Form 8-K LCI INDUSTRIES For: Feb 09


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    Exhibit 99.1

FOR IMMEDIATE RELEASE

lcii1a.jpg

Contact: Brian Hall, CFO

Phone: (574) 535-1125

E Mail: [email protected]

LCI INDUSTRIES REPORTS FOURTH QUARTER RESULTS

Record sales and earnings driven by RV demand and diversification strategy

Fourth Quarter 2020 Highlights

Net sales of $783.0 million in the fourth quarter, an increase of 39% year-over-year

Net income increased $19.9 million, or 69%, to $48.7 million, or $1.92 per diluted share, in the fourth quarter

Adjusted EBITDA increased $30.9 million, or 54%, to $88.1 million in the fourth quarter

North American RV OEM sales grew to $402.9 million in the fourth quarter, up 25% year-over-year

Adjacent Industries OEM sales grew to $189.9 million in the fourth quarter, up 20% year-over-year

Aftermarket Segment sales grew to $157.3 million in the fourth quarter, up 129% year-over-year

Completed the acquisitions of Veada Industries and Challenger Door, each with $80 million of annual sales

Quarterly dividend of $0.75 per share paid totaling $18.9 million

Full Year 2020 Highlights

Net sales of $2.8 billion, an increase of 18% year-over-year

Net income increased $11.9 million, or 8%, to $158.4 million, or $6.27 per diluted share

Adjusted EBITDA increased $52.6 million, or 19%, to $328.2 million

Execution of diversification strategy continued as net sales outside of North American RV OEM net sales grew to 50.3% of total net sales for the year ended December 31, 2020, compared to 42.0% in the prior year

Completed three strategic acquisitions for combined purchase price of $182.1 million

Returned $70.4 million to shareholders through payment of dividends

Elkhart, Indiana – February 9, 2021 – LCI Industries (NYSE: LCII) which, through its wholly-owned subsidiary, Lippert Components, Inc. (“LCI”), 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 fourth quarter and full year 2020 results.

“2020 proved to be a historic year for LCI Industries in many respects, starting with our response to the COVID-19 pandemic and related shutdowns, and culminating with record annual net sales of $2.8 billion. This could not have been possible without the tremendous efforts of our team. They successfully navigated an unprecedented economic environment to capture incredible industry demand, while also working to mitigate supply chain and labor constraints that have impacted the wider RV and marine space. Our team marched right into the storm, led by an experienced leadership team, which has proven time and again that they can pivot quickly – even in times of global crisis – to position LCI Industries to emerge stronger and ready for growth. This outperformance is a testament to the strong, cohesive culture which we continue to foster throughout our Company, and I am thankful for each and every one of our teammates across the globe,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer.

“Furthermore, our focus on operational excellence and commitment to innovation enabled strong organic growth during the year, and importantly, we continued to execute on our diversification strategy, expanding further into the marine and adjacent industries through the acquisitions of Challenger Door and Veada Industries to further establish LCI Industries as an industry leader,” continued Lippert. “We believe that retail tailwinds, which supported our growth in 2020, will remain elevated well into 2021 and beyond. Strong demand for recreational products


continues, bolstered by expanded accessibility from popular services like peer-to-peer rentals and remote work and school, along with the significant reduction in air travel, all of which draw more consumers into the outdoor lifestyle. I would like to again thank all of our team for their hard work as we look to maintain this momentum, accelerate growth and deliver value to our customers, shareholders, team members, and communities in the new year.”

Fourth Quarter 2020 Results

Consolidated net sales for the fourth quarter of 2020 were $783.0 million, an increase of 39 percent from 2019 fourth quarter net sales of $564.0 million. Net income in the fourth quarter of 2020 was $48.7 million, or $1.92 per diluted share, compared to net income of $28.8 million, or $1.14 per diluted share, in the fourth quarter of 2019. Adjusted EBITDA in the fourth quarter of 2020 was $88.1 million, compared to adjusted EBITDA of $57.1 million in the fourth quarter of 2019. Additional information regarding adjusted EBITDA, as well as a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, are provided in the “Supplementary Information – Reconciliation of Non-GAAP Measures” section below.

The increase in year-over-year net sales for the fourth quarter of 2020 was primarily driven by record RV retail demand, in addition to the impact of acquisitions and organic growth across the Company’s aftermarket segment and international markets. Net sales from acquisitions completed in 2019 and 2020 contributed approximately $73 million in the fourth quarter of 2020.

