Rule 424(b)(3)
Registration No. 333-98831
PROSPECTUS
850,000 SHARES
DREW INDUSTRIES INCORPORATED
COMMON STOCK
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, the
selling stockholder may sell from time to time up to an aggregate of 850,000
shares of common stock of Drew Industries Incorporated, a Delaware corporation.
The selling stockholder acquired his Drew shares in connection with the
acquisition by Drew of Lippert Components Inc., in 1997.
The selling stockholder may sell all or any portion of his shares of
common stock in one or more transactions on the American Stock Exchange or in
private, negotiated transactions. The selling stockholder will determine the
prices at which he sells his shares. Drew will not receive any of the proceeds
from the sale of the shares by the selling stockholder, but we will pay all
registration expenses. The selling stockholder will pay all selling expenses,
including all underwriting discounts and selling commissions.
The common stock is listed on the American Stock Exchange under the symbol
"DW." On September 5, 2002, the last reported sale price of the common stock on
the American Stock Exchange was $15.85 per share.
THIS INVESTMENT INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
The shares of Drew common stock may be offered by the selling stockholder
in negotiated transactions or otherwise at market prices prevailing at the time
of sale or at negotiated prices. The selling stockholder may be deemed to be an
"underwriter" as defined in the Securities Act of 1933, as amended (the
"Securities Act"). If any broker-dealers are used by the selling stockholder,
any commissions paid to broker-dealers and, if broker-dealers purchase any
shares as principals, any profits received by such broker-dealers on the resale
of shares of Drew common stock may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any profits realized by the
selling stockholder may be deemed to be underwriting commissions.
The selling stockholder has advised us that he has entered into an
arrangement with Jones & Associates, Inc. ("Jones"), an NASD registered
broker-dealer, to place the shares, on a best efforts basis, in one or more
block transaction in which Jones would receive its usual and customary
commission of five cents per share. Jones may be deemed to be an "underwriter"
in connection with such transactions and the commissions that it receives may be
deemed to be underwriting discounts and commissions under the Securities Act.
This prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, any of the securities offered hereby by any person in any
jurisdiction in which it is unlawful for such person to make such an offering or
solicitation.
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Neither the Securities and Exchange Commission (the "SEC") nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The date of this prospectus is September 12, 2002.
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TABLE OF CONTENTS
Page
Where You Can Find More Information............................................4
Special Note Regarding Forward-Looking Statements..............................5
The Company....................................................................6
Risk Factors...................................................................7
Use Of Proceeds...............................................................10
Description Of Common Stock...................................................11
Selling Stockholder...........................................................12
Plan Of Distribution..........................................................14
Validity Of Securities........................................................15
Experts.......................................................................15
You should rely only on the information contained or incorporated by
reference in this prospectus. Drew has not authorized anyone to provide you with
different information. You should not assume that the information contained in
this prospectus is accurate as of any date other than the date on the front of
this prospectus.
As used in this prospectus, unless the context requires otherwise: "we," "us,"
"our", the "Company" and "Drew" means Drew Industries Incorporated and/or its
predecessors and consolidated subsidiaries.
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WHERE YOU CAN FIND MORE INFORMATION
Drew files annual, quarterly and current reports, proxy statements and
other information with the SEC. Drew's SEC filings are available to the public
over the Internet at the SEC's web site at http://www.sec.gov. You may also read
and copy any document Drew files at the SEC's public reference facility in
Washington, D.C. at the following address:
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference facilities.
Reports, proxy statements and other information concerning us can also be
inspected and copied at the offices of the American Stock Exchange at 86 Trinity
Place, New York, NY 10006.
We have elected to incorporate by reference into this prospectus the
following documents (including the documents incorporated by reference therein)
filed by Drew with the SEC:
Annual Report on Form 10-K for the fiscal year ended December 31, 2001,
filed with the SEC on March 27, 2002;
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2002,
filed with the SEC on May 15, 2002;
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002,
filed with the SEC on August 9, 2002; and
Current Report on Form 8-K filed with the SEC on August 29, 2002.
Any statement made in a document incorporated by reference or deemed
incorporated herein by reference is deemed to be modified or superseded for
purposes of this prospectus if a statement contained in this prospectus or in
any other subsequently filed document which also is incorporated or deemed
incorporated by reference herein modifies or supersedes that statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus. We also incorporate by
reference all documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") after the date of this
prospectus and prior to the termination of this offering.
