x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
13-3250533
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
|
|
(Do
not check if a smaller reporting company)
|
|
Page
|
||
PART
I -
|
FINANCIAL
INFORMATION
|
|
Item
1 - FINANCIAL STATEMENTS
|
||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
3
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
4
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
5
|
|
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
|
6
|
|
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
7-15
|
|
Item
2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
16-31
|
|
Item
3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
32
|
|
Item
4 - CONTROLS AND PROCEDURES
|
33
|
|
PART
II -
|
OTHER
INFORMATION
|
|
Item
1 - LEGAL PROCEEDINGS
|
34-35
|
|
Item
1A - RISK FACTORS
|
36
|
|
Item
2 - UNREGISTERED SALES OF EQUITY SECURITES AND USE OF
PROCEEDS
|
36
|
|
Item
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
37
|
|
Item
6 - EXHIBITS
|
37
|
|
SIGNATURES
|
38
|
|
|
||
EXHIBIT
31.1 - SECTION 302 CEO CERTIFICATION
|
|
|
EXHIBIT
31.2 - SECTION 302 CFO CERTIFICATION
|
|
|
EXHIBIT
32.1 - SECTION 906 CEO CERTIFICATION
|
|
|
EXHIBIT
32.2 - SECTION 906 CFO CERTIFICATION
|
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
(In
thousands, except per share amounts)
|
|||||||||||||
Net
sales
|
$
|
309,671
|
$
|
357,400
|
$
|
150,523
|
$
|
184,456
|
|||||
Cost
of sales
|
233,460
|
272,455 |
111,940
|
138,683
|
|||||||||
Gross
profit
|
76,211
|
84,945 |
38,583
|
45,773
|
|||||||||
Selling,
general and administrative expenses
|
46,373
|
48,063 |
23,076
|
24,789
|
|||||||||
Other
income
|
646
|
656 |
-
|
-
|
|||||||||
Operating
profit
|
30,484
|
37,538 |
15,507
|
20,984
|
|||||||||
Interest
expense, net
|
279
|
1,552 |
197
|
640
|
|||||||||
Income
before income taxes
|
30,205
|
35,986 |
15,310
|
20,344
|
|||||||||
Provision
for income taxes
|
11,910
|
13,835 |
6,120
|
7,782
|
|||||||||
Net
income
|
$
|
18,295
|
$ | 22,151 |
$
|
9,190
|
$
|
12,562
|
|||||
Net
income per common share:
|
|||||||||||||
Basic
|
$
|
0.83
|
$ | 1.02 |
$
|
0.42
|
$
|
0.57
|
|||||
Diluted
|
$
|
0.83
|
$ | 1.01 |
$
|
0.42
|
$
|
0.57
|
|||||
Weighted
average common shares outstanding:
|
|||||||||||||
Basic
|
21,967
|
21,817 |
21,920
|
21,852
|
|||||||||
Diluted
|
22,126
|
22,025 |
22,074
|
22,091
|
June
30,
|
December
31,
|
|||||||||
2008
|
2007
|
2007
|
||||||||
(In
thousands, except shares and per share amount)
|
||||||||||
ASSETS
|
||||||||||
Current
assets
|
||||||||||
Cash
and cash equivalents
|
$
|
43,397
|
$
|
38,561
|
$
|
56,213
|
||||
Accounts
receivable, trade, less allowances
|
23,641
|
36,521
|
15,740
|
|||||||
Inventories
|
99,836
|
75,053
|
76,279
|
|||||||
Prepaid
expenses and other current assets
|
12,105
|
9,830
|
12,702
|
|||||||
Total
current assets
|
178,979
|
159,965
|
160,934
|
|||||||
Fixed
assets, net
|
94,603
|
115,080
|
100,616
|
|||||||
Goodwill
|
39,641
|
35,868
|
39,547
|
|||||||
Other
