Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (May 2009)
38 slides from Lci Industries's investor presentation, May 8, 2009
Slide 1: A Leading National Supplier of Components for RVs and Manufactured Homes
Exhibit 99.1 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 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
Slide 3: About Drew Industries
About Drew Indusiries A leading national manufacturer of quality components for Recreational Vehicles (RV) and Manufactured Homes (MH)
Slide 4: Financial Performance
Financial Performance Sales and EBITDA (in millions) "= RV Segment sales == MH Segment sales = ESITDA\) $100 $750 500 250 2001 2002 2003 2004 2005 2006 2007 2008 LIM (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 35).
Slide 5: Drew's Companies
Drew’s Companies Kier @ Kinro, Inc. - Acquired 1980 = Aluminum windows for RVs = Doors for RVs and MHs = Aluminum and vinyl windows and screens for MHs = Bath and shower units, and sinks for MHs and RVs = Thermoformed exterior panels for RVs © Lippert Components, Inc. - Acquired 1997 = Chassis and c
Slide 6: Drew's Management Team
Drew's Management Team : INNOVATIVE & Highly respected and EXPERIENCED experienced management: MANAGEMENT DREW “i >Leigh J. Abrams, Chairman 35+ years = >Fredric M. Zinn, President and CEO A \ 25+ years | Leigh Abrams Fredric Zinn LIPPERT - KINRO) Jason D. Lippert, CEO, President and Chairman of Lip
Slide 7: Drew's Segments — LTM 3/2009
Drew's Segments — LTM 3/2009 Revenues - $422 million MH = $126 million 30%
Slide 8: Drew's Products
Drew's Products Sales - $422 million 12 Months Ended March 31, 2009 RV Chassis, Slide-outs 41% and Other Chassis MH Windows and 13% Parts: $175 million Screens: $56 million 12% MH Chassis and Chassis Parts: $50 million MH and RV Bath Products: $18 million 4% Specialty Trailers: % — as duck i ’ umitu
Slide 9: Supplier to Industry Leaders
Supplier to Industry Leaders Outstanding customer service and national coverage, with 28 production facilities (approximately 2.5 million sq. ft.), make us a key partner with our customers, including: Forest River (owned by Berkshire Hathaway — largest customer) Heartland Recreational Vehicles, LLC
Slide 10: Business Strategy
Business Strategy = Market share growth = New product introductions = Strategic acquisitions = Operational efficiencies 10} Els strategy accomplished through Outstanding customer service = Motivating management through strong profit incentives = Low cost manufacturing: > Optimizing production effici
Slide 11: Content Per Vehicle - RV
Content Per Vehicle - RV Peak potential is $3,500 to $3,800 per RV 90+% of RV Segment sales are for Towable RVs 2001 2002 2003 2004 2005 2006 2007. 2008 LIM 3/09 profitmargin 8.7% 10.0% 11.6% 98% 97% 86% 128% 7.8% 3.3% (1) _ Includes historical sales for acquisitions assuming the acquisition was mad
Slide 12: Content Per Home - MH
Content Per Home - MH Peak potential is $3,400 to $4,000 per home $1,784 $1,754 $1,652 $1,653 Operating 2001 2002 2003 2004 2005 2006 2007 2008 =LTM3/09 Profit margin 10.8% 10.9% 10.8% 10.5% 106% 9.1% 85% 7.7% 5.1% See Page 21 for Industry Information
Slide 13: Acquisitions and Product Line Extension
Acquisitions and Product Line Extension © © © © Drew is a disciplined and patient acquirer Replace competitors and other suppliers which have ceased operations by acquiring their assets Complimentary to our core RV (including specialty trailers) and MH markets Seek products or technologies that we c
Slide 14: New Product Introductions
