UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023March 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
lcilogo.jpg
LCI INDUSTRIES
(Exact name of registrant as specified in its charter)
Delaware13-3250533
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)
3501 County Road 6 East46514
Elkhart,Indiana(Zip Code)
(Address of principal executive offices)
(574) 535-1125
(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valueLCIINew York Stock Exchange

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

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

1


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

Large accelerated filer                            Accelerated filer
Non-accelerated filer                         Smaller reporting company
Emerging growth company

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

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

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (July 31, 2023)(April 30, 2024) was 25,324,43325,449,794 shares of common stock.

2




LCI INDUSTRIES

TABLE OF CONTENTS
Page
PART I  
  
 
  
 
  
 
 
  
 
  
 
  
 
  
 
  
 
  
PART II
  
 
  
 
  
 
  
 
EXHIBIT 31.1 - SECTION 302 CEO CERTIFICATION
  
EXHIBIT 31.2 - SECTION 302 CFO CERTIFICATION 
  
EXHIBIT 32.1 - SECTION 906 CEO CERTIFICATION 
  
EXHIBIT 32.2 - SECTION 906 CFO CERTIFICATION 

3




PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS

LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended 
June 30,
Six Months Ended 
June 30,
2023202220232022
(In thousands, except per share amounts)(In thousands, except per share amounts)    
(In thousands, except per share amounts)
(In thousands, except per share amounts)
Net sales
Net sales
Net salesNet sales$1,014,639 $1,536,150 $1,987,949 $3,180,718 
Cost of salesCost of sales796,519 1,127,065 1,583,758 2,307,390 
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profitGross profit218,120 409,085 404,191 873,328 
Selling, general and administrative expensesSelling, general and administrative expenses162,946 190,296 328,974 384,838 
Selling, general and administrative expenses
Selling, general and administrative expenses
Operating profit
Operating profit
Operating profitOperating profit55,174 218,789 75,217 488,490 
Interest expense, netInterest expense, net10,249 6,191 20,643 12,443 
Interest expense, net
Interest expense, net
Income before income taxes
Income before income taxes
Income before income taxesIncome before income taxes44,925 212,598 54,574 476,047 
Provision for income taxesProvision for income taxes11,499 58,068 13,889 125,336 
Provision for income taxes
Provision for income taxes
Net income
Net income
Net incomeNet income$33,426 $154,530 $40,685 $350,711 
Net income per common share:Net income per common share:    
Net income per common share:
Net income per common share:
BasicBasic$1.32 $6.07 $1.61 $13.82 
Basic
Basic
Diluted
Diluted
DilutedDiluted$1.31 $6.06 $1.60 $13.76 
Weighted average common shares outstanding:Weighted average common shares outstanding:    
Weighted average common shares outstanding:
Weighted average common shares outstanding:
Basic
Basic
BasicBasic25,329 25,438 25,273 25,377 
DilutedDiluted25,437 25,518 25,359 25,483 
Diluted
Diluted

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4


LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended 
June 30,
Six Months Ended 
June 30,
2023202220232022
(In thousands)(In thousands)    
(In thousands)
(In thousands)
Net incomeNet income$33,426 $154,530 $40,685 $350,711 
Other comprehensive income (loss):
Net income
Net income
Other comprehensive (loss) income:
Other comprehensive (loss) income:
Other comprehensive (loss) income:
Net foreign currency translation adjustmentNet foreign currency translation adjustment763 (13,688)2,763 (16,570)
Actuarial gain on pension plans100 13,985 100 13,985 
Net foreign currency translation adjustment
Net foreign currency translation adjustment
Total comprehensive incomeTotal comprehensive income$34,289 $154,827 $43,548 $348,126 
Total comprehensive income
Total comprehensive income

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5


LCI INDUSTRIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,December 31,March 31,December 31,
20232022 20242023
(In thousands, except per share amount)(In thousands, except per share amount)  (In thousands, except per share amount)  
ASSETSASSETS  
ASSETS
ASSETS  
Current assetsCurrent assets  Current assets  
Cash and cash equivalentsCash and cash equivalents$22,094 $47,499 
Accounts receivable, net of allowances of $7,790 and $5,904 at June 30, 2023 and December 31, 2022, respectively299,469 214,262 
Accounts receivable, net of allowances of $7,181 and $5,701 at March 31, 2024 and December 31, 2023, respectively
Accounts receivable, net of allowances of $7,181 and $5,701 at March 31, 2024 and December 31, 2023, respectively
Accounts receivable, net of allowances of $7,181 and $5,701 at March 31, 2024 and December 31, 2023, respectively
Inventories, netInventories, net830,020 1,029,705 
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Prepaid expenses and other current assetsPrepaid expenses and other current assets83,662 99,310 
Total current assetsTotal current assets1,235,245 1,390,776 
Fixed assets, netFixed assets, net478,885 482,185 
GoodwillGoodwill584,312 567,063 
Other intangible assets, netOther intangible assets, net477,307 503,320 
Operating lease right-of-use assetsOperating lease right-of-use assets241,146 247,007 
Other long-term assetsOther long-term assets59,502 56,561 
Other long-term assets
Other long-term assets
Total assetsTotal assets$3,076,397 $3,246,912 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilitiesCurrent liabilities  Current liabilities  
Current maturities of long-term indebtednessCurrent maturities of long-term indebtedness$27,712 $23,086 
Accounts payable, tradeAccounts payable, trade182,637 143,529 
Current portion of operating lease obligations
Current portion of operating lease obligations
Current portion of operating lease obligationsCurrent portion of operating lease obligations35,004 35,447 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities196,099 219,238 
Total current liabilitiesTotal current liabilities441,452 421,300 
Long-term indebtednessLong-term indebtedness915,756 1,095,888 
Operating lease obligationsOperating lease obligations217,979 222,478 
Deferred taxesDeferred taxes26,900 30,580 
Other long-term liabilitiesOther long-term liabilities103,413 95,658 
Total liabilitiesTotal liabilities1,705,500 1,865,904 
Stockholders' equityStockholders' equity
Common stock, par value $.01 per shareCommon stock, par value $.01 per share286 285 
Common stock, par value $.01 per share
Common stock, par value $.01 per share
Paid-in capitalPaid-in capital235,507 234,956 
Retained earningsRetained earnings1,207,753 1,221,279 
Accumulated other comprehensive incomeAccumulated other comprehensive income9,567 6,704 
Stockholders' equity before treasury stockStockholders' equity before treasury stock1,453,113 1,463,224 
Treasury stock, at costTreasury stock, at cost(82,216)(82,216)
Total stockholders' equityTotal stockholders' equity1,370,897 1,381,008 
Total liabilities and stockholders' equityTotal liabilities and stockholders' equity$3,076,397 $3,246,912 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended 
June 30,
Three Months Ended 
March 31,
(In thousands)(In thousands)20232022(In thousands)20242023
Cash flows from operating activities:Cash flows from operating activities:  
Cash flows from operating activities:
Cash flows from operating activities:  
Net incomeNet income$40,685 $350,711 
Adjustments to reconcile net income to cash flows provided by operating activities:  
Adjustments to reconcile net income to cash flows (used in) provided by operating activities:Adjustments to reconcile net income to cash flows (used in) provided by operating activities:  
Depreciation and amortizationDepreciation and amortization65,549 63,719 
Stock-based compensation expenseStock-based compensation expense9,080 13,701 
Deferred taxes— (2,401)
Other non-cash items
Other non-cash items
Other non-cash itemsOther non-cash items2,192 2,025 
Changes in assets and liabilities, net of acquisitions of businesses:Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net
Accounts receivable, net
Accounts receivable, netAccounts receivable, net(80,952)(95,479)
Inventories, netInventories, net209,346 (51,811)
Prepaid expenses and other assetsPrepaid expenses and other assets11,607 25,746 
Accounts payable, tradeAccounts payable, trade37,949 5,312 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities(21,891)36,448 
Net cash flows provided by operating activities273,565 347,971 
Net cash flows (used in) provided by operating activities
Cash flows from investing activities:Cash flows from investing activities:  Cash flows from investing activities:  
Capital expendituresCapital expenditures(34,082)(70,837)
Acquisitions of businessesAcquisitions of businesses(25,851)(51,789)
Other investing activities
Other investing activities
Other investing activitiesOther investing activities4,344 2,204 
Net cash flows used in investing activitiesNet cash flows used in investing activities(55,589)(120,422)
Cash flows from financing activities:Cash flows from financing activities:  Cash flows from financing activities:  
Vesting of stock-based awards, net of shares tendered for payment of taxesVesting of stock-based awards, net of shares tendered for payment of taxes(9,585)(10,773)
Proceeds from revolving credit facilityProceeds from revolving credit facility234,200 729,400 
Repayments under revolving credit facilityRepayments under revolving credit facility(402,726)(836,500)
Repayments under shelf loan, term loan, and other borrowings(10,703)(60,902)
Repayments under term loan and other borrowings
Payment of dividendsPayment of dividends(53,154)(49,572)
Payment of contingent consideration and holdbacks related to acquisitions(517)(6,039)
Payment of dividends
Payment of dividends
Other financing activities
Other financing activities
Other financing activitiesOther financing activities(834)(4)
Net cash flows used in financing activitiesNet cash flows used in financing activities(243,319)(234,390)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(62)(1,067)
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents(25,405)(7,908)
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period47,499 62,896 
Cash and cash equivalents cash at end of period$22,094 $54,988 
Cash and cash equivalents at end of period
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:  
Cash paid during the period for interest$20,804 $10,558 
Cash paid during the period for income taxes, net of refunds$5,724 $110,871 
Supplemental disclosure of cash flow information:
Supplemental disclosure of cash flow information:  
Cash paid during the period for:
Interest
Interest
Interest
Income taxes, net of refunds
Non-cash investing and financing activities:
Purchase of property and equipment in accrued expensesPurchase of property and equipment in accrued expenses$1,704 $3,157 
Purchase of property and equipment in accrued expenses
Purchase of property and equipment in accrued expenses

