Drew Industries Inc. (NYSE:DW) filed Quarterly Report for the period ended 2010-09-30.
Drew Industries Inc. has a market cap of $444.2 million; its shares were traded at around $20.19 with a P/E ratio of 15.6 and P/S ratio of 1.1. Drew Industries Inc. had an annual average earning growth of 0.7% over the past 10 years.DW is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
Highlight of Business Operations:Cash flows used for investing activities of $4.7 million in the first nine months of 2009 included capital expenditures of $1.9 million, the purchase of $2.0 million of short-term U.S. Treasury Bills, the acquisition of the patents for the QuickBite CouplerTM, and other intellectual properties and assets. The minimum aggregate purchase price in the QuickBite acquisition was $0.5 million, of which $0.3 million was paid at closing and the balance was paid on May 15, 2010, plus an earn-out depending on future unit sales of the product. At September 30, 2010, the Company has recorded a $0.6 million liability for the present value of the estimated earn-out payments.
Cash flows used for financing activities for the first nine months of 2009 of $4.1 million were primarily due to net debt payments of $8.7 million offset by $4.6 million received from the exercise of stock options.
On November 25, 2008, the Company entered into an agreement (the “Credit Agreement”) for a $50.0 million line of credit with JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. (collectively, the “Lenders”). The maximum borrowings under the Company s line of credit can be increased by $20.0 million upon approval of the Lenders. Interest on borrowings under the line of credit is designated from time to time by the Company as either the Prime Rate, but not less than 2.5 percent, plus additional interest up to 0.8 percent (0 percent at September 30, 2010), or LIBOR plus additional interest ranging from 2.0 percent to 2.8 percent (2.0 percent at September 30, 2010) depending on the Company s performance and financial condition. The Credit Agreement expires December 1, 2011. At September 30, 2010, the Company had availability of $44.5 million as there were $5.5 million in outstanding letters of credit under the line of credit.
Both the line of credit pursuant to the Credit Agreement and the “shelf-loan” facility are subject to a maximum leverage ratio covenant which limits the amount of consolidated outstanding indebtedness to 2.5 times the trailing twelve-month EBITDA, as defined; provided however, that if the Company s trailing twelve-month EBITDA is less than $50 million, the maximum leverage ratio covenant declines to 1.25 times the trailing twelve-month EBITDA. At September 30, 2010, the Company s trailing twelve month EBITDA exceeded $50 million and, as a result, the maximum leverage ratio covenant in both the line of credit and “shelf-loan” facilities was 2.5 times the trailing twelve month EBITDA. At September 30, 2010, the maximum leverage ratio debt covenant limits the remaining availability under these facilities to $160.2 million. The $57.2 million in cash and short-term investments at September 30, 2010, together with the borrowing availability under the line of credit and “shelf-loan” facility, are more than adequate to finance the Company s anticipated working capital and capital expenditure requirements, and no borrowings under these facilities are expected.
On November 29, 2007, the Board of Directors authorized the Company to repurchase up to 1 million shares of the Company s Common Stock from time to time in the open market, in privately negotiated transactions, or in block trades. Of this authorization, 447,400 shares were repurchased in 2008 at an average price of $18.58 per share, or $8.3 million in total. An additional 24,381 shares at an average cost of $19.00 per share, or $0.5 million, were repurchased during the third quarter of 2010. The aggregate cost of repurchases was funded from the Company s available cash. The number of shares ultimately repurchased, and the timing of the purchases, will depend upon market conditions, share price, and other factors.
On November 29, 2007, the Company announced a stock repurchase of up to 1,000,000 shares, of which 471,781 shares have been repurchased at an average price of $18.60 per share, or $8.8 million in total.
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