For
the Year End
December
31, 2006
|
Commission
File Number
0-13646
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
13-3250533
(I.R.S.
Employer
Identification
Number)
|
Large Accelerated Filer o | Accelerated Filer x | Non-accelerated filer o |
Excess
inventories by retailers and manufacturers could cause a decline
in the
demand for our products.
|
Increases
in raw material costs could adversely impact our financial condition
and
operating results.
|
RV
PRODUCTS SEGMENT
|
|||||||||||||
City
|
State
|
Square
Feet
|
Owned
|
Leased
|
|||||||||
|
|
||||||||||||
Phoenix
(1)
|
Arizona
|
15,000
|
|
P
|
|||||||||
Fontana
(1)
|
California
|
87,000
|
P
|
||||||||||
Hemet
(1)
|
California
|
35,000
|
P
|
||||||||||
Rialto
|
California
|
62,700
|
P
|
||||||||||
San
Bernardino
|
California
|
20,300
|
P
|
||||||||||
Whittier
|
California
|
47,500
|
P
|
||||||||||
Woodland
|
California
|
25,000
|
P
|
||||||||||
Ontario
|
Canada
|
39,900
|
P
|
||||||||||
Fitzgerald
(1)
|
Georgia
|
15,800
|
P
|
||||||||||
Bristol
|
Indiana
|
97,500
|
P
|
||||||||||
Elkhart
|
Indiana
|
53,950
|
P
|
||||||||||
Goshen
|
Indiana
|
22,000
|
P
|
||||||||||
Goshen
|
Indiana
|
41,500
|
P
|
||||||||||
Goshen
|
Indiana
|
53,500
|
P
|
||||||||||
Goshen
|
Indiana
|
87,800
|
P
|
||||||||||
Goshen
|
Indiana
|
93,000
|
P
|
||||||||||
Goshen
|
Indiana
|
171,000
|
P
|
||||||||||
Goshen
(1)
|
Indiana
|
68,900
|
P
|
||||||||||
Goshen
(1)
|
Indiana
|
340,000
|
P
|
||||||||||
Middlebury
(1)
|
Indiana
|
78,525
|
P
|
||||||||||
Milford
|
Indiana
|
52,000
|
P
|
||||||||||
McMinnville
(1)
|
Oregon
|
12,350
|
P
|
||||||||||
Pendleton
|
Oregon
|
56,800
|
P
|
||||||||||
Denver
(1)
|
Pennsylvania
|
29,200
|
P
|
||||||||||
Longview
(1)
|
Texas
|
56,900
|
P
|
||||||||||
Waxahachie(1)
|
Texas
|
40,000
|
P
|
||||||||||
Kaysville
|
Utah
|
75,000
|
P
|
||||||||||
|
|
1,778,125
|
|||||||||||
|
MH
PRODUCTS SEGMENT
|
|||||||||||||
City
|
State
|
Square
Feet
|
Owned
|
Leased
|
|||||||||
|
|
||||||||||||
Boaz
|
Alabama
|
86,600
|
P
|
||||||||||
Double
Springs
|
Alabama
|
109,000
|
P
|
||||||||||
Phoenix
|
Arizona
|
61,000
|
P
|
||||||||||
Phoenix
(1)
|
Arizona
|
14,900
|
P
|
||||||||||
Fontana
(1)
|
California
|
21,800
|
P
|
||||||||||
Hemet
(1)
|
California
|
25,000
|
P
|
||||||||||
Woodland
|
California
|
13,900
|
|
P
|
|||||||||
Ocala
|
Florida
|
47,100
|
P
|
||||||||||
Cairo
|
Georgia
|
105,000
|
P
|
||||||||||
Fitzgerald
(1)
|
Georgia
|
63,200
|
P
|
||||||||||
Nampa
|
Idaho
|
83,500
|
P
|
||||||||||
Goshen
|
Indiana
|
110,000
|
P
|
||||||||||
Goshen
(1)
|
Indiana
|
24,800
|
P
|
||||||||||
Goshen
(1)
|
Indiana
|
70,000
|
P
|
||||||||||
Howe
|
Indiana
|
60,000
|
P
|
||||||||||
Middlebury
(1)
|
Indiana
|
43,700
|
P
|
||||||||||
Arkansas
City
|
Kansas
|
7,800
|
|
P
|
|||||||||
Bossier
City
|
Louisiana
|
11,400
|
P
|
||||||||||
Whitehall
|
New
York
|
12,700
|
P
|
||||||||||
Liberty
|
North
Carolina
|
47,000
|
|
P
|
|||||||||
Sugarcreek
|
Ohio
|
14,500
|
P
|
||||||||||
McMinnville
(1)
|
Oregon
|
12,350
|
P
|
||||||||||
Denver
(1)
|
Pennsylvania
|
54,100
|
P
|
||||||||||
Dayton
|
Tennessee
|
100,000
|
P
|
||||||||||
Longview
(1)
|
Texas
|
2,000
|
P
|
||||||||||
Mansfield
|
Texas
|
61,500
|
|
P
|
|||||||||
Waxahachie
(1)
|
Texas
|
160,000
|
P
|
||||||||||
Lancaster
|
Wisconsin
|
12,300
|
P
|
||||||||||
|
|
1,435,150
|
|||||||||||
|
ADMINISTRATIVE
|
|||||||||||||
City
|
State
|
Square
Feet
|
Owned
|
Leased
|
|||||||||
|
|
||||||||||||
White
Plains
|
New
York
|
3,400
|
P
|
||||||||||
Goshen
|
Indiana
|
13,500
|
P
|
||||||||||
Goshen
|
Indiana
|
10,000
|
|
P
|
|||||||||
Goshen
|
Indiana
|
9,000
|
P
|
|
|||||||||
Goshen
|
Indiana
|
4,874
|
|
P
|
|||||||||
Goshen
|
Indiana
|
2,000
|
P
|
||||||||||
Naples
|
Florida
|
1,500
|
P
|
||||||||||
Arlington
|
Texas
|
8,500
|
|
P
|
|||||||||
Laguna
Hills
|
California
|
2,000
|
P
|
||||||||||
Lake
Havasu
|
Arizona
|
2,000
|
P
|
||||||||||
|
|
56,774
|
Name
|
Position
|
|
Leigh
J. Abrams
(Age
64)
|
President,
Chief Executive Officer and Director of the Company since March
1984.
|
|
Edward
W. Rose, III
(Age
65)
|
Chairman
of the Board of Direc-tors of the Company since March 1984.
|
|
David
L. Webster
(Age
71)
|
Director
of the Company and Chairman, President and CEO of Kinro, Inc. since
March
1984.
|
|
L.
Douglas Lippert
(Age
59)
|
Director
of the Company since November 1997. Chairman of Lippert Components,
Inc.
from November 1997 until December 31, 2006.
|
|
James
F. Gero
(Age
61)
|
Director
of the Company since May 1992.
|
|
Frederick
B. Hegi, Jr.
(Age
63)
|
Director
of the Company since May 2002.
|
|
David
A. Reed
(Age
59 )
|
Director
of the Company since May 2003.
|
|
John
B. Lowe, Jr.
(Age
67)
|
Director
of the Company since May 2005.
|
|
Jason
D. Lippert
(Age
34)
|
President
and Chief Executive Officer of Lippert Components, Inc. since February
5,
2003, and Chairman of Lippert Components, Inc. since January 1,
2007.
|
|
Fredric
M. Zinn
(Age
55)
|
Chief
Financial Officer of the Company since January 1986 and Executive
Vice
President of the Company since February 2001.
|
|
Scott.
T. Mereness
(Age
35)
|
Executive
Vice President and Chief Operating Officer of Lippert Components,
Inc.
since February 2003.
|
|
Domenic
D. Gattuso
(Age
66)
|
Executive
Vice President of Kinro, Inc. since February 2004 and Chief Financial
Officer of Kinro, Inc. since September
1985.
