Clayton Homes Earns $26 Million for the Third Quarter.Business Editors KNOXVILLE Knoxville, city (1990 pop. 165,121), seat of Knox co., E Tenn., on the Tennessee River; inc. 1876. A port of entry, it is a trade and shipping center for a farm, bituminous-coal, and marble area. , Tenn.--(BUSINESS WIRE)--April 16, 2003 For the third quarter ending March 31, Clayton Clayton, city (1990 pop. 13,874), seat of St. Louis co., E central Mo., a suburb of St. Louis; inc. 1919. Developed in the 1960s, it has high-rise office buildings, hotels, and shopping centers; several major firms are headquartered there. Homes, Inc. (NYSE NYSE See: New York Stock Exchange : CMH CMH Center of Military History CMH Commission on Macroeconomics and Health CMH Chief of Military History CMH Children's Memorial Hospital CMH Ceramic Metal Halide (General Electric light source) CMH Congressional Medal of Honor ) reported net income of $26 million and earnings per share of 19 cents, down 10% and 10% respectively. "Retail same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of dollars increased 5%, and the communities group added a property in San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. and in Kannapolis Kannapolis (kənăp`əlĭs), city (1990 pop. 29,696), Cabarrus and Rowan counties, W central N.C.; founded 1906, inc. 1984. It began as a planned company town and was owned by Cannon Mills (later part of Pillowtex, which went into , NC," remarked president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) T. Clayton. "The lack of independent financing continues to negatively impact results in our manufacturing group, with capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. falling to 48% and shipments to independent retailers declining by 30%. Additionally, the asset backed securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. market remained turbulent, as the company sold $262 million of the $290 million in bonds that were offered." Clayton Homes, Inc. is a vertically integrated manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected company with 20 manufacturing plants, 296 Company-owned stores, 611 independent retailers, 85 manufactured housing communities, and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. operations that provide mortgage services for 168,000 customers and insurance protection for 100,000 families.
SUMMARY RESULTS
Three Months Ended Nine Months Ended
(in thousands March 31, March 31,
except per
share data)
2003 2002 Change 2003 2002 Change
--------- --------- ------ --------- --------- ------
Revenues $277,125 $269,908 3% $884,011 $863,098 2%
Earnings before
taxes 41,564 46,381 -10% 137,174 141,909 -3%
Net Income $26,164 $29,181 -10% $86,374 $89,409 -3%
Average shares
outstanding
(diluted) 136,482 138,804 -2% 136,709 138,782 -1%
Earnings per
share (diluted) $.19 $.21 -10% $.63 $.64 -2%
Certain statements may be considered forward looking and involve certain risks and uncertainties that may cause actual results to differ materially from expectations.
EARNINGS
CLAYTON HOMES, INC. 6 Mos. ENDED Dec. 31 3 Mos. ENDED Mar. 31
-------------------------- ------------------------
2002 2001 % +/- 2003 2002 % +/-
---------------------------- --------- ------ -------- -------- ------
(Unaudited - in $ thousands except per share data)
SALES:
Manufacturing 253,289 265,966 -4.8% 106,604 129,719 -17.8%
Less Intercompany (160,150) (149,922) 6.8% (71,755) (81,842) -12.3%
--------- --------- ------ -------- -------- ------
Net Manufacturing 93,139 116,044 -19.7% 34,849 47,877 -27.2%
Retail - New 301,985 282,232 7.0% 135,124 120,069 12.5%
- Used 16,241 21,129 -23.1% 6,023 11,140 -45.9%
--------- --------- ------ -------- -------- ------
Total Retail 318,226 303,361 4.9% 141,147 131,209 7.6%
Communities - New 16,012 11,739 36.4% 9,726 5,126 89.7%
- Used 8,768 4,112 113.2% 4,582 2,962 54.7%
--------- --------- ------ -------- -------- ------
Total Communities 24,780 15,851 56.3% 14,308 8,088 76.9%
---------------------------- --------- ------ -------- -------- ------
Sales 436,145 435,256 0.2% 190,304 187,174 1.7%
Financial Services 134,400 121,957 10.2% 67,861 63,845 6.3%
Rental and Other
Income 36,341 35,977 1.0% 18,960 18,889 0.4%
