Drew Industries Incorporated (NYSE: DW), a leading supplier of components for recreational vehicles (RVs) and manufactured homes, today announced that its wholly-owned subsidiary, Lippert Components, Inc., has entered into a 6-year aluminum extrusion supply agreement with Atrium Windows and Doors, Inc. (“Atrium”), a Dallas, Texas based aluminum extrusion business. Concurrently, Lippert Components sold certain of its aluminum extrusion assets to Atrium.

“Extruded aluminum is a key raw material for us, and identifying a strong supplier such as Atrium was critical in our search for a new third-party supplier,” said Scott Mereness, Drew’s President. “We were able to reach an agreement with Atrium to supply us with a portion of our extruded aluminum requirements over the next 6 years at a competitive market price.”

“We look forward to this new supplier relationship with Lippert Components,” added Brian Slobodow, Chief Operating Officer of Atrium. “Atrium has been extruding aluminum for over 35 years, with a history of producing high quality products. This additional extrusion volume will be produced at our existing Texas facility and will significantly increase the capacity utilization of our plant.”

Drew also reported that it has sold certain of its aluminum extrusion assets to Atrium for $7.5 million, payable over the next four years, plus contingent consideration of $1.25 million once 95 million pounds of aluminum extruded products are purchased during the term of the supply agreement. Drew anticipates recording a pre-tax loss on this sale of approximately $2 million in the second quarter of 2014.

Scott Mereness concluded, “As part of our ongoing evaluation of capacity and asset utilization, we concluded that our aluminum extrusion assets were not meeting our internal financial standards. The sale of our extrusion related assets will free up needed manufacturing space, as well as allow management to focus on other opportunities with higher growth potential. The outsourcing of these aluminum extrusion requirements to Atrium will immediately be accretive to earnings.”

Source: Drew Industries Inc., Inside INdiana Business