intangible assets
|
30,584
|
28,858
|
32,578
|
|||||||
Other
assets
|
7,710
|
7,218
|
12,062
|
|||||||
Total
assets
|
$
|
351,517
|
$
|
346,989
|
$
|
345,737
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
Current
liabilities
|
||||||||||
Notes
payable, including current maturities of long-term
indebtedness
|
$
|
12,940
|
$
|
10,478
|
$
|
8,881
|
||||
Accounts
payable, trade
|
18,143
|
20,235
|
17,524
|
|||||||
Accrued
expenses and other current liabilities
|
40,389
|
44,733
|
44,668
|
|||||||
Total
current liabilities
|
71,472
|
75,446
|
71,073
|
|||||||
Long-term
indebtedness
|
6,918
|
37,295
|
18,381
|
|||||||
Other
long-term liabilities
|
5,870
|
3,816
|
4,747
|
|||||||
Total
liabilities
|
84,260
|
116,557
|
94,201
|
|||||||
Stockholders’
equity
|
||||||||||
Common
stock, par value $.01 per share: authorized 50,000,000 shares;
issued
24,088,454 shares at June 2008, 23,960,754 shares at June 2007
and
24,082,974 at December 2007
|
241
|
240
|
241
|
|||||||
Paid-in
capital
|
62,868
|
57,323
|
60,919
|
|||||||
Retained
earnings
|
228,100
|
192,189
|
209,805
|
|||||||
Accumulated
other comprehensive (loss) income
|
(11
|
)
|
147
|
38
|
||||||
291,198
|
249,899
|
271,003
|
||||||||
Treasury
stock, at cost - 2,346,725 shares at June 2008, 2,149,325 at June
2007 and
December 2007
|
(23,941
|
)
|
(19,467
|
)
|
(19,467
|
)
|
||||
Total
stockholders’ equity
|
267,257
|
230,432
|
251,536
|
|||||||
Total
liabilities and stockholders’ equity
|
$
|
351,517
|
$
|
346,989
|
$
|
345,737
|
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2008
|
2007
|
||||||
(In
thousands)
|
|||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
18,295
|
$
|
22,151
|
|||
Adjustments
to reconcile net income to cash flows (used for) provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
8,049
|
8,941
|
|||||
Deferred
taxes
|
-
|
(310
|
)
|
||||
(Gain)/loss
on disposal of fixed assets
|
(2,703
|
)
|
1,631
|
||||
Stock-based
compensation expense
|
1,875
|
1,214
|
|||||
Changes
in assets and liabilities, net of business acquisitions:
|
|||||||
Accounts
receivable, net
|
(7,901
|
)
|
(18,069
|
)
|
|||
Inventories
|
(23,557
|
)
|
8,849
|
||||
Prepaid
expenses and other assets
|
(9
|
)
|
741
|
||||
Accounts
payable, accrued expenses and other liabilities
|
(669
|
)
|
18,360
|
||||
Net
cash flows (used for) provided by operating
activities
|
(6,620
|
)
|
43,508
|
||||
Cash
flows from investing activities:
|
|||||||
Capital
expenditures
|
(2,350
|
)
|
(5,425
|
)
|
|||
Acquisition
of businesses
|
(94
|
)
|
(6,594
|
)
|
|||
Proceeds
from sales of fixed assets
|
8,091
|
6,072
|
|||||
Other
investments
|
(39
|
)
|
(16
|
)
|
|||
Net
cash flows provided by (used for) investing
activities
|
5,608
|
(5,963
|
)
|
||||
Cash
flows from financing activities:
|
|||||||
Proceeds
from line of credit and other borrowings
|
-
|
23,792
|
|||||
Repayments
under line of credit and other borrowings
|
(7,404
|
)
|
(31,699
|
)
|
|||
Purchase
of treasury stock
|
(4,474
|
)
