Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $1.1 billion, a 4% increase year-over-year, with EBITDA rising nearly 40% and margins expanding by over 300 basis points [3][25][29] - Gross margins improved to 25.3% from 21.5% in the prior year, driven by lower inbound freight and better fixed cost absorption [28] - GAAP net income for Q2 2024 was $61.2 million, or $2.40 per diluted share, compared to $33.4 million, or $1.31 per diluted share in Q2 2023 [29] Business Line Data and Key Metrics Changes - RV OEM net sales increased by 20% to $490 million, driven by a 15% increase in North American travel trailer and fifth-wheel wholesale shipments [25][27] - Aftermarket net sales were $258 million, up 1% year-over-year, with operating margins in the aftermarket segment increasing approximately 120 basis points [12][27] - Adjacent Industries OEM net sales decreased by 12% to $306 million, primarily due to lower sales in North American marine and utilities trailer OEMs [26][27] Market Data and Key Metrics Changes - North American marine OEM net sales were down 33% year-over-year, reflecting ongoing softness in the marine retail environment [27][15] - International sales were down slightly by 1% year-over-year, with performance in Europe remaining strong [27][18] Company Strategy and Development Direction - The company is focused on a diversification strategy that has expanded its reach into attractive markets, including transportation, residential building products, and marine [4][11] - Continuous improvement initiatives have led to over 25,000 projects completed in 2024, enhancing operational efficiencies and quality [6] - The company plans to continue strategic acquisitions and return capital to shareholders while investing in R&D and innovation [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the RV market's resilience despite current softness in retail demand, anticipating a gradual recovery [10][35] - The company expects RV wholesale shipments to range between 315,000 to 325,000 units for the year, adjusting for current market conditions [31] - Management highlighted the importance of innovation and strong customer relationships as key drivers for future growth [11][12] Other Important Information - The company has reduced its net inventory balance to $688 million, down from $768 million at the end of 2023 [30] - The company anticipates capital expenditures in the range of $40 million to $60 million for the year, reflecting a cautious approach in the current environment [32][65] Q&A Session Summary Question: Can you discuss the deceleration from the trends seen in July? - Management noted that the favorable comparisons in July were due to last year's extended shutdowns, and they expect a slowdown in August and September due to planned shutdowns [33][34] Question: What are the expectations for RV model year '25 conversion? - Management indicated that while they are loading up on content, they expect lower volume in the back half of the year due to current market conditions [35] Question: How do you see organic content growth in towables? - Management confirmed that organic content growth has been around 1% recently, with expectations to improve as new products are introduced [38][39] Question: What is the outlook for marine inventory levels? - Management expects continued destocking in the marine sector, with normalization anticipated by the spring selling season next year [46][47] Question: Can you discuss the M&A pipeline and capital allocation? - Management confirmed a robust M&A pipeline with several opportunities being evaluated, while maintaining a focus on a strong balance sheet [48][49]

Core Insights - LCI reported quarterly earnings of $2.40 per share, exceeding the Zacks Consensus Estimate of $2.29 per share, and showing a significant increase from $1.31 per share a year ago, resulting in an earnings surprise of 4.80% [1] - The company achieved revenues of $1.05 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.16% and reflecting a year-over-year increase from $1.01 billion [2] - LCI has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of LCI's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $1.02 billion, while the estimate for the current fiscal year is $6.29 on revenues of $3.96 billion [7] Market Performance - LCI shares have declined approximately 17% since the beginning of the year, contrasting with the S&P 500's gain of 8.7% [3] - The estimate revisions trend for LCI is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Automotive - Original Equipment industry, to which LCI belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - The upcoming earnings release for LCI is anticipated to show revenues of $1.05 billion, reflecting a year-over-year increase of 3.8% [7] - Analysts have revised their estimates downward, leading to a negative Earnings ESP of -5.47%, indicating a bearish outlook on LCI's earnings prospects [13] - The consensus EPS estimate for LCI has been revised 2.04% lower over the last 30 days, suggesting a collective reassessment by covering analysts [19] Earnings Expectations - Wall Street expects LCI to report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2024 [8] - The stock may experience upward movement if actual results exceed expectations, while a miss could lead to a decline [10] - LCI has beaten consensus EPS estimates in two out of the last four quarters, but the current indicators do not suggest it is a compelling earnings-beat candidate [23][24] Industry Comparisons - In the Zacks Automotive - Original Equipment industry, Ferrari is expected to report earnings of $2.14 per share, representing a year-over-year change of +7.5%, with revenues projected at $1.8 billion, up 11.9% [16] - Ferrari's consensus EPS estimate has been revised 1.2% upward over the last 30 days, but it currently has an Earnings ESP of 0.00%, indicating no expected deviation from the consensus [30] Predictive Models - The Zacks Earnings ESP model compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more recent and potentially more accurate [12] - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [21] - The predictive power of the Earnings ESP model is significant primarily for positive readings, making it challenging to predict outcomes for stocks with negative ESP readings [26]

