Continued execution on operational initiatives drive growth

Third Quarter 2021 Highlights

Net sales of $1.2 billion in the third quarter, an increase of 41% year-over-year
Net income of $63.4 million, or $2.49 per diluted share, in the third quarter
Adjusted EBITDA of $118.1 million in the third quarter
North American RV OEM sales grew to $626.5 million in the third quarter, up 43% year-over-year, driven by record wholesale and retail demand for the quarter
Adjacent Industries OEM sales grew to $280.6 million in the third quarter, up 55% year-over-year
Aftermarket Segment sales grew to $219.0 million in the third quarter, up 18% year-over-year
Net sales from acquisitions in 2020 and 2021 contributed a combined $79 million in the third quarter
Content per travel trailer and fifth-wheel RV for the twelve months ended September 30, 2021, increased 10% year-over-year to $3,786
Completed the acquisition of Furrion with $230 million of projected annual sales
Quarterly dividend of $0.90 per share, totaling $22.7 million in the third quarter

LCI Industries (NYSE:LCII) which, through its wholly-owned subsidiary, Lippert Components, Inc. ("Lippert"), supplies a broad array of highly engineered components for the leading original equipment manufacturers ("OEMs") in the recreation and transportation product markets, and the related aftermarkets of those industries, today reported third quarter 2021 results.

"We posted strong results in the third quarter considering significant cost pressures related to raw materials, freight, and labor. Our teams have continued to do an excellent job in managing the ongoing supply chain challenges to drive organic growth while meeting commitments to our valued customers," commented Jason Lippert, LCI Industries' President and Chief Executive Officer. "We look forward to building on this progress with the addition of Furrion, which will further enhance our product innovation initiatives, while advancing our footprint into new markets, allowing us to become a more dynamic supplier in the recreation space globally."

"Historic levels of new consumers are continuing to take advantage of the outdoor lifestyle, and our Aftermarket business is poised to benefit from the repair, replacement, and upgrade cycles for the record number of RVs currently entering the market. We also remain focused on adding scalable capacity to meet this demand through new automation projects and other operational initiatives. These projects are designed to help us mitigate the impact of heightened material costs and labor constraints to maintain profitability," continued Lippert. "I am exceptionally proud of our performance this quarter and would like to thank the LCI team members for their dedication as we work to deliver value for shareholders."

"The integration of Furrion is well underway, and we are excited about the innovative product suite this acquisition brings. Our goal is to inject more resources into research, development, and innovation to introduce more great products to all of our markets," commented Ryan Smith, Group President - North America.

Third Quarter 2021 Results

Consolidated net sales for the third quarter of 2021 were $1.2 billion, an increase of 41 percent from 2020 third quarter net sales of $827.7 million. Net income in the third quarter of 2021 was $63.4 million, or $2.49 per diluted share, compared to net income of $68.3 million, or $2.70 per diluted share, in the third quarter of 2020. Adjusted EBITDA in the third quarter of 2021 was $118.1 million, compared to adjusted EBITDA of $119.4 million in the third quarter of 2020. Additional information regarding adjusted EBITDA, as well as a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, are provided in the "Supplementary Information - Reconciliation of Non-GAAP Measures" section below.

The increase in year-over-year net sales for the third quarter of 2021 was primarily driven by record RV retail demand and strong Aftermarket sales growth. Net sales from acquisitions completed in 2020 and 2021 contributed approximately $79 million in the third quarter of 2021.

The Company's average product content per travel trailer and fifth-wheel RV for the twelve months ended September 30, 2021, increased $358 to $3,786, compared to $3,428 for the twelve months ended September 30, 2020, adjusted to remove Furrion sales from prior periods. The content increase in towables was a result of organic growth, including new product introductions.

October 2021 Results

October 2021 consolidated net sales were approximately $441 million, up 52 percent from October 2020, as production increased significantly to meet elevated RV and marine retail demand.

Balance Sheet and Other Items

At September 30, 2021, the Company's cash and cash equivalents balance was $72.6 million, up from $51.8 million at December 31, 2020. The Company generated net cash flows from operations of $12.3 million and used $154.5 million for acquisitions, $73.9 million for capital expenditures, and $64.4 million for dividend payments to shareholders in the nine months ended September 30, 2021. Cash flows from operations were partially offset by strategic investments in working capital to support record demand and mitigate future supply chain disruptions.

The Company's outstanding long-term indebtedness, including current maturities, was $1.1 billion at September 30, 2021, and the Company remained in compliance with its debt covenants. The Company believes that its current liquidity is adequate to meet operating needs for the foreseeable future.

