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Drew Industries Inc. posted a fourth-quarter net loss, aggravated by sharp declines in its core markets coupled with charges associated with facility closures and consolidations.
“In response to severe economic and industry conditions, we’ve taken very aggressive steps to reduce costs and maximize operating efficiencies,” said Fred Zinn, president and CEO of the White Plains, N.Y.-based company. “During the fourth quarter of 2008 and in early 2009, we closed seven of our 36 manufacturing facilities, and we’re reviewing plans to close additional facilities, while maintaining adequate production capacity to respond to the needs of our customers.”
Drew, parent to RV and manufactured housing suppliers Lippert Components Inc. and Kinro Inc., reported a fourth-quarter net loss of $9.2 million compared with net income of $6.5 million in the year-ago period. The company noted that the loss included charges for impairment of goodwill and executive retirement of $4.9 million after taxes, primarily related to its specialty trailer operations in California. Sales for period declined 44% to $77 million from $138 million.
For the year, Drew reported net income of $11.7 million, also including charges of $4.9 million, compared with earnings of $39.8 million the previous year while sales declined to $511 million from $669 million.
Drew noted that the fourth quarter was also impacted by higher raw material costs that reduced operating profit between $1.5 million and $2 million before taxes.
RV segment net sales were $47 million in the fourth quarter compared to the $102 million reported in the comparable period in 2007. For the year, RV sales fell to $368 million from $492 million.
“For the past six months, retail sales of RVs, while weak, have declined less rapidly than industrywide production, indicating that dealers have decreased their inventories, partly due to difficulty obtaining floorplan financing,” said Jason Lippert, chairman, president and CEO of Lippert and Kinro. “The situation is still very difficult, especially with consumer financing hard to come by. On a bright note, last week the Federal Reserve indicated that RV consumer and dealer floorplan loans would be included in the Term Asset-Backed Securities Loan Facility (TALF) under the Troubled Assets Relief Program (TARP). We are confident that the RV industry will improve, though we cannot predict the timing.”