814068--2/19/2009--CHAMPION_ENTERPRISES

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{condition, economic, financial}

{debt, indebtedness, cash}

{stock, price, share}

{capital, credit, financial}

{customer, product, revenue}

{acquisition, growth, future}

{personnel, key, retain}

{tax, income, asset}

{competitive, industry, competition}

{cost, regulation, environmental}

{loss, insurance, financial}

New York Stock Exchange We have received notice from the New York Stock Exchange (NYSE) that we are not in compliance with the exchange s continued listing standards because the average closing share price of Champion s common stock for a consecutive 30-day trading period fell below $1.00. Significant debt Our significant debt could limit our ability to obtain additional financing, require us to dedicate a substantial portion of our cash flows from operations for debt service and prevent us from fulfilling our debt obligations. If we are unable to pay our debt obligations when due, we could be in default under our debt agreements and our lenders could accelerate our debt or take other actions which could restrict our operations. Fluctuations in operating results The cyclical and seasonal nature of our construction businesses has caused our sales and operating results to fluctuate. These fluctuations, which have caused operating losses in the past, may continue to occur in the future, which could result in additional operating losses during future downturns. Consumer financing availability Tight credit standards and loan terms, curtailed lending activity, and increased interest rates among consumer lenders could reduce our sales. If consumer financing were to become further curtailed, our sales could decline and our operating results and cash flows could suffer. Floor plan financing availability A reduction in floor plan credit availability or tighter loan terms to our independent retailers could cause our manufacturing sales to decline. As a result, our operating results and cash flows could suffer. Contingent liabilities We have, and will continue to have, significant contingent repurchase obligations and other contingent obligations, some of which could become actual obligations that we must satisfy. We may incur losses under these contingent repurchase obligations or be required to fund these or other contingent obligations that would reduce our cash flows. Dependence upon independent retailers If we are unable to establish or maintain relationships with independent retailers who sell our homes, our sales could decline and our operating results and cash flows could suffer. Cost and availability of raw materials Prices of certain materials can fluctuate significantly and availability of certain materials may be limited at times. Effect on liquidity Industry conditions and our operating results have limited our sources of capital in the past. If we are unable to locate suitable sources of capital when needed we may be unable to maintain or expand our business. Competition The factory-built housing industry is very competitive. If we are unable to effectively compete, our growth could be limited, our sales could decline and our operating results and cash flows could suffer. Zoning If the factory-built housing industry is not able to secure favorable local zoning ordinances, our sales could decline and our operating results and cash flows could suffer. Dependence upon executive officers and other key personnel The loss of any of our executive officers or other key personnel could reduce our ability to manage our businesses and achieve our business plan, which could cause our sales to decline and our operating results and cash flows to suffer. Restrictive covenants The terms of our debt place operating restrictions on us and contain various financial performance and other covenants with which we must remain in compliance. If we do not remain in compliance with these covenants, certain of our debt facilities could be terminated and the amounts outstanding thereunder could become immediately due and payable. Our potential inability to integrate acquired operations could have a negative effect on our expenses and results of operations. Potential Dilution Conversions by holders of our convertible securities and potential capital, debt reduction, or acquisition transactions effected with issuances of our common stock could result in dilution and impair the price of our common stock. Potential impairment charges We have a significant amount of goodwill, amortizable intangible assets and property, plant and equipment which are subject to periodic review and testing for impairment.

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814068--2/19/2009--CHAMPION_ENTERPRISES_INC