Drew Industries Inc., parent to Elkhart, Ind.-based Lippert Components Inc., today (May 9) reported an 80% increase in net income for its first quarter, ended March 31.
Net income totaled $36 million, or $1.45 per diluted share, for the first quarter versus net income of $20.1 million, or 82 per cents diluted share, a year ago.
Consolidated net sales in the first quarter increased to $423 million, 17% higher than the 2015 first quarter. Sales were enhanced through acquisitions in the past year as well as the July 2015 distribution and supply agreement for premium electronics with Furrion, which together added $25 million in net sales in the first quarter of 2016.
“Our net sales in the 2016 first quarter increased at a double digit year-over-year rate of 17% and by over $60 million over the first quarter of 2015,” said Jason Lippert, Drew CEO. “This growth reflects the current strength of our industry, as well as the continued execution of our plan to drive growth in our primary areas of focus. This includes growth from acquisitions, focusing on the needs of the aftermarket customer, new markets for core products and organic growth from innovative new products, enhancements to existing products and market share gains. Of particular note, our net sales attributable to the aftermarket and adjacent industries increased during the 2016 first quarter by a combined $28 million, or 46%.”
Drew’s content per travel trailer and fifth-wheel RV for the 12 months ended March 31 increased $64 to $2,978, compared to content per travel trailer and fifth-wheel RV of $2,914 the previous year while content per motorhome increased by $122, to $1,858.
“Thus far in 2016 we completed three acquisitions, adding approximately $57 million of expected annual sales with further sales and profit growth potential. Notably, this includes our second acquisition in the marine space and our first acquisition in Europe,” said Drew CFO David Smith.
The three operations acquired by Drew so far during 2016 include:
“¢ Project 2000 S.r.l. — An Italian manufacturer of innovative, space-saving bed lifts and retractable steps for RVs, with estimated annual sales of $12 million.
“¢ Flair Interiors — A Goshen, Ind., manufacturer of RV furniture, with estimated annual sales of $25 million.
“¢ Highwater Marine Furniture — An Elkhart marine furniture operation providing furniture solutions for Highwater Marine LLC, a manufacturer of pontoon boats. Estimated annual sales for the marine furniture operation were $20 million.
“Our operating profit in the first quarter of 2016 improved to $56 million, compared to $32 million in the first quarter of 2015,” noted Drew President Scott Mereness. “Accretive acquisitions completed over the last 12 months, significant growth in aftermarket sales and a focus on cost management and operational efficiencies, combined with strong industry growth and lower costs for certain key commodities, all contributed to our profit improvement.
“Starting in the second half of 2015, commodity prices for both aluminum and steel began to trend lower, resulting in favorable material costs compared to the first half of 2015. These commodity prices have historically been volatile and recently experienced some increases. We believe these first quarter results reflect the effective execution of the strategy we have set to profitably grow sales in key areas of our business and exercise disciplined cost management.”
Lippert concluded, “We have completed 10 acquisitions since the beginning of 2014 and a significant amount of structural work inside our business to be in a position to deliver these results. We plan to continue our focus on developing, engineering and building products that create value for our customers, as well as to continue improving our service delivery through customer support, so that each day we are the supplier of choice for the industries we serve. We are excited by what the future holds as we continue to innovate and expand with new products, new customers, new markets and new geographies.”