Elkhart, Ind.-based Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today (May 1) reported that profits nearly doubled in its first quarter, boosted by a 13% increase in sales driven by strong performance in its RV segment.
First-quarter net income totaled $16.2 million, or 67 cents per diluted share, compared to net income of $8.4 million, or 36 cents per diluted share, the previous year. Net income for the 2013 first quarter was net of an after-tax charge of $0.7 million in connection with executive succession. Excluding this charge, net income in the first quarter of 2013 would have been $9.1 million, or 39 cents per diluted share.
Sales in the first quarter, ended March 31, increased to $285 million, 13% higher than the 2013 first quarter. This sales growth was primarily the result of a 16% sales increase by Drew’s RV segment, which accounted for 91% of consolidated net sales this quarter. Drew noted that the increase was in line with a 13% rise in industrywide shipments of travel trailers and fifth-wheels. In addition, sales of recently introduced components for towable and motorhome RVs increased, as did sales to adjacent industries and the aftermarket.
“After a slower than expected start to 2014 due to severe weather conditions, industrywide production of RVs, as well as shipments of our products, have rebounded in recent months,” said Jason Lippert, Drew CEO. “The increase in our net sales in February and March were largely due to the projected increased retail demand, but also included sales to OEM customers who were making up for production delays that occurred in January.”
In April 2014, Drew’s consolidated net sales reached approximately $113 million — 13% higher than April 2013 — as a result of continued solid growth in the company’s RV segment. Drew estimates that industrywide wholesale shipments of travel trailer and fifth-wheel RVs increased approximately 11% in April from a year ago.
“Our operating profit margins in the first quarter of 2014 were 9.1% compared to 5.4% in the first quarter of 2013,” said Scott Mereness, Drew president. “The 2014 first quarter operating profit margins were higher than the comparable period of 2013 largely due to efficiency improvements, declines in the costs of implementing facility consolidations and realignments, and the spreading of fixed costs over a larger sales base. In addition, the investments we have made in our business over the past several years are continuing to benefit our bottom-line results. We added capacity ahead of projected demand, which enabled us to efficiently fulfill customer orders as demand has increased.
“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 continue to improve our customer service. Further, we are continuing to implement lean initiatives and automation where practical, and we are increasing our efforts to improve employee retention. We believe these efforts, combined with our continual evaluation of production capacity, will help us meet expected growth in customer demand, as well as improve operating efficiencies.”
Drew reported two acquisitions during the first quarter that did not have a significant impact on first-quarter results. Acquisitions includedInnovative Design Solutions (IDS), designer, developer and manufacturer of electronic systems, and Star Design, a manufacturer of thermoformed sheet plastic products for the RV, bus and specialty vehicle industries.
Mereness added, “In April 2014, we also entered into a six-year aluminum extrusion supply agreement, and concurrently sold certain of our aluminum extrusion assets. As part of our ongoing evaluation of capacity and asset utilization, we concluded that our aluminum extrusion assets were not meeting our internal financial standards. The sale of our extrusion-related assets will free up needed manufacturing space, as well as allow management to focus on other opportunities with higher growth and profit potential. We anticipate recording a pre-tax loss of approximately $2 million in the second quarter of 2014 on the sale of the aluminum extrusion-related assets. The outsourcing of these aluminum extrusion requirements will immediately be accretive to earnings.”
Drew Industries Inc., a manufacturer of components for the recreational vehicle and manufactured housing industries, will release its first-quarter 2014 financial results before the market opens on May 1.
Drew will also host a conference call on May 1 at 11 a.m. EDT to discuss the results and other business matters. Participation in the question-and-answer session of the call will be limited to institutional investors and analysts. Individual investors, retail brokers and the media are invited to listen to a live webcast of the call on the Drew Industries website at www.drewindustries.com .
Participating in the conference call will be: , Chairman Leigh Abrams, CEO Jason Lippert, President Scott Mereness and CFO and Treasurer Joe Giordano.
