Drew Industries Inc., parent of RV industry supplier firms Kinro and Lippert Components, believes its sales and earnings will improve for all of 2003, despite first-quarter earnings that will be below first-quarter 2002 earnings.
The company’s first-quarter earnings will be lower because of “increased softness in the manufactured housing market and higher steel prices compared with the prior-year first quarter,” said Drew President and CEO Leigh Abrams, who spoke during the Deutsche Bank Securities Basic Industries Conference in New York on Wednesday (April 2).
The settlement of the RV slideout systems patent infringement lawsuit involving Drew and Actuant Corp. also had a negative impact on Drew’s earnings in the first quarter of this year, Abrams added.
During the first quarter of 2002, Drew earned $6.7 million from operations, although it posted a $26.5 million net loss because it took a $30.1 million noncash charge during the first quarter of last year to account for changes in accounting principles.
“While our short-term outlook is cautious, we remain optimistic that we will post strong full-year results,” Abrams told the Deutsche Bank audience. “The current economic uncertainty is causing consumers to delay purchases, but we believe this is only a temporary pullback.
“Yet, even in these challenging market conditions, it is important to note that Drew remains profitable in both of our market segments (RVs and manufactured homes),” Abrams continued. “We are well positioned for the eventual upturn in the manufactured housing market, and we also continue to look for growth opportunities.”