ELKHART, Ind., May 4, 2017
/PRNewswire/ -- LCI Industries (NYSE: LCII) ("LCI", or the
"Company"), a supplier of components for the leading original
equipment manufacturers ("OEMs") of recreational vehicles ("RVs")
and adjacent industries, and the related aftermarkets of those
industries, today reported consolidated net sales in the first
quarter of 2017 of $498 million, 18
percent higher than the 2016 first quarter net sales of
$423 million. Net income was
$43.1 million, or $1.71 per diluted share, for the first quarter
ended March 31, 2017, compared to net income of $36.0 million, or $1.45 per diluted share, for the first quarter
ended March 31, 2016.
The increase in year-over-year net sales reflects industry-wide
growth in wholesale shipments of towable and motorized RVs by OEMs,
which increased 12 percent and 16 percent, respectively, in the
first quarter of 2017, enhanced by acquisitions completed by the
Company over the twelve months ended March 31, 2017, which
added $17 million in net sales in the
first quarter of 2017. Organic growth accounted for 14 of the 18
percent growth in consolidated net sales for the first quarter and
growth from acquisitions provided the remainder. Through continued
focus on aftermarket channels for the Company's products, the
Company increased net sales to the aftermarket in the first quarter
of 2017 by more than 20 percent to $36
million.
"Continuing the industry growth trend from 2016, 2017 first
quarter wholesale travel trailers were up over 12 percent and
fifth-wheels were up over 10 percent," stated Jason Lippert, LCI's Chief Executive Officer.
"Travel trailer sales momentum has continued as the industry
attracts a new generation of RV enthusiasts."
The health of the RV industry is determined by retail demand,
which is up over 12 percent through February, as reported by
Statistical Surveys, Inc, and will likely be revised upwards in
future months as various states report. Based on the retail sales
strength experienced through 2016 and into 2017, as well as sales
order backlogs reported by RV OEMs at record levels, the current
outlook from several RV OEMs and their dealer networks remains very
positive. Additionally, the RVIA's current forecast of wholesale
unit shipments of approximately 446,000 units has been revised
upward from its original Fall forecast of 411,000 for the full year
2017.
The Company's content per travel trailer and fifth-wheel RV for
the twelve months ended March 31, 2017, increased $80 to $3,058,
compared to the twelve months ended March 31, 2016, of
$2,978. The Company's content per
motorhome RV for the twelve months ended March 31, 2017,
increased $164 to $2,022, compared to the twelve months ended
March 31, 2016, of $1,858. The
content increases are a combined result of organic growth,
including new product introductions, as well as acquisitions and
changes in the types of RVs produced industry-wide.
In April 2017, LCI's consolidated
net sales reached approximately $167
million, 15 percent higher than April
2016. "As the industry prepares to meet the anticipated
demand of the 2017 spring and summer selling seasons, I am
encouraged by April sales following up on a strong first quarter,"
said Jason Lippert.
"Our operating profit in the first quarter of 2017 improved to
$59.1 million, compared to
$55.7 million in the first quarter of
2016," said Scott Mereness, LCI's
President. "Strong industry growth and accretive acquisitions
completed over the last year have contributed to profit growth for
the quarter. We continue to focus on cost management and
investments in lean initiatives and other operational efficiencies
to further improve operating margin while supporting the growth of
the business."
Balance Sheet and Other Items
At March 31, 2017,
the Company had a net cash position of $15
million, a decrease of $21
million from a net cash position of $36 million at the beginning of the year,
primarily as a result of $11 million
used for acquisitions, $12 million
for capital expenditures and $12
million of dividend payments in the first quarter of
2017.
The effective tax rate for the three months ended March 31,
2017, was substantially lower than the comparable prior year
period, primarily due to the recognition of excess tax benefits
attributable to the adoption by the Company of Accounting Standards
Update 2016-09, which simplified several aspects of the accounting
for share-based payment transactions, including income tax
consequences. The excess tax benefit equated to $5.2 million recognized in the first quarter of
2017.
Return on equity for the twelve months ended March 31, 2017
improved to 26.0 percent, from the 21.6 percent return on equity in
March 31, 2016. Return on invested capital for the twelve
months ended March 31, 2017 improved to 40.4 percent, from the
29.2 percent return on invested capital in March 31, 2016.
