Robust margin expansion supported by
performance of diversified businesses and consistent operational
execution
First Quarter 2024 Highlights
- Net sales of $968 million in the first quarter, down 1%
year-over-year
- Net income of $37 million, or $1.44 per diluted share, in the
first quarter, up from $7 million, or $0.29 per diluted share, in
the first quarter of 2023
- EBITDA of $90 million in the first quarter, up from $53 million
in the first quarter of 2023
- Aftermarket Segment operating profit margin of 11.8% in the
first quarter, up from 9.7% in the first quarter of 2023
- Inventory reduction of $34 million in the first quarter and
down $175 million from the first quarter of 2023
- Quarterly dividend of $1.05 per share paid totaling $27 million
in the first quarter
- Acquired furniture business of CWDS, LLC, a subsidiary of
Camping World Holdings, Inc. in May 2024, expanding the Company's
furniture portfolio to RV and marine OEM and aftermarket
customers
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 first quarter 2024 results.
"We delivered solid results in the first quarter, starting the
year with healthy EBITDA generation and margin expansion supported
by our strong operational focus and improved material costs. As we
continue to diversify our business, strength in some of our growing
markets like automotive aftermarket, housing, and our
transportation businesses has consistently lifted profitability
while adding a layer of durable, countercyclical revenue streams.
We believe that our diversified markets will remain important
drivers of Lippert’s profitable growth into the future,” commented
Jason Lippert, LCI Industries’ President and Chief Executive
Officer. “We are seeing signs of recovery in North American RV and
expect a gradual improvement in production heading further into the
year, led by towables where we typically provide the majority of
our innovative RV content. Further, introductions of advanced
products like our transformational ABS system are embedding us even
deeper with key OEMs across our markets, creating opportunities for
long-term content growth and serving as the catalyst for
approximately $200 million in new business commitments for
2024.”
"We are committed to making continued operational improvements
across our footprint, with a focus on creating flexible capacity
while reducing costs. We continue to reduce inventory and focus on
cash generation as we progress through the year. With our fortified
balance sheet, we will continue investing in R&D and innovation
while pursuing strategic growth opportunities and returning capital
to shareholders,” continued Mr. Lippert. “Looking ahead, we are
well-positioned to capture market share gains and advance our
competitive position throughout 2024."
“I would like to thank all of the Lippert teams for their
incredible dedication to serving our customers and improving our
business as we work through lingering headwinds," commented Ryan
Smith, LCI Industries' Group President - North America. "Through
our operational expertise, steeped in a culture of product quality
and innovation, we will continue to facilitate sustainable growth
for Lippert well into the future.”
First Quarter 2024 Results
Consolidated net sales for the first quarter of 2024 were $968.0
million, a decrease of 1% from 2023 first quarter net sales of
$973.3 million. Net income in the first quarter of 2024 was $36.5
million, or $1.44 per diluted share, compared to $7.3 million, or
$0.29 per diluted share, in the first quarter of 2023. EBITDA in
the first quarter of 2024 was $90.3 million, compared to EBITDA of
$52.5 million in the first quarter of 2023. 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, is provided in the "Supplementary
Information - Reconciliation of Non-GAAP Measures" section
below.
The decrease in year-over-year net sales for the first quarter
of 2024 was primarily driven by lower North American marine
production levels and decreased selling prices which are indexed to
select commodities, mostly offset by increased North American RV
wholesale shipments.
April 2024 Results
April 2024 consolidated net sales were approximately $378
million, up 12% from April 2023, primarily due to an approximate
17% increase in North American RV production, partially offset by
an approximate 33% decline in marine sales compared to April
2023.
OEM Segment - First Quarter Performance
OEM net sales for the first quarter of 2024 were $758.3 million,
an increase of $0.1 million compared to the same period of 2023. RV
OEM net sales for the first quarter of 2024 were $459.6 million, up
15% compared to the same prior year period, driven by a 9% increase
in North American RV wholesale shipments, partially offset by
decreased selling prices which are indexed to select commodities.
Adjacent Industries OEM net sales for the first quarter of 2024
were $298.7 million, down 17% year-over-year, primarily due to
lower sales to North American marine OEMs. North American marine
OEM net sales in the first quarter of 2024 were $65.4 million, down
45% year-over-year.
Operating profit of the OEM Segment was $32.8 million in the
first quarter of 2024, or 4.3% of net sales, compared to an
operating loss of $0.7 million, or (0.1)%, in the same period in
2023. The operating profit of the OEM Segment for the quarter was
primarily driven by decreased material commodity and freight
costs.
