LCI Industries · NYSE:LCII
LCI Industries — Investor Presentation (January 2017)
48 slides from LCI Industries's investor presentation, Jan 17, 2017
Slide 1: LCI Industries
Ig) | INDUSTRIE lippertcomponents.com
Slide 2: Passionate about winning
passionate about winning? team play with trust “5, 5 honesty « integrity » candor - caring about = people 3 xe) te) ” Lcl INOUSTRIES
Slide 3: Watch the video
Watch the video
Slide 4: Forward-looking statements
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 Comp
Slide 5: Management Team
\ } JASON LIPPERT, CEO 20+ years with LCI Industries Le! INDUSTRIES Management Team SCOTT MERENESS, PRESIDENT 20+ years with LCI Industries BRIAN HALL, CFO Average tenure of LCI’s members of senior managementis 14+ years with the company
Slide 6: Financial Performance
> Financial Performance Net Sales = OEMnet sales.” Aftermarket net sales” — EBITDA” EBITDA $1,800 ae $300 Net Sales and EBITDA (in mitiions) $1,600 iE $250 $1,400 $1,200 $200 $1,000 $150 $800 $681 sooo ¢ $573 iw 100 $400 $50 $200 $127 $0 - = + $0 2010 2011 2012 2013 2014 2015 LT 9/16 (1) Priorto. @2
Slide 7: Sales by Market
>» Sales by Market LIM in millions 2010 2011 2012 2013 2014 2015 9/16 OEM Towable $427 $503 $660 $725 $836 $932 $1,043 Year over year growth 18% 31% 10% 15% 11% 14% OEM Adjacent Industries 96 129 171 197 208 268 312 Year over year growth 34% 32% 15% 6% 29% 24% Aftermarket 31 30 35 39 64 103 127 Year
Slide 8: Non-OEM Towable RV Net Sales
> Non-OEM Towable RV Net Sales es $567 CAGR $500 ene $400 23% $300 $200 146 E : 19% $100 ee $0 2010 LIM 9/16 = OEM Adjacent industies = Aftermarket ™OEMRV Motorhome — m International Sales for the year ended December 31, 2010 compared to the last twelve months ended September 30, 2016. Both periods
Slide 9: Consolidated Sales Growth
>» Consolidated Sales Growth Sales for the twelve months ended December 31 for each year unless noted $1,615 f $1,515 & $1,415 E $1,315 2 $1,215 $1,115 4 81015 ee eeFeFee TO 2013 2014 2015 LIM 9/16 . 2). Sales for acqulstons represent the alg wee mont sales ate date of cquislon. Any postacquston cha
Slide 10: OEM and Aftermarket Industries
OEM and Aftermarket Industries Lcl INOUSTRIES
Slide 11: RVs - Industry Wholesale Shipments
>» RVs - Industry Wholesale Shipments (Compared to LCl’s Performance) ingustY Approximately 71% of LC's OEM Segment net sales are for Travel Trailer and 5" Wheel RVs jerecies (industry units in thousands, net sales in millions) 800 T =m Motorhomes i" 700 Other Towables ct t s1.200 Travel Trailers &
Slide 12: RV Wholesale Shipments
> RV Wholesale Shipments Thousands of Units Charts updated up through September 2016. Ss RV Shipments 23 RV Shipments vs Federal 4 a meal Interest Rate ce E \ =a 250 3 20 | | 200 wa 2 V 20 + &% 1 150 3% © ‘co eae a = a a e/a \ 5 & € 2 : 6 j ° va fe - - 2 ee ous g A es eas vas ae Hed m/. VZ-A\ Ao ae
Slide 13: Product categories
FURRION ELECTRONICS ‘SLIDE-OUT MECHANISMS = FURNITURE FURRION APPLIANCES SHOWERS ‘& SINKS AWNINGS “7 SUSPENSION ENHANCEMENTS
Slide 14: Manufacturing capabilities
