Drew Industries Reports Fourth Quarter And 2012 Full-Year Results

      Drew Industries Reports Fourth Quarter And 2012 Full-Year Results

PR Newswire

WHITE PLAINS, N.Y., Feb. 20, 2013

WHITE PLAINS, N.Y., Feb. 20, 2013 /PRNewswire/ --Drew Industries Incorporated
(NYSE: DW), a leading supplier of components for recreational vehicles (RVs)
and manufactured homes, today reported net income of $4.7 million, or $0.21
per diluted share, for the fourth quarter ended December 31, 2012, net of a
previously announced after-tax charge of $0.9 million in connection with
executive succession. Excluding this charge, net income would have been $5.7
million, or $0.25 per diluted share, an increase of 39 percent compared to net
income of $4.1 million, or $0.18 per diluted share, in the fourth quarter of
2011.

Net sales in the 2012 fourth quarter increased to $200 million, 25 percent
higher than last year, as a result of a 31 percent sales increase by Drew's RV
Segment. This segment accounted for 86 percent of consolidated net sales this
quarter. RV Segment sales growth was largely due to a 21 percent increase in
industry-wide wholesale shipments of travel trailer and fifth-wheel RVs,
Drew's primary RV market. Sales of recently introduced RV products and
motorhome components also increased, as did sales to adjacent industries.

In January 2013, consolidated net sales reached approximately $85 million, 28
percent higher than in January 2012, as a result of continued solid growth in
the Company's RV Segment. Drew estimates that industry-wide production of
towable RVs increased about 20 percent in January 2013.

Retail demand for towable RVs has reportedly remained strong, as evidenced by
favorable reports from recent retail RV trade shows. Most industry analysts
report that dealer inventories of towable RVs are in-line with retail demand.
Future RV industry-wide production levels will depend on the strength of
retail sales. Drew estimates that January 2013 industry-wide production of
manufactured homes was approximately the same as in January 2012. 

The Company's content per travel trailer and fifth-wheel RV in 2012 increased
by $365 to $2,713, or 16 percent greater than in 2011. Content per motorhome
RV reached $1,071 in 2012, an increase of 68 percent over 2011. The Company's
content per manufactured home declined 2 percent from the year-earlier period.
The change in content per unit is a measure of the change in Drew's overall
market share across its existing product lines.

"Our solid sales gains, along with favorable RV industry fundamentals, are
encouraging," said Fred Zinn, Drew's President and CEO. "In the 2012 fourth
quarter our operating profit margin before executive succession charges, while
higher than last year, did not improve enough. Labor efficiencies improved at
several key production facilities. However, this improvement was offset by the
cost of implementing facility consolidations and improving production
processes, as well as refinements to the calculation of our warranty accrual,
and other transitory cost increases. We are confident in our ability to
achieve profit improvement, particularly in the second half of 2013, as these
costs return to more normal levels, and as the bottom-line impact of the
efficiency improvements that have been implemented gains momentum."

"The steps we have taken are enabling our production lines to be more
efficient," said Jason Lippert, CEO of Drew's subsidiaries, Lippert Components
and Kinro. "During the quarter we consolidated and realigned production of
several key product lines, including furniture, manufactured housing and RV
windows, chassis and thermoforming, and continued to benefit from and expand
our lean manufacturing initiatives. While these efforts cost us $2 million in
the 2012 fourth quarter, they are continuing to make us more efficient. Also,
in the 2012 fourth quarter we retained more of our seasonal workforce than
typical, ending the year with 5,200 employees. We spent the last 12 months
building and training our workforce, so that we can minimize hiring and
training costs as demand ramps up in early 2013."

"As previously announced, Fred Zinn will retire as CEO in May, and Jason
Lippert will become Drew's CEO, and Scott Mereness will become President and
COO," said Leigh Abrams, Chairman of Drew's Board of Directors. "Although Fred
Zinn will be missed, we have prepared well and Jason and Scott have been
essential to our growth and success for more than a decade, and they both have
outstanding reputations in the RV and manufactured housing industries. As they
assume these expanded roles, we are confident that they, and the great team
they've built, will successfully lead Drew for years to come."

