Q2 2025 LCI Industries Earnings Call

Lucy: Hello everyone, and thank you for joining the LCI Industries Q4 2025 conference call. My name is Lucy, and I will be coordinating your call today. During the presentation, you can register a question by pressing *1 on your telephone keypad. If you change your mind, please press *2. It is now my pleasure to hand over to your host, Lillian Etzkorn of LCI Industries, to begin. Please go ahead.

Hello everyone. And thank you for joining the LCI Industries. Second quarter, 2025 conference call. My name is Lucy and I'll be coordinating your call today during the presentation. You can register a question by pressing star, followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. It is now my pleasure to hand over to your host Lillian edcon of LCI Industries to begin. Please go ahead.

Lillian Etzkorn: Good morning, everyone, and welcome to the LCI Industries Q4 2025 conference call. I am joined on the call today with Jason Lippert, President and CEO, along with Kip Emenhiser, VP of Finance and Treasurer. We will discuss the results for the quarter in just a moment. First, I would like to inform you that certain statements made in today's conference call regarding LCI Industries and its operations may be considered forward-looking statements under the security laws and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors are discussed in our earnings release and in our Form 10-K and in other filings with the SEC.

Good morning everyone and welcome to the LCI Industries. Second quarter 2025 conference call. I am joined on the call today with Jason lipert, president, and CEO along with Kip iser, VP of finance and Treasurer. We will discuss the results for the quarter in just a moment.

But first, I would like to inform you that certain statements made in today's conference, call regarding LCI Industries, and its operations may be considered forward-looking statements under the security laws, and involve a number of risks and uncertainties.

As a result, the company cautions you that there are a number of factors many of which are beyond the company's control which could cause actual results and events to differ materially from those described in the forward-looking statements.

Lillian Etzkorn: The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. With that, I would like to turn the call over to Jason.

These factors are discussed in our earnings release and in our form 10K in another filings with the FCC.

Circumstances or events that occur. After the date, the forward-looking statements are made except as required by law.

With that. I would like to turn the call over to Jason.

Daniel Moore: Thank you, Lillian, and good morning, everyone. I'd like to welcome you all to LCI Industries Q4 2025 earnings call. We delivered strong Q4 results with $1.1 billion in sales, up 5% year-over-year, along with 2% organic total content growth despite RV mix headwinds. Our strong performance reflects dedication of our team, the strength of our diversified markets and products, and the durability and expansiveness of our competitive mode. While elevated interest rates and other macro factors continue to challenge RV retail demand, our strategic foundation effectively drives growth and resilience, keeping us firmly on track to achieve our $5 billion organic revenue target in 2027. Our 5% growth was driven by continued market share gains in our top five product categories: appliances, axles and suspensions, chassis, furniture, and windows, as well as the continued traction of our five recent key innovations that have reached a $100 million run rate.

Thank you Lillian and good morning everyone. I'd like to welcome you all through LCI industry. Second quarter, 2025 earnings, call we delivered strong second, quarter results, with 1.1 billion, in sales up, 5% year-over-year, along with 2% organic 12, volt content growth, despite RV, mix headwinds, a strong performance, reflects dedication of our teams, the strength of our Diversified markets and products and the durability. And expansiveness of our competitive mode while elevated interest rates and other macro factors continue to challenge RV, retail demand our strategic Foundation, effectively drives growth and resilience. Keeping us firmly on track to achieve our 5 billion, organic Revenue Targets in 2027

Daniel Moore: Our recently completed acquisitions of Freedman Seating Company and Trans/Air contributed $32 million in sales in the quarter, while strengthening our position in the bus market. This market further expands our durability as it benefits from continuous and essential municipal fleet upgrades, providing $200 million in expected annualized revenues to Lippert, unrelated to consumer demand. Early integration efforts have been very successful operationally and culturally, engaging all 875 new team members collectively between the two new businesses within weeks of closing the acquisition. In addition, we are making good headway on synergies through consolidations of our transportation business units and teams. Freedman has just announced new product launches for heavy-duty commercial buses, an entirely new market for them. We remain focused on what we can control, reducing raw material exposure, mitigating new costs around tariffs, and allocating capital with discipline across M&A, CapEx, and shareholder returns.

Our 5% growth was driven by a continued market share gains in our top 5 product categories, appliances axles and suspensions chassis furniture and windows. As well as the continued traction of our 5 recent key. Innovations that have reached a hundred million dollar run rate.

Our recently completed Acquisitions of Freeman. Seating company, and trans are contributed, 32 million of sales in the quarter, while strengthening our position in the bus Market.

This Market further expands our durability as it benefits from continuous and essential Municipal Fleet upgrades, providing 200 million in expected, annualized revenues to lier, unrelated to Consumer demand.

Early integration efforts have been very successful operationally and culturally engaging all 875 new team members, collectively between the 2 new businesses within weeks of closing. The acquisition. In addition, we are making good Headway on synergies through consolidations of our transportation business units and teams in addition for Freedman has just announced new product launches for heavy duty, commercial buses, and entirely New Market for them.

Daniel Moore: We are happy to announce that our tariff mitigation strategy of diversifying our supply chain, with help from our vendors and other sourcing strategies, enabled us to minimize the impact of pricing to our customers, as well as support our bottom line in the quarter, in line with what we stated last quarter when tariffs were first announced. We are also making strong progress toward our goal of reducing China exposure to 10% by the end of 2025, down from 24% in 2024. We are achieving this by further diversifying our supply chain into more strategically favorable regions, including bringing some products back to the U.S. for manufacturing, renegotiating supplier agreements, and leveraging existing inventory to further mitigate cost pressures. We also continue to drive facility consolidation, taking decisive action across multiple facilities to optimize our footprint.

We remain focused on what we can control. Reducing raw material exposure, mitigating new costs around, terrorists and allocating Capital with discipline across m&a, capex, and shareholder returns. We are happy to announce that our tariff mitigation strategy of diversifying. Our supply chain with help from our vendors, and other sourcing strategies enabled us to minimize the impact of pricing to our customers, as well as support or bottom line in the quarter.

in line with what we stated last quarter when tariffs were first announced

we're also making strong progress toward our goal of reducing China, exposure to 10% by the end of 2025 down from 24%, in 2024,

We are achieving this by further diversifying, our supply chain into more strategically favorable regions, including bringing some products back to the US. From manufacturing renegotiating supplier agreements and leveraging. Existing inventory to further, mitigate cost pressures.

Daniel Moore: These actions, along with a lower indirect spend and reduced salary labor, drove sequential adjusted EBITDA margin expansion of 40 basis points to now 11% in the quarter. To support ongoing cost reduction, we intend to continue to optimize our facility footprint in calendar year 2026 by targeting underutilized space for reduction. All our additional actions are helping continue our momentum toward the targeted 85 basis point overhead and G&A reduction for 2025. I'll now move on to the results by business. RV OEM net sales totaled $503 million in the second quarter, with North American RV sales up 5% and overall RV sales up 3% year-over-year, driven by market share gains across our top five product categories. This growth was partially offset by a decline in North American RV wholesale shipments, as dealers remain cautious with inventory levels after this previous quarter's restocking.

