Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (May 2012)
39 slides from Lci Industries's investor presentation, May 11, 2012
Slide 1: Drew Industries Incorporated
Drew Industries Incorporated (NYSE: DW) EXHIBIT 99.1 A Leading National Supplier of a Wide Variety of Components for RVs and Manufactured Homes
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain “forwarc-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive posi
Slide 3: Section I: Overview
SECTION | Overview
Slide 4: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products —- Components for RVs and Manufactured Homes $736 Million of Net Sales for the12 Months Ended March 31, 2012 RV Furniture and is Sh ; Bath Products: Mattresses: RV Chassis, Side-outs and MH Chassis and $19 million $71 million Other Chassis Parts: Chassis Parts: $348 million $42 milli
Slide 5: Drew's Segments — LTM 3/2012
Drew's Segments — LTM 3/2012 Net Sales - $736 million
Slide 6: Financial Performance
Financial Performance Net Sales and EBITDASO") (in mitions) Net Sales = RV Segmentnet salesmem MH Segmentnet sales == EBITDASO EBRITDASO $100 $750 $79 $736 15 500 50 250 25 2001 2002 -2003-—«2004 +2005 «2006+ —«-2007-—«008_-—«-2000| 2010S 2011S LT wa12 (1) EBITDASO is operating profit plus depreciat
Slide 7: Section II: Industries
SECTION II Industries
Slide 8: RV Market
RV Market TOWABLE RVS (Nearly 70% of Drew's RV Segment net sales) ey Sle Travel trailer Fifth-wheel travel trailer — = — * ats Le ae, we ° Travel trailer with Sport utility RV. (0) expandable ends “Toy Hauler” 2 Folding camping trailer Truck camper 90% of industry 2011 unit sales 62% of 2010 wholesa
Slide 9: How RVs Are Used
How RVs Are Used ® More economical family vacations > Typical RV family vacation is 23 to 59 percent less expensive for a family of four ® Shift in U.S. culture toward more RV-related activities > College and NFL football games > NASCAR events > More active, shorter, “greener”, & family oriented vac
Slide 10: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments Nearly 90% of Drew's RV Segment net sales are for Travel Trailers and 5"" Wheel RVs Drew's Indust ad Net Sales “750 (Units in thousands, Net sales in millions} + $700 600 nioethee $600 mama Other Towables mms Travel Trailers & 5th Wheets ate —mDrew BV Segment Net S
Slide 11: Recent RV Industry Trends
Recent RV Industry Trends Units Travel Trailers and 5" Wheel RVs, Drew's primary RV market 300,000 275,000 ME Wholesale "= Retail = = 250,000 225,000 aoe 212,900 200,000 jpaliy S738 185,10 186,010 175,000 164,254 150,000 138,300] 128,000 100,000 75,000 50,000 25,000 0 2008 2009 2010 2011 Qi 2012 Dea
Slide 12: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market ® Cost per sq. ft. is $41 for MH vs. $84 for site-built homes Average retail price of $62,800 for a 1,515 sq. ft. MH 9 million manufactured homes across the U.S. Improved quality, appearance and safety Studies have shown that MHs built since 1995 sustain no more dama
Slide 13: MH — Industry Production
MH — Industry Production Industry ash in rail Drew's (Unitsin thousands, Dollars in millions} Units f ) Net Sales ag = Multi-Sections sem Single-Section mm Drew's MH net sales 269064 349 228 350 $221 % $200 300 8175 250 5150 200 5125 a6 100 150 ss 875 100 $50 55 50 Ba . o $0 MH Share 65% 0% «—TS% TO
