UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549



                            FORM 10-Q
(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the quarterly period ended October 1, 1999 or

[   ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

        For the transition period from _______ to _______

                Commission File Number:  0-21204


                   SOUTHERN ENERGY HOMES, INC.
     (Exact name of registrant as specified in its charter)

               Delaware                                 63-1083246
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)


    Highway 41 North, P.O. Box 390, Addison, Alabama            35540
       (Address of principal executive offices)               (Zip Code)

                         (256) 747-8589
      (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant:  (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                       Yes  [X]   No  [  ]

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.


12,132,990 shares of Common Stock, $.0001 par value, as of November 15, 1999


        SOUTHERN ENERGY HOMES, INC. AND SUBSIDIARIES


                            INDEX

                                                              Page
PART I         FINANCIAL INFORMATION:

          Condensed Consolidated Condensed Balance Sheets,
              October 1, 1999 and January 1, 1999               2

          Condensed Consolidated Statements of Operations -
              Thirteen Weeks Ended October 1, 1999
              and October 2, 1998 and Thirty-nine weeks
              Ended October 1, 1999 and October 2, 1998         3

          Condensed Consolidated Statements of Cash
              Flows - Thirty-nine Weeks Ended October 1,
              1999 and October 2, 1998                          4

          Notes to Condensed Consolidated Financial Statements  5

          Management's Discussion and Analysis of Financial
               Condition and Results of Operations              9

PART II   OTHER INFORMATION                                    13


          SIGNATURES                                           16

I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

        SOUTHERN ENERGY HOMES, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED BALANCE SHEETS
                         (Unaudited)
                                         October 1,    January 1,
                                               1999          1999
                              ASSETS
CURRENT ASSETS:
 Cash and cash equivalents              $ 3,901,000   $ 4,261,000
 Accounts receivable (less allowance
  for doubtful accounts of $216,000
  and $166,000, respectively)            28,709,000    23,071,000
 Installment contracts receivable           165,000       211,000
 Inventories                             34,766,000    36,790,000
 Deferred tax benefits                    2,468,000     1,919,000
 Prepayments and other                      948,000       803,000
                                         70,957,000    67,055,000

PROPERTY AND EQUIPMENT:
 Property and equipment, at cost         36,632,000    32,674,000
 Less - accumulated depreciation         11,346,000     9,354,000
                                         25,286,000    23,320,000

INTANGIBLES AND OTHER ASSETS
 Installment contracts receivable,
  less allowance for credit Losses of
  $227,000 and $295,000, respectively    11,674,000    11,130,000
 Goodwill                                11,437,000    14,995,000
 Non-compete agreements                     271,000       575,000
 Investment in joint ventures             5,614,000     4,963,000
 Other assets                               723,000       730,000
                                         29,719,000    32,393,000
                                       $125,962,000  $122,768,000

             LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Floor plan notes payable               $ 5,025,000  $ 20,556,000
 Notes payable                           20,000,000             -
 Current maturities of long-term debt       544,000     1,099,000
 Accounts payable                         8,444,000     4,393,000
 Accrued liabilities                     17,634,000    19,702,000
                                         51,647,000    45,750,000
LONG-TERM DEBT                            3,296,000     3,569,000

STOCKHOLDERS' EQUITY:
 Preferred stock, $.0001 par value,
  1,000,000 shares authorized,
  None outstanding                                -             -
 Common stock, $.0001 par value,
  40,000,000 shares authorized,
  15,638,890 issued at October 1,
  1999 and at January 1, 1999                 2,000         2,000
 Treasury stock, at cost, 3,505,900
  shares at October 1, 1999 and
  3,000,300 shares at January 1, 1999  (29,354,000)  (26,282,000)
 Capital in excess of par               37,682,000    37,682,000
 Retained earnings                      62,689,000    62,047,000
                                        71,019,000    73,449,000
                                      $125,962,000  $122,768,000
The accompanying notes are an integral part of these condensed
consolidated financial statements.


               SOUTHERN ENERGY HOMES, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Unaudited)
                       Thirteen Weeks Ended       Thirty-nine weeks Ended
                      October 1    October 2,     October 1,    October 2,
                         1999         1998          1999           1998

Net revenues         $63,856,000   $82,145,000   $207,151,000   $231,367,000

Cost of sales         53,569,000    67,777,000    172,283,000    189,036,000

    Gross profit      10,287,000    14,368,000     34,868,000     42,331,000

Operating Expenses:
  Selling, general and
    administrative     8,365,000    10,025,000     25,944,000     26,891,000
  Amortization of
    intangibles           70,000       154,000        263,000        464,000
 Non-Recurring Charge  6,387,000         -0-        6,387,000          -0-
                      14,822,000    10,179,000     32,594,000     27,355,000

  Operating income    (4,535,000)    4,189,000      2,274,000     14,976,000

Interest expense         500,000       685,000      1,510,000      1,848,000
Interest income           68,000       253,000        240,000        728,000

  Income before income
    taxes             (4,967,000)    3,757,000      1,004,000     13,856,000

Provision for income
    taxes             (1,900,000)    1,419,000        362,000      5,176,000