The price trend for LCI (LCII) has been bearish lately and the stock has lost 7.3% over the past two weeks. However, the formation of a hammer chart pattern in its last trading session indicates that the stock could witness a trend reversal soon, as bulls might have gained significant control over the price to help it find support. The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that makes a ...

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, it's pretty easy to find cutting-edge growth sto ...

LCI Industries Q1 2024 Earnings Conference Call INDUSTRIES FORWARD-LOOKING STATEMENTS 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, commodity prices and industry trends, whenever they occur in this presentation are necessarily est ...

Financial Performance - Net sales for Q1 2024 were $968,029, a slight decrease of 0.3% from $973,310 in Q1 2023[9] - Gross profit increased to $223,906, representing a 20.4% increase compared to $186,071 in the same period last year[9] - Operating profit surged to $57,611, up 187.5% from $20,043 in Q1 2023[9] - Net income for Q1 2024 was $36,545, a significant increase of 404.5% compared to $7,259 in Q1 2023[9] - Basic and diluted net income per share rose to $1.44, compared to $0.29 in the prior year, marking a 396.6% increase[9] - The company reported a total comprehensive income of $33,282 for Q1 2024, compared to $9,259 in Q1 2023, indicating a substantial increase[12] - The effective tax rate for the first quarter of 2024 was 24.3%, slightly lower than 24.8% in the same period of 2023[102] Assets and Liabilities - Total assets as of March 31, 2024, were $2,981,336, a slight increase from $2,959,319 at the end of 2023[14] - Cash and cash equivalents decreased to $22,625 from $66,157 at the end of 2023, reflecting a decrease of 65.8%[14] - Total stockholders' equity increased to $1,356,884 from $1,355,036 at the end of 2023, a marginal increase of 0.1%[14] - Accrued expenses and other current liabilities totaled $177,217 thousand as of March 31, 2024, compared to $174,437 thousand at December 31, 2023, reflecting an increase of 1.0%[42] - Long-term indebtedness stood at $854,774 thousand as of March 31, 2024, compared to $846,834 thousand at December 31, 2023, indicating a slight increase of 0.9%[43] Cash Flow - Cash flows used in operating activities were $(7,654) for Q1 2024, a decrease from $74,676 in Q1 2023, reflecting a significant change in cash flow dynamics[17] - Net cash flows used in operating activities were $7.7 million in Q1 2024, a decrease from $74.7 million in Q1 2023, primarily due to a $111.7 million increase in cash used for net change in assets and liabilities[110] - Cash flows used in financing activities were $26.4 million in Q1 2024, primarily due to $26.7 million in dividend payments, compared to $76.8 million in Q1 2023[116][117] - The company experienced a net decrease in cash and cash equivalents of $43.5 million in Q1 2024, compared to a decrease of $24.0 million in Q1 2023[109] Inventory and Goodwill - As of March 31, 2024, the Company reported total inventories of $734.36 million, a decrease from $768.41 million at December 31, 2023[38] - The net balance of goodwill as of March 31, 2024, was $587.79 million, down from $589.55 million at December 31, 2023, primarily due to foreign currency translation adjustments[36] - The Company recorded inventory obsolescence reserves of $76.1 million as of March 31, 2024, compared to $71.3 million at December 31, 2023[38] Capital Expenditures and Financing - Capital expenditures in Q1 2024 were $8.6 million, compared to $17.2 million in Q1 2023, with total estimated capital expenditures for 2024 expected to be between $55 million and $75 million[112][114] - The Company issued $460 million in Convertible Notes with a coupon rate of 1.125%, maturing on May 15, 2026[48] - The fair value of the Convertible Notes was estimated at $454.5 million as of March 31, 2024, based on quoted prices in active markets[54] - The Company has a $600 million revolving credit facility, with $50 million available for letters of credit and up to $400 million in approved foreign currencies[44] - Availability under the revolving credit facility was $153.8 million at March 31, 2024, indicating sufficient liquidity for anticipated cash requirements[46] Segment Performance - The OEM Segment accounted for 78% of consolidated net sales, generating $758.3 million, while the Aftermarket Segment contributed 22% with $209.7 million[66][68] - Operating profit for the OEM Segment was $32.8 million, compared to a loss of $0.7 million in the same period last year, while the Aftermarket Segment reported an operating profit of $24.8 million, up from $20.8 million[70] - Approximately 52% of OEM Segment net sales were from components for travel trailer and fifth-wheel RVs for the three months ended March 31, 2024[67] - Aftermarket Segment net sales decreased by 3% to $209.7 million in the first quarter of 2024 compared to $215.1 million in the same period of 2023[99] - Operating profit margin for the Aftermarket Segment improved to 11.8% in the first quarter of 2024, up from 9.7% in the same period of 2023[100] Market Trends - Retail demand for travel trailer and fifth-wheel RVs decreased by 8% in the first three months of 2024 compared to the same period in 2023, primarily due to inflation and higher interest rates[84] - Industry-wide wholesale shipments of travel trailer and fifth-wheel RVs increased by 17% to 73,500 units in the first quarter of 2024 compared to the same period in 2023[84] - The company executed a strategic initiative to diversify markets, with 57% of net sales for the three months ended March 31, 2024 generated outside the North American RV OEM market[77] Corporate Governance - The company has a stock repurchase program authorized for up to $200 million, with $24.1 million spent on repurchasing 253,490 shares in 2022[64] - The company anticipates that future dividend policies will be determined by the Board of Directors based on financial needs and earnings[119] - The company maintained compliance with all financial covenants in its Credit Agreement as of March 31, 2024[118]

