UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission File Number: 001-13646 LCI INDUSTRIES (Exact name of registrant as specified in its charter) Delaware 13-32 ...

LCI INDUSTRIES 1 LCI Industries First Quarter 2021 Earnings Conference Call May 4, 2021 (LCG LCI INDUSTRIES Forward-Looking Statements and Non-GAAP Financial Measures 2 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 pro ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ LCI INDUSTRIES (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incor ...

Financial Data and Key Metrics Changes - The company reported consolidated net sales for Q4 2020 increased by 39% to $783 million compared to the prior year, with acquisitions contributing 13% and organic growth contributing 26% [41] - GAAP net income for Q4 2020 was $48.7 million or $1.92 per diluted share, compared to $28.8 million or $1.14 per diluted share in Q4 2019, driven by strong growth in net sales [45] - For the full year 2020, GAAP net income was $158.4 million or diluted earnings per share of $6.27, compared to $146.5 million or diluted earnings per share of $5.84 in 2019 [52] Business Line Data and Key Metrics Changes - RV OEM sales increased by 29% in Q4 2020 compared to the prior year, with a total of $1.5 billion for the year, primarily driven by retail demand [10][41] - Aftermarket segment sales increased by 129% in Q4 2020, with total sales for the year reaching $628 million, primarily due to the addition of the CURT Group [42][50] - International sales increased by 62% year-over-year, reaching $237 million, supported by acquisitions closed in late 2019 [26][50] Market Data and Key Metrics Changes - Industry wholesale RV shipments for 2020 totaled approximately 430,000 units, the fourth highest on record, with expectations for growth in 2021 [11][46] - Retail caravan registrations in Europe increased nearly 12% in 2020, with Germany seeing a rise of over 32% [29] Company Strategy and Development Direction - The company made significant progress in its long-term diversification strategy, with Aftermarket and Adjacent markets now accounting for over 50% of total net sales, up from 42% in 2019 [15] - The company is focusing on innovation as a competitive differentiator, with new product offerings such as OneControl and safety products expected to drive growth [30][31] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued supply chain constraints in 2021 but believes the company and its customers are well-positioned to mitigate these challenges [12] - The company expects an increase in wholesale unit shipments in 2021, with RVIA forecasting 507,000 units, an 18% increase compared to 2020 [46] Other Important Information - The company has been actively investing in customer experience initiatives within the Aftermarket segment, including appointing a Director of Customer Experience and launching social communities for feedback [19][20] - The company ended 2020 with a net debt position of $686 million, maintaining a leverage ratio comparable to 2019 [54] Q&A Session Summary Question: Supply chain issues and their impact - Management noted that supply chain issues, particularly related to freight and steel, are ongoing but the industry is resilient and resourceful in finding solutions [78][80] Question: Expectations for RVIA shipments - Management expressed confidence in the realism of RVIA shipment forecasts, citing the addition of new facilities and improved supply chain conditions [88][89] Question: Gross margin expectations amid inflation - Management indicated that while gross margins are strong, input cost inflation may create headwinds in the short term, but they expect to manage these challenges effectively [95][96]

Financial Highlights - LCI Industries achieved a record annual revenue of $2.8 billion in 2020[7] - Non-RV revenues accounted for over 50% of total net revenue in FY 2020, marking a milestone in diversification[7] - The company returned $70.4 million to shareholders through dividends[7] RV OEM Segment - Q4 2020 RV OEM revenues increased by 29% year-over-year, while wholesale shipments rose by 38%[10] - Full year 2020 RV OEM revenues increased by 3% year-over-year, with wholesale shipments up by 9%[10] - Content per towable RV was $3,390, a 1% increase year-over-year, while content per motorhome was $2,479, an 8% increase year-over-year[10] Expanding Markets - Adjacent OEM sales increased by 20% year-over-year in Q4 2020[12] - Aftermarket segment sales increased by 129% year-over-year in Q4 2020[12] - International markets sales increased by 60% year-over-year in Q4 2020[12] Liquidity and Cash Flow - The company's cash and cash equivalents stood at $51.8 million as of December 31, 2020[23]

