10q10k10q10k.net

What changed in LCI INDUSTRIES's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of LCI INDUSTRIES's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+214 added−223 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in LCI INDUSTRIES's 2024 10-K

214 paragraphs added · 223 removed · 166 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

50 edited+21 added−25 removed27 unchanged
Biggest changeOur products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components; appliances; air conditioners; televisions and sound systems; tankless water heaters; and other accessories.
Biggest changeOur diverse portfolio includes: • Chassis & Suspension Solutions: Steel chassis, axles, anti-lock braking systems ("ABS"), suspension systems, and stabilizer/leveling systems (manual, electric, and hydraulic) • Outdoor Living Systems: Awnings, slide-out mechanisms, and accessories • Windows, Doors & Steps: Vinyl, aluminum, and frameless windows; entry, luggage, patio, and ramp doors; and electric and manual entry steps • Interior & Appliance Solutions: Thermoformed bath and kitchen products, furniture, mattresses, tankless water heaters, air conditioners, appliances, electronic components, televisions, and sound systems • Towing & Truck Accessories: Hitches, pin boxes, grill guards, towing electrical, and towing and truck accessories At December 31, 2024, we operated over 110 manufacturing and distribution facilities located throughout North America and Europe, supporting key industries such as recreational vehicles ("RVs"), marine products, utility trailers, transportation, and residential and commercial construction industries.
"Everyone Matters" is the overarching descriptor of our cultural strategy; this fundamental appreciation of the team members who make up our organization guides our business. Culture and Leadership Development Our Culture and Leadership Development Team focuses on leadership development, personal and professional development, training, and corporate and community impact.
"Everyone Matters" is the overarching descriptor of our cultural strategy; this fundamental appreciation of the team members who make up our organization guides our business. Culture and Leadership Development Our Culture and Leadership Development Team focuses on leadership development, professional and personal development, training, and corporate and community impact.
Our equal employment opportunity policy governs all employment decisions, including recruitment, hiring, 8 job assignment, compensation, training, promotion, discipline, transfer, leave-of-absence, access to benefits, layoff, recall, termination and other personnel matters. Health and Safety We maintain a work environment designed to provide a safe and healthy workplace for all team members.
Our equal employment opportunity policy governs all employment decisions, including recruitment, hiring, job assignment, compensation, training, promotion, discipline, transfer, leave-of-absence, access to benefits, layoff, recall, termination, and other personnel matters. Health and Safety We maintain a work environment designed to provide a safe and healthy workplace for all team members.
Prior to joining the Company, she served in multiple financial leadership roles, including Chief Financial Officer at Covia, Shiloh Industries, and CPI Card Group. Additionally, she has held various senior finance positions at Dana Incorporated and Ford Motor Company. ANDREW J.
Prior to joining the Company, she served in multiple financial leadership roles, including Chief Financial Officer at Covia, Shiloh Industries, and CPI Card Group. Additionally, she has held various senior finance positions at Dana Incorporated and Ford Motor Company. 9 ANDREW J.
The Company was incorporated under the laws of Delaware on March 20, 1984, and is the successor to Drew National Corporation, which was incorporated under the laws of Delaware in 1962. Our principal executive and administrative offices are located at 3501 County Road 6 East, Elkhart, Indiana 46514; telephone number (574) 535-1125; website www.lci1.com ; e-mail LCII@lci1.com .
Available Information : The Company was incorporated under the laws of Delaware on March 20, 1984, and is the successor to Drew National Corporation, which was incorporated under the laws of Delaware in 1962. Our principal executive and administrative offices are located at 3501 County Road 6 East, Elkhart, Indiana 46514; telephone number (574) 535-1125; website www.lci1.com; e-mail LCII@lci1.com.
NAMENYE (age 43) joined the Company in September 2017 and has been Chief Legal Officer and Corporate Secretary since November 2017. Effective March 12, 2020, Mr. Namenye also became an Executive Vice President of the Company. Prior to joining the Company, he held roles in senior level positions at Thor Industries, Inc. and All American Group, Inc.
NAMENYE (age 44) joined the Company in September 2017 and has been Chief Legal Officer and Corporate Secretary since November 2017. Effective March 12, 2020, Mr. Namenye also became an Executive Vice President of the Company. Prior to joining the Company, he held roles in senior level positions at Thor Industries, Inc. and All American Group, Inc.
The following employee health and safety ("EHS") objectives helped guide our safety performance in 2023: (a) improve operational ownership of workplace EHS, (b) improve enterprise-wide compliance with EHS rules and requirements at the site level, (c) enhance knowledge of sustainable manufacturing mindset, and (d) improve education of workforce for relevant EHS standards and requirements.
The following employee health and safety ("EHS") objectives helped guide our safety performance in 2024: (a) improve operational ownership of workplace EHS, (b) improve enterprise-wide compliance with EHS rules and requirements at the site level, (c) enhance knowledge of sustainable manufacturing mindset, and (d) improve education of workforce for relevant EHS standards and requirements.
Information About our Executive Officers The following table sets forth our executive officers as of December 31, 2023: Name Position Jason D. Lippert President and Chief Executive Officer Lillian D. Etzkorn Executive Vice President and Chief Financial Officer Andrew J. Namenye Executive Vice President, Chief Legal Officer, and Corporate Secretary Ryan R. Smith Group President – North America Jamie M.
Information About our Executive Officers The following table sets forth our executive officers as of December 31, 2024: Name Position Jason D. Lippert President and Chief Executive Officer Lillian D. Etzkorn Executive Vice President and Chief Financial Officer Andrew J. Namenye Executive Vice President, Chief Legal Officer, and Corporate Secretary Ryan R. Smith Group President – North America Jamie M.
(f/k/a Coachmen Industries), and practiced law at Barnes & Thornburg LLP. RYAN R. SMITH (age 40) became Group President – North America of the Company in May 2020. Previously, he served as Senior Vice President of Sales and Operations of the Company beginning in August of 2018. Mr.
(f/k/a Coachmen Industries), and practiced law at Barnes & Thornburg LLP. RYAN R. SMITH (age 41) became Group President – North America of the Company in May 2020. Previously, he served as Senior Vice President of Sales and Operations of the Company beginning in August of 2018. Mr.
Capacity At December 31, 2023, we operated over 110 manufacturing and distribution facilities across North America and Europe. For most products, we have the ability to fill excess demand by shifting production to other facilities, usually at an increased cost.
Capacity At December 31, 2024, we operated over 110 manufacturing and distribution facilities across North America and Europe. For most products, we have the ability to fill excess demand by shifting production to other facilities, usually at an increased cost.
In 2023, our FSS Playbook was updated to include enterprise-wide safety audits/inspections, and FSS objectives were created to take further steps toward reducing injuries across the Company.
In 2023, our Facility Safety Score ("FSS") Playbook was updated to include enterprise-wide safety audits/inspections, and FSS objectives were created to take further steps toward reducing injuries across the Company.
No other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2023, 2022, and 2021. No customer accounted for more than 10 percent of consolidated accounts receivable, net at December 31, 2023 and 2022.
No other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2024, 2023, and 2022. No customer accounted for more than 10 percent of consolidated accounts receivable, net at December 31, 2024 and 2023.
(through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 15 percent, 20 percent, and 20 percent of our consolidated net sales for the years ended December 31, 2023, 2022, and 2021, respectively.
(through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 18 percent, 15 percent, and 20 percent of our consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively.
At Lippert, we believe that business can and should be a force for good in our world, and we strive to manifest that vision every day in how we lead our organization. Our mission is to make lives better by developing meaningful relationships 7 with our customers, co-workers, and community.
We believe relations with our team members are good. 7 At Lippert, we believe that business can and should be a force for good in our world, and we strive to manifest that vision every day in how we lead our organization. Our mission is to make lives better by developing meaningful relationships with our customers, co-workers, and community.
Research and development expenses were approximately $20 million, $26 million, and $17 million in 2023, 2022, and 2021, respectively. 6 Regulatory Matters We are subject to numerous federal, state and local regulations governing the manufacture and sale of our products in the United States. Sales and manufacturing operations outside the United States are subject to similar regulations.
Research and development expenses were approximately $21 million, $20 million, and $26 million in 2024, 2023, and 2022, respectively. 6 Regulatory Matters We are subject to numerous federal, state and local regulations governing the manufacture and sale of our products in the United States. Sales and manufacturing operations outside the United States are subject to similar regulations.
The ability to adjust capacity in certain product areas through lean manufacturing and automation initiatives, reallocation of existing resources and/or additional capital expenditures is monitored regularly by management in an effort to achieve a high level of production efficiency and return on invested capital. We believe we have adequate capacity to meet projected demand.
The ability to adjust capacity in certain product areas through lean manufacturing and automation initiatives, reallocation of existing resources, flexibility with second or third shifts, and/or additional capital expenditures is monitored regularly by management in an effort to achieve a high level of production efficiency and return on invested capital. We believe we have adequate capacity to meet projected demand.
("Thor"), a customer of both segments, accounted for 16 percent, 23 percent, and 24 percent of our consolidated net sales for the years ended December 31, 2023, 2022, and 2021, respectively. Berkshire Hathaway Inc.
("Thor"), a customer of both segments, accounted for 16 percent, 16 percent, and 23 percent of our consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. Berkshire Hathaway Inc.
Smith has over 16 years of experience with the Company and has served in a wide range of leadership positions with Lippert Components. 9 JAMIE M. SCHNUR (age 52) became Group President – Aftermarket of the Company in May 2020. Previously, he served as Chief Administrative Officer of the Company beginning in May 2013. Mr.
Smith has over 18 years of experience with the Company and has served in a wide range of leadership positions with Lippert Components. JAMIE M. SCHNUR (age 53) became Group President – Aftermarket of the Company in May 2020. Previously, he served as Chief Administrative Officer of the Company beginning in May 2013. Mr.
One particularly powerful metric is the number of "dreams and goals achieved" by team members throughout the Company, with over 8,000 accomplished in 2023, ranging from establishing a healthy mindset to budgeting, saving, exercise goals, improved sleep or nutrition, and community involvement.
One particularly powerful metric is the number of "dreams and goals achieved" by team members throughout the Company, with over 2,100 accomplished in 2024, ranging from establishing a healthy mindset to budgeting, saving, exercise goals, improved sleep or nutrition, and community involvement.
Capital expenditures for 2023 were $62 million, which included normal replacement expenditures along with approximately $12 million in automation investments and approximately $12 million in capacity investments for operational improvements. Seasonality Most industries where we sell products or where our products are used historically have been seasonal and are generally at the highest levels when the weather is moderate.
Capital expenditures for 2024 were $42 million, which included normal replacement expenditures along with approximately $6 million in capacity investments for operational improvements and approximately $3 million in automation investments. Seasonality Most industries where we sell products or where our products are used historically have been seasonal and are generally at the highest levels when the weather is moderate.
Our policies provide for equal employment opportunity to all team members and applicants without regard to race, color, religion, sex, sexual orientation, gender identity, pregnancy, national origin, ancestry, age, genetic information, disability, citizen status, veteran status, military service, marital status or any other legally protected category as established by federal, state, or local law.
We are committed to fostering an environment where all three are expected. 8 Our policies provide for equal employment opportunity to all team members and applicants without regard to race, color, religion, sex, sexual orientation, gender identity, pregnancy, national origin, ancestry, age, genetic information, disability, citizen status, veteran status, military service, marital status or any other legally protected category as established by federal, state, or local law.
We estimate the addressable market for annual net sales of our products outside of North America to be over $2.0 billion. Intellectual Property We hold approximately 710 United States and foreign patents and have approximately 210 patent applications pending that relate to various products we sell.
We estimate the addressable market for annual net sales of our products outside of North America to be over $1.9 billion. Intellectual Property We hold approximately 630 United States and foreign patents and have approximately 165 patent applications pending that relate to various products we sell.
In 2023, our team members logged over 143,000 volunteer hours, hosting more than 750 events, with 85 percent of our team members taking part (an increase from 75 percent in 2022). Through monetary donations, product donations, and company-wide fundraising events, we donated more than $1.1 million in 2023 to support the needs of our communities.
