drewindustries.com
2015 Annual Report
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Drew Industries
Incorporated is a leading
supplier of components
for recreational vehicles
and manufactured homes.
Drew operates through its
wholly-owned subsidiary,
Lippert Components, Inc.
From 42 manufacturing and distribution facilities located
throughout the United States and Canada, Drew
supplies a broad array of components for the leading
manufacturers of recreational vehicles and
manufactured homes, as well as the aftermarket for
these industries. In addition, Drew manufactures
components for adjacent industries including buses,
trailers used to haul livestock, equipment and other
cargo, pontoon boats, modular housing and factory-built
mobile office units. In 2015, the RV Products Segment
accounted for 92 percent of Drew’s con solidated net
sales, of which 73 percent were of components sold to
manufacturers of travel trailer and fifth-wheel RVs. The
Manufactured Housing Products Segment accounted
for 8 percent of Drew’s consolidated net sales.
Management of Drew is committed to acting ethically
and responsibly, and to providing full and accurate
disclosure to the Company’s stockholders, employees
and other stakeholders.
DREW’S SALES CONTENT PER TRAVEL TRAILER AND FIFTH-WHEEL RV PRODUCED INDUSTRY-WIDE
Peak sales potential is estimated to be $7,400 per travel trailer and fifth-wheel RV
$2,690
$2,713
$2,816
$2,987
$1,847
$2,010
$2,337
$2,148
$3,000
$2,500
$2,000
$1,500
$1,000
$500
0
2008
2009
2010
2011
2012
2013
2014
2015
2
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
The graph below compares the cumulative 5-Year total return of holders of the Company’s common stock with
the cumulative total returns of the Russell 2000 index and a customized peer group of eight companies that
includes: Arctic CAT Inc., Brunswick Corporation, Cavco Industries, Inc., Patrick Industries, Inc., Spartan
Motors, Inc., Thor Industries, Inc., Trimas Corporation and Winnebago Industries, Inc. An investment of $100
(with reinvestment of all dividends) is assumed to have been made in our common stock, in the index, and in
the peer group on December 31, 2010 and its relative performance is tracked through December 31, 2015.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Drew Industries Incorporated, the Russell 2000 Index, and a Peer Group
Drew Industries Incorporated
Russell 2000
Peer Group
350
300
250
200
150
100
50
0
12/10
12/11
12/12
12/13
12/14
12/15
* $100 invested on 12/31/10 in stock or index, including
reinvestment of dividends. Fiscal year ending December 31.
Copyright© 2016 Russell Investment Group. All rights reserved.
Drew Industries Incorporated
Russell 2000
Peer Group
12/10
100.00
100.00
100.00
12/11
107.97
95.82
87.60
12/12
151.58
111.49
136.33
12/13
250.17
154.78
210.84
12/14
249.54
162.35
210.64
12/15
307.28
155.18
203.30
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Financial Data
(In thousands, except per share amounts)
2011
2012
2013
2014
2015
Year Ended December 31,
OPERATING DATA:
Net sales
Severance and executive succession
Sale of extrusion assets
Operating profit
Income before income taxes
Provision for income taxes
Net income
Net income per common share:
Basic
Diluted
FINANCIAL DATA:
Working capital
Total assets
Long-term obligations
Stockholders’ equity
$ 681,166
$ 901,123
$ 1,015,576
$ 1,190,782
$ 1,403,066
—
—
48,548
48,256
18,197
$ 30,059
1,456
—
58,132
57,802
20,462
$ 37,340
1,876
—
78,298
77,947
27,828
—
1,954
95,487
95,057
32,791
3,716
—
116,254
114,369
40,024
$
50,119
$
62,266
$
74,345
$
$
1.35
1.34
$
$
1.66
1.64
$
$
2.15
2.11
$
$
2.60
2.56
$
$
3.06
3.02
$ 85,657
351,083
21,876
$ 84,243
373,868
19,843
$ 107,339
$ 100,451
453,184
21,380
543,841
41,758
$ 169,580
622,946
85,509
$ 277,296
$ 284,245
$ 313,613
$ 394,898
$ 438,575
1,500
1,200
900
$681
600
300
0
$1,403
$1,191
$1,016
$901
20
15
12.7
11.4
10
5
0
18.4
17.5
16.0
3.5
3.0
2.5
$3.02
$2.56
$2.11
2.0
1.5
$1.34
$1.64
1.0
0.5
0.0
11
12
13
14
15
11
12
13
14
15
11
12
13
14
15
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
3
$3,000
$2,500
$2,000
$1,500
$1,000
$500
0
$2,690
$2,716
$2,825
$2,987
$1,847
$2,010
$2,337
$2,148
2008
2009
2010
2011
2012
2013
2014
2015
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS TOTAL SALES(in millions)RETURN ON EQUITY(percentage)NET INCOME PER COMMON SHARE(diluted)
WE ARE PLEASED TO REPORT
ANOTHER RECORD YEAR FOR
DREW INDUSTRIES. NOTABLE
VICTORIES FOR 2015:
• Increased net income to
$74.3 million, or $3.02
per diluted share, up from
$62.3 million, or $2.56 per
diluted share, in 2014.
• Achieved another record year
for sales. With more than $1.4
billion in net sales, an increase
of $212 million from 2014, it
was our sixth consecutive year
of consolidated growth of more
than $100 million.
• Continued to drive growth
in adjacent industries,
with overall sales in 2015
reaching $193 million, up
40% from the previous year.
• Invested significantly in our
business by completing
three acquisitions as well
as an exclusive distribution
agreement with Furrion
Limited. Through these
acquisitions we further
expanded into adjacent
markets including the school
bus, specialty vehicle, heavy
truck and marine industries.
• Increased content per unit for
fifth-wheel and travel trailer
RVs to an all-time high of
$2,987 in 2015 from $2,816
per unit the prior year. We also
increased content per unit on
motor home RVs significantly
to $1,810 in 2015 from $1,602
the prior year.
OUR STRATEGIC INITIATIVES
2015 was a year of continued focus on our strategic initiatives. We grew
our core RV business and continued to build market share in various
product lines. We’ve quickly grown the aftermarket into a meaningful
business with more than $100 million in revenues. As we continue to
sell nearly $1 billion of RV components to RV OEMs each year, the
aftermarket parts and accessories business will become even more
meaningful, especially considering higher its margins. We are also giving
our attention to adjacent markets outside the RV industry. Buses, cargo
trailers, equestrian trailers, heavy trucks and boats all require components
similar to RVs. We are tapping into these markets with our existing teams,
operations and capital that have traditionally focused only on our core
markets. Our business outside the RV OEM market exceeded $375 million
in 2015 and we will continue our sales to push that growth. While our
international RV business is still in its early stages, we are making progress
through product introductions, products developed specifically for Europe
and Australia and key relationships and partnerships with international
OEMs. Lastly, and going forward, acquisitions will play an important role in
all of these markets. We are looking for great companies with great people,
great products and a strong growth trajectory, and are excited about the
opportunities we see and the further possibilities on the horizon.
4
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS To Our Stockholders OUR PEOPLE
Other significant initiatives in 2015 included creating a better workforce
through leadership training and implementing our core values throughout
the organization. Our core values have been developed over decades, but
were formally articulated in 2014 as follows:
• Passionate About Winning
• Team Play with Trust
• Honesty, Integrity and Candor
• Caring About People
• Positive Attitude
These core values are not only understood, but visible throughout the
company. Our leadership team and employees have bought into this
vision 100%, making the organization stronger. We use these core values
to evaluate and hire employees.
We have installed a Leadership Development team whose sole
responsibility is to create better leaders throughout the organization.
In 2015 we held weekly leadership events, not just for senior leaders,
but for all levels of management. We are creating a culture of leadership
throughout the entire company, further strengthening our workforce.
We have dedicated Lean teams for many divisions of the company and
will add more in coming years. Lean is a journey and we will continue to
bolster our teams and efforts here. This initiative has opened the eyes of
our employees, changing the way they look at manufacturing, whether
they’re 25-year or 5-year veterans. The excitement generated by making
the company more efficient is contagious.
Our people are at the center of the company. To our 7,000 plus
employees, we thank you for taking us to new heights!
IN SUMMARY
Drew Industries is in an excellent position to grow and prosper. We have
a strong and talented management team, a healthy balance sheet and
unmatched competitive strengths within the industries we serve. We have
an executive management team of 14 people with an average tenure of
more than 15 years with the company.
As we think strategically about the future, we see many prospects for
continued growth. We estimate there are opportunities in all the industries
we serve for our existing products to generate additional sales, potentially
in excess of $3 billion annually.
Thank you to our shareholders for your continued trust in Drew Industries,
and we look forward to a strong and prosperous 2016.
JASON D. LIPPERT
Chief Executive Officer
5
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS 2015 DREW ANNUAL REPORT • drewindustries.com 5 As our wholly-owned subsidiary Lippert Components® enters its
60th year in 2016, we reflect on all the pivotal moments and stages
of growth during our company history. We’ve seen six decades
of fast-paced strategic business development and six decades of
success because we put customers first and care for our employees
like family. And we’re happy to report another year of growth through
strategic acquisitions and product development. We made our first
international acquisition in Canada, stepped into the marine industry
and made positive progress in the RV Aftermarket. Just as we’ve
grown to be a leading supplier to the RV industry, we look to take
that same strategy and success with us wherever we go.
We take the value of caring about people very seriously and believe
it is important to invest in the communities where we live and work.
We are committed to giving back by championing the causes and
supporting the organizations our employees are passionate about.
We strive to have a positive impact in our neighborhoods, not only
through good business, but also through charitable donations and
volunteer work. We are excited to partner with our employees in
supporting wonderful charities doing important work for children
and families in our communities.
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS Year in Review6 2015 DREW ANNUAL REPORT • drewindustries.com RECREATIONAL VEHICLES
We manufacture and market a variety of products used in the production
of RVs, and our net sales to RV OEMs comprised 73% of our 2015
consolidated net sales. Industry-wide wholesale shipments of RVs in
2015 remained strong, increasing 5% to nearly 375,000 units. Growing
content per unit has been a critical component of our growth strategy
over the past decade, allowing us to grow at a faster rate than industry-
wide wholesale shipments. Our growth continued in 2015, with content
per travel trailer and fifth-wheel RV increasing to $2,987, up 6% over
2014, and content per motorhome RV reached $1,810, up nearly 13%
over 2014, reflecting market share gains through organic growth and
completed acquisitions.
NEW PRODUCTS
We strive to be an industry leader in product innovation, with a research
and development staff focused on developing new products, as well
as improving existing products. We are constantly seeking customer
feedback so we can offer products the market wants and needs. In 2015
we introduced several exciting new products. Most notably, we debuted
Sway Command™ tow control technology with a major RV OEM travel
trailer manufacturer, and the product has been well received by dealers
and retail customers; the OneControl™ digital application, which allows
the user to control RV functions from a tablet or smartphone; the first
ever automatic one-touch leveling system designed specifically for travel
trailer RVs; and cutting edge electronics, audiovisual products, camera
systems and kitchen appliances through our partnership with Furrion®.
73%
CONSOLIDATED
NET SALES
CONTENT PER
TRAVEL TRAILER &
FIFTH-WHEEL RV6%
CONTENT PER
MOTORHOME RV
13%
Sway Command™
OneControl™
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
7
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS 2015RV OEMS$2,987$1,810INCREASEINCREASE $193
million
40%
$138
ADJACENT INDUSTRIES
Many of the same product categories we supply to the RV and
manufactured housing industry, we also supply to adjacent industries:
mid-size transit buses, school buses, heavy trucks, and trailers
used to haul boats, livestock, equipment and other cargo. We have
dedicated sales teams focusing on adjacent industries and we’ve
increased sales 40% from $138 million in 2014 to $193 million in 2015.
There are over 800,000 utility, livestock and marine trailers expected
to be built in the US in 2016. We are well positioned to supply
products to the majority of those trailers.
MARINE
In 2015 we stepped into the marine industry when we signed a supply
agreement with Furrion in July and began distributing shore power
products, VibrationSmart™ TVs and galley appliances. In August we
acquired Signature Seating, a manufacturer of furniture solutions
for fresh water boat manufacturers, primarily pontoon boats. Then
in January 2016 we acquired the pontoon furniture manufacturing
operation of Highwater Marine. With a current 24% share of the
estimated marine furniture market (including Highwater Marine), we
are poised to grow and innovate in this market. We will continue
strong marketing and sales efforts dedicated to the marine industry
throughout 2016.
HEAVY TRUCK & BUS
Our Interiors team signed a multi-year, multi-million dollar agreement
with a major truck manufacturer, and we debuted our new Truck
Slide-Out System. We’ve come a long way and are now the largest
manufacturer of school bus windows in North America, thanks to the
acquisition of SpectAL Industries in Canada. SpectAL’s Tennessee
division supplies windows and doors for the cabs of heavy equipment
and off-highway equipment as well.
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT INCREASED SALES20142015millionYear in Review8 2015 DREW ANNUAL REPORT • drewindustries.com $82
million
6%
$77
MANUFACTURED HOUSING
We manufacture and market a variety of products used in the
production of manufactured housing, and our net sales to
manufactured housing OEMs grew 6% to $82 million and comprised
5.8% percent of our consolidated net sales. In 2015, the manufactured
housing industry produced 70,000 homes, an increase of roughly
10% percent from 2014. This year we developed the Heritage brand
of windows, doors and other building products intended to reach
traditional site-built and multi-family home markets as well.
AFTERMARKET: RV, TRAILER & MARINE
In 2011 we formed a team dedicated to the aftermarket and
increased our aftermarket sales from $28 million in 2010 to
$103 million in 2015. We made significant strides in supporting our
aftermarket customers, both dealers and warehouse distributors,
with comprehensive product training and marketing support. We have
spread product brand awareness and goodwill to consumers and
dealers by attending more aftermarket trade shows and RV rallies. In
addition, we invested more into dealerships through strategic marketing
support including point-of-purchase product displays, product profit
programs, email marketing, digital product advertisements and more.
We will also continue to expend significant sales and marketing efforts
in the trailer and marine aftermarket spaces where we are well
positioned on several product lines.
million
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
9
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT AFTERMARKET SALES2015$1032015NET SALES INCREASE TO MH OEMS2014million INTERNATIONAL
In 2015, we saw gradual growth in overseas sales, primarily in Europe
and Australia. Export sales in 2015 represented approximately 1% of
consolidated net sales. We displayed slide-out systems at the largest RV
show in Europe for the second consecutive year as well as two major shows
in the UK. We introduced our patent-pending modular slide-out system for
panel vans in England, then entered into an agreement with Opp XL B.V.,
providing us the exclusive rights to manufacture, sell and distribute the
Euro Slide-Out system designed in the Netherlands to certain European
and international territories. Early in 2016 at the CMT Show in Stuttgart,
Germany, the Euro Slide helped one major towable RV manufacturer
win two awards for best motorhome and best layout. Our Director of
International Business Development will continue building relationships
with new international customers, take existing products to new markets
and develop new products to meet the needs of new customers.
140,000
10
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS Year in ReviewESTIMATED RV UNITS SOLD ANNUALLY IN EUROPE FURRION PARTNERSHIP
In July we entered into a six-year exclusive distribution and supply agreement
with Furrion Limited. This agreement provides LCI with the rights to distribute
Furrion’s complete line of products to OEMs and aftermarket customers in
the RV, specialty vehicle, utility trailer, horse trailer, marine, transit bus and
school bus industries throughout the United States and Canada. Furrion
supplies a premium line of LED televisions and sound systems, navigation
systems, wireless backup cameras, solar prep units, power solutions and
kitchen appliances. Furrion products have been engineered, designed and
tested to meet the unique performance levels that these industries demand,
including extreme road vibrations and temperature variations. Furrion, whose
headquarters is in Hong Kong, is dedicated to staying on the cutting edge
of electronics development and will be focused on bringing exciting and
revolutionary new products to the industries it serves.
Furrion concept
RV kitchen
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
11
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS 1
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BOARD OF DIRECTORS
1. James F. Gero(1)(2)(3)
Chairman of the Board of Drew Industries
Incorporated, and a Private Investor
2. Jason D. Lippert
Chief Executive Officer of Drew Industries
Incorporated
CORPORATE OFFICERS
Jason D. Lippert
Chief Executive Officer
Scott T. Mereness
President
David M. Smith
Chief Financial Officer
3. Leigh J. Abrams(1)(2)
Chairman Emeritus of the Board
of Drew Industries Incorporated
4. Brendan J. Deely(1)(3)
5. Frederick B. Hegi, Jr.(2)(3)
Founding Partner, Wingate Partners
6. John B. Lowe, Jr.(1)(3)
Chairman of TDIndustries, Inc.
7. David A. Reed(1)(2)
President of a privately-held family
investment management company
8. Kieran M. O’Sullivan(1)(2)
President, Chief Executive Officer and
Chairman of the Board of CTS Corporation
9. Frank J. Crespo(2)(3)
Vice President and Chief Procurement
Officer of Caterpillar, Inc.
Members of the Committees of the
Board of Directors, as follows:
(1) Compensation Committee
(2) Audit Committee
(3) Corporate Governance and Nominating
Committee
Robert A. Kuhns
Vice President, Chief Legal Officer and
Secretary
Jamie M. Schnur
Chief Administrative Officer
Nick C. Fletcher
Chief Human Resources Officer
Brian M. Hall
Corporate Controller and Assistant
Secretary
EXECUTIVE OFFICES
3501 County Road 6 East
Elkhart, IN 46514
(574) 535-1125
website: www.drewindustries.com
E-mail: drew@drewindustries.com
LIPPERT COMPONENTS, INC.
Corporate Headquarters
3501 County Road 6 East
Elkhart, IN 46514
(574) 535-1125
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
KPMG LLP
Aon Center
200 East Randolph
Chicago, IL 60601
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
(212) 936-5100
(800) 937-5449
website: www.amstock.com
CORPORATE GOVERNANCE
Copies of the Company’s Governance
Principles, Guidelines for Business
Conduct, Code of Ethics for Senior
Financial Officers, Whistleblower Policy,
and the Charters and Key Practices of the
Audit, Compensation, and Corporate
Governance and Nominating Committees
are on the Company’s website at www.
drewindustries.com, and are available upon
request, without charge, by writing to:
Secretary
Drew Industries Incorporated
3501 County Road 6 East
Elkhart, IN 46514
CEO/CFO CERTIFICATIONS
The most recent certifications by our Chief
Executive Officer and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 are filed as exhibits
to our Form 10-K. We have also filed with
the New York Stock Exchange the most
recent Annual CEO Certification as required
by Section 303A.12 (a) of the New York
Stock Exchange Listed Company Manual.
12
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS Corporate Information 1
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PAY-FOR-PERFORMANCE
Through a combination of performance-
based incentives and stock-based
awards, Drew strives to attract, motivate
and retain talented, entrepreneurial and
innovative management.
We have designed our pay-for-
performance incentive compensation
program to be the “workhorse” of our
management compensation.
Performance-based incentive
compensation has historically represented
the major portion of the overall
compensation of our key managers.
We believe that those key employees who
have the greatest ability to influence the
Company’s results should be
compensated primarily based on the
financial results of those operations for
which they are responsible.
Our stock-based awards ensure that our
managers have a continuing personal
interest in the long-term success of the
Company and create a culture of ownership
among management, while also rewarding
long-term return to stockholders.
Drew Industries remembers a cornerstone of its history and an
architect of its success
On January 29, 2016, Drew Industries lost a great mind, a great
man and, most importantly, a great friend. Edward “Rusty” Rose
was an instrumental figure in Drew Industries’ history, from its
early days to its growth trajectory today. Everyone who knew him
loved him and had a story about him. At the time of his death,
Rusty was active in the business world and many philanthropic
causes. He and his wife Deedie supported numerous causes in
education, health, the arts and nature conservation.
From everyone at Drew Industries and Lippert Components, we
thank Rusty for his years of dedicated service and thoughtful
guidance. His business savvy, experience and tireless support
helped to set the foundation for Drew and Lippert to become the
companies we are today, and for that, we will be forever in his debt
Rusty is survived by his wife, two children and five grandchildren.
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
13
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS 14
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS • PATIO DOORS • ACCESS DOORS • THERMOFORMING • BATH TUBS • SHOWERS • SINKS • AXLES & SUSPENSION • DOORS & LAMINATION • E-COATING • ELECTRONICS • SLIDE-OUT SYSTEMS • SPACE OPTIMIZATION • WINDOWS & GLASS • POWDER COATING • SOFTWARE & APPS • BED & TV LIFTS • ENTRY, BAGGAGE AND RAMP DOOR PARTS • MATTRESSES & BEDDING • FURNITURE • SCHOOL BUS WINDOWS • MARINE FURNITURE • KITCHEN & BATH PRODUCTS • LEVELING & STABILIZATION • CHASSIS • PATIO RAILING KIT REPLACEMENT PARTS • PIN BOXES, HITCHES, COUPLERS & TOWING • AWNINGS & SHADE PARTS & ACCESSORIES • STEPS, ACCESSORIES & REPLACEMENT PARTS • STORAGE • TOWING, AND SECURITY • TRUCK CAMPER TIE DOWNS • WASTE MANAGEMENT • MANUFACTURED HOMES • CUSTOM WINDOWS DREW INDUSTRIES INCORPORATED
2015 Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2015
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission file number 001-13646
DREW INDUSTRIES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
3501 County Road 6 East
Elkhart, Indiana
(Address of principal executive offices)
13-3250533
(I.R.S. Employer
Identification Number)
46514
(Zip Code)
(574) 535-1125
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $.01 par value
Name of each exchange
on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232-405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ☒ No ☐
1
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229-405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12(b)-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
Smaller reporting company ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
The aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which the
common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was
$1,332,983,449. The registrant has no non-voting common equity.
The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (February 15, 2016) was
24,380,291 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement with respect to the 2016 Annual Meeting of Stockholders to be held on May 26, 2016 is incorporated by reference
into Items 10, 11, 12, 13 and 14 of Part III.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains certain “forward-looking statements” with respect to our financial condition,
results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities,
acquisitions, plans and objectives of management, markets for the Company’s Common Stock and other matters. Statements in
this Form 10-K that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section
21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve
a number of risks and uncertainties.
Forward-looking statements, including, without limitation, those relating to the Company’s future business prospects,
net sales, expenses and income (loss), cash flow, and financial condition, whenever they occur in this Form 10-K are necessarily
estimates reflecting the best judgment of the Company’s senior management at the time such statements were made. There are a
number of factors, many of which are beyond the Company’s control, which could cause actual results and events to differ materially
from those described in the forward-looking statements. These factors include, in addition to other matters described in this Form
10-K, pricing pressures due to domestic and foreign competition, costs and availability of raw materials (particularly steel, steel
based components and aluminum) and other components, seasonality and cyclicality in the industries to which we sell our products,
availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory
levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial
condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and
concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives,
availability and costs of labor, employee benefits, employee retention, realization and impact of efficiency improvements and cost
reductions, the successful entry into new markets, the costs of compliance with environmental laws and increased governmental
regulation and oversight, information technology performance and security, the ability to protect intellectual property, interest
rates, oil and gasoline prices, the impact of international, national and regional economic conditions and consumer confidence on
the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the
caption “Risk Factors” in this Annual Report on Form 10-K, and in our subsequent filings with the Securities and Exchange
Commission. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances
or events that occur after the date the forward-looking statements are made, except as required by law.
2
DREW INDUSTRIES INCORPORATED
TABLE OF CONTENTS
PART I –
ITEM 1 - BUSINESS
ITEM 1A - RISK FACTORS
ITEM 1B - UNRESOLVED STAFF COMMENTS
ITEM 2 - PROPERTIES
ITEM 3 - LEGAL PROCEEDINGS
ITEM 4 - MINE SAFETY DISCLOSURES
PART II –
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6 - SELECTED FINANCIAL DATA
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
ITEM 9A - CONTROLS AND PROCEDURES
ITEM 9B - OTHER INFORMATION
PART III –
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11 - EXECUTIVE COMPENSATION
3
Page
5
11
16
16
19
19
20
21
21
39
40
71
71
72
72
72
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV –
ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
SIGNATURES
EXHIBIT 23 - CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
72
72
72
73
77
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
4
Item 1. BUSINESS.
Summary
PART I
Drew Industries Incorporated (“Drew” and collectively with its subsidiaries, the “Company” or the “Registrant”), through
its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, “Lippert Components” or “LCI”), supplies
a broad array of components in the United States and abroad for the leading manufacturers of recreational vehicles (“RVs”) and
manufactured homes and for the related aftermarkets of those industries. The Company also supplies components for adjacent
industries including buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; modular housing; and
factory-built mobile office units.
The Company has two reportable segments: the recreational vehicle products segment (the “RV Segment”) and the
manufactured housing products segment (the “MH Segment”). The RV Segment accounted for 92 percent of consolidated net
sales for 2015, and the MH Segment accounted for 8 percent of consolidated net sales for 2015. Approximately 73 percent of the
Company’s RV Segment net sales in 2015 were of products to manufacturers of travel trailer and fifth-wheel RVs.
The Company is focused on profitable growth, both organic and through the acquisition of manufacturers of components
for RVs, manufactured homes and adjacent industries. In order to support this growth, over the past several years the Company
has expanded its geographic market and product lines, consolidated manufacturing facilities, and integrated manufacturing,
distribution and administrative functions. At December 31, 2015, the Company operated 42 manufacturing and distribution
facilities in 16 states and Quebec, Canada, and reported consolidated net sales of $1.4 billion for the year ended December 31,
2015.
The Company was incorporated under the laws of Delaware on March 20, 1984, and is the successor to Drew National
Corporation, which was incorporated under the laws of Delaware in 1962. The Company’s principal executive and administrative
offices are located at 3501 County Road 6 East, Elkhart, Indiana 46514; telephone number (574) 535-1125; website
www.drewindustries.com; e-mail drew@drewindustries.com. The Company makes available free of charge on its website its
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and amendments to those reports)
filed with the SEC as soon as reasonably practicable after such materials are electronically filed.
Recent Developments
Sales and Profits
Consolidated net sales for 2015 increased to a record $1.4 billion, 18 percent higher than 2014. Acquisitions completed
by the Company in 2015, as well as the Furrion Limited (“Furrion”) distribution and supply agreement for premium electronics
(the “Furrion Agreement”), added $52 million in net sales in 2015. A five percent increase in industry-wide wholesale shipments
of travel trailer and fifth-wheel RVs, the Company’s primary RV market, as well as increased content per unit through market
share gains, also positively impacted net sales growth in 2015.
In 2015, the Company continued to grow sales to both adjacent industries and the aftermarket for the RV and MH Segments.
Aggregate net sales to adjacent industries increased 40 percent to $193 million and aftermarket net sales increased 62 percent to
$103 million. Together, these markets now account for 21 percent of consolidated net sales, double the percentage from 2010.
For the full-year 2015, the Company’s net income increased to $74.3 million, or $3.02 per diluted share, up from net
income of $62.3 million, or $2.56 per diluted share, in 2014. Excluding certain charges for severance, environmental and legal
costs in 2015, net income would have been $79.0 million in 2015, or $3.20 per diluted share, and excluding the 2014 loss on the
sale of the Company's aluminum extrusion-related assets, net income would have been $63.5 million in 2014, or $2.61 per diluted
share.
In Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Company
describes in detail the increase in its sales and profits during 2015.
5
Acquisitions
During 2015 and early 2016 the Company completed five acquisitions:
In January 2015, the Company acquired the business and certain assets of EA Technologies, LLC (“EA Technologies”),
an Elkhart, Indiana-based manufacturer of custom steel and aluminum parts and provider of electro-deposition (‘e-coat’) and
powder coating services for RV, bus, medium-duty truck, automotive, recreational marine, specialty and utility trailer, and military
applications. Net sales reported by EA Technologies for 2014 were $17 million. The purchase price was $9.2 million, of which
$6.6 million was paid in the fourth quarter of 2014, with the balance paid at closing. In connection with this acquisition, the
Company also acquired a 250,000 square foot facility.
