Drew Industries Inc., a manufacturer of components for the recreational vehicle and manufactured housing industries, will release its second quarter financial results before the market opens on Aug. 6.
Drew Industries, parent to Lippert Components Inc. and Kinro Inc., also will host a conference call on Aug. 6 at 11 a.m. EDT 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.
Participating in the conference call will be Chairman Leigh Abrams, CEO Jason Lippert and Joe Giordano, CFO and treasurer.
Drew Industries Inc.’s plans to relocate its headquarters from White Plains, N.Y., to Indiana’s Elkhart County will add up to 800 jobs to the area, according to a press release from the Indiana Economic Development Corp.
Drew, parent to RV and manufactured housing suppliers Lippert Components Inc. and Kinro Inc., announced the relocation in February along with key management changes, including the appointment of Jason D. Lippert as the company’s chairman and CEO.
The company said it plans to invest $12.75 million to renovate and equip four manufacturing facilities in Goshen and Elkhart. As part of the project, Drew will install new manufacturing and production lines, which are expected to be operational this year.
“Our focus on job creation is paying off as Indiana’s economic momentum continues,” said Gov. Mike Pence. “Drew Industries’ announcement builds on our strength as the RV capital of the world and serves as the latest proof that our convenient location, competitive tax environment and talented workforce have put Indiana on the map as a state that works for business.”
With more than 5,200 full-time employees across the country, Drew Industries currently has approximately 3,400 employees in Indiana. The company has already begun hiring additional engineers, furniture assemblers, general laborers, drivers and welders in Elkhart County.
“We have experienced significant growth over the past three years,” said Lippert. “When looking to relocate our corporate headquarters, Indiana made the most sense due to its talented workforce, and because most of the RVs produced in the United States are produced in Elkhart County. We greatly appreciate the support provided to us by the state of Indiana, Elkhart County and the cities of Goshen and Elkhart and we look forward to continued growth and future success here.”
“We’re excited about Drew Industries’ plans for expansion,” said Elkhart Mayor Dick Moore. “This expansion further solidifies Elkhart’s position as the RV capital of the world. I look forward to many more future expansions like this in the community.”
The Indiana Economic Development Corporation offered Drew up to $4.3 million in conditional tax credits and up to $200,000 in training grants based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. The city of Elkhart and the city of Goshen will consider additional property tax abatements at the request of the Economic Development Corporation of Elkhart County.
“Elkhart County is fortunate to have Drew Industries,” said Goshen Mayor Allan Kauffman. “They have become one of the largest employers in the city of Goshen and Elkhart County. We are pleased with their ongoing commitment to investing in our community and applaud their success.”
Denver Mattress Hospitality has partnered exclusively with Lippert Components Inc. to distribute premium mattresses to the RV industry through Denver Mattress Hospitality’s RV Division.
“The aftermarket program for our RV Collection was developed by April Klein and myself,” said Erin Hudson, project manager of the RV division. “She built many of the relationships with our partnered dealerships across the country and we’re very excited to be working with her again. Our goal is to offer exceptional service and to meet the growing needs of RV dealerships, especially with regards to better sleep systems, and we feel that April Klein and her team are the best people for the job.”
Lippert Components is made up of Lippert Interior Solutions, Lippert Components Parts and Mobile Outfitters, which oversee manufacturer accounts, dealership accounts and wholesaler accounts, respectively.
Hudson added, “We made this decision with our customers in the forefront. We feel that the customer service and distribution capabilities of the Lippert companies will better service our customers and allow us to expand our offerings to meet the growing needs of the RV industry.”
The Indiana Economic Development Corp. (IEDC) has played a role in the expansion of the RV industry in Elkhart County.
As reported by The Elkhart Truth, in Elkhart County since 2011, the economic development organization has been a part of nine expansions, including Lippert Components and Kinro Manufacturing Inc., Supreme Industries Inc. and Spartan Motors Inc. totaling $31.7 million in new investment and 1,608 new jobs by 2015.
The companies that have grown in Elkhart County 2011 received $9.4 million in performance-based tax credits and $732,500 in training grants from the IEDC.
Daniel J. Hasler, CEO of the state economic development agency, is optimistic that 250 companies will choose Indiana in 2012 to either expand or relocate their operations. He pointed to the high rankings from CEO magazine and the Tax Foundation along with the infrastructure investments funded by Major Moves and the recently passed Right to Work legislation as indicators of Indiana’s ability to appeal to businesses.
