Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (August 2013)
44 slides from Lci Industries's investor presentation, Aug 20, 2013
Slide 1: Drew Industries Incorporated
Drew Industries Incorporated (NYSE: DW) 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 06/2013
Drew's Segments — LTM 06/2013 Net Sales - $966 million
Slide 5: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products —- Components for RVs and Manufactured Homes Net Sales of $966 Million for the 12 Months Ended June 30, 2013 RV Fumiture and Mattresses: RV Chassis, Slide-outs and Other Chassis Parts: , 86 million MH Chassis and s $475 million Chassis Parts: $40 million Other Products: $53 million A
Slide 6: Financial Performance: Net Sales and EBITDA
Net Sales = RV Segment net salesmen MH Segment net sales == EBITDA EBITDA $1,000 $800 $600 + $400 + $200 so Financial Performance Net Sales and EBITDA "") (in mitions) (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment [see page 42). $75 $60 $45 $30 $15 $0
Slide 7: Section II: RV Industry
SECTION Il RV Industry
Slide 8: RV Market
RV Market TOWABLE RVS (Approximately 83% of Drew's RV Segment net sales) Travel trailer with Sport utility RV expandable ends “Toy Hauler” Folding camping trailer Truck camper =P Fifth-wheel travel trailer 90% of industry 2012 unit sales 66% of 2012 wholesale dollar sales, or $7.0 billion Retail cos
Slide 9: Why We are Optimistic
Why We are Optimistic ® 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 NEL football games > NASCAR events > More active, shorter, “greener”, & family oriente
Slide 10: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments Approximately 83% of Drew's RV Segment net sales are for Travel Trailer and 5" Wheel RVs Industry Units 500 (Industry units in thousands} Motorhomes = Other Towables Sai Travel Trailers & 5th Wheels 384391 300 200 100 0 1988 2000 2001-2002» 2003~«—« 2004 «2005-2006
Slide 11: Recent RV Industry Trends
Recent RV Industry Trends Units Travel Trailer and 5"* Wheel RVs, Drew's primary RV market 300 (Units in thousands) = re 278 \inolesate = Retail 250 242.9 225 | 7268 212.9 zzz daa 206.0 200 85. 108.0 175 164.3 148.6 150 138.3 101.5 108.4 o 123.1 100 75 50 25 o 2008 208 2010 2011 2012 Jun YTD“12 Jun
Slide 12: Section III: Our RV Segment
SECTION III Our RV Segment
Slide 13: RVs - Industry Wholesale Shipments (Compared to Drew's Performance)
RVs - Industry Wholesale Shipments (Compared to Drew's Performance) Industry Approximately 83% of Drew's RV Segment net sales are for Travel Trailer and 5 Wheel RVs —_ Drew's Units Net Sales {industry units in thousands, net sales in millions} 800 $900 —=Snotorhomes oo a mm mEmOther Towables $781 =
Slide 14: Content Per New Towable RV
Content Per New Towable RV - Approximately 83% of RV Segment net sales are for Travel Trailer and Fifth-Wheel RVs - 100% market share in existing products would yield approximately $5,000 per Towable RV - Growth in RV “features” drives content increases 2001 2002 2003 2004 2005 2006 2007 2008 2009 2
Slide 15: RV Segment Net Sales by Type
$38 mil 4% RV Segment Net Sales by Type LTM 6/13- $844 Million $83 million $23 million 10% kon 3% LTM 6/12- $681 Million $63 million 9% $16 million $23 million. 99% 4% = Travel Trailer & Fifth-Wheel - OEM = Motorhome - OEM Aftermarket = Adjacent Industries sane
Slide 16: Section IV: Manufactured Housing Industry
SECTION IV Manufactured Housing Industry
Slide 17: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market ® 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 dama
Slide 18: Manufactured Housing — Industry Production
Manufactured Housing — Industry Production Industry U 400 360 300 250 200 150 100 50 MH Share Held by Mult-Sections 1999 65% 254 Industry units in thousands) == Multi‘Sections === Single-Section 493 52. 55 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 70% 75% 78% 79% 74% «65M 72%_
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 : ; Drew's ; [industry units in thousands, net sales in millions, Units a ) Net Sales “nn mm Multi-Sections === Single-Section mmm Drew's MH net sales — a4 $225 350 $22 $200 300 S75 250 S150 200 $125 s100 150 S75 10
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 1,493 $1,450 $1,429 S143. $1,465 $1,426 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 LTM 613 Sections perh
Slide 23: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 6/13- $122 Million LTM 6/12 - $120 Million OEM Aftermarket. Adjacent industries
Slide 24: Section VI: Strategy
SECTION VI Strategy
Slide 25: Business Strategy
Business Strategy © Maximize profitability and return on assets through = New product introductions = Market share growth = Operational efficiencies = Diversification to related industries = Strategic acquisitions © This strategy accomplished through = Outstanding customer service = Motivating manag
Slide 26: Expanding Our Growth Potential
