained profitable for the quarter despite a further reduction in revenues, earning $0.5 million in operating income compared with $2.1 million in the prior year. Quarterly revenues were $106.3 million, off 9 percent compared with the prior year's $117.1 million. The modular division accounted for 8 percent of sales versus none in the prior year.

"The manufactured housing industry shows no immediate sign of a turnaround," Smith said. "We continue to battle stiff competition from foreclosed site-built homes, as well as the turmoil in the mortgage industry and sluggishness in our traditional retiree market. Despite the immediacy of these concerns, we do not believe they fundamentally alter the positive long-term outlook for a business that provides affordable housing in this country. We are operating above breakeven at current depressed sales levels and continue to be opportunistically poised in the regions and markets in which we participate to take advantage of any recovery. Meanwhile, Trendsetter Homes, our modular division, is carefully but successfully growing its business in the military and commercial fields. We are placing greater emphasis on this sector and have begun to allocate incremental resources to more aggressively pursue additional contracts."

Discontinued Operations

On May 12, 2008, the Company completed the sale of Fleetwood Folding Trailers, Inc. The folding trailer division's revenues and results are now accounted for as discontinued operations, and the financial statements for prior years have been restated accordingly.

Balance Sheet Changes

As of fiscal year end, cash and investments were $100 million, up from both the third quarter and the prior year. This includes $33.5 million from the sale of the corporate headquarters complex, a portion of which the Company is now leasing, and the sale of an RV supply plant. The remaining increase came from improved working capital utilization, primarily reductions in inventory levels.

On June 25, 2008, the Company completed a public offering for 12 million shares of its common stock that raised almost $39 million in net proceeds, which will be used to repurchase a portion of the $100 million 5% convertible senior subordinated debentures and for general corporate purposes. The holders of the debentures are expected to exercise their right to require Fleetwood to repurchase them at par on December 15, 2008, and the Company has the flexibility to redeem them with cash, by issuing common stock, or through a combination of both. The Company also plans to pursue additional sales of idle real estate as well as real estate financing on certain unencumbered facilities to provide additional redemption funding as well as liquidity for ongoing operations.

Corporate Outlook

"We expect sales to remain soft in the manufactured housing business and very challenging in recreational vehicles until fuel prices and home values stabilize and consumer confidence begins to recover," Smith said. "However, we continue working to improve our share of available sales through enhanced, more competitive product offerings and better dealer relations.

"We believe that Fleetwood Financial Services, a previously announced strategic RV wholesale and retail financing alliance with Bank of America, the largest lender in the industry, will play an important role in supporting our efforts and differentiating us from our competition in the RV industry," Smith continued.

RV dealers seem likely to conservatively manage their inventories in the coming months, especially for motor homes. Such conservatism has resulted in lower production volumes so far in the first fiscal quarter. This has led to costs related to short work weeks and layoffs that will negatively impact near-term margins. Operating expenses are expected to show continued year-over-year declines, although at a reduced rate compared with recent quarters.

"Overall, despite expectations of a challenging fiscal 2009, we are confident that the changes we continue to make in all sectors of our Company will enable us to weather current conditions and to capitalize on an upturn," Smith concluded.

Conference Call

The Company will host a conference call with interested parties at 10:30 a.m. PDT/1:30 p.m. EDT on Thursday, June 26, 2008. The call will be broadcast live on the Company's website, http://www.fleetwood.com under Investor Relations, and over the Internet at http://www.streetevents.com and http://www.earnings.com.

About Fleetwood

Fleetwood Enterprises, Inc., through its subsidiaries, is a leading producer of recreational vehicles and manufactured homes. This Fortune 1000 company, headquartered in Riverside, Calif., is dedicated to providing quality, innovative products that offer exceptional value to its customers. Fleetwood operates facilities strategically located throughout the nation, including recreational vehicle, manufactured housing and supply subsidiary plants. For more information, visit the Company's website at http://www.fleetwood.com.