Jason Lippert concluded, "We are
working more than ever on continuously improving our organization
by developing leaders, not just managers, and focusing on how we
touch the lives of our employees. We've also made a commitment to
give back 100,000 hours in service as a company to our communities,
while maintaining a focus on our customers by raising the bar for
service and product development. We believe these initiatives will
benefit everyone at LCI, and the response from our people has been
uplifting. We believe taking corporate culture and leadership to a
new level will continue to have a positive impact on employee
attrition and engagement, which ultimately impacts quality, safety
and the efficiency of our operations. We are committed in our
efforts to develop, engineer and build great products, as well as
improving our service to all customer channels, so that each day we
are the supplier of choice for the industries we serve."
Conference Call & Webcast
LCI will provide an
online, real-time webcast of its first quarter 2017 earnings
conference call on the Company's website, www.lci1.com/investors,
on Thursday, May 4, 2017, at 11:00 a.m.
Eastern time.
Institutional investors can access the call via the
password-protected site, StreetEvents (www.streetevents.com). A
replay of the call will be available for two weeks by dialing (855)
859-2056 and referencing access code 9506089. A replay of the
webcast will also be available on LCI's website until the next
quarterly conference call.
About LCI Industries
From 49 manufacturing and
distribution facilities located throughout the United States and in Canada and Italy, LCI Industries, through its
wholly-owned subsidiary, Lippert Components, Inc., supplies,
domestically and internationally, a broad array of components for
the leading original equipment manufacturers of recreational
vehicles and adjacent industries including buses; trailers used to
haul boats, livestock, equipment and other cargo; trucks; pontoon
boats; trains; manufactured homes; and modular housing. The Company
also supplies components to the related aftermarkets of these
industries, primarily by selling to retail dealers, wholesale
distributors and service centers. LCI'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; furniture
and mattresses; entry, luggage, patio and ramp doors; electric and
manual entry steps; awnings and awning accessories; electronic
components; televisions and sound systems; navigation systems;
backup cameras; appliances and other accessories. Additional
information about LCI and its products can be found at
www.lci1.com.
Forward-Looking Statements
This press release contains
certain "forward-looking statements" with respect to our financial
condition, results of operations, business strategies, operating
efficiencies or synergies, competitive position, growth
opportunities, acquisitions, plans and objectives of management,
markets for the Company's Common Stock 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 our future business prospects, net sales, expenses and
income (loss), cash flow, and financial condition, 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, pricing pressures
due to domestic and foreign competition, costs and availability of
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, employee benefits, employee 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, 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, 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, 2016, and in the Company's
subsequent filings with the Securities and Exchange Commission. 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
|
|
2017
|
|
2016
|
|
Months
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
498,336
|
|
|
$
|
422,798
|
|
|
$
|
1,754,436
|
|
Cost of
sales
|
374,322
|
|
|
314,357
|
|
|
1,309,960
|
|
Gross
profit
|
124,014
|