Drew Industries Inc., parent to suppliers Lippert Components Inc. and Kinro Inc., has completed the previously announced acquisition of certain assets and the business of Star Design LLC, an Elkhart, Ind.-based manufacturer of thermoformed sheet plastic products for the RV, bus and specialty vehicle industries.
According to a news release, the purchase price was $12.3 million, which was paid at closing from borrowings under Drew’s $75 million line of credit with JPMorgan Chase and Wells Fargo. After funding the acquisition, the company said it remains “well-positioned to take advantage of investment opportunities to further improve its results.”
“We are very excited about acquiring Star Design and adding their innovative products to our ever-growing product lineup,” said Scott Mereness, Drew’s president. “We expect to leverage our extensive marketing and distribution capabilities to continue to grow this business. Further, we expect this acquisition to be immediately accretive to Drew’s earnings.”
Lippert said it believes the additional product lines and diversified customer base will accelerate its expansion into specialty markets. Star Design has annual sales of approximately $10 million.
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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Drew Industries Inc., parent to RV and MH suppliers Lippert Components Inc. and Kinro Inc., will release its fourth-quarter and year-end 2013 financial results before the market opens on Feb. 13.
The company will also host a conference call on Feb. 13 at 11 a.m. EDT to discuss the results and other business matters. Participation in the question-and-answer session of the call will be limited to institutional investors and analysts. Individual investors, retail brokers and the media are invited to listen to a live webcast of the call on the Drew Industries website at www.drewindustries.com .
Participating in the conference call will be: Chairman Leigh Abrams, CEO Jason Lippert, President Scott Mereness, and CFO/Treasurer Joe Giordano.
Drew Industries Inc., a announced that its board has approved a special cash dividend of $2 per share of common stock.
The dividend is payable on Jan. 6, 2014, to stockholders of record at the close of business on Dec. 20, 2013.
“We are pleased to demonstrate our continued commitment to shareholder value through this special dividend,” said Drew CEO Jason Lippert. “It reflects the board’s confidence in the Company’s consistent financial performance and in its long-term strategic goals.”
Joe Giordano, Drew’s CFO and treasurer, added, “Our strong balance sheet and consistent cash flow positions us to continue to successfully execute on our strategy to grow sales through acquisitions, greater market share, and innovative new products.”
Drew Industries Inc., parent to RV and manufactured housing suppliers Lippert Components Inc. and Kinro Inc., today (Nov. 1) reported a 52% increase in net income for its third quarter, ended Sept. 30, boosted by improved margins and strong performance in the company’s RV segment.
Net income during the period totaled $14.8 million, or 62 cents per diluted share, compared to net income of $9.8 million, or 43 cents per diluted share, in the third quarter of 2012.
Net sales grew to $251 million, 11% higher than the 2012 third quarter. The sales growth was primarily the result of a 12% sales increase by Drew’s RV segment, which accounted for 87% of consolidated net sales this quarter. Drew said that sales of recently introduced components for towable and motorhome RVs increased, as did sales to adjacent industries and the aftermarket.
“Our companywide focus on our customers as our first priority has enabled us to gain market share and increase sales,” said CEO Jason Lippert. “In addition, we have been successful by staying ahead of the market through innovation. We continue to invest in customer service and research and development resources to maintain our position as a leading supplier to the industries we serve.”
He added, “Our operating profit margins in the third quarter of 2013 were 9.1% compared to 6.6% in the third quarter of 2012. The 2013 third quarter operating profit margins were consistent with the second quarter of 2013 largely due to management’s recently implemented efficiency improvements gaining momentum, partially offset by the anticipated impact of spreading fixed costs over a seasonally smaller sales base. Many of the production improvements resulted in larger than anticipated efficiency gains, including the benefits realized from our new glass tempering equipment.”