LCI (LCII) came out with quarterly earnings of $1.44 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.29 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 166.67%. A quarter ago, it was expected that this recreational vehicle parts supplier would post a loss of $0.11 per share when it actually produced a loss of $0.09, delivering a surprise of 18.18%.Over the last four quarters, ...

Financial Performance - Net sales for Q1 2024 were $968 million, a decrease of 1% from $973.3 million in Q1 2023[4] - Net income increased to $37 million, or $1.44 per diluted share, compared to $7 million, or $0.29 per diluted share in Q1 2023[4] - EBITDA rose to $90 million in Q1 2024, up from $53 million in Q1 2023[4] - Operating profit for the total company increased significantly to $57,611,000 from $20,043,000 year-over-year, indicating a strong recovery in profitability[25] - Net income for the three months ended March 31, 2024, was $36,545,000, compared to $7,259,000 in the same period last year, reflecting a substantial improvement[29] - EBITDA for the three months ended March 31, 2024, was $90,300,000, significantly higher than $52,542,000 in the same period of 2023[33] Segment Performance - RV OEM net sales increased by 15% to $459.6 million, driven by a 9% rise in North American RV wholesale shipments[8] - Aftermarket Segment operating profit margin improved to 11.8%, up from 9.7% in the same period last year[4] - Aftermarket net sales were $209.7 million, down 3% year-over-year, primarily due to lower marine market volumes[10] - The OEM Segment net sales reached $758,311,000, remaining relatively stable compared to $758,173,000 in the prior year, while the Aftermarket Segment net sales decreased to $209,718,000 from $215,137,000[25] Cash and Liquidity - Cash and cash equivalents decreased to $22.6 million from $66.2 million at the end of 2023[13] - The company reported a decrease in cash and cash equivalents to $22,625,000 from $66,157,000 at the end of the previous quarter[27] - Accounts receivable increased to $344,406,000 from $214,707,000, indicating a rise in sales on credit[27] - The remaining availability under the revolving credit facility decreased to $153.8 million from $318.2 million, reflecting tighter liquidity[31] Inventory and Acquisitions - Inventory was reduced by $34 million in Q1 2024, totaling a decrease of $175 million from Q1 2023[4] - The company acquired CWDS, LLC's furniture business in May 2024, expanding its furniture portfolio[4] Tax and Capital Expenditures - The effective tax rate for Q1 2024 was 24.3%, a slight decrease from 24.8% in Q1 2023[12] - The company anticipates a full-year annual tax rate of 24% to 26%[31] - Estimated full-year capital expenditures are projected to be between $55 million and $75 million[31]

