Delivered $527 million of cash from operating
activities in 2023 with strength in diversified businesses
supporting performance in a challenging environment
Fourth Quarter 2023 Highlights
- Net sales of $838 million in the fourth quarter, down 6%
year-over-year
- Net loss of $2 million, or $(0.09) per diluted share, in the
fourth quarter, an improvement of 86% year-over-year
- Aftermarket Segment net sales grew 10% year-over-year and
operating profit improved by $15 million
- EBITDA of $36 million in the fourth quarter, up 248%
year-over-year
Full Year 2023 Highlights
- Net sales of $3.8 billion, down 27% year-over-year
- Net income of $64 million, or $2.52 per diluted share, down 84%
year-over-year
- EBITDA of $255 million, down 63% year-over-year
- Continued execution of diversification strategy with
Aftermarket Segment and Adjacent Industries OEM net sales exceeding
56% of total net sales for the year ended December 31, 2023
- Inventory reduction of $261 million
- Cash flows from operating activities of $527 million
- Net repayments of indebtedness of $277 million
- Returned $106 million to shareholders through quarterly
dividends in 2023
LCI Industries (NYSE: LCII) which, through its wholly-owned
subsidiary, Lippert Components, Inc. ("Lippert"), supplies,
domestically and internationally, a broad array of highly
engineered components for the leading original equipment
manufacturers ("OEMs") in the recreation and transportation
markets, and the related aftermarkets of those industries, today
reported fourth quarter and full year 2023 results.
"Throughout the year, our consistent execution on
diversification priorities and steadfast commitment to operational
discipline has supported our performance despite continued softness
in the RV and marine markets. Remarkable strength in our
Aftermarket business, where we continued to see robust performance,
coupled with solid results and leadership in our other diversified
businesses, significantly contributed to our profitability as we
navigate a challenging industry environment. Our focus on
operational improvement and investments in automation leave us
well-positioned to drive profitable growth when production starts
to normalize in 2024," commented Jason Lippert, LCI Industries'
President and Chief Executive Officer.
"Further, through our world-class R&D capabilities and
culture of innovation, we will continue introducing sophisticated
new products. Our 2023 product launches introduced some great
additions to our portfolio, such as independent suspension axles,
anti-lock braking systems, our new 4000 series windows with
integrated blinds, as well as our new leveling systems for towables
and motor homes. These new products differentiate us from our
competition and will add solid organic content growth and market
share expansion. Demonstrating this strength, we have nearly $200
million in net new business commitments in 2024," continued Mr.
Lippert. "We are entering the new year with a solid balance sheet,
reinforced by recent working capital improvements and a focus on
cash generation. We plan to continue to invest strategically and
are confident in the mid- to long-term profitable growth of our
business."
"January 2024 sales outpaced January 2023 levels by 13% as we
started to see business increase as dealers begin to replenish
inventories. February orders are also pacing ahead of prior year,
reflecting the positive dealer and consumer sentiment from the RV
shows," commented Ryan Smith, LCI Industries' Group President -
North America. "I'd like to thank all of our team members for their
unwavering commitment to driving our business forward as we work to
generate value for our customers and shareholders."
Fourth Quarter 2023 Results
Consolidated net sales for the fourth quarter of 2023 were
$837.5 million, a decrease of 6% from 2022 fourth quarter net sales
of $894.3 million. Net loss in the fourth quarter of 2023 was $2.4
million, or $(0.09) per diluted share, compared to a net loss of
$17.1 million, or $(0.68) per diluted share, in the fourth quarter
of 2022. EBITDA in the fourth quarter of 2023 was $35.6 million,
compared to EBITDA of $10.2 million in the fourth quarter of
2022.
The decrease in year-over-year net sales for the fourth quarter
of 2023 was primarily driven by lower North American marine
production levels, decreased selling prices which are indexed to
select commodities, and decreased North American RV wholesale
shipments, partially offset by growth in Aftermarket net sales and
net sales from recent acquisitions. Net sales from acquisitions
completed in the twelve months ended December 31, 2023 contributed
approximately $11.0 million in the fourth quarter of 2023.
Full Year 2023 Results
Consolidated net sales for the full year 2023 were $3.8 billion,
a decrease of 27% from full year 2022 net sales of $5.2 billion.
