Profits, sales fall sharply at Drew Industries
Sharp declines in shipments of manufactured homes and recreational vehicles continue to hurt Drew Industries Inc., a White Plains-based company that supplies components to those economically sensitive industries.
Drew’s net income of $2.6 million, or 12 cents a share, during the second quarter, fell sharply from net income of $9.2 million, or 42 cents a share, a year earlier. The company blamed the lower profits on a 33 percent drop in net sales to $101 million during the quarter.
Consumers have been reluctant to spend on big-ticket items in a slow economy marked by job insecurity and rising unemployment. That reduction in consumer spending contributed to a 44 percent drop in industry-wide wholesale shipments of travel trailers and 43 percent decrease in industry-wide production of manufactured homes during the quarter.
The slowdown has had ripple effects on parts suppliers such as Drew.
“Last year at this time many of our customers began to significantly cut back production schedules in response to lower demand from dealers,” Jason Lippert, president and chief executive officer of Drew’s subsidiaries, Lippert Components and Kinro. “While there are uncertainties, it appears that many of our customers will continue to produce five days a week for the next couple of months. Beyond that it is difficult to anticipate demand, particularly during the winter months.”
Drew said that it has responded to the challenging economy by cutting costs through plant consolidations, work force reductions and efficiency gains within its operating units.
The cost reduction moves boosted second quarter results by more than $2 million and and are expected to lead to full-year savings of nearly $10 million, according to the company.
Drew also reduced its total debt by more than $5 million to a total of $1 million.