Slide 1: Drew Industries Incorporated
EXHIBIT 99.1 Drew Industries Incorporated (NYSE: DW) A Leading National Supplier of a Wide Variety of Components for RVs and Manufactured Homes
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive posi
Slide 3: Drew's Products – Components for RVs and Manufactured Homes
Drew’s Products – Components for RVs and Manufactured Homes $546 Million of Sales for the12 Months Ended June 30, 2010 RV Chassis, Slide-outs and Other MH Windows and Screens: Chassis Parts: $57 million $243 million MH Chassis and Chassis Parts: $25 million MH & RV Bath Products: $18 million Special
Slide 4: Drew's Segments – LTM 6/2010
Drew’s Segments – LTM 6/2010 Revenues - $546 million MH = $96 million 18% RV = $450 million 82% 90+% for towable RVs Segment Operating Profit - $52 million MH = $9 million 17% RV = $43 million 83% -3-
Slide 5: Supplier to Industry Leaders
Supplier to Industry Leaders Outstanding customer service and national coverage, with 24 production facilities (approximately 2.3 million sq. ft.), make us a key partner with our customers, including: Forest River (owned by Berkshire Hathaway) Heartland Recreational Vehicles, LLC (privately owned) R
Slide 6: Financial Performance
Financial Performance Sales Sales and EBITDA(1) (in millions) EBITDA (2) (2) (1) RV Segment sales MH Segment sales EBITDA (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 35). (2) During 2005 & 2006, the Company experienced a significant increase in bu
Slide 7: Financial Performance – Quarterly
Financial Performance – Quarterly(2) Sales Sales and EBITDA(1) (in millions) EBITDA RV Segment sales MH Segment sales EBITDA(1) $174 $159 $151 $146 $122 $124 $101 $105 $77 $71 (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 36). (2) The Company’s oper
Slide 8: What Drew Has Done - Cost Reductions
What Drew Has Done - Cost Reductions Consolidated more than 35 production facilities into other existing facilities since 2006, improving operating efficiencies Cautiously added back $1 million of annualized fixed costs as demand improved. These facility consolidations, along with reductions in sala
Slide 9: What Drew Has Done - Strengthened Balance Sheet
What Drew Has Done - Strengthened Balance Sheet (1) The Company completed two acquisitions in the first quarter of 2010 which utilized $21 -8- million in cash (see page 15).
Slide 10: What Drew Has Done - Acquisitions and Growth
What Drew Has Done - Acquisitions and Growth -9-
Slide 11: Business Strategy
Business Strategy Maximize profitability and return on assets through Market share growth New product introductions Strategic acquisitions Operational efficiencies This strategy accomplished through Outstanding customer service Motivating management through strong profit incentives Low cost manufact
Slide 12: Content Per New Towable RV
Content Per New Towable RV - 90+% of RV Segment sales are for Travel Trailers and Fifth-Wheel RVs - 100% market share in existing products would yield $3,900 to $4,300 per Towable RV RV Segment operating profit margin 8.7% 10.0% 11.6% 9.7% 9.6% 8.3% 12.2% 6.7% 5.0% 9.6% At industry production levels
Slide 13: Content Per New Manufactured Home
Content Per New Manufactured Home 100% market share in existing products would yield $3,600 to $4,000 per home MH Segment operating profit margin 10.4% 10.7% 10.5% 10.4% 10.3% 8.7% 8.1% 7.2% 3.8% 9.5% See Page 17 for Industry Information - 12 -
Slide 14: Acquisition Criteria
Acquisition Criteria Drew is a disciplined and patient acquirer Gain market share or add products from other suppliers through asset acquisitions Complimentary to our core RV (including specialty trailers) and MH markets Seek products or technologies that we can expand through our nationwide custome
Slide 15: New Product Introductions
New Product Introductions ACQUIRE Began Began Production of ACQUIRE COACH LIPPERT STEP: production of axles for COMPONENTS: Adding electric steps entry doors for towable RVs MH Primarily steel chassis for motorhomes & parts for MH ACQUIRE Introduce RV ACQUIRE Began SCHWINTEK: slide-out Adding wall-s
Slide 16: 2010 Acquisitions
2010 Acquisitions Schwintek – March 16, 2010: Purchase price $20 million cash plus earn-out New wall slide-out design: Attached to the wall, exerting force near the top and the bottom of the wall as opposed to bottom only More space efficient; mechanism inside of wall rather than in the chassis spac
Slide 17: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market Cost per sq. ft. is $41 for MH vs. $93 for site-built homes Average retail price of $65,100 for a 1,595 sq. ft. MH 9 million manufactured homes across the U.S. Improved quality, appearance and safety Studies have shown that MHs built since 1995 sustain no more damage
Slide 18: MH – Industry Production
MH – Industry Production Industry Drew Units (Units in thousands, Dollars in millions) Sales Multi-Sections Single-Section Drew’s MH Sales 373 $221 349 $220 $196 $191 $185 $177 251 $154 $152 $142 $147 $134 65% 193 168 $96 147 $85 70% 131 131 117 75 % 96 78% 82 80% 74% 72% 50 52 68% 63% 63% 62% - 17
Slide 19: MH: Favorable Factors
MH: Favorable Factors INDUSTRY: Demand Demand for quality, affordable housing is likely to increase Baby boomers retiring in increasing numbers Dealer and manufacturer inventory levels are reasonable Financial Subprime market woes could help MH Pre-2003, MH was 20+% of Single Family housing starts I
Slide 20: RV Market
RV Market TOWABLE RVS (90+% of Drew’s RV Segment revenues) Travel trailer Fifth-wheel travel trailer 92% of industry 2009 unit sales 69% of 2009 wholesale dollar sales, or $2.8 billion Travel trailer with expandable ends Sport utility RV “Toy Hauler” Retail cost $4,000 to $100,000 per unit. Average