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2020 increased 41% year-over-year to $828 million, driven by strong RV OEM and aftermarket retail demand, along with incremental revenues from recent acquisitions [33][34] - GAAP net income for Q3 2020 was $68.3 million, or $2.70 per diluted share, compared to $35.8 million, or $1.42 per share in Q3 2019, primarily due to strong growth in net sales [40] - Adjusted EBITDA increased almost 76% to $119.4 million for Q3 2020, driven by heightened retail RV OEM and aftermarket demand [39] Business Line Data and Key Metrics Changes - RV OEM sales increased 32% year-over-year to $451 million for Q3 2020, with organic growth of 40% when normalizing for the termination of the relationship with Furrion [34][36] - Aftermarket segment sales grew 149% year-over-year to $186 million, primarily due to the acquisition of the CURT group [14][37] - Content per towable RV unit increased 5% to $3,428, while content per motorized unit increased 3% to $2,399, excluding the impact of Furrion [35] Market Data and Key Metrics Changes - Sales in adjacent markets increased 11% to $181 million, driven by strong growth in the marine business [20][36] - International sales rose 69% year-over-year to $59 million, with significant growth in European markets [22][37] - The RV industry is projected to see wholesale demand of 508,000 to 520,000 units in 2021, indicating a record year for the RV industry [8] Company Strategy and Development Direction - The company is focused on a diversification strategy, with adjacent aftermarket and international markets making up approximately 50% of trailing 12 months sales [12] - The integration of CURT is progressing smoothly, with strong leadership contributing to exceeding pre-COVID forecasts [17] - The company aims to capitalize on the increased demand for outdoor recreation and the long-term prospects of the RV lifestyle [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strong demand for RVs, despite supply chain and labor challenges [55] - The company anticipates that the shift towards entry-level products will negatively impact content per unit growth by approximately three percentage points [60][100] - Management believes that the aftermarket segment will continue to drive margins higher due to the upcoming replacement cycles for RVs [62] Other Important Information - The company is targeting capital expenditures between $50 million to $60 million for the full year 2020, with expectations for increased CapEx in 2021 [44][80] - The company maintains a strong balance sheet with an outstanding net debt position of $568 million and compliance with debt covenants [45][42] - The liquidity position has been enhanced by strategic cost management actions taken to mitigate the impact of COVID-19 [43] Q&A Session Summary Question: Can you talk about October sales trends? - Management indicated that October sales are expected to grow by 25% year-over-year, with most acquired sales being in the aftermarket [51][52] Question: What are your thoughts on RV retail demand forecasts? - Management feels confident about the wholesale demand forecast of 508,000 units, but supply chain and labor issues remain a concern [55] Question: How do you see the sustainability of market share gains? - Management believes that the company is well-prepared to capture market share as competitors struggle with production capacity [76] Question: What is the outlook for inventory levels at RV dealers? - Management noted that inventory levels are low, and it may take time to restock, depending on retail demand [68][70] Question: How is the supply chain situation evolving? - Management stated that the supply chain is incrementally improving, with efforts to ramp up capacity among suppliers [73] Question: What are the key projects for capital expenditures? - Management mentioned that they are pulling forward some projects to increase capacity and redundancy in production [80]

