Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (March 2013)
44 slides from Lci Industries's investor presentation, Mar 14, 2013
Slide 1: Drew Industries Incorporated
exit 99.4 Drew Industries Incorporated (NYSE: DW) 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 contains certain “forward-looking statements" within the meaning of the Private Secuttes Litigation Reform Act of 1995 with respect fo financial condition, resulls of operations, business strategies, operating efficiencies or synergies, competitive positi
Slide 3: Section I: Overview
SECTION | Overview
Slide 4: Drew's Segments — LTM 12/2012
Drew's Segments — LTM 12/2012 Net Sales - $901 million ‘MH = $120 million 13% RV = $781 million 87% ‘Approx. 84% for towable RVs Segment Operating Profit - $68 million MH = $13 million RV = $55 million 81%
Slide 5: Drew's Products — Components for RVs and Manufactured Homes
Drew’s Products — Components for RVs and Manufactured Homes Net Sales of $901 Million for the12 Months Ended December 31, 2012 RV Furniture and Mattresses: RV Chassis, Side-outs and $78 million (Other Chassis Ports: MH Chassis and $444 million ‘Chassis Ports: ‘$42 million Other Products: ‘$41 millio
Slide 6: Net Sales and EBITDA
Net Sales $1,000 2 Financial Performance Net Sales and EBITDA (in mitions) 2001” 2002 ” 2003” 2004 ” 2005 ” 2006 ” 2007 ” 2008 ” 2000 ” 2010” 201 2012 = AV Segment net sales MH Segment net sales = EBITDASO EBITDA ‘00 S75 5 315 0 (1), EBITDA is operating profit plus depreciation, amortization and goo
Slide 7: Section II: RV Industry
SECTION II RV Industry
Slide 8: RV Market
RV Market TOWABLE RVS (Approximately 847 of Drew's RV Segment net sales) Cy sie Travel reiler Fifth-wheel travel taller 90% of industry 2012 unit sales a Bi\ I i ® 64% of 2011 wholesale dollar tye sales, or $4.6 billion Travel trailer with Sport ulity RV ® Retail cost $4,000 to $100,000 per iyiielss
Slide 9: Why We are Optimistic
Why We are Optimistic ® More economical family vacations > Typical RV family vacation is 23 to 59 percent less expensive for a family of four © Shift in U.S. culture toward more RV-related activities > College and NFL football games > NASCAR events > More active, shorter, “greener”, > & family orien
Slide 10: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments Approximately 847% of Drew's RV Segment net sales are for Travel Trailers and 5" Wheel RVs Industry Units 500 (icsty Unitsin thousanes) otorhomes smother Towables sm Teavel Tellers & Sth Wheel aa “0 370 353 aut 300 ant 307 286 200 ray 282 200 : itl ° L 1909” 2000”
Slide 11: Recent RV Industry Trends
Recent RV Industry Trends Units, 300,000 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 Dealer Inventory ‘Change = wholesale — 199,200 436,010 = Retail Travel Trailers and 5" Wheel RVs, Drew's primary RV market 242,900 222,920 2010 13,190 2012 19,9800 (1) Retail
Slide 12: Section III: Our RV Segment
SECTION III Our RV Segment
Slide 13: RVs - Industry Wholesale Shipments (Compared to Drew's Performance)
RVs - Industry Wholesale Shipments (Compared to Drew's Performance) Industry Approximately 847% of Drew's RV Segment net sales are for Travel Trailers and 5" Wheel RVs Drew's Units. Net Sales 200 (nclustry Units in thousands Net Sales in milfons) 200 tnevsny ’ sr * Motorhomes if 70 mmmOther Towables
Slide 14: Content Per New Towable RV
Content Per New Towable RV - Approximately 84% of RV Segment net sales are for Travel Trailers and Fifth-Wheel RVs - 100% market share in existing products would yield approximately $5,000 per Towable RV - Growth in RV “features” drives content increases 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 15: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 12/12- $781 Million ‘$73 million LTM 12/11 - $571 Million $15 million $40 million $16 million,” 3% 3% Travel Trailer & Fifth-Wheel - OEM = Motorhome - OEM Aftermarket "Adjacent Industries ‘Travel Traller & Fifth-Wheel - OEM = Motorhome - OEM Aftermarket "Adjacent Ind
