Lippert Components Promotes 3 Key Managers

Lippert Components, Inc., a subsidiary of Drew Industries Inc. (NYSE: DW), announced today (June 1) the promotions of three key managers, each of whom has made valuable contributions to Drew’s growth and success, according to a press release.

Steve Jenkins, current general manager of Lippert Components’ operation responsible for the production of RV axles, doors, slide-out mechanisms and accessories, has been promoted to director of manufacturing with responsibility for those products.

“Steve has been with Lippert Components for 11 years” said Jason Lippert, chairman and CEO of Lippert Components, “and has been responsible for the operation of several of our facilities over the years, including the 500,000-square-foot facility (in Goshen, Ind.) with 600 employees, our largest, which he now manages.”

Lippert said Jenkins recently assumed responsibility for the manufacture of new products such as Lippert’s “Level-Up” levelers, in-wall slide-out mechanism and RV entry doors, “which have quickly gained market share.” Jenkins, he added, will also be involved in new-product development.

Adam Clark, general manager of Lippert Components’ Indiana RV chassis operation, has been promoted to director of manufacturing with responsibility for all of the company’s Indiana RV and manufactured housing chassis production. “Chassis production is complex, and for the past 13 years Adam has been a driving force in enabling Lippert Components to become the leading chassis builder in the RV industry,” said Lippert.

Scott Meiner, general manager of Lippert Components’ Indiana RV window operation, has been promoted to vice president of purchasing.

“Scott has managed several of our operations over the past 14 years, including chassis and axle production, and most recently our largest window- and tempering facilities, with more than 400,000 square feet of production capacity and 700 employees,” said Lippert Components President Scott Mereness. “During his career with Lippert Components, Scott has been responsible for plant start-ups and other situations requiring exceptional talent and dedication.”

“Steve, Adam and Scott have earned these promotions through their years of dedication and effectiveness,” concluded Lippert. “We are very proud of these executives and their accomplishments.”

Lippert Components, and Kinro, Inc., its sister company, supply a broad array of components for RVs and manufactured homes, including chassis, chassis parts, RV slide-out mechanisms, axles, upholstered furniture, mattresses, windows, doors, and thermoformed products. Contact www.LCI1.com and www.Kinro.com.

Drew Industries: Higher Q1 Sales and Earnings

Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today (May 2) reported net income for the first quarter ended March 31, 2011, of $9.4 million or 42 cents per share, a 28% increase over net income of $7.3 million or 33 cents per share reported in the first quarter of 2010.

Net sales in the 2011 first quarter increased 15% to $169 million, from $146 million in the first quarter of 2010, due to increases in industrywide shipments of travel trailer and fifth-wheel RVs, as well as continuing increases in Drew’s average product content in these types of RVs. Components for travel trailer and fifth-wheel RVs comprised 81% of the company’s consolidated net sales in the first quarter of 2011, while manufactured housing components accounted for 12%, and the balance consisted of motorhome components and other products.

“Over the last 10 years, our average product content in new travel trailer and fifth-wheel RVs has more than tripled due to market share gains, acquisitions and new product introductions, and this growth continued into 2011,” said Fred Zinn, Drew president and CEO. “For the three months ended March 31, 2011, our average product content in these types of RVs was 6% higher than in the same period in 2010, which helped boost our profit growth in the quarter. Further, our sales remained strong in April 2011, reaching approximately $60 million, about 6% above April 2010 sales, despite having one less shipping day this year than the prior year.”

“With every new product or product enhancement, our goal is to add value for our customers and for the RV user,” said Jason Lippert, CEO of Drew’s subsidiaries, Lippert Components and Kinro. “If we do it right, momentum builds over time, and these products become ‘standard’ on a wide range of RVs. We are very encouraged by our recent market share gains in the products we’ve introduced or enhanced during the past few years, such as RV entry doors, our new in-wall slide-out mechanism, furniture and mattresses, leveling systems, and electric jacks and stabilizers.”

About the RV Segment

The RV Segment represented 87% of the company’s consolidated net sales in the first quarter of 2011, compared to 85% in the 2010 first quarter. In the 2011 first quarter, more than 90% of the company’s RV Segment net sales were components for travel trailer and fifth-wheel RVs, with the balance primarily comprised of components for motorhomes and mid-size buses, as well as specialty trailers.

RV Segment net sales in the first quarter of 2011 reached $146 million, an increase of $22 million, or 18% compared to the 2010 first quarter.

