LCI Industries · NYSE:LCII
LCI Industries — Investor Presentation (May 2017)
46 slides from LCI Industries's investor presentation, May 10, 2017
Slide 1: LCI Industries
Ig) | INDUSTRIE lippertcomponents.com
Slide 2: Passionate about winning
passionate about %& a o Pr winning? team play with trust 4) 35 honesty - integrity#candor + caring about ms people 5 Lcl INOUSTRIES
Slide 3: Watch the video
Ig) ap atch the video
Slide 4: 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, markets for the Comp
Slide 5: Management Team
' } JASON LIPPERT, CEO 20+ years with LCI Industries Ler INDUSTRIES Management Team SCOTT MERENESS, PRESIDENT 20+ years with LCI Industries BRIAN HALL, CFO Average tenure of LCI’s members of senior managementis 15+ years with the company Is
Slide 6: Financial Performance
>» Financial Performance Net Sales — OEMnet sales” Aftermarketnet sales” = EBITDA” EBITDA 52,000 3300 : Net Sales and EBITDA (in mitions) : $1,750 $250 $1,500 $200 $1,250 $1,000 $901 $150 866 $750 $681 , $573 $100 $500 Ea $50 $250 $137 $0 + —— 0 2010 2011 2012 2013 2014 2015 2016 = LTM 3/17 (1) Prio
Slide 7: Net sales by segment
OEM Towable $427 $503 $660 $725 $836 $932 $1,082 $1,127 OEM Motorhome 48 OEM Adjacent Industries 96 129 International Total $573 $681 $901 $1,016 $1,191 $1,403 $1,679 $1,754 + LIM 2017 percentage growth is compared to LIM 2016. + Prior periods have been recast to confomm to the Company's new reporta
Slide 8: Non-OEM Towable RV Net Sales
Non-OEM Towable RV Net Sales $700 $600 $500 $400 $300 $200 $100 $0 $628 26% 2010 LIM 3/17 = OEM Adjacent industies = Aftermarket ™OEMRV Motorhome International Sales for the year ended December 31, 2010 compared to the last twelve months ended March 31 2017. Both periods exclude the Company's net sa
Slide 9: Sales growth notes
a) b) ° ¢) Sales for acquisitions represent the trailing twelve month sales at the date of acquisition. Any post- acquisition changes included in organic orindustry accordingly. Organic growth consists primarily of gains in market share, price increases and new productsales. Industry growth represen
Slide 10: OEM and Aftermarket Industries
OEM and Aftermarket Industries Lcl INOUSTRIES
Slide 11: RVs - Industry Wholesale Shipments
» RVs - Industry Wholesale Shipments (Compared to LCl’s Performance) ingustY Approximately 71% of LC's OEM Segment net sales are for Travel Trailer and 5" Wheel RVs jer ecies s00 Industry units in thousands, net sales in millions) Ras $1,271 I " == Notorhomes $1,216 a aD Other Towables { $1,200 Trav
Slide 12: RV Wholesale Shipments
> RV Wholesale Shipmen ag RV Shipments ze RV Shipments vs Federal = é 5 m 5 400 = «0 l\ Interest Rate = Ete \e Za fall * 200 Vv Bod 4% 150 = m 100 ma 7M m = * b ~SS 1% ¢ ©¢ ¢ »& S§ & 6 Gee SS om a ~~ a = vN 10% ae was “ 12s 0% 2 = A A. 3 of _\ Zoe "an Se \ ‘i ao, [ft \ pea SZ —— a ices ie RV Shipmen
Slide 13: Product lines
Ole) = FURRION ‘SHOWERS ‘APPLIANCES & SINKS AWNINGS FURNITURE MATTRESSES FURRION \ \ } t ELECTRONICS ‘SLIDE-OUT es , MECHANISMS & | oo SUSPENSION oe = oJ 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 LCl’s OEM Segmentn Motorhomes (Approximately 8% of LCI’s.. OEM Segmentnet sales) ee of industry 2016 unit sales of estimated 2016 wholesale dollar sales, or $10.9 billion Retail cost $4,000 to $100,000+ per unit. Average about $30,000 of industry 2016 unit sales of
Slide 16: Camping Industry
