Management’s Discussion and Analysis of Financial Condition  and Results of Operations (Continued) Steel Prices RESULTS OF OPERATIONS Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 Consolidated Highlights 10 • On July 17, the Company completed the acquisition of Kansas-based LTM Manufacturing, LLC (“LTM”), a manufacturer of innovative RV products with annual sales of approximately $4.5 million, for $4.1 million. • On October 3, the Company completed the acquisition of Indiana-based ET&T Frames, Inc. (“ET&T”), a manufacturer of specialty chassis and towable RV chassis products with annual sales of approximately $7 million, for $3.6 million. • Net sales grew by 9 percent. • Operating profit margin increased to 9.7 percent for 2003, from 9.0 percent in 2002. • Income from continuing operations was up 23 percent in 2003, to a record $19.4 million. Net sales and operating profit by segment, as a percent of the total, are as follows: Net sales and operating profit are as follows  (in thousands) : Year Ended December 31, 2003 2002 2001 Net sales: RV segment $219,505 $171,094 $107,504 MH segment 133,611 154,337 147,266 Total $353,116 $325,431 $254,770 Operating profit: RV segment $ 24,779 $ 16,162 $ 9,208 MH segment 14,358 16,900 15,940 Amortization of intangibles (782) (746) (2,591) Corporate and other (4,078) (3,103) (2,212) Total $ 34,277 $ 29,213 $ 20,345 Year Ended December 31, 2003 2002 2001 Net sales: RV segment 62% 53% 42% MH segment 38% 47% 58% Total 100% 100% 100% Operating profit: RV segment 72% 55% 45% MH segment 42% 58% 78% Amortization of intangibles (2)% (2)% (12)% Corporate and other (12)% (11)% (11)% Total 100% 100% 100% In mid December 2003 and continuing into 2004, the Company was notified by its steel suppliers of unprecedented steel cost increases, which through February 2004 have aggregated more than 60 percent. Steel is one of the Company’s primary raw materials. This situation apparently arose as the result of an increase in world-wide steel demand, particularly in China. In addition, due to the weakened value of the United States dollar, which has declined about 15 percent versus the Euro over the last year, and the increased cost of oceanic shipping, it has become uneconomical to import steel. In response to the steel cost increases, the Company took the following immediate actions: a) contacted other steel vendors, both domestic and foreign, in an attempt to obtain better pricing, but to no avail; b) ordered as much steel as possible in December 2003, and January and February 2004, before the monthly cost increases became effective in each month; c) raised prices to customers, which was followed with a second round of price increases; and d) cut operating costs wherever possible. These actions were taken quickly and as a result, the steel cost increases to date are not expected to have a significant effect on 2004 results.