We also continue to drive facility consolidation. Taking decisive action across multiple facilities, to optimize our footprint.

These actions along with a lower indirect spend and reduce salary labor. Go sequential adjusted Eva margins expansion of 40 basis points to now 11% in the quarter.

To support ongoing cost reduction, we intend to continue to optimize our facility footprint and calendar year 2026 by targeting underutilized. Space for reduction.

All our additional actions are helping continue our momentum toward the targeted, 85 basis point overhead and GNA reduction for 2025.

Daniel Moore: Nonetheless, long-term trends supporting the outdoor lifestyle remain strong. According to KOA's 2025 Camping and Outdoor Hospitality Report, over 11 million new households have entered the camping market since 2019, and 72 million Americans are expected to take an RV trip this year, reinforcing a solid foundation for future demand and favorable demographics. A successful adoption by OEMs of our recent innovations, like our Chill Cube 18K air conditioner, anti-lock brakes (ABS) systems, 4K window series, Sun Deck, and Touring Coil Suspension (TCS) system, continue to drive shared gains during the quarter. Recently, we engaged in a collaboration with Keystone Krueger, the best-selling fifth-wheel RV, where we highlighted the capabilities of our new Chill Cube.

I'll now move on to the results. By business, our boom, net sales, total of 503 million in the second quarter with North American RV sales at 5% and overall RV sales at 3%, year-over-year driven by market share gains across our top 5 product categories. This growth was partially offset by a decline in North American RV, wholesale shipments as dealers, remain cautious with inventory levels. After the previous quarters, restocking,

Nonetheless, long-term trends supporting the outdoor lifestyle remain strong according to KOA's 2025 Camping and Outdoor Hospitality Report. Over 11 million new households have entered the camping market since 2019, and 72 million Americans are expected to take an RV trip this year, reinforcing a solid foundation for future demand and favorable demographics.

Daniel Moore: In this collaborative effort, Keystone and Lippert sent our marketing teams to Dust Valley, California, where we showcased the Chill Cube's cooling power, energy efficiency, and quiet operation in one of the most extreme environments in the U.S. The marketing and social media campaigns were released early last month. The Chill Cube and other market-leading innovations that are so critical to customers continue to drive adoption among OEMs, reinforcing our value proposition across all price points. Well-received innovations and continued market share gains increased organic content for travel trailer and fifth wheel by 2% year-over-year, continuing our trend of organic content expansion despite stiff mix headwinds. Our ability to continuously grow content, even amid this ongoing shift towards smaller single-axle trailers, underscores the strength and relevance of our portfolio.

a successful adoption by oems of our recent Innovations, like our chill Cube, 18K air, conditioner, and I lock braking systems 4K, Windows series, fun deck and TCS suspension systems, continue to Drive shared games during the quarter recently, we engaged in a collaboration with Keystone Krueger, the best-selling fifth wheel RV where we highlighted the capabilities of our new chill Cube

In this collaborative effort, he's on the Lippert Center. On our marketing teams, the Death Valley, California, where we showcase the chilled cubes, cooling power, energy efficiency, and quiet operation in one of the most extreme environments in the U.S.

Reinforcing our value proposition across all price points.

Well-received innovations that continued market, share gains increased, organic content, for travel trailer and Fifth Wheel by 2% year-over-year. Continuing our trend of organic content expansion, despite stiff, mixed headwinds,

Daniel Moore: Many of our components, such as axles, chassis, suspension systems, and appliances, are critical to the units, not to mention critical to safety, reliability, and convenience for the consumer, making our products difficult to remove in any decontenting environment. Combined with our large-scale procurement of the raw materials required for these products, low-cost manufacturing, and strong OEM relationships, our offerings remain a solid choice for partners seeking reliable, high-value solutions and continued innovation in the space. Looking ahead, we're confident we can capture additional content opportunities and anticipate that organic content growth should return to 3% to 5% annually in a normalized wholesale environment. Turning to the aftermarket, net sales were $268 million for the second quarter, up 4% year-over-year, primarily driven by product innovations and the expanding camping world relationship in the RV aftermarket.

Our ability to continuously grow content even amid this ongoing shift towards smaller, single axle trailers, underscores strength and relevance of our portfolio.

Many of our components such as axles chassis suspension systems and appliances are critical to the units, not to mention, critical to safety. Reliability and convenience for the consumer. Making our products difficult to remove in any decent contending environment.

Combined with our large scale. Procurement of the raw materials required for these products. Low-cost manufacturing and strong OEM relationships are offering this remain a solid choice for partners seeking reliable high value Solutions and continued innovation in the space.

Looking ahead, we're confident, we can capture additional content opportunities and anticipate that organic content growth to return to 3 to 5% annually and a normalized wholesale environment.

Daniel Moore: We continue to see strong demand for period appliances, particularly in air conditioning, where the Chill Cube and the rest of our AC lineup continues to gain share in the aftermarket. We've already sold three times more ACs in the aftermarket through six months of 2025 than we did of all of 2024. This is a testament to our incredible aftermarket sales teams and technical teams that assist dealerships with a service and winning sales programs. As our aftermarket products continue to see increased adoption, in part through more and more OEM placement over the years, it helps fuel our long-term growth strategy in this segment. As OEM content grows and more RVs exit their warranty periods, demand rises in parallel, further supporting this as the growing U.S. RV ownership base, ultimately creating a larger installed base, which generates recurring product and service opportunities for our business.

Turning to the aftermarket, net sales were 268 million for the second quarter up. 4% year-over-year primarily driven by product Innovations and the expanding Camping World relationships in the RV aftermarket

We continue to see strong demand for furrion appliances, particularly in air conditioning where the chill Cube and the rest of our AC lineup continues to gain, share in the aftermarket.

We've already sold three times more ACS in the aftermarket through six months of 2025 than we did of all of 2024.

This is a testament to our incredible, aftermarket sales teams and Technical teams that assist dealerships with a service and winning sales programs.

As our aftermarket products continue to see increase adoption and part through more and more OEM placement over the years, it helps fuel our long-term growth strategy in the segment.

As OEM content grows and more RVs exit their warranty periods. Demand rises in parallel.

Further supporting this is a growing us. RV ownership base. Ultimately creating a larger installed base.

Daniel Moore: Our partnership with Camping World also remains a key aftermarket growth driver, with sales in their stores up over $7 million year to date, indicating strong retail momentum and customer demand as a result of our in-store collaboration with the Camping World team. This continued strength highlights the impact of strategic alignment and collaborative execution as we increasingly strengthen our retail presence with the largest RV dealer in the world, both in stores and online. In addition, we are also working on similar projects with many other dealerships across the country to apply our Lippert parts in-store concept. We also continue to invest heavily in the long-term growth of our aftermarket by building on our service and training function.

Which generates recurring product and service opportunities for our business.

Our partnership with Camping World. Also remains a key, aftermarket growth driver with sales in their stores up over 7 million year to date indicating strong, retail momentum and customer demand. As a result of our in-store collaboration with the Camping World team.

This continued strength highlights the impact of strategic alignment and collaborative execution, as we increasingly strengthen our retail presence with the largest RV dealer in the world, both in stores and online. In addition, we are also working on similar projects with many other dealerships across the country to apply our Lippert Parts in Store concept.

