0000763744FALSE00007637442024-02-132024-02-13

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): February 13, 2024
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 February 13, 2024, LCI Industries issued a press release setting forth LCI Industries' fourth quarter and full year 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 February 13, 2024
Investor Presentation dated February 13, 2024
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: February 13, 2024



    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 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
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

Elkhart, Indiana - February 13, 2024 - 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,
 2023202220232022
(In thousands, except per share amounts)  
Net sales$837,544 $894,346 $3,784,808 $5,207,143 
Cost of sales676,493 747,439 3,008,618 3,933,854 
Gross profit161,051 146,907 776,190 1,273,289 
Selling, general and administrative expenses158,430 169,944 652,762 720,261 
Operating profit (loss)2,621 (23,037)123,428 553,028 
Interest expense, net9,456 8,220 40,424 27,573 
(Loss) income before income taxes(6,835)(31,257)83,004 525,455 
(Benefit) provision for income taxes(4,458)(14,128)18,809 130,481 
Net (loss) income$(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:    
Basic25,342 25,327 25,305 25,372 
Diluted25,342 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,
2023202220232022
(In thousands)
Net sales:  
OEM Segment:  
RV OEMs:  
Travel trailers and fifth-wheels$325,987 $356,335 $1,358,853 $2,617,585 
Motorhomes62,952 77,441 269,356 339,097 
Adjacent Industries OEMs269,156 296,814 1,275,533 1,359,188 
Total OEM Segment net sales658,095 730,590 2,903,742 4,315,870 
Aftermarket Segment:    
Total Aftermarket Segment net sales179,449 163,756 881,066 891,273 
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 Segment14,346 (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 depreciation4,162 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 amortization3,856 3,775 15,496 15,120 
Total amortization$14,231 $14,360 $57,075 $56,373 


LCI INDUSTRIES
BALANCE SHEET INFORMATION
(unaudited)
 December 31,
 20232022
(In thousands)  
ASSETS  
Current assets  
Cash and cash equivalents$66,157 $47,499 
Accounts receivable, net214,707 214,262 
Inventories, net768,407 1,029,705 
Prepaid expenses and other current assets67,599 99,310 
Total current assets1,116,870 1,390,776 
Fixed assets, net465,781 482,185 
Goodwill589,550 567,063 
Other intangible assets, net448,759 503,320 
Operating lease right-of-use assets245,388 247,007 
Other long-term assets92,971 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, trade183,697 143,529 
Current portion of operating lease obligations36,269 35,447 
Accrued expenses and other current liabilities174,437 219,238 
Total current liabilities394,992 421,300 
Long-term indebtedness846,834 1,095,888 
Operating lease obligations222,680 222,478 
Deferred taxes32,345 30,580 
Other long-term liabilities107,432 95,658 
Total liabilities1,604,283 1,865,904 
Total stockholders' equity1,355,036 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,
 20232022
(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 amortization131,768 129,212 
Stock-based compensation expense18,229 23,695 
Deferred taxes2,067 (9,277)
Other non-cash items7,716 3,496 
Changes in assets and liabilities, net of acquisitions of businesses: 
Accounts receivable, net1,594 115,706 
Inventories, net235,347 117,419 
Prepaid expenses and other assets25,954 14,990 
Accounts payable, trade38,737 (161,121)
Accrued expenses and other liabilities1,622 (26,580)
Net cash flows provided by operating activities527,229 602,514 
Cash flows from investing activities:  
Capital expenditures(62,209)(130,641)
Acquisitions of businesses(25,851)(108,470)
Other investing activities4,312 (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 facility248,900 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 equivalents18,658 (15,397)
Cash and cash equivalents at beginning of period47,499 62,896 
Cash and cash equivalents at end of period$66,157 $47,499 


LCI INDUSTRIES
SUPPLEMENTARY INFORMATION
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
2023202220232022
Industry Data(1) (in thousands of units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs63.4 62.1 259.1 421.7 
Motorhome RVs10.1 12.4 45.9 58.4 
Industry Retail Sales:
Travel trailer and fifth-wheel RVs53.0 59.1 324.8 389.7 
Impact on dealer inventories10.4 3.0 (65.7)32.0 
Motorhome RVs7.7 9.0 44.3 48.3 
Twelve Months Ended
December 31,
20232022
Lippert Content Per Industry Unit Produced:
Travel trailer and fifth-wheel RV$5,058 $6,090 
Motorhome RV$3,506 $4,099 
December 31,
20232022
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 months30.1 27.5 
Inventory turns, based on last twelve months3.5 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,
 2023202220232022
(In thousands) 
Net (loss) income$(2,377)$(17,129)$64,195 $394,974 
Interest expense, net9,456 8,220 40,424 27,573 
Provision for income taxes(4,458)(14,128)18,809 130,481 
Depreciation expense18,719 18,886 74,693 72,839 
Amortization expense14,231 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.