You may request a copy of these filings, in most cases without exhibits,
at no cost by writing or telephoning us at the following address:
Harvey J. Kaplan, Treasurer
200 Mamaroneck Avenue
White Plains, New York 10601
(914) 428-9098
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SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain
certain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to financial condition,
results of operations, business strategies, operating efficiencies or synergies,
competitive position, growth opportunities for existing products, plans and
objectives of management, markets for Drew common stock and other matters.
Statements in this prospectus, including those incorporated by reference, that
are not historical facts are "forward-looking statements" for the purpose of the
safe harbor provided by Section 21E of the Exchange Act and Section 27A of the
Securities Act. Forward-looking statements, including, without limitation, those
relating to our future business prospects, revenues and income, wherever they
occur in this prospectus, are necessarily estimates reflecting the best judgment
of our senior management and involve a number of risks and uncertainties that
could cause actual results to differ materially from those suggested by
forward-looking statements. You should consider forward-looking statements,
therefore, in light of various important factors, including those set forth in
this prospectus. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking
statements include, without limitation:
o the effect of national and regional economic conditions and consumer
confidence on the sale of manufactured homes and RV's;
o pricing pressures due to competition;
o raw material costs, particularly aluminum, vinyl, steel, glass, ABS
resin and tires;
o availability of retail and wholesale financing for manufactured
homes;
o availability and costs of labor;
o inventory levels of retailers and manufacturers;
o interest rates; and
o the effect of adverse weather conditions on retail sales.
Words such as "estimate," "project," "plan," "intend," "expect," "believe"
and similar expressions are intended to identify forward-looking statements. You
will find these forward-looking statements at various places throughout this
prospectus and the documents incorporated by reference, including any
amendments. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they were made. We
do not undertake any obligation to publicly update or release any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this prospectus or to reflect the occurrence of unanticipated events.
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THE COMPANY
Drew 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 200 Mamaroneck Avenue, White Plains, New York 10601;
telephone number (914) 428-9098. The Common Stock of the Company is traded on
the American Stock Exchange (symbol: DW). Our website is www.drewindustries.com.
The information contained on our website is not incorporated by reference in the
prospectus.
Drew has two operating segments: the manufactured housing products segment
(the "MH Segment") and the recreational vehicle products segment (the "RV
Segment"). Drew's wholly-owned subsidiaries, Kinro, Inc. ("Kinro") and Lippert
Components, Inc. ("Lippert"), have operations in both the MH Segment and the RV
Segment, while Lippert's subsidiaries, Lippert Tire & Axle, Inc. ("LTA") and
Coil Clip, Inc. ("Coil Clip"), operate entirely within the MH Segment.
Kinro manufactures and markets aluminum and vinyl windows and
thermo-formed bath and shower units for manufactured homes, and aluminum windows
and doors for recreational vehicles. Lippert manufactures and markets steel
chassis and steel chassis parts and galvanized roofing for manufactured homes,
and manufactures and markets steel chassis and steel chassis parts for
recreational vehicles. LTA manufactures and markets new axles, and refurbishes
and distributes used axles, and distributes new and refurbished tires, for
manufactured homes. Coil Clip produces coil steel and sheet steel components,
certain of which are supplied to Lippert. Several of Drew's customers produce
both manufactured homes and recreational vehicles, and Drew supplies products
having similar characteristics for use in both these lines of business. Drew
currently operates 41 manufacturing facilities in 18 states and one in Canada.
Drew has approximately 2,900 employees. Drew's manufactured housing
products are sold by 19 sales personnel, working exclusively for the Company, to
major builders of manufactured homes, and Drew's recreational vehicles products
are sold by 6 sales personnel, working exclusively for Drew, to major
manufacturers of recreational vehicles.
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RISK FACTORS
Industry Risk Factors
Continued reductions in the availability of financing for manufactured
homes and increases in the costs of this financing could limit the ability
of consumers to purchase manufactured homes, resulting in reduced demand
for our products.
