Drew Industries Inc. announced today (Feb. 12) that President and CEO Fred Zinn will retire, effective May 10. Jason Lippert, who currently serves as chairman and CEO of subsidiaries Lippert Components Inc. and Kinro Inc., will take over as CEO of Drew while Scott Mereness will serve as president and COO.
According to a news release, this transition is the result of a comprehensive succession process initiated by Drew’s board in 2011.
Drew also announced the relocation of its corporate headquarters from White Plains, N.Y., to Elkhart County, Ind. – the location of the corporate headquarters for Lippert and Kinro, and where more than 80% of all RVs produced in the U.S. are manufactured.
The company said that consolidating Drew’s corporate functions with its Indiana-based manufacturing operations will be “both cost-effective and result in an even greater exchange of ideas and expertise between Drew’s management team and executives across the RV and manufactured housing industries.”
Zinn, who will turn 62 in March, has been an executive officer since 1986, serving as president and a director since 2008 and as CEO since 2009. While Zinn will not stand for re-election as a director, he will serve as a consultant to Drew through 2013.
Lippert, 40, has served as chairman and CEO of Lippert Components and Kinro, and as a director of Drew, for the past six years, and will continue in these positions. Lippert has held various executive positions at Lippert Components and Kinro since 1998.
Mereness, 41, will continue to serve as president of Lippert and Kinro, as he has since 2010, while assuming his new duties with Drew. He has held various executive positions at Lippert and Kinro since 2001.
Chairman Leigh J. Abrams stated, “Fred has been Drew’s CEO through very challenging times, including the ‘Great Recession,’ and he has helped guide our strong growth that followed. In the past four years, Drew has generated over $200 million in operating cash flow, enabling the company to complete 13 acquisitions, pay nearly $80 million in special dividends to stockholders, and still close 2012 with no debt. The board is grateful for the substantial contributions Fred has made to Drew for more than 30 years, first as CFO and then during his distinguished tenure as CEO and a director.”
Abrams continued, “This carefully conceived leadership transition brings Jason Lippert and Scott Mereness to Drew’s top executive positions. Both these executives are highly experienced, and they have the vision, energy and ability to lead the company through its next phase of growth.”
Zinn stated, “I have been privileged and proud to work for this vibrant company. After more than three decades with Drew Industries, it’s time to transfer Drew’s executive responsibilities to a new generation. Jason is an exceptionally talented leader, and he has been key to the company’s success. Since he assumed an executive role more than a decade ago, Drew’s market share has grown consistently and significantly. Jason has gained the respect of business executives throughout the industries we serve. He has developed an outstanding team of executives with proven leadership capabilities and extensive experience in our industries.”
Lippert noted, “We will continue our strategic initiatives to enhance Drew’s cash flow and profitability. We intend to accomplish this by providing the highest quality products and superior service, both to our existing customers, and to new customers in the adjacent markets we have been developing in accordance with our ongoing strategic planning process. We have always provided our customers with products that add value and offer innovative solutions to their business needs. It is essential that we maintain our outstanding reputation among both our customers and the investment community.”
He added, “Scott Mereness has provided Drew with exceptional operational leadership for more than a decade. Scott and I have worked closely together for over 15 years, with an emphasis on attracting and developing the best possible talent for every aspect of the company. Together with our extraordinary management team and dedicated employees, Scott and I will continue to develop strategic plans to benefit Drew, including our stockholders, employees and customers.”
Other moves include:
• Joseph S. Giordano III, 44, CFO and treasurer of Drew since 2008 and corporate controller from 2003 to 2008, will relocate to Indiana and continue to serve in his current positions. “For the past decade, Joe has played a crucial role in our success,” said Abrams, “and we are delighted that we can continue to rely on his broad knowledge and experience.”
• Harvey F. Milman, 71, who has served as general counsel then chief legal officer of Drew since 1969, will retire, effective July 31. Milman will continue to serve as a consultant to Drew through 2014. “On behalf of the board, we are most grateful for the advice and counsel Harvey has provided us over the years,” stated Abrams. Milman will be succeeded by Robert A. Kuhns, 47. For the past 13 years Kuhns was a partner in the corporate group at the Minneapolis offices of Dorsey & Whitney, a full-service global law firm. Kuhns has extensive experience with a broad range of corporate, acquisition and securities matters.
As a result of Drew’s leadership transition and corporate relocation, the company will record a pre-tax charge of approximately $3.3 million, including $1.5 million in the fourth quarter of 2012, and the balance in the first and second quarters of 2013, related to contractual obligations for severance and the acceleration of equity awards. Upon completion of the transition, the company will save an estimated $2 million annually in general and administrative costs.