“Our sales increase was significantly more than the 10 percent increase in industry-wide wholesale shipments, largely because of acquisitions, and market share gains in both our towable RV and motorhome product lines,” said Lippert. The company’s content per travel trailer and fifth-wheel RV for the 12 months ended March 2011 reached $2,210, compared to $2,168 for the 12 months ended December 2010.

“Our new products for motorhomes are also attracting a lot of attention, and we continue to see strong growth opportunities in that market,” he added.

Drew’s RV Segment reported operating profit of $15.3 million in the first quarter of 2011, an increase of 19% over the $12.9 million reported in the 2010 first quarter. “The increase in RV Segment operating profit was less than we would typically expect on a $22 million increase in net sales, largely because of higher raw material costs,” said Joseph Giordano, Drew CFO and treasurer. “We expect to be successful at substantially reducing the impact of higher raw material costs, as we have over the last several years.”

On Jan. 28, Drew acquired Home-Style, the leading manufacturer of RV furniture and mattresses in the growing Northwest RV market. “During 2011, the acquisition of Home-Style should add about $60 to our average product content in towable RVs,” added Lippert. “Further, we expect the acquisition to be accretive to earnings this year, as we build on the experience and purchasing power we’ve gained in that product line since our acquisition of Seating Technology in 2008. With our debt-free balance sheet and significant credit availability, we have the capability to continue to invest in profitable growth opportunities.”

Drew’s net sales in the first quarter of 2011 were also aided by a 10% increase in industrywide wholesale shipments of travel trailer and fifth-wheel RVs, compared to the first quarter of 2010. The impact on Drew of this increase in wholesale RV shipments was partially offset by an estimated 14 percent decline in industry-wide wholesale shipments of manufactured homes.

“The long-term health of the RV industry depends on consumer demand for RVs,” added Zinn. “And retail sales of travel trailer and fifth-wheel RVs have been up year-over-year for 12 consecutive months through February 2011, the last month for which retail data is available. In anticipation of a strong spring and summer selling season, RV dealers across the U.S. and Canada added an aggregate of about 23,000 travel trailer and fifth-wheel RVs to their inventories between December 2010 and February 2011, somewhat more than the 20,000 units added during the same period a year earlier. Therefore, strength in retail sales of RVs during the spring and summer selling season is key to maintaining high production levels, and we are encouraged by recent reports of industry analysts which cite continued strength in retail sales, as well as improving credit conditions.”

While industrywide production of RVs has increased, production in the manufactured housing industry has declined, partly due to continued weakness in the housing market and difficult credit conditions. “Despite adverse conditions in the manufactured housing industry, Drew has remained profitable in this segment by carefully controlling overhead costs, improving production efficiencies, expanding our product line, and gaining market share for after-market replacement products,” said Scott Mereness, President of Lippert Components and Kinro. “We continue to see opportunity for growth in the manufactured housing industry over the next few years, as the real estate market begins to recover.”

“We are delighted that Drew’s sales and profits in the first quarter of 2011 were nearly back to the pre-recession results we reached in the first quarter of 2007, and our balance sheet is even stronger than it was then,” said Zinn. “Our pay-for-performance compensation plans incentivize management to focus on producing bottom-line results by controlling costs, improving operating efficiencies, and increasing our return on invested capital. However, we still face uncertainty due to various conditions beyond our control, such as increases in gas prices. Further, our raw material costs increased sharply since November 2010, adding $2 million to cost of sales in the first quarter of 2011. While the effect of these higher costs on Drew’s second quarter cost of sales will be greater than in the first quarter, we have worked with our customers to significantly reduce the impact of these incremental cost increases through sales price increases and increased market share, and we have implemented new production efficiencies.”

Because of the seasonality of the RV and manufactured housing industries, historically, the company’s operating results in the first and fourth quarters have been the weakest, while the second and third quarters are traditionally stronger. However, because of fluctuations in RV dealer inventories and volatile raw material costs, seasonal industry trends may be different than in prior years.

Drew Industries to Podcast May 2 Conference

Drew Industries Inc. will release its first quarter 2011 financial results before the market opens on May 2.

The company also will host a conference call on May 2 at 11 a.m. EST 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.