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7


LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

(In thousands, except shares and per share amounts)(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
(In thousands, except shares and per share amounts)Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive Income (Loss)Treasury
Stock
Total
Stockholders’
Equity
Balance - December 31, 2021$284 $220,459 $930,795 $(501)$(58,162)$1,092,875 
Balance - December 31, 2022
Net incomeNet income— — 196,181 — — 196,181 
Issuance of 138,208 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes(10,570)— — — (10,569)
Issuance of 119,091 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes
Stock-based compensation expenseStock-based compensation expense— 6,517 — — — 6,517 
Other comprehensive loss— — — (2,882)— (2,882)
Cash dividends ($0.90 per share)— — (22,870)— — (22,870)
Dividend equivalents on stock-based awards— 392 (392)— — — 
Balance - March 31, 2022$285 $216,798 $1,103,714 $(3,383)$(58,162)$1,259,252 
Net income— — 154,530 — — 154,530 
Issuance of 18,245 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes— (204)— — — (204)
Stock-based compensation expense— 7,184 — — — 7,184 
Other comprehensive incomeOther comprehensive income— — — 297 — 297 
Cash dividends ($1.05 per share)Cash dividends ($1.05 per share)— — (26,702)— — (26,702)
Dividend equivalents on stock-based awardsDividend equivalents on stock-based awards— 453 (453)— — — 
Balance - June 30, 2022$285 $224,231 $1,231,089 $(3,086)$(58,162)$1,394,357 
Balance - March 31, 2023


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


8


LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

(In thousands, except shares and per share amounts)Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive Income (Loss)Treasury
Stock
Total
Stockholders’
Equity
Balance - December 31, 2022$285 $234,956 $1,221,279 $6,704 $(82,216)$1,381,008 
Net income— — 7,259 — — 7,259 
Issuance of 119,091 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes(8,889)— — — (8,888)
Stock-based compensation expense— 4,695 — — — 4,695 
Other comprehensive income— — — 2,000 — 2,000 
Cash dividends ($1.05 per share)— — (26,563)— — (26,563)
Dividend equivalents on stock-based awards— 532 (532)— — — 
Balance - March 31, 2023$286 $231,294 $1,201,443 $8,704 $(82,216)$1,359,511 
Net income— — 33,426 — — 33,426 
Issuance of 26,445 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes— (697)— — — (697)
Stock-based compensation expense— 4,385 — — — 4,385 
Other comprehensive income— — — 863 — 863 
Cash dividends ($1.05 per share)— — (26,591)— — (26,591)
Dividend equivalents on stock-based awards— 525 (525)— — — 
Balance - June 30, 2023$286 $235,507 $1,207,753 $9,567 $(82,216)$1,370,897 

Balance - December 31, 2023$287 $245,659 $1,177,034 $14,272 $(82,216)$1,355,036 
Net income— — 36,545 — — 36,545 
Issuance of 122,023 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes(9,041)— — — (9,040)
Stock-based compensation expense— 4,327 — — — 4,327 
Other comprehensive loss— — — (3,263)— (3,263)
Cash dividends ($1.05 per share)— — (26,721)— — (26,721)
Dividend equivalents on stock-based awards— 569 (569)— — — 
Balance - March 31, 2024$288 $241,514 $1,186,289 $11,009 $(82,216)$1,356,884 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
98




LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.    BASIS OF PRESENTATION

The Condensed 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. LCII, through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI," or "Lippert"), supplies, domestically and internationally, a broad array of highly engineered components for the leading original equipment manufacturers ("OEMs") in the recreation transportation products, and housingtransportation markets, consisting primarily of recreational vehicles ("RVs") and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; 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, as well as direct to retail customers via the Internet. At June 30, 2023,March 31, 2024, the Company operated over 120110 manufacturing and distribution facilities located throughout North America and Europe.

Most industries where the Company sells products or where its products are used historically have been seasonal and are generally at the highest levels when the weather is moderate. Accordingly, the Company's 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 due to various factors, including fluctuations in dealer inventories and the timing of dealer orders, the impact of international, national, and regional economic conditions and consumer confidence on retail sales of RVs and other products for which the Company sells its components, the impact of severe weather conditions on the timing of industry-wide shipments from time to time, as well as the coronavirus ("COVID-19") pandemic and related impacts.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, but this has been, and may in the future be, different as a result of the COVID-19 pandemic and related impacts.counter-seasonal.

The Company is not aware of any significant events, except as disclosed in the Notes to Condensed Consolidated Financial Statements, which occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Condensed Consolidated Financial Statements. All significant intercompany balances and transactions have been eliminated. Certain prior year balances have been reclassified to conform to the current year presentation.

In the opinion of management, the information furnished in this Form 10-Q reflects all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented. The Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include some information necessary to conform to annual reporting requirements. Results for interim periods should not be considered indicative of results for the full year.

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.

10

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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,
9

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
including changes in tariffs, sanctions, international treaties, and other trade restrictions, including heightenedgeopolitical tensions, between China and Taiwan, the occurrence of aarmed conflicts, natural disasterdisasters or global public health crisis, such as the COVID-19 pandemic, or armed conflicts, such as the conflict between Russia and Ukraine,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

The Condensed Consolidated Financial Statements presented herein have been prepared by the Company in accordance with the accounting policies described in its December 31, 20222023 Annual Report on Form 10-K and should be read in conjunction with the Notes to Consolidated Financial Statements which appear in that report.

There are no recentRecent Accounting Pronouncements

Recently issued accounting pronouncements that have been issued and not yet adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 820): 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 name and title of the chief operating decision maker. The new standard also requires interim disclosures related to reportable segment profit or loss and assets that are expectedhad previously only been disclosed annually. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. 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 haveIncome 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 material impact on our Condensed Consolidated Financial Statements.prospective basis and retrospective application is permitted. The Company is evaluating the effect of adopting this new accounting guidance.

3.    EARNINGS PER SHARE

The following reconciliation details the denominator used in the computation of basic and diluted earnings per share for the periods indicated:
Three Months Ended 
June 30,
Six Months Ended 
June 30,
(In thousands)(In thousands)2023202220232022
(In thousands)
(In thousands)
Weighted average shares outstanding for basic earnings per share
Weighted average shares outstanding for basic earnings per share
Weighted average shares outstanding for basic earnings per shareWeighted average shares outstanding for basic earnings per share25,329 25,438 25,273 25,377 
Common stock equivalents pertaining to stock-based awardsCommon stock equivalents pertaining to stock-based awards108 80 86 106 
Common stock equivalents pertaining to stock-based awards
Common stock equivalents pertaining to stock-based awards
Weighted average shares outstanding for diluted earnings per share
Weighted average shares outstanding for diluted earnings per share
Weighted average shares outstanding for diluted earnings per shareWeighted average shares outstanding for diluted earnings per share25,437 25,518 25,359 25,483 
Equity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutiveEquity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutive165 112 162 111 
Equity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutive
Equity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutive

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 each of the three and six months ended June 30, 2023,March 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
10

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(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 each of the three and six months ended June 30, 2023,March 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.

11

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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

Acquisitions Completed During the Six Months Ended June 30, 2023Subsequent Event

During the six months ended June 30, 2023, the Company completed two acquisitions for an aggregate $25.8 million of cash purchase consideration, plus holdback payments of $0.5 million to be paid over two years. The preliminary purchase price allocations resulted in $18.3 million of goodwill (tax deductible). As these acquisitions are not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented.Camping World Furniture

Acquisitions with Measurement Period Adjustments During the Six Months Ended June 30, 2023
Way
In November 2022,May 2024, the Company acquired substantially allthe business and certain assets of the business assetsfurniture operations of Way Interglobal NetworkCWDS, LLC, ("Way")a subsidiary of Camping World Holdings, Inc., a distributorin exchange for cash consideration of innovative appliances and electronics to OEMs in the RV industry.$20 million. The purchase price was $54.8 million,acquisition, which includes a holdback payment of $2.0 million due on the first anniversary of the acquisition in November 2023, and remains subject to adjustmentqualifies as a result of net working capital true-up procedures. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily incombination for accounting purposes, expands the Company's furniture portfolio and will serve customers in both the OEM Segment. As the operations of this acquisition are not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented.Aftermarket segments.
During the six months ended June 30, 2023, the Company adjusted the preliminary purchase price allocation reported in the Company's December 31, 2022 Annual Report on Form 10-K to account for updates to net working capital balances. These measurement period adjustments would not have resulted in a material impact on the prior period results if the adjustments had been recognized as of the acquisition date. The purchase price allocation is subject to further adjustment for net working capital and the fair value of intangible assets as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date).