2012 Full-Year Results

Net sales for the year ended December 31, 2012 increased by $220 million, to a
record $901 million. Acquisitions added approximately $60 million to 2012 net
sales. Sales growth in new markets and new products were also key factors
enabling Drew's sales to exceed industry growth rates. Key additions to the
Company's RV product lines in recent years include advanced leveling devices,
in-wall slide-out systems, and awnings. Together, net sales of these products
reached $65 million in 2012.

In 2012, Drew continued to grow outside its core RV and manufactured housing
markets, with aggregate net sales of components for adjacent industries
increasing 68 percent, to $96 million, and aftermarket net sales increasing 14
percent to $35 million in 2012. Together, these markets now account for nearly
15 percent of consolidated net sales, an increase from 10 percent of
consolidated net sales in 2010.

For the full year 2012, Drew's net income increased to $37.3 million, or $1.64
per diluted share. Excluding charges related to executive succession, net
income would have been $38.3 million in 2012, or $1.68 per diluted share, up
from net income of $30.1 million, or $1.34 per diluted share in 2011.

In December 2012, the Company paid a special dividend of $2.00 per share,
aggregating $45 million. After the payment of that dividend, the Company had
$10 million in cash and no debt at December 31, 2012, and had almost $200
million in unused credit lines. Return on equity for the 12 months ended
December 31, 2012 improved to 12.7 percent, from 11.4 percent in the
year-earlier period.

Conference Call & Webcast
Drew will provide an online, real-time webcast of its fourth quarter 2012
earnings conference call on the Company's website, www.drewindustries.com, on
Wednesday, February 20, 2013 at 11:00 a.m. Eastern time. The call can also be
accessed at www.companyboardroom.com.

Institutional investors can access the call via the password-protected site,
StreetEvents (www.streetevents.com). A replay of the call will be available by
telephone by dialing (888) 286-8010 and referencing access code 61963755. A
replay of the webcast will also be available on Drew's website.

About Drew
Drew, through its wholly-owned subsidiaries, Kinro and Lippert Components,
supplies a broad array of components for RVs, manufactured homes, modular
housing, truck caps and buses, and trailers used to haul boats, livestock,
equipment and other cargo. Currently, from 30 factories located throughout the
United States, Drew serves most major national manufacturers of RVs and
manufactured homes. Additional information about Drew and its products can be
found at www.drewindustries.com.

Forward-Looking Statements
This press release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect
to financial condition, results of operations, business strategies, operating
efficiencies or synergies, competitive position, growth opportunities for
existing products, acquisitions, plans and objectives of management, markets
for the Company's Common Stock and other matters. Statements in this press
release that are not historical facts are "forward-looking statements" for the
purpose of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934 (the "Exchange Act") and Section 27A of the Securities Act of 1933
(the "Securities Act").

Forward-looking statements, including, without limitation, those relating to
our future business prospects, net sales, expenses and income (loss), cash
flow, and financial condition, whenever they occur in this press release are
necessarily estimates reflecting the best judgment of our senior management at
the time such statements were made, and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by forward-looking statements. The Company does not undertake to
update forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made. You should
consider forward-looking statements, therefore, in light of various important
factors, including those set forth in this press release, and in our
subsequent filings with the Securities and Exchange Commission (the "SEC").

There are a number of factors, many of which are beyond the Company's control,
which could cause actual results and events to differ materially from those
described in the forward-looking statements. These factors include, in
addition to other matters described in this press release, pricing pressures
due to domestic and foreign competition, costs and availability of raw
materials (particularly steel, steel-based components, and aluminum) and other
components, availability of credit for financing the retail and wholesale
purchase of products for which we sell our components, availability and costs
of labor, inventory levels of retail dealers and manufacturers, levels of
repossessed manufactured homes and RVs, changes in zoning regulations for
manufactured homes, sales declines in the industries to which we sell our
products, the financial condition of our customers, the financial condition of
retail dealers of products for which we sell our components, retention and
concentration of significant customers, the successful integration of
acquisitions, realization of efficiency improvements, interest rates, oil and
gasoline prices, and the outcome of litigation. In addition, international,
national and regional economic conditions and consumer confidence affect the
retail sale of products for which we sell our components.

