Commission file number:
|
001-13646
|
Delaware
|
13-3250533
|
|
State
or other jurisdiction of incorporation or organization
|
(I.R.S.
Employer Identification
No.)
|
200 Mamaroneck Avenue, White
Plains, NY
|
10601
|
(Address of principal executive offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common Stock, par value
$0.01
|
New York Stock
Exchange
|
●Towable
RV steel chassis
|
●Aluminum
windows and screens
|
|
●Towable
RV axles and suspension solutions
|
●Chassis
components
|
|
●RV
slide-out mechanisms and solutions
|
●Furniture
and mattresses
|
|
●Thermoformed
bath, kitchen and other products
|
●Entry
and baggage doors
|
|
●Toy
hauler ramp doors
|
●Entry
steps
|
|
●Manual,
electric and hydraulic stabilizer
|
●Other
towable accessories
|
|
and
lifting systems
|
●Specialty
trailers for hauling boats, personal
|
|
watercraft,
snowmobiles and
equipment
|
●Vinyl
and aluminum windows and screens
|
●Steel
chassis
|
|
●Thermoformed
bath and kitchen products
|
●Steel
chassis parts
|
|
●Axles
|
●Entry
doors
|
RV
SEGMENT
|
||||||||||||||
City
|
State
|
Square Feet
|
Owned
|
Leased
|
||||||||||
Rialto
(1)
|
California
|
56,430 |
P
|
|||||||||||
Fitzgerald
(1)
|
Georgia
|
15,800 |
P
|
|||||||||||
Burley
|
Idaho
|
17,000 |
P
|
|||||||||||
Goshen
(1)
|
Indiana
|
385,000 |
P
|
|||||||||||
Goshen
|
Indiana
|
171,000 |
P
|
|||||||||||
Goshen
|
Indiana
|
134,500 |
P
|
|||||||||||
Goshen
|
Indiana
|
87,800 |
P
|
|||||||||||
Goshen
(1)
|
Indiana
|
81,200 |
P
|
|||||||||||
Topeka
|
Indiana
|
67,560 |
P
|
|||||||||||
Goshen
|
Indiana
|
65,000 |
P
|
|||||||||||
Goshen
|
Indiana
|
53,500 |
|
P
|
||||||||||
Pendleton
|
Oregon
|
56,800 |
P
|
|||||||||||
McMinnville
(1)
|
Oregon
|
17,850 |
P
|
|||||||||||
Waxahachie
(1)
|
Texas
|
43,050 |
P
|
|||||||||||
Kaysville
|
Utah
|
75,000 |
P
|
|||||||||||
1,327,490 | (2) |
(1)
|
These
plants also produce products for manufactured homes. The square footage
indicated above represents that portion of the building that is utilized
for manufacture of products for RVs.
|
|
(2)
|
At
December 31, 2008, the Company’s RV Segment used an aggregate of 1,466,379
square feet for manufacturing and
warehousing.
|
MH
SEGMENT
|
||||||||||||||
City
|
State
|
Square Feet
|
Owned
|
Leased
|
||||||||||
Double
Springs
|
Alabama
|
109,000 |
P
|
|||||||||||
Rialto
(1)
|
California
|
6,270 |
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
|
|||||||||||
Middlebury
|
Indiana
|
61,113 |
P
|
|||||||||||
Goshen
(1)
|
Indiana
|
25,000 |
P
|
|||||||||||
Goshen
(1)
|
Indiana
|
14,500 |
P
|
|||||||||||
Arkansas
City
|
Kansas
|
7,800 |
P
|
|||||||||||
McMinnville
(1)
|
Oregon
|
17,850 |
P
|
|||||||||||
Denver
|
Pennsylvania
|
40,200 |
P
|
|||||||||||
Chester
|
South
Carolina
|
78,579 |
P
|
|||||||||||
Waxahachie
(1)
|
Texas
|
156,950 |
P
|
|||||||||||
926,062 | (2) |
(1)
|
These
plants also produce products for RVs. The square footage indicated above
represents that portion of the building that is utilized for manufacture
of products for manufactured homes.
|
|
(2)
|
At
December 31, 2008, the Company’s MH Segment used an aggregate of 1,092,283
square feet for manufacturing and
warehousing.
|
ADMINISTRATIVE
|
||||||||||||||
City
|
State
|
Square Feet
|
Owned
|
Leased
|
||||||||||
White
Plains
|
New
York
|
4,059 |
P
|
|||||||||||
Goshen
|
Indiana
|
22,000 |
P
|
|||||||||||
Goshen
|
Indiana
|
15,500 |
P
|
|||||||||||
Arlington
|
Texas
|
10,473 |
P
|
|||||||||||
Phoenix
|
Arizona
|
1,000 |
P
|
|||||||||||
53,032 |
City
|
State
|
Square Feet
|
||||
Boaz
|
Alabama
|
86,600 | ||||
Phoenix
*
|
Arizona
|
61,000 | ||||
Fontana
*
|
California
|
108,800 | ||||
Elkhart
*
|
Indiana
|
100,000 | ||||
Bristol
|
Indiana
|
97,500 | ||||
Howe
|
Indiana
|
60,000 | ||||
Elkhart
|
Indiana
|
42,000 | ||||
Dayton
|
Tennessee
|
100,000 | ||||
Middlebury
|
Indiana
|
12
acres of land
|
||||
Arkansas
City
|
Kansas
|
5
acres of land
|
Name
|
Position
|
|
Edward
W. Rose, III
(Age
68)
|
Lead
Director of the Board of Directors since January 2009. Director since
March 1984.
|
|
|
||
Leigh
J. Abrams
(Age
67)
|
Chairman
of the Board of Directors since January 2009. Director since March
1984.
|
|
Fredric
M. Zinn
(Age
58)
|
Chief
Executive Officer since January 2009, President and Director since May
2008.
|
|
James
F. Gero
(Age
64)
|
Director
since May 1992.
|
|
Frederick
B. Hegi, Jr.
(Age
66)
|
Director
since May 2002.
|
|
David
A. Reed
(Age
62)
|
Director
since May 2003.
|
|
John
B. Lowe, Jr.
(Age
70)
|
Director
since May 2005.
|
|
|
||
Jason
D. Lippert
(Age
37)
|
President
and Chief Executive Officer of Lippert Components, Inc. since
February 2003, and President and Chief Executive
Officer of Kinro, Inc. since January 2009. Director since May
2007.
|
|
|
||
Joseph
S. Giordano III
(Age
40)
|
Chief
Financial Officer since May 2008, Treasurer since May
2003.
|
|
|
||
Scott
T. Mereness
(Age
38)
|
|
Executive
Vice President and Chief Operating Officer of Lippert Components, Inc.
since February 2003, and Executive Vice President and Chief Operating
Officer of Kinro, Inc. since February
2010.
|
Number
of securities
to
be issued upon
exercise
of outstanding
options,
warrants
and
rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
(excluding
securities
reflected
in
column (a))
|
||||||||||
Plan
category
|
(a)
|
(b)
|
(c)
|
|||||||||
Equity
compensation plans approved by security holders
|
1,891,053 | $ | 22.67 | 1,090,019 | ||||||||
Equity
compensation plans not approved by security holders
|
N/A | N/A | N/A | |||||||||
Total
|
1,891,053 | $ | 22.67 | 1,090,019 |
Year Ended December 31,
|
||||||||||||||||||||
(In thousands, except per share
amounts)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Operating Data:
|
||||||||||||||||||||
Net
sales
|
$ | 397,839 | $ | 510,506 | $ | 668,625 | $ | 729,232 | $ | 669,147 | ||||||||||
Goodwill
impairment
|
$ | 45,040 | $ | 5,487 | $ | - | $ | - | $ | - | ||||||||||
Executive
retirement
|
$ | - | $ | 2,667 | $ | - | $ | - | $ | - | ||||||||||
Operating
(loss) profit
|
$ | (35,581 | ) | $ | 19,898 | $ | 65,959 | $ | 55,295 | $ | 57,729 | |||||||||
(Loss)
income before income taxes
|
$ | (36,370 | ) | $ | 19,021 | $ | 63,344 | $ | 50,694 | $ | 54,063 | |||||||||
(Benefit)
provision for income taxes
|
$ | (12,317 | ) | $ | 7,343 | $ | 23,577 | $ | 19,671 | $ | 20,461 | |||||||||
Net
(loss) income
|
$ | (24,053 | ) | $ | 11,678 | $ | 39,767 | $ | 31,023 | $ | 33,602 | |||||||||
Net
(loss) income per common share:
|
||||||||||||||||||||
Basic
|
$ | (1.10 | ) | $ | 0.54 | $ | 1.82 | $ | 1.43 | $ | 1.60 | |||||||||
Diluted
|
$ | (1.10 | ) | $ | 0.53 | $ | 1.80 | $ | 1.42 | $ | 1.56 | |||||||||
Financial Data:
|
||||||||||||||||||||
Working
capital
|
$ | 113,744 | $ | 84,378 | $ | 89,861 | $ | 61,979 | $ | 76,146 | ||||||||||
Total
assets
|
$ | 288,065 | $ | 311,358 | $ | 345,737 | $ | 311,276 | $ | 307,428 | ||||||||||
Long-term
obligations
|
$ | 8,243 | $ | 9,763 | $ | 23,128 | $ | 47,327 | $ | 64,768 | ||||||||||
Stockholders’
equity
|
$ | 244,115 | $ | 258,878 | $ | 251,536 | $ | 204,888 | $ | 167,709 |
●Towable
RV steel chassis
|
●Aluminum
windows and screens
|
|
●Towable
RV axles and suspension solutions
|
●Chassis
components
|
|
●RV
slide-out mechanisms and solutions
|
●Furniture
and mattresses
|
|
●Thermoformed
bath, kitchen and other products
|
●Entry
and baggage doors
|
|
●Toy
hauler ramp doors
|
●Entry
steps
|
|
●Manual,
electric and hydraulic stabilizer
|
●Other
towable accessories
|
|
and
lifting systems
|
●Specialty
trailers for hauling boats, personal
|
|
|
watercraft,
snowmobiles and equipment
|
●Vinyl
and aluminum windows and screens
|
●Steel
chassis
|
|
●Thermoformed
bath and kitchen products
|
●Steel
chassis parts
|
|
●Axles
|
|
●Entry
doors
|
Wholesale
|
Retail
|
|||||||
Quarter
ended March 31, 2008
