2024 Annual Report
2
2024 ANNUAL REPORT | LCI INDUSTRIES
4-5
TO OUR SHAREHOLDERS
6-7
FINANCIAL DATA
8-9
CORPORATE INFORMATION
1-78
2024 FORM 10-K
TABLE OF CONTENTS
3
2024 ANNUAL REPORT | LCI INDUSTRIES
The market never stands still, and 2024 brought
its share of surprises—but Lippert tackled
them with agility and efficiency, enabling
us to enter 2025 even stronger. Our RV and
marine businesses showed resilience, and
we continued to leverage our strengths in
building products, international markets, and
the aftermarket to sustain revenues near prior-
year levels despite a challenging environment,
while effectively expanding margins. Our
profitability improvement was bolstered by our
increased focus on operational efficiency, which
we believe has further positioned us to both
organically reach our $5 billion revenue target
in 2027 and reclaim double-digit margins.
RV shipments remained below historical levels
and consumers continued to favor smaller
single axle trailers due, in part, to temporary
macroeconomic conditions, including interest
rate sensitivity and affordability trends. Despite
this, Lippert increased market share and
organic content across our top five RV OEM
product categories — appliances, awnings,
chassis, furniture, and windows — through
our continued focus on innovation. From
next-generation suspension systems to top-
tier window innovations, we are redefining
what it means to be an industry leader.
Our CURT Touring Coil Suspension (TCS)
is rapidly securing OEM adoption with those
customers raving about its superior ride
quality; our Lippert Anti-Lock Brake System
(ABS) is helping to redefine safety standards
in towables; and our Furrion Chill Cube, one of
the quietest and most powerful air conditioners
in its class, is attracting strong interest from
OEMs and consumers.
We also expanded our RV content offerings with
premium 4K Windows and glass patio systems
that certain OEMs, including Brinkley RV, have
already integrated into high-end models.
Marine volumes remained subdued as dealers
worked through elevated inventory levels, and
we felt that on the production side. Dealers,
however, are increasingly optimistic that retail
sales will rebound in the second half of 2025 as
consumer confidence improves and inventory
normalizes. With inventory levels more balanced
and demand expected to rebound—historically a
swift recovery—we believe we are well-positioned
with the right products and a proven track record
to capitalize on the recovery when it occurs.
Beyond RV and Marine, innovations drove
meaningful growth across our diverse end
markets. In the automotive aftermarket, our
CURT brand, acquired in 2019, delivered 7%
organic growth during the year, highlighting
our ability to execute meaningful acquisitions
that ultimately contribute to long-term success.
Building products also fueled stability during
the year, supported by notable traction
in residential windows that contributed
$20 million in growth, as more residential
distributors and builders recognize the value
of our entry-level vinyl window products.
Our transportation and utility trailer business
also gained momentum, with industry leaders
like PJ Trailers and Big Tex adopting our ABS
and TCS systems. Additionally, we continue to
capture new opportunities in the on-highway and
off-highway transportation markets by providing
glass and window solutions for school buses,
transit, and off-road vehicles.
Jason D. Lippert
President and Chief Executive Officer
To Our Shareholders
CONSISTENT EXECUTION, OPERATIONAL DISCIPLINE, AND
DIVERSIFIED GROWTH DROVE STRONG CASH GENERATION
4
2024 ANNUAL REPORT | LCI INDUSTRIES
Collectively, these markets represent significant
addressable opportunities and we are
applying our proven OEM playbook to help
drive growth in these high-potential areas.
We have seen that our strength across adjacent
markets boosts margins and provides counter-
cyclical benefits that balance profitability across
economic cycles. This augments the decisive
actions we took in 2024 to improve our cost
structure and drive efficiency. We increased
our EBITDA margin by 250 basis points, as
we delivered $28 million in non-material cost
savings, with even more reductions planned for
2025. Factory consolidations, strategic sourcing
initiatives, and investments in automation have
also lowered fixed costs and strengthened our
ability to scale efficiently as demand rebounds.
At the same time, lower steel prices helped
gross margins, and we expect further pricing
levers to help us partially offset potential
tariff headwinds in 2025. We believe these
initiatives, combined with disciplined cost
control, should drive 25% incremental margin
on new revenue in 2025, accelerating our
path back to double-digit operating margin.
Our disciplined execution is not just
strengthening margin, it is also driving long-
term value creation for shareholders. Back in
November, we announced a 10% increase in our
quarterly dividend to $1.15 per share, reflecting
our confidence in Lippert’s financial strength
and our dedication to delivering shareholder
value. Our strong execution and operational
discipline produced $370 million in operating
cash flow for the full year, reduced net debt by
$89 million, and lowered our net debt to EBITDA
ratio to less than 2.0x, increasing our flexibility
to pursue strategic growth opportunities,
including M&A. We have successfully completed
70+ acquisitions over the past two decades,
each expanding our product portfolio.
Beyond financial performance, we are committed
to operating responsibly and sustainably to
benefit our shareholders, team members,
customers, and communities.
In 2024, we published our third year of Scope
1 and Scope 2 emissions data, expanded
resource and waste monitoring, and invested in
energy-efficient manufacturing. This focus on
transparency and sustainable growth earned
us a spot on Newsweek’s 2025 list of America’s
Most Responsible Companies. We also continued
to foster a purpose-driven culture that empowers
team members and supports communities, as
we surpassed our 100,000-hour volunteer goal
and contributed to numerous local causes.
Heading into 2025, we believe our resilient
business model and unwavering focus
on innovation put us in a great position
to capitalize on the opportunities ahead.
Historically, the RV industry rebounds quickly,
often doubling shipments within 3 to 5 years
following economic downturns. In the interim,
we are confident in our ability to gain market
share, return to 3-5% organic growth in
content per towable unit, organically reach
our $5 billion revenue target in 2027, and
deliver sustainable value for shareholders.
None of this progress would be possible without
our incredible team members, whose passion
and dedication power our success. As we
continue to push boundaries, we remain grateful
to our customers, partners, and shareholders
for their trust and support—and we look forward
to delivering even more in the years ahead.
JASON D. LIPPERT
President and Chief Executive Officer
5
2024 ANNUAL REPORT | LCI INDUSTRIES
Financial Data
TOTAL SALES
(in millions)
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2020
2021
2022
2023
2024
$ 3,785
$ 3,741
$ 2,796
$ 4,473
$ 5,207
NET INCOME PER COMMON SHARE
(diluted)
2020
2021
2022
2023
2024
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
$ 2.52
$ 5.60
$ 6.27
$ 11.32
$ 15.48
In thousands, except per share amounts
Year Ended December 31
2020
2021
2022
2023
2024
OPERATING DATA:
Net sales
$
2,796,166
$
4,472,697
$
5,207,143
$
3,784,808
$
3,741,208
Operating profit
$
222,934
$
398,410
$
553,028
$
123,428
$
218,237
Income before income taxes
$
209,481
$
382,044
$
525,455
$
83,004
$
189,338
Provision for income taxes
$
51,041
$
94,305
$
130,481
$
18,809
$
46,471
Net income
$
158,440
$
287,739
$
394,974
$
64,195
$
142,867
Net income per common share:
Basic
$
6.30
$
11.39
$
15.57
$
2.54
$
5.61
Diluted
$
6.27
$
11.32
$
15.48
$
2.52
$
5.60
Cash dividends per common share
$
2.80
$
3.45
$
4.05
$
4.20
$
4.30
FINANCIAL DATA:
Working capital
$
453,407
$
939,669
$
969,476
$
721,878
$
748,185
Total assets
$
2,298,031
$
3,288,094
$
3,246,912
$
2,959,319
$
2,894,729
Long-term obligations
$
973,311
$
1,568,003
$
1,444,604
$
1,209,291
$
1,095,800
Stockholders’ equity
$
908,326
$
1,092,875
$
1,381,008
$
1,355,036
$
1,386,886
6
2024 ANNUAL REPORT | LCI INDUSTRIES
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Among LCI Industries, the Russell 2000 Index, the S&P Composite 1500 Auto Parts & Equipment Index, and a Peer Group
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
12/19
12/20
12/21
12/22
12/23
12/24
LCI Industries
Russell 2000
Peer Group
S&P Composite 1500
Auto Parts & Equipment
12/2019
12/2020
12/2021
12/2022
12/2023
12/2024
LCI Industries
100.00
124.18
152.77
93.96
132.58
113.14
Russell 2000
100.00
119.96
137.74
109.59
128.14
142.93
S&P Composite 1500
Auto Parts & Equipment
100.00
123.10
150.65
101.83
108.43
86.10
Peer Group
100.00
121.65
159.47
114.48
160.08
141.13
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
*$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright© 2025 Standard & Poor’s, a division of S&P Global. All rights reserved.
Copyright© 2025 Russell Investment Group. All rights reserved.
The graph above matches the cumulative 5-Year total return of holders of LCI Industries’ common stock with the cumulative total returns of the Russell 2000 index,
the S&P Composite 1500 Auto Parts & Equipment index, and a customized peer group of seven companies that includes: Brunswick Corp, Cavco Industries Inc,
Patrick Industries Inc, Shyft Group Inc, Thor Industries Inc, Trimas Corp, and Winnebago Industries Inc. The graph assumes that the value of the investment in our
common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on 12/31/2019 and tracks it through 12/31/2024.
7
2024 ANNUAL REPORT | LCI INDUSTRIES
Board of Directors
Brendan J. Deely (3)(4)(5)
Chief Executive Officer and
President of EFC International
James F. Gero (2)(3)
Private Investor
Jason D. Lippert
President and Chief Executive
Officer of LCI Industries
Kieran M. O’Sullivan (1)(3)(4)
President, Chief Executive Officer,
and Chairman of the Board of
CTS Corporation
Linda K. Myers (3)(4)(5)
Former partner at
Kirkland & Ellis LLP
Virginia L. Henkels (1)(2)4)
Former Chief Financial Officer
and Secretary of Empowerment
& Inclusion Capital 1 Corp.
David A. Reed (1)(4)(5)
President of a privately-held
family investment
management company
Stephanie K. Mains (1)(2)(5)
Chief Executive Officer of LSC
Communications MCL, LLC
LCI Industries Committees
(1) Audit Committee - Chair: Virginia L. Henkels
(2) Compensation and Human Capital Committee - Chair: John A. Sirpilla
(3) Corporate Governance, Nominating, and Sustainability Committee - Chair: Linda K. Myers
(4) Risk Committee - Chair: Kieran M. O’Sullivan
(5) Strategy, Acquisition, and Capital Deployment - Chair: Brendan J. Deely
Tracy D. Graham (1)(3)
Chairman of the Board of LCI
Industries; Chief Executive Officer
and Chief Investment Officer of
Graham-Allen Partners
John A. Sirpilla (2)(4)(5)
Founder and Chief Executive
Officer of Encourage LLC
8
2024 ANNUAL REPORT | LCI INDUSTRIES
CORPORATE OFFICERS
Jason D. Lippert
President and
Chief Executive Officer
Lillian D. Etzkorn
Executive Vice President
and Chief Financial Officer
Andrew J. Namenye
Executive Vice President,
Chief Legal Officer, and
Corporate Secretary
Ryan R. Smith
Group President - North America
Jamie M. Schnur
Group President - Aftermarket
Kip A. Emenhiser
Vice President of Finance
and Treasurer
I
EXECUTIVE OFFICES
3501 County Road 6 East
Elkhart, IN 46514
(574) 535-1125
website: www.lci1.com
E-mail: lcii@lci1.com
Corporate Information
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
KPMG LLP
Aon Center
200 East Randolph
Chicago, IL 60601
I
TRANSFER AGENT
AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
(212) 936-5100
(800) 937-5449
website: www.amstock.com
I
CORPORATE GOVERNANCE
Copies of the Company’s Governance
Principles; Guidelines for Business Conduct;
Code of Ethics for Senior Financial Officers;
Whistleblower Policy; Charters of the
Audit, Compensation and Human Capital,
Corporate Governance, Nominating, and
Sustainability, Risk, and Strategy, Acquisition,
and Capital Deployment Committees; and
the Key Practices of the Audit, Compensation
and Human Capital, and Corporate
Governance, Nominating, and Sustainability
Committees are on the Company’s website
at investors.lci1.com, and are available upon
request, without charge, by writing to:
Secretary
LCI Industries
52567 Independence Ct
Elkhart, IN 46514
CEO/CFO CERTIFICATIONS
The most recent certifications by our Chief
Executive Officer and Chief Financial Officer,
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002, are filed as exhibits to
our Form 10-K. We have also filed with the
New York Stock Exchange the most recent
Annual CEO Certification as required by
Section 303A.12(a) of the New York Stock
Exchange Listed Company Manual.
I
PAY-FOR-PERFORMANCE
Through a combination of performance-based
incentives and stock-based awards, LCI
strives to attract, motivate, and retain talented,
entrepreneurial, and innovative management.
We have designed our pay-for-performance
incentive compensation program to be
the “workhorse” of our management
compensation. Performance-based
incentive compensation has historically
represented the major portion of the overall
compensation of our key managers. We
believe that those key employees who have
the greatest ability to influence the company’s
results should be compensated primarily
based on the financial results of those
operations for which they are responsible.
Our stock-based awards ensure that our
managers have a continuing personal
interest in the long-term success of the
company and create a culture of ownership
among management while also rewarding
long-term returns to stockholders.
9
2024 ANNUAL REPORT | LCI INDUSTRIES
10
2024 ANNUAL REPORT | LCI INDUSTRIES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐
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)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbols(s)
Name of each exchange on which registered
Common Stock, $.01 par value
LCII
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ☐ No ☒
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 ☐
1
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 has filed a report on and attestation to its management's assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which the
common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was
$1,885,436,312. The registrant has no non-voting common equity.
The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (February 14, 2025), was
25,463,227 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 2025 Annual Meeting of Stockholders to be held on May 15, 2025 are incorporated by
reference into Part III of this Annual Report on Form 10-K.
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains certain "forward-looking statements" with respect to our financial
condition, results of operations, profitability, margins, business strategies, operating efficiencies or synergies, competitive
position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company’s common stock,
the impact of legal proceedings, and other matters. Statements in this Form 10-K that are not historical facts are "forward-
looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.
Forward-looking statements, including, without limitation, those relating to the Company’s production levels, future
business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity,
covenant compliance, retail and wholesale demand, integration of acquisitions, R&D investments, commodity prices,
addressable markets, and industry trends, whenever they occur in this Form 10-K, are necessarily estimates reflecting the best
judgment of the Company’s senior management at the time such statements were made. There are a number of factors, many of
which are beyond the Company’s control, which could cause actual results and events to differ materially from those described
in the forward-looking statements. These factors include, in addition to other matters described in this Form 10-K, the impacts
of costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, future
pandemics, geopolitical tensions, armed conflicts, or natural disasters on the global economy and on the Company's customers,
suppliers, team members, business and cash flows, pricing pressures due to domestic and foreign competition, seasonality and
cyclicality in the industries to which we sell our products, availability of credit for financing the retail and wholesale purchase
of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation
for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers
of products for which we sell our components, retention and concentration of significant customers, the costs, pace of, and
successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, team
member benefits, team member retention, realization and impact of expansion plans, efficiency improvements and cost
reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new
markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational
and financial risks related to conducting business internationally, and increased governmental regulation and oversight,
information technology performance and security, the ability to protect intellectual property, warranty and product liability
claims or product recalls, interest rates, oil and gasoline prices, and availability, the impact of international, national and
regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and
other risks and uncertainties discussed more fully under the caption "Risk Factors" in this Annual Report on Form 10-K, and in
our subsequent filings with the Securities and Exchange Commission ("SEC"). Readers of this report are cautioned not to place
undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will
prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect
circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
INDUSTRY AND MARKET DATA
Certain market and industry data and forecasts included in this report were obtained from independent market research,
industry publications and surveys, governmental agencies and publicly available information. Industry surveys, publications
and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable,
although they do not guarantee the accuracy or completeness of such information. We believe the data from such third-party
sources to be reliable. However, we have not independently verified any of such data and cannot guarantee its accuracy or
completeness. Similarly, internal market research and industry forecasts, which we believe to be reliable based upon our
management’s knowledge of the market and the industry, have not been verified by any independent sources. While we are not
aware of any misstatements regarding the market or industry data presented herein, our estimates involve risks and uncertainties
and are subject to change based on various factors, including those discussed under the headings "Special Note Regarding
Forward-Looking Statements," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in this report.
3
LCI INDUSTRIES
TABLE OF CONTENTS
Page
PART I –
ITEM 1 - BUSINESS
5
ITEM 1A - RISK FACTORS
12
ITEM 1B - UNRESOLVED STAFF COMMENTS
23
ITEM 1C - CYBERSECURITY
23
ITEM 2 - PROPERTIES
24
ITEM 3 - LEGAL PROCEEDINGS
24
ITEM 4 - MINE SAFETY DISCLOSURES
24
PART II –
ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
25
ITEM 6 - [RESERVED]
25
ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
25
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
34
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
35
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
65
ITEM 9A - CONTROLS AND PROCEDURES
65
ITEM 9B - OTHER INFORMATION
66
ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
66
PART III –
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
66
ITEM 11 - EXECUTIVE COMPENSATION
66
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
66
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
66
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
66
PART IV –
ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
67
ITEM 16 - FORM 10-K SUMMARY
70
SIGNATURES
71
4
PART I
Item 1. BUSINESS.
Summary
Business Focus
LCI Industries ("LCII" and collectively with its subsidiaries, the "Company," the "Registrant," "we," "us," or "our"),
through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI"
or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation, transportation, and building
products industries. In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs,
selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online.
Our operations are global in scope, supporting a diverse customer base across North America and Europe. In 2024, we
generated consolidated net sales of $3.7 billion, reflecting strong demand for our broad catalog of innovative and high-quality
products. Our diverse portfolio includes:
•
Chassis & Suspension Solutions: Steel chassis, axles, anti-lock braking systems ("ABS"), suspension systems, and
stabilizer/leveling systems (manual, electric, and hydraulic)
•
Outdoor Living Systems: Awnings, slide-out mechanisms, and accessories
•
Windows, Doors & Steps: Vinyl, aluminum, and frameless windows; entry, luggage, patio, and ramp doors; and
electric and manual entry steps
•
Interior & Appliance Solutions: Thermoformed bath and kitchen products, furniture, mattresses, tankless water
heaters, air conditioners, appliances, electronic components, televisions, and sound systems
•
Towing & Truck Accessories: Hitches, pin boxes, grill guards, towing electrical, and towing and truck accessories
At December 31, 2024, we operated over 110 manufacturing and distribution facilities located throughout North
America and Europe, supporting key industries such as recreational vehicles ("RVs"), marine products, utility trailers,
transportation, and residential and commercial construction industries. Our core manufacturing competencies include:
•
Metal fabrication and welding
•
Power and motion systems
•
Lamination
•
Electronics
•
Glass fabrication
•
Plastics forming
•
Cut and sew
Reportable Segments
We operate in two primary segments: OEM and Aftermarket. Together, these segments leverage our manufacturing
competencies, leadership expertise, customer relationships, and market insights to drive efficiencies and innovation that enable
us to maintain a leadership position in the RV market while continuing to expand in adjacent industries and aftermarket
channels.
OEM Segment: Our OEM Segment services leading OEMs in recreation, transportation, and housing markets. Our
strategically located manufacturing and distribution facilities across North America and Europe provide efficient service to
OEMs. In 2024, the OEM Segment contributed 76 percent of our consolidated net sales and 49 percent of our consolidated
operating profit. Key markets served by our OEM Segment include RVs and Adjacent Industries.
•
Recreational Vehicles (RVs): Sales to RV OEMs include motorhomes, travel trailers, fifth-wheel trailers, and other
towables. In 2024, sales to RV OEMs were $1.7 billion, representing 61 percent of OEM Segment net sales. Major
customers include Thor Industries, Inc. (symbol: THO), Forest River, Inc. (a Berkshire Hathaway company, symbol:
BRKA), and Winnebago Industries (symbol: WGO), as well as other RV OEMs. We serve the RV industry by
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delivering high-quality components such as windows, furniture, leveling systems, awnings, and chassis, supported by
innovation and strong customer relationships.
•
Adjacent Industries: Sales to OEMs in adjacent industries include boats, buses, cargo and utility trailers, trucks, trains,
and manufactured and modular homes. In 2024, sales to adjacent industries OEMs were $1.1 billion, representing 39
percent of OEM Segment net sales. We continue to invest in product diversification and customer partnerships to
address challenges in these markets. Major customers include Brunswick Corporation (symbol: BC), Polaris Inc.
(symbol: PII), Blue Bird Corporation (symbol: BLBD), Skyline Champion Corporation (symbol: SKY), and Cavco
Industries, Inc. (symbol: CVCO). We serve our adjacent industries customers by delivering high-quality components
such as axles, windows, furniture, windshields, and chassis for manufactured homes.
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation
markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives additional revenue,
deepens customer engagement, and leverages our OEM expertise. Products are sold through retail dealers, wholesale
distributors, and service centers, as well as direct-to-consumer sales through online platforms.
•
Performance: In 2024, the Aftermarket Segment contributed 24 percent of our consolidated net sales and 51 percent of
our consolidated operating profit. Aftermarket net sales totaled $880.8 million in 2024. Products from our subsidiary
CURT Manufacturing LLC ("CURT"), a leading manufacturer of towing products and truck accessories, contributed
approximately half of Aftermarket sales in both years. CURT complements our OEM markets by serving automotive,
RV, marine, and trailer industries.
•
Key Drivers: U.S. RV ownership reached an estimated 8.1 million households in 2025 according to Go RVing, driving
demand for upgrades and replacements as owners maintain and enhance their units. Many non-critical replacement
parts are purchased outside peak RV selling seasons, which can help to offset the typical seasonality of the OEM
Segment. We serve our aftermarket customers by delivering high-quality components such as hitches, truck
accessories, towing accessories, towing electrical, and slide toppers.
•
Customer Channels, Strategy, and Support: We sell aftermarket products through retail dealers, wholesale distributors,
and service centers, as well as direct-to-consumer sales through online platforms. Multiple customer care centers offer
rapid responses to inquiries related to product delivery, technical support, and critical repairs, designed to minimize
consumer downtime. Dedicated teams offer product, technical, and installation training, as well as marketing support
for aftermarket customers.
Strategic Focus
Our strategy emphasizes profitable growth through innovation, high product quality, and enhanced customer
experience. By driving organic expansion and diversifying revenue streams, we seek to maintain market leadership in the North
American RV market while advancing our position in the aftermarkets and adjacent industries. Across key product categories,
we hold leading market shares, providing a strong foundation for resilience and growth. Additionally, we are actively gaining
share in critical markets through ongoing investment in innovation and operational excellence. We underpin this strategy with
disciplined cost management, streamlining operations, and enhancing efficiency. For example, in 2023 and 2024, we
consolidated certain facilities to reduce overhead and enhance margin stability. Our investments in automation and efficiency
further enhance our competitive position, providing our customers with tailored solutions.
Competitive Differentiation
While barriers to entry are generally low in the industries we serve, compliance with industry standards, safety
requirements, and initial capital investments are necessary to establish operations. We believe that our competitive edge lies in
product quality and reliability, product innovation, price, and customer service and satisfaction. We are more than a supplier—
we are an integral partner to our customers' operations. By providing precision-engineered solutions to address complex needs
with high speed and quality, we continue to hold leading market share in key categories. We believe that our focus on
innovation and operational efficiency can enable us to gain additional share in critical markets, further strengthening our
competitive position. This unique value proposition fosters customer loyalty, creates high switching costs, and deters
competitor entry. We believe that our long-standing customer relationships and proximity to key OEM customer facilities
strengthen our position in the supply chain.
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Raw Materials
Raw materials used across our RV and adjacent industry businesses consist primarily of steel (coil, sheet, tube, and I-
beam), extruded aluminum, glass, wood, fabric, and foam, and are available from a number of sources, both domestic and
foreign.
Sales and Profits
Consolidated net sales for the year ended December 31, 2024 were $3.7 billion, a decrease of one percent from
consolidated net sales for the year ended December 31, 2023 of $3.8 billion. The decrease was primarily driven by decreased
industry production levels in the North American marine and utility trailer markets and the European RV market, mostly offset
by a seven percent increase in total North American RV wholesale shipments and sales from acquisitions. Net sales from
acquisitions completed in 2023 and 2024 contributed approximately $21.4 million in 2024.
Net income for 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or $2.52
per diluted share, in 2023.
In Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations," we
describe in detail the change in our net sales and operating profits for the OEM and Aftermarket Segments during 2024.
