Drew Industries Inc, parent to RV and manufactured home suppliers Lippert Components Inc. and Kinro Inc., today (Feb. 13) reported a double-digit increase in sales for its fourth quarter – driven by strong performance in its RV segment – while topping $1 billion in revenue for the full year.
Sales in the fourth quarter increased to $225 million, 12% higher than the 2012 fourth quarter. Net income totaled $11.1 million, or 46 cents per diluted share, compared to $4.7 million, or 21 cents per diluted share.
Revenue for the year increased by $114 million to a record $1.02 billion from the year prior while net income rose to $50.1 million, or $2.11 per diluted share, from net income of $37.3 million, or $1.64 per diluted share.
Fourth-quarter sales growth was primarily the result of a 16% increase by Drew’s RV segment, which accounted for 88% of consolidated net sales this quarter. In addition, sales of recently introduced components for towable and motorhome RVs increased, as did sales to adjacent industries and the aftermarket.
“The retail demand for RVs in 2013 was the largest the industry has experienced since 2007,” said Jason Lippert, CEO for Elkhart, Ind.-based Drew. “The RV lifestyle continues to grow in popularity each year. Although the RV industry is sensitive to economic conditions, we are optimistic about the potential for continued long-term growth in retail demand for RVs. The strong industry fundamentals combined with our sales gains are positive signs for the future. We strive to maintain our position as a leading supplier to the industries we serve by staying ahead of the market through innovation and investing in customer support resources.”
For the year, Drew’s RV segment sales increased 14% compared to the 10% increase in industrywide wholesale shipments of travel trailers and fifth-wheel RVs. Sales growth in new markets and new products continued to be key factors in enabling Drew’s sales to exceed RV industry growth rates.
In addition, Drew continued to grow outside its core RV and manufactured housing markets, with aggregate net sales of components for adjacent industries increasing 20% to $121 million, and aftermarket net sales increasing 21% to $39 million. Together, these markets now account for 16% of consolidated net sales, an increase from 10%of consolidated net sales in 2010.
“Achieving our $1 billion sales milestone was a significant accomplishment for the company,” said Lippert. “As we look towards future sales growth, we continue to identify the areas where investments are needed for long-term profitable growth. A key area of focus for the past year was our employees, and in 2013 we made solid progress at reducing employee turnover. This year we are increasing our efforts to improve employee retention, which should further improve operating efficiencies. In addition, we continually evaluate our production capacity and while certain capacity expansion plans may have a short-term negative impact on margins, over the long term these investments should allow us to improve our operating results, as well as our industry-leading customer service.”
Drew noted that in January 2014, as a result of the negative impact of the severe winter weather conditions during the month on industrywide production of RVs and manufactured homes, as well as on shipments of the company’s products, Drew’s consolidated net sales were approximately $82 million, a decline of 3% from January 2013.
“As a result of the road and facility closures caused by the extreme weather conditions, industry-wide production schedules for January 2014 were delayed,” said Jason Lippert. “However, retail RV shows for the first part of 2014 have been strong, with reports of higher traffic and increased sales activity, and backlogs at our customers have increased from the prior year. As a result, we are optimistic that the production delays from January 2014 will be made up over the coming months. Further, based on open orders and scheduled shipments for February 2014, our net sales for the year to date February 2014 are projected to be ahead of the comparable period of 2013.”
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