LCI Industries’ third-quarter sales and net income fell from a year earlier as lower North American RV shipments weighed on results. Growth in adjacent markets and aftermarket sales helped offset the weakness, while operating margins improved. The company also said it is moving toward its proposed all-stock combination with Patrick Industries, with a stockholder vote scheduled for Nov. 18.
Key details
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Sales declined: Revenue was $992.5 million, down from $1.04 billion a year earlier. LCI attributed the drop primarily to lower North American RV wholesale shipments. Higher prices tied to certain commodity indexes, automotive aftermarket growth and $5.2 million in sales from acquired businesses provided partial offsets.
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Growth outside core RV demand: Sales in Adjacent Industries rose 7%, and Aftermarket sales increased 6%. Towable RV content per unit—the value of LCI products installed in each unit—grew 6% to $5,733.
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Margins improved: Operating margin expanded to 7.6% from 7.3%. Excluding merger-related expenses and restructuring costs, adjusted operating margin increased to 8.3% from 7.3%.
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Reported earnings fell, while adjusted measures rose: Net income was $50.1 million, or $2.05 per diluted share, compared with $62.5 million, or $2.55 per share, a year earlier. Adjusted net income was $54.0 million, and adjusted diluted EPS rose 12% to $2.21 from $1.97.
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Adjusted EBITDA increased: Adjusted EBITDA was $111 million, equal to 11.2% of sales, versus $106 million, or 10.2% of sales, in the prior-year quarter.
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Cash generation and liquidity: Cash provided by operations totaled $316 million for the 12 months ended Sept. 30. LCI had $841 million of liquidity at quarter-end: $246 million in cash and equivalents and $595 million available under its revolving credit facility.
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Shareholder returns: The company paid $28 million in dividends during the quarter.
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Patrick Industries transaction: LCI and Patrick have agreed to combine in an all-stock merger. LCI plans to hold a special stockholder meeting on Nov. 18 and continues to expect the deal to close in the first half of 2027.
Plain-English implications
The quarter shows a split between weaker demand for new RVs and stronger results in LCI’s adjacent and aftermarket businesses. Reported earnings were lower, but adjusted margins and per-share earnings improved. The proposed Patrick transaction remains pending a stockholder vote and other closing steps.