The Company’s average product content per travel trailer and fifth-wheel RV, adjusted to remove Furrion sales from prior periods, for the twelve months ended December 31, 2020, increased $44 to $3,390, compared to $3,346 for the twelve months ended December 31, 2019. The content increase in towables was a result of organic growth, including new product introductions.

Full Year 2020 Results

Consolidated net sales for the full year 2020 were $2.8 billion, an increase of 18 percent from full year 2019 net sales of $2.4 billion. Net income for the full year 2020 was $158.4 million, or $6.27 per diluted share, compared to net income of $146.5 million, or $5.84 per diluted share, for the full year 2019. Adjusted net income for the year ended December 31, 2020 was $164.0 million, or $6.49 per diluted share. Adjusted EBITDA for the year ended December 31, 2020 was $328.2 million, compared to adjusted EBITDA of $275.6 million for the year ended December 31, 2019. Additional information regarding adjusted net income, adjusted diluted net income per common share, and adjusted EBITDA, as well as reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, are provided in the “Supplementary Information – Reconciliation of Non-GAAP Measures” section below.

The increase in year-over-year net sales for the full year 2020 was primarily driven by the impact of acquisitions, organic growth in the Company’s aftermarket segment, and record RV retail demand following COVID-19 shutdowns in the first half of the year. Net sales from acquisitions completed in 2019 and 2020 contributed approximately $375 million in 2020.

January 2021 Results

January 2021 consolidated net sales were approximately $309 million, up 38 percent from January 2020, as the significant increase in RV production continued into the new year to meet elevated RV retail demand. While the supply chain continues to have challenges, major issues were addressed through the course of 2020 and we are encouraged by the fact that we saw OEMs reduce downtime due to supply chain related issues in January.

Income Taxes

The Company’s effective tax rate was 24.4 percent and 20.0 percent for the year and quarter ended December 31, 2020, respectively, compared to 23.5 percent and 18.5 percent for the year and quarter ended


December 31, 2019, respectively. The effective tax rate was favorably impacted during the fourth quarter of 2020 due to discrete adjustments, which resulted in an increase to diluted earnings per share of $0.15.

Balance Sheet and Other Items

At December 31, 2020, the Company’s cash and cash equivalents balance was $51.8 million, up from $35.4 million at December 31, 2019. The Company generated net cash flows from operations of $231.4 million and used $182.1 million for acquisitions, $70.4 million for dividend payments to shareholders, and $57.3 million for capital expenditures in the twelve months ended December 31, 2020. The Company’s outstanding long-term indebtedness, including current maturities, was $738.2 million at December 31, 2020, 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 will host a conference call to discuss its fourth quarter results on Tuesday, February 9, 2021, at 8:30 a.m. Eastern time, which may be accessed by dialing (877) 668-4883 for participants in the U.S./Canada or (825) 312-2360 for participants outside the U.S./Canada using the required conference ID 5185385. 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 (800) 585-8367 for participants in the U.S./Canada or (416) 621-4642 for participants outside the U.S./Canada and referencing access code 5185385. 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, LCI, 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. 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, financial condition, liquidity, 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, 2019, 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 
December 31,
Twelve Months Ended 
December 31,
  2020 2019 2020 2019
(In thousands, except per share amounts)    
Net sales $ 783,002  $ 564,021  $ 2,796,166  $ 2,371,482 
Cost of sales 585,698  441,539  2,090,076  1,832,280 
Gross profit 197,304  122,482  706,090  539,202 
Selling, general and administrative expenses 133,851  84,837  483,156  338,992 
Operating profit 63,453  37,645  222,934  200,210 
Interest expense, net 2,610  2,290  13,453  8,796 
Income before income taxes 60,843  35,355  209,481  191,414 
Provision for income taxes 12,150  6,548  51,041  44,905 
Net income $ 48,693  $ 28,807  $ 158,440  $ 146,509 
Net income per common share:        
Basic $ 1.93  $ 1.15  $ 6.30  $ 5.86 
Diluted $ 1.92  $ 1.14  $ 6.27  $ 5.84 
Weighted average common shares outstanding:        
Basic 25,166  25,042  25,134  24,998 
Diluted 25,363  25,213  25,255  25,093 
   
Depreciation and amortization $ 24,614  $ 19,476  $ 97,980  $ 75,358 
Capital expenditures $ 28,683  $ 10,435  $ 57,346  $ 58,202 

LCI INDUSTRIES

SEGMENT RESULTS

(unaudited)

