Slide 1: Drew Industries Incorporated
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” with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of managemen
Slide 3: Section I: Overview
SECTION | Overview
Slide 4: Drew's Segments — LTM 12/2013
Drew's Segments — LTM 12/2013 Net Sales - $1,016 million MH = $122 million 12% RV = $894 million 88% Segment Operating Profit - $80 million iH = $12 million 15% RV = $68 million 85%
Slide 5: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products — Components for RVs and Manufactured Homes Net Sales of $1,016 Million for the 12 Months Ended December 31, 2013 RV Furniture ond Mattresses: MH Chassis and $100 million Chassis Parts: $38 million RV Chassis, Slide-outs and Other Chassis Parts: $493 million Other Products: $64 milli
Slide 6: Financial Performance
Financial Performance Net Sales and EBITDA \) (in mittionsy Net Sales = RV Segment net salesmem MH Segment net sales == EBITDA EBITDA $1,200 $120 $105 $1,000 ‘$90 $800 $75 ‘$600 ‘$60 ‘$45 $400 $30 $200 $15 80 so 2001 2002 2003-2004 ©2005 2008-«« 2007 «2008 2009 20102011 2012-2018 (1) EBITDA is opera
Slide 7: Management Team
Management Team © Jason Lippert, CEO > 15+ years with Drew ® Scott Mereness, President > 15+ years with Drew © Joe Giordano, CFO & Treasurer > 10+ years with Drew
Slide 8: Section II: RV Industry
SECTION II RV Industry
Slide 9: RV Market
RV Market TOWABLE RVS (Approximately 81% of Drew’s RV Segment net sales) Travel trailer Fifth-wheel travel trailer 4 So = Travel trailer with Sport utility RV expandable ends “Toy Hauler” Folding camping trailer Truck camper 88% of industry 2013 unit sales 66% of 2012 wholesale dollar sales, or $7.0
Slide 10: Why We are Optimistic
Why We are Optimistic ® More economical family vacations > Typical RV family vacation is 23 to 59 percent less expensive for a family of four © Shift in U.S. culture toward more RV-related activities > College and NFL football games > NASCAR events > More active, shorter, “greener”, & family oriente
Slide 11: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shioments Industry Approximately 81% of Drew's RV Segment net sales are for Travel Trailer and 5" Wheel RVs Units 500 (industry units in thousands) Notorhomes Other Towables 400 Travel Trailers & 5th Wheels 20122013 35% 23% 83% RV Share 63% 87% 65% 73% 75% 74% 78% 83% 82% 85
Slide 12: RV Industry Trends
Units Dealer Inventory Change RV Industry Trends Travel Trailer and 5'" Wheel RVs, Drew's primary RV market (Units in thousands) lM Wholesale mmm Retail 268.0 253.4 242.9 226.4 2129 2zz8 2 199.2 185.4 186.0 164.3 138.3 2008 2009 2010 2011 2012 2013 (41.3) (28.0) 13.2 69 204 14.6 “ue
Slide 13: Demographics
Demographics (RV CONSUMER DEMOGRAPHIC PROFILE — 2011) Number of U.S. households that own an RV 7.9 million 8.9 million Household ownership rates of RVs 8.0 % 8.5% Average age of all RVs 12.7 years 14.2 years pada ee consumers have owned their 6,6 years 8.4 years Age of typical RV owner 49 years 48 y
Slide 14: Section III: Our RV Segment
SECTION III Our RV Segment
Slide 15: RVs - Industry Wholesale Shipments (Compared to Drew's Performance)
RVs - Industry Wholesale Shipments (Compared to Drew's Performance) Industry Approximately 81% of Drew's RV Segment net sales are for Travel Trailer and 5" Wheel RVs Drew’s Units Net Sales (industry units in thousands, net sales in millions) 800 $894 $900 (Wotorhomes 700 $800 Other Towables tm Trave
Slide 16: Content Per New Towable RV
Content Per New Towable RV - Approximately 81% of RV Segment net sales are for Travel Trailer and Fifth-Wheel RVs - 100% market share in existing products would yield approximately $5,000 per Towable RV - Growth in RV “features” drives content increases 2001 2002 2003 2004 2005 2006 2007 2008 2009 2
Slide 17: Content Per New Motorhome RV
Content Per New Motorhome RV - Approximately 5% of RV Segment net sales are for Motorized RVs - 100% market share in existing products would yield approximately $5,000 per Motorized RV $1,227 $1,252 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 RV Segment operating profitmargin 8.2% 8.5% 7.4% 11
