EX-99.2 3 lcii-irshortdeckq322.htm EX-99.2
LCI Industries Q3 2022 Earnings Conference Call November 1, 2022 1

FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company’s common stock, the impact of legal proceedings, and other matters. Statements in this presentation that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties. Forward-looking statements, including, without limitation, those relating to the Company's future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, covenant compliance, retail and wholesale demand, integration of acquisitions, R&D investments, and industry trends, whenever they occur in this presentation are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, in addition to other matters described in this presentation, the impacts of COVID-19, or other future pandemics, and the Russia-Ukraine War on the global economy and on the Company's customers, suppliers, employees, business and cash flows, pricing pressures due to domestic and foreign competition, costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, seasonality and cyclicality in the industries to which we sell our products, availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, team member benefits, team member retention, realization and impact of expansion plans, efficiency improvements and cost reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational and financial risks related to conducting business internationally, and increased governmental regulation and oversight, information technology performance and security, the ability to protect intellectual property, warranty and product liability claims or product recalls, interest rates, oil and gasoline prices and availability, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and in the Company’s subsequent filings with the Securities and Exchange Commission. Readers of this presentation are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. This presentation includes certain non-GAAP financial measures, such as EBITDA and net debt to EBITDA leverage. These non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure are included in the presentation. 2

Ongoing Innovation ■ Innovating to drive market share gains through new product introductions, enhancing portfolio to meet customer demand for advanced offerings Third Quarter 2022 Highlights Financial Performance ■ Net sales of $1.1 billion with net income of $61.4 million in the third quarter ■ 2% increase in EBITDA1 Maintaining focus on diversification while driving content expansion Executing on Diversification ■ Strength across businesses helping offset declines in RV OEM ■ Increased market share in Aftermarket, Marine, and other adjacencies Record Content Growth ■ 55% growth in content per travel trailer and fifth-wheel RV2 supported by continued organic expansion ■ 46% growth in content per power boat2 3 1 Additional information regarding EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix 2 For twelve months ended September 30, 2022

Quarterly Performance • 91,800 units shipped in Q3 2022 as retail demand softens • Q3 2022 North American RV OEM sales down (14)% YoY • Current 2022 forecast of 480 - 500k units implies 45-50% decrease in wholesale shipments in H2 2022 compared to record shipments in H1 2022 RV OEM RV Wholesale/Retail/Inventory Change Retail Wholesale Inventory Linear (Inventory) Q11 9 Q21 9 Q31 9 Q41 9 Q12 0 Q22 0 Q32 0 Q42 0 Q12 1 Q22 1 Q32 1 Q42 1 Q12 2 Q22 2 Q32 2 0 50,000 100,000 150,000 200,000 250,000 (80,000) (60,000) (40,000) (20,000) — 20,000 40,000 60,000 80,000 Content per Wholesale Unit • Travel trailer and fifth-wheel RV content of $5,853 for Q3 2022 (LTM basis) • Increase of 55% over the comparable prior year period 4 $665,688 $576,437 Q3 2021 Q3 2022 Net Sales ($ in thousands)

Quarterly Performance • Q3 2022 NA Adjacent Industries sales up 20% YoY • Growth in marine and other adjacent industries continues to support effective diversification • New product introduction in marine supporting content expansion ◦ 46% growth in content per power boat (LTM basis) • Building out Captain’s customer support group, boasting 1,000+ group members ADJACENT MARKETS 5 Net Sales ($ in thousands) $280,593 $335,983 Q3 2021 Q3 2022

Quarterly Performance • Q3 2022 sales flat YoY • Decline in automotive aftermarket sales largely offset by strength in RV and marine aftermarket sales • Ongoing portfolio expansion supported by innovative Furrion catalog • Customer experience leading towards innovative offerings by 1x1 engagement AFTERMARKET 6 $219,028 $219,659 Q3 2021 Q3 2022 Net Sales ($ in thousands)

