Drew Industries Inc. announced that its wholly owned subsidiary, Lippert Components Inc. (LCI), has acquired certain assets and the business of Duncan Systems Inc. which, like Drew and Lippert, is based in Elkhart, Ind.
Duncan Systems is a distributor of replacement motorhome windshields; RV, heavy truck and specialty vehicle glass and windows; and awnings — primarily to fulfill insurance claims. Sales of the acquired business for the 12 months ended July 2014 were approximately $26 million. LCI estimates the aftermarket for the products it currently sells is in excess of $350 million.
“Consistent with our long-term strategic plan, in the past few years we have increased our sales of aftermarket replacement parts to warehouse distributors and retail RV dealers, as well as through our online store,” said Drew President Scott Mereness. “Acquiring Duncan Systems, in addition to expected synergies, opens up a new aftermarket channel for us, enabling us to fulfill insurance claims for replacement parts. There are an estimated 9 million RVs on the road, creating a significant market opportunity for many of LCI’s products, and we want to be there with solutions for consumers at every stage of RV ownership. Further, we believe the additional relationships that Duncan Systems has in the heavy trucking and specialty vehicle markets, as well as the broadened customer base of existing RV owners, will help accelerate LCI’s aftermarket growth.”
The purchase price was $18 million, which was paid at closing from borrowings under the company’s $75 million line of credit, plus contingent consideration based on future sales. Drew expects the acquisition to be immediately accretive to earnings.
Brent Watson, president of Duncan Systems, entered into an employment agreement with LCI and will continue to manage the business going forward. “It really couldn’t be a better fit,” said Watson. “We are confident Lippert Components will invest in the business for the long term and strategically drive the business forward, as well as provide the opportunity to supply our existing customers with a broader line of replacement parts. For instance, our heavy trucking customers often need replacement mattresses, and joining the LCI team will allow us to offer an impressive range of mattresses, among other time-tested products.”
In September 2013, Lippert Components, Inc. (LCI) hired Director of International Business Development Larry Revelino. Since then, the company has been steadily developing its international presence by attending international RV and caravan trade shows, meeting with OEMs, distributors and suppliers, and adjusting and testing product designs to meet the unique needs of non-U.S. markets.
This September, LCI will be showcasing its RV products and collaborating with several key vendors at one of the largest caravan and motorhome shows in the world, the Caravan Salon 2014 show in Dusseldorf, Germany, according to a written announcement from the company, based in Elkhart, Ind.. LCI will debut its patented In-Wall Slide-Out System on several European motorhome and caravan brands at the show. LCI also plans to display bonded windows and leveling systems.
“In the recent months, Larry Revelino and our operations teams have worked diligently to strengthen our international partnerships and show our potential customers that we are committed to their markets and supply needs,” said LCI CEO Jason Lippert. “We’ve already initiated some new foundational relationships overseas and taken our core products to several potential customers. Our presence at the Dusseldorf show will help us pursue further growth and show our commitment to the European caravan and motorhome market.”
In June, LCI announced that its new partner Coast to Coast Caravan & Leisure would be the exclusive distributor of LCI’s In-Wall Slide-Out systems and other products in Australia and New Zealand. Also in June, the company announced Shanghai Yixin Trading Co. Ltd. will distribute LCI RV and trailer products in China as an exclusive distributor to those markets. Shanghai Yixin Trading showcased LCI products for the first time at the “All in Caravanning” show at the Beijing Exhibition Center the same month.
Revelino said new relationships with international OEMs, distributors and suppliers have brought LCI a better understanding of international customers’ values, product requirements and unique local dynamics. “We have interacted with new and existing customers on four continents and more than a dozen countries this year,” said Revelino. “We have been present at five international trade shows thus far and gathered valuable feedback from hundreds of consumers and manufacturers about our extensive line of products. We feel there is potential for us to supply a wide range of products to these markets like we do in the United States.”
The company also has plans to display products at the Motorhome & Caravan Show in Birmingham, U.K., in October, the China International Recreational Vehicles and Camping Exhibition 2014 in Shanghai, China, in December, and the CMT Holiday Exhibition Show in Stuttgart, Germany, in January.
The company reported net income of $18.6 million, or 77 cents per diluted share, for the second quarter compared to $15.9 million, or 67 cents per diluted share the year prior. In connection with the sale of the aluminum extrusion-related assets in April 2014, the company recorded an after-tax charge of $1.2 million. Excluding this charge, net income in the second quarter of 2014 would have been $19.8 million, or 82 cents per diluted share.