Fabric and Electronics and Steel and Lamination Steel and Motion- Woodworking Plastic Forming Aluminum and Glass Aluminum Systems Fabrication Fabrication Welding
Slide 15: RV Market
>» RV Market (Boronia of LCl’s 8 / oy Of industry 2015 unit sales egmentnet sales) % e an of 2015 wholesale dollar sales, or $9.7 billion 59., Retail cost $4,000 to $100,000+ per unit. 8 Average about $30,000 _ Motorhomes | 3,, of industry 2015 unit sales (Approximately 7% of LCl’s OEM Segmentnet sa
Slide 16: Campers
(SE 59,, Tent Campers 6 0» _ Alm 27.5 million Camp Every Year 28.6 million m= \22% | 10% - @ Camp Every e =) RV Campers Other Year pclive, Campers SS 103nilion 438 milion # 46.6 million ’ > “yl | 8 30% 0 Camp Occasionally ‘ % 14.0 million = Cabin Campers = 8.4 million te) * Estimates based on 106 mi
Slide 17: Why We are Optimistic
Why We are Optimistic More economical family Positive demographics vacations * + Typical RV family vacation is 23 to 59 percentless expensive for a family of four The number of consumers, between the ages of 55and 70 is projectedto total 56 million by 2020 Generation X and Millennials are a source o
Slide 18: RV Industry Trends
RV Industry Trends Units Travel Trailer and 5 Wheel RVs, LCI’s primary RV market 317 p28 Wholesale Retail 559 ott 293 300 (Units in thousands} 277 278 268 2e7 272 251 250 me 239 228 223 225 213, 199 03) 200 | 185 186 175 164 150 138 125 100 0” 2008 2009 2010 2011 2012 2013 2014 2015 © YID9M5 YID9/16
Slide 19: Number of U.S. Households that Own an RV
> Number of U.S. Households that Own an RV (in Millions) 10 6 4 [J : 1980 1984 1988 1993 1997 2001 2005 2011 he Statistics provided by RV Consumer Demographic Profile — 2011 18
Slide 20: Demographics
>» Demographics (RV CONSUMER DEMOGRAPHIC PROFILE — 2011) 2005 2011 Number of U.S. households that own an RV 7.9 million 8.9 million Household ownership rates of RVs 8.0% 85% Average age of all RVs 12.7 years 14.2years Average time consumers have owned their 6.6 years 8.4 years current RV Age of typi
Slide 21: What's Next
+ International RV What’s Next... - Innovation/R&D + Aftermarket OEM Adjacent Markets + Acquisitions - Additional Addressable Market o Lcl INOUSTRIES
Slide 22: International RV Markets
| International RV Markets
Slide 23: Research and Development
Slide 24: Aftermarket Opportunity
Slide 25: Marine Bus Truck Fleet Cargo
Marine Bus Truck Fleet Cargo
Slide 26: New Products & Acquisitions
New Products & Acquisiti
Slide 27: Recent acquisitions
v EA Technologies Custom steeland aluminum parts and provider of electro- deposition ('e-coat’} and power coating services Signature Seating Manufacturer of furiiture solutions for fresh water boat manufacturers, primarily pontoon boats Flair Interiors Manufacturer of RV furiture and mattresses Atwo
Slide 28: Acquisition Discipline and History
o Lcl INOUSTRIES Acquisition Discipline and History Have made nearly 40 acquisitions over the past 16 years Weare experienced at successfully integrating acquisitions Acquisitions have come in the form of intellectual property, small start ups and larger businesses 6 out of last 11 acquisitions have
Slide 29: Expanding Our Growth Potential