   Net income        $(3,067,000)  $ 2,338,000      $ 642,000    $ 8,680,000

Net income per common share:
Basic                     $(0.25)       $ 0.18          $0.05         $ 0.63
Diluted                   $(0.25)       $ 0.18          $0.05         $ 0.63

Weighted average number of common shares:
Basic                 12,132,990    13,296,029     12,191,277     13,698,468
Diluted               12,132,990    13,341,276     12,191,277     13,793,985

The accompanying notes are an integral part of these condensed
  consolidated financial statements


           SOUTHERN ENERGY HOMES, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)
                                               Thirty-nine Weeks Ended
                                              October 1,         October 2,
                                                 1999              1998
Operating activities:
  Net income                                  $ 642,000         $8,680,000
  Adjustments to reconcile net income to net
    cash used in operating activities:
    Equity income of joint ventures            (985,000)          (737,000)
    Distribution from joint ventures            640,000                  -
    Depreciation of property and equipment    1,992,000          2,133,000
    Non-recurring charge                      6,387,000                -0-
    Amortization of intangibles                 263,000            688,000
    Provision (credit) for deferred income
     taxes                                     (549,000)            (5,000)
    (Gain) loss on sale of property and
     equipment                                  (10,000)           (34,000)
    Provision for doubtful accounts receivable   55,000             58,000
    Origination of installment contracts     (2,037,000)        (1,707,000)
    Provision for credit losses on
     installment contracts                      317,000            180,000
    Principal collected on originated
     installment contracts                    1,222,000            406,000
    Change in assets and liabilities, net of effect from
     purchase of subsidiary:
      Inventories                               774,000         (2,223,000)
      Accounts receivable                    (5,693,000)        (4,415,000)
      Prepayments and other                    (180,000)          (237,000)
      Other assets                             (211,000)            (3,000)
      Accounts payable                        4,051,000          6,736,000
      Accrued liabilities                    (4,155,000)         2,203,000

       Net cash provided by
        operating activities                  2,523,000         11,723,000

Investing activities:
   Purchase of subsidiary, net of cash
    acquired                                          -         (7,187,000)
   Capital expenditures                      (3,958,000)        (1,821,000)
   Investments in joint ventures                (88,000)                 -
   Increase in organizational and pre-
    operating costs                                   -           (488,000)
   Proceeds from sale of property and
    equipment                                   594,000             34,000

       Net cash provided by
        investing activities                 (3,452,000)        (9,462,000)

Financing activities:
     Purchases of treasury stock             (3,072,000)       (13,889,000)
     Net borrowings on notes payable          4,469,000          6,891,000
     Repayments on long-term debt              (828,000)          (884,000)
     Proceeds from exercise of stock options          -            454,000

        Net cash provided by (used in)
         financing activities                   569,000         (7,428,000)

Net increase (decrease) in cash and cash
 equivalents                                   (360,000)        (5,167,000)

Cash and cash equivalents at the beginning
 of period                                    4,261,000         17,676,000

Cash and cash equivalents at the end of
 period                                      $3,901,000        $12,509,000

Supplemental cash flow information:
     Cash paid for interest                  $1,510,000         $1,882,000
     Cash paid for income taxes              $3,612,000         $3,885,000
       The accompanying notes are an integral part of these
        consolidated condensed financial statements.

                SOUTHERN ENERGY HOMES, INC. AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION:
The consolidated condensed balance sheet as of January 1, 1999, which has
been derived from audited financial statements, and the unaudited interim
consolidated condensed financial statements as of October 1, 1999, have been
prepared by the Company without audit, but in the opinion of management
reflect all adjustments (which include only normal recurring adjustments)
necessary for the fair presentation of the information set forth therein.
Results of operations for the interim 1999 period are not necessarily
indicative of results expected for the full year.  While certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission, the Company believes that the disclosures herein are
adequate to make the information presented not misleading.  These financial
statements should be read in conjunction with the audited financial statements
and the notes thereto included in the Company's Annual Report
to Stockholders for the fiscal year ended January 1, 1999.

2.  INVENTORIES:
Inventories are valued at first-in, first-out ("FIFO") cost, which is not in
excess of market.  An analysis of inventories follows:

                                      October 1,      January 1,
                                            1999            1999
                                              (Unaudited)

                 Raw materials        $7,973,000     $10,938,000
                 Work in progress        802,000       1,166,000
                 Finished goods       25,991,000      24,686,000
                                     $34,766,000     $36,790,000

3.  EARNINGS PER SHARE:

The EPS results are as follows:

                                      Shares Available
                                        to Common
                      Net Income (Loss)  Shareholders  Earning (Loss) Per Share

     Thirteen Weeks
     Ended
     October 1, 1999
      Basic              $(3,067,000)     12,132,990           $(0.25)
      Dilutive effect
       of options issued           -               -                 -
      Diluted            $(3,067,000)     12,132,990           $(0.25)
     October 2, 1998
      Basic              $ 2,338,000      13,296,029            $0.18
      Dilutive effect
       of options issued           -          45,247                -
      Diluted            $ 2,338,000      13,341,276            $0.18



                                      Shares Available
                                          to Common
                          Net Income      Shareholders     Earning Per Share
     Thirty-nine Weeks
     Ended
     October 1, 1999
      Basic                 $642,000       12,191,277           $0.05
      Dilutive effect
       of options issued           -                -               -
      Diluted               $642,000       12,191,277           $0.05

     October 2, 1998
      Basic                $8,680,000      13,698,468           $0.63
      Dilutive effect of
       options issued               -          95,517               -
        Diluted            $8,680,000      13,793,985           $0.63


Options outstanding of 533,281 for the thirty-nine weeks and thirteen weeks
ended October 1, 1999 were not included in the tables above as they were
antidilutive.