In April 2015, the Company acquired the business and certain assets of Industries Spectal, Inc. (“Spectal”), a Canada-
based manufacturer of windows and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks,
agricultural equipment and RVs. Net sales reported by Spectal for 2014 were $25 million. The purchase price was $22.3 million
paid at closing, plus contingent consideration based on future sales of this operation.
In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature
Seating (“Signature”), a Ft. Wayne, Indiana-based manufacturer of furniture solutions for fresh water boat manufacturers, primarily
pontoon boats. Net sales reported by Signature for the twelve months ended June 2015 were approximately $16 million. The
purchase price was $16.0 million paid at closing, plus contingent consideration based on future sales of this operation.
In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation
of Highwater Marine, LLC (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart,
Indiana. Estimated net sales of the marine furniture business were approximately $20 million. The purchase price was $10.0 million
paid at closing. Concurrently with the acquisition, the Company entered into a five-year supply agreement for marine furniture
and other products with Highwater and Elkhart, Indiana-based Bennington, the largest manufacturer of pontoon boats in the United
States.
In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc. (“Flair”), a Goshen,
Indiana-based manufacturer of RV furniture. Net sales reported by Flair for 2015 were approximately $25 million. The purchase
price was $8.1 million paid at closing.
Other Developments
On April 10, 2015, a special dividend of $2.00 per share of the Company’s Common Stock, representing an aggregate
of $48.2 million, was paid to stockholders of record as of March 27, 2015.
In July 2015, the Company entered into a 6-year exclusive distribution and supply agreement with Furrion, a Hong Kong
based firm that designs, engineers and manufacturers premium electronics. This agreement provides the Company with the rights
to distribute Furrion’s complete line of products to OEMs and aftermarket customers in the RV, specialty vehicle, utility trailer,
horse trailer, marine, transit bus and school bus industries throughout the United States and Canada. Furrion currently supplies a
premium line of LED televisions, sound systems, navigation systems, wireless backup cameras, solar prep units, power solutions
and kitchen appliances, primarily to the RV industry.
RV Segment
Through its wholly-owned subsidiaries, the Company manufactures or distributes a variety of products used in the
production of RVs, including:
● Steel chassis for towable RVs
● Axles and suspension solutions for towable RVs
● Slide-out mechanisms and solutions
● Thermoformed bath, kitchen and other products
● Windows
● Manual, electric and hydraulic stabilizer and
leveling systems
● Furniture and mattresses
● Entry, luggage, patio and ramp doors
● Electric and manual entry steps
● Awnings and awning accessories
● Electronic components
● LED televisions, sound systems, navigation
systems and wireless backup cameras
● Chassis components
● Other accessories
6
The Company also supplies certain of these products to the RV aftermarket and to adjacent industries, including buses,
trailers used to haul boats, livestock, equipment and other cargo, and pontoon boats. In 2015, the RV Segment represented 92
percent of the Company’s consolidated net sales, and 90 percent of consolidated segment operating profit. RVs may be motorized
(motorhomes) or towable (travel trailers, fifth-wheel travel trailers, folding camping trailers and truck campers). Approximately
73 percent of the Company’s RV Segment net sales in 2015 were of products to manufacturers of travel trailer and fifth-wheel
RVs.
Raw materials used by the Company’s RV Segment, consisting primarily of steel (coil, sheet, tube and I-beam), extruded
aluminum, glass, wood, fabric and foam are available from a number of sources, both domestic and foreign.
Operations of the Company’s RV Segment consist primarily of fabricating, welding, thermoforming, painting, sewing
and assembling components into finished products. The Company’s RV Segment operations are conducted at 38 manufacturing
and warehouse facilities throughout the United States and Canada, strategically located in proximity to the customers they serve.
Of these facilities, 7 also conduct operations in the Company’s MH Segment. See Item 2. “Properties.”
The Company’s RV Segment products are sold primarily to major manufacturers of RVs such as Thor Industries (symbol:
THO), Forest River (a Berkshire Hathaway company, symbol: BRKA), Jayco (a private company) and other OEMs, and, to a
lesser extent, to manufacturers in adjacent industries and distributors and retail dealers of aftermarket products.
The RV industry is highly competitive, both among manufacturers of RVs and the suppliers of RV components, generally
with low barriers to entry other than compliance with industry standards, codes and safety requirements, and the initial capital
investment required to establish manufacturing operations. The Company competes with several other component suppliers on a
regional and national basis with respect to a broad array of components for both towable and motorized RVs. The Company’s RV
Segment operations compete on the basis of customer service, quality, functionality, product innovation, price and reliability.
Although definitive information is not readily available, the Company believes with respect to its principal RV products (i) it is
the leading supplier of windows and doors for towable RVs; (ii) it is the leading supplier of chassis and slide-out mechanisms for
towable RVs; (iii) the leading suppliers of axles for towable RVs are the Company and Dexter Axle Company; (iv) it is the leading
supplier of furniture for towable RVs, and the Company competes with several other manufacturers; (v) the Company is the leading
supplier of leveling systems for towable RVs; and (vi) the leading suppliers of awnings for towable RVs are the Company, Carefree
of Colorado and Dometic Corporation.
The Company’s share of the market for its products in adjacent industries cannot be readily determined; however, RV
Segment net sales to adjacent industries increased from $113 million in 2014 to $172 million in 2015. The Company’s share of
the aftermarket for RV parts also cannot be readily determined; however, RV Segment net sales to the aftermarket increased from
$50 million in 2014 to $87 million in 2015. The Company has made investments in people, technology and equipment to increase
its share of both adjacent industries and the aftermarket, and is committed to continue these expansion efforts.
Detailed narrative information about the results of operations of the RV Segment is included in Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” Financial information relating to the Company’s
business segments is included in Note 2 of the Notes to Consolidated Financial Statements in Item 8 of this Report.
MH Segment
Through its wholly-owned subsidiaries, the Company manufactures or distributes a variety of products used in the
production of manufactured homes, including:
●Vinyl and aluminum windows
●Thermoformed bath and kitchen products
●Steel and fiberglass entry doors
●Aluminum and vinyl patio doors
●Steel chassis and related components
●Axles
The Company also supplies certain of these products to the manufactured housing aftermarket and to adjacent industries,
including modular housing and mobile office units. In 2015, the MH Segment represented 8 percent of the Company’s consolidated
net sales, and 10 percent of consolidated segment operating profit. Certain of the Company’s MH Segment customers manufacture
both manufactured homes and modular homes, and certain of the products manufactured by the Company are suitable for both
types of homes. As a result, the Company is not always able to determine in which type of home its products are installed.
Raw materials used by the Company’s MH Segment, consisting primarily of steel (coil, sheet and I-beam), extruded
aluminum and vinyl, glass, and ABS resin, are available from a number of sources, both domestic and foreign.
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Operations of the Company’s MH Segment consist primarily of fabricating, welding, thermoforming, painting and
assembling components into finished products. The Company’s MH Segment operations are conducted at 13 manufacturing and
warehouse facilities throughout the United States, strategically located in proximity to the customers they serve. Of these facilities,
7 also conduct operations in the Company’s RV Segment. See Item 2. “Properties.”
The Company’s manufactured housing products are sold primarily to major producers of manufactured homes such as
Clayton Homes (a Berkshire Hathaway company, symbol: BRKA), Cavco Industries, Inc. (symbol: CVCO), and other OEMs,
and, to a lesser extent, to manufacturers in adjacent industries and distributors of aftermarket products.
The manufactured housing industry is also highly competitive among manufacturers and suppliers. The Company
competes with several other component suppliers with respect to a broad array of components, as well as with manufacturers of
manufactured homes with vertically integrated operations. The Company’s MH Segment competes on the basis of customer service,
quality, product innovation, price and reliability. Although definitive information is not readily available, the Company believes
with respect to its principal manufactured housing products (i) it is the leading supplier of windows for manufactured homes; (ii)
the Company’s manufactured housing chassis and chassis parts operations compete with several other manufacturers of chassis
and chassis parts, as well as with builders of manufactured homes, many of which produce their own chassis and chassis parts;
and (iii) the Company’s thermoformed bath and kitchen unit operation competes with several other manufacturers of bath and
kitchen units.
The Company’s share of the market for its products in adjacent industries and the aftermarket cannot be readily determined.
MH Segment net sales to adjacent industries and the aftermarket was $20 million and $16 million in 2015, respectively. The
Company has made investments in people, technology and equipment to increase its share of both adjacent industries and the
aftermarket, and is committed to continue these expansion efforts.
Detailed narrative information about the results of operations of the MH Segment is included in Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” Financial information relating to the Company’s
business segments is included in Note 2 of the Notes to Consolidated Financial Statements in Item 8 of this Report.
Sales and Marketing
The Company’s sales activities are related to developing new customer relationships and maintaining existing customer
relationships, primarily through the quality of its products, innovation, service, price and customer satisfaction. As a result of the
Company's strategic decision to increase its sales to the aftermarket and adjacent industries, as well as expand into international
markets, the Company has increased its annual marketing and advertising expenditures over the past few years, which were
approximately $2 million in 2015.
The Company has several supply agreements or other arrangements with certain of its customers that provide for prices
of various products to be fixed for periods generally not in excess of eighteen months; however, in certain cases the Company has
the right to renegotiate the prices on sixty-days’ notice. Both the RV Segment and the MH Segment typically ship products on
average within one to two weeks of receipt of orders from their customers and, as a result, neither segment has any significant
backlog.
Capacity
In 2015, the Company’s facilities operated at an average of approximately 55 percent of their practical capacity, assuming
at least two shifts of production at all facilities. However, while certain facilities could add a second shift of production in the
short term, the Company has found this to be inefficient over the long term. Capacity varies significantly based on seasonal demand,
as well as by facility, product line and geographic region, with certain facilities at times operating below 50 percent utilization,
and other facilities at times operating above 90 percent utilization.
At December 31, 2015, the Company operated 42 manufacturing and distribution facilities, and for most products has
the ability to fill demand in excess of capacity at individual facilities by shifting production to other facilities, but the Company
would incur additional freight costs. Capital expenditures for 2015 were $29 million, and included approximately $15 million of
“replacement” capital expenditures and approximately $14 million of “growth” capital expenditures. The ability to expand capacity
in certain product areas, if necessary, as well as the potential to reallocate existing resources, is monitored regularly by management
to help ensure the Company can maintain a high level of production efficiencies throughout its operations.
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Seasonality
The RV and manufactured housing industries, as well as other industries where the Company sells products or where its
products are used, historically have been seasonal and generally at the highest levels when the weather is moderate. Accordingly,
the Company’s sales and profits have generally been the highest in the second quarter and lowest in the fourth quarter. However,
because of fluctuations in dealer inventories, the addition of major RV open houses for dealers to the September/October timeframe,
and the impact of international, national and regional economic conditions and consumer confidence on retail sales of RVs and
other products for which the Company sells its components, as well as the impact of severe weather conditions on the timing of
industry-wide shipments from time to time, current and future seasonal industry trends may be different than in prior years.
International
Over the past several years, the Company has been gradually growing international RV sales, primarily in Europe and
Australia, and export sales represented approximately 1 percent of consolidated net sales in 2015. The Company continues to
focus on developing products tailored for international RV markets. The Company participates in the largest RV shows in Europe
and has been receiving positive feedback on its products, especially its proprietary slide-out products. The Company has spent
more than two years developing three slide-out systems suited to the needs of the European market, which were recently featured
on new RV models. As a result, the Company believes it will see additional orders from European RV OEMs. The Company’s
Director of International Business Development spends time in Australia, Europe and other international markets, assessing the
dynamics of the local marketplace, building relationships with OEMs and helping the Company introduce its existing products
and develop new products for those markets, with the goal of identifying long-term growth opportunities. The Company estimates
the addressable market for annual net sales of its products outside of North America to be $750 million.
Intellectual Property
The Company holds 190 United States and foreign patents and has over 50 patent applications pending that relate to
various products sold by the Company. The Company has also granted certain licenses that permit third parties to manufacture
and sell products in consideration for royalty payments. The Company believes its patents are valuable and vigorously protects
its patents when appropriate.
From time to time, the Company has received notices or claims it may be infringing certain patent or other intellectual
property rights of others, and the Company has given notices to, or asserted claims against, others that they may be infringing
certain patent or other intellectual property rights of the Company. However, no material litigation is currently pending as a result
of these claims.
Research and Development
The Company strives to be an industry leader in product innovation and is focused on developing new products, as well
as improving existing products. Research and development expenditures are expensed as they are incurred. Research and
development expenses were approximately $8 million in 2015 and $5 million in both 2014 and 2013, respectively.
Regulatory Matters
Rules promulgated under the Transportation Recall Enhancement, Accountability and Documentation Act (the “Tread
Act”) require manufacturers of motor vehicles and certain motor vehicle related equipment to regularly make reports and submit
documents and certain historical data to the National Highway Traffic Safety Administration (“NHTSA”) of the United States
Department of Transportation (“DOT”) to enhance motor vehicle safety, and to respond to requests for information relating to
specific complaints or incidents.
Trailers produced by the Company for hauling boats, personal watercraft, snowmobiles and equipment must comply with
Federal Motor Vehicle Safety Standards (“FMVSS”) promulgated by NHTSA relating to lighting, braking, wheels, tires and other
vehicle systems.
Windows and doors produced by the Company for the RV industry must comply with regulations promulgated by NHTSA
governing safety glass performance, egress ability, door hinge and lock systems, egress window retention hardware, and baggage
door ventilation. Windows produced by the Company for buses also must comply with FMVSS promulgated by NHTSA.
9
Upholstered products and mattresses produced by the Company for RVs and buses must comply with FMVSS promulgated
by NHTSA regarding flammability. In addition, upholstered products and mattresses produced by the Company for RVs must
comply with regulations promulgated by the Consumer Products Safety Commission regarding flammability, as well as standards
for toxic chemical levels and labeling requirements promulgated by the California Office of Environmental Health Hazard
Assessment. Plywood, particleboard and fiberboard used in RV products are required to comply with standards for formaldehyde
emission levels promulgated by the California Air Resources Board and adopted by the Recreation Vehicle Industry Association
(“RVIA”).
Windows and entry doors produced by the Company for manufactured homes must comply with performance and
construction regulations promulgated by the U.S. Department of Housing and Urban Development (“HUD”) and by the American
Architectural Manufacturers Association relating to air and water infiltration, structural integrity, thermal performance, emergency
exit conformance, and hurricane resistance. Certain of the Company’s products must also comply with the International Code
Council standards, such as the IRC (International Residential Code), the IBC (International Building Code), and the IECC
(International Energy Conservation Code) as well as state and local building codes. Thermoformed bath products manufactured
by the Company for manufactured homes must comply with performance and construction regulations promulgated by HUD.
The Company believes it is currently operating in compliance, in all material respects, with applicable laws and regulations
and has made reports and submitted information as required. The Company does not believe the expense of compliance with these
laws and regulations, as currently in effect, will have a material effect on the Company's operations, financial condition or
competitive position; however, there can be no assurance this trend will continue as health and safety laws, regulations or other
pertinent requirements evolve.
Environmental
The Company’s operations are subject to certain Federal, state and local regulatory requirements relating to the use,
storage, discharge, transport and disposal of hazardous materials used during the manufacturing processes. Although the Company
believes its operations have been consistent with prevailing industry standards, and are in substantial compliance with applicable
environmental laws and regulations, one or more of the Company’s current or former operating sites, or adjacent sites owned by
third-parties, have been affected by releases of hazardous materials. As a result, the Company may incur expenditures for future
investigation and remediation of these sites, and recorded a pre-tax charge of $1.5 million related to environmental costs in 2015.
In the past, environmental compliance costs have not had, and are not expected in the future to have, a material effect on the
Company’s operations or financial condition; however, there can be no assurance that this trend will continue.
Employees
The number of persons employed full-time by the Company at December 31, 2015 was 6,576, compared to 5,845 at
December 31, 2014. The total at December 31, 2015 included 5,362 in manufacturing, 288 in transportation, 93 in sales, 172 in
customer support and servicing, and 661 in administration. None of the employees of the Company are subject to collective
bargaining agreements. The Company believes that relations with its employees are good.
Executive Officers
The following table sets forth our executive officers as of December 31, 2015:
Name
Jason D. Lippert
Scott T. Mereness
David M. Smith
Robert A. Kuhns
Jamie M. Schnur
Nick C. Fletcher
Position
Chief Executive Officer and Director
President
Chief Financial Officer
Vice President – Chief Legal Officer and Secretary
Chief Administrative Officer
Chief Human Resources Officer
Officers are elected annually by the Board of Directors. There are no family relationships between or among any of the
executive officers or Directors of the Company. Additional information with respect to the Company’s Directors is included in
the Company’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 26, 2016.
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JASON D. LIPPERT (age 43) became Chief Executive Officer of the Company effective May 10, 2013, and has been
Chief Executive Officer of Lippert Components since February 2003. Mr. Lippert has over 16 years of experience with Drew and
its subsidiaries, and has served in a wide range of leadership positions.
SCOTT T. MERENESS (age 44) became President of the Company effective May 10, 2013, and has been President of
Lippert Components since July 2010. Mr. Mereness has over 16 years of experience with Drew and its subsidiaries, and has served
in a wide range of leadership positions.
DAVID M. SMITH (age 52) has been the Chief Financial Officer since September 2015. Prior to joining the Company,
Mr. Smith served for the past ten years as Senior Vice President and Chief Financial Officer of Key Safety Systems, Inc., a global
leader in the design, development and manufacturing of passive safety systems primarily to the automotive industry.
ROBERT A. KUHNS (age 50) joined the Company in March 2013, and has been Vice President – Chief Legal Officer
and Secretary since July 2013. Prior to joining the Company, he was a partner in the Corporate Group at the Minneapolis office
of Dorsey & Whitney LLP, a full-service global law firm.
JAMIE M. SCHNUR (age 44) became Chief Administrative Officer of the Company effective May 2013. Mr. Schnur
has over 19 years of experience with the Company, and has served in a wide range of leadership positions with Lippert Components.
NICK C. FLETCHER (age 55) joined the Company on February 2013 as Vice President of Human Resources. Since
January 2015, he has been Chief Human Resources Officer. Prior to joining the Company, Mr. Fletcher provided consulting services
and held roles in senior level positions at American Commercial Lines, Continental Tire, Wabash National, Siemens and TRW.
Other Officers
BRIAN M. HALL (age 41) joined the Company in March 2013, and has been Corporate Controller since July 2013. Prior
to joining the Company, he was a Senior Manager at Crowe Horwath LLP. Mr. Hall is a Certified Public Accountant.
Item 1A. RISK FACTORS.
The following risk factors should be considered carefully in addition to the other information contained in this Annual
Report on Form 10-K. The risks and uncertainties described below are not the only ones we face, but represent the most significant
risk factors that we believe may adversely affect the RV, manufactured housing and other industries we supply our products to, as
well as our business, operations or financial position. The risks and uncertainties discussed in this report are not exclusive and
other risk factors that we may consider immaterial or do not anticipate may emerge as significant risks and uncertainties.
Industry Risk Factors
Economic and business factors beyond our control, including cyclicality and seasonality in the industries where we sell
our products, could lead to fluctuations in our operating results.
The RV and manufactured housing markets, as well as other markets where we sell our products or where our products
are used, have been characterized by cycles of growth and contraction in consumer demand. Periods of economic recession have
adversely affected, and could again adversely affect, our operating results. Companies in these industries are subject to volatility
in production levels, shipments, sales and operating results due to changes in external factors such as general economic conditions,
including credit availability, consumer confidence, employment rates, prevailing interest rates, inflation, fuel prices and other
economic conditions affecting consumer demand and discretionary consumer spending, as well as demographic and political
changes. Consequently, our operating results for any prior period may not be indicative of results for any future period.
Additionally, manufacturing operations in the RV and manufactured housing industries, as well as other industries where
we sell our products or where our products are used, historically have been seasonal and are generally at the highest levels when
the weather is moderate. Accordingly, our sales and profits have generally been the highest in the second quarter and lowest in the
fourth quarter. However, because of fluctuations in dealer inventories, and the impact of international, national and regional
economic conditions and consumer confidence on retail sales of RVs and other products for which we sell our components, current
and future seasonal industry trends may be different than in prior years. Unusually severe weather conditions in some geographic
areas may also, from time to time, impact the timing of industry-wide shipments from one period to another.
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Reductions in the availability of wholesale financing limits the inventories carried by retail dealers of RVs and
manufactured homes and other products which use our components, which would cause reduced production by our customers,
and therefore reduced demand for our products.
Retail dealers of RVs and manufactured homes and other products which use our components generally finance their
purchases of inventory with financing known as floor-plan financing provided by lending institutions. Reduction in the availability
of floor-plan financing has in the past caused, and would likely cause, many dealers to reduce inventories, which would result in
reduced production, resulting in reduced demand for our products. Moreover, dealers which are unable to obtain adequate financing
could cease operations. Their remaining inventories would likely be sold at discounts, disrupting the market. Such sales have
historically caused a decline in orders for new inventory, which reduced demand for our products.
Conditions in the credit market could limit the ability of consumers to obtain retail financing for RVs and manufactured
homes, resulting in reduced demand for our products.
Restrictions on the availability of consumer financing for RVs and manufactured homes and increases in the costs of such
financing have in the past limited, and could again limit, the ability of consumers to purchase RVs and manufactured homes, which
would result in reduced production of RVs and manufactured homes by our customers, and therefore reduce demand for our
products.
Loans used to finance the purchase of manufactured homes usually have shorter terms and higher interest rates, and are
more difficult to obtain, than mortgages for site-built homes. Historically, lenders required a higher down payment, higher credit
scores and other criteria for these loans. Current lending criteria are higher than historical criteria, and many potential buyers of
manufactured homes may not qualify.
The availability, cost, and terms of these manufactured housing loans are also dependent on economic conditions, lending
practices of financial institutions, government policies, and other factors, all of which are beyond our control. Reductions in the
availability of financing for manufactured homes and increases in the costs of this financing have limited, and could continue to
limit, the ability of consumers to purchase manufactured homes, resulting in reduced production of manufactured homes by our
customers, and therefore reduced demand for our products. In addition, certain provisions of the Dodd-Frank Act, which regulate
financial transactions, could make certain types of mortgages more difficult to obtain – in particular those historically used to
finance the purchase of manufactured homes. Although legislation has been introduced to address this matter, and the Bureau of
Consumer Financial Protection has been reviewing this matter, there can be no assurance of the outcome.
Excess inventories at dealers and manufacturers can cause a decline in the demand for our products.
Dealers and manufacturers could accumulate unsold inventory. High levels of unsold inventory have in the past caused,
and would cause, a reduction in orders, which would likely cause a decline in demand for our products.
Gasoline shortages, or high prices for gasoline, could lead to reduced demand for our products.
Fuel shortages, and substantial increases in the price of fuel, have had a material adverse effect on the RV industry as a
whole in the past, and could again in the future. Travel trailer and fifth-wheel RVs, components for which represented approximately
73 percent of our RV Segment net sales in 2015, are usually towed by light trucks or SUVs. Generally, these vehicles use more
fuel than automobiles, particularly while towing RVs. High prices for gasoline, or anticipation of potential fuel shortages, can
affect consumer use and purchase of light trucks and SUVs, which could result in reduced demand for travel trailer and fifth-wheel
RVs, and therefore reduced demand for our products.
The manufactured housing industry has experienced a significant long-term decline in shipments, which has led to reduced
demand for our products.
Our MH Segment, which accounted for 8 percent of consolidated net sales for 2015, operates in an industry which has
experienced a decline in production of new homes compared to the peak of production in 1998. The downturn was caused, in part,
by limited availability and high cost of financing for manufactured homes, and was exacerbated by economic and political conditions
during the financial crisis.
Although industry-wide wholesale production of manufactured homes has improved in recent years, our annual results
of operations could decline if manufactured housing industry conditions were to worsen.
12
Company-Specific Risk Factors
A significant percentage of our sales are concentrated in the RV industry, and declines in industry-wide wholesale
shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely impact our operating results
and financial condition.
In 2015, the RV Segment represented 92 percent of our consolidated net sales, and 90 percent of consolidated segment
operating profit. Approximately 73 percent of our RV Segment net sales in 2015 were of products to manufacturers of travel trailer
and fifth-wheel RVs. While we measure our RV Segment sales against industry-wide wholesale shipment statistics, the underlying
health of the RV industry is determined by retail demand. Retail sales of RVs historically have been closely tied to general economic
conditions, as well as consumer confidence which was above historical averages in 2015. Declines in industry-wide wholesale
shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely affect our operating results
and financial condition.
Volatile raw material costs could adversely impact our financial condition and operating results.
The prices we pay for steel and aluminum represented approximately 45 percent and 15 percent, respectively, of our raw
material costs in 2015. These, and other key raw materials, have historically been volatile and can fluctuate dramatically with
changes in the global demand and supply for such products.
Because competition and business conditions may limit the amount or timing of increases in raw material costs that can
be passed through to our customers in the form of sales price increases, future increases in raw material costs could adversely
impact our financial condition and operating results. Conversely, as raw material costs decline, we may not be able to maintain
selling prices consistent with higher cost raw materials in our inventory, which could adversely affect our operating results.
We import a portion of our raw materials and the components we sell and the effect of foreign exchange rates could
adversely affect our operating results
We negotiate for the purchase of a significant portion of raw materials and semi-finished components with suppliers that
are not located in the United States. As such, the prices we pay in part are dependent upon the rate of exchange for US Dollars
versus the currency of the local supplier. A dramatic weakening of the US Dollar could increase our cost of goods sold and such
cost increases may not be offset through price increases for our products, adversely impacting our margins.
Inadequate supply of raw materials or components used to make our products could adversely impact our financial
condition and operating results.
Our business depends on our ability to source raw materials, such as steel and aluminum, and certain components in a
timely and cost efficient manner. If raw materials or components that are used in manufacturing our products, particularly those
which we import, become unavailable, or if the supply of these raw materials and components is interrupted or delayed, our
manufacturing operations could be adversely affected. We currently import, or purchase from suppliers who import, approximately
24 percent of our raw materials and components. Consequently, we rely on the free flow of goods through open and operational
ports and on a consistent basis for a significant portion of our raw materials and components. Labor disputes at various ports or
at our suppliers create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes
or other disruptions, and could have an adverse impact on our operating results if we are unable to fulfill customer orders or
required to accumulate excess inventory or find alternate sources of supply, if available, at higher costs.
The loss of any customer accounting for more than 10 percent of our consolidated net sales could have a material adverse
impact on our operating results.
Two customers of the RV Segment accounted for a combined 39 percent, and another customer of both the RV Segment
and the MH Segment accounted for 26 percent, of our consolidated net sales in 2015. The loss of any of these customers would
have a material adverse impact on our operating results and financial condition.
Changes in consumer preferences relating to our products could cause reduced sales.
Changes in consumer preferences, or our inability to anticipate changes in consumer preferences, for RVs or manufactured
homes, or for the products we make for RVs and manufactured homes, could reduce demand for our products and adversely affect
our operating results and financial condition.
13
Competitive pressures could reduce demand for our products or impact our sales prices.
Domestic and foreign competitors may lower prices on products which currently compete with our products, or develop
product improvements, which could reduce demand for our products or cause us to reduce prices for our products. In addition,
the manufacture by our customers themselves of products supplied by us could reduce demand for our products and adversely
affect our operating results and financial condition.
Increases in demand could result in difficulty obtaining additional skilled labor, and available capacity may initially not
be utilized efficiently.
In certain geographic regions in which we have manufacturing facilities we have experienced, and could again experience,
shortages of qualified employees. Competition for skilled workers, especially during improving economic times, may increase
the cost of our labor and create employee retention and recruitment challenges, as employees with knowledge and experience have
the ability to change employers relatively easily. If such conditions become extreme, we may not be able to increase production
to timely satisfy demand, and may initially incur higher labor and production costs, which could adversely impact our operating
results and financial condition.