|
Years
Ended December 31,
|
||||||||||||||||
(In
thousands, except per share amounts)
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
Operating
Data:
|
||||||||||||||||
Net
sales
|
$
|
729,232
|
$
|
669,147
|
$
|
530,870
|
$
|
353,116
|
$
|
325,431
|
||||||
Operating
profit
|
$
|
55,295
|
$
|
57,729
|
$
|
43,996
|
$
|
34,277
|
$
|
29,213
|
||||||
Income
from continuing operations before income taxes and cumulative effect
of
change in accounting principle
|
$
|
50,694
|
$
|
54,063
|
$
|
40,857
|
$
|
31,243
|
$
|
25,647
|
||||||
Provision
for income taxes
|
$
|
19,671
|
$
|
20,461
|
$
|
15,749
|
$
|
11,868
|
$
|
9,883
|
||||||
Income
from continuing operations before cumulative effect of change in
accounting principle
|
$
|
31,023
|
$
|
33,602
|
$
|
25,108
|
$
|
19,375
|
$
|
15,764
|
||||||
Discontinued
operations (net of taxes)
|
$
|
48
|
$
|
(200
|
)
|
|||||||||||
Cumulative
effect of change in accounting principle for goodwill (net of
taxes)
|
$
|
(30,162
|
)
|
|||||||||||||
Net
income (loss)
|
$
|
31,023
|
$
|
33,602
|
$
|
25,108
|
$
|
19,423
|
$
|
(14,598
|
)
|
|||||
Income
(loss) per common share:
|
||||||||||||||||
Income
from continuing operations:
|
||||||||||||||||
Basic
|
$
|
1.43
|
$
|
1.60
|
$
|
1.22
|
$
|
.96
|
$
|
.81
|
||||||
Diluted
|
$
|
1.42
|
$
|
1.56
|
$
|
1.18
|
$
|
.94
|
$
|
.79
|
||||||
Discontinued
operations:
|
||||||||||||||||
Basic
|
$
|
(.01
|
)
|
|||||||||||||
Diluted
|
$
|
(.01
|
)
|
|||||||||||||
Cumulative
effect of change in accounting principle for goodwill:
|
||||||||||||||||
Basic
|
$
|
(1.54
|
)
|
|||||||||||||
Diluted
|
$
|
(1.51
|
)
|
|||||||||||||
Net
income (loss):
|
||||||||||||||||
Basic
|
$
|
1.43
|
$
|
1.60
|
$
|
1.22
|
$
|
.96
|
$
|
(.75
|
)
|
|||||
Diluted
|
$
|
1.42
|
$
|
1.56
|
$
|
1.18
|
$
|
.94
|
$
|
(.73
|
)
|
|||||
Financial
Data:
|
||||||||||||||||
Working
capital
|
$
|
61,979
|
$
|
76,146
|
$
|
57,204
|
$
|
29,700
|
$
|
24,067
|
||||||
Total
assets
|
$
|
311,276
|
$
|
307,428
|
$
|
238,053
|
$
|
160,104
|
$
|
145,396
|
||||||
Long-term
obligations
|
$
|
47,327
|
$
|
64,768
|
$
|
61,806
|
$
|
27,737
|
$
|
39,102
|
||||||
Stockholders’
equity
|
$
|
204,888
|
$
|
167,709
|
$
|
122,044
|
$
|
93,653
|
$
|
70,104
|
2006
|
2005
|
2004
|
||||||||
Net
sales:
|
||||||||||
RV
Segment
|
$
|
508,824
|
$
|
447,662
|
$
|
346,140
|
||||
MH
Segment
|
220,408
|
221,485
|
184,730
|
|||||||
Total
|
$
|
729,232
|
$
|
669,147
|
$
|
530,870
|
||||
Operating
profit:
|
||||||||||
RV
Segment
|
$
|
43,850
|
$
|
43,144
|
$
|
32,637
|
||||
MH
Segment
|
21,037
|
22,566
|
17,742
|
|||||||
Amortization
of intangibles
|
(2,546
|
)
|
(1,427
|
)
|
(1,032
|
)
|
||||
Corporate
and other
|
(7,684
|
)
|
(6,685
|
)
|
(5,779
|
)
|
||||
Other
income
|
638
|
131
|
428
|
|||||||
Total
|
$
|
55,295
|
$
|
57,729
|
$
|
43,996
|
2006
|
2005
|
2004
|
|||||||||||
Net
sales:
|
|||||||||||||
RV
Segment
|
70
|
%
|
|
67
|
%
|
|
65
|
%
|
|
||||
MH
Segment
|
30
|
%
|
|
33
|
%
|
|
35
|
%
|
|
||||
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
||||
Operating
profit:
|
|
||||||||||||
RV
Segment
|
79
|
%
|
|
72
|
%
|
|
72
|
%
|
|
||||
MH
Segment
|
38
|
%
|
|
42
|
%
|
|
42
|
%
|
|
||||
Amortization
of intangibles
|
(5
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
||||
Corporate
and other
|
(14
|
)%
|
|
(12
|
)%
|
|
(13
|
)%
|
|
||||
Other
income
|
1
|
%
|
|
-
|
1
|
%
|
|
||||||
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
||||
|
2006
|
2005
|
2004
|
|||||||||||
RV
Segment
|
|
8.6
|
%
|
|
9.6
|
%
|
|
9.4
|
%
|
|
|||
MH
Segment
|
9.5
|
%
|
|
10.2
|
%
|
|
9.6
|
%
|
|
§ |
Net
sales for 2006 increased $60 million (9 percent) from 2005. The increase
in net sales in 2006 included sales price increases of approximately
$31
million and sales of about $19 million due to acquisitions. The balance
of
the sales growth was generated by sales of newly introduced products
and
market share gains, partially offset by the decrease in hurricane-related
sales of approximately $20 million and the weakness in both the RV
and MH
industries in the latter part of
2006.
|
§ |
Net
income for 2006 decreased 8 percent from 2005. Net income declined
for
several reasons, including:
|
· |
The
negative impact due to the decline in wholesale shipments in the
RV
industry during the latter part of 2006 more than offset the positive
impact of the increase in wholesale shipments in the RV industry
during
the first half of 2006.
|
· |
Declines
in wholesale shipments in the manufactured housing industry during
2006.
|
· |
The
year-over-year decrease in sales of components for emergency housing
resulting from the 2005 Gulf Coast
hurricanes.
|
· |
Increased
losses related to the specialty trailer operation in Indiana, which
was
closed during the third quarter of
2006.
|
· |
Lower
margins on some of the Company’s newer products, largely due to
competitive pressures. Sales of these newer products increased
significantly in 2006.
|
· |
An
increase in stock-based compensation
expense.
|
· |
The
favorable impact in 2006 of spreading fixed costs over a larger sales
base.
|
· |
Accretive
results from Happijac, acquired in June 2006, which supplies bed-lifts
to
the growing toy hauler RV market, net of the related increase in
interest
and amortization expenses.
|
· |
The
new window factory in Arizona, opened in 2005, achieved an operating
profit in 2006, compared to a start-up loss in 2005.
|
· |
The
negative impact on 2005 results of charges of $0.9 million ($0.5
million
after taxes and the direct impact on incentive compensation) related
to
legal proceedings.
|
§ |
In
response to the slowdowns in both the RV and MH industries in the
latter
part of 2006, the Company reduced its hourly workforce to match current
production levels, closed several facilities and consolidated these
operations into other existing facilities, and reduced fixed overhead
where prudent, including reducing staff levels by more than 50 salaried
employees. These facility consolidations and fixed overhead reductions
are
expected to reduce costs by more than $4 million in 2007 (before
taxes and
net of incentive compensation), and the Company is considering additional
facility closings to optimize capacity
utilization.
|
§ |
During
the last few years, the Company introduced several new products for
the RV
and specialty trailer markets, including products for the motorhome
market, a relatively new RV category for the Company. New products
include
slide-out mechanisms and leveling devices for motorhomes, axles for
towable RVs and specialty trailers, entry steps and suspension systems
for
towable RVs, and bed lifts, thermoformed bath and kitchen products,
and
exterior parts for both towable RVs and motorhomes. The Company estimates
that the market potential of these products is over $700 million,
and in
the fourth quarter of 2006, the Company’s sales of these products were
running at an annualized rate of approximately $100 million, as compared
to an annualized rate of approximately $70 million in the fourth
quarter
of 2005.
|
§ |
On
January 2, 2007, Lippert acquired Trailair, Inc. (“Trailair”) and certain
assets and the business of Equa-Flex, Inc. (“Equa-Flex”), two affiliated
companies, which manufacture several patented products, including
innovative suspension systems used primarily for towable RVs. The
minimum
aggregate purchase price was $5.5 million, of which $3.3 million
was paid
at closing and the balance will be paid over the next five years.
The
aggregate purchase price, including non-compete agreements, could
increase
to a maximum of $8.1 million if certain sales targets for these products
are achieved by Lippert over the next five years. The acquisition
was
financed with borrowings under the Company’s line of credit. The Company
has integrated Trailair and Equa-Flex’s business into existing Lippert
facilities.
|
§ |
On
June 12, 2006, Lippert acquired certain assets and the business of
Utah-based Happijac Company (“Happijac”), a supplier of patented bed lift
systems for recreational vehicles. Happijac, which also manufactures
other
RV products such as slide-out systems, tie-down systems and camper
jacks,
had annualized sales of approximately $15 million prior to the
acquisition. The purchase price of $30.3 million was financed through
the
issuance of $15.0 million of variable interest rate seven year Senior
Promissory Notes, $14.6 million of borrowings under the Company’s line of
credit, and the assumption of $0.7 million of equipment
loans.
|
§ |
On
March 10, 2006, the Company acquired certain assets and the business
of
California-based SteelCo., Inc. (“Steelco”), which manufactures chassis
and components for RVs and manufactured housing. Steelco had annual
sales
for the year ended November 30, 2005 of approximately $8 million.
The
purchase price was $4.2 million which was funded with borrowings
under the
Company’s line of credit. The Company has integrated SteelCo’s business
into Lippert’s existing facilities in California. In connection with the
transaction, Lippert and SteelCo terminated litigation pending between
them.
|
2006
|
2005
|
Percent
Change
|
||||||||
Content
per Travel Trailer and
|
||||||||||
Fifth
Wheel RVs
|
$
|
1,564
|
$
|
1,379
|
13%
|
|
||||
Content
per Motorhomes
|
$
|
288
|
$
|
241
|
20%
|
|
||||
Content
per all RVs
|
$
|
1,212
|
$
|
1,048
|
16%
|
|
2006
|
2005
|
Percent
Change
|
|||||||||
Travel
Trailer and Fifth
|
|||||||||||
Wheel
RVs
|
292,400
|
281,400
|
4
|
%
|
|
||||||
Motorhomes
|
55,900
|
61,400
|
(9
|
)%
|
|
||||||
All
RVs
|
390,500
|
384,400
|
2
|
%
|
|
||||||
ELUs
|
31,400
|
38,900
|
(19
|
)%
|
|
2006
|
2005
|
Percent
Change
|
|||||||||
Content
per Homes Produced
|
$
|
1,784
|
$
|
1,507
|
18
|
%
|
|
||||
Content
per Floors Produced
|
$
|
1,014
|
$
|
897
|
13
|
%
|
|
2006
|
2005
|
Percent
Change
|
|||||||||
Total
Homes Produced
|
117,400
|
147,000
|
(20
|
)%
|
|
||||||
Total
Floors Produced
|
206,600
|
246,900
|
(16
|
)%
|
|
§ |
Net
sales for 2005 increased $138 million (26 percent) from 2004. The
increase
in net sales in 2005 consisted of organic growth of about $35-$38
million,
sales price increases of $30-$33 million, sales growth of about $30
million due to acquisitions, and sales of components for emergency
shelters purchased primarily by the Federal Emergency Management
Agency
(“FEMA”) of approximately $40 million.
|
§ |
Net
income for 2005 increased 34 percent from 2004, greater than the
26
percent increase in net sales due
to:
|
· |
The
favorable impact on 2005 of spreading fixed costs over a larger sales
base.
|
· |
The
negative impact on 2004 results of increases in steel costs that
were not
fully passed on to customers until early 2005. Sales price increases
obtained in 2005 and 2004 were largely without profit margin.
|
· |
Start-up
losses in 2005 of approximately $3.3 million ($1.7 million after
taxes and
the direct impact on incentive compensation) related to new products
and
recently opened facilities.
|
· |
During
2005 the Company increased its quality control efforts by adding
dedicated
quality control personnel at many of its larger manufacturing facilities.
