Accelerated growth supported by strong
operational execution
First Quarter 2022 Highlights
- Net sales of $1.6 billion in the first quarter, up 64%
year-over-year
- Net income of $196.2 million, or $7.71 per diluted share, in
the first quarter, up $122.1 million, or 165%, year-over-year
- EBITDA of $301.5 million, up $175.6 million, or 139%,
year-over-year
- Quarterly dividend of $0.90 per share paid totaling $22.9
million in the first quarter
North American RV OEM (56% of net
sales last twelve months)
- Net sales of $997.8 million, up 90% year-over-year, driven by
record wholesale shipments and market share gains
- Content per travel trailer and fifth-wheel RV for the twelve
months ended March 31, 2022, increased 40% year-over-year to a
record $4,854
Adjacent Industries OEM (23% of net
sales last twelve months)
- Net sales of $356.1 million, up 42% year-over-year
- North American marine OEM net sales of $126.5 million, up 49%
year-over-year
Aftermarket Segment (18% of net
sales last twelve months)
- Net sales of $248.0 million, up 35% year-over-year
LCI Industries (NYSE: LCII) which, through its wholly-owned
subsidiary, Lippert Components, Inc. ("Lippert"), supplies 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 reported first quarter 2022 results.
“We delivered exceptional results in the first quarter,
achieving record revenue and EBITDA as we carried forward our
momentum from the prior year. We believe the wide range of
innovative offerings we provide across the outdoor recreation
markets has continued to be a key differentiator for LCI,
accelerating and securing growth in our Aftermarket and Marine
businesses alongside RV. This tremendous performance has also been
supported by our culture of operational excellence, coupled with
our ongoing focus around scalability, continuous improvement, and
automation, which have helped us expand profitability while
managing through ongoing macroeconomic headwinds,” commented Jason
Lippert, LCI Industries’ President and Chief Executive Officer.
“The popularity of the outdoor lifestyle continues to be strong.
As inventories stabilize, we are working closely with all of our
OEMs and dealers to maintain appropriate retail levels of
production. We believe our hard work and focus on driving
operational excellence throughout our business have positioned LCI
for continued strong performance in changing production
environments,” Lippert continued. “I would like to thank all of our
team members around the globe for their tremendous efforts this
quarter in driving our business to record levels. Due to our focus
on culture and leadership over the past several years, coupled with
the resources we have invested in these areas, we believe our
leaders and their teams outperform what many average businesses are
able to do, thus creating a unique and significant value
proposition for all our stakeholders.
"Our teams have done a great job in overcoming significant
challenges, including labor, freight, and supply chain constraints,
to meet record wholesale demand while providing excellent service
to our customers. We look forward to continuing this amazing
progress as we advance in 2022. Further, I want to thank and
congratulate all our leaders and team members who have sacrificed
so much over the last year to meet this historic demand,” commented
Ryan Smith, Group President - North America.
First Quarter 2022 Results
Consolidated net sales for the first quarter of 2022 were $1.6
billion, an increase of 64 percent from 2021 first quarter net
sales of $1.0 billion. Net income in the first quarter of 2022 was
$196.2 million, or $7.71 per diluted share, compared to net income
of $74.1 million, or $2.93 per diluted share, in the first quarter
of 2021. EBITDA in the first quarter of 2022 was $301.5 million,
compared to EBITDA of $125.9 million in the first quarter of 2021.
Additional information regarding EBITDA, as well as a
reconciliation of this non-GAAP financial measure to the most
directly comparable GAAP financial measure, is provided in the
"Supplementary Information - Reconciliation of Non-GAAP Measures"
section below.
The increase in year-over-year net sales for the first quarter
of 2022 was primarily driven by record wholesale shipments, price
realization, and strong Aftermarket sales growth. Net sales from
acquisitions completed in 2021 and 2022 contributed approximately
$79 million in the first quarter of 2022.
The Company's average product content per travel trailer and
fifth-wheel RV for the twelve months ended March 31, 2022,
increased $1,378 to $4,854, compared to $3,476 for the twelve
months ended March 31, 2021. The content increase in towables was
primarily a result of organic growth, including pricing and new
product introductions.
April 2022 Results
April 2022 consolidated net sales were approximately $537
million, up 47 percent from April 2021, as production increased
significantly to meet elevated RV and marine retail demand.
Income Taxes
The Company's effective tax rate was 25.5 percent for the
quarter ended March 31, 2022, compared to 24.9 percent for the
quarter ended March 31, 2021. The increase in the effective tax
rate was primarily due to a decrease in the excess tax benefit
related to the vesting of equity-based compensation awards and the
cash surrender value of life insurance.
