0000763744FALSE00007637442023-08-082023-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2023
LCI INDUSTRIES
(Exact name of registrant as specified in its charter)
Delaware001-1364613-3250533
(State or other jurisdiction of incorporation)(Commission File Number)(I.R.S. Employer
Identification No.)
3501 County Road 6 East, Elkhart,Indiana46514
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:(574)535-1125
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valueLCIINew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition

On August 8, 2023, LCI Industries issued a press release setting forth LCI Industries' second quarter 2023 results. A copy of the press release is attached hereto as Exhibit 99.1.

An investor presentation that LCI Industries will refer to during its conference call to discuss the results is attached hereto as Exhibit 99.2 and will be posted on LCI Industries' investor relations website in advance of the call.

The foregoing information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition." Such information, including the Exhibits attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits

Exhibit Index:
Press Release dated August 8, 2023
Investor Presentation dated August 8, 2023
104Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LCI INDUSTRIES
(Registrant)

By: /s/ Lillian D. Etzkorn
Lillian D. Etzkorn
Chief Financial Officer

Dated: August 8, 2023



    Exhibit 99.1
FOR IMMEDIATE RELEASE
lciia.jpg
Contact: Lillian D. Etzkorn, CFO
Phone: (574) 535-1125
E Mail: LCII@lci1.com

LCI INDUSTRIES REPORTS SECOND QUARTER FINANCIAL RESULTS
Diversification and operational focus leads to sequential margin expansion


Second Quarter 2023 Highlights
•Net sales of $1.0 billion in the second quarter, down 34% year-over-year
•Net income of $33 million, or $1.31 per diluted share, in the second quarter, down 78% year-over-year
•EBITDA of $88 million, down 65% year-over-year
•Continued execution of diversification strategy with North American RV OEM net sales less than 42% of total net sales for twelve months ended June 30, 2023
•Inventory reduction of $200 million year-to-date through June 30, 2023
•Net repayments of long-term indebtedness of $179 million year-to-date through June 30, 2023.
•Quarterly dividend of $1.05 per share paid, totaling $27 million in the second quarter

Elkhart, Indiana - August 8, 2023 - LCI Industries (NYSE: LCII) which, through its wholly-owned subsidiary, Lippert Components, Inc. ("Lippert"), supplies a broad array of highly engineered components for the leading original equipment manufacturers ("OEMs") in the recreation, transportation products, and housing markets, and the related aftermarkets of those industries, today reported second quarter 2023 results.

“Our operational focus and consistent execution on diversification have remained the cornerstone of our performance, supporting solid results in light of significant year-over-year drops in wholesale shipments. Execution on diversification has continued to pay off, with strength across our aftermarket, international, marine, transportation, and housing markets helping partially offset softer sales in North American RV. Specifically, we saw meaningful margin expansion in our Aftermarket segment for the quarter,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer. “Further, our leadership teams have been hard at work to right-size the business, implementing hundreds of continuous improvement projects, kicking off sourcing initiatives to capture lower raw material costs, and investing over $50 million in automation over the past 18 months to drive new efficiencies. These actions, combined with reduced commodity and freight expenses, have put our cost structure into better alignment, leading to another quarter of sequential margin expansion.”

“We are continuing to flex operations to align capacity and labor with shifting OEM production schedules, while also supporting the areas of our business that remain strong. With significant inventory reductions year-to-date, we are generating sufficient cash to pay down debt and further strengthen our balance sheet amidst uncertain operating conditions,” Lippert continued.

“The demand environment is improving, with order forecasts trending slightly upwards from the last quarter, dealer destocking beginning to slow, and older inventory clearing out as the latest models enter the market. Millions more campers hit the road this Memorial Day and Fourth of July versus 2022, and with RV trips being almost 50% cheaper versus traditional modes of vacation, we see a bright road ahead of for the future of the outdoor lifestyle. Most importantly, we would like to give a heartfelt thank you to our team members for their commitment to driving our business forward and managing through a very challenging environment this quarter,” Lippert concluded.

