Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (November 2012)
44 slides from Lci Industries's investor presentation, Nov 13, 2012
Slide 1: Drew Industries Incorporated
Drew Industries Incorporated (NYSE: OW) 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 “forward-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 Segments — LTM 9/2012
Drew's Segments — LTM 9/2012 Net Sales - $860 million PMH = $120 millions y % y 14% f Segment Operating Profit - $67 million t= $14 mili ian f 21% ‘Y
Slide 5: Drew's Products - Components
Drew's Products - Components for RVs and Manufactured Homes Net Sales of $860 Million for the12 Months Ended September 30, 2012 R) ; Bath Products: MliChassisond $20 million $76 million Axles and Suspension Products: ‘$55 million RV Segment Windows and Doors: vent Windows and Doors $166 million MH S
Slide 6: Financial Performance
Financial Performance Net Sales and EBITDASO (in mitions) = RV Segment net salesmm MH Segment net sales == EBITDASO Net Sales cabana 18 00 600 45 400 0 200 6 zoo 2002” 2003 2004 2006 ” 2006 2007” 2008 2009” 2010” 2011 TM esa (1) EBIDASO is operating profit plus depreciation, amortization, goodwillim
Slide 7: Section II: RV Industry
SECTION II RV Industry
Slide 8: RV Market
RV Market TOWABLE RVS (Approximately 857 of Drew's RV Segment net sales) Ey see Traveltrailer fithwwhesttovelraler —@ 90% of industry 2011 unit sales — ean (mei! © 64% of 2011 wholesale dollar sales, or $4.6 billion ® Trovel railer with sper utityev —- @ + Retail cost $4,000 to $100,000 per ieiieaie
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 inc Approximately 85% of Drew's RV Segment net sales are for Travel Trailers and 5" Wheel RVs industry ae Ctr Unt in theutand, Not Sales in elon) 00 Noteromes smother Tousbles 301 32 TAT SPE Eee EEE EEE HE OS OS é (1) Projection for 2012 and 2013s the latest publis
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 Travel Trailers and 5" Wheel RVs, Drew's primary RV market 233,400 236,387 85.10 210,400" 199,200 197, 486,010 164,254 138,300) 125,000 100,000 75,000 50,000 25,000 ° 2008 2009 2010 2011 LTM Sept. 2012 Dealer In
Slide 12: Section III: Our RV Segment
SECTION Ill Our RV Segment
Slide 13: RVs - Industry Wholesale Shipments (Compared to Drew's Performance)
RVs - Industry Wholesale Shipments (Compared to Drew's Performance) Approximately 85% of Drew’s RV Segment net sales are for Travel Trailers and 5" Wheel RVs Drew's tn wustry Net Sales un Andy Uniti tan Net a ers i vo — sro aw nen oo seco mem drew a Sogrent Net Sales = 100 (1) Projection for 2012 an
Slide 14: 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 15: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 9/12- $740 Million $70 million $17 million 9% $26 million_?%. a% LTM 9/11 - $526 Million 118 million. $15 million $31 million 3% 6% ‘Travel Taller & ith: wheel - OEM Motorhome - OEM Aftermarket 1 Adjacent Industries ‘Travel Toller & Filth: wheel - OEM Motorhome - OEM
Slide 16: Section IV: Manufactured Housing Industry
SECTION IV Manufactured Housing Industry
Slide 17: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market i) Cost per sq. ft. is $41 for MH vs. $83 for site-built homes Average retail price of $60,600 for a 1,470 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 dam
Slide 18: Manufactured Housing — Industry Production
Manufactured Housing — Industry Production Industry, (Units in thousands, Dollars in millions) v" saan Ien so o Seal 23 oll) x 200 il 193 49 se a | == age = 144 Bast 1 ST SEP KPH PEE PEE SS ‘ield by Mult-Sections aa There are no industry forecasts for the manufactured housing industry.
Slide 19: 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: © Dre
Slide 20: Section V: Our Manufactured Housing Segment
SECTION V Our Manufactured Housing Segment
Slide 21: Manufactured Housing — Industry Production (Compared to Drew's Performance)
Manufactured Housing — Industry Production (Compared to Drew's Performance) Industry ir ane Drew's prin [Units in thousands, Dollars in milions) Net Seles ~ = Multi-Sections == Single-Section =m Drew's MH net sales $250 GEESE Pe SHEESH ES S SK aby ah Sectons There are no industry forecasts for the m
Slide 22: Content Per New Manufactured Home
Content Per New Manufactured Home = 100% market share in existing products would yield approximately $4,500 per home = Affordability of the homes constrains content growth $1,666 $1,450 $1,429 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LTM 912 Sections perhome 1.77 181 183178 148.76 SS S
Slide 23: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 9/12- $120 Million LTM 9/11 - $102 Million "$17 milion 1% NORM —mAftermarket_mAdiocent Incusties OEM —mAftermarket_mAdiocent Incusties
Slide 24: Section VI: Strategy
SECTION VI Strategy
Slide 25: Business Strategy
Business Strategy = Strategic acquisitions = New product introductions = Market share growth = Operational efficiencies * Diversification to related industries © This strategy accomplished through = Outstanding customer service * Motivating management through strong profit incentives * Low cost manu
Slide 26: What Drew Has Done - Expanding Our Growth Potential