Frequently, manufactured homes are purchased and the land on which
they are placed is leased. Loans used to finance the purchase of manufactured
homes without land have shorter terms and higher interest rates, and may be more
difficult to obtain than loans for site-built homes. The availability of loans
for manufactured homes has been limited because several lenders have curtailed
or discontinued these loans. In addition, many lending institutions have
increased interest rates and raised credit standards. The availability, cost and
terms of these loans are also dependent on economic conditions, lending
practices of financial institutions, governmental policies, and other factors
which are beyond our control. Continued reductions in the availability of
financing for manufactured homes and increases in the costs of this financing
could limit the ability of consumers to purchase manufactured homes, resulting
in reduced demand for our products.
Reductions in the availability of wholesale financing may prevent
retailers from carrying an adequate inventory of homes, which could reduce
demand for our products.
Retailers of manufactured homes generally finance their purchases of
inventory with financing provided by lending institutions. In the last few
years, several lenders have curtailed or discontinued these loans. Reductions in
the availability of wholesale financing may prevent retailers from carrying an
adequate inventory of homes, which could reduce demand for our products.
Excess inventories by retailers and manufacturers could cause a decline in
the demand for our products.
Retailers and manufacturers of recreational vehicles and
manufactured homes may carry excess inventory, as they periodically have in the
past. When excess inventory is sold, the manufacturers of recreational vehicles
and manufactured homes may reduce production of new vehicles and homes, which
could cause a decline in demand for our products.
High levels of repossessions of manufactured homes could cause
manufacturers to reduce production of new manufactured homes, resulting in
reduced demand for our products
Lower credit standards by lenders several years ago, and recent
economic conditions have caused an increase in the number of manufactured homes
repossessed by lenders. Repossessed homes are resold by lenders, often at
substantially reduced prices, which reduces the demand for new manufactured
homes. Continued, or increased, levels of repossessions could cause
manufacturers to reduce production of new manufactured homes, resulting in
reduced demand for our products.
Business cycles may cause substantial fluctuations in our operating
results
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Both the manufactured housing and recreational vehicle industries
are impacted by business cycles and this may cause substantial fluctuations in
our operating results. Business cycles may depend upon general economic
conditions, interest rates, consumer confidence, demographic changes, and other
factors beyond Drew's control.
Changes in zoning regulations for manufactured homes could lead to reduced
demand for our products
Manufactured housing communities and individual home placements are
subject to local zoning regulations. In the past, there has been resistance by
local property owners to zoning ordinances allowing the location of manufactured
homes in areas comprised of conventional residences. Continued resistance to
these zoning ordinances could have an adverse impact on sales of manufactured
homes, which could reduce demand for our products.
Gasoline shortages, or higher prices for gasoline could lead to reduced
demand for our products
Increases in the price of gasoline, or anticipation of potential
fuel shortages, adversely effect consumer demand for recreational vehicles,
which could reduce demand for our products.
The financial condition of several of our significant customers could
adversely impact our financial condition and operating results
The financial condition of several of our significant customers has
been adversely impacted by a decline in production in the manufactured housing
industry. Continued or increased financial difficulties of our significant
customers could result in reduced demand for our products and losses due to the
inability to collect accounts receivable.
Company-specific risk factors
Competitive pressures could reduce demand for our products
We have several competitors. Competitors may lower prices or develop
product improvements which could reduce demand for our products.
Increases in raw material costs could adversely impact our financial
condition and operating results
Drew's primary raw materials are steel, aluminum, vinyl, glass and
ABS resin. Costs of these raw materials fluctuate. Because competition may limit
the amount of increases in raw material costs that can be passed through to
customers in the form of price increases, this could adversely impact our
financial condition and operating results.
Increases in labor rates or the availability of labor could adversely
impact our financial condition and operating results
Certain geographic regions in which Drew has manufacturing
facilities have very low unemployment rates. This could result in shortages of
qualified employees and increased labor costs. Because competition may limit the
amount of labor increases that can be passed
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through to customers in the form of price increases, increased labor costs
could adversely impact our financial condition and operating results.
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USE OF PROCEEDS
The selling stockholder will receive all of the proceeds from the sale of
the Drew common stock offered by this prospectus. Drew will not receive any of
the proceeds from the sale of the shares by the selling stockholder.
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DESCRIPTION OF COMMON STOCK
Drew's authorized capital stock is 20,000,000 shares of common stock,
$0.01 par value. At August 23, 2002, 9,827,363 shares of common stock were
outstanding. In addition to the summary of our common stock that follows, we
encourage you to review our Restated Certificate of Incorporation, as amended,
and Bylaws, which we have filed with the SEC.