Quarterly Performance • Q3 2022 sales up 6% YoY • Diversified end market growth in rail and marine continue to propel international growth • Experiencing different consumer demand than North American business, offering geographic diversification • Maintaining focus on introducing popular European products in North American markets INTERNATIONAL BUSINESS 7 Net Sales ($ in thousands) $87,652 $92,629 Q3 2021 Q3 2022

INNOVATION AS A CULTURE Innovating to drive record content expansion Continuously developing new product innovations to meet increasing demand for technologically-advanced products 8 Independent Suspension Gate Defender Jack ABS (Anti-Lock Brake) System OneControl On-The-Go Ladder Temp & Propane Sensors Furrion Power Cord Set

GROWTH STRATEGY Investing in innovation to win market share Allocating Capital to Areas with the Highest Growth Return • Investment in the business, with focus on automation projects • Reduce leverage • Return capital to shareholders • Execute strategic acquisitions Continue Execution of our Diversification Strategy • Benefit from continued sales growth in end markets unaffected by macroeconomic conditions to produce adequate cash flow • Reinvest back into these markets to further stability and growth during volatile economic times Leveraging Strengths to Win Market Share • Growing market leadership in adjacent markets, international markets, and the aftermarket segment through enhanced engineering innovation • Consistent content per unit growth in the RV OEM industry • Unlocking cross-selling opportunities through new acquisitions 9

Operating Margin 7.6% 7.7% Third Quarter 2021 Third Quarter 2022 (in th ou sa nd s) Consolidated Net Income $63,401 $61,392 Third Quarter 2021 Third Quarter 2022 (in th ou sa nd s) EBITDA* $117,965 $119,822 Third Quarter 2021 Third Quarter 2022 Q3 2022 FINANCIAL PERFORMANCE * Additional information regarding EBITDA, as well as reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, is provided in the Appendix. (in th ou sa nd s) Consolidated Net Sales $1,165,309 $1,132,079 Third Quarter 2021 Third Quarter 2022 10

As of and for the nine months ended September 30 LIQUIDITY AND CASH FLOW 2022 2021 Cash and Cash Equivalents $23M $73M Remaining Availability under Revolving Credit Facility(1) $369M $267M Capital Expenditures $104M $74M Dividends $76M $64M Debt / Net Income (TTM) 2.1x 4.3x Net Debt/EBITDA (TTM) 1.3x(2) 2.2x(3) Cash from Operating Activities $486M $12M (1) Remaining availability under the revolving credit facility is subject to covenant restrictions. (2) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $1,062M, less Cash of $23M, resulted in Net Debt of $1,039M at September 30, 2022, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization, "EBITDA" (Net Income of $494M adding back Interest of $25M, Taxes of $171M, and Depreciation and Amortization of $128M), resulting in $818M EBITDA for the twelve months ended September 30, 2022. The GAAP debt / Net income ratio was $1,062M / $494M or 2.1x. (3) Net Debt/EBITDA ratio is a non-GAAP financial measure and is calculated as follows: Debt of $1,086M, less Cash of $73M, resulted in Net Debt of $1,014M at September 30, 2021, divided by EBITDA (Net Income of $254M, adding back Interest of $13M, Taxes of $80M, and Depreciation and Amortization of $105M), resulting in $453M EBITDA for the twelve months ended September 30, 2021. The GAAP debt / Net income ratio was $1,086M / $254M or 4.3x. 11

EBITDA Reconciliation of Non-GAAP Measures APPENDIX EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense. The Company considers this non-GAAP measure in evaluating and managing the Company's operations and believes that discussion of results adjusted for these items is meaningful to investors because it provides a useful analysis of ongoing underlying operating trends. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies. Three Months Ended September 30, ($ in thousands) 2022 2021 Net Income $ 61,392 $ 63,401 Interest Expense, Net 6,910 4,667 Provision for Income Taxes 19,273 20,956 Depreciation and Amortization 32,247 28,941 EBITDA $ 119,822 $ 117,965 12

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