Goodwill

Changes in the carrying amount of goodwill by reportable segment were as follows:
(In thousands)OEM SegmentAftermarket SegmentTotal
Net balance – December 31, 2022$399,736 $167,327 $567,063 
Acquisitions – 202318,314 — 18,314 
Measurement period adjustments(2,905)(143)(3,048)
Foreign currency translation1,721 262 1,983 
Net balance – June 30, 2023$416,866 $167,446 $584,312 
(In thousands)OEM SegmentAftermarket SegmentTotal
Net balance – December 31, 2023$421,701 $167,849 $589,550 
Foreign currency translation(1,575)(184)(1,759)
Net balance – March 31, 2024$420,126 $167,665 $587,791 
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.

1211

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Other Intangible Assets

Other intangible assets consisted of the following at June 30, 2023:March 31, 2024:
(In thousands)(In thousands)Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated Useful
Life in Years
(In thousands)Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated Useful
Life in Years
Customer relationshipsCustomer relationships$517,588 $180,257 $337,331 6to20Customer relationships$508,140 $$199,501 $$308,639 66to20
PatentsPatents122,373 67,697 54,676 3to20Patents114,459 69,815 69,815 44,644 44,644 33to20
Trade names (finite life)Trade names (finite life)98,650 24,050 74,600 3to20Trade names (finite life)99,136 28,587 28,587 70,549 70,549 33to20
Trade names (indefinite life)Trade names (indefinite life)7,600 — 7,600 IndefiniteTrade names (indefinite life)7,432 — — 7,432 7,432 IndefiniteIndefinite
Non-compete agreementsNon-compete agreements11,484 8,728 2,756 3to6Non-compete agreements10,104 8,948 8,948 1,156 1,156 33to6
OtherOther609 265 344 2to12Other609 301 301 308 308 22to12
Other intangible assetsOther intangible assets$758,304 $280,997 $477,307  
Other intangible assets
Other intangible assets$739,880 $307,152 $432,728   
Other intangible assets consisted of the following at December 31, 2022:2023:
(In thousands)(In thousands)Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated Useful
Life in Years
(In thousands)Gross
Cost
Accumulated
Amortization
Net
Balance
Estimated Useful
Life in Years
Customer relationshipsCustomer relationships$520,273 $163,562 $356,711 6to20Customer relationships$509,505 $$189,967 $$319,538 66to20
PatentsPatents121,167 62,841 58,326 3to20Patents114,864 67,602 67,602 47,262 47,262 33to20
Trade names (finite life)Trade names (finite life)97,810 21,380 76,430 3to20Trade names (finite life)99,366 26,978 26,978 72,388 72,388 33to20
Trade names (indefinite life)Trade names (indefinite life)7,600 — 7,600 IndefiniteTrade names (indefinite life)7,600 — — 7,600 7,600 IndefiniteIndefinite
Non-compete agreementsNon-compete agreements11,584 7,698 3,886 3to6Non-compete agreements10,104 8,453 8,453 1,651 1,651 33to6
OtherOther609 242 367 2to12Other609 289 289 320 320 22to12
Other intangible assetsOther intangible assets$759,043 $255,723 $503,320  
Other intangible assets
Other intangible assets$742,048 $293,289 $448,759   

5.    INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out (FIFO) method) or net realizable value. Cost includes material, labor, and overhead. Inventories consisted of the following at:
June 30,December 31,March 31,December 31,
(In thousands)(In thousands)20232022(In thousands)20242023
Raw materialsRaw materials$503,777 $600,601 
Work in processWork in process45,379 44,850 
Finished goodsFinished goods280,864 384,254 
Inventories, netInventories, net$830,020 $1,029,705 
At June 30, 2023March 31, 2024 and December 31, 2022,2023, the Company had recorded inventory obsolescence reserves of $61.5$76.1 million and $55.9$71.3 million, respectively.

12

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6.    FIXED ASSETS

Fixed assets consisted of the following at:
 June 30,December 31,
(In thousands)20232022
Fixed assets, at cost$976,047 $945,255 
Less accumulated depreciation and amortization497,162 463,070 
Fixed assets, net$478,885 $482,185 
13

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 March 31,December 31,
(In thousands)20242023
Fixed assets, at cost$986,971 $983,548 
Less accumulated depreciation and amortization532,900 517,767 
Fixed assets, net$454,071 $465,781 

7.    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at:
 June 30,December 31,
(In thousands)20232022
Employee compensation and benefits$54,837 $77,804 
Current portion of accrued warranty41,988 35,148 
Deferred acquisition payments and contingent consideration*33,692 34,013 
Other65,582 72,273 
Accrued expenses and other current liabilities$196,099 $219,238 
* Includes current portion of contingent consideration (Note 10) and deferred acquisition payments (Note 4).
 March 31,December 31,
(In thousands)20242023
Employee compensation and benefits$58,183 $58,999 
Current portion of accrued warranty46,725 48,468 
Customer rebates20,697 19,403 
Other51,612 47,567 
Accrued expenses and other current liabilities$177,217 $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 sixthree months ended June 30:March 31:
(In thousands)20232022
Balance at beginning of period$54,528 $52,114 
Provision for warranty expense40,128 28,164 
Warranty costs paid(31,968)(18,646)
Balance at end of period62,688 61,632 
Less long-term portion(20,700)(21,460)
Current portion of accrued warranty at end of period$41,988 $40,172 

(In thousands)20242023
Balance at beginning of period$71,578 $54,528 
Provision for warranty expense13,123 20,827 
Warranty costs paid(14,586)(15,227)
Balance at end of period70,115 60,128 
Less long-term portion(23,390)(19,770)
Current portion of accrued warranty at end of period$46,725 $40,358 
8.    LONG-TERM INDEBTEDNESS

Long-term debt consisted of the following:
June 30,December 31,March 31,December 31,
(In thousands)(In thousands)20232022(In thousands)20242023
Convertible NotesConvertible Notes$460,000 $460,000 
Convertible Notes
Convertible Notes
Term LoanTerm Loan365,000 375,000 
Revolving Credit LoanRevolving Credit Loan122,960 289,067 
OtherOther3,440 3,959 
Other
Other
Unamortized deferred financing feesUnamortized deferred financing fees(7,932)(9,052)
943,468 1,118,974 
855,342
Less current portionLess current portion(27,712)(23,086)
Long-term indebtednessLong-term indebtedness$915,756 $1,095,888 

1413

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 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, which was applied to pay in full the scheduled principal amortization payments due through March 31, 2025. 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 (0.625 percent was applicable at June 30, 2023)March 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 (1.625 percent was applicable at June 30, 2023)March 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 June 30, 2023,March 31, 2024, the Company had $4.6$4.8 million in issued, but undrawn, standby letters of credit under the LC Facility. Availability under the Company’s revolving credit facility, giving effect to certain limitations related to compliance with the maximum net leverage ratio covenant, was $270.0 million at June 30, 2023. A commitment fee ranging from 0.150 percent to 0.275 percent (0.225 percent was applicable at June 30, 2023)March 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.

Shelf-Loan FacilityPursuant 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 March 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 $153.8 million at March 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.

The CompanyAt March 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 certain of its subsidiaries had a $150.0 million shelf-loan facility (the "Shelf-Loan Facility") with PGIM, Inc. (formerly Prudential Investment Management, Inc.) and its affiliates ("Prudential"). On March 29, 2019, the Company issued $50.0 million of Series B Senior Notes (the "Series B Notes") to certain affiliates of Prudential for a term of three years, at a fixed interest rate of 3.80 percent per annum, payable quarterly in arrears. The Series B Notes were paid in full in March 2022, and the Shelf-Loan Facility expireddiscounted future cash flows based on November 11, 2022.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 June 30, 2023,March 31, 2024, the conversion rate of the Convertible Notes was 6.14696.1946 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,
14

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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
15

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.

The Company may not redeem the Convertible Notes prior to May 20, 2024. On or after 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 $443.9$454.5 million at June 30, 2023March 31, 2024 was estimated using Level 1 inputs, as it is based on quoted prices for these instruments in active markets.

General

At June 30, 2023, the fair value of the Company's 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.

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. On May 23, 2023, the Company entered into an amendment to the Credit Agreement that, among other things, provided for adjustments to certain of the financial covenants by increasing the maximum total net leverage ratio and decreasing the minimum debt service coverage ratio, in each case for the two fiscal quarters ending June 30, 2023 and September 30, 2023. At June 30, 2023, the Company was in compliance with all financial covenants.

The Credit Agreement includes a maximum net leverage ratio covenant which limits the amount of consolidated outstanding indebtedness that the Company may incur on a trailing twelve-month EBITDA. This limitation reduced the Company's remaining availability under its revolving credit facility at June 30, 2023. The Company believes the availability of $270.0 million 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.