Customer Concentrations
Thor Industries, Inc. ("Thor"), a customer of both segments, accounted for 16 percent, 16 percent, and 23 percent of
our consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. Berkshire Hathaway Inc.
(through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 18 percent, 15
percent, and 20 percent of our consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. No
other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2024, 2023, and
2022. No customer accounted for more than 10 percent of consolidated accounts receivable, net at December 31, 2024 and
2023. International sales and export sales represented approximately 11 percent, 11 percent, and eight percent of our
consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively.
Acquisitions
During 2024, we completed one acquisition for cash consideration of $20.0 million, plus a holdback payment of $1.0
million due on the first anniversary of the acquisition. Net sales for the company acquired in this acquisition were
approximately $28 million for the twelve months preceding the acquisition.
Our mergers and acquisitions strategy is focused on strategically positioning the Company for long-term growth,
stability, and market leadership by diversifying beyond the RV market into high-growth markets. By acquiring companies that
complement our core strengths in manufacturing, innovation, and operational efficiency, we have been able to achieve
synergies, expand market share, and deliver innovative content to new and growing markets. We will continue to utilize a
disciplined approach regarding acquisitions, prioritizing accretive deals that can create value for shareholders, and leveraging
our expertise to optimize operations and enhance profitability across the Company.
Acquisitions have been a driver of growth for our Company historically and continue to be a focus of management as
part of our balanced capital allocation strategy. We typically look for acquisition targets with strong leadership, innovative
products, niche markets, consistency with our core manufacturing disciplines, and favorable competitive landscapes, and we
look to take advantage of potential synergies such as our purchasing power and cross-selling opportunities.
Sales and Marketing
Our sales activities are related to developing new customer relationships and maintaining existing customer
relationships, primarily through the quality and reliability of our products, innovation, price, customer service, and customer
satisfaction. Our annual marketing and advertising expenditures were $22.3 million, $29.7 million, and $31.4 million, in 2024,
2023, and 2022, respectively.
We have several supply agreements or other arrangements with certain of our customers that provide for prices of
various products to be fixed for periods generally not in excess of eighteen months; however, in certain cases we have the right
to renegotiate the prices on sixty-days' notice. We have agreements with certain customers that index their pricing to select
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commodities. Both the OEM Segment and the Aftermarket Segment typically ship products on average within one to two
weeks of receipt of orders from their customers and, as a result, neither segment has any significant backlog.
Capacity
At December 31, 2024, we operated over 110 manufacturing and distribution facilities across North America and
Europe. For most products, we have the ability to fill excess demand by shifting production to other facilities, usually at an
increased cost. The ability to adjust capacity in certain product areas through lean manufacturing and automation initiatives,
reallocation of existing resources, flexibility with second or third shifts, and/or additional capital expenditures is monitored
regularly by management in an effort to achieve a high level of production efficiency and return on invested capital. We believe
we have adequate capacity to meet projected demand. Capital expenditures for 2024 were $42 million, which included normal
replacement expenditures along with approximately $6 million in capacity investments for operational improvements and
approximately $3 million in automation investments.
Seasonality
Most industries where we sell products or where our products are used historically have been seasonal and are
generally at the highest levels when the weather is moderate. Accordingly, our sales and profits have generally been the highest
in the second quarter and lowest in the fourth quarter. However, because of fluctuations in dealer inventories, the impact of
international, national, and regional economic conditions, consumer confidence on retail sales of RVs and other products for
which we sell our components, the timing of dealer orders, and the impact of severe weather conditions on the timing of
industry-wide shipments from time to time, current and future seasonal industry trends have been, and may in the future be,
different than in prior years. Additionally, many of the optional upgrades and non-critical replacement parts for RVs are
purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal.
International
International and export sales represented approximately 11 percent of consolidated net sales in each of 2024 and
2023, and eight percent in 2022. We continue to focus on developing products tailored for international recreation and
transportation markets. We participate in the largest caravan and marine shows in Europe and have received positive feedback
on our products. Recently, some of the product innovations we developed for European markets have gained popularity in the
United States as well. Our international business development team works with customers and prospects in Europe and other
international markets, assessing the dynamics of the local marketplace, building relationships with OEMs and helping introduce
our existing products and develop new products for those markets, with the goal of identifying long-term growth opportunities.
We target the same international product markets that we supply to in the United States, including RV, adjacent industries such
as marine, cargo trailers, and high-speed trains, and the related aftermarkets. Our largest domestic customer, Thor, has a
presence in the European caravan market, which provides additional business opportunities for us in Europe. We estimate the
addressable market for annual net sales of our products outside of North America to be over $1.9 billion.
Intellectual Property
We hold approximately 630 United States and foreign patents and have approximately 165 patent applications pending
that relate to various products we sell. We have also granted certain licenses that permit third parties to manufacture and sell
products in consideration for royalty payments.
From time to time, we have received notices or claims we may be infringing certain patent or other intellectual
property rights of others, and we have given notices to, or asserted claims against, others that they may be infringing certain
patent or other intellectual property rights of the Company. We believe our patents are valuable and we vigorously protect our
patents when appropriate.
Research and Development
We strive to be an industry leader in product innovation and are focused on developing new products, as well as
improving existing products. Research and development expenditures are expensed as they are incurred. Research and
development expenses were approximately $21 million, $20 million, and $26 million in 2024, 2023, and 2022, respectively.
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Regulatory Matters
We are subject to numerous federal, state and local regulations governing the manufacture and sale of our products in
the United States. Sales and manufacturing operations outside the United States are subject to similar regulations.
Rules promulgated under the Transportation Recall Enhancement, Accountability and Documentation Act require
manufacturers of motor vehicles and certain motor vehicle related equipment to regularly make reports and submit documents
and certain historical data to the National Highway Traffic Safety Administration ("NHTSA") of the United States Department
of Transportation ("DOT") to enhance motor vehicle safety, and to respond to requests for information relating to specific
complaints or incidents.
Trailers produced by the Company for hauling boats, personal watercraft, snowmobiles, and equipment must comply
with Federal Motor Vehicle Safety Standards ("FMVSS") promulgated by NHTSA relating to lighting, braking, wheels, tires,
and other vehicle systems.
Windows and doors produced by the Company for the RV industry must comply with regulations promulgated by
NHTSA governing safety glass performance, egress ability, door hinge and lock systems, egress window retention hardware,
and baggage door ventilation. Windows produced by the Company for buses also must comply with FMVSS promulgated by
NHTSA.
Upholstered products and mattresses produced by the Company for RVs and buses must comply with FMVSS
promulgated by NHTSA regarding flammability. In addition, upholstered products and mattresses produced by the Company
for RVs must comply with regulations promulgated by the Consumer Product Safety Commission regarding flammability, as
well as standards for toxic chemical levels and labeling requirements promulgated by the California Office of Environmental
Health Hazard Assessment. Plywood, particleboard, and fiberboard used in RV products are required to comply with standards
for formaldehyde emission levels promulgated by the California Air Resources Board and adopted by the Recreation Vehicle
Industry Association ("RVIA").
Windows and entry doors produced by the Company for manufactured homes must comply with performance and
construction regulations promulgated by the U.S. Department of Housing and Urban Development ("HUD") and by the
American Architectural Manufacturers Association relating to air and water infiltration, structural integrity, thermal
performance, emergency exit conformance, and hurricane resistance. Certain of the Company’s products must also comply with
the International Code Council standards, such as the IRC (International Residential Code), the IBC (International Building
Code), and the IECC (International Energy Conservation Code) as well as state and local building codes. Thermoformed bath
products manufactured by the Company for manufactured homes must comply with performance and construction regulations
promulgated by HUD.
Our operations are also subject to certain federal, state, and local regulatory requirements relating to the use, storage,
discharge, transport, and disposal of hazardous materials used during the manufacturing processes. If our operating sites, or
adjacent sites owned by third parties, are affected by releases of hazardous materials, we may incur expenditures for future
investigation and remediation of these sites, including in conjunction with voluntary remediation programs or third-party
claims.
In addition, we could be affected by future laws or regulations imposed in response to concerns over climate change,
the timing and impact of which are difficult to assess.
We believe we are currently operating in compliance, in all material respects, with applicable laws and regulations and
have made reports and submitted information as required. We do not believe the expense of compliance with these laws and
regulations, as currently in effect, will have a material effect on our operations, financial condition, or competitive position;
however, there can be no assurance this trend will continue as environmental, health and safety laws, regulations, or other
pertinent requirements evolve.
Human Capital
As of December 31, 2024, Lippert had approximately 11,500 full-time team members, including 10,100 in North
America and 1,400 internationally. Our U.S. team members are not subject to any collective bargaining agreements, although
certain international team members are covered by national labor laws. We believe relations with our team members are good.
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At Lippert, we believe that business can and should be a force for good in our world, and we strive to manifest that
vision every day in how we lead our organization. Our mission is to make lives better by developing meaningful relationships
with our customers, co-workers, and community. "Everyone Matters" is the overarching descriptor of our cultural strategy; this
fundamental appreciation of the team members who make up our organization guides our business.
Culture and Leadership Development
Our Culture and Leadership Development Team focuses on leadership development, professional and personal
development, training, and corporate and community impact. This Team meets regularly with leaders and team members across
the Company to develop action plans and goals focused on both personal and professional development. The Team also
supports our team member engagement surveys to measure and evaluate engagement drivers and helps build specific action
plans in response to the survey results to continually improve our culture and team member engagement.
We believe our future success depends on our continued ability to attract, retain, and motivate qualified team
members. Our retention percentage for team members in North America for the year ended December 31, 2024 was 71 percent,
consistent with our prior year retention percentage. Our Culture Index focuses on tracking leading indicators related to retention
for each division in the Company.
One particularly powerful metric is the number of "dreams and goals achieved" by team members throughout the
Company, with over 2,100 accomplished in 2024, ranging from establishing a healthy mindset to budgeting, saving, exercise
goals, improved sleep or nutrition, and community involvement.
Community Involvement
We strive to create meaningful change and inspire a culture of giving by building positive relationships and aligning
Company resources with our team members' time and talents to support the needs of our communities. In 2024, our team
members logged approximately 160,000 volunteer hours, hosting more than 750 events, with 87 percent of our team members
taking part (an increase from 85 percent in 2023). Through monetary donations, product donations, and company-wide
fundraising events, we donated more than $1.2 million in 2024 to support the needs of our communities. We focus our efforts
on children and families in need, educational programs, community health and wellness, and LCI team members in crisis.
Benefits and Compensation
To attract and motivate team members, we offer competitive compensation and benefits. Our compensation packages
include base salary/wages, and short and long-term incentives. We also offer team members benefits such as life, disability, and
health (medical, dental, and vision) insurance, a 401(k) plan with a company match, paid time off, tuition reimbursement,
military leave, parental bonding leave, and holiday pay.
We provide a well-being initiative to provide team members with resources to improve in all dimensions of their
health, including physical, emotional, and financial. In early 2022, we launched the "Lippert Life" portal, a comprehensive
resource to support our team members' total well-being. Nearly 50 percent of our team members used the portal to access health
coaches, webinars, wellness challenges, and other tools. We also identified Wellness Ambassadors in each location to help
drive our wellness initiative. In 2024, engagement in our wellness program improved to 79 percent from 67 percent in 2023.
Our holistic program focuses on prevention and education and includes health coaching, biometric screenings, flu vaccinations,
heart scans, and quarterly challenges. We launched a tobacco cessation campaign to support team members on their journey to
quit using nicotine products. Additionally, we added walking paths in each location to encourage daily walking, and our teams
tracked millions of steps during a step challenge. Furthermore, our employee assistance program offers access to mental health
services and financial advisors. We also introduced a benefit that offers a network of oncology and orthopedic care at no cost to
team members.
Diversity, Inclusion, and Belonging
We are committed to creating and maintaining a workplace in which all team members have an opportunity to
participate and contribute to the success of the business and are valued for their skills, experience, and unique perspectives. This
commitment is embodied in our policies and the way we do business. While diversity is essential in our business practice,
inclusion and belonging are very important as well. Diversity reflects the differences we have in our workforce, inclusion is
defined as how we as team members include others, and belonging is how we feel as members of our LCI family. We are
committed to fostering an environment where all three are expected.
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Our policies provide for equal employment opportunity to all team members and applicants without regard to race,
color, religion, sex, sexual orientation, gender identity, pregnancy, national origin, ancestry, age, genetic information, disability,
citizen status, veteran status, military service, marital status or any other legally protected category as established by federal,
state, or local law. Our equal employment opportunity policy governs all employment decisions, including recruitment, hiring,
job assignment, compensation, training, promotion, discipline, transfer, leave-of-absence, access to benefits, layoff, recall,
termination, and other personnel matters.
Health and Safety
We maintain a work environment designed to provide a safe and healthy workplace for all team members. We focus
our efforts on eliminating exposures and reducing recordable incidents, lost workdays, and life changing events. Our Total
Recordable Incident Rate ("TRIR") in North America trended positively, with a decrease from 4.29 in 2023 to 3.13 in 2024. We
remain focused on leadership, engagement of team members, aggressive incident investigation with root cause analysis, and
focused corrective actions.
In 2023, our Facility Safety Score ("FSS") Playbook was updated to include enterprise-wide safety audits/inspections,
and FSS objectives were created to take further steps toward reducing injuries across the Company. The following employee
health and safety ("EHS") objectives helped guide our safety performance in 2024: (a) improve operational ownership of
workplace EHS, (b) improve enterprise-wide compliance with EHS rules and requirements at the site level, (c) enhance
knowledge of sustainable manufacturing mindset, and (d) improve education of workforce for relevant EHS standards and
requirements.
Available Information:
The Company was incorporated under the laws of Delaware on March 20, 1984, and is the successor to Drew National
Corporation, which was incorporated under the laws of Delaware in 1962. Our principal executive and administrative offices
are located at 3501 County Road 6 East, Elkhart, Indiana 46514; telephone number (574) 535-1125; website www.lci1.com; e-
mail LCII@lci1.com.
We make available free of charge on our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
and Current Reports on Form 8-K (and amendments to those reports) filed or furnished with the SEC as soon as reasonably
practicable after such materials are electronically filed or furnished.
Information About our Executive Officers
The following table sets forth our executive officers as of December 31, 2024:
Name
Position
Jason D. Lippert
President and Chief Executive Officer
Lillian D. Etzkorn
Executive Vice President and Chief Financial Officer
Andrew J. Namenye
Executive Vice President, Chief Legal Officer, and Corporate Secretary
Ryan R. Smith
Group President – North America
Jamie M. Schnur
Group President – Aftermarket
Officers are elected annually by the Board of Directors. There are no family relationships between or among any of the
executive officers or directors of the Company. Additional information with respect to the Company's directors is included in
the Company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 15, 2025.
JASON D. LIPPERT (age 52) became Chief Executive Officer of the Company effective May 10, 2013, and has been
Chief Executive Officer of Lippert Components since February 2003. Effective May 23, 2019, Mr. Lippert also became
President of the Company. Mr. Lippert has over 29 years of experience with the Company and has served in a wide range of
leadership positions.
LILLIAN D. ETZKORN (age 56) joined the Company in April 2023 and serves as Executive Vice President and Chief
Financial Officer of the Company. Prior to joining the Company, she served in multiple financial leadership roles, including
Chief Financial Officer at Covia, Shiloh Industries, and CPI Card Group. Additionally, she has held various senior finance
positions at Dana Incorporated and Ford Motor Company.
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ANDREW J. NAMENYE (age 44) joined the Company in September 2017 and has been Chief Legal Officer and
Corporate Secretary since November 2017. Effective March 12, 2020, Mr. Namenye also became an Executive Vice President
of the Company. Prior to joining the Company, he held roles in senior level positions at Thor Industries, Inc. and All American
Group, Inc. (f/k/a Coachmen Industries), and practiced law at Barnes & Thornburg LLP.
RYAN R. SMITH (age 41) became Group President – North America of the Company in May 2020. Previously, he
served as Senior Vice President of Sales and Operations of the Company beginning in August of 2018. Mr. Smith has over 18
years of experience with the Company and has served in a wide range of leadership positions with Lippert Components.
JAMIE M. SCHNUR (age 53) became Group President – Aftermarket of the Company in May 2020. Previously, he
served as Chief Administrative Officer of the Company beginning in May 2013. Mr. Schnur has over 28 years of experience
with the Company and has served in a wide range of leadership positions with Lippert Components.
Other Officers
KIP A. EMENHISER (age 51) joined the Company in January 2017 and has been Treasurer since March 2022, Vice
President of Finance since September 2019, and our principal accounting officer since March 2017. Prior to joining the
Company, he held various roles including Senior Vice President of Finance, Chief Accounting Officer, and Vice President and
Corporate Controller at Press Ganey Associates, Inc. Mr. Emenhiser is a Certified Public Accountant.
Item 1A. RISK FACTORS.
The following risk factors should be considered carefully in addition to the other information contained in this Annual
Report on Form 10-K. The risks and uncertainties described below are not the only ones we face, but represent the most
significant risk factors that we believe may adversely affect the RV and other industries we supply our products to, as well as
our business, operations or financial position. The risks and uncertainties discussed in this report are not exclusive and other
risk factors that we may consider immaterial or do not anticipate may emerge as significant risks and uncertainties.
Industry and Economic Risk Factors
Economic and business factors beyond our control, including cyclicality and seasonality in the industries where we sell
our products, could lead to fluctuations in our operating results.
The RV, recreational boat, and other markets where we sell many of our products or where our products are used, have
been characterized by cycles of growth and contraction in consumer demand, often because the purchase of such products is
viewed as a consumer discretionary purchase. A number of factors have in the past, and could continue to, negatively impact
consumer demand, production levels, shipments, sales, and operating results, including credit availability, consumer
confidence, employment rates, prevailing interest rates, inflation, fuel prices, and other economic conditions affecting consumer
demand and discretionary consumer spending, as well as demographic and political changes. For example, during 2024, we
experienced lower marine, utility trailer, and motorhome OEM volumes resulting from, in part, the negative impacts of inflation
and elevated interest rates on consumers' discretionary spending. The declines in these industry volumes compared to 2023 had
an adverse impact on our results. Further, consumer purchases of discretionary items historically tend to decline during
recessionary periods when disposable income is lower or during other periods of economic instability or uncertainty, which
may lead to declines in sales and slow our long-term growth expectations.
Additionally, manufacturing operations in most of the industries where we sell our products or where our products are
used historically have been seasonal. However, because of fluctuations in dealer inventories, the impact of international,
national, and regional economic conditions and consumer confidence on retail sales of products which include our components,
the timing of dealer orders, and the impact of severe weather conditions on the timing of industry-wide shipments from time to
time, current and future seasonal industry trends have been, and may in the future be, different than in prior years.
Reductions in the availability of wholesale financing limits the inventories carried by retail dealers of RVs and other
products which use our components, which would cause reduced production by our customers, and therefore reduced demand
for our products.
Retail dealers of RVs and other products which use our components generally finance their purchases of inventory
with financing known as floor-plan financing provided by lending institutions. A dealer's ability to obtain financing is
significantly affected by the number of lending institutions offering floor-plan financing, and by an institution’s lending limits,
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which are beyond our control. Reduction in the availability of floor-plan financing, or an increase in the cost of such financing,
particularly as a result of recent higher interest rates, have in the past caused, and would in the future again likely cause, many
dealers to reduce inventories, which would result in reduced production by OEMs, and consequently result in reduced demand
for our products. Moreover, dealers which are unable to obtain adequate financing could cease operations. Their remaining
inventories would likely be sold at discounts, disrupting the market. Such sales have historically caused a decline in orders for
new inventory, which reduced demand for our products, and which could reoccur in the future.
Conditions in the credit market could limit the ability of consumers to obtain retail financing for RVs and other
products which use our components, resulting in reduced demand for our products.
Retail consumers who purchase RVs and other products which use our components generally obtain retail financing
from third-party lenders. The availability, terms, and cost of retail financing depend on the lending practices of financial
institutions, governmental policies, and economic and other conditions, all of which are beyond our control. Restrictions on the
availability of consumer financing and increases in the costs of such financing have in the past limited, and could again limit,
particularly due to recent elevated interest rates, the ability of consumers to purchase such discretionary products, which would
result in reduced production of such products by our customers, and therefore reduced demand for our products.
Excess inventories at dealers and manufacturers can cause a decline in the demand for our products.
Dealers and manufacturers could accumulate unsold inventory. High levels of unsold inventory have in the past
caused, and would cause, a reduction in orders, which would likely cause a decline in demand for our products.
Gasoline shortages, or high prices for gasoline, could lead to reduced demand for our products.
Fuel shortages, and substantial increases in the price of fuel, have had an adverse effect on the RV industry as a whole
in the past, and could again in the future. Travel trailer and fifth-wheel RVs, components for which represented approximately
53 percent of our OEM Segment net sales in 2024, are usually towed by light trucks or SUVs. Generally, these vehicles use
more fuel than automobiles, particularly while towing RVs or other trailers. High prices for gasoline, or anticipation of potential
fuel shortages, can affect consumer use and purchase of light trucks and SUVs, which could result in reduced demand for travel
trailer and fifth-wheel RVs, and therefore reduced demand for our products.
Risks Related to our Business, Operations and Strategy
A significant percentage of our sales are concentrated in the RV industry and declines in industry-wide wholesale
shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely impact our operating
results and financial condition.
In 2024, the OEM Segment represented 76 percent of our consolidated net sales and 49 percent of consolidated
segment operating profit. Approximately 53 percent of our OEM Segment net sales in 2024 were from products to
manufacturers of travel trailer and fifth-wheel RVs. While we measure our OEM Segment sales against industry-wide
wholesale shipment statistics, the underlying health of the RV industry is determined by retail demand. Retail sales of RVs
historically have been closely tied to general economic conditions, as well as consumer confidence. Declines in industry-wide
wholesale shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely affect our
operating results and financial condition.
The loss of any key customer, or a significant reduction in purchases by such customers, could have an adverse
material impact on our operating results.
Two customers of both the OEM Segment and the Aftermarket Segment accounted for a combined 34 percent of our
consolidated net sales in 2024. The loss of either of these customers or other significant customers, or a substantial reduction in
sales to any such customer, would have an adverse material impact on our operating results and financial condition. In addition,
we generally do not have long-term agreements with our customers and cannot predict that we will maintain our current
relationships with these customers or that we will continue to supply them at current levels.
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Volatile raw material costs could adversely impact our financial condition and operating results.
Steel and aluminum represented approximately 30 percent and 10 percent, respectively, of our raw material costs in
2024. The prices of these, and other key raw materials, have historically been volatile and can fluctuate dramatically with
changes in the global demand and supply for such products.
Because competition and business conditions may limit the amount or timing of increases in raw material costs that
can be passed through to our customers in the form of sales price increases, increases in raw material costs could adversely
impact our financial condition and operating results. Conversely, as raw material costs decline, we may not be able to maintain
selling prices consistent with higher cost raw materials in our inventory, which could adversely affect our operating results.
Inadequate or interrupted supply of raw materials or components used to make our products could adversely impact
our financial condition and operating results.
Our business depends on our ability to source raw materials, such as steel, aluminum, glass, wood, fabric and foam,
and certain components such as electric motors, in a timely and cost-efficient manner. Most materials and components are
readily available from a variety of sources. However, a few key components are currently produced by only a small group of
quality suppliers that have the capacity to supply large quantities. If raw materials or components that are used in manufacturing
our products or for which we act as a distributor, particularly those which we import, become unavailable, or if the supply of
these raw materials and components is interrupted or delayed, our manufacturing and distribution operations could be adversely
affected, which could adversely impact our financial condition and operating results.
In 2024, we imported, or purchased from suppliers who imported, approximately 35 percent of our raw materials and
components. Consequently, we rely on the free flow of goods through open and operational ports and on a consistent basis for a
significant portion of our raw materials and components. Adverse geopolitical conditions, such as increased tariffs or import
duties, trade embargoes, the heightened tensions between China and Taiwan, inclement weather, natural disasters, epidemics,
public health crises, war, terrorism, or labor disputes at various ports or otherwise adversely impacting our suppliers create
significant risks for our business, particularly if these conditions or disputes result in work slowdowns, lockouts, strikes,
facilities closures, supply chain interruptions, or other disruptions, and could have an adverse impact on our operating results if
we are unable to fulfill customer orders or are required to accumulate excess inventory or find alternate sources of supply, if
available, at higher costs.
The raw materials and components used in the manufacture of Furrion Holdings Limited ("Furrion") products are
provided by a small group of suppliers that are principally located in China. If those raw materials or components become
unavailable or their supply is interrupted or delayed, we may not be able to identify alternative sources in a timely or cost-
effective manner, or at all. Further, as a result of our acquisitions of Furrion in 2021 and Way Interglobal Network LLC
("Way") in 2022, the portion of our raw materials and components that are exported from their country of origin has increased,
which could heighten the risks set forth in the immediately preceding paragraph, including in particular increased tariffs or
import duties.