Second-quarter sales increased to a quarterly record of $322 million, 12% higher than the 2013 second quarter. This sales growth was primarily the result strong performance by Drew’s RV segment, which accounted for 90% of consolidated net sales this quarter. Drew said that recently completed acquisitions added approximately $5 million in net sales during the period.
For the six months, sales totaled $607 million versus $539.8 million the year prior while net income was $34.8 million, or $1.46 per share, compared to $24.2 million, or $1.03 per share.
During the first six months of 2014, the RV industry produced more RVs than the full year of 2009. “The ability for the RV industry to more than double production capacity over the past several years is a testament to the resourcefulness of our customers and the tens of thousands of individuals employed by the industry,” said Jason Lippert, Drew’s CEO. “Staying ahead of the ever-changing demands of our customers is a primary business focus.”
“Towable RVs, and in particular lower-priced entry-level units, led the recovery in RV production so far. Although smaller entry units typically contain fewer of our products, we consider every new RV owner a long-term customer who in the future could purchase larger RVs which contain more of our products, creating a healthier RV industry over the long term. Motorhome RVs also experienced a strong recovery over the last couple years, creating a more significant opportunity for us to gain market share with our motorhome products.”
During July, Drew’s consolidated net sales reached approximately $98 million – 17% higher than July 2013 – as a result of continued growth in the company’s RV Segment. Excluding the impact of acquisitions, the company’s net sales for July 2014 were up approximately 13%.
The company’s operating profit margins in the second quarter of 2014, excluding the loss on sale of the aluminum extrusion-related assets, were 9.7%, compared to 9.2% in the second quarter of 2013, excluding executive succession. “Over the past several years, we have made investments in our business, which are continuing to benefit bottom-line results, and the results we experienced in the 2014 second quarter were consistent with our expectations,” said Drew President Scott Mereness. “We added capacity ahead of projected demand, which enabled us to efficiently fulfill customer orders as demand increased and leverage fixed costs over a larger sales base.
“In anticipation of future growth, we continue to expand and improve production capacity, investing in personnel and facilities in excess of current needs. As noted previously, we have recently entered into two new leases which will add more than 700,000 square feet of production and distribution capacity. While these capacity expansion initiatives have a short-term negative impact on margins, over the long term these investments should allow us to improve our operating results, as well as continue to improve our customer service and operating efficiencies. In addition, we have bolstered our administrative staff over the past several quarters, including the teams that were acquired through acquisitions and new employees hired in preparation for future growth and investment opportunities.”
During the second quarter, Drew completed the acquisition of Actuant Corp., gaining the Power Gear and Kwikee brands, and expanding its product offerings in leveling systems, slideout mechanisms and steps, primarily for motorhome RVs.
For the full report click here.
Lippert Components Inc. (LCI) marked a major milestone today (July 21) in a move that has long-term implications for the company.
The supplier hired a helicopter to install nine air-conditioning units on the roof of its new, 490,000-square-foot facility in Goshen, Ind.
When the facility opens at the end of the fourth quarter, it will bring all operations of the Lippert Interiors division under one roof, Ryan Smith, vice president of Lippert Interiors, told RVBUSINESS.com.
“It’s seen explosive growth,” Smith said of the division, and LCI in general, which is also in the process of retooling an expansive leased facility in South Bend, Ind., that will house aftermarket, customer service, dealer relations teams and its publication group. “I’m looking forward to the efficiencies we’re going to pick up for the customers. We’ll be able to provide superior product, superior quality.”
The building is in the midst of a complete refurbishment, work that started late in the first quarter of the year.
“We still have a lot of machinery coming in from Italy,” said Jeff Few, vice president of automation and manufacturing for LCI. “This building should handle us for about five years, and we’ve got acreage to expand.”
In the middle of the building is a mezzanine — soon to be air conditioned — that will provide 90,000 square feet in space for sewing operations and mattress storage. “It’s bigger than some factories,” Few pointed out. Indeed, it’s nearly two-thirds the size of the existing Lippert Interiors facility in Goshen.
LCI, a subsidiary of publicly traded Drew industries Inc. and the industry’s largest OEM component supplier, hopes to use the air-conditioned sewing space as a competitive advantage in attracting sewing personnel, Few said. “It’s hard to do, but with an air-conditioned mezzanine, bathrooms up there, and all-new equipment, we hope they’ll apply,” he said.
Once Lippert Interiors moves, its current building will house the combined research and development, engineering and manufactured-systems teams, Few said. “We’ll have a task room, we can solve the problems collectively. That’s going to be a big renovation,” he said.