Second Quarter 2023 Results

Consolidated net sales for the second quarter of 2023 were $1.0 billion, a decrease of 34 percent from 2022 second quarter net sales of $1.5 billion. Net income in the second quarter of 2023 was $33.4 million, or $1.31 per diluted


share, compared to net income of $154.5 million, or $6.06 per diluted share, in the second quarter of 2022. EBITDA in the second quarter of 2023 was $88.2 million, compared to EBITDA of $250.7 million in the second quarter of 2022. Additional information regarding EBITDA, as well as a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure of net income, is provided in the "Supplementary Information - Reconciliation of Non-GAAP Measures" section below.

The decrease in year-over-year net sales for the second quarter of 2023 was primarily driven by decreased North American RV wholesale shipments and decreased selling prices which are indexed to select commodities, partially offset by acquisitions. Net sales from acquisitions completed in the twelve months ended June 30, 2023 contributed approximately $17.2 million in the second quarter of 2023.

July 2023 Results

July 2023 consolidated net sales were approximately $295 million, down 20 percent from July 2022, primarily due to an approximate 30 percent decline in North American RV wholesale shipments compared to July 2022. July 2023 results were favorably impacted by our diversification efforts outside of the North American RV market, which made up approximately 38 percent of July 2023 consolidated net sales.

OEM Segment

RV OEM
RV OEM net sales for the second quarter of 2023 were $409.9 million, down 55% compared to the same prior year period, driven by a nearly 44% decline in North American wholesale shipments, partially offset by average product content expansion in towables and motorhomes. For the twelve months ended June 30, 2023, content per North American travel trailer and fifth-wheel RVs increased 2% year-over-year to $5,487, and content per motorized unit increased 6% year-over-year to $3,760.

Adjacent Industries OEM
Adjacent Industries OEM net sales for the second quarter of 2023 were $349.1 million, down 6% year-over-year, primarily due to lower sales to North American marine OEMs and in manufactured housing. North American marine OEM net sales in the second quarter of 2023 were $95.8 million, down 28% year-over-year. Our average product content per North American power boat for the twelve months ended June 30, 2023, decreased 17% year-over-year to $1,457, primarily due to price decreases associated with year-over-year declining input costs and changes in product mix.

Aftermarket Segment

Aftermarket net sales for the second quarter of 2023 were $255.6 million, down 2% year-over-year, driven by inflationary pressures impacting consumer demand. Operating profit of the Aftermarket Segment was $36.5 million in the second quarter of 2023, or 14.3 percent, compared to $28.2 million, or 10.9 percent in the same period in 2022. The operating profit expansion of the Aftermarket Segment for the quarter was driven by decreased commodity costs and targeted price increases.

Income Taxes

The Company's effective tax rate was 25.6 percent for the quarter ended June 30, 2023, compared to 27.3 percent for the quarter ended June 30, 2022. The rate was benefited by an increase related to the cash surrender value of life insurance.

Balance Sheet and Other Items

At June 30, 2023, the Company's cash and cash equivalents balance was $22.1 million, compared to $47.5 million at December 31, 2022. The Company used $53.2 million for dividend payments to shareholders, $34.1 million for capital expenditures, and $25.9 million for acquisitions in the six months ended June 30, 2023. The Company also


made $168.5 million in net repayments under its revolving credit facility and $10.7 million in repayments under its term loan and other borrowings in the six months ended June 30, 2023.
The Company's outstanding long-term indebtedness, including current maturities, was $943.5 million at June 30, 2023, and the Company remained in compliance with its debt covenants.

Conference Call & Webcast

LCI Industries will host a conference call to discuss its second quarter results on Tuesday, August 8, 2023, at 8:30 a.m. Eastern time, which may be accessed by dialing (833) 470-1428 for participants in the U.S. and (404) 975-4839 for participants outside the U.S. using the required conference ID 458725. Due to the high volume of companies reporting earnings at this time, please be prepared for hold times of up to 15 minutes when dialing in to the call. In addition, an online, real-time webcast, as well as a supplemental earnings presentation, can be accessed on the Company's website, www.investors.lci1.com.