16

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9.    LEASES

The Company leases certain manufacturing and warehouse facilities, administrative office space, semi-tractors, trailers, forklifts, and other equipment through operating leases with unrelated third parties. The components of lease expense were as follows:
Three Months Ended June 30,Six Months Ended June 30,
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
(In thousands)
(In thousands)
(In thousands)(In thousands)2023202220232022
Operating lease expenseOperating lease expense$15,670 $13,236 $30,914 $26,148 
Operating lease expense
Operating lease expense
Short-term lease expense
Short-term lease expense
Short-term lease expenseShort-term lease expense1,307 1,934 2,787 3,774 
Variable lease expenseVariable lease expense1,200 936 2,200 1,649 
Variable lease expense
Variable lease expense
Total lease expenseTotal lease expense$18,177 $16,106 $35,901 $31,571 
Total lease expense
Total lease expense

10.    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 fixed payments and 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
15

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
consideration, the Company could record adjustments in future periods. See Note 4 - Acquisitions, GoodwillHoldback payment and Other Intangible Assets for information on certain holdback payments. Contingentcontingent consideration balances were not material at June 30, 2023.March 31, 2024.

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. Product recall reserves were not material at March 31, 2024.

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. Environmental reserves were not material at March 31, 2024.

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 Company beyond that provided in the Condensed Consolidated Balance Sheet as of June 30, 2023,March 31, 2024, would not be material to the Company's financial position or results of operations.

17

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
11.    STOCKHOLDERS' EQUITY

The following table summarizes information about shares of the Company's common stock at:
June 30,December 31,March 31,December 31,
(In thousands)(In thousands)20232022(In thousands)20242023
Common stock authorizedCommon stock authorized75,000 75,000 
Common stock issuedCommon stock issued28,665 28,519 
Treasury stockTreasury stock3,341 3,341 
Common stock outstandingCommon stock outstanding25,324 25,178 

The table below summarizes the regular quarterly dividends declared and paid during the periods ended June 30, 2023March 31, 2024 and December 31, 2022:2023:
(In thousands, except per share data)Per ShareRecord DatePayment DateTotal Paid
First Quarter 2022$0.90 03/11/2203/25/22$22,870 
Second Quarter 20221.05 06/03/2206/17/2226,702 
Third Quarter 20221.05 09/02/2209/16/2226,701 
Fourth Quarter 20221.05 12/02/2212/16/2226,453 
Total 2022$4.05 $102,726 
First Quarter 2023$1.05 03/10/2303/24/23$26,563 
Second Quarter 20231.05 06/02/2306/16/2326,591 
Total 2023$2.10 $53,154 
(In thousands, except per share data)Per ShareRecord DatePayment DateTotal Paid
First Quarter 2023$1.05 03/10/2303/24/23$26,563 
Second Quarter 20231.05 06/02/2306/16/2326,591 
Third Quarter 20231.05 09/01/2309/15/2326,590 
Fourth Quarter 20231.05 12/01/2312/15/2326,592 
Total 2023$4.20 $106,336 
First Quarter 2024$1.05 03/08/2403/22/24$26,721 

16

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Deferred and Restricted Stock Units

The LCI Industries 2018 Omnibus Incentive Plan (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. 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 SharesWeighted Average Price
Outstanding at December 31, 2022277,774 $120.92 
Number of SharesNumber of SharesWeighted Average Price
Outstanding at December 31, 2023
IssuedIssued1,630 117.45 
GrantedGranted159,640 114.22 
Dividend equivalentsDividend equivalents5,695 112.11 
ForfeitedForfeited(13,752)121.41 
VestedVested(129,583)112.24 
Outstanding at June 30, 2023301,404 $118.55 
Outstanding at March 31, 2024

18

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 SharesWeighted Average Price
Outstanding at December 31, 2022162,381 $120.12 
Number of SharesNumber of SharesWeighted Average Price
Outstanding at December 31, 2023
GrantedGranted140,953 108.42
Granted
Granted108,096 132.77
Dividend equivalentsDividend equivalents3,727 112.19Dividend equivalents2,136 116.35116.35
Forfeited(3,245)96.55
VestedVested(100,046)101.11
Outstanding at June 30, 2023203,770 $122.57 
Vested
Vested(78,695)143.54
Outstanding at March 31, 2024

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, 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 sixthree months ended June 30, 2023.March 31, 2024.

12.    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 and 8478 percent of consolidated net sales for each of the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, respectively, manufactures and distributes a broad array of highly engineered components for the leading OEMs in the recreation transportation products, and housingtransportation markets, consisting primarily 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.
17

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Approximately 4452 percent of the Company's OEM Segment net sales for the sixthree months ended June 30, 2023March 31, 2024 were of components for travel trailer and fifth-wheel RVs.

The Aftermarket Segment, which accounted for 24 percent and 1622 percent of consolidated net sales for each of the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, respectively, supplies engineered components to the related aftermarket channels of the recreation and transportation products, and housing 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, 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.

Decisions concerning the allocation of the Company's resources are made by the Company's chief operating decision maker ("CODM"), with oversight by the Board of Directors. The CODM evaluates the performance of each segment based upon segment operating profit or loss, generally defined as income or loss before interest and income taxes. Decisions concerning the allocation of resources are also based on each segment's utilization of assets. 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 in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.2023.

19

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following tables present the Company's revenues disaggregated by segment and geography based on the billing address of the Company's customers:
Three Months Ended June 30, 2023Three Months Ended June 30, 2022
Three Months Ended March 31, 2024Three Months Ended March 31, 2024Three Months Ended March 31, 2023
(In thousands)(In thousands)
U.S. (a)
Int’l (b)
Total
U.S. (a)
Int’l (b)
Total(In thousands)
U.S. (a)
Int’l (b)
Total
U.S. (a)
Int’l (b)
Total
OEM Segment:OEM Segment:
RV OEMs:RV OEMs:
RV OEMs:
RV OEMs:
Travel trailers and fifth-wheels
Travel trailers and fifth-wheels
Travel trailers and fifth-wheelsTravel trailers and fifth-wheels$326,824 $11,915 $338,739 $800,315 $14,194 $814,509 
MotorhomesMotorhomes40,689 30,496 71,185 64,008 27,472 91,480 
Adjacent Industries OEMsAdjacent Industries OEMs298,355 50,729 349,084 323,715 46,574 370,289 
Total OEM Segment net salesTotal OEM Segment net sales665,868 93,140 759,008 1,188,038 88,240 1,276,278 
Aftermarket Segment:Aftermarket Segment:
Total Aftermarket Segment net salesTotal Aftermarket Segment net sales234,901 20,730 255,631 240,246 19,626 259,872 
Total Aftermarket Segment net sales
Total Aftermarket Segment net sales
Total net salesTotal net sales$900,769 $113,870 $1,014,639 $1,428,284 $107,866 $1,536,150 
Six Months Ended June 30, 2023Six Months Ended June 30, 2022
(In thousands)
U.S. (a)
Int’l (b)
Total
U.S. (a)
Int’l (b)
Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels$641,806 $27,486 $669,292 $1,737,950 $29,785 $1,767,735 
Motorhomes84,693 56,043 140,736 124,154 54,580 178,734 
Adjacent Industries OEMs607,820 99,332 707,152 635,363 91,028 726,391 
Total OEM Segment net sales1,334,319 182,861 1,517,180 2,497,467 175,393 2,672,860 
Aftermarket Segment:
Total Aftermarket Segment net sales435,388 35,381 470,769 470,413 37,445 507,858 
Total net sales$1,769,707 $218,242 $1,987,949 $2,967,880 $212,838 $3,180,718 
(a) Net sales to customers in the United States of America
(b) Net sales to customers domiciled in countries domiciled outside of the United States of America

The following table presents the Company's operating profit (loss) by segment:
Three Months Ended 
June 30,
Six Months Ended 
June 30,
(In thousands)(In thousands)2023202220232022
Operating profit:
(In thousands)
(In thousands)
Operating profit (loss):
Operating profit (loss):
Operating profit (loss):
OEM Segment
OEM Segment
OEM SegmentOEM Segment$18,642 $190,577 $17,921 $435,951 
Aftermarket SegmentAftermarket Segment36,532 28,212 57,296 52,539 
Aftermarket Segment
Aftermarket Segment
Total operating profitTotal operating profit$55,174 $218,789 $75,217 $488,490 
Total operating profit
Total operating profit

2018

LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the Company's revenue disaggregated by product:
Three Months Ended 
June 30,
Six Months Ended 
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In thousands)
(In thousands)
(In thousands)(In thousands)2023202220232022
OEM Segment:OEM Segment:
OEM Segment:
OEM Segment:
Chassis, chassis parts, and slide-out mechanisms
Chassis, chassis parts, and slide-out mechanisms
Chassis, chassis parts, and slide-out mechanismsChassis, chassis parts, and slide-out mechanisms$202,735 $486,591 $400,791 $1,046,311 
Windows and doorsWindows and doors220,094 301,985 438,705 632,343 
Windows and doors
Windows and doors
Furniture and mattressesFurniture and mattresses125,346 229,520 265,909 471,746 
Axles and suspension solutions88,635 93,378 164,384 190,423 
Furniture and mattresses
Furniture and mattresses
Axles, ABS, and suspension solutions
Axles, ABS, and suspension solutions
Axles, ABS, and suspension solutions
Other
Other
OtherOther122,198 164,804 247,391 332,037 
Total OEM Segment net salesTotal OEM Segment net sales759,008 1,276,278 1,517,180 2,672,860 
Total OEM Segment net sales
Total OEM Segment net sales
Total Aftermarket Segment net sales
Total Aftermarket Segment net sales
Total Aftermarket Segment net salesTotal Aftermarket Segment net sales255,631 259,872 470,769 507,858 
Total net salesTotal net sales$1,014,639 $1,536,150 $1,987,949 $3,180,718 
Total net sales
Total net sales

2119

LCI INDUSTRIES
ITEM 2 – 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 the Company's Condensed Consolidated Financial Statements and Notes thereto included in Item 1 of Part 1I of this report, as well as the Company's Annual Report on Form 10-K for the year ended December 31, 2022.2023.

