08/11/2023

8 November 2023
8 November 2023, Comments Comments Off on LCI Industries reports third quarter financial results
LCI Industries reports third quarter financial results

LCI Industries has reported its third quarter 2023 results with net sales of $1.0 billion in the third quarter, down 15% year-over-year and a net income of $26 million in the third quarter, down 58% year-over-year.

The decrease in year-over-year net sales for the third quarter of 2023 was primarily driven by decreased North American RV wholesale shipments, lower North American marine production levels, and decreased selling prices which are indexed to select commodities, partially offset by acquisitions. Net sales from acquisitions completed in the twelve months ended September 30, 2023 contributed approximately $16.9 million in the third quarter of 2023.

“Our commitment to diversification and operational discipline continues to support our performance in a volatile macro environment. The strength we are seeing in our diversified businesses, highlighted by substantial margin expansion in Aftermarket, greatly contributes to the long-term growth and profitability prospects of Lippert, helping us weather challenges far better than if we competed solely in the RV OEM space,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer.

“With our diverse set of manufacturing capabilities, continuous new product launches, and broad industry and customer portfolios serving as significant differentiators, we have continued to drive organic content growth even as we have seen selling prices decline. Just in the last four years, we have added sales of $0.9 billion from acquisitions and another $1 billion in organic sales growth. Further, through the investments made in our facilities and teams over the years, we have established strong manufacturing capabilities allowing us to develop deep customer relationships, solidifying Lippert’s position as a leader across the outdoor recreation space. Additionally, new business commitments for 2024 across our businesses total approximately $185 million. We believe these are tremendous organic growth and market share wins for next year.”

“We have an incredibly experienced team that has led our business through downturns like this one in the past and each time we have come out stronger as a result of their great leadership. With our strong balance sheet, reinforced by the substantial inventory reductions we have made throughout the year, we believe we are well-positioned to manage through near-term challenges and capture growth opportunities once conditions improve,” Lippert continued.

“I want to thank all of the Lippert team members worldwide for their dedication and hard work this quarter as we navigate challenging conditions and focus on generating sustained value for all our stakeholders.”

Consolidated net sales for the third quarter of 2023 were $1.0 billion, a decrease of 15% from 2022 third quarter net sales of $1.1 billion. Net income in the third quarter of 2023 was $25.9 million, or $1.02 per diluted share, compared to net income of $61.4 million, or $2.40 per diluted share, in the third quarter of 2022.

October 2023 consolidated net sales were approximately $344 million, down 1% from October 2022, primarily due to an approximate 10% decline in North American RV wholesale shipments and an approximate 3% decline due to decreased selling prices which are indexed to select commodities compared to October 2022. October 2023 results were favorably impacted by our diversification efforts, including 15% growth in adjacent markets and 5% growth in the Aftermarket Segment compared to October 2022.

OEM net sales for the third quarter of 2023 were $728.5 million, down 20% year-over-year, primarily driven by a 21% reduction in North American wholesale shipments, decreased selling prices which are indexed to select commodities, and lower North American marine production levels. Operating profit of the OEM Segment was $11.2 million in the third quarter of 2023, or 1.5% of net sales, compared to $65.2 million, or 7.1%, in the same period in 2022. The operating profit of the OEM Segment for the quarter was driven by decreased selling prices which are indexed to select commodities and the impact of fixed costs on reduced sales.

RV OEM net sales for the third quarter of 2023 were $429.2 million, down 26% compared to the same prior year period, driven by a 21% decline in North American wholesale shipments.

Adjacent Industries OEM net sales for the third quarter of 2023 were $299.2 million, down 11% year-over-year, primarily due to lower sales to North American marine OEMs. North American marine OEM net sales in the third quarter of 2023 were $72.5 million, down 42% year-over-year.

Aftermarket net sales for the third quarter of 2023 were $230.8 million, up 5% year-over-year, as distribution channel inventories stabilized. Operating profit of the Aftermarket Segment was $34.4 million in the third quarter of 2023, or 14.9% of net sales, compared to $22.4 million, or 10.2%, in the same period in 2022. The operating profit expansion of the Aftermarket Segment for the quarter was driven by decreased commodity costs and leveraging of fixed costs over larger sales and production volume.