A replay of the conference call will be available for two weeks by dialing (866) 813-9403 for participants in the U.S. and (929) 458-6194 for participants outside the U.S. and referencing access code 869147. A replay of the webcast will be available on the Company’s website immediately following the conclusion of the call.

About LCI Industries

LCI Industries, through its wholly-owned subsidiary, Lippert, supplies, domestically and internationally, a broad array of highly engineered components for the leading OEMs in the recreation, transportation products, and housing markets, consisting primarily of recreational vehicles and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; trains; manufactured homes; and modular housing. The Company also supplies engineered components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet. Lippert's products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components; appliances; air conditioners; televisions and sound systems; tankless water heaters; and other accessories. Additional information about Lippert and its products can be found at www.lippert.com.

Forward-Looking Statements

This press release contains certain "forward-looking statements" with respect to our financial condition, results of operations, profitability, margin growth, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company's common stock, the impact of legal proceedings, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.

Forward-looking statements, including, without limitation, those relating to our future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, covenant compliance, retail and wholesale demand, integration of acquisitions, R&D investments, and industry trends, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, in addition to other matters described in this press release, the impacts of COVID-19, or other future pandemics, the Russia-Ukraine war, and heightened tensions between China and Taiwan on the global economy and on the Company's customers, suppliers, employees, business and cash flows, pricing pressures due to domestic and foreign competition, costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, seasonality and cyclicality in the industries to


which we sell our products, availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, team member benefits, team member retention, realization and impact of expansion plans, efficiency improvements and cost reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational and financial risks related to conducting business internationally, and increased governmental regulation and oversight, information technology performance and security, the ability to protect intellectual property, warranty and product liability claims or product recalls, interest rates, oil and gasoline prices, and availability, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

###



LCI INDUSTRIES
OPERATING RESULTS
(unaudited)
 Three Months Ended 
June 30,		Six Months Ended 
June 30,		Last Twelve
 2023202220232022Months
(In thousands, except per share amounts)  
Net sales$1,014,639 $1,536,150 $1,987,949 $3,180,718 $4,014,374 
Cost of sales796,519 1,127,065 1,583,758 2,307,390 3,210,222 
Gross profit218,120 409,085 404,191 873,328 804,152 
Selling, general and administrative expenses162,946 190,296 328,974 384,838 664,397 
Operating profit55,174 218,789 75,217 488,490 139,755 
Interest expense, net10,249 6,191 20,643 12,443 35,773 
Income before income taxes44,925 212,598 54,574 476,047 103,982 
Provision for income taxes11,499 58,068 13,889 125,336 19,034 
Net income$33,426 $154,530 $40,685 $350,711 $84,948 
Net income per common share:     
Basic$1.32 $6.07 $1.61 $13.82 $3.35 
Diluted$1.31 $6.06 $1.60 $13.76 $3.34 
Weighted average common shares outstanding:    
Basic25,329 25,438 25,273 25,377 25,326 
Diluted25,437 25,518 25,359 25,483 25,458 
  
Depreciation$18,867 $18,010 $37,117 $35,964 $73,993 
Amortization$14,183 $13,897 $28,432 $27,755 $57,049 
Capital expenditures$16,923 $28,800 $34,082 $70,837 $93,886 



LCI INDUSTRIES
SEGMENT RESULTS
(unaudited)
 Three Months Ended 
June 30,		Six Months Ended 
June 30,		Last Twelve
2023202220232022Months
(In thousands)
Net sales:  
OEM Segment:  
RV OEMs:  
Travel trailers and fifth-wheels$338,739 $814,509 $669,292 $1,767,735 $1,519,143 
Motorhomes71,185 91,480 140,736 178,734 301,098 
Adjacent Industries OEMs349,084 370,289 707,152 726,391 1,339,950 
Total OEM Segment net sales759,008 1,276,278 1,517,180 2,672,860 3,160,191 
Aftermarket Segment:     
Total Aftermarket Segment net sales255,631 259,872 470,769 507,858 854,183 
Total net sales$1,014,639 $1,536,150 $1,987,949 $3,180,718 $4,014,374 
Operating profit:     
OEM Segment$18,642 $190,577 $17,921 $435,951 $61,120 
Aftermarket Segment36,532 28,212 57,296 52,539 78,635 
Total operating profit$55,174 $218,789 $75,217 $488,490 $139,755 
Depreciation and amortization:
OEM Segment depreciation$14,655 $14,376 $29,004 $28,878 $58,293 
Aftermarket Segment depreciation4,212 3,634 8,113 7,086 15,700 
Total depreciation$18,867 $18,010 $37,117 $35,964 $73,993 
OEM Segment amortization$10,204 $10,053 $20,654 $20,197 $41,710 
Aftermarket Segment amortization3,979 3,844 7,778 7,558 15,339 
Total amortization$14,183 $13,897 $28,432 $27,755 $57,049 


