Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (November 2016)
47 slides from Lci Industries's investor presentation, Nov 23, 2016
Slide 1: Your Journey Begins Here
YOUR JOURNEY BEGINS HERE lippertcomponents.com
Slide 2: Passionate about winning?
passionate about winning? team play with trust “5, 5 honesty « integrity » candor - caring about = people = xe) te) ” INDUSTRIES INCORPORATED
Slide 3: Watch the video
WW = -_— @ | crew! Wateh the video INDUSTRIES INCORPORATED
Slide 4: Forward-looking statements
1 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 Co
Slide 5: Management Team
Oo | prew |‘ JASON LIPPERT, CEO inoustmies NeonPonaTED 20+ years with Drew Management Team SCOTT MERENESS, PRESIDENT 20+ years with Drew Average tenure of Drew’s members of senior managementis 14+ years with the company
Slide 6: Financial Performance
> Financial Performance Net Sales $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 © | onew/ = OEMnet sales.” Aftermarket netsales”” <— EBITDA” EBITDA Net Sales and EBITDA (in mitions) oe | $260 $200 $150 $681 $573 | $100 2010 $50 $127 - = + so 2011 2012 2013 2014 2015 LTM 9/16 Prior to @2
Slide 7: Sales by Market
>» Sales by Market LIM in millions 2010 2011 2012 2013 2014 2015 9/16 OEM Towable $427 $503 $660 $725 $836 $932 $1,043 Year over year growth 18% 31% 10% 15% 11% 14% OEM Adjacent Industries 96 129 171 197 208 268 312 Year over year growth 34% 32% 15% 6% 29% 24% Aftermarket 31 30 35 39 64 103 127 Year
Slide 8: Non-OEM Towable RV Net Sales
>» Non-OEM Towable RV Net Sales es $567 CAGR $500 ene $400 23% $300 $200 146 E : 19% $100 ee $0 2010 LIM 9/16 = OEM Adjacent industies = Aftermarket ™OEMRV Motorhome — m International periods exclude the Company's net sales of components for OEM Towables, which made up 75% and 65% of Sales for the y
Slide 9: Consolidated Sales Growth
Consolidated Sales Growth Sales for the twelve months ended December 31 for each year unless noted $1,615 : $1,515 a c $1,415 E sisis e $1,215 $1,115 4 $1,015 4 2013 2014 2015 LIM 9/16 a) Sales for acquisitions represent the traling twelve month sales at the date of acquisition. Any post-acquisition
Slide 10: OEM and Aftermarket Industries
OEM and Aftermarket Industries INDUSTRIES INCORPORATED
Slide 11: RVs - Industry Wholesale Shipments
> RVs - Industry Wholesale Shipments (Compared to Drew’s Performance) ingustY Approximately 71% of Drew’s OEM Segment net sales are for Travel Trailer and 5 Wheel RVs jor ecies am Industry units in thousands, net sales in millions) = Notorhomes 700 Other Towables $1,161 Travel Trailers & 5th Wheels
Slide 12: RV Wholesale Shipments
> RV Wholesale Shipments Thousands of Units Charts updated up through September 2016. Ss RV Shipments 23 RV Shipments vs Federal 4 a meal Interest Rate ce E \ =a aa 250 3 250 + + 5% 200 Vf z V 20 4 mS 2 150 Eo © ‘co eae a = 2 © wa \ _ FS a oe co cS cS £ & e ro AS © ous g = A ie oR aan TEN vs wmf e/a
Slide 13: Furrion and product lines
FURRION ELECTRONICS ‘SLIDE-OUT MECHANISMS = FURNITURE FURRION APPLIANCES SHOWERS ‘& SINKS AWNINGS “7 SUSPENSION ENHANCEMENTS
Slide 14: Manufacturing capabilities
Fabric and Electronics and Steel and Lamination Steel and Motion- Woodworking Plastic Forming Aluminum and Glass Aluminum Systems Fabrication Fabrication Welding ]
Slide 15: Towable RVs and Motorhomes
Towable RVs (Approximately 71% of Drew's OEM Segmentnet sales) _—_——a Motorhomes (Approximately 7% of Drew's - Spemet OEM Segmentnet sales) 7 ~ESa ys Sa : = ¢ SS of industry 2015 unit sales of 2015 wholesale dollar sales, or $9.7 billion Retail cost $4,000 to $100,000+ per unit. Average about $30,00
Slide 16: Campers in the U.S.
(SE 59,, Ny ; Tent Campers 60” Am 27.5 million Camp Every Year g 3 ! 4. 28.6 million Active Campers 10% # 46.6 million: Camp Every Other Year 48 million 30% Camp Occasionally 14.0 million Cabin Campers => 8.4 million * Estimates based on 106 million households. All other (1%) 0.5 million.
