Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (November 2015)
46 slides from Lci Industries's investor presentation, Nov 17, 2015
Slide 1: Drew Industries
drewindustries.com eens | OO: ERT 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 and other matters. St
Slide 3: Management Team
JASON LIPPERT, CEO > 20+ years with Drew prew INDUSTRIES INCORPORATED SCOTT MERENESS, PRESIDENT > 20+ years with Drew Management Team DAVID SMITH, CFO > Average tenure of Drew’s members of senior managementis 14+ years with the company
Slide 4: Financial Performance
> Financial Performance Net Sales == RV Segment net sales © MH Segmentnet sales == EBITDA EBITDA re Net Sales and EBITDA ") (in mitions) ao $1,200 S119) t $140 $1,016 V4 f $120 $1,000 f on & id smo p $669 $669 $681 ce $531 ¥ | uu x | SOLS $511 Va Ss 5 $398 i $400 ae oe mE $255 3 iH E | ce ee ee es i
Slide 5: Net sales by RV towable and aftermarket
RV Towable $428 $498 $653 $728 $844 $916 Aftermarket $28 $28 $14 Total $573 $681 $901 $1,016 $1,191 $1,358 LTM2015 percentage growth is compared to 2013
Slide 6: Sales for the months ended December 31, 2010 compared to the LIM 09/15. Both
Sales for the 12 months ended December 31, 2010 compared to the LIM 09/15. Both periods exclude the Company's net sales of components for Towable RVs, which Novernies mconronateo made up 75% and 68% of consolidated net sales, respectively.
Slide 7: Sales growth: acquisitions, organic, industry
1) Sales for acquistions represent the tring hveWe month sales at the date of acquistion. Any post acquistion change is included in organic orindustry accordingly. ) Organic growth consists primary of gains in market share, price increases, increased adjacent industry sales and new product sales. ©)
Slide 8: RV and Manufactured Housing Industries
RV and Manufactured Housing Industries
Slide 9: RVs - Industry Wholesale Shipments
> RVs - Industry Wholesale Shipments (Compared to Drew’s Performance) ingustY Approximately 74% of Drew’s RV Segment net sales are for Travel Trailer and 5 Wheel RVS yor euies 800 y $1400 (industry units in thousands, net sales in millions) il = Motorhomes 3: 0) m $1,241 Other Towables | $1200 oe Tr
Slide 10: RV Shipments vs Federal Interest Rate
Thousands of Units > RV Shipments - RV Shipments 2 |__ RV Shipments vs Federal ie aso | TR =. I_\___InterestRate 7~\, = = || A eeuival plas zo {| — He paNjamm\ =f | = x0 || Nf 2 iva a V m0 | x rae EE 150 vi % pa ro dA VY =a \ Fr pa 2 z 2 LS & PEEP LEELL ILLS SSS SSD PC CLPPO LOR O DESO PORE ae we se
Slide 11: Lippert Components product lines
@o 9 ©~e@ Doors ‘AWNINGS i ware FURNITURE ELECTRONICS FURRION » > ELECTRONICS winpows ‘SHOWERS. & SINKS SLIDE-OUTS ‘SUSPENSION x ENHANCEMENTS AXLES: STEPS CHASSIS lippertcomponents.com -10-
Slide 12: Manufacturing capabilities
Fabric and Electronics and Steel and Lamination Steel and Motion- Woodworking Plastic Forming Aluminum and Glass Aluminum Systems Fabrication Fabrication Welding
Slide 13: Towable RVs and Motorhomes
Towable RVs (Approximately 74% of Drew's RV Segmentnet sales) _o— Motorhomes (Approximately 6% of Drew's RV Segmentnet sales) of industry 2014 unit sales of 2014 wholesale dollar sales, or $9.4 billion Retail cost $4,000 to $100,000 per unit. Average about $30,000 of industry 2014 unit sales of 2014
Slide 14: Campers in the U.S.
