Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (March 2010)
39 slides from Lci Industries's investor presentation, Mar 9, 2010
Slide 1: Drew Industries Incorporated
Exhibit 99.1 Drew Industries Incorporated (NYSE: DW) A Leading National Supplier of a Wide Variety of Components for RV’s 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: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products — Components for RVs and Manufactured Homes Sales - $398 million Year Ended December 31, 2009 eV Chassis, Sice-outs MH Windows and 44% and Other Chassis Screens: $47 million 12% Parts: $179 million MH Chassis and Chassis Parts: $25 million 6% MH and RV Bath om Products: $15 million S
Slide 4: Drew's Segments — 2009
Drew’s Segments — 2009 Revenues - $398 million <MH= $85 million
Slide 5: Supplier to Industry Leaders
Supplier to Industry Leaders Outstanding customer service and national coverage, with 24 production facilities (approximately 2.3 million sq. ft.), make us a key partner with our customers, including: Forest River (owned by Berkshire Hathaway) Heartland Recreational Vehicles, LLC (privately owned) J
Slide 6: Financial Performance
Financial Performance Sales and EBITDA (in millions) EBITDA = RV Segment sales =x MH Segment sales == EBITDA) $100 Sales $750 500 2001 2002 2002 2004 2005 2006 2007 2008 2009 {1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 32).
Slide 7: Financial Performance — Quarterly
Financial Performance — Quarterly (2) Sales and EBITDA (in millions) Sales EBITDA == RV Segment sales =x MH Segment sales == EBITDA) $30 $150 $20 $120 $90 $10 S60 SO $30 $0 -$10 Qa108 @208 @308 Q408 Q109 @z209 Q309 aso9 {1) EBITDA is operating profit plus depreciation, amortization and goodwill impa
Slide 8: What Drew Has Done - Cost Reductions
What Drew Has Done - Cost Reductions ® Consolidated more than 35 production facilities into other existing facilities since 2006, improving operating efficiencies ® These facility consolidations, along with reductions in salaried staff, changes in insurance, IT improvements, along with other cost sa
Slide 9: What Drew Has Done - Strengthened Balance Sheet
What Drew Has Done - Strengthened Balance Sheet (Sin millions) Cash and Investments Net Cash 12/31/08 3/31/09 $6 $14 $ 8 6/30/09 9/30/09 12/31/09
Slide 10: What Drew Has Done - Acquisitions and Growth
What Drew Has Done - Acquisitions and Growth ‘New Product Market Potential | 2008 = RV Entry Doors | $25 million 2008 — RV Furniture and Mattresses $150 million 2009 — QuickBite™ Coupler $3-5 million 2009 — Manufactured Housing (“MH”) Entry Doors $ 25 million 2009 — Focus on MH Replacement Windows $
Slide 11: Business Strategy
Business Strategy © Maximize profitability and return on assets through = Market share growth = New product introductions = Strategic acquisitions = Operational efficiencies © This strategy accomplished through = Outstanding customer service = Motivating management through strong profit incentives =
Slide 12: Content Per Towable RV
Content Per Towable RV 100% market share in existing products would yield $3,900 to $4,300 per Towable RV. 93% of RV Segment sales are for Towable RVs (1) $2,101 $1,902 2001 2002 2003 2004 2005 2006 2007 2008 2009 RV Segment operating profit margin 8.7% 10.0% 11.6% 9.8% 9.7% 86% 128% 7.8% 65% {1) In
Slide 13: Content Per Manufactured Home
Content Per Manufactured Home 100% market share in existing products would yield $3,600 to $4,000 per home MH Segment 2001 2002 2003 2004 2005 2006 2007 2008 2009 operating profit margin 10.8% 10.9% 10.8% 10.5% 10.6% 9.1% 8.5% 7.7% 4.5% See Page 16 for Industry Information “2.