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201%20%E2%80%93%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for LCI Industries for the three and nine months ended September 30, 2020, compared to the same periods in 2019, including statements of income, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with accompanying notes [Condensed Consolidated Statements of Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Net sales for Q3 2020 increased by **41.2%** YoY to **$827.7 million**, driving net income up by **90.8%** to **$68.3 million**, while for the nine months ended September 30, 2020, net sales grew **11.4%** to **$2.01 billion**, and net income decreased slightly by **6.8%** to **$109.7 million** compared to the prior year period Condensed Consolidated Statements of Income (Unaudited) | (In thousands, except per share amounts) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | **$827,729** | **$586,221** | **$2,013,164** | **$1,807,461** | | Gross profit | $221,439 | $135,473 | $508,786 | $416,720 | | Operating profit | $94,433 | $49,153 | $159,481 | $162,565 | | **Net income** | **$68,347** | **$35,809** | **$109,747** | **$117,702** | | Diluted EPS | $2.70 | $1.42 | $4.35 | $4.70 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Total comprehensive income for Q3 2020 was **$71.7 million**, a significant increase from **$36.6 million** in Q3 2019, while for the nine-month period, total comprehensive income was **$117.6 million** in 2020, compared to **$113.8 million** in 2019, influenced by foreign currency adjustments and actuarial gains Condensed Consolidated Statements of Comprehensive Income (Unaudited) | (In thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net income | $68,347 | $35,809 | $109,747 | $117,702 | | **Total comprehensive income** | **$71,746** | **$36,609** | **$117,586** | **$113,791** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of September 30, 2020, total assets were **$2.11 billion**, an increase from **$1.86 billion** at year-end 2019, driven by increases in accounts receivable, goodwill, and other intangible assets, primarily from acquisitions, while total liabilities rose to **$1.24 billion** from **$1.06 billion**, and stockholders' equity increased to **$875.6 million** Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | **$795,672** | **$670,791** | | **Total assets** | **$2,110,683** | **$1,862,595** | | **Total current liabilities** | **$400,523** | **$271,258** | | **Total liabilities** | **$1,235,121** | **$1,061,923** | | **Total stockholders' equity** | **$875,562** | **$800,672** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the nine months ended September 30, 2020, net cash from operating activities was **$212.5 million**, a slight increase from **$209.5 million** in the prior year period, while cash used in investing activities increased to **$119.6 million**, primarily due to acquisitions, and cash used in financing activities decreased to **$59.2 million** Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash flows provided by operating activities** | **$212,487** | **$209,542** | | Net cash flows used in investing activities | ($119,600) | ($101,326) | | Net cash flows used in financing activities | ($59,206) | ($94,825) | | **Net increase in cash, cash equivalents, and restricted cash** | **$32,828** | **$12,549** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes provide detailed information on accounting policies, the impact of COVID-19, acquisitions, segment performance, and other financial items, including the acquisition of Polyplastic for **$95.8 million** and measurement period adjustments for the CURT acquisition, as well as the termination of its distribution agreement with Furrion, resulting in a **$49.0 million** receivable, and strong growth in the Aftermarket segment largely due to acquisitions - The company supplies engineered components for RVs and adjacent industries like buses, trailers, and boats, operating over **90 facilities** in North America and Europe[23](index=23&type=chunk) - In January 2020, the company acquired Polyplastic Group B.V. for **$95.8 million**, plus potential contingent consideration, with this acquisition included in the OEM Segment[36](index=36&type=chunk) - The company terminated its distribution agreement with Furrion Limited effective December 31, 2019, and as of September 30, 2020, has a receivable of **$49.0 million** from Furrion for inventory purchases, with repayment terms under negotiation due to COVID-19 impacts[66](index=66&type=chunk) Segment Net Sales (Nine Months Ended Sep 30) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **OEM Segment** | **$1,542,223** | **$1,596,698** | | **Aftermarket Segment** | **$470,941** | **$210,763** | | **Total net sales** | **$2,013,164** | **$1,807,461** | Segment Operating Profit (Nine Months Ended Sep 30) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **OEM Segment** | **$110,485** | **$131,434** | | **Aftermarket Segment** | **$48,996** | **$31,131** | | **Total operating profit** | **$159,481** | **$162,565** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=ITEM%202%20%E2%80%93%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the significant factors affecting financial results, including the strong rebound in demand post-COVID-19 shutdowns, which drove record sales in Q3 2020, substantial growth in the Aftermarket segment boosted by the CURT acquisition, the impact of the Furrion agreement termination on comparability, and maintained strong liquidity with revolving credit facility repayments as operations and cash flow improved significantly in the latter half of the period [Impact of COVID-19](index=25&type=section&id=Impact%20of%20COVID-19) The COVID-19 pandemic led to temporary production suspensions in late Q1 and early Q2 2020, prompting cost-saving measures including salary reductions and delayed capital expenditures, but operations fully resumed by late Q2, and a sharp rebound in retail demand for RVs and boats led to record monthly sales from June through September, with the company continuing to prioritize employee health and safety and manage supply chain risks - The company temporarily suspended production at select facilities starting March 25, 2020, but all facilities were fully operational by the end of the second quarter[92](index=92&type=chunk)[94](index=94&type=chunk) - A strong rebound in retail demand in the RV and marine markets led to record net sales for the company in June, July, August, and September 2020[98](index=98&type=chunk)[100](index=100&type=chunk) - In response to the pandemic, the company implemented cost-saving measures such as temporary layoffs, executive salary reductions, and deferral of non-essential capital expenditures[95](index=95&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated net sales in Q3 2020 rose **41%** YoY to **$827.7 million**, driven by a strong recovery in RV and marine markets and **$98.6 million** in sales from acquisitions, with the OEM segment sales growing **26%** to **$642.1 million**, while the Aftermarket segment sales surged **149%** to **$185.7 million**, largely due to the CURT acquisition, and operating profit margin improved to **11.4%** in Q3 2020 from **8.4%** in Q3 2019, benefiting from higher sales volume and leverage of fixed costs - Consolidated net sales in Q3 2020 were **$827.7 million**, a **41%** increase from Q3 2019, primarily driven by a recovery in retail demand and sales from acquired businesses of **$98.6 million**[118](index=118&type=chunk) Q3 2020 Segment Net Sales vs. Q3 2019 | (In thousands) | Q3 2020 | Q3 2019 | Change | | :--- | :--- | :--- | :--- | | **OEM Segment** | **$642,054** | **$511,550** | **26%** | | **Aftermarket Segment** | **$185,675** | **$74,671** | **149%** | - The average product content per travel trailer and fifth-wheel RV for the twelve months ended September 30, 2020, increased by **5%** to **$3,428**[121](index=121&type=chunk) - The Aftermarket segment's Q3 2020 sales increase was primarily due to acquisitions contributing approximately **$78.0 million**[131](index=131&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) For the first nine months of 2020, the company generated **$212.5 million** in cash from operations, with capital expenditures of **$28.7 million** and **$94.9 million** used for acquisitions, and initially drew on its revolving credit facility for liquidity during the pandemic but made net repayments of approximately **$162 million** from May through September as cash flow improved, believing its liquidity is adequate for the next twelve months Cash Flow Summary (Nine Months Ended Sep 30) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $212,487 | $209,542 | | Net cash flows used in investing activities | ($119,600) | ($101,326) | | Net cash flows used in financing activities | ($59,206) | ($94,825) | - Capital expenditures for the first nine months of 2020 were **$28.7 million**, down from **$47.8 million** in the same period of 2019, as the company delayed non-essential spending[141](index=141&type=chunk)[144](index=144&type=chunk) - The company made net repayments on its revolving credit facility of approximately **$162 million** from May through September 30, 2020, as operating cash flow improved[103](index=103&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=ITEM%203%20%E2%80%93%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are