LCI Industries FY 2023 Earnings Conference Call February 13, 2024 1

 
FORWARD-LOOKING STATEMENTS This presentation 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 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 future pandemics, geopolitical tensions, armed conflicts, or natural disaster 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 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, net debt to EBITDA leverage, and free cash flow. 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 of $261 million in 2023, improving cash generation ■ Paid down $277 million in debt in 2023, including $37.5 million in prepayments of Term Loan principal in 3Q23 and 4Q23 ■ Free cash flow1 of $465 million in 2023 Fourth Quarter and Full Year 2023 Highlights Financial Performance ■ Full year net sales of $3.8 billion, down 27% year-over-year ■ Full year net income of $64 million, down 84% year-over-year ■ Full year EBITDA1 of $255 million, down 63% year-over-year ■ Net sales of $838 million with net loss of $(2) million in the fourth quarter Diversification and ample cash generation supporting stability Executing on Diversification ■ Resilience in Aftermarket and international supporting performance amidst declines in RV and marine ■ Aftermarket and adjacent industries currently make up over half of total Company sales ■ Added over $900 million of sales from acquisitions since 2019 Commencing Exciting Partnerships ■ Partnered with Keystone to add ABS brakes to the best selling fifth wheel in the country ■ Continuing to build on our relationship supplying axles to ATW, the largest North American producer of utility trailers ■ Announced a joint venture with Euramax for Mobility to bring their European products to North American OEMs 3 1 Additional information regarding EBITDA and free cash flow, as well as reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure, is provided in the Appendix 2 For twelve months ended December 31, 2023

 
Performance and Trends • 75,100 wholesale units shipped in Q4 2023, up sequentially over 73,300 in Q3 2023 • Q4 2023 RV OEM sales down 10% YoY • Current 2024 North American forecast of 325 - 350k wholesale units • January 2024 net sales up 13% over January 2023, reflecting positive sentiment coming out of retail RV shows RV OEM - NET SALES RV Wholesale/Retail/Inventory Change Retail Wholesale Inventory Linear (Inventory) 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 Q32 3 Q42 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 $5,058 for FY 20231, down 17% over the comparable prior year period • Motorhome content of $3,506 for FY 20231, down 14% 4 $433,776 $388,939 Q4 2022 Q4 2023 Net Sales (in thousands) 1 For twelve months ended December 31, 2023

 
Performance and Trends • Q4 2023 Adjacent Industries sales down 9% YoY • Decrease primarily driven by declines in the Marine market due to inflation and elevated interest rates impacting retail consumers • Leveraging innovation to further expand Marine content through products like our shallow anchor systems, thrusters, seating, and electric biminis • Strength in transit and utility trailer markets have lessened the impact from NA marine softness ADJACENT INDUSTRIES OEM - NET SALES 5 Net Sales (in thousands) $296,814 $269,156 Q4 2022 Q4 2023

 
Performance and Trends • Q4 2023 sales up 10% year over year, as distribution channel inventories stabilized • Meaningful YOY margin expansion driven by decreased commodity costs and leveraging of fixed costs over larger sales and production volume • Sold 910K hitches in 2023, up from 860K in 2022 reflecting improved pricing and market share gains in the automotive aftermarket • Innovation driving ongoing portfolio expansion through sophisticated products, catering to the new generation of RV enthusiasts • Thousands continue to enter the repair and replacement cycle AFTERMARKET SEGMENT 6 $163,756 $179,449 Q4 2022 Q4 2023 Net Sales (in thousands)

 
Performance and Trends • Q4 2023 sales up 4% YoY • 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 • Continue to see positive results and demand in international adjacent industries such as our Rail business INTERNATIONAL BUSINESS - NET SALES 7 Net Sales (in thousands) $92,026 $96,050 Q4 2022 Q4 2023

