LCI Industries(US:LCII)2021-11-02 15:11Financial Performance - Net sales for the three months ended September 30, 2021, were $1,165,309 thousand, a 40.6% increase from $827,729 thousand in the same period of 2020[9] - Gross profit for the nine months ended September 30, 2021, was $750,969 thousand, up 47.5% from $508,786 thousand in the prior year[9] - Operating profit for the three months ended September 30, 2021, was $89,024 thousand, a decrease of 5.0% compared to $94,433 thousand in the same period of 2020[9] - Net income for the nine months ended September 30, 2021, was $205,410 thousand, representing an 87.0% increase from $109,747 thousand in the same period of 2020[9] - Net income for the second quarter of 2021 was $63,401,000, compared to $74,120,000 in the first quarter of 2021[21] - Net income for Q3 2021 was $63.4 million, or $2.49 per diluted share, compared to $68.3 million, or $2.70 per diluted share, in Q3 2020[133] - The effective tax rate for the nine months ended September 30, 2021, was 24.9%, down from 26.2% in the same period of 2020[149] Assets and Liabilities - Total assets as of September 30, 2021, were $3,088,185 thousand, an increase from $2,298,031 thousand as of December 31, 2020[14] - Current liabilities rose to $684,131 as of September 30, 2021, compared to $416,394 at December 31, 2020, indicating a 64.2% increase[14] - Long-term indebtedness increased to $1.012 billion as of September 30, 2021, compared to $720.418 million at the end of 2020, primarily due to the issuance of convertible notes[65] - The Company’s accrued expenses and other current liabilities rose to $283.722 million as of September 30, 2021, compared to $188.200 million at the end of 2020[59] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of the period were $72,615 thousand, compared to $51,821 thousand at the beginning of the period[15] - The company reported a net cash flow provided by operating activities of $12,293 thousand for the nine months ended September 30, 2021, down from $212,487 thousand in the prior year[15] - Capital expenditures for the nine months ended September 30, 2021, were $73,872 thousand, significantly higher than $28,663 thousand in the same period of 2020[15] - Cash flows provided by operating activities decreased significantly to $12,293,000 from $212,487,000 year-over-year[16] - Cash flows used in investing activities totaled $216.9 million, primarily for business acquisitions of $154.5 million and capital expenditures of $73.9 million[159] Acquisitions - The company acquired certain business assets of Exertis for $39.7 million in October 2021, enhancing logistics and warehousing capabilities for Furrion's North American customer base[36] - In September 2021, the company completed the acquisition of Furrion for approximately $146.7 million, with $50.5 million paid in cash at closing and $31.3 million due on the first and second anniversaries[37] - The company acquired Schaudt for approximately $29.4 million in April 2021, with the results included in the OEM Segment[43] - The company acquired Ranch Hand for approximately $56.9 million in April 2021, with contingent consideration of up to $3.0 million, primarily impacting the Aftermarket Segment[46] - The Company acquired Veada Industries, Inc. for a purchase price of $69.0 million, with holdback payments of $12.2 million to be paid over the next two years[49] - The Company acquired Challenger Door, LLC for a purchase price of $35.0 million, including holdback payments of up to $4.5 million to be paid over the next two years[51] Stockholder Equity and Dividends - Total stockholders' equity as of September 30, 2021, was $1,031,140 thousand, up from $908,326 thousand as of December 31, 2020[14] - Cash dividends paid were $22,739,000 for the second quarter of 2021, with a dividend rate of $0.90 per share[21] - The Company declared total dividends of $2.55 per share for 2021, totaling $64.425 million, compared to $2.80 per share for 2020, totaling $70.401 million[93] Segment Performance - The OEM Segment accounted for 81% of consolidated net sales for the nine months ended September 30, 2021, compared to 77% for the same period in 2020[104] - The Aftermarket Segment accounted for 19% of consolidated net sales for the nine months ended September 30, 2021, down from 23% in the same period in 2020[106] - The OEM Segment net sales for the nine months ended September 30, 2021, were $2,627,185, up 70.5% from $1,542,223 in the same period of 2020[109] - Aftermarket Segment net sales increased by 34% to $632.1 million in the first nine months of 2021, compared to $470.9 million in the same period of 2020[147] Market Trends and Economic Conditions - Retail demand for travel trailer and fifth-wheel RVs increased by 15% in the first nine months of 2021 compared to the same period in 2020[124] - Industry-wide wholesale shipments of travel trailer and fifth-wheel RVs increased by 51% to 401,000 units in the first nine months of 2021 compared to the same period in 2020[124] - The company is strategically managing working capital and building inventory levels to address supply chain constraints and rising material costs[119] - The company continues to prioritize health and safety protocols for team members amid the ongoing COVID-19 pandemic[120] Financial Instruments and Debt - The Company issued $460.0 million in aggregate principal amount of 1.125 percent convertible senior notes due 2026, with net proceeds of approximately $448.0 million[75] - The initial conversion rate of the Convertible Notes is 6.0369 shares per $1,000 principal amount, equating to an initial conversion price of approximately $165.65 per share[76] - The fair value of the Convertible Notes was estimated at $478.4 million as of September 30, 2021, based on quoted prices in active markets[81] - The Company recorded a liability for contingent consideration based on the present value of expected future cash flows, using a market participant's weighted average cost of capital of 13.3 percent[88] Miscellaneous - The company operates over 100 manufacturing and distribution facilities across North America, Europe, and Asia[23] - The company anticipates that seasonal trends may differ in 2021 due to the impacts of the COVID-19 pandemic[24] - The company is not aware of any significant events that would materially impact the financial statements post-balance sheet date[25]