Balance Sheet and Other Items
At March 31, 2022, the Company's cash and cash equivalents
balance was $55.4 million, compared to $62.9 million at December
31, 2021. The Company used $50.1 million for acquisitions, $42.0
million for capital expenditures, and $22.9 million for dividend
payments to shareholders in the three months ended March 31, 2022.
The Company also paid off the full outstanding $50.0 million
balance of its shelf loan facility in March 2022.
The Company's outstanding long-term indebtedness, including
current maturities, was $1.3 billion at March 31, 2022, and the
Company remained in compliance with its debt covenants. The Company
believes that its current liquidity is adequate to meet operating
needs for the foreseeable future.
Conference Call & Webcast
LCI Industries will host a conference call to discuss its first
quarter results on Tuesday, May 10, 2022, at 8:30 a.m. Eastern
time, which may be accessed by dialing (844) 200-6205 for
participants in the U.S. and (226) 828-7575 for those in Canada or
(929) 526-1599 for participants outside the U.S./Canada using the
required conference ID 311778. 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 (929) 458-6194 for participants in the U.S. and (226)
828-7578 for those in Canada or (204) 525-0658 for participants
outside the U.S./Canada and referencing access code 057696. 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, 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 product markets, consisting primarily 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. 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; 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,
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, financial
condition, liquidity, covenant compliance, retail and wholesale
demand, integration of acquisitions, R&D investments, 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 COVID-19, or other future
pandemics, 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, 2021, 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
2022
2021
Months
(In thousands, except per share
amounts)
Net sales
$
1,644,568
$
1,000,258
$
5,117,007
Cost of sales
1,180,325
758,481
3,851,506
Gross profit
464,243
241,777
1,265,501
Selling, general and administrative
expenses
194,542
140,346
698,821
Operating profit
269,701
101,431
566,680
Interest expense, net
6,252
2,705
19,913
Income before income taxes
263,449
98,726
546,767
Provision for income taxes
67,268
24,606
136,967
Net income
$
196,181
$
74,120
$
409,800
Net income per common share:
Basic
$
7.75
$
2.94
$
16.20
Diluted
$
7.71
$
2.93
$
16.09
Weighted average common shares
outstanding:
Basic
25,329
25,193
25,299
Diluted
25,461
25,325
25,469
Depreciation
$
17,954
$
15,184
$
67,525
Amortization
$
13,858
$
9,332
$
52,092
Capital expenditures
$
42,037
$
20,957
$
119,614
LCI INDUSTRIES
SEGMENT RESULTS
(unaudited)
Three Months Ended
March 31,
Last Twelve
2022
2021
Months
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
953,226
$
503,016
$
2,745,822
Motorhomes
87,254
62,593
283,656
Adjacent Industries OEMs
356,102
250,641
1,194,466
Total OEM Segment net sales
1,396,582
816,250
4,223,944
Aftermarket Segment:
Total Aftermarket Segment net sales
247,986
184,008
893,063
Total net sales
$
1,644,568
$
1,000,258
$
5,117,007
Operating profit:
OEM Segment
$
245,374
$
79,287
$
470,763
Aftermarket Segment
24,327
22,144
95,917
Total operating profit
$
269,701
$
101,431
$
566,680
Depreciation and amortization:
OEM Segment depreciation
$
14,502
$
12,188
$
53,157
Aftermarket Segment depreciation
3,452
2,996
14,368
Total depreciation
$
17,954
$
15,184
$
67,525
OEM Segment amortization
$
10,144
$
6,452
$
36,573
Aftermarket Segment amortization
3,714
2,880
15,519
Total amortization
$
13,858
$
9,332
$
52,092
LCI INDUSTRIES
BALANCE SHEET
INFORMATION
(unaudited)
March 31,
December 31,
2022
2021
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
$
55,449
$
62,896
Accounts receivable, net
564,672
319,782
Inventories, net
1,136,230
1,095,907
Prepaid expenses and other current
assets
70,766
88,300
Total current assets
1,827,117
1,566,885
Fixed assets, net
450,095
426,455
Goodwill
562,038
543,180
Other intangible assets, net
539,004
519,957
Operating lease right-of-use assets
199,756
164,618
Other long-term assets
62,713
66,999
Total assets
$
3,640,723
$
3,288,094
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term
indebtedness
$
21,108
$
71,003
Accounts payable, trade
340,909
282,183
Current portion of operating lease
obligations
33,500
30,592
Accrued expenses and other current
