Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2003 2002 2001 Cash flows from operating activities: Net income (loss) $ 19,423 $(14,598) $ 8,934 Adjustments to reconcile net income (loss) to cash flows  provided by operating activities: Cumulative effect of change in accounting principle  for goodwill, net of taxes 30,162 Discontinued operations, net of taxes (48) 200 896 Income from continuing operations 19,375 15,764 9,830 Provision for doubtful accounts 106 837 181 Depreciation and amortization 7,863 7,332 8,332 Deferred taxes 383 1,748 (37) Loss on disposal of fixed assets 92 125 156 Deferred stock compensation 411 83 Changes in assets and liabilities, net of business acquisitions: Accounts receivable, net (1,107) (3,313) 3,430 Inventories 218 (11,501) 4,244 Prepaid expenses and other assets 2,524 (4,542) (692) Accounts payable, accrued expenses and other liabilities 926 4,534 1,516 Net cash flows provided by continuing operating activities 30,791 11,067 26,960 Income (loss) from discontinued operations 48 (200) (896) Changes in discontinued operations 702 1,333 2,102 Net cash flows provided by operating activities 31,541 12,200 28,166 Cash flows from investing activities: Capital expenditures (5,073) (10,538) (8,194) Business acquisitions, net of cash acquired (7,397) (2,070) (11,492) Proceeds from sales of fixed assets 78 595 2,545 Net cash flows used for investing activities (12,392) (12,013) (17,141) Cash flows from financing activities: Proceeds from line of credit and other borrowings 31,550 77,350 78,916 Repayments under line of credit and other borrowings (45,949) (81,866) (88,598) Exercise of stock options 3,715 3,348 112 Other 106 (490) Net cash flows used for financing activities (10,684) (1,062) (10,060) Net increase (decrease) in cash 8,465 (875) 965 Cash and cash equivalents at beginning of year 316 1,191 226 Cash and cash equivalents at end of year $ 8,781 $ 316 $ 1,191 Supplemental disclosure of cash flows information: Cash paid during the year for: Interest on debt $ 3,071 $ 3,895 $ 4,567 Income taxes, net of refunds $ 9,449 $ 10,038 $ 4,998 The accompanying notes are an integral part of these consolidated financial statements. DREW INDUSTRIES INCORPORATED 2003 ANNUAL REPORT 21