Drew Industries Inc., parent of RV industry suppliers Lippert Components and Kinro, reports record first-quarter sales and earnings because of the RV industry’s continued strength and manufactured-housing industry sales that improved for the first time in more than two years.
“It was a great quarter by any measure as both our RV and manufactured-housing segments ran well ahead of their industries,” said Leigh Abrams, Drew’s president and CEO.
The New York Stock Exchange-listed company’s total sales increased 34% in the three months ended March 31 to a record $108 million and its net income rose 83% to almost $6 million.
Drew’s RV-related sales revenue increased 46% during the period to $73.2 million and its RV-related operating profit increased 73% to $7.9 million.
“The first-quarter sales increase of $27 million (from $80.8 million during the first three months of 2003) was almost entirely due to increases in product shipments across the company’s product lines, rather than price increases,” Abrams said. “During the 2004 first quarter, Drew realized only $1 million in price increases to customers, which were imposed due to extraordinary increases in the cost of steel.”
Drew passed the higher steel prices on to its customers without an additional markup, Abrams added.
Meanwhile, Drew’s sales revenue increased as RV industry production volume rose. The firm responded to the production increase by adding new customers, which resulted in higher sales volume from recently introduced products such as slideout mechanisms and motorhome stabilizers.
“Various innovative products for RVs that were acquired in the July 2003 acquisition of LTM Manufacturing” also contributed to the sales-revenue gain, Abrams said.
“The huge cost increases for steel (which first appeared in January) and, to a lesser extent, aluminum will be reflected during the balance of 2004,” the company announced.
During the first quarter, Drew acquired “as much steel as possible to avoid some of the cost increases so that we could defer the price increases to our customers as long as possible.” Abrams said.
Drew supplies windows, doors, travel-trailer and fifth-wheel chassis and slideout mechanisms and power units primarily to the towables sector.