Elkhart, Ind,-based Lippert Components Inc. announced today (June 30) it is initiating an exclusive arrangement with Shanghai Yixin Trading Co. Ltd. for the marketing, sale and distribution of LCI products in the Chinese caravan, motorhome and utility trailer markets.
Since 1995, Shanghai Yixin Trading has imported products into China ranging from electric bikes to elevator parts, and recently created a specialized caravan and motorhome division in anticipation of the pending expansion of the Chinese caravan market.
“We are excited to partner with Shanghai Yixin Trading and enter the promising Chinese caravan market,” said LCI CEO Jason Lippert in a press release. “We believe that by introducing our broad line of innovative products in China, we will begin to lay a firm foundation to meet the quickly growing needs of the emerging Chinese caravan market.”
Shanghai Yixin Trading will service more than 70 caravan OEMs as a component supplier, and will operate from a warehouse and distribution location in Tongxiang City. Tongxiang City already supports considerable manufacturing and distribution for automotive and recreational vehicles and is ranked 24th among the top 100 Chinese commercial cities in the country. Shanghai Yixin Trading showcased LCI products for the first time at the “All in Caravanning” show at the Beijing Exhibition Center in China June 27-29.
“Lippert Components is the largest manufacturer of components for RV and trailer products in the US and is well respected in the industries they serve,” said Shanghai Yixin Trading General Manager Chen Jun. “We are honored for this opportunity to represent LCI in the Chinese caravan market, and since the Chinese caravan market continues to grow rapidly, our distribution arrangement could not have come at a better time.”
LCI Director of International Business Development Larry Revelino described the newly formed relationship as fundamental for selling products in the Chinese market, noting, “We are thrilled to share years of innovation with caravan and motorhome manufacturers across China by bringing them our huge variety of established, high quality RV products.”
The company expects to open up the building entirely in mid-August with about 150 employees, said April Klein-Carroll, vice president of aftermarket parts and customer service.
In March, LCI announced plans to invest $2.8 million in the former distribution center for A.J. Wright in South Bend.
Some aftermarket shipping products are already in the warehouse, including some Denver Mattress bedding, sheets and comforters made for RV beds.
Besides serving as a warehouse, the mammoth South Bend facility, which is large enough to cover nine football fields, will house Lippert Components’ aftermarket, customer service and dealer relations teams as well as its publication group, Klein-Carroll said.
“We have a lot of parts and pieces in there,” she said, including interior inventory that LCI sells to original equipment manufacturers.
For the full story click here.
Drew Industries Inc. today (June 16) announced that its wholly owned subsidiary Lippert Components Inc. has acquired the RV interests of Actuant Corp. Under the Power Gear and Kwikee brands, Actuant manufactures leveling systems, slideout mechanisms and steps primarily for the motorhome market.
According to a news release, sales of the acquired business for the 12 months, ended May 31, were approximately $28 million, consisting of sales to OEMs as well as significant aftermarket sales.
The purchase price was $35.5 million, which was paid at closing from available cash, as well as from borrowings under the company’s $75 million line of credit with JP Morgan Chase and Wells Fargo. After funding this acquisition, the said it remains well-positioned to take advantage of other investment opportunities.
“We are thrilled to have the Power Gear and Kwikee business and its employees join the Lippert Components family,” said Drew CEO Jason Lippert. “The RV industry has been growing over the past few years, which has increased the necessity for talented people in engineering, sales, manufacturing and customer service. This talented team will be a strong addition to our existing team, and will help us continue to grow as we move forward.”
Lippert added, “In addition, Power Gear and Kwikee have excellent products, strong customer relationships, and a portfolio of over 80 patents and patent applications. The addition of these patents to our portfolio expands our product development potential, which we believe will lead to better overall products for the RV industry. We expect to leverage our extensive manufacturing, purchasing, distribution and administrative capabilities to improve the profitability of this business, and we expect this acquisition to be immediately accretive to Drew’s earnings.”
Lippert Components Inc. (LCI) announced today it has agreed to give Coast to Coast Caravan & Leisure exclusive rights to sell and distribute LCI Schwintek in-wall slideout systems and other RV products in the Australian and New Zealand caravan markets. According to a press release, Coast to Coast is one of Australia’s largest aftermarket suppliers of RV and leisure products, and has five warehouse locations in Sydney, Melbourne, Brisbane, Perth and Auckland, New Zealand.
“We are ecstatic that Coast to Coast has selected LCI for this exclusive relationship,” said LCI CEO Jason Lippert. “We have a broad line of innovative products with great potential in the Australian and New Zealand caravan markets, and we expect introducing our Schwintek in-wall slideout systems and other products will be a catalyst for growth and new product development to meet the unique needs of these markets.”