We may incur unexpected expenses, or face unanticipated delays, in connection with investments we make in our business,
which could adversely impact our results.
It may take longer than initially anticipated for us to realize expected results from investments in research and development
or acquired businesses, as well as initiatives we have implemented to increase capacity and improve production efficiencies,
automation, customer service and other aspects of our business, or we may incur unexpected expenses in connection with these
matters. These conditions could have an adverse effect on our operating results and financial condition.
We have recently entered new markets in order to enhance our growth potential. Uncertainties with respect to these new
markets could impact our operating results.
We are a leading supplier of components for RVs and manufactured housing, and currently have a significant share of
the market for certain of our products, which limits our ability to expand our market share for those products. We have made
investments in order to expand the sale of our products in the RV and manufactured housing aftermarket, and in adjacent industries
beyond RVs and manufactured housing. We are also exploring opportunities to increase export sales of our products to international
markets. Limited operating experience or limited brand recognition in new markets may limit our expansion strategy. Lack of
demand for our products in these markets or competitive pressures requiring us to lower prices for our products could adversely
impact our business growth in these markets and our results of operations.
If acquired businesses are not successfully integrated into our operations, our financial condition and operating results
could be adversely impacted.
We have completed several business acquisitions and may continue to engage in acquisitions or similar activities, including
joint ventures and other business transactions that involve potential risks, including failure to successfully integrate and realize
the expected benefits of such transactions, assumption of liabilities of the acquired businesses, and possible culture conflicts.
Integrating acquired operations is a significant challenge and there is no assurance that we will be able to manage the integrations
successfully. If we are unable to efficiently integrate these businesses, the attention of our management could be diverted from
our existing operations, which could impair our ability to execute our business plans. Failure to successfully integrate acquired
operations or to realize the expected benefits of such acquisitions may have an adverse impact on our results of operations and
financial condition.
The loss of key management could reduce our ability to execute our business strategy and could adversely affect our
business and results of operations.
We are dependent on the knowledge, experience and skill of our managerial personnel. The loss of the services of one
or more key managers or the failure to attract or retain qualified management staff could impair our ability to execute our business
strategy, which would have a material adverse effect on our business, financial condition and results of operations.
Our business is subject to numerous international, federal, state and local regulations, and increased costs of compliance,
failure in our compliance efforts or events beyond our control could result in damages, expenses or liabilities that could adversely
impact our financial condition and operating results.
14
We are subject to numerous federal, state and local regulations governing the manufacture and sale of our products,
including regulations and standards promulgated by the National Highway Traffic Safety Administration (“NHTSA”) of the United
States Department of Transportation (“DOT”), the Consumer Products Safety Commission, the United States Department of
Housing and Urban Development (“HUD”), and consumer safety standards promulgated by state regulatory agencies and industry
associations, and the failure to comply with present or future regulations and standards could subject us to lawsuits, administrative
penalties, and civil remedies, including fines, injunctions, and recalls of our products. Sales in foreign countries may be subject
to similar regulations. Any recalls of our products, voluntary or involuntary, could adversely impact our financial condition and
operating results. Changes in laws or regulations that impose additional regulatory requirements on us could increase our cost of
doing business or restrict our actions, causing our results of operations to be adversely affected.
Further, certain U.S. and foreign laws and regulations affect our activities. Areas of our business affected by such laws
and regulations include, but are not limited to, labor, advertising, consumer protection, quality of services, warranty, product
liability, real estate, intellectual property, tax, import and export, and competition. We are also subject to compliance with the U.S.
Foreign Corrupt Practices Act (“FCPA”), and other anti-bribery laws applicable to our operations. Compliance with these laws
and others may be onerous and costly, at times, and may be inconsistent from jurisdiction to jurisdiction, which further complicates
compliance efforts. Violations of any such laws could subject us to sanctions or other penalties that could negatively affect our
reputation, business and operating results.
In addition, potentially significant expenditures could be required in order to comply with evolving healthcare, health
and safety laws, regulations or other pertinent requirements that may be adopted or imposed in the future by governmental
authorities. Our operating profit margin in 2015 was impacted by higher health insurance costs, largely due to increased employee
participation, which we believe is largely due to the new healthcare requirements, and operating profit will likely continue to be
impacted in future periods.
Our operations are subject to certain environmental laws and regulations, and costs of compliance, investigation or
remediation of environmental conditions could have an adverse effect on our business and results of operations.
Our operations are also subject to certain federal, state and local environmental laws and regulations relating to air, water,
noise pollution and the use, storage, discharge and disposal of hazardous materials used during the manufacturing processes. Under
certain of these laws, namely the Comprehensive Environmental Response, Compensation, and Liability Act and its state
counterparts, liability for investigation and remediation of hazardous substance contamination at currently or formerly owned or
operated facilities or at third-party waste disposal sites is joint and several. Although we believe that our operations and facilities
have been and are being operated in compliance, in all material respects, with such laws and regulations, one or more of our current
or former operating sites, or adjacent sites owned by third-parties, have been affected by releases of hazardous materials. As a
result, we may incur expenditures for future investigation and remediation. If other potentially responsible persons (“PRPs”) are
unable or otherwise not obligated to contribute to remediation costs, we could be held responsible for their portion of the remediation
costs, and those costs could be material. The operation of our manufacturing facilities entails risks, and we cannot assure that our
costs in relation to these environmental matters or compliance with environmental laws in general will not have an adverse effect
on our business and results of operations.
We may not be able to protect our intellectual property and may be subject to infringement claims.
We rely on certain trademarks and patents, including contractual rights with third parties. We endeavor to protect our
rights; however, third parties may infringe upon our intellectual property rights. We may be forced to take steps to protect our
rights, including through litigation. This could result in a diversion of resources. The inability to protect our intellectual property
rights could have a material adverse effect on our business. We may also be subject to claims by third parties, seeking to enforce
their claimed intellectual property rights.
Compliance with conflict mineral disclosure requirements will create additional compliance cost and may create
reputational challenges.
The SEC adopted rules pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
setting forth new disclosure requirements concerning the use or potential use of certain minerals, deemed conflict minerals
(tantalum, tin, gold and tungsten), that are mined from the Democratic Republic of Congo and adjoining countries. These
requirements necessitate due diligence efforts on our part to assess whether such minerals are used in our products in order to
make the relevant required annual disclosures. There will be costs associated with complying with these disclosure requirements,
including for diligence to determine the sources of conflict minerals used in our products and other potential changes to products,
processes or sources of supply as a consequence of such verification activities. The implementation of these rules could adversely
affect the sourcing, supply and pricing of materials used in our products. As there may be only a limited number of suppliers
15
offering conflict-free minerals, we cannot be sure that we will be able to obtain necessary conflict minerals from such suppliers
in sufficient quantities or at competitive prices, which could adversely affect our ability to meet customer demand. We may also
face reputational challenges if we determine that certain of our products contain minerals not determined to be conflict free or if
we are unable to sufficiently verify the origins for all conflict minerals used in our products through the procedures we may
implement.
If our information technology systems fail to perform adequately or are breached, our operations could be disrupted and
could adversely affect our business, reputation and results of operation.
The efficient operation of our business depends on our information technology systems. We rely on our information
technology systems to effectively manage our business data, inventory, supply chain, order entry and fulfillment, manufacturing,
distribution, warranty administration, invoicing, collection of payments, and other business processes. We use information systems
to report and support the audit our operational and financial results. Additionally, we rely upon information systems in our sales,
marketing, human resources and communication efforts. The failure of our information technology systems to perform as we
anticipate could disrupt our business and could result in transaction errors, processing inefficiencies, and the loss of sales and
customers, causing our business and results of operations to suffer. In addition, our information technology systems may be
vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, security breaches,
telecommunications failures, computer viruses, hackers, and other manipulation or improper use of our systems. Any such events
could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to our
reputation, which could adversely affect our business. Due to our reliance on our information systems, we have established various
levels of security, backup and disaster recovery procedures. Further, we have selected and have begun implementing a new enterprise
resource planning (“ERP”) system, the full implementation of which is expected to take several years; however, there may be
other challenges and risks as we upgrade and standardize our ERP system on a company-wide basis.
If we expand our business internationally, we will be subject to new operational and financial risks.
We have been gradually growing sales overseas, primarily in Europe and Australia, and export sales represented
approximately 1 percent of 2015 consolidated net sales. We plan to continue pursuing international opportunities. Business outside
of the United States is subject to various risks, many of which are beyond our control, including: changes in tariffs, trade restrictions,
trade agreements, and taxations; difficulties in managing or overseeing foreign operations and agents; differences in regulatory
environments, labor practices and market practices; cultural and linguistic differences; foreign currency fluctuations and limitations
on the repatriation of funds because of foreign exchange controls; different liability standards; and intellectual property laws of
countries which do not protect our rights in our intellectual property to the same extent as the laws of the United States. The
occurrence or consequences of any of these factors may have an adverse impact on our operating results and financial condition,
as well as impact our ability to operate in international markets.
Item 1B. UNRESOLVED STAFF COMMENTS.
None.
Item 2. PROPERTIES.
The Company’s manufacturing operations are conducted at facilities that are used for both manufacturing and warehousing.
In addition, the Company maintains administrative facilities used for corporate and administrative functions. At December 31,
2015, the Company’s properties were as follows:
City
Double Springs (1)
Gilbert
Rialto (1)
Lakeland
Nampa
Nampa(1)
Twin Falls
Goshen (1)
State/Province
Alabama
Arizona
California
Florida
Idaho
Idaho
Idaho
Indiana
RV SEGMENT
Square Feet
54,500
11,600
56,430
15,000
147,000
29,225
16,060
459,200
16
Owned
☑
Leased
☑
☑
☑
☑
☑
☑
☑
City
Goshen
Goshen
Elkhart
South Bend
Elkhart
Goshen
Fort Wayne
Goshen (1)
Middlebury
Auburn
Elkhart
Middlebury
Goshen
Elkhart
Goshen
Goshen
Goshen
Elkhart
Goshen
Elkhart
Sterling Heights
Jackson Center
Pendleton
McMinnville (1)
Granby
Gaffney
Springfield
Waxahachie (1)
Kaysville
State/Province
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Michigan
Ohio
Oregon
Oregon
Quebec
South Carolina
Tennessee
Texas
Utah
RV SEGMENT
Square Feet
355,960
363,000
308,864
275,973
250,000
144,500
140,000
138,700
122,226
119,000
102,900
101,776
95,960
92,000
87,800
53,500
50,000
28,000
22,000
18,000
27,363
12,000
56,800
17,850
60,000
55,000
60,000
25,000
70,000
4,043,187
(2)
Owned
☑
Leased
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
____________________________
(1)
These plants also produce products for the MH Segment. The square footage indicated above represents that portion of
the building that is utilized for the manufacture of products for the RV Segment.
At December 31, 2014, the Company’s RV Segment used an aggregate of 3,353,867 square feet for manufacturing and
warehousing.
(2)
City
Double Springs (1)
Rialto (1)
Fitzgerald
Nampa(1)
Goshen
State
Alabama
California
Georgia
Idaho
Indiana
MH SEGMENT
Square Feet
54,500
6,270
79,000
54,275
110,000
17
Leased
Owned
☑
☑
☑
☑
☑
City
Howe
Goshen (1)
Goshen (1)
Arkansas City
McMinnville (1)
Denver
Chester
Waxahachie (1)
State
Indiana
Indiana
Indiana
Kansas
Oregon
Pennsylvania
South Carolina
Texas
MH SEGMENT
Square Feet
60,000
25,000
14,500
7,800
17,850
40,200
108,600
170,000
747,995
(2)
Owned
☑
Leased
☑
☑
☑
☑
☑
☑
☑
____________________________
(1)
These plants also produce products for the RV Segment. The square footage indicated above represents that portion of
the building that is utilized for the manufacture of products for the MH Segment.
At December 31, 2014, the Company’s MH Segment used an aggregate of 747,995 square feet for manufacturing and
warehousing.
(2)
City
Double Springs
Elkhart
Goshen
South Bend
Goshen
Elkhart
Goshen
Goshen
Elkhart
Goshen
Goshen
Sterling Heights
Granby
Gaffney
Springfield
Waxahachie
Waxahachie
Kaysville
State/Province
Alabama
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Michigan
Quebec
South Carolina
Tennessee
Texas
Texas
Utah
ADMINISTRATIVE
Square Feet
7,200
49,200
40,000
25,000
25,000
20,000
15,500
11,000
8,000
6,000
1,680
6,387
5,000
2,500
2,500
16,000
5,000
5,000
250,967
Owned
☑
Leased
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
☑
At December 31, 2015, the Company maintained the following facilities, or partial facilities, not currently used in
production.
Phoenix*
South Bend*
Goshen
City
____________________________
*Currently leased to a third party.
State
Arizona
Indiana
Indiana
Square Feet
61,000
238,164
68,125
18
Item 3. LEGAL PROCEEDINGS.
In the normal course of business, the Company is subject to proceedings, lawsuits, regulatory agency inquiries and other
claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters
could materially affect operating results when resolved in future periods, it is management’s opinion that, after final disposition,
including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that
provided for in the Consolidated Balance Sheet as of December 31, 2015, would not be material to the Company’s financial
position or annual results of operations.
Item 4. MINE SAFETY DISCLOSURES.
Not applicable.
19
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.
As of January 29, 2016, there were 373 holders of the Company’s Common Stock, in addition to beneficial owners of
shares held in broker and nominee names. The Company’s Common Stock trades on the New York Stock Exchange under the
symbol “DW”.
Information concerning the high and low closing prices of the Company’s Common Stock for each quarter during 2015
and 2014 is set forth in Note 15 of the Notes to Consolidated Financial Statements in Item 8 of this Report.
Equity Compensation Plan Information as of December 31, 2015:
Plan category
Number of
securities
to be issued upon
exercise of
outstanding
options, warrants
and rights
Weighted average
exercise price of
outstanding
options, warrants
and rights
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
(a)
1,002,000
N/A
1,002,000
(b)
$3.25
N/A
$3.25
Number of
securities
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
(c)
1,305,440
N/A
1,305,440
Pursuant to the Drew Industries Incorporated Equity Award and Incentive Plan, As Amended and Restated (the “Plan”),
which was approved by stockholders in May 2011, the Company may grant to its directors, employees, and consultants equity-
based awards, such as stock options, restricted stock and deferred stock units. The number of shares available for granting awards
under the Plan was 1,305,440 at December 31, 2015, and 1,389,506 at December 31, 2014. The Plan is the Company’s only equity
compensation plan.
Dividend Information
On April 10, 2015, the Company paid a special cash dividend of $2.00 per share to holders of record of its Common
Stock on March 27, 2015, and on January 6, 2014, the Company paid a special cash dividend of $2.00 per share to holders of
record of its Common Stock on December 20, 2013. Future dividend policy with respect to the Common Stock will be determined
by the Board of Directors of the Company in light of prevailing financial needs and earnings of the Company and other relevant
factors. The Company’s dividend policy is not subject to specific restrictions in its financing agreements, but rather is limited by
certain of the debt covenant calculations.
20
Item 6. SELECTED FINANCIAL DATA.
The following table summarizes certain selected historical financial and operating information of the Company and is
derived from the Company’s Consolidated Financial Statements. Historical financial data may not be indicative of the Company’s
future performance. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the Consolidated Financial Statements and Notes thereto included in Item
7 and Item 8 of this Report, respectively.
(In thousands, except per share amounts)
2015
Year Ended December 31,
2013
2012
2014
2011
Operating Data:
Net sales
Severance
Sale of extrusion assets
Executive succession
Operating profit
Income before income taxes
Provision for income taxes
Net income
Net income per common share:
Basic
Diluted
Financial Data:
Net working capital
Total assets
Long-term obligations
Stockholders’ equity
1,954
$ 1,403,066
$
3,716
$
$
$
$
$
$
116,254
114,369
40,024
74,345
$ 1,190,782
$
— $
— $
$
$
$
$
95,487
95,057
32,791
62,266
— $
$
— $
$
$
$
$
$ 1,015,576
$
— $
— $
$
$
$
$
$
1,876
78,298
77,947
27,828
50,119
901,123
$
— $
— $
$
$
$
$
$
1,456
58,132
57,802
20,462
37,340
$
$
$
$
$
$
3.06
3.02
169,580
622,946
85,509
438,575
$
$
$
$
$
$
2.60
2.56
100,451
543,841
41,758
394,898
$
$
$
$
$
$
2.15
2.11
107,339
453,184
21,380
313,613
$
$
$
$
$
$
1.66
1.64
84,243
373,868
19,843
284,245
$
$
$
$
$
$
681,166
—
—
—
48,548
48,256
18,197
30,059
1.35
1.34
85,657
351,083
21,876
277,296
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in
conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in Item 8 of this Report.
Drew Industries Incorporated (“Drew”, and collectively with its subsidiaries, the “Company”), through its wholly-owned
subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, “Lippert Components” or “LCI”), supplies a broad array
of components in the United States and abroad for the leading manufacturers of recreational vehicles (“RVs”) and manufactured
homes and for the related aftermarkets of those industries. The Company also supplies components for adjacent industries including
buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; modular housing; and factory-built mobile
office units.
The Company has two reportable segments: the recreational vehicle products segment (the “RV Segment”) and the
manufactured housing products segment (the “MH Segment”). Intersegment sales are insignificant. At December 31, 2015, the
Company operated 42 manufacturing and distribution facilities in the United States and Canada.
21
Net sales and operating profit were as follows for the years ended December 31:
(In thousands)
Net sales:
RV Segment:
RV OEMs:
Travel trailers and fifth-wheels
Motorhomes
RV aftermarket
Adjacent industries
Total RV Segment net sales
MH Segment:
Manufactured housing OEMs
Manufactured housing aftermarket
Adjacent industries
Total MH Segment net sales
Total net sales
Operating profit:
RV Segment
MH Segment
Total segment operating profit
Severance
Sale of extrusion assets
Executive succession
Total operating profit
2015
2014
2013
$
$
$
$
938,787
86,513
87,447
172,181
1,284,928
82,032
15,559
20,547
118,138
1,403,066
107,485
12,485
119,970
(3,716)
—
—
116,254
$
$
$
$
841,497
70,332
49,570
113,049
1,074,448
77,421
14,186
24,727
116,334
1,190,782
86,571
10,870
97,441
—
(1,954)
—
95,487
$
$
$
$
727,783
47,937
25,334
92,640
893,694
80,245
13,719
27,918
121,882
1,015,576
68,248
11,926
80,174
—
—
(1,876)
78,298
In the third quarter of 2015, the Company refined its methodology for categorizing sales within the RV Segment. This
change improves accuracy, but has no impact on total RV Segment net sales or trends. Prior periods have been reclassified to
conform to this presentation.
Corporate expenses are allocated between the segments based upon net sales. Accretion related to contingent consideration
and other non-segment items are included in the segment to which they relate.
Net sales and operating profit by segment, as a percent of the total, were as follows for the years ended December 31:
Net sales
RV Segment
MH Segment
Total net sales
Operating Profit:
RV Segment
MH Segment
Total segment operating profit
2015
92%
8%
100%
90%
10%
100%
2014
90%
10%
100%
89%
11%
100%
Operating profit margin by segment was as follows for the years ended December 31:
RV Segment
MH Segment
2015
8.4%
10.6%
2014
8.1%
9.3%
22
2013
88%
12%
100%
85%
15%
100%
2013
7.6%
9.8%
The Company’s RV Segment manufactures or distributes a variety of products used in the production of RVs, including:
● Steel chassis for towable RVs
● Axles and suspension solutions for towable RVs
● Slide-out mechanisms and solutions
● Thermoformed bath, kitchen and other products
● Windows
● Manual, electric and hydraulic stabilizer and
leveling systems
● Furniture and mattresses
● Entry, luggage, patio and ramp doors
● Electric and manual entry steps
● Awnings and awning accessories
● Electronic components
● LED televisions, sound systems, navigation
systems and wireless backup cameras
● Chassis components
● Other accessories
The Company also supplies certain of these products to the RV aftermarket and to adjacent industries, including buses,
trailers used to haul boats, livestock, equipment and other cargo, and pontoon boats. RVs may be motorized (motorhomes) or
towable (travel trailers, fifth-wheels, folding camping trailers and truck campers). Approximately 73 percent of the Company’s
RV Segment net sales in 2015 were of products to original equipment manufacturers (“OEMs”) of travel trailer and fifth-wheel
RVs. Travel trailer and fifth-wheel RVs accounted for 84 percent of all RVs shipped by the industry in 2015.
The Company’s MH Segment manufactures or distributes a variety of products used in the production of manufactured
homes, including:
●Vinyl and aluminum windows
●Thermoformed bath and kitchen products
●Steel and fiberglass entry doors
●Aluminum and vinyl patio doors
●Steel chassis and related components
●Axles
The Company also supplies certain of these products to the manufactured housing aftermarket and to adjacent industries,
including modular housing and mobile office units. Certain of the Company’s MH Segment customers manufacture both
manufactured homes and modular homes, and certain of the products manufactured by the Company are suitable for both types
of homes. As a result, the Company is not always able to determine in which type of home its products are installed.
The RV and manufactured housing industries, as well as other industries where the Company sells products or where its
products are used, historically have been seasonal and are generally at the highest levels when the weather is moderate. Accordingly,
the Company’s sales and profits have generally been the highest in the second quarter and lowest in the fourth quarter. However,
because of fluctuations in dealer inventories, the impact of international, national and regional economic conditions and consumer
confidence on retail sales of RVs and other products for which the Company sells its components, the timing of dealer orders, and
the impact of severe weather conditions on the timing of industry-wide shipments from time to time, current and future seasonal
industry trends may be different than in prior years.
Over the past several years, largely due to the growth the Company has experienced in its RV Segment, the MH Segment
is now a smaller part of the Company. MH Segment net sales were 8 percent of consolidated 2015 net sales. In addition, the
Company has recently increased its focus on the significant opportunities in the aftermarket. The Company continues to evaluate
the information provided to its Chief Operating Decision Maker (“CODM”), and assess how changes to its reporting structures
would be used by the CODM to assess the performance of the Company’s operating segments and make decisions about resource
allocations. Any such changes could necessitate a revision to the operating segments the Company reports.
INDUSTRY BACKGROUND
Recreational Vehicle Industry
An RV is a vehicle designed as temporary living quarters for recreational, camping, travel or seasonal use. RVs may be
motorized (motorhomes) or towable (travel trailers, fifth-wheel travel trailers, folding camping trailers and truck campers).
The annual sales cycle for the RV industry has historically started in October after the “Open House” in Elkhart, Indiana
where many of the largest RV OEMs display product to RV retail dealers, and ends after the conclusion of the summer selling
season in September in the following calendar year. Between October and March, industry-wide wholesale shipments of travel
trailer and fifth-wheel RVs have historically exceeded retail sales as dealers build inventories to support anticipated sales. Between
April and September, the spring and summer selling seasons, retail sales of travel trailer and fifth-wheel RVs have historically
exceeded industry-wide wholesale shipments. Based on dealer surveys and information from wholesale finance companies, industry
analysts report dealer inventories of travel trailer and fifth-wheel RVs are in-line with anticipated retail demand in the upcoming
23
spring 2016 selling season. During 2015, wholesale sales of travel trailers and fifth-wheel RV exceeded retail sales by less than
1 percent, indicating dealers are managing their inventories more tightly and suggesting that changes in retail demand could more
closely affect wholesale sales than in recent history.
According to the Recreation Vehicle Industry Association (“RVIA”), industry-wide wholesale shipments of travel trailer
and fifth-wheel RVs in 2015, the Company’s primary RV markets, increased 5 percent to 314,400 units compared to 2014, as a
result of:
•
•
An estimated 35,900 unit increase in retail demand in 2015, or 13 percent, as compared to 2014. In addition, retail
demand is typically revised upward in subsequent months, primarily due to delayed RV registrations.
RV dealers increasing inventory levels by 1,200 units in 2015.
While the Company measures its RV sales against industry-wide wholesale shipment statistics, the underlying health of
the RV industry is determined by retail demand. A comparison of the number of units and the year-over-year percentage change
in industry-wide wholesale shipments and retail sales of travel trailers and fifth-wheel RVs, as reported by Statistical Surveys,
Inc., as well as the resulting estimated change in dealer inventories, for both the United States and Canada, is as follows:
Year ended December 31, 2015
Year ended December 31, 2014
Year ended December 31, 2013
Wholesale
Retail
Units
314,400
298,900
268,000
Change
5%
12%
10%
Units
313,200
277,300
250,800
Change
13%
11%
13%
Estimated
Unit
Impact on
Dealer
Inventories
1,200
21,600
17,200
According to the RVIA, industry-wide wholesale shipments of motorhome RVs in 2015 increased 8 percent to 47,300
units compared to 2014. Retail demand for motorhome RVs also increased 12 percent in 2015, following a 16 percent increase in
retail demand in 2014.
The RVIA has projected a modest increase in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs
for 2016. Several RV OEM customers are introducing new product lines, additional features and adding production capacity. Retail
sales of RVs historically have been closely tied to general economic conditions, as well as consumer confidence which was above
historical averages in 2015. Furthermore, retail sales of travel trailer and fifth-wheel RVs have increased in 72 of the last 74 months
on a year-over-year basis. Industry resources report strong attendance and high consumer interest at RV shows around the United
States and Canada in late 2015 and into early 2016.
Although future retail demand is inherently uncertain, RV industry fundamentals in 2015, including generally low
unemployment, low fuel prices and available credit for dealers and RV consumers, were strong, as evidenced by the 13 percent
increase in industry-wide retail sales of travel trailer and fifth-wheel RVs. The Company believes the strong RV industry
fundamentals, aided by product innovation, demographic tailwinds, industry promotion and the advent of stronger dealer networks,
are positive signs for 2016. The Company also remains confident in its ability to exceed industry growth rates through new product
introductions, market share gains, aftermarket sales, acquisitions and ongoing investments in research and development,
engineering, quality and customer service.
Over the long term, the Company expects RV industry sales to be aided by positive demographics and the continued
popularity of the “RV Lifestyle”. The number of consumers between the ages of 55 and 70 are projected to total 56 million by
2020, 27 percent higher than in 2010, according to U.S. Census figures, and one in ten vehicle-owning households between the
ages of 50 and 64 own at least one RV. The RVIA reported much of the success of the RV industry has been driven by the Baby
Boomer generation. The size of that generation is beginning to wane, and younger generations, Generation X and Millennials are
becoming more relevant to future industry growth. Generation X and Millennials are more diverse, requiring new and creative
marketing approaches to attract them to the RV industry. The RVIA has an advertising campaign promoting the “RV Lifestyle”
targeted at both parents aged 30 - 49 with children at home, as well as couples aged 50 - 64 with no children at home. In addition,
the RV OEMs have developed more entry level units, specifically targeting younger families, in both towables and motorhomes.
The popularity of traveling in RVs to NASCAR and other sporting events, more family-oriented domestic vacations, and using
RVs as second homes, are trends that could continue to motivate consumer demand for RVs. RVIA studies indicate RV vacations
cost significantly less than other forms of vacation travel, even when factoring in fuel prices and the cost of RV ownership. More
details can be found at www.RVIA.org.
24
Manufactured Housing Industry
Manufactured homes are built entirely in a factory on permanent steel undercarriages or chassis to which axles and wheels
are attached. The homes are then transported to a manufactured housing dealer which sells and transports the home to the buyer’s
home site. The manufactured home is installed pursuant to a federal building code administered by the U.S. Department of Housing
and Urban Development (“HUD”). The federal standards regulate manufactured housing design and construction, methods to site
and secure the home at a home site, strength and durability, transportability, fire resistance, energy efficiency and quality. The
HUD code also sets performance standards for the heating, plumbing, air conditioning, thermal and electrical systems. It is the
only federally regulated national building code.