Net income for the full year 2023 was $64.2 million, or $2.52 per
diluted share, compared to net income of $395.0 million, or $15.48
per diluted share, for the full year 2022. EBITDA for the year
ended December 31, 2023 was $255.2 million, compared to EBITDA of
$682.2 million for the year ended December 31, 2022. Additional
information regarding EBITDA, as well as reconciliations of this
non-GAAP financial measure to the most directly comparable GAAP
financial measure of net income (loss), is provided in the
"Supplementary Information - Reconciliation of Non-GAAP Measures"
section below.
The decrease in year-over-year net sales was primarily driven by
a nearly 39% decrease in North American RV wholesale shipments,
decreased selling prices which are indexed to select commodities,
and lower North American marine production levels, partially offset
by net sales from recent acquisitions. Net sales from acquisitions
completed in 2022 and 2023 contributed approximately $73.6 million
in 2023.
January 2024 Results
January 2024 consolidated net sales were approximately $308
million, up 13% from January 2023, primarily due to an approximate
57% increase in North American RV production, partially offset by
an approximate 44% decline in marine sales compared to January
2023.
OEM Segment - Fourth Quarter Performance
OEM net sales for the fourth quarter of 2023 were $658.1
million, down 10% year-over-year, primarily driven by lower North
American marine production levels, decreased selling prices which
are indexed to select commodities, and a reduction in North
American RV wholesale shipments. RV OEM net sales for the fourth
quarter of 2023 were $388.9 million, down 10% compared to the same
prior year period, driven by decreased selling prices which are
indexed to select commodities and a 3% reduction in North American
RV wholesale shipments. Adjacent Industries OEM net sales for the
fourth quarter of 2023 were $269.2 million, down 9% year-over-year,
primarily due to lower sales to North American marine OEMs. North
American marine OEM net sales in the fourth quarter of 2023 were
$64.6 million, down 41% year-over-year.
Operating loss of the OEM Segment was $11.7 million in the
fourth quarter of 2023, or (1.8)% of net sales, compared to an
operating loss of $22.0 million, or (3.0)%, in the same period in
2022. The operating loss of the OEM Segment for the quarter was
driven by decreased selling prices which are indexed to select
commodities and the impact of fixed costs on reduced sales.
Aftermarket Segment - Fourth Quarter Performance
Aftermarket net sales for the fourth quarter of 2023 were $179.4
million, up 10% year-over-year, as distribution channel inventories
stabilized. Operating profit of the Aftermarket Segment was $14.3
million in the fourth quarter of 2023, or 8.0% of net sales,
compared to an operating loss of $1.1 million, or (0.6)%, in the
same period in 2022. The operating profit expansion of the
Aftermarket Segment for the quarter was driven by decreased
commodity costs and leveraging of fixed costs over larger sales and
production volume.
“We delivered strong aftermarket operating profits for the year
as we continued to capture solid demand for repair, replacement,
and upgrades across our end markets. Aftermarket remains a key
growth driver for Lippert and a critical piece of our
diversification strategy, providing counter cyclical support in a
volatile environment,” Jamie Schnur, LCI Industries' Group
President - Aftermarket commented. “We look forward to leveraging
our industry-leading service teams and innovative product offerings
to continue this momentum in the new year.”
Income Taxes
The Company's effective tax rate was 22.7% and 65.2% for the
year and quarter ended December 31, 2023, respectively, compared to
24.8% and 45.2% for the year and quarter ended December 31, 2022,
respectively. Due to certain operating losses in the fourth
quarters of 2023 and 2022, discrete adjustments related to an
increase in the life insurance contract assets had a proportionally
larger impact on the tax rate in those periods. Fourth quarter and
full year 2023 rates both benefited from a reduction in the
effective state tax rate compared to fourth quarter and full year
2022.
Balance Sheet and Other Items
At December 31, 2023, the Company's cash and cash equivalents
balance was $66.2 million, compared to $47.5 million at December
31, 2022. The Company used $106.3 million for dividend payments to
shareholders, $62.2 million for capital expenditures, and $25.9
million for acquisitions in the twelve months ended December 31,
2023. The Company also made $215.9 million in net repayments under
its revolving credit facility and $61.1 million in repayments under
its term loan and other borrowings in the twelve months ended
December 31, 2023.
The Company's outstanding long-term indebtedness, including
current maturities, was $847.4 million at December 31, 2023, and
the Company was in compliance with its debt covenants.