We import a significant portion of our raw materials and the components we sell, and the effect of foreign exchange
rates could adversely affect our operating results.
We negotiate for the purchase of a significant portion of raw materials and semi-finished components with suppliers
that are not located in the United States, and this amount has increased as a result of our acquisitions of Furrion and Way. As
such, the prices we pay in part are dependent upon the rate of exchange for U.S. Dollars versus the currency of the local
supplier. A dramatic weakening of the U.S. Dollar could increase our cost of sales, and such cost increases may not be offset
through price increases for our products, adversely impacting our margins.
Changes in consumer preferences relating to our products, or the inability to develop innovative new products, could
cause reduced sales.
Changes in consumer preferences for RV, manufactured housing and recreational boat models, and for the components
we make for such products, occur over time. Our inability to anticipate changes in consumer preferences for such products, or
delays in responding to such changes, could reduce demand for our products and adversely affect our net sales and operating
results. Similarly, we believe our ability to remain competitive also depends on our ability to develop innovative new products
or enhance features of existing products. Delays in the introduction or market acceptance of new products or product features
could have an adverse effect on our net sales and operating results.
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Competitive pressures could reduce demand for our products or impact our sales prices.
The industries in which we are engaged are highly competitive and generally characterized by low barriers to entry,
and we have numerous existing and potential competitors. Competition is based primarily upon product quality and reliability,
product innovation, price, customer service, and customer satisfaction.
Competitive pressures have, from time to time, resulted in a reduction of our profit margins and/or reduction in our
market share. Domestic and foreign competitors may lower prices on products which currently compete with our products, or
develop product improvements, which could reduce demand for our products or cause us to reduce prices for our products.
Sustained increases in these competitive pressures could have an adverse material effect on our results of operations. In
addition, the manufacture by our customers themselves of products supplied by us could reduce demand for our products and
adversely affect our operating results and financial condition.
A tight labor market has, and could in the future, result in difficulty obtaining skilled labor, and available capacity may
initially not be utilized efficiently.
In certain geographic regions in which we have a larger concentration of manufacturing facilities, we have
experienced, and could again experience, shortages of qualified employees. Competition for skilled workers may increase the
cost of our labor and create employee retention and recruitment challenges, as employees with knowledge and experience have
the ability to change employers relatively easily. If such conditions become extreme, we may not be able to increase production
to timely satisfy demand, and may incur higher labor and production costs, which could adversely impact our operating results
and financial condition.
We may incur unexpected expenses, or face delays and other obstacles, in connection with expansion plans or
investments we make in our business, which could adversely impact our operating results.
It may take longer than initially anticipated for us to realize expected results from investments in research and
development or acquired businesses, as well as initiatives we have implemented to increase capacity and improve production
efficiencies, automation, customer service and other aspects of our business, or we may incur unexpected expenses in
connection with these matters. Expansion plans may involve the acquisition of existing manufacturing facilities that require
upgrades and improvements or the need to build new manufacturing facilities. Such activities may be delayed or incur
unanticipated costs which could have an adverse effect on our operating results. Similarly, competition for desirable production
facilities, especially during times of increasing production, may increase the cost of acquiring production facilities or limit the
availability of obtaining such facilities. In addition, the start-up of operations in new facilities may incur unanticipated costs and
inefficiencies which may adversely affect our profitability during the ramp up of production in those facilities. Delays in the
construction, re-configuration or relocation of facilities could result in an adverse impact to our operating results or a loss of
market share.
In addition, to the extent our expansion plans involve acquisitions or joint ventures, we may not be able to successfully
identify suitable acquisition or joint venture opportunities or complete any acquisition, combination, joint venture, or other
transaction on acceptable terms. Our identification of suitable acquisition candidates and joint venture opportunities and the
integration of acquired business operations involve risks inherent in assessing the values, strengths, weaknesses, risks, and
profitability of these opportunities, as well as significant financial, management and related resources that would otherwise be
used for the ongoing development of our existing operations and internal expansion.
Epidemic outbreaks, terrorist acts, and political events could disrupt our business and result in lower sales and
otherwise adversely affect our financial performance.
External events, such as epidemic outbreaks, terrorist attacks, or disruptive political events could adversely affect our
business and result in lower sales. In the event that one of our manufacturing or distribution facilities was affected by any such
event, we could be forced to shift production to one of our other facilities, which we may not be able to do effectively or at all,
or to cease operations. Although we maintain insurance for damage to our property and disruption of our business from
casualties, such insurance may not be sufficient to cover all of our potential losses. Any disruption in our manufacturing
capacity could have an adverse impact on our ability to produce sufficient inventory of our products or may require us to incur
additional expenses in order to produce sufficient inventory, and therefore, may adversely affect our net sales and operating
results. Any disruption or delay at our manufacturing or distribution facilities or customer care centers could impair our ability
to meet the demands of our customers, and our customers may cancel orders with us or purchase products from our competitors,
which could adversely affect our business and operating results.
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Further, as a result of pandemic outbreaks, businesses can be shut down, supply chains can be interrupted, slowed or
rendered inoperable and individuals can become ill, quarantined or otherwise unable to work and/or travel due to health reasons
or governmental restrictions, and worldwide economic downturns could occur. Such outbreaks could result in the operations of
our third-party manufacturers and suppliers being disrupted or suspended, or could interfere with our supply chain, which could
have an adverse effect on our business.
Natural disasters and unusual weather, including as a result of climate change, could impact our business negatively.
Our facilities may be affected by natural disasters, such as tornadoes, hurricanes, fires, floods, earthquakes, and
unusual weather conditions exacerbated by the effects of climate change. Natural phenomena with unpredictable destructive
force, such as severe snowstorms, droughts, and flooding, may generate liabilities not sufficiently covered by our contingency
plans and insurances. As we operate globally, these natural disasters can have a significant negative impact on our supply chain
channels.
We have entered new markets in an effort to enhance our growth potential, and uncertainties with respect to these new
markets could impact our operating results.
Our ability to expand our market share for our products that are used as components for RVs is limited. We have made
investments in an effort to expand the sale of our products in adjacent industries, such as boats, buses, trucks, and trains, where
we may have less familiarity with OEM or consumer preferences and could encounter difficulties in attracting customers due to
a reduced level of familiarity with our brands. We have also made investments to expand the sale of our products in the
aftermarket of our industries and to international markets and export sales of our products. These investments involve
significant resources, put a strain on our administrative, operational, and financial capabilities and carry a risk of failure.
Limited operating experience or limited brand recognition in new markets may limit our business expansion strategy. Lack of
demand for our products in these markets or competitive pressures requiring us to lower prices for our products could adversely
impact our business growth in these markets and our results of operations.
If acquired businesses are not successfully integrated into our operations, our financial condition and operating results
could be adversely impacted.
We have completed several business acquisitions and may continue to engage in acquisitions or similar activities, such
as joint ventures and other business transactions. Our ability to grow through acquisitions will depend, in part, on the
availability of suitable candidates at acceptable prices, terms, and conditions, our ability to compete effectively for acquisition
candidates, and the availability of capital and personnel to complete such acquisitions and run the acquired business effectively.
Such acquisitions, joint ventures and other business transactions involve potential risks, including:
•
the failure to successfully integrate personnel, departments and systems, including IT and accounting systems,
technologies, books and records, and procedures;
•
the need for additional investments post-closing that could be greater than anticipated;
•
the assumption of liabilities of the acquired businesses that could be greater than anticipated;
•
incorrect estimates made in the accounting for acquisitions, incurrence of non-recurring charges, and write-off of
significant amounts of goodwill or other assets that could adversely affect our operating results;
•
unforeseen difficulties related to entering geographic regions or industries in which we do not have prior
experience; and
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the potential loss of key employees or existing customers or adverse effects on existing business relationships with
suppliers and customers.
Integrating acquired operations is a significant challenge and there is no assurance that we will be able to manage the
integrations successfully. Integrating operations in countries in which we previously did not have locations or experience
operating could present additional challenges.
If we are unable to efficiently integrate these businesses, the attention of our management could be diverted from our
existing operations and the ability of the management teams at these business units to meet operational and financial
expectations could be adversely impacted, which could impair our ability to execute our business plans. Failure to successfully
integrate acquired operations or to realize the expected benefits of such acquisitions or other transactions may have an adverse
impact on our results of operations and financial condition.
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Our international operations subject us to additional operational and financial risks.
We have gradually grown sales overseas through international opportunities. Thirteen of our acquisitions since 2016
are headquartered in Europe or have international operations and customers.
Conducting business outside of the United States is subject to various risks, many of which are beyond our control,
including:
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adverse political and economic conditions;
•
trade protection measures, including tariffs, trade restrictions, trade agreements, and taxation;
•
difficulties in managing or overseeing foreign operations and agents;
•
differences in regulatory environments, including complex data privacy, environmental, social and governance
("ESG"), and labor relations laws, as well as differences in labor practices and market practices;
•
cultural and linguistic differences;
•
foreign currency fluctuations;
•
limitations on the repatriation of funds because of foreign exchange controls;
•
different liability standards;
•
potentially longer payment cycles;
•
different credit risks;
•
different technology risks;
•
political, social, and economic instability and uncertainty, including sovereign debt issues; and
•
intellectual property laws of countries which do not protect our rights in our intellectual property to the same
extent as the laws of the United States.
The occurrence or consequences of any of these factors may have an adverse impact on our operating results and
financial condition, as well as impact our ability to operate in international markets.
The loss of key management could reduce our ability to execute our business strategy and could adversely affect our
business and results of operations.
We are dependent on the knowledge, experience, and skill of our leadership team. The loss of the services of one or
more key managers or the failure to attract or retain qualified managerial, technical, sales and marketing, operations and
customer care staff could impair our ability to conduct and manage our business and execute our business strategy, which
would have an adverse effect on our business, financial condition and results of operations. Further, any leadership transitions
can be inherently difficult to manage, may result in operational inefficiencies, and impact our ability to retain and hire other key
members of management.
If our information technology systems fail to perform adequately or are breached, our operations could be disrupted,
and it could adversely affect our business, reputation and results of operations.
The efficient operation of our business depends on our information technology systems. We rely on our information
technology systems to effectively manage our business data, inventory, supply chain, order entry and fulfillment,
manufacturing, distribution, warranty administration, invoicing, collection of payments, remote work, and other business
processes. We use information systems to report and support the audit of our operational and financial results. Additionally, we
rely upon information systems in our sales, marketing, human resources, and communication efforts. The failure of our
information technology systems to perform as we anticipate could disrupt our business and could result in transaction errors,
processing inefficiencies, and the loss of sales and customers, causing our business and results of operations to suffer.
In addition, our information technology systems may be vulnerable to damage, interruption or unauthorized access
from circumstances beyond our control, including fire, natural disasters, security breaches, telecommunications failures,
computer viruses, hackers, phishing attempts, cyber-attacks, ransomware and other malware, payment fraud, and other
manipulation or improper use of our systems. Any such events could result in legal claims or proceedings, liability or penalties
under privacy laws, disruption in operations, and damage to our reputation, which could adversely affect our business. Further,
we have been implementing a new enterprise resource planning ("ERP") system, the full implementation of which is expected
to take several years; however, there may be other challenges and risks as we upgrade and standardize our ERP system on a
company-wide basis.
Cyber-attacks, such as those involving the deployment of malware, are increasing in frequency, sophistication, and
intensity and have become increasingly difficult to detect. Despite our ongoing efforts to manage cybersecurity risks, we cannot
assure you that they will be effective or will work as designed. If we fail to maintain or protect our information systems and
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data integrity effectively, we could: lose existing customers; have difficulty attracting new customers; suffer outages or
disruptions in our operations or supply chains; have difficulty preventing, detecting, and controlling fraud; have disputes with
customers and suppliers; have regulatory sanctions or penalties imposed; incur increased operating expenses; incur expenses or
lose revenues as a result of a data privacy breach; or suffer other adverse consequences.
Legal, Regulatory and Compliance Risks
Our business is subject to numerous international, federal, state and local regulations, and increased costs of
compliance, failure in our compliance efforts, or events beyond our control could result in damages, expenses, or liabilities that
could adversely impact our financial condition and operating results.
We are subject to numerous federal, state and local regulations governing the manufacture and sale of our products,
including regulations and standards promulgated by the NHTSA of the DOT, the Consumer Products Safety Commission,
HUD, and consumer safety standards promulgated by state regulatory agencies and industry associations. Sales and
manufacturing operations in foreign countries may be subject to similar regulations. Any major recalls of our products,
voluntary or involuntary, could adversely impact our reputation, net sales, financial condition and operating results. Changes in
laws or regulations, including those related to climate change, which impose additional regulatory requirements on us could
increase our cost of doing business or restrict our actions, causing our results of operations to be adversely affected. Our failure
to comply with present or future regulations and standards could result in fines, penalties, recalls, or injunctions being imposed
on us, administrative penalties, potential civil and criminal liability, suspension of sales or production, or cessation of
operations.
Further, certain other U.S. and foreign laws and regulations affect our activities. Areas of our business affected by such
laws and regulations include, but are not limited to, labor, advertising, consumer protection, quality of services, warranty,
product liability, real estate, intellectual property, tax, import and export duties, tariffs, competition, environmental, and health
and safety. We are also subject to compliance with the U.S. Foreign Corrupt Practices Act ("FCPA"), and other anti-corruption
and anti-bribery laws applicable to our operations. Compliance with these laws and others may be onerous and costly, and may
be inconsistent from jurisdiction to jurisdiction, which further complicates compliance efforts. Violations of these laws and
regulations could lead to significant penalties, including restraints on our export or import privileges, monetary fines, criminal
proceedings and regulatory or other actions that could adversely affect our results of operations. We cannot assure you that our
employees, contractors, vendors or agents will not violate such laws and regulations, or our policies and procedures related to
compliance.
In addition, potentially significant expenditures could be required in order to comply with evolving healthcare, health
and safety laws, regulations, or other pertinent requirements that may be adopted or imposed in the future by governmental
authorities.
Further, foreign, federal, state, and local regulatory and legislative bodies have adopted or proposed various legislative
and regulatory measures relating to climate change, regulating greenhouse gas emissions, and energy policies. Such measures
could impose significant costs on us and our suppliers and customers, including increased cost of materials and natural
resources, sources and supply of energy, capital equipment, environmental monitoring and reporting, or other costs to comply
with such regulations. Climate change regulation combined with public sentiment could result in reduced demand for products
that use our components, higher fuel prices, or carbon taxes, all of which could materially adversely affect our business. Due to
uncertainty in the regulatory and legislative processes, as well as the scope of such requirements and initiatives, we cannot
currently determine the effect such legislation and regulation may have on our business, results of operations and financial
condition.
Our risk management policies and procedures may not be fully effective in achieving their purposes.
Our policies, procedures, controls and oversight to monitor and manage our enterprise risks may not be fully effective
in achieving their purpose and may leave exposure to identified or unidentified risks. Past or future misconduct by our
employees, contractors, vendors, or agents could result in violations of law by us, regulatory sanctions and/or serious
reputational harm or financial harm. We cannot assure you that our policies, procedures, and controls will be sufficient to
prevent all forms of misconduct. We review our compensation policies and practices as part of our overall enterprise risk
management program, but it is possible that our compensation policies could incentivize inappropriate risk taking or
misconduct. If such inappropriate risks or misconduct occurs, it could have an adverse effect on our results of operations and/or
our financial condition.
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Our operations are subject to certain environmental laws and regulations, and costs of compliance, investigation, or
remediation of environmental conditions could have an adverse effect on our business and results of operations.
Our operations are also subject to certain complex federal, state and local environmental laws and regulations relating
to air, water, and noise pollution and the use, storage, discharge and disposal of hazardous materials used during the
manufacturing processes. Under certain of these laws, namely the Comprehensive Environmental Response, Compensation, and
Liability Act and its state counterparts, liability for investigation and remediation of hazardous substance contamination at
currently or formerly owned or operated facilities or at third-party waste disposal sites is joint and several. Failure to comply
with these regulations could cause us to become subject to fines and penalties or otherwise have an adverse impact on our
business. One or more of our current or former operating sites, or adjacent sites owned by third parties, have been affected, and
may in the future be affected, by releases of hazardous materials. As a result, we may incur expenditures for future investigation
and remediation, including in conjunction with voluntary remediation programs or third-party claims. If other potentially
responsible persons are unable or otherwise not obligated to contribute to remediation costs, we could be held responsible for
their portion of the remediation costs, and those costs could be material. The operation of our manufacturing facilities entails
risks, and we cannot assure you that our costs in relation to these environmental matters or compliance with environmental laws
in general will not have an adverse effect on our business and results of operations.
We may not be able to protect our intellectual property and may be subject to infringement claims.
We rely on certain trademarks, patents and other intellectual property rights, including contractual rights with third
parties. Our success depends, in part, on our ability to protect our intellectual property against dilution, infringement, and
competitive pressure by defending our intellectual property rights. We rely on intellectual property laws of the U.S., European
Union, Canada, and other countries, as well as contractual and other legal rights, for the protection of our property rights.
However, we cannot assure that these measures will be successful in any given instance, or that third parties will not infringe
upon our intellectual property rights. We may be forced to take steps to protect our rights, including through litigation, which
could result in a significant expenditure of funds and a diversion of resources. The inability to protect our intellectual property
rights could result in competitors manufacturing and marketing similar products which could adversely affect our market share
and results of operations. Competitors may challenge, invalidate, or avoid the application of our existing or future intellectual
property rights that we receive or license.
From time to time, we receive notices or claims that we may be infringing certain patent or other intellectual property
rights of others. While it is not possible to predict the outcome of patent and other intellectual property litigation, such litigation
could result in our payment of significant monetary damages and/or royalty payments, negatively impact our ability to sell
current or future products, reduce the market value of our products and services, lower our profits, and could otherwise have an
adverse effect on our business, financial condition or results of operations. From time to time, we also face claims of
misappropriation by a third party that believes we or our employees have inappropriately obtained and used trade secrets or
other confidential information of such third parties. Claims that we have misappropriated the trade secrets or other confidential
information of third parties could result in our payment of significant monetary damages, and we could be prevented from
further using such trade secrets or confidential information, limiting our ability to develop our products, any of which may have
an adverse effect on our business, financial condition, results of operations, and prospects.
If we fail to comply with data privacy and security laws and regulations, we could face substantial penalties and our
business, operations, and financial condition could be adversely affected.
We are subject to various data privacy and security laws and regulations. A number of U.S. states have enacted data
privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection
of personal information, such as social security numbers, financial information and other information. For example, several
U.S. territories and all 50 states now have data breach laws that require timely notification to individuals, and at times
regulators, the media or credit reporting agencies, if a company has experienced the unauthorized access or acquisition of
personal information.
Other state laws contain additional disclosure obligations for businesses that collect personal information about
residents and afford those individuals additional rights relating to their personal information that may affect our ability to use
personal information or share it with our business partners. For example, California has laws that give California residents
certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain
disclosures and take certain other acts in furtherance of those rights, and has recently created a new agency, the California
Privacy Protection Agency, authorized to implement and enforce California’s privacy laws, which could result in increased
privacy and information security regulatory actions. Other U.S. states have passed, or have proposed, consumer privacy laws.
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These laws may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow
private class-action litigation and carry significant potential liability for our business.
Outside of the U.S., data protection laws also apply to some of our operations. For example, the General Data
Protection Regulation (the “GDPR”) in the United Kingdom (“U.K.”) and the European Union (“E.U.”) imposes, among other
things, strict obligations and restrictions on the collection and use of U.K. and E.U. personal data, a requirement for prompt
notice of data breaches in certain circumstances, a requirement for implementation of certain approved safeguards for transfers
of personal data to third countries, and possible substantial fines for any violations. Governmental authorities around the world
have enacted similar types of legislative and regulatory requirements concerning data protection, and additional governments
are considering similar legal frameworks.
The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change
and may require substantial costs to monitor and implement compliance with those or any additional requirements. Failure to
comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which
could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect
our operating results and business.
Additionally, because we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data
Security Standard (the "PCI Standard"), issued by the Payment Card Industry Security Standards Council. The PCI Standard
contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing, and
transmission of cardholder data. Complying with the PCI Standard and implementing related procedures, technology, and
information security measures requires significant resources and ongoing attention. Costs and potential problems and
interruptions associated with the implementation of new or upgraded systems and technology such as those necessary to
maintain compliance with the PCI Standard or with maintenance or adequate support of existing systems could also disrupt or
reduce the efficiency of our operations. Any material interruptions or failures in our payment-related systems could have an
adverse effect on our business, financial condition and results of operations.
We could incur warranty claims in excess of reserves.
We receive warranty claims from our customers in the ordinary course of our business. Although we maintain reserves
for such claims, which to date have been adequate, there can be no assurance that warranty expense levels will remain at current
levels or that such reserves will continue to be adequate. A significant increase in warranty claims exceeding our current
warranty expense levels could have an adverse effect on our results of operations and financial condition.
In addition to the costs associated with the contractual warranty coverage provided on our products, we also
occasionally incur costs as a result of additional service actions not covered by our warranties, including product recalls and
customer satisfaction actions. Although we estimate and reserve for the cost of these service actions, there can be no assurance
that expense levels will remain at current levels, or such reserves will continue to be adequate.
We may be subject to product liability claims if people or property are harmed by the products we sell.
Some of the products we sell may expose us to product liability claims relating to personal injury, death, or property
damage, and may require product recalls or other actions. Although we maintain liability and product recall insurance, we
cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be
available to us on economically reasonable terms, or at all. In addition, even if a product liability claim is not successful or is
not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused property damage
or personal injury could damage our brand identity and our reputation with existing and potential consumers and have an
adverse effect on our business, financial condition and results of operations.
Financial, Credit and Liquidity Risks
We could incur asset impairment charges for goodwill, intangible assets, or other long-lived assets.
A portion of our total assets as of December 31, 2024 was comprised of goodwill, intangible assets, and other long-
lived assets. At least annually, we review goodwill and indefinite-lived intangibles for impairment. Long-lived assets,
identifiable intangible assets, and goodwill are also reviewed for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable from future cash flows. These events or circumstances could
include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or
disposition of a significant portion of the business, or other factors. If the carrying value of a long-lived asset is considered
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impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair
value. Our determination of future cash flows, future recoverability, and fair value of our long-lived assets includes significant
estimates and assumptions. Changes in those estimates or assumptions or lower than anticipated future financial performance
may result in the identification of an impaired asset and a non-cash impairment charge, which could be material. Any such
charge could adversely affect our operating results and financial condition.
We may become more leveraged.
Financing for our investments has been provided through a combination of currently available cash and cash
equivalents, term loans, our 1.125 percent convertible senior notes due 2026 (the "Convertible Notes"), and use of our revolving
credit facility. The incurrence of indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a
greater portion of our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy, (3)
limit our ability to obtain additional financing, or (4) negatively affect our outlook by one or more of our lenders.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business
to pay our substantial debt.
Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness,
including the Convertible Notes, depends on our future performance, which is subject to economic, financial, competitive and
other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient
to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to
adopt one or more alternatives, such as selling assets, curtailing spend, restructuring debt, or obtaining additional equity capital
on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets
and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on
desirable terms, which could result in a default on our debt obligations.
We are subject to covenants in our debt agreements that may restrict or limit our operations and acquisitions and our
failure to comply with the covenants in our debt agreements could have an adverse material impact on our business, results of
operations and financial condition.
Our debt agreements contain various covenants, restrictions, and events of default. Among other things, these
provisions require us to maintain certain financial ratios, including a maximum net leverage ratio and a minimum debt service
coverage ratio, and impose certain limits on our ability to incur indebtedness, create liens, and make investments or
acquisitions. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness,
which may permit the lenders under these debt agreements to exercise remedies. These defaults could have an adverse material
impact on our business, results of operations and financial condition.
An increase in interest rates could increase our cost of borrowing and could adversely impact our financial condition,
results of operations and cash flows.
Our financial condition, results of operations and cash flows could be significantly affected by changes in interest rates
and actions taken by the Federal Reserve. Borrowings under our credit agreement currently bear interest at variable rates based
on either an Alternate Base Rate or at term Secured Overnight Financing Rate ("SOFR") plus, in each case, an applicable
margin. Any increase in the interest we pay and a corresponding increase in our costs of capital could have a material adverse
impact on our financial condition, results of operations or cash flows.
Although we currently pay regular quarterly dividends on our common stock, we cannot assure you that we will
continue to pay a regular quarterly dividend.
