The following table sets forth certain statements of operations data expressed as a percentage of net sales for the periods indicated:

FISCAL YEARS ENDED APRIL			2004				2003			2002
Net sales			100.0	%			100.0	%		100.0	%
Cost of products sold			82.0				81.6			80.8
Gross profit			18.0				18.4			19.2
Operating and other expenses			16.4				19.5			23.2
Operating income (loss)			1.6				(1.1	)		(4.0	)
Other income (expense)
Investment income			0.1				0.2			0.2
Interest expense			(1.7	)			(1.9	)		(1.7	)
Other, net			(0.1	)			—			—
Loss before income taxes and
cumulative effect of accounting change			(0.1	)			(2.8	)		(5.5	)
Benefit (provision) for income taxes			(0.7	)			(0.2	)		1.9
Loss before cumulative effect of
accounting change			(0.8	)			(3.0	)		(3.6	)
Cumulative effect of accounting change,
net of income taxes			—				—			(3.5	)
Net loss			(0.8	)%			(3.0	)%		(7.1	)%

CONSOLIDATED RESULTS:

The following table presents net loss and diluted loss per share for fiscal 2004 and 2003:

FISCAL YEARS ENDED APRIL		2004							2003
(AMOUNTS IN THOUSANDS,					% of							% of
EXCEPT PER-SHARE DATA)		Amount			Net Sales				Amount			Net Sales			Change			% Change
Net loss		$	(22,261	)		(0.8	)%		$	(70,739	)		(3.0	)%	$	48,478			68.5	%
Diluted loss per share		$	(.58	)					$	(1.97	)				$	1.39
Our net loss decreased by $48.5 million to $(22.3) million, primarily due to a 12.5 percent increase in sales and a resulting $67.8 million increase in operating income. A strong RV market, particularly in motor homes, combined with a stabilizing Housing market contributed to the smaller net loss. The net losses for both fiscal 2004 and 2003 were negatively impacted by adjustments of $15 million and $28.4 million, respectively, to reduce our net deferred tax asset. The $15 million adjustment in the fourth quarter of fiscal 2004 was caused by a reduction in available tax planning opportunities. The primary reason for this reduction was an increase in the market value of our convertible trust securities of Fleetwood Capital Trust I. NET SALES The following table presents consolidated net sales by group for fiscal 2004 and 2003:
		2004							2003
					% of							% of
(AMOUNTS IN THOUSANDS)		Amount			Net Sales				Amount			Net Sales			Change			% Change
RV		$	1,779,233			68.2	%		$	1,482,595			64.0	%	$	296,638			20.0	%
Housing			782,758			30.0				796,260			34.3			(13,502	)		(1.7	)
Supply			41,120			1.6				37,178			1.6			3,942			10.6
Financial services			4,877			0.2				2,260			0.1			2,617			115.8
Net sales		$	2,607,988			100.0	%		$	2,318,293			100.0	%	$	289,695			12.5	%
Consolidated net sales increased by 12.5 percent or $289.7 million. A strong recreational vehicle market and improved motor home products drove a 20 percent sales increase in RVs, offset by a 1.7 percent decline in Housing Group revenues. The manufactured housing market continued to show signs of recovery from a prolonged slump, and Housing Group revenues for our fourth quarter increased by 21 percent compared to the prior year. CONSOLIDATED NET SALES, COST OF SALES AND GROSS PROFIT The following table presents consolidated net sales, cost of sales and gross profit for fiscal 2004 and 2003:
		2004							2003
					% of							% of
(AMOUNTS IN THOUSANDS)		Amount			Net Sales				Amount			Net Sales			Change			% Change
Net sales		$	2,607,988			100.0	%		$	2,318,293			100.0	%	$	289,695			12.5	%
Cost of sales			2,137,777			82.0				1,892,636			81.6			245,141			13.0
Gross profit		$	470,211			18.0	%		$	425,657			18.4	%	$	44,554			10.5	%
Gross profit margin fell slightly to 18.0 percent of sales compared to 18.4 percent last year. All areas of our business experienced rising raw material costs as prices for timber, steel, aluminum and other commodities increased. These material cost increases, combined with the introduction of new products, offset the positive impacts of higher pricing and a shift to higher-margin products. Overall, gross margins for RVs decreased from 14.5 percent to 14.3 percent. Housing Group gross margin improved from 24.4 percent to 24.9 percent. The Wholesale division was able to manage cost increases more effectively and also benefited from improving operating efficiencies to raise gross margin by 1.3 percent to 22.2 percent. Retail gross margin was down 0.4 percent from the effects of competitive market conditions and reducing aged inventory. OPERATING EXPENSES The following table presents operating expenses for fiscal 2004 and 2003:
		2004							2003
					% of							% of
(AMOUNTS IN THOUSANDS)		Amount			Net Sales				Amount			Net Sales			Change			% Change
Selling		$	87,370			3.4	%		$	78,567			3.4	%	$	8,803			11.2	%
Warranty and service			103,195			3.9				118,239			5.1			(15,044	)		(12.7	)
General and administrative			236,419			9.1				252,708			10.9			(16,289	)		(6.4	)
Operating expenses		$	426,984			16.4	%		$	449,514			19.4	%	$	(22,530	)		(5.0	)%

Higher RV sales and enhanced marketing initiatives accounted for most of the increase in selling expenses, which remained flat as a percentage of sales. The Housing Group reduced product warranty and service expense following a reorganization of the service organization in fiscal 2003. Warranty expenses at the RV Group increased on higher sales but still decreased as a percentage of revenue. General and administrative expenses for fiscal 2003 include $6.8 million for the legal settlement of two class action suits and $9.8 million for retail adjusting entries. Excluding these items, expenses increased by $0.3 million but decreased by 1.1 percent as a percentage of sales.

