White Plain, N.Y.-based Drew Industries Inc. a leading supplier of components for recreational vehicles and manufactured homes, today reported net income for the second quarter, ended June 30, of $11.0 million ($0.49 per diluted share), a 14% increase over net income of $9.6 million ($0.43 per diluted share) reported in the second quarter of 2010.
Second quarter sales increased 7% to $186 million from $174 million the previous year, the result of a 9% increase in Drew’s RV segment sales, and a 1% decline in Drew’s MH segment sales. The RV segment, which manufactures components primarily for travel trailer and fifth-wheel RVs, represented 84% of consolidated sales, while the MH segment sales represented 16%. Industrywide wholesale shipments of travel trailer and fifth-wheel RVs increased 6% in the second quarter, while industrywide production of manufactured homes declined an estimated 11%.
“In the second quarter of 2011, we continued to increase our content per RV and manufactured home, and expand our sales to other industries, such as mid-size buses, modular housing and specialty trailers,” said Fred Zinn, president and CEO of Drew, which is parent to Lippert Components Inc. and Kinro Inc. “As a result, we were able to largely overcome the impact on our industries of slower economic growth in the second quarter of 2011 than had been anticipated. Our consolidated sales increased again in July 2011, reaching approximately $49 million, about 3% above July 2010 sales, despite July 2011 having one less shipping day than July 2010.”
On July 19, 2011, Drew acquired certain assets and business of M-Tec, an Indiana-based manufacturer of components for RVs and mobile office units. This was Drew’s second acquisition of the year, following the January 2011 acquisition of Home-Style, the leading manufacturer of RV furniture and mattresses in the growing Northwest RV market.
“The M-Tec acquisition enables us to expand our product line of components for motorhomes, a market which offers significant long-term opportunity,” said Jason Lippert, CEO of Lippert and Kinro. “The two acquisitions we’ve made so far this year were particularly attractive because we will use our purchasing power and manufacturing expertise to reduce the cost structure of the acquired operations. With our debt-free balance sheet, significant credit availability and outstanding operating management team, we have the capability to continue to invest in profitable growth opportunities.”
“We have also made major strides towards capturing new markets, expanding our customer service capabilities, and further increasing the depth of our management team,” said Scott Mereness, president of Lippert Components and Kinro.
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Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today reported that its wholly-owned subsidiary, Lippert Components Inc., acquired certain assets and business of M-Tec Corp. The acquired business has annual sales of approximately $12 million, primarily of components for RVs and mobile office units.
The purchase price of $6 million was paid from available cash. Depending on sales levels achieved by the acquired business over the next three years, the company may pay an additional purchase price of approximately $0.6 million. Drew expects the acquisition to be immediately accretive to earnings.
The primary manufacturing facilities of the acquired business are in northern Indiana. Goshen, Ind.-based Lippert will lease these facilities for one year, during which time it will consolidate the new production into its existing facilities, substantially reducing the production costs of the acquired business.
“Acquisitions like this have been a big factor in enabling Drew to continually expand,” said Fred Zinn, Drew’s president and CEO. “Further, we have the capability to reduce the cost structure of the acquired operations. As with the eight other acquisitions we have made during the past four years, we were able to complete this acquisition without incurring debt. With no debt, about $30 million in available cash, 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.”
“This acquisition is attractive from several perspectives,” said Jason Lippert, CEO of Lippert Components. “First, it allows us to expand our product line of components for motorhomes by adding the bridge beam used in certain motorhome chassis. Historically, we have focused primarily on components for towable RVs, and, while we plan to continue to grow in that market, we see significant opportunity in motorhome components. The newly-acquired bridge beam product line is a great addition to the motorhome chassis modification business we acquired in 2010. Further, the mobile office unit chassis produced by M-Tec is similar to the chassis for manufactured homes we currently produce, so we will be able to use our manufacturing expertise and purchasing power to reduce the production cost of these products.”
“We are also gaining several talented managers through this acquisition,” said Scott Mereness, president of Lippert Components. “We expect they will play a significant role in taking the acquired business to the next level by utilizing the resources and capabilities available through Lippert Components. We also expect these new managers to be instrumental in other areas of our business. The new products and management talent, along with cost reductions we can achieve, make this a very attractive acquisition.”
Lippert Components Inc. and Kinro Inc. today (June 5) announced they have launched a new effort to expand their sales of aftermarket RV products, hiring industry veteran Bob Mater as director of RV aftermarket services to head up this operation.
“Many of our existing RV products, including doors, windows, mattresses, upholstered seating, leveling devices, suspension products, slideouts, and other accessories, have significant aftermarket potential,” said Jason Lippert, CEO of Goshen, Ind.-based Lippert Components and Arlington, Texas-based Kinro. “Bob Mater is a true veteran, with 18 years experience in the RV and trailer aftermarket, and he is a great choice to lead this new effort. Our current RV aftermarket sales of $13 million, only scratch the surface of this opportunity. We believe we can profitably expand our sales into this market by devoting a talented team, as well as a separate facility, to focus strictly on gaining additional aftermarket business through RV dealers and wholesale distributors. This effort is another in a series of many steps we have taken over the years to continue to increase both our sales and profits.”
Scott Mereness, president of Lippert Components and Kinro added, “Many of our RV components now include features that were not available on new RVs just a few years ago. As a result, our on-line ‘e-store’ (store.lci1.com), where these new products are available for purchase, has recently gained quite a bit of attention from dealers and wholesale distributors, as well as from RVers. This success has given us enough insight about the potential aftermarket demand for our RV products for us to be confident that an additional focus on this market should be well worth the effort.”
The companies, subsidiaries of Drew Industries Inc., are major suppliers to the recreational vehicle and manufactured housing industries.