Quality control costs increased about $2.5 million ($1.3 million
after
taxes and the direct impact on incentive compensation) over
2004.
|
§ |
On
May 20, 2005, the Company acquired the business and certain assets
of
Venture Welding (“Venture”) for approximately $18.5 million in cash.
Venture Welding had annualized sales prior to the acquisition of
approximately $18 million. Venture manufactures chassis and chassis
parts
for manufactured homes, modular homes and office units. Among the
assets
acquired are patents that will enable the Company to improve its
production efficiencies for chassis for manufactured
homes.
|
2006
|
2005
|
2004
|
||||||||
Net
cash flows provided by operating activities
|
$
|
67,021
|
$
|
32,253
|
$
|
9,012
|
||||
Net
cash flows used for investing activities
|
$
|
(51,925
|
)
|
$
|
(41,441
|
)
|
$
|
(48,240
|
)
|
|
Net
cash flows (used for) provided by
|
||||||||||
financing
activities
|
$
|
(13,396
|
)
|
$
|
11,849
|
$
|
33,051
|
a) |
A
$17.3 million decrease in accounts receivable during 2006, compared
to an
increase of $7.5 million in 2005. The decrease in accounts receivable
during 2006 was due to a decline in net sales in December 2006, and
a
decline in the days sales outstanding to approximately 16 days at
December
31, 2006, as compared to 21 days at December 31, 2005. The decrease
in
days sales outstanding was primarily due to the timing of
collections.
|
b) |
A
$20.2 million decrease in inventories during 2006, compared to an
increase
of $27.4 million in 2005. The decrease in inventory in 2006 resulted
from
a concerted effort by management to reduce the number of days of
inventory
on hand at all locations and lower inventory requirements due to
the
decline in sales volume, partially offset by (i) higher inventory
requirements for newly introduced products, (ii) higher raw material
costs, and (iii) increased use of imported components which require
a
longer lead time. The increase in inventory in 2005 resulted from
(i)
additional inventory requirements to meet increased sales volume
due
largely to FEMA-related orders, seasonality and new product offerings,
and
(ii) the Company’s strategic buying of steel in advance of announced price
increases, partially offset by a concerted effort by management to
reduce
inventory on hand at all locations. On both December 31, 2006 and
2005,
there was less than a two week supply of finished goods on hand.
|
c) |
A
$3.7 million increase in depreciation and amortization during 2006,
as
compared to 2005. The increase in depreciation in 2006 resulted from
the
significant capital expenditures made by the Company over the last
several
years, coupled with an increase in amortization as a result of intangible
assets purchased in acquisitions of businesses.
|
d) |
An
offset of $37.3 million due to a decline in accounts payable, accrued
expenses and other current liabilities in 2006, compared to an increase
in
2005. The decrease in 2006 was primarily due to (i) higher payable
balances at the beginning of the 2006 period because of an increase
in
purchases of inventory during the fourth quarter of 2005 to meet
FEMA
demand, (ii) reduced inventory purchases in the latter part of the
fourth
quarter of 2006, and (iii) the timing of payments. Trade payables
are
generally paid within the discount
period.
|
e) |
An
offset of $2.9 million in prepaid expenses and other assets primarily
due
to an increase in prepaid expenses and other assets in 2006, resulting
from the timing of federal tax payments and insurance premiums, as
compared to a decrease in 2005.
|
a)
|
A
$13.4 million greater increase in accounts payable, accrued expenses
and
other current liabilities in 2005, compared to 2004. The larger increase
in 2005 was primarily due to (i) an increase in purchases of inventory
during the fourth quarter of 2005 to meet FEMA demand, (ii) the strategic
buying of certain raw materials ahead of announced price increases,
and
(iii) the timing of payments. Trade payables are generally paid within
the
discount period.
|
b)
|
A
$1.1 million smaller increase in inventories during 2005, as compared
to
2004. The larger increase in inventory in 2004 resulted from (i)
substantial increases in the cost of steel and other raw materials
used by
the Company, (ii) additional inventory requirements to meet increased
sales volume, and (iii) the Company’s strategic buying of steel in advance
of the numerous price increases, so that the Company could postpone
sales
price increases to its customers for as long as possible. The increase
in
inventory in 2005 resulted from (i) additional inventory requirements
to
meet increased sales volume due largely to FEMA-related orders,
seasonality and new product offerings, (ii) additional inventory
purchased
from overseas sources which requires a longer lead time, and (iii)
the
Company’s strategic buying of raw materials in advance of announced price
increases, partially offset by a concerted effort by management to
reduce
inventory on hand at all locations. On both December 31, 2005 and
2004,
there was less than a two week supply of finished goods on hand.
|
c)
|
An
offset to the changes in inventory and accounts payable, accrued
expenses
and other current liabilities resulted from a $1.4 million greater
increase in accounts receivable for 2005. The increase in accounts
receivable for 2005 was due largely to an increase in net sales.
Days
sales outstanding in receivables remained steady at approximately
21 days,
the same as in 2004.
|
Payments
due by period
|
||||||||||||||||
Less
than
|
More
than
|
|||||||||||||||
Total
|
1
year
|
1-3
years
|
3-5
years
|
5
years
|
||||||||||||
Long-term
indebtedness
|
$
|
55,680
|
$
|
9,714
|
$
|
32,138
|
$
|
7,476
|
$
|
6,352
|
||||||
Interest
on fixed rate
|
||||||||||||||||
indebtedness
(a)
|
7,224
|
2,660
|
3,080
|
1,090
|
394
|
|||||||||||
Interest
on variable rate
|
||||||||||||||||
indebtedness
(b)
|
1,683
|
297
|
866
|
245
|
275
|
|||||||||||
Operating
leases
|
15,398
|
3,948
|
6,339
|
3,366
|
1,745
|
|||||||||||
Capital
Leases
|
403
|
208
|
175
|
20
|
-
|
|||||||||||
Employment
contracts
|
7,871
|
2,564
|
3,716
|
1,591
|
-
|
|||||||||||
Royalty
agreement (c)
|
313
|
313
|
-
|
-
|
-
|
|||||||||||
Purchase
obligations (d)
|
69,554
|
61,203
|
7,301
|
1,050
|
-
|
|||||||||||
Total
|
$
|
158,126
|
$
|
80,907
|
$
|
53,615
|
$
|
14,838
|
$
|
8,766
|
(a) |
The
Company has used the contractual payment dates and fixed interest
rates,
including the portion of the $12.0 million of borrowings under the
line of
credit, and the $14.0 million of Senior Promissory Notes, which have
been
effectively converted to fixed rate indebtedness through the use
of
interest rate swaps, to determine the estimated future interest payments
on fixed rate indebtedness.
|
(b) |
The
Company has used the contractual payment dates and the variable interest
rates in effect as of December 31, 2006, to determine the estimated
future
interest payments for variable rate indebtedness. Variable rate
indebtedness excludes the indebtedness noted in footnote (a) which
has
been effectively converted to fixed rate
indebtedness.
|
(c) |
In
addition to the minimum commitments shown here, the Royalty agreement
provides for the Company to pay a royalty of 1 percent for the right
to
use certain patents related to slide-out systems commencing January
1,
2007 through the expiration of the patents, with aggregate payments
subsequent to January 1, 2007 not to exceed $5.0
million.
|
(d) |
These
contractual obligations are primarily comprised of purchase orders
issued
in the normal course of business. Also included are several longer
term
purchase commitments, for which the Company has estimated the expected
future obligation based on current prices and
usage.
