Second Quarter 2019 Highlights
- Net sales of $629.1 million in the second quarter, a decrease
of 8% year-over-year
- Net income of $47.5 million or $1.89 per diluted share in the
second quarter
- Aftermarket sales grew to $75.7 million for the quarter, up 12%
year-over-year
- International sales grew to $31.5 million for the quarter, up
21% year-over-year
- North American RV now less than 60% of total net sales for the
twelve months ended June 30, 2019
- Quarterly dividend of $0.65 per share paid totaling $16.3
million
LCI Industries (NYSE: LCII) ("LCI", or the "Company"), through
its wholly-owned subsidiary, Lippert Components, Inc., supplies,
domestically and internationally, a broad array of engineered
components for the leading original equipment manufacturers
("OEMs") in the recreation and industrial product markets, and the
related aftermarkets of those industries, today reported second
quarter 2019 results.
"In the second quarter, we delivered solid performance led by
growth in Aftermarket, as well as sequential margin expansion
driven by market share gains, operational efficiencies, and
material cost improvements. While the North American RV market
remains challenging, our diversification strategy continues to
generate solid momentum. As of June 30th, our adjacent,
aftermarket, and international sales comprised over 40 percent of
our last twelve-month sales, which was supported by 29 percent
growth in domestic Aftermarket sales over the first quarter and 13
percent year-over-year. In addition, our Aftermarket Segment
operating margin has expanded to 17.1 percent in the second quarter
and 14.9 percent year-to-date. We also benefited from the
implementation of initiatives to enhance our manufacturing
efficiencies through several continuous improvement, lean, and
automation projects, which drove lower labor costs for the quarter
and enhanced margins," said LCI Industries' Chief Executive
Officer, Jason Lippert. "Supplementing our investments in
innovation, content growth, and market share gains, we also
announced two exciting transactions during the quarter, Lewmar
Marine and Lavet, which will further enhance our offerings to the
marine and the international RV market, respectively. As we look to
the back half of 2019, while the domestic RV market will remain
somewhat pressured, we believe we have the opportunity to further
drive value for our shareholders through a continued focus on
diversifying our business as we remain committed to core industry
leadership, innovation, and growth into new markets."
Second Quarter 2019 Results
Consolidated net sales for the second quarter of 2019 were
$629.1 million, a decline of eight percent from 2018 second quarter
net sales of $684.5 million. Net income in the second quarter of
2019 was $47.5 million, or $1.89 per diluted share, compared to net
income of $47.2 million, or $1.86 per diluted share, in the second
quarter of 2018.
The decrease in year-over-year net sales for the second quarter
of 2019 reflects lower RV wholesale shipments as dealers normalize
their inventory levels which we believe to be in the final stages
of correction, offset by continued growth in the Company's
aftermarket and international markets. Net sales from acquisitions
completed by the Company over the twelve months ended June 30,
2019, contributed $8.6 million in the second quarter of 2019.
The Company's content per travel trailer and fifth-wheel RV for
the twelve months ended June 30, 2019, increased $74 to $3,486,
compared to the twelve months ended June 30, 2018, of $3,412. The
Company's content per motorhome RV for the twelve months ended June
30, 2019, increased $30 to $2,468, compared to the twelve months
ended June 30, 2018, of $2,438. The content increases are a result
of organic growth, including new product introductions and price
increases, as well as acquisitions.
July 2019 Results
July 2019 consolidated net sales are approximately $181 million,
down five percent from July 2018. Sales continue to be impacted by
reduced production rates by the RV OEMs.
Income Taxes
The Company's effective tax rate was 25 percent for the quarter
ended June 30, 2019, higher than the comparable prior year period
of 24 percent primarily due to a year-over-year increase in state
income taxes.
Balance Sheet and Other Items
At June 30, 2019, the Company's cash, cash equivalents, and
restricted cash balance was $60.7 million, an increase of $45.7
million from the balance of $14.9 million at the beginning of the
year. The ending balance includes restricted cash of $45.5 million
for the acquisition of Lewmar. The Company generated cash flow from
operations of $180.1 million and invested $35.8 million in capital
expenditures as well as $31.3 million for dividend payments to
shareholders for the six months ended June 30, 2019. The Company's
outstanding debt was $245.3 million at June 30, 2019.