|
(8 | )% | (17 | )% | ||||
Quarter
ended June 30, 2008
|
(18 | )% | (19 | )% | ||||
Quarter
ended September 30, 2008
|
(38 | )% | (26 | )% | ||||
Quarter
ended December 31, 2008
|
(63 | )% | (34 | )% | ||||
Quarter
ended March 31, 2009
|
(61 | )% | (37 | )% | ||||
Quarter
ended June 30, 2009
|
(44 | )% | (29 | )% | ||||
Quarter
ended September 30, 2009
|
5 | % | (19 | )% | ||||
Quarter
ended December 31, 2009
|
88 | % | (8 | )% | ||||
Year
ended December 31, 2009
|
(25 | )% | (26 | )% | ||||
Year
ended December 31, 2008
|
(29 | )% | (23 | )% | ||||
Year
ended December 31, 2007
|
(10 | )% | 4 | % |
2009
|
2008
|
2007
|
||||||||||
Net
sales:
|
||||||||||||
RV
Segment
|
$ | 312,535 | $ | 368,092 | $ | 491,830 | ||||||
MH
Segment
|
85,304 | 142,414 | 176,795 | |||||||||
Total
net sales
|
$ | 397,839 | $ | 510,506 | $ | 668,625 | ||||||
Operating
(loss) profit:
|
||||||||||||
RV
Segment
|
$ | 20,459 | $ | 28,725 | $ | 63,132 | ||||||
MH
Segment
|
3,847 | 11,016 | 15,061 | |||||||||
Total
segment operating profit
|
24,306 | 39,741 | 78,193 | |||||||||
Amortization
of intangibles
|
(5,561 | ) | (5,055 | ) | (4,178 | ) | ||||||
Corporate
|
(6,411 | ) | (7,217 | ) | (7,583 | ) | ||||||
Goodwill
impairment
|
(45,040 | ) | (5,487 | ) | - | |||||||
Other
items
|
(2,875 | ) | (2,084 | ) | (473 | ) | ||||||
Total
operating (loss) profit
|
$ | (35,581 | ) | $ | 19,898 | $ | 65,959 |
2009
|
2008
|
2007
|
||||||||||
Net
sales:
|
||||||||||||
RV
Segment
|
79 | % | 72 | % | 74 | % | ||||||
MH
Segment
|
21 | % | 28 | % | 26 | % | ||||||
Total
net sales
|
100 | % | 100 | % | 100 | % | ||||||
Operating
profit:
|
||||||||||||
RV
Segment
|
84 | % | 72 | % | 81 | % | ||||||
MH
Segment
|
16 | % | 28 | % | 19 | % | ||||||
Total
segment operating profit
|
100 | % | 100 | % | 100 | % |
2009
|
2008
|
2007
|
||||||||||
RV
Segment
|
6.5 | % | 7.8 | % | 12.8 | % | ||||||
MH
Segment
|
4.5 | % | 7.7 | % | 8.5 | % |
Year
Ended December 31, 2009
|
Year
Ended December 31, 2008
|
|||||||||||||||||||||||
(In
thousands)
|
GAAP
|
Adjustments
|
Non-GAAP
|
GAAP
|
Adjustments
|
Non-GAAP
|
||||||||||||||||||
Cost
of sales
|
$ | 319,129 | $ | 4,786 | $ | 314,343 | $ | 403,000 | $ | 164 | $ | 402,836 | ||||||||||||
Selling,
general and administrative expenses
|
$ | 69,489 | $ | 4,180 | $ | 65,309 | $ | 80,129 | $ | (460 | ) | $ | 80,589 | |||||||||||
Goodwill
impairment
|
$ | 45,040 | $ | 45,040 | $ | - | $ | 5,487 | $ | 5,487 | $ | - | ||||||||||||
Executive
retirement
|
$ | - | $ | - | $ | - | $ | 2,667 | $ | 2,667 | $ | - | ||||||||||||
Operating
(loss) profit
|
$ | (35,581 | ) | $ | 54,006 | $ | 18,425 | $ | 19,898 | $ | 7,858 | $ | 27,756 | |||||||||||
Net
(loss) income
|
$ | (24,053 | ) | $ | 34,891 | $ | 10,838 | $ | 11,678 | $ | 4,825 | $ | 16,503 | |||||||||||
Net
(loss) income per diluted share
|
$ | (1.10 | ) | $ | 1.60 | $ | 0.50 | $ | 0.53 | $ | 0.22 | $ | 0.75 |
Year
Ended December 31, 2009
|
Year
Ended December 31, 2008
|
|||||||||||||||||||||||
(In
thousands)
|
GAAP
|
Adjustments
|
Non-GAAP
|
GAAP
|
Adjustments
|
Non-GAAP
|
||||||||||||||||||
RV
Segment operating profit
|
$ | 20,459 | $ | 5,277 | $ | 25,736 | $ | 28,725 | $ | 825 | $ | 29,550 | ||||||||||||
MH
Segment operating profit
|
$ | 3,847 | $ | 931 | $ | 4,778 | $ | 11,016 | $ | 404 | $ | 11,420 | ||||||||||||
Goodwill
impairment
|
$ | (45,040 | ) | $ | 45,040 | $ | - | $ | (5,487 | ) | $ | 5,487 | $ | - | ||||||||||
Other
items
|
$ | (2,875 | ) | $ | 2,758 | $ | (117 | ) | $ | (2,084 | ) | $ | 1,142 | $ | (942 | ) | ||||||||
Operating
(loss) profit
|
$ | (35,581 | ) | $ | 54,006 | $ | 18,425 | $ | 19,898 | $ | 7,858 | $ | 27,756 |
|
§
|
During
the first six months of 2009, as a result of the economic downturn and the
resulting severe declines in industry-wide wholesale shipments by the RV
and manufactured housing industries, the Company experienced a 45 percent
decline in net sales, from $310 million in the first six months of 2008 to
$172 million in the first six months of 2009. As a result, in the first
six months of 2009, the Company reported a net loss of $34.1 million,
including an after-tax charge of $29.4 million for goodwill impairment, as
compared to net income of $18.3 million in the first six months of
2008.
|
|
§
|
On
February 19, 2010, the RVIA published its latest forecast of industry-wide
wholesale shipments for 2010, which projects a 31 percent increase in the
shipments of travel trailers and fifth-wheel RVs as compared to 2009.
There is no assurance that this RV industry-wide wholesale shipments level
will be achieved. There are no industry forecasts for the manufactured
housing industry.
|
|
§
|
In
response to the impact of the recession, the Company focused on increasing
market share for existing products, introducing new products, reducing
fixed costs, improving efficiencies, and strengthening its financial
condition.
|
|
·
|
In
2009, the Company identified and introduced new and improved RV products
that focused on consumer safety and convenience, including the
Quick-BiteTM
coupler, an improved suspension system, entry doors with alarm systems and
keyless entry, and a “new-look” line of windows. As a result, the
Company’s RV Segment continued to achieve market share
gains.
|
|
·
|
The
decline in the Company’s results for 2009 would have been substantially
greater had it not been for an aggressive program of cost-cutting measures
and efficiency improvements implemented beginning in the latter part of
2006. Cost reduction measures benefitted the Company’s operating results
in 2009 by $9 million, compared to 2008, and will further benefit 2010
operating results by $3 million. Collectively, the fixed cost reductions
since 2006 have improved the Company’s annual operating profit by nearly
$25 million compared to results if these steps had not been taken. The
Company anticipates that a significant portion of the fixed cost
reductions and production efficiencies implemented will continue even as
sales increase.
|
2009
|
2008
|
|||||||
Plant
closings and start-ups
|
$ | 4.4 | $ | (1.5 | ) | |||
Obsolete
equipment, inventory and tooling
|
3.1 | 0.2 | ||||||
Staff
reductions and relocations
|
1.1 | 0.6 | ||||||
Executive
retirement
|
- | 2.7 | ||||||
Other
|
0.4 | 0.4 | ||||||
|
$ | 9.0 | $ | 2.4 |
|
·
|
During
2009, the Company continued to generate significant cash flow, increasing
cash and short-term investments by nearly $57 million, to over $65
million, and paying off the entire $9 million debt balance that existed at
December 31, 2008. This was largely accomplished by cash flows provided by
operating activities of $63 million, including a reduction in inventory of
more than $37 million.
|
|
§
|
Steel
and aluminum are among the Company’s principal raw materials. Since late
2007, the costs of steel and aluminum have been volatile. During the first
half of 2009, raw material costs temporarily declined, but subsequently
increased 10 percent to 30 percent in the second half of 2009, depending
upon the type of raw material. The Company anticipates that these cost
increases will reduce operating profit in 2010, although the impact is
expected to be modest.
|
|
·
|
An
‘organic’ sales decline (excluding the impact of acquisitions and sales
price changes) of approximately $68 million. This 19 percent ‘organic’
sales decline during 2009 was due to the 25 percent decrease in
industry-wide wholesale shipments of travel trailers and fifth-wheel RVs,
the Company’s primary RV market. During the first six months of 2009 the
‘organic’ sales decline of RV-related products was approximately $118
million, or 52 percent. However, this was partially offset by an ‘organic’
sales increase of approximately $50 million, or 40 percent, of RV-related
products in the second half of
2009.