Daniel Moore: Our dealer tech training programs are an important piece of our aftermarket growth strategy as they help to ensure that our products are supported correctly after the sale to retail, strengthening our pull-through with dealer service centers. Last year, we completed service on over 1,500 mobile service repairs, which adds to aftermarket revenues. We are set to exceed that this year, and later on this year, we are adding new standalone service bays in Alabama, California, and to our existing Indiana facility, which will help us attract even more customers for service and upfit of our new innovative products. We demonstrate the robustness of our technical service team that assists dealers and our other customers in the aftermarket.

We also continue to invest heavily in the long-term growth of our aftermarket by building on our service and training functions. Our dealer tech training, programs are an important piece of our aftermarket growth strategy as they help to ensure that our products are supported correctly. After the sale to retail strengthening our pull through with dealer service centers. Last year, we completed service on over 1500 Mobile Service Repairs, which adds to aftermarket revenues

We are set to exceed that this year, and later on this year, we are adding new Standalone service, bays in Alabama, California, and to our existing Indiana facility.

Which will help us attract even more customers for service and up the of our new Innovative products.

Daniel Moore: Through the first half of 2025, our service ecosystem had 600,000 views of Lippert-branded tech support seminars, 28,000 individual completions of technical training classes, and over 1 million visits to our Lippert-branded technical service pages, demonstrating our reputation as a trusted dealer partner. We plan to continue to foster these efforts to bolster service support as dealers consistently express their appreciation and tell us we provide the most comprehensive technical support in the entire industry. Turning to adjacent industry, second quarter sales increased 10% year-over-year to $336 million, largely due to our recent acquisitions, Freedman Seating and Trans/Air, that expand our presence in the bus market, as well as some nice organic growth in utility and cargo trailer markets with our axles and suspension products. This growth was partially offset by ongoing softness in the marine market as dealers continue to prioritize inventory rebalancing.

We demonstrate the robustness of our technical service team that assists dealers, and our other customers. In the aftermarket. Through the first half of 2025, our service ecosystem has 600,000 views of leopard branded tech support, seminars 28,000 individual completions of technical training classes and over 1 million visits to our leopard branded technical service Pages, demonstrating our reputation as a trusted dealer partner,

We plan to continue to Foster these efforts to bolster service support as dealers. Consistently express your appreciation and tell us. We provide the most comprehensive technical support and the entire industry.

Turning to adjacent industry. Second quarter sales, increased 10% year-over-year to 336 million largely due to our recent acquisitions Freedom, seating and trans are that expand our presence in the bus Market, as well as some nice organic growth, and utility and cargo trailer markets with our axles and suspension products.

Daniel Moore: We expect softness in the marine market to continue for the balance of the year. We remain committed to product innovation and recently launched a new line of modular replacement pontoon furniture for marine aftermarket consumers, giving boaters a cost-effective way to refresh their boat without purchasing a new unit. We also launched a brand new pontoon ladder system this quarter, which has had great success already making its way into several key pontoon brands as the marine manufacturers enter all their key dealer shows this month. Utility trailers continue to represent meaningful long-term content potential. With approximately 600,000 utility and cargo trailers produced annually, we were well positioned through the strong relationships with leading OEMs to leverage our axle manufacturing and suspension products expertise, as well as getting them to start considering advanced technologies and content such as anti-lock brakes, Touring Coil Suspension, and tire pressure management systems.

This growth is partially offset by ongoing softness in the Marine Market as dealers. Continue to prioritize inventory. Rebalancing we expect softness in the Marine market to continue for the balance of the year.

We remain committed to product, Innovation. And recently, launched a new line of modular replacement pontoon, furniture for marine aftermarket consumers giving voters a cost-effective way to refresh your boat without purchasing a new unit.

3 manufacturers. Enter all their key dealer shows this month.

Utility trailers continue to represent meaningful long-term content potential with approximately 600,000 utility and cargo trailers produced annually.

Daniel Moore: Axle and suspension components represent the largest single content category in these trailers, and our leadership in this area remains a key competitive advantage. For the transportation industry, our window systems and glass products are contributing to content growth across on-highway, off-highway, school bus, and transit bus platforms. The bus market, in particular, continues to demonstrate durability with approximately 70,000 units produced annually and a growing need for fleet replacement across states and municipalities. As mass transit continues to expand, we believe this will remain an attractive market and look forward to further expanding this portfolio in the quarters to come. Lastly, as I mentioned in my opening comments, Freedman Seating is now entering the heavy-duty commercial bus product market with brand new seating solutions that could have meaningful impact on the business.

All positions through the strong relationships with leading oems to leverage our actual manufacturing and suspension products expertise as well as getting them to start considering Advanced Technologies and content, such as anti-lock, braking systems touring coil, spring, suspension and tire pressure Management Systems.

Excellent suspension components represent the largest single content category in these trailers and our leadership in this area remains a key competitive advantage.

With the transportation industry, our Windows systems and glass products are contributing to content growth across on Highway off, Highway school bus and Transit bus platforms. The bus Market in particular continues to demonstrate durability with approximately 70,000 units, produced annually. And a growing need for Fleet replacement across States and municipalities.

As mass transit continues to expand, we believe this will remain an attractive market and look forward to further expanding this portfolio in the quarters to come.

Lastly, as I mentioned in my opening comments Freeman is now entering the heavy duty commercial bus product Market with brand new, seating solutions that could have meaningful impact on the business.

Daniel Moore: Turning to capital allocation, we remain focused on sustaining a strong financial foundation while driving growth and returning capital to shareholders. In the first half of 2025, we generated $155 million in operating cash flow, supported by improved working capital discipline. Additionally, as of June 30, we had $192 million in cash, $595 million of availability on our revolver, and net debt of approximately 2 times EBITDA, positioning us well to pursue strategic acquisitions, invest in innovation, and navigate a dynamic environment of flexibility. We also return capital through $1.15 a share of dividend. We also are excited to announce that we have executed $128 million in share repurchase this year to date through August 1, with $200 million of remaining capacity under a newly authorized $300 million program.

Turn the capital, allocation we remain focused on sustaining a strong financial Foundation while driving growth and returning Capital to shareholders.

In the first half of 2025, we generated $155 million in operating cash flow, supported by improved working capital discipline.

Additionally, as of June 30th, we had 192 million in cash.

595 million of availability on our revolver and net debt of approximately 2 times even positioning us. Well, to pursue strategic Acquisitions and invest in Innovation, and navigate a dynamic environment with flexibility.

Daniel Moore: This continues our consistent and disciplined capital deployment strategy we've executed and balances long-term investment with near-term returns, driving shareholder value across market cycles. Moving to culture, one of our key competitive advantages has played a significant role in reducing employee turnover and fostering a more engaged, committed workforce. Retention is important, but retention combined with high engagement is where the true value lies. We believe helping our team members find meaning and purpose at work by supporting both their personal and professional goals creates an X-factor type advantage that contributes to long-term stability and operational excellence. To be specific, over the last four years, we have been working toward a bold goal, and that goal is by 2025 for every team member to have written personal goals and be actively pursuing them.

