Drew Industries today (May 3) reported net income $7.3 million for the first quarter, a dramatic turnaround from the net loss of $36.7 million, for the same period 2009. Net sales in the 2010 first quarter were $146 million, more than double the $71 million of net sales in the first quarter of 2009.
This sales increase was largely the result of a 99 percent increase in industry-wide wholesale shipments of travel trailers and fifth-wheel RVs, partially offset by an estimated 3 percent decline in industry-wide production of manufactured homes, according to Drew. In addition, primarily as a result of new products, market share gains, and acquisitions, the company’s product content for travel trailers and fifth-wheel RVs in the 2010 first quarter increased substantially compared to the same period in 2009.
"We are very pleased with our first quarter results," said Fred Zinn, Drew's president and CEO, "and we are encouraged by the continuing high production levels throughout the RV industry. Sales continued to be strong in April 2010, reaching approximately $57 million, more than 75 percent above last April. On the other hand, we still face difficult challenges due to the impact on our industries of continuing tight credit markets and high unemployment, as well as very significant increases in our raw material costs. To help offset these higher raw material costs, we are in the process of implementing sales price increases with customers."
The company saw some particularly positive developments as it relates to RV segment sales, which are a major potion of the company’s overall business.
"RV segment net sales in the first quarter of 2010 increased 138 percent over the depressed levels in the 2009 first quarter," noted Joe Giordano, Drew's chief financial officer and treasurer. "Our sales increase was more than the 99 percent increase in industry-wide wholesale shipments, mostly because of an increase in our content per travel trailer and fifth-wheel RV produced during the 2010 first quarter compared to the first quarter of 2009, and, to a lesser extent, an increase in sales of components for utility trailers and mid-size buses. The increase in our RV content this quarter may have been partly due to an increase in inventories of our products held by our RV customers, which may not continue in future quarters. Our content per travel trailer and fifth-wheel RV for the 12 months ended March 2010, which is more stable than the quarterly content, reached approximately $2,200, compared to about $1,900 for the 12 months ended March 2009, an increase of 16 percent."
Meanwhile, Drew reported first quarter 2010 net sales of $22 million for its manufactured housing segment, or 15 percent of consolidated net sales. This represented a 17 percent increase over the $19 million in net sales reported in the comparable period in 2009, largely as a result of new products and increased sales of replacement components in the aftermarket.