|
|
108,441
|
|
|
444,476
|
|
Selling, general and
administrative expenses
|
64,885
|
|
|
52,713
|
|
|
240,225
|
|
Operating
profit
|
59,129
|
|
|
55,728
|
|
|
204,251
|
|
Interest expense,
net
|
437
|
|
|
476
|
|
|
1,639
|
|
Income before income
taxes
|
58,692
|
|
|
55,252
|
|
|
202,612
|
|
Provision for income
taxes
|
15,547
|
|
|
19,293
|
|
|
65,755
|
|
Net income
|
$
|
43,145
|
|
|
$
|
35,959
|
|
|
$
|
136,857
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
1.73
|
|
|
$
|
1.46
|
|
|
$
|
5.52
|
|
Diluted
|
$
|
1.71
|
|
|
$
|
1.45
|
|
|
$
|
5.46
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
Basic
|
24,906
|
|
|
24,567
|
|
|
24,787
|
|
Diluted
|
25,255
|
|
|
24,794
|
|
|
25,084
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
12,241
|
|
|
$
|
10,943
|
|
|
$
|
47,465
|
|
Capital
expenditures
|
$
|
12,020
|
|
|
$
|
6,458
|
|
|
$
|
48,772
|
|
LCI
INDUSTRIES SEGMENT
RESULTS (unaudited)
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
Last
Twelve
|
|
2017
|
|
2016
|
|
Months
|
(In
thousands)
|
|
|
|
|
|
Net sales:
(1)
|
|
|
|
|
|
OEM
Segment:
|
|
|
|
|
|
RV OEMs:
|
|
|
|
|
|
Travel trailers and
fifth-wheels
|
$
|
330,274
|
|
|
$
|
283,369
|
|
|
$
|
1,146,787
|
|
Motorhomes
|
37,044
|
|
|
28,523
|
|
|
124,712
|
|
Adjacent industries
OEMs
|
94,711
|
|
|
80,761
|
|
|
345,968
|
|
Total OEM Segment net
sales
|
462,029
|
|
|
392,653
|
|
|
1,617,467
|
|
Aftermarket
Segment:
|
|
|
|
|
|
Total Aftermarket
Segment net sales
|
36,307
|
|
|
30,145
|
|
|
136,969
|
|
Total net
sales
|
$
|
498,336
|
|
|
$
|
422,798
|
|
|
$
|
1,754,436
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
OEM
Segment
|
$
|
54,397
|
|
|
$
|
50,651
|
|
|
$
|
184,596
|
|
Aftermarket
Segment
|
4,732
|
|
|
5,077
|
|
|
19,655
|
|
Total operating
profit
|
$
|
59,129
|
|
|
$
|
55,728
|
|
|
$
|
204,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Subsequent to March 31, 2016, the Company modified its internal
reporting structure, reflecting a change in how its chief operating
decision maker assesses the performance of the Company's operating
results and makes decisions about resource allocations. The
Company's new reportable segments are the OEM Segment and the
Aftermarket Segment. Prior periods have been reclassified to
conform to this presentation.
|
LCI
INDUSTRIES BALANCE SHEET
INFORMATION (unaudited)
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2016
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
64,381
|
|
|
$
|
27,917
|
|
|
$
|
86,170
|
|
Accounts receivable,
net
|
131,108
|
|
|
104,695
|
|
|
57,374
|
|
Inventories,
net
|
189,020
|
|
|
165,184
|
|
|
188,743
|
|
Prepaid expenses and
other current assets
|
37,456
|
|
|
23,408
|
|
|
35,107
|
|
Total current
assets
|
421,965
|
|
|
321,204
|
|
|
367,394
|
|
Fixed assets,
net
|
178,922
|
|
|
150,378
|
|
|
172,748
|
|
Goodwill
|
98,105
|
|
|
86,112
|
|
|
89,198
|
|
Other intangible
assets, net
|
114,311
|
|
|
109,347
|
|
|
112,943
|
|
Deferred
taxes
|
26,882
|
|
|
29,391
|
|
|
31,989
|
|
Other
assets
|
12,616
|
|
|
12,610
|
|
|
12,632
|
|
Total
assets
|
$
|
852,801
|
|
|
$
|
709,042
|
|
|
$
|
786,904
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable,
trade
|
$
|
70,225
|
|
|
$
|
48,392
|
|
|
$
|
50,616
|
|
Dividend
payable
|
—
|
|
|
7,344
|
|
|
—
|
|
Accrued expenses and
other current liabilities
|
101,020
|
|
|
99,654
|
|
|
98,735
|
|
Total current
liabilities
|
171,245
|
|
|
155,390
|
|
|
149,351
|
|
Long-term
indebtedness
|
49,905
|
|
|
49,920
|
|
|
49,949
|
|
Other long-term
liabilities
|
47,171
|
|
|
36,334
|
|
|
37,335
|
|
Total
liabilities
|
268,321
|
|
|
241,644
|
|
|
236,635
|
|
Total stockholders'
equity
|
584,480
|
|
|
467,398
|
|
|
550,269
|
|
Total liabilities and
stockholders' equity
|
$
|
852,801
|
|
|
$
|
709,042
|
|
|
$
|
786,904
|
|
LCI
INDUSTRIES SUMMARY OF CASH
FLOWS (unaudited)
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