We also returned Capital through a dollar and 15 cents a share of dividend. We also are excited to announce that we have executed a 128 million in share of purchases this year to date through August 1st, with 200 million of remaining capacity under a newly authorized 300 million dollar program

This continues our consistent and disciplined Capital deployment strategy. We've executed and balances long-term Investments with near-term returns.

Driving shareholder value across Market Cycles.

Moving to culture 1 of our key competitive advantages has played a significant role in reducing employee, turnover and fostering a more engaged submitted Workforce retention is important. But retention combined with high engagement is where the True Value lies.

We Believe helping our team members finding, meaning and purpose at work, by supporting both their personal and professional goals, creates an X-Factor type advantage, that contributes to long-term stability and operational excellence.

Daniel Moore: We believe that when our people grow personally, the business will grow as a result of more engagement. We also believe that business can and should be a force for good, demonstrated by the hundreds of community service events organized by our culture and leadership team. Through these service events, thousands of our team members collectively have served over 125,000 hours of volunteer service each year. This effort reinforces a core belief at Lippert: when people unite around a shared mission, their impact extends far beyond the bottom line. Not surprisingly, we found that retention rates in team members who serve are twice as high as those who haven't been involved with these serving events. Service is not only good for the community; it's good for business. As we look ahead to the second half of the year, we remain cautiously confident.

To be specific over the last 4 years. We have been working toward a bold goal, and that goal is by 2025 for every team member to have written personal goals and be actively pursuing them.

because we believe that when our people grow personally, that the business will grow as a result of more engagement,

We also believe that business can and should be a force for good. Demonstrated by the hundreds of community service events, organized by our culture and leadership team.

Through these Service events. Thousands of our team members collectively have served over 125,000 hours of volunteer service each year.

This effort reinforces a core belief at liper. When people unite around a shared Mission, their impact extends, far beyond the bottom line. Not surprisingly, we found that retention rates and team members who serve as twice as high as those who haven't been involved with these serving events.

Will serve as not only good for the community. It's good for business.

Daniel Moore: While inflation and tariff uncertainty continue to pressure consumer behavior, we're encouraged by our ability to respond quickly and thoughtfully. That said, we remain confident in our ability to align our cost structure, capital deployment, and production cadence with real-time market conditions, just as we have done successfully in past cycles while continuing to grow our market shares in all our end markets. July 2025 sales were up 5% year-over-year, and we anticipate that to be the trend for the rest of Q3. We also continue to maintain our full-year 2025 forecast for North American RV wholesale shipments at 320,000 to 350,000 units, and we plan to remain steadfast to our approach to achieve growth in this environment, grounded in what we can control.

As we look ahead to the second half of the year, we remain cautiously confident while inflation, and tariff uncertainty continue to pressure consumer Behavior. We're encouraged by our ability to respond quickly and thoughtfully

that said we remain confident in our ability to align our cost structure, Capital deployment, and production, Cadence with real-time market conditions,

This is we have done successfully in past Cycles while continuing to grow our market shares and all our end markets.

Daniel Moore: In addition, we believe the toughest part is behind us, as the team has done an incredible job right-sizing the business and continuing to right-size after the falloff in RV volume in 2023. We believe we are putting ourselves in a great position for success as we come out of the cycle and off the bottom as volume begins to get back to a more normalized level. In closing, we operate a diversified and durable business, supported by a rich history and culture rooted in servant leadership, operational discipline, and strong execution from an experienced leadership team. While the external environment may remain somewhat volatile in areas, our strategy hasn't changed. We've successfully navigated cycles like this before and have recently demonstrated that we have done it again. Our competitive mode is even more valuable at certain times, positioning us to continue driving market share gains and long-term growth.

July 2025 sales were up 5% year-over-year and we anticipate that to be the trend for the rest of. Q3 we also continue to maintain our full year 20125 forecast, for North American RV, wholesale shipments at 320,000 to 350,000 units and we plan to remain steadfast to our approach to achieve growth in this environment, grounded in what we can control. In addition, we believe the toughest part is behind us, is the team is done an incredible job, right? Sizing the business and continuing to write size after the fall off and RV volume in 2023.

We believe we are putting ourselves in a great position for success as we come out of the cycle, and off the bottom, as volume begins to get back to a more normalized level.

Strong execution from an experienced leadership. Team all the external environment. May remain. Somewhat volatile in areas our strategy hasn't changed, we successfully navigated Cycles like this before and have recently demonstrated that we've done it again.

our competitive mode is even more valuable and at certain times,

Positioning us to continue driving market, share gains and long-term growth.

Daniel Moore: As always, and probably the most important thing I can say on these calls is that none of these results and accomplishments would be possible without the phenomenal consistency of our leadership teams across the business. The dedication, ingenuity, and passion of our people continue to move Lippert forward and provide outstanding results. I'm as proud as ever as what we're building together and even more excited for what's to come. I'll now turn the call over to Lillian, who will provide more detail on our financial results.

As always. And probably, most important thing I can say in these calls is that none of these results and accomplishments will be possible without the phenomenal consistency of our leadership teams across the business,

The dedication Ingenuity and passion of our people. Continue to move, liberate, forward and provide outstanding results. I'm as proud as ever as what we're building together and even more excited for what's to come, I'll turn the call over to Lillian who will provide more detail on our financial results.

Lillian Etzkorn: Thank you, Jason. During the quarter, LCI Industries' industry-leading innovations, strong competitive advantages, and successful M&A drove net sales growth, while our ability to mitigate tariffs and advanced cost-savings initiatives delivered resilient margin performance despite mixed headwinds. Our consolidated net sales for the second quarter were $1.1 billion, an increase of 5% from the second quarter of 2024. OEM net sales for the second quarter of 2025 were $840 million, up 5% from the same period of 2024. RV OEM net sales for the second quarter of 2025 were $503 million, up 3% compared to the prior year period, driven by market share gains and an increased mix of higher content fifth-wheel units. These results were partially offset by the overall continued shift in unit mix towards lower content single-axle travel trailers.

Thank you Jason during the quarter, libert's, industry-leading, Innovation, strong competitive advantages and successful m&a, throughout net sales growth while our ability to mitigate tariffs in advance cost savings initiatives. Delivered resilient margin performance despite Nick's headwinds

Our Consolidated, net sales for the second quarter were 1.1 billion and increase the 5% from the second quarter of 2024.

OEM net sales for the second quarter of 2025, for 840 million up 5%, from the same period of 2024.

RV OEM net sales for the second quarter, 2025, were 503 million up 3%? Compared to the prior year, period, driven by market, share gains and an increased mix of higher content. Fifth wheel units.

Lillian Etzkorn: Single-axle trailers do remain in an atypical portion of production, but we expect this trend to normalize once consumer demand recovers. Content per towable RV unit was roughly flat year-over-year at $5,234, and content per motorized unit was up 1% to $3,793. Towable RV organic content grew 1% sequentially and 2% year-over-year, supported by the share gains we delivered in the top product categories we supply to RV OEMs: appliances, axles and suspensions, chassis, furniture, and windows, as well as the continued adoption of recent innovations like our ABS, TCS, and best-in-class appliances. This growth offset the impact from the continued shift to smaller single-axle trailers. Adjacent Industries OEM net sales for the second quarter of 2025 were $336 million, up 10% year-over-year, primarily due to sales from acquired businesses within transportation, which represents $32 million in the quarter.