Slide 14: Acquisitions and Product Line Extension
Acquisitions and Product Line Extension (0) ® 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 throu
Slide 15: New Product Introductions
New Product Introductions Began Acquire COACH Began Production of STEP: production of axles for Pacidiaig elects entry doors for steps for motor towable RVs MH homes ACQUIRE LipPERT COMPONENTS: Began Primarily steel chassis Introduce RV Introduced RV production of & parts for MH slide-out suspension
Slide 16: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market ® © © 10} 10} 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
Slide 17: MH — Industry Production
MH — Industry Production Industry Drew Units (Units in thousands, Dollars in millions) Sales 400 wae Multi-Sections =m Single-Section sm: Drew's MH Sales $250 225 350 & $200 300 S175 250 $150 200 $125 400 150 2 $75 400 $50 50 $25 ° 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -18-
Slide 18: MH: Favorable Factors
MH: Favorable Factors ® Demand — 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 © Financial — Subprime market woes could help MH » Pre-2003, MH was 20+
Slide 19: RV Market
RV Market TOWABLE RVS (93% of Drew's RV Segment revenues) — Travel trailer Fifth wheel travel trailer 92% of industry 2009 unit sales 57% of 2008 wholesale dollar te sales, or $4.0 billion ss Sport utility RV Retail cost $4,000 to $100,000 per pee unit. Average about $24,000 Folding camping tron Tru
Slide 20: 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 active, shorter, environmentally friendlier vacations ; ® More economical family vacations > Typical RV family vacation is less expensive ® Many RVs are “parked” over th
Slide 21: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments noe 93% of Drew's RV product sales are for Travel Trailers and 5'" Wheel RVs (Units in thousands, Sales in millions 500 BW Travel Trailers & 5 Wheol 400 100 oa (1) Projection for 2010 is the latest published by the RVIA in February 2010. Drew Sales $600 400 $300 $2
Slide 22: Recent RV Industry Trends
Recent RV Industry Trends Travel Trailers and 5° Wheels, Drew's primary RV market chenge BRetail @ Wholesale Q1 08 Q2 08 Q308 4.08 Q109 = Q2:09 3.09 Q409° Jan 10 -21-
Slide 23: The Future
The Future © RV recovery from recession ® Demographic tailwind © Exploring related industries ® Affordable housing 22.
Slide 24: Stock Price History
Stock Price History = Drew has 22 million shares outstanding and a market capitalization of approximately $535 million as of March 4, 2010 2000 2001 + 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 3/4/10 (December 31, unless noted) -23-
Slide 25: Operating Results
Operating Results Year Ended December 31, "(Sin millions, except EPS) 2008 2) @ FINANCIAL PERFORMANCE Net Sales!” $668.6 | $510.5 Operating Profit $ 66.0) $ 27.8 % of Sales 9.9% 5.4% Net Income $ 39.8); $ 16.5 -35% Diluted EPS $ 180} $0.75 -34% EBITDA”! $83.5) $ 448 -18% (1) Sales deciines due to re
Slide 26: Results By Segment
Results By Segment Year Ended December 31, FINANCIAL PERFORMANCE “(Sin millions) Adjusted. Adjusted Adjusted 2009 2007 2008 (2) 2009 vs 2008 Net Sales!" RV Segment MH Segment Operating Profit $ 176.8 RV Segment $ 63.1 $ 29.6 $ 25.7 -13% MH Segment $ 15.1 $ 114 $ 48 -58% Operating Profit as a Percent
Slide 27: Operating Results
Operating Results Three Months Ended December 31, FINANCIAL PERFORMANCE Adjusted Adjusted Adjusted 2009 2008 2009 —_-vs 2008 NetSales § ~—' | $766 | $104.6 Operating Profit (Loss) $ (5.6) $ 7.6 % of Sales 7A 7.2% Net Income (Loss) $ (3.5) $ 4.4 Diluted EPS $(0.16) $ 0.20 (1) Excludes certain “extra