In March 2016, our Board of Directors approved the commencement of a dividend program under which we have paid
regular quarterly cash dividends to holders of our common stock. Our ability to pay dividends, and our Board of Directors'
determination to maintain our current dividend policy, will depend on a number of factors, including:
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the state of our business, competition, and changes in our industry;
•
changes in the factors, assumptions, and other considerations made by our Board of Directors in reviewing and
revising our dividend policy;
•
our future results of operations, financial condition, liquidity needs, and capital resources;
•
limitations in our debt agreements; and
•
our various expected cash needs, including cash interest and principal payments on our indebtedness, capital
expenditures, the purchase price of acquisitions, and taxes.
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Each of the factors listed above could negatively affect our ability to pay dividends in accordance with our dividend
policy or at all. In addition, our Board of Directors may elect to suspend or alter the current dividend policy at any time.
Conversion of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress
the price of our common stock.
The conversion of some or all of the Convertible Notes may dilute the ownership interests of our stockholders. Upon
conversion of the Convertible Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common
stock or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation
in excess of the aggregate principal amount of the notes being converted. If we elect to settle the remainder, if any, of our
conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in shares of our
common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock
issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence
of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes
could be used to satisfy short positions, or anticipated conversion of the Convertible Notes into shares of our common stock
could depress the price of our common stock.
The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition
and operating results.
In the event the conditional conversion feature of the Convertible Notes is triggered, holders will be entitled to convert
their Convertible Notes at any time during specified periods at their option. If one or more holders elect to convert their
Convertible Notes, we would be required to settle any converted principal amount of such Convertible Notes through the
payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their
Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding
principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our
net working capital.
Certain provisions in the Indenture governing the Convertible Notes may delay or prevent an otherwise beneficial
takeover attempt of us.
Certain provisions in the Indenture may make it more difficult or expensive for a third party to acquire us. For
example, the Indenture will require us, subject to certain exceptions, to repurchase the Convertible Notes for cash upon the
occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its
Convertible Notes in connection with a make-whole fundamental change. A takeover of us may trigger the requirement that we
repurchase the Convertible Notes and/or increase the conversion rate, which could make it more costly for a potential acquirer
to engage in such a takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would
otherwise be beneficial to investors.
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term
stockholder value, and share repurchases could increase the volatility of our stock price and will diminish our cash reserves.
Although our board of directors has authorized a stock repurchase program, the program does not require us to
repurchase any specific dollar amount or to acquire any specific number of shares. We cannot guarantee that the program will
be fully consummated or that it will enhance long-term stockholder value. The program could also affect the trading price of
our stock and increase volatility, and any announcement of a termination or change of this program may result in a decrease in
the trading price of our stock. In addition, purchases made under this program diminish our cash reserves.
Our stock price may be volatile.
The price of our common stock may fluctuate widely, depending upon a number of factors, many of which are beyond
our control. These factors include:
•
the perceived prospects of our business and our industries as a whole;
•
differences between our actual financial and operating results and those expected by investors and analysts;
•
changes in analysts' recommendations or projections;
•
changes affecting the availability of financing in the wholesale and consumer lending markets;
•
actions or announcements by competitors;
•
changes in laws and regulations affecting our business;
22
•
the gain or loss of significant customers;
•
significant sales of shares by a principal stockholder;
•
activity under our stock repurchase program;
•
changes in key personnel;
•
actions taken by stockholders that may be contrary to our Board of Directors' recommendations; and
•
changes in general economic or market conditions.
In addition, stock markets generally experience significant price and volume volatility from time to time, which may
adversely affect the market price of our common stock for reasons unrelated to our performance.
Item 1B. UNRESOLVED STAFF COMMENTS.
None.
Item 1C. CYBERSECURITY.
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality,
integrity, and availability of our critical systems and information.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity
Framework ("NIST CSF"). This does not imply that we meet any particular technical standards, specifications, or requirements,
but rather that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our
business.
Our cybersecurity risk management program is aligned to the Company’s business strategy. It shares common
methodologies, reporting channels and governance processes that apply to other areas of enterprise risk, including legal,
compliance, strategic, operational, and financial risk. Key elements of our cybersecurity risk management program include:
•
risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products,
services, and our broader enterprise information technology environment;
•
a security team principally responsible for managing our cybersecurity risk assessment processes, our security
controls, and our response to cybersecurity incidents;
•
the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security
controls;
•
training and awareness programs for team members that include periodic and ongoing assessments to drive adoption
and awareness of cybersecurity processes and controls;
•
a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
•
a third-party risk management process for service providers, suppliers, and vendors, which is part of our global
information security policy.
In the last three fiscal years, the Company has not experienced any material cybersecurity incidents, and expenses
incurred from cybersecurity incidents were immaterial. However, we are subject to ongoing risks from cybersecurity threats
that could materially affect us, including our business strategy, results of operations or financial condition, as further described
in Item 1A. Risk Factors - "Risks Related to our Business, Operations and Strategy."
Cybersecurity Governance
The Board of Directors established its Risk Committee with specific responsibility for overseeing risks from
cybersecurity threats, among other things. Our Vice President of Global Information Security provides the Risk Committee
periodic reports on our cybersecurity risks and any material cybersecurity incidents. In addition, our cybersecurity team
provides annual reports to our Board of Directors.
Our team of cybersecurity professionals is led day-to-day by our Vice President of Global Information Security who
reports to our Chief Information Officer. Our Vice President of Global Information Security has over 20 years of experience in
IT operations and cybersecurity leadership and is a Certified Information Systems Security Professional (CISSP). The Vice
President of Global Information Security also serves on our Enterprise Risk and Compliance Committee where leaders from
across the Company discuss cyber risk and other risk matters. The cybersecurity team has primary responsibility for our overall
23
cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external
cybersecurity consultants.
Our cybersecurity team also monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and
incidents through various means, which may include briefings with internal security personnel, threat intelligence and other
information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and
reports produced by security tools deployed in the information technology environment.
Item 2. PROPERTIES.
Our manufacturing operations are conducted at facilities that are used for both manufacturing and distribution. Many
of the properties manufacture and warehouse products sold through both the OEM Segment and Aftermarket Segment and are
included in the OEM Segment in the table below. We believe that substantially all of our properties are in generally good
condition and there is sufficient capacity to meet current and projected manufacturing and distribution requirements. In
addition, we maintain administrative facilities used for corporate and administrative functions. Our primary administrative
offices are located in Elkhart, Indiana. Total administrative space company-wide aggregates approximately 500,000 square feet.
At December 31, 2024, our key property holdings are summarized in the following table:
Segment
Type
North America
Facilities
Europe Facilities
Total Facilities
Owned Facilities
OEM
Manufacturing (a)
67
24
91
33
Other (b)
20
2
22
8
Aftermarket
Manufacturing (a)
11
—
11
2
Other (b)
16
—
16
3
Total
114
26
140
46
(a) Includes multi-activity sites which are predominately manufacturing
(b) Includes engineering, administrative, and distribution locations
Item 3. LEGAL PROCEEDINGS.
In the normal course of business, we are subject to proceedings, lawsuits, regulatory agency inquiries, and other
claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters
could materially affect operating results when resolved in future periods, management believes that, after final disposition,
including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond
that provided for in the Consolidated Balance Sheet as of December 31, 2024, would not be material to our financial position or
annual results of operations.
Item 4. MINE SAFETY DISCLOSURES.
Not applicable.
24
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Market and Stockholders
As of February 14, 2025, there were 197 holders of the Company's common stock, in addition to beneficial owners of
shares held in broker and nominee names. Our common stock trades on the New York Stock Exchange under the symbol
"LCII".
The table and related information required for the Equity Compensation Plan is incorporated by reference from the
information contained under the caption "Equity Compensation Plan Information" in our 2025 Proxy Statement.
Dividends and Share Repurchases
See Note 13 - Stockholders' Equity of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-
K) for further discussion regarding dividends and share repurchases. There were no share repurchases in the year ended
December 31, 2024.
In 2016, we initiated the payment of regular quarterly dividends. Future dividend policy with respect to the common
stock will be determined by the Board of Directors of the Company in light of prevailing financial needs and earnings of the
Company and other relevant factors, including any limitations in our debt agreements, such as maintenance of certain financial
ratios.
Item 6. [RESERVED]
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in
conjunction with our Consolidated Financial Statements and Notes thereto included in Part II, Item 8 of this Report.
This Management's Discussion and Analysis of Financial Condition and Results of Operations generally discusses
2024 and 2023 items and year-over-year comparisons between 2024 and 2023. A detailed discussion of 2022 items and year-
over-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual
Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024.
We are a global leader in supplying engineered components to the outdoor recreation, transportation, and building
products industries. In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs,
selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online.
25
Sales and Profit - OEM and Aftermarket Segments
We have two reportable segments, the OEM Segment and the Aftermarket Segment. At December 31, 2024, we
operated over 110 manufacturing and distribution facilities located throughout North America and Europe. Net sales and
operating profit were as follows for the years ended December 31:
Sales and Operating Profit by Segment and in Total (In thousands)
2024
2023
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
1,514,578 $
1,358,853
Motorhomes
233,066
269,356
Adjacent Industries OEMs
1,112,806
1,275,533
Total OEM Segment net sales
2,860,450
2,903,742
Aftermarket Segment:
Total Aftermarket Segment net sales
880,758
881,066
Total net sales
$
3,741,208 $
3,784,808
Operating profit1:
OEM Segment
$
107,081 $
17,361
Aftermarket Segment
111,156
106,067
Total operating profit
$
218,237 $
123,428
Sales and Operating Profit by Segment as a Percent of Total
2024
2023
Net sales:
OEM Segment
76%
77%
Aftermarket Segment
24%
23%
Total net sales
100%
100%
Operating profit1:
OEM Segment
49%
14%
Aftermarket Segment
51%
86%
Total segment operating profit
100%
100%
Operating Profit Margin by Segment
2024
2023
OEM Segment
3.7%
0.6%
Aftermarket Segment
12.6%
12.0%
1 Corporate expenses are allocated between the segments based upon net sales.
Operating profit margins in 2024 were impacted by a number of factors, as further described below under “Results of
Operations – Year Ended December 31, 2024 Compared to Year Ended December 31, 2023.”
Reportable Segments: Our two reportable segments consist of the OEM Segment and the Aftermarket Segment. Our
OEM Segment drives innovation and manufacturing expertise, serving leading OEMs in recreation, transportation, and housing
markets. Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation markets by offering
discretionary accessories, replacement parts, and upgrades. This approach drives recurring revenue, deepens customer
engagement, and leverages our OEM expertise.
OEM Segment: Manufactures and distributes a broad array of engineered components for the leading OEMs of RVs
and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; trains;
manufactured homes; and modular housing.
Aftermarket Segment: Supplies many of our engineered components to the related aftermarket channels of the
recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to
retail customers via the Internet. The Aftermarket Segment also includes biminis, covers, buoys, and fenders to the marine
26
industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, tankless water heaters, and
the sale of replacement glass and awnings to fulfill insurance claims.
See Part I, Item 1, "Business - Reportable Segments" for more detail on our reportable segments.
Diversification Strategy: Over the past several years, we have diversified our portfolio beyond the RV OEM market
into marine, building products, transportation, international, and aftermarket sectors. Leveraging our manufacturing
competencies in other industries can accelerate profitable growth and help to mitigate seasonal and cyclical market risk. For
example, within our Aftermarket Segment, many of the optional upgrades and non-critical replacement parts for RVs are
purchased outside the normal product selling season, thereby causing certain sales within this segment to be counter-seasonal.
Approximately 57 percent and 61 percent of net sales for the years ended December 31, 2024 and 2023, respectively,
were generated outside of the North American RV OEM market, providing a balanced foundation for continued growth.
Industry Background
OEM Segment - North American Recreational Vehicle Industry: RVs are designed as temporary living quarters
for recreational, camping, travel, or seasonal use. They can be either motorized, such as motorhomes, or towable, including
travel trailers, fifth-wheel trailers, folding camping trailers, and truck campers. The RV industry generally follows a predictable
annual sales cycle that starts after the annual fall "Open House" in Elkhart, Indiana:
•
October - March: Dealers build inventory, leading wholesale shipments to historically outpace retail sales.
•
April - September: Retail sales typically exceed wholesale shipments, driven by spring and summer demand.
In 2024, Recreation Vehicle Industry Association ("RVIA") data shows U.S. wholesale shipments of travel trailers and
fifth-wheel RVs, the Company's primary market, increased 13 percent to 291,600 units compared with 2023. Retail demand
decreased 6 percent to 307,000 units compared with 2023, reflecting a partial stabilization from the sharp declines of prior
years. However, inflation and elevated interest rates continued to pressure consumer discretionary spending, dampening
demand. Retail registration data is often revised upward in subsequent months due to reporting delays.
While we track our OEM Segment RV sales against wholesale shipment statistics, the health of the RV industry is
ultimately determined by retail demand. The table below highlights trends in wholesale shipments, retail sales, and dealer
inventory adjustments for travel trailers and fifth-wheel RVs, as reported by Statistical Surveys, Inc. ("Statistical Surveys").
Wholesale
Retail
Estimated Unit
Impact on
Dealer
Inventories
Units
Change
Units
Change
Year ended December 31, 2024
291,600
13%
307,000
(6)%
(15,400)
Year ended December 31, 2023
259,100
(39)%
327,000
(16)%
(67,900)
Year ended December 31, 2022
421,700
(21)%
389,700
(22)%
32,000
Motorhomes, another key RV category, experienced a significant 24 percent decline in wholesale shipments to 34,900
units in 2024, while retail demand fell 12 percent, according to RVIA data.
OEM Segment - Adjacent Industries: LCI's expertise in RV components extends to adjacent industries, including
boats, buses, trailers, trucks, trains, manufactured homes, and modular housing. These adjacent industries offer significant
growth opportunities, including by helping us leverage our established relationships with OEMs that often operate in multiple
sectors. While the potential content per unit we may supply to adjacent industries varies across these markets, and is different
than RVs, they represent meaningful diversification opportunities. Key adjacent industries and the annual retail units sold of
each include:
•
Enclosed trailers: According to Statistical Surveys, approximately 191,900 units were sold in 2024, down from
200,800 in 2023 and 213,800 in 2022.
•
Boats: Statistical Surveys also reported approximately 245,800 units were sold in 2024, compared to 269,100 in 2023
and 270,900 in 2022. Pontoon boats, a subset of this market, sold 53,600 units in 2024, compared to 61,300 in 2023
and 62,700 in 2022.
•
School buses. According to School Bus Fleet, sales decreased to 40,300 units in 2024, down from 41,200 in 2023 and
40,600 in 2022.
27
•
Manufactured housing. According to the Institute for Building Technology and Safety, wholesale shipments totaled
102,600 units in 2024, up from 89,200 in 2023 but down from 112,900 in 2022.
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation
markets by offering discretionary accessories, replacement parts, and upgrades through various channels, including retail
dealers, wholesale distributors, and service centers, as well as direct-to-consumer platforms. These products support recreation
and transportation markets, addressing both routine maintenance needs and customer-driven enhancements.
We also provide comprehensive customer support through multiple customer care centers, offering rapid responses to
inquiries related to technical support, product delivery, and critical repair, designed to minimize consumer downtime. Dedicated
teams deliver product, technical, and installation training, as well as marketing assistance, to enhance customer engagement and
satisfaction.
Aftermarket offerings span a diverse product portfolio, including:
•
Marine Products: Biminis, covers, buoys, and fenders.
•
Recreation and Transportation Accessories: Towing products, truck accessories, replacement glass, and awnings.
•
Core Systems: Appliances, air conditioners, televisions, sound systems, and tankless water heaters.
Aftermarket sales are influenced by seasonal trends, with many non-critical upgrades and replacement parts purchased
outside peak selling periods, creating certain counter-seasonal demand.
Market Dynamics: The U.S. RV ownership base, which reached a record 8.1 million households in 2025 (Go RVing),
drives robust demand for aftermarket products. Owners seek to enhance and maintain their units, replacing components that
experience normal wear and tear. This vibrant and growing market represents a key driver of our Aftermarket Segment’s
performance.
Strategic Expansion: We have strategically expanded our Aftermarket Segment through acquisitions that strengthen
our product portfolio and market reach, including Curt Manufacturing LLC and Kaspar Ranch Hand Equipment, LLC.
CURT Manufacturing LLC: Acquired in 2019, CURT is a leading manufacturer of towing products and truck
accessories, complementing our OEM markets. CURT contributed approximately 50% of Aftermarket Segment net sales in
both 2024 and 2023, selling 1,061,000 hitches in 2024, up from 910,000 in 2023.
Kaspar Ranch Hand Equipment, LLC: Acquired in 2021, Ranch Hand broadened our offerings with custom bumpers,
grill guards, and steps for the automotive aftermarket, reinforcing our position in complementary markets.
RESULTS OF OPERATIONS
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Consolidated Summary
•
Consolidated net sales for 2024 were $3.7 billion, 1 percent lower than consolidated net sales for 2023 of $3.8
billion. The decrease was primarily driven by decreased industry production levels in the North American marine
and utility trailer markets and the European RV market, mostly offset by a 7 percent increase in total North
American RV wholesale shipments and sales from acquisitions. Net sales from acquisitions completed in 2023
and 2024 contributed approximately $21.4 million in 2024.
•
Net income for 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or
$2.52 per diluted share, for 2023.
•
Consolidated operating profit during 2024 was $218.2 million compared to $123.4 million in 2023. Operating
profit margin was 5.8 percent in 2024 compared to 3.3 percent in 2023. The increase was primarily due to
decreases in material, freight, and warranty costs.
28
•
The cost of steel and aluminum consumed in certain of our manufactured components decreased in 2024
compared to 2023. Raw material costs are subject to continued fluctuation and impact certain contractual selling
prices which are indexed to select commodities.
•
The effective tax rate of 24.5 percent for 2024 was higher than the prior year, primarily due to tax adjustments as
discussed below under "Income Taxes."
•
Interest expense, net in 2024 was $28.9 million compared to $40.4 million in 2023. The decrease was primarily
due to net repayments of indebtedness of $89.2 million in 2024 and interest income of $5.1 million earned on cash
and cash equivalent balances in 2024.
•
In 2024, we paid quarterly dividends aggregating $4.30 per share, or $109.5 million.
OEM Segment
Net sales of the OEM Segment in 2024 decreased 1 percent, or $43.3 million, compared to 2023. Net sales of
components to OEMs were to the following markets for the years ended December 31:
(In thousands)
2024
2023
Change
RV OEMs:
Travel trailers and fifth-wheels
$
1,514,578 $
1,358,853
11%
Motorhomes
233,066
269,356
(13)%
Adjacent Industries OEMs
1,112,806
1,275,533
(13)%
Total OEM Segment net sales
$
2,860,450 $
2,903,742
(1)%
According to the RVIA, industry-wide wholesale shipments for the years ended December 31 were:
2024
2023
Change
Travel trailer and fifth-wheel RVs
291,600
259,100
13%
Motorhomes
34,900
45,900
(24)%
The trend in our average product content per RV produced is an indicator of our overall market share of components
for new RVs. Our average product content per type of RV, calculated based upon our net sales of components to domestic RV
OEMs for the different types of RVs produced for the twelve months ended December 31, divided by the industry-wide
wholesale shipments of the different product mix of RVs for the same period, was:
Content per:
2024
2023
Change
Travel trailer and fifth-wheel RV
$
5,097 $
5,058
1%
Motorhome
$
3,742 $
3,506
7%
Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and
Adjacent Industries. Content per RV is impacted by changes in selling prices for our products, market share gains, and
acquisitions. The increase in travel trailer and fifth-wheel content in 2024 compared to 2023 was driven primarily by market
share gains and alignment in wholesale unit production and shipments, compared to wholesale unit shipments outpacing
production as a result of inventory de-stocking efforts in 2023, partially offset by an increasing shift in unit mix towards lower
content single axle travel trailers and pricing decreases indexed to commodity and freight indices.
Our increase in net sales to RV OEMs during 2024 was driven by a 13 percent increase in wholesale shipments of
travel trailers and fifth wheel units and market share gains, partially offset by a 24 percent decrease in motorhome wholesale
shipments and a shift in unit mix towards lower content single axle travel trailers.
Our decrease in net sales to OEMs in Adjacent Industries during 2024 was primarily due to lower sales to North
American marine and utility trailer OEMs, driven by current dealer inventory levels, inflation, and elevated interest rates
impacting retail consumers. North American marine OEM sales totaled $245.6 million, down 30% from 2023.
29
Operating profit of the OEM Segment was $107.1 million in 2024, an increase of $89.7 million compared to 2023. The
operating profit margin of the OEM Segment increased to 3.7 percent in 2024 compared to 0.6 percent in 2023, and was
positively impacted by:
•
Decreases in material costs, which positively impacted operating profit by $97.8 million compared to 2023, primarily
related to lower in-bound freight costs, decreased steel prices, and material sourcing strategies.
•
A decrease in warranty costs, primarily due to product quality initiatives that resulted in reduced warranty claim
payments, which increased operating profit by $28.0 million compared to 2023.
Partially offset by:
•
Sales mix increase of lower margin products, which negatively impacted operating profit by $12.1 million compared to
2023.
•
Decreases in selling prices, which negatively impacted operating profit by $9.0 million related to prices contractually
tied to indices of select commodities and $2.0 million related to targeted products.
Amortization expense on intangible assets for the OEM Segment was $39.8 million in 2024, compared to $41.6
million in 2023. Depreciation expense on fixed assets for the OEM Segment was $53.5 million in 2024, compared to $58.4
million in 2023.
Aftermarket Segment
Net sales of the Aftermarket Segment in 2024 were consistent with 2023. Net sales of components in the Aftermarket
Segment were as follows for the years ended December 31:
(In thousands)
2024
2023
Change
Total Aftermarket Segment net sales
$
880,758 $
881,066
—%
Our net sales to the Aftermarket Segment included lower volumes within the RV and marine aftermarkets, mostly
offset by market share gains within the automotive aftermarket.
Operating profit of the Aftermarket Segment was $111.2 million in 2024, an increase of $5.1 million compared to
2023. The operating profit margin of the Aftermarket Segment was 12.6 percent in 2024, compared to 12.0 percent in 2023, and
was positively impacted by:
•
Decreases in material costs, which positively impacted operating profit by $16.8 million compared to 2023, primarily
related to decreased steel prices, lower in-bound freight costs, product mix, and material sourcing strategies.
•
Pricing changes to targeted products, resulting in an increase in operating profit of $5.1 million compared to 2023.
Partially offset by:
•
Increases in production labor costs due to product mix, which negatively impacted operating profit by $10.2 million
compared to 2023.
•
Increased production facility costs resulting from investments to expand capacity in the automotive aftermarket over
the past year, which reduced operating profit by $6.4 million.
Amortization expense on intangible assets for the Aftermarket Segment was $15.5 million in 2024, consistent with
2023. Depreciation expense on fixed assets for the Aftermarket Segment was $16.9 million in 2024, compared to $16.3 million
in 2023.
Interest Expense
Interest expense, net was $28.9 million in 2024, compared to $40.4 million in 2023. The decrease in net interest
expense was primarily due to net repayments on our revolving credit facility, principal payments on the Term Loan (as defined
in Note 9 of the Notes to Consolidated Financial Statements), and $5.1 million of interest income earned on investments in
money market mutual funds, partially offset by higher global interest rates early in 2024 on our adjustable rate Term Loan and
revolving credit facility. We prepaid $35.0 million of principal on the Term Loan during 2024. These prepayments were applied
to pay in full the scheduled principal amortization payments due through March 31, 2026. See Note 9 of the Notes to
Consolidated Financial Statements for a description of our credit facilities.
30
Income Taxes
The effective income tax rate for 2024 was 24.5 percent compared to 22.7 percent in 2023. The higher effective tax
rate for 2024 was primarily due to increases in non-deductible executive compensation expenses and increases in the state
effective tax rate. We estimate the 2025 effective income tax rate will be approximately 24 to 26 percent.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
We maintain a level of liquidity sufficient to allow us to meet our cash needs in the short term. Over the long term, we
manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility
for our future strategic investments. We continuously assess our capital requirements, working capital needs, debt and leverage
levels, debt and lease maturity schedules, capital expenditure requirements, dividends, future investments or acquisitions, and
potential share repurchases. We believe our operating cash flows, credit facilities, as well as any potential future borrowings,
will be sufficient to fund our future payments and long-term initiatives.