Participating in the conference call will be:

• Leigh Abrams, chairman, Drew Industries.
• Fred Zinn, president and CEO, Drew Industries.
• Jason Lippert, CEO and chairman, Lippert Components Inc. and Kinro Inc.
• Joe Giordano, CFO and treasurer, Drew Industries

Drew, through its wholly owned subsidiaries, Kinro and Lippert Components, supplies a broad array of components for RVs and manufactured homes, including windows, doors, chassis, chassis parts, bath and shower units, axles, and upholstered furniture. In addition, Drew manufactures slide-out mechanisms and leveling devices for RVs, and trailers primarily for hauling boats. Currently, from 26 factories located throughout the United States, Drew serves most major national manufacturers of RVs and manufactured homes in an efficient and cost-effective manner. Additional information about Drew and its products can be found at www.drewindustries.com.

Drew Industries Files Investor Presentation

Drew Industries Inc. recently gave an investor presentation and filed a copy of that program on Form 8-D with the Securities and Exchange Commission (SEC).

Click here to view the document filed with the SEC.

Drew Industries Secures Two New Credit Lines

Drew Industries Inc. has reached two new lines of credit totaling $200 million for its Kinro and Lippert Components holdings.

According to an 8-K filing with the Securities and Exchange Commission:

On Nov. 25, 2008, the company entered into an agreement for a $50 million line of credit with JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. The agreement, which was scheduled to expire on Dec. 1, 2011, was amended and extended on Feb. 24, 2011, and now expires on Jan. 1, 2016.

On Nov. 25, 2008, the company entered into a $125 million “shelf-loan” facility with Prudential Investment Management, Inc. and its affiliates. The facility provides for Prudential to consider purchasing, at the company’s request, in one or a series of transactions, Senior Promissory Notes of the company in the aggregate principal amount of up to $125 million, to mature no more than 12 years after the date of original issue of each Senior Promissory Note. Prudential has no obligation to purchase the Senior Promissory Notes. This facility, which was scheduled to expire on Nov. 25, 2011, was amended and extended on Feb. 24, 2011, and now expires on Feb. 24, 2014. In addition, the “shelf-loan” facility was increased to $150 million.

Click here to read the SEC filing.

Drew Stock Hits 52-Week High on Wall Street

Shares of Drew Industries Inc. hit a new 52-week high on Tuesday (Feb. 15) in trading on Wall Street. The stock traded as high as $26.51 during mid-day trading and last traded at $25.70. The stock previously closed at $23.15, American Banking News reported.

Shares of Drew Industries traded up 9.76% during mid-day trading on Tuesday. Drew Industries Inc. has a 52-week low of $17.89 and a 52-week high of $28.10. The stock’s 50-day moving average is $23.08 and its 200-day moving average is $21.43.

Earlier in the day, Drew reported improved sales and earnings for the fourth quarter of 2010.

Drew Industries Inc. 2010 Sales Soared 44%

Drew Industries Inc. today (Feb. 15) reported net income for the fourth quarter ended Dec. 31, 2010, of $3.1 million, or 14 cents per share, compared to net income of $2.9 million, or 13 cents per share in the fourth quarter of 2009, according to a news release.

Net sales in the 2010 fourth quarter exceeded $106 million, up 2% compared to 2009 fourth quarter net sales. Industrywide wholesale shipments of travel trailers and fifth-wheel RVs, Drew’s primary RV market, increased 4% in the quarter, while industrywide production of manufactured homes declined 16%. Drew’s RV segment represented 81% of consolidated net sales.

As reported last year, net income for the 2009 fourth quarter was reduced by $1.5 million due to charges incurred largely as a result of unprecedented conditions in the RV and manufactured housing industries in 2009. Results in the 2010 fourth quarter were impacted by higher raw material costs than in the fourth quarter of 2009.

Drew’s net sales in January 2011 reached approximately $51 million, 16% higher than in January 2010. “This was a great start to the new year and builds on our success in 2010,” said Fred Zinn, Drew president and CEO. “Further, recent reports of increased sales at consumer RV shows over the last month, as well as indications that credit availability has been improving, along with higher consumer confidence readings in four of the last five months, are all encouraging signs for Drew and the RV industry.”

“Drew continuously responds to the needs of our customers for new and innovative products,” said Jason Lippert, CEO of Drew’s subsidiaries, Lippert Components and Kinro. “In 2010, we completed four acquisitions, through which we added a wide array of product offerings for our customers. In addition to driving market share gains for existing products, these acquisitions helped us expand our product line of motorhome components and increase our content per towable RV to $2,171, an increase of $158 in 2010.”

