04/11/2022

4 November 2022
4 November 2022, Comments Comments Off on Lippert to maintain strong performance during downturn in RV demand
Lippert to maintain strong performance during downturn in RV demand

LCI Industries says its diversification strategy means it is positioned to maintain strong performance during the current downturn in North American RV wholesale shipments, which it has offset by price realization, acquisitions, and an increase in net sales to OEMs in adjacent industries.

Its third quarter 2022 results (ended 30 September 2022) include net sales of $1.1 billion, down just 3%, year-over-year. Net income was $61.4 million, also down just 3%, year-over-year.

Lippert’s average product content per travel trailer and fifth-wheel RV for the twelve months ended September 30, 2022, increased $2,067 to $5,853, compared to $3,786 for the twelve months ended September 30, 2021.

“Our results continue to demonstrate the effectiveness of our diversification strategy, which has positioned Lippert to maintain strong performance during a downturn in RV demand. During the third quarter, we delivered growth in adjacent markets and leveraged our flexible cost structure to support profitability, as the RV industry adjusts to softened consumer demand and macroeconomic uncertainty,” commented Jason Lippert, LCI Industries’ President and Chief Executive Officer.

“The operational improvements we’ve implemented over the last several years have enabled us to nimbly balance capacity while maintaining our product quality, as wholesale RV production is expected to remain tempered in the near-term. Other key end markets, including marine, motorhomes, manufactured housing, power sports, and the RV aftermarket continued to perform well, helping our overall business more effectively than if it was solely concentrated in the RV market. We remain confident in the underlying secular trends fueling popularity in the outdoor lifestyle and will keep investing in innovation throughout our portfolio to capture demand for technologically sophisticated products,” Lippert continued. “With our strong, cohesive culture guided by our experienced leadership team, we believe we are well-positioned to manage through a challenging economic environment to advance our business and drive long-term shareholder value.”

“The operational strength demonstrated by our teams proved critical to supporting our performance this quarter. We look forward to continuing this momentum as we continue to collaborate with our customers while achieving progress on strategic priorities,” commented Ryan Smith, Group President – North America.

October 2022 consolidated net sales were approximately $345 million, down 24 percent from October 2021, demonstrating positive trends as the Company moves into the last quarter of 2022, a testament to diversification efforts which are helping to offset the deceleration experienced in North American RV production.

At September 30, 2022, the Company’s cash and cash equivalents balance was $23.4 million, compared to $62.9 million at December 31, 2021. The Company used $103.7 million for 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 $156.1 million in net repayments under its revolving credit facility and $65.9 million in repayments under its shelf loan, term loan, and other borrowings in the nine months ended September 30, 2022.

LCI Industries, through its wholly-owned subsidiary, Lippert, supplies, domestically and internationally, a broad array of highly engineered components for the leading OEMs in the recreation and transportation product markets, consisting primarily of recreational vehicles and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing.

The Company also supplies engineered components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet.

Lippert’s products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components; appliances; air conditioners; televisions and sound systems; tankless water heaters; and other accessories.

Additional information about Lippert and its products can be found at www.lippert.com.