Conference Call & Webcast
LCI will host a conference call to discuss its second quarter
2019 earnings on Tuesday, August 6, 2019, at 8:30 a.m. Eastern
time, which may be accessed by dialing (888) 525-0270 for
participants in the U.S./Canada or (704) 935-3405 for participants
outside the U.S./Canada using the required conference ID 2298822.
In addition, an online, real-time webcast, as well as a
supplemental earnings presentation can be accessed on the Company's
website, www.lci1.com/investors.
A replay of the conference call will be available for two weeks
by dialing (855) 859-2056 and referencing access code 2298822. A
replay of the webcast will also be available on LCI's website until
the next quarterly conference call.
About LCI Industries
From over 65 manufacturing and distribution facilities located
throughout the United States and in Canada, Ireland, Italy, and the
United Kingdom, LCI Industries, through its wholly-owned
subsidiary, LCI, supplies, domestically and internationally, a
broad array of engineered components for the leading OEMs in the
recreation and industrial product markets, consisting 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 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; entry,
luggage, patio, and ramp doors; furniture and mattresses; electric
and manual entry steps; awnings and awning accessories; electronic
components; appliances; televisions, sound systems, navigation
systems, and backup cameras; 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,
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 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 availability, 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, 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, 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, 2018, 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 June 30,
Six Months Ended June 30,
Last Twelve
2019
2018
2019
2018
Months
(In thousands, except per share
amounts)
Net sales
$
629,068
$
684,455
$
1,221,240
$
1,334,947
$
2,362,100
Cost of sales
480,415
533,999
939,993
1,043,758
1,851,698
Gross profit
148,653
150,456
281,247
291,189
510,402
Selling, general and administrative
expenses
82,996
86,368
167,835
167,281
322,110
Operating profit
65,657
64,088
113,412
123,908
188,292
Interest expense, net
2,099
1,660
4,606
2,761
8,281
Income before income taxes
63,558
62,428
108,806
121,147
180,011
Provision for income taxes
16,031
15,204
26,913
26,587
44,127
Net income
$
47,527
$
47,224
$
81,893
$
94,560
$
135,884
Net income per common share:
Basic
$
1.90
$
1.87
$
3.28
$
3.75
$
5.42
Diluted
$
1.89
$
1.86
$
3.28
$
3.70
$
5.38
Weighted average common shares
outstanding:
Basic
25,024
25,233
24,963
25,195
25,069
Diluted
25,091
25,454
25,005
25,527
25,258
Depreciation and amortization
$
18,666
$
17,201
$
37,115
$
32,476
$
72,165
Capital expenditures
$
11,344
$
28,535
$
35,786
$
54,539
$
101,074
LCI INDUSTRIES
SEGMENT RESULTS
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
Last Twelve
2019
2018
2019
2018
Months
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
343,051
$
399,464
$
659,922
$
804,421
$
1,296,231
Motorhomes
41,357
49,071
86,357
101,986
171,668
Adjacent Industries OEMs
168,960
168,383
338,869
310,690
642,768
Total OEM Segment net sales
553,368
616,918
1,085,148
1,217,097
2,110,667
Aftermarket Segment:
Total Aftermarket Segment net sales
75,700
67,537
136,092
117,850
251,433
Total net sales
$
629,068
$
684,455
$
1,221,240
$
1,334,947
$
2,362,100
Operating profit:
OEM Segment
$
52,679
$
53,591
$
93,087
$
107,531
$
153,032
Aftermarket Segment
12,978
10,497
20,325
16,377
35,260
Total operating profit
$
65,657
$
64,088
$
113,412
$
123,908
$
188,292
LCI INDUSTRIES
BALANCE SHEET
INFORMATION
(unaudited)
June 30,
December 31,
2019
2018
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
$
15,128
$
14,928
Restricted cash
45,532
—
Accounts receivable, net of allowances of
$2,512 and $1,895 at June 30, 2019 and December 31, 2018,
respectively
143,111
121,812
Inventories, net
301,159
340,615
Prepaid expenses and other current
assets
33,168
49,296
Total current assets
538,098
526,651
Fixed assets, net
339,613
322,876
Goodwill
182,224
180,168
Other intangible assets, net