Aftermarket Segment - First Quarter Performance
Aftermarket net sales for the first quarter of 2024 were $209.7
million, down 3% year-over-year, primarily driven by lower volumes
within marine markets and the impacts of inflation and elevated
interest rates on consumers' discretionary spending, partially
offset by growth in the automotive aftermarket driven by market
share gains. Operating profit of the Aftermarket Segment was $24.8
million in the first quarter of 2024, or 11.8% of net sales,
compared to an operating profit of $20.8 million, or 9.7%, in the
same period in 2023. The operating profit expansion of the
Aftermarket Segment for the quarter was primarily driven by
decreased commodity and freight costs as well as pricing changes to
targeted products.
“We achieved another quarter of strong profitability in
Aftermarket, expanding operating margins by over 200 basis points.
Robust demand from the automotive aftermarket, in addition to the
growing need for repair, replacement, and upgrades in RV and other
adjacencies we serve, are providing a strong tailwind for the
business,” Jamie Schnur, LCI Industries’ Group President –
Aftermarket commented. “As Jason mentioned, Aftermarket is
consistently supporting Lippert’s overall profitability in a
challenging environment. We are excited to continue this progress,
providing our customers with best-in-class service and innovative
new products, as we head further into 2024.”
Income Taxes
The Company's effective tax rate was 24.3% for the quarter ended
March 31, 2024, compared to 24.8% for the quarter ended March 31,
2023. The decrease in the effective tax rate was primarily due to
decreases in non-deductible executive compensation costs and
effective state tax rates.
Balance Sheet and Other Items
At March 31, 2024, the Company's cash and cash equivalents
balance was $22.6 million, compared to $66.2 million at December
31, 2023. The Company used $26.7 million for dividend payments to
shareholders and $8.6 million for capital expenditures in the three
months ended March 31, 2024.
The Company remained focused on inventory reductions to improve
cash generation and optimize working capital in the first quarter.
As of March 31, 2024, the Company's net inventory balance was
$734.4 million, down from $768.4 million at December 31, 2023 and
$909.4 million at March 31, 2023.
The Company's outstanding long-term indebtedness, including
current maturities, was $855.3 million at March 31, 2024, and the
Company was in compliance with its debt covenants.
Conference Call & Webcast
LCI Industries will host a conference call to discuss its first
quarter results on Wednesday, May 8, 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 327802. 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 453124. 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, 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, addressable markets, 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, 2023, 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
March 31,
Last Twelve
2024
2023
Months
(In thousands, except per share
amounts)
Net sales
$
968,029
$
973,310
$
3,779,527
Cost of sales
744,123
787,239
2,965,502
Gross profit
223,906
186,071
814,025
Selling, general and administrative
expenses
166,295
166,028
653,029
Operating profit
57,611
20,043
160,996
Interest expense, net
9,321
10,394
39,351
Income before income taxes
48,290
9,649
121,645
Provision for income taxes
11,745
2,390
28,164
Net income
$
36,545
$
7,259
$
93,481
Net income per common share:
Basic
$
1.44
$
0.29
$
3.69
Diluted
$
1.44
$
0.29
$
3.67
Weighted average common shares
outstanding:
Basic
25,374
25,228
25,350
Diluted
25,389
25,293
25,468
Depreciation
$
18,585
$
18,250
$
75,028
Amortization
$
14,104
$
14,249
$
56,930
Capital expenditures
$
8,608
$
17,159
$
53,658
LCI INDUSTRIES
SEGMENT RESULTS
(unaudited)
Three Months Ended
March 31,
Last Twelve
2024
2023
Months
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
390,763
$
330,553
$
1,419,063
Motorhomes
68,838
69,551
268,643
Adjacent Industries OEMs
298,710
358,069
1,216,174
Total OEM Segment net sales
758,311
758,173
2,903,880
Aftermarket Segment:
Total Aftermarket Segment net sales
209,718
215,137
875,647
Total net sales
$
968,029
$
973,310
$
3,779,527
Operating profit (loss):
OEM Segment
$
32,836
$
(721
)
$
50,918
Aftermarket Segment
24,775
20,764
110,078
Total operating profit
$
57,611
$
20,043
$
160,996
Depreciation and amortization:
OEM Segment depreciation
$
14,035
$
14,350
$
58,082
Aftermarket Segment depreciation
4,550
3,900
16,946
Total depreciation
$
18,585
$
18,250
$
75,028
OEM Segment amortization
$
10,280
$
10,450
$
41,409
