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Drew Industries Inc. Reports Operating Results (10-Q)

August 09, 2012 | About:
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10qk

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Drew Industries Inc. (DW) filed Quarterly Report for the period ended 2012-06-30.

Drew Industries, Inc. has a market cap of $643.5 million; its shares were traded at around $29.25 with a P/E ratio of 19 and P/S ratio of 0.9.

Highlight of Business Operations:

The Company s net sales growth in components for travel trailer and fifth-wheel RVs during the second quarter of 2012 exceeded the increase in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs primarily due to market share gains of $16 million, net sales from acquisitions completed during the last twelve months of $15 million, as well as sales price increases of $3 million.

The Company s net sales growth in components for travel trailer and fifth-wheel RVs during the first six months of 2012 exceeded the increase in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs primarily due to the acquisitions completed during the twelve months ended June 30, 2012, which added $29 million in net sales, market share gains of $19 million, as well as sales price increases of $8 million.

Operating profit of the MH Segment was $7.2 million in the first six months of 2012, an increase of $2.0 million compared to the first six months of 2011, primarily due to the $9 million increase in net sales. This increase in MH Segment operating profit was consistent with the Company s target 20 percent incremental margin for its established products.

A $13.9 million improvement in inventories due to a decrease in inventories of $1.2 million in the first six months of 2012 compared to a $12.6 million increase in inventories in the first six months of 2011. The reduction in the first six months of 2012 was primarily due to the higher than expected surge in sales in the first six months of 2012, while the first six months of 2011 saw a more typical seasonal increase in inventory, as well as an increase in raw material costs. The inventory reduction in the first six months of 2012 of $1.2 million follows a reduction of $5.7 million in the fourth quarter of 2011. Inventory turnover for the twelve months ended June 30, 2012 improved to 7.1 turns from 6.3 turns for the full year 2011, and 6.2 turns for the twelve months ended June 30, 2011. The Company is working to improve inventory turns on a sustainable basis.

In connection with several acquisitions since 2009, if certain sales targets for the acquired products are achieved, the Company would pay additional cash consideration. The Company has recorded a $13.9 million liability for the aggregate fair value of these expected contingent consideration liabilities at June 30, 2012. During the first six months of 2012, the Company paid $1.6 million related to these contingent consideration liabilities, and expects to pay $5.0 million over the next twelve months. For further information see Note 10 of the Notes to Condensed Consolidated Financial Statements.

Read the The complete Report

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