Third Quarter 2024 Highlights
- Net sales of $915 million in the third quarter, down 5% year-over-year
- Net income of $36 million, or $1.39 per diluted share, in the third quarter, up 38% from the third quarter of 2023
- EBITDA of $85 million in the third quarter, or 9.3% of net sales, up 8% year-over-year
- Operating profit margin of 5.9% in the third quarter, up from 4.8% in the third quarter of 2023
- Quarterly dividend of $1.05 per share paid, totaling $27 million in the third quarter
- Cash flows provided by operations of $402 million for the LTM period ended September 30, 2024
- Strong liquidity position with $161 million of cash and cash equivalents and $383 million of availability on revolving credit facility at September 30, 2024
ELKHART, Ind. – LCI Industries (NYSE: LCII), a leading supplier of engineered components to the recreation and transportation markets, today reported third quarter 2024 results.
“Despite a challenging RV and Marine industry backdrop, we delivered a strong quarter with continued market share expansion, increased operating margins, and robust operating cash flow which has reached $402 million over the last twelve months. Share gains were particularly strong across appliances, awnings, chassis, furniture, and windows, which together represent more than 70% of our total North American RV OEM business. These gains were fueled by innovative products like the new line of CURT towing and suspension products we showcased at the September Open House,” commented Jason Lippert, LCI Industries’ president and chief executive officer.
“As a result,” he continued, “our key customers have maintained and increased the amount of Lippert content across their 2025 RV models. At the same time, we believe our commitment to operational excellence, including product quality and supply chain improvement initiatives, drove further margin expansion. Looking ahead, we believe we’re positioned to outperform as demand rebounds, powered by our cutting-edge innovation and a prioritization of strategic M&A to further enhance our diversification and long-term growth potential.”
“I’d like to thank our team members for their dedication to driving our business forward this quarter while working through a challenging environment,” commented Ryan Smith, LCI Industries’ Group President – North America. “We remain focused on leveraging our operational expertise and culture of innovation to support long-term growth for Lippert.”
Third Quarter 2024 Results
Consolidated net sales for the third quarter of 2024 were $915.5 million, a decrease of 5% from 2023 third quarter net sales of $959.3 million. Net income in the third quarter of 2024 was $35.6 million, or $1.39 per diluted share, compared to $25.9 million, or $1.02 per diluted share, in the third quarter of 2023. EBITDA in the third quarter of 2024 was $85.2 million, compared to EBITDA of $78.9 million in the third quarter of 2023. Additional information regarding EBITDA, as well as reconciliations of this non-GAAP financial measure to the most directly comparable GAAP financial measure of net income, is provided in the “Supplementary Information – Reconciliation of Non-GAAP Measures” section below.
The decrease in year-over-year net sales for the third quarter of 2024 was primarily driven by lower sales to North American marine and utility trailer OEMs and declines in wholesale shipments of motorhome RV units, partially offset by increased North American RV wholesale shipments of travel trailers and fifth-wheels and market share gains in the automotive aftermarket.
October 2024 Results
October 2024 consolidated net sales were approximately $330 million, down 4% from October 2023, primarily due to an approximate 12% decline in marine sales and an approximate 3% decrease in North American RV production compared to October 2023.
OEM Segment – Third Quarter Performance
OEM net sales for the third quarter of 2024 were $684.5 million, a decrease of $44.0 million compared to the same period of 2023. RV OEM net sales for the third quarter of 2024 were $422.0 million, down 2% compared to the same prior year period, driven by a shift in unit mix towards lower content single axle travel trailers and a 25% decrease in motorhome wholesale shipments, partially offset by an 11% increase in North American travel trailer and fifth-wheel wholesale shipments and market share gains. Adjacent Industries OEM net sales for the third quarter of 2024 were $262.4 million, down 12% year-over-year, primarily due to lower sales to North American marine and utility trailers OEMs, driven by current dealer inventory levels, inflation, and elevated interest rates impacting retail consumers. North American marine OEM net sales in the third quarter of 2024 were $60.8 million, down 16% year-over-year.
Operating profit of the OEM Segment was $21.8 million in the third quarter of 2024, or 3.2% of net sales, compared to $11.2 million, or 1.5% of net sales, in the same period in 2023. The operating profit expansion of the OEM Segment for the quarter was primarily driven by operational improvements, partially offset by the impact of fixed costs spread over decreased sales.
Aftermarket Segment – Third Quarter Performance
Aftermarket net sales for the third quarter of 2024 were $231.0 million, in line with the same period in 2023. Resiliency in the Aftermarket Segment was primarily driven by market share gains in the automotive aftermarket, partially offset by lower volumes within the RV aftermarket, which has been negatively impacted by lower consumer discretionary spending. Operating profit of the Aftermarket Segment was $32.1 million in the third quarter of 2024, or 13.9% of net sales, compared to $34.4 million, or 14.9% of net sales, in the same period in 2023. The operating profit contraction of the Aftermarket Segment for the quarter was primarily driven by increased labor costs due to product mix and increased facility costs resulting from investments to expand capacity within the automotive aftermarket, partially offset by decreased material costs.
“Our automotive aftermarket business has continued to outperform, delivering a 7.3% increase in sales to help offset softness in the RV and Marine aftermarkets. We’re also capitalizing on the growing demand for replacement and repair parts by providing innovative content coupled with high quality service, setting us apart for both dealers and consumers,” commented Jamie Schnur, LCI Industries’ Group President – Aftermarket. “We look forward to further expanding our presence in premium markets to support Lippert’s long-term, profitable growth.”
Income Taxes
The company’s effective tax rate was 24.8% for the quarter ended September 30, 2024, compared to 26.6% for the quarter ended Sept. 30, 2023. The decrease in the effective tax rate was primarily due to a discrete tax benefit related to an increase in the cash surrender value of company-owned life insurance policies compared to the prior year period.
Balance Sheet and Other Items
At Sept. 30, 2024, the company’s cash and cash equivalents balance was $161.2 million, compared to $66.2 million at December 31, 2023. The company used $80.2 million for dividend payments to shareholders, $31.4 million for capital expenditures, and $20.0 million for an acquisition in the nine months ended September 30, 2024.
The company’s outstanding long-term indebtedness, including current maturities, was $822.5 million at Sept. 30, 2024, and the company was in compliance with its debt covenants. As of September 30, 2024, the company had $383.1 million of borrowing availability under the revolving credit facility.
Conference Call & Webcast
LCI Industries will host a conference call to discuss its third quarter results at 8:30 a.m. Eastern time, Thursday, Nov. 7, 2024, which may be accessed by dialing (833) 470-1428 for participants in the U.S. and (929) 526-1599 for participants outside the U.S. using the required conference ID 630651. 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 (866) 813-9403 for participants in the U.S. and (44) 204-525-0658 for participants outside the U.S. and referencing access code 625624. 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 (NYSE: LCII), through its Lippert subsidiary, is a global leader in supplying engineered components to the outdoor recreation and transportation markets. We believe our innovative culture, advanced manufacturing capabilities, and dedication to enhancing the customer experience have established Lippert as a reliable partner for both OEM and aftermarket customers.
For more information, visit www.lippert.com.
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