As of December 31, 2024, we had $165.8 million in cash and cash equivalents, and $452.5 million of availability
under our revolving credit facility under the Credit Agreement (as defined in Note 9 of the Notes to Consolidated Financial
Statements). We also have the ability to request an increase to the revolving and/or incremental term loan facilities by up to an
additional $400.0 million in the aggregate upon approval of the lenders providing any such increase and the satisfaction of
certain other conditions. See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities.
We believe the availability under the revolving credit facility under the Credit Agreement, along with our cash flows
from operations, are adequate to finance our anticipated cash requirements for the next twelve months.
The Consolidated Statements of Cash Flows reflect the following for the years ended December 31:
(In thousands)
2024
2023
Net cash flows provided by operating activities
$
370,284 $
527,229
Net cash flows used in investing activities
(61,098)
(83,748)
Net cash flows used in financing activities
(208,221)
(426,184)
Effect of exchange rate changes on cash and cash equivalents
(1,366)
1,361
Net increase in cash and cash equivalents
$
99,599 $
18,658
Discussion - Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Cash Flows from Operations
Net cash flows provided by operating activities were $370.3 million in 2024, compared to $527.2 million in 2023. The
decrease in net cash flows provided by operating activities was primarily due to the decrease in inventory in 2023 of
$235.3 million driven by decreasing commodity costs and initiatives to reduce inventory levels, compared to the decrease in
inventories in 2024 of $46.3 million. The decrease in net cash flows provided by operating activities was partially offset by the
$78.7 million increase in net income in 2024 compared to 2023.
Over the long term, based on our historical collection and payment patterns, as well as inventory turnover, and also
giving consideration to emerging trends and changes to the sales mix, we expect working capital to increase or decrease
equivalent to approximately 10 to 15 percent of the increase or decrease, respectively, in net sales. However, there are many
factors that can impact this relationship, especially in the short term.
Depreciation and amortization was $125.7 million and $131.8 million in 2024 and 2023, respectively, and is expected
to be approximately $115 to $125 million in 2025. Non-cash stock-based compensation expense was $18.7 million and $18.2
million in 2024 and 2023, respectively, and is expected to be approximately $18 to $23 million in 2025.
31
Cash Flows from Investing Activities
Cash flows used in investing activities of $61.1 million in 2024 were primarily comprised of $42.3 million for capital
expenditures and $20.0 million for a business acquisition. Cash flows used in investing activities of $83.7 million in 2023 were
primarily comprised of $62.2 million for capital expenditures and $25.9 million for the acquisition of businesses.
Our capital expenditures are primarily for replacement and growth. Over the long term, based on our historical capital
expenditures, the replacement portion has averaged approximately one to two percent of net sales, while the growth portion has
averaged approximately two to three percent of net sales. However, there are many factors that can impact the actual spending
compared to these historical averages. We estimate 2025 capital expenditures (excluding any potential business combinations)
of $50 to $70 million, including investments in automation and lean projects, which we expect to fund with cash flows from
operations or periodic borrowings under the revolving credit facility as needed.
The 2024 capital expenditures and acquisitions were funded by cash generated from operations and borrowings under
our Credit Agreement. Capital expenditures and acquisitions in 2025 are expected to be funded primarily from cash generated
from operations, as well as periodic borrowings under our revolving credit facility.
Cash Flows from Financing Activities
Cash flows used in financing activities of $208.2 million in 2024 were primarily comprised of payments of quarterly
dividends of $109.5 million, $52.5 million in net repayments under our revolving credit facility, $36.7 million in repayments
under our Term Loan and other borrowings, and cash outflows of $9.2 million related to vesting of stock-based awards, net of
shares tendered for payment of taxes. Included in the repayments under our Term Loan were $35.0 million of principal
prepayments in 2024. These prepayments were applied to pay in full the scheduled principal amortization payments due
through March 31, 2026.
Cash flows used in financing activities of $426.2 million in 2023 were primarily comprised of $215.9 million in net
repayments under our revolving credit facility, payments of quarterly dividends of $106.3 million, $61.1 million in repayments
under our Term Loan and other borrowings, $31.9 million related to payment of contingent consideration and holdbacks related
to acquisitions, and cash outflows of $9.6 million related to vesting of stock-based awards, net of shares tendered for payment
of taxes.
The Credit Agreement includes both financial and non-financial covenants. The covenants dictate that we shall not
permit our net leverage ratio to exceed certain limits, shall maintain a minimum debt service coverage ratio, and must meet
certain other financial requirements. At December 31, 2024, we were in compliance with all applicable financial covenants and
expect to remain in compliance for the next twelve months.
We have paid regular quarterly dividends since 2016. Future dividend policy with respect to our common stock will be
determined by our Board of Directors in light of our prevailing financial needs, earnings, and other relevant factors, including
any limitations in our debt agreements, such as maintenance of certain financial ratios. In May 2022, our Board of Directors
authorized a stock repurchase program for the purchase of up to $200.0 million of our common stock over a three-year period
ending on May 19, 2025. Under this stock repurchase program, we purchased 253,490 shares at a weighted average price of
$94.89 per share, totaling $24.1 million, during the year ended December 31, 2022. No shares were repurchased during the
years ended December 31, 2024 and 2023. See Note 13 of the Notes to Consolidated Financial Statements for additional
information related to our dividend and share repurchase programs.
32
Future Cash Requirements
The following table summarizes our material estimated future cash requirements under our contractual obligations for
indebtedness and operating leases at December 31, 2024, in total and disaggregated into current (payable in 2025) and long-
term (payable after 2025) obligations.
(In thousands)
Total
Current
Long-Term
Total indebtedness (a)
$
761,274
$
423
$
760,851
Interest on indebtedness (a)
41,483
22,869
18,614
Operating leases (b)
314,527
52,407
262,120
Total
$
1,117,284
$
75,699
$
1,041,585
a.
See Note 9 of the Notes to Consolidated Financial Statements for additional information regarding the maturities of
debt principal. Interest payments on our indebtedness are calculated using the outstanding balances and interest rates
in effect on December 31, 2024.
b.
See Note 11 of the Notes to Consolidated Financial Statements for additional information regarding the maturity of
our lease obligations under operating leases. Our finance leases were not material at December 31, 2024.
Retirement and Other Benefit Plans
We consider various factors when making funding decisions, such as regulatory requirements, actuarially determined
minimum contribution requirements, and contributions required to avoid benefit restrictions for defined benefit pension plans.
For the year ended December 31, 2024, we made discretionary matching contributions of $11.6 million to our defined
contribution 401(k) profit sharing plan. We expect to make matching contributions to our defined contribution 401(k) profit
sharing plan in 2025 at a level similar to 2024; however, these contributions are discretionary and subject to change. See Note 8
of the Notes to Consolidated Financial Statements for further information related to our retirement and other benefit plans.
CORPORATE GOVERNANCE
We are in compliance with the corporate governance requirements of the SEC and the New York Stock Exchange. Our
governance documents, committee charters, and key practices have been posted to the "Investors" section of our website
(www.lci1.com) and are updated periodically. The website also contains, or provides direct links to, all SEC filings, press
releases and investor presentations. We have also established a Whistleblower Policy, which includes a toll-free hotline
(800-461-9330) to report complaints about our accounting, internal controls, auditing matters or other concerns. The
Whistleblower Policy and procedure for complaints can be found on our website (www.lci1.com).
CONTINGENCIES
Additional information required by this item is included under Item 3 of Part I of this Annual Report on Form 10-K.
CRITICAL ACCOUNTING ESTIMATES
Our Consolidated Financial Statements have been prepared in conformity with accounting principles generally
accepted in the United States of America, which requires certain estimates and assumptions to be made that affect the amounts
and disclosures reported in those financial statements and the related accompanying notes. Actual results could differ from
these estimates and assumptions. While our significant accounting policies are more fully described in Note 2 of the Notes to
Consolidated Financial Statements, the following discussion addresses our most critical accounting estimates, which are those
that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our
financial condition and results of operations. Management has discussed the development and selection of its critical accounting
estimates with the Audit Committee of the Company’s Board of Directors, and the Audit Committee has reviewed the
disclosure presented below relating to the critical accounting estimates.
Warranty
We provide warranty terms based upon the type of product sold. We use historical warranty costs, claim lag, sales, and
current trends of repair costs as assumptions and inputs into our model to estimate future warranty claims and the associated
warranty accrual. The accounting for warranty accruals requires us to make assumptions and judgments, and to the extent actual
33
results differ from original estimates, adjustments to recorded accruals may be required. For further information on our
warranty accrual, including a roll-forward of changes in the accrual, see Note 7 of the Notes to Consolidated Financial
Statements.
Fair Value of Intangible Assets of Acquired Businesses
We value the intangible assets associated with the acquisitions of businesses on the respective acquisition dates.
Depending upon the type of intangible asset acquired, we use different valuation techniques in determining the fair value. Those
techniques include comparable market prices, long-term sales, profitability and cash flow forecasts, assumptions regarding
future industry-specific economic and market conditions and a market participant’s weighted average cost of capital, as well as
other techniques as circumstances require. By their nature, these assumptions require judgment, and if management had chosen
different assumptions, the fair value of intangible assets of acquired businesses would have been different. For further
information on acquired intangible assets, see Note 4 of the Notes to Consolidated Financial Statements.
New Accounting Pronouncements
Information required by this item is included in Note 2 of the Notes to Consolidated Financial Statements.
INFLATION
The prices of key raw materials, consisting primarily of steel and aluminum, and components used by us which are
made from these raw materials, are influenced by demand and other factors specific to these commodities, as well as by
inflationary pressures. Prices of these commodities have historically been volatile, and over the past few months prices have
continued to fluctuate. Overall, we experienced reduced prices of these commodities in 2024, and at this time, we expect
commodity prices to be generally stable in 2025; however, recent tariff activity could have an adverse impact. Please see
"Results of Operations" above for additional information regarding the impact of raw material costs on our results of operations
for the year ended December 31, 2024.
While we experienced deflation in the prices of our key raw materials in 2024, inflation on consumer products and
elevated interest rates in 2024 impacted retail consumers' discretionary spending, which we believe contributed to our decline in
sales, especially in our RV OEM and certain adjacent industries OEM markets, such as marine. Additionally, elevated interest
rates in 2023 and through the first half of 2024 impacted retail dealers' cost of floorplan financing, which elevates the carrying
cost of inventory on retail dealer lots. Interest rate reductions began in the last four months of 2024, and we expect potential
further interest rate reductions in 2025, which we believe would favorably impact retail consumers, as well as retail dealers'
floorplan financing.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risk related to changes in short-term interest rates on our variable rate debt, as further
described in Note 9 to the Notes to Consolidated Financial Statements. At December 31, 2024, we had $299.3 million of
borrowings outstanding on our variable rate revolving credit facility and incremental term loan. Assuming consistent borrowing
levels and an increase of 100 basis points in the interest rate for borrowings of a similar nature subsequent to December 31,
2024, future cash flows would be reduced by approximately $3.0 million per annum.
We are also exposed to changes in the prices of raw materials, specifically steel and aluminum. We have, from time to
time, entered into derivative instruments for the purpose of managing a portion of the exposures associated with fluctuations in
steel and aluminum prices. While these derivative instruments are subject to fluctuations in value, these fluctuations are
generally offset by the changes in fair value of the underlying exposures. We had no outstanding derivative instruments on
commodities at December 31, 2024 and 2023.
We have historically been able to obtain sales price increases to partially offset the majority of raw material cost
increases. However, there can be no assurance future cost increases, if any, can be partially or fully passed on to customers, or
that the timing of such sales price increases will match raw material cost increases.
Additional information required by this item is included under the caption "Inflation" in Part II, Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
34
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
LCI Industries:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of LCI Industries and subsidiaries (the Company) as of
December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and
cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the
consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over
financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
35
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Estimation of certain product warranty accruals
As discussed in Note 7 to the consolidated financial statements, the Company’s product warranty accrual as of
December 31, 2024 was $65.5 million. The Company provides warranty terms based upon the type of product sold and
estimates warranty accruals based upon various factors and information, including historical warranty costs, warranty
claim lag, and sales.
We identified the evaluation of certain product warranty accruals as a critical audit matter. Complex auditor judgment
was required to evaluate the Company's warranty accruals, including the model used to determine certain product
warranty accruals, which required the use of actuarial professionals with specialized skills and knowledge.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls related to certain product warranty accruals, including
controls related to the Company's model. We assessed the data used by the Company in developing the estimate by
comparing it to relevant claims and sales documentation. In addition, we involved actuarial professionals with
specialized skills and knowledge, who assisted in evaluating the Company's model by comparing certain of the
Company's product warranty accruals to a range of those product warranty accruals determined using independently
developed models.
/s/ KPMG LLP
We have served as the Company’s auditor since 1980.
Chicago, Illinois
February 21, 2025
36
LCI INDUSTRIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
2024
2023
2022
(In thousands, except per share amounts)
Net sales
$ 3,741,208
$ 3,784,808
$ 5,207,143
Cost of sales
2,861,493
3,008,618
3,933,854
Gross profit
879,715
776,190
1,273,289
Selling, general and administrative expenses
661,478
652,762
720,261
Operating profit
218,237
123,428
553,028
Interest expense, net
28,899
40,424
27,573
Income before income taxes
189,338
83,004
525,455
Provision for income taxes
46,471
18,809
130,481
Net income
$
142,867
$
64,195
$
394,974
Net income per common share:
Basic
$
5.61
$
2.54
$
15.57
Diluted
$
5.60
$
2.52
$
15.48
Weighted average common shares outstanding:
Basic
25,447
25,305
25,372
Diluted
25,507
25,436
25,514
The accompanying notes are an integral part of these Consolidated Financial Statements.
37
LCI INDUSTRIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31,
2024
2023
2022
(In thousands)
Net income
$
142,867
$
64,195
$
394,974
Other comprehensive income (loss):
Net foreign currency translation adjustment
(10,807)
8,532
(20,920)
Actuarial (loss) gain on pension plans
(233)
(964)
28,125
Total comprehensive income
$
131,827
$
71,763
$
402,179
The accompanying notes are an integral part of these Consolidated Financial Statements.
38
LCI INDUSTRIES
CONSOLIDATED BALANCE SHEETS
December 31,
2024
2023
(In thousands, except per share amount)
ASSETS
Current assets
Cash and cash equivalents
$
165,756
$
66,157
Accounts receivable, net of allowances of $5,439 and $5,701 at
December 31, 2024 and 2023, respectively
199,560
214,707
Inventories, net
736,604
768,407
Prepaid expenses and other current assets
58,318
67,599
Total current assets
1,160,238
1,116,870
Fixed assets, net
432,728
465,781
Goodwill
585,773
589,550
Other intangible assets, net
392,018
448,759
Operating lease right-of-use assets
224,313
245,388
Other long-term assets
99,669
92,971
Total assets
$
2,894,739
$
2,959,319
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term indebtedness
$
423
$
589
Accounts payable, trade
187,684
183,697
Current portion of operating lease obligations
38,671
36,269
Accrued expenses and other current liabilities
185,275
174,437
Total current liabilities
412,053
394,992
Long-term indebtedness
756,830
846,834
Operating lease obligations
199,929
222,680
Deferred taxes
26,110
32,345
Other long-term liabilities
112,931
107,432
Total liabilities
1,507,853
1,604,283
Stockholders' equity
Common stock, par value $.01 per share
288
287
Paid-in capital
257,486
245,659
Retained earnings
1,208,096
1,177,034
Accumulated other comprehensive income
3,232
14,272
Stockholders' equity before treasury stock
1,469,102
1,437,252
Treasury stock, at cost
(82,216)
(82,216)
Total stockholders' equity
1,386,886
1,355,036
Total liabilities and stockholders' equity
$
2,894,739
$
2,959,319
The accompanying notes are an integral part of these Consolidated Financial Statements.
39
LCI INDUSTRIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(In thousands)
2024
2023
2022
Cash flows from operating activities:
Net income
$
142,867
$
64,195
$
394,974
Adjustments to reconcile net income to cash flows provided by
operating activities:
Depreciation and amortization
125,693
131,768
129,212
Stock-based compensation expense
18,653
18,229
23,695
Deferred taxes
(7,073)
2,067
(9,277)
Other non-cash items
7,209
7,716
3,496
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net
13,469
1,594
115,706
Inventories, net
46,335
235,347
117,419
Prepaid expenses and other assets
4,532
25,954
14,990
Accounts payable, trade
3,474
38,737
(161,121)
Accrued expenses and other liabilities
15,125
1,622
(26,580)
Net cash flows provided by operating activities
370,284
527,229
602,514
Cash flows from investing activities:
Capital expenditures
(42,333)
(62,209)
(130,641)
Acquisitions of businesses
(19,957)
(25,851)
(108,470)
Other investing activities
1,192
4,312
(2,679)
Net cash flows used in investing activities
(61,098)
(83,748)
(241,790)
Cash flows from financing activities:
Vesting of stock-based awards, net of shares tendered for payment of
taxes
(9,159)
(9,628)
(10,961)
Proceeds from revolving credit facility
86,248
248,900
1,128,400
Repayments under revolving credit facility
(138,752)
(464,822)
(1,233,740)
Repayments under shelf loan, term loan, and other borrowings
(36,655)
(61,099)
(73,031)
Payment of dividends
(109,471)
(106,336)
(102,726)
Payment of contingent consideration and holdbacks related to
acquisitions
(2)
(31,857)
(60,228)
Repurchases of common stock
—
—
(24,054)
Other financing activities
(430)
(1,342)
1,469
Net cash flows used in financing activities
(208,221)
(426,184)
(374,871)
Effect of exchange rate changes on cash and cash equivalents
(1,366)
1,361
(1,250)
Net increase (decrease) in cash and cash equivalents
99,599
18,658
(15,397)
Cash and cash equivalents at beginning of period
66,157
47,499
62,896
Cash and cash equivalents at end of period
$
165,756
$
66,157
$
47,499
The accompanying notes are an integral part of these Consolidated Financial Statements.
40
LCI INDUSTRIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
Year Ended December 31,
2024
2023
2022
(In thousands)
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest
$
31,505
$
39,925
$
25,052
Income taxes, net of refunds
46,422
8,118
170,012
Non-cash investing and financing activities:
Contribution of net assets for investment in unconsolidated joint
venture
—
34,220
—
Purchase of property and equipment in accrued expenses
293
531
1,730
The accompanying notes are an integral part of these Consolidated Financial Statements.
41
LCI INDUSTRIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(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 - January 1, 2022
$
284 $ 220,459 $ 930,795 $
(501) $ (58,162) $
1,092,875
Net income
—
—
394,974
—
—
394,974
Issuance of 159,125 shares of common
stock pursuant to stock-based awards, net
of shares tendered for payment of taxes
1
(10,962)
—
—
—
(10,961)
Stock-based compensation expense
—
23,695
—
—
—
23,695
Repurchase of 253,490 shares of
common stock
—
—
—
—
(24,054)
(24,054)
Other comprehensive income
—
—
—
7,205
—
7,205
Cash dividends ($4.05 per share)
—
— (102,726)
—
—
(102,726)
Dividend equivalents on stock-based
awards
—
1,764
(1,764)
—
—
—
Balance - December 31, 2022
285
234,956 1,221,279
6,704
(82,216)
1,381,008
Net income
—
—
64,195
—
—
64,195
Issuance of 147,216 shares of common
stock pursuant to stock-based awards, net
of shares tendered for payment of taxes
2
(9,630)
—
—
—
(9,628)
Stock-based compensation expense
—
18,229
—
—
—
18,229
Other comprehensive income
—
—
—
7,568
—
7,568
Cash dividends ($4.20 per share)
—
— (106,336)
—
—
(106,336)
Dividend equivalents on stock-based
awards
—
2,104
(2,104)
—
—
—
Balance - December 31, 2023
287
245,659 1,177,034
14,272
(82,216)
1,355,036
Net income
—
—
142,867
—
—
142,867
Issuance of 137,114 shares of common
stock pursuant to stock-based awards, net
of shares tendered for payment of taxes
1
(9,160)
—
—
—
(9,159)
Stock-based compensation expense
—
18,653
—
—
—
18,653
Other comprehensive loss
—
—
—
(11,040)
—
(11,040)
Cash dividends ($4.30 per share)
—
— (109,471)
—
—
(109,471)
Dividend equivalents on stock-based
awards
—
2,334
(2,334)
—
—
—
Balance - December 31, 2024
$
288 $ 257,486 $ 1,208,096 $
3,232 $ (82,216) $
1,386,886
The accompanying notes are an integral part of these Consolidated Financial Statements.
42
LCI INDUSTRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
BASIS OF PRESENTATION
The Consolidated Financial Statements include the accounts of LCI Industries and its wholly-owned subsidiaries
("LCII" and collectively with its subsidiaries, the "Company," "we," "us," or "our"). LCII has no unconsolidated subsidiaries.
All significant intercompany balances and transactions have been eliminated.
LCII, through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert
Components," "LCI," or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation,
transportation, and building products industries. In addition to serving original equipment manufacturers ("OEMs"), the
Company also caters to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as
directly to consumers online. At December 31, 2024, the Company operated over 110 manufacturing and distribution facilities
located throughout North America and Europe.
The Company's results are influenced by seasonal demand patterns, with sales and profits typically strongest in the
second quarter and weakest in the fourth quarter. However, economic conditions, dealer inventory fluctuations, and consumer
trends can impact these patterns. Additionally, many of the optional upgrades and non-critical replacement parts for RVs are
purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal.
The Company is not aware of any significant events which occurred subsequent to the balance sheet date but prior to
the filing of this report that would have a material impact on the Consolidated Financial Statements. Certain prior year balances
have been reclassified to conform to the current year presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities,
net sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates
its estimates, including, but not limited to, those related to product returns, sales and purchase rebates, accounts receivable,
inventories, goodwill and other intangible assets, net assets of acquired businesses, income taxes, warranty and product recall
obligations, self-insurance obligations, operating lease right-of-use assets and obligations, asset retirement obligations, long-
lived assets, pension and post-retirement benefits, stock-based compensation, segment allocations, contingent consideration,
environmental liabilities, contingencies, and litigation. The Company bases its estimates on historical experience, other
available information, and various other assumptions believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other
resources. Actual results and events could differ significantly from management estimates.
Risks and Uncertainties
Negative conditions in the general economy in the United States or abroad, including conditions resulting from
financial and credit market fluctuations, increased inflation and interest rates, changes in economic policy, trade uncertainty,
including changes in tariffs, sanctions, international treaties, and other trade restrictions, geopolitical tensions, armed conflicts,
natural disasters or global public health crises, have negatively impacted, and could continue to negatively impact, the
Company’s business, liquidity, financial condition, and results of operations.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
The Company considers cash on hand, money market funds, and other highly liquid investments with original
maturities of three months or less to be cash and cash equivalents.
43
Accounts Receivable
Accounts receivable are stated at historical carrying value, net of write-offs and allowances. The Company establishes
allowances based upon historical experience, current conditions, and reasonable forecasts. Uncollectible accounts receivable are
written off when a settlement is reached or when the Company has determined the balance will not be collected.
Inventories
Inventories are stated at the lower of cost (using the first-in, first-out (FIFO) method) or net realizable value. Cost
includes material, labor, and overhead.
Fixed Assets
Fixed assets which are owned are stated at cost less accumulated depreciation and are depreciated on a straight-line
basis over the estimated useful lives of the properties and equipment. Leasehold improvements and leased equipment are
amortized over the shorter of the lives of the leases or the underlying assets. Maintenance and repair costs that do not improve
service potential or extend economic life are expensed as incurred.
Leases
The Company leases certain manufacturing and distribution facilities, administrative office space, semi-tractors,
trailers, forklifts, and other equipment through operating leases with unrelated third parties. At contract inception, the Company
determines whether a contract is or contains a lease and whether the lease should be classified as an operating or finance lease.
The Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the
future minimum lease payments over the lease term at the commencement date. The Company uses its incremental borrowing
rate based on information available at lease inception in determining the present value of the lease payments. The Company
applies a portfolio approach for determining the incremental borrowing rate based on applicable lease terms and the current
economic environment. Many of the Company's leases include renewal options, which are included in the lease term when it is
reasonably certain the option will be exercised. Leases with an initial term of 12 months or less are recognized in lease expense
on a straight-line basis over the lease term and not recorded on the Consolidated Balance Sheets.
Certain of the Company's lease arrangements contain lease components (such as minimum rent payments) and non-
lease components (such as common-area or other maintenance costs and taxes). The Company generally accounts for each
component separately based on the estimated standalone price of each component. Some of the Company's lease arrangements
include rental payments that are adjusted periodically for an index rate. These leases are initially measured using the projected
payments in effect at the inception of the lease. Certain of the Company's leased semi-tractors, trailers, and forklifts include
variable costs for usage or mileage. Such variable costs are expensed as incurred and included in variable lease costs.