Slide 28: Results By Segment
Results By Segment Three Months Ended December 31, (Sin millions) FINANCIAL PERFORMANCE Adjusted Adjusted 2009 2009 () vs 2008 Net Sales _ RV Segment $ 47.2 $ 84.4 19% MH Segment!) | $29.4 $202 “31% Operating Profit (Loss) RV Segment $ (2.6) $ 87 MH Segment $ 04 $ Te? Operating Profit (Loss) as a Pe
Slide 29: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE Total assets Total debt $ - Cash & investments $ 65 Stockholders’ equity $244 RATIOS Days sales in accounts receivable" 16 days | 15 days | 15 days | 14 days Inventory turns?! 5.6 turns | 6.3 turns | 4.1 turns | 4.8 turns (1) Days sales in accounts receivable Is t
Slide 30: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/07 =: 12/31/08@) = 12/31/09) Return on Equity Return on Assets 12% 4% 2% Total Debt to Equity 0.1 0.0 0.0 Total Debt to EBITDA" (1) EBITDA is operating profit plus depreciation, amortization and goodwill impairment (see page 32). (2) Excludes a goodwill
Slide 31: Analyst Coverage
Analyst Coverage Avondale Partners, LLC Bret Jordan - (617) 314-0480 CJS Securities Torin Eastburn — (914) 287-7600 Janney Montgomery Scott LLC Liam D. Burke — (202) 955-4305 Sidoti & Company, LLC Scott Stember — (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 891-6206
Slide 32: 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 -31-
Slide 33: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA (Sin millions) FINANCIAL PERFORMANCE 2001 2002 2003 2004 2005 2006 2007 2008 2009 Operating 5 ; 4 : sae prot (os) $ 20.3 | $29.2 | $34.3 | $ 44.0 | $57.7 | $55.3 | $66.0 | $19.9 | $(35.6) Depreciation & $ 84|/$ 7.3) $7.8|$ 9.3|$12.0) $15.7] $17.6 |$ 17.1
Slide 34: Reconciliation of Operating Profit to EBITDA - Quarterly
Reconciliation of Operating Profit to EBITDA - Quarterly FINANCIAL PERFORMANCE (s in millions) Q108 Q208 @308 @408 Q109 Q2079 @Q309 407 Operating Profit (Loss) $0) Depreciation & $ 41 |$ 40 Amortization Goodwill : Impairment pel EBITDA $19.1 1$19.5 |$ 9.0 |$ (5.1) |$ (62)|$ 84 ]$163 |$ 93
Slide 35: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (Sin millions) Year Ended 12/31/08 Year Ended 12/31/09 Actual Adjust. | Adjusted, [save [s - [save | Net Sales Cost of Sales Selling, General and Administrative Expenses | $ 80.1 | $ (0.5) | $ 806 Executive Retirement Operating Profi
Slide 36: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit TO ACTUOD iiecoss praccemance ($ in millions) Year Ended 12/31/08 Year Ended 12. Actual Adjust") Adjusted Actual Adjust) Adjusted (1) During 2009 and 2008, the Company recorded “extra” expenses resulting primarily from plant closings and start-ups,
Slide 37: Reconciliation of Adjusted Results to Actual
Reconciliation of Adjusted Results to Actual FINANCIAL PERFORMANCE (Sin millions) Three Months Ended 12/31/08 Three Months Ended 12/31/09 Actual Adjust — Adjusted Actual | Adjust() Adjusted [netsoes | s 706 [5 = 8 766 _| Selling, General anc Administrative Exper Operating Profit (Loss) as a % of Sal
Slide 38: Reconciliation of Segment Adjusted Operating Profit to Actual
Reconciliation of Segment Adjusted Operating Profit TO ACTUOD iiecoss praccemance ($ in millions) Three Months Ended 12/31/08 Three Months Ended 12/31/09 Actual Adjust") Adjusted Actual Adjust) Adjusted Tonen [oo] os | oe | | os | (1) During 2009 and 2008, the Company recorded “extra” expenses resul
Slide 39: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE ded Decem! Net Sales: RV Segment $491.8 $ 368.1 $3125 MH Segment 176.8 142.4 85.3 Total Net Sales $ 668.6 $510.5 $ 397.8 Operating Profit: RV Segment $ 63.1 $ 28.7 $ 20.5 MH Segment 15.1 11.0 3.8 Total Segment Operating Profit 7