MANUFACTURED HOMES Approximately 22 million people live in nearly 10 million manufactured homes across the United States. Manufactured homes today are a far cry from the “mobile homes” of the past. These homes come in a wide range of styles and sizes and offer many of the advantages of traditional homes, but at a lower cost. For millions of Americans, manufactured homes will continue to provide quality, affordable housing, and the opportunity to realize the American dream of home ownership. Easy credit in the 1990s, high interest rates for manufactured homes versus site built homes, and excess inventory  of new and repossessed homes have contributed to the five year, 65 percent decline in the manufactured housing industry. However, it appears that the slump in the MH industry finally may be nearing a bottom, as the level of repos- sessions of manufactured homes and the level of inventory of both repossessed homes and new homes have declined significantly from last year. Throughout the five-year industry downturn, Drew’s manufactured housing products segment has remained highly profitable as a result of a strategy of maximizing operating efficiencies, pursuing acquisitions and concentrating on market share gains. Drew is a leading supplier to the manufactured housing industry of vinyl and aluminum windows and screens, chassis, chassis parts, and bath and shower units. Net sales in Drew’s MH segment declined 13 percent to $133.6 million for 2003, better than the industry-wide 22 percent decline in production of manufactured homes to 131,000 homes in 2003. Despite the market dynamics of the past five years, manufactured housing remains a significant profit and growth opportunity for Drew, particularly with a pending recovery in sight. Segment Results MH Products Drew's Sales Content  Per Home Produced by Industry $ 916 $ 763 $ 548 $ 606 1999 2000 2001 2002 2003 $ 1,021 2003 ANNUAL REPORT 7 DREW INDUSTRIES INCORPORATED 22 million people reside in 10 million manufactured  homes across the U.S. $10 million increase For every additional 10,000 homes produced by the MH industry in 2004 over 2003  levels, Drew’s sales would likely increase $10 million, based on Drew’s current sales content per home. With little new fixed overhead required to increase production, this growth should be at favorable margins.