---------------------------- --------- ------ -------- -------- ------
OPERATING REVENUE 606,886 593,190 2.3% 277,125 269,908 2.7%
Cost Of Sales 285,459 284,524 0.3% 123,792 122,421 1.1%
Selling, General &
Administrative 204,774 197,400 3.7% 102,992 98,575 4.5%
Financial Services
Interest 90 236 -61.9% 14 89 -84.3%
Provision for
Credit Losses 15,900 10,500 51.4% 10,200 5,000 104.0%
---------------------------- --------- ------ -------- -------- ------
OPERATING EXPENSES 506,223 492,660 2.8% 236,998 226,085 4.8%
---------------------------- --------- ------ -------- -------- ------
OPERATING INCOME 100,663 100,530 0.1% 40,127 43,823 -8.4%
Interest Income
(expense), net /
other (5,053) (5,002) -1.0% 1,437 2,558 -43.8%
---------------------------- --------- ------ -------- -------- ------
Income Before
Income Taxes 95,610 95,528 0.1% 41,564 46,381 -10.4%
Tax Rate 37.0% 37.0% 37.1% 37.1%
Provision for
Income Taxes 35,400 35,300 0.3% 15,400 17,200 -10.5%
---------------------------- --------- ------ -------- -------- ------
NET INCOME 60,210 60,228 0.0% 26,164 29,181 -10.3%
============================ ========= ====== ======== ======== ======
EARNINGS PER SHARE
Basic $0.44 $0.44 0.0% $0.19 $0.21 -9.5%
Diluted $0.44 $0.43 2.3% $0.19 $0.21 -9.5%
AVERAGE SHARES
OUTSTANDING
Basic 136,308 137,711 -1.0% 136,111 137,602 -1.1%
Diluted 136,816 138,785 -1.4% 136,482 138,804 -1.7%
---------------------------- --------- ------ -------- -------- ------
EARNINGS
CLAYTON HOMES, INC. 9 Mos. ENDED Mar. 31
--------------------------
2003 2002 % +/-
---------------------------------------------------- --------- ------
(Unaudited - in $ thousands except per share data)
SALES:
Manufacturing 359,893 395,685 -9.0%
Less Intercompany (231,905) (231,764) 0.1%
--------- --------- ------
Net Manufacturing 127,988 163,921 -21.9%
Retail - New 437,109 402,301 8.7%
- Used 22,264 32,269 -31.0%
--------- --------- ------
Total Retail 459,373 434,570 5.7%
Communities - New 25,738 16,865 52.6%
- Used 13,350 7,074 88.7%
--------- --------- ------
Total Communities 39,088 23,939 63.3%
---------------------------------------------------- --------- ------
Sales 626,449 622,430 0.6%
Financial Services 202,261 185,802 8.9%
Rental and Other Income 55,301 54,866 0.8%
---------------------------------------------------- --------- ------
OPERATING REVENUE 884,011 863,098 2.4%
Cost Of Sales 409,251 406,945 0.6%
Selling, General & Administrative 307,766 295,975 4.0%
Financial Services Interest 104 325 -68.0%
Provision for Credit Losses 26,100 15,500 68.4%
---------------------------------------------------- --------- ------
OPERATING EXPENSES 743,221 718,745 3.4%
---------------------------------------------------- --------- ------
OPERATING INCOME 140,790 144,353 -2.5%
Interest Income (expense), net / other (3,616) (2,444) -47.9%
---------------------------------------------------- --------- ------
Income Before Income Taxes 137,174 141,909 -3.3%
Tax Rate 37.0% 37.0%
Provision for Income Taxes 50,800 52,500 -3.2%
---------------------------------------------------- --------- ------
NET INCOME 86,374 89,409 -3.4%
==================================================== ========= ======
EARNINGS PER SHARE
Basic $0.63 $0.65 -3.1%
Diluted $0.63 $0.64 -1.6%
AVERAGE SHARES OUTSTANDING
Basic 136,244 137,675 -1.0%
Diluted 136,709 138,782 -1.5%
---------------------------------------------------- --------- ------
CONDENSED CONSOLIDATED BALANCE SHEETS
(in $ thousands) (unaudited)
March 31, June 30,
2003 2002
----------------------------------------------- ----------- ----------
Assets
Cash & cash equivalents 28,999 83,729
Receivables, net 988,164 978,585
Inventories 194,153 189,976
Property, plant, & equipment, net 316,091 310,764
Other assets 322,835 265,349
----------------------------------------------- ----------- ----------
TOTAL ASSETS 1,850,242 1,828,403
=============================================== =========== ==========
Liabilities & Shareholders' Equity
Accounts payable & accrued liabilities 117,043 139,308
Debt obligations 115,904 92,912
Other liabilities 300,510 334,226
Shareholders' equity 1,316,785 1,261,957