>» Expanding Our Growth Potential” Doors, Windows, Mattresses, Furniture and Awnings Furrion?) Travel Trailer Leveling VV Content Electronics Chassis and Axles Axles Aftermarket Adjacent $690 Doors, Windows, Mattresses and Furniture Marine Furniture se International fe) (1) Amounts {in milions) repr
Slide 30: Content Per New Towable RV
Content Per New Towable RV + Approximately 71% of OEM Segment net sales are for Travel Trailer and Fifth-Wheel OEMs + 100% market share in existing products would yield 4 yer’ an estimated $7,400 per Towable RV =) 49 $2,987 $9 95953025 + In 2016, Travel Trailer unit volume is up 14% yly due wore $2,
Slide 31: Content Per New Motorhome RV
Content Per New Motorhome RV + Approximately 7% of OEM Segment net sales are for Motorhome OEMs x + 100% market share in existing nee $1,957 products would yield an estimated on $1,810 $1,807 $6,000 per Motorhome RV noe xem on’ $208 Increase $330 Increase 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 32: Supplemental Schedules
Supplemental Schedules Lcl INOUSTRIES
Slide 33: Operating Results
Operating Results Three Months Ended September 30 FINANCIAL PERFORMANCE 6 ns, except EPS) 2016 2015 Change Net Sales $ 412.4 $ 345.3 19% Operating Profit $ 45.1 $ 27.2 66% % of Sales 10.9% 79% Net Income $ 29.8 $ 17.3 73% Diluted EPS S125 0 70 70%
Slide 34: Operating Results
Operating Results Nine Months Ended September 30 FINANCIAL PERFORMANCE 6 ns, except EPS) 2016 2015 Change Net Sales $ 1,276.0 $ 1,068.8 19% Operating Profit $ 160.3 $ 926 73% % of Sales 12.6% 87% Net Income $ 103.4 $ 58.2 78% Diluted EPS $ 415) $ 236 76%
Slide 35: Results By Segment
Results By Segment Three Months Ended September 30 FINANCIAL PERFORMANCE (Sin mi 2016 Net Sales: OEM Segment $ 375.9 $ 315.2 19% Aftermarket Segment 36.5 30.1 21% Operating Profit: OEM Segment 39.0 2255 74% Aftermarket Segment 6.1 47 30% Operating Profit as a Percentage of Net Sales: OEM Segment 10.
Slide 36: Results By Segment
Results By Segment Nine Months Ended September 30 FINANCIAL PERFORMANCE (Sin mi 2016 Net Sales: OEM Segment $1L,175:5. $99.19 19% Aftermarket Segment 100.5 He? 31% Operating Profit: OEM Segment 144.1 81.7 76% Aftermarket Segment 16.2 11.0 47% Operating Profit as a Percentage of Net Sales: OEM Segmen
Slide 37: Debt Position
> Debt Position a) (2) (3) (4) FINANCIAL PERFORMANCE Cash and Net Cash pee eee (Sin mitions) Investments (Debt) the Period 12/31/11 $ - Si $ a $ 50 12/31/12 - ton) On) 1 12/31/13 - 66 66 5 12/31/14 16 - (16) 107 12/31/15 0) 12 (38) 41 09/30/16 50 95 4514) 37 On December 20, 2012, the Company paid a
Slide 38: Cash Flow
> Cash Flow ($ in millions) FINANCIAL PERFORMANCE Acquisitions (24) () $ 296 Capital expenditures 192 Dividends 195 Stock repurchases 2 Total $ 685 (1} Includes 2016 YTD acquisitions totaling $49.4 million, which includes Atwood Seating and Chassis acquired in October 2016 <O7r
Slide 39: Cash Flow
> Cash Flow mmm Dividends Capital Expenditures: FINANCIAL PERFORMANCE SD se Acquisitions 5149 eau * Operating Cash Flow $140 e $180 $160 $120 $140 $100 wen $80 $100 $65 A 80 $60 + 565 Q $60 $40 10 $10] $22 + $40 $20 2 $45 sar $42 ue = * om Ea a 3 —— $0 2009 2010 2011 2012 2013 (1) 2014 2015 YTD 916