|
|
·
|
An
‘organic’ sales decline of approximately 52 percent or $7 million in
specialty trailers due primarily to a severe industry-wide decline in
sales of small and medium size boats, particularly on the West Coast, the
Company’s primary specialty trailer
market.
|
|
·
|
Full
year impact in 2009 of acquisitions completed in 2008, aggregating
approximately $13 million.
|
|
·
|
Sales
price increases of approximately $7 million, primarily due to raw material
cost increases in 2008.
|
|
2009
|
2008
|
Percent Change
|
|||||||||
Content
per Travel Trailer and Fifth-Wheel RV
|
$ | 2,101 | $ | 1,902 | 10 | % | ||||||
Content
per Motorhome
|
$ | 523 | $ | 574 | (9 | )% | ||||||
Content
per all RVs
|
$ | 1,795 | $ | 1,554 | 16 | % |
2009
|
2008
|
Percent Change
|
||||||||||
Travel
Trailer and Fifth-Wheel RVs
|
138,300 | 185,100 | (25 | )% | ||||||||
Motorhomes
|
13,200 | 28,300 | (53 | )% | ||||||||
All
RVs
|
165,700 | 237,000 | (30 | )% |
|
·
|
Implementation
of cost-cutting measures which reduced cost of
sales.
|
|
·
|
Lower
health insurance costs largely due to the implementation of a new
plan.
|
|
·
|
Lower
warranty costs.
|
|
·
|
Lower
raw material costs in the second half of 2009 compared to the same period
of 2008 when raw material costs were unusually high, partially offset by
higher raw material costs during the first six months of 2009. Depending
upon the type of raw material, costs have recently risen 10 percent to 30
percent.
|
|
·
|
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
|
·
|
Higher
overtime and labor inefficiencies due to rapid changes in sales
volumes.
|
|
·
|
Excluding
the “extra” expenses, an increase in selling, general and administrative
expenses to 12.3 percent of net sales in 2009 from 12.2 percent of net
sales in 2008, largely due to the spreading of fixed administrative costs
over a smaller sales base, partially offset by the implementation of fixed
cost reductions. In addition, incentive compensation was lower as a
percent of sales in 2009 because incentive compensation is only recorded
on operating profit in excess of pre-established
hurdles.
|
2009
|
2008
|
Percent Change
|
||||||||||
Content
per Home Produced
|
$ | 1,378 | $ | 1,489 | (7 | )% | ||||||
Content
per Floor Produced
|
$ | 837 | $ | 901 | (7 | )% |
2009
|
2008
|
Percent Change
|
||||||||||
Total
Homes Produced
|
49,700 | 81,900 | (39 | )% | ||||||||
Total
Floors Produced
|
81,900 | 135,300 | (39 | )% |
|
·
|
Implementation
of cost-cutting measures which reduced cost of
sales.
|
|
·
|
Lower
raw material costs. However, depending upon the type of raw
material, costs have recently risen 10 percent to 30
percent.
|
|
·
|
Lower
health insurance costs largely due to the implementation of a new
plan.
|
|
·
|
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
|
·
|
Labor
inefficiencies due to the sharp drop in
sales.
|
|
·
|
Excluding
the “extra” expenses, an increase in selling, general and administrative
expenses to 19.0 percent of net sales in 2009 from 16.1 percent of net
sales in 2008 due largely to the spreading of fixed administrative costs
over a smaller sales base, partially offset by fixed cost reductions.
Also, incentive compensation was lower as a percent of sales in 2009
because year-to-date operating profit for certain MH Segment operations
were below the previously established annual incentive compensation
hurdles.
|
Year
Ended
|
||||||||
December 31,
|
||||||||
2009
|
2008
|
|||||||
Selling,
general and administrative expenses:
|
||||||||
Legal
proceedings
|
$ | 416 | $ | 2,109 | ||||
Gain
on sold facilities
|
(89 | ) | (3,523 | ) | ||||
Loss
on sold facilities and write-downs to estimated current fair value of
facilities to be sold
|
3,349 | 1,602 | ||||||
Incentive
compensation impact of other non-segment items
|
(533 | ) | (96 | ) | ||||
Other
|
12 | - | ||||||
Executive
retirement
|
- | 2,667 | ||||||
Other
(income) from the collection of a previously reserved note
|
(280 | ) | (675 | ) | ||||
Total
other non-segment items
|
$ | 2,875 | $ | 2,084 |
|
§
|
Net
sales for 2008, excluding the impact of sales price increases and
acquisitions, decreased $202 million (30 percent) from 2007, primarily as
a result of the 29 percent decline in industry-wide wholesale shipments of
travel trailers and fifth-wheel RVs in 2008, as well as a 14 percent
decline in industry-wide wholesale shipments of manufactured homes. In
addition, 2008 sales were negatively affected by the 49 percent decline in
industry-wide wholesale shipments of motorhomes, and the severe
industry-wide decline in sales of small and medium-sized boats,
particularly on the West Coast, for which the Company supplies specialty
trailers.
|
|
§
|
Net
income for 2008 decreased 71 percent from 2007, primarily due to the
decrease in net sales and higher raw material costs. In addition, the
Company recorded a non-cash charge for impairment of goodwill, as well as
an executive retirement charge, aggregating $4.9 million after
taxes.
|
|
§
|
In
response to reduced retail sales during 2008 and inventory reductions by
RV dealers, RV manufacturers significantly reduced their output, which
negatively affected the Company in 2008. In response to the difficult
economic environment, the Company was extremely proactive and took the
following steps:
|
|
·
|
Reduced
its workforce and production capacity to be more in line with anticipated
demand.
|
|
·
|
Closed
facilities and reduced fixed overhead
costs.
|
|
·
|
Implemented
synergies between the operations of Kinro and Lippert by combining certain
administrative functions and sales
efforts.
|
|
§
|
On
November 25, 2008, the Company entered into an agreement for a $50.0
million line of credit with JPMorgan Chase Bank, N.A. and Wells Fargo
Bank, N.A. Simultaneously, the Company entered into a $125.0 million
“shelf-loan” facility with Prudential Investment Management, Inc. and its
affiliates. At December 31, 2008, the collective availability under these
facilities was $117.2 million.
|
|
§
|
On
July 1, 2008, Lippert acquired certain assets and liabilities, and the
business of Seating Technology, a manufacturer of a wide variety of
furniture products primarily for towable RVs, including a full line of
upholstered furniture and mattresses. Seating Technology had annual sales
of $40 million in 2007. The purchase price was $28.7 million, which was
paid at closing from available cash. Subsequent to the acquisition,
Lippert closed two of Seating Technology's five leased facilities in
Indiana, and consolidated those operations into existing
facilities.
|
|
§
|
Steel
and aluminum are among the Company’s principal raw materials. Since late
2007, the costs of steel and aluminum have been volatile, and although the
Company was able to raise sales prices, higher cost raw materials, net of
sales price increases, reduced 2008 earnings by approximately $0.10 to
$0.13 per diluted share.
|
|
·
|
An
‘organic’ sales decline of approximately $141 million, or 30 percent, of
RV-related products. This 30 percent decline was due largely to the 29
percent decrease in industry-wide wholesale shipments of travel trailers
and fifth-wheel RVs, the Company’s primary RV market. In addition,
industry-wide wholesale shipments of motorhomes, components for which
represent about 5 percent of the Company’s RV Segment net sales, were down
49 percent during 2008.
|
|
·
|
An
‘organic’ sales decline of approximately $14 million in specialty
trailers, due primarily to a severe 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 2008 and 2007 acquisitions aggregating approximately $19
million.
|
|
·
|
Sales
price increases of approximately $12 million, primarily due to raw
material cost increases.
|
2008
|
2007
|
Percent Change
|
||||||||||
Content
per Travel Trailer and Fifth-Wheel RV
|
$ | 1,902 | $ | 1,697 | 12 | % | ||||||
Content
per Motorhome
|
$ | 574 | $ | 429 | 34 | % | ||||||
Content
per all RVs
|
$ | 1,554 | $ | 1,324 | 17 | % |
2008
|
2007
|
Percent Change
|
||||||||||
Travel
Trailer and Fifth-Wheel RVs
|
185,100 | 261,700 | (29 | )% | ||||||||
Motorhomes
|
28,300 | 55,400 | (49 | )% | ||||||||
All
RVs
|
237,000 | 353,400 | (33 | )% |
|
·
|
Higher
raw material costs.
|
|
·
|
Labor
inefficiencies due to the sharp drop in sales during the latter part of
2008.
|
|
·
|
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
|
·
|
Higher
health insurance costs.
|
|
·
|
Higher
than expected integration costs of the Seating Technology acquisition, and
costs incurred for prototype expenses for potential new customer accounts.
