LCI Industries Reports First Quarter Financial Results
LCI Industries reported first quarter 2024 results with net sales of $968 million, down 1% year-over-year, net income of $37 million, and EBITDA of $90 million. The company acquired CWDS, expanding its furniture portfolio. Despite lower marine sales, the OEM segment saw increased RV sales. Aftermarket segment operating profit margin increased to 11.8%. The company remains focused on reducing inventory and improving cash generation while investing in R&D and returning capital to shareholders.
Strong EBITDA generation and margin expansion in the first quarter.
Acquisition of CWDS, to expand furniture portfolio.
Increased RV sales in the OEM segment.
Aftermarket segment operating profit margin increased to 11.8%.
Focus on reducing inventory and improving cash generation.
Decrease in consolidated net sales by 1% year-over-year.
Decline in North American marine sales.
Decreased selling prices indexed to select commodities.
Decrease in Aftermarket net sales by 3% year-over-year.
Reduced cash and cash equivalents balance compared to the previous quarter.
Insights
Robust margin expansion supported by performance of diversified businesses and consistent operational execution
First Quarter 2024 Highlights
-
Net sales of
$968 million 1% year-over-year -
Net income of
$37 million $1.44 $7 million $0.29 -
EBITDA of
$90 million $53 million -
Aftermarket Segment operating profit margin of
11.8% in the first quarter, up from9.7% in the first quarter of 2023 -
Inventory reduction of
$34 million $175 million -
Quarterly dividend of
$1.05 $27 million - 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
"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
"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 -
First Quarter 2024 Results
Consolidated net sales for the first quarter of 2024 were
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
OEM Segment - First Quarter Performance
OEM net sales for the first quarter of 2024 were
Operating profit of the OEM Segment was
Aftermarket Segment - First Quarter Performance
Aftermarket net sales for the first quarter of 2024 were
“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
Balance Sheet and Other Items
At March 31, 2024, the Company's cash and cash equivalents balance was
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
The Company's outstanding long-term indebtedness, including current maturities, was
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
A replay of the conference call will be available for two weeks by dialing (866) 813-9403 for participants in the
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 |
|
|
|
|
|||||||||
Depreciation and amortization |
|
|
|
|
|||||||||
Stock-based compensation expense |
|
|
|
|
|||||||||
Annual tax rate |
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|||||||
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508012644/en/
Lillian D. Etzkorn, CFO
(574) 535-1125
LCII@lci1.com
Source: LCI Industries
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