[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201%20%E2%80%93%20FINANCIAL%20STATEMENTS) For the six months ended June 30, 2025, LCI Industries reported a 6.4% increase in net sales to $2.15 billion and a 9.6% rise in net income to $107.1 million compared to the prior year. The balance sheet shows growth in total assets to $3.17 billion, primarily driven by acquisitions and increased accounts receivable. Cash flow from operations decreased to $154.9 million from $185.3 million in the prior year period, while investing activities increased significantly due to acquisitions [Condensed Consolidated Statements of Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the second quarter of 2025, net sales increased by 5.0% year-over-year to $1.11 billion, while net income decreased by 5.8% to $57.6 million. For the six-month period, net sales grew 6.4% to $2.15 billion, and net income increased 9.6% to $107.1 million Consolidated Income Statement Highlights (Unaudited) | (In thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,107,250 | $1,054,544 | $2,152,840 | $2,022,573 | | **Gross profit** | $270,021 | $266,445 | $521,770 | $490,351 | | **Operating profit** | $87,804 | $90,604 | $169,121 | $148,215 | | **Net income** | $57,635 | $61,163 | $107,073 | $97,708 | | **Diluted EPS** | $2.29 | $2.40 | $4.23 | $3.85 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets increased to $3.17 billion from $2.89 billion at year-end 2024, driven by a significant rise in accounts receivable and goodwill. Total liabilities also grew to $1.79 billion from $1.51 billion, primarily due to an increase in long-term indebtedness Balance Sheet Summary (Unaudited) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,358,245 | $1,160,238 | | **Total assets** | $3,174,138 | $2,894,739 | | **Total current liabilities** | $484,298 | $412,053 | | **Long-term indebtedness** | $944,313 | $756,830 | | **Total liabilities** | $1,789,038 | $1,507,853 | | **Total stockholders' equity** | $1,385,100 | $1,386,886 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash from operating activities was $154.9 million, a decrease from $185.3 million in the prior year period. Cash used in investing activities increased substantially to $123.4 million due to acquisitions. Financing activities used $4.1 million, reflecting significant debt restructuring and capital returns Cash Flow Summary (Unaudited, Six Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash flows provided by operating activities** | $154,937 | $185,282 | | **Net cash flows used in investing activities** | ($123,350) | ($40,733) | | **Net cash flows used in financing activities** | ($4,102) | ($79,093) | | **Net increase in cash and cash equivalents** | $26,175 | $64,261 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail significant financial events, including two acquisitions in the first half of 2025, major debt refinancing activities, and capital return activities through dividends and a new share repurchase program. Segment reporting shows revenue growth in both OEM and Aftermarket segments, with OEM operating profit increasing while Aftermarket profit declined - In H1 2025, the company acquired Freedman Seating Company for approximately **$68.6 million** in cash and Trans/Air Manufacturing Corporation for **$29.6 million** in cash[45](index=45&type=chunk)[46](index=46&type=chunk) - In March 2025, the company issued **$460.0 million** of 3.000% Convertible Notes due 2030 and used a portion of the proceeds to repurchase **$368.0 million** of its 1.125% Convertible Notes due 2026, resulting in a **$6.2 million** loss on extinguishment of debt[61](index=61&type=chunk)[75](index=75&type=chunk) - A new **$300.0 million** share repurchase program was authorized in May 2025, under which the company repurchased **424,132 shares** for **$38.5 million** in June 2025[86](index=86&type=chunk)[87](index=87&type=chunk) Segment Performance (Six Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **OEM Net Sales** | $1,663,114 | $1,554,436 | | **OEM Operating Profit** | $113,657 | $83,399 | | **Aftermarket Net Sales** | $489,726 | $468,137 | | **Aftermarket Operating Profit** | $55,464 | $64,816 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=ITEM%202%20%E2%80%93%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses a 5.0% consolidated net sales increase in Q2 2025, driven by acquisitions and RV market share gains, though operating profit margin slightly declined. The OEM segment saw sales growth from acquisitions and a favorable RV mix, while the Aftermarket segment's growth was driven by product innovation, though its profitability was impacted by sales mix and higher costs. The company highlights its strong liquidity position, recent debt refinancing, and capital return programs. Key industry trends show a divergence between rising wholesale RV shipments and declining retail demand [Industry Background](index=27&type=section&id=Industry%20Background) The analysis of the North American RV industry shows a mixed environment. For the first six months of 2025, wholesale shipments of travel trailers and fifth-wheels increased by 8%, while retail demand fell by 3% due to inflation