Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (August 2012)
41 slides from Lci Industries's investor presentation, Aug 10, 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 DRE
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 $801 Million of Net Sales for the12 Months Ended June 30, 2012 RV Furniture and is Sh MChostsong PUnPFeducts: Mattresses: BMC osse Side cuban sis an 19 million $73 million ep Chassis rr Chassis Parts: > yi $386 million $43 million Se XN Ot
Slide 5: Drew's Segments — LTM 6/2012
Drew's Segments — LTM 6/2012 Net Sales - $801 million MH = $120 million” DG > f y fi Segment Operating Profit - $61 million ge a
Slide 6: Financial Performance
Financial Performance Net Sales and EBITDASO") (in mitions) = RV Segmentnet salesmem MH Segmentnet sales == EBITDASO EBRITDASO $100 Net Sales 5801 $750 15 500 50 250 25 $147 51540 ga 2001 2002 -2003-—«2004 +2005 «2006-2007: 008_-—«-2009| 2010S 2011 LTM ax (1) EBITDASO is operating profit plus deprec
Slide 7: Section II: Industries
SECTION II Industries
Slide 8: RV Market
RV Market TOWABLE RVS (Approximately 85% 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 64% of 2011
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 Approximately 85% of Drew's RV Segment net sales are for Travel Trailers and 5" Wheel RVs Drew's Indust ad Net Sales “750 (Industry Units in thousands, Net Sales in millions) ~ $700 600 nioethee $600 mama Other Towables ei mms Travel Trailers & 5th Wheets ate —mDre
Slide 11: Recent RV Industry Trends
Recent RV Industry Trends Units 300,000 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0 Dealer Inventory Change Travel Trailers and 5" Wheel RVs, Drew's primary RV market ME Wholesale "= Retail = = 228.387 212,900 199,200 197,384 185,10 186,010 164,254 138,300}
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 $120 100 150 ss 875 100 $50 56 50 a . o $0 MH Share 65% 70% «75% T
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 2008/2012— RV Entry Doors $ 40 million 2008/2011 — RV Furniture and Mattresses $ 200 milion 2009 — Manufactured Housing (“MH”) Entry Doors $ 25 million 2009 — Focus on MH Replacement Windows $ 20milion 2010 —Level-Up™ System for Fifth-Wheel RVs $ 2
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 - Approximately 85% 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 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 22: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 6/12- $681 Million $62 million $16 million 10% $21 million__2%. 3% LTM 6/11 - $512 Million $16 million $15 million $26 million 3% AN 3% 5% Travel Trailer & Fifth-Wheel - OEM Motorhome - OEM m Aftermarket mOther Travel Trailer & Fifth-Wheel - OEM Motorhome - OEM After
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 $1,498 $4,476 1,268 sigea 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LTM 612 Sections perh
Slide 24: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 6/12- $120 Million $21 million 17%. $16 million 0 LTM 6/11 - $96 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 - Three Months Ended June 30
Operating Results Three Months Ended June 30, FINANCIAL PERFORMANCE $ 251.0 Operating Profit SER) 6% % of Sales 9.6% 7.6% Net Income emote) 11.7 7% Diluted EPS $ 0.49| $ 0.52 8% Net Sales (1] The Company's operating profit margin in the second quarter of 2012 was impacted by excess labor, overtime,
Slide 28: Operating Results - Six Months Ended June 30
Operating Results Six Months Ended June 30, FINANCIAL PERFORMANCE Net Sales $ 3549| $ 474.6 Operating Profit $ 33.5} $ 363 9% % of Sales 9.A% 7.7% Net Income | $ 204| $ 228 12% Diluted EPS $ 0.91| $ 1.01 11% (1] The Company's operating profit margin in the fist six months of 2012 was impacted by exc