|
-
|
||||
Exercise
of stock options
|
74
|
2,138
|
|||||
Net
cash flows used for financing activities
|
(11,804
|
)
|
(5,769
|
)
|
|||
Net
(decrease) increase in cash
|
(12,816
|
)
|
31,776
|
||||
Cash
and cash equivalents at beginning of period
|
56,213
|
6,785
|
|||||
Cash
and cash equivalents at end of period
|
$
|
43,397
|
$
|
38,561
|
|||
Supplemental
disclosure of cash flow information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
on debt
|
$
|
668
|
$
|
1,658
|
|||
Income
taxes, net of refunds
|
$
|
11,577
|
$
|
7,225
|
Accumulated
|
|||||||||||||||||||
Other
|
Total
|
||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
Stockholders’
|
||||||||||||||
Stock
|
Capital
|
Earnings
|
Income
(Loss)
|
Stock
|
Equity
|
||||||||||||||
(In
thousands, except shares)
|
|||||||||||||||||||
Balance
- December 31, 2007
|
$
|
241
|
$
|
60,919
|
$
|
209,805
|
$
|
38
|
$
|
(19,467
|
)
|
$
|
251,536
|
||||||
Net
income for the six months ended June 30, 2008
|
-
|
-
|
18,295
|
-
|
-
|
18,295
|
|||||||||||||
Unrealized
loss on interest rate swap, net of taxes
|
-
|
-
|
-
|
(49
|
)
|
-
|
(49
|
)
|
|||||||||||
Comprehensive
income
|
18,246
|
||||||||||||||||||
Issuance
of 5,480 shares of common stock pursuant to stock options and deferred
stock units exercised
|
-
|
59
|
-
|
-
|
-
|
59
|
|||||||||||||
Purchase
of 197,400 shares of treasury stock
|
-
|
-
|
-
|
-
|
(4,474
|
)
|
(4,474
|
)
|
|||||||||||
Income
tax benefit relating to issuance of common stock pursuant to stock
options
exercised
|
-
|
15
|
-
|
-
|
-
|
15
|
|||||||||||||
Stock-based
compensation expense
|
-
|
1,875
|
-
|
-
|
-
|
1,875
|
|||||||||||||
Balance
- June 30, 2008
|
$
|
241
|
$
|
62,868
|
$
|
228,100
|
$
|
(11
|
)
|
$
|
(23,941
|
)
|
$
|
267,257
|
1. |
Basis
of Presentation
|
2. |
Segment
Reporting
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Net
sales:
|
|||||||||||||
RV
Segment
|
$
|
235,247
|
$
|
263,037
|
$
|
111,292
|
$
|
133,905
|
|||||
MH
Segment
|
74,424
|
94,363
|
39,231
|
50,551
|
|||||||||
Total
net sales
|
$
|
309,671
|
$
|
357,400
|
$
|
150,523
|
$
|
184,456
|
|||||
Operating
profit:
|
|||||||||||||
RV
Segment
|
$
|
27,250
|
$
|
36,121
|
$
|
12,996
|
$
|
19,941
|
|||||
MH
Segment
|
7,076
|
8,106
|
4,566
|
5,174
|
|||||||||
Total
segment operating profit
|
34,326
|
44,227
|
17,562
|
25,115
|
|||||||||
Amortization
of intangibles
|
(2,123
|
)
|
(1,903
|
)
|
(1,070
|
)
|
(1,022
|
)
|
|||||
Corporate
|
(3,967
|
)
|
(3,917
|
)
|
(2,017
|
)
|
(2,030
|
)
|
|||||
Other
items
|
2,248
|
(869
|
)
|
1,032
|
(1,079
|
)
|
|||||||
Total
operating profit
|
$
|
30,484
|
$
|
37,538
|
$
|
15,507
|
$
|
20,984
|
3. |
Acquisitions
|
4. |
Cash
and Cash Equivalents
|
5. |
Inventories
|
June
30,
|
December
31,
|
|||||||||
2008
|
2007
|
2007
|
||||||||
Finished
goods
|
$
|
12,348
|
$
|
11,477
|
$
|
12,698
|
||||
Work
in process
|
3,811
|
3,375
|
2,975
|
|||||||
Raw
material
|
83,677
|
60,201
|
60,606
|
|||||||
Total
|
$
|
99,836
|
$
|
75,053
|
$
|
76,279
|
6.