New Product Introductions Introduced RV Began suspension Production of products ACQUIRE axles for Began LIPPERT fowabie Bs ACQUIRE production of COMPONENTS: Introduce RV COACH STEP: entry doors for Primarily steel chassis slide out Adding electric RVs mechanisms i steps for motor homes | t | | 1997
Slide 15: Investments
Investments ® Kinro and Lippert have extensive R&D departments ® Since January 1998 = Invested nearly $156 million in plant and equipment » Invested nearly $162 million for acquisitions = Invested $28 million for stock repurchases at an average price of $5.85 per share through March 31, 2009
Slide 16: RV Market
RV Market TOWABLE RVS (90+% of Drew's RV Segment revenues) — Travel trailer Fifth wheel travel trailer © 88% of industry 2008 unit sales a's Bi : B® 47% of 2007 wholesale dollar 2 7 sales, or $5.5 billion Travel trailer with Sport uility RV ® Retail cost $4,000 to $100,000 per expandable ends “Toy H
Slide 17: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments 90+% of Drew's RV product sales are for Travel Trailers and 5'" Wheel RVs Industry {Units in thousends, Sales in milions) Drew Units Trailers & hheot Sales ravel Trailers & 5 Wheel 509 ther Towables $500 Motorhomes MH Drew's RY Sales 400 $400 300 $300 200 $200 100
Slide 18: Economic and Market Conditions
Economic and Market Conditions @® Recession has had d 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 fo help » Term Asset-Backed Securities Loan Facility (TALF) to
Slide 19: Trends In RV Market
Trends In RV Market STRONG LONG-TERM GROWTH ays : PROSPECTS © 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 —"-T over 50 by 2014 = © Industry Advertising Campaign = Target M
Slide 20: How RVs Are Used
How RVs Are Used STRONG LONG-TERM GROWTH sep PROSPECTS © 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 up to 74% less expensive ® Many RVs are “parked” over the long-term as sec
Slide 21: MH — Industry Production
MH — Industry Production Industry Units 400 7 (Units in thousands, Dollars in millions) 373 === MultiSections sms Single-Section =m Drew's MH Sales 350 300 250 200 150 100 50 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Drew Sales $250 $225 $200 S175 $150 $125 $100 S75 $50 $25 Exe) <21-
Slide 22: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market STRONG LONG-TERM GROWTH ECTS ® 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
Slide 23: MH: Other Favorable Factors
MH: Other Favorable Factors STRONG LONG-TERM GROWTH PROSPECTS ® Affordability and quality ® Baby Boomers retiring in increasing numbers ® Dealer and manufacturer inventory levels are reasonable ® Favorable HUD code revisions ® Improved industry image > Advertising campaign may begin in 2009
Slide 24: MH: Industry Financing Trends
MH: Industry Financing Trends © © © © © © STRONG LONG-TERM GROWTH . . PROSPECTS mproved lending practices ROSES he American Recovery Act of 2009 authorizes a ax credit of up to $8,000 for qualified first time home buyers Recently passed legislation increased FHA insured chattel loan limits (home onl
Slide 25: Financial Performance
Financial Performance ® Stock Price History = Drew has 22 million shares outstanding and a market capitalization of approximately $300 50 million as of May 1, 2009 2000 82001 2002 2003 «2004 «2005 2006 10/5/07 2007 2008 5/1/09 (December 31 unless noted) During 2008, Drew repurchased 447,400 shares o
Slide 26: Operating Results
Operating Results Year Ended December 31, (except as noted) FINANCIAL PERFORMANCE (Sin millions, except EPS) ’ Adjusted Adjusted - Adjusted = 2008 LIM _ 2006 2007 2008 i 2( Net Sales!) $729 | $669 | $511 $422 Operating Profit | $55.3 | $66.0 | $28.0 Sila % of Sales 7.6% | 9.9% | 5.5% 0.4% Net Income
Slide 27: Results By Segment