This press release contains certain forward-looking statements and information based on the beliefs of Fleetwood's management as well as assumptions made by, and information currently available to, Fleetwood's management. Such statements, including those regarding our outlook for the RV and housing industries, the effect of Fleetwood Financial Services on our competitive position, our pursuit of modular business, our ability to meet the upcoming $100 million obligation with cash, and our expectation for first quarter revenues and results, reflect the current views of Fleetwood with respect to future events and are subject to certain risks, uncertainties, and assumptions, including risk factors identified in Fleetwood's 10-K and other SEC filings. These risks and uncertainties include, without limitation, the lack of assurance that we will regain sustainable profitability in the foreseeable future; the effect of ongoing weakness in both the manufactured housing and the recreational vehicle markets; the effect of a decline in home equity values, volatile fuel prices and interest rates, global tensions, employment trends, stock market performance, availability of financing generally, and other factors that can and have had a negative impact on consumer confidence, which may reduce demand for our products, particularly recreational vehicles; the availability and cost of wholesale and retail financing for both manufactured housing and recreational vehicles; our ability to comply with financial tests and covenants on existing debt obligations; our ability to obtain, on reasonable terms if at all, the financing we will need in the future to execute our business strategies and to meet the repayment terms of our outstanding convertible debt instruments, including the 5% convertible senior subordinated debentures; potential dilution associated with equity financings we may undertake to raise additional capital and the risk that the equity pricing may not be favorable; the cyclical and seasonal nature of both the manufactured housing and recreational vehicle industries; expenses and uncertainties associated with the entry into new business segments or the manufacturing, development, and introduction of new products; the potential for excessive retail inventory levels in the manufactured housing and recreational vehicle industries; the volatility of our stock price; repurchase agreements with floorplan lenders, which could result in increased costs; potential increases in the frequency of product liability, wrongful death, class action, and other legal actions; and the highly competitive nature of our industries.

All financial information is unaudited and subject to possible adjustment prior to the finalization of the Company's Annual Report on Form 10-K.

     Contact:
     Lyle Larkin
     Vice President - Treasurer
     (951) 351-3535

     Kathy A. Munson
     Director - Investor Relations
     (951) 351-3650

                              (tables to follow)



                         Fleetwood Enterprises, Inc.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Amounts in thousands, except per share data)
                                 (Unaudited)

                                                        13 Weeks Ended
                                              April 27, 2008    April 29, 2007
    Net Sales:
       RV Group                                    $257,259          $371,240
       Housing Group                                106,288           117,075
                                                    363,547           488,315

    Cost of products sold                           313,765           418,151
       Gross profit                                  49,782            70,164

    Operating expenses                               55,360            72,674
    Other operating (income) expenses, net          (23,557)            9,608
                                                     31,803            82,282

       Operating income (loss)                       17,979           (12,118)
    Other income (expense):
       Investment income                                733             1,201
       Interest expense                              (4,664)           (6,784)
       Other, net                                       -                 -

                                                     (3,931)           (5,583)
    Income (loss) from continuing
     operations before income taxes                  14,048           (17,701)
    Benefit (provision) for income taxes              7,660           (14,268)
    Income (loss) from continuing operations         21,708           (31,969)

    Loss from discontinued operations, net           (2,805)           (7,249)

    Net income (loss)                               $18,903          $(39,218)

                                             Basic   Diluted   Basic   Diluted

    Net income (loss) per common share:
       Income (loss) from continuing
        operations                            $0.34   $0.30    $(0.50) $(0.50)
       Loss from discontinued operations      (0.05)  (0.04)    (0.11)  (0.11)

    Net income (loss) per common share        $0.29   $0.26    $(0.61) $(0.61)

    Weighted average common shares           64,257  72,965    64,058  64,058



                         Fleetwood Enterprises, Inc.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Amounts in thousands, except per share data)
                                 (Unaudited)