Manufactured homes contain one or more “floors” or sections which can be joined to make larger homes. A typical section
may range in size from 800 to 1,200 square feet. During 2015, multi-section homes were 54 percent of the total manufactured
homes produced, consistent with 2012 - 2014. Multi-section homes averaged 64 percent of the total manufactured homes produced
between 2007 - 2010. Multi-section manufactured homes generally contain more of the Company’s products than single-section
manufactured homes.
The Institute for Building Technology and Safety (“IBTS”) reported industry-wide wholesale shipments of manufactured
homes were 70,500 units in 2015, an increase of 10 percent from 2014. For the full year 2014, there were 64,300 industry-wide
wholesale shipments of manufactured homes, an increase of 7 percent compared to 2013.
For the 20 years prior to the sub-prime boom in home financing, manufactured housing industry-wide wholesale shipments
represented 20 percent or more of single-family housing starts. During the sub-prime years of 2003 - 2007, when low cost loans
were available for financing purchases of site-built homes, many traditional buyers of manufactured homes were able to purchase
site-built homes instead of manufactured homes, and manufactured housing’s share of the single-family market dropped to below
10 percent. Since the sub-prime “bubble” burst in 2007 and 2008, this market share has averaged about 11 percent, despite interest
rates for manufactured home loans remaining historically high relative to interest rates for site-built home loans. Accordingly, the
Company believes the manufactured housing industry may experience a modest recovery if the economy continues to improve
and home buyers look at affordable housing options. However, because of the current real estate, credit and economic environment,
including the availability of site built homes at stable prices and high interest rate spreads between conventional mortgages for
site-built homes and loans for manufactured homes, the Company expects industry-wide wholesale shipments of manufactured
homes to remain low until these conditions improve.
In addition, certain provisions of the Dodd-Frank Act, which regulate financial transactions, have made certain types of
mortgages, including chattel loans, more difficult or more expensive to obtain – in particular those historically used to finance the
purchase of manufactured homes. Although the Consumer Financial Protection Bureau has been reviewing this matter and
legislation has been passed by the U.S. House of Representatives to address this matter, there can be no assurance of the outcome.
Nevertheless, the Company believes long-term growth prospects for manufactured housing remain positive because of
the quality and affordability of the home, and favorable demographic trends, including the increasing number of retirees who, in
the past, had represented a significant market for manufactured homes.
RESULTS OF OPERATIONS
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Consolidated Highlights
•
•
Consolidated net sales for the year ended December 31, 2015 increased to a record $1.4 billion, 18 percent higher
than the year ended December 31, 2014. Acquisitions completed by the Company in 2015, as well as the Furrion
Limited (“Furrion”) distribution and supply agreement for premium electronics (the “Furrion Agreement”), added
$52 million in net sales in 2015. The five percent increase in industry-wide wholesale shipments of travel trailer and
fifth-wheel RVs, the Company’s primary RV market, as well as increased content per unit through market share
gains, positively impacted net sales growth in 2015.
In 2015, the Company continued to grow sales to both adjacent industries and the aftermarket for the RV and
manufactured housing segments. Aggregate net sales to adjacent industries increased 40 percent to $193 million and
aftermarket net sales increased 62 percent to $103 million. Together, these markets now account for 21 percent of
consolidated net sales, double the percentage from 2010.
25
•
•
•
•
•
•
For the full-year 2015, the Company’s net income increased to $74.3 million, or $3.02 per diluted share, up from
net income of $62.3 million, or $2.56 per diluted share, in 2014. Excluding certain charges for severance,
environmental and legal costs in 2015, net income would have been $79.0 million in 2015, or $3.20 per diluted share,
and excluding the 2014 loss on the sale of the Company's aluminum extrusion-related assets, net income would have
been $63.5 million in 2014, or $2.61 per diluted share.
Consolidated operating profits during 2015 increased 22 percent, to $116.3 million in 2015 from $95.5 million in
2014. Operating profit margin increased to 8.3 percent in 2015 from 8.0 percent in 2014.
Raw material costs continue to fluctuate. In particular, aluminum rose nearly 20 percent during the second half of
2014, and dropped during the second half of 2015. Similarly, the cost of steel used in certain of the Company’s
manufactured components dropped during the course of 2015; however, certain market prices have increased in early
2016 from the low points experienced during 2015. Raw material costs are expected to remain volatile.
During 2015 the Company completed three acquisitions:
•
•
•
Signature Seating -- A Ft. Wayne, Indiana-based manufacturer of furniture solutions for fresh water boat
manufacturers, primarily pontoon boats, with annual sales of approximately $16 million;
Spectal Industries -- A Canada-based manufacturer of windows and doors primarily for school buses, as well
as commercial buses, emergency vehicles, trucks, agricultural equipment and RVs, with annual sales of $25
million.
EA Technologies -- An Elkhart, Indiana-based manufacturer of custom steel and aluminum parts and provider
of electro-deposition (‘e-coat’) and powder coating services for RV, bus, medium-duty truck, automotive,
recreational marine, specialty and utility trailer, and military applications, with annual sales of $17 million.
The Company plans to grow sales and leverage its purchasing power and manufacturing capabilities in addition to
its engineering and design resources to improve the cost structure of the acquired operations. After funding these
acquisitions in 2015, the Company believes it has access to sufficient financial capital and staff to take advantage
of additional investment opportunities.
For 2015, the Company achieved an 18.4 percent return on equity, an improvement from the 17.5 percent return on
equity in 2014.
In April 2015, the Company paid a special dividend of $2.00 per share, aggregating $48.2 million.
RV Segment
Net sales of the RV Segment in 2015 increased 20 percent, or $210 million, compared to 2014. Net sales of components
were to the following markets for the years ending December 31:
(In thousands)
RV OEMs:
Travel trailers and fifth-wheels
Motorhomes
RV aftermarket
Adjacent industries
Total RV Segment net sales
2015
2014
Change
$
$
938,787
86,513
87,447
172,181
1,284,928
$
$
841,497
70,332
49,570
113,049
1,074,448
12%
23%
76%
52%
20%
According to the RVIA, industry-wide wholesale shipments for the years ended December 31, were:
Travel trailer and fifth-wheel RVs
Motorhomes
2015
2014
314,400
47,300
298,900
43,900
Change
5%
8%
The Company’s net sales growth in components for travel trailer and fifth-wheel RVs during 2015 exceeded the increase
in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs during the same period primarily due to market share
gains and acquisitions completed in 2015, which acquisitions added $6 million in net sales during 2015.
The Company’s net sales growth in components for motorhomes during 2015 exceeded the increase in industry-wide
wholesale shipments of motorhomes during the same period primarily due to market share gains and an acquisition completed in
2014, which acquisition added $8 million in net sales during 2015. Over the past few years, the Company has been expanding its
product line of components for motorhomes in order to increase its customer base and market penetration, and further growth is
expected.
26
The trend in the Company’s average product content per RV produced is an indicator of the Company’s overall market
share of components for new RVs. The Company’s average product content per type of RV, calculated based upon the Company’s
net sales of components to RV OEMs for the different types of RVs produced for the years ended December 31, divided by the
industry-wide wholesale shipments of the different types of RVs for the same period, was:
Content per:
Travel trailer and fifth-wheel RV
Motorhome
2015
2014
$
$
2,987
1,810
$
$
2,816
1,602
Change
6%
13%
In the third quarter of 2015, the Company refined the calculation of RV content per unit. This change improves accuracy,
but has no impact on total RV Segment net sales or trends of content per unit. Prior periods have been reclassified to conform to
this presentation.
The Company’s average product content per type of RV excludes sales to the aftermarket and adjacent industries. Content
per RV is impacted by market share gains, acquisitions, new product introductions, and changes in selling prices for the Company’s
products, as well as changes in the types of RVs produced industry-wide.
The Company’s net sales to the RV aftermarket increased during 2015 primarily due to market share gains and acquisitions
completed in 2014, which acquisitions added $20 million in net sales during 2015. With an estimated 10 million households in
North America owning an RV and the Company’s increasing content per unit, the Company continues to believe there are significant
opportunities in the RV aftermarket.
The Company’s net sales to adjacent industries, including components for buses, trailers used to haul boats, livestock,
equipment and other cargo, and pontoon boats, increased during 2015 primarily due to market share gains and acquisitions
completed in 2015, which acquisitions added $37 million in net sales during 2015. The Company continues to believe there are
significant sales growth opportunities in adjacent industries.
Over the past several years, the Company has been gradually growing international RV sales, primarily in Europe and
Australia, and export sales represented approximately 1 percent of consolidated net sales in 2015. The Company continues to
focus on developing products tailored for international RV markets. The Company participates in the largest RV shows in Europe
and has been receiving positive feedback on its products, especially its proprietary slide-out products. The Company has spent
more than two years developing three slide-out systems suited to the needs of the European market, which were recently featured
on new RV models. As a result, the Company believes it will see additional orders from European RV OEMs. The Company
estimates the addressable market for annual net sales of its products outside of North America to be $750 million.
Excluding the severance charges in 2015 and the loss on sale of extrusion assets in 2014, operating profit of the RV
Segment was $107.5 million in 2015, an improvement of $20.9 million, reflecting a 10 percent incremental margin compared to
2014. This increase in RV Segment operating profit was less than the Company’s expected 15 to 20 percent incremental margin.
The operating profit margin of the RV Segment in 2015 was adversely impacted by:
•
•
•
•
•
Fixed costs which were approximately $15 to $20 million higher than in 2014. Over the past couple of years, the
Company made significant investments in manufacturing capacity, both facilities and personnel, to prepare for the
expected increase in net sales in 2015 and beyond. In addition to investments in fixed costs to expand manufacturing
capacity, the Company made improvements in marketing, human resources, engineering, customer service and other
critical departments. The Company also added the teams from acquired businesses as well as related amortization
of intangible assets. As industry-wide wholesale shipments growth has slowed from multi-year double-digit rates to
mid-single-digit rates, the Company evaluated its expenses and in the fourth quarter of 2015 initiated a focused
program to reduce indirect labor costs to improve operating leverage. Annual cost savings of approximately $8 to
$10 million were identified and implemented late in 2015 and will come from aligning staff levels more closely to
anticipated growth.
An increase in stock-based compensation of approximately $3.2 million due to the implementation of the new 2015
compensation program for management.
Sales mix changes of its products, including lower sales of fifth-wheel products.
A charge of $1.5 million related to environmental costs.
A voluntary safety recall of the Company’s double and triple Coach Steps, for which the Company recorded a reserve
of $1.1 million for the contingent obligation in selling, general and administrative expenses.
27
Partially offset by:
•
•
•
Investments over the past several years to increase capacity and improve operating efficiencies, which benefit
operating results. The Company added capacity ahead of projected demand, which enabled it to efficiently fulfill
customer orders as demand increased. Further, the Company has implemented additional efficiency improvements,
including lean, automation and employee retention initiatives to improve operating efficiencies going forward.
Lower material costs for certain raw material inputs. After increasing in the latter part of 2014, steel and aluminum
costs declined over the course of 2015. Nevertheless, material costs, which are subject to global supply and demand
forces, remain volatile.
Better fixed costs absorption by spreading fixed costs over a $212 million larger sales base.
MH Segment
Net sales of the MH Segment in 2015 increased 2 percent, or $2 million, compared to 2014. Net sales of components
were to the following markets for the years ending December 31:
(In thousands)
Manufactured housing OEMs
Manufactured housing aftermarket
Adjacent industries
Total MH Segment net sales
2015
2014
82,032
15,559
20,547
118,138
$
$
77,421
14,186
24,727
116,334
$
$
According to the IBTS, industry-wide wholesale shipments for the years ended December 31, were:
Total homes produced
Total floors produced
2015
2014
70,500
109,600
64,300
99,200
Change
6%
10%
(17)%
2%
Change
10%
10%
Industry-wide wholesale shipments of manufactured homes increased during 2015 when compared to 2014, as well as
the Company’s net sales of components for new manufactured homes increased during 2015, primarily due to customer mix, as
the Company’s content per unit varies between customers.
Manufactured homes contain one or more “floors” or sections which can be joined to make larger homes. The larger
homes typically contain more of the Company’s products. The Company’s average product content per manufactured home
produced by the industry and total manufactured home floors produced by the industry, calculated based upon the Company’s net
sales of components to manufactured housing OEMs for newly produced manufactured homes for the years ended December 31,
divided by the number of manufactured homes and manufactured home floors produced by the industry, respectively, for the same
period, was:
Content per:
Home produced
Floor produced
2015
2014
$
$
1,163
748
$
$
1,203
783
Change
(3)%
(4)%
The Company’s average product content per manufactured home excludes sales of replacement parts to the aftermarket
and sales to adjacent industries. Content per manufactured home and content per floor are impacted by market share changes,
acquisitions and new product introductions, and changes in selling prices for the Company’s products, as well as changes in the
types of floors produced industry-wide.
Operating profit of the MH Segment was $12.5 million in 2015, an increase of $1.6 million compared to 2014 primarily
due to the increase in net sales from higher unit sales.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Consolidated Highlights
•
Consolidated net sales for the year ended December 31, 2014 increased to $1.2 billion, 17 percent higher than the
year ended December 31, 2013, primarily due to the 20 percent increase in net sales of the Company’s RV Segment.
Acquisitions completed by the Company in 2014 added $36 million in net sales in 2014. The twelve percent increase
28
in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs, the Company’s primary RV market, as
well as increased content per unit through market share gains, positively impacted net sales growth in 2014.
In 2014, the Company continued to grow both adjacent industries and the aftermarket for the RV and manufactured
housing segments. Aggregate net sales to adjacent industries increased 14 percent to $138 million and aftermarket
net sales increased 63 percent to $64 million.
For the full-year 2014, the Company’s net income increased to $62.3 million, or $2.56 per diluted share, up from
net income of $50.1 million, or $2.11 per diluted share, in 2013. Excluding the loss related to the sale of the Company’s
aluminum extrusion-related assets in 2014 and charges for executive succession in 2013, net income would have
been $63.5 million in 2014, or $2.61 per diluted share, up from net income of $51.3 million, or $2.16 per diluted
share, in 2013. Net income in 2014 was also impacted by facility start-up and realignment costs, which reduced net
income per diluted share by approximately $0.09.
Consolidated operating profits during 2014 increased 22 percent, to $95.5 million in 2014 from $78.3 million in
2013. Operating profit margin increased to 8.0 percent in 2014 from 7.7 percent in 2013. As a result of facility start-
up and realignment costs, as well as higher health insurance costs, the Company’s incremental margin in 2014 was
lower than its historical average.
During 2014 the Company completed four acquisitions, which added approximately $68 million of acquired annual
sales, of which $36 million occurred in 2014. The four operations acquired by the Company during 2014 were:
▪
▪
▪
▪
Innovative Design Solutions, Inc. (“IDS”) - A designer, developer and manufacturer of electronic systems
encompassing a wide variety of RV, automotive, medical and industrial applications, with annual sales of $19
million, of which $15 million were to the Company;
Star Design, LLC (“Star Design”) - A manufacturer of thermoformed sheet plastic products for the RV, bus and
specialty vehicle industries, with annual sales of $10 million;
Power Gear® and Kwikee® brands (RV business of Actuant Corporation) - A manufacturer of leveling systems,
slide-out mechanisms and steps, primarily for motorhome RVs, with annual sales of $28 million;
Duncan Systems, Inc. (“Duncan Systems”) - A supplier of replacement motorhome windshields, awnings, and
RV, heavy truck, and specialty vehicle glass and windows, primarily to fulfill insurance claims, with annual
sales of $26 million.
For 2014, the Company achieved a 17.5 percent return on equity, an improvement from the 16.0 percent return on
equity in 2013.
In January 2014, the Company paid a special dividend of $2.00 per share, aggregating $47 million.
•
•
•
▪
•
•
RV Segment
Net sales of the RV Segment in 2014 increased 20 percent, or $181 million, compared to 2013. Net sales of components
were to the following markets for the years ending December 31:
(In thousands)
RV OEMs:
Travel trailers and fifth-wheels
Motorhomes
RV aftermarket
Adjacent industries
Total RV Segment net sales
2014
2013
Change
$
$
841,497
70,332
49,570
113,049
1,074,448
$
$
727,783
47,937
25,334
92,640
893,694
16%
47%
96%
22%
20%
According to the RVIA, industry-wide wholesale shipments for the years ended December 31, were:
Travel trailer and fifth-wheel RVs
Motorhomes
2014
2013
298,900
43,900
268,000
38,300
Change
12%
15%
The Company’s net sales growth in components for travel trailer and fifth-wheel RVs during 2014 exceeded the increase
in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs primarily due to market share gains and acquisitions
completed in 2014, which acquisitions added $4 million in net sales during 2014.
29
The Company’s net sales to the RV aftermarket increased during 2014 primarily due to market share gains and acquisitions
completed in 2014, which acquisitions added $9 million in net sales during 2014. With an estimated 10 million households in
North America owning an RV, the Company continues to believe there are significant opportunities in the RV aftermarket.
The trend in the Company’s average product content per RV produced is an indicator of the Company’s overall market
share of components for new RVs. The Company’s average product content per type of RV, calculated based upon the Company’s
net sales of components to RV OEMs for the different types of RVs produced for the years ended December 31, divided by the
industry-wide wholesale shipments of the different types of RVs for the same period, was:
Content per:
Travel trailer and fifth-wheel RV
Motorhome
2014
2013
$
$
2,816
1,602
$
$
2,713
1,272
Change
4%
26%
The Company’s average product content per type of RV excludes sales to the aftermarket and adjacent industries. Content
per RV is impacted by market share gains, acquisitions, new product introductions, and changes in selling prices for the Company’s
products, as well as changes in the types of RVs produced industry-wide.
The Company’s net sales to the RV aftermarket increased during 2014 primarily due to market share gains and acquisitions
completed in 2014, which acquisitions added $15 million in net sales during 2014.
The Company’s net sales to adjacent industries, including components for buses, trailers used to haul boats, livestock,
equipment and other cargo, truck campers and truck caps, increased during 2014 primarily due to market share gains and acquisitions
completed in 2014, which acquisitions added $8 million in net sales during 2014.
Operating profit of the RV Segment was $86.6 million in 2014, an improvement of $18.3 million compared to 2013. This
increase in RV Segment operating profit was less than the Company’s expected 15 to 20 percent incremental margin. The operating
profit margin of the RV Segment in 2014 was adversely impacted by:
•
•
Higher health insurance costs, largely due to increased employee participation.
Fixed costs, which were approximately $15 million higher than in 2013. In response to the increase in net sales, the
Company bolstered its administrative staff during 2014, including the teams that were acquired through acquisitions
and new employees hired in preparation for future growth and investment opportunities.
In early 2014, the Company entered into two new leases which added more than 700,000 square feet of production
and distribution capacity. These two new leased facilities became operational during the latter half of 2014 and the
realignment of the related operations were completed.
Partially offset by:
The elimination of production inefficiencies and costs incurred as a result of significant growth which occurred in
2012 and early 2013.
Lower payroll costs as a percent of sales, largely due to a reduction in state unemployment tax rates and improved
employee retention.
Lower warranty costs as a percent of sales, largely due to lower claim experience.
The spreading of fixed costs over a $181 million larger sales base.
•
•
•
•
MH Segment
Net sales of the MH Segment in 2014 decreased 5 percent, or $6 million, compared to 2013. Net sales of components
were to the following markets for the years ending December 31:
(In thousands)
Manufactured housing OEMs
Manufactured housing aftermarket
Adjacent industries
Total MH Segment net sales
2014
2013
77,421
14,186
24,727
116,334
$
$
80,245
13,719
27,918
121,882
Change
(4)%
3%
(11)%
(5)%
$
$
30
According to the IBTS, industry-wide wholesale shipments for the years ended December 31, were:
Total homes produced
Total floors produced
2014
2013
64,300
99,200
60,200
92,900
Change
7%
7%
The Company’s net sales growth in components for new manufactured homes was less than the increase in industry-wide
wholesale shipments of manufactured homes, primarily due to customer mix, as the Company’s content per unit varies between
customers, and loss of market share for certain products. Content per manufactured home and content per floor are impacted by
market share changes, acquisitions and new product introductions, changes in selling prices for the Company’s products, as well
as changes in the types of floors produced industry-wide.
Net sales to the manufactured housing aftermarket increased due to market share gains.
The trend in the Company’s average product content per manufactured home produced is an indicator of the Company’s
overall market share of components for new manufactured homes. Manufactured homes contain one or more “floors” or sections
which can be joined to make larger homes. The larger homes typically contain more of the Company’s products. The Company’s
average product content per manufactured home produced by the industry and total manufactured home floors produced by the
industry, calculated based upon the Company’s net sales of components to manufactured housing OEMs for newly produced
manufactured homes for the years ended December 31, divided by the number of manufactured homes and manufactured home
floors produced by the industry, respectively, for the same period, was:
Content per:
Home produced
Floor produced
2014
2013
$
$
1,203
783
$
$
1,332
864
Change
(10)%
(9)%
The Company’s average product content per manufactured home excludes sales of replacement parts to the aftermarket
and sales to adjacent industries. Content per manufactured home and content per floor are impacted by market share changes,
acquisitions and new product introductions, and changes in selling prices for the Company’s products, as well as changes in the
types of floors produced industry-wide.
Operating profit of the MH Segment was $10.9 million in 2014, a decrease of $1.1 million compared to 2013 primarily
due to the decline in net sales.
Sale of Extrusion Assets
In April 2014, the Company entered into a six-year aluminum extrusion supply agreement, and concurrently sold certain
aluminum extrusion assets. The Company recorded a pre-tax loss of $2.0 million in the second quarter of 2014 on the sale of the
aluminum extrusion-related assets. In connection with the sale, the Company received $0.3 million at closing and a $7.2 million
note receivable collectible over the next four years, recorded at its present value of $6.4 million on the date of closing. During
2015 and 2014, the Company received installments of $3.8 million under the note. At December 31, 2015, the present value of
the remaining amount due under the note receivable was $3.2 million.
In July 2015, the Company agreed to terminate the supply agreement, and as consideration the Company received a $2.0
million note receivable collectible in 2019 and 2020. The Company recorded this note receivable at its present value of $1.6 million
and a corresponding gain of $1.6 million in the 2015 third quarter. At December 31, 2015, the present value of the remaining
amount due under the note receivable was $1.6 million.
Severance and Executive Succession
In 2015, the Company initiated a focused program to reduce indirect labor costs. In connection with this cost reduction
program, the Company incurred severance charges of $3.7 million.
In 2013, in connection with the Company’s executive succession and corporate relocation from White Plains, New York
to Elkhart County, Indiana, the Company recorded pre-tax charges of $1.9 million, related to contractual obligations for severance
and the acceleration of equity awards held by certain employees whose employment terminated as a result of the executive
succession and relocation to Indiana. The liability for executive succession and severance obligations were paid through 2015.
31
Provision for Income Taxes
The effective income tax rate for 2015 was 35.0 percent, more than the 34.5 percent in 2014. Both 2015 and 2014 benefited
from federal and state tax credits, as well as the reversal of federal and state tax reserves, due to the closure of the statutes of
limitation of federal and state tax years, with a larger benefit in 2014. The Company estimates the 2016 effective income tax rate
to be approximately 35 percent to 36 percent.
The effective income tax rate for 2014 was 34.5 percent compared to 35.7 percent in 2013.
LIQUIDITY AND CAPITAL RESOURCES
The Consolidated Statements of Cash Flows reflect the following for the years ended December 31:
(In thousands)
Net cash flows provided by operating activities
Net cash flows used for investing activities
Net cash flows (used for) provided by financing activities
Net increase (decrease) in cash
2015
2014
2013
$
$
95,018
(66,116)
(16,601)
12,301
$
$
$
107,020
(144,074)
(29,222)
(66,276) $
82,677
(36,055)
9,719
56,341
Cash Flows from Operations
Net cash flows from operating activities in 2015 were $12.0 million lower than in 2014, primarily due to:
•
•
•
A larger increase in inventories of $9.3 million in 2015 compared to 2014. The increase in inventories in 2015 was
primarily due to increases in sourced products, including inventory to support the Furrion Agreement (discussed
immediately below) and acquisitions completed in 2015. A portion of the increase in inventory is also due to strategic
positions to take advantage of favorable market conditions and include the strategic onboarding of a new supplier.
Inventory turnover for 2015 decreased to 6.9 turns compared to 8.2 turns for 2014. The Company is working to
improve inventory turnover over the coming quarters, however, inventory turns may trend lower due to growth in
product categories such as imported furniture and Furrion electronics.
In July 2015, the Company entered into a 6-year exclusive distribution and supply agreement with Furrion Limited
(“Furrion”), a Hong Kong based firm that designs, engineers and manufactures premium electronics. This agreement
provides the Company with the rights to distribute Furrion’s complete line of products to OEMs and aftermarket
customers in the RV, specialty vehicle, utility trailer, horse trailer, marine, transit bus and school bus industries
throughout the United States and Canada. Furrion currently supplies a premium line of LED televisions, sound
systems, navigation systems, wireless backup cameras, solar prep units, power solutions and kitchen appliances,
primarily to the RV industry. In connection with this agreement, the Company acquired Furrion’s current inventory,
as well as Furrion’s deposits on inventory scheduled for delivery, for approximately $11 million.
A $5.9 million decrease in accounts payable and accrued expenses and other liabilities in 2015 compared to a $31.2
million increase in 2014, primarily due to increased imports and other prepaid inventories, efforts to increase
consignments as well as the timing of purchases.
Partially offset by:
•
•
A $12.1 million increase in net income in 2015 compared to 2014.
Increases in non-cash charges against net income in 2015 including:
•
•
•
A $9.0 million increase in depreciation and amortization primarily due to investments in acquisitions and
capital expenditures.
A $3.2 million increase in stock-based compensation in 2015 compared to 2014.
An increase in deferred taxes of $1.1 million in 2015 compared to a $5.5 million decrease in 2014 due to
an increase in certain expenses currently not deductible for tax purposes in 2015.
Over the long term, based on the Company’s historical collection and payment patterns, as well as inventory turnover,
and also giving consideration to emerging trends and changes to the sales mix, the Company expects working capital to increase
or decrease equivalent to approximately 11 to 14 percent of the increase or decrease, respectively, in net sales. However, there are
many factors that can impact this relationship, especially in the short term.
32
Depreciation and amortization was $41.6 million in 2015, and is expected to be approximately $42 million to $47 million
for fiscal year 2016. Non-cash stock-based compensation in 2015 was $16.1 million, including $2.0 million of deferred stock units
issued to certain executive officers in lieu of cash for a portion of their 2014 incentive compensation in accordance with their
compensation arrangements. Non-cash stock-based compensation is expected to be approximately $16 million to $18 million in
2016.
Net cash flows from operating activities in 2014 were $24.3 million higher than in 2013, primarily due to:
•
•
•
•
A $12.1 million increase in net income in 2014 compared to 2013.
A $24.0 million larger increase in accounts payable and accrued expenses and other liabilities in 2014 compared to
2013, primarily due to the increases in sales, production and earnings, as well as the timing of these payments.
An $8.5 million smaller increase in accounts receivable in 2014 compared to 2013, primarily due to a decrease in
days sales outstanding to 15 at December 31, 2014, compared to 17 at December 31, 2013.
A $5.1 million increase in depreciation and amortization primarily due to the acquisitions completed during 2014
and capital expenditures over the last couple years.
Partially offset by:
•
•
An $18.5 million larger increase in inventories in 2014 as compared to 2013. The larger increase in inventories in
2014 was primarily to support the 41 percent increase in net sales in January 2015. Higher raw material costs and
increased lead time on imports also contributed to the increase in inventory. Inventory turnover for 2014 improved
to 8.2 turns compared to 7.9 turns for 2013.
An increase in deferred taxes of $5.5 million in 2014 compared to a $0.3 million decrease in 2013 due to an increase
in certain expenses not currently deductible for tax purposes in 2014.
Cash Flows from Investing Activities
Cash flows used for investing activities of $66.1 million in 2015 were primarily comprised of $41.1 million for the
acquisition of businesses and $29.0 million for capital expenditures.