These results were partially offset by the overall continued shift, in unit, mix towards lower content, single axle, travel trailers.

Single axle trailers do remain in an atypical portion of production. But we expect this trend to normalize once consumer demand recovers.

Content for towable RV units was roughly flat year-over-year at 5,234 and content per. Motorized unit was up 1% to 3,793

Towable RV organic content grew 1% sequentially and 2% year-over-year.

By the share gains. We delivered in the top product categories. We Supply to RV, oems.

Appliances axles and suspension chassis furniture and windows as well as the continued adoption of recent Innovations like our ABS ccs and best-in-class appliances. This growth offset the impact from the continued shift to smaller, single axle trailers.

Lillian Etzkorn: This is partially offset by lower sales in North American marine, as sales were down 15% due to the impact of inflation and still high interest rates on retail demand. Based on current visibility, we expect this softness to continue. Aftermarket net sales for the second quarter of 2025 were $268 million, an increase of 4% compared to the same period in 2024, primarily driven by product innovation and the expanding Camping World relationship within the RV aftermarket, partially offset by lower volumes within the automotive aftermarket. Gross margins for the second quarter of 2025 were 24.4% compared to 25.3% for the prior year period. The decrease was primarily due to executive separation costs related to the departure of our Chief Legal and Human Resources Officer and changes in product mix for both OEM and aftermarket segments.

Adjacent Industries OEM net sales for the second quarter of 2025 were 336 million up. 10% year-over-year primarily due to sales from acquired businesses within Transportation, which represents 32 million in the quarter.

This is partially offset by lower sales. In North American Marine, as sales were down. 15% due to the impact of inflation and still high interest rates on retail demand and based on current visibility, we expect the softness to continue.

After market, net sales for the second quarter of 2025 were 268 million and increase of 4% compared to the same period in 2024, primarily driven by product Innovation and the expanding Camping World relationship within the RV, aftermarket, partially offset by lower volumes within the automotive aftermarket.

Gross margins. For the second quarter of 2025 were 24.4% compared to 25.3% for the prior year period.

The decrease was primarily due to Executive separation costs related to the departure of our chief legal, and Human Resources officer and changes in product, mix for both OEM and aftermarket segments.

Lillian Etzkorn: Consolidated operating profit during the second quarter was $88 million, or 7.9%, a 70 basis point contraction over the prior year period. Excluding executive separation costs, operating margin was nearly flat compared to the prior year. This reflects our successful tariff mitigation strategy, where we offset $15 million in tariff and freight impacts through diversifying our supply chain, assistance from our vendors, and pricing pass-through. Our operating margin was further supported by ongoing cost improvement actions, including facility consolidations and overhead reductions, demonstrating steady progress toward our 85 basis point target. These initiatives largely offset headwinds from lower margin product mix and contractual price decreases tied to commodity indices. The operating profit margin of the OEM segment decreased to 6.2% in the second quarter of 2025, compared to 6.4% for the same period of 2024. Excluding separation expenses, OEM margin improved 10 basis points to 6.5% year-over-year.

Consolidate an operating profit during the second quarter was 88 million or 7.9% a 70 basis point contraction over the prior year period.

Excluding executive separation costs, operating margin was nearly flat compared to the prior year. This reflects our successful tariff mitigation strategy, where we offset $15 million in tariff and freight impacts through diversifying our supply chain, assistance from our vendors, and pricing pass-through.

Our operating margin was further supported by ongoing cost Improvement actions including facility consolidations and overhead reductions.

Demonstrating steady progress toward our 85 basis point target.

Is tied to commodity indices?

The operating profit margin of the OEM segment decreased to 6.2% in the second quarter of 2025 compared to 6.4% for the same period of 2024 excluding separation. Expenses, OEM margin improved 10 basis points to 6.5% year-over-year.

Lillian Etzkorn: The aftermarket segment delivered a 13.5% operating profit margin, down from 15.5% in the prior year period, driven by mix in investments and capacity and distribution processes to support growth for the aftermarket segment. However, on a sequential basis, aftermarket margins expanded nearly 500 basis points, which was stronger than the prior year's sequential improvements. GAAP net income in the second quarter was $58 million, or $2.29 earnings per diluted share, compared to net earnings of $61 million, or $2.40 per diluted share in the prior year period. Net income in the second quarter of 2025, adjusted for executive separation costs, was $60 million, or $2.39 earnings per diluted share. Adjusted EBITDA in the second quarter was $121 million, or 11% of net sales.

To a 13.5% operating profit margin down from 15.5% in the prior year, period, driven by mix and Investments, and capacity, and distribution processes to support growth for the aftermarket segment.

However, on a sequential basis aftermarket, margins expanded nearly 500 basis points which was stronger than the prior year sequential improvements.

Gaap net income in the second quarter was 58 million or $2.29 earnings per diluted share compared to net earnings of 61 million or $2.40 per diluted share in the prior year period.

Net income in the second quarter of 2025 adjusted for executive. Separation costs was 60 million or $2.39 earnings per diluted share.

Adjusted ibaon. The second quarter was 121 million or 11% of net sales.

Lillian Etzkorn: Non-cash depreciation and amortization was $60 million for the six months ended June 30, 2025, while non-cash stock-based compensation expense was $11 million for the same period. We continue to anticipate depreciation and amortization in the range of $115 to $125 million during the full year 2025. At June 30, 2025, our company's cash and cash equivalents balance was $192 million, compared to $166 million at December 31, 2024. For the six months ended June 30, 2025, cash provided by operating activities was $155 million, down $30 million from the second quarter of 2024. Investing cash inflows included $22 million used for capital expenditures and $98 million used for the acquisition. We also announced a $300 million share repurchase program during the quarter, underscoring our commitment to balanced capital allocation and shareholder returns.

Non-cash depreciation in amateurs, million dollars for the 6 months. Ended June 30th 2025.

Will non-cash, stock-based. Compensation expense was 11 million for the same period.

We continue to anticipate depreciation in the range of $115 million to $125 million during the full year 2025.

At June 30th, 2025 our company's cash and cash. Equivalents balance was 192 million compared to 166 million at December. 31st 2024,

for the 6 months end of June 30th 2025 cash provided by operating activities was 155 million.

Down 30 million from the second quarter of 2024.

Investing cash inflows included, 22 million used for Capital expenditures and 98 million used for the acquisition.

Lillian Etzkorn: This authorization provides substantial flexibility to repurchase shares opportunistically while maintaining our financial strength for strategic investment and acquisition. During the quarter, we returned to shareholders $38 million through share repurchases and $29 million through our quarterly dividend of $1.15 per share. Year to date, through August 1, 2025, we returned $187 million to shareholders in the form of dividends and share repurchases. As of June 30, 2025, our net inventory balance was $710 million, down from $737 million at December 31, 2024. At the end of the second quarter, we had outstanding net debt of $756 million, 2.1 times pro forma EBITDA, adjusted to include LTM EBITDA of acquired businesses and the impact of non-cash and other items as defined in our credit agreement. For the month of July, sales were up 5% versus July 2024 due to acquisition sales and pricing offset by lower North America RV production.

