LCI Industries Reports Fourth Quarter and Full Year Financial Results

ELKHART, Ind.--(BUSINESS WIRE)--LCI Industries (NYSE: LCII), a leading supplier of engineered components to the recreation and transportation markets, today reported fourth quarter and full year 2024 results. “Lippert demonstrated continued market leadership and resilience in 2024, leveraging cost savings and operational improvements to increase EBITDA by $89 million over 2023. This performance came despite a challenging RV and marine industry backdrop, as meaningful investments toward innovations like our Touring Coil Suspension, anti-lock braking systems, our Chill Cube revolutionary RV air conditioning system, and our new RV window series fueled content expansion and further market share gains. Our diversified end markets—particularly our Aftermarket segment—helped us navigate volatility by expanding growth opportunities and bolstering profitability. Our Aftermarket business also continues to benefit from a growing presence within Camping World stores, as we achieved revenue growth of $12 million within the 14 newly upfitted locations against an environment that was declining only a year ago,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer. “As we enter 2025, we are focused on continuing to expand profitability and remain committed to achieving further cost savings in addition to the significant strides made in 2024. We’re also seeing modest improvement in the RV market, with consolidated January sales up 6% year-over-year along with growing optimism from customers," Mr. Lippert continued. "Overall, not only is Lippert well positioned to capitalize on an industry recovery due to our operational flexibility and agility, but we have the playbook required to further expand business in our other end markets, including aftermarket, building products, transportation, and utility trailers. We believe these factors, along with our experienced leadership team and numerous competitive advantages, will enable us to achieve our target of $5 billion in net sales organically by 2027 as well as a return to double digit operating margins.” “Thanks to the dedication of our experienced leadership team and team members, along with our focus on safety, quality, and customer service, we strengthened our leadership position within the recreation space in 2024. As we enter 2025, we remain committed to creating value for all stakeholders through disciplined execution and strategic growth initiatives,” commented Ryan Smith, LCI Industries' Group President - North America. Fourth Quarter 2024 Results Consolidated net sales for the fourth quarter of 2024 were $803.1 million, a decrease of 4% from 2023 fourth quarter net sales of $837.5 million. Net income in the fourth quarter of 2024 was $9.5 million, or $0.37 per diluted share, compared to a net loss of $2.4 million, or $(0.09) per diluted share, in the fourth quarter of 2023. EBITDA in the fourth quarter of 2024 was $45.8 million, compared to EBITDA of $35.6 million in the fourth 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 (loss), is provided in the "Supplementary Information - Reconciliation of Non-GAAP Measures" section below. The decrease in year-over-year net sales for the fourth quarter of 2024 was primarily driven by lower sales to North American marine and utility trailer OEMs, declines in wholesale shipments of motorhome RV units and an increased shift in unit mix towards lower content single axle travel trailers, partially offset by increased North American RV wholesale shipments of travel trailers and fifth-wheels and market share gains in the automotive aftermarket. Full Year 2024 Results Consolidated net sales for the full year 2024 were $3.7 billion, a decrease of 1% from full year 2023 net sales of $3.8 billion. Net income for the full year 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or $2.52 per diluted share, for the full year 2023. EBITDA for the year ended December 31, 2024 was $343.9 million, compared to EBITDA of $255.2 million for the year ended December 31, 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 (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 decreased industry production levels in the North American marine, utility trailer, and European RV markets and an increased shift in RV unit mix towards lower content single axle travel trailers, partially offset by a 7% increase