In 2024, our team members logged approximately 160,000 volunteer hours, hosting more than 750 events, with 87 percent of our team members taking part (an increase from 85 percent in 2023). Through monetary donations, product donations, and company-wide fundraising events, we donated more than $1.2 million in 2024 to support the needs of our communities.
Human Capital As of December 31, 2023, Lippert had approximately 11,700 full-time team members, including 10,200 in North America and 1,500 internationally. Our U.S. team members are not subject to any collective bargaining agreements, although certain international team members are covered by national labor laws. We believe relations with our team members are good.
Human Capital As of December 31, 2024, Lippert had approximately 11,500 full-time team members, including 10,100 in North America and 1,400 internationally. Our U.S. team members are not subject to any collective bargaining agreements, although certain international team members are covered by national labor laws.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations," we describe in detail the change in our net sales and operating profits during 2023. 3 Customer Concentrations Thor Industries, Inc.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations," we describe in detail the change in our net sales and operating profits for the OEM and Aftermarket Segments during 2024. Customer Concentrations Thor Industries, Inc.
While diversity is essential in our business practice, inclusion and belonging are very important as well. Diversity reflects the differences we have in our workforce, inclusion is defined as how we as team members include others, and belonging is how we feel as members of our LCI family. We are committed to fostering an environment where all three are expected.
While diversity is essential in our business practice, inclusion and belonging are very important as well. Diversity reflects the differences we have in our workforce, inclusion is defined as how we as team members include others, and belonging is how we feel as members of our LCI family.
We also offer team members benefits such as life, disability, and health (medical, dental, and vision) insurance, a 401(k) plan with a company match, paid time off, tuition reimbursement, military leave, parental bonding leave, and holiday pay. We also provide a well-being initiative to provide team members with resources to improve their physical and emotional health.
We also offer team members benefits such as life, disability, and health (medical, dental, and vision) insurance, a 401(k) plan with a company match, paid time off, tuition reimbursement, military leave, parental bonding leave, and holiday pay.
Our retention percentage for team members in North America for the year ended December 31, 2023 was 71 percent, an improvement over the prior year retention of 57 percent. Our Culture Index focuses on tracking leading indicators related to retention for each division in the Company.
Our retention percentage for team members in North America for the year ended December 31, 2024 was 71 percent, consistent with our prior year retention percentage. Our Culture Index focuses on tracking leading indicators related to retention for each division in the Company.
Sales and Profits Consolidated net sales for the year ended December 31, 2023 were $3.8 billion, a decrease of 27 percent from the consolidated net sales for the year ended December 31, 2022 of $5.2 billion.
Sales and Profits Consolidated net sales for the year ended December 31, 2024 were $3.7 billion, a decrease of one percent from consolidated net sales for the year ended December 31, 2023 of $3.8 billion.
Effective May 23, 2019, Mr. Lippert also became President of the Company. Mr. Lippert has over 28 years of experience with the Company and has served in a wide range of leadership positions. LILLIAN D. ETZKORN (age 55) joined the Company in April 2023 and serves as Executive Vice President and Chief Financial Officer of the Company.
Lippert has over 29 years of experience with the Company and has served in a wide range of leadership positions. LILLIAN D. ETZKORN (age 56) joined the Company in April 2023 and serves as Executive Vice President and Chief Financial Officer of the Company.
In 2023, engagement in our wellness program improved from 53 percent in 2022 to 67 percent. Our holistic program focuses on prevention and education and includes health coaching, biometric screenings, heart scans, and quarterly challenges. We launched a tobacco cessation campaign to support team members on their journey to quit using nicotine products.
Our holistic program focuses on prevention and education and includes health coaching, biometric screenings, flu vaccinations, heart scans, and quarterly challenges. We launched a tobacco cessation campaign to support team members on their journey to quit using nicotine products.
We typically look for acquisition targets with strong leadership, innovative products, niche markets, consistency with our core manufacturing disciplines, and favorable competitive landscapes, and we look to take advantage of potential synergies such as our purchasing power and cross-selling opportunities. During 2023, we completed two acquisitions for an aggregate of $25.8 million of cash purchase consideration.
We typically look for acquisition targets with strong leadership, innovative products, niche markets, consistency with our core manufacturing disciplines, and favorable competitive landscapes, and we look to take advantage of potential synergies such as our purchasing power and cross-selling opportunities.
Net income for 2023 was $64.2 million, or $2.52 per diluted share, compared to net income of $395.0 million, or $15.48 per diluted share, in 2022. In Part II, Item 7.
Net income for 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or $2.52 per diluted share, in 2023. In Part II, Item 7.
Additionally, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal. International Over the past several years, we have been gradually investing in our international business, primarily in Europe.
Additionally, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal. International International and export sales represented approximately 11 percent of consolidated net sales in each of 2024 and 2023, and eight percent in 2022.
EMENHISER (age 50) joined the Company in January 2017 and has been Treasurer since March 2022, Vice President of Finance since September 2019 and our principal accounting officer since March 2017. Prior to joining the Company, he held various roles including Senior Vice President of Finance, Chief Accounting Officer, and Vice President and Corporate Controller at Press Ganey Associates, Inc.
Prior to joining the Company, he held various roles including Senior Vice President of Finance, Chief Accounting Officer, and Vice President and Corporate Controller at Press Ganey Associates, Inc. Mr. Emenhiser is a Certified Public Accountant.
In early 2022, we launched the "Lippert Life" portal, a comprehensive resource to support total well-being. Over 65 percent of our team members used the portal to access health coaches, webinars, wellness challenges, and other tools. We also identified Wellness Ambassadors in each location to help drive our wellness initiative.
Nearly 50 percent of our team members used the portal to access health coaches, webinars, wellness challenges, and other tools. We also identified Wellness Ambassadors in each location to help drive our wellness initiative. In 2024, engagement in our wellness program improved to 79 percent from 67 percent in 2023.
The decrease was primarily driven by a nearly 39 percent decrease in total North American RV wholesale shipments, decreased selling prices which are indexed to select commodities, and lower North American marine production levels, partially offset by acquisitions. Net sales from acquisitions completed in 2022 and 2023 contributed approximately $73.6 million in 2023.
The decrease was primarily driven by decreased industry production levels in the North American marine and utility trailer markets and the European RV market, mostly offset by a seven percent increase in total North American RV wholesale shipments and sales from acquisitions. Net sales from acquisitions completed in 2023 and 2024 contributed approximately $21.4 million in 2024.
"Management's Discussion and Analysis of Financial Condition and Results of Operations." Sales and Marketing Our sales activities are related to developing new customer relationships and maintaining existing customer relationships, primarily through the quality and reliability of our products, innovation, price, customer service, and customer satisfaction.
Sales and Marketing Our sales activities are related to developing new customer relationships and maintaining existing customer relationships, primarily through the quality and reliability of our products, innovation, price, customer service, and customer satisfaction. Our annual marketing and advertising expenditures were $22.3 million, $29.7 million, and $31.4 million, in 2024, 2023, and 2022, respectively.
International and export sales represented approximately 11 percent of consolidated net sales in 2023 and eight percent in each of 2022 and 2021. We continue to focus on developing products tailored for international recreation and transportation markets. We participate in the largest caravan shows in Europe and have been receiving positive feedback on our products.
We continue to focus on developing products tailored for international recreation and transportation markets. We participate in the largest caravan and marine shows in Europe and have received positive feedback on our products. Recently, some of the product innovations we developed for European markets have gained popularity in the United States as well.
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 both product delivery and technical support. This support is designed for a rapid response to critical repairs, so customer downtime is minimal.
Multiple customer care centers offer rapid responses to inquiries related to product delivery, technical support, and critical repairs, designed to minimize consumer downtime. Dedicated teams offer product, technical, and installation training, as well as marketing support for aftermarket customers. Strategic Focus Our strategy emphasizes profitable growth through innovation, high product quality, and enhanced customer experience.
We also added walking paths in each location to encourage daily walking and our teams tracked millions of steps during the step challenge.
Additionally, we added walking paths in each location to encourage daily walking, and our teams tracked millions of steps during a step challenge. Furthermore, our employee assistance program offers access to mental health services and financial advisors. We also introduced a benefit that offers a network of oncology and orthopedic care at no cost to team members.
Additional information with respect to the Company's directors is included in the Company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 16, 2024. JASON D. LIPPERT (age 51) became Chief Executive Officer of the Company effective May 10, 2013, and has been Chief Executive Officer of Lippert Components since February 2003.
JASON D. LIPPERT (age 52) became Chief Executive Officer of the Company effective May 10, 2013, and has been Chief Executive Officer of Lippert Components since February 2003. Effective May 23, 2019, Mr. Lippert also became President of the Company. Mr.
Schnur Group President – Aftermarket Eileen S. Pruitt Executive Vice President, Chief Human Resources Officer, and Senior Legal Counsel Officers are elected annually by the Board of Directors. There are no family relationships between or among any of the executive officers or directors of the Company.
Schnur Group President – Aftermarket Officers are elected annually by the Board of Directors. There are no family relationships between or among any of the executive officers or directors of the Company. Additional information with respect to the Company's directors is included in the Company's Proxy Statement for the Annual Meeting of Stockholders to be held on May 15, 2025.
RVs may be motorized (motorhomes) or towable (travel trailers, fifth-wheel travel trailers, folding camping trailers, and truck campers). Raw materials used by our OEM Segment, consisting primarily of steel (coil, sheet, tube, and I-beam), extruded aluminum, glass, wood, fabric, and foam, are available from a number of sources, both domestic and foreign.
We believe that our long-standing customer relationships and proximity to key OEM customer facilities strengthen our position in the supply chain. 4 Raw Materials Raw materials used across our RV and adjacent industry businesses consist primarily of steel (coil, sheet, tube, and I-beam), extruded aluminum, glass, wood, fabric, and foam, and are available from a number of sources, both domestic and foreign.
Summary LCI Industries ("LCII" and collectively with its subsidiaries, the "Company," the "Registrant," "we," "us," or "our"), through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI" or "Lippert"), supplies, domestically and internationally, a broad array of engineered components for the leading original equipment manufacturers ("OEMs") in the recreation, transportation products, and housing 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.
Item 1. BUSINESS. Summary Business Focus LCI Industries ("LCII" and collectively with its subsidiaries, the "Company," the "Registrant," "we," "us," or "our"), through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI" or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation, transportation, and building products industries.
International sales and export sales represented approximately 11 percent, eight percent, and eight percent of our consolidated net sales for the years ended December 31, 2023, 2022, and 2021, respectively. Acquisitions Acquisitions have been a driver of growth for our Company historically and continue to be a focus of management as part of our balanced capital allocation strategy.
International sales and export sales represented approximately 11 percent, 11 percent, and eight percent of our consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. Acquisitions During 2024, we completed one acquisition for cash consideration of $20.0 million, plus a holdback payment of $1.0 million due on the first anniversary of the acquisition.
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. According to Go RVing, estimated RV ownership in the United States as of 2021 increased to a record-high 11.2 million households.
RV ownership reached an estimated 8.1 million households in 2025 according to Go RVing, driving demand for upgrades and replacements as owners maintain and enhance their units. Many non-critical replacement parts are purchased outside peak RV selling seasons, which can help to offset the typical seasonality of the OEM Segment.
Schnur has over 26 years of experience with the Company and has served in a wide range of leadership positions with Lippert Components. EILEEN S. PRUITT (age 46) joined the Company in April 2019 as Director of Legal Affairs. In September 2019, she became Director of Litigation and Human Resources, and in November 2021, she became Deputy CHRO & Sr.
Schnur has over 28 years of experience with the Company and has served in a wide range of leadership positions with Lippert Components. Other Officers KIP A. EMENHISER (age 51) joined the Company in January 2017 and has been Treasurer since March 2022, Vice President of Finance since September 2019, and our principal accounting officer since March 2017.
CURT is a leading manufacturer and distributor of branded towing products and truck accessories and sells products to the automotive and truck aftermarket, as well as the RV, marine, and trailer markets, all of which require towing products, which we believe complements the OEM markets we serve.