 
INNOVATION AS A CULTURE Constant innovation continues to drive long-term content expansion Continued focus on innovation has resulted in a record number of product introductions in the last 10 years 8 Independent Suspension Furrion® 18K Chill Cube Air Conditioner Solera® 3000 Off-Grid Series Solar awning Titan Leveling Systems™ Towable & Motorized 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 DoubleCOOL Acrylic Cooling Solutions

 
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 • 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 long term content per unit growth in all groups • Unlocking cross-selling opportunities through new acquisitions and partnerships 9

 
Operating Margin (2.6)% 0.3% Fourth Quarter 2022 Fourth Quarter 2023 (in th ou sa nd s) Consolidated Net Loss $(17,129) $(2,377) Fourth Quarter 2022 Fourth Quarter 2023 (in th ou sa nd s) EBITDA* $10,209 $35,571 Fourth Quarter 2022 Fourth Quarter 2023 Q4 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 $894,346 $837,544 Fourth Quarter 2022 Fourth Quarter 2023 10

 
Operating Margin 10.6% 3.3% 2022 2023 (in th ou sa nd s) Consolidated Net Income $394,974 $64,195 2022 2023 (in th ou sa nd s) EBITDA* $682,240 $255,196 2022 2023 FY 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 $5,207,143 $3,784,808 2022 2023 11

 
As of and for the twelve months ended December 31 LIQUIDITY AND CASH FLOW 2023 2022 Cash and Cash Equivalents $66M $47M Remaining Availability under Revolving Credit Facility(1) $245M $307M Capital Expenditures $62M $131M Dividends $106M $103M Debt / Net Income (TTM) 13.3x 2.8x Net Debt/EBITDA (TTM)(2)(3) 3.1x 1.6x Cash from Operating Activities $527M $603M Free Cash Flow(4) $465M $472M (1) Remaining availability under the revolving credit facility is subject to covenant restrictions. (2) 2023 Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $847M, less Cash of $66M, resulted in Net Debt of $781M at December 31, 2023, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization, "EBITDA" (Net Income of $64M adding back Interest of $40M, Taxes of $19M, and Depreciation and Amortization of $132M), resulting in $255M EBITDA for the twelve months ended December 31, 2023. The GAAP debt / Net income ratio was $847M / $64M or 13.3x. The leverage ratio formula for our debt covenants under our credit agreement contain additional adjustments not included in the non- GAAP measure presented above. (3) 2022 Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $1,119M, less Cash of $47M, resulted in Net Debt of $1,071M at December 31, 2022, divided by EBITDA (Net Income of $395M, adding back Interest of $28M, Taxes of $130M, and Depreciation and Amortization of $129M), resulting in $682M EBITDA for the twelve months ended December 31, 2022. The GAAP debt / Net income ratio was $1,119M / $395M or 2.8x. (4) Additional information regarding free cash flow, as well as a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix. 12

 
Reconciliation of Non-GAAP Measures APPENDIX EBITDA Three Months Ended December 31, Twelve Months Ended December 31, ($ in thousands) 2023 2022 2023 2022 Net (loss) income $ (2,377) $ (17,129) $ 64,195 $ 394,974 Interest expense, net 9,456 8,220 40,424 27,573 (Benefit) provision for income taxes (4,458) (14,128) 18,809 130,481 Depreciation and amortization 32,950 33,246 131,768 129,212 EBITDA $ 35,571 $ 10,209 $ 255,196 $ 682,240 FREE CASH FLOW Twelve Months Ended December 31, ($ in thousands) 2023 2022 Net cash flows provided by operating activities $ 527,229 $ 602,514 Capital expenditures (62,209) (130,641) Free cash flow $ 465,020 $ 471,873 13 EBITDA and free cash flow are non-GAAP performance measures included to illustrate and improve comparability of the Company's results from period to period. EBITDA is defined as net income (loss) before interest expense, provision (benefit) for income taxes, depreciation and amortization expense. Free cash flow is defined as net cash flows provided by operating activities minus capital expenditures. The Company considers these non-GAAP measures in evaluating and managing the Company's operations and believes that discussion of results adjusted for these items is meaningful to investors because they provide a useful analysis of ongoing underlying 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.

 
14

 
v3.24.0.1
Cover
Feb. 13, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 13, 2024
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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