4.  REPURCHASE AGREEMENTS:
It is customary practice for companies in the manufactured home industry to
enter into repurchase agreements with financial institutions, which provide
financing to independent dealers.  Generally, the agreements provide for
the repurchase of the manufactured homes from the financing institution in
the event of repossession upon an independent dealer's default.  The
Company's contingent liability under such agreements is approximately
$83 million as of October 1, 1999.  Losses experienced under these agreements
have not been significant and, in the opinion of management, any future
losses under these agreements should not have a material effect on the
accompanying financial statements of the Company.

5.  LEGAL PROCEEDINGS:
On March 1, 1999, the Company, without admitting any liability, entered into
a settlement with HUD that requires the Company to correct construction and
safety violations in homes manufactured at the North Carolina manufacturing
facility.  In addition, the settlement requires the Company to inspect 600
additional homes for possible violations.  The Company has agreed to a
one-year warranty extension of certain homes.  HUD claimed that the Company
failed to comply with the consumer notification and defect correction
requirements of The National Manufactured Housing Construction and Safety
Standards Act of  1974.  The Company has been assessed a civil penalty by HUD
of up to $300,000 in connection with the settlement; however, this penalty
can be reduced by HUD depending on Company actions.

The Company has been named, along with several other manufactured housing
companies, as a defendant in a class action lawsuit filed in Kentucky in
September 1998, claiming wrongful conduct, fraudulent misrepresentation, and
that manufactured housing units are unsafe and/or dangerous for residential
use.  The amount of the damages has not been  specified.  The Company
believes the claims are without merit and plans to vigorously defend itself
against these claims.  However, the outcome of the litigation cannot be
predicted and such outcome could have a material adverse effect on the
Company.

The Company is a party to various other legal proceedings incidental to its
business.  The majority of these legal proceedings relate to employment
matters or product warranty liability claims for which management believes
adequate reserves are maintained.  In the opinion of management, after
consultation with legal counsel, the ultimate liability, if any, with respect to
these proceedings will not materially
affect the financial position or results of operations of the Company;
however, the ultimate resolution of these matters, which could occur within
one year, could result in losses in excess of the amounts reserved.

6.  TREASURY STOCK REPURCHASE
In October 1998, the Company extended its stock repurchase program for an
additional twelve months and increased the number of shares eligible for
purchase from 3,000,000 to 4,000,000.  From the inception of the program to
October 1, 1999, the Company has repurchased 3,505,900 shares at a cost of
$29,354,388, or an average cost of $8.37 per share.  During the first quarter
of 1999, the Company repurchased 505,600 shares at a cost of $3,072,350,
or an average cost of $6.08 per share.  The Company paid for these
repurchases out of available cash.  No shares were repurchased during
the second or third quarter of 1999.

7.  NORTH CAROLINA CLOSURE
On July 26, 1999, management closed the Company's
manufactured housing facility located in North Carolina.  The
decision was based primarily on changes in local market
conditions  and operating results of the facility.  The exit
plan began when the Company discontinued production on July
26, 1999, and will include the sale of existing inventories
and ultimate sale of the facility.  Management expects to be
substantially complete with the exit plan by December 31,
1999.  In connection with the decision to close the North
Carolina facility, the Company will incur losses on the
impairment of the facility's assets and accrued certain other
expenses related to the closure.  The Company estimates that
the impairment losses consisting primarily of impairment of
goodwill, and other incremental expenses will approximate
$6.4 million, pre-tax.  Although this amount represents
management's best estimate of total costs to close the
facility, the actual cost could ultimately differ from this
amount.  The Company has recorded the exit costs  as a non-
recurring charge in the accompanying statement of operations.
During the twenty-six weeks ended July 2, 1999 and July 3,
1998, this facility generated 4.4% and 6.8%, respectively, of
the total revenues of the Company.  The impact of this
facility on the operating income of the Company was a pre-tax
loss of $1.3 million ($800,000 after-tax) and a pre-tax
profit of $245,000 ($150,000 after-tax) during the twenty-six
weeks ended July 2, 1999 and July 3, 1998, respectively.

8.  SEGMENT AND RELATED INFORMATION
The Company has three primary reportable segments:
manufacturing, retail operations, and component supply.  The
manufacturing segment produces manufactured homes for sale to
independent and company owned retail centers.  The retail
operations segment sells to retail customers homes
which have been produced by various manufacturers including
the Company's manufacturing segment.  The component supply
segment sells various supply products to the Company's
manufacturing segment and to third party customers.

The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.
The Company evaluates performance based on total (external
and intersegment) revenues, gross profit, and net income.
The Company accounts for intersegment sales and transfers as
if the sales or transfers were to third parties, that is at
current market prices.  The Company does not allocate income
taxes, interest income, and interest expense and unusual
items to all segments.  In addition, not all segments have
significant noncash items other than depreciation and
amortization in reported profit or loss.  There has been no
change in the Company's basis of segmentation between January
1, 1999 and October 1, 1999.  For segment purposes,
there has been no material change in total assets between
January 1, 1999 and October 1, 1999.

