Slide 1: Drew Industries Incorporated
Drew Industries Incorporated (NYSE: DW) A Leading National Supplier of a Wide Variety of Components for RV's and Manufactured Homes
Slide 2: Forward-Looking Statements
e 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 po
Slide 3: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products — Components for RVs and Manufactured Homes $473 million of Sales for the 12 Months Ended March 31, 2010 RV Chassis, Slide-outs and Other Chassis Parts: $210 million MH Windows and Screens: $51 million MH Chassis and Chassis Parts: $24 million MH & RV Bath Products: ck $17 million Sp
Slide 4: Drew's Segments — LTM 3/2010
Drew's Segments — LTM 3/2010 Revenues - $473 million MH = $88 million 19% RV = $385 million 81% 90+% for towable RVs Segment Operating Profit - $41 million MH = $7 million 17% RV = $34 million 83%
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) J
Slide 6: Financial Performance
Financial Performance Sales and EBITDA EBITDA = RY Segment sales mm MH Segment sales == EBITDA) $100 Sales millions) $750 500 2001 2002 2003 2004 2005 2006 2007 2008 2009 LTM 3/10 (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 33}.
Slide 7: Financial Performance — Quarterly
Financial Performance — Quarterly (2) Sales and EBITDA (in millions) Sales EBITDA "= RV Segment sales == MH Segment sales —= EBITDA $30 $150 $20 $120 90 = $10 S60 sO $30 sO -$10 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q1 10 (1) EBITDA is operating profit plus depreciation, amortization and goodwill
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 ® These facility consolidations, along with reductions in salaried staff, changes in insurance, IT improvements, along with other cost sa
Slide 9: What Drew Has Done - Strengthened Balance Sheet
What Drew Has Done - Strengthened Balance Sheet 3/31/09 9/30/09 3/31/10 $- $52 $52
Slide 10: What Drew Has Done - Acquisitions and Growth
What Drew Has Done - Acquisitions and Growth | Po! 2008 — RV Entry Doors Hal $ 25 million 2008 — RV Furniture and Mattresses $150 million 2009 — QuickBite™ Coupler — ‘| $3-S5 million 2009 — Manufactured Housing (“MH”) Entry Doors $ 25 million 2009 — Focus on MH Replacement Windows = |_ $15- 25 milli
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 =
Slide 12: Content Per Towable RV
Content Per Towable RV 100% market share in existing products would yield $3,900 to $4,300 per Towable RV. 90+% of RV Segment sales are for Towable RVs $1,902 2001 2002 2003 2004 2005 2006 2007 2008 2009 LTM 3/10 RV Segment operating profit margin 8.7% 10.0% 116% 9.7% 9.6% 83% 122% 6.7% 5.0% 8.9% Se
Slide 13: Content Per Manufactured Home
Content Per Manufactured Home 100% market share in existing products would yield $3,600 to $4,000 per home $1,611 $1,489 $1,378 $1414 2001 2002 ©2003 +2004 «= 2005 «= 2006S 2007 «2008 «= 2009S LTM MH Segment 3/10 operating profit margin 10.4% 10.7% 10.5% 10.4% 10.3% 87% 81% 7.2% 38% 7.9% See Page 17
Slide 14: Acquisition Criteria
Acquisition Criteria ® Drewis 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
Slide 15: New Product Introductions
New Product Introductions Began Acquire COACH Began Production of STEP: production of axles for Gding elecinc entry doors for steps for motor towable RVs MH homes ACQUIRE LipPERT COMPONENTS: Began Infroduce RV Introduced RV production of slide-out suspension entry doors mechanisms products for RVs |
Slide 16: 2010 Acquisitions
2010 Acquisitions Schwintek - March 16, 2010: Cost = $20 million plus earnout New wall slide-out design: —Attached to the wall, exerting force near the top and the bottom of the wall —More space efficient; no under chassis space used —Significanily lighter —Minimizes need for user adjustments and re
Slide 17: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market @ 0) @ @ 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 mo
Slide 18: MH — Industry Production
MH — Industry Production Industry Drew Units (Units in thousands, Dollars in millions) Sales 400 w= Multi-Sections =m Single-Section =m Drew's MH Sales $250 225 350 %: $200 300 S175 250 $150 200 $125 100, 150 ® S75 400 $50 50 $25 . .— sO 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -1
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 ho
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 Ps : 57% of 2008 wholesale dollar sales, or $4.0 billion Travel trailer with Sport uility RV Retail cost $4,000 to $100,000 per expandable ends “Toy Hauler" unit.