|
2005
|
2004
|
||||||
Net
income, as reported
|
$
|
33,602
|
$
|
25,108
|
|||
Add:
Compensation expense related to stock options
|
|||||||
included
in reported net income, net of related
|
|||||||
tax
effects
|
668
|
550
|
|||||
Deduct:
Total compensation expense related to stock
|
|||||||
options
determined under fair value method for all
|
|||||||
stock
option awards, net of related tax effects
|
(740
|
)
|
(799
|
)
|
|||
Pro
forma net income
|
$
|
33,530
|
$
|
24,859
|
|||
Net
income per common share:
|
|||||||
Basic
- as reported
|
$
|
1.60
|
$
|
1.22
|
|||
Basic
- pro forma
|
$
|
1.60
|
$
|
1.21
|
|||
Diluted
- as reported
|
$
|
1.56
|
$
|
1.18
|
|||
Diluted
- pro forma
|
$
|
1.56
|
$
|
1.17
|
Drew
Industries Incorporated
|
||||||||||
Consolidated
Statements of Income
|
||||||||||
(In
thousands, except per share amounts)
|
||||||||||
Year
Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Net
sales
|
$
|
729,232
|
$
|
669,147
|
$
|
530,870
|
||||
Cost
of sales
|
575,156
|
519,000
|
414,491
|
|||||||
Gross
profit
|
154,076
|
150,147
|
116,379
|
|||||||
Selling,
general and administrative expenses
|
99,419
|
92,549
|
72,811
|
|||||||
Other
income
|
638
|
131
|
428
|
|||||||
Operating
profit
|
55,295
|
57,729
|
43,996
|
|||||||
Interest
expense, net
|
4,601
|
3,666
|
3,139
|
|||||||
Income
before income taxes
|
50,694
|
54,063
|
40,857
|
|||||||
Provision
for income taxes
|
19,671
|
20,461
|
15,749
|
|||||||
Net
income
|
$
|
31,023
|
$
|
33,602
|
$
|
25,108
|
||||
Net
Income per common share:
|
||||||||||
Basic
|
$
|
1.43
|
$
|
1.60
|
$
|
1.22
|
||||
Diluted
|
$
|
1.42
|
$
|
1.56
|
$
|
1.18
|
Drew
Industries Incorporated
|
|||||||
Consolidated
Balance Sheets
|
|||||||
(In
thousands, except shares and per share amount)
|
|||||||
December
31,
|
|||||||
2006
|
2005
|
||||||
ASSETS
|
|||||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
6,785
|
$
|
5,085
|
|||
Accounts
receivable, trade, less allowances of
|
|||||||
$1,501
in 2006 and $2,090 in 2005
|
17,828
|
33,583
|
|||||
Inventories
|
83,076
|
100,617
|
|||||
Prepaid
expenses and other current assets
|
13,351
|
11,812
|
|||||
Total
current assets
|
121,040
|
151,097
|
|||||
Fixed
assets, net
|
124,558
|
116,828
|
|||||
Goodwill
|
34,344
|
22,118
|
|||||
Other
intangible assets
|
24,801
|
10,652
|
|||||
Other
assets
|
6,533
|
6,733
|
|||||
Total
assets
|
$
|
311,276
|
$
|
307,428
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities
|
|||||||
Notes
payable, including current maturities
|
|||||||
of
long-term indebtedness
|
$
|
9,714
|
$
|
11,140
|
|||
Accounts
payable, trade
|
12,027
|
26,404
|
|||||
Accrued
expenses and other current liabilities
|
37,320
|
37,407
|
|||||
Total
current liabilities
|
59,061
|
74,951
|
|||||
Long-term
indebtedness
|
45,966
|
62,093
|
|||||
Other
long-term liabilities
|
1,361
|
2,675
|
|||||
Total
liabilities
|
$
|
106,388
|
$
|
139,719
|
|||
Stockholders'
equity
|
|||||||
Common
stock, par value $.01 per share: authorized
|
|||||||
30,000,000
shares; issued 23,833,045 shares in 2006 and
|
|||||||
23,625,793
shares in 2005
|
$
|
238
|
$
|
236
|
|||
Paid-in
capital
|
53,973
|
47,655
|
|||||
Retained
earnings
|
170,038
|
139,015
|
|||||
Accumulated
other comprehensive income
|
106
|
270
|
|||||
224,355
|
187,176
|
||||||
Treasury
stock, at cost - 2,149,325 shares in 2006 and 2005
|
(19,467
|
)
|
(19,467
|
)
|
|||
Total
stockholders' equity
|
204,888
|
167,709
|
|||||
Total
liabilities and stockholders' equity
|
$
|
311,276
|
$
|
307,428
|
|||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
Drew
Industries Incorporated
|
||||||||||
Consolidated
Statements of Cash Flows
|
||||||||||
(In
thousands)
|
||||||||||
Year
Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
31,023
|
$
|
33,602
|
$
|
25,108
|
||||
Adjustments
to reconcile net income to cash flows
|
||||||||||
provided
by operating activities:
|
||||||||||
Depreciation
and amortization
|
15,669
|
11,945
|
9,300
|
|||||||
Deferred
taxes
|
653
|
(215
|
)
|
(1,394
|
)
|
|||||
(Gain)
loss on disposal of fixed assets
|
(913
|
)
|
(43
|
)
|
828
|
|||||
Stock-based
compensation expense
|
2,981
|
1,492
|
1,245
|
|||||||
Changes
in assets and liabilities, net of business acquisitions:
|
||||||||||
Accounts
receivable, net
|
17,272
|
(7,484
|
)
|
(6,127
|
)
|
|||||
Inventories
|
20,219
|
(27,357
|
)
|
(28,447
|
)
|
|||||
Prepaid
expenses and other assets
|
(2,213
|
)
|
653
|
2,232
|
||||||
Accounts
payable, accrued expenses and other liabilities
|
(17,670
|
)
|
19,660
|
6,267
|
||||||
Net
cash flows provided by operating activities
|
67,021
|
32,253
|
9,012
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Capital
expenditures
|
(22,250
|
)
|
(26,092
|
)
|
(27,058
|
)
|
||||
Acquisition
of businesses
|
(33,695
|
)
|
(17,880
|
)
|
(21,388
|
)
|
||||
Proceeds
from sales of fixed assets
|
4,032
|
2,663
|
369
|
|||||||
Other
investments
|
(12
|
)
|
(132
|
)
|
(343
|
)
|
||||
Net
cash flows used for investing activities
|
(51,925
|
)
|
(41,441
|
)
|
(48,420
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from line of credit and other borrowings
|
182,670
|
199,275
|
221,846
|
|||||||
Repayments
under line of credit and other borrowings
|
(200,955
|
)
|
(197,466
|
)
|
(190,418
|
)
|
||||
Exercise
of stock options
|
3,339
|
10,360
|
1,979
|
|||||||
Other
|
1,550
|
(320
|
)
|
(356
|
)
|
|||||
Net
cash flows (used for) provided by
|
||||||||||
financing
activities
|
(13,396
|
)
|
11,849
|
33,051
|
||||||
Net
increase (decrease) in cash
|
1,700
|
2,661
|
(6,357
|
)
|
||||||
Cash
and cash equivalents at beginning of year
|
5,085
|
2,424
|
8,781
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
6,785
|
$
|
5,085
|
$
|
2,424
|
||||
Supplemental
disclosure of cash flows information:
|
||||||||||
Cash
paid during the year for:
|
||||||||||
Interest
on debt
|
$
|
4,555
|
$
|
3,713
|
$
|
2,987
|
||||
Income
taxes, net of refunds
|
$
|
18,619
|
$
|
14,607
|
$
|
15,053
|
Drew
Industries Incorporated
|
|||||||||||||||||||
Consolidated
Statements of Stockholders' Equity
|
|||||||||||||||||||
(In
thousands, except shares)
|
|||||||||||||||||||
|
|||||||||||||||||||
|
|
||||||||||||||||||
Accumulated
|
|||||||||||||||||||
Other
|
Total
|
||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
Stockholders’
|
||||||||||||||
Stock
|
Capital
|
Earnings
|
Income
|
Stock
|
Equity
|
||||||||||||||
|
|||||||||||||||||||
Balance
- December 31, 2003
|
$
|
226
|
$
|
32,589
|
$
|
80,305
|
$
|
-
|
$
|
(19,467
|
)
|
$
|
93,653
|
||||||
Net
income
|
25,108
|
25,108
|
|||||||||||||||||
Unrealized
gain on interest rate
|
|||||||||||||||||||
swap,
net of taxes
|
59
|
59
|
|||||||||||||||||
Comprehensive
income
|
25,167
|
||||||||||||||||||
Issuance
of 204,560 shares of
|
|||||||||||||||||||
common
stock pursuant to stock
|
|||||||||||||||||||
options
exercised
|
2
|
1,147
|
1,149
|
||||||||||||||||
Income
tax benefit relating to
|
|||||||||||||||||||
issuance
of common stock
|
|||||||||||||||||||
pursuant
to stock options
|
|||||||||||||||||||
exercised
|
830
|
830
|
|||||||||||||||||
Stock-based
compensation expense
|
1,245
|
1,245
|
|||||||||||||||||
Balance
- December 31, 2004
|
228
|
35,811
|
105,413
|
59
|
(19,467
|
)
|
122,044
|
||||||||||||
Net
income
|
33,602
|
33,602
|
|||||||||||||||||
Unrealized
gain on interest rate
|
|||||||||||||||||||
swap,
net of taxes
|
211
|
211
|
|||||||||||||||||
Comprehensive
income
|
33,813
|
||||||||||||||||||
Issuance
of 847,020 shares of
|
|||||||||||||||||||
common
stock pursuant to stock
|
|||||||||||||||||||
options
exercised
|
8
|
4,990
|
4,998
|
||||||||||||||||
Income
tax benefit relating to
|
|||||||||||||||||||
issuance
of common stock
|
|||||||||||||||||||
pursuant
to stock options
|
|||||||||||||||||||
exercised
|
5,362
|
5,362
|
|||||||||||||||||
Stock-based
compensation expense
|
1,492
|
1,492
|
|||||||||||||||||
Balance
- December 31, 2005
|
236
|
47,655
|
139,015
|
270
|
(19,467
|
)
|
167,709
|
||||||||||||
Net
income
|
31,023
|
31,023
|
|||||||||||||||||
Unrealized
loss on interest rate
|
|||||||||||||||||||
swaps,
net of taxes
|
(164
|
)
|
(164
|
)
|
|||||||||||||||
Comprehensive
income
|
30,859
|
||||||||||||||||||
Issuance
of 197,480 shares of
|
|||||||||||||||||||
common
stock pursuant to stock
|
|||||||||||||||||||
options