The Company's reportable segments are strategic business
units that offer different products and services.  They are
managed separately because each business requires different
operating and marketing strategies.  The following table
presents information about segment profit or loss, dollars in
thousands:

                           Thirteen Weeks Ended     Thirty-nine Weeks Ended
                          October 1,   October 2,   October 1,    October 2,
                            1999         1998           1999           1998

     Revenues:
        Manufacturing     $48,868    $64,518         $168,404      $186,106
        Retail             17,758     20,584           51,691        57,295
        Component supply   11,118     15,113           39,768        44,773
        Other operating
         segments             296        207              932           858
        Eliminations      (14,184)   (18,277)         (53,644)      (57,665)
         Total revenures  $63,856    $82,145          $207,151     $231,367

     Gross profit:
        Manufacturing     $ 5,197    $ 7,763          $ 18,273     $ 22,759
        Retail operations   4,757      6,226            14,570       17,004
        Component supply      818      1,169             3,141        4,019
        Other operating
         segments            (371)      (478)             (815)        (739)
        Eliminations         (114)      (312)             (301)        (712)
           Gross profit   $10,287    $14,368           $34,868      $42,331



                        Thirteen Weeks Ended        Thirty-nine Weeks Ended
                         October 1,   October,2     October 1,    October 2,
                           1999          1998         1999           1998


     Segment operating income:
        Manufacturing    $(4,426)     $ 4,322        $ 1,472       $ 12,321
        Retail operations   (495)        (859)        (1,409)            30
        Component supply     401          727          1,871          2,642
        Corporate           (204)        (721)          (151)        (1,389)
        Other operating
         segments            189          720            491          1,372
                          (4,535)       4,189          2,274         14,976

     Income/expenses not allocated
      to segments:
       Interest income, net (432)        (432)         (1,270)        (1,120)
       Provision for income
        taxes               1900       (1,419)           (362)        (5,176)
     Net income (Loss)   $(3,067)     $ 2,338           $ 642        $ 8,680

Revenue from segments below the quantitative thresholds is attributable to
three other operating segments of the Company.  Those segments include a
trucking business, a finance business, and a small insurance business.
None of those segments has ever met any of the quantitative thresholds for
determining reportable segments.  The Corporate segment does not generate
any revenues, but does incur certain administrative elements.

Item 2.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
Thirty-nine weeks and thirteen weeks ended October 1, 1999 as compared
with thirty-nine weeks and thirteen weeks ended October 2, 1998.

Net Revenues

Total net revenues (gross sales less volume discounts,
returns and allowances) for the thirty-nine weeks
ended October 1, 1999 were $207.1 million, as
compared with $231.4 million in the prior year period.
For the thirteen weeks ended October 2, 1999,
total net revenues  were $63.8 million, as compared with
$82.1 million for the comparable period a year ago.

Net revenues from the wholesale sale of manufactured homes
were $168.4 million (including intersegment revenues of
$23.6 million) for the thirty-nine weeks ended
October 1, 1999, as compared with $186.1 million
(including intersegment revenues of $22.6 million) for
the prior year period, a decrease of 9.5%.  The decline in
manufacturing revenue was primarily attributable to decreased
demand, resulting from excessive retail inventories industry
wide, and closure of the North Carolina plant in July of
1999. Total homes shipped for the thirty-nine weeks
ended October 1, 1999 was 6,256, down 7.8%
from the number of homes shipped in the prior year period.
The average wholesale price per home for the thirty-nine weeks ended
October 1, 1999 was $26,919, as compared with $27,408 in the prior year
period, a decline of 1.8%. For the thirteen weeks ended October 1,
1999, net revenues from the wholesale sale of manufactured
homes were $48.9 million (including intersegment
revenues of $5.7million), as compared with $64.5
million (including intersegment revenues of $7.2 million)
for the prior year period, a decrease of 24.2%.    The
decline in manufacturing revenue was primarily attributable
to decreased demand, resulting from excessive retail
inventories industry wide, and closure of the North Carolina
plant in July of 1999.    Total homes shipped for the thirteen weeks
ended October 1, 1999 was 1,790, down 23.6% from the number of homes
shipped in the prior year period.  The average wholesale price per
home for the thirteen weeks ended October 1, 1999 was $27,300, as compared
with $27,525 in the prior year period.


Net revenues from the retail sale of manufactured homes were
$51.7 million for the thirty-nine weeks ended
October 1, 1999, as compared with $57.3 million for
the prior year period, a decrease of  9.8%.  Total retail
homes sold for the thirty-nine weeks ended October 1, 1999 was1,397,
down 16.9% from the number of homes sold in the prior year period.
The decline in retail revenues was attributable to a decrease in retail
homes sold, partially offset by an slight increase in the
average retail price per new homes sold during the thirty-nine weeks
ended October 1, 1999. For the thirteen weeks ended October 1, 1999,
net revenues from the retail sale of manufactured homes were $17.8 million,
as compared with $20.6 million for the prior year period, a
decrease of 13.6%.  Total retail homes sold for the
thirteen weeks ended October 1, 1999 was 469, down
27.1% from the number of homes sold in the prior year
period.  The decline in retail revenues was attributable to a
decrease in retail homes sold, partially, offset by an
slight increase in the average retail price per new homes
sold during the thirteen weeks ended October 1, 1999.


