CHICAGO Drew Industries
Inc.s profits narrowed in the first quarter as production
issues, higher material costs and expansions and
reorganizations bit into the bottom line.
But costs associated with
consolidating facilities and realigning production are expected
to decline in future quarters, the White Plains, N.Y.-based
supplier of components for the recreational vehicle (RV) and
manufactured homes markets said in commentary released with
earnings data May 3.
"We remain confident in our
ability to achieve further profit improvement, particularly
during the second half of 2013, as these costs return to more
normal levels," said Jason Lippert, chief executive officer of
Drew subsidiaries Lippert Components Inc. and Kinro.
Lippert will replace Drew
president and chief executive officer Fred Zinn, who plans to
retire May 10 (
amm.com, Feb. 13).
Drew posted net income of $8.37
million for the three months ended March 31, down 24.7 percent
from $11.12 million in the same period last year despite a
13-percent increase in sales to $252.59 million thanks to
strong results from Drews RV segment, which saw sales
jump 14.5 percent. RV sales accounted for 89 percent of
consolidated net sales, the company said.
RV production improved in April
after a slowdown in late March, Drew said. The company
estimates that wholesale shipments of travel trailers and
fifth-wheel RVs increased about 15 percent last month compared
with the same month last year, and retail demand for towable
RVs increased about 10 percent in the first quarter.
Drew said its content per travel
trailer and fifth-wheel RV increased 11 percent in the first
quarter from a year earlier.
RV dealers in the United States
and Canada have boosted inventory levels over the past six
months in anticipation of the seasonally stronger spring and
summer selling seasons, Drew said. But the company cautioned
that future RV production levels will depend on retails sales,
which it said are sensitive to overall economic conditions.