Slide 18: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 12/13- $894 Million $93 million $25 miljon 10% $48 million 4% ae LTM 12/12- $781 Million $74 million $19 million 9% $35 million, 3% 4% BTravel Trailer & Fifth-Wheel - OEM = Motorhome - OEM mAftermarket m Adjacent Industries
Slide 19: Section IV: Manufactured Housing Industry
SECTION IV Manufactured Housing Industry
Slide 20: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market 0} Cost per sq. ft. is $41 for MH vs. $83 for site-built homes Average retail price of $60,600 for a 1,470 sq. ft. MH 9 million manufactured homes across the U.S. Improved quality, appearance and safety Studies have shown MHs built since 1995 sustain no more damage i
Slide 21: Manufactured Housing — Industry Production
Manufactured Housing — Industry Production Industry (Industry units in thousands) Units 250 === Multi-Sections === Single-Section 2001 2002-2008» 2004 2005 ©» 2008-2007 «2008 )« 2008 2010-2011 2012-2013 MH Share 75% 78% 79% 74% ©«—««B5% «72% ©—««GB%H_-««GIN%H_««GI%H_« HHH «81% 53% 53% Held by Mult-S
Slide 22: 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 —Availability of financing is still an issue, as is the weak overall housing market DREW: ® Dre
Slide 23: Section V: Our Manufactured Housing Segment
SECTION V Our Manufactured Housing Segment
Slide 24: Manufactured Housing — Industry Production (Compared to Drew's Performance)
M MH Shere anufactured Housing — Industry Production (Compared to Drew's Performance) Industry Drew’s Units Net Sales 250 === Multi-Sections == Single-Section mmm Drew's MH net sales $250 (industry units in thousands, net sales in millions) $220 $225 $200 $175 $160 $128 $100 $75 $50 $25 80 2001 2002
Slide 25: Content Per New Manufactured Home
Content Per New Manufactured Home - 100% market share in existing products would yield approximately $4,500 per home - Affordability of the homes constrains content growth $1,666 $1,450 $1,429 81.493 $1,465 $1,368 1,000 $1,307 $1,281 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 S
Slide 26: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 12/13- $122 Million LTM 12/12 - $120 Million OEM Aftermarket m Adjacent industries
Slide 27: Section VI: Strategy
SECTION VI Strategy
Slide 28: Business Strategy
Business Strategy © Maximize profitability and return on assets through = New product introductions = Market share growth = Operational efficiencies = Diversification to related industries = Strategic acquisitions ® This strategy accomplished through = Outstanding customer service = Motivating manag
Slide 29: Expanding Our Growth Potential
Expanding Our Growth Potential $ 2011 — Newly Developed Line of RV Awnings 175 million 2011 — Doors and Windows for Truck Caps, Horse Trailers and Buses $ 100 million 2011 — Cross Sell Existing Products to Boat, Livestock, Equipment, Utility and Cargo Trailer | $ 400 million Markets, as well as Mid-
Slide 30: Acquisition Criteria
Acquisition Criteria © Drew is a disciplined and patient acquirer © Gain market share or add products from other suppliers through acquisitions © Seek products or technologies that we can expand through our nationwide customer base and factory network © Become an even more extensive supplier to our
Slide 31: New Products and Acquisitions
New Products and Acquisitions ACQUIRE TRAIL AIR: Adding RV suspension products ACQUIRE COACH STEP: Adding electric steps for motorhomes ACQUIRE HAPPUAC: Adding patented bed lifts for RVs ACQUIRE EXTREME ENGINEERING: Expanding specialty trailer product line Began production of entry doors for RVs ACQ
Slide 32: New Products and Acquisitions
New Products and Acquisitions ACQUIRE AcquirE M&M Midstates: FABRICATORS: Adding Tool & Expanding chassis Die and customization operation automation capabilities Acquire M-TEC: Adding components for RVs and mobile office units Acquire EA Introduce TECHNOLOGIES: Introduce RVLOCK remote Expanding towa
Slide 33: 2012 - 2014 Acquisitions
2012 - 2014 Acquisitions Purchase orical ($ in millions) Price Sales Description Amerimax $ 175 Lee Midstates $ 1.5|$ 2 | Seale Fortress $s |Saee) |eeere Innovative Design Solutions") ME ooOW MIO) sucovcy cece Star Design & ols OO) Sea Total $ 545/$ 40 {1} Plus contingent consideration payable on fu
