Palm Harbor Homes Reports First Quarter Earnings For Fiscal 2007

DALLAS, Texas (July 18, 2006) - Palm Harbor Homes, Inc. (Nasdaq/NM:PHHM) today reported financial results for the first quarter ended June 30, 2006.

Net sales for the first quarter totaled $194.5 million compared with $166.2 million in the year-earlier period. Net income for the first quarter of 2007 totaled $3.6 million, or $0.16 per share, compared with net income of $2.6 million, or $0.12 per share, a year ago.

Larry Keener, chairman and chief executive officer of Palm Harbor Homes, Inc., said, "The results for the first quarter of fiscal 2007 reflect a very solid performance for Palm Harbor Homes. Our year-over-year revenue and earnings improvement reflect increased market share, a continued shift in product mix to modular homes and higher average sales prices. Overall, we are pleased with the positive start to a new fiscal year and our ability to execute in a difficult market. However, we recognize that the industry environment continues to be tenuous, and a recovery has yet to gain traction. The pace of growth in our own business has slowed since the end of calendar 2005. Backlogs are smaller and our incoming order rates indicate relatively flat growth for the near future.

"While we expect the rebuilding activity in the Gulf Coast area will create important new business opportunities for Palm Harbor in fiscal 2007, this is just starting to develop," added Keener. "The scale of this reconstruction is unprecedented and should provide a sustainable boost for our industry by creating opportunities to introduce factory-built housing as an attractive alternative to traditional site-built homes. Modular housing is particularly promising because of the related construction efficiencies and offers a fast and secure option that is superior to and, in most cases, stronger than, traditional site-built homes. In addition, state and local leaders along the Gulf Coast are looking for solid structures built to local codes that will reflect the architectural history of the region. In response to this demand, Palm Harbor has already started production of a shotgun-style cottage that is faithful to the Gulf Coast's architectural past. We expect to be a major participant as the extensive rebuilding efforts get underway in fiscal 2007 and continue in the years ahead.  read more