A special charge against earnings along with lower manufactured housing and RV sales resulted in supplier firm Drew Industries Inc. reporting a fourth quarter net loss and sharply lower earnings for the full year 2000.
The company lost $4.6 million during the fourth quarter, compared with a profit of $3.8 million earned a year earlier. During the full year 2000, its earnings declined 91% to $1.5 million, compared with $17.2 million in 1999.
The company’s sales declined 15% during the fourth quarter to $59 million and its full-year 2000 sales were down 11% to $287.8 million.
Drew posted a fourth quarter loss because it took a $6.9 million charge against earnings to write-off goodwill related to its axle and tire refurbishing business.
However, Drew, parent of RV industry supplier firms Lippert and Kinro, reported its RV sales increased nearly 30% during 2000. Its towable RV chassis business experienced an 80% increase in sales, although its operating profits declined 22% due to start-up costs and lower operating efficiencies at its new chassis assembly plants.
Competitive pricing pressures and higher labor costs also reduced profit levels at Lippert’s chassis operations.
Drew executives believe the company will be profitable during the first half of 2001, although profits will be below the levels reached during the first half of 2000.
They also believe lower interest rates will encourage RV dealers to replenish their inventories at faster rates.