[EE 54,, ii Tent Campers _ Aim 25.0 milion wd i] 14... i N\21% } Active Campers . — RV Campers ys 46.2 million- ~~ 9.7 million —~\21% = Cabin Campers = 9.7 million = * Estimates based on 108 million households. All other (4%) 1.8 milion. 59», Camp Every Year 27.4 million 11% Camp Every Other Year 48
Slide 15: RV vacation trends
Typical RV family vacation is 23 to 59 percentless expensive for a family of four College and NFL football games NASCAR events More active, shorter, “greener”, & family oriented vacations The number of consumers between the ages of 55 and 70 is projected to total 56 million by 2020, 27 percent highe
Slide 16: 2015 State of the RV Industry
> 2015 State of the RV Industry Retail Value of 2015 —— RV Shipments 51% Increase ~ in RV Industry »/ \_< Annual Revenue of _ Employees po RV-Related Business “248,090 2009 to 2015 {878,000 Mar ‘09 20% 11% Mar ‘11 Mar ‘13 9% 2 .h, “,. <0). 0, 20). 0). 0, 0, .X 45% Mar ‘14 05 “ng Cg 0p 201, 20) °0)3
Slide 17: RV Industry Trends
> RV Industry Trends Units Travel Trailer and 5" Wheel RVs, Drew’s primary RV market S28, Wholesale ses Retail 298.9 ~ (Units in thousands} nits in thousands} 277.0 as 268.0 me Baee 250.8 250 : 234.3. 289 2264 226.6 poe he) 222.8 199.2 2teo 200 495.1 186.0 178 164.3 150 138.3 125 100 75 50 25 0 7 20
Slide 18: Number of U.S. Households that Own an RV
> Number of U.S. Households that Own an RV (in Millions) 10 6 | ‘i = Ld = . E B| 1980 1984 1988 1993 1997 2001 2005 2011 Statistics provided by RV Consumer Demographic Profile — 2011
Slide 19: Demographics
> Demographics Number of U.S. households that own an RV 7.9 million 8.9 million Household ownership rates of RVs 80% 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 A9 years A8 years Average income of RV o
Slide 20: Manufactured Housing - Industry Production
> Manufactured Housing — Industry Production (Compared to Drew's Performance) Industry - a, Drew’s Gate (Industry unitsin thousands, net sales in millions} Ne cues _ Multi-Sections === Single-Section Drew's MH Segment a net sales $250 S220NMez20 200 193 $200 ate $177 168 ee a 131, 431 $142 $150 $134
Slide 21: What's Next
- International RV What's Next... + Innovation/RD + Aftermarket RV + Adjacent Markets - Acquisitions - Additional North American RV Growth/Content
Slide 22: International RV Markets
| International RV Markets
Slide 23: Research and Development
Slide 24: RV Aftermarket Opportunity
Slide 25: Marine, Bus, Truck, Fleet, Cargo
Marine Bus Truck Fleet Cargo
Slide 26: New Products
2015 2014 2012 = =2013 New Products & A sesng pue sialien 3sioy'sdeo Yong 10} sMopU LLSANDUVLS SuiSLUeYDelU yNo-epIls pUe sISseYD AY eIgeMo} BulpuedK :S3IOOTONHO3L V4 SHUN B0lYJO B|IGOWW PUE SAY 40} SJusUOdWOD Bulppy <= TOSL-IN quINDoy
Slide 27: Recent acquisitions
Innovative Design Solutions!) $ 35.9 $19 eae USShoreaoncation ‘a wide variety of RV applications Power Gear & Kwikee $ 35.5 BY leveingsysters.sideoutsandstepe EA Technologies Sees iba oribien sae ‘and power coating services Signature Seating!) $16.0 = $ 16 Neferecafmonutccturer primary pontoon bocla
Slide 28: Acquisition Discipline and History
Acquisition Discipline and History Have made 36 acquisitions over the past 15 years We are experienced at integrating acquisitions Acquisitions have come in the form of intellectual property, small start ups and larger businesses 6 out of last 7 acquisitions have had substantial revenue outside our
Slide 29: Addressable markets
0 BB BB B Interna ional (1) Amounts represent the estimated size of the addressable market, excluding the Company’s current net sales to those markets.
