Establishing emergency fund for team members in
crisis
LCI Industries (NYSE: LCII), which, through its wholly-owned
subsidiary, Lippert Components, Inc. ("LCI"), supplies,
domestically and internationally, a broad array of highly
engineered components for the leading original equipment
manufacturers ("OEMs") in the recreation and transportation product
markets, and the related aftermarkets of those industries, today
announced additional actions and support activities in response to
the COVID-19 pandemic. In addition, the Company will be
establishing an emergency fund for team members in crisis.
“During this unprecedented crisis, the health and safety of our
team members remains our top priority. At the same time, we are
taking the necessary steps to mitigate the long-term impact of this
prolonged macro-economic uncertainty on our business stemming from
the COVID-19 pandemic. As a result, we have taken substantial
actions in response to this rapidly changing environment, including
implementing broad-based reductions in compensation, delaying
non-essential capital expenditures, and eliminating discretionary
spending. We believe these steps will be critical to maintaining a
strong, flexible financial position. Now more than ever, our
operational discipline and track record of successfully navigating
various economic cycles will prove critical to ensuring we emerge
from this crisis a stronger, more nimble company,” said LCI
Industries President and CEO Jason Lippert.
“Many of our team members on the front lines are experiencing
personal and financial difficulties as our economy has ground to a
rapid halt. As a result, we will be establishing a temporary
emergency fund to support extreme needs of team members, if needed.
In this difficult period, I want to again express my gratitude to
all our team members for their extraordinary leadership,” concluded
Mr. Lippert.
Business Update
As previously announced, on March 25, 2020, the Company
announced the temporary suspension of production at select
manufacturing facilities across the U.S. and Europe. In addition,
LCI Industries is making the following temporary compensation
adjustments:
- President and Chief Executive Officer, Jason Lippert, as well
as Ryan Smith, Senior Vice President of Operations, will reduce
their base salaries by 25%.
- The executive leadership team, general managers and other
executives across the Company will reduce their respective base
salaries.
- The LCI Industries Board of Directors will reduce their
quarterly retainer by 25%.
The Company will continue to carefully review executive and
director compensation, as well as other salaried personnel costs,
to identify other potential cost saving opportunities.
LCI has implemented further cost saving measures, and is
evaluating additional actions, including:
- Rightsizing workforce to match current demand levels.
- Delaying certain capital expenses and reducing or eliminating
non-critical business expenses.
- Temporary hiring freezes in all locations and furloughs for
non-critical team members.
- Postponing merit increases for salaried employees until the end
of the fiscal year.
- Continually engaging with our strategic banking partners
regarding appropriate options relative to future financial
liquidity.
“Despite incredibly strong headwinds we are facing globally,
long-term, we remain encouraged by the secular trends driving a
positive outlook for the RV industry, which remains popular among
younger demographics who seek innovative, technologically advanced
products. Further, given our new normal, which will include
significantly less air travel and hotel stays in the intermediate
term, combined with the need for social distancing for the
foreseeable future, RVs provide a wonderful opportunity for people
to continue to enjoy vacation and leisure activities,” continued
Mr. Lippert. “While we have paused on some of our inorganic
opportunities that will advance our diversification strategy, we
are continuing to prudently invest in technology that will allow
LCI to further extend its leadership position in the markets we
serve.”
Financial Strength and Flexibility
LCI Industries maintains a strong financial position supported
by ample liquidity, with a current net debt position of
approximately $700 million, net of approximately $100 million of
cash available on its balance sheet and borrowing availability of
over $190 million at March 31, 2020.
The Company has no significant debt maturities until 2022, and
as of the most recent quarter end, the Company was well within its
loan covenant which requires a leverage ratio (net debt to proforma
TTM EBITDA) under 3.0.
Community Support
LCI Industries is dedicated to participating in overall relief
efforts across over 90 facilities. The Company is donating personal
protective equipment and other supplies throughout our local
communities, in addition to manufacturing roughly 56,000 medical
face shields used by doctors and nurses in Italy.
In accordance with LCI’s Social Impact philosophy, the Company
will also be establishing a temporary emergency fund to aid those
team members who have faced personal and financial difficulties due
to the COVID-19 health crisis. LCI will also continue to encourage
and support employee-initiated volunteer efforts.
About LCI Industries
From over 90 manufacturing and distribution facilities located
throughout North America and Europe, LCI Industries, through its
wholly-owned subsidiary, LCI, supplies, domestically and
internationally, a broad array of highly engineered components for
the leading OEMs in the recreation and transportation 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
engineered 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; towing
products; truck accessories; electronic components; 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), capital expenditures, tax rate, 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, 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, 2019, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200408005418/en/
Brian M. Hall, CFO Phone: (574) 535-1125 E Mail:
LCII@lci1.com
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