165,170
176,342
Operating lease right-of-use assets
62,898
—
Deferred taxes
9,219
10,948
Other assets
32,997
26,908
Total assets
$
1,330,219
$
1,243,893
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable, trade
$
89,323
$
78,354
Current portion of operating lease
obligations
14,141
—
Accrued expenses and other current
liabilities
116,928
99,228
Total current liabilities
220,392
177,582
Long-term indebtedness
245,310
293,528
Operating lease obligations
51,408
—
Other long-term liabilities
60,233
66,528
Total liabilities
577,343
537,638
Total stockholders’ equity
752,876
706,255
Total liabilities and stockholders’
equity
$
1,330,219
$
1,243,893
LCI INDUSTRIES
SUMMARY OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
2019
2018
(In thousands)
Cash flows from operating activities:
Net income
$
81,893
$
94,560
Adjustments to reconcile net income to
cash flows provided by operating activities:
Depreciation and amortization
37,115
32,476
Stock-based compensation expense
7,848
9,762
Other non-cash items
705
(927)
Changes in assets and liabilities, net of
acquisitions of businesses:
Accounts receivable, net
(22,345)
(52,236)
Inventories, net
39,944
(14,556)
Prepaid expenses and other assets
11,444
(5,743)
Accounts payable, trade
11,567
5,412
Accrued expenses and other liabilities
11,944
10,181
Net cash flows provided by operating
activities
180,115
78,929
Cash flows from investing activities:
Capital expenditures
(35,786)
(54,539)
Acquisitions of businesses, net of cash
acquired
(8,530)
(153,415)
Proceeds from note receivable
—
2,000
Other investing activities
251
(1,016)
Net cash flows used in investing
activities
(44,065)
(206,970)
Cash flows from financing activities:
Vesting of stock-based awards, net of
shares tendered for payment of taxes
(7,144)
(14,114)
Proceeds from revolving credit facility
borrowings
305,288
631,148
Repayments under revolving credit facility
borrowings
(354,981)
(469,148)
Proceeds from other borrowings
—
4,509
Payment of dividends
(31,266)
(28,985)
Payment of contingent consideration
related to acquisitions
(4)
(3,011)
Other financing activities
(393)
(556)
Net cash flows (used in) provided by
financing activities
(88,500)
119,843
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(1,818)
—
Net increase (decrease) in cash, cash
equivalents, and restricted cash
45,732
(8,198)
Cash, cash equivalents, and restricted
cash at beginning of period
14,928
26,049
Cash, cash equivalents, and restricted
cash at end of period
$
60,660
$
17,851
LCI INDUSTRIES
SUPPLEMENTARY
INFORMATION
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
Last Twelve
2019
2018
2019
2018
Months
Industry Data(1) (in thousands of
units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs
101.0
115.5
185.7
232.4
368.3
Motorhome RVs
12.8
15.6
25.5
33.1
50.0
Industry Retail Sales:
Travel trailer and fifth-wheel RVs
133.3
(2)
149.3
210.3
(2)
230.9
400.7
(2)
Impact on dealer inventories
(32.3)
(2)
(33.8)
(24.6)
(2)
1.5
(32.4)
(2)
Motorhome RVs
14.9
(2)
17.4
24.4
(2)
29.3
47.0
(2)
Twelve Months Ended
June 30,
2019
2018
LCI Content Per Industry Unit
Produced:
Travel trailer and fifth-wheel RV
$
3,486
$
3,412
Motorhome RV
$
2,468
$
2,438
June 30,
December 31,
2019
2018
2018
Balance Sheet Data:
Current ratio
2.4
2.7
3.0
Total indebtedness to stockholders'
equity
0.3
0.3
0.4
Days sales in accounts receivable, based
on last twelve months
24.6
22.9
24.2
Inventory turns, based on last twelve
months
5.7
7.0
6.2
2019
Estimated Full Year Data:
Capital expenditures
$ 55 - $ 65 million
Depreciation and amortization
$ 70 - $ 75 million
Stock-based compensation expense
$ 15 - $ 17 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) June 2019 retail sales data for RVs
has not been published yet, therefore 2019 retail data for RVs
includes an estimate for June 2019 retail units. Retail sales data
will likely be revised upwards in future months as various states
report.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190806005281/en/
Contact: Brian Hall, CFO Phone: (574) 535-1125
E Mail: LCII@lci1.com
LCI Industries (NYSE:LCII)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
LCI Industries (NYSE:LCII)
Historical Stock Chart
Von Jul 2023 bis Jul 2024