LCI Industries ("LCII" and collectively with its subsidiaries, the "Company," "we," "us," or "our"), through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI," or "Lippert"), supplies, domestically and internationally, a broad array of highly engineered components for the leading original equipment manufacturers ("OEMs") in the recreation transportation products, and housingtransportation markets, consisting primarily of recreational vehicles ("RVs") and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; trains; manufactured homes; and modular housing. We also supply engineered components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet.

We have two reportable segments, the OEM Segment and the Aftermarket Segment. Intersegment sales are insignificant. At June 30, 2023,March 31, 2024, we operated over 120110 manufacturing and distribution facilities located throughout North America and Europe. See Note 12 of the Notes to Condensed Consolidated Financial Statements for further information regarding our segments.

Our OEM Segment manufactures orand distributes a broad array of highly 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. Approximately 5849 percent of our OEM Segment net sales for the twelve months ended June 30, 2023March 31, 2024 were of components for travel trailer and fifth-wheel RVs, including:
● Steel chassis and related components● Electric and manual entry steps
● Axles, ABS, and suspension solutions● Awnings and awning accessories
● Slide-out mechanisms and solutions● Electronic components
● Thermoformed bath, kitchen, and other products● Appliances
● Vinyl, aluminum, and frameless windows● Air conditioners
● Manual, electric, and hydraulic stabilizer and 
   leveling systems
● Televisions and sound systems
● Entry, luggage, patio, and ramp doors● Tankless water heaters
● Furniture and mattresses● Other accessories
The Aftermarket Segment supplies many of these engineered components to the related aftermarket channels of the recreation and transportation products, and housing 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, 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.

We are executing a strategic initiative to diversify the markets we serve outside of the historical concentration within the North American RV OEM industry. Approximately 57 percent of net sales for the three months ended March 31, 2024 were generated outside of the North American RV OEM market. We believe our diversification strategy has helped offset downswings in the North American RV OEM industry, while maintaining our strong position and ability to ramp up quickly to take advantage of upswings.

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 due to various factors, including fluctuations in dealer inventories and the timing of dealer orders, the impact of international, national, and regional economic conditions and consumer confidence on retail sales of RVs and other products for which the Company sells its components, the impact of severe weather conditions on the timing of industry-wide shipments from time to time, as well as the coronavirus ("COVID-19") pandemic and related impacts.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, but this has been, and may in the future be, different as a result of the COVID-19 pandemic and related impacts.counter-seasonal.

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, including heightened tensions between China and Taiwan, the occurrence of a natural disaster or global public health crisis, such as the COVID-19 pandemic, or armed
2220

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
including changes in tariffs, sanctions, international treaties, and other trade restrictions, geopolitical tensions, armed conflicts, such as the conflict between Russia and Ukraine,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.

INDUSTRY BACKGROUND

OEM Segment

North American Recreational Vehicle Industry

An RV is a vehicle designed as temporary living quarters for recreational, camping, travel, or seasonal use. RVs may be motorized (motorhomes) or towable (travel trailers, fifth-wheel travel trailers, folding camping trailers, and truck campers).
The annual sales cycle for the RV industry generally starts in October after the "Open House" in Elkhart, Indiana where many of the largest RV OEMs display product to RV retail dealers and ends after the conclusion of the summer selling season in September in the following calendar year. Between October and March, industry-wide wholesale shipments of travel trailer and fifth-wheel RVs have historically exceeded retail sales as dealers build inventories to support anticipated sales. Between April and September, the spring and summer selling seasons, retail sales of travel trailer and fifth-wheel RVs have historically exceeded industry-wide wholesale shipments. Due to the COVID-19 pandemic, the 2021 and 2020 Open Houses were canceled, but an Open House was held in September 2022, and this year's Open House is scheduled for September 2023. The seasonality of the RV industry has been impacted by the COVID-19 pandemic, and the timing of a return to historical seasonality is not possible to predict at this time.
According to the Recreation Vehicle Industry Association ("RVIA"), industry-wide wholesale shipments from the United States of travel trailer and fifth-wheel RVs, our primary RV market, decreased 54increased 17 percent to 132,80073,500 units in the first sixthree months of 2023,2024, compared to the first sixthree months of 2022, primarily due2023, as retail dealers restocked inventories in the first quarter of 2024 compared to decreased retail demand.destocking efforts in the same period of 2023. Retail demand for travel trailer and fifth-wheel RVs decreased 218 percent in the first sixthree months of 20232024 compared to the same period in 2022.2023. Retail demand has declined from recent elevated post-pandemic levels, partiallyprimarily driven by risinginflation and higher interest rates impacting retail consumers.consumers' discretionary spending. Retail demand is typically revised upward in subsequent months, primarily due to delayed RV registrations.
While we measure our OEM Segment RV sales against industry-wide wholesale shipment statistics, the underlying health of the RV industry is determined by retail demand. A comparison of the number of units and the year-over-year percentage change in industry-wide wholesale shipments and retail sales of travel trailers and fifth-wheel RVs, as reported by Statistical Surveys, Inc., as well as the resulting estimated change in dealer inventories, for both the United States and Canada, is as follows:
     Estimated
 WholesaleRetailUnit Impact on
 UnitsChangeUnitsChangeDealer Inventories
Quarter ended June 30, 202371,600 (46)%105,300 (19)%(33,700)
Quarter ended March 31, 202361,200 (60)%71,400 (25)%(10,200)
Quarter ended December 31, 202262,000 (52)%59,000 (23)%3,000
Quarter ended September 31, 202273,400 (46)%106,000 (19)%(32,600)
Twelve months ended June 30, 2023268,200 (51)%341,700 (21)%(73,500)
Quarter ended June 30, 2022133,800 0%129,600 (28)%4,200
Quarter ended March 31, 2022152,400 16%95,000 (17)%57,400
Quarter ended December 31, 2021130,400 13%76,700 (14)%53,700
Quarter ended September 30, 2021136,000 24%131,000 (18)%5,000
Twelve months ended June 30, 2022552,600 13%432,300 (20)%120,300
    Estimated
 WholesaleRetailUnit Impact on
 UnitsChangeUnitsChangeDealer Inventories
Quarter ended March 31, 202473,500 17%66,400 (8)%7,100
Quarter ended December 31, 202363,400 2%53,700 (9)%9,700
Quarter ended September 30, 202361,500 (16)%92,000 (13)%(30,500)
Quarter ended June 30, 202371,600 (47)%109,000 (16)%(37,400)
Twelve months ended March 31, 2024270,000 (19)%321,100 (12)%(51,100)
Quarter ended March 31, 202362,700 (58)%71,800 (24)%(9,100)
Quarter ended December 31, 202262,000 (52)%59,100 (23)%2,900
Quarter ended September 30, 202273,300 (46)%106,000 (19)%(32,700)
Quarter ended June 30, 2022133,900 0%129,600 (28)%4,300
Twelve months ended March 31, 2023331,900 (40)%366,500 (24)%(34,600)
According to the RVIA, industry-wide wholesale shipments of motorhome RVs in the first sixthree months of 20232024 decreased 1722 percent to 25,50010,400 units compared to the first sixthree months of 2022.2023. Retail demand for motorhome RVs decreased 12ten percent year-over-year in the first sixthree months of 2023,2024, compared to a 1115 percent year-over-year decrease in retail demand in the
2321

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
in the same period of 2022. We believe the decline in retail2023. Retail demand has beendeclined from post-pandemic elevated levels, partially driven by inflation and risinghigher interest rates impacting retail consumers.

Our current estimate for full-year 2023 industry-wide wholesale shipments from the United States of travel trailer, fifth-wheel, and motorhome RVs is approximately 290,000 to 310,000 units. This estimate is based on the current RVIA forecast and suggests a decrease of 41 to 37 percent compared to actual wholesale shipments in 2022. This projected decline is being driven by current dealer inventory levels, inflation, and rising interest rates impacting retail consumers.consumers' discretionary spending.