In January 2015, the Company acquired the business and certain assets of EA Technologies, a manufacturer of custom
steel and aluminum parts and provider of electro-deposition (‘e-coat’) and powder coating services for RV, bus, medium-duty
truck, automotive, recreational marine, specialty and utility trailer, and military applications. The purchase price was $9.2 million,
of which $6.6 million was paid in the fourth quarter of 2014, with the balance paid at closing.
In April 2015, the Company acquired the business and certain assets of Spectal, a Canada-based manufacturer of windows
and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks, agricultural equipment and RVs.
The purchase price was $22.3 million paid at closing, plus contingent consideration based on future sales of this operation.
In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature
Seating, a manufacturer of furniture solutions for fresh water boat manufacturers, primarily pontoon boats. The purchase price
was $16.0 million paid at closing, plus contingent consideration based on future sales of this operation.
The Company’s capital expenditures are primarily for replacement and growth. Over the long term, based on the
Company’s historical capital expenditures, the replacement portion has averaged approximately 2 percent of net sales, while the
growth portion has averaged approximately 10 to 12 percent of the annual increase in net sales. However, there are many factors
that can impact the actual spending compared to these historical averages. In 2015 capital expenditures of $29 million were in
line with historical averages. However, in 2014, the Company’s capital expenditures were $42.5 million, higher than the
aforementioned historical averages. The increased spending was the result of several long-term growth and capacity expansion
initiatives. As such, coupled with the success achieved in lean manufacturing to free up additional manufacturing space, the
Company believes it is well positioned to meet the increased manufacturing demands expected for 2016 and into 2017 with capital
expenditures at or below the historical levels.
The Company estimates capital expenditures will be $20 million to $26 million in 2016, including $11 million to $14
million of “replacement” capital expenditures and $9 million to $12 million of “growth” capital expenditures. Additional capital
expenditures may be required in 2016 depending on the extent of the sales growth, the effect of any acquisitions and other initiatives
by the Company.
The 2015 capital expenditures and acquisitions were funded by cash from operations and periodic borrowings under the
Company’s line of credit and $50 million of Senior Promissory Notes issued under the “shelf-loan” facility with Prudential. The
33
2016 capital expenditures are expected to be funded primarily from cash generated from operations, as well as periodic borrowings
under the Company’s line of credit.
Cash flows used for investing activities of $144.1 million in 2014 were primarily comprised of $42.5 million for capital
expenditures and $106.8 million for the acquisition of businesses.
In February 2014, the Company acquired IDS, a designer, developer and manufacturer of electronic systems encompassing
a wide variety of RV applications. IDS also manufactures electronic systems for automotive, medical and industrial applications.
The purchase price was $35.9 million, of which $34.2 million was paid at closing, with the balance to be paid out annually over
the subsequent three years, plus contingent consideration based on future sales of this operation.
In March 2014, the Company acquired the business and certain assets of Star Design, which manufactures thermoformed
sheet plastic products for the RV, bus and specialty vehicle industries. The purchase price was $12.2 million paid at closing.
In June 2014, the Company acquired the RV business of Actuant Corporation, which manufactures leveling systems,
slide-out mechanisms and steps, primarily for motorhome RVs, under the Power Gear and Kwikee brands. The purchase price
was $35.5 million, paid at closing.
In August 2014, the Company acquired the business and certain assets of Duncan Systems, an aftermarket distributor of
replacement motorhome windshields, awnings, and RV, heavy truck and specialty vehicle glass and windows, primarily to fulfill
insurance claims. The purchase price was $18.0 million paid at closing, plus contingent consideration based on future sales of this
operation.
Cash Flows from Financing Activities
Cash flows used by financing activities in 2015 included the payment of a special dividend of $2.00 per share of the
Company’s Common Stock, representing an aggregate of $48.2 million, paid to stockholders of record as of March 27, 2015,
partially offset by a net increase in indebtedness of $34.4 million. The increase in indebtedness includes new debt comprised of
$50.0 million of Senior Promissory Notes drawn in March 2015 under the Prudential Investment Management, Inc. “shelf-loan”
facility, partially offset by a $15.7 million decrease in debt due to paying down the Company’s line of credit. The Company had
no outstanding borrowings under the line of credit as of December 31, 2015, but borrowings reached a high of $71.6 million during
2015. In addition, the Company made $4.0 million in payments for contingent consideration related to acquisitions.
Cash flows used for financing activities in 2014 included the payment of a special dividend of $2.00 per share of the
Company’s Common Stock, representing an aggregate of $46.7 million, paid to stockholders of record as of December 20, 2013,
partially offset by a net increase in indebtedness of $15.6 million. The increase in indebtedness was due to borrowings under the
Company’s line of credit. In addition, in 2014, the Company received $5.8 million in cash and the related tax benefits from the
exercise of stock-based compensation, offset by $3.7 million in payments for contingent consideration related to acquisitions.
In connection with certain business acquisitions, if established sales targets for the acquired products are achieved, the
Company is contractually obligated to pay additional cash consideration. The Company has recorded a $10.8 million liability for
the aggregate fair value of these expected contingent consideration liabilities at December 31, 2015, including $3.9 million recorded
as a current liability. For further information, see Note 11 of the Notes to the Consolidated Financial Statements.
On February 24, 2014, the Company entered into a $75.0 million line of credit (the “Credit Agreement”) with JPMorgan
Chase Bank, N.A. and Wells Fargo Bank, N.A., amending an existing facility first entered into in 2008. On March 3, 2015, in
accordance with the terms of the Credit Agreement, the Company increased its line of credit by $25.0 million to $100.0 million.
The Credit Agreement expires on January 1, 2019. At December 31, 2015, the Company had $2.7 million in standby letters of
credit under the line of credit primarily to secure certain insurance arrangements. Availability under the Company’s line of credit
was $97.3 million at December 31, 2015.
On February 24, 2014, the Company also entered into a $150.0 million “shelf-loan” facility with Prudential Investment
Management, Inc. and its affiliates (“Prudential”). The facility provides for Prudential to consider purchasing, at the Company’s
request, in one or a series of transactions, Senior Promissory Notes of the Company in the aggregate principal amount of up to
$150.0 million, to mature no more than twelve years after the date of original issue of each Senior Promissory Note. Prudential
has no obligation to purchase the Senior Promissory Notes. This facility expires on February 24, 2017. On March 20, 2015, the
Company issued $50.0 million of Senior Promissory Notes to Prudential, under the “shelf-loan” facility, for a term of five years,
at a fixed interest rate of 3.35 percent per annum, payable quarterly in arrears, of which the entire amount was outstanding at
December 31, 2015. Availability under the Company’s “shelf-loan” facility, subject to the approval of Prudential, was $100.0
million at December 31, 2015.
34
Pursuant to the Credit Agreement and “shelf-loan” facility, at December 31, 2015, the Company was required to maintain
minimum interest and fixed charge coverages, and to meet certain other financial requirements. At December 31, 2015, the Company
was in compliance with all such requirements.
Availability under both the Credit Agreement and the “shelf-loan” facilities is subject to a maximum leverage ratio
covenant which limits the amount of consolidated outstanding indebtedness to 2.5 times the trailing twelve-month EBITDA, as
defined in the agreements. This limitation did not impact the Company’s borrowing availability at December 31, 2015. The
remaining availability under these facilities was $197.3 million at December 31, 2015. The Company believes the availability
under the Credit Agreement and “shelf-loan” facility in conjunction with cash from operations is adequate to finance the Company’s
anticipated cash requirements for the next twelve months.
Additional information on the Company’s Credit Agreement and “shelf-loan” facility is included in Note 9 of the Notes
to the Condensed Consolidated Financial Statements.
Future minimum commitments relating to the Company’s contractual obligations at December 31, 2015 were as follows:
(In thousands)
Total indebtedness
Interest on fixed rate
indebtedness (a)
Operating leases
Employment contracts (b)
Deferred compensation (c)
Royalty agreements and contingent
consideration payments (d)
Purchase obligations (e)
Taxes (f)
Total
$
Total
Less than
1 year
Payments due by period
1-3 years
3-5 years
More than
5 years
Other
$
50,000
$
— $
— $
50,000
$
— $
7,063
39,672
15,200
11,485
14,444
587,854
2,927
728,645
1,675
7,472
8,311
185
4,045
238,553
2,927
263,168
$
$
3,350
12,314
6,889
2,892
7,287
261,447
—
294,179
2,038
8,795
—
951
2,034
87,854
—
151,672
$
$
—
11,091
—
4,118
1,078
—
—
16,287
$
—
—
—
—
3,339
—
—
—
3,339
(a) The Company has used the contractual payment dates and the fixed interest rates in effect as of December 31, 2015,
to determine the estimated future interest payments for fixed rate indebtedness.
(b) Includes amounts payable under employment contracts and arrangements, and retirement and severance agreements.
Includes amounts payable under deferred compensation arrangements. The Other column represents the liability
(c)
for deferred compensation for employees that have elected to receive payment upon separation from service from
the Company.
(d) Comprised of estimated future contingent consideration payments for which a liability has been recorded in
connection with business acquisitions over the past few years.
(e) Primarily comprised of (i) purchase orders issued in the normal course of business and (ii) long term purchase
commitments, for which the Company has estimated the expected future obligation based on current prices and
usage.
(f) Represents unrecognized tax benefits, as well as related interest and penalties.
These commitments are described more fully in the Notes to Consolidated Financial Statements.
CORPORATE GOVERNANCE
The Company is in compliance with the corporate governance requirements of the Securities and Exchange Commission
(“SEC”) and the New York Stock Exchange. The Company’s governance documents and committee charters and key practices
have been posted to the Company’s website (www.drewindustries.com) and are updated periodically. The website also contains,
or provides direct links to, all SEC filings, press releases and investor presentations. The Company has also established a
Whistleblower Policy, which includes a toll-free hotline (877-373-9123) to report complaints about the Company’s accounting,
internal controls, auditing matters or other concerns. The Whistleblower Policy and procedure for complaints can be found on the
Company’s website (www.drewindustries.com).
35
CONTINGENCIES
Additional information required by this item is included under Item 3 of Part I of this Annual Report on Form 10-K.
CRITICAL ACCOUNTING POLICIES
The Company’s Consolidated Financial Statements have been prepared in conformity with accounting principles generally
accepted in the United States of America which requires certain estimates and assumptions be made that affect the amounts and
disclosures reported in those financial statements and the related accompanying notes. Actual results could differ from these
estimates and assumptions. The following critical accounting policies, some of which are impacted significantly by judgments,
assumptions and estimates, affect the Company’s Consolidated Financial Statements. Management has discussed the development
and selection of its critical accounting policies with the Audit Committee of the Company’s Board of Directors and the Audit
Committee has reviewed the disclosure presented below relating to the critical accounting policies.
Inventories
Inventories (finished goods, work in process and raw materials) are stated at the lower of cost, determined on a first-in,
first-out basis, or market. Cost is determined based solely on those charges incurred in the acquisition and production of the related
inventory (i.e. material, labor and manufacturing overhead costs). The Company estimates an inventory reserve for excess quantities
and obsolete items based on specific identification and historical write-offs, taking into account future demand and market
conditions. To the extent actual demand or market conditions in the future differ from original estimates, adjustments to recorded
inventory reserves may be required.
Self-Insurance
The Company is self-insured for certain health and workers’ compensation benefits up to certain stop-loss limits. Such
costs are accrued based on known claims and an estimate of incurred, but not reported (“IBNR”) claims. IBNR claims are estimated
using historical lag information and other data provided by third-party claims administrators. This estimation process is subjective,
and to the extent actual results differ from original estimates, adjustments to recorded accruals may be required.
Warranty
The Company provides warranty terms based upon the type of product sold. The Company estimates the warranty accrual
based upon various factors, including (i) historical warranty costs, (ii) current trends, (iii) product mix, and (iv) sales. The accounting
for warranty accruals requires the Company to make assumptions and judgments, and to the extent actual results differ from
original estimates, adjustments to recorded accruals may be required.
Income Taxes
The Company’s tax provision is based on pre-tax income, statutory tax rates, federal and state tax credits, and tax planning
strategies. Significant management judgment is required in determining the tax provision and in evaluating the Company’s tax
position. The Company establishes additional provisions for income taxes when, despite the belief the tax positions are fully
supportable, there remain certain tax positions that are likely to be challenged and may or may not be sustained on review by tax
authorities. The Company adjusts these tax accruals in light of changing facts and circumstances. The effective tax rate in a given
financial statement period may be materially impacted by changes in the expected outcome of tax audits. The Company’s
accompanying Consolidated Balance Sheets also include deferred tax assets resulting from deductible temporary differences,
which are expected to reduce future taxable income. These assets are based on management’s estimate of realizability, which is
reassessed each quarter based upon the Company’s forecast of future taxable income. Failure to achieve forecasted taxable income
could affect the ultimate realization of certain deferred tax assets, and may result in the recognition of a valuation reserve. For
additional information, see Note 10 of the Notes to Consolidated Financial Statements.
Fair Value of Net Assets of Acquired Businesses
The Company values the assets and liabilities associated with the acquisitions of businesses on the respective acquisition
dates. Depending upon the type of asset or liability acquired, the Company uses different valuation techniques in determining the
fair value. Those techniques include comparable market prices, long-term sales, profitability and cash flow forecasts, assumptions
regarding future industry-specific economic and market conditions, a market participant’s weighted average cost of capital, as
well as other techniques as circumstances required. By their nature, these assumptions require judgment, and if management had
36
chosen different assumptions, the fair value of net assets of acquired businesses would have been different. For further information
on acquired assets and liabilities, see Notes 3 and 13 of the Notes to Consolidated Financial Statements.
Impairment of Long-Lived Assets, including Other Intangible Assets and Goodwill
The Company performs recoverability and impairment tests of noncurrent assets in accordance with accounting principles
generally accepted in the United States. For certain assets, recoverability and/or impairment tests are required only when conditions
exist that indicate the carrying value may not be recoverable. When such events or circumstances occur, the Company assesses
the recoverability of long-lived assets by determining whether the carrying value will be recovered through the expected
undiscounted future cash flows resulting from the use of the asset. In the event the sum of the expected undiscounted future cash
flows is less than the carrying value of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair
value would be recorded.
For other assets, impairment tests are required at least annually, or more frequently, if events or circumstances indicate
that an asset may be impaired. The impairment test for other assets consists of an assessment of qualitative factors. If such qualitative
factors do not support that the fair value of the reporting unit is greater than the carrying amount, the Company then uses a
discounted cash flow model to estimate the fair value of the reporting unit.
The Company’s assessment of the recoverability and impairment tests of noncurrent assets involve critical accounting
estimates. These estimates require significant management judgment, include inherent uncertainties and are often interdependent;
therefore, they do not change in isolation. Factors that management must estimate include, among others, the economic life of the
asset, sales volume, pricing, cost of raw materials, delivery costs, inflation, cost of capital, tax rates, capital spending and proceeds
from the sale of assets. These factors are even more difficult to predict when financial markets are highly volatile. The estimates
management uses when assessing the recoverability of noncurrent assets are consistent with those management uses in its internal
planning. When performing impairment tests, management estimates the fair values of the assets using management’s best
assumptions, which is believed to be consistent with what a hypothetical marketplace participant would use. Estimates and
assumptions used in these tests are evaluated and updated as appropriate. The variability of these factors depends on a number of
conditions, including uncertainty about future events, and thus accounting estimates may change from period to period. If other
assumptions and estimates had been used when these tests were performed, impairment charges could have resulted. As mentioned
above, these factors do not change in isolation and, therefore, the Company does not believe it is practicable or meaningful to
present the impact of changing a single factor. Furthermore, if management uses different assumptions or if different conditions
occur in future periods, future impairment charges could result.
Contingent Consideration Payments
In connection with several acquisitions, in addition to the cash paid at closing, additional payments could be required
depending upon the level of sales generated from certain of the acquired products. The fair value of the aggregate estimated
contingent consideration payments has been recorded as a liability in the Consolidated Balance Sheets. Each quarter, the Company
is required to re-evaluate the fair value of the liability for the estimated contingent consideration payments for such acquisitions.
The fair value of the contingent consideration payments is estimated using a discounted cash flow model. This model involves
the use of estimates and significant judgments that are based on a number of factors including sales of certain products, future
business plans, economic projections, weighted average cost of capital, and market data. Actual results may differ from forecasted
results.
Other Estimates
The Company makes a number of other estimates and judgments in the ordinary course of business including, but not
limited to, those related to product returns, sales and purchase rebates, accounts receivable, lease terminations, asset retirement
obligations, long-lived assets, executive succession, post-retirement benefits, stock-based compensation, segment allocations,
environmental liabilities, contingencies and litigation. Establishing reserves for these matters requires management’s estimate and
judgment with regard to risk and ultimate liability or realization. As a result, these estimates are based on management’s current
understanding of the underlying facts and circumstances and may also be developed in conjunction with outside advisors, as
appropriate. Due to uncertainties related to the ultimate outcome of these issues or the possibilities of changes in the underlying
facts and circumstances, actual results and events could differ significantly from management estimates.
New Accounting Pronouncements
Information required by this item is included in Note 14 of the Notes to the Consolidated Financial Statements.
37
INFLATION
The prices of key raw materials, consisting primarily of steel and aluminum, and components used by the Company
which are made from these raw materials, are influenced by demand and other factors specific to these commodities, rather than
being directly affected by inflationary pressures. Prices of these commodities have historically been volatile, and over the past
few months prices have continued to fluctuate. The Company did not experience any significant increases in its labor costs in
2015 related to inflation.
38
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
At December 31, 2015, the Company had $50.0 million of fixed rate debt outstanding. Assuming there is an increase of
100 basis points in the interest rate for borrowings of a similar nature subsequent to December 31, 2015, which the Company
becomes unable to capitalize on in the short-term as a result of the structure of its fixed rate financing, future cash flows would
be approximately $0.3 million lower per annum than if the fixed rate financing could be obtained at current market rates.
The Company is also exposed to changes in the prices of raw materials, specifically steel and aluminum. The Company
has, from time to time, entered into derivative instruments for the purpose of managing a portion of the exposures associated with
fluctuations in aluminum prices. While these derivative instruments are subject to fluctuations in value, these fluctuations are
generally offset by the changes in fair value of the underlying exposures. At December 31, 2015, the Company had no derivative
instruments outstanding.
The Company has historically been able to obtain sales price increases to partially offset the majority of raw material
cost increases. However, there can be no assurance future cost increases, if any, can be partially or fully passed on to customers,
or that the timing of such sales price increases will match raw material cost increases.
Additional information required by this item is included under the caption “Inflation” in the Management’s Discussion
and Analysis of Financial Condition and Results of Operations section of this Report.
39
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Drew Industries Incorporated:
We have audited the accompanying consolidated balance sheets of Drew Industries Incorporated and subsidiaries (the
“Company”) as of December 31, 2015 and 2014, and the related consolidated statements of income, stockholders’ equity, and cash
flows for each of the years in the three-year period ended December 31, 2015. We also have audited the Company’s internal control
over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is
responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s
Annual Report on Internal Control over Financial Reporting.” Our responsibility is to express an opinion on these consolidated
financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all
material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Drew Industries Incorporated and subsidiaries as of December 31, 2015 and 2014, and the results of their operations
and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally
accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
/s/ KPMG LLP
Chicago, Illinois
February 29, 2016
40
DREW INDUSTRIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Severance
Sale of extrusion assets
Executive succession
Operating profit
Interest expense, net
Income before income taxes
Provision for income taxes
Net income
Net income per common share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
Year ended December 31,
2015
2014
2013
$ 1,403,066
1,097,064
$ 1,190,782
935,859
$ 1,015,576
802,467
306,002
186,032
3,716
—
—
116,254
1,885
114,369
40,024
74,345
3.06
3.02
$
$
$
254,923
157,482
—
1,954
—
95,487
430
95,057
32,791
62,266
2.60
2.56
$
$
$
213,109
132,935
—
—
1,876
78,298
351
77,947
27,828
50,119
2.15
2.11
$
$
$
24,295
24,650
23,911
24,334
23,321
23,753
The accompanying notes are an integral part of these Consolidated Financial Statements.
41
DREW INDUSTRIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amount)
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Deferred taxes
Prepaid expenses and other current assets
Total current assets
Fixed assets, net
Goodwill
Other intangible assets, net
Deferred taxes
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable, trade
Accrued expenses and other current liabilities
Total current liabilities
Long-term indebtedness
Other long-term liabilities
Total liabilities
Stockholders’ equity
Common stock, par value $.01 per share: authorized
75,000 shares; issued 27,039 shares at December 31, 2015
and 26,534 shares at December 31, 2014
Paid-in capital
Retained earnings
Stockholders’ equity before treasury stock
Treasury stock, at cost, 2,684 shares at December 31, 2015
and December 31, 2014
Total stockholders’ equity
December 31,
2015
2014
$
$
12,305
41,509
170,834
22,616
21,178
268,442
150,600
83,619
100,935
6,775
12,575
4
37,987
132,492
18,709
18,444
207,636
146,788
66,521
96,959
11,744
14,193
$
622,946
$
543,841
$
$
29,700
69,162
98,862
50,000
35,509
184,371
49,534
57,651
107,185
15,650
26,108
148,943
270
166,566
301,206
468,042
(29,467)
438,575
265
147,186
276,914
424,365
(29,467)
394,898
Total liabilities and stockholders’ equity
$
622,946
$
543,841
The accompanying notes are an integral part of these Consolidated Financial Statements.
42
DREW INDUSTRIES INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2015
2014
2013
$
74,345
$
62,266
$
50,119
(In thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to cash flows provided by
operating activities:
Depreciation and amortization
Stock-based compensation expense
Deferred taxes
Other non-cash items
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net
Inventories, net
Prepaid expenses and other assets
Accounts payable, trade
Accrued expenses and other liabilities
Net cash flows provided by operating activities
Cash flows from investing activities:
Capital expenditures
Acquisitions of businesses
Proceeds from note receivable
Proceeds from sales of fixed assets
Other investing activities
Net cash flows used for investing activities
Cash flows from financing activities:
Exercise of stock-based awards, net of shares tendered for
payment of taxes
Proceeds from line of credit borrowings
Repayments under line of credit borrowings
Payment of special dividend
Proceeds from shelf-loan borrowing
Payment of contingent consideration related to acquisitions
Other financing activities
Net cash flows (used for) provided by financing activities
41,624
14,043
1,062
1,335
2,082
(31,276)
(2,249)
(21,783)
15,835
95,018
(28,989)
(41,058)
2,000
2,337
(406)
(66,116)
1,470
614,629
(630,279)
(48,227)
50,000
(3,974)
(220)
(16,601)
32,596
10,817
(5,493)
2,796
(606)
(21,940)
(4,610)
21,269
9,925
107,020
(42,458)
(106,782)
1,750
3,587
(171)
(144,074)
5,769
425,330
(409,680)
(46,706)
—
(3,739)
(196)
(29,222)
Net increase (decrease) in cash
12,301
(66,276)
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest
Income taxes, net of refunds
$
$
$
4
66,280
12,305
$
4
$
2,113
33,782
$
$
641
30,947
$
$
364
26,799
The accompanying notes are an integral part of these Consolidated Financial Statements.
43
27,500
10,839
269
1,867
(9,013)
(3,403)
(2,288)
2,296
4,491
82,677
(32,595)
(4,750)
—
1,444
(154)
(36,055)
15,175
135,452
(135,452)
—
—
(5,456)
—
9,719
56,341
9,939
66,280
DREW INDUSTRIES INCORPORATED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands, except shares and per share
amounts)
Balance - December 31, 2012
Net income
Issuance of 681,426 shares of common stock
pursuant to stock-based awards
Income tax benefit relating to issuance of
common stock pursuant to stock-based
awards
Stock-based compensation expense
Issuance of 3,776 deferred stock units relating to
prior year compensation
Special cash dividend ($2.00 per share)
Balance - December 31, 2013
Net income
Issuance of 476,047 shares of common stock
pursuant to stock-based awards
Income tax benefit relating to issuance of
common stock pursuant to stock-based
awards
Stock-based compensation expense
Issuance of 43,188 deferred stock units relating to
prior year compensation
Dividend equivalents on stock-based awards
Balance - December 31, 2014
Net income
Issuance of 505,312 shares of common stock
pursuant to stock-based awards
Income tax benefit relating to issuance of
common stock pursuant to stock-based
awards
Stock-based compensation expense
Issuance of 36,578 deferred stock units relating to
prior year compensation
Special cash dividend ($2.00 per share)
Dividend equivalents on stock-based awards
Balance - December 31, 2015
$
Common
Stock
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Total
Stockholders’
Equity
$
254 $
—
100,412 $
—
213,046 $
50,119
(29,467) $
—
284,245
50,119
7
—
—
—
—
261
—
4
—
—
—
—
265
—
5
—
—
—
—
13,440
1,534
10,839
135
—
126,360
—
2,298
3,914
10,817
1,986
1,811
147,186
—
(7,563)
9,028
14,043
2,046
—
—
270 $
1,826
166,566 $
—
—
—
—
(46,706)
216,459
62,266
—
—
—
—
(1,811)
276,914
74,345
—
—
—
—
(48,227)
(1,826)
301,206 $
—
—
—
—
—
(29,467)
—
—
—
—
—
—
(29,467)
—
—
—
—
—
—
—
(29,467) $
13,447
1,534
10,839
135
(46,706)
313,613
62,266
2,302
3,914
10,817
1,986
—
394,898
74,345
(7,558)
9,028
14,043
2,046
(48,227)
—
438,575
The accompanying notes are an integral part of these Consolidated Financial Statements.
44
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Consolidated Financial Statements include the accounts of Drew Industries Incorporated and its wholly-owned
subsidiaries (“Drew” and collectively with its subsidiaries, the “Company”). Drew has no unconsolidated subsidiaries. Drew,
through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, “Lippert Components” or “LCI”),
supplies a broad array of components in the United States and abroad for the leading manufacturers of recreational vehicles (“RVs”)
and manufactured homes and for the related aftermarkets of those industries, and also supplies components for adjacent industries
including buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; modular housing; and factory-
built mobile office units. At December 31, 2015, the Company operated 42 manufacturing and distribution facilities.
The RV and manufactured housing industries, as well as other industries where the Company sells products or where its
products are used, historically have been seasonal and are generally at the highest levels when the weather is moderate. Accordingly,
the Company’s sales and profits have generally been the highest in the second quarter and lowest in the fourth quarter. However,
because of fluctuations in dealer inventories, the impact of international, national and regional economic conditions and consumer
confidence on retail sales of RVs and other products for which the Company sells its components, the timing of dealer orders, and
the impact of severe weather conditions on the timing of industry-wide shipments from time to time, current and future seasonal
industry trends may be different than in prior years.
The Company is not aware of any significant events, except as disclosed in the Notes to Consolidated Financial Statements,
which occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the
Consolidated Financial Statements.
All significant intercompany balances and transactions have been eliminated. Certain prior year balances have been
reclassified to conform to current year presentation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to
be cash equivalents.
Accounts Receivable
Accounts receivable are stated at historical carrying value, net of write-offs and allowances. The Company establishes
allowances based upon historical experience and any specific customer collection issues identified by the Company. Uncollectible
accounts receivable are written off when a settlement is reached or when the Company has determined the balance will not be
collected.
Inventories
Inventories are stated at the lower of cost (using the first-in, first-out method) or market. Cost includes material, labor
and overhead; market is replacement cost or realizable value after allowance for costs of distribution.
Fixed Assets
Fixed assets which are owned are stated at cost less accumulated depreciation, and are depreciated on a straight-line basis
over the estimated useful lives of the properties and equipment. Leasehold improvements and leased equipment are amortized
over the shorter of the lives of the leases or the underlying assets. Maintenance and repair costs that do not improve service potential
or extend economic life are expensed as incurred; significant improvements are capitalized.
Income Taxes
Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and
tax basis of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected
to reverse.
45
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The Company accounts for uncertainty in tax positions by recognizing in its financial statements the impact of a tax
position only if that position is more likely than not of being sustained on audit, based on the technical merits of the position.