Slide 16: Section IV: Manufactured Housing Industry
SECTION IV Manufactured Housing Industry
Slide 17: Manufactured Housing (MH) Market
Manufactured Housing (MH) Market © Cost per sq. ft. is $41 for MH vs. $83 for site-built homes Average retail price of $60,600 for a 1,470 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 dama
Slide 18: Manufactured Housing — Industry Production
Manufactured Housing — Industry Production Industry ; Unite [Units in thousands) 400 = Multi'Sections == Single-Section ‘1999 " 2000” 2001” 2002” 2009” 2008 ~ 2005 ” 2008 ” 2007" 2008 ” 2000 ” 2010 " 2011” 2012 uk sare Ce ee ee ed Hetty Mu sectons There ore no indlusty forecasts for the manufactured
Slide 19: MH: Favorable Factors
MH: Favorable Factors INDUSTRY: @® Demand —Demand for quality, affordable housing is likely to increase —Baby boomers retiring in increasing numbers —Dealer and manufacturer inventory levels are reasonable — Availability of financing is still an issue, as is the weak overall housing market DREW: © D
Slide 20: Section V: Our Manufactured Housing Segment
SECTION V. Our Manufactured Housing Segment
Slide 21: Manufactured Housing — Industry Production (Compared to Drew's Performance)
Manufactured Housing — Industry Production (Compared to Drew's Performance) Drew's Industry its inmil oa Units in thousands, Dollars in milions) Net Sales 40 = Multi:Sections <= Single-Section mam Drew's MH net sales, $250 so} $22; ss wet siave ee ee ee ee ee ec? ely Hm Secons There are no industy f
Slide 22: Content Per New Manufactured Home
Content Per New Manufactured Home = 100% market share in existing products would yield approximately $4,500 per home - Affordability of the homes constrains content growth 81.666 ‘$1,450 $1,429 Sum S465 $1,368 $1,339 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sections perhome 1.77 1
Slide 23: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 12/12- $120 Million LTM 12/11 - $111 Million NORM —mAftermertet Adjacent Incusties NORM mAftermertet Adjacent Incusties
Slide 24: Section VI: Strategy
SECTION VI Strategy
Slide 25: Business Strategy
Business Strategy © Maximize profitability and return on assets through = Strategic acquisitions = New product introductions = Market share growth = Operational efficiencies * Diversification to related industries © This strategy accomplished through * Outstanding customer service * Motivating manag
Slide 26: What Drew Has Done - Expanding Our Growth Potential
What Drew Has Done - Expanding Our Growth Potential New Product Est. Total Market 2011 = Aluminum Extrusions we $200 milion 2011 ~ Cross Sell Existing Products: tock, Equipment id Trailer Markets, as welll as Mid-St
Slide 27: Acquisition Criteria
Acquisition Criteria © Drewis a disciplined and patient acquirer ® Gain market share or add products from other suppliers through acquisitions ® Seek products or technologies that we can expand through our nationwide customer base and factory network ® Become an even more extensive supplier to our c
Slide 28: New Products and Acquisitions
New Products and Acquisitions ‘AcquIRE TRAIL AIR: Adding RV suspension products Began Introduce production of RVLOCK remote entry doors locking product for MH RVs in Northwest market ‘Acquire EA TECHNOLOGIES: Expanding towable RV chassis and slide-out mechanisms Introduce RV awnings ‘AcquiRE Conc Sr
Slide 29: 2010 — 2011 — 2012 Acquisitions
2010 — 2011 — 2012 Acquisitions Purchase Historical ($ in millions) Price Sales Description Level-Up ™() SS Sree stom tortion Schwintek"") 9 00/8 6 Ea Sellers $ 05/$ i) | Sees Scie aie Home-Stylel") $ 7.3 |$ 12 | iovebe Risin tne noxwestmertel M-Tec!!) $ G10 | 1 | Caperen crs motte otic ents EA Tech