New customer accounts were gained as a
result.
|
|
·
|
An
increase in selling, general and administrative expenses to 12.4 percent
of net sales in 2008 from 11.3 percent of net sales in 2007, largely due
to an increase in bad debt expense, and 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 expense as
a percent of net sales due to reduced operating profit
margins.
|
|
·
|
Implementation
of cost-cutting measures.
|
|
·
|
Lower
overtime and warranty costs.
|
2008
|
2007
|
Percent Change
|
||||||||||
Content
per Home Produced
|
$ | 1,489 | $ | 1,611 | (8 | )% | ||||||
Content
per Floor Produced
|
$ | 901 | $ | 942 | (4 | )% |
2008
|
2007
|
Percent Change
|
||||||||||
Total
Homes Produced
|
81,900 | 95,800 | (14 | )% | ||||||||
Total
Floors Produced
|
135,300 | 163,700 | (17 | )% |
|
·
|
The
spreading of fixed manufacturing costs over a smaller sales
base.
|
|
·
|
Higher
health insurance costs.
|
|
·
|
An
increase in selling, general and administrative expenses to 16.5 percent
of net sales in 2008 from 14.6 percent of net sales in 2007 due to higher
fuel and delivery costs as a percent of net sales, as well as the
spreading of fixed administrative costs over a smaller sales
base.
|
|
·
|
Changes
in product mix.
|
|
·
|
The
elimination of certain low margin business exited in the latter half of
2007.
|
|
·
|
Implementation
of cost-cutting measures.
|
|
·
|
Improved
production efficiencies.
|
Year
Ended
|
||||||||
December 31,
|
||||||||
2008
|
2007
|
|||||||
Cost
of sales:
|
||||||||
Other
|
$ | - | $ | (236 | ) | |||
Selling,
general and administrative expenses:
|
||||||||
Legal
proceedings
|
2,109 | 1,616 | ||||||
Gain
on sold facilities
|
(3,523 | ) | (2,253 | ) | ||||
Loss
on sold facilities and write-downs to estimated current market value of
facilities to be sold
|
1,602 | 2,231 | ||||||
Incentive
compensation impact of other non-segment items
|
(96 | ) | (178 | ) | ||||
Executive
retirement
|
2,667 | - | ||||||
Other
(income) from the collection of the previously reserved
Note
|
(675 | ) | (707 | ) | ||||
$ | 2,084 | $ | 473 |
2009
|
2008
|
2007
|
||||||||||
Net
cash flows provided by operating activities
|
$ | 63,256 | $ | 4,657 | $ | 84,910 | ||||||
Net
cash flows used for investing activities
|
(16,445 | ) | (25,492 | ) | (11,641 | ) | ||||||
Net
cash flows used for financing activities
|
(3,138 | ) | (26,686 | ) | (23,841 | ) | ||||||
Net
increase (decrease) in cash
|
$ | 43,673 | $ | (47,521 | ) | $ | 49,428 |
|
-
A
|
$37.5
million reduction in inventories in 2009, compared to a $12.7 million
increase in 2008. Inventories increased in 2008 due to the Company’s
strategic purchase of raw materials in advance of price increases, as well
as higher priced raw materials in inventory. During 2009, the Company
reduced inventory through consumption of higher priced inventory on hand,
and reduced inventory purchases.
|
|
-
A
|
$2.2
million decrease in accounts payable, accrued expenses and other
liabilities in 2009, compared to a decrease of $23.5 million in 2008 due
largely to the timing of payments for inventory
purchases.
|
|
Partially
offset by:
|
|
-
A
|
$4.6
million increase in accounts receivable in 2009, compared to a $9.5
million decrease in 2008. Accounts receivable increased in 2009 due to an
increase in sales in December 2009 as compared to December
2008.
|
Payments due by period
|
||||||||||||||||||||
Less
than
|
More
than
|
|||||||||||||||||||
Total
|
1 year
|
1-3 years
|
3-5 years
|
5 years
|
||||||||||||||||
Operating
leases
|
$ | 13,842 | $ | 4,668 | $ | 6,824 | $ | 1,887 | $ | 463 | ||||||||||
Capital
leases
|
20 | 20 | - | - | - | |||||||||||||||
Employment
contracts and deferred compensation (a)
|
9,476 | 4,677 | 2,999 | 99 | 1,701 | |||||||||||||||
Royalty
agreements and earn-out payments (b)
|
4,386 | 710 | 1,511 | 824 | 1,341 | |||||||||||||||
Purchase
obligations (c)
|
53,561 | 48,933 | 1,760 | 1,324 | 1,544 | |||||||||||||||
Taxes
(d)
|
3,876 | 3,876 | - | - | - | |||||||||||||||
Total
|
$ | 85,161 | $ | 62,884 | $ | 13,094 | $ | 4,134 | $ | 5,049 |
|
(a)
|
This
includes amounts payable under employment contracts and arrangements,
retirement and severance agreements, and deferred compensation. These
amounts do not include $0.3 million in deferred compensation, as the
timing of payment is based upon the employees’ separation from
service.
|
|
(b)
|
These
amounts are comprised of minimum required future payments, as well as
estimated future payments for which a liability has been recorded, in
connection with acquisitions over the past few years. Excluded from these
amounts, because they are not ascertainable, are a license agreement that
provides for the Company to pay a royalty of 1 percent of sales of certain
slide-out systems, the remaining aggregate of which cannot exceed $4.3
million, and an earn-out of up to $2.6 million related to an acquisition
in 2007 if certain sales targets for the acquired products are achieved
over the five years subsequent to the acquisition.
|
|
(c)
|
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.
|
|
(d)
|
These
amounts include $1.3 million of estimated income tax payments for 2009,
and $2.6 million for unrecognized tax benefits and related interest and
penalties.
|
Year Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Net
sales
|
$ | 397,839 | $ | 510,506 | $ | 668,625 | ||||||
Cost
of sales
|
319,129 | 403,000 | 509,875 | |||||||||
Gross
profit
|
78,710 | 107,506 | 158,750 | |||||||||
Selling,
general and administrative expenses
|
69,489 | 80,129 | 93,498 | |||||||||
Goodwill
impairment
|
45,040 | 5,487 | - | |||||||||
Executive
retirement
|
- | 2,667 | - | |||||||||
Other
(income)
|
(238 | ) | (675 | ) | (707 | ) | ||||||
Operating
(loss) profit
|
(35,581 | ) | 19,898 | 65,959 | ||||||||
Interest
expense, net
|
789 | 877 | 2,615 | |||||||||
(Loss)
income before income taxes
|
(36,370 | ) | 19,021 | 63,344 | ||||||||
(Benefit)
provision for income taxes
|
(12,317 | ) | 7,343 | 23,577 | ||||||||
Net
(loss) income
|
$ | (24,053 | ) | $ | 11,678 | $ | 39,767 | |||||
Net
(loss) income per common share:
|
||||||||||||
Basic
|
$ | (1.10 | ) | $ | 0.54 | $ | 1.82 | |||||
Diluted
|
$ | (1.10 | ) | $ | 0.53 | $ | 1.80 | |||||
Weighted
average common shares outstanding:
|
||||||||||||
Basic
|
21,807 | 21,808 | 21,893 | |||||||||
Diluted
|
21,807 | 21,917 | 22,126 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 52,365 | $ | 8,692 | ||||
Short-term
investments
|
12,995 | - | ||||||
Accounts
receivable, trade, less allowances of $1,232 in 2009 and $1,666 in
2008
|
12,541 | 7,913 | ||||||
Inventories
|
57,757 | 93,934 | ||||||
Prepaid
expenses and other current assets
|
13,793 | 16,556 | ||||||
Total
current assets
|
149,451 | 127,095 | ||||||
Fixed
assets, net
|
80,276 | 88,731 | ||||||
Goodwill
|
- | 44,113 | ||||||
Other
intangible assets
|
39,171 | 42,787 | ||||||
Deferred
taxes
|
16,532 | 306 | ||||||
Other
assets
|
2,635 | 8,326 | ||||||
Total
assets
|
$ | 288,065 | $ | 311,358 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities
|
||||||||
Notes
payable, including current maturities of long-term
indebtedness
|
$ | - | $ | 5,833 | ||||
Accounts
payable, trade
|
7,513 | 4,660 | ||||||
Accrued
expenses and other current liabilities
|
28,194 | 32,224 | ||||||
Total
current liabilities
|
35,707 | 42,717 | ||||||
Long-term
indebtedness
|
- | 2,850 | ||||||
Other
long-term liabilities
|
8,243 | 6,913 | ||||||
Total
liabilities
|
43,950 | 52,480 | ||||||
Stockholders'
equity
|
||||||||
Common
stock, par value $.01 per share: authorized 30,000,000 shares; issued
24,561,358 shares at December 31, 2009 and 24,122,054 shares at December
31, 2008
|
246 | 241 | ||||||
Paid-in
capital
|
74,239 | 64,954 | ||||||
Retained
earnings
|
197,430 | 221,483 | ||||||
271,915 | 286,678 | |||||||
Treasury
stock, at cost - 2,596,725 shares at December 31, 2009 and
2008
|
(27,800 | ) | (27,800 | ) | ||||
Total
stockholders' equity
|
244,115 | 258,878 | ||||||
Total
liabilities and stockholders' equity
|
$ | 288,065 | $ | 311,358 |
Year Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
(loss) income
|
$ | (24,053 | ) | $ | 11,678 | $ | 39,767 | |||||
Adjustments
to reconcile net (loss) income to cash flows provided by operating
activities:
|
||||||||||||
Depreciation
and amortization
|
18,468 | 17,078 | 17,557 | |||||||||
Deferred
taxes
|
(16,685 | ) | (2,145 | ) | (1,488 | ) | ||||||
Loss
(gain) on disposal of fixed assets and other non-cash
items
|
2,836 | (2,393 | ) | (351 | ) | |||||||
Stock-based
compensation expense
|
3,744 | 3,636 | 2,489 | |||||||||
Goodwill
impairment
|
45,040 | 5,487 | - | |||||||||
Changes
in assets and liabilities, net of business acquisitions:
|
||||||||||||
Accounts
receivable, net
|
(4,628 | ) | 9,497 | 3,061 | ||||||||
Inventories
|
37,505 | (12,695 | ) | 8,994 | ||||||||
Prepaid
expenses and other assets
|
3,226 | (1,980 | ) | 1,478 | ||||||||
Accounts
payable, accrued expenses and other liabilities
|