in total North American RV wholesale shipments and sales from acquisitions. Net sales from acquisitions completed in 2023 and 2024 contributed approximately $21.4 million in 2024. January 2025 Results January 2025 consolidated net sales were approximately $328 million, up 6% from January 2024, primarily due to increases in RV OEM sales of 17% and aftermarket sales of 6%, partially offset by softness in international and other adjacent markets. OEM Segment - Fourth Quarter Performance OEM net sales for the fourth quarter of 2024 were $621.6 million, a decrease of $36.5 million compared to the same period of 2023. RV OEM net sales for the fourth quarter of 2024 were $376.1 million, down 3% compared to the same prior year period, primarily driven by a 21% decrease in motorhome wholesale shipments and a shift in RV unit mix towards lower content single axle travel trailers, partially offset by a 7% increase in North American travel trailer and fifth-wheel wholesale shipments and market share gains. Adjacent Industries OEM net sales for the fourth quarter of 2024 were $245.5 million, down 9% year-over-year, primarily due to lower sales to North American marine and utility trailers OEMs. This decline was driven by current dealer inventory levels, inflation, and elevated interest rates impacting retail consumers. North American marine OEM net sales in the fourth quarter of 2024 were $55.1 million, down 15% year-over-year. Operating profit of the OEM Segment was $1.9 million in the fourth quarter of 2024, or 0.3% of net sales, compared to an operating loss of $11.7 million, or (1.8)% of net sales, in the same period in 2023. The operating profit expansion of the OEM Segment for the quarter was primarily driven by operational improvements, partially offset by the impact of fixed costs spread over decreased sales. Aftermarket Segment - Fourth Quarter Performance Aftermarket net sales for the fourth quarter of 2024 were $181.6 million, an increase of 1% compared to the same period of 2023. Resiliency in the Aftermarket Segment was primarily driven by market share gains in the automotive aftermarket, partially offset by lower volumes within the marine aftermarket. Operating profit of the Aftermarket Segment was $14.3 million in the fourth quarter of 2024, or 7.9% of net sales, in line with the same period of 2023. The operating profit margin of the Aftermarket Segment for the quarter was impacted by increased labor costs due to product mix and increased facility costs resulting from investments to expand capacity within the automotive aftermarket, partially offset by decreased material costs. “Our automotive aftermarket business has consistently outperformed, achieving a 7% increase in sales in the full year 2024 that has helped offset softness in the RV and marine aftermarkets," commented Jamie Schnur, LCI Industries’ Group President – Aftermarket. "This growth was further fueled by Lippert’s increasing content on RVs, which drives demand for our replacement and repair parts. By continuing to differentiate ourselves through high-quality product offerings and exceptional service, we are building further trust with both dealers and consumers. Moving forward, we remain focused on expanding our presence in premium markets to support Lippert’s long-term, profitable growth.” Income Taxes The Company's effective tax rate was 24.5% and 13.5% for the year and quarter ended December 31, 2024, respectively, compared to 22.7% and 65.2% for the year and quarter ended December 31, 2023, respectively. The increase in the effective tax rate for the full year 2024 compared to 2023 was primarily due to an increase in the state tax rate. Due to certain operating losses in the fourth quarter of 2023, discrete adjustments related to an increase in life insurance contract assets had a proportionately larger impact on the tax rate in that period. Balance Sheet and Other Items At December 31, 2024, the Company's cash and cash equivalents balance was $165.8 million, compared to $66.2 million at December 31, 2023. The Company used $109.5 million for dividend payments to shareholders, $89.2 million for the repayment of debt (net of borrowings), $42.3 million for capital expenditures, and $20.0 million for an acquisition in the twelve months ended December 31, 2024. The Company's outstanding long-term indebtedness, including current maturities, was $757.3 million at December 31, 2024, and the Company was in compliance with its debt covenants. As of December 31, 2024, the Company had $452.5 million of borrowing availability under the revolving credit facility. Conference Call & Webcast LCI Industries will host a conference call to discuss its fourth quarter results on Tuesday, February 11, 2025, 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 823178. 