What Drew Has Done - Expanding Our Growth Potential New Product Est. Total Market Pe st $ 20milon | 2011= i 2011 ~ Cross Sell Existing Products to Trailer Markets, as welll as Mid: -25-
Slide 27: Acquisition Criteria
Acquisition Criteria Drew is a disciplined and patient acquirer Gain market share or add products from other suppliers through acauisitions Seek products or technologies that we can expand through our nationwide customer base and factory network Become an even more extensive supplier to our customer
Slide 28: New Product Introductions
New Product Introductions Acquire TRAIL AIR: ‘Adding RV suspension products cates HONeSIE cotta — rete panding ee te | | AR er enity doors locking product ‘Acquine EA TECHNOLOGIES: Expanding towable RV ACQUIRE chassis and slide-out Cenraca mechanisms sige ‘Adding wall-stide production of for MH Acqu
Slide 29: 2010 — 2011 — 2012 Acquisitions
2010 — 2011 — 2012 Acquisitions Purchase Historical ($ in millions) Price Sales Description Level-Up ™()) $ VALS 1 _| Sepentevetng sister for ttrwheet Schwintek(!) § 20S 5 | ERS sal Sellers $ 0.5 | $ |) Seeseuasimnemeesaes Homesiiem SUZ)| SUNN | esas sssrens” M-Tecl") $ 60% 1» |= EA Technologies $ 1
Slide 30: Section VII: Operating Results
SECTION VII Operating Results
Slide 31: Operating Results
Operating Results Three Months Ended September 30, FINANCIAL PERFORMANCE (Sin millions, except EPS) 2011 20120) Change Net Sales $ 166.7) $ 226.3 36% Operating Profit $ 92)$ 149 62% % of Sales 5.5% 6.6% Net Income $ 56|$ 98 74% Diluted EPS $ 0.25) $ 0.43 72% (1) The Company's operating profit morgin
Slide 32: Operating Results
Operating Results Nine Months Ended September 30, FINANCIAL PERFORMANCE (Sin millions, except EPS) 2011 20121) Change Net Sales $ 521.6) $ 700.9 34% Operating Profit $ 427) $ 513 20% % of Sales 8.2% 7.3% Net Income $ 260) $ 32.6 26% Diluted EPS $ 1.16) $ 1.43 23% {1) Refer 10 page 20 for a narrative
Slide 33: Results By Segment
Results By Segment Three Months Ended September 30, FINANCIAL PERFORMANCE (Sin millions) 2011 20120) Change Net Sales: RV Segment $ 136.2) $ 195.0 43% MH Segment $ 305 $ 31.4 3% Operating Profit: RV Segment S tW| & PY 67% MH Segment $ 38] $ 38 0% Operating Profit as a Percentage of Net Sales: RV Seg
Slide 34: Results By Segment
Results By Segment Nine Months Ended September 30, FINANCIAL PERFORMANCE (Sin millions) 2011 20120) Change Net Sales: RV Segment $ 439.7, $ 608.9 39% MH Segment $ 819) $ 91.9 12% Operating Profit: RV Segment $ 40.4. $ 47.2 17% MH Segment $ 9.0) $ 109 22% Operating Profit as a Percentage of Net Sales
Slide 35: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash Utilized for Acquisitions Cash and Net During the YTD (Sin millions) Debt Investments Cash/(Debt) Period 12/31/08 | $ 9 § Le 12/31/09 | $ - $ 65 $ 2 12/31/10 | $ = $ 4a Se) 12/31/11 $ - $ 7 $ 50 9/30/12 | $ - sa } $ 1 Ul) On December 26,2010, the Company paid
Slide 36: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE (Sin millions) 12/31/08 12/31/09 12/31/10 12/31/11 9/30/12 Total Assets $ 311 |$ 288/$ 307 |$ 351 |/$ 418 Total Debt $ 91s -|$ = 3 -|$ 7 Cash & $ 91$ 65) $ 44 | $ 71$ 33 Investments ‘Stockholders! $ 259 |$ 244/$ 243") $ 277 |$ 318 Equity RATIOS Days Sales in 1Sday
Slide 37: Cash Flow
Cash Flow FINANCIAL PERFORMANCE Significant use of cash items since December 31, 2007 Acquisitions (14) $107 million Capital expenditures $64 million Debt reduction $27 million Special dividend $33 million Stock repurchases $10 million Total $ 241 million
Slide 38: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 9/30/12 Return on Equity 17% 6%) 279) 11%. 11%. 13% Return on Assets. 12% AG) 2%) % % I% Total Debt to. Equity O11 0.00 0.00 0.00 0.00 0.00 Total Debt to. EBITDA) 0.33 0.20 0.00 0.00 0.00 0.00 [1) EBITDA is operati
Slide 39: The Future
The Future Increasing RV content RV recovery from recession Demographic tailwind Expanding into adjacent industries © ®G® 6 © Affordable housing recovery
Slide 40: Stock Price History
Stock Price History = Drew has 22 million shares outstanding and a market capitalization of approximately $710 million as of October 31, 2012 $44 $32 $6 2000 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 10/31/12 (December 31, unless noted) »
Slide 41: 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 42: 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 > 4
Slide 43: Reconciliation of Operating Profit to EBITDA and EBITDASO
Reconciliation of Operating Profit to EBITDA and EBITDASO FINANCIAL PERFORMANCE um (Sinmilions) 200220032004 2005-2006 200720082009 2010 2011—9/12 Operating Kote) | $ B2/$ 43/$ M0] $ 577) $ 553] $ 660] $ 199 | $1054) |$ 452] 5 405) 5 572 Depreciation & ee tion |$ 73]$ 78/$ 93]$ 120]$ 157]$ 176/$ 17.
Slide 44: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated paincacperonunee Net Sales: RV Segment $ 368.1 | $ 312.5) $ 477.2 | $570.6 | $ 739.9 MH Segment 142.4 85.3 95.6 110.5 120.6 Total Net Sales $ 510.5 | $ 397.8 $ 572.8 $681.2 | $ 860.5 Operating Profit: RV Segment $ 246|/$ 15.7|)$ 444/$ 45.7) $ 52.6 MH
Drew Industries — Investor Presentation (November 2012) on 6ix