                                                      52 Weeks Ended
                                            April 27, 2008      April 29, 2007
    Net Sales:
       RV Group                               $1,163,041          $1,400,886
       Housing Group                             496,939             518,461
                                               1,659,980           1,919,347

    Cost of products sold                      1,410,133           1,654,370
       Gross profit                              249,847             264,977

    Operating expenses                           262,474             310,269
    Other operating (income) expenses, net       (30,460)             12,487
                                                 232,014             322,756

       Operating income (loss)                    17,833             (57,779)
    Other income (expense):
       Investment income                           4,459               5,902
       Interest expense                          (23,010)            (25,557)
       Other, net                                    -                18,530

                                                 (18,551)             (1,125)
    Income (loss) from continuing
     operations before income taxes                 (718)            (58,904)
    Benefit (provision) for income taxes           3,637             (19,109)
    Income (loss) from continuing operations       2,919             (78,013)

    Loss from discontinued operations, net        (3,932)            (11,948)

    Net income (loss)                            $(1,013)           $(89,961)

                                          Basic   Diluted     Basic   Diluted

    Net income (loss) per common
     share:
       Income (loss) from continuing
        operations                         $0.05   $0.05      $(1.22) $(1.22)
       Loss from discontinued operations   (0.07)  (0.07)      (0.19)  (0.19)

    Net income (loss) per common share    $(0.02) $(0.02)     $(1.41) $(1.41)

    Weighted average common shares        64,228  64,582      63,933  63,933



                         Fleetwood Enterprises, Inc.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Amounts in thousands)
                                 (Unaudited)

                                          April 27,  January 27,  April 29,
                                             2008        2008        2007
    ASSETS

    Cash and cash equivalents               $58,262     $20,088     $52,127
    Restricted cash and investments (A)      41,877      24,990      24,161
    Receivables                             102,420     112,930     118,334
    Inventories                             139,813     172,503     162,944
    Other current assets                     40,649      47,109      49,362
       Total current assets                 383,021     377,620     406,928

    Property, plant and equipment, net      146,573     154,277     185,454
    Deferred taxes, net                      45,909      42,362      46,488
    Other assets                             50,067      54,605      64,301

       Total assets                        $625,570    $628,864    $703,171

    LIABILITIES & SHAREHOLDERS' EQUITY

    Accounts payable                        $27,701     $32,720     $49,625
    Employee compensation and benefits       32,253      32,098      47,018
    Other short-term borrowings               9,568       8,362       7,314
    5% convertible senior subordinated
     debentures                             100,000     100,000         -
    Other current liabilities               109,621     127,024     142,689
       Total current liabilities            279,143     300,204     246,646

    5% convertible senior subordinated
     debentures                                 -           -       100,000
    6% convertible subordinated
     debentures                             160,142     160,142     160,142
    Other long-term debt                     16,145      17,482      17,508
    Other non-current liabilities            83,873      85,403      92,868
       Total non-current liabilities        260,160     263,027     370,518

    Total shareholders' equity               86,267      65,633      86,007

          Total liabilities and
           shareholders' equity            $625,570    $628,864    $703,171

    (A) Includes $16.8 million of restricted cash proceeds from a real estate
        sale pledged in connection with the Company's secured credit facility.
        The restriction lapsed on May 23, 2008, following the completion of
        the substitution of alternative real estate collateral.



