RV Sales Power Drew’s 2Q Earnings Growth
White Plain, N.Y.-based Drew Industries Inc. a leading supplier of components for recreational vehicles and manufactured homes, today reported net income for the second quarter, ended June 30, of $11.0 million ($0.49 per diluted share), a 14% increase over net income of $9.6 million ($0.43 per diluted share) reported in the second quarter of 2010.
Second quarter sales increased 7% to $186 million from $174 million the previous year, the result of a 9% increase in Drew’s RV segment sales, and a 1% decline in Drew’s MH segment sales. The RV segment, which manufactures components primarily for travel trailer and fifth-wheel RVs, represented 84% of consolidated sales, while the MH segment sales represented 16%. Industrywide wholesale shipments of travel trailer and fifth-wheel RVs increased 6% in the second quarter, while industrywide production of manufactured homes declined an estimated 11%.
“In the second quarter of 2011, we continued to increase our content per RV and manufactured home, and expand our sales to other industries, such as mid-size buses, modular housing and specialty trailers,” said Fred Zinn, president and CEO of Drew, which is parent to Lippert Components Inc. and Kinro Inc. “As a result, we were able to largely overcome the impact on our industries of slower economic growth in the second quarter of 2011 than had been anticipated. Our consolidated sales increased again in July 2011, reaching approximately $49 million, about 3% above July 2010 sales, despite July 2011 having one less shipping day than July 2010.”
On July 19, 2011, Drew acquired certain assets and business of M-Tec, an Indiana-based manufacturer of components for RVs and mobile office units. This was Drew’s second acquisition of the year, following the January 2011 acquisition of Home-Style, the leading manufacturer of RV furniture and mattresses in the growing Northwest RV market.
“The M-Tec acquisition enables us to expand our product line of components for motorhomes, a market which offers significant long-term opportunity,” said Jason Lippert, CEO of Lippert and Kinro. “The two acquisitions we’ve made so far this year were particularly attractive because we will use our purchasing power and manufacturing expertise to reduce the cost structure of the acquired operations. With our debt-free balance sheet, significant credit availability and outstanding operating management team, we have the capability to continue to invest in profitable growth opportunities.”
“We have also made major strides towards capturing new markets, expanding our customer service capabilities, and further increasing the depth of our management team,” said Scott Mereness, president of Lippert Components and Kinro.
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