Net revenues from the component supply segment were $39.8
million (including intersegment revenues of $31.1
million) for the thirty-nine weeks ended
October 1, 1999, as compared with $44.8 million
(including intersegment revenues of $35.1 million) for
the prior year period, a decrease of 11.2%.  The decline
in supply sales was primarily attributable to a decline in
intersegment sales to the manufacturing segment. For the
thirteen weeks ended October 1, 1999, net revenues from
the component supply segment were $11.1 million (including
intersegment revenues of $8.5 million), as compared with
$15.1 million (including intersegment revenues of $12.1
million) for the prior year period, a decrease of 26.5%.
The decrease in supply sales was primarily attributable to
an decrease in intersegment sales to the manufacturing
segment.


Revenues from the retail finance subsidiary were $932,000
and $296,000, respectively, for the thirty-nine
weeks and thirteen weeks ended October 1, 1999, as
compared with revenues of  $858,000 and $290,000 for
the comparable prior year periods. The increases were
attributable to increased lending activity by the Company's
wholly owned subsidiary, Wenco Finance, Inc. ("Wenco
Finance").  Wenco Finance originatesd and servicesd consumer
loans primarily for homes manufactured by the Company. In
February 1997, the Company formed a joint venture with 21st
Century Mortgage Corporation ("21st Century"). The joint
venture, Wenco 21, will continue to offer consumer financing
for homes manufactured by the Company as well as for other
homes sold through its retail centers and independent
dealers.



Gross Profit

Gross profit consists of net revenues less the cost of sales,
which includes labor, materials, and overhead.  Gross profit
for the thirty-nine weeks ended October 1,
1999 was $34.9 million, or 16.8% of net revenues, as
compared with $42.3 million, or 18.3% of net revenues,
in the prior year period.  The decline in gross profit
percentage resulted from the Company's
inability to pass on higher labor and material costs due to a
competitive manufactured housing market and a decline in
retail margins due to the competitive retail market.
For the thirteen weeks ended October 1, 1999,
gross profit was $10.3 million, or 16.1% of net revenues,
as compared with $14.4 million, or 17.5% of net
revenues, in the prior year period.  The decline in gross
profit percentage resulted from the Company's
inability to pass on increased labor and material
costs, and a decline retail margins due to the competitive retail market.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include
primarily sales commissions, advertising expenses, freight
costs, salaries for support personnel, administrative
salaries, executive and management bonuses, insurance costs,
and professional fees.  Selling, general and administrative
expenses were $25.9 million, or 12.5% of net revenues,
during the thirty-nine weeks ended October 1,
1999, as compared with $26.9 million, or 11.6% of net
revenues, for the same period of the prior year.  For the
thirteen weeks ended October 1, 1999, selling, general
and administrative expenses were $8.4 million, or 13.1%
of net revenues, as compared with $10.0 million, or 12.2%
of net revenues, for the same period of the prior year.  The
increase in selling, general and administrative expenses as a
percentage of sales were attributable primarily to a higher ratio of fixed
expenses at the retail centers, partially offset by a
reduction of variable selling expenses.

Interest Expense

Interest expense for the thirty-nine weeks ended
October 1, 1999 was $1.5 million, as compared with
$1.8 million in the prior year period.  For the thirteen
weeks ended October 1, 1999, interest expense was
$500,000, as compared with $685,000 in the prior year
period.  The decrease in interest expense in the current year
periods was a result of increased use of available cash,
instead of floor plan financing, to fund the purchase of the
Company's retail inventory.

Interest Income

Interest income for the thirty-nine weeks ended
October 1, 1999 was $240,000, as compared with
$728,000 in the comparable prior year period.  For the
thirteen weeks ended October 1, 1999, interest income
was $68,000, as compared with $253,000 in the prior year
period.   The decrease in interest income reflects lower
average cash and cash equivalent balances during the current
year periods, due to the Company financing a portion of its
retail inventory with available cash.

Provision for Income Taxes

Income taxes are provided for based on the tax effect of
revenue and expense transactions included in the
determination of pre-tax book income. Income tax expense for
the thirty-nine weeks ended October 1, 1999
was $362,000 or an effective tax rate of
36.1%, as compared with $5.2 million, or an effective
tax rate 37.4% in the prior year period.  For the thirteen
weeks ended October 1, 1999, credit provision for
income tax expense was $1.9 million, or an effective tax
rate of 38.2%, as compared with a provision for income tax
of $1.4 million, or an effective tax rate of 37.8% in
the prior year periods.


LIQUIDITY AND CAPITAL RESOURCES

Since its organization, the Company has financed its
operations primarily with cash generated from a combination
of operations, stock offerings, and borrowings.