|
Long-term
Indebtedness
|
June
30,
|
December
31,
|
|||||||||
2008
|
2007
|
2007
|
||||||||
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% per annum, final payment to be made on April 29,
2010
|
$
|
8,000
|
$
|
12,000
|
$
|
10,000
|
||||
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% per annum
|
-
|
12,857
|
-
|
|||||||
Notes
payable pursuant to the Credit Agreement expiring June 30, 2009
consisting
of a line of credit, not to exceed $70,000, with interest at prime
rate of
LIBOR plus a rate margin based upon the Company’s
performance
|
6,000
|
10,000
|
8,000
|
|||||||
Industrial
Revenue Bonds, interest rates at June 30, 2008 of 3.72% to 6.28%,
due 2009
through 2017; secured by certain real estate and equipment
|
3,131
|
6,097
|
5,448
|
|||||||
Other
loans primarily secured by certain real estate and equipment, due
2009 to
2011, with fixed interest rates at June 30, 2008 of 5.18% to
6.52%
|
2,727
|
5,019
|
3,727
|
|||||||
Other
loan primarily secured by certain real estate, with a variable
interest rate
|
-
|
1,800
|
87
|
|||||||
19,858
|
47,773
|
27,262
|
||||||||
Less
current portion
|
12,940
|
10,478
|
8,881
|
|||||||
Total
long-term indebtedness
|
$
|
6,918
|
$
|
37,295
|
$
|
18,381
|
7. |
Weighted
Average Common Shares
Outstanding
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Weighted
average shares outstanding for basic earnings per share
|
21,967
|
21,817
|
21,920
|
21,852
|
|||||||||
Common
stock equivalents pertaining to stock options
|
159
|
208
|
154
|
239
|
|||||||||
Total
for diluted shares
|
22,126
|
22,025
|
22,074
|
22,091
|
8. |
Commitments
and Contingencies
|
9. |
Stockholders’
Equity
|
10. |
New
Accounting Pronouncements
|
|
Wholesale
|
|
Retail
|
January
|
(6%)
|
|
(10%)
|
February
|
(3%)
|
|
(6%)
|
March
|
(14%)
|
|
(27%)
|
April
|
(7%)
|
|
(15%)
|
May
|
(21%)
|
|
(24%)
|
June
|
(25%)
|
|
Not
yet available
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Net
sales:
|
|||||||||||||
RV
Segment
|
$
|
235,247
|
$
|
263,037
|
$
|
111,292
|
$
|
133,905
|
|||||
MH
Segment
|
74,424
|
94,363
|
39,231
|
50,551
|
|||||||||
Total
net sales
|
$
|
309,671
|
$
|
357,400
|
$
|
150,523
|
$
|
184,456
|
|||||
Operating
profit:
|
|||||||||||||
RV
Segment
|
$
|
27,250
|
$
|
36,121
|
$
|
12,996
|
$
|
19,941
|
|||||
MH
Segment
|
7,076
|
8,106
|
4,566
|
5,174
|
|||||||||
Total
segment operating profit
|
34,326
|
44,227
|
17,562
|
25,115
|
|||||||||
Amortization
of intangibles
|
(2,123
|
)
|
(1,903
|
)
|
(1,070
|
)
|
(1,022
|
)
|
|||||
Corporate
|
(3,967
|
)
|
(3,917
|
)
|
(2,017
|
)
|
(2,030
|
)
|
|||||
Other
items
|
2,248
|
(869
|
)
|
1,032
|
(1,079
|
)
|
|||||||
Total
operating profit
|
$
|
30,484
|
$
|
37,538
|
$
|
15,507
|
$
|
20,984
|
§
|
Net
sales for the second quarter of 2008 decreased $34 million (18 percent)
from the second quarter of 2007, primarily as a result of the 18
percent
decline in industry wholesale shipments of travel trailers and fifth
wheel
RVs in the second quarter of 2008, as well as an 11 percent decline
in
industry wholesale shipments of manufactured homes.
|
§
|
Net
income for the second quarter of 2008 decreased 27 percent from the
second
quarter of 2007, primarily due to the 18 percent decrease in net
sales.
|
§
|
Facility
consolidations and fixed overhead reductions improved operating profit
in
the second quarter of 2008 by approximately $1.4 million ($0.9 million
after taxes), compared to the second quarter of 2007, and are expected
to
improve operating profit by approximately $5 million for all of 2008
as
compared to 2007.
|
§
|
On
July 1, 2008, Lippert acquired certain assets and the business of
Seating
Technology, Inc. and its affiliated companies (“Seating Technology”).
Seating Technology had annual sales of $40 million in 2007. The purchase
price was $28.4 million, which was financed from available cash.
