Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (February 2018)
50 slides from Lci Industries's investor presentation, Feb 8, 2018
Slide 1: LCI Industries
Ig) | INDUSTRIE lippertcomponents.com
Slide 2: Forward-looking statements
This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Comp
Slide 3: Company values
passionate about %& a o a winning? team play with trust 4) 35 honesty - integrity#candor + caring about = people 5 o Lcl INOUSTRIES
Slide 4: Financial Performance
>» Financial Performance Net Sales — O€Mnet sales Aftermarket netsales = EBITDA” — Net Sales and EBITDA (in mitionsy $2,000 $1,750 $1,679 $1,500 $1,250 Fa $1,000 $750 $500 $250 $0 7 2010 2011 2012 2013 2014 2015 2016 EBITDA $2,148 1 $300 $1,977 $200 ‘$150 $100 $50 s171 i) 2017 (1) EBITDA isnet incom
Slide 5: Net sales by segment
n 011 015 OEM Towable $427 $503 $660 $725 $836 $932 $1,082 $1,369 OEM Motorhome 70 ee ee ee, OEM Adjacent Industries 96 129 97 210 267 — Aftermarket 31 30 35 39 64 103 131 171 Total $573 $681 $901 $1,016 $1,191 $1,403 $1,679 $2,148 __Yearoveryeargrowth 19% 32% 13% 17% 18% 20% 28% Y + Sales of Furrio
Slide 6: Non-OEM Towable RV Net Sales
Non-OEM Towable RV Net Sales CAGR $779 27% $800 $700 $600 $500 $400 $300 $200 $100 $0 2010 2017 = OEM Adjacent industies = Aftermarket ™OEMRV Motorhome International Sales for the year ended December 31, 2010 compared to the year ended December 31, 2017. Both periods exclude the Company's net sales
Slide 7: Consolidated Sales Growth
Consolidated Sales Growth Sales for the twelve months ended December 31 for each year unless noted 13 2014 2015 2016 2017 Proforma impact of acquisitions completed in 2016 and 2017, assuming each of these had been completed at the beginning ofthe year ended December 31,2017, Sales for acquisitions r
Slide 8: OEM and Aftermarket Industries
OEM and Aftermarket Industries Lcl INOUSTRIES
Slide 9: RV Wholesale Shipments
> RV Wholesale Shipments Thousands of Units Es MN Thousands of Units 8 = = MN Pa SC C S L e gs f oe & © o © © a fe fe SF FF s 2 iga 5 800 175 ae: cee J 3 150 a AM WY je E 8 S00 ~ om Vaw i 5 ee Sa VEN Lae 0% a! Oa aN 75 200 Ss ea a 100 44 cs 25 cae RV Shipments Annual Change a eee & ££ S © ee ee eS S
Slide 10: Market Indicators
>» Market Indicators Statistics provided by RVIA in 2017. *Interest Rates *New Private Housing *Fuel Prices *Fuel Availability *Consumer Sentiment ***Wholesale & Retail Credit Availability *Wages & Employment “Car & Light Truck Sales Dealer Inventories Sources: * US. Department of Commerce * US. Dep
Slide 11: Product Lines & Volumes
> Product Lines & Volumes
Slide 12: Product Breadth
Product Breadth It would take a competitor substantial investments to be able to manufacture the breadth of products that we offer Investment into R&D We make significant investments in R&D and our facilities Customer Relationships We strive to have the best customer relationships in the industry
Slide 13: Industry Trends
> Industry Trends | Millennials Fueling Growth 31% of the total US population 38% of all campers 51% intend to increase the frequency in which they camp Willing to try RVs at the same rate as tents More apt to camp in groups
Slide 14: Camping Industry