Cash Flows

During the thirty-nine weeks ended October 1,
1999, the Company's cash provided by operations was
approximately $2.5 million.  Cash used by operations
included origination of installment contracts of $2.0
million, and increased accounts receivable of 5.7 million,
and decreased accrued liabilities  of $2.1 million.  These amounts were
partially offset by net income of $0.6 million and
increased accounts payable and decreased inventory of
$6.1 million.  In addition to cash used by operating
activities, other significant uses of cash included capital
expenditures of $3.9 million, purchase of treasury stock
of $3.1 million, and repayments of long-term debt of $0.8
million.  Other significant sources of cash included
increased borrowings on notes payable used for floor plan
finance at its retail operations of $4.5 million, .as well
as principal collected on its
originated installment contracts of $1.2 million and sale of
retail centers of $0.6 million.

During the thirty-nine weeks ended October 2, 1998, the
Company's cash provided by operations was approximately $11.7
million.  Cash was provided by net income of $8.7 million and
increased accounts payable and accrued liabilities totaling
$8.9 million.  These amounts were partially offset by cash
used in operations, which included increased accounts
receivable, prepayments and other, and inventory totaling
$6.9 million and a decrease in origination's of installment
contracts of $1.7 million.  Other cash flows included
purchases of subsidiaries for $7.2 million, capital
expenditures of  $1.8 million, increased organizational and
pre-operating expenses of $488,000, purchase of treasury
stock of $13.9 million, increased borrowings on notes payable
of $6.9 million, repayments of long-term debt of $884,000 and
proceeds from exercise of stock options of $455,000.

At October 1, 1999, the Company's net working
capital was $19.3 million, compared with $21.3 million at
January 1, 1999.  The decrease in net working capital was
primarily a result of a decrease in inventory of $2.0 million
increase in notes payable of $4.5 million, and an
increase in accounts payable of $4.1 million, partially
offset by a $5.6 million increase in accounts
receivable, and a $2.1 million decrease in accrued
liabilities. The Company also has a $25 million unsecured
line of credit which is renewable annually and bears interest
at the London Interbank Offered Rate ("LIBOR") plus 1.5%.
The Company's ability to draw upon this line of credit is
dependent upon meeting certain financial ratios and
covenants.  At October 1, 1999 the Company had $20 million
in outstanding borrowings under this line which
is used for floor plan finance at its retail operations.


Substantially all of the Company's dealers finance their
purchases through "floor-plan" arrangements under which a
financial institution provides the dealer with a loan for the
purchase price of the home and maintains a security interest
in the home as collateral. In connection with a floor-plan
agreement, the financial institution which provides the
dealer financing customarily requires the Company to enter
into a separate repurchase agreement with the financial
institution under which the Company is obligated, upon
default by the dealer, to repurchase the homes at the
Company's original invoice price plus certain administrative
and shipping expenses less any principal payments made by the
dealer. At October 1, 1999, the Company's
contingent repurchase liability under floor plan financing
arrangements was approximately $83 million. While homes
that have been repurchased by the Company under floor-plan
financing arrangements are usually sold to other dealers and
losses experienced to date under these arrangements have been
insignificant, no assurance can be given that the Company
will be able to sell to other dealers homes which it may be
obligated to repurchase in the future under such floor plan
financing arrangements or that the Company will not suffer
losses with respect to, and as a consequence of, those
arrangements.

Inflation

The Company believes that the relatively moderate rate of
inflation over the past few years has not had a significant
impact on its sales or profitability. The Company has in the
past been able to pass on most of the increases in its costs
by increasing selling prices. However, in the current
competitive manufactured housing market, the Company has
recently been unable to pass on these increases and the
Company's gross profit margins have declined.


Year 2000 Compliance

Many currently installed computer systems and software
products are coded to accept only two-digit entries in the
date code field and cannot distinguish dates after the year
2000.  These date code fields will need to distinguish "Year
2000" dates from earlier dates and, as a result, many
companies' software and computer systems may need to be
upgraded or replaced in order to comply with such "Year 2000"
requirements.

Although the Company is currently working to resolve the
potential impact of the Year 2000 issue on the computerized
systems it utilizes internally, and with regard to its
products and customers, at this time, the Company's systems
are not Year 2000 compliant.

During the fourth quarter of 1998, the Company commenced
replacement of its current information technology system with
a new system.  The replacement, which is expected to be
completed by March 2000, is required to
meet current and future needs of the Company's business as
well as to make more efficient various administrative and
operating functions.  Because the Company did not undertake
this replacement for reasons of Year 2000 compliance, the
costs of this conversion have not been identified as Year
2000 compliance costs.  The current upgrading of the
Company's software program and operating systems will cost
approximately $3.3 million.  The Company anticipates it will
fund such expenditures through a combination of equipment
leasing and available cash.  The Company believes that these
new programs and systems will be Year 2000 compliant.

The failure of the Company to make its systems Year 2000
compliant in a timely manner couldwill have a material
adverse effect on the Company.

The Company relies upon various vendors, utility companies,
telecommunications service companies, delivery service
companies, and other service providers, which are outside of
the Company's control.  The company has not yet determined
the extent to which the computer systems of such service
providers are Year 2000 compliant, if at all.  The failure of
the Company's vendors to make their systems Year 2000
compliant in a timely manner will have a material adverse
effect on the Company.