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 151640. 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 (NYSE: LCII), through its Lippert subsidiary, is a global leader in supplying engineered components to the outdoor recreation and transportation markets. We believe our innovative culture, advanced manufacturing capabilities, and dedication to enhancing the customer experience have established Lippert as a reliable partner for both OEM and aftermarket customers. For more information, visit www.lippert.com. Forward-Looking Statements This press release contains certain "forward-looking statements" with respect to our financial condition, results of operations, profitability, margins, 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), operating margins, 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 Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 (In thousands, except per share amounts) Net sales $ 803,138 $ 837,544 $ 3,741,208 $ 3,784,808 Cost of sales 633,732 676,493 2,861,493 3,008,618 Gross profit 169,406 161,051 879,715 776,190 Selling, general and administrative expenses 153,272 158,430 661,478 652,762 Operating profit 16,134 2,621 218,237 123,428 Interest expense, net 5,100 9,456 28,899 40,424 Income (loss) before income taxes 11,034 (6,835 ) 189,338 83,004 Provision (benefit) for income taxes 1,487 (4,458 ) 46,471 18,809 Net income (loss) $ 9,547 $ (2,377 ) $ 142,867 $ 64,195 Net income (loss) per common share: Basic $ 0.37 $ (0.09 ) $ 5.61 $ 2.54 Diluted $ 0.37 $ (0.09 ) $ 5.60 $ 2.52 Weighted average common shares outstanding: Basic 25,481 25,342 25,447 25,305 Diluted 25,599 25,342 25,507 25,436 Depreciation $ 16,482 $ 18,719 $ 70,393 $ 74,693 Amortization $ 13,211 $ 14,231 $ 55,300 $ 57,075 Capital expenditures $ 10,943 $ 12,149 $ 42,333 $ 62,209 LCI INDUSTRIES SEGMENT RESULTS (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 (In thousands) Net sales: OEM Segment: RV OEMs: Travel trailers and fifth-wheels $ 328,254 $ 325,987 $ 1,514,578 $ 1,358,853 Motorhomes 47,808 62,952 233,066 269,356 Adjacent Industries OEMs 245,491 269,156 1,112,806 1,275,533 Total OEM Segment net sales 621,553 658,095 2,860,450 2,903,742 Aftermarket Segment: Total Aftermarket Segment net sales 181,585 179,449 880,758 881,066 Total net sales $ 803,138 $ 837,544 $ 3,741,208 $ 3,784,808 Operating profit (loss): OEM Segment $ 1,858 $ (11,725 ) $ 107,081 $ 17,361 Aftermarket Segment 14,276 14,346 111,156 106,067 Total operating profit $ 16,134 $ 2,621 $ 218,237 $ 123,428 Depreciation and amortization: OEM Segment depreciation $ 12,446 $ 14,557 $ 53,484 $ 58,397 Aftermarket Segment depreciation 4,036 4,162 16,909 16,296 Total depreciation $ 16,482 $ 18,719 $ 70,393 $ 74,693 OEM Segment amortization $ 9,417 $ 10,375 $ 39,843 $ 41,579 Aftermarket Segment amortization 3,794 3,856 15,457 15,496 Total amortization $ 13,211 $ 14,231 $ 55,300 $ 57,075 LCI INDUSTRIES BALANCE SHEET INFORMATION (unaudited) December 31, December 31, 2024 2023 (In thousands) ASSETS Current assets Cash and cash equivalents $ 165,756 $ 66,157 Accounts receivable, net 199,560 214,707 Inventories, net 736,604 768,407 Prepaid expenses and other current assets 58,318 67,599 Total current assets 1,160,238 1,116,870 Fixed assets, net 432,728 465,781 Goodwill 585,773 589,550 Other intangible assets, net 392,018 448,759 Operating lease right-of-use assets 224,313 245,388 Other long-term assets 99,669 92,971 Total assets $ 2,894,739 $ 2,959,319 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term indebtedness $ 423 $ 589 Accounts payable, trade 187,684 183,697 Current portion of operating lease obligations 38,671 36,269 Accrued expenses and other current liabilities 185,275 174,437 Total current liabilities 412,053 394,992 Long-term indebtedness 756,830 846,834 Operating lease obligations 199,929 222,680 Deferred taxes 26,110 32,345 Other long-term liabilities 112,931 107,432 Total liabilities 1,507,853 1,604,283 Total stockholders' equity 1,386,886 1,355,036 Total liabilities