ELKHART, Ind – LCI Industries (NYSE: LCII) which, through its wholly owned subsidiary, Lippert Components Inc. supplies a wide range of highly engineered components for major original equipment manufacturers in the automotive markets. leisure and transportation products, and the related secondary markets of these industries, today (November 1) announced results for the third quarter of 2022.
Third Quarter 2022 Highlights
- Net sales of $1.1 billion in the third quarter, down $33.2 million, or 3%, year over year
- Net income of $61.4 million, or $2.40 per diluted share, in the third quarter, down $2.0 million, or 3%, year over year
- EBITDA of $119.8 million, up $1.9 million, or 2%, year over year
- Quarterly dividend of $1.05 per share paid totaling $26.7 million in the third quarter
North American RV OEM (56% of last twelve months net sales)
- Net sales of $541.2 million in the third quarter, down $85.3 million, or 14%, year over year, due to an almost 40% decline in shipments in industry wholesale
- Content per trailer and fifth wheel for the twelve months ended September 30, 2022 increased 55% year over year to a record $5,853
North American OEM of adjacent industries (21% of last twelve months net sales)
- Net sales of $295.2 million in the third quarter, up $48.6 million, or 20%, year-over-year
- North American marine OEM net sales of $125.1 million, up 22% year-over-year
- Content per powerboat for the twelve months ended September 30, 2022 increased 46% year-over-year to $1,792
North American secondary market (16% of last twelve months net sales)
- Net sales of $203.1 million in the third quarter, down $1.5 million, or 1%, year over year
- Lower automotive aftermarket sales largely offset by strong recreational vehicle aftermarket sales
International Industries (7% of turnover for the last twelve months)
- Net sales of $92.6 million in the third quarter, up $5.0 million, or 6%, year over year
“Our results continue to demonstrate the effectiveness of our diversification strategy, which has positioned Lippert to maintain strong performance during a decline in RV demand. During the third quarter, we generated growth in adjacent markets and leveraged our flexible cost structure to support profitability as the RV industry adjusts to declining consumer demand and macroeconomic uncertainty,” commented Jason Lippert, President and CEO of LCI Industries .
“The operational improvements we’ve implemented over the past few years have allowed us to deftly balance capacity while maintaining our product quality, as wholesale VR production is expected to remain subdued in the near term. Other key end markets, including marine, motor homes, manufactured homes, powersports and the RV aftermarket, continued to perform well, helping our overall business more effectively than if it were solely focused on the RV market. We remain confident in the underlying secular trends that are fueling the popularity of the outdoor lifestyle and will continue to invest in innovation across our portfolio to capture demand for technologically sophisticated products,” Lippert continued. . “With our strong and cohesive culture guided by our experienced management team, we believe we are well positioned to manage a challenging economic environment to drive our business forward and drive long-term shareholder value.”
“The operational strength demonstrated by our teams has been essential in supporting our performance this quarter. We look forward to building on this momentum as we continue to collaborate with our customers while making progress on strategic priorities,” commented Ryan Smith, Group President – North America.
Third quarter 2022 results
Consolidated net sales for the third quarter of 2022 were $1.1 billion, down 3% from third quarter 2021 net sales of $1.2 billion. Net income in the third quarter of 2022 was $61.4 million, or $2.40 per diluted share, compared to net income of $63.4 million, or $2.49 per diluted share, in the third quarter of 2021 EBITDA in the third quarter of 2022 was $119.8 million, compared to EBITDA of $118.0 million in the third quarter of 2021. Additional information regarding EBITDA, as well as a reconciliation of this financial measure non-GAAP measures with the most directly comparable GAAP financial measure, are provided in the “Additional Information – Reconciliation of -GAAP Measures” below.
Lower year-over-year net sales for the third quarter of 2022 were primarily due to lower wholesale RV shipments in North America, partially offset by price realization, acquisitions and an increase in net sales to OEMs of adjacent industries. Net sales from acquisitions made during the twelve months ended September 30, 2022 contributed approximately $39 million in the third quarter of 2022.
Average company product content per trailer and fifth wheel for the twelve months ended September 30, 2022 increased by $2,067 to $5,853 compared to $3,786 for the twelve months ended September 30, 2021 The increase in trailer content was primarily the result of organic growth, including pricing and new product launches, market share gains and acquisitions.
Results October 2022
Consolidated net sales for October 2022 were approximately $345 million, down 24% from October 2021, demonstrating positive trends as the company enters the final quarter of 2022, reflecting the efforts of diversification that help offset the deceleration of RV production in North America.
The Company’s effective tax rate was 23.9% for the three months ended September 30, 2022, compared to 24.8% for the three months ended September 30, 2021. The decrease in the effective tax rate is primarily due to the settlement of uncertain tax positions, partially offset by a decrease in life insurance cash value.
Balance sheet and other elements
As of September 30, 2022, the Company’s cash and cash equivalents balance was $23.4 million, compared to $62.9 million as of December 31, 2021. The Company used $103.7 million to capital expenditures, $76.3 million for dividend payments to shareholders and $55.7 million for acquisitions in the nine months ended September 30, 2022. The company also made net repayments of 156 $.1 million under its revolving credit facility and $65.9 million in repayments under its interim loan, term loan and other borrowings during the nine-month period ended September 30, 2022.
The company’s long-term debt outstanding, including current maturities, was $1.1 billion as of September 30, 2022, and the company remained in compliance with its debt covenants. The Company believes that its current liquidity is sufficient to meet operating requirements for the foreseeable future.
Conference call and webcast
LCI Industries will host a conference call to discuss its third quarter results on Tuesday, November 1, 2022 at 8:30 a.m. Eastern Time, accessible by dialing (844) 200-6205 for participants in the United States and ( 226) 828-7575 for those in Canada or (929) 526-1599 for participants outside the US/Canada using the required conference ID 464745. 15 minutes when connecting to the call . In addition, a real-time online webcast, along with an additional earnings presentation, is available on the company’s website, www.investors.lci1.com.
A replay of the conference call will be available for two weeks by dialing (929) 458-6194 for participants in the United States and (226) 828-7578 for those in Canada or (204) 525-0658 for participants outside the USA/Canada. and referencing passcode 932786. A replay of the webcast will be available on the Company’s website immediately following the conclusion of the call.