LCI INDUSTRIES
BALANCE SHEET INFORMATION
(unaudited)
 June 30,December 31,
 20232022
(In thousands)  
ASSETS  
Current assets  
Cash and cash equivalents$22,094 $47,499 
Accounts receivable, net299,469 214,262 
Inventories, net830,020 1,029,705 
Prepaid expenses and other current assets83,662 99,310 
Total current assets1,235,245 1,390,776 
Fixed assets, net478,885 482,185 
Goodwill584,312 567,063 
Other intangible assets, net477,307 503,320 
Operating lease right-of-use assets241,146 247,007 
Other long-term assets59,502 56,561 
Total assets$3,076,397 $3,246,912 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities  
Current maturities of long-term indebtedness$27,712 $23,086 
Accounts payable, trade182,637 143,529 
Current portion of operating lease obligations35,004 35,447 
Accrued expenses and other current liabilities196,099 219,238 
Total current liabilities441,452 421,300 
Long-term indebtedness915,756 1,095,888 
Operating lease obligations217,979 222,478 
Deferred taxes26,900 30,580 
Other long-term liabilities103,413 95,658 
Total liabilities1,705,500 1,865,904 
Total stockholders' equity1,370,897 1,381,008 
Total liabilities and stockholders' equity$3,076,397 $3,246,912 





LCI INDUSTRIES
SUMMARY OF CASH FLOWS
(unaudited)
 Six Months Ended 
June 30,
 20232022
(In thousands)  
Cash flows from operating activities:  
Net income$40,685 $350,711 
Adjustments to reconcile net income to cash flows provided by operating activities:  
Depreciation and amortization65,549 63,719 
Stock-based compensation expense9,080 13,701 
Deferred taxes— (2,401)
Other non-cash items2,192 2,025 
Changes in assets and liabilities, net of acquisitions of businesses: 
Accounts receivable, net(80,952)(95,479)
Inventories, net209,346 (51,811)
Prepaid expenses and other assets11,607 25,746 
Accounts payable, trade37,949 5,312 
Accrued expenses and other liabilities(21,891)36,448 
Net cash flows provided by operating activities273,565 347,971 
Cash flows from investing activities:  
Capital expenditures(34,082)(70,837)
Acquisitions of businesses(25,851)(51,789)
Other investing activities4,344 2,204 
Net cash flows used in investing activities(55,589)(120,422)
Cash flows from financing activities:  
Vesting of stock-based awards, net of shares tendered for payment of taxes(9,585)(10,773)
Proceeds from revolving credit facility234,200 729,400 
Repayments under revolving credit facility(402,726)(836,500)
Repayments under shelf loan, term loan, and other borrowings(10,703)(60,902)
Payment of dividends(53,154)(49,572)
Payment of contingent consideration and holdbacks related to acquisitions(517)(6,039)
Other financing activities(834)(4)
Net cash flows used in financing activities(243,319)(234,390)
Effect of exchange rate changes on cash and cash equivalents (62)(1,067)
Net decrease in cash and cash equivalents(25,405)(7,908)
Cash and cash equivalents at beginning of period47,499 62,896 
Cash and cash equivalents cash at end of period$22,094 $54,988 


