Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (August 2017)
50 slides from Lci Industries's investor presentation, Aug 24, 2017
Slide 1: | INDUSTRIE
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 Pr winning? team play with trust 4) 35 honesty - integrity#candor + caring about ms people 5 Lcl INOUSTRIES
Slide 4: Financial Performance
>» Financial Performance Net Sales = OEMnet sales Aftermarket net sales = EBITDA” EBITDA 52,000 tT $300 : Net Sales and EBITDA (in mitions) : $1,750 $250 $1,500 $200 $1,250 $1,000 $901 $150 866 $750 $681 , $573 $100 $500 Ea + $50 $250 $148 $0 — —— 0 2010 2011 2012 2013 2014 2015 2016 = LTM6/17 (1) E
Slide 5: Sales by Market
>» Sales by Market (Sin millions 2010 20 2012 2013 2014 2 20 OEM Towable $427 $503 $660 $725 $836 $932 $1,082 $1,189 SITY ET yee eee OEM Motorhome vA 48 6 International Total $573 $681 $901 $1,016 $1,191 $1,403 $1,679 $1,861 Y + Furrion sales were over $55M for the LIM Q217 + LIM2017 percentage grow
Slide 6: Non-OEM Towable RV Net Sales
Non-OEM Towable RV Net Sales $800 $700 $600 $500 $400 $300 $200 $100 $0 CAGR $672 27% 2010 LIM 6/17 = OEM Adjacent industies = Aftermarket ™OEMRV Motorhome International Sales for the year ended December 31, 2010 compared to the last twelve months ended June 30, 2017. Both periods exclude the Compan
Slide 7: Proforma impact of acquisitions
a) b) ° 4) Proforma impact of acquisitions completed in 2016 and 2017, assuming each of these had been completed at the beginning ofthe period ended June 30, 2017 Sales for acquisitions represent the trailing twelve month sales at the date of acquisition. Any post- acquisition changes included in or
Slide 8: OEM and Aftermarket Industries
OEM and Aftermarket Industries Lcl INOUSTRIES
Slide 9: RV Wholesale Shipments
> RV Wholesale Shipments $ 450 a 2 4s0 7% 5 400 3 aes 7 aD 2 Fan pia 3 00 pam He pal ie = vo iow 5a 10 eg! KE 20 LAN Se i 150 io aa a Vi & 100 0 NW. NEN % * ‘5 Nw /a\ ea ef FF FC SF SF S SK ' €€ & es £ S ‘i ae 7) 200 0% 5 70 175 Be ‘© 20% A 5 0 iN 125 om AN \- E 100 Na A V ma S| VV a = aes ee 2 VY ©
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. Depa
Slide 11: Product Lines & Market Share
> Product Lines & Market Share
Slide 12: Product Breadth
Product Breadth It would take a competitor substantial investments to be able to manufacture the breadth of products that we have Investment into R&D LCI invests more into R&D and facilities than its competitors Customer Relationships No competitor can match our customer relationships
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 RV’s 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 144, Active Campers }) 55.9 million: * Estimates based on 126 million households. All other (1%) 0.6 million. li ~\ 66% Camp Every Year 37.1 million 9% Camp Ev
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
EA Technologies Sepontion (e-coot land power soctingsenices Signature Seating?) 16.0 16 Merutoctuers pimarivpontoonboats om HonwaterFumtwe 0020 Ea Flair Interiors 8.1 25 Manufacturer of RV furniture and mattresses Project 20002 188A ERS atte Atwood Seating & Chassis 12.5 30 Menancauamebeeraas ee Lex
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 Eeeoccctit eo0 Doors, Windows, Mattresses and Furniture International Marine Furniture (1) Amounts {in millions) repre
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 estimated $7,400 per Towable RV, 41% penetration + In 2016, Travel Trailer unit volume is up 14% yly due in inte part to an in
Slide 19: Content Per New Motorhome RV
> Content Per New Motorhome RV Approximately 8% of OEM Segment net sales are for Motorhome OEMs $2,011 $2072 100% market share in existing products es 1,810 would yield an estimated $6,000 per 2 geer 5 Motorhome RV, 35% penetration eo? $1,602 $201 Increase $330 Increase 2004 2005 2006 2007 2008 2009
Slide 20: Supplemental Schedules
Supplemental Schedules Lcl INOUSTRIES
Slide 21: Operating Results
> Operating Results Three Months Ended June 30 FINANCIAL PERFORMANCE 6 ions, except EPS) é Change Net Sales $ 547.55 $ 440.8 24% Operating Profit $ 63.0 $ 59.4 6% % of Sales 11.5% 13.5% Net Income $ 40.1 $ 37.6 7% Diluted EPS Ise) a 150 5% Vs]
Slide 22: Operating Results
> Operating Results Six Months Ended June 30 FINANCIAL PERFORMANCE 6 ions, except EPS) 2017 é Change Net Sales $1,045.8 $ 863.6 21% Operating Profit $ 1222 $ 715) 6% % of Sales 11.7% 13.3% Net Income $ 83:3 § 735 13% Diluted EPS G C22) Bye 11% Vs] .