Slide 17: Why We are Optimistic
Why We are Optimistic More economical family vacations + Typical RV family vacation is 23 to 59 percentless expensive for a family of four Positive demographics 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
Slide 18: RV Industry Trends
>» RV Industry Trends 0 | Units 325 300 275 250 225 200 15 150 125 100 226 18 Travel Trailer and 5" Wheel RVs, Drew’s primary RV market 317 Wholesale == Retail ott (Units in thousands} 268 243 213, a 199 03) 186 164 1 | | 299 Estimated Dealer Inventory Change 2008 (41) 2009 2010 2011 2012 2013 2014
Slide 19: Number of U.S. Households that Own an RV
> Number of U.S. Households that Own an RV (in Millions) 10 6 4 [J : 1980 1984 1988 1993 1997 2001 2005 2011 he) | prew Statistics provided by RV Consumer Demographic Profile — 2011
Slide 20: Demographics
>» Demographics 2005 2011 Number of U.S. households that own an RV 7.9 million 8.9 million Household ownership rates of RVs 8.0% 85% Average age of all RVs 12.7 years 14.2years Average time consumers have owned their 6.6 years 8.4 years current RV Age of typical RV owner A? years A8 years Average in
Slide 21: What's Next...
What’s Next... International RV Innovation/R&D - Aftermarket OEM Adjacent Markets + Acquisitions + Additional Addressable Market
Slide 22: International RV Markets
| International RV Markets
Slide 23: Slide 23
Slide 24: Adjacent markets
larke
Slide 25: Marine Bus Truck Fleet Cargo
Marine Bus Truck Fleet Cargo
Slide 26: New Products & Acquisitions
New Products & Acquisiti .
Slide 27: Recent acquisitions
v o EA Technologies Custom steeland aluminum parts and provider of electro- deposition ('e-coat’} and power coating services Signature Seating Manufacturer of furiiture solutions for fresh water boat manufacturers, primarily pontoon boats Flair Interiors Manufacturer of RV furniture and mattresses A
Slide 28: Acquisition Discipline and History
Acquisition Discipline and History Have made nearly 40 acquisitions over the past 16 years Weare experienced at successfully integrating acquisitions Acquisitions have come in the form of intellectual property, small start ups and larger businesses 6 out of last 11 acquisitions have had substantial
Slide 29: Expanding Our Growth Potential
>» Expanding Our Growth Potential” Doors, Windows, Mattresses, Furniture and Awnings Furrion?) Travel Trailer Leveling VV Content Electronics Chassis and Axles Axles Aftermarket Adjacent $690 Doors, Windows, Mattresses and Furniture Marine Furniture se International (1) Amounts {in milions) represen
Slide 30: 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 4 yer’ an estimated $7,400 per Towable RV =) 49 $2,987 $9 95953025 + In 2016, Travel Trailer unit volume is up 14% yly due wore $
Slide 31: Content Per New Motorhome RV
>» Content Per New Motorhome RV + Approximately 7% of OEM Segment net sales are for Motorhome OEMs x + 100% market share in existing nee $1,957 products would yield an estimated on $1,810 $1,807 $6,000 per Motorhome RV noe xem on’ $208 Increase $330 Increase 2004 2005 2006 2007 2008 2009 2010 2011 2
Slide 32: Supplemental Schedules
Supplemental Schedules INDUSTRIES INCORPORATED
Slide 33: Operating Results - Three Months
Operating Results Three Months Ended September 30 FINANCIAL PERFORMANCE 6 ns, except EPS) 2016 2015 Change Net Sales $ 412.4 $ 345.3 19% Operating Profit $ 45.1 $ 27.2 66% % of Sales 10.9% 79% Net Income $ 29.8 $ 17.3 73% Diluted EPS S125 0 70 70%
Slide 34: Operating Results - Nine Months
Operating Results Nine Months Ended September 30 FINANCIAL PERFORMANCE 6 ns, except EPS) 2016 2015 Change Net Sales $ 1,276.0 $ 1,068.8 19% Operating Profit $ 160.3 $ 926 73% % of Sales 12.6% 87% Net Income $ 103.4 $ 58.2 78% Diluted EPS $ 415) $ 236 76%
Slide 35: Results By Segment - Three Months
Results By Segment Three Months Ended September 30 FINANCIAL PERFORMANCE (Sin mi 2016 Net Sales: OEM Segment $ 375.9 $ 315.2 19% Aftermarket Segment 36.5 30.1 21% Operating Profit: OEM Segment 39.0 2255 74% Aftermarket Segment 6.1 47 30% Operating Profit as a Percentage of Net Sales: OEM Segment 10.