  Three Months Ended 
December 31,
Twelve Months Ended 
December 31,
2020 2019 2020 2019
(In thousands)
Net sales:    
OEM Segment:    
RV OEMs:    
Travel trailers and fifth-wheels $ 384,891  $ 302,740  $ 1,321,567  $ 1,276,718 
Motorhomes 50,855  34,456  158,096  155,623 
Adjacent Industries OEMs 189,942  158,007  688,248  659,560 
Total OEM Segment net sales 625,688  495,203  2,167,911  2,091,901 
Aftermarket Segment:        
Total Aftermarket Segment net sales 157,314  68,818  628,255  279,581 
Total net sales $ 783,002  $ 564,021  $ 2,796,166  $ 2,371,482 
Operating profit:        
OEM Segment $ 45,607  $ 33,856  $ 156,092  $ 165,290 

Aftermarket Segment (1)

17,846  3,789  66,842  34,920 
Total operating profit $ 63,453  $ 37,645  $ 222,934  $ 200,210 
Depreciation and amortization:
OEM Segment depreciation $ 12,303  $ 11,601  $ 47,763  $ 46,020 
Aftermarket Segment depreciation 2,902  1,673  12,344  5,580 
Total depreciation $ 15,205  $ 13,274  $ 60,107  $ 51,600 
OEM Segment amortization $ 6,654  $ 5,164  $ 26,325  $ 20,787 
Aftermarket Segment amortization 2,755  1,038  11,548  2,971 
Total amortization $ 9,409  $ 6,202  $ 37,873  $ 23,758 

(1) Full year 2020 results include a non-cash charge for inventory fair value step-up of $7.3 million incurred in the first nine months of 2020 related to CURT purchase accounting.


LCI INDUSTRIES

BALANCE SHEET INFORMATION

(unaudited)

  December 31, December 31,
  2020 2019
(In thousands)    
ASSETS    
Current assets    
Cash and cash equivalents $ 51,821  $ 35,359 

Accounts receivable, net of allowances of $5,642 and $3,144 at December 31, 2020 and 2019, respectively

268,625  199,976 
Inventories, net 493,899  393,607 
Prepaid expenses and other current assets 55,456  41,849 
Total current assets 869,801  670,791 
Fixed assets, net 387,218  366,309 
Goodwill 454,728  351,114 
Other intangible assets, net 420,885  341,426 
Operating lease right-of-use assets 104,179  98,774 
Other assets 61,220  34,181 
Total assets $ 2,298,031  $ 1,862,595 
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current liabilities    
Current maturities of long-term indebtedness $ 17,831  $ 17,883 
Accounts payable, trade 184,931  99,262 
Current portion of operating lease obligations 25,432  21,693 
Accrued expenses and other current liabilities 188,200  132,420 
Total current liabilities 416,394  271,258 
Long-term indebtedness 720,418  612,906 
Operating lease obligations 82,707  79,848 
Deferred taxes 53,833  35,740 
Other long-term liabilities 116,353  62,171 
Total liabilities 1,389,705  1,061,923 
Total stockholders’ equity 908,326  800,672 
Total liabilities and stockholders’ equity $ 2,298,031  $ 1,862,595 

LCI INDUSTRIES

SUMMARY OF CASH FLOWS

(unaudited)

  Twelve Months Ended 
December 31,
  2020 2019
(In thousands)    
Cash flows from operating activities:    
Net income $ 158,440  $ 146,509 
Adjustments to reconcile net income to cash flows provided by operating activities:    
Depreciation and amortization 97,980  75,358 
Stock-based compensation expense 18,502  16,077 
Deferred taxes (1,504) 3,416 
Other non-cash items 2,229  (1,553)
Changes in assets and liabilities, net of acquisitions of businesses:  
Accounts receivable, net (45,028) (25,452)
Inventories, net (86,898) 57,790 
Prepaid expenses and other assets (29,158) 6,882 
Accounts payable, trade 67,679  (12,189)
Accrued expenses and other liabilities 49,158  2,687 
Net cash flows provided by operating activities 231,400  269,525 
Cash flows from investing activities:    
Capital expenditures (57,346) (58,202)
Acquisitions of businesses, net of cash acquired (182,130) (447,764)
Other investing activities 7,175  2,132 
Net cash flows used in investing activities (232,301) (503,834)
Cash flows from financing activities:    
Vesting of stock-based awards, net of shares tendered for payment of taxes (4,853) (8,084)
Proceeds from revolving credit facility 543,991  655,387 
Repayments under revolving credit facility (430,390) (628,891)
Proceeds from term loan borrowings —  300,000 
Repayments under term loan and other borrowings (22,444) — 
Payment of dividends (70,401) (63,813)
Payment of contingent consideration related to acquisitions (1,633) (10)
Other financing activities (222) 382 
Net cash flows provided by financing activities 14,048  254,971 
Effect of exchange rate changes on cash and cash equivalents 3,315  (231)
Net increase in cash and cash equivalents 16,462  20,431 
Cash and cash equivalents at beginning of period 35,359  14,928 
Cash and cash equivalents cash at end of period $ 51,821  $ 35,359 

