Drew Industries Inc., parent to RV and manufactured housing suppliers Kinro Inc. and Lippert Components Inc., today (Aug. 2) reported net income of $11.7 million, or $0.52 per diluted share, for its second quarter ended June 30 compared to net income of $11.0 million, or $0.49 per diluted share, in the second quarter of 2011.
Net sales in the quarter increased to $251 million, a record for any quarter and 35% higher than the same period a year ago. This sales growth was primarily the result of a 39% sales increase by Drew’s RV segment, which accounted for 87% of Drew’s consolidated net sales. RV segment sales growth was largely due to acquisitions, market share gains, and an 8% increase in industrywide wholesale shipments of travel trailer and fifth-wheel RVs, Drew’s primary RV market. In addition, sales to adjacent markets more than doubled this quarter, largely as a result of acquisitions and an increase in sales of axles to non-RV markets. Drew’s MH Segment also reported strong sales growth in the second quarter of 2012, due to an estimated 13% increase in industrywide production of manufactured homes. Excluding the impact of acquisitions, consolidated sales were up 23%.
Drew’s sales growth continued in July 2012, during which sales reached approximately $73 million, 49% higher than in July 2011. Excluding the impact of acquisitions, net sales for July 2012 were up approximately 35%. It is estimated that industrywide shipments of travel trailer and fifth-wheel RVs increased 20% to 25% in July 2012.
Drew’s operating profit margin was 7.6% in the second quarter of 2012 compared to 7.8 percent in the 2012 first quarter. Profit margins continue to be impacted by excess labor, overtime and related costs, all of which reduced net income by approximately $3 million, or $0.13 per diluted share compared to expectations. These higher costs were the result of lower operating efficiencies due to greater-than-expected demand which caused the company to hire, train and support 1,100 more employees than in the second quarter of 2011. Material cost as a percent of sales was also higher than in the first quarter, partly as a result of increased outsourcing costs due to capacity limitations, as well as higher scrap costs.
“As a result of higher-than-expected demand for our products throughout the second quarter of 2012, our operating margins did not improve sequentially as had been anticipated,” said Fred Zinn, Drew’s president and CEO. “In some product lines, demand exceeded our capability to efficiently produce. In order to maintain our commitments to customers for on-time delivery of quality products, we incurred substantial overtime costs and other inefficiencies. However, the increased demand for our products will ultimately benefit our long-term profitability, as we increase capacity and improve production efficiencies.”
“We continue to devote significant effort, and invest financial resources, to expand production capacity and improve production efficiencies,” said Jason Lippert, CEO of Drew’s subsidiaries, Lippert Components and Kinro. “Over the past year and a half we have added 700,000 square feet of production space, and plan to reopen some of the space we shuttered in prior years. Further, we are developing leaner manufacturing strategies, and exploring technology to improve our production capabilities. We have experienced growth surges in the past, and we have right-sized our capacity through investment in people, technology and facilities. While the full impact of such investments takes time to realize, we expect production efficiencies to improve, and we will continue to invest in order to realize our future potential.”
Drew will provide an online, real-time webcast of its second quarter 2012 earnings conference call on the company’s website, www.drewindustries.com today at 11 a.m. Eastern. The call can also be accessed at www.companyboardroom.com.
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Drew Industries Inc., parent to suppliers Lippert Components Inc. and Kinro Inc., will release its second quarter 2012 financial results before the market opens on Aug. 2.
Drew Industries also will host a conference call on at 11 a.m. (Eastern) 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.
White Plains, N.Y.-based Drew Industries Inc., parent to recreational vehicle and manufactured housing suppliers Lippert Components Inc. and Kinro Inc., posted first-quarter sales that eclipsed any quarter in the company’s history.
According to the company, revenue increased 32% to $224 million in the first quarter, ended March 31, compared with $169 million the year prior. The sales growth, boosted by recent acquisitions, was primarily the result of a 34% sales increase by Drew’s RV segment. The RV segment accounted for 87% of Drew’s consolidated net sales.
Net income during the quarter was $11.1 million, or $0.49 per diluted share, compared to net income of $9.4 million, or $0.42 per diluted share, a year ago.