The company’s content per motorhome and towable RV for the twelve months ended September 2013 increased 4% to $1,137 per unit and 2% to $2,719 per unit, respectively, from the year-earlier period as a result of recent product introductions, product improvements and market share gains. The change in content per RV is a measure of the change in Drew’s overall market share across its existing product lines.
“Our labor as a percent of net sales in the third quarter of 2013 was consistent with the second quarter of 2013, despite the seasonal decline in net sales,” said President Scott Mereness. “The labor efficiencies we have realized over the past several quarters, while introducing new products and adjusting to industry and market share growth, have been significant. These improvements in labor during the first three quarters of 2013 were also primarily due to completed production efficiency improvement projects, as well as declines in the costs of implementing facility consolidations and realignments. We will continue to implement additional efficiency improvements as we identify them.”
In October 2013, Drew’s consolidated net sales reached approximately $95 million – 12% higher than in October 2012 – as a result of continued solid growth in the company’s RV segment.
“Our consolidated net sales for the trailing twelve months ended October 31 exceeded $1 billion,” added Mereness. “Achieving this milestone is quite an accomplishment for the company. In anticipation of future growth, we continue to expand and improve production capacity, investing in personnel and facilities in excess of current needs.”
Lippert noted, “Having completed our first full quarter since the executive transition, we believe that the process has been seamless, and we are pleased to report the 52% increase in year-over-year quarterly earnings. As we develop our strategic plans for the future, we expect to continue along the same path which has historically brought us success – profitable growth in our core RV and manufactured housing markets, diversification into adjacent industries, and cost control and production efficiencies. We believe the keys to accomplishing these goals are continuing to invest in new product development and customer service, as well as identifying areas where additional savings can be realized. I am confident that our management team has the ability to execute our strategic goals for the long-term growth of the company.”
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Drew Industries Inc., a manufacturer of components for the recreational vehicle and manufactured housing industries, will release its third quarter 2013 financial results before the market opens on Nov. 1.
Drew, parent to Lippert Components Inc. and Kinro Inc., also will host a conference call on Nov. 1 at 11 a.m. ET to discuss its results and other business matters. Participation in the question-and-answer session of the call will be limited to institutional investors and analysts.
Individual investors, retail brokers and the media are invited to listen to a live webcast of the call on Drew Industries’ website at www.drewindustries.com.
Calling it a “great company,” Indiana Gov. Mike Pence visited the new headquarters of Drew Industries Inc. today (Oct. 2) to help celebrate the relocation of the RV industry’s largest supplier to Elkhart County.
Drew, parent company of Lippert Components Inc. and Kinro Inc., recently completed its previously announced plans to relocate its corporate headquarters from White Plains, N.Y., to Elkhart, and to expand its Indiana manufacturing operations.
“This is a real success for Elkhart County, and for the state and people of Indiana,” said Gov. Pence, who was joined at the podium by Elkhart Mayor Dick Moore and Goshen City Council President Jim McKee. “This ribbon-cutting reaffirms that the RV market is coming back stronger than ever — and it will be centered here in the state of Indiana for generations to come.”
In introducing the governor, Drew CEO Jason Lippert reflected on the origins of Lippert Components, the division of Drew Industries founded by his grandfather Lawrence C. Lippert in Michigan in 1956. His father, Doug Lippert, took over the company in 1979.
“Drew acquired Lippert in 1997,” Jason noted. “At the time, we were doing about $100 million in sales. Today, Drew is a billion-dollar revenue company — and we’ve grown to more than 5,500 employees nationwide.
“When I started with the company in 1994, we had about 600 employees in Elkhart County and the surrounding areas. I’m proud to say that, today, we have about 4,500 employees in the state of Indiana. We also are the largest supplier to the RV industry. Through Lippert and Kinro and our 50 factories in the U.S., Drew supplies full lines of products to the leading manufacturers of the RV, manufactured housing and specialty vehicle markets.