and higher interest rates. This indicates that dealers were building inventory despite softer consumer demand. The U.S. RV ownership base reached a record 8.1 million households in 2025, supporting robust demand for the Aftermarket segment - For the first six months of 2025, industry-wide wholesale shipments of travel trailer and fifth-wheel RVs increased **8% YoY**, while retail demand decreased **3% YoY**[108](index=108&type=chunk) Travel Trailer & Fifth-Wheel RV Market Trends (Units) | Quarter ended | Wholesale Units | Retail Units | Estimated Impact on Dealer Inventories | | :--- | :--- | :--- | :--- | | **June 30, 2025** | 81,400 (-1% YoY) | 97,100 (-2% YoY) | (15,700) | | **March 31, 2025** | 86,300 (+18% YoY) | 62,400 (-4% YoY) | 23,900 | - The U.S. RV ownership base reached a record **8.1 million households** in 2025, which is a key driver for the Aftermarket Segment's performance[118](index=118&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) In Q2 2025, consolidated net sales grew 5.0% to $1.1 billion, but operating profit margin decreased to 7.9% from 8.6% YoY due to executive separation costs and a lower-margin product mix. The OEM segment's sales rose 5% driven by acquisitions and RV market share gains, with operating margin slightly declining. The Aftermarket segment's sales increased 4%, but its operating margin fell from 15.5% to 13.5% due to unfavorable product mix, higher material costs, and strategic investments - Q2 2025 consolidated net sales increased **5.0% YoY**, primarily due to approximately **$35.0 million** in sales from acquisitions (Freedman Seating and Trans/Air Manufacturing)[123](index=123&type=chunk) - OEM segment operating profit margin in Q2 2025 was negatively impacted by **$13.9 million** in tariff costs and **$2.6 million** in executive separation costs[128](index=128&type=chunk)[126](index=126&type=chunk) - Aftermarket segment operating profit margin in Q2 2025 decreased to **13.5%** from **15.5% YoY**, negatively impacted by a shift to lower-margin products, investments in capacity, and higher material costs[133](index=133&type=chunk)[134](index=134&type=chunk) - The effective tax rate for H1 2025 increased to **26.4%** from **25.4%** in H1 2024, primarily due to an increase in non-deductible executive compensation[143](index=143&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with $191.9 million in cash and $595.3 million available on its revolving credit facility as of June 30, 2025. Operating cash flow for H1 2025 decreased to $154.9 million from $185.3 million YoY. The company executed significant financing activities, including issuing new convertible notes and repurchasing old ones, and returned capital to shareholders through dividends and a new $300 million share repurchase program - As of June 30, 2025, the company had **$191.9 million** in cash and cash equivalents and **$595.3 million** of availability under its revolving credit facility[146](index=146&type=chunk) - Net cash from operating activities decreased in H1 2025 primarily due to a **$168.0 million** increase in accounts receivable from seasonally higher sales[150](index=150&type=chunk) - Capital expenditures for full-year 2025 are projected to be between **$50 million** and **$70 million**[153](index=153&type=chunk) - In May 2025, a new **$300.0 million** stock repurchase program was authorized, valid until May 2028. The company repurchased **$38.5 million** worth of shares in June 2025 and another **$62.5 million** between July 1 and August 1, 2025[162](index=162&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=ITEM%203%20%E2%80%93%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks stem from interest rate fluctuations on its variable-rate debt and price volatility of raw materials, particularly steel and aluminum. Management notes that a hypothetical 0.25% increase in interest rates would not materially affect results. The company actively manages tariff impacts through supply chain diversification and other sourcing strategies - The company is exposed to market risk from changes in short-term interest rates on its variable rate debt[174](index=174&type=chunk) - The company is also exposed to price changes for raw materials, specifically steel and aluminum, and has historically been able to pass on a majority of cost increases to customers[175](index=175&type=chunk)[176](index=176&type=chunk) - The company's tariff mitigation strategy, including supply chain diversification, helped minimize the pricing impact on customers and support profitability in the second quarter[176](index=176&type=chunk) [Controls and Procedures](index=37&type=section&id=ITEM%204%20%E2%80%93%20CONTROLS%20AND%20PROCEDURES) Based on an evaluation conducted by management, including the CEO and CFO, the company concluded that its disclosure controls and procedures were effective as of June 30, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[180](index=180&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[181](index=181&type=chunk) [PART II – OTHER INFORMATION](index=38&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=ITEM%201%20%E2%80%93%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings