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LCI INDUSTRIES (LCII)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue fell 4% year-over-year to $803.1M, but profitability improved: EBITDA rose 29% to $45.8M (5.7% margin) and diluted EPS turned positive to $0.37 from a loss in Q4 2023; operating margin expanded to 2.0% from 0.3% .
  • OEM segment operating profit flipped to $1.9M (0.3% margin), and Aftermarket remained resilient at $181.6M revenue and 7.9% margin despite marine softness .
  • Dividend increased 10% quarter-over-quarter to $1.15 per share (paid $29M in Q4), with a new declaration on Feb 19, 2025, continuing the higher rate .
  • 2025 outlook: RV wholesale shipments forecast 335–350k units; January 2025 sales +6% YoY (RV OEM +17%), while management targets additional cost saves and expects incremental margins ~25% on volume gains; tariffs seen as a manageable ~50 bps headwind under current assumptions .
  • Wall Street consensus estimates from S&P Global were unavailable at time of query; estimate comparisons are not provided.

What Went Well and What Went Wrong

What Went Well

  • EBITDA and margin expansion: EBITDA rose to $45.8M (5.7% of sales), and operating margin improved to 2.0% on cost actions and lower steel/freight; warranty costs declined $9M QoQ, aiding margins .
  • OEM profitability inflected: OEM operating profit turned positive to $1.9M (0.3% margin) versus a loss last year; Aftermarket operated at $14.3M (7.9% margin), supported by share gains in automotive .
  • Strategic innovation and share gains: Management highlighted Touring Coil Suspension, ABS, Chill Cube A/C, and new windows driving content growth and wins with top brands; “Lippert demonstrated continued market leadership… increasing EBITDA by $89 million over 2023” .

What Went Wrong

  • Revenue down 4% YoY to $803.1M, pressured by lower sales to marine and utility trailer OEMs and motorhome shipment declines (-21% YoY) .
  • Mix shift to lower-content units: higher single-axle trailer mix (approx. 24% in Q4 vs ~20% prior year; typically 16–19%) depressed towable content per unit despite organic gains .
  • Marine softness persists: NA marine OEM sales fell 15% YoY in Q4; management expects continued slowness in H1 2025 before improvement in H2 .

Financial Results

Summary Performance vs Prior Year, Prior Quarter

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$837.5 $915.5 $803.1
Diluted EPS ($)$(0.09) $1.39 $0.37
EBITDA ($USD Millions)$35.6 $85.2 $45.8
Gross Margin (%)19.2% 24.0% 21.1%
Operating Margin (%)0.3% 5.9% 2.0%

Note: Wall Street consensus estimates via S&P Global were unavailable at time of query; comparisons to estimates are not provided.

Segment Breakdown (Net Sales)

Segment ($USD Millions)Q2 2024Q3 2024Q4 2024
RV OEM – Travel trailers & Fifth-wheels$426.3 $369.2 $328.3
RV OEM – Motorhomes$63.6 $52.8 $47.8
Adjacent Industries OEMs$306.2 $262.4 $245.5
Total OEM Segment$796.1 $684.5 $621.6
Aftermarket Segment$258.4 $231.0 $181.6
Total Net Sales$1,054.5 $915.5 $803.1

KPIs and Balance Sheet

KPIQ2 2024Q3 2024Q4 2024
Cash & Equivalents ($USD Millions)$130.4 $161.2 $165.8
Cash from Operations (LTM) ($USD Millions)$439 $402 $370.3 (FY)
Free Cash Flow (LTM) ($USD Millions)N/A$465.0 (FY 2023 reference) $328.0 (FY)
Net Debt / EBITDA (TTM) (x)~2.0x (net debt $699M) ~2.0x (net debt $661M) 1.7x
Total Debt ($USD Millions)$829.2 $822.3 $757.3
Dividend per Share ($)$1.05 (Q2/Q3) $1.05 (paid in Q3) $1.15 (Q4 raised)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
North American RV wholesale shipmentsFY 2025315–325k (FY 2024 view) 335–350k Raised
Q1 RevenueQ1 2025N/AAbout flat YoY New
Q1 RV OEM SalesQ1 2025N/AUp ~9% YoY New
Q1 Operating MarginQ1 2025N/AFlat to slight improvement vs Q1 2024 New
Capital ExpendituresFY 2024 vs FY 2025$35–$45M (FY 2024) $50–$70M (FY 2025) Raised
Depreciation & AmortizationFY 2024 vs FY 2025$125–$135M (FY 2024) $115–$125M (FY 2025) Lowered
Stock-based CompensationFY 2024 vs FY 2025$17–$22M (FY 2024) $18–$23M (FY 2025) Slightly raised
Annual Tax RateFY 2024 vs FY 202524–26% (FY 2024) 24–26% (FY 2025) Maintained
Dividend Per ShareQ3 vs Q4 2024$1.05 (Q3) $1.15 (Q4 and Feb-2025 declaration) Raised