Slide 30: Section VII: Operating Results
SECTION VII Operating Results
Slide 31: Operating Results — Three Months
Operating Results Three Months Ended December 31, FINANCIAL PERFORMANCE ($ in millions, except EPS) 2011 20122) Change Net Income 4 (1) Operating profi and net income in 012 was impacted by Inver operating eficiences resulting rom tang in excess of 1.000 new employees. overtime. outsoutcing and othe
Slide 32: Operating Results — Twelve Months
Operating Results Twelve Months Ended December 31, ($ in millions, except EPS) 2011 Net Income FINANCIAL PERFORMANCE 20121) Change (1) Refer to page 30 fora norratve of 2012 resus sate
Slide 33: Results By Segment — Three Months
Results By Segment Three Months Ended December 31, FINANCIAL PERFORMANCE (Sin millions) 2011 20120) Change Net Sales: RV Segment $ 131.0) $ 172.0 31% MH Segment $es e838 ig) Operating Profit: RV Segment (EEESSLSE bese pemeeyans 48% MH Segment $3.0] $ 24 (21%) Operating Profit as a Percentage of Net
Slide 34: Results By Segment — Twelve Months
Results By Segment Twelve Months Ended December 31, FINANCIAL PERFORMANCE (Sin millions) 2011 20120) Change Net Sales: RV Segment $ 570.6) $ 780.9 37% MH Segment $ 110.5, $ 120.2 9% Operating Profit: RV Segment eA S Weep ood 21% MH Segment 120) 9 iss 11% Operating Profit as a Percentage of Net Sales
Slide 35: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash Utilized for Acquisitions Cashand Net Cash During the YTD Debt Investments (Debt) Period a a = i= (1) On December 26, 2010, the Company paid a special dividend of $1.50 per share of the ‘Company's Common Stock or an aggregate of $33 milion. (2) On December 20
Slide 36: Balance Sheet
Balance Sheet FINANCIAL PERFORMANCE (Sin millions) 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 Total Assets $ 311 |$ 288/$ 307 |$ 351 |$ 374 Total Debt $ 91s -|$ aS) |9 q Cash & $ 9\$ 65 | $ 448) | > 7\$ 104) Investments ‘Stockholders’ $ 259 |$ 244/$ 2431§ 277 | $ 284K Equity RATIOS Days Sales in 1
Slide 37: Cash Flow
Cash Flow FINANCIAL PERFORMANCE Significant use of cas! ms since December 31, 2007 Capital expenditures $74 million
Slide 38: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/07 12/31/08 12/31/09 12/31/10 _12/31/11_ 12/31/12 RetumoneEquity | 17% | 6x2 | 2%) | 11%, n% 13% Retum on Assets 12% AGI) 209) % % 10% Total Debt to Bay on 000 | 000 | 000 | 000 | 0.00 Total pet 033 | 020 | 000 | 000 | 000 | 000 EBITDA) (1) EBITDA is op
Slide 39: The Future
The Future Increasing RV content RV recovery from recession Demographic tailwind Expanding into adjacent industries © ®G® 6 © Affordable housing recovery
Slide 40: Stock Price History
Stock Price History = Drew has 22.8 million shares outstanding and a market capitalization of approximately $840 million as of March 13, 2013 saa $6 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 2012 3/13/13, {December 31, unless noted) >
Slide 41: Analyst Coverage
Analyst Coverage CJS Securities ] Dan Moore - (914) 287-7600 Sidoti & Company, LLC Scott Stember - (212) 453-7017 ae Thompson Research Group Kathryn Thompson — (615) 891-6206
Slide 42: Thank you!
Thank you! For more information contact: Fredric M. Zinn President and CEO 914-428-9098 fred@drewindustries.com Joseph S. Giordano III CFO & Treasurer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com > 4 a
Slide 43: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE 2010 2011 (Sere | ms] s salsa
Slide 44: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated ($ in millions) FINANCIAL PERFORMANCE 2010 2011-2012 Net Sal RV Segment MH Segment Operating Profit RV Segment MH Segment comme | al 65 ea] | aaa OS) =) oo