Seating
Technology manufactures a wide variety of furniture products primarily
for
towable RVs, including folding sofas for toy hauler RVs, a full line
of
upholstered furniture, mattresses, decorative pillows, wood-backed
valances and quilted soft good products. This acquisition has added
an
entirely new product line for the Company. Lippert will initially
continue
production at Seating Technology's existing leased facilities in
Indiana.
|
§
|
On
July 1, 2008, Lippert acquired the patent for "JT's Strong Arm Jack
Stabilizer," and other intellectual properties and assets, from JT's
RV
Accessories. The purchase price was $3.0 million, which was financed
from
available cash. JT's Strong Arm Jack Stabilizer represents a significant
advance in the elimination of side-to-side and front-to-back movement
of a
parked travel trailer or fifth wheel RV.
|
§
|
Steel
and aluminum are among the Company’s principal raw materials. Since late
2007, the cost of flat-rolled steel has doubled, structural I-beam
steel
is up nearly 50 percent, and aluminum has increased 25 percent. Assuming
the cost of raw materials remains at these high levels, these cost
increases would increase the Company’s cost of sales by approximately $70
million on an annualized basis. The higher cost raw materials began
to
impact the Company’s results in the second quarter of 2008, however, the
cost of raw materials flowing through cost-of-sales in the third
quarter
of 2008 will be significantly higher than in the second quarter.
In
particular, the cost of steel in inventory at June 30, 2008, depending
upon the type of steel, is 25 percent to 60 percent higher than the
steel
used in the second quarter. Similarly, the cost of aluminum in inventory
at June 30, 2008 is approximately 15 percent to 20 percent
higher.
|
· |
An
organic sales decline of approximately $24 million, or 19 percent,
of RV
related products. This 19 percent decline was due largely to the
18
percent decrease in industry-wide wholesale shipments of travel trailers
and fifth wheel RVs, the Company’s primary RV market. Industry-wide
wholesale shipments of motorhomes, components for which represent
about 5
percent of the Company’s RV segment net sales, were down 41 percent during
the second quarter of 2008.
|
· |
An
organic sales decline of approximately $5 million in specialty trailers,
due primarily to an industry-wide decline in sales of small and medium
size boats, particularly on the West Coast, the Company’s primary
specialty trailer market.
|
· |
Sales
generated from 2007 acquisitions aggregating approximately $4 million.
|
· |
Sales
price increases of approximately $2 million, primarily due to material
cost increases.
|
2008
|
2007
|
Percent
Change
|
||||||||
Content
per Travel Trailer and Fifth Wheel RVs
|
$
|
1,725
|
$
|
1,652
|
4%
|
|
||||
Content
per Motorhomes
|
$
|
505
|
$
|
373
|
35%
|
|
||||
Content
per all RVs
|
$
|
1,381
|
$
|
1,273
|
8%
|
|
2008
|
2007
|
Percent
Change
|
||||||||
Travel
Trailer and Fifth Wheel RVs
|
242,900
|
265,800
|
(9)%
|
|
||||||
Motorhomes
|
45,300
|
56,600
|
(20)%
|
|
||||||
All
RVs
|
319,900
|
361,500
|
(12)%
|
|
· |
Higher
raw material costs.
|
· |
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
· |
Higher
health insurance costs.
|
· |
An
increase in selling, general and administrative expenses to 12.1
percent
of net sales in the second quarter of 2008 from 11.2 percent of net
sales
in the second quarter of 2007, largely due to higher fuel and delivery
costs, as well as the spreading of fixed administrative costs over
a
smaller sales base. This was partially offset by lower incentive
compensation as a percent of net sales due to reduced operating profit
margins.
|
· |
Implementation
of cost-cutting measures.
|
· |
Lower
warranty and overtime costs.
|
· |
An
organic sales decline of approximately $31 million, or 12 percent,
of RV
related products. This 12 percent decline was due largely to the
13
percent decrease in industry-wide wholesale shipments of travel trailers
and fifth wheel RVs. Industry-wide wholesale shipments of motorhomes,
components for which represent about 5 percent of the Company’s RV segment
net sales, were down 33 percent during the first six months of
2008.
|
· |
An
organic sales decline of approximately $8 million in specialty trailers,
due primarily to an industry-wide decline in sales of small and medium
size boats, particularly on the West Coast, the Company’s primary
specialty trailer market.
|
· |
Sales
generated from 2007 acquisitions aggregating approximately $7 million.
|
· |
Sales
price increases of approximately $4 million, primarily due to material
cost increases.
|
· |
Higher
raw material costs.
|
· |
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
· |
Higher
health insurance costs.