> Camping Industry by Kampgrounds of America (KOA") 60:. Tent Campers 33.5 million 22. RV Campers 12.3 million 17% Cabin Campers 9.5 million 144, Active Campers }) 55.9 million: * Estimates based on 126 million households. All other (1%) 0.6 million. li ~\ 66% Camp Every Year 37.1 million 9% Camp Ev
Slide 17: RV vacation and demographic drivers
Typical RV family vacation is 23 to 59 percentless expensive for a family of four Oo 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 industry growth mainly in the entry-level market College and NFL football gam
Slide 18: RV Industry Trends
>» RV Industry Trends Units Travel Trailer and 5'" Wheel RVs, LCI’s primary RV market “a Wholesale Retail (Units in thousands} SS ry 350 314 317 299 300 | 979 nm 262) 268 243 251 2) = oe 223 199 206 200 185) 186 164 150 138) 102 100 - 63 68 50 0" 2007 2008 2009-2010» 2011 «2012-2013. 2014 «2015 ©201
Slide 19: Number of U.S. Households that Own an RV
> Number of U.S. Households that Own an RV (in Millions) 10 9 8 £ 6 = 4 a 2 = 1980 1984 1988 1993 1997 2001 2005 2011 es) Statistics provided by RV Consumer Demographic Profile — 2011 18
Slide 20: Demographics
>» Demographics 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 income of RV
Slide 21: What's Next...
What’s Next... o Lcl INOUSTRIES International RV Innovation/R&D Aftermarket OEM Adjacent Markets + Acquisitions + Additional Addressable Market
Slide 22: International RV Markets
Slide 23: Research and Development
Slide 24: Aftermarket Opportunity
Slide 25: Marine, Bus, Truck, Fleet, Cargo
Marine Bus Truck Fleet Cargo
Slide 26: New Products & Acquisitions
Slide 27: Acquisitions summary
EA Technologies Glacho-depostion (e-coaP ond power Sota: rervices Signature Seating! elke actrees Flair Interiors Manufacturer of RV furniture and mattresses Atwood Seating & Chassis RV seating and chassis component operation of wood Mobile Product, a subsidiary of Dometic Group Total 105.4 [1] In J
Slide 28: Acquisition Discipline and History
Acquisition Discipline and History o Lcl INOUSTRIES 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 7 out of last 9 acquisitions have
Slide 29: Expanding Our Growth Potential
> Expanding Our Growth Potential" Doors, Windows, Mattresses, Furniture and Awnings Furrion®) . . Travel Trailer Leveling Electronics Chassis and Axles Aftermarket Axles Eeeoroctit oe0 E Doors, Windows, Mattresses and Furniture ’ Marine Furniture J International (1) Amounts {in millions) represent M
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 an estimated $7,400 per Towable RV, 41% penetration $2,987 $3,022 $9,058 + In 2016, Travel Trailer unit volume is up 14% yly due
Slide 31: Content Per New Motorhome RV
> Content Per New Motorhome RV + Approximately 8% of OEM Segment net sales are for Motorhome OEMs $2,011 $2,022 + 100% market share in existing products et 1,810 would yield an estimated $6,000 per pee ° Motorhome RV, 34% penetration xeo8 $1,602 $201 Increase $330 Increase 2004 2005 2006 2007 2008 2
Slide 32: Supplemental Schedules
Supplemental Schedules Lcl INOUSTRIES
Slide 33: Operating Results
> Operating Results Three Months Ended March 31 FINANCIAL PERFORMANCE 6 ions, except EPS) é Change Net Sales $ 498.3 $ 4228 18% Operating Profit S 521 & i557 6% % of Sales 11.9% 13.2% Net Income $ 43.1 $ 36.0 20% Diluted EPS S Il) 145 18%
Slide 34: Results By Segment