related to interest rate changes on its variable-rate debt and price fluctuations of raw materials, particularly steel and aluminum, with management stating that a hypothetical **0.25%** increase in interest rates would not materially affect results, though there is no assurance that raw material cost increases can continue to be passed on - The company is exposed to market risk from changes in short-term interest rates on variable-rate debt, but a hypothetical **0.25%** increase in the indexed rate would not have a material effect[159](index=159&type=chunk) - The company is exposed to price volatility in raw materials, specifically steel and aluminum, and has used derivative instruments to manage this risk[160](index=160&type=chunk) [Controls and Procedures](index=38&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's disclosure controls and procedures were concluded to be effective as of September 30, 2020, with no material changes in internal control over financial reporting during the quarter, and the company is continuing its multi-year implementation of a new ERP system - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[165](index=165&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[165](index=165&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=ITEM%201%20%E2%80%93%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings and claims in the normal course of business, with management believing that the final outcome of these matters will not have a material adverse effect on the company's financial position or results of operations - Management believes that after final disposition, any monetary liability from legal proceedings would not be material to the Company's financial position or results of operations[168](index=168&type=chunk) [Risk Factors](index=39&type=section&id=ITEM%201A%20%E2%80%93%20RISK%20FACTORS) This section updates the company's risk factors, highlighting the material and adverse effects of the COVID-19 pandemic, with key risks cited including disruptions to employee productivity, facility closures, supply chain interruptions, reduced customer demand, increased costs, and potential breaches of debt covenants - The report adds a significant risk factor related to the COVID-19 pandemic, stating it has materially and adversely affected, and could continue to affect, the business[170](index=170&type=chunk) - Specific pandemic-related risks include disruptions to operations and supply chains, reduced demand, increased costs, financial market volatility, and potential breaches of debt covenants[171](index=171&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=ITEM%202%20%E2%80%93%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no stock repurchase activity during the nine months ended September 30, 2020, and as of that date, **$121.3 million** remained available under the current share repurchase authorization - There was no activity under the company's stock repurchase program during the nine months ended September 30, 2020[182](index=182&type=chunk) - At September 30, 2020, **$121.3 million** remained in the current share repurchase authorization[182](index=182&type=chunk) [Exhibits](index=41&type=section&id=ITEM%206%20%E2%80%93%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, which include corporate governance documents, an amendment to a note purchase agreement, CEO and CFO certifications (Sections 302 and 906), and financial data formatted in Inline XBRL - The report includes required exhibits such as CEO and CFO certifications under Rules 13a-14(a) and Section 1350, and financial statements formatted in Inline XBRL[185](index=185&type=chunk)[186](index=186&type=chunk) Signatures [Signatures](index=42&type=section&id=SIGNATURES) The Form 10-Q report was officially signed on behalf of LCI Industries by Brian M Hall, the Chief Financial Officer, on November 2, 2020 - The report was signed by Brian M Hall, Chief Financial Officer, on November 2, 2020[188](index=188&type=chunk)

LCI Industries (NYSE:LCII) Q2 2020 Earnings Conference Call August 4, 2020 8:00 AM ET Company Participants Victoria Sivrais - Investor Relations Jason Lippert - President and Chief Executive Officer Brian Hall - Executive Vice President and Chief Financial Officer Conference Call Participants Craig Kennison - Baird Brian Biros - Thompson Research Group Scott Stember - C.L. King & Associates Fred Wightman - Wolfe Research Mark Jordan - Jefferies Shawn Collins - Citigroup Brandon Rolle - Northcoast Research ...