> Camping Industry by Kampgrounds of America (KOA") 60:. Tent Campers 33.5 million 22. RV Campers 12.3 million 17% Cabin Campers 9.5 million Active Campers }) 55.9 million: a > 66% Camp Every Year 37.1 million 9% Camp Every Other Year 48 million 25% Camp Occasionally 14.0 million * Estimates based o
Slide 15: Manufacturing capabilities
Fabric and Electronics and Steel and Lamination Steel and Motion- Woodworking Plastic Forming Aluminum and Glass Aluminum Systems Fabrication Fabrication Welding
Slide 16: Acquisitions
ription Pontoon furniture manufacturing operation of Highwater Highwater Furniture Marine, part of the largest manufacturer of pontoon boatsin the US. 5 Halian manufacturer of bed lifts andretractable stey Project 2000/7) 14 establishingEuropean footprint = SessaKlein!2) 85 11 Italian manufacturer o
Slide 17: Expanding Our Growth Potential
> Expanding Our Growth Potential" Doors, Windows, Mattresses, Furniture and Awnings Appliances & Electronics Travel Trailer Leveling Electronics Chassis and Axles Aftermarket Axles pee cerit meOod) Doors, Windows, Mattresses and Furniture International Marine Furniture (1) Amounts [in millions) repr
Slide 18: Content Per New Towable RV
> Content Per New Towable RV + Approximately 71% of OEM Segment net sales are for Travel Trailer and Fifth-Wheel OEMs + 100% market share in existing products would yield an ee $3,263 estimated $7,400 per Towable RV, 44% penetration cae pepe as 022 ec + For2017, Travel Trailer unit volume was up 18%
Slide 19: Content Per New Motorhome RV
>» Content Per New Motorhome RV + Approximately 8% of OEM Segment net sales are for Motorhome OEMs $2,219 x + 100% market share in existing products me would yield an estimated $6,000 per eee $1,810 Motorhome RV, 37% penetration ccs $1,602 ci ae os oo? o n is Nhe o oB ome or? a CMOS ¥ wi ee S oO a =
Slide 20: Supplemental Schedules
Supplemental Schedules Lcl INOUSTRIES
Slide 21: Operating Results (Quarter)
> Operating Results Three Months Ended December 31 FINANCIAL PERFORMANCE (Sin mi except EPS) 20170) 2016 Change Net Sales $ 547.1 $ 402.9 36% Operating Profit $ 442 $ 40.6 9% % of Sales 8.1% 10.1% Net Income $ 17.5 $ 263 (34%) Diluted EPS S Os] 5 10S (35%) Adjusted Diluted EPS $ 1.20 $ 1.05 14% char
Slide 22: Operating Results (Year)
> Operating Results Years Ended December 31 FINANCIAL PERFORMANCE (Sin mi except EPS) 20170) 2016 Change Net Sales $ 2,147.8 $ 1,678.9 28% Operating Profit $ 2143 $ 200.9 7% % of Sales 10.0% 12.0% Net Income $ 1329 $ 1297 2% Diluted EPS $241 $ eo 20) 1% Adjusted Diluted EPS $ 576 $ 5.20 11% charge o
Slide 23: Results By Segment (Quarter)
» Results By Segment Three Months Ended December 31 FINANCIAL PERFORMANCE (Sinm 2017 2016 Net Sales: OEM Segment $ 505.9 $ 372.6 36% Aftermarket Segment 41.2 30.3 36% Operating Profit: OEM Segment 38.4 36.8 4% Aftermarket Segment 5.8 3.8 51% Operating Profit as a Percentage of Net Sales: OEM Segment
Slide 24: Results By Segment (Year)
» Results By Segment Years Ended December 31 FINANCIAL PERFORMANCE (Sinm 2017 2016 Change Net Sales: OEM Segment $1,976.6 $1,548.1 28% Aftermarket Segment 171E1 130.8 31% Operating Profit: OEM Segment 190.3 180.9 5% Aftermarket Segment 24.0 20.0 20% Operating Profit as a Percentage of Net Sales: OEM