Slide 23: Results By Segment
>» Results By Segment Three Months Ended June 30 FINANCIAL PERFORMANCE (Sin mi 2017 Net Sales: OEM Segment $ 502.8 $ 406.9 24% Aftermarket Segment 44.7 33.9 32% Operating Profit: OEM Segment 56.4 54.4 4% Aftermarket Segment 6.6 5.0 32% Operating Profit as a Percentage of Net Sales: OEM Segment 11.2%
Slide 24: Results By Segment
>» Results By Segment Six Months Ended June 30 FINANCIAL PERFORMANCE (Sin mi 2017 Net Sales: OEM Segment $ 9648 $ 799.6 21% Aftermarket Segment 81.0 64.1 26% Operating Profit: OEM Segment 110.8 10591 6% Aftermarket Segment 11.3 10.1 13% Operating Profit as a Percentage of Net Sales: OEM Segment 11.5
Slide 25: Debt Position
> Debt Position FINANCIAL PERFORMANCE Cash ed for Cash and Net Cash cg more Omg r Investments (Debt) the Period 12/31/11 $ = $ 7 $ Zh $ 50 12/31/12 - 100) 100) 1 12/31/13 2 66 66 5 12/31/14 16 = (16) 107 12/31/15 50 12 (38)!) Al 12/31/16 50 86 3612) 49 06/30/17 50 38 (12)8) 63 (1) On December 20, 20
Slide 26: Cash Flow
> Cash Flow ($ in millions) FINANCIAL PERFORMANCE Acquisitions (28) $ 366 Capital expenditures 246 Dividends DEO Stock repurchases 2 Total S$ 846
Slide 27: Operating cash flow
FINANCIAL PERFORMANCE : . sso | 7 ? ¥ $107 ] ¢ aa $45 Operating cash flow from 2009 to present ($ in millions) (1} Cash dividend of $2.00 per share, or $47 million, declared in December 2013 2% and paid in January 2014,
Slide 28: Balance Sheets
> Balance Sheets FINANCIAL PERFORMANCE ($ in mi Nn: 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 oy Total Assets $ 374 |$ 453 |$ 544 $2623) (S$) 787% |S 9925 Total Debt - 7 16 50 50 50 Cash & Investments 10 66 = 12 86 38 Stockholders’ Equity 2843) 31419) 395 43913) 55014) 62015) Days Salesin A/R'"”
Slide 29: Financial Strength
> Financial Strength FINANCIAL PER ORMANCE (12 months ended) 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 06/30/17 Return on Equity 13% 16% 17% 18% 26% 25% Return on Assets 10% 12% 12% 12% 18% 17% Return on Invested Capital) 22% 28% 26% 25% A1% 39% Total Debt to Equity 0.00 0.00 0.04 0.11 0.09 0.08
Slide 30: Reconciliation of Net Income to EBITDA
> Reconciliation of Net Income to EBITDA FINANCIAL PERFORMANCE LIM (Sin ns) 2010 2011 2012 2013 2014 2015 16 6/17 Net Income $45.4 $30.1 $37.3) $50.1 $623 $743 $129.7 $139.4 Income Taxes 17.1 18.2 20.5 278 32.8 40.0 69.5 668 Interest Expense 0.3 03 O38 0.4 0.4 1) ey 1.6 Depreciation & Amortization 2
Slide 31: Segment Net Sales
2014 | Segment Net Sales: OEM 865.9 §$ ee $ 1,127.0 $ 1,300.1 $ 1,548.1 1,713.3 in Aftermarket 35.2 63.8 103.0 130.8 147.8 Segment Operating Profit: | OEM 58 $ 748 $ e7 $ 103 $ 1809 $ 167 int Aftermarket 14. 20.0 _ Severance Executive Succession
Slide 32: Stock Price History
>» Stock Price History LCI Industries has 24.9 million shares outstanding and a market capitalization of approximately $2.7 billion as of July 31, 2017 $120 7— $108 $107 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 7/26/17 + Dates noted above are as of December 31,