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 th
Slide 22: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments ingustry 90+% of Drew's RV product sales are for Travel Trailers and 5'* Wheel RVs brew nits (Units in thousands, Sales in milions) Bates 500 $500 Travel Trailors & 5 Wheel Other Towables Motorhomes WM Drow's RV Sal em row's RY Sales ‘304.391 iss a ad = C] 293 300
Slide 23: Recent RV Industry Trends
Recent RV Industry Trends Travel Trailers and 5!" Wheels, Drew's primary RV market Year over Year Change 140% BRetal Wholesale 100% 60% 20% -20% 60% 100% 108 @208 308 408 tos 0209 309 409 2110 (1) (1) Q1 2010 retail through February 2010, the latest month for which data is available. =22-
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 $520 million as of May 12, 2010 2000 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 5/12/10 (December 31, unless noted) 24
Slide 26: Operating Results
Operating Results Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE Ad ed Ad ed 009 00 8 008 0 Operating Profit $660] $278 | $184 | -34% $37.1 i Net Income EBITDA® $ -18% $ 54.5 (1) Sales declines in 2008 and 2009 due to reductions in industry-wide shipments of RVs and Manufactured Hom
Slide 27: Results By Segment
Results By Segment Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE (Sin millions) ‘Adjusted Adjusted =: 2009 2009 @) vs 2008 RV Segment MH Segment Operating Profit | RV Segment MH Segment RV Segment (1) Sales declines due to reductions in industry-wide shipments of RVs and Manufactur
Slide 28: Operating Results
Operating Results Three Months Ended March 31, (Sin millions, except EPS) FINANCIAL PERFORMANCE 2010 vs Adjusted 2008 #68 S| : l L a = i He Adjusted Actual 2009 (1) 2010 ae 0.33 (1) Excludes certain “extra expenses" recorded by the Company during the three months ended March 31, 2009, resulting prim
Slide 29: Results By Segment
Results By Segment Three Months Ended March 31, FINANCIAL PERFORMANCE -($in millions) 2010 Adjusted tuc vs Adjusted 2009 (0) 2009 RV Segment (1) Excludes certain “extra expenses" recorded by the Company during the three months ended March 31, 2009, resulting primarily from plant closings, staff redu
Slide 30: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE Total debt $ 27 $2 $ - 2 Stockholders’ equity $259 $244 $252 Days sales in accounts receivable") | 5 days | 14 days | 19 days (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.
Slide 31: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/07 12/31/08) 12/31/09) 3/31/10 Re | ; i Return on Assets Total Debt to EBITDA" (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 33). (2) Excludes a goodwill impairment charge of $5.5 million ($3.4 million
Slide 32: Analyst Coverage
Analyst Coverage Avondale Partners, LLC Bret Jordan — (617) 314-0480 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
Slide 33: Thank you!
Thank you! For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com Joseph S. Giordano Ill Chief Financial Officer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com
Slide 34: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE [TM 2001 (2002 1003 2004 2005 (2006 2007 2008 2009 3/31/10 $ 553] $ 660 Depreciation & ‘Amortization peti? $ 17.6 EBITDA $ 287) $ 365 )$ 421)$ 533)$ 69.7) $71.0 |$ 835 Cc Expenditures
Slide 35: Reconciliation of Operating Profit to EBITDA - Quarterly
Reconciliation of Operating Profit fo EBITDA - Quarterly FINANCIAL PERFORMANCE (Sinmillions) = F _ _ ’ Q108 Q208 @308 @408 Ql0? @Q209 @Q309 @Q409 Ql10 $156.3) |$ 42 |$113 |$ 52 Depreciation . & i . x $ 51 1$ 42 |$ 51 [$ 41 Amortization EBITDA 9 $ (6.2) |$ 84 1$163 1$ 93
Slide 36: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE {Sin millions) Year Ended 12/31/08 Year Ended 12/31/09 UM Ended 3/31/10 imager fl feos maker a (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups, staff reductions an
Slide 37: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit to Actual FINANCIAL PERFORMANCE (Sin millions) Year Ended 12/31/08 Year Ended 12/31/09 LIM Ended 3/31/10 Actual Adjust) Adjusted Ac \Gjust djuste Actual’) “Adjust, Adjusted (1) During 2009 and 2008, the Company recorded “extra” expenses resulting p
Slide 38: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (Sin millions) Three Months Ended 3/31/09 Actual Adjust Adjusted Selling, General and Administrative Expenses | $ 17.3 2. $ 14. (1) During the three months ended March 31, 2009, the Company recorded “extra” expenses resulting primari
Slide 39: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit to Actual ($ in millions) FINANCIAL PERFORMANCE Three Months Ended 3/31/09 Actual Adjust ( Adjusted Operating Loss P vmseament [tails] al (1) During 2009, the Company recorded “extra” expenses resulting primarily from plant closings, staff reductio
Slide 40: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated (Sin millions) Net Sales: RV Segment MH Segment Operating Profit: RV Segment MH Segment Corporate Other non-segment items 12 Months Ended 2007 2008 2009 $ 491.8 $ 368.1 $ 312.5 176.8 142.4 85.3 FINANCIAL PERFORMANCE “31/0 -39-