Conference Call & Webcast
LCI Industries will host a conference call to discuss its fourth
quarter results on Tuesday, February 13, 2024, at 8:30 a.m. Eastern
time, which may be accessed by dialing (833) 470-1428 for
participants in the U.S. and (929) 526-1599 for participants
outside the U.S. using the required conference ID 216951. 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 (44)
204-525-0658 for participants outside the U.S. and referencing
access code 584031. 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 and
transportation 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 production levels, including normalization and timing,
new business commitments and orders, as well as other factors, in
2024, future business prospects, growth, 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 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 future pandemics,
geopolitical tensions, armed conflicts, or natural disasters 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 December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
(In thousands, except per share
amounts)
Net sales
$
837,544
$
894,346
$
3,784,808
$
5,207,143
Cost of sales
676,493
747,439
3,008,618
3,933,854
Gross profit
161,051
146,907
776,190
1,273,289
Selling, general and administrative
expenses
158,430
169,944
652,762
720,261
Operating profit (loss)
2,621
(23,037
)
123,428
553,028
Interest expense, net
9,456
8,220
40,424
27,573
(Loss) income before income taxes
(6,835
)
(31,257
)
83,004
525,455
(Benefit) provision for income taxes
(4,458
)
(14,128
)
18,809
130,481
Net (loss) income
$
(2,377
)
$
(17,129
)
$
64,195
$
394,974
Net (loss) income per common share:
Basic
$
(0.09
)
$
(0.68
)
$
2.54
$
15.57
Diluted
$
(0.09
)
$
(0.68
)
$
2.52
$
15.48
Weighted average common shares
outstanding:
Basic
25,342
25,327
25,305
25,372
Diluted
25,342
25,327
25,436
25,514
Depreciation
$
18,719
$
18,886
$
74,693
$
72,839
Amortization
$
14,231
$
14,360
$
57,075
$
56,373
Capital expenditures
$
12,149
$
26,893
$
62,209
$
130,641
LCI INDUSTRIES
SEGMENT RESULTS
(unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
325,987
$
356,335
$
1,358,853
$
2,617,585
Motorhomes
62,952
77,441
269,356
339,097
Adjacent Industries OEMs
269,156
296,814
1,275,533
1,359,188
Total OEM Segment net sales
658,095
730,590
2,903,742
4,315,870
Aftermarket Segment:
Total Aftermarket Segment net sales
179,449
163,756
881,066
891,273
Total net sales
$
837,544
$
894,346
$
3,784,808
$
5,207,143
Operating (loss) profit:
OEM Segment
$
(11,725
)
$
(21,987
)
$
17,361
$
479,150
Aftermarket Segment
14,346
(1,050
)
106,067
73,878
Total operating profit (loss)
$
2,621
$
(23,037
)
$
123,428
$
553,028
Depreciation and amortization:
OEM Segment depreciation
$
14,557
$
15,075
$
58,397
$
58,166
Aftermarket Segment depreciation
4,162
3,811
16,296
14,673
Total depreciation
$
18,719
$
18,886
$
74,693
$
72,839
OEM Segment amortization
$
10,375
$
10,585
$
41,579
$
41,253
Aftermarket Segment amortization
3,856
3,775
15,496
15,120
Total amortization
$
14,231
$
14,360
$
57,075
$
56,373
LCI INDUSTRIES
BALANCE SHEET
INFORMATION
(unaudited)
December 31,
2023
2022
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
$
66,157
$
47,499
Accounts receivable, net
214,707
214,262
Inventories, net
768,407
1,029,705
Prepaid expenses and other current
assets
67,599
99,310
Total current assets
1,116,870
1,390,776
Fixed assets, net
465,781
482,185
Goodwill
589,550
567,063
Other intangible assets, net
448,759
503,320
Operating lease right-of-use assets
245,388
247,007
Other long-term assets
92,971
56,561
Total assets
$
2,959,319
$
3,246,912
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term
indebtedness
$
589
$
23,086
Accounts payable, trade
183,697
143,529
Current portion of operating lease
obligations
36,269
35,447
Accrued expenses and other current
liabilities
174,437
219,238
Total current liabilities
394,992
421,300
Long-term indebtedness
846,834
1,095,888
Operating lease obligations
222,680
222,478
Deferred taxes
32,345
30,580
Other long-term liabilities
107,432
95,658
Total liabilities
