LCI Industries(US:LCII)2024-05-08 15:53Financial 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]