“Over the past few months, retail demand in the RV industry has improved,” said Fred Zinn, Drew’s president and CEO. “Despite continued concerns about high unemployment and slower economic growth in the U.S., industry-wide retail sales of travel trailer and fifth-wheel RVs increased more than 6% for the three months ended February 2012, compared to the year-earlier period. Although the RV industry is sensitive to economic conditions, we are optimistic about the potential for long-term growth in retail demand for RVs.”
Jason Lippert, CEO of Goshen, Ind.-based Lippert Components and Kinro, added, “As we expected, the acquisitions we completed and the new products we introduced over the past two years added substantially to our sales growth in our core markets and adjacent markets in the first quarter of 2012. This sales growth, combined with significant increases in industry-wide production of both RVs and manufactured homes, was a great start for the year.”
Drew reported that sales growth continued in April 2012, reaching approximately $80 million, 34% higher than in April 2011. Excluding the impact of acquisitions, Drew’s net sales for April 2012 were up approximately 22%. Sales orders for May have remained strong.
As anticipated, the company’s operating margin improved in the first quarter of 2012 compared to the fourth quarter of 2011, which was impacted by higher material costs, higher production costs in one product line and start-up and integration costs.
Drew will provide an online, real-time webcast and rebroadcast of its first quarter 2012 earnings conference at www.drewindustries.com today at 11 a.m. Eastern. Individual investors can also listen to the call at www.companyboardroom.com.
To view the entire report click here.
Drew Industries Inc. announced that its subsidiary Lippert Components Inc. has acquired the business and certain assets of the United States RV entry door operation of Euramax International Inc.
According to a news release, the acquired business has annualized sales of approximately $6 million, and the purchase price was $1.7 million, of which $1.2 million was paid at closing, with the balance to be paid over the next three years. Drew expects the acquisition to be immediately accretive to earnings.
“This acquisition enhances our growth and profit potential,” said Fred Zinn, Drew’s president and CEO. “Our Lippert team developed its entry door in early 2009. Since then, Lippert has become the leading supplier of RV doors, adding many new features and enhancements, which we will now offer to the former Euramax customers.
“With substantial borrowing capacity, and an outstanding operating management team, we have the resources to continue to pursue expansion opportunities which we believe will yield favorable returns on our investments.”
In addition to its wide array of components for RVs and manufactured homes, Goshen, Ind.-based Lippert supplies a variety of doors for horse trailers, cargo trailers, enclosed utility vehicles and mobile office products.
“This acquisition will complement our existing door business,” said Jason Lippert, CEO of Lippert Components. “We will be able to consolidate the Euramax door production into our existing facilities, and utilize our existing production capacity and strong management team, as well as our purchasing power and effective production techniques, to improve efficiencies and reduce costs of the acquired operations.”
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.”
To view the entire report click here.
Drew Industries Inc., a major supplier of components for the recreational vehicle and manufactured housing industries, will release its fourth quarter 2011 financial results before the market opens on Feb. 13.
Drew, parent to Lippert Components Inc. and Kinro Inc., also will host a conference call on Feb. 13 at 11 a.m. (Eastern) 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.
Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today reported net income for the third quarter ended Sept. 30 of $5.6 million ($0.25 per diluted share), compared to net income of $8.0 million ($0.36 per diluted share) reported in the third quarter of 2010. Drew is parent to Goshen, Ind.-based Lippert Components Inc. and Kinro Inc.
Net sales in the 2011 third quarter increased 14% to $167 million from $147 million in the third quarter of 2010, as a result of a 12% increase in Drew’s RV segment sales and a 23% increase in Drew’s manufactured housing segment sales. These revenue gains were achieved despite a 2% decrease in industrywide wholesale shipments of travel trailer and fifth-wheel RVs, and no significant change in industrywide production of manufactured homes.
As a result of market share gains and acquisitions completed in 2011, Drew’s October 2011 net sales increased more than 55% compared to last October, to $62 million. Excluding the impact of sales price increases and 2011 acquisitions, sales for October 2011 were up more than 30%, exceeding the company’s estimate of growth in industrywide production of RVs and manufactured homes.
