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.

Zacks Upgrades Drew Industries Inc. Ratings

Equities research analysts at Zacks Investment Research upgraded shares of Drew Industries Inc. from an “underperform” rating to a “neutral” rating in a research note to clients and investors on Monday (Jan. 3).

Shares of Drew traded up 1.56% during mid-day trading on Wednesday, hitting $22.80. Drew has a 52-week low of $17.89 and a 52-week high of $28.10. The stock’s 50-day moving average is $22.0 and its 200-day moving average is $20.85. On average, analysts predict that Drew will post 31 cents earnings per share next quarter. The company has a market cap of $501 million and a price-to-earnings ratio of 17.93.

Ganshorn’s New Lippert/Kinro Sales Manager

Chris Ganshorn is joining the management team of Lippert Components Inc. and Kinro Inc., both subsidiaries of Drew Industries Inc.,as sales manager,  the company announced today (Dec. 15).

Lippert and Kinro are focused on an array of RV industry-related new products, including a variety of electronics. Ganshorn, with a degree in electrical engineering from Purdue University and an MBA and years of practical experience as an automotive engineer, “is expected to play a vital role in the development and introduction of innovative products designed to meet the needs of our customers,” the release stated.

“Chris is a great fit with the rest of our management teams. He is very creative, and his skills and experience will enable us to design more new products to bring to the RV industry,” said Jason Lippert, CEO of Lippert Components and Kinro. “It has been our long-standing belief that our outstanding management team is the key to our success, and we are confident that Chris will add significant value to our team and to our companies.”

Lippert Components, Kinro Promoting Execs

Goshen, Ind.-based Lippert Components Inc. announced today (Dec. 13) the promotions of the following key executives within its Lippert and Kinro operations:

• Jason Falk – vice president of operations – West Coast Group.
• Marc Grimes – vice president of operations – East Coast RV and MH Chassis Group.
• Todd Driver – vice president of operations – RV Products.
• Andy Murray – vice president of sales – RV Group.
• Matt Hazelbaker – vice president of operations – Seating and Mattress Products.
• Jim Chamberlain – vice president of operations – Kinro.
• Conny Holcombe – vice president of sales – MH Group.

“These executives have been vital to the growth and success of our company for the past decade,” Jason Lippert, CEO of Lippert Components and Kinro, said in a news release. “Because of their experience, dedication and focus, we have achieved consistent profitable growth through new product introductions, acquisitions, market share growth and efficiency improvements. Most importantly, they have each been critical in taking care of our most valuable assets — our customers and our employees at all levels in our organization. Each member of our team is motivated to provide the highest level of customer service, while producing quality and innovative products.”

Lippert and Kinro are subsidiaries of Drew Industries Inc, White Plains, N.Y.

Drew Declares Special $1.50 Cash Dividend

Drew Industries Inc. today (Dec. 1) announced that its board of directors approved a special cash dividend of $1.50 per share of common stock.

The dividend is payable on Dec. 28 to stockholders of record at the close of business on Dec. 20, according to a news release.

“This special dividend reflects the board’s confidence in the financial strength of the Company, as well as the company’s positive long-term outlook,” said Fred Zinn, Drew president and CEO. “Our strong cash balance and consistent cash flow provide us the opportunity and resources to take this tangible step in demonstrating our commitment to returning value to our stockholders.”

Even after this cash dividend, aggregating approximately $33 million, Drew will have more than $30 million of available cash, no debt and substantial unused borrowing capacity. “Our strong balance sheet will enable us to continue our long-term strategy of growth through acquisitions, market share gains, and new product introductions,” added Zinn.

Stockholders of record will receive a 2010 Form 1099 with respect to this dividend by Jan. 31.

Drew Industries CEO Discusses Acquisitions

Management of Drew Industries Inc. held a conference call on Monday (Nov. 1) following release of its third-quarter financial results. Excerpts of that call, concerning a question on the company’s posture toward acquisitions, follow. To read the entire transcript, courtesy of Seeking Alpha click here or visit www.seekingalpha.com.

Questioner: Liam Burke – Janney Montgomery Scott

In terms of acquisitions I know you made some within you two segments earlier in the year. You have always discussed a third leg or a third business. Without getting into specifics is that still what you are considering in terms of the acquisition front?

Response: Fred Zinn, president and CEO

I think its still possible. Right now, we are looking into series related industries. We have talked about it before whether it’s mid-sized buses we developed seating components for mid-sized buses, windows for mid-size buses. We are looking at other products that could be nice product area for us. Some of our customers, as you know, already make mid-size buses, but utility and cargo travelers require many of the same components that we made for towable RVs (inaudible) in some cases doors or ramp doors and windows. So, it’s really a combination of various products as opposed to looking for some new third leg we are looking at related industries that will give us more market demand.

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