We also announced a 300 million dollar share repurchase program during the quarter. Underscoring. Our commitment to balance Capital, allocation and shareholder returns.

This authorization, provides substantial, flexibility to repurchase shares opportunistically while maintaining our financial strength for strategic Investments and acquisitions.

During the quarter, we return to shareholders 38 million through share repurchases in 29 million, through our quarterly dividend of a dollar 15 cents per share.

Year to date through August 1st 2025, we returned 187 million to shareholders in the form of dividends and share repurchases.

As of June 30th 2025, our net inventory, balance was 710 million down from 737 million at December 31st 2024.

At the end of the second quarter, we had outstanding net debt of $756 million, 2.1 times pro forma IBA adjusted to include LTM IBA of acquired businesses and the impact of non-cash and other items as defined in our credit agreements.

Lillian Etzkorn: As we think about the balance of the year, I want to remind you that historically the second half tends to be lower than the first half, and we expect that to be the case this year as well, even with the addition of our recent acquisition. For Q3, we expect overall revenue to be up 5% year-over-year, and this reflects total revenue, including our recent acquisition. We also continue to maintain our full-year 2025 forecast for North American RV wholesale shipments at $320,000 to $350,000. For Q3 2025, we expect RV OEM sales to be up about 4% to 5% over prior year. We also expect Q3 EBIT margins to be similar to 2024 levels.

For the month of July, sales were up 5% versus July 2024, due to acquisition sales and pricing, offset by lower North America RV production.

As we think about the balance of the year, I want to remind you that historically the second half tends to be lower than the first half and we expect that to be the case this year as well. Even with the addition of our recent acquisitions,

for Q3, we expect overall Revenue to be up 5% year-over-year and this reflects total revenue, including our recent acquisition,

We also continue to maintain our full-year 2025 forecast for North American RV, with wholesale shipments projected at 320,000 to 350,000.

For Q3 2025, we expect RV, OEM sales to be up about 4 to 5% over prior year. We also expect Q3 ebit. Margins to be similar to 2024 levels.

Lillian Etzkorn: Looking to capital allocation for the full year of 2025, capital expenditures are anticipated to be in the range of $50 to $70 million as we continue to focus on investing into the business and innovation. We continue our aim to utilize our balance sheet to pursue strategic opportunities that help us capture profitable growth and deliver shareholder value, while maintaining a long-term leverage target of 1.5 to 2 times net debt to EBITDA and maintain our commitment to returning cash to shareholders. In closing, we remain on track to organically achieve our $5 billion revenue target in 2027 and return to double-digit operating margins as our operational flexibility, strategic diversification, and effective cost management, along with a strong balance sheet, enable us to deliver sustainable and measurable shareholder value. That is the end of our prepared remarks. Operator, we are ready to take questions. Thank you.

Shareholder value while maintaining a long-term leverage Target of 1.5 to 2 times. Net debt to EBA, and maintain our commitment to returning cash to shareholders.

In closing, we remain on track to organically achieve. Our 5 billion Revenue Target in 2027 and returned to double digit operating margins. As our operational flexibility,

Strategic diversification and effective cost management along with the strong balance sheet, enables us to deliver sustainable and measurable shareholder value.

That is the end of our prepared. Remarks operator. We are ready to take questions. Thank you.

Lucy: Thank you, Lillian. To ask a question, please press *1 on your telephone keypad now. If you change your mind, please press *2. When preparing to ask a question, please ensure your device is unmuted locally. The first question comes from Daniel Moore of CJS Securities. Your line is now open. Please go ahead.

Thank you Lillian to ask a question. Please press star. Followed by 1 on your telephone keypad now.

If you change a mind, please press star followed by 2.

When preparing to ask a question, please, ensure your device is unmuted locally.

The first question comes from Daniel Moore of CJs Securities. Your line is now open. Please go ahead.

Daniel Moore: Thank you. Good morning, Jason. Good morning, Lillian. Thanks for taking the questions.

Thank you. Good morning, Jason. Good morning, Lillian. Thanks for taking the questions.

Jason Lippert: Morning, Dan.

Kip Emenhiser: Good morning.

Calling Dan good morning.

Daniel Moore: Let's see, a couple of things. One to start with, first inventory levels. Dealer inventories, both RV and marine, from your perspective, clearly dealers remain cautious, had some significant destock in Q2. Just trying to get a sense for where you see inventories today and what the potential impact of a restock could look like once demand starts to improve in those two end markets. Then a quick follow-up. Thanks.

Um, so I guess, let's see. A couple things wanted to start with. Um,

yeah, just

first inventory levels, you know, dealer inventory is both RV and Marine, you know, from your perspective, clearly dealers remain cautious or, you know, um,

It adds some significant dto and Q2 just trying to get a sense for you know where you where you see inventories today um and and what the potential impact of of a restock could look like once demand starts to improve uh in those 2 end markets and on a quick follow-up. Thanks.

Jason Lippert: Yeah, thanks, Dan. Excuse me. I think that, you know, the inventories, you know, like you mentioned, the dealers have been pretty cautious. I think on top of that, the OEMs have been extra cautious as well. I think those two things are going to lead. That momentum has been building for the last year and a half. When you look at going forward, I think that, you know, that cautiousness is going to continue and the discipline is going to continue. When it does lift, I do not think, excuse me, sorry, I do not think we are going to come out of this quickly. I think it is going to be a slow and gradual, steady rise once we start seeing the business lift. On the marine side, you know, probably a little bit more cautiousness there and discipline on the OEM side as well.

Yeah. Thanks Dan. I excuse me, I think that um,

You know, the the inventory is, you know, like you mentioned the the dealers have been pretty cautious. I think, on top of that, the the oems have been extra cautious as well. So I think those 2 things are are going to lead and that momentum has been building for the last year and a half. So, you know, when you look at 4 going forward, I think that you know, that cautiousness is going to continue and the discipline is going to continue. Um, and when it does lift, I don't think, excuse me, sorry, I don't think we're going to come out of this quickly, so I think it's going to be a slow and gradual steady rise. Once we, once we start seeing the business lift,

Jason Lippert: I think, you know, they are more in the middle innings than this destocking and just inventory rebalance versus the RV dealers. We have heard some really good, you know, I have talked to some of the big dealers recently, and there has been some, you know, Blue Compass went on RV business recently and talked about a really, you know, strong May and June, or May and June in the last two years. They said it was the best May and June that they have had. That is really positive. They said July was really strong. Camping World reported, you know, their numbers were fairly strong on units. I think, you know, I think we are just in a position where they are going to continue to be cautious and disciplined, and that is good and healthy for the industry.

But, you know, on the Marine side, you know, probably a little bit more cautiousness there, uh, and, and, and discipline on the OEM side as well. I think, you know, they're they're more in the, the middle middle Innings than this, this, uh, destocking and just inventory. Rebalance versus the RV. Uh, the RV dealers, so, but, you know, we've heard some really good.

You know, I talked to some of the big dealers recently, and there's been some, you know, Blue Compass went on every business recently and talked about a little, you know, strong May and June.