Slide 21: How RVs Are Used
How RVs Are Used Shift in U.S. culture toward more RV-related activities College and NFL football games NASCAR events More active, shorter, environmentally friendlier vacations More economical family vacations Typical RV family vacation is less expensive Many RVs are “parked” over the long-term as s
Slide 22: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments Industry Units 90+% of Drew’s RV product sales are for Travel Trailers and 5 th Wheel RVs Drew Sales (Units in thousands, Sales in millions) Travel Trailers & 5th Wheel Other Towables Motorhomes Drew’s RV Sales 391 384 370 353 321 311 321 293 300 257 237 230 166 (1
Slide 23: Recent RV Industry Trends
Recent RV Industry Trends Year over Travel Trailers and 5th Wheel RVs, Drew’s primary RV market Year Change 140% Retail Wholesale 99% 100% 88% 80% 60% 14% 20% 5% 6% -20% -8% -10% -21% -18% -27% -23% -33% -34% -38% -39% -40% -44% -60% -63% -61% -100% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210
Slide 24: The Future
The Future RV recovery from recession Demographic tailwind Exploring related industries Affordable housing -23-
Slide 25: Stock Price History
Stock Price History Drew has 22 million shares outstanding and a market capitalization of approximately $485 million as of August 2, 2010 (December 31, unless noted) - 24 -
Slide 26: Operating Results
Operating Results Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE (1) Sales declines in 2008 and 2009 due to reductions in industry-wide shipments of RVs and Manufactured Homes. (2) Excludes certain “extra expenses” recorded by the Company during 2009 and 2008, resulting primarily fr
Slide 27: Results By Segment
Results By Segment Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE (1) Sales declines due to reductions in industry-wide shipments of RVs and Manufactured Homes. (2) Excludes certain “extra expenses” recorded by the Company during 2009 and 2008, resulting primarily from plant closing
Slide 28: Operating Results
Operating Results Three Months Ended June 30, FINANCIAL PERFORMANCE (1) Excludes certain “extra expenses” recorded by the Company during the three months ended June 30, 2009, resulting primarily from plant closings and staff reductions. These expenses were largely due to the unprecedented conditions
Slide 29: Operating Results
Operating Results Six Months Ended June 30, FINANCIAL PERFORMANCE (1) Excludes certain “extra expenses” recorded by the Company during the six months ended June 30, 2009, resulting primarily from plant closings, staff reductions, increased bad debts, and obsolete inventory and tooling. These expense
Slide 30: Results By Segment
Results By Segment FINANCIAL Three Months Ended June 30 PERFORMANCE (1) Excludes certain “extra expenses” recorded by the Company during the three months ended June 30, 2009, resulting primarily from plant closings and staff reductions. These expenses were largely due to the unprecedented conditions
Slide 31: Results By Segment
Results By Segment FINANCIAL Six Months Ended June 30, PERFORMANCE (1) Excludes certain “extra expenses” recorded by the Company during the six months ended June 30, 2009, resulting primarily from plant closings, staff reductions, increased bad debts, and obsolete inventory and tooling. These expens
Slide 32: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE (1) Days sales in accounts receivable is the most recent month’s net sales divided by accounts receivable, net, at the end of the period. (2) Inventory turns is cost of goods sold for the last twelve months divided by average inventory for the last twelve months.
Slide 33: Financial Strength
Financial Strength FINANCIAL PERFORMANCE (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 35). (2) Excludes a goodwill impairment charge of $5.5 million ($3.4 million after tax). (3) Excludes a goodwill impairment charge of $45.0 million ($29.4 million
Slide 34: Analyst Coverage
Analyst Coverage Avondale Partners, LLC Bret Jordan – (617) 314-0487 CJS Securities Torin Eastburn – (914) 287-7600 Janney Montgomery Scott LLC Liam D. Burke – (202) 955-4305 Sidoti & Company, LLC Scott Stember – (212) 453-7017 Thompson Research Group Kathryn Thompson – (615) 891-6206 - 33 -
Slide 35: Thank you!
Thank you! For more information contact: Fredric M. Zinn Joseph S. Giordano III President and CEO Chief Financial Officer 914-428-9098 914-428-9098 fred@drewindustries.com joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com - 34 -
Slide 36: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE - 35 -
Slide 37: Reconciliation of Operating Profit to EBITDA - Quarterly
Reconciliation of Operating Profit to EBITDA - Quarterly FINANCIAL PERFORMANCE - 36 -
Slide 38: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups, staff reductions and relocations, increased bad debts and obsolete inventory and tooling. These expenses were larg
Slide 39: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups, staff reductions and relocations, increased bad debts and obsolete inventory and tooling. These expenses were larg
Slide 40: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit to Actual FINANCIAL PERFORMANCE (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups, staff reductions and relocations, increased bad debts and obsolete inventory and tooling. These e
Slide 41: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit to Actual FINANCIAL PERFORMANCE (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups, staff reductions and relocations, increased bad debts and obsolete inventory and tooling. These e
Slide 42: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE - 41 -