arising from the normal course of business. Management does not believe that the final disposition of these matters will have a material adverse effect on the company's financial position or results of operations - Management believes that any potential monetary liability from ongoing legal proceedings, after final disposition and anticipated insurance recoveries, would not be material to the company's financial position[183](index=183&type=chunk) [Risk Factors](index=38&type=section&id=ITEM%201A%20%E2%80%93%20RISK%20FACTORS) A new risk factor has been added to address the potential negative impact of changing global tariff frameworks. The company warns that tariffs could increase the cost of goods, disrupt the supply chain, and negatively affect demand, which could materially harm the business and its financial results - A new risk factor was added regarding the potential negative impact of global tariffs on the company's business, operating results, and financial condition[185](index=185&type=chunk) - The company states that tariffs have increased sourcing costs and could negatively impact product demand, potentially having a material adverse effect on the business[186](index=186&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202%20%E2%80%93%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's stock repurchase activities. The previous $200 million program expired in May 2025. A new $300 million program was authorized in May 2025. During June 2025, the company repurchased 424,132 shares at an average price of $89.79 per share, for a total of approximately $38.1 million Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased (in millions) | | :--- | :--- | :--- | :--- | | **April 2025** | — | $— | $147.6 | | **May 2025** | — | $— | $300.0 | | **June 2025** | 424,132 | $89.79 | $261.9 | - On May 15, 2025, the Board of Directors authorized a new stock repurchase program for up to **$300.0 million** of common stock over a three-year period[188](index=188&type=chunk) [Other Information](index=39&type=section&id=ITEM%205%20%E2%80%93%20OTHER%20INFORMATION) During the second quarter of 2025, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or any non-Rule 10b5-1 trading arrangements for the purchase or sale of company securities - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or other non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[190](index=190&type=chunk) [Exhibits](index=39&type=section&id=ITEM%206%20%E2%80%93%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (Sections 302 and 906) and financial data formatted in Inline XBRL

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $1,100,000,000 for Q2 2025, representing a 5% increase year over year [27] - Adjusted EBITDA for the quarter was $121,000,000, or 11% of net sales [33] - GAAP net income for Q2 was $58,000,000, or $2.29 per diluted share, compared to $61,000,000, or $2.40 per diluted share in the prior year [32] - Gross margins decreased to 24.4% from 25.3% year over year, primarily due to executive separation costs and changes in product mix [30] Business Line Data and Key Metrics Changes - RV OEM net sales totaled $840,000,000, up 5% from the same period in 2024, driven by market share gains [27] - Aftermarket net sales were $268,000,000, an increase of 4% year over year, primarily due to product innovations and expanding relationships [30][12] - Adjacent Industries OEM net sales increased by 10% year over year to $336,000,000, largely due to recent acquisitions [29] Market Data and Key Metrics Changes - North American RV sales were up 5%, while overall RV sales increased by 3% year over year [9] - The marine market experienced a 15% decline in sales due to inflation and high interest rates affecting retail demand [30] - The company expects North American RV wholesale shipments for 2025 to be between 320,000 and 350,000 units [24] Company Strategy and Development Direction - The company aims to achieve an organic revenue target of $5,000,000,000 by 2027, supported by strategic acquisitions and product innovations [4][38] - A focus on reducing raw material exposure and diversifying the supply chain is emphasized, with a goal to reduce China exposure from 24% in 2024 to 10% by 2025 [7] - The company is committed to facility consolidation and cost reduction initiatives, targeting an 85 basis point overhead reduction for 2025 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the retail environment, noting that while inflation and tariff uncertainties persist, there are signs of stabilization in demand [23] - The company anticipates a slow and steady recovery in inventory levels once demand improves, particularly in the RV sector [45] - Management remains confident in their ability to align cost structures and capital deployment with market conditions [24] Other Important Information - The company executed a $300,000,000 share repurchase program, returning $187,000,000 to shareholders year to date through dividends and repurchases [34] - The company is focused on maintaining a strong financial foundation while pursuing strategic acquisitions and investments in innovation [19] Q&A Session Summary Question: What is the current state of