Drew Announces Record Fourth Quarter and Year-End Results
10 February 1999
Drew Announces Record Fourth Quarter and Year-End Results
WHITE PLAINS, N.Y.--Feb. 10, 1999--Drew Industries Incorporated (AMEX:DW) today reported record net sales of $331 million in 1998, an increase of 59 percent from sales of $208 million in 1997. Drew supplies a wide variety of products to the manufactured housing industry and the RV industry. Sales of Drew's manufactured housing products segment increased 58 percent to $271 million in 1998, while sales of its RV products segment increased 60 percent to $60 million. Although these sales increases were primarily the result of acquisitions consummated during the past two years, sales by currently owned operations increased 14 percent in 1998. During 1998, the manufactured housing industry reported that shipments of new homes increased 5 percent over 1997, while the RV industry reported growth of 15 percent.Earnings per share (diluted) increased 13 percent to $1.34 in 1998 from $1.19 in 1997, while net income for 1998 increased 27 percent to $15.2 million. The acquisitions completed in the past two years were accretive to per share earnings for 1998.
Net sales for the 1998 fourth quarter of $80 million, increased 21 percent from $66 million during last year's fourth quarter. The increase was primarily the result of volume growth rather than acquisitions. Net income increased 17 percent to $3.5 million or $.31 per share (diluted) compared to net income of $3.0 million or $.28 per share (diluted) for last year's fourth quarter.
Drew's record results were achieved despite new competition experienced in our axle and tire refurbishing product line, which reduced its gross margin. Competition in this line of products is expected to continue throughout 1999.
"Drew's sales have more than tripled over the last three years, through acquisitions, product line extensions and geographic expansion. Drew's sales growth, excluding acquisitions, exceeded that achieved by the manufactured housing and RV industries. In 1999, we expect to continue to increase sales and improve production efficiencies, which should more than offset the pressure on margins in our refurbished axles and tires product line." said Leigh J. Abrams, President and CEO.
This press release contains certain statements, including the Company's plans regarding its operating strategy, its products and performance and its views of industry prospects, which could be construed to be forward looking statements within the meaning of the Securities Exchange Act of 1934. These statements reflect the Company's current views with respect to future plans, events and financial performance. The Company has identified certain risk factors which could cause actual plans and results to differ substantially from those included in the forward looking statements. These factors include pricing pressures due to competition, raw material costs (particularly aluminum, steel, vinyl and glass) and interest rates. In addition, general economic conditions may affect the retail sale of manufactured homes and RV's.
Drew, through its wholly-owned subsidiaries, Kinro, Lippert and Shoals, supplies a wide variety of components for manufactured homes and recreational vehicles. Manufactured products include windows, doors, chassis, chassis parts, roofs and new and refurbished axles. The Company also distributes new and refurbished tires. The Company operates 34 plants in 16 states.
DREW INDUSTRIES INCORPORATED
OPERATING RESULTS(1)
Quarter Ended Year Ended
December 31, December 31,
(In thousands, except 1998 1997 1998 1997
per share amounts)
Net sales $ 80,211 $66,354 $330,640 $208,365
Cost of sales 63,266 52,406 262,741 162,084
Gross profit 16,945 13,948 67,899 46,281
Selling, general and 10,359 8,098 38,957 24,520
administrative expenses
Operating profit 6,586 5,850 28,942 21,761
Interest expense 895 1,009 3,890 2,505
Income before income taxes 5,691 4,841 25,052 19,256
Provision for income taxes 2,185 1,813 9,835 7,262
Net income $ 3,506 $ 3,028 $ 15,217 $11,994
Net income per common $ .31 $ .29 $ 1.36 $ 1.22
share (basic)
Weighted average basic common
shares outstanding(2) 11,257 10,614 11,179 9,845
Net income per common share $ .31 $ .28 $ 1.34 $ 1.19
(diluted)
Weighted average diluted common
shares outstanding(2) 11,418 10,853 11,386 10,090
(1) Includes the operations of Pritt Axle and Tire from May 5, 1997,
Lippert Components, Inc. from October 7, 1997, and Coil Clip,
Inc. from December 16, 1998, the dates these assets and
businesses were acquired by Drew.
(2) Adjusted for two-for-one stock split effective March 1997.
DREW INDUSTRIES INCORPORATED
BALANCE SHEET INFORMATION
December 31,
(In thousands, except per share
amounts and ratios) 1998 1997
Current assets
Cash and short term investments $ 2,690 $ 1,028
Accounts receivable, net 13,559 9,181
Inventories 35,400 29,456
Prepaid expenses and other 6,032 6,610
current assets
Total current assets 57,681 46,275
Fixed assets, net 43,139 38,096
Goodwill, net 47,887 44,215
Other assets 5,718 1,763
Total assets $ 154,425 $ 130,349
Current liabilities
Current maturities of $ 779 $ 643
long-term obligations
Accounts payable and 25,272 21,623
accrued expenses
Total current liabilities 26,051 22,266
Long-term indebtedness 57,947 54,760
Other long-term obligations 1,665 1,370
Total liabilities 85,663 78,396
Total stockholders' equity 68,762 51,953
Total liabilities and $ 154,425 $ 130,349
stockholders' equity
Current ratio 2.2 2.1
Total debt to equity .85 1.07
Book value per share $ 6.06 $ 4.67