Products from our subsidiary CURT Manufacturing LLC ("CURT"), a leading manufacturer of towing products and truck accessories, contributed approximately half of Aftermarket sales in both years. CURT complements our OEM markets by serving automotive, RV, marine, and trailer industries. • Key Drivers : U.S.
"Properties." Our OEM Segment products are sold primarily to major manufacturers of RVs such as Thor Industries, Inc. (symbol: THO), Forest River, Inc. (a Berkshire Hathaway company, symbol: BRKA), Winnebago Industries, Inc. (symbol: WGO) and other RV OEMs, and to manufacturers in other adjacent industries such as Brunswick Corporation (symbol: BC), Polaris Inc.
(a Berkshire Hathaway company, symbol: BRKA), and Winnebago Industries (symbol: WGO), as well as other RV OEMs.
Removed
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.
Added
In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online. Our operations are global in scope, supporting a diverse customer base across North America and Europe.
Removed
We have two reportable segments: the original equipment manufacturers segment (the "OEM Segment") and the aftermarket segment (the "Aftermarket Segment"). We are focused on profitable growth in our industries, both organic and through acquisitions.
Added
In 2024, we generated consolidated net sales of $3.7 billion, reflecting strong demand for our broad catalog of innovative and high-quality products.
Removed
In order to support this growth, over the past several years we have expanded our geographic market and product lines, executed on our diversification strategy with aftermarkets and adjacent industries, and integrated manufacturing, distribution, and administrative functions. We are also focused on margin stability in our industries.
Added
Our core manufacturing competencies include: • Metal fabrication and welding • Power and motion systems • Lamination • Electronics • Glass fabrication • Plastics forming • Cut and sew Reportable Segments We operate in two primary segments: OEM and Aftermarket.
Removed
In 2023, we consolidated certain of our facilities in order to streamline operations and reduce overhead costs. At December 31, 2023, we operated over 110 manufacturing and distribution facilities located throughout North America and Europe, and reported consolidated net sales of $3.8 billion for the year ended December 31, 2023.
Added
Together, these segments leverage our manufacturing competencies, leadership expertise, customer relationships, and market insights to drive efficiencies and innovation that enable us to maintain a leadership position in the RV market while continuing to expand in adjacent industries and aftermarket channels. OEM Segment: Our OEM Segment services leading OEMs in recreation, transportation, and housing markets.
Removed
Net sales for the companies acquired in these acquisitions were approximately $15 million for the twelve months preceding the acquisitions.
Added
Our strategically located manufacturing and distribution facilities across North America and Europe provide efficient service to OEMs. In 2024, the OEM Segment contributed 76 percent of our consolidated net sales and 49 percent of our consolidated operating profit.
Removed
OEM Segment Through our wholly-owned subsidiaries, we manufacture and distribute a broad array of engineered components for the leading OEMs in the recreation, transportation products, and housing 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.
Added
Key markets served by our OEM Segment include RVs and Adjacent Industries. • Recreational Vehicles (RVs) : Sales to RV OEMs include motorhomes, travel trailers, fifth-wheel trailers, and other towables. In 2024, sales to RV OEMs were $1.7 billion, representing 61 percent of OEM Segment net sales. Major customers include Thor Industries, Inc. (symbol: THO), Forest River, Inc.
Removed
In 2023, the OEM Segment represented 77 percent of our consolidated net sales and 14 percent of consolidated segment operating profit. Approximately 47 percent of our OEM Segment net sales in 2023 were from products to manufacturers of travel trailer and fifth-wheel RVs.
Added
We serve the RV industry by 3 delivering high-quality components such as windows, furniture, leveling systems, awnings, and chassis, supported by innovation and strong customer relationships. • Adjacent Industries : Sales to OEMs in adjacent industries include boats, buses, cargo and utility trailers, trucks, trains, and manufactured and modular homes.
Removed
Operations of our OEM Segment consist primarily of fabricating, welding, thermoforming, painting, sewing, and assembling components into finished products. Our OEM Segment operations are conducted at manufacturing and distribution facilities throughout North America and Europe, strategically located in proximity to the customers they serve. See Item 2.
Added
In 2024, sales to adjacent industries OEMs were $1.1 billion, representing 39 percent of OEM Segment net sales. We continue to invest in product diversification and customer partnerships to address challenges in these markets. Major customers include Brunswick Corporation (symbol: BC), Polaris Inc. (symbol: PII), Blue Bird Corporation (symbol: BLBD), Skyline Champion Corporation (symbol: SKY), and Cavco Industries, Inc.
Removed
(symbol: PII), Blue Bird Corporation (symbol: BLBD), Skyline Champion Corporation (symbol: SKY) and Cavco Industries, Inc. (symbol: CVCO).
Added
(symbol: CVCO). We serve our adjacent industries customers by delivering high-quality components such as axles, windows, furniture, windshields, and chassis for manufactured homes. Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives additional revenue, deepens customer engagement, and leverages our OEM expertise.
Removed
The RV industry is highly competitive, both among manufacturers of RVs and the suppliers of RV components, generally with low barriers to entry other than compliance with industry standards, codes and safety requirements, and the initial capital investment required to establish manufacturing operations.
Added
Products are sold through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. • Performance : In 2024, the Aftermarket Segment contributed 24 percent of our consolidated net sales and 51 percent of our consolidated operating profit. Aftermarket net sales totaled $880.8 million in 2024.
Removed
We compete with several other component suppliers on a regional and national basis with respect to a broad array of components for both towable and motorized RVs. Our operations compete on the basis of product quality and reliability, product innovation, price, customer service, and customer 4 satisfaction.
Added
We serve our aftermarket customers by delivering high-quality components such as hitches, truck accessories, towing accessories, towing electrical, and slide toppers. • Customer Channels, Strategy, and Support : We sell aftermarket products through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms.
Removed
Although definitive information is not readily available, we believe we are a leading supplier for towable RVs for the following principal RV products: ● windows, ● furniture, ● doors, ● leveling systems, ● chassis, ● awnings, ● slide-out mechanisms, ● anti-lock braking systems ("ABS"), and ● axles, ● electronics, and appliances.
Added
By driving organic expansion and diversifying revenue streams, we seek to maintain market leadership in the North American RV market while advancing our position in the aftermarkets and adjacent industries. Across key product categories, we hold leading market shares, providing a strong foundation for resilience and growth.
Removed
OEM Segment net sales to adjacent industries decreased six percent to $1.3 billion in 2023 from $1.4 billion in 2022 and was 44 percent and 31 percent of total OEM Segment net sales in 2023 and 2022, respectively. Within adjacent industries, North American marine OEM net sales totaled $352.2 million in 2023, a decrease of $140.4 million compared to 2022.
Added
Additionally, we are actively gaining share in critical markets through ongoing investment in innovation and operational excellence. We underpin this strategy with disciplined cost management, streamlining operations, and enhancing efficiency. For example, in 2023 and 2024, we consolidated certain facilities to reduce overhead and enhance margin stability.
Removed
Our market share for our products in adjacent industries cannot be readily determined; however, we continue to make investments in acquisitions, people, technology, and equipment, and we are committed to expanding our presence in these industries. Detailed narrative information about the results of operations of the OEM Segment is included in Part II, Item 7.
Added
Our investments in automation and efficiency further enhance our competitive position, providing our customers with tailored solutions. Competitive Differentiation While barriers to entry are generally low in the industries we serve, compliance with industry standards, safety requirements, and initial capital investments are necessary to establish operations.
Removed
"Management's Discussion and Analysis of Financial Condition and Results of Operations." Aftermarket Segment Many of our OEM Segment products are also sold through various aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet. This includes discretionary accessories and replacement service parts.
Added
We believe that our competitive edge lies in product quality and reliability, product innovation, price, and customer service and satisfaction. We are more than a supplier—we are an integral partner to our customers' operations. By providing precision-engineered solutions to address complex needs with high speed and quality, we continue to hold leading market share in key categories.

… 16 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

37 edited+4 added−7 removed132 unchanged
Biggest changeIf we fail to maintain or protect our information systems and data integrity effectively, we could: lose existing customers; have difficulty attracting new customers; suffer outages or disruptions in our operations or supply chains; have difficulty preventing, detecting, and controlling fraud; have disputes with customers and suppliers; have regulatory sanctions or penalties imposed; incur increased operating expenses; incur expenses or lose revenues as a result of a data privacy breach; or suffer other adverse consequences. 15 Legal, Regulatory and Compliance Risks Our business is subject to numerous international, federal, state and local regulations, and increased costs of compliance, failure in our compliance efforts, or events beyond our control could result in damages, expenses, or liabilities that could adversely impact our financial condition and operating results .
Biggest changeIf we fail to maintain or protect our information systems and 15 data integrity effectively, we could: lose existing customers; have difficulty attracting new customers; suffer outages or disruptions in our operations or supply chains; have difficulty preventing, detecting, and controlling fraud; have disputes with customers and suppliers; have regulatory sanctions or penalties imposed; incur increased operating expenses; incur expenses or lose revenues as a result of a data privacy breach; or suffer other adverse consequences.
These factors include: • the perceived prospects of our business and our industries as a whole; • differences between our actual financial and operating results and those expected by investors and analysts; • changes in analysts' recommendations or projections; • changes affecting the availability of financing in the wholesale and consumer lending markets; • actions or announcements by competitors; • changes in laws and regulations affecting our business; • the gain or loss of significant customers; • significant sales of shares by a principal stockholder; • activity under our stock repurchase program; 20 • changes in key personnel; • actions taken by stockholders that may be contrary to our Board of Directors' recommendations; and • changes in general economic or market conditions.
These factors include: • the perceived prospects of our business and our industries as a whole; • differences between our actual financial and operating results and those expected by investors and analysts; • changes in analysts' recommendations or projections; • changes affecting the availability of financing in the wholesale and consumer lending markets; • actions or announcements by competitors; • changes in laws and regulations affecting our business; 20 • the gain or loss of significant customers; • significant sales of shares by a principal stockholder; • activity under our stock repurchase program; • changes in key personnel; • actions taken by stockholders that may be contrary to our Board of Directors' recommendations; and • changes in general economic or market conditions.
For example, the General Data Protection Regulation (the “GDPR”) in the United Kingdom (“U.K.”) and the European Union (“E.U.”) imposes, among other things, strict obligations and restrictions on the collection and use of U.K. and E.U. personal data, a requirement for prompt notice of data breaches in certain circumstances, a requirement for implementation of certain approved safeguards for transfers 17 of personal data to third countries, and possible substantial fines for any violations.
For example, the General Data Protection Regulation (the “GDPR”) in the United Kingdom (“U.K.”) and the European Union (“E.U.”) imposes, among other things, strict obligations and restrictions on the collection and use of U.K. and E.U. personal data, a requirement for prompt notice of data breaches in certain circumstances, a requirement for implementation of certain approved safeguards for transfers of personal data to third countries, and possible substantial fines for any violations.
Retail dealers of RVs and other products which use our components generally finance their purchases of inventory with financing known as floor-plan financing provided by lending institutions. A dealer's ability to obtain financing is significantly affected by the number of lending institutions offering floor-plan financing, and by an institution’s lending limits, which are beyond our control.
Retail dealers of RVs and other products which use our components generally finance their purchases of inventory with financing known as floor-plan financing provided by lending institutions. A dealer's ability to obtain financing is significantly affected by the number of lending institutions offering floor-plan financing, and by an institution’s lending limits, 10 which are beyond our control.
Moreover, dealers which are unable to obtain adequate financing could cease operations. Their remaining 10 inventories would likely be sold at discounts, disrupting the market. Such sales have historically caused a decline in orders for new inventory, which reduced demand for our products, and which could reoccur in the future.
Moreover, dealers which are unable to obtain adequate financing could cease operations. Their remaining inventories would likely be sold at discounts, disrupting the market. Such sales have historically caused a decline in orders for new inventory, which reduced demand for our products, and which could reoccur in the future.
Changes in those estimates or assumptions or lower than anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material. Any such charge could adversely affect our operating results and financial condition. 18 We may become more leveraged .
