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Champion reported fourth-quarter 2008 consolidated revenue of $187.9 million, down 42% from $325.6 million a year earlier. The company posted a pretax loss of $26.6 million versus pretax income of $11.2 million last year, and net loss of $20.8 million, or $0.27 per diluted share, versus a loss of $6 million, or $0.08 per diluted share. Full-year revenue declined 19% to $1.03 billion, pretax loss was $52 million versus pretax income of $4 million, and net loss was just under $200 million, or $2.57 per diluted share. Management did not provide formal next-quarter or full-year guidance, but said industry volumes are likely to fall again in 2009, especially in the first half; the UK margin outlook for 2009 was said to be about 5% to 6%, down from a normal 8% to 8.5%. Reported items included non-cash foreign currency transaction losses of $8.7 million, a $6.3 million retail inventory write-down, $1.2 million of restructuring charges, and a $600,000 loss on debt retirement. Cash used in operations was $3.4 million in Q4, and year-end cash, cash equivalents, and short-term investments were $52.8 million, with $65.6 million of total liquidity including revolver availability. Total debt was about $313 million at year-end, and management said the company remained in compliance with debt covenants.

Bill Griffiths framed the quarter as the result of a severe global financial crisis and historically weak housing demand, with financing availability still a major constraint. He stressed cost reduction, liquidity preservation, and capacity management as the main priorities, noting that the company has closed or idled multiple plants and reduced headcount by 42%. He also said the company is using the slowdown to refresh products toward smaller, more affordable, more energy-efficient homes and to target adjacent markets such as multi-family, hotels, seniors, and student housing.

Phyllis Knight focused on the earnings impact of weak demand, currency pressure, and several special items. She cited Q4 revenue of $187.9 million, a pretax loss of $26.6 million, net loss of $20.8 million, and special items including $8.7 million of foreign currency losses and a $6.3 million retail inventory charge; for the full year she highlighted $1.03 billion of revenue, a $52 million pretax loss, and a net loss of just under $200 million, including a $165 million non-cash tax charge to establish a valuation allowance. On liquidity, she said the company used $3.4 million in operations in Q4, ended with $52.8 million of cash and $65.6 million of total liquidity, and remained in compliance with debt covenants with over $10 million of cushion at year-end.

Analysts focused on retail floor-plan financing, covenant headroom, UK margin pressure, Canadian demand, and the NYSE listing issue. Management said exposure to national floor-plan lenders had historically been a little over 40% of North American revenue, with GE the largest relationship and Textron historically in the low-to-mid teens, while they encouraged dealers toward local banks and said they were not ready to announce any companywide financing program. On covenants, Phyllis Knight said there had been no change, the company expected to stay compliant through 2009, and the April lender update was only a reporting requirement, not a new covenant test. On the listing, Bill Griffiths said Champion had submitted its plan to the NYSE and was considering all options, including but not limited to a reverse split.