[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) The company's Q2 and H1 2020 financial performance was significantly impacted by COVID-19, resulting in substantial declines in net sales and income, while acquisitions increased assets and operating cash flow decreased Condensed Consolidated Statements of Income (Unaudited) | (In thousands, except per share amounts) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $525,765 | $629,068 | $1,185,435 | $1,221,240 | | **Operating profit** | $20,782 | $65,657 | $65,048 | $113,412 | | **Net income** | $13,186 | $47,527 | $41,400 | $81,893 | | **Diluted EPS** | $0.52 | $1.89 | $1.64 | $3.28 | Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $697,291 | $670,791 | | **Total assets** | $2,018,274 | $1,862,595 | | **Total current liabilities** | $309,871 | $271,258 | | **Total liabilities** | $1,201,644 | $1,061,923 | | **Total stockholders' equity** | $816,630 | $800,672 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Net cash flows provided by operating activities** | $102,101 | $180,115 | | **Net cash flows used in investing activities** | ($105,166) | ($44,065) | | **Net cash flows provided by (used in) financing activities** | $32,093 | ($88,500) | | **Net increase in cash and cash equivalents** | $26,913 | $45,732 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail significant impacts of COVID-19, recent acquisitions, and accounting policy changes, including debt structure amendments and a notable shift in segment sales mix - In January 2020, the Company acquired Polyplastic Group B.V. for a purchase price of **$95.8 million**, net of cash acquired, plus potential contingent consideration, adding **$57.7 million** in goodwill[38](index=38&type=chunk) - Measurement period adjustments for the December 2019 CURT acquisition resulted in a **$14.5 million** decrease in the fair value of net assets acquired and a corresponding increase in goodwill to **$116.4 million**[41](index=41&type=chunk) - Goodwill increased from **$351.1 million** at year-end 2019 to **$418.8 million** at June 30, 2020, primarily due to the Polyplastic acquisition and measurement period adjustments for CURT[45](index=45&type=chunk) - Following the termination of the Furrion supply agreement, the company holds a **$52.0 million** receivable from Furrion, with **$34.7 million** reclassified as long-term and discounted due to renegotiated payment terms impacted by COVID-19[72](index=72&type=chunk)[114](index=114&type=chunk) Segment Net Sales Contribution (Six Months Ended June 30) | Segment | 2020 % of Total Sales | 2019 % of Total Sales | | :--- | :--- | :--- | | OEM Segment | 76% | 89% | | Aftermarket Segment | 24% | 11% | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=ITEM%202%20%E2%80%93%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A details the significant operational and financial impacts of COVID-19, including temporary shutdowns and a June rebound, alongside the Furrion agreement termination, Q2 sales declines, margin compression, and liquidity management [Impact of COVID-19](index=29&type=section&id=IMPACT%20OF%20COVID-19) COVID-19 led to temporary production suspensions and cost-saving measures, followed by a sharp rebound in demand and operations by Q2 end, with the company drawing on credit for liquidity - The company temporarily suspended production at select manufacturing facilities across North America and Europe starting March 25, 2020, due to government mandates and customer closures[100](index=100&type=chunk)[102](index=102&type=chunk) - Cost-saving measures included temporary executive salary reductions, furloughs, delayed capital expenses, and postponing merit increases[103](index=103&type=chunk) - Operations resumed for most facilities on May 4, 2020, with a sharp rebound in retail demand for RV and marine markets leading to a record sales month in June[104](index=104&type=chunk)[108](index=108&type=chunk) - To improve financial flexibility, the company drew on its revolving credit facility in March and April 2020, but made net repayments of approximately **$62 million** in Q2 as operating cash flow improved[111](index=111&type=chunk) [Results of Operations](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) Q2 2020 consolidated net sales and income declined significantly, primarily due to a substantial drop in OEM segment sales, while the Aftermarket segment grew due to acquisitions, impacting overall operating margins and the effective tax rate Q2 2020 Consolidated Highlights vs. Q2 2019 | Metric | Q2 2020 | Q2 2019 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $525.8M | $629.1M | -16% | | Operating Profit | $20.8M | $65.7M | -68% | | Operating Margin | 4.0% | 10.4% | -6.4 p.p. | | Net Income | $13.2M | $47.5M | -72% | Q2 2020 Segment Performance vs. Q2 2019 | Segment | Net Sales | % Change | Operating Profit | % Change | Operating Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | **OEM** | $367.8M | -34% | $1.8M | -96% | 0.5% | | **Aftermarket** | $158.0M | +109% | $19.0M | +46% | 12.0% | - The increase in Aftermarket segment sales was primarily due to acquisitions contributing approximately **$78.3 million** in sales for the quarter[140](index=140&type=chunk) - The effective tax rate for the first six months of 2020 was **26.3%**, up from **24.7%** in 2019, mainly due to reduced excess tax benefits from equity awards and an increase in non-deductible expenses[146](index=146&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) For H1 2020, net cash from operations decreased, while investing activities increased due to acquisitions, and financing activities provided cash through net borrowings, with the company confident in its liquidity for the next twelve months Cash Flow Summary (Six Months Ended June 30) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $102,101 | $180,115 | | Net cash flows used in investing activities | ($105,166) | ($44,065) | | Net cash flows provided by (used in) financing activities | $32,093 | ($88,500) | - Cash used in investing activities included **$94.7 million** for business acquisitions and **$14.5 million** for capital expenditures in the first six months of 2020[151](index=151&type=chunk) - Financing activities included **$79.2 million** in net borrowings under the revolving credit facility and **$32.7 million** in dividend payments during the first half of 2020[155](index=155&type=chunk) - The company has a contingent consideration liability of **$5.8 million** at June 30, 2020, related to past acquisitions[157](index=157&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=ITEM%203%20%E2%80%93%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risk from variable interest rates and volatile raw material prices, historically offsetting cost increases through price adjustments, though future assurance is not guaranteed - The company is exposed to market risk from variable interest rates on its debt and price fluctuations of raw materials like steel and aluminum[172](index=172&type=chunk)[173](index=173&type=chunk) - The company has historically passed on a majority of raw material cost increases to customers through price adjustments, but cannot guarantee this will continue in the future[174](index=174&type=chunk) [Controls and Procedures](index=45&type=section&id=ITEM%204%20%E2%80%93%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of June 30, 2020, with no material changes to internal controls, while continuing a multi-year ERP system implementation - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[178](index=178&type=chunk) - No material changes were made to the internal control over financial reporting during the second quarter of 2020[178](index=178&type=chunk) - The company is continuing the implementation of a new ERP system, which is now live at 35 locations[179](index=179&type=chunk) [PART II – OTHER INFORMATION](index=46&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=ITEM%201%20%E2%80%93%20LEGAL%20PROCEEDINGS) The company is subject to various legal proceedings, which management believes will not materially impact its financial position or results of operations - Management states that any monetary liability from ongoing legal proceedings, after final disposition and anticipated insurance recoveries, is not expected to be material to the company's financial position[181](index=181&type=chunk) [Risk Factors](index=46&type=section&id=ITEM%201A%20%E2%80%93%20RISK%20FACTORS) A new risk factor details the material and adverse effects of the COVID-19 pandemic, including operational disruptions, financial market volatility, and potential debt covenant breaches, with the ultimate impact remaining highly uncertain - A new risk factor has been added to address the material and adverse effects of the COVID-19 pandemic on the business, financial condition, and results of operations[183](index=183&type=chunk) - Specific risks cited include disruptions to operations, supply chain, and customer demand; increased costs; financial market volatility; and potential breaches of debt covenants[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk) - The ultimate impact of the pandemic is described as highly uncertain and unpredictable, depending on its duration, spread, and the governmental response[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=ITEM%202%20%E2%80%93%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no stock repurchase activity during the first six months of 2020, with **$121.3 million** remaining under its share repurchase authorization - There was no stock repurchase activity during the six months ended June 30, 2020[195](index=195&type=chunk) - The company has **$121.3 million** remaining in its share repurchase authorization as of June 30, 2020[195](index=195&type=chunk) [Exhibits](index=48&type=section&id=ITEM%206%20%E2%80%93%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial data in Inline XBRL format - The report includes required CEO and CFO certifications under Rules 13a-14(a) and 13a-14(b) (Sections 302 and 906)[199](index=199&type=chunk)

LCI INDUSTRIES 1 LCI Industries Second Quarter 2020 Earnings Conference Call August 4, 2020 (LCG LCI INDUSTRIES Forward-Looking Statements and Non-GAAP Financial Measures 2 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 ...