Coast to Coast General Manager Tony Canta pointed to LCI’s quality products and consistent growth as key factors in the company’s decision to partner with LCI. “Schwintek will be a key feature of our OEM initiative as we will not only assure on-demand service of supply, but also technical training and assistance to all our customers,” said Canta. “We are thrilled to bring this popular and proven innovation to the Australian and New Zealand market.”
Coast to Coast reports positive customer feedback on LCI’s Schwintek in-wall slideout systems and is happy to strengthen the business relationship. “Schwintek has not only been proven in America, we’ve done extensive testing to ensure it will stand up to Australia’s rugged roads,” said Canta. “What’s more, Schwintek is just one example of the extensive LCI line of products that offers us exciting opportunities for innovation in our markets.”
Larry Revelino, LCI’s director of international business development, described the company’s relationship with Coast to Coast as foundational. “We’ve been supplying products to the Australian RV market for years and are excited by the opportunity to provide the Australian and New Zealand RV market with more of our quality products and systems through Coast to Coast,” said Revelino.
The company said in a written release that the app provides users with comprehensive product information, photos and videos, as well as customer support material including manuals, components lists and Lippert Informational Sheets.
“The myLCI application will allow employees, dealers, distributors and consumers to find the information they need to understand, install, operate and troubleshoot much of our extensive line of products,” said Director of Marketing and Media Jarod Lippert. “We believe myLCI will better serve our customers by providing them an easy, on-the-go product information solution.”
LCI’s marketing team developed this new product information database, compiling detailed product material and existing customer support services documentation. myLCI offers a clean, modern design, easy-to-navigate responsive functionality and a content-rich database experience. Its product interface allows customers to quickly and easily find product information, with products organized into three main categories: chassis, body and interior.
“We’re excited to offer the myLCI app as another customer support service,” said Lippert. “The products included in the first version of the myLCI app were selected based on customer feedback. More products will be added over time, so check for updates often.”
The myLCI app is available for free from the App Store on iPhone, iPad and iPod touch or at http://www.AppStore.com. LCI is also developing the myLCI app for Android-based devices. Contact email@example.com with questions or feedback.
Lippert Components Inc. (LCI), an RV and manufactured housing supplier, already has a large presence in northern Indiana, but it’s still in a growth mode.
The South Bend Tribune reported that with about 4,000 employees in Indiana and 5,300 nationwide, Lippert Components already operates at 23 locations in Elkhart County and now one in South Bend. It is adding employees in both Goshen and South Bend, the latter at the former A.J. Wright building, which the company recently announced it will lease for the next 12 1/2 years.
What follows is an interview with Lippert:
Q.You plan to hire workers for the new South Bend operation this year. When does that start? Will there be a job fair?
A. The 180 jobs is the total commitment for the facility, (including Bimbo Bakeries’ logistic company, which is subletting the facility from Lippert). We are looking forward to doing our part to meet our commitment. We will immediately begin equipping the South Bend building and hiring employees for warehousing, distribution and light manufacturing operations.
Q.What were some of the main reasons you chose the South Bend location and decided to further expand in the area?
A. We believe the South Bend facility will allow us to better serve our customers, both inside and outside of Elkhart County. The facility is a great facility — it’s truly a beautiful building and provides great space for warehousing and light manufacturing. A larger facility such as this one allows us to consolidate operations to improve efficiency and have room for future growth. Additionally, expanding into South Bend allows us to diversify our work force and tap into a new pool of talent. When the RV industry gets very busy like it is now, every RV manufacturer, as well as other employers benefiting from the improved economy, in Elkhart County taps into a relatively small work force.
Q. Do you think the industry can sustain its current growth pattern? And why?
A. The RV industry has performed quite well over the past few years. Based on solid retail sales in 2013 and industry expectations for 2014, we believe that the RV industry is strong. Many of our RV customers are introducing new product lines and offering new features on existing lines, as well as increasing production capacity to meet projected industrywide growth for 2014 and beyond. While nothing is certain, we have no reason to believe that the industry will not continue to do well in the coming years. As an industry, we know that RV products are appealing to more people in different demographics than ever before. The popularity of traveling in RVs to NASCAR and other sporting events, more family-oriented domestic vacations, and using RVs as second homes, appear to motivate consumer demand for RVs. It’s not just the baby boom generation that’s buying RVs; RVs are also appealing to younger and younger buyers every year.”
For the full article click here.