Slide 34: Section VII: Operating Results
SECTION VII Operating Results
Slide 35: Operating Results — Three Months Ended December 31
Operating Results Three Months Ended December 31, FINANCIAL PERFORMANCE (S in millions, except EPS) 20120) 2013 Change Net Sales $ 200.2) $ 2249| 12% Operating Profit $ BS || 85 ew 95% % of Sales 4.1% 7.2% Net Income $ Sys 11.1 95% Diluted EPS $ 0.25) $ 0.46 84% (1) Excludes executive succession. Ac
Slide 36: Operating Results — Twelve Months Ended December 31
Operating Results Twelve Months Ended December 31, 20120) FINANCIAL PERFORMANCE 20132) (Sin millions, except EPS) Change Net Sales $ 901.1| $1,015.6| 13% Operating Profit Soro ld | 80:2 35% % of Sales 6.6% 7.9% Net Income Suesss |S 51.3 34% Diluted EPS $ 1.68) $ 2.16 29% (1) Excludes executive succe
Slide 37: Results By Segment — Three Months
Results By Segment Three Months Ended December 31, FINANCIAL PERFORMANCE ($ in millions) 2013 Change Net Sales: ; RV Segment $ 172.0) $ 198.7 16% MH Segment Assi] 3 Aas (7%) Operating Profit: RV Segment Ae 129% MH Segment S21) $ 20 (5%) Operating Profit as a Percentage of Net Sales: RV Segment 3.6%
Slide 38: Results By Segment — Twelve Months
Results By Segment Twelve Months Ended December 31, aes iad ($ in millions) 201: 2013 Change Net Sales: = RV Segment $ 780.9) $ 893.7 14% MH Segment $120.2) ¢$ 121.9 1% Operating Profit: RV Segment $ 47.2) $ 68.2 44% MH Segment $ 124) $ 119 (4%) Operating Profit as a Percentage of Net Sales: RV Segm
Slide 39: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash Utilized for Acquisitions Cash and Net Cash During the YTD (Sin millions) Debt Investments (Debt) Period i2zsivio |$ = | S asm | sa 12/31/11 14 2 sy $ 7 % 50 12/31/12__| $C Ba 12/31/13 | $ : $ 668 | $ 660) S 5 (1) On December 28, 2010, the Company paid a spec
Slide 40: Balance Sheets
Balance Sheets FINANCIAL PERFORMANCE ($ in millions) 12/31/10 _ 12/31/11 31/ 12/31/13 Total Assets $ 307 $351 $ 374 $ 453 Total Debt $ - $ - $ - $ - Cash & $ 4409) | § 7 $ 104 | $ 66!5) Investments Stockholders’ $ 243° |$ 277 |$ 2844 |$ 3140) Equity RATIOS Days Sales in AIR" | 13 days 17 days 14 day
Slide 41: Cash Flow
Cash Flow FINANCIAL PERFORMANCE eases ( 13)0) $125 frilfon Capital expenditures $ 99 million Special dividends $125 million Stock repurchases $ 2million Total $ 351 million (1) Includes the acquisition of Innovative Design Solutions purchased in QI 2014 for $36 million.
Slide 42: Financial Strength
Financial Strength FINANCIAL PERFORMANCE (12 months ended) 12/31/10 12/31/11 12/31/13 Return on Equity 11% 11% 13% 16% Return on Assets 9% 9% 10% 12% Total Debt to ‘ Esti 0.00 0.00 0.00 0.00 Bae 0.00 | 000 | 000 | 000 (1) EBITDA is operating profit plus depreciation, amortization and goodwill impair
Slide 43: The Future
The Future Increasing RV content RV industry growth Demographic tailwind Expanding into adjacent industries © © © © © Affordable housing recovery “42.
Slide 44: Stock Price History
Stock Price History 60 20 10 = Drew has 23.5 million shares outstanding and a market capitalization of approximately $1.23 billion as of March 7, 2014 $21 @ ie oy rt xX i 21 mA $3. $14 $1, 56 2001 2002 2003 2004 2005 2006 10/5/07 2007 2008 3/9/09 2009 2010 2011 2012 2013 3/7/14 (December 31, unless
Slide 45: Analyst Coverage
Analyst Coverage Citi Research Gregory Badishkanian — (212) 816-2720 CJS Securities Dan Moore — (914) 287-7600 Sidoti & Company, LLC Scott Stember — (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 891-6206
Slide 46: Thank you!
Thank you! For more information contact: Jason D. Lippert Chief Executive Officer 574-535-1125 JasonL@lIci1.com Joseph S. Giordano Ill CFO & Treasurer 574-535-1125 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com > -45-
Slide 47: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE (S$ in millions) 2010 2011 2012 2013 seis EBITDA Capital Expenditures
Slide 48: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE ($ in millions) 2011 2012 2013 2010 Net Sales: RV Segment $ 477.2 | $ 570.6| $ 780.9|$ 893.7 MH Segment 110.6 120.2 121.9 Operating Profit: RV Segment OL Scie |S) AZ2|$ 68.2 MH Segment [secure nccein =| as] na | -47-