“Further, on Jan. 28, 2011, we acquired Home-Style, the leading manufacturer of RV furniture and mattresses in the growing Northwest RV market,” added Lippert. “We expect the acquisition of Home-Style to be immediately accretive to earnings. The acquisition of Home-Style will allow us to quickly capture the leading market share for RV furniture and mattresses in that region, while capitalizing on our experience and purchasing power in that product line. With our talented operating management team, and strong, debt-free balance sheet, we have the capability to continue the steady growth in RV content we have accomplished throughout the past decade.”

“We are also quite pleased that the improvement in the RV industry, which began over a year ago, continued in the fourth quarter of 2010 and apparently in January 2011, as the economy continued to emerge from the recession,” said Zinn. “Industrywide retail sales of travel trailer and fifth-wheel RVs were consistently higher in 2010, increasing an estimated 13% from 2009, including increases of 9% in October and 12% in November, the last month for which this data is available. In December 2010, RV dealers expressed their confidence by boosting purchases in anticipation of strong retail demand in the upcoming spring selling season. While RV dealer purchases and inventory levels may continue to fluctuate, we believe continued strength in retail sales is the key to an ongoing recovery in the RV industry.”

“In 2010 Drew also continued to grow in other markets, most notably after-market products for both RVs and manufactured homes, net sales of which were up nearly 35%, to $29 million,” said Scott Mereness, president of Lippert Components and Kinro. “Our net sales to other industries, largely modular housing and transit buses, increased as well, reaching $21 million in 2010, 44% above 2009 net sales.”

“Drew’s success in 2010 and prior years is in large part attributable to the motivation provided by our pay-for-performance compensation policies,” said Zinn. “These policies encourage our management team to make business decisions which are likely to yield high short-term and long-term returns, at an acceptable level of risk. As a result of these policies and our improved operating results, performance-based incentive compensation represented more than 50% of the total 2010 compensation of our top executives. Further, 30% of the total 2010 compensation of our top executives was equity-based compensation.”

Because of the seasonality of the RV and manufactured housing industries, historically, the company’s operating results in the first and fourth quarters have been the weakest, while the second and third quarters are traditionally stronger. However, because of fluctuations in RV dealer inventories since the fourth quarter of 2009, seasonal industry trends have been different than in prior years.

2010 Full-Year Results

For the full year, Drew’s net income increased to $28.0 million, or $1.26 per share. For 2009 Drew reported a net loss of $24.1 million, or ($1.10) per diluted share. As reported in 2009, excluding a goodwill impairment charge of $29.4 million, net of taxes, or ($1.34) per diluted share, net income for 2009 was $5.2 million, or 24 cents per diluted share. During 2009, the company also incurred expenses totaling $5.5 million, net of taxes, or 25 cents per diluted share, resulting from plant closings and start-ups, staff reductions and relocations, increased bad debts, and obsolete inventory and tooling, largely due to the unprecedented conditions in the RV and manufactured housing industries.

Net sales for the year ended Dec. 31, 2010, reached $573 million, a 44% increase over net sales of $398 million in 2009, as both of the company’s segments achieved greater growth than the industries they serve. Net sales of the company’s RV segment increased 53%, compared to a 44% increase in industrywide wholesale shipments of travel trailers and fifth-wheel RVs. Net sales of the company’s manufactured housing segment increased 12%, compared to a 1% increase in industrywide production of manufactured homes.

“Raw material costs as a percent of net sales has been volatile between quarters for the past two years,” said Joe Giordano, Drew CFO and treasurer. “Volatility in raw material costs has become the norm, and in recent weeks the cost of steel and aluminum has again increased. Over the years, we have been highly successful in implementing sales price adjustments as the costs of raw materials change. Further, our operating management team has proven to be highly effective in improving operating efficiencies in all facets of our business, and we expect to continue making progress in this area as well.”

“Clearly, 2010 marked an impressive rebound for Drew,” said Zinn. “We reported solid sales and earnings growth in both the RV and Manufactured Housing Segments, and we made investments that should help us continue to grow. After investing nearly $30 million for five acquisitions in the last 13 months, and paying a $1.50 per share special dividend aggregating $33 million, we are still debt-free, and have more than $25 million in cash, as well as substantial available borrowing capacity. While we still face challenges, I believe Drew and the two industries we serve are currently well below their long-term potential. If the U.S. economy continues to recover, as recent forecasts suggest, and credit markets continue to improve, we expect to make progress in 2011 towards realizing the long-term potential of our business.”