Conference Call & Webcast

LCI Industries will host a conference call to discuss its third quarter results on Tuesday, November 2, 2021, at 8:30 a.m. Eastern time, which may be accessed by dialing (877) 668-4883 for participants in the U.S./Canada or (825) 312-2360 for participants outside the U.S./Canada using the required conference ID 7996875. Due to the high volume of companies reporting earnings at this time, please be prepared for hold times of up to 15 minutes when dialing in to the call. In addition, an online, real-time webcast, as well as a supplemental earnings presentation, can be accessed on the Company's website, www.investors.lci1.com.

A replay of the conference call will be available for two weeks by dialing (800) 585-8367 for participants in the U.S./Canada or (416) 621-4642 for participants outside the U.S./Canada and referencing access code 7996875. A replay of the webcast will be available on the Company's website immediately following the conclusion of the call.

About LCI Industries

LCI Industries, through its wholly-owned subsidiary, Lippert, supplies, domestically and internationally, a broad array of highly engineered components for the leading OEMs in the recreation and transportation product markets, consisting primarily of recreational vehicles and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing. The Company also supplies engineered components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors, and service centers. Lippert's products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components; appliances; air conditioners; televisions and sound systems; and other accessories. Additional information about Lippert and its products can be found at www.lippert.com.

Forward-Looking Statements

This press release contains certain "forward-looking statements" with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company's common stock, the impact of legal proceedings, and other matters. Statements in this press release 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 our future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, retail and wholesale demand, integration of acquisitions, R&D investments, and industry trends, whenever they occur in this press release 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 press release, the impacts of COVID-19, or other future pandemics, on the global economy and on the Company's customers, suppliers, employees, business and cash flows, pricing pressures due to domestic and foreign competition, costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release 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.

LCI INDUSTRIES OPERATING RESULTS (unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,				Last Twelve
	2021		2020		2021		2020		Months
(In thousands, except per share amounts)

Net sales	$	1,165,309	$	827,729	$	3,259,287	$	2,013,164	$	4,042,289
Cost of sales		913,728		606,290		2,508,318		1,504,378		3,094,016
Gross profit		251,581		221,439		750,969		508,786		948,273

Selling, general and administrative expenses		162,557		127,006		466,532		349,305		600,383
Operating profit		89,024		94,433		284,437		159,481		347,890
Interest expense, net		4,667		1,948		10,844		10,843		13,454
Income before income taxes		84,357		92,485		273,593		148,638		334,436
Provision for income taxes		20,956		24,138		68,183		38,891		80,333
Net income	$	63,401	$	68,347	$	205,410	$	109,747	$	254,103

Net income per common share:
Basic	$	2.51	$	2.72	$	8.14	$	4.37	$	10.07
Diluted	$	2.49	$	2.70	$	8.10	$	4.35	$	10.01

Weighted average common shares outstanding:
Basic		25,286		25,162		25,247		25,125		25,233
Diluted		25,417		25,313		25,371		25,220		25,376

Depreciation and amortization	$	28,941	$	24,567	$	80,211	$	73,366	$	104,825
Capital expenditures	$	31,867	$	14,114	$	73,872	$	28,663	$	102,555

LCI INDUSTRIES SEGMENT RESULTS (unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,				Last Twelve
	2021		2020		2021		2020		Months
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	602,429	$	417,050	$	1,633,059	$	936,676	$	2,017,950
Motorhomes		63,259		44,441		193,105		107,241		243,960
Adjacent Industries OEMs		280,593		180,563		801,021		498,306		990,963
Total OEM Segment net sales		946,281		642,054		2,627,185		1,542,223		3,252,873
Aftermarket Segment:
Total Aftermarket Segment net sales		219,028		185,675		632,102		470,941		789,416
Total net sales	$	1,165,309	$	827,729	$	3,259,287	$	2,013,164	$	4,042,289

Operating profit:
OEM Segment	$	64,136	$	65,533	$	206,757	$	110,485	$	252,364
Aftermarket Segment ⁽¹⁾		24,888		28,900		77,680		48,996		95,526
Total operating profit	$	89,024	$	94,433	$	284,437	$	159,481	$	347,890

Depreciation and amortization:
OEM Segment depreciation	$	12,782	$	11,911	$	37,054	$	35,460	$	49,357
Aftermarket Segment depreciation		3,669		2,860		9,993		9,442		12,896
Total depreciation	$	16,451	$	14,771	$	47,047	$	44,902	$	62,253

OEM Segment amortization	$	8,632	$	6,928	$	22,877	$	19,671	$	29,531
Aftermarket Segment amortization		3,858		2,868		10,287		8,793		13,041
Total amortization	$	12,490	$	9,796	$	33,164	$	28,464	$	42,572

⁽¹⁾Results for the 2021 periods include a non-cash charge for inventory fair value step-up of $0.2 million for the third quarter and $0.8 million for the first nine months of 2021 related to Ranch Hand purchase accounting. Results for the 2020 periods include a non-cash charge for inventory fair value step-up of $0.4 million for the third quarter of 2020 and $7.3 million for the first nine months of 2020 related to CURT purchase accounting.