LCI INDUSTRIES
SUPPLEMENTARY INFORMATION
(unaudited)
Three Months EndedSix Months Ended
June 30,June 30,Last Twelve
2023202220232022Months
Industry Data(1) (in thousands of units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs71.6 133.8 132.8 286.2 268.2 
Motorhome RVs12.1 14.8 25.5 30.7 53.2 
Industry Retail Sales:
Travel trailer and fifth-wheel RVs105.3 (2)129.6 176.7 (2)224.6 341.7 (2)
Impact on dealer inventories(33.7)(2)4.2 (43.9)(2)61.6 (73.5)(2)
Motorhome RVs13.0 (2)14.0 23.8 (2)27.1 45.1 (2)
Twelve Months Ended
June 30,
20232022
Lippert Content Per Industry Unit Produced:
Travel trailer and fifth-wheel RV$5,487 $5,379 
Motorhome RV$3,760 $3,557 
June 30,December 31,
202320222022
Balance Sheet Data (debt availability in millions):
Remaining availability under the revolving credit facility (3)
$270.0 $286.7 $306.5 
Days sales in accounts receivable, based on last twelve months28.4 28.2 27.5 
Inventory turns, based on last twelve months3.2 4.3 3.5 
2023
Estimated Full Year Data:
Capital expenditures
$60 - $80 million
Depreciation and amortization
$130 - $140 million
Stock-based compensation expense
$18 - $23 million
Annual tax rate
24% - 26%
(1) Industry wholesale production data for travel trailer and fifth-wheel RVs and motorhome RVs provided by the Recreation Vehicle Industry Association. Industry retail sales data provided by Statistical Surveys, Inc.
(2) June 2023 retail sales data for RVs has not been published yet, therefore 2023 retail data for RVs includes an estimate for June 2023 retail units. Retail sales data will likely be revised upwards in future months as various states report.
(3) Remaining availability under the revolving credit facility is subject to covenant restrictions.



LCI INDUSTRIES
SUPPLEMENTARY INFORMATION
RECONCILIATION OF NON-GAAP MEASURES
(unaudited)

The following table reconciles net income to EBITDA.
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
(In thousands) 
Net income$33,426 $154,530 $40,685 $350,711 
Interest expense, net10,249 6,191 20,643 12,443 
Provision for income taxes11,499 58,068 13,889 125,336 
Depreciation expense18,867 18,010 37,117 35,964 
Amortization expense14,183 13,897 28,432 27,755 
EBITDA$88,224 $250,696 $140,766 $552,209 
In addition to reporting financial results in accordance with U.S. GAAP, the Company has provided the non-GAAP performance measure of EBITDA to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income before interest expense, net, provision for income taxes, depreciation expense, and amortization expense during the three and six month periods ended June 30, 2023 and 2022. The Company considers this non-GAAP measure in evaluating and managing the Company's operations and believes that discussion of results adjusted for these items is meaningful to investors because it provides a useful analysis of ongoing underlying operating trends. The measure is not in accordance with, nor is it a substitute for, GAAP measures, and it may not be comparable to similarly titled measures used by other companies.

LCI Industries Q2 2023 Earnings Conference Call August 8, 2023 1

 
FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company’s common stock, the impact of legal proceedings, and other matters. Statements in this presentation that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties. Forward-looking statements, including, without limitation, those relating to the Company's future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, covenant compliance, retail and wholesale demand, integration of acquisitions, R&D investments, commodity prices and industry trends, whenever they occur in this presentation are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, in addition to other matters described in this presentation, the impacts of COVID-19, or other future pandemics, and the Russia-Ukraine war, and heightened tensions between China and Taiwan on the global economy and on the Company's customers, suppliers, employees, business and cash flows, pricing pressures due to domestic and foreign competition, costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, seasonality and cyclicality in the industries to which we sell our products, availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, team member benefits, team member retention, realization and impact of expansion plans, efficiency improvements and cost reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational and financial risks related to conducting business internationally, and increased governmental regulation and oversight, information technology performance and security, the ability to protect intellectual property, warranty and product liability claims or product recalls, interest rates, oil and gasoline prices and availability, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company’s subsequent filings with the Securities and Exchange Commission, including the Company's Quarterly Reports on the 10-Q. Readers of this presentation are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. This presentation includes certain non-GAAP financial measures, such as EBITDA and net debt to EBITDA leverage. These non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure are included in the presentation. 2