dealer inventories in RV and marine markets? - Management noted that dealers remain cautious, leading to significant destocking, and expect a slow and gradual rise in inventory levels once demand improves [43][45] Question: What is the expected impact of tariffs on margins? - The tariff impact increased from 180 basis points to 290 basis points due to a rise in tariffs from 20% to 30%, but management is confident in their mitigation strategies [57][58] Question: How is the company addressing the shift towards single axle trailers? - Management indicated that while single axle trailers have increased in market share, they expect a return to larger multi-axle units as consumer preferences evolve [64][70] Question: What is the outlook for retail demand and production volumes? - Management expects retail demand to stabilize, with wholesale and retail being similar this year, but anticipates a soft fourth quarter due to seasonal trends [96][98]

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $1,100,000,000 for the second quarter, representing a 5% increase year over year [27] - Adjusted EBITDA for the quarter was $121,000,000, or 11% of net sales [33] - GAAP net income was $58,000,000, or $2.29 earnings per diluted share, compared to $61,000,000, or $2.40 per diluted share in the prior year [32] - Gross margins decreased to 24.4% from 25.3% year over year, primarily due to executive separation costs and changes in product mix [30] Business Line Data and Key Metrics Changes - RV OEM net sales totaled $840,000,000, up 5% from the same period in 2024, driven by market share gains [27] - Aftermarket net sales were $268,000,000, an increase of 4% year over year, primarily due to product innovations and expanding relationships [30][12] - Adjacent Industries OEM net sales increased by 10% year over year to $336,000,000, largely due to recent acquisitions [30] Market Data and Key Metrics Changes - North American RV sales were up 5%, while overall RV sales increased by 3% year over year [9] - The marine market experienced a 15% decline in sales due to inflation and high interest rates affecting retail demand [30] - The company expects softness in the marine market to continue for the balance of the year [16] Company Strategy and Development Direction - The company aims to achieve $5,000,000,000 in organic revenue by 2027, focusing on strategic acquisitions and product innovations [4][38] - A tariff mitigation strategy has been implemented to diversify the supply chain and minimize pricing impacts on customers [6] - The company is committed to reducing exposure to China from 24% in 2024 to 10% by 2025 through supply chain diversification [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the year, noting that inflation and tariff uncertainties continue to pressure consumer behavior [23] - The company anticipates a gradual recovery in demand, with July 2025 sales up 5% year over year [24] - Management believes the toughest part of the cycle is behind them, positioning the company for success as volumes normalize [24] Other Important Information - The company generated $155,000,000 in operating cash flow, supported by improved working capital discipline [19] - A $300,000,000 share repurchase program was announced, with $128,000,000 executed year to date [34] - The company is focused on maintaining a strong financial foundation while driving growth and returning capital to shareholders [19] Q&A Session Summary Question: Inventory levels and potential restock impact - Management noted that dealers remain cautious with inventory levels, and any restock will likely be slow and gradual once demand improves [42][45] Question: Margin perspective and tariff impact - The company indicated that tariff impacts have increased to 290 basis points, primarily due to changes in government tariffs [58][59] Question: Sales growth and RV model year changeover - Management confirmed that the recent RV model year changeover did not significantly impact sales in Q2 or Q3 [60] Question: Trends in single axle and multi-axle RVs - Management reported a slight improvement in the mix of multi-axle units, with single axle units decreasing to about 20.5% in Q2 [66][67] Question: Aftermarket activity from previous years' buyers - Management indicated that there is less aftermarket opportunity for single axle trailers, but the overall aftermarket continues to grow [74] Question: Contribution of acquisitions to sales growth - Management estimated that 3% to 4% of the recent sales growth was attributable to acquisitions [79] Question: Future revenue targets and wholesale shipment volumes - The company expects to return to a normalized wholesale shipment range of 400,000 to 415,000 units over the next two to three years [83]

LCI (LCII) came out with quarterly earnings of $2.39 per share, beating the Zacks Consensus Estimate of $2.22 per share. This compares to earnings of $2.4 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.66%. A quarter ago, it was expected that this recreational vehicle parts supplier would post earnings of $1.55 per share when it actually produced earnings of $2.19, delivering a surprise of +41.29%. There are no easy answe ...