“To put it best,” he continued, “this new headquarters for all of our leadership teams symbolizes the company’s maturity, strength, and potential. Indiana has a strong and talented workforce, and is home to many of our customers and employees. That’s why Elkhart County was Drew and Lippert’s logical choice for relocation. Our customers are here, our facilities are here, our employees are here — and, now, our national headquarters is here.”
In his remarks, Gov. Pence noted that, “as is being recognized more and more nationally, Indiana is quite simply the best place in America to start a business, grow a business and get a job.
“We’ve been sending a message all across the country for the last eight years and nine months, that Indiana is open for business,” he continued. “We’ve been doing that by making the hard decisions, of living within our means. This last session of the Indiana General Assembly, we passed another honestly balanced budget — more than 12% in our budget are reserves. At a time when many states are struggling, Indiana is showing nearly $2 billion in the bank. In addition to that, we passed the largest state tax cut in history, we declared a moratorium on red tape and Indiana just a few short years ago became the first Midwest state in America to recognize the right to work.
“That, combined with our commitment to education, innovation and reform is making days like this a possibility — and making days like this the right decision for more and more businesses all across America.”
The new facility gives Drew Industries room for growth, with 50,000-square-feet of office space and 110,000-square-feet of manufacturing and warehousing space.
“This new facility allows us to have our executive team under one roof,” Drew President Scott Mereness noted in an accompanying release. “Centralizing our management and shared services personnel will improve communications and cultivate our tradition of long-term team building. It also provides a larger home for Kinro’s thermoforming operation with room for continued expansion.”
Drew Industries Inc., parent to RV and MH suppliers Lippert Components Inc. (LCI) and Kinro Inc., today (Aug. 6) reported improved earnings, driven by higher margins, along with record sales for its second quarter, ended June 30.
Net income for the period was $15.9 million, or 67 cents per diluted share, compared to $11.7 million, or 52 cents per share, the previous year.
“Our operating profit margins improved sequentially in the second quarter of 2013 primarily due to efficiency improvements implemented by management, as well as the benefits of spreading fixed costs over a seasonally larger sales base and seasonally lower payroll taxes,” said Jason Lippert, Drew’s CEO. “This sequential margin gain was greater than originally expected, as many of the improvements implemented by management resulted in efficiency gains sooner than anticipated. We were confident that the steps we had taken to meet anticipated customer demand and improve profitability were correct, and it was reassuring to see the results of these efforts in the 2013 second quarter.”
Net sales in the second quarter increased to a record $287 million, 14% higher than $251 million in the same period last year. The growth was a result of a 16% sales increase by Drew’s RV segment, which accounted for 88% of consolidated net sales this quarter. Sales of recently introduced components for towable and motorhome RVs also contributed to the revenue increase, as did sales to adjacent industries and the aftermarket.
The company reported that its content per towable RV and motorhome for the 12 months ended June 2013 increased 5% and 23%, respectively, from the year-earlier period as a result of recent product introductions, product improvements and market share gains.
For the six months, Drew posted net income of $24.2 million, or $1.03 per share, versus $22.8 million, or $1.01 per share, a year ago while sales rose to $539.8 million from $474.56 million.
“Our labor efficiencies continued to improve, with labor costs as a percent of sales declining in the second quarter of 2013,” continued Jason Lippert. “This improvement followed a sequential reduction of labor as a percent of sales of more than 1%t in the first quarter of 2013. These reductions during the first two quarters of 2013 were primarily due to improved production processes, as well as expected declines in the costs of implementing facility consolidations and realignments. Nonetheless, we are continuing to implement additional efficiency improvements as we identify them. However, the benefits of such improvements on our operating margins in the latter half of 2013 will likely be offset by the spreading of fixed costs over a seasonally smaller sales base.”
In July 2013, Drew’s consolidated net sales reached approximately $83 million – 13% higher than in July 2012 – as a result of continued solid growth in the company’s RV segment.
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