|
· |
An
increase in selling, general and administrative expenses to 12.0
percent
of net sales in the first six months of 2008 from 11.2 percent
of net
sales in the same period of 2007, largely due to higher fuel and
delivery
costs, as well as the spreading of fixed administrative costs over
a
smaller sales base. This was partially offset by lower incentive
compensation as a percent of net sales due to reduced operating
profit
margins.
|
· |
Implementation
of cost-cutting measures.
|
· |
Lower
warranty costs.
|
2008
|
2007
|
Percent
Change
|
||||||||
Content
per Home Produced
|
$
|
1,615
|
$
|
1,853
|
(15)%
|
|
||||
Content
per Floor Produced
|
$
|
962
|
$
|
1,063
|
(11)%
|
|
2008
|
2007
|
Percent
Change
|
||||||||
Total
Homes Produced
|
92,300
|
99,300
|
(7)%
|
|
||||||
Total
Floors Produced
|
154,900
|
173,000
|
(10)%
|
|
· |
Changes
in product mix.
|
· |
The
elimination of certain low margin
business.
|
· |
Improved
production efficiencies.
|
· |
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
· |
Higher
health insurance costs.
|
· |
An
increase in selling, general and administrative expenses to 15.7
percent
of net sales in the second quarter of 2008 from 14.0 percent of net
sales
in second quarter of 2007 due to higher fuel and delivery costs as
a
percent of net sales, as well as the spreading of fixed costs over
a
smaller sales base.
|
· |
Changes
in product mix.
|
· |
The
elimination of certain low margin
business.
|
· |
Improved
production efficiencies.
|
· |
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
· |
Higher
health insurance costs.
|
· |
An
increase in selling, general and administrative expenses to 15.6
percent
of net sales in the first six months of 2008 from 14.2 percent of
net
sales in same period of 2007 due to higher fuel and delivery costs
as a
percent of net sales, as well as the spreading of fixed costs over
a
smaller sales base.
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Cost
of sales:
|
|||||||||||||
Gain
on sold facilities
|
$
|
(3,275
|
)
|
$
|
(229
|
)
|
$
|
(2,081
|
)
|
$
|
-
|
||
Loss
on sold facilities and write-downs to estimated current market
value of
facilities to be sold
|
447
|
1,921
|
302
|
977
|
|||||||||
Other
|
-
|
(237
|
)
|
-
|
-
|
||||||||
Selling,
general and administrative expenses:
|
|||||||||||||
Legal
proceedings
|
906
|
371
|
529
|
317
|
|||||||||
Incentive
compensation impact of above items
|
320
|
(301
|
)
|
218
|
(215
|
)
|
|||||||
$
|
1,602
|
$
|
1,525
|
$
|
1,032
|
$
|
(1,079
|
)
|
2008
|
2007
|
||||||
Net
cash flows (used for) provided by operating activities
|
$
|
(6,620
|
)
|
$
|
43,508
|
||
Net
cash flows provided by (used for) investment activities
|
$
|
5,608
|
$
|
(5,963
|
)
|
||
Net
cash flows used for financing activities
|
$
|
(11,804
|
)
|
$
|
(5,769
|
)
|
a)
|
Evaluation
of Disclosure Controls and Procedures
|
b)
|
Changes
in Internal Controls
|
Issuer
Purchases of Equity Securities
|
||||
(a)
|
(b)
|
(c)
|
(d)
|
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs
|
May
1 - 31, 2008
|
197,400
|
$22.62
|
197,400
|
802,600
|
a) |
Exhibits
as required by item 601 of Regulation
8-K:
|
1)
|
31.1
Certification of Chief Executive Officer pursuant to 13a-14(a) under
the
Securities Exchange Act of 1934. Exhibit 31.1 is filed herewith.
|
2)
|
31.2
Certification of Chief Financial Officer pursuant to 13a-14(a) under
the
Securities Exchange Act of 1934. Exhibit 31.2 is filed herewith.
|
3)
|
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350. Exhibit 32.1 is filed
herewith.
|
4)
|
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350. Exhibit 32.2 is filed
herewith.
|
DREW INDUSTRIES INCORPORATED | |
Registrant | |
By /s/ Joseph S. Giordano III | |
Joseph S. Giordano III | |
Chief Financial Officer |