Financial Performance - Net sales reached $1.1 billion, a 5% increase year-over-year[10] - Net income was $58 million, representing 5.2% of net sales, a 6% decrease year-over-year[10] - Adjusted EBITDA was $121 million, or 11.0% of net sales, a 1% decrease year-over-year[10] Capital Allocation - Returned $67.1 million to shareholders, including $29 million in dividends ($1.15 per share) and $38.1 million in share repurchases in Q2[11] - Total share repurchases year-to-date reached $128.3 million as of August 1, 2025[11] Acquisitions and Market Trends - Acquired Freedman Seating in April, adding approximately $125 million in annual revenues in the bus market[11] - RV OEM sales increased by 3% year-over-year, driven by market share gains and increased mix in higher-content fifth wheels[17] - Adjacent Industries sales increased by 10% year-over-year, primarily due to recent acquisitions in the bus market[28] Tariff Mitigation - Tariff mitigation strategy minimized pricing impact to customers and supported profitability in Q2, with $15.4 million of tariff expenses mitigated[10, 61] - Target is to reduce China sourcing to approximately 10% in 2025[60] Outlook - Expects to deliver an 85 bps margin improvement in 2025 through optimizing infrastructure[10, 67] - North American wholesale unit shipments forecast for full year 2025 is 320,000-350,000 units[71]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) LCI Industries reported a 5% YoY increase in Q2 2025 net sales to $1.1 billion, driven by market share gains and acquisitions, while maintaining strong liquidity and returning $67 million to shareholders Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1.1 billion | $1.05 billion | +5% | | Net Income | $58 million | $61 million | -4.9% | | Diluted EPS | $2.29 | $2.40 | -4.6% | | Adjusted Net Income | $60 million | $61 million | -1.6% | | Adjusted Diluted EPS | $2.39 | $2.40 | -0.4% | | Adjusted EBITDA | $121 million | $123 million | -1.0% | | Operating Profit Margin | 7.9% | 8.6% | -70 bps | - Completed the acquisition of Freedman Seating Company, a manufacturer of transportation seating solutions, which is expected to contribute approximately **$125 million** in annual revenue[3](index=3&type=chunk)[5](index=5&type=chunk) - Returned **$67 million** to shareholders in Q2 through **$29 million** in dividends and **$38 million** in share repurchases. Year-to-date through August 1, 2025, a total of **$187 million** has been returned to shareholders[3](index=3&type=chunk)[5](index=5&type=chunk) - Maintained a strong liquidity position with **$192 million** of cash and cash equivalents and **$595 million** of availability on its revolving credit facility as of June 30, 2025[5](index=5&type=chunk) - An effective tariff mitigation strategy, including supply chain diversification and other sourcing strategies, helped minimize price impacts to customers and support profitability[1](index=1&type=chunk)[5](index=5&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) Consolidated net sales rose 5.0% to $1.11 billion in Q2 2025, though operating profit and net income decreased due to executive separation costs and product mix changes [Operating Results (Income Statement)](index=5&type=section&id=Operating%20Results%20(Income%20Statement)) Consolidated Operating Results (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,107,250 | $1,054,544 | $2,152,840 | $2,022,573 | | Gross Profit | $270,021 | $266,445 | $521,770 | $490,351 | | Operating Profit | $87,804 | $90,604 | $169,121 | $148,215 | | Net Income | $57,635 | $61,163 | $107,073 | $97,708 | | Diluted EPS | $2.29 | $2.40 | $4.23 | $3.85 | [Balance Sheet](index=7&type=section&id=Balance%20Sheet) Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $191,931 | $165,756 | | Total current assets | $1,358,245 | $1,160,238 | | Total assets | $3,174,138 | $2,894,739 | | Long-term indebtedness | $944,313 | $756,830 | | Total liabilities | $1,789,038 | $1,507,853 | | Total stockholders' equity | $1,385,100 | $1,386,886 | - As of June 30, 2025, the company had outstanding long-term indebtedness of **$948.0 million** and was in compliance with all debt covenants[17](index=17&type=chunk) [Cash Flow Statement](index=8&type=section&id=Cash%20Flow%20Statement) Summary of Cash Flows - Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $154,937 | $185,282 | | Net cash used in investing activities | ($123,350) | ($40,733) | | Net cash used in financing activities | ($4,102) | ($79,093) | | Net increase in cash | $26,175 | $64,261 | - For the first six months of 2025, significant cash uses included **$98.2 million** for acquisitions, **$66.3 million** for share repurchases, **$58.4 million** for dividend payments, and **$21.8 million** for capital expenditures[16](index=16&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) OEM segment net sales increased 5% to $839.6 million, while