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 OEMs“) in the recreation and transportation product markets, and the related aftermarkets of those industries, on Tuesday reported third-quarter 2021 results.(“
“We posted strong results in the third quarter considering significant cost pressures related to raw materials, freight, and labor. Our teams have continued to do an excellent job in managing the ongoing supply chain challenges to drive organic growth while meeting commitments to our valued customers,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer. “We look forward to building on this progress with the addition of Furrion, which will further enhance our product innovation initiatives, while advancing our footprint into new markets, allowing us to become a more dynamic supplier in the recreation space globally.”
“Historic levels of new consumers are continuing to take advantage of thelifestyle, and our Aftermarket business is poised to benefit from the repair, replacement, and upgrade cycles for the record number of currently entering the market. We also remain focused on adding scalable capacity to meet this demand through new automation projects and other operational initiatives. These projects are designed to help us mitigate the impact of heightened material costs and labor constraints to maintain profitability,” continued Lippert. “I am exceptionally proud of our performance this quarter and would like to thank the LCI team members for their dedication as we work to deliver value for shareholders.”
“The integration of Furrion is well underway, and we are excited about the innovative product suite this acquisition brings. Our goal is to inject more resources into research, development, and innovation to introduce more great products to all of our markets,” commented Ryan Smith, Group President –.
Third Quarter 2021 Results
Consolidated net sales for the third quarter of 2021 were $1.2 billion, an increase of 41 percent from 2020 third-quarter net sales of $827.7 million. Net income in the third quarter of 2021 was $63.4 million, or $2.49 per diluted share, compared to net income of $68.3 million, or $2.70 per diluted share, in the third quarter of 2020. Adjusted EBITDA in the third quarter of 2021 was $118.1 million, compared to adjusted EBITDA of $119.4 million in the third quarter of 2020. 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 third quarter of 2021 was primarily driven by record RV retail demand and strong Aftermarket sales growth. Net sales from acquisitions completed in 2020 and 2021 contributed approximately $79 million in the third quarter of 2021.
The Company’s average product content per travel trailer andRV for the twelve months ended September 30, 2021, increased $358 to $3,786, compared to $3,428 for the twelve months ended September 30, 2020, adjusted to remove Furrion sales from prior periods. The content increase in towables was a result of organic growth, including new product introductions.
October 2021 Results
October 2021 consolidated net sales were approximately $441 million, up 52 percent from October 2020, as production increased significantly to meet elevated RV and marine retail demand.
Balance Sheet and Other Items
At September 30, 2021, the Company’s cash and cash equivalents balance was $72.6 million, up from $51.8 million at December 31, 2020. The Company generated net cash flows from operations of $12.3 million and used $154.5 million for acquisitions, $73.9 million for capital expenditures, and $64.4 million for dividend payments to shareholders in the nine months ended September 30, 2021. Cash flows from operations were partially offset by strategic investments in working capital to support record demand and mitigate future supply chain disruptions.
The Company’s outstanding long-term indebtedness, including current maturities, was $1.1 billion at September 30, 2021, 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 third-quarter results on Tuesday, November 2, 2021, at 8:30 a.m. Eastern time, which may be accessed by dialing (877) 668-4883 for participants in the U.S./or (825) 312-2360 for participants outside the U.S./ using the required conference ID 7996875. 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./or (416) 621-4642 for participants outside the U.S./ and referencing access code 7996875. 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 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.