Slide 40: Balance Sheets
> Balance Sheets FINANCIAL PE AANCE (S$ in million 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 @Q32016 Total Assets Sa Sepa eas Total Debt = = = 16 50 50 Cash & Investments Zi 10 66 = 12 95 Stockholders’ Equity 277 28413) 3144) 395. 43915) 53116) Days Salesin A/R'” 17 days 14 days 16 days 15 days 1
Slide 41: Financial Strength
> Financial Strength FINANCIAL (12 months end 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 09/30/16 Return on Equity 11% 13% 16% 17% 18% 25% Return on Assets 9% 10% 12% 12% 12% 17% Return on Invested Capitalt 20% 22% 28% 26% 25% 38% Total Debt to Equity 0.00 0.00 0.00 0.04 0.11 0.09 Total Debt to EB
Slide 42: Reconciliation of Net Income to EBITDA
>» Reconciliation of Net Income to EBITDA FINANCIAL PERFORMANCE (S in millions) D 13 15 LIM 9/16 Net Income $ 301 $ 373 $ 501 $ 623 §$ 743 §$ 1195 Income Taxes 18.2 20.5 278 32.8 40.0 62.6 Interest Expense (0}e3) 0.3 0.4 0.4 Eo: 18 De presanonis: 205 27 2275 326 Ab AAT Amortization EBITDA 691, 838 1
Slide 43: Reconciliation of Segment Results to Consolidated
Reconciliation of Segment Results to Consolidated FINANCIAL PERFORMANCE (S in millions) 2011 2012 2013 2014 2015 LIM Segment Net Sales: OEM $ 6514 $ 8659 §$ a8 F $ 1,127.0 $ 1,300.1 $ 1,483.6 Aftermarket DoF 35.2 63.8 103.0 126.6 Segment Operating Profit: OEM ae Be (es $ Sey $ 102 $ 167.6 Aftermarke
Slide 44: Stock Price History
>» Stock Price History LCI Industries has 24.7 million shares outstanding and a market capitalization of approximately $2.7 billion as of December 31, 2016 $120 7— $100 +~ $60 +- $20 +~ $o + Dates noted above are as of + Stock prices above are not a sted for divider
Slide 45: Analyst Coverage
>» Analyst Coverage a” Citi Research > Gregory Badishkanian — (212) 816-2720 a CJS Securities > Dan Moore — (914) 287-7600 a” CL King & Associates > Scott Stember — (212) 364-1806 A Sidoti & Company ” Thompson Research Group > Kathryn Thompson — (615) 891-6206
Slide 46: Industry Statistics Summary: Towable RV
LCI Industries Industry Statistics Summary TOWABLE RECREATIONAL VEHICLES (RV) TOWABLES™ ]_ [ Wholesale Units [ Retail Units “77 Dealer Inventory Impact Month, YTD. TIM Wonth YTD TM Month YTD TIM Deo-14 22,700 28% 298,900 12% 298,900 10,187 28% 277,345 11% 277,345 12,513 21,555 21,555 Jan-15 23,800 1
Slide 47: Industry Statistics Summary: Motorized RV
LCI Industries Industry Statistics Summary MOTORIZED RECREATIONAL VEHICLES (RV) MOTORIZED © [ Wholesale Units ™ 1_f Retail Units ™ Dealer Inventory Impact Month YTD. Tr Month YTD. crm Month YTD, TT. Dec-14 2,900 0% 43,900 15% 43,900 1,840 29% 36,477 16% 36,477 1,060 7,423 7,423 Jan-15 3,700 12% 3,70
Slide 48: Market Shift
Market Shift Share of new light-vehicle buyers by age 50% Birth years 4O ee 1946- § 1964 20 1977- § 1994 ) 1965- 20 1976 10 li Before 1945 (6) - erm 2010 ‘11 ‘12 ‘13 ‘14 ‘15° *Through Nov. Source: J.D. Power THE WALL STREET JOURNAL.
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