lcii-20230630

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: June 30, 2023


☐			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		13-3250533
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

3501 County Road 6 East		46514
Elkhart,	Indiana	(Zip Code)
(Address of principal executive offices)

(574) 535-1125

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report) N/A

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	LCII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (July 31, 2023) was 25,324,433 shares of common stock.

LCI INDUSTRIES

TABLE OF CONTENTS


		Page
PART I –	FINANCIAL INFORMATION

	ITEM 1 – FINANCIAL STATEMENTS

	CONDENSED CONSOLIDATED STATEMENTS OF INCOME	4

	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONDENSED CONSOLIDATED BALANCE SHEETS	6

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	7

	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	8

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	10

	ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22

	ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32

	ITEM 4 – CONTROLS AND PROCEDURES	32

PART II –	OTHER INFORMATION

	ITEM 1 – LEGAL PROCEEDINGS	33

	ITEM 1A – RISK FACTORS	33

	ITEM 5 – OTHER INFORMATION	33

	ITEM 6 – EXHIBITS	33

SIGNATURES		34

EXHIBIT 31.1 - SECTION 302 CEO CERTIFICATION

EXHIBIT 31.2 - SECTION 302 CFO CERTIFICATION

EXHIBIT 32.1 - SECTION 906 CEO CERTIFICATION

EXHIBIT 32.2 - SECTION 906 CFO CERTIFICATION

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
(In thousands, except per share amounts)

Net sales	$	1,014,639	$	1,536,150	$	1,987,949	$	3,180,718
Cost of sales	796,519		1,127,065		1,583,758		2,307,390
Gross profit	218,120		409,085		404,191		873,328
Selling, general and administrative expenses	162,946		190,296		328,974		384,838
Operating profit	55,174		218,789		75,217		488,490
Interest expense, net	10,249		6,191		20,643		12,443
Income before income taxes	44,925		212,598		54,574		476,047
Provision for income taxes	11,499		58,068		13,889		125,336
Net income	$	33,426	$	154,530	$	40,685	$	350,711

Net income per common share:
Basic	$	1.32	$	6.07	$	1.61	$	13.82
Diluted	$	1.31	$	6.06	$	1.60	$	13.76

Weighted average common shares outstanding:
Basic	25,329		25,438		25,273		25,377
Diluted	25,437		25,518		25,359		25,483

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
(In thousands)

Net income	$	33,426	$	154,530	$	40,685	$	350,711
Other comprehensive income (loss):
Net foreign currency translation adjustment	763		(13,688)		2,763		(16,570)
Actuarial gain on pension plans	100		13,985		100		13,985

Total comprehensive income	$	34,289	$	154,827	$	43,548	$	348,126

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30,		December 31,
	2023			2022
(In thousands, except per share amount)

ASSETS
Current assets
Cash and cash equivalents	$	22,094		$	47,499

Accounts receivable, net of allowances of $7,790 and $5,904 at June 30, 2023 and December 31, 2022, respectively	299,469			214,262
Inventories, net	830,020			1,029,705

Prepaid expenses and other current assets	83,662			99,310
Total current assets	1,235,245			1,390,776
Fixed assets, net	478,885			482,185
Goodwill	584,312			567,063
Other intangible assets, net	477,307			503,320
Operating lease right-of-use assets	241,146			247,007

Other long-term assets	59,502			56,561
Total assets	$	3,076,397		$	3,246,912

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term indebtedness	$	27,712		$	23,086
Accounts payable, trade	182,637			143,529

Current portion of operating lease obligations	35,004			35,447
Accrued expenses and other current liabilities	196,099			219,238
Total current liabilities	441,452			421,300
Long-term indebtedness	915,756			1,095,888
Operating lease obligations	217,979			222,478
Deferred taxes	26,900			30,580
Other long-term liabilities	103,413			95,658
Total liabilities	1,705,500			1,865,904
Stockholders' equity
Common stock, par value $.01 per share	286			285
Paid-in capital	235,507			234,956
Retained earnings	1,207,753			1,221,279
Accumulated other comprehensive income	9,567			6,704
Stockholders' equity before treasury stock	1,453,113			1,463,224
Treasury stock, at cost	(82,216)			(82,216)
Total stockholders' equity	1,370,897			1,381,008
Total liabilities and stockholders' equity	$	3,076,397		$	3,246,912

