Manufactured homes conform to federal HUD-Code regulations, while modular homes are built in accordance with local housing codes. Factory-built construction offers advantages over traditional construction methods including: production takes place in a climate-controlled facility where labor is supervised and materials are secured, the structures are more ruggedly built to withstand the rigors of transportation, site disruption is minimized and construction time is dramatically reduced.

The manufactured housing industry in the U.S. has experienced a significant decline since 1998. Initially, the decrease in shipments was due to manufactured housing lenders tightening consumer credit standards in reaction to high levels of loan defaults and home repossessions. More recently, the decline partially has been the result of the wide array of available mortgage products for site-built homes attracting potential manufactured homebuyers to site-built homes. In contrast, modular homes qualify for the same consumer financing as site-built homes.

Champion has set forth a strategy to diversify its revenue base while remaining focused on its core competency of manufacturing, maintaining its position as a leading player in the manufactured housing market and driving strong cash returns to reinvest in the growth of its domestic and international modular business. Since 2005, the Company has acquired four modular homebuilders in North America and two steel modular construction companies in the U.K. Acquisitions will continue to be an important element of Champion's growth strategy. In addition, the Company will continue to expand its distribution network of builders and developers who use modular structures as a key component of their overall construction projects.