exercised
|
2
|
1,769
|
1,771
|
||||||||||||||||
Income
tax benefit relating to
|
|||||||||||||||||||
issuance
of common stock
|
|||||||||||||||||||
pursuant
to stock options
|
|||||||||||||||||||
exercised
|
1,568
|
1,568
|
|||||||||||||||||
Stock-based
compensation expense
|
2,981
|
2,981
|
|||||||||||||||||
Balance
- December 31, 2006
|
$
|
238
|
$
|
53,973
|
$
|
170,038
|
$
|
106
|
$
|
(19,467
|
)
|
$
|
204,888
|
2006
|
2005
|
2004
|
|||||||||||
Risk-free
interest rate
|
4.57
|
%
|
|
4.50
|
%
|
|
3.54
|
%
|
|
||||
Expected
volatility
|
33.1
|
%
|
|
32.1
|
%
|
|
34.7
|
%
|
|
||||
Expected
life
|
5.7
|
years
|
4.8
|
years
|
5.2
|
years
|
|||||||
Contractual
life
|
|
|
6.0
|
years
|
6.0
|
years
|
6.0
|
years
|
|||||
Dividend
yield
|
N/A
|
N/A
|
N/A
|
||||||||||
Fair
value of stock options granted
|
$
|
10.58
|
$
|
10.05
|
$
|
5.91
|
2005
|
2004
|
||||||
Net
income, as reported
|
$
|
33,602
|
$
|
25,108
|
|||
Add:
Compensation expense related to stock options included
|
|||||||
in
reported net income, net of related tax effects
|
668
|
550
|
|||||
Deduct:
Total compensation expense related to stock options
|
|||||||
determined
under fair value method for all stock option
|
|||||||
awards,
net of related tax effects
|
(740
|
)
|
(799
|
)
|
|||
Pro
forma net income
|
$
|
33,530
|
$
|
24,859
|
|||
Net
income per common share:
|
|||||||
Basic
- as reported
|
$
|
1.60
|
$
|
1.22
|
|||
Basic
- pro forma
|
$
|
1.60
|
$
|
1.21
|
|||
Diluted
- as reported
|
$
|
1.56
|
$
|
1.18
|
|||
Diluted
- pro forma
|
$
|
1.56
|
$
|
1.17
|
Segments
|
Corporate
|
Intangible
|
|||||||||||||||||
RV
|
MH
|
Total
|
and
Other
|
Assets
|
Total
|
||||||||||||||
Year
ended December 31, 2006
|
|||||||||||||||||||
Revenues
from external
|
|||||||||||||||||||
customers(a)
|
$
|
508,824
|
$
|
220,408
|
$
|
729,232
|
$
|
729,232
|
|||||||||||
Segment
operating profit (loss)(b)
|
43,850
|
21,037
|
64,887
|
$
|
(7,046
|
)
|
$
|
(2,546
|
)
|
55,295
|
|||||||||
Segment
assets(c)
|
149,961
|
75,468
|
225,429
|
26,091
|
59,756
|
311,276
|
|||||||||||||
Expenditures
for long-lived
|
|||||||||||||||||||
assets(d)
|
17,009
|
6,598
|
23,607
|
4
|
23,611
|
||||||||||||||
Depreciation
and amortization
|
7,816
|
5,290
|
13,106
|
17
|
2,546
|
15,669
|
|||||||||||||
Year
ended December 31, 2005
|
|||||||||||||||||||
Revenues
from external
|
|||||||||||||||||||
customers(a)
|
$
|
447,662
|
$
|
221,485
|
$
|
669,147
|
$
|
669,147
|
|||||||||||
Segment
operating profit (loss)(b)
|
43,144
|
22,566
|
65,710
|
$
|
(6,554
|
)
|
$
|
(1,427
|
)
|
57,729
|
|||||||||
Segment
assets(c)
|
162,546
|
88,436
|
250,982
|
22,881
|
33,565
|
307,428
|
|||||||||||||
Expenditures
for long-lived
|
|||||||||||||||||||
assets(d)
|
17,542
|
13,914
|
31,456
|
39
|
31,495
|
||||||||||||||
Depreciation
and amortization
|
6,429
|
4,062
|
10,491
|
27
|
1,427
|
11,945
|
|||||||||||||
Year
ended December 31, 2004
|
|||||||||||||||||||
Revenues
from external
|
|||||||||||||||||||
customers(a)
|
$
|
346,140
|
$
|
184,730
|
$
|
530,870
|
$
|
530,870
|
|||||||||||
Segment
operating profit (loss)(b)
|
32,637
|
17,742
|
50,379
|
$
|
(5,351
|
)
|
$
|
(1,032
|
)
|
43,996
|
|||||||||
Segment
assets(c)
|
120,974
|
77,196
|
198,170
|
16,301
|
23,582
|
238,053
|
|||||||||||||
Expenditures
for long-lived
|
|||||||||||||||||||
assets(d)
|
25,466
|
13,377
|
38,843
|
36
|
38,879
|
||||||||||||||
Depreciation
and amortization
|
4,196
|
4,043
|
8,239
|
29
|
1,032
|
9,300
|
a) |
One
customer of the RV Segment accounted for 23 percent, 21 percent and
22
percent of the Company’s consolidated net sales in the years ended
December 31, 2006, 2005, and 2004, respectively. One customer of
both
segments accounted for 19 percent, 20 percent and 17 percent of the
Company’s consolidated net sales in the years ended December 31, 2006,
2005 and 2004, respectively, and another customer of both segments
accounted for 12 percent of the Company’s consolidated net sales for the
year ended December 31, 2004.
|
b) |
Certain
general and administrative expenses of Kinro and Lippert are allocated
between the segments based upon sales or operating profit, depending
upon
the nature of the expense.
|
c) |
Segment
assets include accounts receivable, inventories and fixed assets.
Corporate and other assets include cash and cash equivalents, prepaid
expenses and other current assets, deferred taxes and other assets,
excluding intangible assets. Intangibles include goodwill, other
intangible assets and deferred charges which are not considered in
the
measurement of each segment’s
performance.
|
d) |
Segment
expenditures for long-lived assets include capital expenditures and
fixed
assets purchased as part of the acquisition of companies and businesses.
The Company purchased $1.4 million, $5.4 million and $11.8 million
of
fixed assets as part of the acquisitions of businesses in 2006, 2005
and
2004, respectively. Expenditures for other long-lived assets, goodwill
and
other intangible assets are not included in the segment since they
are not
considered in the measurement of each segment’s
performance.
|
2006
|
2005
|
2004
|
||||||||
Recreational
Vehicles:
|
||||||||||
Chassis
and chassis parts
|
$
|
216,391
|
$
|
194,113
|
$
|
156,873
|
||||
Windows,
doors and screens
|
117,985
|
112,269
|
98,040
|
|||||||
Slide-out
mechanisms
|
104,777
|
89,661
|
66,441
|
|||||||
Axles
|
39,153
|
9,974
|
501
|
|||||||
Specialty
trailers
|
24,983
|
33,064
|
17,231
|
|||||||
Other
|
5,535
|
8,581
|
7,054
|
|||||||
508,824
|
447,662
|
346,140
|
||||||||
Manufactured
Housing:
|
||||||||||
Windows,
doors and screens
|
88,827
|
93,563
|
80,222
|
|||||||
Chassis
and chassis parts
|
87,221
|
83,013
|
68,606
|
|||||||
Shower
and bath units
|
19,792
|
19,425
|
17,159
|
|||||||
Axles
and tires
|
18,390
|
14,346
|
6,396
|
|||||||
Other
|
6,178
|
11,138
|
12,347
|
|||||||
220,408
|
221,485
|
184,730
|
||||||||
Net
Sales
|
$
|
729,232
|
$
|
669,147
|
$
|
530,870
|
Net
tangible assets acquired
|
$
|
3,925
|
||
Patents
|
9,600
|
|||
Other
identifiable intangible assets
|
6,400
|
|||
Goodwill
(tax deductible)
|
10,338
|
|||
Total
consideration
|
30,263
|
|||
Less:
Debt assumed
|
(732
|
)
|
||
Total
cash consideration
|
$
|
29,531
|
Net
tangible assets acquired
|
$
|
756
|
||
Identifiable
intangible assets
|
1,520
|
|||
Goodwill
(tax deductible)
|
1,888
|
|||
Total
cash consideration
|
$
|
4,164
|
Net
tangible assets acquired
|
$
|
5,810
|
||
Identifiable
intangible assets
|
6,707
|
|||
Goodwill
(tax deductible)
|
6,056
|
|||
Total
cash consideration
|
$
|
18,573
|
Net
tangible assets acquired
|
$
|
19,644
|
||
Identifiable
intangible assets
|
2,600
|
|||
Goodwill
(tax deductible)
|
3,691
|
|||
Total
consideration
|
25,935
|
|||
Less:
Debt assumed
|
(5,240
|
)
|
||
Total
cash consideration
|
$
|
20,695
|
Accumulated
|
Estimated
Useful
|
||||||||||||
Gross
|
Amortization
|
Net
|
Life
in Years
|
||||||||||
Non-compete
agreements
|
$
|
1,821
|
$
|
651
|
$
|
1,170
|
4
to
7
|
||||||
Customer
relationships
|
11,280
|
2,244
|
9,036
|
8
to
16
|
|||||||||
Tradenames
|
2,700
|
609
|
2,091
|
5
to
14
|
|||||||||
Patents
|
13,265
|
761
|
12,504
|
5
to
19
|
|||||||||
Other
intangible assets
|
$
|
24,801
|
Accumulated
|
Estimated
Useful
|
||||||||||||
Gross
|
Amortization
|
Net
|
Life
in Years
|
||||||||||
Non-compete
agreements
|
$
|
681
|
$
|
317
|
$
|
364
|
4
to
7
|
||||||
Customer
relationships
|
6,100
|
1,130
|
4,970
|
8
to
12
|
|||||||||
Tradenames
|
1,100
|
302
|
798
|
5
to
7
|
|||||||||
Patents
|
3,653
|
220
|
3,433
|
5
to
15
|
|||||||||
9,565
|
|||||||||||||
Royalty
agreement(a)
|
1,087
|
||||||||||||
Other
intangible assets
|
$
|
10,652
|
a) |
In
February 2003, the Company entered into an agreement for a non-exclusive
license for certain patents related to slide-out-systems. Royalties
are
payable on an annual declining percentage of sales of certain slide-out
systems produced by the Company, with a minimum annual royalty of
$1.0
million for 2002 and annual minimum royalties of $1.3 million for
2003
through 2006. The agreement also provides for the Company to pay
a royalty
of 1 percent on sales of certain slide-out systems commencing January
1,
2007 through the expiration of the patents, with aggregate payments
subsequent to January 1, 2007 not to exceed $5.0 million.