LCI INDUSTRIES

SUPPLEMENTARY INFORMATION

(unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
2020 2019 2020 2019

Industry Data(1) (in thousands of units):

Industry Wholesale Production:
Travel trailer and fifth-wheel RVs 115.2  83.3  380.0  349.7 
Motorhome RVs 12.4  10.3  40.7  46.6 
Industry Retail Sales:
Travel trailer and fifth-wheel RVs 82.8  (2) 63.6  445.3  (2) 397.8 
Impact on dealer inventories 32.4  (2) 19.7  (65.3) (2) (48.1)
Motorhome RVs 8.6  (2) 8.4  43.3  (2) 46.0 
Twelve Months Ended
December 31,
2020 2019

LCI Content Per Industry Unit Produced: (3)

Travel trailer and fifth-wheel RV $ 3,390  $ 3,346 
Motorhome RV $ 2,479  $ 2,287 
December 31,
2020 2019

Balance Sheet Data (debt availability in millions):

Remaining availability under the debt facilities (4)

$ 352.2  $ 481.8 
Days sales in accounts receivable, based on last twelve months 31.6  25.7 
Inventory turns, based on last twelve months 5.7  5.7 
2021
Estimated Full Year Data:
Capital expenditures $ 130 – $ 150 million
Depreciation and amortization $ 110 – $ 120 million
Stock-based compensation expense $ 20 – $ 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) December 2020 retail sales data for RVs has not been published yet, therefore 2020 retail data for RVs includes an estimate for December 2020 retail units. Retail sales data will likely be revised upwards in future months as various states report.

(3) The content figures presented were adjusted to remove Furrion sales from prior periods, as the Furrion distribution and supply agreement was terminated effective December 31, 2019.

(4) Remaining availability under the debt facilities is subject to covenant restrictions and, in the case of $150 million of such availability, the lender’s discretion.


LCI INDUSTRIES

SUPPLEMENTARY INFORMATION

RECONCILIATION OF NON-GAAP MEASURES

(unaudited)

The following table reconciles net income to adjusted net income and diluted net income per common share to adjusted diluted net income per common share.

Three Months Ended December 31, Twelve Months Ended December 31,
2020 2019 2020 2019
(In thousands, except per share amounts)
Net income $ 48,693  $ 28,807  $ 158,440  $ 146,509 
Non-cash charge for inventory fair value step-up —  —  7,286  — 
Income tax impact of inventory fair value step-up —  —  (1,772) — 
Adjusted net income $ 48,693  $ 28,807  $ 163,954  $ 146,509 
Diluted net income per common share $ 1.92  $ 1.14  $ 6.27  $ 5.84 
Non-cash charge for inventory fair value step-up —  —  0.29  — 
Income tax impact of inventory fair value step-up —  —  (0.07) — 
Adjusted diluted net income per common share $ 1.92  $ 1.14  $ 6.49  $ 5.84 

The following table reconciles net income to EBITDA and Adjusted EBITDA.

Three Months Ended December 31, Twelve Months Ended December 31,
  2020 2019 2020 2019
(In thousands)  
Net income $ 48,693  $ 28,807  $ 158,440  $ 146,509 
Interest expense, net 2,610  2,290  13,453  8,796 
Provision for income taxes 12,150  6,548  51,041  44,905 
Depreciation expense 15,205  13,274  60,107  51,600 
Amortization expense 9,409  6,202  37,873  23,758 
EBITDA 88,067  57,121  320,914  275,568 
Non-cash charge for inventory fair value step-up —  —  7,286  — 
Adjusted EBITDA $ 88,067  $ 57,121  $ 328,200  $ 275,568 

In addition to reporting financial results in accordance with U.S. GAAP, the Company has provided the non-GAAP performance measures of adjusted net income, adjusted diluted net income per common share, and adjusted EBITDA to illustrate and improve comparability of its results from period to period. Adjusted net income is defined as net income adjusted for items that impact the comparability of the Company’s results from period to period, which consisted of the inventory fair value step-up from the acquisition of CURT and related tax impacts during the twelve month period ended December 31, 2020. Adjusted diluted net income per common share is defined as net income per common share adjusted for items that impact the comparability of the Company’s results from period to period, which consisted of the inventory fair value step-up from the acquisition of CURT and related tax impacts during the twelve month period ended December 31, 2020. Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period, which consisted of the inventory fair value step-up from the acquisition of CURT during the twelve month period ended December 31, 2020. 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. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies.