"SAFE HARBOR"  STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995  Forward-looking statements in
this report, including without limitation, statements
relating to the adequacy of the Company's resources, are made
pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.  Investors are
cautioned that actual
results could differ materially from those projected in any
forward looking statements, due to, among other factors: the
cyclical and seasonal nature of housing markets; the
availability of financing for prospective purchasers of the
Company's homes; the amount of capital that the Company may
commit to its consumer finance subsidiary and Wenco 21 joint
venture to make available consumer loans; the performance of
the loans held by the Company's finance subsidiary; the
availability and pricing of raw materials; the concentration
of the Company's business in certain regional markets; the
Company's ability to execute and manage its expansion plans;
the availability of labor to implement those plans; the
highly competitive nature of the manufactured housing
industry, including the retail sale of manufactured homes;
federal, state and local regulation of the Company's
business; the company's contingent repurchase liabilities
with respect to dealer financing; the Company's reliance on
independent dealers; and other risks indicated from time to
time in the Company's filings with the Securities and
Exchange Commission.

Item 3.  Quantitative and  Qualitative
Disclosures about Market Risk
     "Not Applicable"

                 PART II - OTHER INFORMATION

Item 1.   Legal Proceedings
On March 1, 1999, the Company, without admitting any
liability, entered into a settlement with HUD that requires
the Company to correct construction and safety violations in
homes manufactured at the North Carolina manufacturing
facility.  In addition, the settlement requires the Company
to inspect 600 additional homes for possible violations.  The
Company has agreed to a one-year warranty extension of
certain homes.  HUD claimed that the Company failed to comply
with the consumer notification and defect correction
requirements of the 1974 Act.  The Company has been assessed
a civil penalty by HUD of up to $300,000 in connection with
the settlement; however, this penalty can be reduced by HUD
depending on Company actions.

The Company has been named, along with several other
manufactured housing companies, as a defendant in a class
action lawsuit filed in Kentucky in September 1998, claiming
wrongful conduct, fraudulent misrepresentation, and that
manufactured housing units are unsafe and/or dangerous for
residential use.  The amount of the damages has not been
specified.  The Company believes the claims are without merit
and plans to vigorously defend itself against these claims.
However, the outcome of the litigation cannot be predicted
and such outcome could have a material adverse effect on the
Company.

The Company is a party to various other legal proceedings
incidental to its business.  The majority of these legal
proceedings relate to employment matters or product warranty
liability claims for which management believes adequate
reserves are maintained.  In the opinion of management, after
consultation with legal counsel, the ultimate liability, if
any, with respect to these proceedings will not materially
affect the financial position or results of operations of the
Company; however, the ultimate resolution of these matters,
which could occur within one year, could result in losses in
excess of the amounts reserved.