(2,197 | ) | (23,506 | ) | 13,403 | |||||||
Net
cash flows provided by operating activities
|
63,256 | 4,657 | 84,910 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Capital
expenditures
|
(3,107 | ) | (4,199 | ) | (8,770 | ) | ||||||
Acquisition
of businesses
|
(1,679 | ) | (28,764 | ) | (17,299 | ) | ||||||
Proceeds
from sales of fixed assets
|
1,367 | 10,541 | 14,492 | |||||||||
Purchase
of short-term investments
|
(14,992 | ) | - | - | ||||||||
Proceeds
from sales of short-term investments
|
2,000 | - | - | |||||||||
Other
investing activities
|
(34 | ) | (3,070 | ) | (64 | ) | ||||||
Net
cash flows used for investing activities
|
(16,445 | ) | (25,492 | ) | (11,641 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from line of credit and other borrowings
|
5,775 | 14,600 | 23,800 | |||||||||
Repayments
under line of credit and other borrowings
|
(14,458 | ) | (33,179 | ) | (52,218 | ) | ||||||
Exercise
of stock options
|
5,562 | 402 | 4,577 | |||||||||
Purchase
of treasury stock
|
- | (8,333 | ) | - | ||||||||
Other
financing activities
|
(17 | ) | (176 | ) | - | |||||||
Net
cash flows used for financing activities
|
(3,138 | ) | (26,686 | ) | (23,841 | ) | ||||||
Net
increase (decrease) in cash
|
43,673 | (47,521 | ) | 49,428 | ||||||||
Cash
and cash equivalents at beginning of year
|
8,692 | 56,213 | 6,785 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 52,365 | $ | 8,692 | $ | 56,213 | ||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Cash
paid during the year for:
|
||||||||||||
Interest
|
$ | 499 | $ | 1,319 | $ | 3,426 | ||||||
Income
taxes, net of refunds
|
$ | 3,290 | $ | 13,852 | $ | 16,881 |
Accumulated
|
||||||||||||||||||||||||
Other
|
Total
|
|||||||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
Stockholders’
|
|||||||||||||||||||
Stock
|
Capital
|
Earnings
|
Income
|
Stock
|
Equity
|
|||||||||||||||||||
Balance
- December 31, 2006
|
$ | 238 | $ | 53,973 | $ | 170,038 | $ | 106 | $ | (19,467 | ) | $ | 204,888 | |||||||||||
Net
income
|
39,767 | 39,767 | ||||||||||||||||||||||
Unrealized
loss on interest rate swaps, net of taxes
|
(68 | ) | (68 | ) | ||||||||||||||||||||
Comprehensive
income
|
39,699 | |||||||||||||||||||||||
Issuance
of 249,929 shares of common stock pursuant to stock options and deferred
stock units
|
3 | 2,510 | 2,513 | |||||||||||||||||||||
Income
tax benefit relating to issuance of common stock pursuant to stock
options
|
1,947 | 1,947 | ||||||||||||||||||||||
Stock-based
compensation expense
|
2,489 | 2,489 | ||||||||||||||||||||||
Balance
- December 31, 2007
|
241 | 60,919 | 209,805 | 38 | (19,467 | ) | 251,536 | |||||||||||||||||
Net
income
|
11,678 | 11,678 | ||||||||||||||||||||||
Unrealized
loss on interest rate swaps, net of taxes
|
(38 | ) | (38 | ) | ||||||||||||||||||||
Comprehensive
income
|
11,640 | |||||||||||||||||||||||
Issuance
of 39,080 shares of common stock pursuant to stock options and deferred
stock units
|
340 | 340 | ||||||||||||||||||||||
Income
tax benefit relating to issuance of common stock pursuant to stock
options
|
59 | 59 | ||||||||||||||||||||||
Stock-based
compensation expense
|
3,636 | 3,636 | ||||||||||||||||||||||
Purchase
of 447,400 shares of treasury stock
|
(8,333 | ) | (8,333 | ) | ||||||||||||||||||||
Balance
- December 31, 2008
|
241 | 64,954 | 221,483 | - | (27,800 | ) | 258,878 | |||||||||||||||||
Net
loss
|
(24,053 | ) | (24,053 | ) | ||||||||||||||||||||
Issuance
of 439,304 shares of common stock pursuant to stock options and deferred
stock units
|
5 | 5,010 | 5,015 | |||||||||||||||||||||
Income
tax benefit relating to issuance of common stock pursuant to stock
options
|
531 | 531 | ||||||||||||||||||||||
Stock-based
compensation expense
|
3,744 | 3,744 | ||||||||||||||||||||||
Balance
- December 31, 2009
|
$ | 246 | $ | 74,239 | $ | 197,430 | $ | - | $ | (27,800 | ) | $ | 244,115 |
●Steel
chassis
|
●Vinyl
and aluminum windows and doors
|
●Axles
and suspension solutions
|
●Chassis
components
|
●RV
slide-out mechanisms and solutions
|
●Furniture
and mattresses
|
●Thermoformed
bath, kitchen and other products
|
●Entry
and baggage doors
|
●Toy
hauler ramp doors
|
●Entry
steps
|
●Manual,
electric and hydraulic stabilizer
|
●Other
towable accessories
|
and
lifting systems
|
●Specialty
trailers for hauling boats, personal
|
watercraft,
snowmobiles and equipment
|
2009
|
2008
|
2007
|
||||||||||
Balance
at beginning of period
|
$ | 1,486 | $ | 803 | $ | 1,081 | ||||||
Provision
for doubtful accounts
|
998 | 1,066 | (163 | ) | ||||||||
Additions
related to acquired companies
|
- | 30 | 85 | |||||||||
Accounts
written off, net of recoveries
|
(1,481 | ) | (413 | ) | (200 | ) | ||||||
Balance
at end of period
|
$ | 1,003 | $ | 1,486 | $ | 803 |
2009
|
2008
|
2007
|
||||||||||
Risk-free
interest rate
|
2.12 | % | 2.17 | % | 3.83 | % | ||||||
Expected
volatility
|
53.2 | % | 42.5 | % | 33.8 | % | ||||||
Expected
life
|
4.8
years
|
4.8
years
|
5.0
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
|
$ | 9.87 | $ | 4.68 | $ | 11.68 |
|
·
|
Level
1 - Quoted prices (unadjusted) for identical assets and liabilities in
active markets that the Company has the ability to access at the
measurement date.
|
|
·
|
Level
2 - Quoted prices for similar assets and liabilities in active markets;
quoted prices for identical or similar assets and liabilities in markets
that are not active; and inputs other than quoted prices that are
observable for the asset or liability, including interest rates, yield
curves and credit risks, or inputs that are derived principally from or
corroborated by observable market data through
correlation.
|
|
·
|
Level
3 - Values determined by models, significant inputs to which are
unobservable and are primarily based on internally derived assumptions
regarding the timing and amount of expected cash
flows.
|
●Towable
RV steel chassis
|
●Aluminum
windows and screens
|
|
●Towable
RV axles and suspension solutions
|
●Chassis
components
|
|
●RV
slide-out mechanisms and solutions
|
●Furniture
and mattresses
|
|
●Thermoformed
bath, kitchen and other products
|
●Entry
and baggage doors
|
|
●Toy
hauler ramp doors
|
●Entry
steps
|
|
●Manual,
electric and hydraulic stabilizer
|
●Other
towable accessories
|
|
and
lifting systems
|
●Specialty
trailers for hauling boats, personal
|
|
|
watercraft,
snowmobiles and
equipment
|
●Vinyl
and aluminum windows and screens
|
●Steel
chassis
|
|
●Thermoformed
bath and kitchen products
|
●Steel
chassis parts
|
|
●Axles
|
|
●Entry
doors
|
Segments
|
Corporate
|
Intangible
|
||||||||||||||||||||||
RV
|
MH
|
Total
|
and
Other
|
Assets
|
Total
|
|||||||||||||||||||
Year
ended December 31, 2009
|
||||||||||||||||||||||||
Revenues
from external customers(a)
|
$ | 312,535 | $ | 85,304 | $ | 397,839 | $ | - | $ | - | $ | 397,839 | ||||||||||||
Operating
profit (loss)(b)(e)
|
20,459 | 3,847 | 24,306 | (9,286 | ) | (50,601 | ) | (35,581 | ) | |||||||||||||||
Total
assets(c)
|
108,724 | 41,671 | 150,395 | 98,347 | 39,323 | 288,065 | ||||||||||||||||||
Expenditures
for long-lived assets(d)
|
2,398 | 865 | 3,263 | 110 | - | 3,373 | ||||||||||||||||||
Depreciation
and amortization
|
9,534 | 3,309 | 12,843 | 64 | 5,561 | 18,468 | ||||||||||||||||||
Year
ended December 31, 2008
|
||||||||||||||||||||||||
Revenues
from external customers(a)
|
$ | 368,092 | $ | 142,414 | $ | 510,506 | $ | - | $ | - | $ | 510,506 | ||||||||||||
Operating
profit (loss)(b)(e)
|
28,725 | 11,016 | 39,741 | (9,301 | ) | (10,542 | ) | 19,898 | ||||||||||||||||
Total
assets(c)
|
143,205 | 47,241 | 190,446 | 33,747 | 87,165 | 311,358 | ||||||||||||||||||
Expenditures
for long-lived assets(d)
|
5,488 | 719 | 6,207 | 31 | - | 6,238 | ||||||||||||||||||
Depreciation
and amortization
|
8,636 | 3,353 | 11,989 | 34 | 5,055 | 17,078 | ||||||||||||||||||
Year
ended December 31, 2007
|
||||||||||||||||||||||||
Revenues
from external customers(a)
|
$ | 491,830 | $ | 176,795 | $ | 668,625 | $ | - | $ | - | $ | 668,625 | ||||||||||||
Operating
profit (loss)(b)(e)
|
63,132 | 15,061 | 78,193 | (8,056 | ) | (4,178 | ) | 65,959 | ||||||||||||||||
Total
assets(c)
|
140,531 | 51,969 | 192,500 | 80,803 | 72,434 | 345,737 | ||||||||||||||||||
Expenditures
for long-lived assets(d)
|
8,080 | 1,002 | 9,082 | 119 | - | 9,201 | ||||||||||||||||||
Depreciation
and amortization
|
9,017 | 4,346 | 13,363 | 16 | 4,178 | 17,557 |
|
a)
|
Thor
Industries, Inc., a customer of the RV Segment, accounted for 25 percent,
21 percent and 23 percent of the Company’s consolidated net sales in the
years ended December 31, 2009, 2008 and 2007, respectively. Berkshire
Hathaway Inc. (through its subsidiaries Forest River, Inc. and Clayton
Homes, Inc.), a customer of both segments, accounted for 24 percent, 22
percent and 20 percent of the Company’s consolidated net sales in the
years ended December 31, 2009, 2008 and 2007, respectively. No other
customer accounted for more than 10 percent of consolidated net sales in
the years ended December 31, 2009, 2008 and
2007.
