Cavalier Homes Expects 3Q Loss

Addison, AL, September 5, 2007–Manufactured housing maker Cavalier Homes said it no longer expects to post a fiscal third-quarter profit because of revenue and gross margin pressures resulting from tough market conditions.

Cavalier said its gross margin expansion will be lower than previously expected because of lower revenue and a lower production rate of homes for the Mississippi Emergency Management Agency.

The company also said it will close one of the two home manufacturing lines it operates in Millen, Georgia.

Cavalier has cut temporary and probationary employees at the Millen lines and plans to further reduce its work force. The lines previously employed about 390 people.

Cavalier said it expects to record one-time termination benefits of $200,000 to $275,000 in the third quarter as a result of the restructuring.