On March 30, 2005, the Company announced plans to exit its manufactured housing retail and financial services businesses and completed the sale of the majority of the assets of these businesses by August 2005. The decision to exit these businesses was intended to stem losses sustained in the retail operations. The return to a traditional focus on manufacturing operations was part of the Company’s stated goal of making the transition to sustained profitability. Assets and liabilities to be sold or extinguished were reclassified to Current assets and liabilities from discontinued operations, respectively, and consisted of the following as of April 30, 2006 and April 24, 2005:

Retail flooring liabilities represented amounts borrowed by Company-owned retail sales centers to finance inventory purchases of manufactured homes. The amounts outstanding at April 24, 2005, were financed under agreements with two national floorplan lenders that provided for a security interest in the units financed and repayment at the time the units were sold. Interest rates ranged from prime rate plus 0.75 percent to prime plus 3.00 percent, depending upon the age of the inventory being financed. For unsold units, mandatory curtailment payments that reduce the balance outstanding were due in various increments and at various intervals, beginning at one year and extending up to 21 or 24 months, at which time the obligation was due in full. One of the floorplan agreements included cross-default provisions tied to the covenants in the senior secured credit facility. Borrowings were repaid in full upon the sale of the underlying inventory collateral during the year.

On December 30, 2003, the Company’s financial services subsidiary, HomeOne, entered into a Master Loan and Security Agreement with Greenwich Capital Financial Products, Inc. (Greenwich) that provided up to $75 million in warehouse funding. Collateral for borrowings under the facility was manufactured housing consumer loans originated by HomeOne. The availability of financing under the facility was dependent on a number of factors, including the borrowing base represented by the loans pledged to Greenwich. The advance rate for eligible loans varied between 72 and 80 percent of the principal amount of the loans, depending on the weighted average credit scores of the borrowers under loans and the interest rate selected by HomeOne. Available interest rates charged by Greenwich varied from 2.00 to 2.50 percent over LIBOR. As the selected interest rate decreased, so did the available advance rate. The Company and HomeOne agreed to guarantee the facility in an aggregate amount not to exceed 10 percent of the amount of principal and interest outstanding. The Company’s guaranty included financial and other covenants, including maintenance of specified levels of tangible net worth, total indebtedness to tangible net worth and liquidity. At the end of fiscal 2005, HomeOne had borrowings of
$40.7 million under this facility. Borrowings were repaid in full upon the sale of the underlying loan collateral during 2006.

The carrying value of assets from discontinued operations was adjusted by non-cash impairment charges in fiscal 2006 and 2005. Operating results of these businesses, including impairment charges, are classified as discontinued operations for all periods presented. Discontinued operations, net for fiscal years 2006, 2005 and 2004, consist of the following:

The net loss before impairment charges included interest expense on the retail flooring liability and the warehouse line of credit, which were repaid upon sale of their related collateral of $1.7 million, $3.5 million and $2.1 million, in fiscal 2006, 2005 and 2004, respectively. No tax provision (benefit) was recorded on discontinued operations in fiscal 2006, 2005 or 2004. The Company expects to incur minor ongoing operating losses but these are not expected to be material to the results of operations or to the Company’s financial position.