Drew Industries Incorporated (NYSE: DW) a leading supplier of components for recreational vehicles (RV) and manufactured homes, recently reported net income of $7.2 million, or $0.33 per diluted share, for the third quarter ended September 30, 2009. Net income for the third quarter of 2008 was $2.6 million, or $0.12 per diluted share.
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The marked increase in 2009 third quarter net income was achieved despite a 2 percent decline in net sales, to $122 million. Market share gains enabled the Company to increase net sales in its RV Segment by 10 percent in the third quarter, better than the 5 percent increase in industry-wide wholesale shipments of travel trailers and fifth-wheel RVs, as compared to the third quarter of 2008. While our profits have not yet recovered to the record pace of earnings we achieved in 2007, we have made critical strides in controlling costs and increasing our content per RV and manufactured home." "RV industry production levels during the last several months have continued to exceed expectations, reportedly due to both a restocking of inventory by dealers, and improvement in retail demand," added Lippert. "While recent retail industry data is not available, we believe that dealers would likely not be restocking inventory so late in the season unless retail demand had improved. Further, many of our RV customers are expecting higher fourth quarter production levels than they did in the fourth quarter of 2008." "We're also very pleased with recent developments in our Manufactured Housing Segment," continued Lippert. "Over the summer, a supplier of manufactured housing windows and doors exited the market. Since then we have gained new window business of more than $7 million annually, and growing. In addition, with our recent purchase of door production equipment and inventory, we expect to be a significant supplier in the $25 million to $30 million market for manufactured housing doors. Half of this new potential is in aftermarket replacement doors for manufactured homes, and we will be aggressively pursuing new aftermarket business for both doors and windows." "Historically, the RV industry has been a leading indicator of broader economic recoveries," said Zinn. "Therefore, the recent improvements in this market are encouraging. A prolonged recovery in the RV market depends on the strength of retail demand, so we are pleased that the popularity of RVing remains high. As evidence, many campgrounds and RV parks have reported that occupancies this year have kept pace with 2008. The Recreation Vehicle Industry Association has projected a 29 percent increase in wholesale shipments of travel trailers and fifth-wheel RVs in 2010, and we continue to be "bullish" on the long-term future of the RV industry."
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