Changes in those estimates or assumptions or lower than anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material. Any such charge could adversely affect our operating results and financial condition. We may become more leveraged .
In addition, we generally do not have long-term agreements with our customers and cannot predict that we will maintain our current relationships with these customers or that we will continue to supply them at current levels. Volatile raw material costs could adversely impact our financial condition and operating results .
In addition, we generally do not have long-term agreements with our customers and cannot predict that we will maintain our current relationships with these customers or that we will continue to supply them at current levels. 11 Volatile raw material costs could adversely impact our financial condition and operating results .
Such outbreaks could result in the operations of our third-party manufacturers and suppliers being disrupted or suspended, or could interfere with our supply chain, which could have an adverse effect on our business. 13 Natural disasters and unusual weather, including as a result of climate change, could impact our business negatively .
Such outbreaks could result in the operations of our third-party manufacturers and suppliers being disrupted or suspended, or could interfere with our supply chain, which could have an adverse effect on our business. Natural disasters and unusual weather, including as a result of climate change, could impact our business negatively .
Under certain of these laws, namely the Comprehensive Environmental Response, Compensation, and 16 Liability Act and its state counterparts, liability for investigation and remediation of hazardous substance contamination at currently or formerly owned or operated facilities or at third-party waste disposal sites is joint and several.
Under certain of these laws, namely the Comprehensive Environmental Response, Compensation, and Liability Act and its state counterparts, liability for investigation and remediation of hazardous substance contamination at currently or formerly owned or operated facilities or at third-party waste disposal sites is joint and several.
Because competition and business conditions may limit the amount or timing of increases in raw material costs that can be passed through to our customers in the form of sales price increases, increases in raw material costs could adversely 11 impact our financial condition and operating results.
Because competition and business conditions may limit the amount or timing of increases in raw material costs that can be passed through to our customers in the form of sales price increases, increases in raw material costs could adversely impact our financial condition and operating results.
If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Our determination of future cash flows, future recoverability, and fair value of our long-lived assets includes significant estimates and assumptions.
If the carrying value of a long-lived asset is considered 18 impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Our determination of future cash flows, future recoverability, and fair value of our long-lived assets includes significant estimates and assumptions.
If such inappropriate risks or misconduct occurs, it could have an adverse effect on our results of operations and/or our financial condition. Our operations are subject to certain environmental laws and regulations, and costs of compliance, investigation, or remediation of environmental conditions could have an adverse effect on our business and results of operations .
If such inappropriate risks or misconduct occurs, it could have an adverse effect on our results of operations and/or our financial condition. 16 Our operations are subject to certain environmental laws and regulations, and costs of compliance, investigation, or remediation of environmental conditions could have an adverse effect on our business and results of operations .
Further, as a result of our acquisitions of Furrion and Way Interglobal Network LLC ("Way"), the portion of our raw materials and components that are exported from their country of origin has increased, which could heighten the risks set forth in the immediately preceding paragraph, including in particular increased tariffs or import duties.
Further, as a result of our acquisitions of Furrion in 2021 and Way Interglobal Network LLC ("Way") in 2022, the portion of our raw materials and components that are exported from their country of origin has increased, which could heighten the risks set forth in the immediately preceding paragraph, including in particular increased tariffs or import duties.
Our facilities may be affected by natural disasters, such as tornadoes, hurricanes, fires, floods, earthquakes, and unusual weather conditions exacerbated by the effects of climate change. Natural phenomena with unpredictable destructive force, such as severe snowstorms, droughts, and flooding, may generate liabilities not appropriately covered by our contingency plans and insurances.
Our facilities may be affected by natural disasters, such as tornadoes, hurricanes, fires, floods, earthquakes, and unusual weather conditions exacerbated by the effects of climate change. Natural phenomena with unpredictable destructive force, such as severe snowstorms, droughts, and flooding, may generate liabilities not sufficiently covered by our contingency plans and insurances.
The loss of the services of one or more key managers or the failure to attract or retain qualified managerial, technical, sales and marketing, operations and customer service staff could impair our ability to conduct and manage our business and execute our business strategy, which would have an adverse effect on our business, financial condition and results of operations.
The loss of the services of one or more key managers or the failure to attract or retain qualified managerial, technical, sales and marketing, operations and customer care staff could impair our ability to conduct and manage our business and execute our business strategy, which would have an adverse effect on our business, financial condition and results of operations.
Financial, Credit and Liquidity Risks We could incur asset impairment charges for goodwill, intangible assets, or other long-lived assets . A portion of our total assets as of December 31, 2023 was comprised of goodwill, intangible assets, and other long-lived assets. At least annually, we review goodwill and indefinite-lived intangibles for impairment.
Financial, Credit and Liquidity Risks We could incur asset impairment charges for goodwill, intangible assets, or other long-lived assets . A portion of our total assets as of December 31, 2024 was comprised of goodwill, intangible assets, and other long-lived assets. At least annually, we review goodwill and indefinite-lived intangibles for impairment.
Further, foreign, federal, state, and local regulatory and legislative bodies have proposed various legislative and regulatory measures relating to climate change, regulating greenhouse gas emissions, and energy policies.
Further, foreign, federal, state, and local regulatory and legislative bodies have adopted or proposed various legislative and regulatory measures relating to climate change, regulating greenhouse gas emissions, and energy policies.
Travel trailer and fifth-wheel RVs, components for which represented approximately 47 percent of our OEM Segment net sales in 2023, are usually towed by light trucks or SUVs. Generally, these vehicles use more fuel than automobiles, particularly while towing RVs or other trailers.
Travel trailer and fifth-wheel RVs, components for which represented approximately 53 percent of our OEM Segment net sales in 2024, are usually towed by light trucks or SUVs. Generally, these vehicles use more fuel than automobiles, particularly while towing RVs or other trailers.
Adverse geopolitical conditions, such as the heightened tensions between China and Taiwan, trade embargoes, increased tariffs or import duties, inclement weather, natural disasters, epidemics, public health crises, war, such as the Russia-Ukraine and Israel-Hamas wars, terrorism, such as the maritime attacks in the Red Sea, or labor disputes at various ports or otherwise adversely impacting our suppliers create significant risks for our business, particularly if these conditions or disputes result in work slowdowns, lockouts, strikes, facilities closures, supply chain interruptions, or other disruptions, and could have an adverse impact on our operating results if we are unable to fulfill customer orders or are required to accumulate excess inventory or find alternate sources of supply, if available, at higher costs.
Adverse geopolitical conditions, such as increased tariffs or import duties, trade embargoes, the heightened tensions between China and Taiwan, inclement weather, natural disasters, epidemics, public health crises, war, terrorism, or labor disputes at various ports or otherwise adversely impacting our suppliers create significant risks for our business, particularly if these conditions or disputes result in work slowdowns, lockouts, strikes, facilities closures, supply chain interruptions, or other disruptions, and could have an adverse impact on our operating results if we are unable to fulfill customer orders or are required to accumulate excess inventory or find alternate sources of supply, if available, at higher costs.
Steel and aluminum represented approximately 30 percent and ten percent, respectively, of our raw material costs in 2023. The prices of these, and other key raw materials, have historically been volatile and can fluctuate dramatically with changes in the global demand and supply for such products.
Steel and aluminum represented approximately 30 percent and 10 percent, respectively, of our raw material costs in 2024. The prices of these, and other key raw materials, have historically been volatile and can fluctuate dramatically with changes in the global demand and supply for such products.
In 2023, we imported, or purchased from suppliers who imported, approximately 30 percent of our raw materials and components. Consequently, we rely on the free flow of goods through open and operational ports and on a consistent basis for a significant portion of our raw materials and components.
In 2024, we imported, or purchased from suppliers who imported, approximately 35 percent of our raw materials and components. Consequently, we rely on the free flow of goods through open and operational ports and on a consistent basis for a significant portion of our raw materials and components.
In addition, our Board of Directors may elect to suspend or alter the current dividend policy at any time. 19 Conversion of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
In addition, our Board of Directors may elect to suspend or alter the current dividend policy at any time. Conversion of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock. The conversion of some or all of the Convertible Notes may dilute the ownership interests of our stockholders.
We have also made investments to expand the sale of our products in the aftermarket of our industries and are continuing to pursue opportunities to increase international sales and export sales of our products. These investments involve significant resources, put a strain on our administrative, operational, and financial capabilities and carry a risk of failure.
We have also made investments to expand the sale of our products in the aftermarket of our industries and to international markets and export sales of our products. These investments involve significant resources, put a strain on our administrative, operational, and financial capabilities and carry a risk of failure.
Thirteen of our acquisitions since 2016 are headquartered in Europe or have international operations and customers, including our acquisition of Furrion that involves operations and locations in Hong Kong and China. 14 Conducting business outside of the United States is subject to various risks, many of which are beyond our control, including: • adverse political and economic conditions; • trade protection measures, including tariffs, trade restrictions, trade agreements, and taxation; • difficulties in managing or overseeing foreign operations and agents; • differences in regulatory environments, including complex data privacy, environmental, social and governance ("ESG"), and labor relations laws, as well as differences in labor practices and market practices; • cultural and linguistic differences; • foreign currency fluctuations; • limitations on the repatriation of funds because of foreign exchange controls; • different liability standards; • potentially longer payment cycles; • different credit risks; • different technology risks; • political, social, and economic instability and uncertainty, including sovereign debt issues; and • intellectual property laws of countries which do not protect our rights in our intellectual property to the same extent as the laws of the United States.
Conducting business outside of the United States is subject to various risks, many of which are beyond our control, including: • adverse political and economic conditions; • trade protection measures, including tariffs, trade restrictions, trade agreements, and taxation; • difficulties in managing or overseeing foreign operations and agents; • differences in regulatory environments, including complex data privacy, environmental, social and governance ("ESG"), and labor relations laws, as well as differences in labor practices and market practices; • cultural and linguistic differences; • foreign currency fluctuations; • limitations on the repatriation of funds because of foreign exchange controls; • different liability standards; • potentially longer payment cycles; • different credit risks; • different technology risks; • political, social, and economic instability and uncertainty, including sovereign debt issues; and • intellectual property laws of countries which do not protect our rights in our intellectual property to the same extent as the laws of the United States.
Our ability to pay dividends, and our Board of Directors' determination to maintain our current dividend policy, will depend on a number of factors, including: • the state of our business, competition, and changes in our industry; • changes in the factors, assumptions, and other considerations made by our Board of Directors in reviewing and revising our dividend policy; • our future results of operations, financial condition, liquidity needs, and capital resources; • limitations in our debt agreements; and • our various expected cash needs, including cash interest and principal payments on our indebtedness, capital expenditures, the purchase price of acquisitions, and taxes.
Our ability to pay dividends, and our Board of Directors' determination to maintain our current dividend policy, will depend on a number of factors, including: • the state of our business, competition, and changes in our industry; • changes in the factors, assumptions, and other considerations made by our Board of Directors in reviewing and revising our dividend policy; • our future results of operations, financial condition, liquidity needs, and capital resources; • limitations in our debt agreements; and • our various expected cash needs, including cash interest and principal payments on our indebtedness, capital expenditures, the purchase price of acquisitions, and taxes. 19 Each of the factors listed above could negatively affect our ability to pay dividends in accordance with our dividend policy or at all.
For example, during 2023, we experienced lower RV and marine OEM volumes resulting from, in part, the negative impacts of inflation and elevated interest rates on consumers' discretionary spending. The declines in these industry volumes compared to 2022 had an adverse impact on our results, including inventory reserve costs.
For example, during 2024, we experienced lower marine, utility trailer, and motorhome OEM volumes resulting from, in part, the negative impacts of inflation and elevated interest rates on consumers' discretionary spending. The declines in these industry volumes compared to 2023 had an adverse impact on our results.
Competitive pressures could reduce demand for our products or impact our sales prices . The industries in which we are engaged are highly competitive and generally characterized by low barriers to entry, and we have numerous existing and potential competitors. Competition is based primarily upon product quality and reliability, product innovation, price, customer service, and customer satisfaction.
The industries in which we are engaged are highly competitive and generally characterized by low barriers to entry, and we have numerous existing and potential competitors. Competition is based primarily upon product quality and reliability, product innovation, price, customer service, and customer satisfaction.