Slide 33: Industry Statistics Summary: Towable RVs
Let industries Industry Statistics Summary TOWABLE RECREATIONAL VEHICLES (RV) ToT] SSS OS 1 COC i Beale Taverna ape sae s oe — 5 7 Er x Eo
Slide 34: Industry Statistics Summary: Motorized RVs
Let industries Industry Statisties Summary MOTORIZED RECREATIONAL VEHICLES (RV) TO] SSS OS 1 Cone 1 Dealer vernon pe sae us 300 Le Fo 8 7 oe if
Slide 35: Market Shift
Market Shift Share of new light-vehicle buyers by age 50% Birth years pu 1946- —~ 9 1964 30 1977- m 1994 © 1965- 20 1976 16 Before 1945 io} © 1995- 2010 ‘11 ‘12 13 ‘14 ‘15° 2014 *Through Nov. Source: J.D. Power THE WALL STRE 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 Wells Fargo* > Dan Moore — (914) 287-7600 > Mare Torrente — (314) 875-2557 a CL King & Associates > Scott Stember — (212) 364-1806 a Sidoti & Company > Stephen O'Har
Slide 37: Lcl INOUSTRIES
Lcl INOUSTRIES
Slide 38: Watch the video
Ig) ap atch the video
Slide 39: Management Team
' } JASON LIPPERT, CEO 20+ years with LCI Industries Ler INDUSTRIES Management Team SCOTT MERENESS, PRESIDENT 20+ years with LCI Industries BRIAN HALL, CFO 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 jer ecies Industry units in thousands, net sales in millions) 800 ie $1,600 = No torhomes si3a7 tf KO Other Towables 2 | $1400 Travel T
Slide 41: Towable RVs and Motorhomes
Towable RVs (Approximately 71% of LCl’s OEM Segmentn Motorhomes (Approximately 8% of LCI’s.. OEM Segmentnet sales) ee of industry 2016 unit sales of estimated 2016 wholesale dollar sales, or $10.9 billion Retail cost $4,000 to $100,000+ per unit. Average about $30,000 of industry 2016 unit sales of
Slide 42: RV vacation cost and consumer trends
Typical RV family vacation is 23 to 59 percentless expensive for a family of four 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 College and NFL football gam
Slide 43: RV Industry Trends
>» RV Industry Trends Units Travel Trailer and 5'" Wheel RVs, LCI’s primary RV market “a Wholesale Retail (Units in thousands} SS ry 350 314 317 299 300 | 979 nm 262) 268 243 251 2) = = 199 218206 217299 200 185) 186 oes 164 150 139) 100 50 0" 2007 2008 2009-2010» 2011 «2012's «2013.« 2014 «2015 ©20
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 a 2 = 1980 1984 1988 1993 1997 2001 2005 2011 es) 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 A? years Average income of RV owner $78,000 8.9 million 85% 14.2years 8.4
Slide 46: What's Next...
What’s Next... o Lcl INOUSTRIES International RV Innovation/R&D Aftermarket OEM Adjacent Markets + Acquisitions + Additional Addressable Market Ae.
Slide 47: International RV Markets
Slide 48: Research and Development
Slide 49: Aftermarket Opportunity
Slide 50: Fleet Marine Cargo Train
Fleet Marine Cargo Train