Aftermarket sales grew 4% to $267.7 million, though both experienced operating margin contractions [OEM Segment](index=2&type=section&id=OEM%20Segment) OEM Segment Performance - Q2 2025 vs Q2 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $839,559 | $796,124 | +5.5% | | Operating Profit | $51,684 | $50,562 | +2.2% | | Operating Margin | 6.2% | 6.4% | -20 bps | - RV OEM net sales increased **3%** to **$503.3 million**, driven by market share gains and a higher mix of fifth-wheel units. Adjacent Industries OEM net sales grew **10%** to **$336.3 million**, primarily due to acquisitions[10](index=10&type=chunk) - The slight contraction in operating margin was primarily caused by executive separation costs and changes in sales mix, partially offset by production labor efficiencies[11](index=11&type=chunk) [Aftermarket Segment](index=2&type=section&id=Aftermarket%20Segment) Aftermarket Segment Performance - Q2 2025 vs Q2 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $267,691 | $258,420 | +3.6% | | Operating Profit | $36,120 | $40,042 | -9.8% | | Operating Margin | 13.5% | 15.5% | -200 bps | - Sales growth was primarily driven by product innovations and an expanding relationship with Camping World within the RV aftermarket[12](index=12&type=chunk) - The operating margin contraction was mainly due to changes in sales mix towards lower-margin products, investments in capacity and technology, and reduced fixed cost utilization in the automotive aftermarket[13](index=13&type=chunk) [Outlook & Other Information](index=2&type=section&id=Outlook%20%26%20Other%20Information) LCI Industries is on track for its $5 billion organic revenue target by 2027, with July 2025 sales up 5% YoY, and provided full-year 2025 guidance [Company Outlook & Guidance](index=2&type=section&id=Company%20Outlook%20%26%20Guidance) - The company remains on track to reach its **$5 billion** organic revenue target in 2027 and is making progress toward its **85 basis point** overhead and G&A improvement goal for 2025[6](index=6&type=chunk) - July 2025 consolidated net sales were approximately **$327 million**, representing a **5%** increase from July 2024[9](index=9&type=chunk) Estimated Full Year 2025 Guidance | Metric | Estimated Range | | :--- | :--- | | Capital expenditures (Millions USD) | $50 - $70 million | | Depreciation and amortization (Millions USD) | $115 - $125 million | | Stock-based compensation expense (Millions USD) | $18 - $23 million | | Annual tax rate (%) | 25% - 27% | [Supplementary & Industry Data](index=9&type=section&id=Supplementary%20%26%20Industry%20Data) Lippert Content Per RV Unit (Twelve Months Ended June 30) | RV Type | 2025 (USD) | 2024 (USD) | | :--- | :--- | :--- | | Travel trailer and fifth-wheel RV | $5,234 | $5,237 | | Motorhome RV | $3,793 | $3,766 | RV Industry Wholesale Production (in thousands of units) | RV Type | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Travel trailer and fifth-wheel RVs | 81.4 | 82.0 | | Motorhome RVs | 9.3 | 8.8 | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) LCI provided non-GAAP metrics for Q2 2025, with Adjusted EBITDA at $121.3 million and Adjusted Net Income at $60.1 million, primarily adjusted for executive separation costs Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $57,635 | $61,163 | | Interest, Taxes, D&A | $59,492 | $61,480 | | EBITDA | $118,127 | $122,643 | | Executive separation costs | $3,193 | $— | | **Adjusted EBITDA** | **$121,320** | **$122,643** | Reconciliation of Net Income to Adjusted Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $57,635 | $61,163 | | Executive separation costs | $3,193 | $— | | Tax effect of adjustments | ($765) | $— | | **Adjusted net income** | **$60,063** | **$61,163** |

Group 1 - Wall Street anticipates a year-over-year decline in earnings for LCI, with expected earnings of $2.22 per share, reflecting a -7.5% change, while revenues are projected to be $1.08 billion, up 2.2% from the previous year [3][12] - The upcoming earnings report is scheduled for August 5, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2][12] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] Group 2 - LCI's Earnings ESP is +4.62%, suggesting a positive outlook for earnings, as the Most Accurate Estimate is higher than the Zacks Consensus Estimate [12] - The company has a history of beating consensus EPS estimates, having surpassed expectations in the last four quarters, including a +41.29% surprise in the last reported quarter [13][14] - The Zacks Rank for LCI is 3, indicating a hold position, which combined with a positive Earnings ESP suggests a likelihood of beating the consensus EPS estimate [12][19] Group 3 - In the automotive industry, Magna is expected to report earnings of $1.19 per share, reflecting an -11.9% year-over-year change, with revenues projected at $10.41 billion, down 5% from the previous year [18] - Magna's consensus EPS estimate has been revised 3.1% higher in the last 30 days, resulting in an Earnings ESP of +5.04%, indicating a potential to beat the consensus EPS estimate [19]