Results By Segment FINANCIAL PERFORMANCE (Sin millions) _ ’ au pls 12/31/08 __12/31/07_‘12/31/08 __vs.2007 _ 3/31/09 Net sales!" RV Segment MH Segment ‘$ 220.4 $176.8 Operating Profit RV Segmel $ 43.6 $ 63.1 MH Segment $ 20.1 $ 15.1 Operating Profit as a Percentage of RV Segment MH Segment (1) Sales
Slide 28: Operating Results
Operating Results Three Months Ended March 31, FINANCIAL PERFORMANCE (Sin millions, except EPS) (1) Excludes goodwill impairment charge (see page 37). Sales Operating Profit $ 15.0 $(11.2) -175% % of Sales 94% -15.8% Net Income $ 9.1 $ (7.3) -180% Diluted EPS $ 0.41 $ (0.34) | -184%
Slide 29: Results By Segment
Results By Segment Three Months Ended March 31, FINANCIAL PERFORMANCE (Sin millions) 2008 2009 Net sales RV Segment!!) $124.0 $002.3 -58% MH Segment!) § 35:2 $ 18.7 -47% Operating Profit RV Segment $ 14.3 $ (4.7) | -133% MH Segment | $ 25 | $ (2.0) -181% Operating Profit as a Percentage of Net Sales
Slide 30: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE _ 12/31/07 12/3 3/31/0 07 ‘Total assets $346 | $311 | $275 | Total debt $27 cu $ 6 Invested cash $ 53 $4 $ - Stockholders’ equity $252 $259 $224 RATIOS Days sales in accounts 1édays | I15days | 15days | 20 days receivable!” Inventory turns”) 5.6 turns | 6.3 turns
Slide 31: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/06 12/31/07 12/31/08 3/31/09) Return on Equity 16% 17% 6% -1% Return on Assets 9% 12% 4% 0% Total Debt to t; : Equity 0.3 0.1 0.0 0.0 Total Debt to EBITDA") 0.8 0.3 0.2 0.4 (1) EBITDA is operating profit plus depreciation, amortization and goodwill impa
Slide 32: Peer comparison
Peer comparison FINANCIAL PERFORMANCE Trailing Forward PAE P/E ROA Drew (DW) 26.7 19.5 6% 5% Champion (CHB) N/A N/A (1%) (107%) Patrick (PATK) N/A N/A (2%) (8%) Spartan (SPAR) 6.4 16.1 16% 29% Thor (THO) 51.3 56.3 3% 3% Winnebago (WGO) N/A 66.0 (11%) (17%) Source: Capital IQ, May 1, 2009, data obtai
Slide 33: Analyst Coverage
Analyst Coverage Avondale Partners, LLC CJS Securities Torin Eastburn — (914) 287-7600 Janney Montgomery Scott LLC John T. G. Rogers — (202) 955-4316 Sidoti & Company, LLC Scott Stember — (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 414-0321 -33-
Slide 34: Thank you!
Thank you! For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com Joseph S. Giordano Ill Chief Financial Officer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com -34-
Slide 35: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE Lm (Sin millions) 2001 2002 2003 2004 2005 2006 2008 3/31/09 Seen $20.3 | $29.2 | $34.3 | $44.0 | $57.7 | $55.3 | $66.0 | $19.9 | $151.3) Depreciation & $8.4 | $7.3 | $7.8 | $9.3 | $12.0 | $15.7 | $17.6] $17.1 $18.1 Amortization Good
Slide 36: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted R esu Its to Actu al FINANCIAL PERFORMANCE LTM Ended 3/31/09 Actual Adjust® Adjusted $510.5 Operating | $19.9 $8.1 $28.0 Profit % of Sales 3.9% 5.5% Net $11.7 $4.9 $16.6 Income Diluted EPS | $0.53 $0.23 $0.76 (1) Includes goodwill impairment of $5.3 million after direct im
Slide 37: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual Sales $159.1 OperatingProfit $15.0 % of Sales 94% Net Income $9.1 Diluted EPS $0.41 (1) Includes goodwill impairment of $45.0 million. FINANCIAL PERFORMANCE Quarter Ended 3/31/09 Actual 9 Adjust Adjusted s710 | - | $71.0 [79.2% |__| -15.8%_| -37-
Slide 38: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated 12 FINANCIAL PERFORMANCE Net Sales: RV Segment $ 508.8 $ 491.8 $ 368.1 $ 296.4 MH Segment 220.4 176.8 142.4 126.0 Total Net Sales S$ /22 $ 668.6 $ 510.5 $ 422.4 Operating Profit: RV Segment $ 43.6 $ 63.1 $ 28.7 $ 98 MH Segment 20.1 15.1 11.0 6.5 Tota