Palm Harbor Homes Reports Third Quarter Fiscal 2006 Earnings

DALLAS, Texas (January 17, 2006) - Palm Harbor Homes, Inc. (Nasdaq/NM:PHHM) today reported financial results for the third quarter and nine-month period of fiscal 2006, which ended December 30, 2005.

Net sales for the third quarter totaled $193.2 million compared with $154.6 million in the year-earlier period. Net income for the third quarter totaled $4.3 million, or $0.18 per diluted share, compared with a net loss of $4.6 million, or $0.20 per diluted share, a year ago. Results for the third quarter of fiscal 2005 included $2.8 million, or $0.12 per diluted share, for charges related to closing sales centers, streamlining retail operations and idling a production line.

Net sales for nine months ended December 30, 2005, were $530.4 million compared with $462.8 million in the year-earlier period. Net income for the year-to-date period in fiscal 2006 totaled $7.9 million, or $0.35 per diluted share, compared with a net loss of $5.8 million, or $0.25 per diluted share, in the prior-year period.

Larry Keener, chairman and chief executive officer of Palm Harbor Homes, Inc., said, "Palm Harbor continued to build momentum this quarter with record third quarter revenues. The additional business generated by Federal Emergency Management Agency (FEMA) orders for hurricane victims boosted the Company's overall revenues by $12.3 million for the quarter; however, we still delivered a strong performance in all other areas of our business. Our modular sales have continued to accelerate as the favorable response from dealers and builders is translating into an increasing number of customer orders. Sales of our modular products were up over 15 percent from the same period last year and now account for over 25 percent of our recurring revenues.  read more