In 2023, the OEM Segment represented 77 percent of our consolidated net sales and 14 percent of consolidated segment operating profit. Approximately 47 percent of our OEM Segment net sales in 2023 were from products to manufacturers of travel trailer and fifth-wheel RVs.
In 2024, the OEM Segment represented 76 percent of our consolidated net sales and 49 percent of consolidated segment operating profit. Approximately 53 percent of our OEM Segment net sales in 2024 were from products to manufacturers of travel trailer and fifth-wheel RVs.
The loss of either of these customers or other significant customers, or a substantial reduction in sales to any such customer, would have an adverse material impact on our operating results and financial condition.
Two customers of both the OEM Segment and the Aftermarket Segment accounted for a combined 34 percent of our consolidated net sales in 2024. The loss of either of these customers or other significant customers, or a substantial reduction in sales to any such customer, would have an adverse material impact on our operating results and financial condition.
Other U.S. states have passed, or have proposed, consumer privacy laws. We will continue to monitor and assess the impact of these state laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.
Other U.S. states have passed, or have proposed, consumer privacy laws. 17 These laws may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business. Outside of the U.S., data protection laws also apply to some of our operations.
Failure to successfully integrate acquired operations or to realize the expected benefits of such acquisitions or other transactions may have an adverse impact on our results of operations and financial condition. As we expand our business internationally, we are subject to new operational and financial risks .
Failure to successfully integrate acquired operations or to realize the expected benefits of such acquisitions or other transactions may have an adverse impact on our results of operations and financial condition. 14 Our international operations subject us to additional operational and financial risks . We have gradually grown sales overseas through international opportunities.
In certain geographic regions in which we have a larger concentration of manufacturing facilities, we are experiencing, and could again experience, shortages of qualified employees. Competition for skilled workers may increase the cost of our labor and create employee retention and recruitment challenges, as employees with knowledge and experience have the ability to change employers relatively easily.
Competition for skilled workers may increase the cost of our labor and create employee retention and recruitment challenges, as employees with knowledge and experience have the ability to change employers relatively easily.
Domestic and foreign competitors may lower prices on products which currently compete with our products, or develop product improvements, which could reduce demand for our products or cause us to reduce prices for our products. 12 Sustained increases in these competitive pressures could have an adverse material effect on our results of operations.
Competitive pressures have, from time to time, resulted in a reduction of our profit margins and/or reduction in our market share. Domestic and foreign competitors may lower prices on products which currently compete with our products, or develop product improvements, which could reduce demand for our products or cause us to reduce prices for our products.
Similarly, we believe our ability to remain competitive also depends on our ability to develop innovative new products or enhance features of existing products. Delays in the introduction or market acceptance of new products or product features could have an adverse effect on our net sales and operating results.
Delays in the introduction or market acceptance of new products or product features could have an adverse effect on our net sales and operating results. 12 Competitive pressures could reduce demand for our products or impact our sales prices .
Further, as a result of pandemic outbreaks, businesses can be shut down, supply chains can be interrupted, slowed or rendered inoperable and individuals can become ill, quarantined or otherwise unable to work and/or travel due to health reasons or governmental restrictions, and worldwide economic downturns could occur.
Any disruption or delay at our manufacturing or distribution facilities or customer care centers could impair our ability to meet the demands of our customers, and our customers may cancel orders with us or purchase products from our competitors, which could adversely affect our business and operating results. 13 Further, as a result of pandemic outbreaks, businesses can be shut down, supply chains can be interrupted, slowed or rendered inoperable and individuals can become ill, quarantined or otherwise unable to work and/or travel due to health reasons or governmental restrictions, and worldwide economic downturns could occur.
The loss of any key customer, or a significant reduction in purchases by such customers, could have an adverse material impact on our operating results . Two customers of both the OEM Segment and the Aftermarket Segment accounted for a combined 31 percent of our consolidated net sales in 2023.
Declines in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely affect our operating results and financial condition. The loss of any key customer, or a significant reduction in purchases by such customers, could have an adverse material impact on our operating results .
In addition, the manufacture by our customers themselves of products supplied by us could reduce demand for our products and adversely affect our operating results and financial condition. A tight labor market has, and could in the future, result in difficulty obtaining skilled labor, and available capacity may initially not be utilized efficiently .
Sustained increases in these competitive pressures could have an adverse material effect on our results of operations. In addition, the manufacture by our customers themselves of products supplied by us could reduce demand for our products and adversely affect our operating results and financial condition.
Removed
Declines in industry-wide wholesale shipments of travel trailer and fifth-wheel RVs could reduce demand for our products and adversely affect our operating results and financial condition. For example, in 2023 the industry experienced a nearly 37 percent decrease in wholesale RV OEM shipments, which negatively impacted our net sales for the year.
Added
Similarly, we believe our ability to remain competitive also depends on our ability to develop innovative new products or enhance features of existing products.
Removed
Competitive pressures have, from time to time, resulted in a reduction of our profit margins and/or reduction in our market share.
Added
A tight labor market has, and could in the future, result in difficulty obtaining skilled labor, and available capacity may initially not be utilized efficiently . In certain geographic regions in which we have a larger concentration of manufacturing facilities, we have experienced, and could again experience, shortages of qualified employees.
Removed
Any disruption or delay at our manufacturing or distribution facilities or customer service centers could impair our ability to meet the demands of our customers, and our customers may cancel orders with us or purchase products from our competitors, which could adversely affect our business and operating results.
Added
Thirteen of our acquisitions since 2016 are headquartered in Europe or have international operations and customers.
Removed
We have been gradually growing sales overseas and plan to continue pursuing international opportunities.
Added
Legal, Regulatory and Compliance Risks Our business is subject to numerous international, federal, state and local regulations, and increased costs of compliance, failure in our compliance efforts, or events beyond our control could result in damages, expenses, or liabilities that could adversely impact our financial condition and operating results .
Removed
Outside of the U.S., data protection laws also apply to some of our operations.
Removed
Each of the factors listed above could negatively affect our ability to pay dividends in accordance with our dividend policy or at all.
Removed
The conversion of some or all of the Convertible Notes may dilute the ownership interests of our stockholders.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−0 removed5 unchanged
Biggest changeThe Vice President of Global Information Security also serves as the Chair of our Enterprise Risk and Compliance Committee where leaders from across the Company discuss cyber risk and other risk matters.
Biggest changeOur Vice President of Global Information Security has over 20 years of experience in IT operations and cybersecurity leadership and is a Certified Information Systems Security Professional (CISSP). The Vice President of Global Information Security also serves on our Enterprise Risk and Compliance Committee where leaders from across the Company discuss cyber risk and other risk matters.
The cybersecurity team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. 21 Our cybersecurity team also monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
Our cybersecurity team also monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings with internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
In addition, our cybersecurity team provides annual reports to our Board of Directors. Our team of cybersecurity professionals is led day-to-day by our Vice President of Global Information Security who reports to our Chief Information Officer. Our Vice President of Global Information Security has a combined 20 years of experience in IT operations and cybersecurity leadership.
In addition, our cybersecurity team provides annual reports to our Board of Directors. Our team of cybersecurity professionals is led day-to-day by our Vice President of Global Information Security who reports to our Chief Information Officer.
In the last three fiscal years, the Company has not experienced any material cybersecurity incidents, and expenses incurred from cybersecurity incidents were immaterial. For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, refer to Item 1A.
In the last three fiscal years, the Company has not experienced any material cybersecurity incidents, and expenses incurred from cybersecurity incidents were immaterial. However, we are subject to ongoing risks from cybersecurity threats that could materially affect us, including our business strategy, results of operations or financial condition, as further described in Item 1A.
Added
The cybersecurity team has primary responsibility for our overall 21 cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeAt December 31, 2023, our key property holdings are summarized in the following table: Segment Type North America Facilities Europe Facilities Total Facilities Owned Facilities OEM Manufacturing (a) 66 22 88 33 Other (b) 20 3 23 8 Aftermarket Manufacturing (a) 10 — 10 2 Other (b) 19 — 19 3 Total 115 25 140 46 (a) Includes multi-activity sites which are predominately manufacturing (b) Includes engineering, administrative, and distribution locations
Biggest changeAt December 31, 2024, our key property holdings are summarized in the following table: Segment Type North America Facilities Europe Facilities Total Facilities Owned Facilities OEM Manufacturing (a) 67 24 91 33 Other (b) 20 2 22 8 Aftermarket Manufacturing (a) 11 — 11 2 Other (b) 16 — 16 3 Total 114 26 140 46 (a) Includes multi-activity sites which are predominately manufacturing (b) Includes engineering, administrative, and distribution locations

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeWhile these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided for in the Consolidated Balance Sheet as of December 31, 2023, would not be material to our financial position or annual results of operations.
Biggest changeWhile these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided for in the Consolidated Balance Sheet as of December 31, 2024, would not be material to our financial position or annual results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed1 unchanged
Biggest changeItem 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES. Market and Stockholders As of February 16, 2024, there were 206 holders of the Company's common stock, in addition to beneficial owners of shares held in broker and nominee names. Our common stock trades on the New York Stock Exchange under the symbol "LCII".
Biggest changeItem 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market and Stockholders As of February 14, 2025, there were 197 holders of the Company's common stock, in addition to beneficial owners of shares held in broker and nominee names. Our common stock trades on the New York Stock Exchange under the symbol "LCII".
Dividends and Share Repurchases See Note 13 - Stockholders' Equity of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion regarding dividends and share repurchases. There were no share repurchases in the year ended December 31, 2023. In 2016, we initiated the payment of regular quarterly dividends.
Dividends and Share Repurchases See Note 13 - Stockholders' Equity of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion regarding dividends and share repurchases. There were no share repurchases in the year ended December 31, 2024. In 2016, we initiated the payment of regular quarterly dividends.
The table and related information required for the Equity Compensation Plan is incorporated by reference from the information contained under the caption "Equity Compensation Plan Information" in our 2024 Proxy Statement.
The table and related information required for the Equity Compensation Plan is incorporated by reference from the information contained under the caption "Equity Compensation Plan Information" in our 2025 Proxy Statement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+22 added−25 removed16 unchanged
Biggest changeNet sales and operating profit by segment, as a percent of the total, were as follows for the years ended December 31: 2023 2022 Net sales: OEM Segment 77% 83% Aftermarket Segment 23% 17% Total net sales 100% 100% Operating Profit: OEM Segment 14% 87% Aftermarket Segment 86% 13% Total segment operating profit 100% 100% Operating profit margin by segment was as follows for the years ended December 31: 2023 2022 OEM Segment 0.6% 11.1% Aftermarket Segment 12.0% 8.3% Operating profit margins in 2023 were impacted by a number of factors, as further described below under “Results of Operations – Year Ended December 31, 2023 Compared to Year Ended December 31, 2022.” Our OEM Segment manufactures and distributes a broad array of engineered components for the leading OEMs of RVs and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; 24 trains; manufactured homes; and modular housing.
Biggest changeOperating profit margins in 2024 were impacted by a number of factors, as further described below under “Results of Operations – Year Ended December 31, 2024 Compared to Year Ended December 31, 2023.” Reportable Segments: Our two reportable segments consist of the OEM Segment and the Aftermarket Segment.
Cash Flows from Financing Activities Cash flows used in financing activities of $426.2 million in 2023 were primarily comprised of $215.9 million in net repayments under our revolving credit facility, payments of quarterly dividends of $106.3 million, $61.1 million in repayments under our Term Loan and other borrowings, $31.9 million related to payments of contingent consideration and holdbacks related to acquisitions, and cash outflows of $9.6 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.
Cash flows used in financing activities of $426.2 million in 2023 were primarily comprised of $215.9 million in net repayments under our revolving credit facility, payments of quarterly dividends of $106.3 million, $61.1 million in repayments under our Term Loan and other borrowings, $31.9 million related to payment of contingent consideration and holdbacks related to acquisitions, and cash outflows of $9.6 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.