                         Fleetwood Enterprises, Inc.
                      CONDENSED STATEMENTS OF CASH FLOWS
                            (Amounts in thousands)
                                 (Unaudited)

                                          13 Weeks Ended     52 Weeks Ended
                                       4/27/2008 4/29/2007 4/27/2008 4/29/2007
    CASH FLOWS FROM OPERATING
     ACTIVITIES:
    Income (loss) from continuing
     operations                          $21,708  $(31,969)  $2,919  $(78,013)
    Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
       Depreciation and amortization
        expense                            4,446     6,430   19,538    25,074
       Stock-based compensation            2,508       976    5,141     3,438
       Gain on sale of property, plant
        and equipment                    (24,084)     (561) (32,487)   (4,325)
       Deferred taxes, net                (7,700)   11,136   (4,887)   14,721
       Other non-cash items                  479        (1)     286   (15,763)
       Changes in assets and
        liabilities:
             Inventories                  32,690    18,545   23,131     5,076
             Other assets and
              liabilities, net            (5,495)   31,717  (44,689)   18,447

    Net cash provided by (used in)
     operating activities                 24,552    36,273  (31,048)  (31,345)


    CASH FLOWS FROM INVESTING
     ACTIVITIES:
    Purchases and sales of investments,
     net                                    (292)     (298)  (1,237)   (1,085)
    Purchases of property, plant and
     equipment, net                         (793)   (2,083)  (6,019)   (7,752)
    Proceeds from sale of property,
     plant and equipment                  32,739     3,149   59,699    12,398
    Change in restricted cash            (16,790)       --  (16,790)       --

    Net cash provided by investing
     activities                           14,864       768   35,653     3,561

    CASH FLOWS FROM FINANCING
     ACTIVITIES:
    Change in short-term borrowings        1,171     2,420    1,984      (341)
    Changes in long-term debt             (1,302)   (1,263)  (1,093)   (5,512)
    Redemption of convertible
     subordinated debentures                  --        --       --   (30,385)
    Proceeds from exercise of stock
     options                                  --       234      872     1,063

    Net cash provided by (used in)
     financing activities                   (131)    1,391    1,763   (35,175)

    CASH FLOWS FROM DISCONTINUED
     OPERATIONS:

    Net cash provided by (used in)
     discontinued operations              (1,111)    3,159     (494)   (8,523)

    Foreign currency translation
     adjustment                               --       815      261       469

    Increase (decrease) in cash           38,174    42,406    6,135   (71,013)

    Cash at beginning of period           20,088     9,721   52,127   123,140

    Cash at end of period                $58,262   $52,127  $58,262   $52,127



                         Fleetwood Enterprises, Inc.
                BUSINESS SEGMENT AND UNIT SHIPMENT INFORMATION
                        (Dollar amounts in thousands)
                                 (Unaudited)

                                     13 Weeks Ended        52 Weeks Ended
                                  April 27, April 29,  April 27,   April 29,
                                     2008      2007       2008        2007
    REVENUES:
       Motor homes                 $189,862  $278,201    $919,578    $961,925
       Travel trailers               61,383    83,725     219,014     391,310
       RV supply                      6,014     9,314      24,449      47,651
    RV Group                        257,259   371,240   1,163,041   1,400,886
    Housing Group                   106,288   117,075     496,939     518,461

                                   $363,547  $488,315  $1,659,980  $1,919,347

    OPERATING INCOME (LOSS):
       Motor homes                  $(2,176)  $11,489     $14,767     $12,122
       Travel trailers                  855   (23,420)    (16,765)    (65,301)
       RV supply                      6,896      (131)      4,998       1,598
    RV Group                          5,575   (12,062)      3,000     (51,581)
    Housing Group                       507     2,099       8,608      (2,557)
    Corporate and other              11,897    (2,155)      6,225      (3,641)

                                    $17,979  $(12,118)    $17,833    $(57,779)

    UNITS SOLD:
    Recreational vehicles -
       Motor homes                    1,716     2,386       7,804       8,496
       Travel trailers                3,145     4,566      10,926      22,035
                                      4,861     6,952      18,730      30,531

    Housing -
       HUD                            2,631     3,057      12,337      13,257
       MOD                              220         -         759           -
                                      2,851     3,057      13,096      13,257

    Total Company shipments           7,712    10,009      31,826      43,788

SOURCE Fleetwood Enterprises, Inc.