LCI Industries(LCII) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights 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][5] - 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][5] - 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] - An effective tariff mitigation strategy, including supply chain diversification and other sourcing strategies, helped minimize price impacts to customers and support profitability[1][5] Consolidated Financial Performance 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) 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 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] Cash Flow Statement 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] Segment Performance 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 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] - 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] Aftermarket Segment 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] - 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] Outlook & Other Information 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 - 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] - July 2025 consolidated net sales were approximately $327 million, representing a 5% increase from July 2024[9] 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 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 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 |