LCI Industries (NYSE: LCII) (the “Company”) 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
and transportation product markets, and the related aftermarkets of
those industries, today announced that it intends to offer, subject
to market conditions and other factors, $400.0 million in aggregate
principal amount of convertible senior notes due 2026 (the “notes”)
in a private placement (the “offering”) to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”). In connection with the offering,
the Company expects to grant the initial purchasers of the notes an
option to purchase, within a 13-day period from and including the
date on which the notes are first issued, up to an additional $60.0
million in aggregate principal amount of notes.
The notes will be senior unsecured obligations of the Company.
Final terms of the notes, including the initial conversion price,
interest rate and certain other terms of the notes will be
determined at the time of pricing of the offering. The notes will
be generally unsecured obligations of the Company and will bear
interest, payable semi-annually in arrears, and the notes will
mature on May 15, 2026, unless earlier converted, redeemed or
repurchased in accordance with their terms prior to such date.
Prior to the close of business on the business day immediately
preceding January 15, 2026, noteholders may convert their notes
only upon the satisfaction of certain conditions and during certain
periods. On or after January 15, 2026 until the close of business
on the second scheduled trading day immediately preceding the
maturity date, noteholders may convert all or any portion of their
notes at any time.
The Company will settle conversions by paying cash up to the
aggregate principal amount of the notes to be converted and paying
or delivering, as the case may be, cash, shares of its common stock
or a combination of cash and shares of its common stock, at its
election, in respect of the remainder, if any, of its conversion
obligation in excess of the aggregate principal amount of the notes
being converted, based on the then applicable conversion rate.
Noteholders will have the right to require the Company to
repurchase for cash all or any portion of their notes at 100% of
their principal amount, plus any accrued and unpaid interest, upon
the occurrence of certain fundamental changes.
In connection with the offering of the notes, the Company
expects to enter into privately negotiated convertible note hedge
transactions with one or more financial institutions, which may
include one or more of the initial purchasers or their respective
affiliates (the “option counterparties”). These transactions will
cover, subject to customary anti-dilution adjustments, the number
of shares of the Company’s common stock that will initially
underlie the notes, and are expected generally to reduce the
potential equity dilution, and/or offset any cash payments the
Company is required to make in excess of the principal amount due,
as the case may be, upon conversion of the notes.
The Company also expects to enter into separate, privately
negotiated warrant transactions with the option counterparties at a
higher strike price relating to the same number of shares of the
Company’s common stock, subject to customary anti-dilution
adjustments, pursuant to which the Company will sell warrants to
the option counterparties. The warrants could have a dilutive
effect on the Company’s outstanding common stock and the Company’s
earnings per share to the extent that the market price per share of
the Company’s common stock exceeds the applicable strike price of
those warrants.
If the initial purchasers exercise their option to purchase
additional notes, the Company expects to enter into additional
convertible note hedge transactions and additional warrant
transactions with the option counterparties, which will initially
cover the number of shares of the Company’s common stock that will
initially underlie the additional notes sold to the initial
purchasers.
The Company intends to use a portion of the net proceeds from
the offering to fund the cost of entering into the convertible note
hedge transactions (after such cost is partially offset by the
proceeds to the Company from the sale of the warrant transactions).
The Company intends to use the remainder of the net proceeds from
the offering to repay outstanding borrowings under its revolving
credit facility and for general corporate purposes. If the initial
purchasers exercise their option to purchase additional notes, then
the Company intends to use a portion of the additional net proceeds
to fund the cost of entering into additional convertible note hedge
transactions (after such cost is partially offset by the proceeds
to the Company from the sale of the additional warrant
transactions).
The Company has been advised that in connection with
establishing their initial hedges of the convertible note hedge and
warrant transactions, the option counterparties and/or their
respective affiliates expect to enter into various derivative
transactions with respect to the Company’s common stock and/or
purchase shares of the Company’s common stock concurrently with or
shortly after the pricing of the notes. This activity could have
the effect of increasing (or reducing the size of any decrease in)
the market price of the Company’s common stock and/or the notes at
that time. The option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Company’s common
stock and/or purchasing or selling the Company’s common stock or
other securities of the Company in secondary market transactions
following the pricing of the notes and prior to the maturity of the
notes (and the option counterparties and/or their respective
affiliates are likely to do so in connection with any conversion of
the notes or redemption or repurchase of the notes).
The potential effect, if any, of these transactions and
activities on the market price of the Company’s common stock or the
notes will depend in part on market conditions and cannot be
ascertained at this time, but any of these activities could
adversely affect the value of the Company’s common stock, which
could affect the ability of noteholders to convert the notes, the
value of the notes and the amount of cash and the number of and
value of the shares of the Company’s common stock, if any,
noteholders would receive upon conversion of the notes.
The offer and sale of the notes and the shares of the Company’s
common stock, if any, issuable upon conversion of the notes have
not been registered under the Securities Act or any state
securities laws, and the notes and such shares may not be offered
or sold absent registration or an applicable exemption from, or in
a transaction not subject to, the registration requirements of the
Securities Act and applicable state laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification thereof under the
securities laws of such jurisdiction. Any offers of the notes will
be made only by means of a private offering memorandum. The notes
being offered have not been approved or disapproved by any
regulatory authority, nor has any such authority passed upon the
accuracy or adequacy of the applicable private offering
memorandum.
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 product markets, consisting primarily of
recreational vehicles and adjacent industries, including buses;
trailers used to haul boats, livestock, equipment, and other cargo;
trucks; boats; 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. 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; and other accessories.
Forward-Looking Statements
This press release contains “forward-looking statements” that
involve risks and uncertainties, including statements concerning
the proposed terms of the notes and the convertible note hedge and
warrant transactions, the completion, timing and size of the
proposed offering of the notes and the convertible note hedge and
warrant transactions and the anticipated use of proceeds from the
offering. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual events
to differ materially from the Company’s plans. These risks include,
but are not limited to, market risks, trends and conditions, and
those risks included in the section titled “Risk Factors” in the
Company’s Securities and Exchange Commission (“SEC”) filings and
reports, including its Annual Report on Form 10-K for the year
ended December 31, 2020, its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2021 and other filings that the Company
makes from time to time with the SEC, which are available on the
SEC’s website at www.sec.gov. All forward-looking statements
contained in this press release speak only as of the date on which
they were made. The Company undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210510005416/en/
Contact: Brian M. Hall, CFO Phone: (574) 535-1125
E Mail: LCII@lci1.com
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