Lci Industries · NYSE:LCII
Lci Industries — Drew Industries — Investor Presentation (May 2013)
42 slides from Lci Industries's investor presentation, May 10, 2013
Slide 1: Drew Industries Incorporated
Exhibit 99.1 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 “forwarc-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: Section I: Overview
SECTION | Overview
Slide 4: Drew's Segments — LTM 03/2013
Drew's Segments — LTM 03/2013 Net Sales - $930 million
Slide 5: Drew's Products — Components for RVs and Manufactured Homes
Drew's Products —- Components for RVs and Manufactured Homes Net Sales of $930 Million for the 12 Months Ended March 31, 2013 RV Furniture and Mattresses: RV Chassis, Slide-outs and Other Chassis Parts: . 10 million MH Chassis and Se $458 million Chassis Parts: $41 million Other Products: $47 millio
Slide 6: Financial Performance
Financial Performance Net Sales and EBITDA “) (in mitions) Net Sales = RV Segment net sales ma MH Segment net sales m= EBITDA EBITDA $1,000 om T $90 $75 $800 360 $600 + ‘$45 $400 + $30 $200 $15 $0 $0 2001 2002 | 2003 ° 2004 | 2008 2008 «2007-2008» 00920102011 2012S (1) EBITDA is operating profit plu
Slide 7: Section II: RV Industry
SECTION Il RV Industry
Slide 8: RV Market
RV Market TOWABLE RVS (Approximately 84% of Drew's RV Segment net sales) ey Sle Travel trailer Fifth-wheel travel trailer — = — * ats Le ae, we ° Travel trailer with Sport utility RV. (0) expandable ends “Toy Hauler” 2 Folding camping trailer Truck camper 90% of industry 2012 unit sales 64% of 2011
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 ® Shiftin U.S. culture toward more RV-related activities > College and NFL football games > NASCAR events > More active, shorter, “greener”, & family oriented
Slide 10: RVs - Industry Wholesale Shipments
RVs - Industry Wholesale Shipments Approximately 84% of Drew’s RV Segment net sales are for Travel Trailer and 5" Wheel RVs Industry Units 500 Industry units in thousands} Motorhomes ™ Other Towables 400 Travel Trailers & 5th Wheels 384391 370 353 321 321 314 300 294 307 300 286 a 242-252 237 200 16
Slide 11: Recent RV Industry Trends
Recent RV Industry Trends Travel Trailer and 5! Wheel RVs, Drew's primary RV market Units 300 (Units in thousands) = = Retail 275 Wholesale = Retail 250 242.9 Be 226.4 ro 1222.9 q908 206.0 200 85. 186.0 175 164.3 150 138.3] 125 100 75 aoa 66.7 50 9.1 pee 25 0 2008 2009 2010 2011 2012 Q12012 Q12013 D
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 84% of Drew's RV Segment net sales are for Travel Trailer and5" Wheel RVs Drew's Units Net Sales (industry unitsin thousands, net sales in millions} 800 $809 $800 Wotorhomes 700 mm Other Towables $700 mm Trave
Slide 14: Content Per New Towable RV
Content Per New Towable RV - Approximately 84% of RV Segment net sales are for Travel Trailer 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 2
Slide 15: RV Segment Net Sales by Type
RV Segment Net Sales by Type LTM 3/13- $809 Million $77 million $21 million 9 $34 million 3% 4% LTM 3/12- $620 Million $51 million 8% $15 million $17 million. 99%, 3% m Travel Trailer & Fifth-Wheel - OEM = Motorhome - OEM mw Aftermarket @ Adjacent Industries
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 [Industry units in thousands} Units 400 m= Multi-Sections === Single-Section sen | 348 300 254 260 200 160 3 131 cy 226 6 100 3 so 90 52 55 55 50 ® a 1999 2001 2002 2003 2004. 2008 2006 2007 2008 2009 2010 2011 2012 LTM 33 uh Share 65% 70% 75% 70%
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: ® Dre
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) Industry Units 400 360 300 250 200 160 100 50 Mi Share Held by Mut-Sections 349 1999 65% 2000 70% == Multi-Sections p54 9152 $147 193 2001 75% 78% 154 168 ! 2002 2003 79% {Industry units in thousands, net sales in millions)
Slide 22: Content Per New Manufactured Home
Content Per New Manufactured Home - 100% market share in existing products would yield approximately $4,500 perhome - Affordability of the homes constrains content growth $1,666 $1,450 $1,429 $1493 $1465 $4,446 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 LTM 313, 152 1.84 1.85 Sectio
Slide 23: MH Segment Net Sales by Type
MH Segment Net Sales by Type LTM 3/13- $121 Million LTM 3/12 - $116 Million =OEM Aftermarket m Adjacent industries
Slide 24: Section VI: Strategy
SECTION VI Strategy
Slide 25: Business Strategy