Jason Lippert: When it does lift, it is going to be kind of a slow and steady rise.

May and June, uh, the last 2 years, it was they said it was the best May and June that they've had. So that's really positive and they said July was really strong, so, you know, Camping World reported, you know, you know, their numbers were fairly strong on units. So I think, you know, I think we're we're just in in a position. We're going to, they're going to continue to be cautious and disciplined and and that's good. Good and healthy for the industry and then when it does, lift, it's going to be kind of a slow and steady. Rise.

Daniel Moore: That's really helpful. Just trying to triangulate the commentary from a margin perspective. So EBIT margins, I think, Lillian, you said flattish for Q3 year-over-year. Then you also sort of gave the updated tariff impact of 290 basis points before mitigating, before any mitigation efforts. Just trying to understand, is the tariff impact maybe greater than what we thought previously? If you have any thoughts in terms of what kind of an overall net margin target might look like for fiscal 25, given kind of one quarter left to go, would be super helpful. Thanks again.

That's really helpful um just trying to try and get the commentary from a margin perspective. So even if it margins, I think Lillian you said flattish for Q3 year-over-year um and then you know you also sort of gave the updated tariff

impact of 290 basis points, you know, before mitigating, you know, before any mitigation efforts.

Um so just trying to understand is is the is the Tariff impact may be greater than what we thought previously. Um, and you know, if you have any thoughts in terms of what kind of a overall net, you know, um, margin.

uh,

Target might look like, for for fiscal 25, given kind of 1 quarter, you know left uh, to go would be super helpful. Thanks again.

Kip Emenhiser: Yeah, sure, Daniel. So maybe some color, you know, around both the tariff impact and also just margins in general. When we are thinking about the tariffs, there is going to be margin compression from the perspective that we are not mitigating margin; we are mitigating the cost of the tariff with the actions that we are taking. So that does put pressure just mathematically on the margins as we go forward. The other thing I would call just in terms of some things driving some of the margin activity as we look to Q3, and it will be improving as we get to Q4, is, you know, we did just acquire some pretty meaty acquisitions with Freedman Seating and Trans/Air. So there is some cost associated with integrating and onboarding these organizations and streamlining to get the synergy.

Yeah, sure Dan. So maybe some color, you know, around both the tariffs impact and also just margins in general. Um, when we're thinking about the tariffs,

We're there's going to be margin compression from the perspective that we're not mitigating margin. We're mitigating the cost of the Tariff with the, the actions that we're taking. So that does put pressure, just mathematically on the margins as we go forward.

Kip Emenhiser: So that is also going to be a little bit of an overhead on the margin as we look to Q3 and a little bit, obviously, to Q4 as well. But we are continuing to work on the cost mitigation actions that Jason Lippert spoke of in his remarks, so targeting that 85 basis point overall improvement for 2025. But we do have some of those other factors overhanging on the margins.

Jason Lippert: Yeah, if you add the, you can add the mix headwinds as well, along with, you know, the tariffs have created, you know, rising steel prices and aluminum prices domestically. So as those, as you know, how we're indexed with a lot of our component pricing to our customers, you know, we chase that price going up until it stabilizes. Then, you know, we get whole once it stabilizes and starts either retreating or once it stays, you know, at the peak. So, you know, we got a bunch of things that we're working against there, but, you know, all those things hold right size and time.

Pretty meaty. Um, Acquisitions with Freedman and transair. So there is some cost associated with integrating and onboarding these, um, organizations and streamlining to get the Synergy. So that's also going to be a little bit of an overhead on the margin as we look to Q3 and a little bit obviously to Q4 as well. But we're continuing to work on the cost mitigation actions. Uh, the Jason spoke of in in his in his remarks. So targeting that 85 basis point overall Improvement, uh, for 2025, but we do have some of some of those other factors, um, overhanging on the margins. Yeah, if you had the, you can add the next next headwinds as well along with, you know, the, the tariffs have

Have uh, have created, you know, Rising steel prices and aluminum prices domestically. So as those, as you know, how we're index with a lot of our our um, component pricing to our customers, you know, we chase that price going up until it's until it stabilizes. And then, you know, we we get a whole once it stabilizes and starts starts to see their retreating or or once it stays

You know, at the at the peak so you know we got to we got a bunch of things that we're working against there but you know all those things will write right size and time.

Daniel Moore: Very helpful. I guess, did I hear correct that Q3 should be flattish on a year-over-year basis from an operating margin perspective? I just want to clarify that.

It very helpful I guess did. Did I hear correct? The Q3 should be flattish shiny over your basis from an operating margin perspective. So I just want to clarify that. Yeah.

Kip Emenhiser: Correct.

Daniel Moore: Okay. Very helpful. Excellent. I will circle back with any follow-ups. Thank you.

Correct. Okay, very helpful. Uh excellent. I'll I'll Circle back to let me follow up. Thank you.

Kip Emenhiser: Thank you.

Thank you.

Lucy: The next question comes from Joseph Altobello of Raymond James. Your line is now open. Please go ahead.

The next question comes from Joseph Alto of Raymond James, your line is now open. Please go ahead.

Joseph Altobello: Thanks. Good morning, everybody. Since we are talking about tariffs, I guess I will start there. It looked like the impact went from about 180 bps last quarter to now 290. I guess first, what was the biggest driver of that increase, and what is a good annualized number to use from a tariff standpoint?

Thanks, good morning, everybody. Um, since we're talking about tariffs, I guess I'll I'll start there. It looks like the impact went from

About 180 basis points, last quarter to now, 290. So I guess, I guess first, what was the biggest driver of of that increase, um, and and, and what's a good annualized number to use from a tariff standpoint.

Kip Emenhiser: Yeah, so Joe, the biggest change, if you recall, our last earnings call was the second week in April. It was right after the initial liberation day. We had assumed at that time that China tariffs would be at 20%. We have since settled, or I should say the government has since settled at 30%. That is going to be the biggest driver of change from the last time that we talked. I think just kind of taking these and annualizing it is a fair representation for the tariffs on a go-forward basis. Again, we believe that through the mitigation efforts that we have, both from the resourcing, onshoring some of the product, resourcing to other nations, and then pricing pass-throughs as appropriate, we do feel confident that we have mitigation plans in place so that we will not have an overall impact to the business on a go-forward basis.

so Joe the biggest

earning of call was,

Second week in April. So it was right after the initial Liberation day, um, we had assumed at that time that China tariffs would be a 20% we've since settled or I should say the government had since settled at 30%. So that's going to be that's going to be the biggest driver of change from the last time that we talked.

um,

And I think just you know kind of taking these an annualizing. It is is a fair representation for the tariffs on a go forward basis. Um, but again, you know, we believe that through the mitigation um efforts that we have both from the resourcing, you know, on on Shoring, some of the product resourcing to other nations and then um, you know, pricing pass throughs as appropriate. We do feel confident that we have mitigation plans in place, so that we will not have an overall impact to the business.

Um and and to go forward with basis.

Joseph Altobello: Okay. Thank you. Just to shift over to sales, it looks like, up 5% in the quarter, a little bit better than I think you had guided. Is there any impact either to Q2 or Q3 or both from the earlier RV model year changeover this year?