Finance leases and lease arrangements under which the Company is the lessor are not material to the Company's
consolidated financial statements. The Company's lease agreements typically do not contain any significant residual value
guarantees or restrictive covenants.
Warranty
The Company provides warranty terms based upon the type of product sold. The Company uses historical warranty
costs, claim lag, sales, and current trends of repair costs as assumptions and inputs into its model to estimate future warranty
claims and the associated warranty accrual. The accounting for warranty accruals requires the Company to make assumptions
and judgments, and to the extent actual results differ from original estimates, adjustments to recorded accruals may be required.
The Company records adjustments to the warranty accrual as preexisting warranty amounts which represent a change in
estimates related to sales occurring in prior periods. Such adjustments typically occur when actual claim experience deviates
from historical trends. See Note 7 - Accrued Expenses and Other Current Liabilities for further detail.
Income Taxes
Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting
and tax basis of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are
expected to reverse. In assessing the realizability of deferred tax assets, management considers whether it is more likely than
not that some portion or all the deferred tax assets will not be realized.
44
The Company accounts for uncertainty in tax positions by recognizing in its financial statements the impact of a tax
position only if that position is more likely than not of being sustained on audit, based on the technical merits of the position.
Further, the Company assesses the tax benefits of the tax positions in its financial statements based on experience with similar
tax positions, information obtained during the examination process and the advice of experts. The Company recognizes
previously unrecognized tax benefits upon the earlier of the expiration of the period to assess tax in the applicable taxing
jurisdiction or when the matter is constructively settled and upon changes in statutes or regulations and new case law or rulings.
The Company classifies interest and penalties related to income taxes as a component of income tax expense in its Consolidated
Statements of Income.
Goodwill
Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the
net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit
level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may
exist. In 2024 and 2023, the Company assessed qualitative factors of its reporting units to determine whether it was more likely
than not the fair value of the reporting unit was less than its carrying amount, including goodwill. The qualitative impairment
test consists of an assessment of qualitative factors, including general economic and industry conditions, market share, and
input costs.
Other Intangible Assets
Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their
estimated residual values and reviewed for impairment. Intangible assets are amortized using either an accelerated or straight-
line method, whichever best reflects the pattern in which the estimated future economic benefits of the asset will be consumed.
The useful lives of intangible assets are determined after considering the expected cash flows and other specific facts and
circumstances related to each intangible asset. Intangible assets with indefinite lives are not amortized, but instead are tested for
impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.
Impairment of Long-Lived Assets
Long-lived assets, other than goodwill, are tested for impairment when changes in circumstances indicate their
carrying value may not be recoverable. A determination of impairment, if any, is made based on the undiscounted value of
estimated future cash flows, salvage value or expected net sales proceeds, depending on the circumstances. Impairment is
measured as the excess of the carrying value over the estimated fair value of such assets.
Foreign Currency Translation
The financial statements of the Company's international subsidiaries generally are measured using the local currency as
the functional currency. The translation from the applicable foreign currency to U.S. Dollars is performed for balance sheet
accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted
average exchange rate for the period. The resulting translation adjustments are recorded in accumulated other comprehensive
income as a component of stockholders' equity. The Company reflects net foreign exchange transaction gains and losses
resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange
gains or losses in selling, general and administrative expenses in the Consolidated Statements of Income.
Stock-Based Compensation
All stock-based compensation awards are expensed over their vesting period, based on fair value. For awards having a
service-only vesting condition, the Company recognizes stock-based compensation expense on a straight-line basis over the
requisite service periods. For awards with a performance vesting condition, which are subject to certain pre-established
performance targets, the Company recognizes stock-based compensation expense on a graded-vesting basis to the extent it is
probable the performance targets will be met. The fair values of deferred stock units, restricted stock units, restricted stock, and
stock awards are based on the market price of the Company's common stock, all on the date the stock-based awards are granted.
45
Revenue Recognition
The Company recognizes revenue when performance obligations under the terms of contracts with customers are
satisfied, which occurs with the transfer of control of the Company’s products. Revenue is measured as the amount of
consideration the Company expects to receive in exchange for transferring its products to its customers. Sales, value added, and
other taxes collected concurrently with revenue-producing activities are excluded from revenue.
For product sales, the Company transfers control and recognizes revenue when it ships the product from its facility to
its customer. The amount of consideration the Company receives, and the revenue recognized, varies with sales discounts,
volume rebate programs, and indexed material pricing. When the Company offers customers retrospective volume rebates, it
estimates the expected rebates based on an analysis of historical experience. The Company adjusts its estimate of revenue
related to volume rebates at the earlier of when the most likely amount of consideration expected to be received changes or
when the consideration becomes fixed. Volume rebates are generally settled on a quarterly basis. When the Company offers
customers prompt pay sales discounts or agrees to variable pricing based on material indices, it estimates the expected discounts
or pricing adjustments based on an analysis of historical experience. The Company adjusts its estimate of revenue related to
sales discounts and indexed material pricing to the expected value of the consideration to which the Company will be entitled.
The Company includes the variable consideration in the transaction price to the extent that it is probable that a significant
reversal of cumulative revenue will not occur when the volume, discount or indexed material price uncertainties are resolved.
See Note 14 - Segment Reporting for the Company's disclosures of disaggregated revenue.
Shipping and Handling Costs
The Company recognizes shipping and handling costs as fulfillment costs when control over products has transferred
to the customer, and records the expense within selling, general and administrative expenses. Such costs aggregated to
$208.2 million, $214.9 million, and $230.4 million in the years ended December 31, 2024, 2023, and 2022, respectively.
Legal Costs
The Company expenses all legal costs associated with litigation as incurred. Legal expenses are included in selling,
general and administrative expenses in the Consolidated Statements of Income.
Fair Value Measurements
Fair value is determined using a hierarchy that has three levels based on the reliability of the inputs used to determine
fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to
fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant
unobservable inputs.
Recent Accounting Pronouncements
Recently issued accounting pronouncements not yet adopted
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update
("ASU") 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible
Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments
should be accounted for as an induced conversion rather than as debt extinguishments. This ASU is effective for fiscal years
beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted.
The Company is evaluating the effect of adopting this new accounting guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of disaggregated information about specific
categories underlying certain income statement expense line items in the notes to the financial statements for both annual and
interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after
46
December 15, 2027, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting
guidance.
In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures
requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and
income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions
and unrecognized deferred tax liabilities. This ASU is effective for fiscal years beginning after December 15, 2024 on a
prospective basis and retrospective application is permitted. The Company will adopt this ASU for the year ending
December 31, 2025, and it will only impact the Company's disclosures with no impacts to its financial condition or results of
operations.
Recently adopted accounting pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures, which requires entities to report incremental information about significant segment expenses included in a
segment's profit or loss measure as well as the title and position of the chief operating decision maker ("CODM"). The new
standard also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been
disclosed annually. The Company adopted ASU 2023-07 effective December 31, 2024 on a retrospective basis. As a result, the
Company has enhanced its segment disclosures in this report to include the presentation of cost of sales and selling, general and
administrative expenses by segment and the disclosure of its CODM. The adoption of this ASU only affects the Company's
disclosures with no impact to its financial condition or results of operations.
3.
EARNINGS PER SHARE
The following reconciliation details the denominator used in the computation of basic and diluted earnings per share
for the years ended December 31:
(In thousands)
2024
2023
2022
Weighted average shares outstanding for basic earnings per share
25,447
25,305
25,372
Common stock equivalents pertaining to stock-based awards
60
131
142
Weighted average shares outstanding for diluted earnings per share
25,507
25,436
25,514
Equity instruments excluded from diluted net earnings per share
calculation as the effect would have been anti-dilutive
242
165
102
For the Company's 1.125 percent convertible senior notes due 2026 (the "Convertible Notes") issued in May 2021, the
dilutive effect is calculated using the if-converted method. The Company is required, pursuant to the indenture governing the
Convertible Notes, dated May 13, 2021, by and between the Company and U.S. Bank National Association, as trustee (the
"Indenture"), to settle the principal amount of the Convertible Notes in cash and may elect to settle the remaining conversion
obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company's common stock, or a
combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the
conversion obligation, assuming all the Convertible Notes are converted. Because the average closing price of the Company's
common stock for the year ended December 31, 2024, which is used as the basis for determining the dilutive effect on earnings
per share, was less than the conversion price of $165.65, all associated shares were antidilutive.
In conjunction with the issuance of the Convertible Notes, the Company, in privately negotiated transactions with
certain commercial banks (the "Counterparties"), sold warrants to purchase 2.8 million shares of the Company's common stock
(the "Warrants"). The Warrants have a strike price of $259.84 per share, subject to customary anti-dilution adjustments. For
calculating the dilutive effect of the Warrants, the Company uses the treasury stock method. With this method, the Company
assumes exercise of the Warrants at the beginning of the period, or at time of issuance if later, and issuance of shares of
common stock upon exercise. Proceeds from the exercise of the Warrants are assumed to be used to repurchase shares of the
Company's common stock at the average market price during the period. The incremental shares, representing the number of
shares assumed to be received upon the exercise of the Warrants less the number of shares repurchased, are included in diluted
shares. For the year ended December 31, 2024, the average share price was below the Warrant strike price of $259.84 per share,
and therefore 2.8 million shares were considered antidilutive.
47
In connection with the issuance of the Convertible Notes, the Company entered into privately negotiated call option
contracts on the Company's common stock (the "Convertible Note Hedge Transactions") with the Counterparties. The Company
paid an aggregate amount of $100.1 million to the Counterparties pursuant to the Convertible Note Hedge Transactions. The
Convertible Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those in the
Convertible Notes, approximately 2.8 million shares of the Company's common stock, the same number of shares initially
underlying the Convertible Notes, at a strike price of approximately $165.65, subject to customary anti-dilution adjustments.
The Convertible Note Hedge Transactions will expire upon the maturity of the Convertible Notes, subject to earlier exercise or
termination. Exercise of the Convertible Note Hedge Transactions would reduce the number of shares of the Company's
common stock outstanding, and therefore would be antidilutive.
4.
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS
Acquisition in 2024
Camping World Furniture
In May 2024, the Company acquired the business and certain assets of the furniture operations of CWDS, LLC, a
subsidiary of Camping World Holdings, Inc., in exchange for cash consideration of $20.0 million, plus a holdback payment of
$1.0 million due on the first anniversary of the acquisition. The acquisition, which qualifies as a business combination for
accounting purposes, expands the Company's furniture portfolio. The results of the acquired business have been included in the
Consolidated Statements of Income since the acquisition date, primarily in the OEM segment. The preliminary purchase price
allocation resulted in $1.7 million of goodwill (tax deductible) and $4.3 million of acquired intangible assets. As this
acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations
and other disclosures are not presented.
Acquisitions in 2023
During the year ended December 31, 2023, the Company completed two acquisitions for an aggregate $25.8 million of
cash purchase consideration, plus holdback payments of $0.2 million to be paid in 2025. The purchase price allocations resulted
in $16.8 million of goodwill (tax deductible).
Acquisitions in 2022
Way
In November 2022, the Company acquired substantially all of the business assets of Way Interglobal Network LLC
("Way"), a distributor of innovative appliances and electronics to OEMs in the RV industry. The Company paid $52.8 million
in cash consideration at closing, subject to adjustment as a result of net working capital true-up procedures, and with deferred
consideration of $2.0 million originally due on the first anniversary of the acquisition in November 2023. The Company
completed a reconciliation of net working capital with the seller, which resulted in a reduction of the purchase price by
$15.4 million. This purchase price reduction resulted in the cancellation of the holdback payment and recognition of a
receivable from the seller. Following these adjustments, the Company determined that the total fair value of the consideration
given was $39.3 million. The results of the acquired business have been included in the Consolidated Statements of Income
since the acquisition date, primarily in the Company's OEM Segment.
Girard
In March 2022, the Company acquired substantially all of the business assets of Girard Systems and Girard Products
LLC (collectively "Girard"), a manufacturer and distributor of proprietary awnings and tankless water heaters for OEMs and
aftermarket customers in the RV, specialty vehicle, and related industries. The total fair value of consideration was
approximately $70.7 million. The Company paid $50.0 million in cash consideration at closing, with fixed deferred
consideration of $20.0 million paid in July 2022 and $0.7 million paid to true up net working capital in September 2022. The
results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, in both
the Company's OEM and Aftermarket Segments.
48
Other Acquisitions in 2022
During the twelve months ended December 31, 2022, the Company completed two other acquisitions for $5.0 million
of cash purchase consideration. The purchase price allocations resulted in $0.8 million of goodwill (tax deductible).
Goodwill
Changes in the carrying amount of goodwill by reportable segment were as follows:
(In thousands)
OEM
Segment
Aftermarket
Segment
Total
Net balance – December 31, 2022
$
399,736
$
167,327
$
567,063
Acquisitions and divestitures
14,025
—
14,025
Measurement period adjustments
5,708
160
5,868
Foreign currency translation
2,232
362
2,594
Net balance – December 31, 2023
421,701
167,849
589,550
Acquisitions
1,709
—
1,709
Foreign currency translation
(5,190)
(296)
(5,486)
Net balance – December 31, 2024
$
418,220
$
167,553
$
585,773
The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30,
2024, 2023, and 2022, and concluded no goodwill impairment existed at any of those times. The Company plans to update its
assessment as of November 30, 2025, or sooner if events occur or circumstances change that could more likely than not reduce
the fair value of a reporting unit below its carrying value. The goodwill balance as of each of December 31, 2024, 2023, and
2022 included $50.5 million of accumulated impairment, which occurred prior to December 31, 2022.
Other Intangible Assets
Other intangible assets, by segment, at December 31 were as follows:
(In thousands)
2024
2023
OEM Segment
$
235,403
$
276,622
Aftermarket Segment
156,615
172,137
Other intangible assets
$
392,018
$
448,759
Other intangible assets consisted of the following at December 31, 2024:
(In thousands)
Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated
Useful
Life in Years
Customer relationships
$
508,945
$
228,332
$
280,613
6
to
20
Patents
111,934
74,010
37,924
3
to
20
Trade names (finite life)
95,879
30,524
65,355
3
to
20
Trade names (indefinite life)
7,432
—
7,432
Indefinite
Non-compete agreements
5,154
4,732
422
3
to
6
Other
609
337
272
2
to
12
Other intangible assets
$
729,953
$
337,935
$
392,018
The Company performed its annual impairment test for indefinite lived intangible assets as of November 30, 2024,
2023, and 2022, and concluded no impairment existed at any of those times.
49
Other intangible assets consisted of the following at December 31, 2023:
(In thousands)
Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated
Useful
Life in Years
Customer relationships
$
509,505
$
189,967
$
319,538
6
to
20
Patents
114,864
67,602
47,262
3
to
20
Trade names (finite life)
99,366
26,978
72,388
3
to
20
Trade names (indefinite life)
7,600
—
7,600
Indefinite
Non-compete agreements
10,104
8,453
1,651
3
to
6
Other
609
289
320
2
to
12
Other intangible assets
$
742,048
$
293,289
$
448,759
Amortization expense related to other intangible assets was as follows for the years ended December 31:
(In thousands)
2024
2023
2022
Cost of sales
$
8,915
$
9,910
$
10,155
Selling, general and administrative expense
46,385
47,165
46,218
Amortization expense
$
55,300
$
57,075
$
56,373
Estimated amortization expense for other intangible assets for the next five years is as follows:
(In thousands)
2025
2026
2027
2028
2029
Cost of sales
$
7,997
$
6,779
$
6,046
$
5,995
$
5,049
Selling, general and administrative
expense
43,184
41,279
40,219
37,064
35,967
Amortization expense
$
51,181
$
48,058
$
46,265
$
43,059
$
41,016
5.
INVENTORIES
Inventories consisted of the following at December 31:
(In thousands)
2024
2023
Raw materials
$
427,585
$
457,877
Work in process
44,435
45,112
Finished goods
264,584
265,418
Inventories, net
$
736,604
$
768,407
At December 31, 2024 and 2023, the Company had recorded inventory obsolescence reserves of $77.7 million and
$71.3 million, respectively.
50
6.
FIXED ASSETS
Fixed assets consisted of the following at December 31:
Estimated
Useful Life
(In thousands)
2024
2023
in Years
Land
$
20,506
$
20,669
Buildings and improvements
247,276
244,742
10 to 40
Leasehold improvements
34,114
33,193
3 to 20
Machinery and equipment
539,327
542,395
3 to 15
Furniture and fixtures
82,049
100,368
3 to 15
Construction in progress
36,947
42,181
Fixed assets, at cost
960,219
983,548
Less accumulated depreciation and amortization
(527,491)
(517,767)
Fixed assets, net
$
432,728
$
465,781
Depreciation and amortization of fixed assets was as follows for the years ended December 31:
(In thousands)
2024
2023
2022
Cost of sales
$
56,773
$
57,134
$
56,039
Selling, general and administrative expenses
13,620
17,559
16,800
Total
$
70,393
$
74,693
$
72,839
7.
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following at December 31:
(In thousands)
2024
2023
Employee compensation and benefits
$
70,107
$
58,845
Current portion of accrued warranty
40,735
48,468
Customer rebates
21,707
19,403
Other
52,726
47,721
Accrued expenses and other current liabilities
$
185,275
$
174,437
Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty
obligations, the Company considers various factors, including the Company's historical warranty costs, warranty claim lag, and
sales. The following table provides a reconciliation of the activity related to the Company's accrued warranty, including both
the current and long-term portions, for the years ended December 31:
(In thousands)
2024
2023
2022
Balance at beginning of period
$
71,578
$
54,528
$
52,114
Provision for warranty expense issued during the period
38,123
55,023
39,782
Provision for warranty expense for preexisting warranties
16,724
29,308
6,581
Warranty liability from acquired businesses
—
789
—
Warranty costs paid
(60,940)
(68,070)
(43,949)
Balance at end of period
65,485
71,578
54,528
Less long-term portion
(24,750)
(23,110)
(19,380)
Current portion of accrued warranty at end of period
$
40,735
$
48,468
$
35,148
51
8.
RETIREMENT AND OTHER BENEFIT PLANS
Defined Contribution Plan
The Company maintains a discretionary defined contribution 401(k) profit sharing plan covering all eligible
employees. The Company contributed $11.6 million, $12.1 million, and $12.9 million to this plan during the years ended
December 31, 2024, 2023, and 2022, respectively.
Deferred Compensation Plan
The Company has an Executive Non-Qualified Deferred Compensation Plan (the "Plan"). Pursuant to the Plan, certain
management employees are eligible to defer all or a portion of their regular salary and incentive compensation. Participants
deferred $0.4 million, $2.6 million, and $5.4 million during the years ended December 31, 2024, 2023, and 2022, respectively.
The amounts deferred under this Plan are credited with earnings or losses based upon changes in values of the notional
investments elected by the Plan participants. Each Plan participant is fully vested in their deferred compensation and earnings
credited to his or her account as all contributions to the Plan are made by the participant. The Company is responsible for
certain costs of Plan administration, which are not significant, and will not make any contributions to the Plan. Pursuant to the
Plan, payments to the Plan participants are made from the general unrestricted assets of the Company, and the Company's
obligations pursuant to the Plan are unfunded and unsecured. Participants withdrew $2.9 million, $5.0 million, and $2.4 million
from the Plan during the years ended December 31, 2024, 2023, and 2022, respectively. At December 31, 2024 and 2023,
deferred compensation of $43.8 million and $40.5 million, respectively, was recorded in other long-term liabilities, and
deferred compensation of $2.5 million and $2.5 million, respectively, was recorded in accrued expenses and other current
liabilities. The Company invests the majority of amounts deferred by the Plan participants in life insurance contracts, matching
the investments elected by the Plan participants. Deferred compensation assets and liabilities are recorded at contract value. At
December 31, 2024 and 2023, investments under the plan of $45.2 million and $41.8 million, respectively, were recorded in
other long-term assets.
Dutch Pension Plans
The acquisition of Polyplastic in January 2020 included the assumption of two partially-funded defined benefit
pension plans (the "Dutch pension plans") based in the Netherlands. The Dutch pension plans, which are qualified defined
benefit pension plans, provided benefits based on years of service and average pay. During 2022, there was a curtailment of the
Dutch pension plans for the Company's Dutch employees. These employees were moved into defined contribution plans. The
Company has purchased annuity contracts from an insurance company to cover the vested benefits of the defined pension plans;
however, future indexation and cost of living adjustments for all participants remains applicable, and the Company remains
liable for future funding. The Company is not obligated to provide future pension funding for service after December 31, 2022.
9.
LONG-TERM INDEBTEDNESS
Long-term debt consisted of the following at December 31:
(In thousands)
2024
2023
Convertible Notes
$
460,000
$
460,000
Term Loan
280,000
315,000
Revolving Credit Loan
19,263
75,909
Other
1,588
3,138
Unamortized deferred financing fees
(3,598)
(6,624)
757,253
847,423
Less current portion
(423)
(589)
Long-term indebtedness
$
756,830
$
846,834
Credit Agreement
The Company and certain of its subsidiaries are party to a credit agreement dated December 14, 2018 with JPMorgan
Chase, N.A., as a lender and administrative agent, and other bank lenders (as amended, the "Credit Agreement"). The Credit
52
Agreement provides for a $600.0 million revolving credit facility (of which $50.0 million is available for the issuance of letters
of credit (the "LC Facility") and up to $400.0 million is available in approved foreign currencies). The Credit Agreement also
provides for term loans (the "Term Loan") to the Company in an aggregate principal amount of $400.0 million. The maturity
date of the Credit Agreement is December 7, 2026. The Term Loan is required to be repaid in an amount equal to 1.25 percent
of the original principal amount of the Term Loan for the first eight quarterly periods commencing with the quarter ended
December 31, 2021, 1.875 percent of the original principal amount of the Term Loan for the next eight quarterly periods, and
then 2.50 percent of the original principal amount of the Term Loan of each additional payment until the maturity date. The
Company prepaid $37.5 million of principal on the Term Loan during 2023 and an additional $35.0 million of principal on the
Term Loan during 2024, which was applied to pay in full the scheduled principal amortization payments due through March 31,
2026. The Credit Agreement also permits the Company to request an increase to the revolving and/or term loan facility by up to
an additional $400.0 million in the aggregate upon the approval of the lenders providing any such increase and the satisfaction
of certain other conditions.
Borrowings under the Credit Agreement in U.S. dollars are designated from time to time by the Company as (i) base
rate loans which bear interest at a base rate plus additional interest ranging from 0.0 percent to 0.875 percent (0.375 percent was
applicable at December 31, 2024) depending on the Company’s total net leverage ratio or (ii) term benchmark loans which bear
interest at term Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment of 0.1 percent for an interest
period selected by the Company plus additional interest ranging from 0.875 percent to 1.875 percent (1.375 percent was
applicable at December 31, 2024) depending on the Company’s total net leverage ratio. Foreign currency borrowings have the
same additional interest margins applicable to term benchmark loans based on the Company's total net leverage ratio. At
December 31, 2024 and 2023, the Company had $4.8 million and $4.7 million, respectively, in issued, but undrawn, standby
letters of credit under the LC Facility. A commitment fee ranging from 0.150 percent to 0.275 percent (0.200 percent was
applicable at December 31, 2024) depending on the Company's total net leverage ratio accrues on the actual daily amount that
the revolving commitment exceeds the revolving credit exposure.
Pursuant to the Credit Agreement, the Company shall not permit its net leverage ratio to exceed certain limits, shall
maintain a minimum debt service coverage ratio, and must meet certain other financial requirements. At December 31, 2024,
the Company was in compliance with all financial covenants. The maximum net leverage ratio covenant limits the amount of
consolidated outstanding indebtedness that the Company may incur on a trailing twelve-month EBITDA. Availability under the
Company’s revolving credit facility, giving effect to this limitation, was $452.5 million at December 31, 2024. The Company
believes the availability under the revolving credit facility under the Credit Agreement, along with its cash flows from
operations, are adequate to finance the Company's anticipated cash requirements for the next twelve months.
At December 31, 2024, the fair value of the Company's floating rate long-term debt under the Credit Agreement
approximates the carrying value, as estimated using quoted market prices and discounted future cash flows based on similar
borrowing arrangements.
Convertible Notes
On May 13, 2021, the Company issued $460.0 million in aggregate principal amount of 1.125 percent Convertible
Notes due 2026 in a private placement to certain qualified institutional buyers, resulting in net proceeds to the Company of
approximately $447.8 million after deducting the initial purchasers' discounts and offering expenses payable by the Company.