|
MH
Segment
|
RV
Segment
|
Total
|
||||||||
Balance
- January 1, 2005
|
$
|
3,201
|
$
|
13,554
|
$
|
16,755
|
||||
Acquisition
in 2005
|
6,056
|
-
|
6,056
|
|||||||
Adjustment
to 2004 acquisition
|
(6
|
)
|
(687
|
)
|
(693
|
)
|
||||
Balance
- December 31, 2005
|
9,251
|
12,867
|
22,118
|
|||||||
Acquisitions
in 2006
|
-
|
12,226
|
12,226
|
|||||||
Balance
- December 31, 2006
|
$
|
9,251
|
$
|
25,093
|
$
|
34,344
|
2006
|
2005
|
||||||
Finished
goods
|
$
|
13,513
|
$
|
16,140
|
|||
Work
in process
|
3,868
|
3,256
|
|||||
Raw
materials
|
65,695
|
81,221
|
|||||
Total
|
$
|
83,076
|
$
|
100,617
|
Estimated
Useful
|
||||||||||
2006
|
2005
|
Life
in Years
|
||||||||
Land
|
$
|
14,860
|
$
|
14,608
|
||||||
Buildings
and improvements
|
76,563
|
73,823
|
10
to 40
|
|||||||
Leasehold
improvements
|
3,165
|
3,213
|
3
to 10
|
|||||||
Machinery
and equipment
|
73,172
|
61,049
|
3
to 12
|
|||||||
Transportation
equipment
|
3,889
|
3,665
|
3
to
7
|
|||||||
Furniture
and fixtures
|
8,223
|
6,975
|
2
to 10
|
|||||||
Construction
in progress
|
4,720
|
3,720
|
||||||||
184,592
|
167,053
|
|||||||||
Less
accumulated depreciation and amortization
|
60,034
|
50,225
|
||||||||
Fixed
assets, net
|
$
|
124,558
|
$
|
116,828
|
2006
|
2005
|
2004
|
||||||||
Charged
to cost of sales
|
$
|
11,081
|
$
|
8,828
|
$
|
7,115
|
||||
Charged
to selling, general and
|
||||||||||
administrative
expenses
|
1,905
|
1,554
|
991
|
|||||||
Total
|
$
|
12,986
|
$
|
10,382
|
$
|
8,106
|
2006
|
2005
|
||||||
Accrued
employee compensation and fringes
|
$
|
19,319
|
$
|
23,349
|
|||
Accrued
warranty
|
3,990
|
3,139
|
|||||
Accrued
expenses and other
|
14,011
|
10,919
|
|||||
Total
|
$
|
37,320
|
$
|
37,407
|
2006
|
2005
|
2004
|
||||||||
Balance
at beginning of period
|
$
|
3,139
|
$
|
2,179
|
$
|
1,172
|
||||
Provision
for warranty expense
|
5,160
|
4,408
|
3,041
|
|||||||
Warranty
costs paid
|
(4,309
|
)
|
(3,448
|
)
|
(2,034
|
)
|
||||
Balance
at end of period
|
$
|
3,990
|
$
|
3,139
|
$
|
2,179
|
2006
|
2005
|
||||||
Senior
Promissory Notes payable at the rate of $1,000 per
|
|||||||
quarter
on January 29, April 29, July 29 and October 29,
|
|||||||
with
interest payable quarterly at the rate of 5.01 percent per
|
|||||||
annum,
final payment to be made on April 29, 2010
|
$
|
14,000
|
$
|
18,000
|
|||
Senior
Promissory Notes payable at the rate of $536 per
|
|||||||
quarter
on the last business day of March, June, September,
|
|||||||
and
December with interest payable at the rate of LIBOR
|
|||||||
plus
1.65 percent per annum, final payment to be
|
|||||||
made
on June 28, 2013
|
13,929
|
-
|
|||||
Notes
payable pursuant to a Credit Agreement expiring
|
|||||||
June
30, 2009 consisting of a line of credit, not to
|
|||||||
exceed
$70,000 at December 31, 2006 and $60,000 at
|
|||||||
December
31, 2005; interest at prime rate or LIBOR plus a
|
|||||||
rate
margin based upon the Company's performance(a)
(b)
|
12,000
|
31,425
|
|||||
Industrial
Revenue Bonds, interest rates at December 31,
|
|||||||
2005
of 4.68 percent to 6.28 percent, due 2008 through 2017;
|
|||||||
secured
by certain real estate and equipment
|
8,077
|
9,416
|
|||||
Other
loans primarily secured by certain real estate and
|
|||||||
equipment,
due 2009 to 2011, with fixed interest rates of
|
|||||||
5.18
percent to 6.63 percent
|
5,780
|
10,351
|
|||||
Other
loans primarily secured by certain real estate and
|
|||||||
equipment,
due 2011 to 2016, with variable interest rates of
|
|||||||
7.00
percent to 8.50 percent
|
1,894
|
4,041
|
|||||
55,680
|
73,233
|
||||||
Less
current portion
|
9,714
|
11,140
|
|||||
Total
long-term indebtedness
|
$
|
45,966
|
$
|
62,093
|
(a) |
The
weighted average interest rate on these borrowings, including the
affect
of the interest rate swap described below, was 4.35 percent and 5.43
percent at December 31, 2006 and 2005, respectively. Pursuant to
the
performance schedule, the interest rate on LIBOR loans was LIBOR
plus 1.0
percent at December 31, 2006 and 2005.
|
(b) |
As
of December 31, 2006 and 2005, the Company had letters of credit
of $2.7
million and $5.9 million outstanding under the line of credit,
respectively.
|
2007
|
$
|
9,714
|
||
2008
|
11,332
|
|||
2009
|
20,806
|
|||
2010
|
4,739
|
|||
2011
|
2,737
|
|||
Thereafter
|
6,352
|
|||
55,680
|
||||
Less
current portion
|
9,714
|
|||
Total
long-term indebtedness
|
$
|
45,966
|
2006
|
2005
|
2004
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
15,284
|
$
|
17,745
|
$
|
14,655
|
||||
State
|
3,734
|
2,931
|
2,487
|
|||||||
Deferred:
|
||||||||||
Federal
|
807
|
(373
|
)
|
(1,114
|
)
|
|||||
State
|
(154
|
)
|
158
|
(279
|
)
|
|||||
Total
income tax provision
|
$
|
19,671
|
$
|
20,461
|
$
|
15,749
|
2006
|
2005
|
2004
|
||||||||
Income
tax at Federal statutory rate
|
$
|
17,743
|
$
|
18,922
|
$
|
14,300
|
||||
State
income taxes, net of Federal income tax benefit
|
2,327
|
2,008
|
1,435
|
|||||||
Non-deductible
expenses
|
197
|
138
|
152
|
|||||||
Manufacturing
credit pursuant to Jobs Creation Act
|
(443
|
)
|
(540
|
)
|
-
|
|||||
Other
|
(153
|
)
|
(67
|
)
|
(138
|
)
|
||||
Provision
for income taxes
|
$
|
19,671
|
$
|
20,461
|
$
|
15,749
|
2006
|
2005
|
||||||
Deferred
tax assets:
|
|||||||
Accounts
receivable
|
$
|
659
|
$
|
906
|
|||
Inventories
|
1,477
|
1,649
|
|||||
Goodwill
and other assets
|
2,251
|
2,963
|
|||||
Accrued
insurance
|
1,207
|
2,440
|
|||||
Employee
benefits
|
2,011
|
1,463
|
|||||
Other
|
1,027
|
1,444
|
|||||
Total
deferred tax assets
|
8,632
|
10,865
|
|||||
Deferred
tax liabilities:
|
|||||||
Fixed
assets
|
3,018
|
4,660
|
|||||
Other
|
66
|
169
|
|||||
Total
deferred tax liabilities
|
3,084
|
4,829
|
|||||
Net
deferred tax asset
|
$
|
5,548
|
$
|
6,036
|
2006
|
2005
|
||||||
Prepaid
expenses and other current assets
|
$
|
6,199
|
$
|
7,712
|
|||
Other
long-term liabilities
|
(651
|
)
|
(1,676
|
)
|
|||
$
|
5,548
|
$
|
6,036
|
Operating
|
Capital
|
||||||
Leases
|
Leases
|
||||||
2007
|
$
|
3,948
|
$
|
208
|
|||
2008
|
3,476
|
131
|
|||||
2009
|
2,863
|
44
|
|||||
2010
|
1,990
|
20
|
|||||
2011
|
1,376
|
-
|
|||||
Thereafter
|
1,745
|
-
|
|||||
Total
minimum lease payments
|
$
|
15,398
|
403
|
||||
Less
amounts representing interest
|
29
|
||||||
Present
value of minimum lease payments
|
374
|
||||||
Less
current portion
|
190
|
||||||
Total
long term portion of capital lease obligations
|
$
|
184
|
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Number
of
|
Stock
Option
|
Exercise
|
|||||||||||
|
|
|
Option
Shares
|
|
|
Exercise
Price
|
Price
|
||||||
Outstanding
at December 31,
2003
|
1,968,640
|
||||||||||||
Granted
|
65,000
|
$16.15
|
-
|
$16.16
|
|||||||||
Exercised
|
(204,560
|
)
|
|
$4.41
|
-
|
$12.78
|
|||||||
Canceled
|
(13,800
|
)
|
|
$4.55
|
-
|
$12.78
|
|||||||
Outstanding
at December 31,
2004
|
1,815,280
|
|
|||||||||||
Granted
|
626,000
|
|
$28.33
|
-
|
$28.71
|
||||||||
Exercised
|
(847,020
|
)
|
|
$2.84
|
-
|
$16.15
|
|||||||
Canceled
|
(15,800
|
)
|
|
$4.55
|
-
|
$12.78
|
|||||||
Outstanding
at December 31,
2005
|
1,578,460
|
$17.78 | |||||||||||
Granted