and stockholders' equity $ 2,894,739 $ 2,959,319 LCI INDUSTRIES SUMMARY OF CASH FLOWS (unaudited) Twelve Months Ended December 31, 2024 2023 (In thousands) Cash flows from operating activities: Net income $ 142,867 $ 64,195 Adjustments to reconcile net income to cash flows provided by operating activities: Depreciation and amortization 125,693 131,768 Stock-based compensation expense 18,653 18,229 Deferred taxes (7,073 ) 2,067 Other non-cash items 7,209 7,716 Changes in assets and liabilities, net of acquisitions of businesses: Accounts receivable, net 13,469 1,594 Inventories, net 46,335 235,347 Prepaid expenses and other assets 4,532 25,954 Accounts payable, trade 3,474 38,737 Accrued expenses and other liabilities 15,125 1,622 Net cash flows provided by operating activities 370,284 527,229 Cash flows from investing activities: Capital expenditures (42,333 ) (62,209 ) Acquisitions of businesses (19,957 ) (25,851 ) Other investing activities 1,192 4,312 Net cash flows used in investing activities (61,098 ) (83,748 ) Cash flows from financing activities: Vesting of stock-based awards, net of shares tendered for payment of taxes (9,159 ) (9,628 ) Proceeds from revolving credit facility 86,248 248,900 Repayments under revolving credit facility (138,752 ) (464,822 ) Repayments under term loan and other borrowings (36,655 ) (61,099 ) Payment of dividends (109,471 ) (106,336 ) Payment of contingent consideration and holdbacks related to acquisitions (2 ) (31,857 ) Other financing activities (430 ) (1,342 ) Net cash flows used in financing activities (208,221 ) (426,184 ) Effect of exchange rate changes on cash and cash equivalents (1,366 ) 1,361 Net increase in cash and cash equivalents 99,599 18,658 Cash and cash equivalents at beginning of period 66,157 47,499 Cash and cash equivalents at end of period $ 165,756 $ 66,157 LCI INDUSTRIES SUPPLEMENTARY INFORMATION (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Industry Data(1) (in thousands of units): Industry Wholesale Production: Travel trailer and fifth-wheel RVs 67.7 63.4 291.6 259.1 Motorhome RVs 8.0 10.1 34.9 45.9 Industry Retail Sales: Travel trailer and fifth-wheel RVs 54.8 53.7 307.0 327.0 Impact on dealer inventories 12.9 9.7 (15.4 ) (67.9 ) Motorhome RVs 7.9 8.0 40.0 45.3 Twelve Months Ended December 31, 2024 2023 Lippert Content Per Industry Unit Produced: Travel trailer and fifth-wheel RV $ 5,097 $ 5,058 Motorhome RV $ 3,742 $ 3,506 December 31, 2024 2023 Balance Sheet Data (debt availability in millions): Remaining availability under the revolving credit facility (2) $ 452.5 $ 245.3 Days sales in accounts receivable, based on last twelve months 29.9 30.1 Inventory turns, based on last twelve months 4.0 3.5 2025 Estimated Full Year Data: Capital expenditures $50 - $70 million Depreciation and amortization $115 - $125 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) 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 and net income as a percentage of net sales to EBITDA as a percentage of net sales. Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 (In thousands) Net income (loss) $ 9,547 $ (2,377 ) $ 142,867 $ 64,195 Interest expense, net 5,100 9,456 28,899 40,424 Provision (benefit) for income taxes 1,487 (4,458 ) 46,471 18,809 Depreciation expense 16,482 18,719 70,393 74,693 Amortization expense 13,211 14,231 55,300 57,075 EBITDA $ 45,827 $ 35,571 $ 343,930 $ 255,196 Net sales $ 803,138 $ 837,544 $ 3,741,208 $ 3,784,808 Net income (loss) as a percentage of net sales 1.2 % (0.3 %) 3.8 % 1.7 % EBITDA as a percentage of net sales 5.7 % 4.2 % 9.2 % 6.7 % In addition to reporting financial results in accordance with U.S. GAAP, the Company has provided the non-GAAP performance measures of EBITDA and EBITDA as a percentage of net sales to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income (loss) before interest expense, net, provision/benefit for income taxes, depreciation expense, and amortization expense during the three and twelve month periods ended December 31, 2024 and 2023. 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 it provides a useful analysis of ongoing underlying operating trends. These measures are not in accordance with, nor are they substitutes for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies.

LCI Industries Reports Fourth Quarter and Full Year Financial Results

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