Core Insights - LCI (LCII) is positioned to potentially continue its earnings-beat streak, having surpassed earnings estimates by an average of 36.72% in the last two quarters [1][5] Earnings Performance - For the most recent quarter, LCI reported earnings of $1.55 per share, falling short of the expected $2.19 per share, resulting in a surprise of 41.29% [2] - In the previous quarter, LCI exceeded the consensus estimate of $0.28 per share by reporting $0.37 per share, achieving a surprise of 32.14% [2] Earnings Estimates and Predictions - Estimates for LCI have been trending higher, influenced by its history of earnings surprises [5] - The stock currently has a positive Zacks Earnings ESP of +4.62%, indicating increased analyst optimism regarding its near-term earnings potential [8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong likelihood of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]

Financial Performance - Net sales for Q1 2025 reached $1,045,590, an increase of 8.0% compared to $968,029 in Q1 2024[9] - Gross profit for the same period was $251,749, reflecting a 12.5% increase from $223,906 in Q1 2024[9] - Net income for Q1 2025 was $49,438, up 35.2% from $36,545 in Q1 2024[12] - Total comprehensive income for Q1 2025 was $59,867, compared to $33,282 in Q1 2024, marking an increase of 79.9%[12] - Operating profit for Q1 2025 was $81,317, a significant increase of 41.1% from $57,611 in Q1 2024[9] - The OEM Segment accounted for 79% of consolidated net sales in Q1 2025, with net sales of $823.6 million, up from $758.3 million in Q1 2024[84] - The Aftermarket Segment represented 21% of consolidated net sales in Q1 2025, generating $222.0 million, compared to $209.7 million in Q1 2024[85] - Gross profit for the three months ended March 31, 2025, was $251.7 million, reflecting a gross margin of approximately 24.1%[87] - Operating profit for the OEM Segment was $61.9 million, while the Aftermarket Segment reported an operating profit of $19.3 million for the same period[87] Cash and Assets - Cash and cash equivalents increased to $231,243 as of March 31, 2025, from $165,756 at the end of 2024, a rise of 39.5%[14] - Total assets grew to $3,099,998 as of March 31, 2025, up from $2,894,739 at the end of 2024, representing an increase of 7.1%[14] - The total stockholders' equity increased to $1,366,713,000 as of March 31, 2025, from $1,356,884,000 as of December 31, 2024[22] - As of March 31, 2025, the company had $231.2 million in cash and cash equivalents and $595.3 million available under its revolving credit facility[129] Debt and Financing - The company reported a loss on extinguishment of debt amounting to $8,053 in Q1 2025, with no such loss reported in Q1 2024[9] - Long-term indebtedness rose from $756.830 million on December 31, 2024, to $934.632 million on March 31, 2025, primarily due to the issuance of 2030 Convertible Notes[52] - The Company has a $600.0 million revolving credit facility, with a maturity date of March 25, 2030, and term loans of $400.0 million maturing on March 25, 2032[53] - The company issued $460.0 million in aggregate principal amount of 2030 Convertible Notes, resulting in net proceeds of approximately $447.0 million after expenses[58] - The company repaid $280.0 million of the previous term loan and recognized a loss on extinguishment of debt of $1.9 million during the three months ended March 31, 2025[57] Shareholder Returns - Cash dividends declared were $1.15 per share, totaling $29,352,000 for the three months ended March 31, 2025[22] - The company returned $57.6 million to shareholders in Q1 2025 through dividends and share repurchases[117] - As of March 31, 2025, the company had $147.6 million remaining under its stock repurchase program, having repurchased 308,898 shares at an average price of $91.47 per share in March 2025[82] Acquisitions and Investments - The company made an acquisition of a business costing $29,579 during Q1 2025[17] - The Company acquired Freedman Seating Company for approximately $78.7 million in April 2025, which will be included primarily in the OEM segment[44] - The Company acquired Trans/Air Manufacturing Corporation for $29.6 million in cash, with contingent consideration up to $2.0 million, included in the OEM segment[45] - Goodwill increased from $585.773 million on December 31, 2024, to $590.204 million on March 31, 2025, reflecting acquisitions and foreign currency translation[46] Operational Footprint - The company operated over 110 manufacturing and distribution facilities across North America and Europe as of March 31, 2025[25] - The company has diversified its portfolio beyond the RV OEM market into marine, building products, transportation, and