|
45,000
|
$26.39 | 26.39 | ||||||||||
Exercised
|
(197,480
|
)
|
|
$4.55
|
-
|
$16.16
|
8.97
|
||||||
Canceled
|
(61,900
|
)
|
|
$4.55
|
-
|
$28.33
|
18.15
|
||||||
Outstanding
at December 31,
2006
|
1,364,080
|
|
$4.55
|
-
|
$28.71
|
$19.33 | |||||||
Exercisable
at December 31, 2006
|
606,080
|
|
$4.55
|
-
|
$28.71
|
$15.03 |
Option
|
Option
|
|||||||||||||
Exercise
|
Shares
|
Remaining
|
Shares
|
|||||||||||
Price
|
Outstanding
|
Life
(Years)
|
Exercisable
|
|||||||||||
$4.55
|
136,880
|
0.9
|
136,880
|
|||||||||||
$7.88
|
|
30,000
|
2.0
|
30,000
|
||||||||||
$12.78
|
467,700
|
2.9
|
208,900
|
|||||||||||
$13.80
|
30,000
|
3.0
|
30,000
|
|||||||||||
$16.15
|
40,000
|
4.0
|
40,000
|
|||||||||||
$16.16
|
12,000
|
3.9
|
3,000
|
|||||||||||
$28.33
|
557,500
|
4.9
|
112,300
|
|||||||||||
$28.71
|
45,000
|
5.0
|
45,000
|
|||||||||||
$26.39
|
45,000
|
6.0
|
- |
Stock
Price
|
|||||||||
Number
of
|
at
Date
|
||||||||
Shares
|
of
Issuance
|
||||||||
Outstanding
at December31,2003
|
34,214
|
||||||||
Issued
|
12,836
|
|
$13.90-$20.51
|
||||||
Outstanding
at December31,2004
|
47,050
|
||||||||
Issued
|
12,456
|
|
$18.06-$29.95
|
||||||
Outstanding
at December31,2005
|
59,506
|
||||||||
Issued
|
9,451
|
|
$25.01-$37.35
|
||||||
Exercised
|
(2,460
|
)
|
|
|
$13.90-$29.95
|
||||
Outstanding
at December31,2006
|
66,497
|
|
$6.87-$37.35
|
2006
|
2005
|
2004
|
||||||||
Weighted
average shares outstanding for
|
||||||||||
basic
earnings per share
|
21,619,455
|
21,011,792
|
20,563,222
|
|||||||
Common
stock equivalents pertaining to
|
||||||||||
stock
options
|
247,542
|
532,410
|
635,518
|
|||||||
Total
for diluted shares
|
21,866,997
|
21,544,202
|
21,198,740
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Year
|
||||||||||||
Year
Ended December 31, 2006
|
||||||||||||||||
Net
sales
|
$
|
208,461
|
$
|
201,976
|
$
|
180,743
|
$
|
138,052
|
$
|
729,232
|
||||||
Gross
profit
|
43,701
|
44,605
|
37,918
|
27,852
|
154,076
|
|||||||||||
Income
before income taxes
|
16,583
|
16,692
|
11,466
|
5,953
|
50,694
|
|||||||||||
Net
income
|
10,205
|
10,231
|
6,937
|
3,650
|
31,023
|
|||||||||||
Net
income per common share:
|
||||||||||||||||
Basic
|
.47
|
.47
|
.32
|
.17
|
1.43
|
|||||||||||
Diluted
|
.47
|
.47
|
.32
|
.17
|
1.42
|
|||||||||||
Stock
Market Price
|
||||||||||||||||
High
|
$
|
37.65
|
$
|
38.16
|
$
|
31.19
|
$
|
29.15
|
$
|
38.16
|
||||||
Low
|
$
|
29.00
|
$
|
27.25
|
$
|
22.65
|
$
|
24.86
|
$
|
22.65
|
||||||
Close
(at end of quarter)
|
$
|
35.55
|
$
|
32.40
|
$
|
25.26
|
$
|
26.01
|
$
|
26.01
|
||||||
Year
Ended December 31, 2005
|
||||||||||||||||
Net
sales
|
$
|
154,546
|
$
|
163,023
|
$
|
170,791
|
$
|
180,787
|
$
|
669,147
|
||||||
Gross
profit
|
33,018
|
37,801
|
38,646
|
40,682
|
150,147
|
|||||||||||
Income
before income taxes
|
9,499
|
14,075
|
15,721
|
14,768
|
54,063
|
|||||||||||
Net
income
|
5,816
|
8,661
|
9,787
|
9,338
|
33,602
|
|||||||||||
Net
income per common share:
|
||||||||||||||||
Basic
|
.28
|
.41
|
.46
|
.44
|
1.60
|
|||||||||||
Diluted
|
.27
|
.40
|
.45
|
.43
|
1.56
|
|||||||||||
Stock
Market Price
|
||||||||||||||||
High
|
$
|
19.75
|
$
|
22.70
|
$
|
26.27
|
$
|
31.66
|
$
|
31.66
|
||||||
Low
|
$
|
17.98
|
$
|
18.62
|
$
|
21.16
|
$
|
24.75
|
$
|
17.98
|
||||||
Close
(at end of quarter)
|
$
|
18.83
|
$
|
22.70
|
$
|
25.81
|
$
|
28.19
|
$
|
28.19
|
(a) |
Management’s
Annual Report on Internal Control over Financial Reporting.
|
/s/ LEIGH J. ABRAMS | /s/ FREDRIC M. ZINN | ||
President and |
Executive Vice President and |
||
Chief Executive Officer | Chief Financial Officer |
Exhibit
|
||
Number
|
Description
|
Sequentially
|
Numbered
Page
|
||
3.
|
Articles
of Incorporation and By-laws.
|
|
3.1
|
Drew
Industries Incorporated Restated Certificate of
Incorporation.
|
|
3.2
|
Drew
Industries Incorporated By-laws, as amended.
|
|
Exhibit
3.1 is incorporated by reference to Exhibit III to the Proxy
Statement-Prospectus constituting Part I of the Drew National Corporation
and Drew Industries Incorporated Registration Statement on Form
S-14
(Registration No. 2-94693).
|
||
Exhibit
3.2 is incorporated by reference to the Exhibit bearing the same
number
included in the Annual Report of Drew Industries Incorporated on
Form 10-K
for the fiscal year ended August 31, 1985.
|
||
10.
|
Material
Contracts.
|
|
10.164
|
Executive
Employment and Non-Competition Agreement, dated January 2, 2004,
by and
between Lippert Components, Inc. and L. Douglas Lippert.
|
|
10.194
|
Drew
Industries Incorporated 2002 Equity Award and Incentive Plan, as
amended.
|
10.195
|
License
Agreement, dated February 28, 2003, by and among Versa Technologies,
Inc.,
VT Holdings II, Inc. and Engineered Solutions LP, and Lippert Components,
Inc.
|
10.197
|
Amended
Change of Control Agreement by and between Fredric M. Zinn and Registrant,
dated March 3, 2006, as amended on July 18,
2006.
|
10.198
|
Amended
and Restated Credit Agreement dated as of February 11, 2005 by and
among
Kinro, Inc., Lippert Components, Inc., KeyBank, National Association,
HSBC
Bank USA, National Association, and JPMorgan Chase Bank, N.A.,
individually and as Administrative
Agent.
|
10.199
|
Amended
and Restated Subsidiary Guarantee Agreement dated as of February
11, 2005
by and among Lippert Tire & Axle, Inc., Kinro Holding, Inc., Lippert
Tire & Axle Holding, Inc., Lippert Holding, Inc., Kinro Manufacturing,
Inc., Lippert Components Manufacturing, Inc., Kinro Texas Limited
Partnership, Kinro Tennessee Limited Partnership, Lippert Tire & Axle
Texas Limited Partnership, Lippert Components Texas Limited Partnership,
BBD Realty Texas Limited Partnership, LD Realty, Inc., LTM Manufacturing,
L.L.C., Coil Clip, Inc., Zieman Manufacturing Company, with and in
favor
of JPMorgan Chase Bank, N.A., as Administrative Agent for the
Lenders.
|
10.200
|
Amended
and Restated Company Guarantee Agreement dated as of February 11,
2005 by
and among Drew Industries Incorporated, with and in favor of JPMorgan
Chase Bank, N.A., as Administrative Agent for the
Lenders.
|
10.201
|
Amended
and Restated Subordination Agreement dated as of February 11, 2005
by and
among Kinro, Inc., Lippert Tire & Axle, Inc., Lippert Components,
Inc., Kinro Holding, Inc., Lippert Tire & Axle Holding, Inc., Lippert
Holding, Inc., Kinro Manufacturing, Inc., Lippert Components
Manufacturing, Inc., Lippert Components of Canada, Inc., Coil Clip,
Inc.,
Zieman Manufacturing Company, Kinro Texas Limited Partnership, Kinro
Tennessee Limited Partnership, Lippert Tire & Axle Texas Limited
Partnership, BBD Realty Texas Limited Partnership, Lippert Components
Texas Limited Partnership, LD Realty, Inc., LTM Manufacturing, L.L.C.,
with and in favor of JPMorgan Chase Bank, N.A., as Administrative
Agent.
|
10.202
|
Amended
and Restated Pledge Agreement dated as of February 11, 2005 by and
among
Drew Industries Incorporated, Kinro, Inc., Lippert Tire & Axle, Inc.,
Kinro Holding, Inc., Lippert Tire & Axle Holding, Inc., Lippert
Components, Inc., Lippert Holding, Inc., with and in favor of JPMorgan
Chase Bank, N.A., as Administrative
Agent.