Earnings Call Themes & Trends

TopicQ2 2024 (Aug 6)Q3 2024 (Nov 7)Q4 2024 (Feb 11)Trend
Tariffs/MacroPricing pass-throughs moderating; commodity pass-through ~4.5% De-risking China; mitigations via nearshoring and pass-through Tariffs ~50 bps headwind assumed; pass-through on steel/aluminum; suppliers support mitigation Manageable, fluid
Mix & ContentOrganic towable content +1%; mix toward smaller units depresses reported content Single-axle mix up to ~23%; organic content +1%; content per towable ~$5,147 Single-axle ~24%; organic content +1–2%; normalization expected by Q2 Content builds as mix normalizes
Product Innovation (ABS, TCS, Chill Cube, windows)Showcased; OEM reception strong; ~$400–500M TAM runway Ongoing launches; content wins; chassis strengthening Growing adoption; ABS double-digit placement; A/C share ambition Positive adoption
Aftermarket & Camping WorldCURT automotive aftermarket +8%; Camping World partnership driving growth Camping World sales +47% in Q3; Furrion appliances +18% YTD 14 stores upfitted; plan ~100 additional; aftermarket automotive +7% FY Expanding footprint
Marine/AdjacentMarine down 33% in Q2; longer H1 softness expected Marine down 16% in Q3; H1 2025 softness expected Marine down 15% in Q4; improvement expected in H2 2025 Soft H1, recovery H2
Europe/InternationalEurope less volatile; launching appliances to EU caravan International down 9%; rail strength International softness in Jan; European H1 down/H2 up Mixed
M&A PipelineActive pipeline; balance sheet focus; small contribution (~$5M in Q2) Expect more activity in 6–12 months Robust pipeline across segments; aim for strategic deals Building

Management Commentary

  • “Lippert demonstrated continued market leadership and resilience in 2024, leveraging cost savings and operational improvements to increase EBITDA by $89 million over 2023… innovations like our Touring Coil Suspension, anti-lock braking systems, Chill Cube revolutionary RV air conditioning system, and our new RV window series fueled content expansion and further market share gains.” — Jason Lippert, CEO .
  • “Gross margins for the fourth quarter of 2024 were 21.1%… supported by decreased steel prices, lower inbound freight costs and material sourcing strategies.” — Lillian Etzkorn, CFO .
  • “Our automotive aftermarket business has consistently outperformed… achieving a 7% increase in sales in the full year 2024.” — Jamie Schnur, Group President – Aftermarket .
  • “We believe… enable us to achieve our target of $5 billion in net sales organically by 2027 as well as a return to double digit operating margins.” — Jason Lippert, CEO .

Q&A Highlights

  • Tariffs: Management assumes ~50 bps headwind under current China/steel/aluminum tariff scenarios; mitigation via pass-throughs, supplier support, nearshoring and domestic sourcing; chassis largely domestically sourced steel .
  • Mix normalization: Single-axle trailers rose to ~24% in Q4; expectation for mix to normalize after start of Q2, supporting content per unit .
  • Margin trajectory: No specific margin target; incremental margins ~25% on volume; additional 85 bps overhead/G&A cost improvement targeted; tariffs expected to be mitigated .
  • Restocking cadence: Strong January (RV +17%); dealers see improved shows; production weekly chassis rates rising; broader restock tied to retail momentum and rates .
  • Aftermarket: Camping World store upfits expanding (~100 planned); RV repair/replace cycle to benefit as 2020–2022 units exit warranty (~1.5M RVs) .

Estimates Context

  • Wall Street consensus estimates for Q4 2024 (revenue and EPS) via S&P Global were unavailable at time of query due to provider limits. As such, we cannot provide beat/miss analysis versus consensus for this quarter.

Key Takeaways for Investors

  • Profitability inflection amidst soft topline: Q4 showed improved EBITDA and operating margin despite -4% revenue; execution on cost and quality (lower warranty) is working .
  • Mix is the key swing factor: As single-axle towable mix normalizes through mid-2025, expect content per unit and margins to improve; watch RVIA wholesale/retail mix .
  • Innovation drives share and aftermarket pull-through: ABS/TCS/windows/Chill Cube are gaining adoption; aftermarket benefits from OEM placement and Camping World footprint expansion .
  • 2025 setup improving: Management’s shipment outlook (335–350k) and January +6% sales signal stabilizing demand; incremental margins (~25%) and cost saves should support margin expansion; monitor H1 marine headwinds .
  • Balance sheet flexibility: Net debt/EBITDA down to 1.7x; FCF strong; dividend raised to $1.15; capacity for targeted M&A retained .
  • Tariff risk manageable: Exposure mitigated through pass-throughs and sourcing strategies; near-term volatility possible but magnitude appears limited per management .
  • Trading lens: Near-term stock moves likely tied to confirmation of RV restocking/mix normalization and evidence of continued margin uplift; marine recovery in H2 and aftermarket execution are additional catalysts .