 
Generating Ample Cash to Strengthen the Balance Sheet ■ Inventory reductions that now total $200 million YTD, improving cash generation ■ Paid down $179 million in debt YTD Second Quarter 2023 Highlights Financial Performance ■ Net sales of $1.0 billion in the second quarter, down 34% ■ Net income of $33 million in the second quarter, down 78% ■ EBITDA1 of $88 million in the second quarter, down 65% year-over-year Executing on discplined cost management and diversification to ensure stability Executing on Diversification ■ Resilience in Aftermarket, International, Marine, and other adjacencies supporting performance amidst declines in RV OEM ■ Sales outside of North American RV OEM business currently make up over half of total Company sales Ongoing Innovation Fuels Content Growth ■ 2% growth in content per travel trailer and fifth-wheel RV2 ■ 6% growth in content per motorized unit 3 1 Additional information regarding EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix 2 For twelve months ended June 30, 2023

 
Quarterly Performance • Current 2023 North American forecast of 290 - 310k wholesale units; 86,200 wholesale units shipped in Q2 2023 • Q2 2023 RV OEM sales down 55% YoY primarily due to softened retail demand • Destocking rates amongst dealers have begun to decelerate as inventories reach appropriate levels RV OEM RV Wholesale/Retail/Inventory Change Retail Wholesale Inventory Linear (Inventory) Q31 9 Q41 9 Q12 0 Q22 0 Q32 0 Q42 0 Q12 1 Q22 1 Q32 1 Q42 1 Q12 2 Q22 2 Q32 2 Q42 2 Q12 3 Q22 3 0 50,000 100,000 150,000 200,000 250,000 (80,000) (60,000) (40,000) (20,000) — 20,000 40,000 60,000 80,000 Content per Wholesale Unit • Travel trailer and fifth-wheel RV content of $5,487 for Q2 2023 (LTM basis), up 2% over the comparable prior year period • Motorhome content of $3,760 for Q2 2023 (LTM basis), up 6% 4 $905,989 $409,924 Q2 2022 Q2 2023 Net Sales (in thousands)

 
Quarterly Performance • Q2 2023 sales down 2% year over year, driven by inflationary pressures impacting consumer demand • Meaningful YOY margin expansion in Q2 driven by decreased commodity costs and targeted pricing increases • Innovation driving ongoing portfolio expansion through sophisticated products, catering to the new generation of RV enthusiasts • Increased spend during trade-up seasons as consumers upgrade RVs, leveraging our recent acquisitions AFTERMARKET 5 $259,872 $255,631 Q2 2022 Q2 2023 Net Sales (in thousands)

 
Quarterly Performance • Q2 2023 Adjacent Industries sales down 6% YoY • Decrease driven by declines in the Marine market due to softening retail demand and reductions in OEM backlogs as dealer inventories have normalized • Strength in other adjacent markets such as transit have lessened the impact from lighter NA marine demand Content per Power Boat • 17% decline in content per power boat (LTM basis), primarily due to pricing and product mix ADJACENT MARKETS 6 Net Sales (in thousands)$370,289 $349,084 Q2 2022 Q2 2023

 
Quarterly Performance • Q2 2023 sales up 6% YoY • Inventories are replenishing as supply chain constraints ease, enabling European OEMs to meet pent-up demand • Maintaining focus on introducing popular European products in North American markets, including window blinds, pop top, and B- vans • International results include RV OEM, Adjacent Industries OEM, and Aftermarket net sales INTERNATIONAL BUSINESS 7 Net Sales (in thousands) $107,866 $113,870 Q2 2022 Q2 2023

 
INNOVATION AS A CULTURE Constant innovation continues to drive content expansion Continuously developing new product innovations; 2023 marks more innovative product introductions than any year in the last 10 years 8 Independent Suspension Furrion® 18K Chill Cube Air Conditioner Solera® 3000 Off-Grid Series Solar awning Basecamp Towable & Motorized Leveling System CURT® Enhanced Pin Box Solutions OneControl® Auto featuring True Course™ ABS (Anti-Lock Braking System) SureShade® Forward Facing Power Bimini New Window Designs and Integrated Shades Lewmar® Electric Powered Shallow Water Anchor