OTHER, NET

Other charges, net in fiscal 2004 consists exclusively of net gain on sale of fixed assets of $4.6 million. The sale of the drapery facility along with two idle plants generated $4.4 million of the gain. The prior year net gain of $1.8 million included net gains on sale of fixed assets of $5.8 million related to the sale of facilities and land. The prior year also included $1.2 million of asset impairment charges and $2.8 million of restructuring costs in the Housing Group.

OTHER INCOME (EXPENSE)

Other income (expense) increased by $5.3 million to $(45.1) million in fiscal 2004 when compared to the previous year. Net interest expense increased by $2.0 million as a result of the issuance of the $100 million convertible debentures combined with lower interest income. Also, in the fourth quarter of fiscal 2004, we entered into various privately negotiated transactions with the holders of convertible preferred securities of Fleetwood Capital Trust III to convert their securities to common stock prior to their redemption dates. We paid a premium of $2.4 million in excess of interest accrued that is included in Other income (expense).

RECREATIONAL VEHICLES:

The following table presents RV Group net sales by division for fiscal 2004 and 2003:

		2004							2003
					% of							% of
(AMOUNTS IN THOUSANDS)		Amount			Net Sales				Amount			Net Sales			Change			% Change
Motor homes		$	1,104,624			62.1	%		$	918,742			62.0	%	$	185,882			20.2	%
Travel trailers			570,420			32.1				441,885			29.8			128,535			29.1
Folding trailers			104,189			5.8				121,968			8.2			(17,779	)		(14.6	)
Net sales		$	1,779,233			100.0	%		$	1,482,595			100.0	%	$	296,638			20.0	%
The motor home division’s performance was the result of improved market conditions and favorable acceptance of our mid-line diesel products and new Class A gas motor home products. For fiscal year 2004, Class A diesel product shipments rose 14 percent while Class A gas and Class C shipments rose 3 percent and 29 percent, respectively. Travel trailer revenues increased 29.1 percent to $570.4 million on a 14 percent increase in unit volume. The disproportionate increase in travel trailer revenues to shipments reflects the sales growth of larger, higher-priced floor plans in the conventional and fifth wheel products offered. Folding trailer sales declined 14.6 percent to $104 million on a 15 percent decline in unit volume. The RV Group earned $58.1 million of operating income in the fiscal year ended April 25, 2004, compared to $35.3 million in the prior fiscal year. The $22.8 million increase in profitability was mainly due to the increase in diesel sales, which have higher selling prices and gross margins, and profit in travel trailers compared to an operating loss in the prior period as a result of higher revenues and gross margins. Operating expenses decreased from 12.2 percent of sales to 11.1 percent but increased $16.5 million in the current year primarily due to higher selling costs from expanded RV market initiatives and higher warranty costs. MANUFACTURED HOUSING: The following table presents Housing Group net sales by division for fiscal 2004 and 2003:
		2004							2003
					% of							% of
(AMOUNTS IN THOUSANDS)		Amount			Net Sales				Amount			Net Sales			Change			% Change
Wholesale		$	657,388			84.0	%		$	667,087			83.8	%	$	(9,699	)		(1.5	)%
Retail			242,505			31.0				245,076			30.8			(2,571	)		(1.0	)
Intercompany sales			(117,135	)		(15.0	)			(115,903	)		(14.6	)		(1,232	)		(1.1	)
Net sales		$	782,758			100.0	%		$	796,260			100.0	%	$	(13,502	)		(1.7	)%

Results for the wholesale division include sales to our retail division. Transactions between these operating divisions are eliminated in consolidation, including any intercompany profit in retail division inventory.

Housing Group revenues declined by 1.7 percent to $782.8 million. Operating losses decreased from $57.6 million in fiscal 2003 to $28.8 million in fiscal 2004 after deducting intercompany profit on retail inventory of $5.6 million and $1.6 million, respectively.

WHOLESALE OPERATIONS

Gross manufacturing revenues in fiscal year 2004 were $657.4 million, down 1.5 percent from the prior year, and included $117.1 million of intercompany sales to Company-owned retail sales centers. Manufacturing unit volume declined 6 percent to 20,859 homes, but the total number of housing sections was down 8 percent to 37,443 due to a slight shift in sales mix toward single-section homes. Multi-section homes represented 78 percent of factory shipments versus 81 percent last year.

Sales volume was below the prior year because of a weaker manufactured housing market, which has been adversely affected by competition from repossessed units and restrictive retail financing conditions. In addition, the industry’s two largest retail lenders and the two largest inventory floorplan lenders exited the business.

Gross profit margin for the wholesale division increased from 20.9 percent to 22.2 percent of sales, mainly as a result of improving labor efficiencies and reducing manufacturing overhead. Operating costs declined $12.5 million or 8 percent as a result of reduced product warranty expenses. The reduction in warranty service costs is attributable to the fiscal 2003 reorganization of the service organization. Overall results improved from an operating loss of $13.5 million to an operating profit of $5.4 million due to the improvement in gross margins and the reduction in warranty costs.