Slide 14: MH: Favorable Factors
MH: Favorable Factors INDUSTRY: ® Demand — Demand for quality, affordable housing is likely to increase — Baby boomers retiring in increasing numbers — Dealer and manufacturer inventory levels are reasonable — Availability of financing is still an issue, as is the weak overall housing market DREW: ®
Slide 15: Section III: Strategy
SECTION Ill Strategy
Slide 16: Business Strategy
Business Strategy © Maximize profitability and return on assets through = Strategic acquisitions = New product introductions = Market share growth = Operational efficiencies = Diversification to related industries © This strategy accomplished through = Outstanding customer service = Motivating manag
Slide 17: Acquisition Criteria
Acquisition Criteria ® Drew is a disciplined and patient acquirer Gain market share or add products from other suppliers through acquisitions Seek products or technologies that we can expand through our nationwide customer base and factory network Become an even more extensive supplier to our custom
Slide 18: New Product Introductions
New Product Introductions Acquire TRAIL AIR: Adding RV suspension products Acquire HOME-STYLE: Expanding furniture for RVs in Northwest market Introduce RVLOCK remote Began production of entry doors locking product —— for MH TecHNoLocies: resis Expanding towable RV ae Acquire chassis and slide-out A
Slide 19: What Drew Has Done - Expanding Our Growth Potential
What Drew Has Done - Expanding Our Growth Potential lew Product | 2008/2012- RV Entry Doors $ 30milion 2008/2011 — RV Furniture and Mattresses $ 200 milion 2009 — Manufactured Housing (“MH”) Entry Doors $ 25 million 2009 — Focus on MH Replacement Windows $ 20million 2010 —Level-Up™ System for Fifth-
Slide 20: 2010 — 2011 — 2012 Acquisitions
2010 — 2011 — 2012 Acquisitions Purchase H Level-U p TM(1) - $ 1.4 $ 1 oo leveling system for fifth-wheel Schwintek() SI 20.0) SS | sistercnsesmvcma sence Sellers 5 056 | SS ease Home-Style(”) $ 3) 2 atciia rrcinthe Nodiwest marcel MTect oa... EA Technologies ele | lee Starquest!!) S022 6) Seee2alea
Slide 21: Content Per New Towable RV
Content Per New Towable RV - Nearly 90% of RV Segment net sales are for Travel Trailers and Fifth-Wheel RVs - 100% market share in existing products would yield approximately $4,500 per Towable RV - Growth in RV “features” drives content increases $2,489 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 22: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 3/12- $620 Million $15 million $43 million 2% 7% oe $17 million. 3% LTM 3/11 - $499 Million $17 milli 15 milli - ae S19 milfon Travel Trailer & Fifth-Wheel - OEM Motorhome - OEM m Aftermarket mOther Travel Trailer & Fifth-Wheel - OEM Motorhome - OEM Aftermarket mOthe
Slide 23: Content Per New Manufactured Home
Content Per New Manufactured Home - 100% market share in existing products would yield approximately $4,500 perhome - Affordability of the homes constrains content growth $1,666 1,493, $1,450 $1,429 Suss3!s4400 1,268 sigea 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LTM 312 Sections perho
Slide 24: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 3/12- $116 Million $19 million 16%. $16 million 4% LTM 3/11 - $94 Million $17 million mOEM = Aftermarket mOther 23.
