lcii-20210331

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: March 31, 2021


☐			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 (April 30, 2021) was 25,254,445 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	9

	ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

	ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

	ITEM 4 – CONTROLS AND PROCEDURES	30

PART II –	OTHER INFORMATION

	ITEM 1 – LEGAL PROCEEDINGS	31

	ITEM 1A – RISK FACTORS	31

	ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

	ITEM 6 – EXHIBITS	32

SIGNATURES		33

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 March 31,
	2021		2020
(In thousands, except per share amounts)

Net sales	$	1,000,258	$	659,670
Cost of sales	758,481		501,065
Gross profit	241,777		158,605
Selling, general and administrative expenses	140,346		114,339
Operating profit	101,431		44,266
Interest expense, net	2,705		5,197
Income before income taxes	98,726		39,069
Provision for income taxes	24,606		10,855
Net income	$	74,120	$	28,214

Net income per common share:
Basic	$	2.94	$	1.13
Diluted	$	2.93	$	1.12

Weighted average common shares outstanding:
Basic	25,193		25,075
Diluted	25,325		25,143

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 March 31,
	2021		2020
(In thousands)

Net income	$	74,120	$	28,214
Other comprehensive income (loss):
Net foreign currency translation adjustment	(3,589)		(4,740)

Unrealized gain on fair value of derivative instruments	—		1,200
Total comprehensive income	$	70,531	$	24,674

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

LCI INDUSTRIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31,		December 31,
	2021			2020
(In thousands, except per share amount)

ASSETS
Current assets
Cash and cash equivalents	$	63,319		$	51,821

Accounts receivable, net of allowances of $6,478 and $5,642 at March 31, 2021 and December 31, 2020, respectively	405,395			268,625
Inventories, net	535,056			493,899

Prepaid expenses and other current assets	64,410			55,456
Total current assets	1,068,180			869,801
Fixed assets, net	392,713			387,218
Goodwill	454,382			454,728
Other intangible assets, net	407,599			420,885
Operating lease right-of-use assets	121,789			104,179

Other assets	55,810			61,220
Total assets	$	2,500,473		$	2,298,031

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term indebtedness	$	67,154		$	17,831
Accounts payable, trade	232,481			184,931

Current portion of operating lease obligations	24,794			25,432
Accrued expenses and other current liabilities	210,559			188,200
Total current liabilities	534,988			416,394
Long-term indebtedness	726,608			720,418
Operating lease obligations	101,677			82,707
Deferred taxes	55,563			53,833
Other long-term liabilities	122,050			116,353
Total liabilities	1,540,886			1,389,705
Stockholders’ equity
Common stock, par value $.01 per share	283			282
Paid-in capital	227,400			227,407
Retained earnings	786,566			731,710
Accumulated other comprehensive income	3,500			7,089
Stockholders’ equity before treasury stock	1,017,749			966,488
Treasury stock, at cost	(58,162)			(58,162)
Total stockholders’ equity	959,587			908,326
Total liabilities and stockholders’ equity	$	2,500,473		$	2,298,031

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

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2021		2020
(In thousands)
Cash flows from operating activities:
Net income	$	74,120	$	28,214
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	24,516		24,614
Stock-based compensation expense	7,436		3,295

Other non-cash items	1,318		(2,231)
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(139,245)		(74,776)
Inventories, net	(41,170)		40,883
Prepaid expenses and other assets	(3,328)		6,350
Accounts payable, trade	49,644		31,878
Accrued expenses and other liabilities	31,556		(13,468)
Net cash flows provided by operating activities	4,847		44,759
Cash flows from investing activities:
Capital expenditures	(20,957)		(7,955)
Acquisitions of businesses, net of cash acquired	(2,779)		(95,766)


Other investing activities	(605)		1,972
Net cash flows used in investing activities	(24,341)		(101,749)
Cash flows from financing activities:
Vesting of stock-based awards, net of shares tendered for payment of taxes	(7,767)		(4,517)
Proceeds from revolving credit facility	208,863		247,154
Repayments under revolving credit facility	(141,489)		(102,330)
Repayments under term loan and other borrowings	(3,889)		(3,750)

Payment of dividends	(18,939)		(16,321)
Payment of contingent consideration and holdbacks related to acquisitions	(2,792)		—
Other financing activities	—		(391)
Net cash flows provided by financing activities	33,987		119,845
Effect of exchange rate changes on cash and cash equivalents	(2,995)		(215)
Net increase in cash and cash equivalents	11,498		62,640
Cash and cash equivalents at beginning of period	51,821		35,359
Cash and cash equivalents cash at end of period	$	63,319	$	97,999

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	3,564	$	5,536
Cash received during the period for income taxes, net of payments	$	(86)	$	(73)
Purchase of property and equipment in accrued expenses	$	3,787	$	2,459

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, 2019	$	281	$	212,485	$	644,945	$	1,123	$	(58,162)	$	800,672
Net income	—		—		28,214		—		—		28,214
Issuance of 87,833 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	1		(4,518)		—		—		—		(4,517)
Stock-based compensation expense	—		3,295		—		—		—		3,295
Other comprehensive loss	—		—		—		(3,540)		—		(3,540)
Cash dividends ($0.65 per share)	—		—		(16,321)		—		—		(16,321)
Dividend equivalents on stock-based awards	—		297		(297)		—		—		—
Balance - March 31, 2020	282

SEC Form 10-Q filed by LCI Industries