Interest payments on our indebtedness are calculated using the outstanding balances and interest rates in effect on December 31, 2023. b. See Note 11 of the Notes to Consolidated Financial Statements for additional information regarding the maturity of our lease obligations under operating leases. Our finance leases were not material at December 31, 2023.
Interest payments on our indebtedness are calculated using the outstanding balances and interest rates in effect on December 31, 2024. b. See Note 11 of the Notes to Consolidated Financial Statements for additional information regarding the maturity of our lease obligations under operating leases. Our finance leases were not material at December 31, 2024.
A detailed discussion of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023.
A detailed discussion of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024.
Please see "Results of Operations" above for additional information regarding the impact of raw material costs on our results of operations for the year ended December 31, 2023.
Please see "Results of Operations" above for additional information regarding the impact of raw material costs on our results of operations for the year ended December 31, 2024.
This Management's Discussion and Analysis of Financial Condition and Results of Operations generally discusses 2023 and 2022 items and year-over-year comparisons between 2023 and 2022.
This Management's Discussion and Analysis of Financial Condition and Results of Operations generally discusses 2024 and 2023 items and year-over-year comparisons between 2024 and 2023.
At December 31, 2023, we operated over 110 manufacturing and distribution facilities located throughout North America and Europe.
At December 31, 2024, we operated over 110 manufacturing and distribution facilities located throughout North America and Europe.
Retirement and Other Benefit Plans We consider various factors when making funding decisions, such as regulatory requirements, actuarially determined minimum contribution requirements, and contributions required to avoid benefit restrictions for defined benefit pension plans. For the year ended December 31, 2023, we made discretionary matching contributions of $12.1 million to our defined contribution 401(k) profit sharing plan.
Retirement and Other Benefit Plans We consider various factors when making funding decisions, such as regulatory requirements, actuarially determined minimum contribution requirements, and contributions required to avoid benefit restrictions for defined benefit pension plans. For the year ended December 31, 2024, we made discretionary matching contributions of $11.6 million to our defined contribution 401(k) profit sharing plan.
While we experienced deflation in the prices of our key raw materials in 2023, inflation on consumer products and interest rates that increased throughout 2023 impacted retail consumers' discretionary spending, which we believe contributed to our decline in sales, especially in our RV OEM and certain adjacent industries OEM markets such as marine.
While we experienced deflation in the prices of our key raw materials in 2024, inflation on consumer products and elevated interest rates in 2024 impacted retail consumers' discretionary spending, which we believe contributed to our decline in sales, especially in our RV OEM and certain adjacent industries OEM markets, such as marine.
See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities. Income Taxes The effective income tax rate for 2023 was 22.7 percent compared to 24.8 percent in 2022.
See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities. 28 Income Taxes The effective income tax rate for 2024 was 24.5 percent compared to 22.7 percent in 2023.
Capital expenditures and acquisitions in 2024 are expected to be funded primarily from cash generated from operations, as well as periodic borrowings under our revolving credit facility.
The 2024 capital expenditures and acquisitions were funded by cash generated from operations and borrowings under our Credit Agreement. Capital expenditures and acquisitions in 2025 are expected to be funded primarily from cash generated from operations, as well as periodic borrowings under our revolving credit facility.
We have paid regular quarterly dividends since 2016. Future dividend policy with respect to our common stock will be determined by our Board of Directors in light of our prevailing financial needs, earnings, and other relevant factors, including any limitations in our debt agreements, such as maintenance of certain financial ratios.
Future dividend policy with respect to our common stock will be determined by our Board of Directors in light of our prevailing financial needs, earnings, and other relevant factors, including any limitations in our debt agreements, such as maintenance of certain financial ratios.
Our average product content per type of RV, calculated based upon our net sales of components to domestic RV 27 OEMs for the different types of RVs produced for the twelve months ended December 31, divided by the industry-wide wholesale shipments of the different product mix of RVs for the same period, was: Content per: 2023 2022 Change Travel trailer and fifth-wheel RV $ 5,058 $ 6,090 (17)% Motorhome $ 3,506 $ 4,099 (14)% Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and Adjacent Industries.
Our average product content per type of RV, calculated based upon our net sales of components to domestic RV OEMs for the different types of RVs produced for the twelve months ended December 31, divided by the industry-wide wholesale shipments of the different product mix of RVs for the same period, was: Content per: 2024 2023 Change Travel trailer and fifth-wheel RV $ 5,097 $ 5,058 1% Motorhome $ 3,742 $ 3,506 7% Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and Adjacent Industries.
Our decrease in net sales to OEMs in Adjacent Industries during 2023 was primarily due to lower sales to North American OEMs in the marine and manufactured housing markets, primarily driven by dealer inventory levels, inflation, and elevated interest rates impacting retail consumers.
Our decrease in net sales to OEMs in Adjacent Industries during 2024 was primarily due to lower sales to North American marine and utility trailer OEMs, driven by current dealer inventory levels, inflation, and elevated interest rates impacting retail consumers.
However, there are many factors that can impact this relationship, especially in the short term. Depreciation and amortization was $131.8 million and $129.2 million in 2023 and 2022, respectively, and is expected to be approximately $130 to $140 million in 2024.
However, there are many factors that can impact this relationship, especially in the short term. Depreciation and amortization was $125.7 million and $131.8 million in 2024 and 2023, respectively, and is expected to be approximately $115 to $125 million in 2025.
RESULTS OF OPERATIONS Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Consolidated Summary • Consolidated net sales for 2023 were $3.8 billion, 27 percent lower than consolidated net sales for 2022 of $5.2 billion.
RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consolidated Summary • Consolidated net sales for 2024 were $3.7 billion, 1 percent lower than consolidated net sales for 2023 of $3.8 billion.
Included in the repayments under our Term Loan were $37.5 million of principal prepayments in 2023. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2025.
Included in the repayments under our Term Loan were $35.0 million of principal prepayments in 2024. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2026.
Prices of these commodities have historically been volatile, and over the past few months prices have continued to fluctuate. Overall, we experienced reduced prices of these commodities in 2023, and at this time, we expect commodity prices to be generally stable in 2024.
Prices of these commodities have historically been volatile, and over the past few months prices have continued to fluctuate. Overall, we experienced reduced prices of these commodities in 2024, and at this time, we expect commodity prices to be generally stable in 2025; however, recent tariff activity could have an adverse impact.
As of December 31, 2023, we had $66.2 million in cash and cash equivalents, and $245.3 million of availability under our revolving credit facility under the Credit Agreement (as defined in Note 9 of the Notes to Consolidated Financial Statements).
As of December 31, 2024, we had $165.8 million in cash and cash equivalents, and $452.5 million of availability under our revolving credit facility under the Credit Agreement (as defined in Note 9 of the Notes to Consolidated Financial Statements).
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.
The Aftermarket Segment also includes biminis, covers, buoys, and fenders to the marine 24 industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, tankless water heaters, and the sale of replacement glass and awnings to fulfill insurance claims. See Part I, Item 1, "Business - Reportable Segments" for more detail on our reportable segments.
Amortization expense on intangible assets for the Aftermarket Segment was $15.5 million in 2023, compared to $15.1 million in 2022. Depreciation expense on fixed assets for the Aftermarket Segment was $16.3 million in 2023, compared to $14.7 million in 2022. Interest Expense Interest expense, net was $40.4 million in 2023, compared to $27.6 million in 2022.
Amortization expense on intangible assets for the Aftermarket Segment was $15.5 million in 2024, consistent with 2023. Depreciation expense on fixed assets for the Aftermarket Segment was $16.9 million in 2024, compared to $16.3 million in 2023. Interest Expense Interest expense, net was $28.9 million in 2024, compared to $40.4 million in 2023.
Non-cash stock-based compensation expense was $18.2 million and $23.7 million in 2023 and 2022, respectively, and is expected to be approximately $20 to $25 million in 2024. Cash Flows from Investing Activities Cash flows used in investing activities of $83.7 million in 2023 were primarily comprised of $62.2 million for capital expenditures and $25.9 million for the acquisition of businesses.
Non-cash stock-based compensation expense was $18.7 million and $18.2 million in 2024 and 2023, respectively, and is expected to be approximately $18 to $23 million in 2025. 29 Cash Flows from Investing Activities Cash flows used in investing activities of $61.1 million in 2024 were primarily comprised of $42.3 million for capital expenditures and $20.0 million for a business acquisition.
Under this stock repurchase program, we purchased 253,490 shares at a weighted average price of $94.89 per share, totaling $24.1 million, during the year ended December 31, 2022. No shares were repurchased during the year ended December 31, 2023. See Note 13 of the Notes to Consolidated Financial Statements for additional information related to our dividend and share repurchase programs.
Under this stock repurchase program, we purchased 253,490 shares at a weighted average price of $94.89 per share, totaling $24.1 million, during the year ended December 31, 2022. No shares were repurchased during the years ended December 31, 2024 and 2023.
Net sales from acquisitions completed in 2022 and 2023 contributed approximately $73.6 million in 2023. • Net income for 2023 was $64.2 million, or $2.52 per diluted share, compared to net income of $395.0 million, or $15.48 per diluted share, for 2022. • Consolidated operating profit during 2023 was $123.4 million compared to $553.0 million in 2022.
Net sales from acquisitions completed in 2023 and 2024 contributed approximately $21.4 million in 2024. • Net income for 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or $2.52 per diluted share, for 2023. • Consolidated operating profit during 2024 was $218.2 million compared to $123.4 million in 2023.
Net sales of components to OEMs were to the following markets for the years ended December 31: (In thousands) 2023 2022 Change RV OEMs: Travel trailers and fifth-wheels $ 1,358,853 $ 2,617,585 (48)% Motorhomes 269,356 339,097 (21)% Adjacent Industries OEMs 1,275,533 1,359,188 (6)% Total OEM Segment net sales $ 2,903,742 $ 4,315,870 (33)% According to the RVIA, industry-wide wholesale shipments for the years ended December 31 were: 2023 2022 Change Travel trailer and fifth-wheel RVs 259,100 421,700 (39)% Motorhomes 45,900 58,400 (21)% The trend in our average product content per RV produced is an indicator of our overall market share of components for new RVs.
Net sales of components to OEMs were to the following markets for the years ended December 31: (In thousands) 2024 2023 Change RV OEMs: Travel trailers and fifth-wheels $ 1,514,578 $ 1,358,853 11% Motorhomes 233,066 269,356 (13)% Adjacent Industries OEMs 1,112,806 1,275,533 (13)% Total OEM Segment net sales $ 2,860,450 $ 2,903,742 (1)% According to the RVIA, industry-wide wholesale shipments for the years ended December 31 were: 2024 2023 Change Travel trailer and fifth-wheel RVs 291,600 259,100 13% Motorhomes 34,900 45,900 (24)% The trend in our average product content per RV produced is an indicator of our overall market share of components for new RVs.
The increase in interest expense was primarily due to higher global interest rates on our adjustable rate Term Loan (as defined in Note 9 of the Notes to Consolidated Financial Statements) and revolving credit facility, partially offset by principal payments on the Term Loan, net repayments on our revolving credit facility, and the payoff of the shelf loan balance in March 2022.
The decrease in net interest expense was primarily due to net repayments on our revolving credit facility, principal payments on the Term Loan (as defined in Note 9 of the Notes to Consolidated Financial Statements), and $5.1 million of interest income earned on investments in money market mutual funds, partially offset by higher global interest rates early in 2024 on our adjustable rate Term Loan and revolving credit facility.
The operating profit margin of the Aftermarket Segment was 12.0 percent in 2023, compared to 8.3 percent in 2022, and was positively impacted by: • Decreases in material commodity costs, which positively impacted operating profit by $34.4 million, primarily related to decreased steel and aluminum costs. • Pricing changes to targeted products, resulting in an increase in operating profit of $6.8 million compared to the same period of 2022.
The operating profit margin of the Aftermarket Segment was 12.6 percent in 2024, compared to 12.0 percent in 2023, and was positively impacted by: • Decreases in material costs, which positively impacted operating profit by $16.8 million compared to 2023, primarily related to decreased steel prices, lower in-bound freight costs, product mix, and material sourcing strategies. • Pricing changes to targeted products, resulting in an increase in operating profit of $5.1 million compared to 2023.