Slide 29: Results By Segment - Three Months
Results By Segment Three Months Ended June 30, PINBNEIALEEROIMANEE Net Sales: | RV Segment $157.2) $) 218-4 39% "MH Segment gu zels [gaze | 13% Operating Profit: RV Segment $73) $75] 1% MH Segment $ 3:0) $ 4.0 36% Operating Profit as a Percentage of Net Sales: | RV Segment 11.0% 8.0%!) MH Segment |
Slide 30: Results By Segment - Six Months
Results By Segment Six Months Ended June 30, FNBRGIALEERCCRMANCE Net Sales: | RV Segment $ 303.4) $ 414.0 36% "MH Segment ~$ 51.5) $ 606| 18% Operating Profit: RV Segment $ 32.6] $ 34.311) 5% MH Segment $ 5.2| §$ 72. 38% Operating Profit as a Percentage of Net Sales: | RV Segment 10.8% 8.3%!) MH Seg
Slide 31: Net Sales Compared to Pre-Recession Levels
Net Sales Compared to Pre- Recession Levels FINANCIAL PERFORMANCE Q22008, $ 150.5 Impact of industry-wide shipments: Travel Trailer and Fifth-Wheel RVs— 15%increase 15.8 Motorhomes — 18% decline (1.2) Manufactured Housing— 36% decline (11.5) Subtotal— Impact of Industry Changes 3.1 Drew's sales grow
Slide 32: 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 6/30/12 {]. On December 28, 2010, the Company paid a special dividend of $1.50 pershare of the Company's Common Stock, or an agg
Slide 33: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE }2/31/09_ 12/3: Total Assets $ $ $ Total Debt $ 91$ -|$ - - Cash & $ a ae cae eee 43 Investments Stockholders’ $ 259 |$ 244/$ 243°|$ 277 |$ 305 Equity RATIOS Days Sales in 15 days 14 days 13 days 17 days 19 days AIR"! Inventory Turns | 4.1 turns | 4.8turns | 6.5tu
Slide 34: Cash Flow
Cash Flow FINANCIAL PERFORMANCE ‘$i e Acquisitions (14) $107 million Capital expenditures $55 million Debt reduction $27 million Special dividend $33 million Stock repurchases $10 million Total $ 232 million
Slide 35: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31 Return on Equity 6p) 2K) 11% 11% 11% 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 36: The Future
Tne Future © ® © © 1) Increasing RV content RV recovery from recession Demographic tailwind Expanding into adjacent industries Affordable housing recovery 35
Slide 37: Stock Price History
Stock Price History = Drew has 22 million shares outstanding and a market capitalization of approximately $650 million as of August 8, 2012 $44 A / \ $28 /_\ $29 a ae $26. >27 $21 ZB \ VA Sia so ga $5 $2 5 2000 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 8/8/12 (December 31
Slide 38: Analyst Coverage
Analyst Coverage CJS Securities Dan Moore — (914) 287-7600 Sidoti & Company, LLC Scott Stember-— (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 891-6206 -37-
Slide 39: Thank you!
Thank you! For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com Joseph S. Giordano Ill CFO & Treasurer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com >
Slide 40: Reconciliation of Operating Profit to EBITDA and EBITDASO
Reconciliation of Operating Profit to EBITDA and EBITDASO FINANCIAL PERFORMANCE 2004 = 2005 = 2006 ~=—-2007 Depreciation & ‘Arorization |% 73|% 78|$ 93/$ 120|$ 157] $ 176] $ 171|$ 185|$ 17.1] $ 205/$ 229 Goodwill # : impairment |$ -|$ -|$ -|# -|$ =-|$ -|$ 55/$450/$ -|$ -|$ - EBIIDA $ 365 | $ 42.1 |
Slide 41: 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 | $ 681.2 MH Segment 142.4 85.3 95.6) 110.5 HES) Total Net Sales $ 510.5 | $ 397.8 | $ 572.8 | $681.2 | $ 800.9 Operating Profit: RV Segment $ 24.6|)$ 15.7)$ 444) $ 45.7|)$ 473 MH S
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