Item 6.  Exhibits and Reports on Form 8-K
     (a)  Exhibits
     The following Exhibits are incorporated herein by reference
      (except as otherwise noted).
        3.1  Certificate of incorporation of the Company, as amended
              (filed as Exhibit 3.1 to the Registration Statement on Form
              S-3, Registration No. 333-32933.)
        3.2  By-Laws of the Company. (Filed as Exhibit 3.2 to the
              Registration Statement on Form S-1, Registration No. 33-57420).
        4.1  Specimen of Stock Certificate. (Filed as Exhibit 4.1 to
              the Registration Statement on Form S-1, Registration No. 33-
              57420.)
        4.2  Southern Development Council, Inc. Promissory Note.
              (Filed as Exhibit 4.10 to the Registration Statement on Form
              S-1, Registration No. 33-57420.)
        4.3  Stockholders' Agreement, dated as of June 8, 1989
              (Filed as Exhibit 4.12 to the Registration Statement on Form
               S-1, Registration No. 33-57420.)
        4.4  Form of First Amendment to Stockholders' Agreement,
              dated as of January 13, 1993.  (Filed as Exhibit 4.13 to the
              Registration Statement on Form S-1, Registration No. 33-
              57420.)
       10.1  Employment Agreement with Wendell L. Batchelor, dated as
              of June 8, 1989.  (Filed as Exhibit 10.1 to the Registration
              Statement on Form S-1, Registration No. 33-57420.)
       10.2  Employment Agreement with Keith Brown, dated as of June
              8, 1989.  (Filed as Exhibit 10.2 to the Registration
              Statement on Form S-1, Registration No. 33-57420.)
       10.3  Employment Agreement with Johnny R. Long, dated as of
              June 8, 1989.  (Filed as Exhibit 10.3 to the Registration
              Statement on Form S-1, Registration No. 33-57420.)
       10.4  Southern Energy Homes, Inc. 1993 Stock Option Plan.
              (Filed as Exhibit 10.4 to the Registration Statement on Form
              S-1, Registration No. 33-57420.)
       10.5  Form of Southern Energy Homes, Inc. 401(k) Retirement
              Plan. (Filed as Exhibit 10.5 to the Registration Statement on
              Form S-1, Registration No. 33-57420.)
       10.6  Management Agreement, effective as of June 8, 1989, by
              and between Lee Capital Holdings and Southern Energy Homes,
              Inc. (Filed as Exhibit 10.14 to the Registration Statement on
              Form S-1, Registration No. 33-57420.)
       10.7  Southern Development Council, Inc. Loan Commitment
              Agreement. Filed as Exhibit 10.15 to the Registration
              Statement on Form S-1, Registration No. 33-57420.)
       10.8  Lease Agreement by and between Hillard Brannon and
              Southern Energy Homes, Inc., dated July 30, 1992. (Filed as
              Exhibit 10.16 to the Registration Statement on Form S-1,
              Registration No. 33-57420.)
       10.9  Lease Agreement by and between Hillard Brannon and
              Southern Energy Homes, Inc., dated November 16, 1989. (Filed
              as Exhibit 10.17 to the Registration Statement on Form S-1,
              Registration No. 33-57420.)
      10.10  Lease Agreement by and between Robert Lowell
              Burdick, Nina Burdick Vono, Carolyn Burdick Hunsaker, Jean
              Burdick Hall, Mildred Burdick Marmont and Lane Burdick Adams
              as Landlord, and Southern Energy Homes, Inc., dated as of
              November 20, 1985. (Filed as Exhibit 10.23 to the
              Registration Statement on Form S-1, Registration No. 33-
              57420.)
      10.11  Agreement and Plan of Merger of Southern Energy
              Homes, Inc., a Delaware corporation, and Southern Energy
              Homes, Inc., an Alabama corporation, dated as of January 15,
              1993. (Filed as Exhibit 10.25 to the Registration Statement
              on Form S-1, Registration No. 33-57420.)
      10.12  Certificate of Merger Merging of Southern Energy
              Homes, Inc., an Alabama corporation, with and into Southern
              Energy Homes, Inc., a Delaware corporation, dated as of
              January 19, 1993. (Filed as Exhibit 10.26 to the Registration
              Statement on Form S-1, Registration No. 33-57420.)
      10.13  Assignment of Lease and Rights dated June 29, 1993
              between B.B.H.L.P Partnership and Southern Energy Homes, Inc.
              (Filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q
              for the quarter ended July 2, 1993, File No. 0-21204.)
      10.14  Lease Agreement dated as of June 1, 1984 between
              the Industrial Development Board of the town of Addison,
              Alabama and B.B.H.L.P Partnership. (Filed as Exhibit 10.2 to
              the Quarterly Report on Form 10-Q for the quarter ended July
              2, 1993, File No. 0-21204.)
      10.15 Agreement Of Lease and Rights dated June 19, 1993
             between B.B.H.L.P and Southern Energy Homes, Inc. (Filed as
             Exhibit 10.3 to the Quarterly Report on Form 10-Q for the
             quarter ended July 2, 1993, File No. 0-21204.)
      10.16 Lease Agreement dated as of December 1,1986 between
             the Industrial Development Board of the town of Addison,
             Alabama and B.B.H.L.P Partnership. (Filed as Exhibit 10.4 to
             the Quarterly Report on Form 10-Q for the quarter ended July
             2, 1993, File No. 0-21204.)
      10.17 Letter Agreement dated May 18, 1993 and Master Note
             dated May 19, 1993 between the Company and AmSouth Bank, N.A.
             (Filed as Exhibit 10.27 to the Registration Statement on Form
             S-1, Registration No. 33-68954.)
      10.18 Deed of Real Estate dated August 5, 1993 relating
             to the Company's Plant No. 2 in Addison, Alabama. (Filed as
             Exhibit 10.27 to the Registration Statement on Form S-1,
             Registration No. 33-68954.)
      10.19 Deed of Real Estate dated July 30, 1993 relating to
             the Company's manufacturing facility in Fort Worth, Texas.
             (Filed as Exhibit 10.27 to the Registration Statement on Form
             S-1, Registration No. 33-68954.)
      10.20 Southern Energy Homes, Inc.1996 Option Plan for Non-
             employee Directors. (Filed as Exhibit 10.20 to the Company's
             Annual Report on Form 10-K for the year ended December 29,
             1995.)
      10.21 Agreement and Plan of Reorganization of Southern
             Energy Homes, Inc. a Delaware Corporation, and SE Management,
             Inc. an Alabama Corporation, dated November 22, 1996.
      10.22 Amended and Restated Employment Agreement with
             Wendell L. Batchelor, dated as of June 14, 1996.
      10.23 Amended and Restated Employment Agreement with
             Keith W. Brown, dated as of June 14, 1996.
      10.24 Asset Purchase Agreement, dated as of December 3,
             1997, by and among the Registrant, A&G, Inc. and the sole
             stockholder of A&G, Inc. (Filed as Exhibit 10.24 to the
             Company's Annual Report on Form 10-K for the year ended
             January 2, 1998.)
      10.25 Asset Purchase Agreement, dated as of April 3,
             1998, by and among Southern Energy S. C. Retail Corp.,
             Rainbow Homes, Inc. and the sole stockholder of Rainbow
             Homes, Inc.   (filed as Exhibit 10.25 to the Company's
             quarterly Report on Form 10-Q for the quarter ended October
             2, 1998)
      27     Financial Data Schedule.**

     (b)  Reports on Form 8-K      None
** Filed herewith

                         SIGNATURES

Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.

                                   SOUTHERN ENERGY HOMES,INC.

Date: November 15, 1999          By: /s/  Wendell L. Batchelor
                                  Wendell L. Batchelor, Chairman and Chief
                                  Executive Officer


Date: November 15, 1999          By: /s/ Keith W. Brown
                                  Keith W. Brown, Executive Vice President,
                                  Chief Financial Officer, Treasurer and
                                  Secretary