Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Fleetwood is one of the nation’s leaders in producing both recreational vehicles and manufactured housing. The RV Group sold 40,754 and 54,574 recreational vehicles in fiscal 2007 and 2006, respectively. In calendar 2006, we had a 10.9% share of the overall recreational vehicle retail market, consisting of a 16.3% share of the motor home market, a 6.8% share of the travel trailer market and a 39.4% share of the folding trailer market. The Housing Group produced and shipped 13,257 and 22,681 manufactured homes in fiscal 2007 and 2006, respectively, including intercompany sales. In calendar 2006, we had a 12.9% share of the manufactured housing wholesale market, making us the third largest producer of HUD-Code homes in the U. S. based upon shipments to dealers. The Supply Group operates two fiberglass manufacturing operations, a lumber brokerage business, and an imports sales and distributions operation that provide components for our manufactured housing and recreational vehicle operations, while also generating outside sales.

Our business began in 1950 producing travel trailers and quickly evolved to what are now termed manufactured homes. We re-entered the recreational vehicle business with the acquisition of a travel trailer operation in 1964. Our manufacturing activities are conducted in 15 states within the U.S., and to a much lesser extent in Mexico. We distribute our manufactured products primarily through a network of independent dealers throughout the United States and Canada.

The following table sets forth revenues by business segment and the relative contribution of these revenues to total revenues for the past three fiscal years. Information with respect to operating income (loss) and identifiable assets by industry segment is shown in the Notes to Consolidated Financial Statements in this annual report.

  Fiscal years ended April
  2007   %   2006   %   2005   %
  (Amounts in thousands)
Recreational vehicles:
   Motor homes
  $ 961,925         47.9 %     $ 976,698         40.2 %     $ 1,097,091         46.2 %  
   Travel trailers   391,310     19.5     551,501     22.7     477,610     20.1  
   Folding trailers   88,575     4.4     84,018     3.4     85,181     3.6  
    1,441,810     71.8     1,612,217     66.3     1,659,882     69.9  
Housing Group   518,258     25.8     795,596     32.7     785,547     33.1  
Supply Group   47,854     2.4     50,214     2.1     57,020     2.4  
Intercompany sales           (25,627   (1.1   (127,737   (5.4
  $ 2,007,922     100.0 $ 2,432,400     100.0 $ 2,374,712     100.0