Further, the Company assesses the tax benefits of the tax positions in its financial statements based on experience with similar tax
positions, information obtained during the examination process and the advice of experts. The Company recognizes previously
unrecognized tax benefits upon the earlier of the expiration of the period to assess tax in the applicable taxing jurisdiction or when
the matter is constructively settled and upon changes in statutes or regulations and new case law or rulings.
The Company classifies interest and penalties related to income taxes as income tax expense in its Consolidated Financial
Statements.
Goodwill
Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the
net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level
for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist. In
2015 and 2014, the Company assessed qualitative factors of its reporting units to determine whether it was more likely than not
the fair value of the reporting unit was less than its carrying amount, including goodwill. The qualitative impairment test consists
of an assessment of qualitative factors, including general economic and industry conditions, market share and input costs.
Other Intangible Assets
Intangible assets with estimable useful lives are amortized, primarily on an accelerated basis, over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment. The amortization of other intangible assets is done
using a method, straight-line or accelerated, which best reflects the pattern in which the estimated future economic benefits of the
asset will be consumed. The useful lives of intangible assets are determined after considering the expected cash flows and other
specific facts and circumstances related to each intangible asset.
Impairment of Long-Lived Assets
Long-lived assets, other than goodwill, are tested for impairment when changes in circumstances indicate their carrying
value may not be recoverable. A determination of impairment, if any, is made based on the undiscounted value of estimated future
cash flows, salvage value or expected net sales proceeds, depending on the circumstances. Impairment is measured as the excess
of the carrying value over the estimated fair value of such assets.
Asset Retirement Obligations
Asset retirement obligations are legal obligations associated with the retirement of long-lived assets. The Company records
asset retirement obligations on certain of its owned and leased facilities and leased machinery and equipment. These liabilities are
initially recorded at fair value and are adjusted for changes resulting from revisions to the timing or the amount of the original
estimate.
Environmental Liabilities
Accruals for environmental matters are recorded when it is probable a liability has been incurred and the amount of the
liability can be reasonably estimated, based upon current law and existing technologies. These amounts, which are not discounted
and are exclusive of claims against potentially responsible third parties, are adjusted periodically as assessment and remediation
efforts progress or additional technical or legal information becomes available. Environmental exposures are difficult to assess for
numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies and remedial
activities, advances in technology, changes in environmental laws and regulations and their application, the scarcity of reliable
data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible
parties and the Company’s ability to obtain contributions from other parties, and the lengthy time periods over which site remediation
occurs. It is possible some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably
against the Company, and could materially affect operating results when resolved in future periods.
46
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Financial Instruments
The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated their fair value
due to the short-term nature of these instruments.
Stock-Based Compensation
All stock-based compensation awards are expensed over their vesting period, based on fair value. For awards having a
service-only vesting condition, the Company recognizes stock-based compensation expense on a straight-line basis over the
requisite service periods. For awards with a performance vesting condition, which are subject to certain pre-established performance
targets, the Company recognizes stock-based compensation expense on a graded-vesting basis to the extent it is probable the
performance targets will be met. The fair value for stock options is determined using the Black-Scholes option-pricing model,
while the fair values of deferred stock units, restricted stock and stock awards are based on the market price of the Company’s
Common Stock, all on the date the stock-based awards are granted.
Revenue Recognition
The Company recognizes revenue when products are shipped and the customer takes ownership and assumes risk of loss,
collectability is reasonably assured, and the sales price is fixed or determinable. Sales taxes collected from customers and remitted
to governmental authorities, which are not significant, are accounted for on a net basis and therefore are excluded from net sales
in the Consolidated Statements of Income.
Shipping and Handling Costs
The Company records shipping and handling costs within selling, general and administrative expenses. Such costs
aggregated $45.8 million, $40.9 million and $36.4 million in the years ended December 31, 2015, 2014 and 2013, respectively.
Legal Costs
The Company expenses all legal costs associated with litigation as incurred. Legal expenses are included in selling,
general and administrative expenses in the Consolidated Statements of Income.
Fair Value Measurements
Fair value is determined using a hierarchy that has three levels based on the reliability of the inputs used to determine
fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to
fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant
unobservable inputs.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales
and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates,
including, but not limited to, those related to product returns, sales and purchase rebates, accounts receivable, inventories, goodwill
and other intangible assets, net assets of acquired businesses, income taxes, warranty and product recall obligations, self-insurance
obligations, lease terminations, asset retirement obligations, long-lived assets, post-retirement benefits, stock-based compensation,
segment allocations, contingent consideration, environmental liabilities, contingencies and litigation. The Company bases its
estimates on historical experience, other available information and various other assumptions believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not
readily apparent from other resources. Actual results and events could differ significantly from management estimates.
2.
SEGMENT REPORTING
The Company has two reportable segments: the recreational vehicle products segment (the “RV Segment”) and the
manufactured housing products segment (the “MH Segment”). Intersegment sales are insignificant.
47
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The RV Segment, which accounted for 92 percent, 90 percent, and 88 percent of consolidated net sales for the years ended
December 31, 2015, 2014 and 2013 respectively, manufactures or distributes a variety of products used in the production of RVs,
including:
● Steel chassis for towable RVs
● Furniture and mattresses
● Axles and suspension solutions for towable RVs
● Entry, luggage, patio and ramp doors
● Slide-out mechanisms and solutions
● Thermoformed bath, kitchen and other products
● Windows
● Manual, electric and hydraulic stabilizer and
leveling systems
● Electric and manual entry steps
● Awnings and awning accessories
● Electronic components
● LED televisions, sound systems, navigation
systems and wireless backup cameras
● Chassis components
● Other accessories
The Company also supplies certain of these products to the RV aftermarket, and to adjacent industries, including buses
and trailers used to haul boats, livestock, equipment and other cargo, and pontoon boats. Approximately 73 percent of the Company’s
RV Segment net sales in 2015 were of products to original equipment manufacturers (“OEMs”) of travel trailer and fifth-wheel
RVs.
The MH Segment, which accounted for 8 percent, 10 percent and 12 percent of consolidated net sales for the years ended
December 31, 2015, 2014 and 2013, respectively, manufactures or distributes a variety of products used in the production of
manufactured homes, including:
●Vinyl and aluminum windows
●Aluminum and vinyl patio doors
●Thermoformed bath and kitchen products
●Steel chassis and related components
●Steel and fiberglass entry doors
●Axles
The Company also supplies certain of these products to the manufactured housing aftermarket, and to adjacent industries,
including modular housing and mobile office units. Certain of the Company’s MH Segment customers manufacture both
manufactured homes and modular homes, and certain of the products manufactured by the Company are suitable for both types
of homes. As a result, the Company is not always able to determine in which type of home its products are installed.
Decisions concerning the allocation of the Company’s resources are made by the Company’s key executives, with oversight
by the Board of Directors. This group evaluates the performance of each segment based upon segment operating profit or loss,
generally defined as income or loss before interest and income taxes. Decisions concerning the allocation of resources are also
based on each segment’s utilization of assets. Management of debt is a corporate function. The accounting policies of the RV and
MH Segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements.
Corporate expenses are allocated between the segments based upon net sales. Accretion related to contingent consideration
and other non-segment items are included in the segment to which they relate.
Information relating to segments follows for the years ended December 31:
(In thousands)
2015
Net sales to external customers (a)
Operating profit (loss) (b)
Total assets (c)
Expenditures for long - lived assets (d)
Depreciation and amortization
RV
Segments
MH
Total
Corporate
and Other
Total
$
$
$
$
$
1,284,928 $
107,485 $
519,795 $
30,126 $
39,065 $
118,138 $
12,485 $
27,702 $
1,193 $
2,412 $
1,403,066 $
119,970 $
547,497 $
31,319 $
41,477 $
— $
(3,716) $
75,449 $
— $
147 $
1,403,066
116,254
622,946
31,319
41,624
48
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(In thousands)
2014
Net sales to external customers (a)
Operating profit (loss) (b)
Total assets (c)
Expenditures for long - lived assets (d)
Depreciation and amortization
2013
Net sales to external customers (a)
Operating profit (loss) (b)
Total assets (c)
Expenditures for long - lived assets (d)
Depreciation and amortization
$
$
$
$
$
$
$
$
$
$
RV
Segments
MH
Total
Corporate
and Other
Total
1,074,448 $
86,571 $
451,264 $
145,406 $
29,933 $
116,334 $
10,870 $
29,482 $
2,039 $
2,568 $
1,190,782 $
97,441 $
480,746 $
147,445 $
32,501 $
— $
(1,954) $
63,095 $
— $
95 $
1,190,782
95,487
543,841
147,445
32,596
893,694 $
68,248 $
306,139 $
34,989 $
24,615 $
121,882 $
11,926 $
32,948 $
2,682 $
2,806 $
1,015,576 $
80,174 $
339,087 $
37,671 $
27,421 $
— $
(1,876) $
114,097 $
— $
79 $
1,015,576
78,298
453,184
37,671
27,500
(a) Thor Industries, Inc., a customer of the RV Segment, accounted for 29 percent, 33 percent and 34 percent of the Company’s consolidated
net sales for the years ended December 31, 2015, 2014 and 2013, respectively. Berkshire Hathaway Inc. (through its subsidiaries
Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 26 percent, 28 percent and 28 percent of the
Company’s consolidated net sales for the years ended December 31, 2015, 2014 and 2013, respectively. Jayco, Inc., a customer of the
RV Segment, accounted for 10 percent of the Company's consolidated net sales for the year ended December 31, 2015. No other
customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2015, 2014 and 2013.
(b) Certain general and administrative expenses are allocated between the segments based upon net sales or operating profit, depending
upon the nature of the expense.
(c) Segment assets include accounts receivable, inventories, fixed assets, goodwill and other intangible assets. Corporate and other assets
include cash and cash equivalents, prepaid expenses and other current assets, deferred taxes, and other assets.
(d) Expenditures for long-lived assets include capital expenditures, as well as fixed assets, goodwill and other intangible assets purchased
as part of the acquisition of businesses. The Company purchased $38.6 million, $105.0 million and $4.8 million of long-lived assets,
as part of the acquisitions of businesses in the years ended December 31, 2015, 2014 and 2013, respectively.
Net sales by product were as follows for the years ended December 31:
2015
2014
2013
(In thousands)
RV Segment:
Chassis, chassis parts and slide-out mechanisms
$
Windows and doors
Furniture and mattresses
Axles and suspension solutions
Other
$
638,261
245,016
163,380
114,531
123,740
564,543
204,054
133,371
92,261
80,219
Total RV Segment net sales
$
1,284,928
$
1,074,448
MH Segment:
Windows and doors
Chassis and chassis parts
Other
Total MH Segment net sales
Total net sales
$
$
$
73,035
29,798
15,305
118,138
1,403,066
$
$
$
66,140
33,842
16,352
116,334
1,190,782
49
$
$
$
$
$
493,244
181,934
100,196
69,818
48,502
893,694
67,029
38,359
16,494
121,882
1,015,576
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The composition of net sales was as follows for the years ended December 31:
(In thousands)
Net sales:
RV Segment:
RV OEMs:
2015
2014
2013
Travel trailers and fifth-wheels
$
938,787
$
841,497
$
727,783
Motorhomes
RV aftermarket
Adjacent industries
86,513
87,447
172,181
70,332
49,570
113,049
Total RV Segment net sales
$
1,284,928
$
1,074,448
MH Segment:
Manufactured housing OEMs
Manufactured housing aftermarket
Adjacent industries
Total MH Segment net sales
Total net sales
$
$
$
82,032
15,559
20,547
118,138
1,403,066
$
$
$
77,421
14,186
24,727
116,334
1,190,782
47,937
25,334
92,640
893,694
80,245
13,719
27,918
121,882
1,015,576
$
$
$
$
In the third quarter of 2015, the Company refined its methodology for categorizing sales within the RV Segment. This
change improves accuracy, but has no impact on total RV Segment net sales or trends. Prior periods have been reclassified to
conform to this presentation.
Potential Future Changes to Reporting Segments
Over the past several years, largely due to the growth the Company has experienced in its RV Segment, the MH Segment
is now a smaller part of the Company. Net sales to manufactured housing OEMs are 6 percent of consolidated net sales for the
year ending December 31, 2015. In addition, the Company has recently increased its focus on the significant opportunities in the
aftermarket. The Company continues to evaluate the information provided to its Chief Operating Decision Maker (“CODM”), and
assess how changes to its reporting structures would be used by the CODM to assess the performance of the Company’s operating
segments and make decisions about resource allocations. Any such changes could necessitate a revision to the operating segments
the Company reports.
3.
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS
Acquisitions in 2016
Flair Interiors
In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc. (“Flair”), a manufacturer
of RV furniture. Net sales reported by Flair for 2015 were approximately $25 million. The purchase price was $8.1 million paid
at closing.
Highwater Marine Furniture
In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation
of Highwater Marine, LLC (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart,
Indiana. Estimated net sales of the marine furniture business were approximately $20 million. The purchase price was $10.0 million
paid at closing. The results of the acquired business will be included in the Company’s RV Segment and in the Consolidated
Statements of Income subsequent to the acquisition date. The Company is in the process of allocating the consideration for the
fair value of the assets acquired.
50
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Acquisitions in 2015
Signature Seating
In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature
Seating (“Signature”), a manufacturer of furniture solutions for fresh water boat manufacturers, primarily pontoon boats. Net sales
reported by Signature for the twelve months ended June 2015 were approximately $16 million. The purchase price was $16.0
million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business
have been included in the Company’s RV Segment and in the Consolidated Statements of Income since the acquisition date. The
acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Contingent consideration
Total fair value of consideration given
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
$
16,000
3,556
19,556
7,500
390
3,633
11,523
8,033
The customer relationships intangible asset is being amortized over its preliminary estimated useful life of 15 years. The
consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates
leveraging its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified
customer base will further its expansion into adjacent industries.
Spectal Industries
In April 2015, the Company acquired the business and certain assets of Industries Spectal, Inc. (“Spectal”), a Canada-
based manufacturer of windows and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks,
agricultural equipment and RVs. Net sales reported by Spectal for 2014 were $25 million. The purchase price was $22.3 million
paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have
been included in the Company’s RV Segment and in the Consolidated Statements of Income since the acquisition date. The
acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Contingent consideration
Total fair value of consideration given
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
$
22,335
1,211
23,546
10,100
700
3,681
14,481
9,065
The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration
given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging
its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer
base will further its expansion into adjacent industries.
51
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
EA Technologies
In January 2015, the Company acquired the business and certain assets of EA Technologies, LLC (“EA Technologies”),
a manufacturer of custom steel and aluminum parts and provider of electro-deposition (‘e-coat’) and powder coating services for
RV, bus, medium-duty truck, automotive, recreational marine, specialty and utility trailer, and military applications. Net sales
reported by EA Technologies for 2014 were $17 million. The purchase price was $9.2 million, of which $6.6 million was paid in
the fourth quarter of 2014, with the balance paid at closing. The results of the acquired business have been included in the Company’s
RV Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded
on the acquisition date as follows (in thousands):
Cash consideration
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Gain on bargain purchase
Acquisitions in 2014
Duncan Systems
$
$
$
$
9,248
400
80
8,868
9,348
100
In August 2014, the Company acquired the business and certain assets of Duncan Systems, Inc. (“Duncan Systems”), an
aftermarket distributor of replacement motorhome windshields, awnings, and RV, heavy truck and specialty vehicle glass and
windows, primarily to fulfill insurance claims. Net sales reported by Duncan Systems for the twelve months ended July 2014 were
$26 million. The purchase price was $18.0 million paid at closing, plus contingent consideration based on future sales of this
operation. The results of the acquired business have been included in the Company’s RV Segment and in the Consolidated Statements
of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Contingent consideration
Total fair value of consideration given
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
$
18,000
1,914
19,914
10,500
930
4,070
15,500
4,414
The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration
given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates the attainment
of synergies and an increase in market share for the distributed products.
Power Gear and Kwikee Brands
In June 2014, the Company acquired the RV business of Actuant Corporation, which manufactures leveling systems,
slide-out mechanisms and steps, primarily for motorhome RVs, under the Power Gear and Kwikee brands. Net sales reported by
the acquired business for the twelve months ended May 2014 were $28 million, consisting of sales to OEMs and the aftermarket.
The purchase price was $35.5 million, paid at closing. The results of the acquired business have been included in the Company’s
RV Segment and in the Consolidated Statements of Income since the acquisition date.
52
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Customer relationships
Patents
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
35,500
12,300
5,300
2,130
2,227
21,957
13,543
The customer relationships intangible asset is being amortized over its estimated useful life of 14 years and the patents
are being amortized over their estimated useful life of 8 years. The consideration given was greater than the fair value of the assets
acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for
the acquired products.
Star Design
In March 2014, the Company acquired the business and certain assets of Star Design, LLC (“Star Design”). Net sales
reported by Star Design for 2013 were $10 million, comprised primarily of thermoformed sheet plastic products for the RV, bus
and specialty vehicle industries. The purchase price was $12.2 million paid at closing. The results of the acquired business have
been included in the Company’s RV Segment and in the Consolidated Statements of Income since the acquisition date. The
acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
12,232
4,400
610
2,108
7,118
5,114
The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration
given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging
its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer
base will further its expansion into adjacent industries.
Innovative Design Solutions
In February 2014, the Company acquired Innovative Design Solutions, Inc. (“IDS”), a designer, developer and
manufacturer of electronic systems encompassing a wide variety of RV applications. IDS also manufactures electronic systems
for automotive, medical and industrial applications. Net sales reported by IDS for 2013 were $19 million, of which $15 million
were to the Company. The purchase price was $35.9 million, of which $34.2 million was paid at closing, with the balance to be
paid out annually over the subsequent three years, plus contingent consideration based on future sales of this operation. The results
of the acquired business have been included in the Company’s RV Segment and in the Consolidated Statements of Income since
the acquisition date.
53
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Present value of future payments
Contingent consideration
Total fair value of consideration given
Patents
Customer relationships
Other identifiable intangible assets
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
$
34,175
1,739
710
36,624
6,000
4,000
3,180
1,894
15,074
21,550
The patents are being amortized over their estimated useful life of 10 years and the customer relationships intangible
asset is being amortized over its estimated useful life of 12 years. The consideration given was greater than the fair value of the
assets acquired, resulting in goodwill, because the Company anticipates an increase in the markets for the acquired products, market
share growth in both existing and new markets, as well as attainment of synergies.
Acquisitions in 2013
Fortress Technologies
In December 2013, the Company acquired the business and certain assets of Fortress Technologies, LLC (“Fortress”), a
manufacturer of specialized RV chassis. Net sales reported by Fortress for 2013 were $3 million. The results of the acquired
business have been included in the Company’s RV Segment and in the Consolidated Statements of Income since the acquisition
date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):
Cash consideration
Working capital, net
Net tangible assets
Total fair value of net assets acquired
Midstates Tool & Die and Engineering
$
$
$
3,299
(111)
3,410
3,299
In June 2013, the Company acquired the business and certain assets of Midstates Tool & Die and Engineering, Inc.
(“Midstates”), a manufacturer of tools and dies, as well as automation equipment. Net sales reported by the acquired business for
the twelve months ended May 2013 were $2 million. The results of the acquired business have been included in the Company’s
RV Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded
on the acquisition date as follows (in thousands):
Cash consideration
Non-compete agreement
Net tangible assets
Total fair value of net assets acquired
Goodwill (tax deductible)
$
$
$
$
1,451
40
1,043
1,083
368
The consideration given was greater than the fair value of assets acquired, resulting in goodwill, because the Company
anticipates the tool and die and automation capabilities of the acquired business will help improve its operating efficiencies.
54
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Sale of Extrusion Assets
In April 2014, the Company entered into a six-year aluminum extrusion supply agreement, and concurrently sold certain
aluminum extrusion assets. The Company recorded a pre-tax loss of $2.0 million in the second quarter of 2014 on the sale of the
aluminum extrusion-related assets. In connection with the sale, the Company received $0.3 million at closing and a $7.2 million
note receivable collectible over the next four years, recorded at its present value of $6.4 million on the date of closing. During
2015 and 2014, the Company received installments of $3.8 million under the note. At December 31, 2015, the present value of
the remaining amount due under the note receivable was $3.2 million.
In July 2015, the Company agreed to terminate the supply agreement, and as consideration the Company received a $2.0
million note receivable collectible in 2019 and 2020. The Company recorded this note receivable at its present value of $1.6 million
and a corresponding gain of $1.6 million in the 2015 third quarter. At December 31, 2015, the present value of the remaining
amount due under the note receivable was $1.6 million.
Goodwill
Goodwill by reportable segment was as follows:
(In thousands)
Accumulated cost
Accumulated impairment
Net balance – December 31, 2012
Acquisitions – 2013
Net balance – December 31, 2013
Acquisitions – 2014
Net balance – December 31, 2014
Acquisitions – 2015
Net balance – December 31, 2015
Accumulated cost
Accumulated impairment
Net balance – December 31, 2015
RV Segment
MH Segment
Total
$
$
$
$
61,679
(41,276)
20,403
368
20,771
44,976
65,747
17,098
82,845
124,121
(41,276)
82,845
$
$
$
$
10,025
(9,251)
774
—
774
—
774
—
774
10,025
(9,251)
774
$
$
$
$
71,704
(50,527)
21,177
368
21,545
44,976
66,521
17,098
83,619
134,146
(50,527)
83,619
The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30,
2015, 2014 and 2013, and concluded no goodwill impairment existed at that time. The Company plans to update its review as of
November 30, 2016, or sooner if events occur or circumstances change that could reduce the fair value of a reporting unit below
its carrying value.
Other Intangible Assets
Other intangible assets, by segment, consisted of the following at December 31:
(In thousands)
RV Segment
MH Segment
Other intangible assets
2015
2014
$
$
100,418
517
100,935
$
$
95,075
1,884
96,959
55
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Other intangible assets consisted of the following at December 31, 2015:
(In thousands)
Customer relationships
Patents
Tradenames
Non-compete agreements
Other
Purchased research and development
$
Gross
Cost
Accumulated
Amortization
Net
Balance
$
94,560
54,293
8,935
4,493
594
4,687
$
30,514
28,255
4,751
2,800
307
—
64,046
26,038
4,184
1,693
287
4,687
Other intangible assets
$
167,562
$
66,627
$
100,935
Other intangible assets consisted of the following at December 31, 2014:
(In thousands)
Customer relationships
Patents
Tradenames
Non-compete agreements
Other
Purchased research and development
$
Gross
Cost
81,260
54,333
9,173
3,948
360
4,687
Accumulated
Amortization
27,553
$
$
22,389
4,525
2,233
102
—
Net
Balance
53,707
31,944
4,648
1,715
258
4,687
Estimated
Useful
Life in Years
6
3
3
3
2
to
to
to
to
to
16
19
15
6
12
Indefinite
Estimated
Useful
Life in Years
16
to
6
3
3
3
2
to
to
to
to
19
15
6
12
Indefinite
Other intangible assets
$
153,761
$
56,802
$
96,959
Amortization expense related to other intangible assets was as follows for the years ended December 31:
(In thousands)
Cost of sales
Selling, general and administrative
Amortization expense
2015
2014
2013
$
$
6,017
10,038
16,055
$
$
5,092
7,612
12,704
$
$
3,610
6,398
10,008
Estimated amortization expense for other intangible assets for the next five years is as follows:
(In thousands)
Cost of sales
Selling, general and administrative
Amortization expense
2016
2017
2018
2019
2020
$
$
6,186 $
9,523
15,709 $
5,732 $
8,460
14,192 $
4,911 $
7,813
12,724 $
4,235 $
7,174
11,409 $
3,014
5,983
8,997
4.
RECEIVABLES
The following table provides a reconciliation of the activity related to the Company’s allowance for doubtful accounts
receivable, for the years ended December 31:
(In thousands)
Balance at beginning of period
Provision for doubtful accounts
Additions related to acquired businesses
Recoveries
Accounts written off
Balance at end of period
2015
2014
2013
$
$
917
(5)
33
8
(109)
844
$
$
705
178
58
4
(28)
917
$
$
677
194
5
1
(172)
705
56
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In addition to the allowance for doubtful accounts receivable, the Company had an allowance for prompt payment
discounts in the amount of $0.4 million and $0.4 million at December 31, 2015 and 2014, respectively.
5.
INVENTORIES
Inventories consisted of the following at December 31:
(In thousands)
Raw materials
Work in process
Finished goods
Inventories, net
6.
FIXED ASSETS
Fixed assets consisted of the following at December 31:
(In thousands)
Land
Buildings and improvements
Leasehold improvements
Machinery and equipment
Furniture and fixtures
Construction in progress
Fixed assets, at cost
Less accumulated depreciation and amortization
Fixed assets, net
2015
2014
$
$
$
$
144,397
4,932
21,505
170,834
2015
11,064
89,616
11,147
153,784
20,653
5,512
291,776
141,176
150,600
$
$
$
$
111,366
2,624
18,502
132,492
Estimated Useful
2014
Life in Years
10 to 40
3 to 10
3 to 15
3 to 8
10,792
85,002
8,114
138,025
20,729
9,515
272,177
125,389
146,788
Depreciation and amortization of fixed assets was as follows for the years ended December 31:
(In thousands)
Cost of sales
Selling, general and administrative expenses
Total
2015
2014
2013
$
$
21,289
4,137
25,426
$
$
16,364
3,440
19,804
$
$
14,667
2,773
17,440
7.
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following at December 31:
(In thousands)
Employee compensation and benefits
Current portion of accrued warranty
Other
Accrued expenses and other current liabilities
2015
2014
$
$
25,147
17,020
26,995
69,162
$
$
21,473
14,516
21,662
57,651
Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty
obligations, the Company considers various factors, including the Company’s (i) historical warranty costs, (ii) current trends, (iii)
product mix, and (iv) sales.
57
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The following table provides a reconciliation of the activity related to the Company’s accrued warranty, including both
the current and long-term portions, for the years ended December 31:
(In thousands)
Balance at beginning of period
Provision for warranty expense
Warranty liability from acquired businesses
Warranty costs paid
Balance at end of period
Less long-term portion
Current portion of accrued warranty
8.
RETIREMENT AND OTHER BENEFIT PLANS
Defined Contribution Plan
2015
2014
2013
$
$
21,641
17,267
240
(12,944)
26,204
9,184
17,020
$
$
17,325
12,860
688
(9,232)
21,641
7,125
14,516
$
$
12,729
13,874
21
(9,299)
17,325
5,594
11,731
The Company maintains a discretionary defined contribution 401(k) profit sharing plan covering all eligible employees.
The Company contributed $2.5 million, $1.8 million and $1.4 million to this plan during the years ended December 31, 2015,
2014 and 2013, respectively.
Deferred Compensation Plan
The Company has an Executive Non-Qualified Deferred Compensation Plan (the “Plan”). Pursuant to the Plan, certain
management employees are eligible to defer all or a portion of their regular salary and incentive compensation. Participants deferred
$1.2 million, $1.6 million and $1.7 million during the years ended December 31, 2015, 2014 and 2013, respectively. The amounts
deferred under this Plan are credited with earnings or losses based upon changes in values of the notional investments elected by
the Plan participants. Each Plan participant is fully vested in their deferred compensation and earnings credited to his or her account
as all contributions to the Plan are made by the participant. The Company is responsible for certain costs of Plan administration,
which are not significant, and will not make any contributions to the Plan. Pursuant to the Plan, payments to the Plan participants
are made from the general unrestricted assets of the Company, and the Company’s obligations pursuant to the Plan are unfunded
and unsecured. Participants withdrew $0.8 million, $0.4 million and $0.2 million from the Plan during the years ended December 31,
2015, 2014 and 2013, respectively. At December 31, 2015 and 2014, deferred compensation of $11.7 million and $10.7 million,
respectively, was recorded in other long-term liabilities, and deferred compensation of $0.2 million and $0.8 million, respectively,
was recorded in accrued expenses and other current liabilities.
9.