|
10.203
|
Revolving
Credit Note dated as of February 11, 2005 by and among Kinro, Inc.,
Lippert Components, Inc., payable to the order of JPMorgan Chase
Bank,
N.A. in the principal amount of Twenty-Five Million ($25,000,000)
Dollars.
|
10.204
|
Revolving
Credit Note dated as of February 11, 2005 by and among Kinro, Inc.,
Lippert Components, Inc., payable to the order of KeyBank National
Association in the principal amount of Twenty Million ($20,000,000)
Dollars.
|
10.205
|
Revolving
Credit Note dated as of February 11, 2005 by and among Kinro, Inc.,
Lippert Components, Inc., payable to the order of HSBC USA, National
Association in the principal amount of Fifteen Million ($15,000,000)
Dollars.
|
10.206
|
Note
Purchase and Private Shelf Agreement dated as of February 11, 2005
by and
among Kinro, Inc., Lippert Components, Inc., Drew Industries Incorporated
and Prudential Investment Management,
Inc.
|
10.207
|
Form
of Senior Note (Shelf Note).
|
10.208
|
Parent
Guarantee Agreement dated as of February 11, 2005 by and among Drew
Industries Incorporated, Prudential Investment Management, Inc. and
the
Noteholders.
|
10.209
|
Subsidiary
Guaranty dated as of February 11, 2005 by and among Lippert Tire
&
Axle, Inc., Kinro Holding, Inc., Lippert Tire & Axle Holding, Inc.,
Lippert Holding, Inc., Kinro Manufacturing, Inc., Lippert Components
Manufacturing, Inc., Kinro Texas Limited Partnership, Kinro Tennessee
Limited Partnership, Lippert Tire & Axle Texas Limited Partnership,
Lippert Components Texas Limited Partnership, BBD Realty Texas Limited
Partnership, LD Realty, Inc., LTM Manufacturing, L.L.C., Coil Clip,
Inc.,
Zieman Manufacturing Company, with and in favor of Prudential Investment
Management, Inc. and the Noteholders listed
thereto.
|
10.210
|
Intercreditor
Agreement dated as of February 11, 2005 by and among Prudential Investment
Management, Inc., JPMorgan Bank, N.A. (as Lender and Administrative
Agent), KeyBank, National Association, HSBC Bank USA, National Association
and JPMorgan Bank, N.A. (as Trustee and Administrative
Agent).
|
10.211
|
Subordination
Agreement dated as of February 11, 2005 by and among Drew Industries
Incorporated, Kinro, Inc., Lippert Tire & Axle, Inc., Lippert
Components, Inc., Kinro Holding, Inc., Lippert Tire & Axle Holding,
Inc., Lippert Holding, Inc., Kinro Manufacturing, Inc., Lippert Components
Manufacturing, Inc., Lippert Components of Canada, Inc., Coil Clip,
Inc.,
Zieman Manufacturing Company, Kinro Texas Limited Partnership, Kinro
Tennessee Limited Partnership, Lippert Tire & Axle Texas Limited
Partnership, BBD Realty Texas Limited Partnership, Lippert Components
Texas Limited Partnership, LD Realty, Inc., LTM Manufacturing, L.L.C.,
with and in favor of Prudential Investment Management,
Inc.
|
10.212
|
Pledge
Agreement dated as of February 11, 2005 by and among Drew Industries
Incorporated, Kinro, Inc., Lippert Tire & Axle, Inc., Kinro Holding,
Inc., Lippert Tire & Axle Holding, Inc., Lippert Components, Inc.,
Lippert Holding, Inc. in favor of JPMorgan Chase Bank, N.A. as security
trustee.
|
10.213
|
Collateralized
Trust Agreement dated as of February 11, 2005 by and among Kinro,
Inc.,
Lippert Components, Inc., Prudential Investment Management, Inc.
and
JPMorgan Chase Bank, N.A. as security trustee for the
Noteholders.
|
10.214
|
Amended
and Restated Employment Agreement between Registrant and David L.
Webster,
dated February 17, 2005.
|
10.221
|
Form
of Indemnification Agreement between Registrant and its officers
and
independent directors.
|
10.222
|
Employment
Agreement by and between Lippert Components, Inc. and Jason D. Lippert,
effective January 1, 2006.
|
10.223 | Amended Change of Control Agreement by and between Harvey F. Milman and Registrant, dated March 3, 2006, as amended on July 18, 2006. |
10.224
|
Memorandum
to Leigh J. Abrams from the Compensation Committee of the Board of
Directors dated November 15, 2006.
|
10.225 | Asset Purchase Agreement dated as of May 20, 2005, by and among Lippert Components Manufacturing, Inc., Banks Corporation, William P. Banks and John K. Banks. |
10.226 | Non-Competition Agreement dated as of May 20, 2005, by and between Lippert Components Manufacturing Inc., and William P. Banks. |
10.227 | Non-Competition Agreement dated as of May 20, 2005, by and between Lippert Components Manufacturing Inc., and John P. Banks. |
10.228 |
Amendment
to Asset Purchase Agreement by and among Lippert Components Manufacturing,
Inc., Banks Corporation, William P. Banks and John K.
Banks.
|
10.229 |
Contract
for Purchase and Sale of Real Estate by and between Lippert Components
Manufacturing, Inc. and Banks Enterprises,
Inc.
|
10.230 |
Second
Amendment to Amended and Restated Credit Agreement dated as of March
10,
2006 by and among Kinro, Inc., Lippert Components, Inc., KeyBank,
National
Association, HSBC Bank USA, National Association, and JPMorgan Chase
Bank,
N.A., individually and as Administrative
Agent.
|
10.231 |
Executive
Non-Qualified Deferred Compensation Plan.
|
Exhibit 10.164 is incorporated by reference to the Exhibit bearing the same number included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. |
Exhibit 10.194 is incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K dated February 23, 2007. |
Exhibit 10.195 is incorporated by reference to the Exhibits bearing the same numbers included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. |
Exhibits 10.198-10.213 are incorporated by reference to Exhibits 10.1-10.16 included in the Company’s Form 8-K filed on February 16, 2005. |
Exhibit 10.214 is incorporated by reference to Exhibit 10.1 included in the Company’s Form 8-K filed on February 23, 2005. |
Exhibit 10.221 is incorporated by reference to Exhibit 99.1 included in the Company’s Form 8-K filed on February 9, 2005. |
Exhibit 10.222 is incorporated by reference to Exhibit 10.1 included in the Company’s Form 8-K filed on October 11, 2005. |
Exhibit 10.224 is incorporated by reference to Exhibit 99.1 included in the Company’s Form 8-K filed on November 20, 2006. |
Exhibits 10.225-10.229 are incorporated by reference to Exhibits 10.1-10.5 included in the Company’s Form 8-K/A filed on July 19, 2005. |
Exhibits 10.197 and 10.223 are incorporated by reference to Exhibits 10.1-10.2 included in the Company’s Forms 8-K filed on March 7, 2006 and March 1, 2007. |
Exhibit 10.230 is incorporated by reference to Exhibit 10.1 included in the Company’s Form 8-K filed on March 14, 2006. |
Exhibit 10.231 is incorporated by reference to Exhibit 10.1 included in the Company’s Form 8-K filed on December 12, 2006. |
14.
|
Code
of Ethics.
|
14.1
|
Code
of Ethics for Senior Financial Officers Exhibit
14.1 is incorporated by reference to Exhibit 14 included in the
Company’s
Annual Report on Form 10-K for the year ended December 31,
2003.
|
14.2
|
Guidelines
for Business Conduct Exhibit
14.2 is filed herewith.
|
21 |
Subsidiaries
of the Registrant. Exhibit 21 is filed
herewith.
|
23 |
Consent
of Independent Registered Public Accounting Firm Exhibit 23 is
filed
herewith.
|
24 |
Powers
of Attorney. Powers
of Attorney of persons signing this Report are included as part
of this
Report.
|
31. |
Rule
13a-14(a)/15d-14(a) Certifications.
|
31.1 |
Rule
13a-14(a) Certificate of Chief Executive
Officer
|
31.2 |
Rule
13a-14(a) Certificate of Chief Financial
Officer
|
32. |
Section
1350 Certifications
|
32.1 |
Section
1350 Certificate of Chief Executive
Officer
|
32.2 |
Section
1350 Certificate of Chief Financial Officer Exhibits 31.1-32.2
are filed
herewith.
|
Date: March 13, 2007 | ||
DREW
INDUSTRIES INCORPORATED
|
||
|
|
|
By: | /s/ Leigh J. Abrams | |
Leigh
J. Abrams, President
|
||
Date
|
Signature
|
Title
|
March
13, 2007
|
By: /s/Leigh
J. Abrams
(Leigh
J. Abrams)
|
Director,
President and
Chief
Executive Officer
|
March
13, 2007
|
By: /s/
Fredric M. Zinn
(Fredric
M. Zinn)
|
Executive
Vice President and
Chief
Financial Officer
|
March
13, 2007
|
By:/s/
Joseph S. Giordano
III
(Joseph
S. Giordano III)
|
Corporate
Controller and Treasurer
|
March
13, 2007
|
By: /s/
Edward W. Rose, III
(Edward
W. Rose, III)
|
Director
|
March
13, 2007
|
By: /s/
David L. Webster
(David
L. Webster)
|
Director
|
March
13, 2007
|
By: /s/
L. Douglas Lippert
(L.
Douglas Lippert)
|
Director
|
March
13, 2007
|
By:
/s/
James F. Gero
(James
F. Gero)
|
Director
|
March
13, 2007
|
By:/s/
Frederick B. Hegi, Jr.
(Frederick
B. Hegi, Jr.)
|
Director
|
March
13, 2007
|
By:/s/
David A. Reed
(David
A. Reed)
|
Director
|
March
13, 2007
|
By:
/s/
John B. Lowe, Jr.
(John
B. Lowe, Jr.)
|
Director
|