Adjacent Industries

Our portfolio of products used in RVs can also be used in other applications, including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; trains; manufactured homes; and modular housing (collectively, "Adjacent Industries"). In many cases, OEM customers of the Adjacent Industries are affiliated with RV OEMs through related subsidiaries. We believe there are significant opportunities in these Adjacent Industries.

We currently expect economic uncertainty to negatively impact consumer discretionary purchases such as trailers and boats as we progress further into the second half of 2023; however, we currently anticipate that production of manufactured homes, buses, and trains should remain at or near current run rates through 2023.

Aftermarket Segment

Many of our OEM Segment products are also sold through various aftermarket channels of the recreation transportation products, and housingtransportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet. This includes discretionary accessories and replacement service parts. We have teams dedicated to product, technical, and installation training as well as marketing support for our Aftermarket Segment customers. We also support multiple call centers to provide responses to customers for product, delivery, and technical support. This support is designed for a rapid response to critical repairs, so customer downtime is minimal. The Aftermarket Segment also includes biminis, covers, buoys, 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. 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, but this has been, and may in the future be, different as a result of the COVID-19 pandemic and the continuing impact of market and supply chain disruptions.counter-seasonal.

According to Go RVing, estimated RV ownership in the United States as of 2020 had2021 increased to over 11a record-high 11.2 million households. This vibrant market is a key driver for aftermarket sales, as we anticipate owners will likely upgrade their units as well as replace parts and accessories which have been subjected to normal wear and tear.

We currently expect to see a slight increase in aftermarket sales over prior year levels in the second half of 2023 as distribution channel inventories stabilize. We expect these gains will be tempered by the impact of inflation and rising interest rates on consumers' discretionary spending.

RESULTS OF OPERATIONS

Consolidated Highlights

Consolidated net sales in the secondfirst quarter of 20232024 were $1.0 billion, 34 percent lower than consolidated net sales$968.0 million, down slightly from $973.3 million for the same period of 2022 of $1.5 billion. The decrease was primarily driven by a nearly 44 percent decrease in North American RV wholesale shipments and decreased selling prices which are indexed to select commodities, partially offset by acquisitions. Net sales from acquisitions completed in the twelve months ended June 30, 2023 contributed approximately $17.2 million in the second quarter of 2023.
Net income for the secondfirst quarter of 20232024 was $33.4$36.5 million, or $1.31$1.44 per diluted share, compared to net income of $154.5$7.3 million, or $6.06$0.29 per diluted share, for the same period of 2022.2023.
Consolidated operating profit during the secondfirst quarter of 20232024 was $55.2$57.6 million, compared to $218.8$20.0 million in the same period of 2022.2023. Operating profit margin was 5.46.0 percent in the secondfirst quarter of 20232024 compared to 14.22.1 percent in the same period of 2022.2023. The decreaseincrease was primarily due to decreased selling prices which are indexed
24

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
to select commodities and the impact of fixed costs on reduced organic sales, partially offset by decreases in material commodity and freight costs.
The cost of steel and aluminum consumed in certain of our manufactured components decreased in the secondfirst quarter of 20232024 compared to the same period of 2022.2023. 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 25.4 percent for the six months ended June 30, 2023 was lower than the comparable prior year period of 26.3 percent, primarily due to an increased discrete benefit related to the cash surrender value of life insurance, as discussed below under "Income Taxes."
In June 2023,March 2024, we paid a quarterly dividend of $1.05 per share, aggregating to $26.6$26.7 million.
We made net repayments of long-term indebtedness of $179.2 million year-to-date through June 30, 2023.

22

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
OEM Segment - SecondFirst Quarter

Net sales of the OEM Segment in the secondfirst quarter of 2023 decreased $517.32024 increased by $0.1 million, compared to the same period of 2022.2023. Net sales of components to OEMs were to the following OEMs markets for the three months ended June 30 were:March 31:
(In thousands)(In thousands)20232022Change(In thousands)20242023Change
RV OEMs:RV OEMs: RV OEMs: 
Travel trailers and fifth-wheelsTravel trailers and fifth-wheels$338,739 $814,509 (58)%Travel trailers and fifth-wheels$390,763 $$330,553 18 18 %
MotorhomesMotorhomes71,185 91,480 (22)%Motorhomes68,838 69,551 69,551 (1)(1)%
Adjacent Industries OEMsAdjacent Industries OEMs349,084 370,289 (6)%Adjacent Industries OEMs298,710 358,069 358,069 (17)(17)%
Total OEM Segment net salesTotal OEM Segment net sales$759,008 $1,276,278 (41)%Total OEM Segment net sales$758,311 $$758,173 — — %

According to the RVIA, industry-wide wholesale unit shipments for the three months ended June 30March 31 were:
20232022Change 20242023Change
Travel trailer and fifth-wheelsTravel trailer and fifth-wheels71,600 133,800 (46)%Travel trailer and fifth-wheels73,500 62,700 62,700 17 17 %
MotorhomesMotorhomes12,100 14,800 (18)%Motorhomes10,400 13,400 13,400 (22)(22)%

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 June 30,March 31, divided by the industry-wide wholesale shipments of the different product mix of RVs for the same period, was:
Content per:Content per:20232022ChangeContent per:20242023Change
Travel trailer and fifth-wheelTravel trailer and fifth-wheel$5,487 $5,379 %Travel trailer and fifth-wheel$5,097 $$5,861 (13)(13)%
MotorhomeMotorhome$3,760 $3,557 %Motorhome$3,656 $$3,993 (8)(8)%

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. For the twelve months ended March 31, 2024, travel trailer and fifth-wheel RV content declined year-over-year primarily due to pricing decreases indexed to commodity and freight indices and unit mix, partially offset by market share gains.

Our decreaseincrease in net sales to RV OEMs during the secondfirst quarter of 20232024 was driven by a 44nine percent reductionincrease in North American RV wholesale shipments during the secondfirst quarter of 2023, driven by2024, primarily due to current dealer inventory levels, inflation, and rising interest rates impacting retail consumers. The decrease wasrestocking, partially offset by average product content expansion.decreased selling prices which are indexed to select commodities.

Our decrease in net sales to OEMs in Adjacent Industries during the secondfirst quarter of 20232024 was primarily due to lower sales to North American marine OEMs, and in manufactured housing, driven by inflation and rising interest rates impacting retail consumers.

Operating profit of the OEM Segment was $18.6$32.8 million in the secondfirst quarter of 2023, a decrease2024, an increase of $171.9$33.6 million compared to an operating profitloss of the OEM Segment of $190.6$0.7 million in the same period of 2022.2023. The operating profit margin of the OEM Segment in the secondfirst quarter of 2023 decreased2024 increased to 2.54.3 percent compared to the operating profitloss margin of 14.90.1 percent for the same period of 20222023 and was negativelypositively impacted by:
Decreases in material commodity and freight costs, which positively impacted operating profit by $28.0 million, primarily related to decreased steel and aluminum costs.
A decrease in warranty costs primarily due to reduced warranty claim payments, resulting in an increase in operating profit of $7.2 million compared to the same period of 2023.
A decrease in production labor to align with current demand levels, resulting in an increase in operating profit of $6.2 million compared to the same period of 2023.
Price increases to targeted products, resulting in an increase in operating profit of $2.8 million compared to the same period of 2023.
25
23

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Selling prices contractually tied to indices of select commodities decreased,A reduction in general and administrative costs resulting in a decreasean increase in operating profit of $83.1$2.4 million compared to the same period of 2022.2023.
The impact of fixed costs on reduced organic sales, which decreased operating profit by $27.8 million related to fixed selling, general, and administrative costs and $22.9 million related to fixed production overhead costs.Partially offset by:
Sales mix increase of lower margin products, which negatively impacted operating profit by $8.3$12.0 million.
Partially offset by:
Decreases in material commodity costs, which positively impacted operating profit by $37.3 million, primarily related to decreased steel costs.
A reduction in general and administrative costs resulting in an increase in operating profit of $7.8 million compared to the same period of 2022.
Price increases to targeted products, resulting in an increase in operating profit of $4.4 million compared to the same period of 2022.
A decrease in production labor primarily related to reduced overtime and temporary staffing, resulting in an increase in operating profit of $1.9 million compared to the same period of 2022.
Amortization expense on intangible assets for the OEM Segment was $10.2 million in the second quarter of 2023, compared to $10.1 million in the same period in 2022. Depreciation expense on fixed assets for the OEM Segment was $14.7 million in the second quarter of 2023, compared to $14.4 million in the same period of 2022.

OEM Segment – Year to Date

Net sales of the OEM Segment in the first six months of 2023 decreased 43 percent, or $1.2 billion, compared to the first six months of 2022. Net sales of components to OEMs were to the following markets for the six months ended June 30:
(In thousands)20232022Change
RV OEMs:   
Travel trailers and fifth-wheels$669,292 $1,767,735 (62)%
Motorhomes140,736 178,734 (21)%
Adjacent Industries OEMs707,152 726,391 (3)%
Total OEM Segment net sales$1,517,180 $2,672,860 (43)%

According to the RVIA, industry-wide wholesale unit shipments for the six months ended June 30 were:
 20232022Change
Travel trailer and fifth-wheel RVs132,800 286,200 (54)%
Motorhomes25,500 30,700 (17)%

Our decrease in net sales to RV OEMs during the first six months of 2023 was driven by a 50 percent reduction in North American wholesale shipments during the first six months of 2023, driven by current dealer inventory levels, inflation, and rising interest rates impacting retail consumers. The decrease was partially offset by average product content expansion.

