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.
To view the entire report click here.
The Goshen, Ind., City Council approved tax phase-ins for Kinro Inc. and Forest River Inc., two manufacturing companies dealing in the recreational vehicle industry, that will bring at least 220 new jobs combined to the Goshen area by the end of 2014, according to reports from Mark Brinson, director of the Community Development Department.
Forest River’s proposal is tied into a broader request for local and state tax breaks that would assist in expansions at five of its Elkhart County facilities and add 440 jobs by the end of 2015. Company representatives made a presentation to the Elkhart City Council Saturday and a vote will be taken in a second meeting on Aug. 11 after a public hearing.
The Goshen News reported that during the City Council meeting, Dave Ogle from the Economic Development Corp. of Elkhart County spoke on behalf of the projects, and said these were “significant” moves.
“It’s significant that we have two of our biggest employers in Elkhart County in the room tonight,” Ogle said to the Council. “They have the option and opportunity to locate in any place in the county, and they choose Elkhart County, and specifically Elkhart and Goshen, as their home.”
The Kinro request provides a five-year phase-in for the project, which is a proposed move of production lines currently at 1201 S. Eisenhower Drive to a larger manufacturing facility in Goshen, according to the project overview.
The Forest River request provides a seven-year real property phase-in, with a five-year personal property phase-in for the project, for the construction of two new manufacturing facilities in Goshen.
Goshen, Ind.-based supplier Kinro Inc., a division of Drew Industries Inc., announced today (July 11) that it acquired the thermoforming design and production operation of Agile Vehicle Modifications.
According to a news release, Agile, which has annual revenues of less than $1 million, produces thermoformed plastic components and tooling largely for the OEM and aftermarket vehicle market.
“Kinro’s existing thermoforming capability will be substantially expanded company-wide as a result of this acquisition,” said Jason Lippert, chairman and CEO of Kinro, sister company of Lippert Components Inc. “Now we can provide thermoformed products in Northern Indiana to meet our customers’ needs.”
Scott Mereness, president of Kinro, added, “Agile’s focus on thermoformed products for the OEM and aftermarket vehicle market fits perfectly with our continuing expansion into the specialty markets.”
The acquisition price was $0.3 million paid at closing, plus up to an additional $150,000, depending on sales of this acquired operation for one year. The operation will initially be conducted at Agile’s existing facility in Elkhart, which was leased to Kinro.
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.
Goshen, Ind.-based Lippert Components Inc. (LCI) and Kinro, Inc., subsidiaries of Drew Industries Inc., announced today (March 15) that its employee base has grown to 4,541 employees nationwide.
According to a press release, this represents an increase of over 15% – or 750 workers since August of 2011 – for one of the largest suppliers to the RV, manufactured housing and specialty trailer industries. In the last month alone the company grew by 110 employees. Much of the company’s increase in employment is in Indiana’s Elkhart County, of the hardest hit regions in the country affected by the recession.
“The high rate of growth that Lippert Components and Kinro has experienced is not only due to recent acquisitions, but also due to an increase in market share in various product lines such as our entry door, specialty trailer components, motorized chassis stretching, awning and slideout mechanisms,” said Jason Lippert, CEO of Lippert Components. “Our growth is also due to our ‘get it done’ culture and our ability to work with the OEMs we serve to solve manufacturing problems with custom solutions and innovations. Lippert Components and Kinro will continue to add the best people to better service our customers. We understand that fulfilling our products with little or no lead times is part of our legacy of supplier excellence.”
The press release stated that with the expansion of so many new products, Lippert Components and Kinro are “dedicating significant assets toward the customer service and warranty sector of their business to better serve new customers on the OEM, dealer and consumer levels.”
“We realize as one of the largest suppliers in the industry, our customers expect the best service,” said Jason Lippert. “We are aggressively seeking experienced customer service and warranty professionals to help us with this anticipated expansion. In the coming months we are also planning to add more service bays to better service our customers. Our goal is to exceed our customer expectations. Further, we are looking for the best and brightest in welding, manufacturing, operations management and logistics.”