LONG-TERM INDEBTEDNESS
At December 31, 2015, the Company had no outstanding borrowings on its line of credit. At December 31, 2014, the
Company had $15.7 million of outstanding borrowings on its line of credit at a weighted average interest rate of 1.9 percent.
On February 24, 2014, the Company entered into a $75.0 million line of credit (the “Credit Agreement”) with JPMorgan
Chase Bank, N.A. and Wells Fargo Bank, N.A. On March 3, 2015, in accordance with the terms of the Credit Agreement, the
Company increased its line of credit by $25.0 million to $100.0 million. Interest on borrowings under the line of credit is designated
from time to time by the Company as either (i) the Prime Rate, minus a rate ranging from 0.75 to 1.0 percent (minus 1.0 percent
at December 31, 2015), but not less than 1.5 percent, or (ii) LIBOR, plus additional interest ranging from 1.75 to 2.0 percent (plus
1.75 percent at December 31, 2015) depending on the Company’s performance and financial condition. The Credit Agreement
expires on January 1, 2019. At December 31, 2015 and 2014, the Company had $2.7 million and $1.9 million, respectively, in
standby letters of credit under the line of credit. Availability under the Company’s line of credit was $97.3 million at December 31,
2015.
On February 24, 2014, the Company also entered into a $150.0 million “shelf-loan” facility with Prudential Investment
Management, Inc. and its affiliates (“Prudential”). The facility provides for Prudential to consider purchasing, at the Company’s
request, in one or a series of transactions, Senior Promissory Notes of the Company in the aggregate principal amount of up to
$150.0 million, to mature no more than twelve years after the date of original issue of each Senior Promissory Note. Prudential
has no obligation to purchase the Senior Promissory Notes. Interest payable on the Senior Promissory Notes will be at rates
58
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
determined by Prudential within five business days after the Company issues a request to Prudential. This facility expires on
February 24, 2017. On March 20, 2015, the Company issued $50.0 million of Senior Promissory Notes to Prudential for a term
of five years, at a fixed interest rate of 3.35 percent per annum, payable quarterly in arrears, of which the entire amount was
outstanding at December 31, 2015. Availability under the Company’s “shelf-loan” facility, subject to the approval of Prudential,
was $100.0 million at December 31, 2015. At December 31, 2015, the fair value of the Company’s long-term debt approximates
the carrying value, as estimated using quoted market prices and discounted future cash flows based on similar borrowing
arrangements.
Borrowings under both the line of credit and the “shelf-loan” facility are secured on a pari-passu basis by first priority
liens on the capital stock or other equity interests of each of the Company’s direct and indirect subsidiaries.
Pursuant to the Credit Agreement and “shelf-loan” facility, at December 31, 2015 and 2014, the Company was required
to maintain minimum interest and fixed charge coverages, and to meet certain other financial requirements. At December 31, 2015
and 2014, the Company was in compliance with all such requirements, and expects to remain in compliance for the next twelve
months.
Availability under both the Credit Agreement and the “shelf-loan” facilities is subject to a maximum leverage ratio
covenant which limits the amount of consolidated outstanding indebtedness to 2.5 times the trailing twelve-month EBITDA, as
defined in the agreements. This limitation did not impact the Company’s borrowing availability at December 31, 2015. The
remaining availability under these facilities was $197.3 million at December 31, 2015. The Company believes the availability
under the Credit Agreement and “shelf-loan” facility in conjunction with cash from operations is adequate to finance the Company’s
anticipated cash requirements for the next twelve months.
10.
INCOME TAXES
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended
December 31:
(In thousands)
Current:
Federal
State
Total current provision
Deferred:
Federal
State
Total deferred provision
Provision for income taxes
2015
2014
2013
$
$
$
$
$
31,292
7,670
38,962
466
596
1,062
40,024
$
$
$
$
$
32,142
6,142
38,284
(4,545)
(948)
(5,493)
32,791
$
$
$
$
$
23,430
4,129
27,559
68
201
269
27,828
The provision for income taxes differs from the amount computed by applying the federal statutory rate to income
before income taxes for the following reasons for the years ended December 31:
(In thousands)
Income tax at federal statutory rate
State income tax, net of federal income tax impact
Manufacturing credit pursuant to Jobs Creation Act
Federal tax credits
Other
Provision for income taxes
2015
2014
2013
$
$
40,029
5,373
(2,336)
(1,049)
(1,993)
40,024
$
$
33,270
3,376
(2,258)
(681)
(916)
32,791
$
$
27,281
2,815
(1,444)
(747)
(77)
27,828
At December 31, 2015, federal income taxes receivable of $8.1 million and state income taxes receivable of $0.4 million
were included in prepaid expenses and other current assets. At December 31, 2014, federal and state income taxes receivable of
$1.3 million were included in prepaid expenses and other current assets, and state income taxes payable of $0.8 million were
included in accrued expenses and other current liabilities.
59
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities were as follows at December 31:
(In thousands)
Deferred tax assets:
Goodwill and other intangible assets
Stock-based compensation
Deferred compensation
Warranty
Inventory
Other
Total deferred tax assets
Deferred tax liabilities:
Fixed assets
Net deferred tax assets
2015
2014
$
$
$
11,879
7,428
5,310
8,809
5,974
4,922
44,322
14,066
7,172
5,040
7,845
3,897
3,189
41,209
(14,931)
29,391
$
(10,756)
30,453
The Company concluded it is more likely than not the deferred tax assets at December 31, 2015 will be realized in the
ordinary course of operations based on projected future taxable income and scheduling of deferred tax liabilities.
Excess tax benefits on stock-based compensation of $9.0 million, $3.9 million and $1.5 million were credited directly to
stockholders’ equity during the years ended December 31, 2015, 2014 and 2013, respectively, relating to tax benefits which
exceeded the compensation cost for stock-based compensation recognized in the Consolidated Financial Statements.
At December 31, 2015, the remaining pool of excess tax benefits from prior exercises of stock-based compensation in
stockholders’ equity was $23.4 million.
Unrecognized Tax Benefits
The following table reconciles the total amounts of unrecognized tax benefits, at December 31:
(In thousands)
Balance at beginning of period
Changes in tax positions of prior years
Additions based on tax positions related to the current year
Payments
Closure of tax years
Balance at end of period
2015
2014
2013
1,526
912
866
(85)
(365)
2,854
$
$
1,369
84
603
—
(530)
1,526
$
$
1,701
(29)
676
(126)
(853)
1,369
$
$
In addition, the total amount of accrued interest and penalties related to taxes was $0.2 million, $0.2 million and $0.2
million at December 31, 2015, 2014 and 2013, respectively.
The total amount of unrecognized tax benefits, net of federal income tax benefits, of $2.7 million, $1.2 million and $1.0
million at December 31, 2015, 2014 and 2013, respectively, would, if recognized, increase the Company’s earnings, and lower
the Company’s annual effective tax rate in the year of recognition.
The Company periodically undergoes examinations by the Internal Revenue Service (“IRS”), as well as various state
taxing authorities. The IRS and other taxing authorities may challenge certain deductions and positions reported by the Company
on its income tax returns. For federal income tax purposes, the tax years 2012 through 2014 remain subject to examination. For
Indiana state income tax purposes, the tax years 2012 through 2014 remain subject to examination. Approximately 80 percent of
the Company’s operations are located in Indiana.
The Company has assessed its risks associated with all tax return positions, and believes its tax reserve estimates reflect
its best estimate of the deductions and positions it will be able to sustain, or it may be willing to concede as part of a settlement.
At this time, the Company cannot estimate the range of reasonably possible change in its tax reserve estimates in 2016. While
these tax matters could materially affect operating results when resolved in future periods, it is management’s opinion that after
60
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
final disposition, any monetary liability or financial impact to the Company beyond that provided for in the Consolidated Balance
Sheet as of December 31, 2015, would not be material to the Company’s financial position or annual results of operations.
11.
COMMITMENTS AND CONTINGENCIES
Leases
The Company’s lease commitments are primarily for real estate, machinery and equipment, and vehicles. The significant
real estate leases provide for renewal options and require the Company to pay for property taxes and all other costs associated
with the leased property.
Future minimum lease payments under operating leases at December 31, 2015 are as follows (in thousands):
2016
2017
2018
2019
2020
Thereafter
Total minimum lease payments
$
$
7,472
6,761
5,553
4,752
4,043
11,093
39,674
Rent expense for operating leases was $9.8 million, $8.6 million and $7.1 million for the years ended December 31, 2015,
2014 and 2013, respectively.
Contingent Consideration
In connection with several business acquisitions, if certain sales targets for the acquired products are achieved, the
Company would pay additional cash consideration. The Company has recorded a liability for the fair value of this contingent
consideration at December 31, 2015 and 2014, based on the present value of the expected future cash flows using a market
participant’s weighted average cost of capital of 13.9 percent and 15.0 percent, respectively.
As required, the liability for this contingent consideration is measured at fair value quarterly, considering actual sales of
the acquired products, updated sales projections, and the updated market participant weighted average cost of capital. Depending
upon the weighted average costs of capital and future sales of the products which are subject to contingent consideration, the
Company could record adjustments in future periods.
The following table provides a reconciliation of the Company’s contingent consideration liability for the years ended
December 31:
(In thousands)
Balance at beginning of period
Acquisitions
Payments
Accretion (a)
Fair value adjustments (a)
Balance at end of the period (b)
2015
2014
2013
$
8,129
$
7,414
$
4,766
(3,974)
1,196
723
10,840
(3,877)
6,963
$
3,370
(3,739)
1,075
9
8,129
(3,622)
4,507
$
11,519
—
(5,456)
1,308
43
7,414
(3,462)
3,952
Less current portion in accrued expenses and other current liabilities
Total long-term portion in other long-term liabilities
$
(a) Recorded in selling, general and administrative expense in the Consolidated Statements of Income.
(b) Amounts represent the fair value of estimated remaining payments. The total estimated remaining undiscounted payments
as of December 31, 2015 are $14.4 million. The liability for contingent consideration expires at various dates through
September 2029. Certain of the contingent consideration arrangements are subject to a maximum payment amount, while
the remaining arrangements have no maximum contingent consideration.
61
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Furrion Distribution and Supply Agreement
In July 2015, the Company entered into a 6-year exclusive distribution and supply agreement with Furrion Limited
(“Furrion”), a Hong Kong based firm that designs, engineers and manufactures premium electronics. This agreement provides the
Company with the rights to distribute Furrion’s complete line of products to OEMs and aftermarket customers in the RV, specialty
vehicle, utility trailer, horse trailer, marine, transit bus and school bus industries throughout the United States and Canada. Furrion
currently supplies a premium line of LED televisions, sound systems, navigation systems, wireless backup cameras, solar prep
units, power solutions and kitchen appliances, primarily to the RV industry. Furrion’s sales were approximately $35 million in
2014.
In connection with this agreement, the Company acquired Furrion’s current inventory, as well as Furrion’s deposits on
inventory scheduled for delivery, for approximately $11 million. In addition, the Company entered into the following minimum
purchase obligations (“MPOs”):
July 2015 - June 2016
July 2016 - June 2017
July 2017 - June 2018
July 2018 - June 2019
$ 60 million
$ 90 million
$127 million
$172 million
If the Company misses an MPO in any given year by more than ten percent, after taking into account excess purchases
from the previous year, Furrion has the right to either terminate the distribution agreement with six months’ notice or remove
exclusivity from the Company. If exclusivity is withdrawn, the Company, at its election, can terminate the distribution agreement
with six months’ notice. Upon termination of the agreement, Furrion has agreed to purchase from the Company any non-obsolete
stocks of Furrion products at the cost paid by the Company. After the first year, Furrion and the Company have agreed to review
these MPOs on an annual basis and adjust the MPOs as necessary based upon current economic and industry conditions, the
development and customer acceptance of new Furrion products, competition and other factors which impact demand for Furrion
products.
Product Recalls
From time to time, the Company cooperates with and assists its customers on their product recalls and inquiries, and
occasionally receives inquiries directly from the National Highway Traffic Safety Administration (“NHTSA”) regarding reported
incidents involving the Company’s products. In February 2015, NHTSA opened a Preliminary Evaluation as a result of four Vehicle
Owner Questionnaires (VOQs) alleging failure of the Company’s electrically powered step (“Coach Step”), which was primarily
supplied for motorhome RVs between model years 2008 and 2014. The Coach Step was no longer manufactured after 2014. In
March 2015, NHTSA sent a formal request for information, data and supporting documentation from the Company regarding the
Coach Step, which the Company provided in April 2015. After a thorough review of the design and operation of the Coach Step,
the Company initiated a voluntary safety recall in September 2015 of all double and triple Coach Steps. The Company recorded
a reserve of $1.1 million for the contingent obligation in selling, general and administrative expenses.
Environmental
The Company’s operations are subject to certain Federal, state and local regulatory requirements relating to the use,
storage, discharge and disposal of hazardous materials used during the manufacturing processes. Although the Company believes
its operations have been consistent with prevailing industry standards, and are in substantial compliance with applicable
environmental laws and regulations, one or more of the Company’s current or former operating sites, or adjacent sites owned by
third-parties, have been affected by releases of hazardous materials. As a result, the Company may incur expenditures for future
investigation and remediation of these sites, and recorded a pre-tax charge of $1.5 million related to environmental costs in 2015.
Litigation
In the normal course of business, the Company is subject to proceedings, lawsuits, regulatory agency inquiries and other
claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters
could materially affect operating results when resolved in future periods, it is management’s opinion that, after final disposition,
including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that
62
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
provided in the Consolidated Balance Sheet as of December 31, 2015, would not be material to the Company’s financial position
or annual results of operations.
Executive Succession and Severance
In 2015, the Company initiated a focused program to reduce indirect labor costs. In connection with this cost reduction
program, the Company incurred severance charges of $3.7 million.
In 2013, in connection with the Company’s executive succession and corporate relocation from White Plains, New York
to Elkhart County, Indiana, the Company recorded pre-tax charges of $1.9 million, related to contractual obligations for severance
and the acceleration of equity awards held by certain employees whose employment terminated as a result of the executive succession
and relocation to Indiana. The liability for executive succession and severance obligations were paid through 2015.
12.
STOCKHOLDERS' EQUITY
Special Dividend
On April 10, 2015, a special dividend of $2.00 per share of the Company’s Common Stock, representing an aggregate of
$48.2 million, was paid to stockholders of record as of March 27, 2015. On January 6, 2014, a special dividend of $2.00 per share
of the Company’s Common Stock, representing an aggregate of $46.7 million, was paid to stockholders of record as of December 20,
2013. In connection with these special dividends, holders of deferred stock units, restricted stock and stock awards were credited
with deferred stock units, restricted stock or stock equal to $2.00 per special dividend for each deferred stock unit, share of restricted
stock or stock award, representing $1.8 million in total for each of the 2015 and 2014 special dividends. In connection with each
of these special cash dividends, the exercise price of all outstanding stock options was reduced by $2.00 per share. These reductions
in exercise price were made pursuant to the terms of the outstanding awards, resulting in no incremental stock-based compensation
expense.
Stock-Based Awards
Pursuant to the Drew Industries Incorporated Equity Award and Incentive Plan, as Amended and Restated (the “Equity
Plan”), which was approved by stockholders in May 2011, the Company may grant to its directors, employees, and other eligible
persons Common Stock-based awards, such as stock options, restricted stock and deferred stock units. All such awards granted
under the Equity Plan must be approved by the Compensation Committee of Drew’s Board of Directors (the “Committee”). The
Committee determines the period for which all such awards may be exercisable, but in no event may such an award be exercisable
more than 10 years from the date of grant. The number of shares available under the Equity Plan, and the exercise price of all such
awards granted under the Equity Plan, are subject to adjustments by the Committee to reflect stock splits, dividends, recapitalization,
mergers, or other major corporate actions.
At the Annual Meeting of Stockholders held on May 22, 2014, stockholders approved an amendment to the Equity Plan
to increase the number of shares of common stock available for issuance pursuant to awards by 1,678,632 shares.
The number of shares available for granting awards was 1,305,440, 1,389,506 and 246,368 at December 31, 2015, 2014
and 2013, respectively.
Stock-based compensation resulted in charges to operations as follows for the years ended December 31:
(In thousands)
Stock options
Deferred stock units
Restricted stock
Stock awards
Stock-based compensation expense
2015
2014
2013
$
$
974
7,023
1,031
5,015
14,043
$
$
1,412
4,343
910
4,152
10,817
$
$
2,325
5,425
911
2,178
10,839
Stock-based compensation expense is recorded in the Consolidated Statements of Income in the same line as cash
compensation to those employees is recorded, primarily in selling, general and administrative expenses. In addition, for the years
ended December 31, 2015, 2014 and 2013, the Company issued deferred stock units to certain executive officers in lieu of cash
for a portion of prior year incentive compensation, in accordance with their compensation arrangements, of $2.0 million, $2.0
63
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
million and $0.1 million, respectively. In February 2016, the Company issued deferred stock units valued at $0.3 million, to certain
officers in lieu of cash for a portion of their 2015 incentive compensation in accordance with their compensation arrangements.
Stock Options
The Equity Plan provides for the grant of stock options that qualify as incentive stock options under Section 422 of the
Internal Revenue Code, and non-qualified stock options. The exercise price for stock options granted under the Equity Plan must
be at least equal to 100 percent of the fair market value of the shares subject to such stock option on the date of grant. The exercise
price may be paid in cash or in shares of the Company’s Common Stock which have been held for a minimum of six months.
Historically, upon exercise of stock options, new shares have been issued instead of using treasury shares.
Outstanding stock options expire six years from the date of grant, and either vest ratably over the service period of five
years for employees or, for certain executive officers, based on achievement of specified performance conditions. As a result of
the Company’s executive succession and corporate relocation, the vesting of certain stock options was accelerated pursuant to
contractual obligations with certain employees whose employment terminated as a result of the relocation to Indiana.
Transactions in stock options under the Equity Plan are summarized as follows:
Outstanding at December 31, 2012
Exercised
Forfeited
Outstanding at December 31, 2013
Exercised
Forfeited
Reduction for cash dividend
Outstanding at December 31, 2014
Exercised
Forfeited
Reduction for cash dividend
Outstanding at December 31, 2015
Exercisable at December 31, 2015
Number of
Option Shares
1,320,819
(574,288)
(22,870)
723,661
(258,530)
(11,800)
Stock Option
Exercise Price
$ 8.09 - $29.11
$ 8.09 - $29.11
$ 8.09 - $29.11
$ 8.09 - $21.17
$ 6.09 - $19.17
$6.09 - $19.17
— $ 6.09 - $19.17
$15.49 - $19.17
$13.49 - $19.17
$13.49 - $19.17
— $13.49 - $17.17
$13.67 - $17.17
$13.67 - $17.17
453,331
(214,601)
(26,700)
212,030
162,170
Weighted
Average
Exercise Price
19.92
$
23.04
$
19.36
$
15.46
$
12.89
$
16.93
$
(2.00)
$
16.89
$
14.48
$
14.30
$
(2.00)
$
15.38
$
14.83
$
Additional information for the exercise of stock options is as follows for the years ended December 31:
(In thousands)
Intrinsic value of stock options exercised
Cash receipts from stock options exercised
Income tax benefits from stock option exercises
Grant date fair value of stock options vested
2015
2014
2013
$
$
$
$
9,424
3,280
2,885
1,055
$
$
$
$
7,860
3,333
3,660
1,561
$
$
$
$
9,062
13,231
3,473
2,252
The following table summarizes information about stock options outstanding at December 31, 2015:
Exercise Price
$
13.67
17.17
$
Total Shares
Option Shares
Outstanding
Remaining
Life in Years
Option Shares
Exercisable
108,450
103,580
212,030 (a)
0.9
1.9
108,450
53,720
162,170 (a)
(a) The aggregate intrinsic value for option shares outstanding and option shares exercisable is $9.6 million and $7.5
million, respectively. The weighted average remaining term for option shares outstanding and option shares
exercisable is 1.4 years and 1.2 years, respectively.
64
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
As of December 31, 2015, there was $0.4 million of total unrecognized compensation costs related to unvested stock
options, which are expected to be recognized over a weighted average remaining period of 0.9 years.
Deferred Stock Units
The Equity Plan provides for the grant or issuance of deferred stock units (“DSUs”) to directors, employees and other
eligible persons. Recipients of DSUs are entitled to receive shares at the end of a specified deferral period. Holders of DSUs receive
dividends granted to holders of the Common Stock, payable in additional DSUs, and are subject to the same vesting criteria as the
original grant.
DSUs vest (i) ratably over the service period, (ii) at a specified future date, or (iii) for certain officers, based on achievement
of specified performance conditions. As a result of the Company’s executive succession and corporate relocation, the vesting of
certain deferred stock units was accelerated pursuant to contractual obligations with certain employees whose employment
terminated. In addition, DSUs are issued in lieu of cash compensation.
Transactions in DSUs under the Equity Plan are summarized as follows:
Outstanding at December 31, 2012
Issued
Granted
Forfeited
Exercised
Outstanding at December 31, 2013
Issued
Granted
Dividend equivalents
Forfeited
Exercised
Outstanding at December 31, 2014
Issued
Granted
Dividend equivalents
Forfeited
Exercised
Outstanding at December 31, 2015
Number of
Shares
Stock Price
$ 6.16 - $33.32
$33.84 - $48.53
$36.58 - $50.85
$30.50
613,754
32,462
140,461
(4,505)
(89,211) $20.20 - $30.65
$ 6.16 - $50.85
692,961
$36.68 - $51.46
56,212
$45.98 - $46.95
187,490
$50.45
27,532
(38,855) $26.98 - $50.89
(187,052) $19.98 - $50.89
$ 6.16 - $51.20
738,288
$52.20 - $60.92
54,982
$52.20 - $61.53
90,184
$59.94
20,922
(23,604) $30.50 - $60.29
(353,259) $20.89 - $51.46
$ 6.16 - $61.53
527,513
As of December 31, 2015, there was $12.7 million of total unrecognized compensation costs related to DSUs, which is
expected to be recognized over a weighted average remaining period of 1.9 years.
Restricted Stock
The Equity Plan provides for the grant of restricted stock to directors, employees and other eligible persons. The restriction
period is established by the Committee, but may not be less than one year. Holders of restricted stock have all the rights of a
stockholder of the Company, including the right to vote and the right to receive dividends granted to holders of the Common Stock,
payable in additional shares of restricted stock, and subject to the same vesting criteria as the original grant. Shares of restricted
stock are not transferable during the restriction period. Restricted stock grants, which were all made to directors, were as follows
(in thousands except share and per share amounts):
Granted
Stock price
Fair value of stock granted
2015
2014
2013
20,558
$58.96 - $61.53
1,220
$
$
$
19,439
46.82
910
$
$
17,885
50.89
910
65
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
As of December 31, 2015, there was $1.0 million of total unrecognized compensation costs related to restricted stock,
which is expected to be recognized over a weighted average remaining period of 0.8 years.
Stock Awards
In accordance with the Executive Employment and Non-Competition Agreements for various officers of the Company,
such officers are entitled to receive an annual long-term award consisting of the right to earn shares of common stock. These shares
are earned during the subsequent three year period based on growth in the Company’s earnings per diluted share.
Transactions in stock awards under the Equity Plan are summarized as follows:
Outstanding at December 31, 2012
Granted
Outstanding at December 31, 2013
Granted
Dividend equivalents
Exercised
Outstanding at December 31, 2014
Granted
Dividend equivalents
Forfeited
Exercised
Outstanding at December 31, 2015
Number of
Shares
Stock Price
90,102
$26.88
103,500
$32.25 - $43.70
193,602
$26.88 - $43.70
103,500
7,675
(31,959)
272,818
96,010
$51.20
$50.45
$26.88
$26.88 - $51.45
$60.29
$59.94
8,992
(16,534)
(98,830) $26.88 - $43.70
$32.25 - $60.29
262,456
$60.29
As of December 31, 2015, there was $6.7 million of total unrecognized compensation costs related to outstanding stock
awards, which is expected to be recognized over a weighted average remaining period of 1.5 years.
Weighted Average Common Shares Outstanding
The following reconciliation details the denominator used in the computation of basic and diluted earnings per share for
the years ended December 31:
(In thousands)
Weighted average shares outstanding for basic earnings per share
Common stock equivalents pertaining to stock-based awards
Weighted average shares outstanding for diluted earnings per share
2015
2014
2013
24,295
355
24,650
23,911
423
24,334
23,321
432
23,753
The weighted average diluted shares outstanding for the years ended December 31, 2015, 2014 and 2013, exclude the
effect of 255,547, 293,860 and 303,240 shares of common stock, respectively, subject to stock-based awards. Such shares were
excluded from total diluted shares because they were anti-dilutive or the specified performance conditions that those shares were
subject to were not yet achieved.
66
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
13.
FAIR VALUE MEASUREMENTS
Recurring
The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at
December 31:
(In thousands)
Assets
Deferred compensation
Total assets
Liabilities
Contingent consideration
Deferred compensation
Total liabilities
Deferred Compensation
2015
2014
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
$
$
7,774 $
7,774 $
7,774 $
7,774 $
— $
— $
— $
— $
7,388 $
7,388 $
7,388 $
7,388 $
— $
— $
—
—
$ 10,840 $
11,836
— $
11,836
$ 22,676 $ 11,836 $
— $ 10,840
—
—
— $ 10,840
$
8,129 $
11,478
— $
11,478
$ 19,607 $ 11,478 $
— $
—
— $
8,129
—
8,129
The Company has an Executive Non-Qualified Deferred Compensation Plan (the “Plan”). The amounts deferred under
the Plan are credited with earnings or losses based upon changes in values of the notional investments elected by the Plan participants.
The Company invests approximately 65 percent of the amounts deferred by the Plan participants in life insurance contracts,
matching the investments elected by the Plan participants. Deferred compensation assets and liabilities were valued using a market
approach based on the quoted market prices of identical instruments.
Contingent Consideration Related to Acquisitions
Liabilities for contingent consideration related to acquisitions were fair valued using management’s projections for long-
term sales forecasts, including assumptions regarding market share gains and future industry-specific economic and market
conditions, and a market participant’s weighted average cost of capital. Over the next six years, the Company’s long-term sales
growth forecasts for products subject to contingent consideration arrangements average approximately 13 percent per year. For
further information on the inputs used in determining the fair value, and a roll-forward of the contingent consideration liability,
see Note 11 of the Notes to Consolidated Financial Statements.
Changes in either of the inputs in isolation would result in a change in the fair value measurement. A change in the
assumptions used for sales forecasts would result in a directionally similar change in the fair value liability, while a change in the
weighted average cost of capital would result in a directionally opposite change in the fair value liability. If there is an increase in
the fair value liability, the Company would record a charge to selling, general and administrative expenses, and if there is a decrease
in the fair value liability, the Company would record a benefit in selling, general and administrative expenses.
Non-recurring
The following table presents the carrying value on the measurement date of any assets and liabilities which were measured
at fair value and recorded at the lower of cost or fair value, on a non-recurring basis, using significant unobservable inputs (Level
3), and the corresponding non-recurring losses recognized during the years ended December 31:
(In thousands)
Assets
Vacant owned facilities
Other intangible assets
Net assets of acquired businesses
Total assets
2015
2014
2013
Carrying
Value
Non-
Recurring
Losses
Carrying
Value
Non-
Recurring
Losses
Carrying
Value
Non-
Recurring
Losses
$
$
2,537
$
—
28,727
31,264
$
— $
—
—
— $
67
3,863
$
—
66,169
70,032
$
— $
—
—
— $
3,197
$
—
4,382
7,579
$
145
—
—
145
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Vacant Owned Facilities
During 2015, the Company reviewed the recoverability of the carrying value of three vacant owned facilities, of which
one of these facilities was sold and one was reopened. At December 31, 2015, the Company had one vacant owned facility, with
an estimated fair value of $3.1 million and a carrying value of $2.5 million, classified in fixed assets in the Consolidated Balance
Sheets.