Slide 30: Additional growth opportunities
> Additional growth opportunities emanating from our core POTENTIAL SOURCES OF GROWIH Capabilities Core Industries: Business é Core of 2 Extensions % Adjacencies Core extensions vary on one dimension from existing core business and can be managed within the existing operating model Lowest execution
Slide 31: Content Per New Towable RV
> Content Per New Towable RV -Approximately 74% of RV Segment net sales are for Travel Trailer and Fifth-Wheel RVs = 100% market share in existing products would yield an estimated $5,500 per Towable RV B = Growth in RV “features” drives content increases 288 $2,952 $2,690 $2,713 $2818 2001 2002 200
Slide 32: Content Per New Motorhome RV
> Content Per New Motorhome RV -Approximately 6% of RV Segment net sales are for Motorhome RVs. - 100% market share in existing ot 10% xe $1,602 products would yield an estimated Perk $5,500 per Motorhome RV Rixci cot $1227 $1,272 roe) arene pk $669 "t a I | li | TE 2005 2009 ©2010 2011 «2012 «2013
Slide 33: Supplemental Schedules
Supplemental Schedules
Slide 34: Operating Results - Three Months
> Operating Results Three Months Ended September 30 FINANCIAL PERFORMANCE 6 ions, except EPS) 2015 2014 Change Net Sales $ 345.3 $ 2943 17% Operating Profit $ 272 $ 23:1 18% % of Sales 7.9% 7.8% Net Income $ 17.3 $ 15:5 12% Diluted EPS $ 0.70 $ 0.64 9%
Slide 35: Operating Results - Nine Months
> Operating Results Nine Months Ended September 30 FINANCIAL PERFORMANCE ($ in millions, except EPS) 2015 Net Sales $ 1,068.8 Operating Profit $e "O26 % of Sales 8.7% Net Income $ 58.2 Diluted EPS $ 2.36 prew million, or diluted EPS of $2.07. 2014) Change $ 901.4 19% $ 80.2 15% 8.9% $ 51:5 13% 2 11%
Slide 36: MH Segment and RV Segment
wo a wr Se No ES PI MH Segment RV Segment
Slide 37: Segment operating margin
MH Segment RV Segment 8.5% 8.9%
Slide 38: Debt Position
> Debt Position in millions) FINANCIAL PERFORMA\ 12/31/11 12/31/12 12/31/13 12/31/14 09/30/15 9 FRB) oo (BB) 2 Cashand — Net Cash accvisitons During the Debt Investments (Debt) ‘ $ 7 $ 7 $ 50 = $ 100) $ 100) $ 1 = $ 66 $ 66 $ 5 16 $ = $ (16)2) $ 107 92 $ 7 $ — (85)°) $ 4) On December 20, 2012, the C
Slide 39: Balance Sheets
> Balance Sheets ($ in millions, 12/31/11 12/31/12 1/13 12/31/14 09/30/15 1 Total Assets col be 374 $ 453 $ 544 $ 669 Total Debt $ - $ - $ - $ 16 $ 92 Cash & Investments $ a $ 104) $ 66 $ - $ wy Stockholders’ Equity $- 27 $ 2848 $ 3144 $ 395 $ 41815) Days Sales in a/R" 17 days 14 days 16 days 15 day
Slide 40: Cash Flow
> Cash Flow FINANCIAL PERFORMANCE Significant use of cash items since December 31, 2009 Acquisitions (21) $244 million Capital expenditures $163 million Special dividends $173 million Stock repurchases $ 2million Total $ 582 million
Slide 41: Cash Flow
> Cash Flow mmm Dividends Capital Expenditures: FINANCIAL PERFORMANCE $160 = Acquisitions 5149 $160 * Operating Cash Flow $140 $140 $120 $120 $100 $100 $85 $80 ceed $80 $65 bs] $60 $¢3 $33 $60 $40 $70 $40 $20 ron S45 $42 $20 $5 $33 $24 = $0 2009 2010 2011 2012 2013 (1) 2014 YTD 09/15 (2) Operating c
Slide 42: Financial Strength
> Financial Strength FINANCIAL PERFORMANCE 12/31/11 12/31/12 12/31/13 12/31/14 09/30/15 Return on Equity 11% 13% 16% 17% 18% Return on Assets 9% 10% 12% 12% 12% Weey eine 0.00 0.00 0.00 0.04 0.22 Equity oe se 0.00 0.00 0.00 0.12 0.60 (1) EBIDA is operating profit plus depreciation and amortization.
Slide 43: EBIDA
$93 $120 $157 $175 $171 $185 $171 $205 $257 $326 $397 | EBIDA $287 $265 $421 $533 $69.7 $710 $885 $425 $279 5 $69.0 $838 «$1058 $128.1 $149.6 $5.1 $27.1 $26.1 $223 $88 $101 $243 $320 «$326 «= $425 $342 -42-
Slide 44: Net sales and operating profit by segment
Net Sales: RV Segment $ 5706 $ 7809 $ es z $ 1,074. 2 $ 1,241 a MH Segment 110.6 120.2 12 116. 116. Operating Profit: RV Segment z $ A7.2 $ 68.2 $ 86.6 MH Segment . 12.4 119 10.8 Sale of extrusion assets _ Total Operating Profit $ $ 78.3 $ 955 $ 109.9 F -43-
Slide 45: Stock Price History
> Stock Price History Drew has 24.1 million shares outstanding and a market capitalization of approximately $1.4 billion as of October 31, 2015 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10/31/15 + Datesnoted above are as of December 31, unless noted. + Stock prices above
Slide 46: 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 ” Sidoti & Company > Tristan Thomas — (212) 453-7019 ” Thompson Research Group > Kathryn Thompson — (615) 891-6206
Drew Industries — Investor Presentation (November 2015) on 6ix