LCI INDUSTRIES 1 LCI Industries Fourth Quarter and Full Year 2020 Earnings Conference Call February 9, 2021


 

LCI INDUSTRIES 2 Forward-Looking Statements and Non-GAAP Financial Measures This presentation 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 presentation 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 the Company’s future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, retail and wholesale demand, integration of acquisitions, R&D investments, and industry trends, whenever they occur in this presentation 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 presentation, 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, 2019, and in the Company’s subsequent filings with the Securities and Exchange Commission. Readers of this presentation 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. This presentation includes certain non-GAAP financial measures. These non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is included in this presentation. 2


 

LCI INDUSTRIES 3 Fourth Quarter and Full-Year 2020 Highlights Achieved $2.8 billion in annual revenue, the highest in LCI’s history, along with double-digit adjusted EBITDA growth, supported by strong performance across the business Reached a milestone in LCI’s long-term diversification strategy, with non-RV revenues now accounting for over 50% of total net revenue in FY 2020 Completed three strategic acquisitions totaling $182.1 million, further strengthening LCI’s presence in adjacent and international markets Returned $70.4 million to shareholders through payment of dividends


 

LCI INDUSTRIES 4 RV OEM • Retail demand continued its strong momentum throughout the quarter, expected to remain at elevated levels into 2021 and beyond ◦ Q4 2020 RV OEM revenues up 29% YoY (wholesale shipments up 38% YoY) ◦ FY 2020 RV OEM revenues up 3% YoY (wholesale shipments up 9% YoY) • New product innovation and market share gains drove improvement in content per towable RV, partially offset by high volume of entry-level units ◦ Content per towable RV: $3,390, +1% YoY(1) ◦ Content per motorhome: $2,479, +8% YoY(1) • Record amount of new buyers drive the long-term growth prospects of the RV lifestyle ◦ Consumer desire to find safe, alternative outdoors activities that enable social distancing will help to drive sustainable growth, supported by trending services including peer-to-per RV rentals ◦ Industry wholesale RV shipments for the year totaled ~430,300 units, expected to grow further in 2021 (1) For trailing twelve months ended December 31, 2020, adjusted to remove impact of Furrion sales from all prior periods 4


 

LCI INDUSTRIES 5 Expanding Markets Executing on our diversification strategy to reach goal of 40% North American RV OEM by 2022 Adjacent Markets Aftermarket International ◦ Q4 2020 sales up 129% YoY ◦ Further invested into our customer service initiatives, appointing a Director of Customer Experience and launching Lippert Scouts group along with the Campground Project ◦ CURT business demonstrating strong performance, exceeding pre-COVID forecasts and realizing better-than expected cost synergies ◦ Q4 2020 sales up 20% YoY ◦ Completed acquisitions of Challenger Door and Veada Industries, serving as additional growth drivers in these markets as integration progresses ◦ Launched collaboration with TRACKER Marine, aiming to launch several new facilities as part of partnership in marine furniture production ◦ Q4 2020 sales up 60% YoY ◦ Demand in European markets ramping back up as recovery continues, supported by similar secular trends driving growth in the U.S. ◦ Expanding LCI’s international footprint through opportunities created by our Polyplastic, Lewmar Marine, Lavet, Femto, and Ciesse acquisitions 5


 

LCI INDUSTRIES 6 Innovation Highlights Innovation: a critical part of our strategy ◦ R&D expertise and innovation remains a core component of LCI’s long-term strategy ◦ Expanding OneControl capabilities to integrate into customer support; success continues as customers increasingly seek technologically sophisticated products ◦ Announced new Vice President of Innovation, responsible for overseeing LCI’s new product innovation and driving improvements across existing offerings 6


 