|
|
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, short-term
investments, prepaid expenses and other current assets, deferred taxes,
and other 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 businesses. The Company
purchased $0.3 million, $2.0 million and $0.4 million of fixed assets as
part of the acquisitions of businesses in 2009, 2008 and 2007,
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.
|
|
e)
|
The
operating loss for the Corporate and Other column is comprised of
Corporate expenses of $6.4 million, $7.2 million and $7.6 million for
2009, 2008 and 2007, respectively, and Other non-segment items of $2.9
million, $2.1 million and $0.5 million for 2009, 2008 and 2007,
respectively.
|
2009
|
2008
|
2007
|
||||||||||
Recreational
Vehicles:
|
||||||||||||
Chassis,
chassis parts and slide-out mechanisms
|
$ | 178,563 | $ | 228,310 | $ | 315,875 | ||||||
Windows,
doors and screens
|
64,684 | 79,279 | 107,693 | |||||||||
Furniture
|
30,290 | 11,726 | - | |||||||||
Axles
|
26,343 | 30,024 | 42,025 | |||||||||
Specialty
trailers
|
6,810 | 13,773 | 20,749 | |||||||||
Other
|
5,845 | 4,980 | 5,488 | |||||||||
312,535 | 368,092 | 491,830 | ||||||||||
Manufactured
Housing:
|
||||||||||||
Windows,
doors and screens
|
46,961 | 62,924 | 72,580 | |||||||||
Chassis
and chassis parts
|
24,892 | 56,869 | 70,428 | |||||||||
Shower
and bath units
|
12,636 | 18,108 | 19,921 | |||||||||
Axles
and tires
|
757 | 3,811 | 10,502 | |||||||||
Other
|
58 | 702 | 3,364 | |||||||||
85,304 | 142,414 | 176,795 | ||||||||||
Net
Sales
|
$ | 397,839 | $ | 510,506 | $ | 668,625 |
Net
tangible assets acquired
|
$ | 1,370 | ||
Intangible
assets
|
1,780 | |||
3,150 | ||||
Less:
Present value of future estimated earn-out payments
|
(1,204 | ) | ||
Less:
Other
|
(267 | ) | ||
Total
cash consideration
|
$ | 1,679 |
Net
tangible assets acquired
|
$ | 5,766 | ||
Customer
relationships
|
9,400 | |||
Other
identifiable intangible assets
|
2,575 | |||
Goodwill
(tax deductible)
|
10,918 | |||
Total
cash consideration
|
$ | 28,659 |
Net
tangible assets acquired
|
$ | 1,238 | ||
Identifiable
intangible assets
|
5,600 | |||
Goodwill
(tax deductible)
|
3,974 | |||
Total
cash consideration
|
$ | 10,812 |
Net
tangible assets acquired
|
$ | 604 | ||
Identifiable
intangible assets
|
1,830 | |||
Goodwill
(tax deductible)
|
598 | |||
Total
cash consideration
|
$ | 3,032 |
Net
tangible assets acquired
|
$ | 625 | ||
Identifiable
intangible assets
|
4,160 | |||
Goodwill
(tax deductible)
|
267 | |||
Goodwill
(non tax deductible)
|
426 | |||
Total
consideration
|
5,478 | |||
Less
present value of future minimum payments
|
(1,961 | ) | ||
Total
cash consideration
|
$ | 3,517 |
MH Segment
|
RV Segment
|
Total
|
||||||||||
Balance
- January 1, 2008
|
$ | 9,251 | $ | 30,296 | $ | 39,547 | ||||||
Acquisitions
|
- | 10,053 | 10,053 | |||||||||
Impairments
|
- | (5,487 | ) | (5,487 | ) | |||||||
Balance
- December 31, 2008
|
9,251 | 34,862 | 44,113 | |||||||||
Adjustment
to 2008 Seating Technology acquisition
|
- | 927 | 927 | |||||||||
Impairments
|
(9,251 | ) | (35,789 | ) | (45,040 | ) | ||||||
Balance
- December 31, 2009
|
$ | - | $ | - | $ | - |
Accumulated
|
Estimated Useful
|
||||||||||||
Gross
|
Amortization
|
Net
|
Life in Years
|
||||||||||
Non-compete
agreements
|
$ | 2,830 | $ | 1,031 | $ | 1,799 |
3
to 7
|
||||||
Customer
relationships
|
24,870 | 8,851 | 16,019 |
8
to 16
|
|||||||||
Tradenames
|
6,151 | 2,390 | 3,761 |
5
to 15
|
|||||||||
Patents
|
22,693 | 5,101 | 17,592 |
5
to 19
|
|||||||||
Other
intangible assets
|
$ | 56,544 | $ | 17,373 | $ | 39,171 |
Accumulated
|
Estimated Useful
|
||||||||||||
Gross
|
Amortization
|
Net
|
Life in Years
|
||||||||||
Non-compete
agreements
|
$ | 3,231 | $ | 1,130 | $ | 2,101 |
3
to 7
|
||||||
Customer
relationships
|
24,870 | 6,225 | 18,645 |
8
to 16
|
|||||||||
Tradenames
|
6,251 | 1,846 | 4,405 |
5
to 15
|
|||||||||
Patents
|
21,183 | 3,547 | 17,636 |
5
to 19
|
|||||||||
Other
intangible assets
|
$ | 55,535 | $ | 12,748 | $ | 42,787 |
2009
|
2008
|
|||||||
Finished
goods
|
$ | 9,264 | $ | 10,801 | ||||
Work
in process
|
1,576 | 2,946 | ||||||
Raw
materials
|
46,917 | 80,187 | ||||||
Total
|
$ | 57,757 | $ | 93,934 |
Estimated Useful
|
|||||||||||
2009
|
2008
|
Life in Years
|
|||||||||
Land
|
$ | 9,917 | $ | 8,323 | |||||||
Buildings
and improvements
|
65,574 | 63,508 |
10
to 40
|
||||||||
Leasehold
improvements
|
1,164 | 1,182 |
2
to 15
|
||||||||
Machinery
and equipment
|
73,995 | 77,653 |
3
to 10
|
||||||||
Transportation
equipment
|
2,590 | 2,985 |
3
to 7
|
||||||||
Furniture
and fixtures
|
8,625 | 8,356 |
3
to 8
|
||||||||
Construction
in progress
|
464 | 1,294 | |||||||||
162,329 | 163,301 | ||||||||||
Less
accumulated depreciation and amortization
|
82,053 | 74,570 | |||||||||
Fixed
assets, net
|
$ | 80,276 | $ | 88,731 |
2009
|
2008
|
2007
|
||||||||||
Charged
to cost of sales
|
$ | 11,155 | $ | 10,292 | $ | 11,497 | ||||||
Charged
to selling, general and administrative expenses
|
1,752 | 1,731 | 1,882 | |||||||||
Total
|
$ | 12,907 | $ | 12,023 | $ | 13,379 |
2009
|
2008
|
||||||||||
Accrued
employee compensation and benefits
|
$ | 11,815 | $ | 13,010 | |||||||
Accrued
warranty
|
3,340 | 4,510 | |||||||||
Other
accrued expenses and current liabilities
|
13,039 | 14,704 | |||||||||
Total
|
$ | 28,194 | $ | 32,224 |
2009
|
2008
|
2007
|
||||||||||
Balance
at beginning of period
|
$ | 5,419 | $ | 5,762 | $ | 3,990 | ||||||
Provision
for warranty expense
|
2,279 | 3,984 | 6,335 | |||||||||
Warranty
costs paid
|
(3,012 | ) | (4,327 | ) | (4,563 | ) | ||||||
Total
accrued warranty
|
4,686 | 5,419 | 5,762 | |||||||||
Less
long-term portion
|
1,346 | 909 | 1,402 | |||||||||
Current
accrued warranty
|
$ | 3,340 | $ | 4,510 | $ | 4,360 |
2009
|
2008
|
|||||||
Senior
Promissory Notes
|
$ | - | $ | 6,000 | ||||
Notes
payable pursuant to a Credit Agreement
|
- | - | ||||||
Industrial
Revenue Bonds, secured by certain real estate and
equipment
|
- | 1,662 | ||||||
Other
loans primarily secured by certain real estate and
equipment
|
- | 1,021 | ||||||
|
- | 8,683 | ||||||
Less
current portion
|
- | 5,833 | ||||||
Total
long-term indebtedness
|
$ | - | $ | 2,850 |
2009
|
2008
|
2007
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | 3,700 | $ | 7,312 | $ | 20,774 | ||||||
State
|
668 | 2,176 | 4,291 | |||||||||
Total
current
|
4,368 | 9,488 | 25,065 | |||||||||
Deferred:
|
||||||||||||
Federal
|
(13,485 | ) | (1,721 | ) | (1,137 | ) | ||||||
State
|
(3,200 | ) | (424 | ) | (351 | ) | ||||||
Total
deferred
|
(16,685 | ) | (2,145 | ) | (1,488 | ) | ||||||
Total
income tax (benefit) provision
|
$ | (12,317 | ) | $ | 7,343 | $ | 23,577 |
2009
|
2008
|
2007
|
||||||||||
Income
tax at federal statutory rate
|
$ | (12,366 | ) | $ | 6,657 | $ | 22,171 | |||||