----------------------------------------------- ----------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 1,850,242 1,828,403
=============================================== =========== ==========
OPERATING DATA
----------------------------- -------- ------ -------- -------- ------
CLAYTON HOMES, INC. 6 Mos. ENDED Dec. 31 3 Mos. ENDED Mar. 31
------------------------ ------------------------
2002 2001 % +/- 2003 2002 % +/-
----------------------------- -------- ------ -------- -------- ------
UNIT SALES:
MANUFACTURING GROUP
Single-section 4,117 4,677 -12.0% 1,772 2,153 -17.7%
Multi-section 5,299 5,571 -4.9% 2,224 2,767 -19.6%
----------------------------- -------- ------ -------- -------- ------
Total shipped 9,416 10,248 -8.1% 3,996 4,920 -18.8%
Less Intercompany (5,847) (5,795) 0.9% (2,704) (3,081) -12.2%
----------------------------- -------- ------ -------- -------- ------
NET MANUFACTURING 3,569 4,453 -19.9% 1,292 1,839 -29.7%
RETAIL GROUP
New Single-section 2,859 2,939 -2.7% 1,366 1,383 -1.2%
New Multi-section 3,518 3,389 3.8% 1,500 1,367 9.7%
----------------------------- -------- ------ -------- -------- ------
TOTAL NEW 6,377 6,328 0.8% 2,866 2,750 4.2%
USED 1,075 1,545 -30.4% 491 774 -36.6%
----------------------------- -------- ------ -------- -------- ------
TOTAL RETAIL 7,452 7,873 -5.3% 3,357 3,524 -4.7%
COMMUNITIES GROUP
New 391 308 26.9% 243 134 81.3%
Used 310 170 82.4% 168 119 41.2%
----------------------------- -------- ------ -------- -------- ------
TOTAL COMMUNITIES 701 478 46.7% 411 253 62.5%
----------------------------- -------- ------ -------- -------- ------
TOTAL HOMES SOLD 11,722 12,804 -8.5% 5,060 5,616 -9.9%
============================= ======== ====== ======== ======== ======
NUMBER (actual):
PLANTS 20 20 20 20
RETAILERS -
Independent 622 578 7.6% 611 583 4.8%
RETAILERS -
Company-owned 290 292 -0.7% 296 288 2.8%
COMMUNITIES 83 81 2.5% 85 81 4.9%
Sites owned 21,632 21,129 2.4% 22,436 21,260 5.5%
Sites rented 16,245 15,665 3.7% 16,652 15,936 4.5%
Percent occupied 75.1% 74.1% 74.2% 75.0%
============================= ======== ====== ======== ======== ======
---- AVERAGES ----
============================= ======== ====== ======== ======== ======
NUMBER (average):
PLANTS 20 20 20 20
RETAILERS -
Independent 612 606 0.9% 617 581 6.2%
RETAILERS -
Company-owned 289 295 -2.0% 293 290 1.0%
COMMUNITIES 83 81 1.9% 84 81 3.7%
Sites owned 21,507 21,125 1.8% 22,034 21,195 4.0%
Sites rented 16,201 15,701 3.2% 16,449 15,801 4.1%
Percent occupied 75.3% 74.3% 74.7% 74.6%
============================= ======== ====== ======== ======== ======
AVERAGE UNIT PRICE:
WHOLESALE - ALL $26,900 $25,953 3.6% $26,678 $26,366 1.2%
WHOLESALE -
INDEPENDENT ONLY 26,097 26,060 0.1% 26,973 26,034 3.6%
RETAIL - New 47,355 44,601 6.2% 47,147 43,661 8.0%
RETAIL - Used 15,108 13,676 10.5% 12,267 14,393 -14.8%
COMMUNITIES - New 40,950 38,113 7.4% 40,026 38,256 4.6%
TOTAL RETAIL AND
COMMUNITIES $42,071 $38,224 10.1% $41,257 $36,880 11.9%
SALES $ (thousands)
PER-
PLANT $12,664 $13,298 -4.8% $5,330 $6,486 -17.8%
INDEPENDENT
RETAILER 152 191 -20.5% 57 82 -31.5%
COMPANY-OWNED SALES
CENTER 1,103 1,030 7.1% 482 452 6.5%
COMMUNITY $300 $196 53.5% $170 $100 70.6%
============================= ======== ====== ======== ======== ======
TOTAL HOMES SOLD BY
COMPANY-OWNED 25.8 26.7 -3.4% 11.5 12.2 -5.7%
============================= ======== ====== ======== ======== ======
NEW FLOORS SOLD BY
COMPANY-OWNED 34.3 33.0 3.9% 14.9 14.2 5.0%
============================= ======== ====== ======== ======== ======
ORDER BACKLOGS
(thousands) $17,400 $40,100 -56.6% $14,900 $21,400 -30.4%
============================= ======== ====== ======== ======== ======
PAST DUE
Originated 3.43% 3.37% 2.54% 2.34%
All (includes
purchased loans) 3.89% 4.23% 2.86% 3.02%
============================= ======== ====== ======== ======== ======
OPERATING DATA
------------------------------------------------------ -------- ------
CLAYTON HOMES, INC. 9 Mos. ENDED Mar. 31
------------------------
2003 2002 % +/-
------------------------------------------------------ -------- ------
UNIT SALES:
MANUFACTURING GROUP
Single-section 5,889 6,830 -13.8%
Multi-section 7,523 8,338 -9.8%
------------------------------------------------------ -------- ------