The Convertible Notes bear interest at a coupon rate of 1.125 percent per annum, payable semiannually in arrears on May 15
and November 15 of each year, beginning on November 15, 2021. The Convertible Notes will mature on May 15, 2026, unless
earlier converted, redeemed, or repurchased, in accordance with their terms.
As of December 31, 2024, the conversion rate of the Convertible Notes was 6.2482 shares of the Company's common
stock per $1,000 principal amount of the Convertible Notes. The conversion rate of the Convertible Notes is subject to further
adjustment upon the occurrence of certain specified events. In addition, upon the occurrence of a make-whole fundamental
change (as defined in the Indenture) or upon a notice of redemption, the Company will, in certain circumstances, increase the
conversion rate for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental
change or notice of redemption, as the case may be.
Prior to the close of business on the business day immediately preceding January 15, 2026, the Convertible Notes are
convertible at the option of the holders only under certain circumstances as set forth in the Indenture. On or after January 15,
2026, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may
convert all or any portion of their Convertible Notes at any time. Upon conversion, the Company will pay cash up to the
aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of the
53
Company's common stock, or a combination of cash and shares of the Company's common stock, at the Company's election, in
respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the
Convertible Notes being converted.
Beginning on May 20, 2024, the Company may redeem for cash all or any portion of the Convertible Notes, at the
Company's option, if the last reported sale price of the Company's common stock has been at least 130 percent of the
conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day
period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date
on which the Company provides notice of redemption at a redemption price equal to 100 percent of the principal amount of the
Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence
of a fundamental change (as defined in the Indenture), subject to certain conditions, holders of the Convertible Notes may
require the Company to repurchase for cash all or any portion of their Convertible Notes in principal amounts of $1,000 or an
integral multiple thereof at a repurchase price equal to 100 percent of the principal amount of the Convertible Notes to be
repurchased, plus accrued and unpaid interest on such Convertible Notes to, but not including, the fundamental change
repurchase date (as defined in the Indenture).
The Convertible Notes are senior unsecured obligations and rank senior in right of payment to all of the Company's
indebtedness that is expressly subordinated in right of payment to the Convertible Notes, equal in right of payment with all the
Company's liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness to the extent
of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including
trade payables) of our subsidiaries. The Indenture contains customary terms and covenants, including that upon certain events
of default occurring and continuing, either the named trustee or the holders of at least 25 percent of the aggregate principal
amount of the outstanding Convertible Notes may declare 100 percent of the principal of, and accrued and unpaid interest, if
any, on all the outstanding Convertible Notes to be due and payable.
The Convertible Notes are not registered securities nor listed on any securities exchange but may be actively traded by
qualified institutional buyers. The fair value of the Convertible Notes of $453.1 million at December 31, 2024 was estimated
using Level 1 inputs, as it is based on quoted prices for these instruments in active markets.
10.
INCOME TAXES
The components of earnings before income taxes consisted of the following for the years ended December 31:
(In thousands)
2024
2023
2022
United States
$
195,866
$
92,679
$
550,030
Foreign
(6,528)
(9,675)
(24,575)
Total earnings before income taxes
$
189,338
$
83,004
$
525,455
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended
December 31:
(In thousands)
2024
2023
2022
Current:
Federal
$
45,922
$
15,454
$
114,744
State and local
6,887
1,752
22,998
Foreign
735
(464)
2,016
Total current provision
53,544
16,742
139,758
Deferred:
Federal
(2,249)
5,824
(3,786)
State and local
(425)
824
(285)
Foreign
(4,399)
(4,581)
(5,206)
Total deferred provision (benefit)
(7,073)
2,067
(9,277)
Provision for income taxes
$
46,471
$
18,809
$
130,481
The Company had cash and cash equivalents of approximately $165.8 million and $66.2 million at December 31, 2024
and 2023, respectively, of which approximately 11 percent and 19 percent was held by subsidiaries in foreign countries. The
54
Company examined the potential liabilities related to investments in foreign subsidiaries and concluded that there are no
material deferred tax liabilities that should be recorded.
The provision for income taxes differs from the amount computed by applying the federal statutory rate of 21 percent
for 2024, 2023, and 2022 to income before income taxes for the following reasons for the years ended December 31:
(In thousands)
2024
2023
2022
Income tax at federal statutory rate
$
39,761
$
17,431
$
110,345
State income tax, net of federal income tax impact
5,105
2,035
17,944
Section 162(m) permanent addback
3,735
1,896
3,784
Federal tax credits
(1,002)
(1,219)
(1,638)
Share-based payment compensation excess tax benefit
(346)
(242)
(509)
Other
(782)
(1,092)
555
Provision for income taxes
$
46,471
$
18,809
$
130,481
At December 31, 2024, the Company had domestic federal income taxes receivable of $5.6 million, domestic state
income taxes receivable of $3.7 million, and foreign taxes receivable of $3.3 million recorded. At December 31, 2023, the
Company had domestic federal income taxes receivable of $7.7 million, domestic state income taxes receivable of $5.8 million,
and foreign taxes receivable of $3.2 million recorded.
Deferred Income Tax Assets and Liabilities and Valuation Allowances
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities were as follows at December 31:
(In thousands)
2024
2023
Deferred tax assets:
Stock-based compensation
$
1,836
$
1,840
Pension
909
1,133
Deferred compensation
11,114
10,223
Warranty
13,540
13,936
Convertible debt bond hedge
7,323
12,289
Inventory
24,007
20,811
Research and experimental costs
9,018
6,845
Other
6,963
7,043
Lease obligation asset
57,528
62,460
Net operating loss, interest, and tax credit carryforwards
15,152
13,231
Total deferred tax assets before valuation allowance
147,390
149,811
Less valuation allowance
(7,657)
(7,300)
Total deferred tax assets net of valuation allowance
139,733
142,511
Deferred tax liabilities:
Lease obligation liability
(54,106)
(59,212)
Fixed assets
(40,432)
(45,995)
Intangible assets
(64,953)
(66,398)
Total deferred tax liabilities
(159,491)
(171,605)
Net deferred tax liabilities
$
(19,758)
$
(29,094)
At December 31, 2024 and 2023, the Company had net foreign deferred tax liabilities of $8.7 million and
$15.4 million, respectively, primarily related to intangible assets, fixed assets, foreign pension obligations, and net operating
loss carryforwards net of any related valuation allowances included in other long-term liabilities on the Consolidated Balance
Sheets.
55
As of December 31, 2024, the Company had deferred tax assets recorded related to foreign net operating losses and tax
credit carryforwards of $15.2 million, net. This includes $1.7 million related to U.K. entities, $5.1 million related to Italian
entities, $7.5 million related to Hong Kong entities, and $0.9 million related to other foreign entities. The net operating losses
and tax credit carryforwards have indefinite lives.
The foreign valuation allowance for Hong Kong deferred tax assets as of December 31, 2024 and 2023 was $7.5
million and $7.2 million, respectively. Based upon historical results and estimated future results, it is the judgment of
management that these tax carryforward attributes related to Hong Kong entities are not likely to be realized. The Company has
concluded it is more likely than not that it will realize the benefit of all other existing deferred tax assets, net of the valuation
allowances mentioned above.
Unrecognized Tax Benefits
The following table reconciles the total amounts of unrecognized tax benefits, at December 31:
(In thousands)
2024
2023
2022
Balance at beginning of period
$
24,395
$
23,376
$
20,462
Changes in tax positions of prior years
—
218
—
Additions based on tax positions related to the current year
1,219
1,195
5,758
Decreases due to settlements of liabilities
—
—
(904)
Decreases due to closure of tax years
(699)
(394)
(1,940)
Balance at end of period
$
24,915
$
24,395
$
23,376
In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was
$9.6 million, $7.2 million, and $5.1 million at December 31, 2024, 2023, and 2022, respectively.
The total amount of unrecognized tax benefits, net of federal income tax benefits, of $33.9 million, $30.8 million, and
$27.5 million at December 31, 2024, 2023, and 2022, respectively, would, if recognized, increase the Company’s earnings, and
lower the Company's annual effective tax rate in the year of recognition.
The Company is subject to taxation in the United States and various states and foreign jurisdictions. In the normal
course of business, the Company is subject to examinations by taxing authorities in these jurisdictions. For U.S. federal and
state income tax purposes, tax years 2023, 2022, and 2021 remain subject to examination.
The Company has assessed its risks associated with all tax return positions and believes its tax reserve estimates reflect
its best estimate of the deductions and positions it will be able to sustain, or it may be willing to concede as part of a settlement.
At this time, the Company does not anticipate any material change in its tax reserves in the next twelve months. The Company
will continue to monitor the progress and conclusion of all audits and will adjust its estimated liability as necessary.
11.
LEASES
The components of lease cost were as follows for the years ended December 31:
(In thousands)
2024
2023
2022
Operating lease cost
$
64,343
$
61,247
$
55,414
Short-term lease cost
3,587
4,969
7,737
Variable lease cost
4,180
4,312
3,046
Total lease cost
$
72,110
$
70,528
$
66,197
At December 31, 2024, the Company's operating leases had a weighted-average remaining lease term of 8.5 years and
a weighted-average discount rate of 6.7 percent.
Cash Flows
Right-of-use assets of $29.6 million, $44.5 million, and $132.7 million were recognized as non-cash asset additions
that resulted from new operating lease obligations during the years ended December 31, 2024, 2023, and 2022, respectively,
which included $5.5 million, $0.4 million, and $42.2 million of right-of-use assets from acquisitions, respectively. Cash paid for
56
amounts included in the present value of operating lease obligations and included in cash flows from operations was
$59.6 million, $55.5 million, and $47.9 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Future minimum lease payments under operating leases as of December 31, 2024 were as follows:
(In thousands)
Year Ending December 31,
2025
$
52,407
2026
41,855
2027
35,847
2028
32,668
2029
29,303
Thereafter
122,447
Total future minimum lease payments
314,527
Less interest
(75,927)
Present value of operating lease liabilities
$
238,600
12.
COMMITMENTS AND CONTINGENCIES
Holdback Payments and Contingent Consideration
From time to time, the Company finances a portion of its business combinations with deferred acquisition payments
("holdback payments") and/or contingent earnout provisions. Holdback payments are accrued at their discounted present value.
As required, the liability for contingent consideration is measured at fair value quarterly, considering actual sales of the
acquired products, updated sales projections, and the updated market participant weighted average cost of capital. Depending
upon the weighted average costs of capital and future sales of the products which are subject to contingent consideration, the
Company could record adjustments in future periods. See Note 4 - Acquisitions, Goodwill and Other Intangible Assets for
information on certain holdback payments. Contingent consideration balances were not material at December 31, 2024 and
2023.
Product Recalls
From time to time, the Company cooperates with and assists its customers on their product recalls and inquiries, and
occasionally receives inquiries directly from the National Highway Traffic Safety Administration regarding reported incidents
involving the Company's products. As a result, the Company has incurred expenses associated with product recalls from time to
time and may incur expenditures for future investigations or product recalls.
Environmental
The Company's operations are subject to certain Federal, state, and local regulatory requirements relating to the use,
storage, discharge, and disposal of hazardous materials used during the manufacturing processes. Although the Company
believes its operations have been consistent with prevailing industry standards and are in substantial compliance with applicable
environmental laws and regulations, one or more of the Company's current or former operating sites, or adjacent sites owned by
third-parties, have been affected, and may in the future be affected, by releases of hazardous materials. As a result, the
Company may incur expenditures for future investigation and remediation of these sites, including in conjunction with
voluntary remediation programs or third-party claims.
Litigation
In the normal course of business, the Company is subject to proceedings, lawsuits, regulatory agency inquiries, and
other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these
matters could materially affect operating results when resolved in future periods, management believes that, after final
disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the
57
Company beyond that provided in the Consolidated Balance Sheet as of December 31, 2024, would not be material to the
Company's financial position or annual results of operations.
13.
STOCKHOLDERS' EQUITY
The following table summarizes information about shares of the Company's common stock at December 31:
(In thousands)
2024
2023
Common stock authorized
75,000
75,000
Common stock issued
28,804
28,667
Treasury stock
3,341
3,341
Common stock outstanding
25,463
25,326
Dividends
The table below summarizes the regular quarterly dividends declared and paid during the years ended December 31:
First Quarter 2022
$
0.90
03/11/22
03/25/22
$
22,870
Second Quarter 2022
1.05
06/03/22
06/17/22
26,702
Third Quarter 2022
1.05
09/02/22
09/16/22
26,701
Fourth Quarter 2022
1.05
12/02/22
12/16/22
26,453
Total 2022
$
4.05
$
102,726
First Quarter 2023
$
1.05
03/10/23
03/24/23
$
26,563
Second Quarter 2023
1.05
06/02/23
06/16/23
26,591
Third Quarter 2023
1.05
09/01/23
09/15/23
26,590
Fourth Quarter 2023
1.05
12/01/23
12/15/23
26,592
Total 2023
$
4.20
$
106,336
First Quarter 2024
$
1.05
03/08/24
03/22/24
$
26,721
Second Quarter 2024
1.05
05/31/24
06/14/24
26,734
Third Quarter 2024
1.05
08/30/24
09/13/24
26,736
Fourth Quarter 2024
1.15
11/29/24
12/13/24
29,280
Total 2024
$
4.30
$
109,471
(In thousands, except per share data)
Per Share
Record Date
Payment Date
Total Paid
Stock-Based Awards
On May 24, 2018, the Company's stockholders approved the LCI Industries 2018 Omnibus Incentive Plan (the "2018
Plan"), which provides that the number of shares of common stock that may be the subject of awards and issued under the 2018
Plan is 1,500,000, plus shares subject to any awards outstanding as of May 24, 2018 under the LCI Industries Equity Award and
Incentive Plan, as Amended and Restated, that subsequently expire, are forfeited or canceled, are settled for cash, are not issued
in shares, or are tendered or withheld to pay the exercise price or satisfy any tax withholding obligations related to the award.
Executive officers and other employees of the Company and its subsidiaries and affiliates, and independent directors,
consultants, and others who provide substantial services to the Company and its subsidiaries and affiliates, are eligible to be
granted awards under the 2018 Plan. Under the 2018 Plan, the Compensation Committee of LCII's Board of Directors is
authorized to grant stock options, stock appreciation rights, restricted stock awards, stock unit awards, other stock-based
awards, and cash incentive awards.
The number of shares available for future awards under the 2018 Plan was 640,848, 821,703, and 1,032,403 at
December 31, 2024, 2023, and 2022, respectively.
58
Stock-based compensation resulted in charges to operations as follows for the years ended December 31:
(In thousands)
2024
2023
2022
Deferred and restricted stock units
$
15,668
$
15,462
$
15,594
Performance stock units
2,985
2,767
8,101
Stock-based compensation expense
$
18,653
$
18,229
$
23,695
Stock-based compensation expense is recorded in the Consolidated Statements of Income in the same line as cash
compensation to those employees is recorded, primarily in selling, general and administrative expenses.
Deferred and Restricted Stock Units
The 2018 Plan provides for the grant or issuance of stock units, including those that have deferral periods, such as
deferred stock units ("DSUs"), and those with time-based vesting provisions, such as restricted stock units ("RSUs"), to
directors, employees and other eligible persons. Recipients of DSUs and RSUs are entitled to receive shares at the end of a
specified vesting or deferral period. Holders of DSUs and RSUs receive dividend equivalents based on dividends granted to
holders of the common stock, which dividend equivalents are payable in additional DSUs and RSUs and are subject to the same
vesting criteria as the original grant.
DSUs vest (i) ratably over the service period, (ii) at a specified future date, or (iii) for certain officers, based on
achievement of specified performance conditions. RSUs vest (i) ratably over the service period or (ii) at a specified future date.
As a result of the Company's executive succession, the vesting of certain RSUs was accelerated pursuant to contractual
obligations with certain employees whose employment terminated. In addition, DSUs are issued in lieu of certain cash
compensation. Transactions in DSUs and RSUs under the 2018 Plan are summarized as follows:
Number of
Shares
Weighted
Average Price
Outstanding at December 31, 2021
285,711
$
110.41
Issued
5,427
101.87
Granted
162,719
119.84
Dividend equivalents
10,871
103.27
Forfeited
(15,012)
121.99
Vested
(171,942)
96.21
Outstanding at December 31, 2022
277,774
$
120.92
Issued
3,244
119.43
Granted
159,640
114.22
Dividend equivalents
10,731
116.99
Forfeited
(23,440)
121.16
Vested
(131,644)
112.10
Outstanding at December 31, 2023
296,305
$
118.60
Issued
2,321
111.83
Granted
143,407
125.20
Dividend equivalents
11,596
112.25
Forfeited
(21,249)
122.30
Vested
(130,903)
114.87
Outstanding at December 31, 2024
301,477
$
119.84
As of December 31, 2024, there was $19.0 million of total unrecognized compensation cost related to DSUs and
RSUs, which is expected to be recognized over a weighted average remaining period of 1.7 years.
59
Performance Stock Units
The 2018 Plan provides for performance stock units ("PSUs") that vest at a specific future date based on achievement
of specified performance conditions. Transactions in PSUs under the 2018 Plan are summarized as follows:
Number of
Shares
Stock Price
Outstanding at December 31, 2021
149,961
$
104.01
Granted
91,988
110.83
Dividend equivalents
6,210
103.29
Forfeited
(4,840)
78.11
Vested
(80,938)
82.40
Outstanding at December 31, 2022
162,381
$
120.12
Granted
140,953
108.42
Dividend equivalents
7,236
117.20
Forfeited
(3,245)
96.55
Vested
(100,046)
101.11
Outstanding at December 31, 2023
207,279
$
122.57
Granted
108,096
132.77
Dividend equivalents
9,198
112.27
Vested
(78,695)
143.54
Outstanding at December 31, 2024
245,878
$
120.26
As of December 31, 2024, there was $6.3 million of total unrecognized compensation cost related to PSUs, which is
expected to be recognized over a weighted average remaining period of 2.2 years.
Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), net of income taxes, are as follows:
(In thousands)
Foreign
currency items
Pension items
Total
Accumulated other comprehensive income (loss) at December 31,
2022
$
(23,321)
$
30,025
$
6,704
Net foreign currency translation adjustment
8,532
—
8,532
Actuarial loss on pension plans
—
(964)
(964)
Net current-period other comprehensive income (loss)
8,532
(964)
7,568
Accumulated other comprehensive income (loss) at December 31,
2023
(14,789)
29,061
14,272
Net foreign currency translation adjustment
(9,366)
(1,441)
(10,807)
Actuarial loss on pension plans
—
(233)
(233)
Net current-period other comprehensive loss
(9,366)
(1,674)
(11,040)
Accumulated other comprehensive income (loss) at December 31,
2024
$
(24,155)
$
27,387
$
3,232
In both years ended December 31, 2024 and 2023, the Company recorded an immaterial amount in taxes related to
other comprehensive income (loss).
Stock Repurchase Program
On May 19, 2022, the Company's Board of Directors authorized a stock repurchase program granting the Company
authority to repurchase up to $200.0 million of the Company's common stock over a three-year period, ending on May 19,
60
2025. The timing of stock repurchases, and the number of shares will depend upon the market conditions and other factors.
Share repurchases, if any, will be made in the open market and in privately negotiated transactions in accordance with
applicable securities laws. The stock repurchase program may be modified, suspended, or terminated at any time by the Board
of Directors. In 2022, the Company purchased 253,490 shares at a weighted average price of $94.89 per share, totaling $24.1
million. No purchases were made during the years ended December 31, 2024 and 2023.
14.
SEGMENT REPORTING
The Company has two reportable segments, the OEM Segment and the Aftermarket Segment. Intersegment sales are
insignificant.
The OEM Segment, which accounted for 76 percent, 77 percent, and 83 percent of consolidated net sales for the years
ended December 31, 2024, 2023, and 2022, respectively, manufactures and distributes a broad array of highly engineered
components for the leading OEMs in the recreation and transportation markets, consisting of RVs and adjacent industries,
including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; trains; manufactured homes;
and modular housing. Approximately 53 percent, 47 percent, and 61 percent of the Company's OEM Segment net sales in 2024,
2023, and 2022, respectively, were of components for travel trailer and fifth-wheel RVs.
The Aftermarket Segment, which accounted for 24 percent, 23 percent, and 17 percent of consolidated net sales for
each of the years ended December 31, 2024, 2023, and 2022, respectively, supplies engineered components to the related
aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service
centers, as well as direct to retail customers via the Internet. The Aftermarket Segment also includes biminis, covers, buoys, and
fenders to the marine industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems,
tankless water heaters, and the sale of replacement glass and awnings to fulfill insurance claims.
The Company's CODM is its President and Chief Executive Officer. The decisions concerning the allocation of the
Company's resources are made by the CODM with oversight by the Board of Directors. The CODM evaluates the performance
of each segment and makes decisions concerning the allocation of resources based upon segment operating profit (loss),
generally defined as income or loss before interest expense and income taxes. Segment assets are not reviewed by the
Company's CODM and therefore are not disclosed below. Management of debt is a corporate function. The accounting policies
of the OEM and Aftermarket Segments are the same as those described in Note 2 of the Notes to Consolidated Financial
Statements.
The following tables present the Company's revenues disaggregated by segment and geography based on the billing
address of the Company's customers for the years ended December 31:
2024
(In thousands)
U.S. (a)
Int'l (b)
Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
1,486,108
$
28,470
$
1,514,578
Motorhomes
130,545
102,521
233,066
Adjacent Industries OEMs
927,276
185,530
1,112,806
Total OEM Segment net sales
2,543,929
316,521
2,860,450
Aftermarket Segment:
Total Aftermarket Segment net sales
803,354
77,404
880,758
Total net sales
$
3,347,283
$
393,925
$
3,741,208
61
2023
(In thousands)
U.S. (a)
Int'l (b)
Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
1,310,638
$
48,215
$
1,358,853
Motorhomes
160,857
108,499
269,356
Adjacent Industries OEMs
1,085,631
189,902
1,275,533
Total OEM Segment net sales
2,557,126
346,616
2,903,742
Aftermarket Segment:
Total Aftermarket Segment net sales
814,103
66,963
881,066
Total net sales
$
3,371,229
$
413,579
$
3,784,808
2022
(In thousands)
U.S. (a)
Int'l (b)
Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels
$
2,561,683
$
55,902
$
2,617,585
Motorhomes
238,613
100,484
339,097
Adjacent Industries OEMs
1,184,459
174,729
1,359,188
Total OEM Segment net sales
3,984,755
331,115
4,315,870
Aftermarket Segment:
Total Aftermarket Segment net sales
824,895
66,378
891,273
Total net sales
$
4,809,650
$
397,493
$
5,207,143
(a) Net sales to customers in the United States of America
(b) Net sales to customers domiciled in countries outside of the United States of America
Long-lived assets, including net fixed assets, operating lease right-of-use assets, goodwill, and other net intangible
assets, domiciled in countries outside of the United States of America were $361.8 million and $399.4 million as of
December 31, 2024 and 2023, respectively.
62
Corporate expenses are allocated between the segments based upon net sales. Accretion related to contingent
consideration and other non-segment items are included in the segment to which they relate. Information relating to segments
follows for the years ended December 31:
2024
Net sales to external customers (a)
$
2,860,450 $
880,758 $
3,741,208
Cost of sales
2,303,283
558,210
2,861,493
Gross profit
557,167
322,548
879,715
Selling, general and administrative expenses (b)
450,086
211,392
661,478
Operating profit
$
107,081 $
111,156 $
218,237
Expenditures for long-lived assets (c)
28,593
19,469
48,062
Depreciation and amortization
93,327
32,366
125,693
2023
Net sales to external customers (a)
$
2,903,742 $
881,066 $
3,784,808
Cost of sales
2,448,176
560,442
3,008,618
Gross profit
455,566
320,624
776,190
Selling, general and administrative expenses (b)
438,205
214,557
652,762
Operating profit
$
17,361 $
106,067 $
123,428
Expenditures for long-lived assets (c)
68,750
20,230
88,980
Depreciation and amortization
99,976
31,792
131,768
2022
Net sales to external customers (a)
$
4,315,870 $
891,273 $
5,207,143
Cost of sales
3,325,354
608,500
3,933,854
Gross profit
990,516
282,773
1,273,289
Selling, general and administrative expenses (b)
511,366
208,895
720,261
Operating profit
$
479,150 $
73,878 $
553,028
Expenditures for long-lived assets (c)
173,732
33,245
206,977
Depreciation and amortization
99,419
29,793
129,212
Segments
(In thousands)
OEM
Aftermarket
Total
(a) Thor Industries, Inc., a customer of both segments, accounted for 16 percent, 16 percent, and 23 percent of the Company's
consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. Berkshire Hathaway Inc. (through its
subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 18 percent, 15 percent, and
20 percent of the Company's consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. No other
customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2024, 2023, and 2022. No
customer accounted for more than 10 percent of consolidated accounts receivable, net at December 31, 2024 and 2023.