aftermarket sectors, aiming for profitable growth and risk mitigation[94] Market Trends - The RV industry saw an 18% increase in wholesale shipments of travel trailers and fifth-wheels to 86,400 units in Q1 2025, while retail demand for these units decreased by 7%[99][101] - The U.S. RV ownership base reached a record 8.1 million households in 2025, driving robust demand for aftermarket products[109] Tax and Compliance - The effective tax rate for the three months ended March 31, 2025, was 26.5%, an increase from 24.3% in the same period of 2024[127] - As of March 31, 2025, the Company was in compliance with all financial covenants under the Credit Agreement[55] Future Outlook - The company anticipates that sales and profits will be strongest in the second quarter, influenced by seasonal demand patterns[26] - Capital expenditures for 2025 are estimated to be between $50 million and $70 million, including investments in automation and lean projects[137]

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $1,000,000,000 for Q1 2025, an increase of 8% year over year, marking the highest quarterly growth since June 2022 [4][25] - Operating profit for the first quarter was $81,000,000, representing a 180 basis point improvement over the prior year period, with an operating margin of 7.8% [28] - GAAP net income for Q1 was $49,000,000, or $1.94 per diluted share, compared to $37,000,000, or $1.44 per diluted share in the prior year [29] Business Line Data and Key Metrics Changes - RV OEM net sales totaled $531,000,000 for Q1, up 15% year over year, driven by an 18% increase in North American travel trailer and fifth wheel wholesale shipments [6][25] - Aftermarket net sales were $222,000,000 for Q1, up 6% year over year, supported by higher volumes in the RV and marine aftermarket [9][27] - Adjacent Industries OEM net sales decreased by 2% to $293,000,000, primarily due to lower sales in the marine sector [12][26] Market Data and Key Metrics Changes - The company anticipates wholesale shipments in 2025 to range between 320,000 to 350,000 units, reflecting consumer demand headwinds and economic uncertainty [32] - April sales increased by 3% year over year, with RV sales up 7%, while marine sales were down 15% due to inflation and high interest rates affecting retail demand [9][32] Company Strategy and Development Direction - The company aims to achieve $5,000,000,000 in revenue by 2027, focusing on organic growth without including acquisitions [4][35] - Recent acquisitions of Freedom Seating and TransAir are expected to strengthen the company's position in the bus market, which is less susceptible to economic cycles [5][16] - The company is actively diversifying its supply chain to mitigate tariff impacts, with a goal to reduce reliance on Chinese suppliers from 35% to approximately 10% by the end of 2025 [18][60] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious confidence for the second and third quarters, acknowledging inflationary pressures and market volatility affecting consumer behavior [22][23] - The company is focused on maintaining solid operating margins despite headwinds, with expectations for RV OEM sales to increase by about 5% in Q2 [33][101] - Management emphasized the importance of operational flexibility and strategic diversification to navigate challenges and deliver shareholder value [35][23] Other Important Information - The company generated $43,000,000 in operating cash flow for Q1, significantly up from the prior year, and continued to return capital to shareholders through dividends and share repurchases [17][31] - The company has a net debt position of approximately 2x EBITDA, providing financial flexibility for future opportunities [18][32] Q&A Session Summary Question: What is the annualized revenue opportunity for the recent acquisitions? - The combined annualized revenue opportunity for TransAir and Freedom Seating is estimated at about $200,000,000, and both businesses are expected to be accretive to results [40] Question: What has been the measurable impact of tariffs on retail demand? - Currently, there has not been much movement in retail prices on dealer lots, but changes are expected with model year pricing in the summer [44] Question: What is the expected impact of tariffs on margins? - The company estimates a potential margin impact of 180 basis points for the year, which could be higher if mitigation efforts are not successful [52] Question: How is the company diversifying its supply chain out of China? - The company has diversified its supply chain significantly, moving production to countries like Vietnam, India, and Turkey, with a focus on appliances, furniture, and axles [68] Question: What are the expectations for organic revenue in Q2? - RV OEM sales are expected to be up about 5%, while overall organic revenue is likely to be flat due to softness in adjacent markets [101]