Aftermarket Segment amortization
3,824
3,799
15,521
Total amortization
$
14,104
$
14,249
$
56,930
LCI INDUSTRIES
BALANCE SHEET
INFORMATION
(unaudited)
March 31,
December 31,
2024
2023
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
$
22,625
$
66,157
Accounts receivable, net
344,406
214,707
Inventories, net
734,360
768,407
Prepaid expenses and other current
assets
68,068
67,599
Total current assets
1,169,459
1,116,870
Fixed assets, net
454,071
465,781
Goodwill
587,791
589,550
Other intangible assets, net
432,728
448,759
Operating lease right-of-use assets
242,442
245,388
Other long-term assets
94,845
92,971
Total assets
$
2,981,336
$
2,959,319
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term
indebtedness
$
568
$
589
Accounts payable, trade
193,933
183,697
Current portion of operating lease
obligations
37,322
36,269
Accrued expenses and other current
liabilities
177,217
174,437
Total current liabilities
409,040
394,992
Long-term indebtedness
854,774
846,834
Operating lease obligations
218,236
222,680
Deferred taxes
31,211
32,345
Other long-term liabilities
111,191
107,432
Total liabilities
1,624,452
1,604,283
Total stockholders' equity
1,356,884
1,355,036
Total liabilities and stockholders'
equity
$
2,981,336
$
2,959,319
LCI INDUSTRIES
SUMMARY OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
2024
2023
(In thousands)
Cash flows from operating activities:
Net income
$
36,545
$
7,259
Adjustments to reconcile net income to
cash flows (used in) provided by operating activities:
Depreciation and amortization
32,689
32,499
Stock-based compensation expense
4,327
4,695
Other non-cash items
1,107
877
Changes in assets and liabilities, net of
acquisitions of businesses:
Accounts receivable, net
(131,059
)
(123,072
)
Inventories, net
32,892
131,708
Prepaid expenses and other assets
(2,392
)
5,577
Accounts payable, trade
12,038
25,822
Accrued expenses and other liabilities
6,199
(10,689
)
Net cash flows (used in) provided by
operating activities
(7,654
)
74,676
Cash flows from investing activities:
Capital expenditures
(8,608
)
(17,159
)
Acquisitions of businesses
—
(6,250
)
Other investing activities
173
1,960
Net cash flows used in investing
activities
(8,435
)
(21,449
)
Cash flows from financing activities:
Vesting of stock-based awards, net of
shares tendered for payment of taxes
(9,040
)
(8,888
)
Proceeds from revolving credit
facility
86,248
165,300
Repayments under revolving credit
facility
(76,927
)
(201,385
)
Repayments under term loan and other
borrowings
(5
)
(5,276
)
Payment of dividends
(26,721
)
(26,563
)
Other financing activities
(2
)
(12
)
Net cash flows used in financing
activities
(26,447
)
(76,824
)
Effect of exchange rate changes on cash
and cash equivalents
(996
)
(437
)
Net decrease in cash and cash
equivalents
(43,532
)
(24,034
)
Cash and cash equivalents at beginning of
period
66,157
47,499
Cash and cash equivalents at end of
period
$
22,625
$
23,465
LCI INDUSTRIES
SUPPLEMENTARY
INFORMATION
(unaudited)
Three Months Ended
March 31,
Last Twelve
2024
2023
Months
Industry Data(1) (in thousands of
units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs
73.5
62.7
269.9
Motorhome RVs
10.4
13.4
42.9
Industry Retail Sales:
Travel trailer and fifth-wheel RVs
66.4
(2
)
71.8
321.1
(2
)
Impact on dealer inventories
7.1
(2
)
(9.1
)
(51.2
)
(2
)
Motorhome RVs
9.9
(2
)
11.0
44.1
(2
)
Twelve Months Ended
March 31,
2024
2023
Lippert Content Per Industry Unit
Produced:
Travel trailer and fifth-wheel RV
$
5,097
$
5,861
Motorhome RV
$
3,656
$
3,993
March 31,
December 31,
2024
2023
2023
Balance Sheet Data (debt availability in
millions):
Remaining availability under the revolving
credit facility (3)
$
153.8
$
318.2
$
245.3
Days sales in accounts receivable, based
on last twelve months
30.5
27.9
30.1
Inventory turns, based on last twelve
months
3.7
3.3
3.5
2024
Estimated Full Year Data:
Capital expenditures
$55 - $75 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)
March 2024 retail sales data for RVs has
not been published yet, therefore 2024 retail data for RVs includes
an estimate for March 2024 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 March 31,
2024
2023
(In thousands)
Net income
$
36,545
$
7,259
Interest expense, net
9,321
10,394
Provision for income taxes
11,745
2,390
Depreciation expense
18,585
18,250
Amortization expense
14,104
14,249
EBITDA
$
90,300
$
52,542
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 month periods ended March 31, 2024 and 2023. 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/20240508012644/en/
Lillian D. Etzkorn, CFO (574) 535-1125 LCII@lci1.com
LCI Industries (NYSE:LCII)
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