LCI INDUSTRIES BALANCE SHEET INFORMATION (unaudited)

	September 30,		December 31,
	2021		2020
(In thousands)

ASSETS
Current assets
Cash and cash equivalents	$	72,615	$	51,821
Accounts receivable, net of allowances of $7,454 and $5,642 at September 30, 2021 and December 31, 2020, respectively		394,766		268,625
Inventories, net		790,651		493,899
Prepaid expenses and other current assets		102,434		55,456
Total current assets		1,360,466		869,801
Fixed assets, net		421,053		387,218
Goodwill		568,885		454,728
Other intangible assets, net		518,300		420,885
Operating lease right-of-use assets		164,142		104,179
Other assets		55,339		61,220
Total assets	$	3,088,185	$	2,298,031

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term indebtedness	$	74,311	$	17,831
Accounts payable, trade		297,347		184,931
Current portion of operating lease obligations		28,751		25,432
Accrued expenses and other current liabilities		283,722		188,200
Total current liabilities		684,131		416,394
Long-term indebtedness		1,012,078		720,418
Operating lease obligations		143,839		82,707
Deferred taxes		56,309		53,833
Other long-term liabilities		160,688		116,353
Total liabilities		2,057,045		1,389,705
Total stockholders' equity		1,031,140		908,326
Total liabilities and stockholders' equity	$	3,088,185	$	2,298,031

LCI INDUSTRIES SUMMARY OF CASH FLOWS (unaudited)

	Nine Months Ended September 30,
	2021			2020
(In thousands)
Cash flows from operating activities:
Net income	$	205,410		$	109,747
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization		80,211			73,366
Stock-based compensation expense		20,295			13,646
Other non-cash items		5,418			1,818
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net		(140,768	)		(103,209	)
Inventories, net		(253,031	)		24,423
Prepaid expenses and other assets		(28,274	)		(29,489	)
Accounts payable, trade		97,071			68,379
Accrued expenses and other liabilities		25,961			53,806
Net cash flows provided by operating activities		12,293			212,487
Cash flows from investing activities:
Capital expenditures		(73,872	)		(28,663	)
Acquisitions of businesses, net of cash acquired		(154,544	)		(94,909	)
Other investing activities		11,544			3,972
Net cash flows used in investing activities		(216,872	)		(119,600	)
Cash flows from financing activities:
Vesting of stock-based awards, net of shares tendered for payment of taxes		(8,258	)		(4,807	)
Proceeds from revolving credit facility		832,493			285,827
Repayments under revolving credit facility		(912,547	)		(273,130	)
Repayments under term loan and other borrowings		(13,375	)		(15,385	)
Proceeds from issuance of convertible notes		460,000			—
Purchases of convertible note hedge contracts		(100,142	)		—
Proceeds from issuance of warrants concurrent with note hedge contracts		48,484			—
Payment of debt issuance costs		(11,955	)		—
Payment of dividends		(64,425	)		(51,535	)
Payment of contingent consideration and holdbacks related to acquisitions		(8,061	)		(9	)
Other financing activities		1,972			(167	)
Net cash flows provided by (used in) financing activities		224,186			(59,206	)
Effect of exchange rate changes on cash and cash equivalents		1,187			(853	)
Net increase in cash and cash equivalents		20,794			32,828
Cash and cash equivalents at beginning of period		51,821			35,359
Cash and cash equivalents cash at end of period	$	72,615		$	68,187

LCI INDUSTRIES SUPPLEMENTARY INFORMATION (unaudited)

	Three Months Ended			Nine Months Ended
	September 30,			September 30,					Last Twelve
	2021		2020	2021			2020		Months
Industry Data⁽¹⁾ (in thousands of units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs	136.0		110.1		401.0			264.8		516.1
Motorhome RVs	13.3		11.3		42.4			28.3		54.8
Industry Retail Sales:
Travel trailer and fifth-wheel RVs	126.3	⁽²⁾	159.1		420.9	⁽²⁾		366.7		510.3	⁽²⁾
Impact on dealer inventories	9.7	⁽²⁾	(49.0)		(19.9)	⁽²⁾		(101.9)		5.8	⁽²⁾
Motorhome RVs	13.1	⁽²⁾	18.2		42.7	⁽²⁾		41.2		54.6	⁽²⁾