(b)
Certain general and administrative expenses are allocated between the segments based upon net sales or operating profit,
depending upon the nature of the expense.
(c)
Expenditures for long-lived assets include capital expenditures, as well as fixed assets, goodwill and other intangible assets
purchased as part of the acquisition of businesses. The Company purchased $6.0 million, $28.3 million, and $78.7 million of long-
lived assets, as part of the acquisitions of businesses in the years ended December 31, 2024, 2023, and 2022, respectively.
63
Net sales by OEM Segment product were as follows for the years ended December 31:
OEM Segment:
Chassis, chassis parts, and slide-out mechanisms
$
811,607
$
785,158
$
1,563,168
Windows and doors
838,530
851,761
1,085,302
Furniture and mattresses
404,021
464,113
790,664
Axles, ABS, and suspension solutions
306,760
313,224
306,843
Other
499,532
489,486
569,893
Total OEM Segment net sales
2,860,450
2,903,742
4,315,870
Total Aftermarket Segment net sales
880,758
881,066
891,273
Total net sales
$
3,741,208
$
3,784,808
$
5,207,143
(In thousands)
2024
2023
2022
64
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
Item 9A. CONTROLS AND PROCEDURES.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in
our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is (i) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure, in accordance with the definition of "disclosure controls and procedures" in Rule
13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized
that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the
desired control objectives. Management included in its evaluation the cost-benefit relationship of possible controls and
procedures. We continually evaluate our disclosure controls and procedures to determine if changes are appropriate based upon
changes in our operations or the business environment in which we operate.
As of the end of the period covered by this Form 10-K, we performed an evaluation, under the supervision and with
the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of
December 31, 2024.
(a)
Management's Annual Report on Internal Control over Financial Reporting.
We are responsible for the preparation and integrity of the Consolidated Financial Statements appearing in this Annual
Report on Form 10-K. We are also responsible for establishing and maintaining adequate internal control over financial
reporting for the Company. We maintain a system of internal control that is designed to provide reasonable assurance as to the
fair and reliable preparation and presentation of the Consolidated Financial Statements, as well as to safeguard assets from
unauthorized use or disposition. We continually evaluate our system of internal control over financial reporting to determine if
changes are appropriate based upon changes in our operations or the business environment in which we operate.
Our control environment is the foundation for our system of internal control over financial reporting and is embodied
in our Guidelines for Business Conduct. It sets the tone of our organization and includes factors such as integrity and ethical
values. Our internal control over financial reporting is supported by formal policies and procedures which are reviewed,
modified and improved as changes occur in business conditions and operations.
We conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). This evaluation included review of the documentation of controls, evaluation of the design
effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Although there
are inherent limitations in the effectiveness of any system of internal control over financial reporting, based on our evaluation,
we have concluded that our internal control over financial reporting was effective as of December 31, 2024.
KPMG LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements
included in this Annual Report on Form 10-K and, as part of their audit, has issued their report on the effectiveness of our
internal control over financial reporting, included elsewhere in this Form 10-K.
(b)
Report of the Independent Registered Public Accounting Firm.
The report is included in Item 8. "Financial Statements and Supplementary Data."
(c)
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024,
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
65
Item 9B. OTHER INFORMATION.
During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the
Exchange Act) adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was
intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading
arrangement (as defined in Item 408(c) of Regulation S-K).
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not Applicable.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information with respect to our executive officers appears under "Information About our Executive Officers" in Part I,
Item 1, "Business," in this Report.
We have adopted Governance Principles, Guidelines for Business Conduct, a Whistleblower Policy, and a Code of
Ethics for Senior Financial Officers ("Code of Ethics"), each of which, as well as the Charters and Key Practices, as applicable,
of our Audit Committee, Risk Committee, Compensation and Human Capital Committee, Corporate Governance, Nominating,
and Sustainability Committee, and Strategy, Acquisition, and Capital Deployment Committee, are available on our website at
www.lci1.com/investors. A copy of any of these documents will be furnished, without charge, upon written request to
Secretary, LCI Industries, 3501 County Road 6 East, Elkhart, Indiana 46514.
If we make any substantive amendment to the Code of Ethics or the Guidelines for Business Conduct, or grant a
waiver to a director or executive officer from a provision of the Code of Ethics or the Guidelines for Business Conduct, we will
disclose the nature of such amendment or waiver on our website or in a Current Report on Form 8-K. There have been no
waivers to directors or executive officers of any provisions of the Code of Ethics or the Guidelines for Business Conduct.
The additional information required by this item is incorporated by reference from the information contained in our
Proxy Statement for the Annual Meeting of Stockholders to be held on May 15, 2025 (the "2025 Proxy Statement") under the
captions "Proposal 1. Election of Directors," "Delinquent Section 16(a) Reports," and "Corporate Governance and Related
Matters."
Item 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference from the information contained in our 2025 Proxy
Statement, under the captions "Director Compensation," "Executive Compensation," "CEO Pay Ratio," and "Transactions with
Related Persons."
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
The information required by this item is incorporated by reference from the information contained in our 2025 Proxy
Statement under the captions "Equity Compensation Plan Information" and "Voting Securities."
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this item is incorporated by reference from the information contained in our 2025 Proxy
Statement under the captions "Transactions with Related Persons" and "Corporate Governance and Related Matter."
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Our independent registered public accounting firm is KPMG LLP, Chicago, Illinois, Auditor Firm ID: 185.
The information required by this item concerning principal accountant fees and services is incorporated by reference
from the information contained in our 2025 Proxy Statement, under the caption "Proposal 3. Ratification of Appointment of
Auditors."
66
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
Documents Filed:
(1)
Financial Statements.
(2)
Exhibits. See Item 15 (b) - "List of Exhibits" incorporated herein by reference.
(b)
Exhibits - List of Exhibits.
EXHIBIT INDEX
3.1
Amended and Restated Certificate of Incorporation of LCI Industries, conformed version that
includes all amendments through May 16, 2024 (incorporated by reference to Exhibit 3.3 included
in the Registrant's Form 10-Q filed on August 6, 2024).
3.2
Amended and Restated Bylaws of LCI Industries, effective March 9, 2023 (incorporated by
reference to Exhibit 3.2 included in the Registrant's Form 10-Q filed on May 9, 2023).
4.1
Description of Registrant's Securities Registered under Section 12 of the Securities Exchange Act
of 1934, as amended (incorporated by reference to Exhibit 4.1 included in the Registrant's Form
10-K filed February 23, 2024).
4.2
Indenture, dated May 13, 2021, by and between LCI Industries and U.S. Bank National
Association (incorporated by reference to Exhibit 4.1 included in the Registrant's Form 8-K filed
on May 14, 2021).
4.3
Form of 1.125% Convertible Senior Note due 2026 (included in Exhibit 4.2).
10.1†
Form of Indemnification Agreement between Registrant and its officers and independent directors
(incorporated by reference to Exhibit 10.1 included in the Registrant's Form 8-K filed on May 26,
2015).
10.2†
Executive Non-Qualified Deferred Compensation Plan, as amended (incorporated by reference to
Exhibit 10.231 included in the Registrant's Form 10-K for the year ended December 31, 2015).
10.3†
Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.1 included
in the Registrant's Form 8-K filed March 4, 2015).
10.4
Fourth Amended and Restated Company Guarantee Agreement dated as of April 27, 2016, made
by Drew Industries Incorporated, with and in favor of JPMorgan Chase Bank, N.A. as
Administrative Agent (incorporated by reference to Exhibit 10.4 included in the Registrant's Form
8-K filed May 3, 2016).
10.5
Fourth Amended and Restated Subsidiary Guarantee Agreement dated as of April 27, 2016, made
by certain subsidiaries of Drew Industries Incorporated and Lippert Components, Inc., with and in
favor of JPMorgan Chase Bank, N.A. as Administrative Agent (incorporated by reference to
Exhibit 10.5 included in the Registrant's Form 8-K filed May 3, 2016).
10.6
Fourth Amended and Restated Subordination Agreement dated as of April 27, 2016, made by
Drew Industries Incorporated and certain subsidiaries of Drew Industries Incorporated, with and
in favor of JPMorgan Chase Bank, N.A. as Administrative Agent (incorporated by reference to
Exhibit 10.6 included in the Registrant's Form 8-K filed May 3, 2016).
10.7†
Grantor Trust Agreement, effective January 15, 2017, by and between LCI Industries and Wells
Fargo Bank, National Association (incorporated by reference to Exhibit 10.318 included in the
Registrant's Form 10-K for the year ended December 31, 2016).
10.8†
Second Amended and Restated Executive Non-Qualified Deferred Compensation Plan
(incorporated by reference to Exhibit 10.2 included in the Registrant's Form 8-K filed on March
22, 2017).
10.9†
LCI Industries 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 included
in the Registrant’s Form 8-K filed May 29, 2018).
Exhibit
Number
Description
67
10.10†
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) under the LCI
Industries 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.5 included in
the Registrant’s Form 8-K filed May 29, 2018).
10.11†
Form of Deferred Stock Unit Master Agreement (Non-Employee Directors) under the LCI
Industries 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.6 included in
the Registrant’s Form 8-K filed May 29, 2018).
10.12†
Form of Agreement for Common Stock in Lieu of Cash Compensation for Non-Employee
Directors (incorporated by reference to Exhibit 10.7 included in the Registrant’s Form 8-K filed
May 29, 2018).
10.13
Fourth Amended and Restated Credit Agreement dated December 14, 2018 among LCI
Industries, Lippert Components, Inc., LCI Industries B.V., LCI Industries C.V., JPMorgan Chase
Bank, N.A., individually and as Administrative Agent, Wells Fargo Bank, N.A., individually and
as Syndication Agent, Bank of America, N.A., individually and as Documentation Agent, and a
syndicate of other lenders (incorporated by reference to Exhibit 10.1 included in the Registrant’s
Form 8-K filed December 19, 2018).
10.14†
Form of Extension Agreement with certain officers (incorporated by reference to Exhibit 10.3
included in the Registrant’s Form 8-K filed March 12, 2019).
10.15†
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) under the LCI
Industries 2018 Omnibus Incentive Plan (Revised February 2019) (incorporated by reference to
Exhibit 10.2 included in the Registrant’s Form 10-Q/A filed June 21, 2019).
10.16†
Form of Deferred Stock Unit Master Agreement (Non-Employee Directors) under the LCI
Industries 2018 Omnibus Incentive Plan (Revised February 2019) (incorporated by reference to
Exhibit 10.3 included in the Registrant’s Form 10-Q/A filed June 21, 2019).
10.17
Incremental Joinder and Amendment No. 1, dated as of December 19, 2019, among LCI
Industries, Lippert Components, Inc., LCI Industries B.V., LCI Industries C.V., LCI Industries
Pte. Ltd., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
(incorporated by reference to Exhibit 10.1 included in the Registrant’s Form 8-K filed December
19, 2019).
10.18
Amendment No. 2 to Fourth Amended and Restated Credit Agreement, dated as of May 7, 2021,
by and among LCI Industries, Lippert Components, Inc., LCI Industries B.V., LCI Industries Pte.
Ltd., each other Subsidiary of the Company listed on the signature pages thereto, the lenders party
thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to
Exhibit 10.1 included in the Registrant's Form 8-K filed on May 10, 2021).
10.19
Purchase Agreement, dated May 10, 2021, by and among LCI Industries, Wells Fargo Securities,
LLC, BofA Securities, Inc. and J.P. Morgan Securities LLC (incorporated by reference to Exhibit
10.1 included in the Registrant’s Form 8-K filed on May 14, 2021).
10.20
Base Convertible Note Hedge Confirmation, dated May 10, 2021, between LCI Industries and
Bank of America, N.A. (incorporated by reference to Exhibit 10.2 included in the Registrant’s
Form 8-K filed on May 14, 2021).
10.21
Base Convertible Note Hedge Confirmation, dated May 10, 2021, between LCI Industries and
Bank of Montreal (incorporated by reference to Exhibit 10.3 included in the Registrant’s Form 8-
K filed on May 14, 2021).
10.22
Base Convertible Note Hedge Confirmation, dated May 10, 2021, between LCI Industries and
JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.4 included
in the Registrant’s Form 8-K filed on May 14, 2021).
10.23
Base Convertible Note Hedge Confirmation, dated May 10, 2021, between LCI Industries and
Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.5 included in
the Registrant’s Form 8-K filed on May 14, 2021).
10.24
Additional Convertible Note Hedge Confirmation, dated May 12, 2021, between LCI Industries
and Bank of America, N.A. (incorporated by reference to Exhibit 10.6 included in the
Registrant’s Form 8-K filed on May 14, 2021).
10.25
Additional Convertible Note Hedge Confirmation, dated May 12, 2021, between LCI Industries
and Bank of Montreal (incorporated by reference to Exhibit 10.7 included in the Registrant’s
Form 8-K filed on May 14, 2021).
Exhibit
Number
Description
68
10.26
Additional Convertible Note Hedge Confirmation, dated May 12, 2021, between LCI Industries
and JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.8
included in the Registrant’s Form 8-K filed on May 14, 2021).
10.27
Additional Convertible Note Hedge Confirmation, dated May 12, 2021, between LCI Industries
and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.9 included
in the Registrant’s Form 8-K filed on May 14, 2021).
10.28
Base Warrant Confirmation, dated May 10, 2021, between LCI Industries and Bank of America,
N.A. (incorporated by reference to Exhibit 10.10 included in the Registrant’s Form 8-K filed on
May 14, 2021).
10.29
Base Warrant Confirmation, dated May 10, 2021, between LCI Industries and Bank of Montreal
(incorporated by reference to Exhibit 10.11 included in the Registrant’s Form 8-K filed on May
14, 2021).
10.30
Base Warrant Confirmation, dated May 10, 2021, between LCI Industries and JPMorgan Chase
Bank, National Association (incorporated by reference to Exhibit 10.12 included in the
Registrant’s Form 8-K filed on May 14, 2021).
10.31
Base Warrant Confirmation, dated May 10, 2021, between LCI Industries and Wells Fargo Bank,
National Association (incorporated by reference to Exhibit 10.13 included in the Registrant’s
Form 8-K filed on May 14, 2021).
10.32
Additional Warrant Confirmation, dated May 12, 2021, between LCI Industries and Bank of
America, N.A. (incorporated by reference to Exhibit 10.14 included in the Registrant’s Form 8-K
filed on May 14, 2021).
10.33
Additional Warrant Confirmation, dated May 12, 2021, between LCI Industries and Bank of
Montreal (incorporated by reference to Exhibit 10.15 included in the Registrant’s Form 8-K filed
on May 14, 2021).
10.34
Additional Warrant Confirmation, dated May 12, 2021, between LCI Industries and JPMorgan
Chase Bank, National Association (incorporated by reference to Exhibit 10.16 included in the
Registrant’s Form 8-K filed on May 14, 2021).
10.35
Additional Warrant Confirmation, dated May 12, 2021, between LCI Industries and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 10.17 included in the
Registrant’s Form 8-K filed on May 14, 2021).
10.36
Amendment No. 3 to Fourth Amended and Restated Credit Agreement, dated as of September 7,
2021, by and among LCI Industries, Lippert Components, Inc., LCI Industries B.V., LCI
Industries Pte. Ltd., each other Subsidiary of the Company listed on the signature pages thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated
by reference to Exhibit 10.1 included in the Registrant's Form 10-Q filed November 2, 2021).
10.37
Amendment No. 4 to Fourth Amended and Restated Credit Agreement, dated as of December 7,
2021, by and among LCI Industries, Lippert Components, Inc., LCI Industries B.V., LCI
Industries Pte. Ltd., each other Subsidiary of the Company listed on the signature pages thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated
by reference to Exhibit 10.1 included in the Registrant's Form 8-K filed on December 9, 2021).
10.38
Amendment No. 5 to Fourth Amended and Restated Credit Agreement, dated as of May 23, 2023,
by and among LCI Industries, Lippert Components, Inc., LCI Industries B.V., LCI Industries Pte.
Ltd., each other Subsidiary of the Company listed on the signature pages thereto, the lenders party
thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to
Exhibit 10.1 included in the Registrant’s Form 8-K filed on May 24, 2023).
10.39
Amendment No. 6 to Fourth Amended and Restated Credit Agreement, dated as of December 22,
2023, by and among LCI Industries, Lippert Components, Inc., LCI Industries B.V., LCI
Industries Pte. Ltd., each other Subsidiary of the Company listed on the signature pages thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated
by reference to Exhibit 10.1 included in the Registrant’s Form 8-K filed on December 22, 2023).
10.40†
Form of Restricted Stock Unit Award Agreement (Executives) under the LCI Industries 2018
Omnibus Incentive Plan (Revised 2022) (incorporated by reference to Exhibit 10.1 included in the
Registrant’s Form 10-Q filed August 2, 2022).
Exhibit
Number
Description
69
10.41†
Form of Performance Stock Unit Award Agreement under the LCI Industries 2018 Omnibus
Incentive Plan (Revised 2022) (incorporated by reference to Exhibit 10.2 included in the
Registrant’s Form 10-Q filed August 2, 2022).
10.42†
Form of Executive Employment Agreement (Revised 2022) (incorporated by reference to Exhibit
10.3 included in the Registrant’s Form 10-Q filed August 2, 2022).
10.43†
Offer Letter between LCI Industries and Lillian Etzkorn, accepted on March 30, 2023
(incorporated by reference to Exhibit 10.1 included in the Registrant’s Form 8-K filed on April 5,
2023).
10.44†
Form of Performance Stock Unit Agreement under the LCI Industries 2018 Omnibus Incentive
Plan (incorporated by reference to Exhibit 10.1 included in the Registrant's Form 10-Q filed
May 8, 2024).
19*
LCI Industries Insider Trading Policy and LCI Industries Insider Trading Policy Addendum for
Restricted Persons.
21*
Subsidiaries of the Registrant.
23*
Consent of Independent Registered Public Accounting Firm.
24*
Powers of Attorney (included on the signature page of this Report).
31.1*
Certification of Chief Executive Officer required by Rule 13a-14(a).
31.2*
Certification of Chief Financial Officer required by Rule 13a-14(a).
32.1*
Certification of Chief Executive Officer required by Rule 13a-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States Code.
32.2*
Certification of Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States Code.
97
LCI Industries Compensation Recovery Policy, as amended effective September 7, 2023
(incorporated by reference to Exhibit 97 included in the Registrant's Form 10-K filed
February 23, 2024).
101*
The following information from the Registrant’s Annual Report on Form 10-K for the year ended
December 31, 2024, formatted in Inline XBRL: (i) Consolidated Statements of Income; (ii)
Consolidated Statements of Comprehensive Income; (iii) Consolidated Balance Sheets; (iv)
Consolidated Statements of Cash Flows; (v) Consolidated Statements of Stockholders’ Equity;
(vi) Notes to Consolidated Financial Statements; (vii) information in Part I, Item 1C; and (viii)
information in Part II, Item 9B.
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
Exhibit
Number
Description
* Filed herewith
† Denotes a management contract or compensation plan or arrangement
Item 16. FORM 10-K SUMMARY.
None.
70
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 21, 2025
LCI INDUSTRIES
By: /s/ Jason D. Lippert
Jason D. Lippert
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes Jason D. Lippert and Lillian D. Etzkorn, or either of
them, to file one or more amendments to the Annual Report on Form 10-K which amendments may make such changes in such
Report as either of them deems appropriate, and each such person hereby appoints Jason D. Lippert and Lillian D. Etzkorn, or
either of them, as attorneys-in-fact to execute in the name and on behalf of each such person individually, and in each capacity
stated below, such amendments to such Report.
Date
Signature
Title
February 21, 2025
By: /s/ Jason D. Lippert
(Jason D. Lippert)
Chief Executive Officer and Director
(principal executive officer)
February 21, 2025
By: /s/ Lillian D. Etzkorn
(Lillian D. Etzkorn)
Chief Financial Officer
(principal financial officer)
February 21, 2025
By: /s/ Kip A. Emenhiser
(Kip A. Emenhiser)
VP of Finance and Treasurer
(principal accounting officer)
February 21, 2025
By: /s/ Tracy D. Graham
(Tracy D. Graham)
Chairman of the Board of Directors
February 21, 2025
By: /s/ Brendan J. Deely
(Brendan J. Deely)
Director
February 21, 2025
By: /s/ James F. Gero
(James F. Gero)
Director
February 21, 2025
By: /s/ Virginia L. Henkels
(Virginia L. Henkels)
Director
February 21, 2025
By: /s/ Stephanie K. Mains
(Stephanie K. Mains)
Director
February 21, 2025
By: /s/ Linda K. Myers
(Linda K. Myers)
Director
February 21, 2025
By: /s/ Kieran M. O’Sullivan
(Kieran M. O’Sullivan)
Director
February 21, 2025
By: /s/ David A. Reed
(David A. Reed)
Director
February 21, 2025
By: /s/ John A. Sirpilla
(John A. Sirpilla)
Director
71
Curt Manufacturing, Ltd
British Columbia, Canada
Zieman Manufacturing Company
California
Curt Manufacturing, LLC
Delaware
Lippert Components, Inc.
Delaware
Lippert Components Manufacturing, Inc.
Delaware
LCI Transit Corp.
Delaware
Taylor Made Group, LLC
Delaware
LCI Industries GmbH
Germany
Schaudt GmbH Elektrotechnik & Apparatebau
Germany
LCI Idaho Realty, LLC
Idaho
LCI Idaho Realty II, LLC
Idaho
Lippert Components India Private Limited
India
LCI Service Corp.
Indiana
KM Realty, LLC
Indiana
KM Realty II, LLC
Indiana
LCM Realty, LLC
Indiana
LCM Realty II, LLC
Indiana
LCM Realty IV, LLC
Indiana
LCM Realty VI, LLC
Indiana
LCM Realty IX, LLC
Indiana
LCM Realty X, LLC
Indiana
LCM Realty XI, LLC
Indiana
LCM Realty XII, LLC
Indiana
Veada Industries, Inc.
Indiana
Taylor Made Glass & Systems Limited
Ireland
Ke-Star S.r.l.
Italy
LCI Italy S.r.l.
Italy
Innovative Design Solutions, Inc.
Michigan
Delta Glass B.V.
Netherlands
LCI Industries B.V.
Netherlands
Polyplastic B.V.
Netherlands
Polyplastic Group B.V.
Netherlands
Lippert Components Canada Distribution, Ltd.
Ontario, Canada
LCI Canada Group, Inc.
Quebec, Canada
LCI Industries Pte. Ltd.
Singapore
Kaspar Ranch Hand Equipment, LLC
Texas
Kinro Texas, Inc.
Texas
Ciesse Med Suarl
Tunisia
LCI Industries UK, Ltd.
United Kingdom
Lewmar Ltd.
United Kingdom
Lewmar Marine Ltd.
United Kingdom
EXHIBIT 21
Active Subsidiaries of Registrant
Name
State of Organization
Trend Marine Products Limited
United Kingdom
Furrion Holdings Limited
Hong Kong
Furrion Limited
Hong Kong
Furrion LLC
Delaware
EXHIBIT 21
Active Subsidiaries of Registrant
Name
State of Organization
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements (Nos. 333-225177, 333-91174, 333-141276,
333-152873, 333-161242, 333-181272, and 333-201336) on Form S-8 of our report dated February 21, 2025, with respect to
the consolidated financial statements of LCI Industries and the effectiveness of internal control over financial reporting.
/s/ KPMG LLP
Chicago, Illinois
February 21, 2025
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Jason D. Lippert, Chief Executive Officer, certify that:
1.
I have reviewed this annual report on Form 10-K of LCI Industries;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 21, 2025
By /s/ Jason D. Lippert
Jason D. Lippert, Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Lillian D. Etzkorn, Chief Financial Officer, certify that:
1.
I have reviewed this annual report on Form 10-K of LCI Industries;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 21, 2025
By /s/ Lillian D. Etzkorn
Lillian D. Etzkorn, Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of LCI Industries (the “Company”) for the period ended
December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jason D. Lippert,
Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by
the Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ Jason D. Lippert
Chief Executive Officer
Principal Executive Officer
February 21, 2025
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of LCI Industries (the “Company”) for the period ended
December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Lillian D.
Etzkorn, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by
the Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ Lillian D. Etzkorn
Chief Financial Officer
Principal Financial Officer
February 21, 2025
Copyright © 2025 Lippert
All rights reserved. No part of this publication may be reproduced, distributed, transmitted, or used in any
form or by any means, including photocopying, recording, or other electronic or mechanical methods,
without the prior written permission of Lippert Components, Inc.
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