Slide 25: Debt Position
>» Debt Position FINANCIAL PERFORMANCE Cash and Net Cash poe sea ( Investments (Debt) the Period 12/31/11 $ = $ Zz $ 7 $ 50 12/31/12 2 Jol) Jon) 1 12/31/13 2 66 66 5 12/31/14 16 = (16) 107 12/31/15 50 12 (38) 4l 12/31/16 50 86 3602) 49 12/31/17 50 26 (24)() 63 (1) On December 20, 2012, January 6, 20
Slide 26: Cash Flow
> Cash Flow ($ in millions) FINANCIAL PERFORMANCE Acquisitions (29) (1) §) AB Capital expenditures 302 Dividends 258 Stock repurchases 2 Total $ 1,021 @ [1] Includes January 2018 acquisition of Taylor Made for $88.9 million
Slide 27: Cash Flow
Cash Flow FINANCIAL PERFORMANCE $220 mmmDividends oe Capital Expenditures $203 5201 $200 ees Acquisitions . $200 $180 + Operating Cash Flow $180 $160 $160 $140 $140 $120 aus $120 a : $85 so7 fee $80 S74 ue $80 Ba ee $60 $40 $20 $0 2009 2010 2011 2012 2013 (1) 2014 2015 2016 2017 \ Operating cash flo
Slide 28: Balance Sheets
> Balance Sheets FINANCIAL PERFORMANCE (S$ in million 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Total Assets $ 374||$ 453 | $544 $ 623 $ 787 $ 946 Total Debt = = 16 50 50 50 Cash & Investments 10 66 = 12 86 26 Stockholders’ Equity 2843) 31413) 395 43913) 55014) 65315) Days Sales in A/R'
Slide 29: Financial Strength
> Financial Strength FIN MANCE (12 months ended) 12/31/12, 12/31/13 12/31/14 12/31/15 12/31/16 = 12/31/17 Return on Equity 13% 16% 17% 18% 26% 22% Retum on Assets 10% 12% 12% 12% 18% 15% Return on Invested Capital) 22% 28% 26% 25% Al% 34% Total Debt to Equity 0.00 0.00 0.04 0.11 0.09 0.08 Total Debt
Slide 30: Reconciliation of Net Income to EBITDA
> Reconciliation of Net Income to EBITDA FINANCIAL PERF IRMANCE (Sin 2010 2011 2012 2013 2014 2015 16 17 Net Income $28.0 $30.1 $37.3 $50.1 $623 $743 $1297 $1329 Income Taxes 17.2 18.2 20.5 278 32.8 40.0 69.5 80.0 Interest Expense 0.2 03 (x) 0.4 0.4 12 IE 1.4 Depreciation & Amortization TZ 20.5 25:7
Slide 31: Segment Net Sales and Operating Profit
| Segment Net Sales: OEM $ 8659 §$ 78 = $: 1127.0) -$ 1,300.1 $ 1.5481 $1: Hie 6 in Aftermarket 35.2 63.8 103.0 130.8 LZ, Segment Operating Profit: | OEM $ 56.1 $ 74.6 $ 887 $ 1052°$ 1809 $ 1 Aftermarket 3.5 5.6 87 148 20.0 _ Severance Executive Succession (1.5) (1.9) = a z
Slide 32: Stock Price History
$140 $120 $100 $80 $60 $40 $20 $o » Stock Price History LCI Industries has 25.0 million shares outstanding and a market capitalization of approximately $3.2 billion as of December 31, 2017 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 + Dates noted above are as
Slide 33: Industry Statistics Summary: Towable RVs
Let industries Industry Statistics Summary TOWABLE RECREATIONAL VEHICLES (RV) ToT] coo LI COC Lt Loo RCL T2500 FE ASOT BIE oT aaa ea7e sae EXEL:
Slide 34: Industry Statistics Summary: Motorized RVs
Let industries Industry Statisties Summary MOTORIZED RECREATIONAL VEHICLES (RV) SSSR] [—— Se —1_I earn oe ae Das 00 Fino co a oe aro ae 500 Tot
Slide 35: Market Shift
Market Shift Share of new light-vehicle buyers by age 50% Birth years 2 1946- ——~ 51964 30 1977- @ 1994 © 1965- 20 1976 a0 Bi Before 1945 cc} = B 1995- 2010 ‘11 ‘12 ‘13 14 ‘15° 2014 ‘Through Nov. Source: J.D. Power THE WAL fT JOURNAL.