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Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today (Aug. 8) announced that its wholly owned subsidiary, Lippert Components Inc., is preparing to launch a newly developed line of RV awnings. This new product line will be formally introduced in late September at the open house events held by RV manufacturers in Indiana.
According to a press release, the awnings will be manufactured in one of Lippert Components’ existing facilities in Goshen, Ind., available in both manual and electric versions. Todd Driver, vice president of operations, RV Products, and Steve Jenkins, director of manufacturing for RV Accessory Products, and his operating team, will provide the manufacturing leadership for this product line. The company plans to market the awnings directly to RV manufacturers, as well as through aftermarket distributors.
“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 will be priced to provide value to our customers, the RV manufacturers,” said Jason Lippert, CEO of Lippert Components. “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.”
“The raw materials, components and manufacturing processes used in awnings are very similar to those we use extensively in our existing product lines, so we will be able to quickly ramp up production and efficiencies,” said Scott Mereness, president of Lippert Components. “Further, with our previously announced aluminum extrusion facility, scheduled to open late in the third quarter of 2011, we will be able to produce the extruded aluminum components used in our awnings. Additional information about the aluminum extrusion project will be forthcoming.”
“The RV awnings are another step forward in our long-standing strategic plan of profitable growth through new product introductions, acquisitions and market share gains,” added Jason Lippert. “The introduction of this exciting product line follows two accretive acquisitions we made so far this year, which added an aggregate of nearly $25 million in annual sales. We will continue to pursue similar opportunities, both through internal development and acquisitions.”
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., a subsidiary of Drew Industries Inc., announced today (July 18) the opening of its new, state-of-the-art customer service center.
According to a news release, the new service center at Lippert’s headquarters in Goshen, Ind., will also have the capability to sell and install aftermarket products such as windows, doors, suspension and Trailair products, and the Level Up towable RV leveling system.
The new service center has five service bays and is staffed by 40 highly trained repair personnel and service technicians, who can both install and answer technical questions on a wide array of RV products sold by Lippert Components and its sister company, Kinro, Inc.
“Our new service center is also fully equipped with customer-friendly conveniences, such as Internet access, TV, and kitchen facilities, to help ensure that our customers are comfortable and productive while we are providing service or installing new features for their RVs,” said Andrew VanSchoick, Lippert’s director of customer service.
“Andrew and his entire team have consistently done an outstanding job of meeting the service needs of retail customers, the RV dealer network and RV manufacturers,” said Jason Lippert, CEO of Lippert Components and Kinro. “Our new service center, located in the heart of ‘RV country,’ will enable us to provide these services even more efficiently, and install new aftermarket features, in one convenient location. Outstanding customer service has always been key to the success of Lippert Components and Kinro, and once again we believe we have raised the bar for superior service. We are all very excited to significantly expand our capabilities to serve the RV industry.”
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.
Drew Industries Inc., a leading supplier of components for recreational vehicles and manufactured homes, today (May 2) reported net income for the first quarter ended March 31, 2011, of $9.4 million or 42 cents per share, a 28% increase over net income of $7.3 million or 33 cents per share reported in the first quarter of 2010.
Net sales in the 2011 first quarter increased 15% to $169 million, from $146 million in the first quarter of 2010, due to increases in industrywide shipments of travel trailer and fifth-wheel RVs, as well as continuing increases in Drew’s average product content in these types of RVs. Components for travel trailer and fifth-wheel RVs comprised 81% of the company’s consolidated net sales in the first quarter of 2011, while manufactured housing components accounted for 12%, and the balance consisted of motorhome components and other products.
“Over the last 10 years, our average product content in new travel trailer and fifth-wheel RVs has more than tripled due to market share gains, acquisitions and new product introductions, and this growth continued into 2011,” said Fred Zinn, Drew president and CEO. “For the three months ended March 31, 2011, our average product content in these types of RVs was 6% higher than in the same period in 2010, which helped boost our profit growth in the quarter. Further, our sales remained strong in April 2011, reaching approximately $60 million, about 6% above April 2010 sales, despite having one less shipping day this year than the prior year.”
“With every new product or product enhancement, our goal is to add value for our customers and for the RV user,” said Jason Lippert, CEO of Drew’s subsidiaries, Lippert Components and Kinro. “If we do it right, momentum builds over time, and these products become ‘standard’ on a wide range of RVs. We are very encouraged by our recent market share gains in the products we’ve introduced or enhanced during the past few years, such as RV entry doors, our new in-wall slide-out mechanism, furniture and mattresses, leveling systems, and electric jacks and stabilizers.”