RVs may be motorized (motorhomes) or towable (travel trailers, fifth-wheel travel trailers, folding camping trailers, and truck campers).
They can be either motorized, such as motorhomes, or towable, including travel trailers, fifth-wheel trailers, folding camping trailers, and truck campers.
OEM Segment Net sales of the OEM Segment in 2023 decreased 33 percent, or $1.4 billion, compared to 2022.
OEM Segment Net sales of the OEM Segment in 2024 decreased 1 percent, or $43.3 million, compared to 2023.
We estimate 2024 capital expenditures of $55 to $75 million, including investments in automation and lean projects, which we expect to fund with cash flows from operations or periodic borrowings under the revolving credit facility as needed. The 2023 capital expenditures and acquisitions were funded by cash generated from operations and borrowings under our Credit Agreement.
We estimate 2025 capital expenditures (excluding any potential business combinations) of $50 to $70 million, including investments in automation and lean projects, which we expect to fund with cash flows from operations or periodic borrowings under the revolving credit facility as needed.
Future Cash Requirements The following table summarizes our material estimated future cash requirements under our contractual obligations for indebtedness and operating leases at December 31, 2023, in total and disaggregated into current (payable in 2024) and long-term (payable after 2024) obligations.
See Note 13 of the Notes to Consolidated Financial Statements for additional information related to our dividend and share repurchase programs. 30 Future Cash Requirements The following table summarizes our material estimated future cash requirements under our contractual obligations for indebtedness and operating leases at December 31, 2024, in total and disaggregated into current (payable in 2025) and long-term (payable after 2025) obligations.
The lower effective tax rate for 2023 was primarily due to an increase in the cash surrender value of life insurance, a decrease in non-deductible executive compensation expenses, and a decrease in the state effective tax rate. We estimate the 2024 effective income tax rate to be approximately 24 to 26 percent.
The higher effective tax rate for 2024 was primarily due to increases in non-deductible executive compensation expenses and increases in the state effective tax rate. We estimate the 2025 effective income tax rate will be approximately 24 to 26 percent.
Cash flows used in financing activities of $374.9 million in 2022 were primarily comprised of $105.3 million in net repayments under our revolving credit facility, payments of quarterly dividends of $102.7 million, $73.0 million in repayments under our shelf loan, Term Loan, and other borrowings, $60.2 million related to payment of contingent consideration and 30 holdbacks related to acquisitions, $24.1 million in repurchases of common stock, and cash outflows of $11.0 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.
Cash Flows from Financing Activities Cash flows used in financing activities of $208.2 million in 2024 were primarily comprised of payments of quarterly dividends of $109.5 million, $52.5 million in net repayments under our revolving credit facility, $36.7 million in repayments under our Term Loan and other borrowings, and cash outflows of $9.2 million related to vesting of stock-based awards, net of shares tendered for payment of taxes.
Cash flows used in investing activities of $241.8 million in 2022 were primarily comprised of $130.6 million for capital expenditures and $108.5 million for the acquisition of businesses. Our capital expenditures are primarily for replacement and growth.
Cash flows used in investing activities of $83.7 million in 2023 were primarily comprised of $62.2 million for capital expenditures and $25.9 million for the acquisition of businesses. Our capital expenditures are primarily for replacement and growth.
Amortization expense on intangible assets for the OEM Segment was $41.6 million in 2023, compared to $41.3 million in 2022. Depreciation expense on fixed assets for the OEM Segment was $58.4 million in 2023, compared to $58.2 million in 2022. Aftermarket Segment Net sales of the Aftermarket Segment in 2023 decreased 1 percent, or $10.2 million, compared to 2022.
Amortization expense on intangible assets for the OEM Segment was $39.8 million in 2024, compared to $41.6 million in 2023. Depreciation expense on fixed assets for the OEM Segment was $53.5 million in 2024, compared to $58.4 million in 2023. Aftermarket Segment Net sales of the Aftermarket Segment in 2024 were consistent with 2023.
The Company, through its wholly-owned subsidiary, LCI, supplies, domestically and internationally, a broad array of highly engineered components for the leading OEMs in the recreation and transportation 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.
OEM Segment: Manufactures and distributes a broad array of engineered components for the leading OEMs of RVs and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; trains; manufactured homes; and modular housing.
Aftermarket Segment Many of our OEM Segment products are also sold through various aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet. This includes discretionary accessories and replacement service parts.
Aftermarket Segment: Supplies many of our engineered components to the related aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet.
Raw material costs are subject to continued fluctuation and impact certain contractual selling prices which are indexed to select commodities. • The decrease in selling, general and administrative costs of $67.5 million in 2023 was primarily driven by personnel costs reductions of $41.5 million, discretionary spend reductions of $22.3 million, and a decrease in transportation costs of $17.5 million, due to lower volumes in 2023 compared to 2022, partially offset by incremental costs from recent acquisitions of $7.6 million. • The effective tax rate of 22.7 percent for the full-year 2023 was lower than the prior year, primarily due to tax adjustments as discussed below under "Income Taxes." • Interest expense in 2023 was $40.4 million compared to $27.6 million in 2022.
Raw material costs are subject to continued fluctuation and impact certain contractual selling prices which are indexed to select commodities. • The effective tax rate of 24.5 percent for 2024 was higher than the prior year, primarily due to tax adjustments as discussed below under "Income Taxes." • Interest expense, net in 2024 was $28.9 million compared to $40.4 million in 2023.
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. According to Go RVing, estimated RV ownership in the United States as of 2021 increased to a record-high 11.2 million households.
For example, within our Aftermarket Segment, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain sales within this segment to be counter-seasonal.
The Whistleblower Policy and procedure for complaints can be found on our website ( www.lci1.com ). 31 CONTINGENCIES Additional information required by this item is included under Item 3 of Part I of this Annual Report on Form 10-K.
CONTINGENCIES Additional information required by this item is included under Item 3 of Part I of this Annual Report on Form 10-K.
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. 29 The Consolidated Statements of Cash Flows reflect the following for the years ended December 31: (In thousands) 2023 2022 Net cash flows provided by operating activities $ 527,229 $ 602,514 Net cash flows used in investing activities (83,748) (241,790) Net cash flows used in financing activities (426,184) (374,871) Effect of exchange rate changes on cash and cash equivalents 1,361 (1,250) Net increase (decrease) in cash and cash equivalents $ 18,658 $ (15,397) Discussion - Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Cash Flows from Operations Net cash flows provided by operating activities were $527.2 million in 2023, compared to $602.5 million in 2022.
The Consolidated Statements of Cash Flows reflect the following for the years ended December 31: (In thousands) 2024 2023 Net cash flows provided by operating activities $ 370,284 $ 527,229 Net cash flows used in investing activities (61,098) (83,748) Net cash flows used in financing activities (208,221) (426,184) Effect of exchange rate changes on cash and cash equivalents (1,366) 1,361 Net increase in cash and cash equivalents $ 99,599 $ 18,658 Discussion - Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Cash Flows from Operations Net cash flows provided by operating activities were $370.3 million in 2024, compared to $527.2 million in 2023.
We have also established a Whistleblower Policy, which includes a toll-free hotline (800-461-9330) to report complaints about the Company’s accounting, internal controls, auditing matters or other concerns.
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 ).
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.
Aftermarket offerings span a diverse product portfolio, including: • Marine Products: Biminis, covers, buoys, and fenders. • Recreation and Transportation Accessories: Towing products, truck accessories, replacement glass, and awnings. • Core Systems: Appliances, air conditioners, televisions, sound systems, and tankless water heaters.
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.
CORPORATE GOVERNANCE We are in compliance with the corporate governance requirements of the SEC and the New York Stock Exchange. Our governance documents, committee charters, and key practices have been posted to the "Investors" section of our website ( www.lci1.com ) and are updated periodically.
Additionally, with the acquisition of Kaspar Ranch Hand Equipment, LLC in April 2021, we continued to expand our product offering to include custom bumpers, grill guards, and steps for the automotive aftermarket.
Kaspar Ranch Hand Equipment, LLC: Acquired in 2021, Ranch Hand broadened our offerings with custom bumpers, grill guards, and steps for the automotive aftermarket, reinforcing our position in complementary markets.
The decrease was primarily driven by a nearly 37 percent decrease in total North American RV wholesale shipments, decreased selling prices which are indexed to select commodities, and lower North American marine production levels, partially offset by net sales from recent acquisitions.
The decrease was primarily driven by decreased industry production levels in the North American marine and utility trailer markets and the European RV market, mostly offset by a 7 percent increase in total North American RV wholesale shipments and sales from acquisitions.
We prepaid $37.5 million of principal on the Term Loan during 2023. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2025, and are projected to save us approximately $1.9 million in annual interest expense based on interest rates in effect at December 31, 2023.
We prepaid $35.0 million of principal on the Term Loan during 2024. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2026.
Net sales and operating profit were as follows for the years ended December 31: (In thousands) 2023 2022 Net sales: OEM Segment: RV OEMs: Travel trailers and fifth-wheels $ 1,358,853 $ 2,617,585 Motorhomes 269,356 339,097 Adjacent Industries OEMs 1,275,533 1,359,188 Total OEM Segment net sales 2,903,742 4,315,870 Aftermarket Segment: Total Aftermarket Segment net sales 881,066 891,273 Total net sales $ 3,784,808 $ 5,207,143 Operating profit: OEM Segment $ 17,361 $ 479,150 Aftermarket Segment 106,067 73,878 Total operating profit $ 123,428 $ 553,028 Corporate expenses are allocated between the segments based upon net sales.
Net sales and operating profit were as follows for the years ended December 31: Sales and Operating Profit by Segment and in Total (In thousands) 2024 2023 Net sales: OEM Segment: RV OEMs: Travel trailers and fifth-wheels $ 1,514,578 $ 1,358,853 Motorhomes 233,066 269,356 Adjacent Industries OEMs 1,112,806 1,275,533 Total OEM Segment net sales 2,860,450 2,903,742 Aftermarket Segment: Total Aftermarket Segment net sales 880,758 881,066 Total net sales $ 3,741,208 $ 3,784,808 Operating profit 1 : OEM Segment $ 107,081 $ 17,361 Aftermarket Segment 111,156 106,067 Total operating profit $ 218,237 $ 123,428 Sales and Operating Profit by Segment as a Percent of Total 2024 2023 Net sales: OEM Segment 76% 77% Aftermarket Segment 24% 23% Total net sales 100% 100% Operating profit 1 : OEM Segment 49% 14% Aftermarket Segment 51% 86% Total segment operating profit 100% 100% Operating Profit Margin by Segment 2024 2023 OEM Segment 3.7% 0.6% Aftermarket Segment 12.6% 12.0% 1 Corporate expenses are allocated between the segments based upon net sales.
Net sales of components in the Aftermarket Segment were as follows for the years ended December 31: (In thousands) 2023 2022 Change Total Aftermarket Segment net sales $ 881,066 $ 891,273 (1)% Our net sales to the Aftermarket Segment decreased during 2023 primarily driven by lower volumes within marine markets and the impacts of inflation and elevated interest rates on consumers' discretionary spending.
Net sales of components in the Aftermarket Segment were as follows for the years ended December 31: (In thousands) 2024 2023 Change Total Aftermarket Segment net sales $ 880,758 $ 881,066 —% Our net sales to the Aftermarket Segment included lower volumes within the RV and marine aftermarkets, mostly offset by market share gains within the automotive aftermarket.
Additionally, increasing interest rates in 2023 impacted retail dealers' cost of floorplan financing, which elevates the carrying cost of inventory on retail dealer lots. We expect that the potential for interest rate reductions later in 2024 would favorably impact retail consumers, as well as retail dealers' floorplan financing. 32
Additionally, elevated interest rates in 2023 and through the first half of 2024 impacted retail dealers' cost of floorplan financing, which elevates the carrying cost of inventory on retail dealer lots.
We anticipate making minimum required contributions of approximately $0.7 million to our Dutch pension plans in 2024 following curtailment of the plans at the end of 2022. We also expect to make matching contributions to our defined contribution 401(k) profit sharing plan in 2024 at a level similar to 2023; however, these contributions are discretionary and subject to change.