State
income taxes, net of federal income tax impact
|
(1,671 | ) | 1,139 | 2,561 | ||||||||
Non-deductible
goodwill
|
2,030 | - | - | |||||||||
Research
and development credit
|
(354 | ) | - | (64 | ) | |||||||
Other
non-deductible expenses
|
100 | 169 | 135 | |||||||||
Manufacturing
credit pursuant to Jobs Creation Act
|
(50 | ) | (407 | ) | (1,123 | ) | ||||||
Tax-free
interest income
|
- | (7 | ) | (277 | ) | |||||||
Other
|
(6 | ) | (208 | ) | 174 | |||||||
(Benefit)
provision for income taxes
|
$ | (12,317 | ) | $ | 7,343 | $ | 23,577 |
2009
|
2008
|
|||||||
Prepaid
expenses and other current assets
|
$ | 9,879 | $ | 9,436 | ||||
Other
long-term assets
|
16,532 | 306 | ||||||
Net
deferred tax assets
|
$ | 26,411 | $ | 9,742 |
2009
|
2008
|
|||||||
Deferred
tax assets:
|
||||||||
Goodwill
and other intangible assets
|
$ | 16,299 | $ | 2,741 | ||||
Employee
benefits
|
3,887 | 3,765 | ||||||
Inventories
|
2,145 | 1,759 | ||||||
Deferred
compensation
|
1,460 | 1,270 | ||||||
Accrued
insurance
|
1,247 | 996 | ||||||
Post
retirement
|
986 | 1,474 | ||||||
Accounts
receivable
|
559 | 758 | ||||||
Other
|
2,226 | 1,812 | ||||||
Total
deferred tax assets
|
28,809 | 14,575 | ||||||
Deferred
tax liabilities:
|
||||||||
Fixed
assets
|
2,398 | 4,833 | ||||||
Net
deferred tax assets
|
$ | 26,411 | $ | 9,742 |
2009
|
2008
|
2007
|
||||||||||
Balance
at beginning of period
|
$ | 5,782 | $ | 4,829 | $ | 3,752 | ||||||
Changes
in tax positions of prior years
|
(287 | ) | 819 | 373 | ||||||||
Additions
based on tax positions related to the current year
|
661 | 363 | 791 | |||||||||
Payments
|
(3,891 | ) | - | - | ||||||||
Expiration
of statute of limitations
|
(106 | ) | (229 | ) | (87 | ) | ||||||
Balance
at end of period
|
$ | 2,159 | $ | 5,782 | $ | 4,829 |
2010
|
$ | 4,668 | ||
2011
|
3,991 | |||
2012
|
2,833 | |||
2013
|
1,381 | |||
2014
|
506 | |||
Thereafter
|
463 | |||
Total
minimum lease payments
|
$ | 13,842 |
Weighted
|
||||||||||||
Average
|
||||||||||||
Number
of
|
Stock
Option
|
Exercise
|
||||||||||
Option Shares
|
Exercise Price
|
Price
|
||||||||||
Outstanding
at December 31, 2006
|
1,364,080 | $ | 4.55 – $28.71 | $ | 19.33 | |||||||
Granted
|
586,000 | $ | 28.09 – $32.61 | $ | 32.32 | |||||||
Exercised
|
(248,840 | ) | $ | 4.55 – $28.71 | $ | 10.10 | ||||||
Forfeited
|
(41,600 | ) | $ | 12.78 – $28.33 | $ | 24.84 | ||||||
Outstanding
at December 31, 2007
|
1,659,640 | $ | 7.88 – $32.61 | $ | 25.16 | |||||||
Granted
|
515,500 | $ | 11.59 – $14.22 | $ | 11.92 | |||||||
Exercised
|
(38,200 | ) | $ | 7.88 – $12.78 | $ | 8.93 | ||||||
Forfeited
|
(60,600 | ) | $ | 12.78 – $32.61 | $ | 26.18 | ||||||
Outstanding
at December 31, 2008
|
2,076,340 | $ | 11.59 – $32.61 | $ | 22.14 | |||||||
Granted
|
327,900 | $ | 20.99 | $ | 20.99 | |||||||
Exercised
|
(389,100 | ) | $ | 11.59 – $16.15 | $ | 12.88 | ||||||
Forfeited
/ cancelled
|
(255,200 | ) | $ | 11.59 – $32.61 | $ | 25.70 | ||||||
Outstanding
at December 31, 2009
|
1,759,940 | $ | 11.59 – $32.61 | $ | 23.46 | |||||||
Exercisable
at December 31, 2009
|
755,710 | $ | 11.59 – $32.61 | $ | 26.01 |
Option
|
|
Option
|
||||||||||||
Exercise
|
Shares
|
Remaining
|
Shares
|
|||||||||||
Price
|
Outstanding
|
Life (Years)
|
Exercisable
|
|||||||||||
$ | 16.16 | 12,000 |
0.9
|
12,000 | ||||||||||
$ | 16.15 | 30,000 |
1.0
|
30,000 | ||||||||||
$ | 28.33 | 375,640 |
1.9
|
297,360 | ||||||||||
$ | 28.71 | 37,500 |
2.0
|
37,500 | ||||||||||
$ | 26.39 | 37,500 |
3.0
|
37,500 | ||||||||||
$ | 32.61 | 444,450 |
3.9
|
178,200 | ||||||||||
$ | 28.09 | 37,500 |
4.0
|
37,500 | ||||||||||
$ | 11.59 | 392,950 |
4.9
|
62,750 | ||||||||||
$ | 13.03 | 2,000 |
4.9
|
400 | ||||||||||
$ | 14.22 | 62,500 |
5.0
|
62,500 | ||||||||||
$ | 20.99 | 327,900 |
5.9
|
- |
Stock
Price
|
||||||||
Number
of
|
at
Date
|
|||||||
Shares
|
of Issuance
|
|||||||
Outstanding
at December 31, 2006
|
66,497 | $ | 6.87 – $37.35 | |||||
Issued
|
10,589 | $ | 26.01 – $43.02 | |||||
Exercised
|
(1,089 | ) | $ | 7.61 – $12.78 | ||||
Outstanding
at December 31, 2007
|
75,997 | $ | 6.87 – $43.02 | |||||
Issued
|
21,995 | $ | 11.59 – $27.40 | |||||
Exercised
|
(880 | ) | $ | 25.01 – $37.35 | ||||
Outstanding
at December 31, 2008
|
97,112 | $ | 6.87 – $43.02 | |||||
Issued
|
84,202 | $ | 5.50 – $21.90 | |||||
Exercised
|
(50,201 | ) | $ | 7.43 – $43.02 | ||||
Outstanding
at December 31, 2009
|
131,113 | $ | 5.50 – $40.68 |
2009
|
2008
|
2007
|
||||||||||
Weighted
average shares outstanding for basic earnings per share
|
21,807,413 | 21,808,073 | 21,892,656 | |||||||||
Common
stock equivalents pertaining to stock options and contingently issuable
deferred stock units
|
- | 109,048 | 233,244 | |||||||||
Total
for diluted shares
|
21,807,413 | 21,917,121 | 22,125,900 |
First
|
Second
|
Third
|
Fourth
|
|||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Year
|
||||||||||||||||
Year
ended December 31, 2009
|
||||||||||||||||||||
Net
sales
|
$ | 71,019 | $ | 100,563 | $ | 121,666 | $ | 104,591 | $ | 397,839 | ||||||||||
Gross
profit
|
5,826 | 20,553 | 27,974 | 24,357 | 78,710 | |||||||||||||||
(Loss)
income before income taxes
|
(56,464 | ) | 3,958 | 11,134 | 5,002 | (36,370 | ) | |||||||||||||
Net
(loss) income
|
$ | (36,702 | ) | $ | 2,556 | $ | 7,189 | $ | 2,904 | $ | (24,053 | ) | ||||||||
Net
(loss) income per common share:
|
||||||||||||||||||||
Basic
|
$ | (1.70 | ) | $ | 0.12 | $ | 0.33 | $ | 0.13 | $ | (1.10 | ) | ||||||||
Diluted
|
$ | (1.70 | ) | $ | 0.12 | $ | 0.33 | $ | 0.13 | $ | (1.10 | ) | ||||||||
Stock
market price
|
||||||||||||||||||||
High
|
$ | 12.30 | $ | 15.40 | $ | 23.00 | $ | 23.56 | $ | 23.56 | ||||||||||
Low
|
$ | 5.50 | $ | 8.50 | $ | 10.36 | $ | 19.14 | $ | 5.50 | ||||||||||
Close
(at end of quarter)
|
$ | 8.68 | $ | 12.17 | $ | 21.69 | $ | 20.65 | $ | 20.65 | ||||||||||
Year
ended December 31, 2008
|
||||||||||||||||||||
Net
sales
|
$ | 159,148 | $ | 150,523 | $ | 124,274 | $ | 76,561 | $ | 510,506 | ||||||||||
Gross
profit
|
36,579 | 36,804 | 24,982 | 9,141 | 107,506 | |||||||||||||||
Income
(loss) before income taxes
|
14,895 | 15,310 | 4,207 | (15,391 | ) | 19,021 | ||||||||||||||
Net
income (loss)
|
$ | 9,105 | $ | 9,190 | $ | 2,593 | $ | (9,210 | ) | $ | 11,678 | |||||||||
Net
income (loss) per common share:
|
||||||||||||||||||||
Basic
|
$ | 0.41 | $ | 0.42 | $ | 0.12 | $ | (0.43 | ) | $ | 0.54 | |||||||||
Diluted
|
$ | 0.41 | $ | 0.42 | $ | 0.12 | $ | (0.43 | ) | $ | 0.53 | |||||||||
Stock
market price
|
||||||||||||||||||||
High
|
$ | 28.69 | $ | 26.81 | $ | 20.58 | $ | 16.05 | $ | 28.69 | ||||||||||
Low
|
$ | 21.47 | $ | 15.95 | $ | 14.80 | $ | 9.65 | $ | 9.65 | ||||||||||
Close
(at end of quarter)
|
$ | 24.46 | $ | 15.95 | $ | 17.11 | $ | 12.00 | $ | 12.00 |
|
(a)
|
Management’s Annual
Report on Internal Control over Financial
Reporting.