Slide 36: Analyst Coverage
> Analyst Coverage a CitiResearch a Baird > Gregory Badishkanian — (212) 816-2720 > Craig Kennison — (414) 765-3870 a CJS Securities a Northcoast Research > Dan Moore — (914) 287-7600 > Seth Woolf — (216) 468-6927 a CL King & Associates a Wells Fargo* > Scott Stember — (212) 364-1806 > Mare Torrente
Slide 37: LCI Industries
Lcl INOUSTRIES
Slide 38: Watch the video
Ig) apatch the video
Slide 39: Management Team
' } JASON LIPPERT, CEO 20+ years with LCI Industries Lel INDUSTRIES Management Team SCOTT MERENESS, PRESIDENT 20+ years with LCI Industries BRIAN HALL, CFO 5+ years with LCI Industries Average tenure of LCI’s members of senior managementis 15+ years with the company =38-
Slide 40: RVs - Industry Wholesale Shipments
» RVs - Industry Wholesale Shipments (Compared to LCl’s Performance) ingustY Approximately 71% of LC's OEM Segment net sales are for Travel Trailer and 5" Wheel RVs er ecies (Industry units in thousands, net sales in millions) eh $1,565 = 7 $1,600 =m Motorhomes $1,454 8 ay Other Towables (See Travel
Slide 41: RV Market
> RV Market (Approximately 71% of LCl’s 8 Le of industry 2016 unit sales 0 OEM Segmentyabs of estimated 2016 wholesale 59. dollar sales, or $10.9 billion % Retail cost $4,000 to $100,000+ per unit. Average about $30,000 (Approximately 8% of LCl'sa.__, bas 3., of industry 2016 unit sales OEM Segmentn
Slide 42: RV family vacation and demographics trends
Typical RV family vacation is 23 to 59 percentless expensive for a family of four according to RVIAstudies Oo The number of consumers between the ages of 55and 70 is projectedto total 56 million by 2020 Generation X and Millennials are a source of industry growth mainly in the entry-level market Col
Slide 43: RV Industry Trends
>» RV Industry Trends Units Travel Trailer and 5" Wheel RVs, LCI’s primary RV market ano Wholesale == Retail 430 Units in thousands 260) ( ) 395 363 455 360 314 317 son 299 hea??? Be 277 251 250 28 228 223 199 213206 200 185, 186 164 150 ue 100 50 0 "2007 2008 += 2008S «2010-2011. 201220132014 «2015
Slide 44: Number of U.S. Households that Own an RV
> Number of U.S. Households that Own an RV (in Millions) 10 9 8 £ 6 = 4 : i 1980 1984 1988 1993 1997 2001 2005 2011 ey) Statistics provided by RV Consumer Demographic Profile — 2011
Slide 45: Demographics
>» Demographics Number of U.S. households that own an RV 7.9 million Household ownership rates of RVs 8.0% Average age of all RVs 12.7 years Average time consumers have owned their 6.6 years current RV Age of typical RV owner 49 years Average income of RV owner $78,000 8.5% 14.2years 8.4 years 48 ye
Slide 46: What's Next...
What’s Next... o Lcl INOUSTRIES International RV Innovation/R&D Aftermarket OEM Adjacent Markets + Acquisitions + Additional Addressable Market a=
Slide 47: International RV Markets
Slide 48: Research and Development
Slide 49: Aftermarket Opportunity
Slide 50: Fleet Marine Cargo Train
Fleet Marine Cargo Train
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