Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (August 2009)
37 slides from Lci Industries's investor presentation, Aug 12, 2009
Slide 1: A Leading National Supplier of Components for RVs and Manufactured Homes
2003 A Leading National Supplier of a Wide Variety of Components for RV’s and Manufactured Homes Drew Industries Incorporated (NYSE: DW) Exhibit 99.1
Slide 2: Forward-Looking Statements
This presentation may contain 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 position, growth opportuniti
Slide 3: Financial Performance: Sales and EBITDA
(1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 33). MH Segment sales RV Segment sales EBITDA (1) Financial Performance Sales and EBITDA (in millions)
Slide 4: Drew's Management Team
LIPPERT - KINRO DREW Drew’s Management Team Jason D. Lippert, CEO, President and Chairman of Lippert and Kinro 13+ years Jason Lippert Leigh J. Abrams, Chairman 35+ years Fredric M. Zinn, President and CEO 25+ years Leigh Abrams Fredric Zinn
Slide 5: Drew's Segments – LTM 6/2009
RV = $3 million 46% MH = $4 million 54% RV = $264 million 71% 90+% for towable RVs MH = $108 million 29% Segment Operating Profit - $7 million Revenues - $372 million Drew’s Segments – LTM 6/2009
Slide 6: Drew's Products
Drew’s Products Sales - $372 million 12 Months Ended June 30, 2009 RV Chassis, Slide-outs and Other Chassis Parts: $148 million RV Windows and Doors: $54 million Other: $3 million MH and RV Bath Products: $17 million Specialty Trailers: $9 million RV and MH Axles: $26 million MH Chassis and Chassis
Slide 7: Drew's Companies
Kinro, Inc. - Acquired 1980 Lippert Components, Inc. - Acquired 1997 Aluminum windows for RVs Doors for RVs and MH Aluminum and vinyl windows and screens for MH Bath and shower units, and sinks for MH and RVs Chassis and chassis parts for RVs and MH RV slide-out mechanisms and solutions Manual, elec
Slide 8: Economic and Market Conditions
Recession has had a severe impact on retail and wholesale sales of RVs and manufactured homes Exacerbated by extremely tight credit markets and a weak real estate market Government programs designed to help Term Asset-Backed Securities Loan Facility (TALF) to include dealer financing $8,000 tax cred
Slide 9: Business Strategy
Increase sales and profitability through This strategy accomplished through Business Strategy Market share growth New product introductions Strategic acquisitions Operational efficiencies Outstanding customer service Motivating management through strong profit incentives Low cost manufacturing: Opti
Slide 10: Content Per Vehicle - RV
Content Per Vehicle - RV Operating profit margin 8.7% 10.0% 11.6% 9.8% 9.7% 8.6% 12.8% 7.8% 1.2% (1) Includes historical sales for acquisitions assuming the acquisition was made at the beginning of the period. See Page 15 for Industry Information Peak potential is $3,500 to $3,800 per RV 90+% of RV
Slide 11: Content Per Home - MH
100% market share in existing products would yield $3,600 to $4,000 per home Content Per Home - MH Operating Profit margin 10.8% 10.9% 10.8% 10.5% 10.6% 9.1% 8.5% 7.7% 3.4% See Page 18 for Industry Information
Slide 12: Acquisitions and Product Line Extension
Acquisitions and Product Line Extension Drew is a disciplined and patient acquirer Gain market share or add products from other suppliers through asset acquisitions Complimentary to our core RV (including specialty trailers) and MH markets Seek products or technologies that we can expand through our
Slide 13: New Product Introductions
Began production of entry doors for RVs Introduce RV slide out mechanisms Began Production of axles for towable RVs ACQUIRE LIPPERT COMPONENTS: Primarily steel chassis & parts for MH ACQUIRE BETTER BATH: Adding thermo- formed products ACQUIRE HAPPIJAC: Adding patented bed lifts for RVs ACQUIRE EXTRE
Slide 14: Supplier to Industry Leaders
Champion (NYSE: CHB) Clayton (owned by Berkshire Hathaway) Palm Harbor (Nasdaq: PHHM) Skyline (NYSE: SKY) MH Forest River (owned by Berkshire Hathaway) Heartland Recreational Vehicles, LLC (privately owned) Jayco/Starcraft (privately owned) Skyline (NYSE: SKY) Thor (NYSE: THO) – largest customer RV
Slide 15: RV Market
TOWABLE RVS (90+% of Drew’s RV Segment revenues) MOTORHOMES (2% of Drew’s RV Segment revenues) 88% of industry 2008 unit sales 57% of 2008 wholesale dollar sales, or $4.0 billion Retail cost $4,000 to $100,000 per unit. Average about $24,000 RV Market 12% of industry 2008 unit sales 43% of 2008 whol
Slide 16: RVs - Industry Wholesale Shipments
90+% of Drew’s RV product sales are for Travel Trailers and 5 th Wheel RVs Projection for 2009 is the latest published by the RVIA. (Units in thousands, Sales in millions) Travel Trailers & 5 th Wheel Other Towables Motorhomes Drew’s RV Sales RVs - Industry Wholesale Shipments Industry Units Drew Sa
Slide 17: Positive Demographic Trends
Positive Demographic Trends Americans 50 and over are a prime market for RVs According to March 2004 census projections, there are expected to be 20 million more people over 50 by 2014 Industry Advertising Campaign Target Market 25 and over Airport security hassles and high airline ticket prices inc