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(In thousands)	2023		2022

Cash flows from operating activities:
Net income	$	40,685	$	350,711
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	65,549		63,719
Stock-based compensation expense	9,080		13,701
Deferred taxes	—		(2,401)
Other non-cash items	2,192		2,025
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(80,952)		(95,479)
Inventories, net	209,346		(51,811)
Prepaid expenses and other assets	11,607		25,746
Accounts payable, trade	37,949		5,312
Accrued expenses and other liabilities	(21,891)		36,448
Net cash flows provided by operating activities	273,565		347,971
Cash flows from investing activities:
Capital expenditures	(34,082)		(70,837)
Acquisitions of businesses	(25,851)		(51,789)


Other investing activities	4,344		2,204
Net cash flows used in investing activities	(55,589)		(120,422)
Cash flows from financing activities:
Vesting of stock-based awards, net of shares tendered for payment of taxes	(9,585)		(10,773)
Proceeds from revolving credit facility	234,200		729,400
Repayments under revolving credit facility	(402,726)		(836,500)
Repayments under shelf loan, term loan, and other borrowings	(10,703)		(60,902)




Payment of dividends	(53,154)		(49,572)
Payment of contingent consideration and holdbacks related to acquisitions	(517)		(6,039)
Other financing activities	(834)		(4)
Net cash flows used in financing activities	(243,319)		(234,390)
Effect of exchange rate changes on cash and cash equivalents	(62)		(1,067)
Net decrease in cash and cash equivalents	(25,405)		(7,908)
Cash and cash equivalents at beginning of period	47,499		62,896
Cash and cash equivalents cash at end of period	$	22,094	$	54,988
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	20,804	$	10,558
Cash paid during the period for income taxes, net of refunds	$	5,724	$	110,871
Purchase of property and equipment in accrued expenses	$	1,704	$	3,157

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


(In thousands, except shares and per share amounts)	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
Balance - December 31, 2021	$	284	$	220,459	$	930,795	$	(501)	$	(58,162)	$	1,092,875
Net income	—		—		196,181		—		—		196,181
Issuance of 138,208 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	1		(10,570)		—		—		—		(10,569)
Stock-based compensation expense	—		6,517		—		—		—		6,517
Other comprehensive loss	—		—		—		(2,882)		—		(2,882)
Cash dividends ($0.90 per share)	—		—		(22,870)		—		—		(22,870)
Dividend equivalents on stock-based awards	—		392		(392)		—		—		—
Balance - March 31, 2022	$	285	$	216,798	$	1,103,714	$	(3,383)	$	(58,162)	$	1,259,252
Net income	—		—		154,530		—		—		154,530
Issuance of 18,245 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	—		(204)		—		—		—		(204)
Stock-based compensation expense	—		7,184		—		—		—		7,184


Other comprehensive income	—		—		—		297		—		297
Cash dividends ($1.05 per share)	—		—		(26,702)		—		—		(26,702)
Dividend equivalents on stock-based awards	—		453		(453)		—		—		—
Balance - June 30, 2022	$	285	$	224,231	$	1,231,089	$	(3,086)	$	(58,162)	$	1,394,357

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


(In thousands, except shares and per share amounts)	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
Balance - December 31, 2022	$	285	$	234,956	$	1,221,279	$	6,704	$	(82,216)	$	1,381,008
Net income	—		—		7,259		—		—		7,259
Issuance of 119,091 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	1		(8,889)		—		—		—		(8,888)
Stock-based compensation expense	—		4,695		—		—		—		4,695
Other comprehensive income	—		—		—		2,000		—		2,000
Cash dividends ($1.05 per share)	—		—		(26,563)		—		—		(26,563)
Dividend equivalents on stock-based awards	—		532		(532)		—

SEC Form 10-Q filed by LCI Industries