|
/s/
Fredric M. Zinn
|
/s/
Joseph S. Giordano III
|
President
and
|
Chief
Financial Officer and
|
Chief
Executive Officer
|
Treasurer
|
(1)
|
Financial
Statements.
|
(2)
|
Exhibits. See
Item 15 (b) – “List of Exhibits” incorporated herein by
reference.
|
Exhibit
Number
|
Description
|
|
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
Number
|
Description
|
|
10
|
Material
Contracts.
|
|
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 and December 23,
2008.
|
|
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.
|
Exhibit
|
||
Number
|
Description
|
|
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.
|
|
10.221
|
Form
of Indemnification Agreement between Registrant and its officers and
independent directors.
|
|
10.223*
|
Amended
Change in Control Agreement by and between Harvey F. Milman and
Registrant, dated March 3, 2006, as amended and
supplemented.
|
|
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, as
amended.
|
Exhibit
Number
|
Description
|
|
10.233
|
Second
Amended and Restated Credit Agreement dated as of November 25, 2008 by and
among Kinro, Inc., Lippert Components, Inc., JPMorgan Chase Bank, N.A.,
individually and as Administrative Agent, and Wells Fargo Bank, N.A.
individually and as Documentation Agent.
|
|
10.234
|
Second
Amended and Restated Subsidiary Guarantee Agreement dated as of November
25, 2008 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., Trailair, Inc., Coil Clip, Inc., Zieman
Manufacturing Company, with and in favor of JPMorgan Chase Bank, N.A., as
Administrative Agent for the Lenders.
|
|
10.235
|
Second
Amended and Restated Company Guarantee Agreement dated as of November 25,
2008 by and among Drew Industries Incorporated, with and in favor of
JPMorgan Chase Bank, N.A., as Administrative Agent for the
Lenders.
|
|
10.236
|
Second
Amended and Restated Subordination Agreement dated as of November 25, 2008
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., 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., Trailair, Inc,
with and in favor of JPMorgan Chase Bank, N.A., as Administrative
Agent.
|
|
10.237
|
Second
Amended and Restated Pledge and Security Agreement dated as of November
25, 2008 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.
|
|
10.238
|
Second
Amended and Restated Revolving Credit Note dated as of November 25, 2008
by and among Kinro, Inc., Lippert Components, Inc., payable to the order
of JPMorgan Chase Bank, N.A. in the principal amount of Thirty Million
($30,000,000) Dollars.
|
|
10.239
|
Revolving
Credit Note dated as of November 25, 2008 by and among Kinro, Inc.,
Lippert Components, Inc., payable to the order of Wells Fargo Bank, N.A.
in the principal amount of Twenty Million ($20,000,000)
Dollars.
|
|
10.240
|
Second
Amended and Restated Note Purchase and Private Shelf Agreement dated as of
November 25, 2008 by and among Prudential Investment Management, Inc. and
Affiliates, and Kinro, Inc. and Lippert Components, Inc., guaranteed by
Drew Industries Incorporated.
|
|
10.241
|
Form
of Fixed Rate Shelf Note.
|
|
10.242
|
Form
of Floating Rate Shelf Note.
|
|
10.243
|
|
Confirmation,
Reaffirmation and Amendment of Parent Guarantee Agreement dated as of
November 25, 2008 by and among Drew Industries Incorporated, Prudential
Investment Management, Inc. and the Noteholders listed
thereto.
|
Exhibit
Number
|
Description
|
|
10.245
|
Amended
and Restated Intercreditor Agreement dated as of November 25, 2008 by and
among Prudential Investment Management, Inc. and Affiliates, JPMorgan
Bank, N.A. (as Lender), Wells Fargo Bank, N.A. (as Lender), and JPMorgan
Bank, N.A. (as Administrative Agent, Collateral Agent and
Trustee).
|
|
10.246
|
Confirmation,
Reaffirmation and Amendment of Subordination Agreement dated as of
November 25, 2008 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., 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. and
Affiliates.
|
|
10.247
|
Confirmation,
Reaffirmation and Amendment of Pledge Agreement dated as of November 25,
2008 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 trustee.
|
|
10.248
|
Collateralized
Trust Agreement dated as of November 25, 2008 by and among Kinro, Inc.,
Lippert Components, Inc., Prudential Investment Management, Inc. and
Affiliates and JPMorgan Chase Bank, N.A. as security trustee for the
Noteholders.
|
|
10.249*
|
Amended
Change of Control Agreement by and between Joseph S. Giordano III and
Registrant dated July 18, 2006, as amended on December 23,
2008.
|
|
10.250*
|
Amended
Change of Control Agreement by and between Christopher L. Smith and
Registrant dated July 17, 2006, as amended on December 23, 2008 and March
5, 2009.
|
|
10.251*
|
Corrected
Executive Compensation and Benefits Agreement between Registrant and David
L. Webster, dated December 31, 2008.
|
|
10.252*
|
Executive
Compensation and Benefits Agreement between Registrant and Leigh J.
Abrams, dated April 6, 2009.
|
|
10.253*
|
Executive
Employment and Non-Competition Agreement between Registrant and Jason D.
Lippert, dated May 6, 2009.
|
|
10.254*
|
Executive
Compensation and Non-Competition Agreement between Registrant and Fredric
M. Zinn, dated May 28, 2009.
|
|
10.255*
|
Executive
Employment and Non-Competition Agreement between Registrant and Scott T.
Mereness, dated June 24, 2009.
|
|
10.256*
|
|
Severance
Agreement between Registrant and Joseph S. Giordano III, dated November
18,
2009.
|
Exhibit
10.194 is incorporated by reference to Exhibit 10.1 to the Company’s Form
8-K dated January 8, 2009.
|
|
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
10.221 is incorporated by reference to Exhibit 99.1 included in the
Company’s Form 8-K filed on February 9, 2005.
|
|
Exhibits
10.197 and 10.223 are incorporated by reference to Exhibits 10.1-10.2
included in the Company’s Form 8-K filed on January 8,
2009.
|
|
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 January 9, 2009.
|
|
Exhibits
10.233 – 10.248 are incorporated by reference to Exhibits 10.1 - 10.16
included in the Company’s Form 8-K filed on December 2,
2008.
|
|
Exhibit
10.249 is incorporated by reference to Exhibits 10.3 included in the
Company’s Form 8-K filed on January 8, 2009.
|
|
Exhibit
10.250 is incorporated by reference to Exhibit 10.4 included in the
Company’s Form 8-K filed on January 8, 2009 and to Exhibit 10.1 included
in the Company’s Form 8-K filed on March 6, 2009.
|
|
Exhibit
10.251 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K/A filed on January 6, 2009.
|
|
Exhibit
10.252 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K/A filed on April 8, 2009.
|
|
Exhibit
10.253 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K/A filed on May 6, 2009.
|
|
Exhibit
10.254 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K/A filed on May 28, 2009.
|
|
Exhibit
10.255 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K/A filed on June 25, 2009.
|
|
Exhibit
10.256 is incorporated by reference to Exhibit 10 (iii)(A) included in the
Company’s Form 8-K filed on November 19,
2009.
|
Exhibit
|
||
Number
|
Description
|
|
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 11, 2010
|
DREW
INDUSTRIES INCORPORATED
|
|
By:
|
/s/ Fredric M. Zinn
|
|
Fredric
M. Zinn, President and Chief Executive
Officer
|
Date
|
Signature |
Title
|
|||
March
11, 2010
|
By:
|
/s/ Fredric M. Zinn
|
Director,
President and Chief
Executive Officer
|
||
(Fredric
M. Zinn)
|
|
||||
March
11, 2010
|
By:
|
/s/ Joseph S. Giordano III
|
Chief
Financial Officer and Treasurer
|
||
(Joseph
S. Giordano III)
|
|||||
March
11, 2010
|
By:
|
/s/ Christopher L. Smith
|
Corporate
Controller
|
||
(Christopher
L. Smith)
|
|||||
March
11, 2010
|
By:
|
/s/ Edward W. Rose, III
|
Lead
Director
|
||
(Edward
W. Rose, III)
|
|||||
March
11, 2010
|
By:
|
/s/ Leigh J. Abrams
|
Chairman
of the Board of Directors
|
||
(Leigh
J. Abrams)
|
|||||
March
11, 2010
|
By:
|
/s/ James F. Gero
|
Director
|
||
(James
F. Gero)
|
|||||
March
11, 2010
|
By:
|
/s/ Frederick B. Hegi, Jr.
|
Director
|
||
(Frederick
B. Hegi, Jr.)
|
|||||
March
11, 2010
|
By:
|
/s/ David A. Reed
|
Director
|
||
(David
A. Reed)
|
|||||
March
11, 2010
|
By:
|
/s/ John B. Lowe, Jr.
|
Director
|
||
(John
B. Lowe, Jr.)
|
|||||
March
11, 2010
|
|
By:
|
/s/ Jason D.
Lippert
|
|
Director
|
(Jason
D. Lippert)
|