Drew Pays $7.25 Million for Furniture Builder

Drew Industries Inc. today (Jan. 31) reported that its wholly owned subsidiary, Lippert Component Inc., acquired the assets and business of Nampa, Idaho-based Home-Style Industries, and its affiliated companies. The purchase price of $7.25 million was paid from available cash, and Drew expects the acquisition of Home-Style to be immediately accretive to earnings, according to a news release.

Home-Style manufactures a full line of upholstered furniture and mattresses, primarily for towable recreational vehicles, in the Northwest market. Home-Style’s sales for 2010 were approximately $12 million. Lippert Components currently manufactures RV furniture and mattresses in Indiana through its Seating Technology division, which it acquired in July 2008, but does not serve the Northwest RV market, making Home-Style a strong strategic complement to Seating Technology.

“The acquisition of the assets and business of Home-Style represents another successful step in our long-term strategy of increasing our content per RV,” said Fred Zinn, Drew president and CEO. “Our strong balance sheet allowed us to complete this acquisition without incurring debt. With no debt and still more than $25 million in available cash, we have the resources to continue to pursue expansion opportunities that we believe will yield favorable returns on our investment.”

Randy Raptosh and Tony Doramus, the former owners of Home-Style, have agreed to provide assistance with the transition, and Terry Frisk, Home-Style’s, general operations manager, has entered into an employment contract with Lippert Components. Frisk will continue to be responsible for Home-Style’s day-to-day operations.

“Home-Style has an excellent management team, and a great reputation in the RV market,” said Jason Lippert, CEO of Lippert Components. “The expanding Northwest RV market is particularly attractive to us, and acquiring the Home-Style business will allow us to quickly capture the leading market share for furniture and mattresses in that region. Our management team has done an outstanding job of integrating the operations of Seating Technology, while at the same time gaining market share and improving production efficiencies. Our goal is to achieve the same type of success with Home-Style.”

About Drew

Drew, through its wholly owned subsidiaries, Kinro and Lippert Components, supplies a broad array of components for RVs and manufactured homes, including windows, doors, chassis, chassis parts, bath and shower units, axles, and upholstered furniture. In addition, Drew manufactures slide-out mechanisms and leveling devices for RVs, and trailers primarily for hauling boats. Currently, from 26 factories located throughout the United States, Drew serves most major national manufacturers of RVs and manufactured homes in an efficient and cost-effective manner. Additional information about Drew and its products can be found at www.drewindustries.com.

Drew Industries’ Investor Talk Free Online

Drew Industries Inc. today (Jan. 19) announced its Jan. 11Retail Investor Conferences.com presentation is available for on-demand viewing.

Fred Zinn, Drew president and CEO, and Joseph Giordano III, Drew CFO and treasurer, presented to retail investors through the virtual investor conference platform.

To view the archived presentation, click on www.retailinvestorconferences.com.

Drew’s presentation will be available for 90 days or about mid-April. Investors may download shareholder materials from the “virtual trade booth” for the next three weeks.

Drew on Jan. 11 Web Conference Agenda

BetterInvesting (NAIC), PR Newswire and MUNCmedia have announced the agenda of the Jan. 1 RetailInvestorConferences.com, the monthly online investor conference series, according to a news release.

Drew Industries Inc. representatives will present between 1 p.m. and 1:50 p.m. EST.

There is no fee to log in and attend the presentations. Individual investors, institutional investors and analysts are invited.

RetailInvestorConferences.com is a secure, opt-in event environment: pre-registration is suggested to save time: http://bit.ly/hieYRH

“We’re excited about the response we have already received from individual investors,” said Bradley H. Smith, chief marketing officer at MUNCmedia. “To date, almost 5,000 individuals have come to RetailInvestorConferences.com, all generated from our inaugural event. Being a monthly conference series, we anticipate the number of retail investors to compound month after month. Certainly our new prize center will insert a little fun, too.”

The Jan. 11 event also features a live presentation by renowned investment finance expert Michael A. Berry, During the past six years he has been a guest lecturer at the Federal Reserve twice each year and in 2010 he testified to U.S. Congress on natural resource policy, specifically strategic mineral supply-chain development.

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