Holders of our common stock are entitled to one vote for each share held
of record on all matters on which stockholders are generally entitled to vote.
The vote of the holders of a majority of the stock represented at a meeting at
which a quorum is present is generally required to take stockholder action,
unless a greater vote is required by law. Directors are elected by a plurality
of the votes cast at any election and there is no cumulative voting of shares.
Holders of common stock have no preemptive rights. Subject to applicable
laws, holders of common stock are entitled to such dividends as may be declared
by our board of directors. The common stock is not entitled to any sinking fund,
redemption or conversion provisions. Upon our dissolution, liquidation or
winding up, the holders of our common stock are entitled to share ratably in our
net assets remaining after the payment of all creditors. The outstanding shares
of common stock are duly authorized, validly issued, fully paid and
nonassessable.
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SELLING STOCKHOLDER
The following table sets forth the selling stockholder's name, number of
shares beneficially owned and percent of outstanding shares as of August 23,
2002.
Number of Shares
Number of Shares Percent of Registered for Sale
Name of Selling Stockholder Beneficially Owned Outstanding Shares Hereby (1)
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L. Douglas Lippert 2,028,434 (2) 18.8% (3) 850,000 (4)
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(1) This prospectus will also cover any additional shares of common stock
which become issuable in connection with the shares registered for sale hereby
by reason of any stock dividend, stock split, merger, consolidation,
recapitalization or other similar transaction effected without the receipt of
consideration that results in an increase in the number of outstanding shares of
common stock.
(2) Includes 574,119 shares held by Mr. Lippert as Trustee for trusts for
the benefit of members of Mr. Lippert's immediate family, over which Mr. Lippert
has sole voting and dispositive power. Although Mr. Lippert disclaims any
pecuniary interest in such shares, 230,000 of such shares are offered under this
prospectus on behalf of the beneficiaries of two of such trusts. Pursuant to
Rules 13-1(f)(1)-(2) of Regulation 13-D of the General Rules and Regulations
under the Exchange Act, on October 17, 1997, Mr. Lippert, together with certain
other persons, jointly filed a single Schedule 13-D Statement (as amended) with
respect to the securities listed in the foregoing table. Such persons made the
single, joint filing because they may be deemed to constitute a "group" within
the meaning of Section 13(d)(3) of the Exchange Act, although neither the fact
of the filing nor anything contained therein shall be deemed to be an admission
by such persons that a group exists. In November 1999, Mr. Lippert was granted
an option pursuant to Drew's Stock Option Plan to purchase 50,000 shares of
Common Stock at $9.3125 per share. Although no part of such option has been
exercised, all shares subject to such option are included in the above table as
beneficially owned.
(3) 10.9% following completion of this offering.
(4) Includes 230,000 shares offered on behalf of the beneficiaries of two
trusts for the benefit of members of Mr. Lippert's family, of which Mr. Lippert
is Trustee. Mr. Lippert disclaims any pecuniary interest in the proceeds from
the sale of such shares.
Mr. Lippert has been a director of Drew since 1997. He has been President
and Chief Executive Officer of Lippert Components Inc., a Drew subsidiary, since
1997. Mr. Lippert acquired the shares that he is offering under this prospectus
from us in 1997 as part of the purchase price for our acquisition of Lippert
Components, Inc.
We prepared this table based on the information supplied to us by the
selling stockholder, and we have not sought to verify such information.
Because the selling stockholder may offer all or some of his shares of
Drew common stock from time to time, we cannot estimate the number of shares of
Drew common stock that will be held by the
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selling stockholder upon the termination of any particular offering by such
selling stockholder. See "Plan of Distribution."
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PLAN OF DISTRIBUTION
The selling stockholder intends to distribute the shares of Drew common
stock from time to time only as follows (if at all):
o to or through underwriters, brokers or dealers;
o directly in privately negotiated transactions to one or more other
purchasers;
o through agents on a best-efforts basis; or
o otherwise through a combination of any such methods of sale.
If the selling stockholder sells the shares of Drew common stock through
underwriters, dealers, brokers or agents, such underwriters, dealers, brokers or
agents may receive compensation in the form of discounts, concessions or
commissions from the selling stockholder and/or the purchasers of the shares of
Drew common stock.