“Third quarter 2011 net income was reduced by approximately $0.05 per diluted share due to higher raw material costs flowing through our P&L,” said Fred Zinn, president and CEO of White Plains, N.Y.-based Drew. “While the sales price increases we implemented did not fully offset peak raw material costs, based on recent cost trends we expect the impact of high raw material costs to decline over the coming months. In addition, net income was reduced by approximately $0.05 per diluted share as a result of higher than usual production costs for one of our product lines, in part related to increased demand. We have taken corrective action to help ensure that these production costs improve over the next few quarters.”
Results for the third quarter of 2011 also included start-up costs of $0.03 per diluted share related to recently completed acquisitions, new product introductions, and other projects. On the other hand, results for the prior year third quarter benefited from an after-tax gain of $0.03 per diluted share, related to an adjustment to previously estimated future earn-out payments on acquisitions.
“We recognize that one of our most important responsibilities is to maintain our focus on the long-term, and in the third quarter we invested significant resources – both financial and human – to increase our long-term profit potential,” said Zinn.
“During the third quarter we completed three acquisitions at a cost of $42 million, which add more than $75 million of annual sales, and represent significant profit potential,” said Jason Lippert, CEO Lippert Components and Kinro. “We also invested in a new aluminum extrusion operation, as well as several new product lines, key among them our new RV awnings which has a market potential in excess of $100 million. As a result of our reputation for providing outstanding customer service and product quality, we are confident in our ability to gain market share in these new product lines.”
Drew’s RV segment represented 82% of consolidated sales in the 2011 third quarter. Segment net sales in the third quarter of 2011 reached $136 million, 12% above third quarter 2010 net sales. This compares to the 2% decrease in industrywide wholesale shipments of towable RVs. Largely as a result of the acquisitions, the company’s content per travel trailer and fifth- wheel RV for the 12 months ended September 2011 reached $2,289, compared to $2,179 for the 12 months ended September 2010. Excluding acquisitions and sales price increases, Drew’s RV Segment sales grew 5% in the twelve months ended September 30, 2011 as compared to the comparable period in the prior year. Drew’s RV segment reported operating profit of $7.7 million in the third quarter of 2011, down from $11.1 million in the 2010 third quarter.
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The South Bend Tribune reported that Lippert will create up to 100 jobs in Middlebury and up to another 80 in Goshen by 2012. Along with a previously announced expansion in Elkhart, the company will have invested more than $9.3 million in Elkhart County, according to the Economic Development Corp. of Elkhart County.
In addition, Kinro products is adding another 30 jobs, Mark Brinson, community development director for Goshen, said, while retaining another 120. The company recently purchased Starquest Products.
But the good news hardly stops there.
On Tuesday night, the Goshen City Council took a step toward approving tax abatements for Benteler Automotive Inc. and GDC Corp., both of Goshen, which would help those companies expand.
Brinson said both abatements are expected to be finalized in two weeks.
When approved, Benteler Automotive will begin its first phase of expansion at a cost of $32.2 million, said Brinson, adding 98 jobs.
The company also has announced long-range plans to add another 80 jobs by 2016 and purchase $22.1 million in equipment while spending another $7 million on construction. Those 80 jobs aren’t even included in the nearly 400 new jobs announced this week.
Brinson also said GDC Corp. of Goshen, also known as Goshen Die Casting, has entered into a joint agreement with Monadnock Non-Woven of Pennsylvania.
It will take over an existing facility in Goshen, where it will spend $5.1 million for equipment and hire 73 people.
“It’s a perfect storm, and this time it’s a good storm,” Brinson said. “We’ve got a lot of good things happening.
“It’s amazing how much activity there is in the Goshen market, and it is fairly evenly split up between the automotive supplier business and the recreational vehicle supplier business.
“Those two are very active industry sectors at the moment.”
Brinson said the teamwork between the Indiana Economic Development Corp., the Economic Development Corp. of Elkhart County and the city of Goshen is paying off.
“They’re looking at where the best place is to do business, and it just so happens that we’re on the map as having a great cost of doing business and it’s working out great for Goshen,” Brinson said.
“It’s exactly what economic development is about,” said Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County. “We are excited to see they are existing businesses growing and expanding.”