Expanding Our Growth Potential Est. Total Opportunities Market 2011 — Aluminum Extrusions a - $ 200 million 2011 — Cross Sell Existing Pre Markets, as well as Mid-
Slide 27: 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 cust
Slide 28: New Products and Acquisitions
New Products and Acquisitions Acquire TRAIL AIR: Adding RV ‘Acquire HOME-STYLE: Expanding furniture for RVs in Northwest market Introduce Began RVLOCK remote 7 roduction of ACQUIRE sree ray doors locking product idstates: products pili Acquire EA Foca oe TECHNOLOGIES: eherll ba reors Expanding towab
Slide 29: 2010 — 2013 Acquisitions
2010 — 2013 Acquisitions Purchase Historical Price Level-Up TM(1) $ 1.4 $ 1 oe leveling system for fifth-wheel Schwintek") § 2O0|\$ 8 | Ree einem Sellers § oS 1 =a Home-Style!!) $ 7.3 |$ 12 _| tenable vein tne Norwest meet MTecl!) § 60/9 12 ||RUeerr: inall EA Technologies S 1835/8 2 | Be tll Starque
Slide 30: Section VII: Operating Results
SECTION VII Operating Results
Slide 31: Operating Results: Three Months Ended June 30
Operating Results Three Months Ended June 30, FINANCIAL PERFORMANCE | Net Sales Same EONS 9287-2 14% Operating Profit Si Olle 25.7 35% % of Sales 7.6% 9.0% Net Income $ ieaies 15.9 36% Diluted EPS SmeeO-o2105 0.67 29% (1) The Company's operating profit margin in the second quarter of 2013 improved f
Slide 32: Operating Results: Six Months Ended June 30
Operating Results Six Months Ended June 30, FINANCIAL PERFORMANCE Net Sales $ 474.6) $ 539.8 14% Operating Profit SMSO SiS 39.3 8% % of Sales 7.6% 7.3% Net Income See28 |p 24.2 6% Diluted EPS $ 1.01} $ 1.03 2% (1) During the first quarter of 2013, the Company's operating profit margin was below the
Slide 33: Results By Segment: Three Months
Results By Segment Three Months Ended June 30, FINANCIAL PERFORMANCE (S in millions) 2012 2013 Change Net Sales: RV Segment $ 218.4] $ 253.1 16% MH Segment $ 326 $ 34.1 5% Operating Profit: RV Segment ee AClle bn 22:6 53% MH Segment $ 41} $ 38 (7%) Operating Profit as a Percentage of Net Sales: RV S
Slide 34: Results By Segment: Six Months
Results By Segment Six Months Ended June 30, FINANCIAL PERFORMANCE (S in millions) 2012 2013 Change Net Sales: RV Segment $ 414.0) $ 477.1 15% MH Segment $ 606) $ 627 3% Operating Profit: RV Segment $ 29.3) $ 34.9 19% MH Segment $ 70) $ 63] (10%) Operating Profit as a Percentage of Net Sales: RV Seg
Slide 35: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash Utilized for Acquisitions Cash and Net Cash During the YTD (Sin millions) Debt Investments (Debt) 12/31/10 fT $22 12/31/11 | $ = $ 50 LA So 06/30/13 | $ = $ 2 [I] On December 28, 2010, the Company paid a special dividend of $1.50 per share of the Company's Co
Slide 36: Balance Sheets
Balance Sheets (S in millions) FINANCIAL PERFORMANCE Total Assets Total Debt Cash & $ i $ 10/4) 32 Investments Stockholders’ $ 243° |$ 277 |$ 28414) 325 Equity RATIOS Days Sales in A/R"” 13 days 17 days 14 days 20 days Inventory Turns”) 6.5 turns 6.2 turns 7.8 turns 7.8 turns [1] Days Sales in A/R i
Slide 37: Cash Flow
Cash Flow FINANCIAL PERFORMANCE Sig ificant use of cash items since December 31, 2007 Acquisitions (15) $113 million Capital expenditures $ 91 million Debt reduction $ 27 million Special dividends $ 78 million Stock repurchases $ 10 million Total $ 319 million =36-
Slide 38: Financial Strength
Financial Strength FINANCIAL PERFORMANCE (12 months ended) 12/31/08 12/31/09 12/31/10 12/31/11__12/31/12 06/30/13 Return on Equity 6%") 2%") 11% 11% 13% 13% Return on Assets 4%) 2%'*) 9% 9% 10% 9% Total Debt to Equity 0.00 0.00 0.00 0.00 0.00 0.00 Total Debt to RD. 0.20 0.00 0.00 0.00 0.00 0.00 (1)
Slide 39: The Future
The Future 1) 1) 0) (0) 0) Increasing RV content RV industry growth Demographic tailwind Expanding into adjacent industries Affordable housing recovery -38-
Slide 40: Stock Price History
Stock Price History = Drew has 23.2 million shares outstanding and a market capitalization of approximately $994 million as of August 16, 2013 45 $44 $43. ie 53,44 soy / Sead SV $6 2001 2002 2003 2004 ©2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 2012 8/15/13 {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: Jason Lippert Chief Executive Officer 574-535-1125 JasonL@lci1.com Joseph S. Giordano Ill CFO & Treasurer 574-535-1125 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com > 4 save
Slide 43: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE (in millions) 2001 2002 2006 2008 2010 2011 2012 Ate Ge $20.3 | $29.2 | $34.3 | $44.0 | $57.7 | $55.3 | $66.0 | $19.9 | $135.6) | $45.2 | $48.5 | $58.1 | $61.1 Depreciation & | $3.4 | $73 | $78 | $93 | $120 | $157 | $176 | $171 | $1a
Slide 44: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE Net Sales: RV Segment $ 368.1 | $ 312.5 | $ 477.2 | $ 570.6| $ 780.9|$ 844.0 MH Segment 142.4 85.3 95.6 110.6 120.2 122.3 Total Net Sales $ 510.5 | $ 397.8 | $ 572.8 | $ 681.2} $ 901.1 | $ 966.3 Operating Profit: RV Segment SIZ
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