We expect to make matching contributions to our defined contribution 401(k) profit sharing plan in 2025 at a level similar to 2024; however, these contributions are discretionary and subject to change. See Note 8 of the Notes to Consolidated Financial Statements for further information related to our retirement and other benefit plans.
We estimate the warranty accrual based upon various factors, including historical warranty costs, warranty claim lag, and sales. The accounting for warranty accruals requires us to make assumptions and judgments, and to the extent actual results differ from original estimates, adjustments to recorded accruals may be required.
The accounting for warranty accruals requires us to make assumptions and judgments, and to the extent actual 31 results differ from original estimates, adjustments to recorded accruals may be required. For further information on our warranty accrual, including a roll-forward of changes in the accrual, see Note 7 of the Notes to Consolidated Financial Statements.
The automotive aftermarket, in particular, experienced growth in the second half of 2023 primarily due to market share gains. 28 Operating profit of the Aftermarket Segment was $106.1 million in 2023, an increase of $32.2 million compared to 2022.
Operating profit of the Aftermarket Segment was $111.2 million in 2024, an increase of $5.1 million compared to 2023.
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.
We also provide comprehensive customer support through multiple customer care centers, offering rapid responses to inquiries related to technical support, product delivery, and critical repair, designed to minimize consumer downtime. Dedicated teams deliver product, technical, and installation training, as well as marketing assistance, to enhance customer engagement and satisfaction.
Content per RV is impacted by changes in selling prices for our products, market share gains, and acquisitions. The declines in content in 2023 compared to 2022 were driven primarily by decreased selling prices contractually tied to indices of select commodities, partially offset by organic and acquisition growth.
Content per RV is impacted by changes in selling prices for our products, market share gains, and acquisitions.
During 2023, we entered into two amendments to the Credit Agreement that provided for adjustments to certain of the financial covenants for the second, third, and fourth fiscal quarters of 2023. At December 31, 2023, we were in compliance with all applicable financial covenants and expect to remain in compliance for the next twelve months.
At December 31, 2024, we were in compliance with all applicable financial covenants and expect to remain in compliance for the next twelve months. We have paid regular quarterly dividends since 2016.
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. 23 We have two reportable segments, the OEM Segment and the Aftermarket Segment.
In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online. 23 Sales and Profit - OEM and Aftermarket Segments We have two reportable segments, the OEM Segment and the Aftermarket Segment.
The decrease was primarily due to decreased selling prices which are indexed to select commodities and the impact of fixed costs on reduced sales, partially offset by decreases in material commodity costs. • The cost of steel and aluminum consumed in certain of our manufactured components decreased in 2023 compared to 2022.
Operating profit margin was 5.8 percent in 2024 compared to 3.3 percent in 2023. The increase was primarily due to decreases in material, freight, and warranty costs. 26 • The cost of steel and aluminum consumed in certain of our manufactured components decreased in 2024 compared to 2023.
The increase was primarily due to interest rate increases throughout the year on our variable rate indebtedness, partially offset by net repayments of indebtedness of $277.0 million in 2023. • In 2023, we paid quarterly dividends aggregating $4.20 per share, or $106.3 million.
The decrease was primarily due to net repayments of indebtedness of $89.2 million in 2024 and interest income of $5.1 million earned on cash and cash equivalent balances in 2024. • In 2024, we paid quarterly dividends aggregating $4.30 per share, or $109.5 million.
According to School Bus Fleet, there were approximately 41,200, 40,600, and 30,600 school buses sold in 2023, 2022, and 2021, respectively. • Manufactured housing. According to the Institute for Building Technology and Safety, there were approximately 89.200, 112,900, and 105,800 manufactured home wholesale shipments in 2023, 2022, and 2021, respectively.
According to the Institute for Building Technology and Safety, wholesale shipments totaled 102,600 units in 2024, up from 89,200 in 2023 but down from 112,900 in 2022.
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.
However, inflation and elevated interest rates continued to pressure consumer discretionary spending, dampening demand. Retail registration data is often revised upward in subsequent months due to reporting delays. While we track our OEM Segment RV sales against wholesale shipment statistics, the health of the RV industry is ultimately determined by retail demand.
(In thousands) Total Current Long-Term Total indebtedness (a) $ 854,046 $ 589 $ 853,457 Interest on indebtedness (a) 89,717 32,544 57,173 Operating leases (b) 345,718 50,589 295,129 Total $ 1,289,481 $ 83,722 $ 1,205,759 a. See Note 9 of the Notes to Consolidated Financial Statements for additional information regarding the maturities of debt principal.
(In thousands) Total Current Long-Term Total indebtedness (a) $ 761,274 $ 423 $ 760,851 Interest on indebtedness (a) 41,483 22,869 18,614 Operating leases (b) 314,527 52,407 262,120 Total $ 1,117,284 $ 75,699 $ 1,041,585 a. See Note 9 of the Notes to Consolidated Financial Statements for additional information regarding the maturities of debt principal.
The primary provider of cash generated from net assets in 2023 was the decrease in inventory of $235.3 million, due to decreasing material commodity costs and initiatives to reduce inventory as RV production demand has slowed from elevated post-pandemic levels seen during the first half of 2022.
The decrease in net cash flows provided by operating activities was primarily due to the decrease in inventory in 2023 of $235.3 million driven by decreasing commodity costs and initiatives to reduce inventory levels, compared to the decrease in inventories in 2024 of $46.3 million.
While North American RV OEM wholesale shipments declined 37 percent year-over year, due to the effectiveness of our diversification strategy, consolidated net sales were only down 27 percent. 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.
Approximately 57 percent and 61 percent of net sales for the years ended December 31, 2024 and 2023, respectively, were generated outside of the North American RV OEM market, providing a balanced foundation for continued growth. Industry Background OEM Segment - North American Recreational Vehicle Industry: RVs are designed as temporary living quarters for recreational, camping, travel, or seasonal use.
According to the RVIA, industry-wide wholesale shipments from the United States of travel trailer and fifth-wheel RVs, the Company's primary RV market, decreased 39 percent to 259,100 units in 2023, compared to 2022, primarily due to decreased retail demand. Retail demand for travel trailer and fifth-wheel RVs decreased 17 percent in 2023 compared to 2022.
In 2024, Recreation Vehicle Industry Association ("RVIA") data shows U.S. wholesale shipments of travel trailers and fifth-wheel RVs, the Company's primary market, increased 13 percent to 291,600 units compared with 2023. Retail demand decreased 6 percent to 307,000 units compared with 2023, reflecting a partial stabilization from the sharp declines of prior years.
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.
The RV industry generally follows a predictable annual sales cycle that starts after the annual fall "Open House" in Elkhart, Indiana: • October - March: Dealers build inventory, leading wholesale shipments to historically outpace retail sales. • April - September: Retail sales typically exceed wholesale shipments, driven by spring and summer demand.
The following are key target markets for Adjacent Industries component sales: • Enclosed trailers. According to Statistical Surveys, approximately 184,300, 198,700, and 239,700 enclosed trailers were sold in 2023, 2022, and 2021, respectively. • Traditional power boats. Statistical Surveys also reported approximately 178,900, 185,400, and 216,900 traditional power boats were sold in 2023, 2022, and 2021, respectively.
Key adjacent industries and the annual retail units sold of each include: • Enclosed trailers: According to Statistical Surveys, approximately 191,900 units were sold in 2024, down from 200,800 in 2023 and 213,800 in 2022. • Boats: Statistical Surveys also reported approximately 245,800 units were sold in 2024, compared to 269,100 in 2023 and 270,900 in 2022.
Removed
Approximately 47 percent of our OEM Segment net sales for the year ended December 31, 2023 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 markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet.
Added
We are a global leader in supplying engineered components to the outdoor recreation, transportation, and building products industries.
Removed
Diversification Strategy We are executing a strategic initiative to diversify the markets we serve away from the historical concentration within the North American RV OEM industry.
Added
Our OEM Segment drives innovation and manufacturing expertise, serving leading OEMs in recreation, transportation, and housing markets. Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives recurring revenue, deepens customer engagement, and leverages our OEM expertise.
Removed
Approximately 61 percent of net sales for the year ended December 31, 2023 were generated outside of the North American RV OEM market compared to 46 percent in 2022, demonstrating positive results from our diversification strategy in 2023.
Added
Diversification Strategy: Over the past several years, we have diversified our portfolio beyond the RV OEM market into marine, building products, transportation, international, and aftermarket sectors. Leveraging our manufacturing competencies in other industries can accelerate profitable growth and help to mitigate seasonal and cyclical market risk.
Removed
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.
Added
The table below highlights trends in wholesale shipments, retail sales, and dealer inventory adjustments for travel trailers and fifth-wheel RVs, as reported by Statistical Surveys, Inc. ("Statistical Surveys").
Removed
Retail demand has declined from elevated post-pandemic levels, primarily driven by inflation and higher interest rates impacting retail consumers' discretionary spending. Retail demand is typically revised upward in subsequent months, primarily due to delayed RV registrations.
Added
Wholesale Retail Estimated Unit Impact on Dealer Inventories Units Change Units Change Year ended December 31, 2024 291,600 13% 307,000 (6)% (15,400) Year ended December 31, 2023 259,100 (39)% 327,000 (16)% (67,900) Year ended December 31, 2022 421,700 (21)% 389,700 (22)% 32,000 Motorhomes, another key RV category, experienced a significant 24 percent decline in wholesale shipments to 34,900 units in 2024, while retail demand fell 12 percent, according to RVIA data.
Removed
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 25 Statistical Surveys, Inc., as well as the resulting estimated change in dealer inventories, for both the United States and Canada, is as follows: Wholesale Retail Estimated Unit Impact on Dealer Inventories Units Change Units Change Year ended December 31, 2023 259,100 (39)% 324,800 (17)% (65,700) Year ended December 31, 2022 421,700 (21)% 389,700 (22)% 32,000 Year ended December 31, 2021 531,300 40% 502,700 10% 28,600 According to the RVIA, industry-wide wholesale shipments of motorhome RVs in 2023 decreased 21 percent to 45,900 units compared to 2022.
Added
OEM Segment - Adjacent Industries: LCI's expertise in RV components extends to adjacent industries, including boats, buses, trailers, trucks, trains, manufactured homes, and modular housing. These adjacent industries offer significant growth opportunities, including by helping us leverage our established relationships with OEMs that often operate in multiple sectors.
Removed
Retail demand for motorhome RVs decreased eight percent in 2023, compared to a 13 percent decrease in retail demand in 2022. Retail demand has declined from post-pandemic elevated levels, partially driven by inflation and higher interest rates impacting retail consumers' discretionary spending.

… 34 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeAt December 31, 2023, we had $390.9 million of borrowings outstanding on our variable rate revolving credit facility and incremental term loan. Assuming consistent borrowing levels and an increase of 100 basis points in the interest rate for borrowings of a similar nature subsequent to December 31, 2023, future cash flows would be reduced by approximately $3.9 million per annum.
Biggest changeAt December 31, 2024, we had $299.3 million of borrowings outstanding on our variable rate revolving credit facility and incremental term loan. Assuming consistent borrowing levels and an increase of 100 basis points in the interest rate for borrowings of a similar nature subsequent to December 31, 2024, future cash flows would be reduced by approximately $3.0 million per annum.
While these derivative instruments are subject to fluctuations in value, these fluctuations are generally offset by the changes in fair value of the underlying exposures. We had no outstanding derivative instruments on commodities at December 31, 2023 and 2022. We have historically been able to obtain sales price increases to partially offset the majority of raw material cost increases.
While these derivative instruments are subject to fluctuations in value, these fluctuations are generally offset by the changes in fair value of the underlying exposures. We had no outstanding derivative instruments on commodities at December 31, 2024 and 2023. We have historically been able to obtain sales price increases to partially offset the majority of raw material cost increases.
"Management's Discussion and Analysis of Financial Condition and Results of Operations." 33
"Management's Discussion and Analysis of Financial Condition and Results of Operations." 32

Other LCII 10-K year-over-year comparisons