1,604,283
1,865,904
Total stockholders' equity
1,355,036
1,381,008
Total liabilities and stockholders'
equity
$
2,959,319
$
3,246,912
LCI INDUSTRIES
SUMMARY OF CASH FLOWS
(unaudited)
Twelve Months Ended December
31,
2023
2022
(In thousands)
Cash flows from operating activities:
Net income
$
64,195
$
394,974
Adjustments to reconcile net income to
cash flows provided by operating activities:
Depreciation and amortization
131,768
129,212
Stock-based compensation expense
18,229
23,695
Deferred taxes
2,067
(9,277
)
Other non-cash items
7,716
3,496
Changes in assets and liabilities, net of
acquisitions of businesses:
Accounts receivable, net
1,594
115,706
Inventories, net
235,347
117,419
Prepaid expenses and other assets
25,954
14,990
Accounts payable, trade
38,737
(161,121
)
Accrued expenses and other liabilities
1,622
(26,580
)
Net cash flows provided by operating
activities
527,229
602,514
Cash flows from investing activities:
Capital expenditures
(62,209
)
(130,641
)
Acquisitions of businesses
(25,851
)
(108,470
)
Other investing activities
4,312
(2,679
)
Net cash flows used in investing
activities
(83,748
)
(241,790
)
Cash flows from financing activities:
Vesting of stock-based awards, net of
shares tendered for payment of taxes
(9,628
)
(10,961
)
Proceeds from revolving credit
facility
248,900
1,128,400
Repayments under revolving credit
facility
(464,822
)
(1,233,740
)
Repayments under shelf loan, term loan,
and other borrowings
(61,099
)
(73,031
)
Payment of dividends
(106,336
)
(102,726
)
Payment of contingent consideration and
holdbacks related to acquisitions
(31,857
)
(60,228
)
Repurchases of common stock
—
(24,054
)
Other financing activities
(1,342
)
1,469
Net cash flows used in financing
activities
(426,184
)
(374,871
)
Effect of exchange rate changes on cash
and cash equivalents
1,361
(1,250
)
Net increase (decrease) in cash and cash
equivalents
18,658
(15,397
)
Cash and cash equivalents at beginning of
period
47,499
62,896
Cash and cash equivalents at end of
period
$
66,157
$
47,499
LCI INDUSTRIES
SUPPLEMENTARY
INFORMATION
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Industry Data(1) (in thousands of
units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs
63.4
62.1
259.1
421.7
Motorhome RVs
10.1
12.4
45.9
58.4
Industry Retail Sales:
Travel trailer and fifth-wheel RVs
53.0
59.1
324.8
389.7
Impact on dealer inventories
10.4
3.0
(65.7
)
32.0
Motorhome RVs
7.7
9.0
44.3
48.3
Twelve Months Ended
December 31,
2023
2022
Lippert Content Per Industry Unit
Produced:
Travel trailer and fifth-wheel RV
$
5,058
$
6,090
Motorhome RV
$
3,506
$
4,099
December 31,
2023
2022
Balance Sheet Data (debt availability in
millions):
Remaining availability under the revolving
credit facility (2)
$
245.3
$
306.5
Days sales in accounts receivable, based
on last twelve months
30.1
27.5
Inventory turns, based on last twelve
months
3.5
3.5
2024
Estimated Full Year Data:
Capital expenditures
$55 - $75 million
Depreciation and amortization
$130 - $140 million
Stock-based compensation expense
$20 - $25 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)
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 (loss)
income to EBITDA.
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
(In thousands)
Net (loss) income
$
(2,377
)
$
(17,129
)
$
64,195
$
394,974
Interest expense, net
9,456
8,220
40,424
27,573
Provision for income taxes
(4,458
)
(14,128
)
18,809
130,481
Depreciation expense
18,719
18,886
74,693
72,839
Amortization expense
14,231
14,360
57,075
56,373
EBITDA
$
35,571
$
10,209
$
255,196
$
682,240
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 (loss)
income before interest expense, net, provision for income taxes,
depreciation expense, and amortization expense during the three and
twelve month periods ended December 31, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213522707/en/
Lillian D. Etzkorn, CFO Phone: (574) 535-1125 E
Mail: LCII@lci1.com
LCI Industries (NYSE:LCII)
Historical Stock Chart
From Apr 2024 to May 2024
LCI Industries (NYSE:LCII)
Historical Stock Chart
From May 2023 to May 2024