Our decrease in net sales to OEMs in Adjacent Industries during the first six months of 2023 was primarily due to lower sales to North American marine OEMs and in manufactured housing, driven by inflation and rising interest rates impacting retail consumers. We continue to believe there are significant opportunities in Adjacent Industries.

Operating profit of the OEM Segment was $17.9 million in the first six months of 2023, a decrease of $418.0 million compared to the same period of 2022. The operating profit margin of the OEM Segment in the first six months of 2023 decreased to 1.2 percent, compared to 16.3 percent for the same period of 2022, and was negatively impacted by:
Selling prices contractually tied to indices of select commodities decreased, resulting in a decrease in operating profit of $149.2$3.6 million compared to the same period of 2022.
The impact of fixed costs on reduced organic sales, which decreased operating profit by $59.7 million related to fixed selling, general, and administrative costs and $51.5 million related to fixed production overhead costs.
26

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Incremental costs incurred due to volatile OEM schedules resulting in a decrease in operating profit of $20.2 million compared to the same period of 2022.
Sales mix increase of lower margin products from recent acquisitions and related integration costs, which negatively impacted operating profit by $12.3 million.
Partially offset by:
Decreases in material commodity costs, which positively impacted operating profit by $57.6 million, primarily related to decreased steel costs.
A reduction in general and administrative costs resulting in an increase in operating profit of $11.6 million compared to the same period of 2022.
Pricing changes to targeted products, resulting in an increase in operating profit of $4.1 million compared to the same period of 2022.2023.
Amortization expense on intangible assets for the OEM Segment was $20.7$10.3 million in the first six monthsquarter of 2023,2024, compared to $20.2$10.5 million in the same period of 2022.in 2023. Depreciation expense on fixed assets for the OEM Segment was $29.0$14.0 million in the first six monthsquarter of 2023,2024, compared to $28.9$14.4 million in the same period of 2022.2023.

Aftermarket Segment - SecondFirst Quarter

Net sales of the Aftermarket Segment in the secondfirst quarter of 20232024 decreased by $4.2$5.4 million, compared to the same period of 2022.2023. Net sales of components in the Aftermarket Segment were as follows for the three months ended June 30:March 31:
(In thousands)(In thousands)20232022Change(In thousands)20242023Change
Total Aftermarket Segment net salesTotal Aftermarket Segment net sales$255,631 $259,872 (2)%Total Aftermarket Segment net sales$209,718 $$215,137 (3)(3)%

Net sales of the Aftermarket Segment for the secondfirst quarter of 20232024 were slightly lower than for the same period in 2022,2023, primarily driven by inflationary pressures impacting consumer demand.lower volumes within marine markets and the impacts of inflation and elevated interest rates on consumers' discretionary spending, partially offset by growth in the automotive aftermarket driven by market share gains.

Operating profit of the Aftermarket Segment was $36.5$24.8 million in the secondfirst quarter of 2023,2024, an increase of $8.3$4.0 million compared to the same period of 2022.2023. The operating profit margin of the Aftermarket Segment was 14.311.8 percent in the secondfirst quarter of 2023,2024, compared to 10.99.7 percent in the same period in 2022,2023, and was positively impacted by:
Decreases in material commodity and freight costs, which positively impacted operating profit by $9.5 million, primarily related to decreased steel costs.
Pricing changes to targeted products, resulting in an increase in operating profit of $2.6 million compared to the same period of 2022.
Partially offset by:
The impact of fixed costs on reduced organic sales, which decreased operating profit by $1.0 million related to fixed selling, general, and administrative costs and $0.4 million related to fixed production overhead costs.
Increases in production overhead costs in the current period resulting from investments to expand capacity over the past year, which negatively impacted operating profit by $0.7 million in the current period.
Amortization expense on intangible assets for the Aftermarket Segment was $4.0 million in the second quarter of 2023, compared to $3.8 million in the same period of 2022. Depreciation expense on fixed assets for the Aftermarket Segment was $4.2 million in the second quarter of 2023, compared to $3.6 million in the same period of 2022.

Aftermarket Segment – Year to Date

Net sales of the Aftermarket Segment in the first six months of 2023 decreased 7 percent, or $37.1 million, compared to the same period of 2022. Net sales of components in the Aftermarket Segment were as follows for the six months ended June 30:
(In thousands)20232022Change
Total Aftermarket Segment net sales$470,769 $507,858 (7)%

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LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Net sales of the Aftermarket Segment decreased during the first six months of 2023 primarily driven by lower volumes within the truck and marine markets due to fully stocked distribution channels and the impacts of inflation and rising interest rates on consumers' discretionary spending.
Operating profit of the Aftermarket Segment was $57.3 million in the first six months of 2023, an increase of $4.8 million compared to the same period of 2022. The operating profit margin of the Aftermarket Segment was 12.2 percent in the first six months of 2023, compared to 10.3 percent in the same period in 2022, and was positively impacted by:
Decreases in material commodity costs, which positively impacted operating profit by $12.7$4.6 million, primarily related to decreased steel and aluminum costs.
Pricing changes to targeted products, resulting in an increase in operating profit of $6.7$1.9 million compared to the same period of 2022.2023.
Partially offset by:
The impact of fixed costs due to reduced organic volumes, which decreased operating profit by $7.3$1.2 million related to fixed selling, general, and administrative costs and $2.4$0.6 million related to fixed overhead costs.
Higher production facility costs in the current period resulting from investments to expand capacity over the past year, which reduced operating profit by $2.0 million in the current period.
Amortization expense on intangible assets for the Aftermarket Segment was $7.8$3.8 million in the first six monthsquarter of 2023, compared to $7.6 million in2024, consistent with the same period of 2022.2023. Depreciation expense on fixed assets for the Aftermarket Segment was $8.1$4.6 million in the first six monthsquarter of 2023,2024, compared to $7.1$3.9 million in the same period of 2022.2023.

Interest Expense

Interest expense, net was $20.6$9.3 million for the sixthree months ended June 30, 2023,March 31, 2024, compared to $12.4$10.4 million in the same period of 2022.2023. The increasedecrease in interest expense was primarily due to higher global interest ratesnet repayments of $215.9 million on the revolving credit facility during 2023 and principal prepayments of $37.5 million on our adjustable rate Term Loan (as defined in Note 8 of the Notes to Condensed Consolidated Financial Statements) in the third and fourth quarters of 2023, partially offset by higher global interest rates on our adjustable rate debt including the Term Loan and revolving credit facility, partially offset by principal paymentsand net borrowings on the Term Loan, net repayments on our revolving credit facility andin the payofffirst three months of the shelf loan balance in March 2022.2024. See Note 8 of the Notes to Condensed Consolidated Financial Statements for a description of our credit facilities.

Income Taxes

The effective tax rates for the sixthree months ended June 30,March 31, 2024 and 2023 and 2022 were 25.424.3 percent and 26.324.8 percent, respectively. The effective tax rate for the sixthree months ended June 30, 2023March 31, 2024 differed from the Federal statutory rate primarily due to state taxes, foreign taxes, and non-deductible expenses, partially offset by the recognition of excess tax benefits on stock-based compensation as a component of the provision for income taxes, and Federal and Indiana research and development
24

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
credits. The decrease in the effective tax rate for the sixthree months ended June 30, 2023March 31, 2024 as compared to the same period in 20222023 was primarily due to an increased benefit related to the cash surrender value of life insurance.decreases in non-deductible executive compensation costs and effective state tax rates.

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 June 30, 2023,March 31, 2024, we had $22.1$22.6 million in cash and cash equivalents, and $270.0$153.8 million of availability under our revolving credit facility under the Credit Agreement (as defined in Note 8 of the Notes to Condensed 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
28

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
certain other conditions. See Note 8 of the Notes to Condensed 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 Condensed Consolidated Statements of Cash Flows reflect the following for the sixthree months ended June 30:March 31:

(In thousands)(In thousands)20232022(In thousands)20242023
Net cash flows provided by operating activities$273,565 $347,971 
Net cash flows (used in) provided by operating activities
Net cash flows used in investing activitiesNet cash flows used in investing activities(55,589)(120,422)
Net cash flows used in financing activitiesNet cash flows used in financing activities(243,319)(234,390)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(62)(1,067)
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents$(25,405)$(7,908)

Cash Flows from Operations
Net cash flows used in operating activities were $7.7 million in the first three months of 2024, compared to cash provided by operating activities were $273.6of $74.7 million in the first sixthree months of 2023, compared to $348.0 million in the first six months of 2022.2023. The decreasechange in net cash flows provided byused in operating activities was primarily due to a decrease in net income of $310.0 million. The decrease in net income was partially offset by the net change in assets and liabilities, net of acquired businesses, as it generated $235.8used $111.7 million more cash in the first sixthree months of 20232024 compared to the same period in 2022.2023. The net change in assets and liabilities was partially offset by an increase in net income of $29.3 million. The primary provideruse of cash generated fromin net assets was the increase of $131.1 million in accounts receivable due to seasonally higher sales in the first sixthree months of 2024. While we continued to reduce inventory in the first three months of 2024, the larger decrease in inventory in the first three months of 2023 was the decrease in inventory of $209.3 million, due to decreasing commodity and freight costs and initiatives to reduce inventory as RV production demand has slowed from record levels seen during the first half of 2022. The primary use of cash in net assets was the increase of $81.0 million in accounts receivable due to seasonally higher sales in the first six months of 2023.
Depreciation and amortization was $65.5$32.7 million in the first sixthree months of 2023,2024, and is expected to be approximately $130 to $140 million for the full year 2023.2024. Non-cash stock-based compensation expense in the first sixthree months of 20232024 was $9.1$4.3 million. Non-cash stock-based compensation expense is expected to be approximately $18 to $23 million for the full year 2023.2024.