Slide 18: How RVs Are Used
How RVs Are Used Shift in U.S. culture toward more RV-related activities College and NFL football games NASCAR events More economical family vacations Typical RV family vacation is less expensive Many RVs are “parked” over the long-term as second homes
Slide 19: MH – Industry Production
61% 65% 70% 75 % 78% 80% 74% 64% 72% 63% 68% MH – Industry Production Single-Sect ion Multi-Sections Drew’s MH Sales $177 $220 $221 $183 $134 $154 $147 $152 $191 $196 (Units in thousands, Dollars in millions) Industry Units Drew Sales $142
Slide 20: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market Cost per sq. ft. is $41 for MH vs. $93 for site-built homes Average retail price of $65,100 for a 1,595 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 damage
Slide 21: MH: Other Favorable Factors
MH: Other Favorable Factors Demand for quality, affordable housing is likely to increase Baby Boomers retiring in increasing numbers Dealer and manufacturer inventory levels are reasonable Favorable HUD code revisions
Slide 22: MH: Industry Financing Trends
MH: Industry Financing Trends The American Recovery Act of 2009 authorizes a tax credit of up to $8,000 for qualified first time home buyers Recently passed legislation increased FHA insured chattel loan limits (home only) on manufactured homes from $48,600 to $69,678 Pressure on Fannie Mae/Freddie
Slide 23: Financial Performance: Stock Price History
Financial Performance Stock Price History Drew has 22 million shares outstanding and a market capitalization of approximately $450 million as of August 6, 2009 (December 31 unless noted) During 2008, Drew repurchased 447,400 shares of its common stock at an aggregate of $8.3 million, or an average p
Slide 24: Operating Results
Operating Results Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE (1) Sales declines due to reductions in industry-wide shipments of RVs and Manufactured Homes. (2) Adjusted 2008 and LTM 2009 excludes goodwill impairment and executive retirement charges (see page 34 & 35). (1) EBITDA
Slide 25: Results By Segment
Results By Segment (1) Sales declines due to reductions in industry-wide shipments of RVs and Manufactured Homes. See page 36 for a reconciliation to consolidated results. FINANCIAL PERFORMANCE
Slide 26: Operating Results – Three Months Ended June 30
Operating Results Three Months Ended June 30, FINANCIAL PERFORMANCE
Slide 27: Operating Results – Six Months Ended June 30
Operating Results Six Months Ended June 30, FINANCIAL PERFORMANCE (1) Excludes goodwill impairment charge (see page 35).
Slide 28: Results By Segment – Three Months Ended June 30
Results By Segment Three Months Ended June 30, See Press Release dated July 30, 2009 for a reconciliation to consolidated results. FINANCIAL PERFORMANCE (1) Sales declines due to reductions in industry-wide shipments of RVs and manufactured homes.
Slide 29: Results By Segment – Six Months Ended June 30
Results By Segment Six Months Ended June 30, See Press Release dated July 30, 2009 for a reconciliation to consolidated results. FINANCIAL PERFORMANCE (1) Sales declines due to reductions in industry-wide shipments of RVs and manufactured homes.
Slide 30: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE 1) Days sales in accounts receivable is the most recent month’s net sales divided by accounts receivable, net, at the end of the period. 2) Inventory turns is cost of goods sold for the last twelve months divided by average inventory for the last twelve months.
Slide 31: Financial Strength
Financial Strength (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 33). (2) Excludes a goodwill impairment charge of $5.5 million ($3 million after tax). (3) Excludes a goodwill impairment charge of $50.5 million ($36 million after tax). FINANCIAL PER
Slide 32: Analyst Coverage
Analyst Coverage CJS Securities Torin Eastburn – (914) 287-7600 Thompson Research Group Kathryn Thompson – (615) 414-0321 Janney Montgomery Scott LLC John T. G. Rogers – (202) 955-4316 Sidoti & Company, LLC Scott Stember – (212) 453-7017 Avondale Partners, LLC Bret Jordan – (617) 314-0480
Slide 33: Thank you!
Thank you! Joseph S. Giordano III Chief Financial Officer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com
Slide 34: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE
Slide 35: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (1) Includes goodwill impairment of $5.3 million after direct impact on incentive compensation and executive retirement charges of $2.7 million. (2) Includes goodwill impairment of $50.4 million after direct impact on incentive compe
Slide 36: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (1) Includes goodwill impairment of $45.0 million.
Slide 37: Reconciliation of Segment Results to Consolidated
FINANCIAL PERFORMANCE (1) Other non-segment items for the twelve months ended 12/31/08 and 6/30/09 include a $2.7 million charge for executive retirement. Reconciliation of Segment Results to Consolidated
Drew Industries — Investor Presentation (August 2009) on 6ix