Experienced individuals in customer service and warranty, welding, manufacturing, operations management and logistics should send a resume with work experience to Human Resources Department, Lippert Components, Inc., 2703 College Ave., Goshen, Ind., 46528. Downloadable employment applications are also available online at www.LCI1.com by clicking on “Company” and then “Employee Services.”
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.
To view the entire report click here.
Goshen, Ind.-based Lippert Components Inc. and its sister company Kinro Inc., which combined are the nation’s largest RV OEM supplier, continued to grow on a number of fronts this fall on the brink of RVIA’s 49th Annual National RV Trade Show, Nov. 29-Dec. 1 at the Kentucky Exposition Center in Louisville, Ky.
In the past three months, the 4,000-employee companies, both units of Drew Industries Inc., White Plains, N.Y.:
• Announced the licensing from Texas Innovators LLC of the exclusive rights to manufacture and sell innovative new slideout boot and slideout quarter topper products. The slideout boot covers the slideout and, in so doing, prevents leaks into the RV and replaces traditional slideout awning toppers.
• Completed the $13.5 million purchase from EA Technologies LLC of the business and certain assets of the towable RV chassis and slideout mechanism operation previously owned by Dexter Chassis Group, with annual sales of more than $40 million.
• Announced the acquisition through Kinro of Starquest Products LLC and its affiliate Qualitec Manufacturing LLC. Starquest, Drew’s fourth acquisition of 2011 generates annual sales of about $22 million in windows for truck caps and equestrian trailers. Current management stays in place at Starquest, the principals of which were Kelly Rose, chairman, and Mike Schoeffler, CEO.
• Obtained preliminary tax phase-in approval from the Elkhart County Council that could mean the 100 more jobs at its Greenfield Parkway plant in Middlebury in addition to the 1,835 already employed there.
Meanwhile, Lippert Vice President of RV Sales Andy Murray says LCI plans to display an array of new products at Louisville, foremost among which is LCI’s first line of Solera manual and power awnings for OEMs and aftermarket distributors. These new awnings have manual override and “easy operating” rain dump systems.
“As with our previous product introductions, the RV awning product line has been designed to add significant value for the RV owner, and the awnings are priced to provide value to our customers, the RV manufacturers,” said Jason Lippert, CEO of both Lippert and Kinro. “By pricing the product right, providing more durable components and offering innovative features and options not generally found in the marketplace, we expect to capture market share in this $100 million plus market.”
Also on LCI’s front burner:
• Leveling systems, as Lippert promotes the extension of its more sophisticated one-touch fully automated leveling systems – the three-year-old Level Up hydraulic and Ground Control electric systems — into mainstream fifth-wheel markets through both OEM and aftermarket channels.
• Level Up Lite LED-Assisted Manual Leveling
• Friction Hinge Door Stays
• JT Strongarm Stabilizaton System
• Correct Track Chassis Alignment System
• Schwintek Slide System Telescoping Slide-in-a-Slide
• RV Lock Next Generation Keyless Entry
Sister companies Lippert Components Inc. and Kinro Inc. are looking for help with tax incentives from the Goshen, Ind., City Council. Both supplier firms are subsidiaries of subsidiaries of Drew Industries Inc.
According to WSBT, South Bend, the companies want to expand their operations and hire more workers. The council will consider a tax phase-in for one, and do the same for the other in two weeks.
Kinro wants to expand an existing plant where 130 people are employed. It is a move that would keep those jobs here and adds an additional 20. Kinro is looking for final approval from the Goshen’s City Council for a five-year tax phase-in.
“As the company executes its business plan and they invest in capital and equipment,” said Mark Brinson, Community Development Department, “they are asking for tax breaks on those additional taxes and will result from those new investments.”