DREW INDUSTRIES INCORPORATED
OPERATING RESULTS
(unaudited)
                                    Twelve Months Ended   Three Months Ended
                                    December 31,          December 31,
(In thousands, except per share     2012       2011       2012       2011
amounts)
Net sales                           $        $        $        $  
                                    901,123    681,166    200,234    159,596
Cost of sales                       732,464    541,445    164,363    131,814
Gross profit                        168,659    139,721    35,871     27,782
Selling, general and administrative 109,071    91,173     27,572     21,890
expenses
Executive succession                1,456      -          1,456      -
Operating profit                    58,132     48,548     6,843      5,892
Interest expense, net               330        292        84         95
Income before income taxes          57,802     48,256     6,759      5,797
Provision for income taxes          20,462     18,197     2,014      1,709
Net income                          $       $       $      $    
                                    37,340     30,059     4,745      4,088
Net income per common share:
Basic                               $      $      $      $    
                                    1.66      1.35      0.21      0.18
Diluted                             $      $      $      $    
                                    1.64      1.34      0.21      0.18
Weighted average common shares
outstanding:
Basic                               22,558     22,267     22,712     22,309
Diluted                             22,828     22,444     23,138     22,495
Depreciation and amortization       $       $       $      $    
                                    25,665     20,522     6,454      5,453
Capital expenditures                $       $       $       $    
                                    32,026     24,317     10,016     6,596

DREW INDUSTRIES INCORPORATED
SEGMENT RESULTS
(unaudited)
                                    Twelve Months Ended  Three Months Ended
                                    December 31,         December 31,
(In thousands)                      2012       2011      2012       2011
Net sales:
RV Segment:
RV OEMs:
Travel trailers and fifth-wheels    $        $       $        $  
                                    658,961    499,852   144,308    112,106
Motorhomes                          30,196     15,828    7,628      3,584
RV aftermarket                      19,119     14,660    4,405      2,491
Adjacent industries                 72,649     40,303    15,641     12,806
Total RV Segment net sales          780,925    570,643   171,982    130,987
MH Segment:
Manufactured housing OEMs           80,392     77,087    18,714     20,975
Manufactured housing aftermarket    16,060     16,184    3,330      3,491
Adjacent industries                 23,746     17,252    6,208      4,143
Total MH Segment net sales          120,198    110,523   28,252     28,609
Total net sales                     $        $       $        $  
                                    901,123    681,166   200,234    159,596
Operating Profit:
RV Segment                          $       $      $      $    
                                    55,120     45,715    7,911      5,345
MH Segment                          13,335     11,980    2,393      3,017
Total segment operating profit      68,455     57,695    10,304     8,362
Corporate                           (8,508)    (7,483)   (1,995)    (1,637)
Executive succession                (1,456)    -         (1,456)    -
Accretion related to contingent     (1,756)    (1,886)   (406)      (492)
consideration
Other non-segment items             1,397      222       396        (341)
Total operating profit              $       $      $      $    
                                    58,132     48,548    6,843      5,892

DREW INDUSTRIES INCORPORATED
BALANCE SHEET INFORMATION
(unaudited)
                                             December 31,
(In thousands)                               2012             2011
Current Assets
Cash and cash equivalents                    $     9,939  $     6,584
Accounts receivable, net                     21,846           22,620
Inventories                                  97,367           92,052
Deferred taxes                               10,073           10,125
Prepaid expenses and other current assets    14,798           6,187
Total current assets                         154,023          137,568
Fixed assets, net                            107,936          95,050
Goodwill                                     21,177           20,499
Other intangible assets, net                 69,218           79,059
Deferred taxes                               14,993           14,496
Other assets                                 6,521            4,411
Total assets                                 $   373,868    $   351,083
Current liabilities
Accounts payable, trade                      $    21,725   $    15,742
Accrued expenses and other current           48,055           36,169
liabilities
Total current liabilities                    69,780           51,911
Other long-term liabilities                  19,843           21,876
Total liabilities                            89,623           73,787
Total stockholders' equity                   284,245          277,296
Total liabilities and stockholders' equity   $   373,868    $   351,083