LCI INDUSTRIES 7 Growth Strategy Integrating and Realizing Synergies from New Acquisitions ◦ LCI remains focused on realizing new synergies from our most recent acquisitions, preserving cash, and paying down debt in the near-term ◦ Maintaining a robust pipeline of M&A targets split evenly across all market segments and are open to small and strategic tuck-in acquisitions Capitalizing on Ability to Win Market Share ◦ Growing market leadership in adjacent markets, international markets, and the aftermarket segment through enhanced engineering and innovation Continued Focus on Stated Capital Allocation Goals ◦ Investment in the business ◦ Reduce leverage ◦ Return capital to shareholders ◦ Execute strategic acquisitions 7


 

LCI INDUSTRIES 8 Consolidated Net Sales $564,021 $783,002 Fourth Quarter 2019 Fourth Quarter 2020 Operating Margin 6.7% 8.1% Fourth Quarter 2019 Fourth Quarter 2020 Q4 2020 Financial Performance Consolidated Net Sales by Market YoY (in thousands) +29% RV OEM +20% ADJACENT OEM +129% AFTERMARKET SEGMENT +60% INTERNATIONAL MARKETS Consolidated Net Income $28,807 $48,693 Fourth Quarter 2019 Fourth Quarter 2020 (in thousands) Adjusted EBITDA $57,121 $88,067 Fourth Quarter 2019 Fourth Quarter 2020 (in thousands) Additional information regarding adjusted EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in Appendix A.8


 

LCI INDUSTRIES 9 Consolidated Net Sales $2,371,482 $2,796,166 Full Year 2019 Full Year 2020 Operating Margin 8.4% 8.0% Full Year 2019 Full Year 2020 FY 2020 Financial Performance Consolidated Net Sales by Market YoY (in thousands) +3% RV OEM +4% ADJACENT OEM +125% AFTERMARKET SEGMENT +62% INTERNATIONAL MARKETS Consolidated Net Income $146,509 $158,440 Full Year 2019 Full Year 2020 (in thousands) Adjusted EBITDA $275,568 $328,200 Full Year 2019 Full Year 2020 (in thousands) Additional information regarding adjusted EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in Appendix A.9


 

LCI INDUSTRIES 10 ($ in millions) 2020 2019 Cash, Cash Equivalents $51.8 $35.4 Remaining availability under Debt Facilities(1) $352.2 $481.8 Capital Expenditures $57.3 $58.2 Dividends $70.4 $63.8 Debt / Net Income (TTM) 4.7x(2) 4.3x(3) Net Debt / EBITDA (TTM) 2.1x(2) 2.2x(3) Cash from Operating Activities $231.4 $269.5 (1) Remaining availability under the debt facilities is subject to covenant restrictions and, in the case of $150 million of such availability, the lender’s discretion. (2) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $738M, less Cash of $52M, resulted in Net Debt of $686M at December 31, 2020, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization, “EBITDA” (Net Income of $158M adding back Interest of $13M, Taxes of $51M, and Depreciation and Amortization of $98M), resulting in $321M EBITDA for the twelve months ended December 31, 2020. The GAAP debt / Net income ratio was $738M / $158M or 4.7x. (3) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $631M, less Cash of $35M, resulted in Net Debt of $595M at December 31, 2019, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization, “EBITDA” (Net Income of $147M, adding back Interest of $9M, Taxes of $45M, and Depreciation and Amortization of $75M), resulting in $276M EBITDA for the twelve months ended December 31, 2019. The GAAP debt / Net income ratio was $631M / $147M or 4.3x. Liquidity and Cash Flow As of and for the Twelve Months Ended December 31, 10


 

LCI INDUSTRIES 11 Reconciliation of Non-GAAP Measures The following table reconciles net income to EBITDA and Adjusted EBITDA. Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 (In thousands) Net income $ 48,693 $ 28,807 $ 158,440 $ 146,509 Interest expense, net 2,610 2,290 13,453 8,796 Provision for income taxes 12,150 6,548 51,041 44,905 Depreciation expense 15,205 13,274 60,107 51,600 Amortization expense 9,409 6,202 37,873 23,758 EBITDA 88,067 57,121 320,914 275,568 Non-cash charge for inventory fair value step-up — — 7,286 — Adjusted EBITDA $ 88,067 $ 57,121 $ 328,200 $ 275,568 In addition to reporting financial results in accordance with U.S. GAAP, the Company has provided the non-GAAP performance measure of adjusted EBITDA to illustrate and improve comparability of its results from period to period. Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period, which consisted of the inventory fair value step-up from the acquisition of CURT during the twelve month period ended December 31, 2020. The Company considers this non-GAAP measure, and the non-GAAP measure of Net Debt/EBITDA ratio, 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 adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies. Appendix A 11


 

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