Cash Flows from Investing Activities
Cash flows used in investing activities of $55.6$8.4 million in the first sixthree months of 2024 were primarily comprised of $8.6 million for capital expenditures. Cash flows used in investing activities of $21.4 million in the first three months of 2023 were primarily comprised of $34.1$17.2 million for capital expenditures and $25.9$6.3 million for the acquisitions of businesses. Cash flows used in investing activities of $120.4 million in the first six months of 2022 were primarily comprised of $70.8 million for capital expenditures and $51.8 million for the acquisitions of businesses, net of cash acquired.
25

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
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 full year 20232024 capital expenditures of $60$55 to $80$75 million, including investments in automation and lean projects.
Capital expenditures and acquisitions in the first sixthree months of 20232024 were funded by cash generated from operationson hand and borrowings under our Credit Agreement. Capital expenditures and any acquisitions in the remainder of fiscal year 20232024 are expected to be funded primarily from cash generated from operations, as well as periodic borrowings under our revolving credit facility as needed.facility.

Cash Flows from Financing Activities
Cash flows used in financing activities of $243.3$26.4 million in the first sixthree months of 2024 were primarily comprised of payments of quarterly dividends of $26.7 million and cash outflows of $9.0 million related to vesting of stock-based awards, net of shares tendered for payment of taxes, partially offset by $9.3 million in net borrowings under our revolving credit facility.
Cash flows used in financing activities of $76.8 million in the first three months of 2023 were primarily comprised of $168.5$36.1 million in net repayments under our revolving credit facility, payments of quarterly dividends of $53.2$26.6 million, $10.7 million in repayments under our Term Loan and other borrowings, and cash outflows of $9.6$8.9 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.
29

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Cash flows used in financing activities of $234.4 million in the first six months of 2022 were primarily comprised of $107.1 million in net repayments under our revolving credit facility, $60.9taxes, and $5.3 million in repayments under our shelf loan, Term Loan and other borrowings, payments of quarterly dividends of $49.6 million, and cash outflows of $10.8 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.borrowings.
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. On May 23, 2023, we entered into an amendment to the Credit Agreement that, among other things, provided for adjustments to certain of the financial covenants by increasing the maximum total net leverage ratio and decreasing the minimum debt service coverage ratio, in each case for the two fiscal quarters ending June 30, 2023 and September 30, 2023. At June 30, 2023,March 31, 2024, we were in compliance with all financial covenants. The amendment to the Credit Agreement also provided for the transition from LIBOR to term SOFR as the benchmark rate for purposes of calculating interest on certain outstanding borrowings.
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 ofconsidering 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. No shares were repurchased during the three months ended March 31, 2024 and 2023. As of March 31, 2024, there was $175.9 millionremaining under the stock repurchase program.

CORPORATE GOVERNANCE

We are in compliance with the corporate governance requirements of the Securities and Exchange Commission (“SEC”(the “SEC”) and the New York Stock Exchange. Our governance documents and 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

Information required by this item is included in Note 10 of the Notes to Condensed Consolidated Financial Statements and is incorporated herein by reference.

RAW MATERIALS 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. We experienced reduced prices of these commodities in the first sixthree months of 2023,2024, but prices of these commodities have historically been volatile, and over the past few months prices have continued to fluctuate.volatile. As a result, while we currently expect commodity prices in upcoming quarters in 2023for the remainder of the year to remain generally consistent with prices in the first six monthsquarter of 2023,2024, there can be no assurance that raw material costs will not
26

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
increase. Please see "Results of Operations" above for additional information regarding the impact of raw material costs on our results of operations for the first sixthree months of 2023.2024.

NEW ACCOUNTING PRONOUNCEMENTS

Information required by this item is included in Note 2 of the Notes to Condensed Consolidated Financial Statements.

USE OFCRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us 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, we evaluate our 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,
30

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
pension and post-retirement benefits, stock-based compensation, segment allocations, contingent consideration, environmental liabilities, contingencies and litigation. We base our 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.

For a discussion of our critical accounting estimates, refer to Management's Discussion and Analysis of Results of Operations and Financial Condition in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to our critical accounting estimates as described in that Annual Report.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain "forward-looking statements" with respect to our financial condition, results of operations, profitability, margin growth, 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-Q 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 (the "Exchange Act"), 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-Q, 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-Q, the impacts of COVID-19, or other future pandemics, the Russia-Ukraine war, and heightenedgeopolitical tensions, between China and Taiwanarmed conflicts, or natural disasters 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
27

LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
10-K for the year ended December 31, 2022,2023, and in the Company's subsequent filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. 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.
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LCI INDUSTRIES
ITEM 3 – 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. Depending on the interest rate option selected as more fullyfurther described in Note 8 of the Notes to Condensed Consolidated Financial Statements, interest is charged based on an indexed rate plus an applicable margin. Assuming a hypothetical increase of 0.25 percent in the indexed interest rate (which approximates a sevensix percent increase of the weighted-average interest rate on our borrowings as of June 30, 2023)March 31, 2024), our results of operations would not be materially affected.
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 June 30, 2023March 31, 2024 and December 31, 2022.2023.
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 that 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""Raw Materials Inflation" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this report.

ITEM 4 – CONTROLS AND PROCEDURES
a.Evaluation of Disclosure 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 principal executive officer and principal 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(e) 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-Q, we performed an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.March 31, 2024.
b.Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2023,March 31, 2024, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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LCI INDUSTRIES

PART II – OTHER INFORMATION

ITEM 1 – 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, it is management’s opinion that after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided in the Condensed Consolidated Balance Sheet as of June 30, 2023,March 31, 2024, would not be material to our financial position or results of operations.

ITEM 1A – RISK FACTORS

There have been no material changes to the matters discussed in Part I, Item 1A – Risk Factors in our Annual Report on Form 10-K as filed with the SEC on February 24, 2023.23, 2024.

ITEM 5 - OTHER INFORMATION

During the three months ended June 30, 2023, noneOn March 1, 2024, Jason Lippert, our Chief Executive Officer and a member of our board of 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 wasentered into a 10b5-1 trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) ofpromulgated under the Exchange Act or any non-Rule 10b5-1Act. The trading arrangement (aswill terminate on the earlier of December 31, 2024 or the date all shares are sold thereunder, and may be terminated earlier in the limited circumstances defined in Item 408(c)the trading arrangement. An aggregate of Regulation S-K).

up to 35,000 shares may be sold pursuant to the trading arrangement.

ITEM 6 – EXHIBITS

a)    Exhibits as required by item 601 of Regulation S-K:

11LCI Industries Restated Certificate of Incorporation, as amended effective December 30, 2016 (incorporated by reference to Exhibit 3.1 included in the Registrant’s Form 10-K for the year ended December 31, 2016).1LCI Industries Restated Certificate of Incorporation, as amended effective December 30, 2016 (incorporated by reference to Exhibit 3.1 included in the Registrant’s Form 10-K for the year ended December 31, 2016).
22Amended 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).2Amended 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).
33Amendment 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).3Form of Performance Stock Unit Award Agreement under the LCI Industries 2018 Omnibus Incentive Plan.
44Certification of Chief Executive Officer required by Rule 13a-14(a).4Certification of Chief Executive Officer required by Rule 13a-14(a).
55Certification of Chief Financial Officer required by Rule 13a-14(a).5Certification of Chief Financial Officer required by Rule 13a-14(a).
66Certification of Chief Executive Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code.6Certification of Chief Executive Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code.
77Certification of Chief Financial Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code.7Certification of Chief Financial Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code.
88101
The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Stockholders’ Equity; and (vi) Notes to Condensed Consolidated Financial Statements.
8101
The following information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Stockholders’ Equity; (vi) Notes to Condensed Consolidated Financial Statements; and (vii) information in Part II, Item 5.
99104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).9104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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LCI INDUSTRIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LCI INDUSTRIES
Registrant
By/s/ Lillian D. Etzkorn
Lillian D. Etzkorn
Chief Financial Officer
AugustMay 8, 20232024

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