>» Results By Segment Three Months Ended March 31 FINANCIAL PERFORMANCE (Sin mi 2017 Net Sales: OEM Segment $ 462.0 $ 392.7 18% Aftermarket Segment 36.3 30.1 20% Operating Profit: OEM Segment 54.4 50.7 7% Aftermarket Segment 47 5.1 (7%) Operating Profit as a Percentage of Net Sales: OEM Segment 11.8
Slide 35: Debt Position
> Debt Position FINANCIAL PERFORMANCE Cash ed for Cash and Net Cash cg more Omg r Investments (Debt) the Period 12/31/11 $ = $ 7 $ Zh $ 50 12/31/12 = 101) 100) 1 12/31/13 2 66 66 5 12/31/14 16 = (16) 107 12/31/15 50 12 (38)!) Al 12/31/16 0) 86 3622) 49 03/31/17 50 64 141) 9 (1) On December 20, 2012,
Slide 36: Cash Flow
> Cash Flow ($ in millions) FINANCIAL PERFORMANCE Acquisitions (24) Sl Capital expenditures 207 Dividends DO) Stock repurchases 2 Total $ 760
Slide 37: Operating cash flow from 2009 to present
FINANCIAL PERFORMANCE Operating cash flow from 2009 to present ($ in millions) (1} Cash dividend of $2.00 per share, or $47 million, declared in December 2013 36 and paid in January 2014,
Slide 38: Balance Sheets
> Balance Sheets FINANCIAL PERFORMANCE (S$ in million 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 @Q1 2017 Total Assets $374 |\$ 453 | $544 $ 623 ($787) | 853) Total Debt = = 16 50 50 50 Cash & Investments 10 66 = 12 86 64 Stockholders’ Equity 2849) 31419) 395 43913) 55014) 58415) Days Salesin A/R'
Slide 39: Financial Strength
> Financial Strength FINANCIAL PER ORMANCE (12 months ended) 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 03/31/17 Return on Equity 13% 16% 17% 18% 26% 26% Return on Assets 10% 12% 12% 12% 18% 18% Return on Invested Capitalt 22% 28% 26% 25% A1% 40% Total Debt to Equity 0.00 0.00 0.04 0.11 0.09 0.09
Slide 40: Reconciliation of Net Income to EBITDA
> Reconciliation of Net Income to EBITDA FINANCIAL PERFORMANCE LIM (Sin ns) 2010 2011 2012 2013 2014 2015 16 = 3/17 Net Income $45.4 $30.1 $37.3 $50.1 $623 $743 $1297 $1369 Income Taxes 17.1 18.2 20.5 278 32.8 40.0 69.5 658 Interest Expense 0.3 03 O38 0.4 0.4 1) ey 1.6 Depreciation & Amortization 20
Slide 41: Segment Net Sales and Operating Profit
2014 | Segment Net Sales: OEM 865.9 §$ ee $ 1,127.0 $ 1,300.1 $ 1,548.1 1,617.4 in Aftermarket 35.2 63.8 103.0 130.8 137.0 Segment Operating Profit: | OEM 58 $ 748 $ e7 $ 103 $ 1809 $ 1886 int Aftermarket 14. 20.0 19. _ Severance Executive Succession
Slide 42: Stock Price History
>» Stock Price History $120 $100 $80 $60 $40 $20 $o LCI Industries has 24.9 million shares outstanding and a market capitalization of approximately $2.5 billion as of April 28, 2017 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 4/28/17 + Dates noted above are as of
Slide 43: 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 > Stephen O'Hara — (212) 894-3329 ”~ Thompson Research Group > Kathryn Thompson — (615) 891-6206 CS)
Slide 44: Industry Statistics Summary: Towable RVs
Let industries Industry Statistics Summary TOWABLE RECREATIONAL VEHICLES (RV) ToT] SSS OS 1 COC 11 Beale Taverna ape coat z 700
Slide 45: Industry Statistics Summary: Motorized RVs
Let industries Industry Statisties Summary MOTORIZED RECREATIONAL VEHICLES (RV)
Slide 46: Market Shift
Market Shift Share of new light-vehicle buyers by age 50% Birth years pu 1946- —~ 9 1964 30 1977- m 1994 © 1965- 20 1976 16 Before 1945 io} © 1995- 2010 ‘11 ‘12 13 ‘14 ‘15° 2014 *Through Nov. Source: J.D. Power THE WALL STRE JOURNAL.