Financial Performance - Consolidated net sales for 2023 were $3.8 billion, a decrease of 27% from $5.2 billion in 2022, primarily due to a nearly 39% decrease in North American RV wholesale shipments[24]. - Net income for 2023 was $64.2 million, or $2.52 per diluted share, compared to $395.0 million, or $15.48 per diluted share, in 2022[25]. - The OEM Segment represented 77% of consolidated net sales in 2023, with approximately 47% of OEM Segment net sales coming from travel trailer and fifth-wheel RV manufacturers[30]. - Aftermarket Segment net sales decreased 1% from $891.3 million in 2022 to $881.1 million in 2023, with CURT Manufacturing accounting for approximately half of these sales[37]. - Total OEM Segment net sales decreased by 33% to $2.9 billion in 2023, with travel trailers and fifth-wheels down 48% to $1.36 billion[190]. - Operating profit margin for the OEM Segment fell to 0.6% in 2023 from 11.1% in 2022, while the Aftermarket Segment improved to 12.0% from 8.3%[175]. - Interest expense increased to $40.4 million in 2023 from $27.6 million in 2022, primarily due to rising interest rates[190]. - Net cash flows provided by operating activities were $527.2 million in 2023, down from $602.5 million in 2022, mainly due to a decrease in net income adjusted for non-cash items[203]. Acquisitions and Growth - Acquisitions completed in 2022 and 2023 contributed approximately $73.6 million to net sales in 2023, with two acquisitions in 2023 totaling $25.8 million[24][28]. - The company is expanding into adjacent industries and international markets, which involves significant resources and carries risks of failure due to limited brand recognition[110]. - Approximately 61% of net sales in 2023 were generated outside the North American RV OEM market, up from 46% in 2022, indicating successful diversification[178]. Operational Metrics - Capital expenditures for 2023 were $62 million, including $12 million in automation investments and $12 million in capacity investments[41]. - The company operates over 110 manufacturing and distribution facilities across North America and Europe[41]. - As of December 31, 2023, the company had approximately 11,700 full-time team members, with 10,200 in North America and 1,500 internationally[56]. - The company has 140 total facilities, with 115 located in North America and 25 in Europe, indicating a robust operational footprint[161]. Employee Engagement and Community Support - The retention percentage for team members in North America improved to 71% in 2023, up from 57% in the prior year[60]. - Team members logged over 143,000 volunteer hours in 2023, with 85% participation, an increase from 75% in 2022[62]. - The company donated more than $1.1 million in 2023 to support community needs, focusing on children and families, education, and health[62]. - Over 8,000 "dreams and goals" were achieved by team members in 2023, covering various personal and professional development areas[61]. - Engagement in the wellness program improved from 53% in 2022 to 67% in 2023[64]. Risks and Compliance - The company believes it is currently operating in compliance with applicable laws and regulations, with no material effect on operations or financial condition[55]. - The company faces risks related to conducting business internationally, including operational and financial uncertainties[115]. - Cyber-attacks are increasing in frequency and sophistication, posing risks to customer retention and operational efficiency[119]. - The company is subject to numerous regulations, and failure to comply could result in significant penalties and adversely impact financial results[120]. - Changes in laws related to climate change could impose additional costs on the company, affecting its business operations and financial condition[124]. - The company faces risks related to environmental laws, which could lead to fines and remediation costs that adversely affect operations[126]. Financial Structure and Debt - The company has a debt structure that includes term loans, 1.125% convertible senior notes due 2026, and a revolving credit facility, which may increase leverage and financial risk[141]. - The ability to service substantial debt depends on future performance, which is influenced by various uncontrollable economic and competitive factors[142]. - Debt agreements impose covenants that require maintaining certain financial ratios, which if breached, could lead to defaults and adversely impact operations[144]. - An increase in interest rates could significantly raise borrowing costs, adversely affecting financial condition and cash flows[145]. - The company has paid regular quarterly dividends since March 2016, but future payments depend on business performance and financial conditions[146]. Market Conditions - The company experienced lower RV and marine OEM volumes in 2023 due to inflation and elevated interest rates impacting consumer discretionary spending[80]. - The RV industry experienced a nearly 37% decrease in wholesale RV OEM shipments in 2023, negatively impacting the company's net sales for the year[89]. - Steel and aluminum comprised approximately 30% and 10% of the company's raw material costs, respectively, highlighting the impact of volatile raw material prices on financial performance[92]. - The company imported about 30% of its raw materials and components in 2023, making it vulnerable to geopolitical risks and supply chain disruptions[96]. - The inability to develop innovative new products or respond to changes in consumer preferences could adversely affect net sales and operating results[99].