The shares of Drew common stock may be sold from time to time:
o in one or more transactions at a fixed price or prices, which may be
changed;
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices;
o at varying prices determined at the time of sale; or
o at negotiated prices.
Such sales may be effected in transactions:
o on any national securities exchange or quotation service on which
Drew common stock may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in block transactions in which the broker or dealer so engaged will
attempt to sell the shares of Drew common stock as agent but may
position and resell a portion of the block as principal to
facilitate the transaction, or in crosses, in which the same broker
acts as an agent on both sides of the trade;
o in transactions otherwise than on such exchanges or services or in
the over-the-counter market;
o through the writing of options; or
o through other types of transactions.
In connection with sales of the Drew common stock or otherwise, the
selling stockholder may enter into hedging transactions with brokers-dealers or
others, which may in turn engage in short sales of the Drew common stock in the
course of hedging the positions they assume. The selling stockholder may loan or
pledge Drew common stock to brokers-dealers or others that in turn may sell such
securities. The
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selling stockholder may pledge or grant a security interest in some or all of
the Drew common stock owned by him and, if he defaults in the performance of his
secured obligations, the pledgees or secured parties may offer and sell the Drew
common stock from time to time pursuant to this prospectus. The selling
stockholder also may transfer and donate shares of Drew common stock in other
circumstances, in which case the transferees, donees, pledgees or other
successors in interest will be the selling stockholder for purposes of the
prospectus. In addition, any shares of Drew common stock covered by this
prospectus that qualify for sale pursuant to Rule 144, Rule 144A or any other
available exemption from registration under the Securities Act may be sold under
Rule 144, Rule 144A or such other available exemption.
At the time a particular offering of shares of Drew common stock is made,
a prospectus supplement, if required, will be distributed, which will set forth
the number of shares of Drew common stock being offered and the terms of the
offering, including the name or names of any underwriters, dealers, brokers or
agents, if any, and any discounts, commissions or concessions allowed or
reallowed to be paid to brokers or dealers.
The selling stockholder and any underwriters, dealers, brokers or agents
who participate in the distribution of the shares of Drew common stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profits on the sale of the shares of Drew common stock by them and any
discounts, commissions or concessions received by any such underwriters,
dealers, brokers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.
Without limiting the generality of the foregoing, the selling stockholder
has advised us that he has entered into an arrangement with Jones & Associates,
Inc. ("Jones"), an NASD registered broker-dealer, to place the shares, on a best
efforts basis, in one or more block transaction in which Jones would receive its
usual and customary commission of five cents per share. Jones may be deemed to
be an "underwriter" in connection with such transactions and the commissions
that it receives may be deemed to be underwriting discounts and commissions
under the Securities Act.
The selling stockholder and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of the shares of Drew
common stock by the selling stockholder and any other such person. Furthermore,
Regulation M under the Exchange Act may restrict the ability of any person
engaged in a distribution of the shares of Drew common stock to engage in
market-making activities with respect to the shares of Drew common stock being
distributed for a period of up to five business days prior to the commencement
of such distribution. All of the foregoing may affect the marketability of the
shares of Drew common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of Drew common stock.
Drew will pay all expenses of the shelf registration statement, except
that the selling stockholder will pay any broker's commission, agency fee or
underwriter's discount or commission.
VALIDITY OF SECURITIES
The validity of the securities offered by this prospectus will be passed
upon by Phillips Nizer LLP, New York, New York. As of the date hereof, Harvey F.
Milman, a partner of Phillips Nizer LLP, beneficially owned 26,900 shares of
Drew common stock.
EXPERTS
The consolidated financial statements and financial statement schedule of
Drew as of December 31, 2001 and 2000, and for each of the years in the
three-year period ended December 31, 2001, have been incorporated by reference
in this prospectus in reliance upon the report of KPMG LLP, independent
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certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
PROSPECTUS
You may rely on the information contained in this prospectus. Drew has not
authorized anyone to provide information different from that contained in this
prospectus. Neither the delivery of this prospectus nor sale of ordinary shares
means that information contained in this prospectus is correct after the date of
this prospectus. This prospectus is not an offer to sell or a solicitation of an
offer to buy these ordinary shares in any circumstances under which the offer or
solicitation is unlawful.
September 12, 2002