Business Strategy © Maximize profitability and return on assets through = New product introductions = Market share growth = Operational efficiencies = Diversification to related industries = Strategic acquisitions © 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 Est. Total New Opportunities Market 2011 — Cross Sell Existing Products: $ 400 milion Markets, as well as Mid-Size uses ; — ' 2 : | -25-
Slide 27: Acquisition Criteria
Acquisition Criteria Drew is 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 customer
Slide 28: New Products and Acquisitions
New Products and Acquisitions Acquire HOME-STYLE: Expanding furniture for RVs in Northwest market Acquire TRAIL AIR: Adding RV Introduce RVLOCK remote Began | roduction of suspension Toy dood locking product products Re Acquire EA TecHNoLocies: Mredeee resin Expanding towable RV “i Coach Ste: ACQUIR
Slide 29: 2010 — 2011 — 2012 Acquisitions
2010 — 2011 — 2012 Acquisitions Purchase Historical Price Sales ($in millions) Description Leve! -Up TM(1) © 1.4 $ 1 ect leveling system for fifth-wheel Schwintek() $ 20.0 | $ By) cismuisnine mma dencar Sellers © OC |> 0 [Ree ee Home-Stylel) $ 73) SI T2 9) sec eveintnanioanwert mental M-Tect) See |)
Slide 30: Section VII: Operating Results
SECTION VII Operating Results
Slide 31: Operating Results
Operating Results Three Months Ended March 31, FINANCIAL PERFORMANCE (Sinn ; 20130 ; | Net Sales $ 223.6] $ 252.6 13% Operating Profit $ 17.4] $ 13.6 (22%) % of Sales 7 8% 5.4% Net Income $ iieiieG, 8.4 (25%) Diluted EPS $ 049| $ 0.36 (27%) (1) The Company's operating proft margin was below the fist
Slide 32: Results By Segment
Results By Segment Three Months Ended March 31, FINANCIAL PERFORMANCE ($ in millions) Net Sales: RV Segment $ 195.6} $ 224.0 15% MH Segment $ 28.0) $ 28.6 2% Operating Profit: RV Segment $ 168) $ 145 (13%) MH Segment $ S$ 2.7 (13%) Operating Profit as a Percentage of Net Sales: RV Segment 8.6% 6.5%
Slide 33: Debt Position
Debt Position FINANCIAL PERFORMANCE Cash and Net Cash During the YTD Debt Investments (Debt) Period 12/31/11 12/31/12 03/31/13 (1) On December 28, 2010, the Company paid a special dividend of $1.50 pershare of the Company's Common Stock, or an aggregate of $33 million. (2) On December 20, 2012, the
Slide 34: Balance Sheets
Balance Sheets FINANCIAL PERFORMANCE Total Assets A412 Total Debt $ = a - ay $ a Cash & $ 448) |$ Hi $ 104 | $ 4 Investments Stockholders’ $ 243° |$ 277° |$ 2844 |$ 301 Equity RATIOS Days Sales in AR! 13 days 17 days 14 days 20 days Inventory Turns?! 6.5 turns 6.2 turns 7.8 turns 7.9 turns [1] Doys
Slide 35: Cash Flow
Cash Flow FINANCIAL PERFORMANCE S' cant use 3¢ ms since Dec Acquisitions (14) $110 million Capital expenditures $ 83 million Debt reduction $ 27 million Special dividends $ 78 million Stock repurchases $ 10 million Total $ 308 million
Slide 36: Financial Strength
Financial Strength FINANCIAL PERFORMANCE 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 03/31 Return on Equity 6%"! 2%") 11% 11% 13% 12% Return on Assets AMI) 2%") 9% 9% 10% 9% Total Debt fo ; 5 . 0. Equity 0.00 0.00 0.00 0.00 0.00 00 Total Debt to ene 0.20 0.00 0.00 0.00 0.00 0.00 (1) EBIDA is operat
Slide 37: The Future
Tne Future © ® © © 1) Increasing RV content RV recovery from recession Demographic tailwind Expanding into adjacent industries Affordable housing recovery 3
Slide 38: Stock Price History
Stock Price History = Drew has 22.9 million shares outstanding and a market capitalization of approximately $825 million as of May 7, 2013 45 san . 7\ mot 30 $28 \ ae $26 \ $23 $37 \ $2¢ 15 ois \ iis 10 $3 Aa sik, / all M $6 2001 2002 2003 2004 2005 2006 2007 10/5/07 2008 3/9/09 2009 2010 2011 2012
Slide 39: Analyst Coverage
Analyst Coverage CJS Securities Dan Moore — (914) 287-7600 Sidoti & Company, LLC Scott Stember-— (212) 453-7017 Thompson Research Group Kathryn Thompson — (615) 891-6206
Slide 40: Thank you!
Thank you! For more information contact: Jason Lippert Chief Executive Officer 574-535-1125 JasonL@lci1.com Joseph S. Giordano Ill CFO & Treasurer 914-428-9098 joe@drewindustries.com OR VISIT OUR WEBSITE: www.drewindustries.com > -39-
Slide 41: Reconciliation of Operating Profit to EBITDA
Reconciliation of Operating Profit to EBITDA FINANCIAL PERFORMANCE Pe hee | $209 | $29.2 $940 | saa | $57.7 | $55 | $660 | $19.9 | $195.6) | $452 | $4a5 | $50.1 | $549 Depreciation & ‘Amortization $8.4 $7.3 $7.8 $9.3 $12.0 | $15.7 | $17.6 | $17.1 | $18.5 $17.1 | $20.5 $25.7 | $25.8 ‘Goodwill 4 a eek
Slide 42: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE Net Sales: RV Segment $ 368.1 | $ 312.5 | $ 477.2 | $ 570.6 | $ 780.9 | $ 809.4 MH Segment 142.4 85.3 95.6 110.5 120.2 120.8 Total Net Sales $ 510.5 | $397.8 | $572.8 | $ 681.2) $ 901.1 | $ 930.2 Operating Profit: RV Segment $ 2