liabilities
345,486
243,438
Total current liabilities
741,003
627,216
Long-term indebtedness
1,265,379
1,231,959
Operating lease obligations
176,255
143,436
Deferred taxes
41,260
43,184
Other long-term liabilities
157,574
149,424
Total liabilities
2,381,471
2,195,219
Total stockholders' equity
1,259,252
1,092,875
Total liabilities and stockholders'
equity
$
3,640,723
$
3,288,094
LCI INDUSTRIES
SUMMARY OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
2022
2021
(In thousands)
Cash flows from operating activities:
Net income
$
196,181
$
74,120
Adjustments to reconcile net income to
cash flows provided by operating activities:
Depreciation and amortization
31,812
24,516
Stock-based compensation expense
6,517
7,436
Other non-cash items
1,771
1,318
Changes in assets and liabilities, net of
acquisitions of businesses:
Accounts receivable, net
(240,404
)
(139,245
)
Inventories, net
(31,278
)
(41,170
)
Prepaid expenses and other assets
20,495
(3,328
)
Accounts payable, trade
57,808
49,644
Accrued expenses and other liabilities
92,024
31,556
Net cash flows provided by operating
activities
134,926
4,847
Cash flows from investing activities:
Capital expenditures
(42,037
)
(20,957
)
Acquisitions of businesses
(50,089
)
(2,779
)
Other investing activities
(219
)
(605
)
Net cash flows used in investing
activities
(92,345
)
(24,341
)
Cash flows from financing activities:
Vesting of stock-based awards, net of
shares tendered for payment of taxes
(10,569
)
(7,767
)
Proceeds from revolving credit
facility
372,400
208,863
Repayments under revolving credit
facility
(330,600
)
(141,489
)
Repayments under shelf loan, term loan,
and other borrowings
(55,642
)
(3,889
)
Payment of dividends
(22,870
)
(18,939
)
Payment of contingent consideration and
holdbacks related to acquisitions
(2,031
)
(2,792
)
Other financing activities
(4
)
—
Net cash flows (used in) provided by
financing activities
(49,316
)
33,987
Effect of exchange rate changes on cash
and cash equivalents
(712
)
(2,995
)
Net (decrease) increase in cash and cash
equivalents
(7,447
)
11,498
Cash and cash equivalents at beginning of
period
62,896
51,821
Cash and cash equivalents cash at end of
period
$
55,449
$
63,319
LCI INDUSTRIES
SUPPLEMENTARY
INFORMATION
(unaudited)
Three Months Ended
March 31,
Last Twelve
2022
2021
Months
Industry Data(1) (in thousands of
units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs
152.2
131.2
552.3
Motorhome RVs
15.8
14.3
57.7
Industry Retail Sales:
Travel trailer and fifth-wheel RVs
93.8
(2)
114.5
481.3
(2)
Impact on dealer inventories
58.4
(2)
16.7
71.0
(2)
Motorhome RVs
13.3
(2)
13.0
55.6
(2)
Twelve Months Ended
March 31,
2022
2021
Lippert Content Per Industry Unit
Produced:
Travel trailer and fifth-wheel RV
$ 4,854
$ 3,476
Motorhome RV
$ 3,144
$ 2,525
March 31,
December 31,
2022
2021
2021
Balance Sheet Data (debt availability in
millions):
Remaining availability under the revolving
credit facility (3)
$ 129.8
$ 142.4
$ 168.3
Days sales in accounts receivable, based
on last twelve months
29.2
31.4
30.6
Inventory turns, based on last twelve
months
4.7
5.8
5.0
2022
Estimated Full Year Data:
Capital expenditures
$130 - $150 million
Depreciation and amortization
$130 - $140 million
Stock-based compensation expense
$25 - $30 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) March 2022 retail sales data
for RVs has not been published yet, therefore 2022 retail data for
RVs includes an estimate for March 2022 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,
2022
2021
(In thousands)
Net income
$
196,181
$
74,120
Interest expense, net
6,252
2,705
Provision for income taxes
67,268
24,606
Depreciation expense
17,954
15,184
Amortization expense
13,858
9,332
EBITDA
301,513
125,947
In addition to reporting financial results in accordance with
U.S. GAAP, the Company has provided the non-GAAP performance
measure of EBITDA to illustrate and improve comparability of its
results from period to period. EBITDA is defined as net income
before interest expense, net, provision for income taxes,
depreciation expense, and amortization expense during the three
month periods ended March 31, 2022 and 2021, respectively. The
Company considers this non-GAAP measure 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.
The measure is not in accordance with, nor is it a substitute for,
GAAP measures, and it may not be comparable to similarly titled
measures used by other companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510005298/en/
Brian Hall, CFO (574) 535-1125 LCII@lci1.com
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