				Twelve Months Ended
				September 30,
				2021			2020
Lippert Content Per Industry Unit Produced: ⁽³⁾
Travel trailer and fifth-wheel RV				$	3,786		$	3,428
Motorhome RV				$	2,732		$	2,399


				September 30,					December 31,
				2021			2020		2020
Balance Sheet Data (debt availability in millions):
Remaining availability under the debt facilities ⁽⁴⁾				$	417.2		$	460.9	$	352.2
Days sales in accounts receivable, based on last twelve months					30.9			30.8		31.6
Inventory turns, based on last twelve months					5.7			5.7		5.7


				2021
Estimated Full Year Data:
Capital expenditures				$130 - $150 million
Depreciation and amortization				$110 - $120 million
Stock-based compensation expense				$25 - $30 million
Annual tax rate				24% - 26%

⁽¹⁾ Industry wholesale production data for travel trailer and fifth-wheel RVs and motorhome RVs provided by the Recreation Vehicle Industry Association. Industry retail sales data provided by Statistical Surveys, Inc.

⁽²⁾ September 2021 retail sales data for RVs has not been published yet, therefore 2021 retail data for RVs includes an estimate for September 2021 retail units. Retail sales data will likely be revised upwards in future months as various states report.

⁽³⁾ The content figures presented were adjusted to remove Furrion sales from prior periods, as the Furrion distribution and supply agreement was terminated effective December 31, 2019.

⁽⁴⁾ Remaining availability under the debt facilities is subject to covenant restrictions and, in the case of $150 million of such availability, the lender's discretion.

LCI INDUSTRIES SUPPLEMENTARY INFORMATION RECONCILIATION OF NON-GAAP MEASURES (unaudited)

The following table reconciles net income to adjusted net income and diluted net income per common share to adjusted diluted net income per common share.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
(In thousands, except per share amounts)
Net income	$	63,401		$	68,347		$	205,410		$	109,747
Non-cash charge for inventory fair value step-up		179			388			790			7,286
Income tax impact of inventory fair value step-up		(44	)		(94	)		(194	)		(1,772	)
Adjusted net income	$	63,536		$	68,641		$	206,006		$	115,261

Diluted net income per common share	$	2.49		$	2.70		$	8.10		$	4.35
Non-cash charge for inventory fair value step-up		0.01			0.02			0.03			0.29
Income tax impact of inventory fair value step-up		(0.00	)		(0.00	)		(0.01	)		(0.07	)
Adjusted diluted net income per common share	$	2.50		$	2.72		$	8.12		$	4.57

The following table reconciles net income to EBITDA and Adjusted EBITDA.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
(In thousands)
Net income	$	63,401		$	68,347		$	205,410		$	109,747
Interest expense, net		4,667			1,948			10,844			10,843
Provision for income taxes		20,956			24,138			68,183			38,891
Depreciation expense		16,451			14,771			47,047			44,902
Amortization expense		12,490			9,796			33,164			28,464
EBITDA		117,965			119,000			364,648			232,847
Non-cash charge for inventory fair value step-up		179			388			790			7,286
Adjusted EBITDA	$	118,144		$	119,388		$	365,438		$	240,133

In addition to reporting financial results in accordance with U.S. GAAP, the Company has provided the non-GAAP performance measures of adjusted net income, adjusted diluted net income per common share, and adjusted EBITDA to illustrate and improve comparability of its results from period to period. Adjusted net income is defined as net income adjusted for items that impact the comparability of the Company's results from period to period, which consisted of the inventory fair value step-up from the acquisitions of Ranch Hand and CURT and related tax impacts during the three and nine month periods ended September 30, 2021 and 2020, respectively. Adjusted diluted net income per common share is defined as net income per common share adjusted for items that impact the comparability of the Company's results from period to period, which consisted of the inventory fair value step-up from the acquisitions of Ranch Hand and CURT and related tax impacts during the three and nine month periods ended September 30, 2021 and 2020, respectively. Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period, which consisted of the inventory fair value step-up from the acquisitions of Ranch Hand and CURT during the three and nine month periods ended September 30, 2021 and 2020, respectively. The Company considers these non-GAAP measures in evaluating and managing the Company's operations and believes that discussion of results adjusted for these items is meaningful to investors because it provides a useful analysis of ongoing underlying operating trends. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures, and they may not be comparable to similarly titled measures used by other companies.

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