 
GROWTH STRATEGY Prioritizing ample liquidity and investments back into the company Balanced Capital Allocation Strategy • Reduce leverage • Investment in the business, with focus on automation projects • Execute strategic acquisitions and divestitures • Return capital to shareholders Continue Execution of our Diversification Strategy • Lessen the impact from RV down cycles by further expanding market share in our Non-RV OEM channel to increase stability • Continue to expand offerings in our various markets through innovations and acquisitions Leveraging Strengths to Win Market Share • Continue to innovate, bringing new and useful offerings to the space • Focusing on content per unit growth in all groups • Unlocking cross-selling opportunities through new acquisitions 9

 
Operating Margin 14.2% 5.4% Second Quarter 2022 Second Quarter 2023 (in th ou sa nd s) Consolidated Net Income $154,530 $33,426 Second Quarter 2022 Second Quarter 2023 (in th ou sa nd s) EBITDA* $250,696 $88,224 Second Quarter 2022 Second Quarter 2023 Q2 2023 FINANCIAL PERFORMANCE * Additional information regarding EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix. (in th ou sa nd s) Consolidated Net Sales $1,536,150 $1,014,639 Second Quarter 2022 Second Quarter 2023 10

 
As of and for the six months ended June 30 LIQUIDITY AND CASH FLOW 2023 2022 Cash and Cash Equivalents $22M $55M Remaining Availability under Revolving Credit Facility(1) $270M $287M Capital Expenditures $34M $71M Dividends $53M $50M Debt / Net Income (TTM) 11.1x 2.3x Net Debt/EBITDA (TTM) 3.4x(2) 1.3x(3) Cash from Operating Activities $274M $348M (1) Remaining availability under the revolving credit facility is subject to covenant restrictions. (2) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $943M, less Cash of $22M, resulted in Net Debt of $921M at June 30, 2023, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization, "EBITDA" (Net Income of $85M adding back Interest of $36M, Taxes of $19M, and Depreciation and Amortization of $131M), resulting in $271M EBITDA for the twelve months ended June 30, 2023. The GAAP debt / Net income ratio was $943M / $85M or 11.1x. (3) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $1,123M, less Cash of $55M, resulted in Net Debt of $1,068M at June 30, 2022, divided by EBITDA (Net Income of $496M, adding back Interest of $23M, Taxes of $172M, and Depreciation and Amortization of $125M), resulting in $816M EBITDA for the twelve months ended June 30, 2022. The GAAP debt / Net income ratio was $1,123M / $496M or 2.3x. 11

 
EBITDA Reconciliation of Non-GAAP Measures APPENDIX EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income (loss) before interest expense, provision for income taxes, depreciation and amortization expense. The Company considers this non-GAAP measure in evaluating and managing the Company's operations and believes that discussion of results adjusted for these items is meaningful to investors because it provides a useful analysis of ongoing underlying operating trends. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies. Three Months Ended June 30, ($ in thousands) 2023 2022 Net Income $ 33,426 $ 154,530 Interest Expense, Net 10,249 6,191 Provision for Income Taxes 11,499 58,068 Depreciation and Amortization 33,050 31,907 EBITDA $ 88,224 $ 250,696 12

 
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v3.23.2
Cover
Aug. 08, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2023
Entity Registrant Name LCI INDUSTRIES
Entity Incorporation, State or Country Code DE
Entity File Number 001-13646
Entity Tax Identification Number 13-3250533
Entity Address, Address Line One 3501 County Road 6 East,
Entity Address, City or Town Elkhart,
Entity Address, State or Province IN
Entity Address, Postal Zip Code 46514
City Area Code (574)
Local Phone Number 535-1125
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, $.01 par value
Trading Symbol LCII
Security Exchange Name NYSE
Entity Central Index Key 0000763744
Amendment Flag false
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