About the RV Segment
The RV Segment represented 87% of the company’s consolidated net sales in the first quarter of 2011, compared to 85% in the 2010 first quarter. In the 2011 first quarter, more than 90% of the company’s RV Segment net sales were components for travel trailer and fifth-wheel RVs, with the balance primarily comprised of components for motorhomes and mid-size buses, as well as specialty trailers.
RV Segment net sales in the first quarter of 2011 reached $146 million, an increase of $22 million, or 18% compared to the 2010 first quarter.
“Our sales increase was significantly more than the 10 percent increase in industry-wide wholesale shipments, largely because of acquisitions, and market share gains in both our towable RV and motorhome product lines,” said Lippert. The company’s content per travel trailer and fifth-wheel RV for the 12 months ended March 2011 reached $2,210, compared to $2,168 for the 12 months ended December 2010.
“Our new products for motorhomes are also attracting a lot of attention, and we continue to see strong growth opportunities in that market,” he added.
Drew’s RV Segment reported operating profit of $15.3 million in the first quarter of 2011, an increase of 19% over the $12.9 million reported in the 2010 first quarter. “The increase in RV Segment operating profit was less than we would typically expect on a $22 million increase in net sales, largely because of higher raw material costs,” said Joseph Giordano, Drew CFO and treasurer. “We expect to be successful at substantially reducing the impact of higher raw material costs, as we have over the last several years.”
On Jan. 28, Drew acquired Home-Style, the leading manufacturer of RV furniture and mattresses in the growing Northwest RV market. “During 2011, the acquisition of Home-Style should add about $60 to our average product content in towable RVs,” added Lippert. “Further, we expect the acquisition to be accretive to earnings this year, as we build on the experience and purchasing power we’ve gained in that product line since our acquisition of Seating Technology in 2008. With our debt-free balance sheet and significant credit availability, we have the capability to continue to invest in profitable growth opportunities.”
Drew’s net sales in the first quarter of 2011 were also aided by a 10% increase in industrywide wholesale shipments of travel trailer and fifth-wheel RVs, compared to the first quarter of 2010. The impact on Drew of this increase in wholesale RV shipments was partially offset by an estimated 14 percent decline in industry-wide wholesale shipments of manufactured homes.
“The long-term health of the RV industry depends on consumer demand for RVs,” added Zinn. “And retail sales of travel trailer and fifth-wheel RVs have been up year-over-year for 12 consecutive months through February 2011, the last month for which retail data is available. In anticipation of a strong spring and summer selling season, RV dealers across the U.S. and Canada added an aggregate of about 23,000 travel trailer and fifth-wheel RVs to their inventories between December 2010 and February 2011, somewhat more than the 20,000 units added during the same period a year earlier. Therefore, strength in retail sales of RVs during the spring and summer selling season is key to maintaining high production levels, and we are encouraged by recent reports of industry analysts which cite continued strength in retail sales, as well as improving credit conditions.”
While industrywide production of RVs has increased, production in the manufactured housing industry has declined, partly due to continued weakness in the housing market and difficult credit conditions. “Despite adverse conditions in the manufactured housing industry, Drew has remained profitable in this segment by carefully controlling overhead costs, improving production efficiencies, expanding our product line, and gaining market share for after-market replacement products,” said Scott Mereness, President of Lippert Components and Kinro. “We continue to see opportunity for growth in the manufactured housing industry over the next few years, as the real estate market begins to recover.”
“We are delighted that Drew’s sales and profits in the first quarter of 2011 were nearly back to the pre-recession results we reached in the first quarter of 2007, and our balance sheet is even stronger than it was then,” said Zinn. “Our pay-for-performance compensation plans incentivize management to focus on producing bottom-line results by controlling costs, improving operating efficiencies, and increasing our return on invested capital. However, we still face uncertainty due to various conditions beyond our control, such as increases in gas prices. Further, our raw material costs increased sharply since November 2010, adding $2 million to cost of sales in the first quarter of 2011. While the effect of these higher costs on Drew’s second quarter cost of sales will be greater than in the first quarter, we have worked with our customers to significantly reduce the impact of these incremental cost increases through sales price increases and increased market share, and we have implemented new production efficiencies.”
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 and volatile raw material costs, seasonal industry trends may be different than in prior years.