Slide 25: Compensation Plans
Compensation Plans Aggregate 2011 Compensation of Key Executives By Component Cash vs. Equity | 29% Performance Based = Stock Options mSalary & Other Equity =Cash = 24-
Slide 26: Section IV: Operating Results
SECTION IV Operating Results
Slide 27: Operating Results
Operating Results Three Months Ended March 31, FINANCIAL PERFORMANCE (Sin millions, ex Net Sales $ 168.8) $ 223.6 Operating Profit Se oo es 17:4 12% % of Sales 9.2% 78% Net Income 4 es 11.1") 18% Diluted EPS $ 0.42| $0.49 17% (1] The Company's operating margin in the first quarter of 2012 was impact
Slide 28: Results By Segment
Results By Segment Three Months Ended March 31, FINANCIAL PERFORMANCE ($ in millions) Net Sales: RV Segment $ 146.2] $ 195.6 34% MH Segment |S |g 8.0 | 24% Operating Profit: RV Segment $ 15.3] $ 16.8) 10% MH Segment $ 22) $ 3.1 41% Operating Profit as a Percentage of Net Sales: RV Segment 10.5% 8.6%
Slide 29: Net Sales Compared to Pre-Recession Levels
Net Sales Compared to Pre- Recession Levels FINANCIAL PERFORMANCE QI 2008, $1591 Impact of industry-wide shipments: Travel Trailer and Fifth-Wheel RVs— 5% decline (6.0) Motorhomes — 37% decline (2.9) Manufactured Housing -37% decline 10.3) Subtotal— Impact of Industry Declines (19.2) Drew's sales gr
Slide 30: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash Utilized for Acquisitions Cash and Net During the YTD (Sin millions) Debt Period 12/31/08 |$ 9 } 9 12/31/09 $ - wa 12/31/11 $ = 50 12 {]. On December 28, 2010, the Company paid a special dividend of $1.50 pershare of the Company's Common Stock, or an aggregat
Slide 31: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE }2/31/09_ 12/3: Total Assets $ $ $ Total Debt $ 91$ -|$ - - Cash & $ ous 65|$ 4A 4 Investments Stockholders’ $ 259 |$ 244/$ 243°|$ 277 |$ 291 Equity RATIOS Days Sales in 15 days 14 days 13 days 17 days 21 days AIR"! Inventory Turns | 4.1 turns | 4.8turns | 6.5turm
Slide 32: Cash Flow
Cash Flow FINANCIAL PERFORMANCE ‘$i e Acquisitions (13) $104 million Capital expenditures $47 million Debt reduction $27 million Special dividend $33 million Stock repurchases $10 million Total $ 221 million -31-
Slide 33: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31 Return on Equity 6p) 2K) 11% 11% 12% Return on Assets ARI) 2%) 9% 9% 9% Total Debt to Equity 0.00 0.00 0.00 0.00 0.00 Total Debt to EBITDA" 0.20 0.00 0.00 0.00 0.00 {1) EBIDA is operating profit plus depreciation, amortization and goodwill impairment [s
Slide 34: The Future
Tne Future © ® © © 1) Increasing RV content RV recovery from recession Demographic tailwind Expanding into adjacent industries Affordable housing recovery 33
Slide 35: Stock Price History
Stock Price History = Drew has 22 million shares outstanding and a market capitalization of approximately $625 million as of May 8, 2012 $44 A / \ at Sal $26 27 ae ZB \ VA $14 say ga $5 $2 $6 2000 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 5/8/12 (December 31, unless noted
Slide 36: Analyst Coverage
Analyst Coverage CJS Securities Dan Moore — (914) 287-7600 Sidoti & Company, LLC Scott Stember-— (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 891-6206
Slide 37: Thank you!
Thank you! For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com Joseph S. Giordano Ill CFO & Treasurer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com > =36-
Slide 38: Reconciliation of Operating Profit to EBITDA and EBITDASO
Reconciliation of Operating Profit to EBITDA and EBITDASO FINANCIAL PERFORMANCE 2004 = 2005 = 2006 ~=—-2007 Depreciation & ‘Arorization |% 73|$% 78|$ 93/$ 120|$ 157|$ 176]$ 17.1 |$ 185] $ 17.1] $ 205|$ 220 Goodwill # : impairment |$ -|$ -|$ -|# -|$ =-|$ -|$ 55/$450/$ -|$ -|$ - EBIIDA $ 365 | $ 42.1
Slide 39: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated rans rear Net Sales: RV Segment $ 368.1 | $ 312.5 | $ 477.2 | $570.6 | $ 620.0 MH Segment 142.4 85.3 95.6) 110.5 115.9 Total Net Sales $ 510.5 | $ 397.8 | $ 572.8 | $681.2 | $ 735.9 Operating Profit: RV Segment $ 24.6|)$ 15.7|/$ 444) $ 45.7) $ 47.2 M