LCI Industries has reported its first quarter 2023 results with a decline in revenue attributed to a decreased North American recreational vehicle (RV) wholesale shipments and decreased selling prices.
The company’s net sales were $973.3 million, which was a 41% decrease from the first quarter net sales of $1.6 billion in 2022.
The decrease in year-over-year net sales was due to decreased North American RV wholesale shipments and decreased selling prices, which are indexed to select commodities, partially offset by acquisitions.
Net income in the first quarter of 2023 was $7.3 million, or $0.29 per diluted share, compared to net income of $196.2 million, or $7.71 per diluted share, in the first quarter of 2022.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of 2023 was $52.5 million, compared to EBITDA of $301.5 million in the first quarter of 2022.
Despite the challenging wholesale and original equipment manufacturer (OEM) environments, LCI Industries delivered solid results in the first quarter of 2023.
This was underscored by robust content growth and strong sequential margin expansion given the current market conditions, according to Jason Lippert, LCI Industries’ President and Chief Executive Officer.
Lippert also emphasized the company’s steadfast focus on its diversification strategy and continued operational improvements that have positioned LCI Industries to deliver sustained profitability.
Performance in its adjacent industries and aftermarket businesses helped to partially offset the impact of lower RV OEM shipments. Lippert added that the company is aggressively working to expand market share through product innovations to meet consumer demand for high-quality, sophisticated content.
LCI Industries has continued to execute its diversification strategy, with North American RV OEM net sales representing less than 48% of total net sales for the twelve months ended March 31, 2023.
This is a reduction from the same period the previous year. Additionally, the company achieved an inventory reduction of $120 million compared to the prior quarter.
The company’s average product content per travel trailer and fifth-wheel RV for the twelve months ended March 31, 2023, increased $1,027 to $5,881, compared to $4,854 for the twelve months ended March 31, 2022.
The content increase in towables was primarily a result of organic growth, including pricing and new product introductions, market share gains, and acquisitions.
Looking ahead, Lippert remains confident in the underlying strength of the outdoor lifestyle despite the current down cycle largely driven by recent overproduction within the industry.
He also noted continued retail demand coming out of spring shows. The company has made significant progress towards its plan to reduce inventories by $300 million this year, supporting enhanced cash generation.
With the efficiencies captured, combined with the continued performance of its diversified portfolio, Lippert believes the company is poised to continue its trajectory of strong performance and deliver substantial margin growth when RV OEM production recovers.
The financial performance of LCI Industries is of particular interest to the RV industry as the company is a leading supplier of highly-engineered components for RV OEMs, as well as adjacent industries such as boats, buses, and trucks.
As such, LCI’s financial results can be seen as an indicator of the health of the broader RV industry. The decline in LCI’s net sales and income can be attributed to a decrease in North American RV wholesale shipments and selling prices, which are indexed to select commodities. These factors are indicative of a challenging wholesale and OEM environment in the RV industry.
About Lippert Components Inc.
LCI Industries supplies a broad array of highly engineered components for the leading original equipment manufacturers in the recreation and transportation product markets, and the related aftermarkets of those industries. The company’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
Isn’t it interesting how LCI Industries tackled a revenue dip in 2023? They’re really making moves with diversification and innovation to bounce back stronger. It’s crucial for them to keep the momentum going and adapt to the changing market landscape. With their focus on innovation and resilience, they’re on the right track to overcome industry challenges. What do you think about their strategy to navigate through tough times?