DREW INDUSTRIES INCORPORATED
SUMMARY OF CASH FLOWS
(unaudited)
                                              Twelve Months Ended
                                              December 31,
(In thousands)                                2012             2011
Cash flows from operating activities:
Net income                                    $    37,340   $    30,059
Adjustments to reconcile net income to cash
flows provided by operating activities:
Depreciation and amortization                 25,665           20,522
Stock-based compensation expense              6,318            4,587
Deferred taxes                                (533)            821
Other non-cash items                          654              1,570
Changes in assets and liabilities, net of
acquisitions of businesses:
Accounts receivable, net                      774              (5,007)
Inventories                                   (4,727)          (14,738)
Prepaid expenses and other assets             (10,738)         (1,848)
Accounts payable                              5,983            4,391
Accrued expenses and other liabilities        11,953           (3,526)
Net cash flows provided by operating          72,689           36,831
activities
Cash flows from investing activities:
Capital expenditures                          (32,026)         (24,317)
Acquisitions of businesses                    (1,473)          (50,302)
Proceeds from maturity of short-term          -                5,000
investments
Proceeds from sales of fixed assets           5,420            1,338
Other investing activities                    (119)            (843)
Net cash flows used for investing activities  (28,198)         (69,124)
Cash flows from financing activities:
Exercise of stock options and deferred stock  8,217            1,188
units
Proceeds from line of credit borrowings       52,227           130,500
Repayments under line of credit borrowings    (52,227)         (130,500)
Payment of contingent consideration related   (4,315)          (402)
to acquisitions
Payment of special dividend                   (45,038)         -
Purchase of treasury stock                    -                (626)
Other financing activities                    -                (163)
Net cash flows used for financing activities  (41,136)         (3)
Net increase (decrease) in cash               3,355            (32,296)
Cash and cash equivalents at beginning of     6,584            38,880
period
Cash and cash equivalents at end of period    $     9,939  $     6,584

DREW INDUSTRIES INCORPORATED
SUPPLEMENTARY INFORMATION
(unaudited)
                       Twelve Months Ended            Three Months Ended
                       December 31,                   December 31,
                       2012                2011       2012           2011
Industry Data^(1)(in
thousands of units):
Industry Wholesale
Production:
Travel trailer and     242.9               212.9      54.7           45.2
fifth-wheel RVs
Motorhome RVs          28.2                24.8       6.9            4.8
Manufactured homes     54.9                51.6       13.0           14.5
Industry Retail Sales:
Travel trailer and     222.5      ^(2)     206.0      32.3     ^(2)  30.1
fifth-wheel RVs
Impact on dealer       20.4       ^(2)     6.9        22.4     ^(2)  15.1
inventories
                                                      Twelve Months Ended
                                                      December 31,
                                                      2012           2011
Drew Content Per
Industry Unit
Produced:
Travel trailer and fifth-wheel RV                     $           $   
                                                       2,713         2,348
Motorhome RV                                          $           $   
                                                       1,071          638
Manufactured home                                     $           $   
                                                       1,465         1,493
                                                      December 31,
                                                      2012           2011
Balance Sheet Data:
Current ratio                                         2.2            2.7
Total indebtedness to stockholders' equity            -              -
Days sales in accounts receivable                     14.3           17.1
Inventory turns, based on last twelve months          7.8            6.3
                                                      2013
Estimated Full Year
Data:
Capital expenditures                                  $ 25 - 30 million
Depreciation and amortization                         $ 24 - 26 million
Stock-based compensation expense                      $ 7 - 8 million
Annual tax rate                                       37% - 38%
(1) Industry wholesale production data for travel trailer and fifth-wheel RVs
and motorhome RVs provided by the Recreation Vehicle Industry Association
("RVIA"). Industry wholesale production data for manufactured homes provided
by the Institute for Building Technology and Safety ("IBTS"). Industry
retail sales data provided by Statistical Surveys, Inc.
(2) December retail sales data for RVs has not been published yet, therefore
2012 retail data for RVs includes an estimate for December 2012 retail units.



SOURCE Drew Industries Incorporated

Website: http://www.drewindustries.com
Contact: Fred Zinn, President and CEO, Phone: +1-914-428-9098 Fax:
+1-914-428-4581, E Mail: Drew@drewindustries.com