Drew Reports Second Quarter Results and Six Months Results
22 July 1999
Drew Reports Second Quarter Results and Six Months Results
WHITE PLAINS, N.Y.--July 22, 1999--Drew Industries Incorporated (AMEX: DW) today reported that net income for the quarter ended June 30, 1999 increased 16 percent to $5.1 million, or $.44 per share (diluted), from $4.4 million, or $.39 per share, in the second quarter last year.Net sales for the quarter were $89.2 million, a 2 percent increase over the second quarter last year. For the last 12 months, net income reached $16.8 million, or $1.47 per share, on sales of $343 million.
Operating profit of the manufactured housing products segment for the second quarter increased 4 percent to $8.3 million, on sales of $69 million, a 4 percent decline from last year's second quarter sales. The decline in sales resulted from continued competition in the Company's axle and tire refurbishing product line, as well as a slight decline in industry-wide shipments of manufactured homes. Sales of the Company's vinyl windows continued to expand.
Operating profit of the recreational vehicle products segment increased 87 percent to $2.4 million for the second quarter, on a 30 percent increase in sales to $21 million, due to rapid expansion of the recreational vehicle chassis product line. Margins at the Company's new recreational vehicle chassis facilities exceeded margins at older facilities.
Net income for the six months ended June 30, 1999 increased 22 percent to $9.0 million, or $.79 per share, from $7.4 million, or $.65 per share in the comparable period last year. Net sales for the six month period increased 8 percent to $175 million. Operating profit of the manufactured housing products segment increased 7 percent to $15.3 million for the six month period, on a 2 percent increase in sales to $136 million. Operating profit of the recreational vehicle products segment more than doubled to $4.4 million on a 36 percent increase in sales to $39 million.
"The start-up of operations in our new RV chassis facilities has gone extremely well, as operating efficiencies during this period have exceeded our expectations," said Leigh J. Abrams, President and CEO. "We expect to continue the expansion of our RV chassis product line, and anticipate increases in sales of vinyl windows and chassis in the manufactured housing segment. Although we have experienced the effects of a slow down in wholesale sales of manufactured homes over the past few months, we believe that the manufactured housing industry will grow in the long-term. We also expect that anticipated increases in our market share will soften the impact of any near-term decline in industry-wide sales of manufactured homes," said Mr. Abrams.
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.
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 are described in the Company's most recent Form 10-Q.
DREW INDUSTRIES INCORPORATED
OPERATING RESULTS
Six Months Ended Quarter Ended Last
June 30, June 30, Twelve
(In thousands, except
per share amounts) 1999 1998 1999 1998 Months
---- ---- ---- ---- ------
Net sales $ 75,096 $ 162,506 $ 89,209 $ 87,325 $ 343,230
Cost of sales 135,474 129,500 67,860 69,399 268,715
---------- --------- -------- -------- ---------
Gross profit 39,622 33,006 21,349 17,926 74,515
Selling, general
and administrative
expenses 22,662 18,619 11,945 9,650 43,000
---------- --------- -------- -------- ---------
Operating profit 16,960 14,387 9,404 8,276 31,515
Interest expense 1,860 2,062 857 987 3,688
---------- --------- -------- -------- ---------
Income before
income taxes 15,100 12,325 8,547 7,289 27,827
Provision for
income taxes 6,061 4,894 3,450 2,894 11,002
---------- --------- -------- -------- ---------
Net income $ 9,039 $ 7,431 $ 5,097 $ 4,395 $ 16,825
========== ========= ======== ======== =========
Net income
per common
share:
Basic $ .79 $ .67 $ .44 $ .39 $ 1.49
========== ======== ======== ======== ========
Diluted $ .79 $ .65 $ .44 $ .39 $ 1.47
========== ======== ======== ======== ========
Weighted average
common shares
outstanding:
Basic 11,424 11,141 11,468 11,147 11,316
========== ======== ======= ======= ========
Diluted 11,475 11,374 11,490 11,395 11,450
========== ======== ======= ======= ========
Depreciation and
amortization $ 3,954 $ 3,111 $ 1,998 $ 1,616 $ 7,679
========== ======== ======= ======== ========
BALANCE SHEET INFORMATION
(In thousands, except per share amounts and ratios)
Current assets
Cash and short term investments $ 6,685 $ 3,445
Accounts receivable, net 17,757 17,408
Inventories 30,614 29,537
Prepaid expenses and other current assets 4,653 4,050
---------- ----------
Total current assets 59,709 54,440
Fixed assets, net 45,928 41,247
Goodwill, net 46,987 43,426
Other assets 5,214 5,811
---------- ----------
Total assets $ 157,838 $ 144,924
========== ==========
Current liabilities
Current maturities of long-term
obligations $ 794 $ 794
Accounts payable and accrued expenses 32,266 29,854
---------- ----------
Total current liabilities 33,060 30,648
Long-term indebtedness 45,547 53,364
Other long-term obligations 1,665 1,370
---------- ----------
Total liabilities 80,272 85,382
Total stockholders' equity 77,566 59,542
---------- ----------
Total liabilities and
stockholders' equity $ 157,838 $ 144,924
========== ==========
Current ratio 1.8 1.8
Total debt to equity 0.6 0.9
Book value per share $ 6.77 $ 5.34