During 2014, the Company reviewed the recoverability of the carrying value of four vacant owned facilities. At
December 31, 2014, the Company had three vacant owned facilities with an estimated combined fair value of $4.2 million and a
combined carrying value of $3.9 million, classified in fixed assets in the Consolidated Balance Sheets.
During 2013, the Company reviewed the recoverability of the carrying value of six vacant owned facilities. The fair value
of two of these vacant owned facilities did not exceeded their carrying value, therefore an impairment charge of $0.1 million was
recorded in selling, general, and administrative expenses in the Consolidated Statements of Income. At December 31, 2013, the
Company had three vacant owned facilities, with an estimated combined fair value of $3.6 million and a combined carrying value
of $3.2 million, classified in fixed assets in the Consolidated Balance Sheets.
The determination of fair value was based on the best information available, including internal cash flow estimates, market
prices for similar assets, broker quotes and independent appraisals, as appropriate.
Net Assets of Acquired Businesses
The Company valued the assets and liabilities associated with the acquisitions of businesses on the respective acquisition
dates. Depending upon the type of asset or liability acquired, the Company used different valuation techniques in determining the
fair value. Those techniques included comparable market prices, long-term sales, profitability and cash flow forecasts, assumptions
regarding future industry-specific economic and market conditions, a market participant’s weighted average cost of capital, as well
as other techniques as circumstances required. For further information on acquired assets and liabilities, see Note 3 of the Notes
to Consolidated Financial Statements.
14.
NEW ACCOUNTING PRONOUNCEMENTS
In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2015-17, Balance Sheet Classification of Deferred Taxes. This ASU requires entities with a classified balance sheet to present all
deferred tax assets and liabilities as non-current. This ASU is effective for annual and interim periods beginning after December
15, 2016, and can be applied prospectively or retrospectively to adjustments with early adoption permitted at the beginning of an
interim or annual reporting period. The Company is evaluating the effect of adopting this new accounting guidance, but does not
expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position.
In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments.
This ASU applies to restating prior periods to reflect adjustments made to provisional amounts recognized in a business combination.
Under the new guidance, an acquirer must recognize adjustments to provisional amounts identified during the measurement period
in the reporting period in which the adjustment amounts are determined. This ASU is effective for annual and interim periods
beginning after December 15, 2015, and is to be applied prospectively to adjustments to provisional amounts occurring after the
effective date with early adoption permitted at the beginning of an interim or annual reporting period. The Company is evaluating
the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s
results of operations, cash flows or financial position.
In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This ASU applies to inventory
measured using the first-in, first-out (“FIFO”) or average cost methods. Under the updated guidance, an entity should measure
inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary
course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for annual
and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the
beginning of an interim or annual reporting period. Adoption of this ASU will not have a material impact on the Company’s results
of operations, cash flows or financial position.
68
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. This ASU requires
debt issuance costs be presented on the balance sheet as a direct reduction from the related debt liability rather than as an asset.
Amortization of the costs would be reported as interest expense. The amendments in this ASU are to be applied retrospectively
and are effective for interim and annual reporting periods beginning after December 15, 2015. Adoption of this ASU will not have
a material impact on the Company’s results of operations, cash flows or financial position.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU provides a five-step
analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. This ASU is for annual periods, and interim periods within
those years, beginning after December 15, 2017, with early adoption permitted for years beginning after December 15, 2016, to
be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company
is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the
Company’s results of operations, cash flows or financial position.
69
DREW INDUSTRIES INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
15.
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Interim unaudited financial information follows:
(In thousands, except per share amounts)
Year ended December 31, 2015
Net sales
Gross profit
Income before income taxes
Net income
Net income per common share:
Basic
Diluted
Stock market price:
High
Low
Close (at end of quarter)
Year ended December 31, 2014
Net sales
Gross profit
Income before income taxes
Net income
Net income per common share:
Basic
Diluted
Stock market price:
High
Low
Close (at end of quarter)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Year
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
361,457
76,403
31,649
20,073
0.83
0.82
64.61
47.63
61.54
285,377
63,200
25,926
16,164
0.68
0.67
54.20
45.53
54.20
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
362,085
82,060
33,019
20,869
0.86
0.85
62.60
55.26
58.02
321,783
72,012
29,075
18,618
0.78
0.77
54.15
45.80
50.01
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
345,296
74,125
26,576
17,263
0.71
0.70
59.42
52.42
54.61
294,271
62,483
22,941
15,488
0.65
0.64
50.83
41.00
42.19
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
334,228
73,414
23,125
16,140
$ 1,403,066
306,002
$
114,369
$
74,345
$
0.66
0.65
61.90
53.55
60.89
$
$
$
$
$
3.06
3.02
64.61
47.63
60.89
289,351
57,228
17,115
11,996
$ 1,190,782
254,923
$
95,057
$
62,266
$
0.50
0.49
51.69
41.95
51.07
$
$
$
$
$
2.60
2.56
54.20
41.00
51.07
The sum of per share amounts for the four quarters may not equal the total per share amounts for the year as a result
of changes in the weighted average common shares outstanding or rounding.
70
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
Item 9A. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed in the Company’s Exchange Act reports is (i) recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including its
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, in
accordance with the definition of “disclosure controls and procedures” in Rule 13a-15 under the Exchange Act. In designing and
evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well
designed and operated, cannot provide absolute assurance of achieving the desired control objectives. Management included in
its evaluation the cost-benefit relationship of possible controls and procedures. The Company continually evaluates its disclosure
controls and procedures to determine if changes are appropriate based upon changes in the Company’s operations or the business
environment in which it operates.
As of the end of the period covered by this Form 10-K, the Company performed an evaluation, under the supervision
and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s
Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.
Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective.
(a)
Management’s Annual Report on Internal Control over Financial Reporting.
We are responsible for the preparation and integrity of the Consolidated Financial Statements appearing in the Annual
Report on Form 10-K. We are also responsible for establishing and maintaining adequate internal control over financial reporting.
We maintain a system of internal control that is designed to provide reasonable assurance as to the fair and reliable preparation
and presentation of the Consolidated Financial Statements, as well as to safeguard assets from unauthorized use or disposition.
The Company continually evaluates its system of internal control over financial reporting to determine if changes are appropriate
based upon changes in the Company’s operations or the business environment in which it operates.
Our control environment is the foundation for our system of internal control over financial reporting and is embodied in
our Guidelines for Business Conduct. It sets the tone of our organization and includes factors such as integrity and ethical values.
Our internal control over financial reporting is supported by formal policies and procedures which are reviewed, modified and
improved as changes occur in business conditions and operations.
We conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework
in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). This evaluation included review of the documentation of controls, evaluation of the design effectiveness
of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Although there are inherent
limitations in the effectiveness of any system of internal control over financial reporting, based on our evaluation, we have concluded
that our internal control over financial reporting was effective as of December 31, 2015.
KPMG LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements included
in this Report and, as part of their audit, has issued their attestation report on the effectiveness of our internal control over financial
reporting, included elsewhere in this Form 10-K.
/s/ Jason D. Lippert
Chief Executive Officer
/s/ David M. Smith
Chief Financial Officer
(b)
Report of the Independent Registered Public Accounting Firm.
The attestation report of our independent registered public accounting firm on the effectiveness of our internal control
over financial reporting is included in Item 8. “Financial Statements and Supplementary Data.”
71
(c)
Changes in Internal Control over Financial Reporting.
There were no changes in the Company’s internal controls over financial reporting during the quarter ended December
31, 2015, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.
The Company has selected a new enterprise resource planning (“ERP”) system, and has begun implementing that system.
Although to date there have been no significant changes in the Company’s internal controls, the Company anticipates internal
controls will be strengthened incrementally due both to the installation of the new ERP software and business process changes.
The full implementation is expected to take several years.
Item 9B. OTHER INFORMATION.
None.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information with respect to the Company’s Directors, Executive Officers and Corporate Governance is incorporated by
reference from the information contained under the proposal entitled “Election of Directors” and under the caption “Corporate
Governance and Related Matters – Board Committees” in the Company’s Proxy Statement for the Annual Meeting of Stockholders
to be held on May 26, 2016 (the “2016 Proxy Statement”) and from the information contained under “Executive Officers of the
Registrant” in Part I, Item 1, “Business,” in this Report.
Information regarding Section 16 reporting compliance is incorporated by reference from the information contained under
the caption “Voting Securities – Compliance with Section 16(a) of the Exchange Act” in the Company’s 2016 Proxy Statement.
The Company has adopted Governance Principles, Guidelines for Business Conduct, a Whistleblower Policy, and a Code
of Ethics for Senior Financial Officers (“Code of Ethics”), each of which, as well as the Charter and Key Practices of the Company’s
Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee, are available on the
Company’s website at www.drewindustries.com. A copy of any of these documents will be furnished, without charge, upon written
request to Secretary, Drew Industries Incorporated, 3501 County Road 6 East, Elkhart, Indiana 46514.
If the Company makes any substantive amendment to the Code of Ethics or the Guidelines for Business Conduct, or
grants a waiver to a Director or Executive Officer from a provision of the Code of Ethics or the Guidelines for Business Conduct,
the Company will disclose the nature of such amendment or waiver on its website or in a Current Report on Form 8-K. There have
been no waivers to Directors or Executive Officers of any provisions of the Code of Ethics or the Guidelines for Business Conduct.
Item 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference from the information contained under the caption
“Executive Compensation” and “Director Compensation” in the Company’s 2016 Proxy Statement.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
The information required by this item is incorporated by reference from the information contained under the caption
“Voting Securities – Security Ownership of Certain Beneficial Owners and Management” in the Company’s 2016 Proxy Statement
and the Equity Compensation Plan Information contained in Part I, Item 5 in this Report.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this item with respect to transactions with related persons and director independence is
incorporated by reference from the information contained under the captions “Transactions with Related Persons” and “Corporate
Governance and Related Matters – Board of Directors and Director Independence” in the Company’s 2016 Proxy Statement.
72
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this item is incorporated by reference from the information contained under the proposal
entitled “Appointment of Auditors – Fees for Independent Auditors” in the Company’s 2016 Proxy Statement.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)
Documents Filed:
PART IV
(1)
(2)
Financial Statements.
Exhibits. See Item 15 (b) - “List of Exhibits” incorporated herein by reference.
(b)
Exhibits - List of Exhibits.
Exhibit
Number
3.1*
3.2
10.221
Description
Drew Industries Incorporated Restated Certificate of Incorporation.
Amended and Restated By-laws of Drew Industries Incorporated (incorporated by reference to
Exhibit 4.2 included in the Registrant’s Registration Statement on Form S-8 filed on December 31,
2014 (Registration No. 333-201336)).
Form of Indemnification Agreement between Registrant and its officers and independent directors
(incorporated by reference to Exhibit 10.1 included in the Registrant's Form 8-K filed on May 26,
2015).
10.231†*
Executive Non-Qualified Deferred Compensation Plan, as amended.
10.233
10.257
10.259†
10.263†
10.268†
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
(incorporated by reference to Exhibit 10.1 included in the Registrant’s Form 8-K filed on December
2, 2008).
First Amendment dated February 24, 2011 to the Second Amended and Restated Credit Agreement
dated as of November 25, 2008 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 (incorporated by reference to Exhibit 10.1 included in the Registrant’s
Form 8-K filed on February 25, 2011).
Drew Industries Incorporated Equity Award and Incentive Plan, As Amended and Restated
(incorporated by reference to Appendix A included in the Registrant’s Definitive Proxy Statement
on Schedule 14A filed on April 11, 2014).
Executive Compensation and Non-Competition Agreement between Registrant and Joseph S.
Giordano III, dated February 10, 2012 (incorporated by reference to Exhibit 10(iii)(A) included in
the Registrant’s Form 8-K filed on February 13, 2012).
Change in Control Agreement between Registrant and Jason D. Lippert, dated April 9, 2012
(incorporated by reference to Exhibit 10.02 included in the Registrant’s Form 8-K filed on April 10,
2012).
73
10.269†
10.270†
10.271†
10.272†
10.273†
10.274†
10.276†
10.277†
10.278†
10.279
10.280
10.281
10.282
Change in Control Agreement between Registrant and Scott T. Mereness, dated April 9, 2012
(incorporated by reference to Exhibit 10.03 included in the Registrant’s Form 8-K filed on April 10,
2012).
Amended and Restated Executive Employment and Non-Competition Agreement among Drew
Industries Incorporated, Lippert Components Manufacturing, Inc., Kinro Manufacturing, Inc. and
Jason D. Lippert, dated February 26, 2013 (incorporated by reference to Exhibit 10(iii)(A) included
in the Registrant’s Form 8-K filed on February 26, 2013).
Amended and Restated Executive Employment and Non-Competition Agreement among Drew
Industries Incorporated, Lippert Components Manufacturing, Inc., Kinro Manufacturing, Inc. and
Scott T Mereness, dated March 4, 2013 (incorporated by reference to Exhibit 10(iii)(A) included in
the Registrant’s Form 8-K filed on March 5, 2013).
Amendment to Executive Compensation and Non-Competition Agreement between Registrant and
Joseph S. Giordano III, dated April 10, 2013 (incorporated by reference to Exhibit 10(iii)(A) included
in the Registrant’s Form 8-K filed on April 11, 2013).
Amendment to Change in Control Agreement between Registrant and Jason D. Lippert, dated May
10, 2013 (incorporated by reference to Exhibit 10(ii)(A)-2 included in the Registrant’s Form 8-K
filed on May 10, 2013).
Amendment to Change in Control Agreement between Registrant and Scott T. Mereness, dated May
10, 2013 (incorporated by reference to Exhibit 10(ii)(A)-3 included in the Registrant’s Form 8-K
filed on May 10, 2013).
Severance Agreement between Registrant and Robert A. Kuhns, dated February 11, 2014
(incorporated by reference to Exhibit 10(iii)(A) included in the Registrant’s Form 8-K filed on
February 14, 2014).
Description of 2014 executive compensation arrangement between Registrant and Robert A. Kuhns
(incorporated by reference to Item 5.02 included in the Registrant’s Form 8-K filed on February 14,
2014).
Change in Control Agreement between Registrant and Robert A. Kuhns, dated April 4, 2013, as
amended May 20, 2013.
Second Amendment dated as of February 24, 2014 to Second Amended and Restated Credit
Agreement dated as of November 25, 2008 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 (incorporated by reference to Exhibit 10.1 included in the
Registrant’s Form 8-K filed on February 26, 2014).
Restated Revolving Credit Note dated as of February 24, 2014 by Lippert Components, Inc., payable
to the order of JPMorgan Chase Bank, N.A. in the principal amount of Forty-Five Million
($45,000,000) Dollars (incorporated by reference to Exhibit 10.2 included in the Registrant’s Form
8-K filed on February 26, 2014).
Restated Revolving Credit Note dated as of February 24, 2014 by Lippert Components, Inc., payable
to the order of Wells Fargo Bank, N.A. in the principal amount of Thirty Million ($30,000,000)
Dollars (incorporated by reference to Exhibit 10.3 included in the Registrant’s Form 8-K filed on
February 26, 2014).
Third Amended and Restated Pledge and Security Agreement dated as of February 24, 2014, made
by Drew Industries Incorporated, Lippert Components, Inc. and Lippert Components Manufacturing,
Inc., in favor of JPMorgan Chase Bank, N.A. as Collateral Agent (incorporated by reference to
Exhibit 10.4 included in the Registrant’s Form 8-K filed on February 26, 2014).
74
10.283
10.284
10.285
10.286
10.287
10.288
10.289
10.290
10.291
10.292
10.293
Third Amended and Restated Company Guarantee Agreement dated as of February 24, 2014, made
by Drew Industries Incorporated, with and in favor of JPMorgan Chase Bank, N.A. as Administrative
Agent (incorporated by reference to Exhibit 10.5 included in the Registrant’s Form 8-K filed February
26, 2014).
Third Amended and Restated Subsidiary Guarantee Agreement dated as of February 24, 2014, made
by each direct and indirect subsidiary of Drew Industries Incorporated and Lippert Components,
Inc., with and in favor of JPMorgan Chase Bank, N.A. as Administrative Agent (incorporated by
reference to Exhibit 10.6 included in the Registrant’s Form 8-K filed on February 26, 2014).
Third Amended and Restated Subordination Agreement dated as of February 24, 2014, made by
Drew Industries Incorporated and each direct and indirect subsidiary of Drew Industries
Incorporated, with and in favor of JPMorgan Chase Bank, N.A. as Administrative Agent
(incorporated by reference to Exhibit 10.7 included in the Registrant’s Form 8-K filed February 26,
2014).
Third Amended and Restated Note Purchase and Private Shelf Agreement dated as of February 24,
2014, by and among Prudential Investment Management, Inc. and Affiliates, and Lippert
Components, Inc., guaranteed by Drew Industries Incorporated (incorporated by reference to Exhibit
10.8 included in the Registrant’s Form 8-K filed February 26, 2014).
Form of Shelf Note of Lippert Components, Inc. pursuant to the Third Amended and Restated Note
Purchase and Private Shelf Agreement (incorporated by reference to Exhibit 10.9 included in the
Registrant’s Form 8-K filed February 26, 2014).
Amended and Restated Parent Guarantee Agreement dated as of February 24, 2014, made by Drew
Industries Incorporated in favor of Prudential Investment Management, Inc. and the Noteholders
thereto from time to time (incorporated by reference to Exhibit 10.10 included in the Registrant’s
Form 8-K filed February 26, 2014).
Amended and Restated Subsidiary Guarantee Agreement dated as of February 24, 2014, made by
each direct and indirect subsidiary (other than Lippert Components, Inc.) of Drew Industries
Incorporated, in favor of Prudential Investment Management, Inc. and each of the Noteholders
thereto from time to time (incorporated by reference to Exhibit 10.11 included in the Registrant’s
Form 8-K filed February 26, 2014).
Amended and Restated Pledge and Security Agreement dated as of February 24, 2014, made by
Drew Industries Incorporated, Lippert Components, Inc., Lippert Components Manufacturing, Inc.
and the other Subsidiary Guarantors, in favor of JPMorgan Chase Bank, N.A., as Trustee for the
benefit of the Noteholders (incorporated by reference to Exhibit 10.12 included in the Registrant’s
Form 8-K filed February 26, 2014).
Amended and Restated Subordination Agreement dated as of February 24, 2014, made by Lippert
Components, Inc., Drew Industries Incorporated and each direct and indirect subsidiary of Drew
Industries Incorporated, with and in favor of Prudential Investment Management, Inc. and each of
the Noteholders thereto from time to time (incorporated by reference to Exhibit 10.13 included in
the Registrant’s Form 8-K filed February 26, 2014).
Amended and Restated Collateralized Trust Agreement dated as of February 24, 2014, by and among
Lippert Components, Inc. and Prudential Investment Management, Inc. and each of the Noteholders
thereto from time to time, and JPMorgan Chase Bank, N.A. as Trustee for the Noteholders
(incorporated by reference to Exhibit 10.14 included in the Registrant’s Form 8-K filed February
26, 2014).
Second Amended and Restated Intercreditor Agreement dated as of February 24, 2014 by and among
Prudential Investment Management, Inc. and Affiliates, JPMorgan Chase Bank, N.A. (as Lender
and Administrative Agent), Wells Fargo Bank, N.A. (as Lender), and JPMorgan Chase Bank, N.A.
(as Collateral Agent and Trustee) (incorporated by reference to Exhibit 10.15 included in the
Registrant’s Form 8-K filed February 26, 2014).
10.294†
Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 included in
the Registrant's Form 8-K filed March 4, 2015).
75
10.295†
10.296†
10.297†
10.298
10.299
10.300†
10.301†
10.302†
14.1*
14.2*
21*
23*
24*
31.1*
31.2*
32.1*
32.2*
2015 Annual Incentive Plan (incorporated by reference to Exhibit 10.2 included in the Registrant's
Form 8-K filed March 4, 2015).
Form of Performance Stock Award (incorporated by reference to Exhibit 10.3 included in the
Registrant's Form 8-K filed March 4, 2015).
Form of Deferred Stock Award (incorporated by reference to Exhibit 10.4 included in the Registrant's
Form 8-K filed March 4, 2015).
Incremental Joinder Agreement dated March 3, 2015 among Lippert Components, Inc., Drew
Industries Incorporated, each subsidiary of Drew Industries Incorporated listed therein, the Lenders
listed therein, and JPMorgan Chase Bank, individually and as Administrative Agent (incorporated
by reference to Exhibit 10.1 included in the Registrant's Form 8-K filed March 6, 2015).
Form of 3.35% Series A Senior Notes due March 20, 2020 of Lippert Components, Inc. pursuant to
the Third Amended and Restated Note Purchase and Private Shelf Agreement (incorporated by
reference to Exhibit 10.2 included in the Registrant's Form 8-K filed March 23, 2015).
Transition, Separation and General Release Agreement, dated August 14, 2015, between Drew
Industries Incorporated and Joseph S. Giordano III (incorporated by reference to Exhibit 10.1
included in the Registrant's Form 8-K filed August 20, 2015).
Transition, Separation and General Release Agreement, dated January 1, 2016, between Drew
Industries Incorporated and Todd Driver (incorporated by reference to Exhibit 10.1 included in the
Registrant's Form 8-K filed January 7, 2016).
2016 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 included in the Registrant's
Form 8-K filed February 12, 2016).
Code of Ethics for Senior Financial Officers.
Guidelines for Business Conduct.
Subsidiaries of the Registrant.
Consent of Independent Registered Public Accounting Firm.
Powers of Attorney (included on the signature page of this Report).
Certification of Chief Executive Officer required by Rule 13a-14(a).
Certification of Chief Financial Officer required by Rule 13a-14(a).
Certification of Chief Executive Officer required by Rule 13a-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States Code.
Certification of Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63
of Title 18 of the United States Code.
101
Interactive Data Files.
*Filed herewith
†Denotes a compensation plan or arrangement
76
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: February 29, 2016
DREW INDUSTRIES INCORPORATED
By:
/s/ Jason D. Lippert
Jason D. Lippert
Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, this Report has been signed below
by the following persons on behalf of the Registrant and in the capacities and dates indicated.
Each person whose signature appears below hereby authorizes Jason D. Lippert and David M. Smith, or either of them,
to file one or more amendments to the Annual Report on Form 10-K which amendments may make such changes in such Report
as either of them deems appropriate, and each such person hereby appoints Jason D. Lippert and David M. Smith, or either of
them, as attorneys-in-fact to execute in the name and on behalf of each such person individually, and in each capacity stated below,
such amendments to such Report.
Date
Signature
Title
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
February 29, 2016
By: /s/ Jason D. Lippert
(Jason D. Lippert)
By: /s/ David M. Smith
(David M. Smith)
By: /s/ Brian M. Hall
(Brian M. Hall)
By: /s/ James F. Gero
(James F. Gero)
By: /s/ Leigh J. Abrams
(Leigh J. Abrams)
By: /s/ Frederick B. Hegi, Jr.
(Frederick B. Hegi, Jr.)
By: /s/ David A. Reed
(David A. Reed)
By: /s/ John B. Lowe, Jr.
(John B. Lowe, Jr.)
By: /s/ Brendan J. Deely
(Brendan J. Deely)
By: /s/ Frank J. Crespo
(Frank J. Crespo)
By: /s/ Kieran M. O’Sullivan
(Kieran M. O’Sullivan)
77
Chief Executive Officer and Director
(principal executive officer)
Chief Financial Officer
(principal financial officer)
Corporate Controller
(principal accounting officer)
Chairman of the Board of Directors
Director
Director
Director
Director
Director
Director
Director
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Drew Industries Incorporated:
We consent to the incorporation by reference in the Registration Statements (Nos. 333-91174, 333-141276,
333-152873, 333-161242, 333-181272 and 333-201336) on Form S-8 of Drew Industries Incorporated of
our report dated February 29, 2016, with respect to the consolidated balance sheets of Drew Industries
Incorporated and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements
of income, stockholders’ equity and cash flows for each of the years in the three-year period ended December
31, 2015 and the effectiveness of internal control over financial reporting as of December 31, 2015, which
report appears in the December 31, 2015 annual report on Form 10-K of Drew Industries Incorporated and
subsidiaries.
/s/ KPMG LLP
Chicago, Illinois
February 29, 2016
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Jason D. Lippert, Chief Executive Officer, certify that:
1)
I have reviewed this annual report on Form 10-K of Drew Industries Incorporated;
EXHIBIT 31.1
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 29, 2016
By /s/ Jason D. Lippert
Jason D. Lippert, Chief Executive Officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, David M. Smith, Chief Financial Officer, certify that:
1)
I have reviewed this annual report on Form 10-K of Drew Industries Incorporated;
EXHIBIT 31.2
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 29, 2016
By /s/ David M. Smith
David M. Smith, Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.1
In connection with the annual report on Form 10-K of Drew Industries Incorporated (the “Company”) for the period ended
December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jason D. Lippert,
Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ Jason D. Lippert
Chief Executive Officer
Principal Executive Officer
February 29, 2016
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.2
In connection with the annual report on Form 10-K of Drew Industries Incorporated (the “Company”) for the period ended
December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David M. Smith,
Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ David M. Smith
Chief Financial Officer
Principal Financial Officer
February 29, 2016
Drew Industries
Incorporated is a leading
supplier of components
for recreational vehicles
and manufactured homes.
Drew operates through its
wholly-owned subsidiary,
Lippert Components, Inc.
From 42 manufacturing and distribution facilities located
throughout the United States and Canada, Drew
supplies a broad array of components for the leading
manufacturers of recreational vehicles and
manufactured homes, as well as the aftermarket for
these industries. In addition, Drew manufactures
components for adjacent industries including buses,
trailers used to haul livestock, equipment and other
cargo, pontoon boats, modular housing and factory-built
mobile office units. In 2015, the RV Products Segment
accounted for 92 percent of Drew’s con solidated net
sales, of which 73 percent were of components sold to
manufacturers of travel trailer and fifth-wheel RVs. The
Manufactured Housing Products Segment accounted
for 8 percent of Drew’s consolidated net sales.
Management of Drew is committed to acting ethically
and responsibly, and to providing full and accurate
disclosure to the Company’s stockholders, employees
and other stakeholders.
DREW’S SALES CONTENT PER TRAVEL TRAILER AND FIFTH-WHEEL RV PRODUCED INDUSTRY-WIDE
Peak sales potential is estimated to be $7,400 per travel trailer and fifth-wheel RV
$2,690
$2,713
$2,816
$2,987
$1,847
$2,010
$2,337
$2,148
$3,000
$2,500
$2,000
$1,500
$1,000
$500
0
2008
2009
2010
2011
2012
2013
2014
2015
2
20 15 D R E W A N N UA L R E P O R T • d r e w i n d u s t r i e s .c o m
The graph below compares the cumulative 5-Year total return of holders of the Company’s common stock with
the cumulative total returns of the Russell 2000 index and a customized peer group of eight companies that
includes: Arctic CAT Inc., Brunswick Corporation, Cavco Industries, Inc., Patrick Industries, Inc., Spartan
Motors, Inc., Thor Industries, Inc., Trimas Corporation and Winnebago Industries, Inc. An investment of $100
(with reinvestment of all dividends) is assumed to have been made in our common stock, in the index, and in
the peer group on December 31, 2010 and its relative performance is tracked through December 31, 2015.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Drew Industries Incorporated, the Russell 2000 Index, and a Peer Group
Drew Industries Incorporated
Russell 2000
Peer Group
350
300
250
200
150
100
50
0
12/10
12/11
12/12
12/13
12/14
12/15
* $100 invested on 12/31/10 in stock or index, including
reinvestment of dividends. Fiscal year ending December 31.
Copyright© 2016 Russell Investment Group. All rights reserved.
Drew Industries Incorporated
Russell 2000
Peer Group
12/10
100.00
100.00
100.00
12/11
107.97
95.82
87.60
12/12
151.58
111.49
136.33
12/13
250.17
154.78
210.84
12/14
249.54
162.35
210.64
12/15
307.28
155.18
203.30
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
drewindustries.com
2015 Annual Report
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