Lippert Components, a manufacturer of recreational vehicle and manufactured housing components, plans to invest about $650,000 in new machinery and equipment as part of the expansion, according to the state’s release.
Kinro, a manufacturer of windows and doors for the recreational vehicle, manufactured housing and other industries, plans to invest about $3.5 million for the lease of a facility, and the purchase of machinery and equipment for the expanded production line.
“We are extremely pleased to continue to expand the operations of both Lippert Components and Kinro in Indiana,” said Jason Lippert, chairman and chief executive officer of Lippert Components and Kinro, in the release.
The company plans to begin filling the new manufacturing and administrative positions this fall. Lippert Components and Kinro currently operate 31 facilities in 12 states.
The Indiana Economic Development Corp. offered Lippert Components Manufacturing Inc. up to $1.55 million in performance-based tax credits and up to $165,000 in training grants based on the company’s job creation plans.
According to the release, Elkhart County and the city of Goshen will consider additional property tax abatement for Lippert at the request of the Economic Development Corp. of Elkhart County.
Even before these announcements, Elkhart County ranked third in the largest growth of gross domestic product in 2010, Brinson said.
“We all know we’ve had some rough spots in Elkhart County,” he said. “We’ve gotten a lot of attention as kind of being the poster child for unemployment, but the news lately is anything but that.
“We’ve become kind of the example of growth in manufacturing over the growth that has occurred over the last year,” he said.
Drew Industries Inc., parent to recreational vehicle and manufactured housing suppliers Lippert Components Inc. and Kinro Inc., today (Sept. 12) announced that Brendan J. Deely was appointed by Drew’s board to serve as an additional independent director.
Drew’s nine-member board will now consist of six independent directors. It is anticipated that Deely, 45, will also serve on one or more of the board committees and will be nominated for election as a director by stockholders at Drew’s annual stockholders meeting to be held in May 2012.
Deely is president and chief executive officer of L&W Supply Corp., a subsidiary of USG Corp., and senior vice president of USG Corp. He is a member of the USG Corporation Executive Committee. USG Corporation is a $3 billion global manufacturer and distributor of high-performance building systems through its United States Gypsum Company, USG Interiors, Inc., L&W Supply Corporation and other subsidiaries.
Deely earned an MBA from Northwestern University’s Kellogg School of Management. He has held several executive positions at USG in sales, marketing, operations and general management since 1988. He also serves on the board of directors of the National Safety Council and is president of the board of directors of the Lincoln Park Community Shelter in Chicago.
Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today (Aug. 29) announced that its wholly owned subsidiary, Kinro Inc., acquired the business and assets of Starquest Products LLC and its affiliate Qualitec Manufacturing LLC. This is the company’s fourth acquisition of 2011, which together add more than $70 million in annualized sales.
According to a news release, Starquest has annual sales of approximately $22 million, comprised primarily of windows for truck caps, which are fiberglass enclosures that fit over the bed of pick-up trucks, painted to automotive standards and designed to exact truck bed specifications. Starquest also manufactures windows and doors for horse trailers and buses. The purchase price of $22.6 million was funded with available cash and approximately $12 million of borrowings pursuant to Drew’s $50 million line of credit. Drew expects the acquisition to be immediately accretive to earnings.
“Starquest is a great company, and highly respected in its industries, with a 50% market share for windows for truck caps and an increasing share in the horse trailer market,” said Fred Zinn, president and CEO for White Plains, N.Y.-based Drew. “This is an excellent opportunity to accelerate our diversification into related markets.”
The key managers of Starquest have entered into employment agreements with Kinro, and will continue to manage the business. “The Starquest team has developed strong relationships throughout their industries, and we expect to build on that strength,” said Jason Lippert, CEO of Kinro, and its sister company, Lippert Components Inc.. “As in our all of our businesses, management’s responsiveness to the needs of our customers is the key to success.”
“We are very pleased that the business we have seen thrive will continue to be managed by our outstanding team,” said Kelly Rose, chairman, and Mike Schoeffler, CEO, who were the two principals of Starquest. “With the financial and strategic support that Kinro and Lippert Components can provide, we are confident that the Starquest business will continue to grow.”