Total shipped 13,412 15,168 -11.6%
Less Intercompany (8,551) (8,876) -3.7%
------------------------------------------------------ -------- ------
NET MANUFACTURING 4,861 6,292 -22.7%
RETAIL GROUP
New Single-section 4,225 4,322 -2.2%
New Multi-section 5,018 4,756 5.5%
------------------------------------------------------ -------- ------
TOTAL NEW 9,243 9,078 1.8%
USED 1,566 2,319 -32.5%
------------------------------------------------------ -------- ------
TOTAL RETAIL 10,809 11,397 -5.2%
COMMUNITIES GROUP
New 634 442 43.4%
Used 478 289 65.4%
------------------------------------------------------ -------- ------
TOTAL COMMUNITIES 1,112 731 52.1%
------------------------------------------------------ -------- ------
TOTAL HOMES SOLD 16,782 18,420 -8.9%
====================================================== ======== ======
NUMBER (actual):
PLANTS
RETAILERS - Independent
RETAILERS - Company-owned
COMMUNITIES
Sites owned
Sites rented
Percent occupied
====================================================== ======== ======
---- AVERAGES ----
====================================================== ======== ======
NUMBER (average):
PLANTS 20 20
RETAILERS - Independent 606 609 -0.4%
RETAILERS - Company-owned 292 293 -0.3%
COMMUNITIES 84 81 3.1%
Sites owned 21,909 21,191 3.4%
Sites rented 16,404 15,837 3.6%
Percent occupied 74.9% 74.7%
====================================================== ======== ======
AVERAGE UNIT PRICE:
WHOLESALE - ALL $26,834 $26,087 2.9%
WHOLESALE - INDEPENDENT ONLY 26,329 26,052 1.1%
RETAIL - New 47,291 44,316 6.7%
RETAIL - Used 14,217 13,915 2.2%
COMMUNITIES - New 40,596 38,157 6.4%
TOTAL RETAIL AND COMMUNITIES $41,814 $37,806 10.6%
SALES $ (thousands) PER-
PLANT $17,995 $19,784 -9.0%
INDEPENDENT RETAILER 211 269 -21.6%
COMPANY-OWNED SALES CENTER 1,576 1,486 6.1%
COMMUNITY $468 $296 58.4%
====================================================== ======== ======
TOTAL HOMES SOLD BY COMPANY-OWNED 37.1 39.0 -4.8%
====================================================== ======== ======
NEW FLOORS SOLD BY COMPANY-OWNED 48.9 47.3 3.4%
====================================================== ======== ======
ORDER BACKLOGS (thousands)
====================================================== ======== ======
PAST DUE
Originated
All (includes purchased loans)
====================================================== ======== ======
STATISTICS TO ANSWER FREQUENTLY ASKED QUESTIONS:
(Data for March 2003 Quarter, Unless Otherwise Noted)
CLAYTON HOMES
--------------------------------------------------
Actual shares outstanding: 136,202,552
Shares repurchased in quarter: 0
Capital expenditures in quarter: $11.9 million
YTD capital expenditures: $20.6 million
Off balance sheet debt: $ 0
RETAIL
--------------------------------------------------
Same store sales dollar increase: 5%
Average new units per store: 17.4
Average foreclosures per store: 5.3
Average foreclosures per store last March quarter: 4.4
Stores opened in quarter: 8
Stores closed in quarter: 2
Quarter segment income %: 10%
YTD segment income %: 10%
MANUFACTURING
--------------------------------------------------
Capacity utilization: 48%
Capacity utilization last March quarter: 57%
Material prices trend: flat
Quarter segment income %: 15%
YTD segment income %: 19%
FINANCIAL SERVICES
--------------------------------------------------
Mortgage applications change: 13%
Average term originated contracts: 17.3 years
Net losses on originated contracts: 2.1%
Total net losses (including acquired): 2.5%
Gain on sale per share: 2 cents
Total loans serviced: $ 5.3 billion
ABS bonds held on balance sheet: $ 87 million
Floor plan finance receivables: $ 137 million
Credit losses netted in F/S revenues: $19.4 million
Residual impairment: $ 2.1 million
Quarter segment income %: 80%
YTD segment income %: 74%
COMMUNITIES
--------------------------------------------------
Rental revenue change: 5%
New sites added since March 2002: 1,176
New sites that were acquired: 537
New sites that were expansions: 444
Communities portion of CAPX for quarter: 78%
Quarter segment income %: 12%
YTD segment income %: 8%
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