Drew Ind. Reports Higher 4Q, Year-end Earnings
Drew Industries Inc. today (Feb. 13) reported net income for the fourth quarter ended Dec. 31, 2011 of $4.1 million, or $0.18 per diluted share, compared to net income of $3.1 million, or $0.14 per diluted share in the fourth quarter of 2010. White Plains, N.Y.-based Drew is parent to recreational vehicle and manufactured housing suppliers Lippert Components Inc. and Kinro Inc.
Sales in the fourth quarter increased to $160 million, a 50% increase compared to the 2010 fourth quarter, as a result of a 51% rise in Drew’s RV segment sales and a 45% increase in Drew’s MH sales. Drew reported that sales in January 2012 reached approximately $65 million, 28% higher than in January 2011. Excluding the impact of sales price increases and acquisitions, net sales for January 2012 were up approximately 10%.
Sales for the full year increased 19% to $681 million compared to $573 million in 2010. Drew’s RV sales increased 20% while MH sales were up 16%. For the full year 2011, Drew’s net income increased to $30.1 million, or $1.34 per diluted share, compared to net income of $28.0 million, or $1.26 per diluted share in 2010. The company said that net income in 2011 was impacted by higher raw material costs, higher production costs in one product line and start-up costs, which reduced earnings by an aggregate of approximately $0.32 per diluted share.
“In 2011, we invested more than $50 million in acquisitions, expanding our product lines and capabilities, both in our core markets and related markets,” said Fred Zinn, Drew’s president and CEO. “These acquired businesses had annualized revenues of approximately $90 million, of which $40 million was included in our consolidated net sales for 2011. We also started production in our new aluminum extrusion facility, and made additional investments in new capacity, product development, including our new RV awning product line, slideout boot and others, and enhanced marketing efforts. As a result, we expect sales growth in our core markets, adjacent markets, the aftermarket for replacement products and in products for motorhomes, as our investments continue to yield results.”
Zinn added, “We recognize that our responsibility to stockholders is to turn opportunities and investments into solid profit growth, and we are focused on achieving that profit growth in 2012 and beyond. During the past year, we built the foundation for profit improvement. With our strong, debt-free balance sheet, we have the resources to continue to invest in opportunities which are expected to yield favorable long-term bottom-line returns.”
Jason Lippert, CEO of Lippert Components and Kinro, noted, “By expanding our production capacity and gaining footholds in new markets, we have opened doors to further opportunities in the years ahead. In 2012, we expect the investments we made in 2011 and 2010 to positively impact our bottom-line results. Returns on investments like these are not realized over night, but in recent months we have begun to achieve improved results on these investments, through accelerating customer acceptance of our new products, increased production efficiencies, and cost reductions.”
The company noted that production levels at Drew’s new aluminum extrusion facility have significantly increased in recent weeks. “Our first aluminum extrusion press is now running 24/7,” said Scott Mereness, president of Lippert Components and Kinro. “We expect the second and third presses to be in production within a few months.”
“We are also pleased with the improvement in the RV industry in 2011,” said Lippert. “Despite high unemployment in the U.S., industrywide retail sales of travel trailer and fifth-wheel RVs increased an estimated 5% in 2011. In the fourth quarter of 2011, despite a modest softening of retail demand, RV dealers expressed their confidence by boosting purchases. Industry reports indicate that these increases in dealer purchases were due to both anticipation of improved retail demand in the upcoming spring selling season, and new financing programs for dealers, designed in part to level seasonal production. While RV dealer purchases and inventory levels may continue to fluctuate, we are optimistic about the potential for long-term improvement in retail demand for RVs.”
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