Slide 36: Results By Segment - Nine Months
Results By Segment Nine Months Ended September 30 FINANCIAL PERFORMANCE (Sin mi 2016 Net Sales: OEM Segment $1L,175:5. $99.19 19% Aftermarket Segment 100.5 He? 31% Operating Profit: OEM Segment 144.1 81.7 76% Aftermarket Segment 16.2 11.0 47% Operating Profit as a Percentage of Net Sales: OEM Segmen
Slide 37: Debt Position
> Debt Position FINANCIAL PERFORMANCE Cash and Net Cash pee eee (Sin mitions) Investments (Debt) the Period 12/31/11 $ - Si $ a $ 50 12/31/12 - ton) On) 1 12/31/13 - 66 66 5 12/31/14 16 - (16) 107 12/31/15 0) 12 (38) 41 09/30/16 50 95 4514) 37 (1} On December 20, 2012, the Company paid a special div
Slide 38: Cash Flow
> Cash Flow ($ in millions) FINANCIAL PERFORMANCE Acquisitions (24) () $ 296 Capital expenditures 192 Dividends 195 Stock repurchases 2 Total $ 685 prew (1} Includes 2016 YTD acquisitions totaling $49.4 million, which includes Atwood Seating and Es eo Chassis acquired in October 2016 <O7r
Slide 39: Cash Flow
> Cash Flow mmm Dividends Capital Expenditures: FINANCIAL PERFORMANCE SD se Acquisitions 5149 eau * Operating Cash Flow $140 e $180 $160 $120 $140 $100 wen $80 $100 $65 A 80 $60 + 565 Q $60 $40 10 $10] $22 + $40 $20 2 $45 sar $42 ue = * om Ea a 3 —— $0 2009 2010 2011 2012 2013 (1) 2014 2015 YTD 916
Slide 40: Balance Sheets
> Balance Sheets FINANCIAL PE AANCE (S$ in million 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 @Q32016 Total Assets soll 3745 53. $ S44 $623" | 775) Total Debt = = = 16 50 50 Cash & Investments Zi 10 66 = 12 95 Stockholders’ Equity 277 28413) 3144) 395. 43915) 53116) Days Salesin A/R'” 17 days 14 d
Slide 41: Financial Strength
> Financial Strength FINANCIAL (12 months end 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 09/30/16 Return on Equity 11% 13% 16% 17% 18% 25% Return on Assets 9% 10% 12% 12% 12% 17% Return on Invested Capitalt 20% 22% 28% 26% 25% 38% Total Debt to Equity 0.00 0.00 0.00 0.04 0.11 0.09 Total Debt to EB
Slide 42: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE (Sinm 1 15 LIM 9/16 ecraing $ 485 $ 581 $ 783 $ 955 §$ 1163 $ 1839 Profit De presanonis: 205 27 2275 326 Ab AAT Amortization EBITDA 690 838 1058 1281 1579 228.5 Celeie 943|| 320|| 426 42.5, 29.0 29.1 Expenditures -Al-
Slide 43: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE (S in millions) 2011 2012 2013 2014 2015 LIM Segment Net Sales: OEM $ 6514 $ 8659 §$ a8 F $ 1,127.0 $ 1,300.1 $ 1,483.6 Aftermarket DoF 35.2 63.8 103.0 126.6 Segment Operating Profit: OEM ae Be (es $ Sey $ 102 $ 167.6 Aftermarke
Slide 44: Stock Price History
>» Stock Price History Drew has 24.6 million shares outstanding and a market capitalization of approximately $2.2 billion as of October 31, 2016 $28 $26 $27 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10/31 prew + Dates noted above are as of co Teo + Stock prices above
Slide 45: Analyst Coverage
>» Analyst Coverage a” Citi Research > Gregory Badishkanian — (212) 816-2720 a CJS Securities > Dan Moore — (914) 287-7600 a” CL King & Associates > Scott Stember — (212) 364-1806 A Sidoti & Company ” Thompson Research Group > Kathryn Thompson — (615) 891-6206
Slide 46: Industry Statistics Summary - Towable RVs
Drew Industries Incorporated Industry Statistics Summary TOWABLE RECREATIONAL VEHICLES (RV) Towaates™ ] Wholesale Unite @ LI Retail Units 7 Lt Dealer Inventory Impact Month YTo om Month YD cM Month Yo cM bees 376038 S886. 3586358 S88, ieriar 3a SSS eS aE peer 34888 Sieee ‘Jancis 33'800 1956 32.800"
Slide 47: Industry Statistics Summary - Motorized RVs
Drew Industries Incorporated Industry Statistics Summary MOTORIZED RECREATIONAL VEHICLES (RV) mororzep™ |] [ Wholesale Units = Lf Retail Units © Lf Dealer Inventory Impact Month YI cm Month VID cm Month YTD. um Decit 2900 0%. 43,900 15% 43,900 7840 20% 36477 16% 36.477 7,060. 7.423 7.433 Jan-15 3.70
Drew Industries — Investor Presentation (November 2016) on 6ix