(In
thousands)
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
43,145
|
|
|
$
|
35,959
|
|
Adjustments to
reconcile net income to cash flows provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
12,241
|
|
|
10,943
|
|
Stock-based
compensation expense
|
3,902
|
|
|
3,140
|
|
Excess tax benefits
from stock-based compensation
|
5,239
|
|
|
—
|
|
Other non-cash
items
|
1,139
|
|
|
(166)
|
|
Changes in assets and
liabilities, net of acquisitions of businesses:
|
|
|
|
Accounts receivable,
net
|
(71,155)
|
|
|
(63,286)
|
|
Inventories,
net
|
1,847
|
|
|
8,497
|
|
Prepaid expenses and
other assets
|
(2,181)
|
|
|
(2,197)
|
|
Accounts payable,
trade
|
18,146
|
|
|
18,692
|
|
Accrued expenses and
other liabilities
|
10,433
|
|
|
32,116
|
|
Net cash flows
provided by operating activities
|
22,756
|
|
|
43,698
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(12,020)
|
|
|
(6,458)
|
|
Acquisitions of
businesses, net of cash acquired
|
(10,689)
|
|
|
(18,100)
|
|
Proceeds from sales
of fixed assets
|
119
|
|
|
234
|
|
Other investing
activities
|
80
|
|
|
(151)
|
|
Net cash flows used
for investing activities
|
(22,510)
|
|
|
(24,475)
|
|
Cash flows from
financing activities:
|
|
|
|
Exercise of
stock-based awards, net of shares tendered for payment of
taxes
|
(7,650)
|
|
|
(3,196)
|
|
Proceeds from line of
credit borrowings
|
—
|
|
|
81,458
|
|
Repayments under line
of credit borrowings
|
—
|
|
|
(81,458)
|
|
Payment of
dividends
|
(12,442)
|
|
|
—
|
|
Payment of contingent
consideration related to acquisitions
|
(1,884)
|
|
|
(415)
|
|
Other financing
activities
|
(59)
|
|
|
—
|
|
Net cash flows used
for financing activities
|
(22,035)
|
|
|
(3,611)
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(21,789)
|
|
|
15,612
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
86,170
|
|
|
12,305
|
|
Cash and cash
equivalents at end of period
|
$
|
64,381
|
|
|
$
|
27,917
|
|
LCI
INDUSTRIES SUPPLEMENTARY
INFORMATION (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
|
|
Last
Twelve
|
|
|
2017
|
|
2016
|
|
Months
|
|
Industry
Data(1) (in thousands of units):
|
|
|
|
|
|
|
Industry Wholesale
Production:
|
|
|
|
|
|
|
Travel trailer and
fifth-wheel RVs
|
101.5
|
|
|
90.8
|
|
|
373.4
|
|
|
Motorhome
RVs
|
16.3
|
|
|
14.0
|
|
|
57.1
|
|
|
Industry Retail
Sales:
|
|
|
|
|
|
|
Travel trailer and
fifth-wheel RVs
|
68.2
|
|
(2)
|
62.9
|
|
|
357.6
|
|
(2)
|
Impact on dealer
inventories
|
33.3
|
|
(2)
|
27.9
|
|
|
15.8
|
|
(2)
|
Motorhome
RVs
|
10.2
|
|
(2)
|
9.6
|
|
|
47.4
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
2016
|
|
|
|
LCI Content Per
Industry Unit Produced:
|
|
|
|
|
|
|
Travel trailer and
fifth-wheel RV
|
$
|
3,058
|
|
|
$
|
2,978
|
|
|
|
|
Motorhome
RV
|
$
|
2,022
|
|
|
$
|
1,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
2016
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
Current
ratio
|
2.5
|
|
|
2.1
|
|
|
2.5
|
|
|
Total indebtedness to
stockholders' equity
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
Days sales in
accounts receivable
|
21.6
|
|
|
20.7
|
|
|
15.8
|
|
|
Inventory turns,
based on last twelve months
|
7.7
|
|
|
6.8
|
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
Estimated Full Year
Data:
|
|
|
|
|
|
|
Capital
expenditures
|
$ 65 - $ 75
million
|
|
|
|
Depreciation and
amortization
|
$ 50 - $ 55
million
|
|
|
|
Stock-based
compensation expense
|
$ 17 - $ 19
million
|
|
|
|
Annual tax
rate
|
33% - 34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
2017 retail sales data for RVs has not been published yet,
therefore 2017 retail data for RVs includes an estimate for March
2017 retail units. Retail sales data will likely be revised
upwards in future months as various states report.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lci-industries-reports-2017-first-quarter-results-300451222.html
SOURCE LCI Industries