Okay, thank you and just to shift over to sales. It looks like, you know, up 5% in the quarter a little bit better than I think you had guided. Um, is there any impact either to Q2 or Q3 or both from the earlier RV model year, change over this year?

Jason Lippert: I do not think so. Can you be a little bit more specific there?

Joseph Altobello: Yeah, it sounds like the changeover happened in June this year versus, let's say, July last year.

I don't, I don't, I don't think so. Can you be a little bit more specific there?

Yeah, it sounds like the change over happened in June this year. Versus let's say, July last year.

Jason Lippert: Yeah, the model change startup is usually slow to start, but I would say there was no impact. We will see that happen over the course of the next 12 months. That will be where the impact is.

Yeah, I mean model change startup is usually slow uh you know slow to start but I I would say no there's no there's there was no impact, we'll start we'll see that. You know, we'll see that happen over the course of uh the next 12 months.

No, that'll be where the impact is.

Joseph Altobello: Got it. Thank you.

Got it. Thank you.

Jason Lippert: Yep.

Yep.

Lucy: The next question comes from Craig Kennison of Baird. Your line is now open. Please go ahead.

The next question comes from Craig Kennison of bed. Your line is now open. Please go ahead.

Daniel Moore: Hey, good morning. Thanks for taking my questions. Lillian, you mentioned the trend towards single-axle towable RVs, you know, maybe close to a bottom. I am just wondering if you can give us a sense for what mix normally is of single-axle and where it is today, and then confirm whether it is, maybe based on your orders, whether that trend is back in a good direction.

Hey, good morning. Thanks for taking my questions Lillian. You mentioned the trend towards single axle, towable RVs. You know, maybe close to a bottom. I'm just wondering if you can give us a sense for what mix normally is of single axle and where it is today and

And then confirm, whether it's maybe based on your orders. Whether that trend is is back uh, in a good direction.

Kip Emenhiser: Good morning, Craig. Historically, the single-axles were probably in the mid to upper teens in terms of overall mix. We have been seeing over the last, call it, 18 months, a gradual increase into the mid-20%. I think we were at 24% last quarter. In the second quarter, we have seen a little bit of an improvement there, where we are down to about 20%, 20 and a half percent in second quarter. So it was nice to see that slight improvement. Hopefully, that trend does continue. I think, as we have talked before, I think overall expectations from the industry is that we will revert back to the larger multi-axle units just because they are so much more practical for the end consumer to be able to utilize the RV in the best way possible.

Yeah, good morning Craig. So historically the single axle is, we're probably in the mid to Upper teams in terms of overall overall mix.

Kip Emenhiser: It is, when we look at a trailing 12-month basis from a content perspective, having that elevated overall mix for the past 12 months does still pressure the content, but it was nice to see in the second quarter that there was a little bit of an improvement to get back to the multi-axle.

Jason Lippert: Craig, we track that every week. Last week, it was under 20%, it averaged under 20% for the week, which is a good sign to see. We have been tracking this for a long time. If you go back 10 years, it was just under 10%. It has been gradually growing over time. As Lillian Etzkorn said, the last 18 to 24 months, it has been creeping over 20% up to 25% as a high, and we are starting to see some retreating there. That is what we want to see. We would rather see, honestly, less wholesale units and obviously bigger units and less single axles from a margin perspective.

Bit of an improvement there, um, where we're down to about 20%, 20 and a half percent in second quarter, so it was nice to see, uh, nice to see that slight Improvement. Hopefully that Trend does continue. I think as we've talked before I think overall expectations from the industry is that we will revert back to the larger, uh, multi-axle units. Just because there's so much more practical for for the end consumer to, to be able to utilize the RV in the best way possible. Um, it is when we look at a trailing 12 month basis from a Content perspective, you know, having that elevated overall. Mix for the past 12 months, does still pressure the content but it was nice to see in the second quarter that there was a little bit of an improvement to get back to the multi axle and Craig. We tracked that every week. So you know, just just last week, it was under 20 it averaged under 20% for the week which is which is a good sign to see but you know we've been tracking this for a long time. If you go back 10 years, it was

It was just under 10%. So you know, it's been gradually growing over time. And like Lillian said, the last 18 to 24 months, it's been, you know, it's been creeping over, 20% up to up, to 25%, as a high. And we're, we're starting to see some retreating there. So, that's, that's what we want to see. We'd rather see, honestly less less wholesale units. And, and that obviously bigger units and less single axles for from margin perspective.

Daniel Moore: That makes a lot of sense, but trying to reconcile that with, you know, the Camping World report where they are clearly doing really well at the most affordable or with the most affordable units. I presume those are also single axle. Is it just a change in what manufacturers are building in anticipation of a change, or can you give us the sense that this is a consumer-driven trend change and improvement?

And then that makes a lot of sense but trying to reconcile that with you know, the Camping World Report where you know they're clearly doing really well at the most affordable or with most most affordable units I presume those are also single axle is is it just a a change in what manufacturers are building and anticipation of a change or can you?

Give us the sense that this is a consumer-driven trend change and Improvement.

Jason Lippert: I think there's some of that, certainly. You know, I don't know how well you can do it at an $89.99 price point or a $12,999 price point in terms of margin. I think that's the real thing. A lot of these, I would say the majority of these single-axle trailers are getting purchased by first-time buyers. The real hope here is that the longer-term trend is that they trade up and buy something bigger, that they stay in the lifestyle and buy a bigger trailer with more content. We put a, I think Camping World especially has put a lot of energy and resources into that strategy. Now it's time to, over the next couple of years, we see some of those first-time buyers that have bought over the last few years these small units to trade up.

I think there's I think there's some of that certainly, but, you know, I don't know how well you can do it at 89.99 price point or a 12 9 12,999 price point in terms of margin. So I think that's the real thing. But, you know, a lot of these, you know, I would say the majority of these single axle trailers are are getting purchased by first-time buyers. And, you know, the real hope here is that the longer term trend is that they, they trade up and buy something bigger that they stay in the lifestyle and buy a bigger trailer with more content. So you know, um we put a I think Camping World especially is put a lot of energy and resources into that strategy. And now it's time to, you know, over the next couple of years. We see some of those those first time buyers that have bought over the last few years, these small units to trade up.

Daniel Moore: Thanks. I guess, Jason, to that end, just looking at your aftermarket business, I know you've got this view that the pandemic era orders ultimately will lead to some reorders. How much data do you have that you can track aftermarket purchase activity among people who bought during that era? Because it does feel like you could get an echo effect benefit from all the activity at that time.

Thanks, I guess Jason to that end. Just looking at your aftermarket.

Business. I know you've got this view that.

You know, the pandemic era orders ultimately will lead to some reorders. How much data do you have that? You can track.

um, you know, aftermarket purchase activity, among people who, you know, bought during that era because it it does feel like

You could get a an echo effect benefit, um, from from all the activity. At, at that time,

Jason Lippert: Yeah, I think there is probably less, you know, I think, you know, when you look at single-axle trailers specifically, I think that there is, you know, there is less aftermarket opportunity there because you are not, there is nothing really to fix up on those trailers. They are so bare when it comes to retail parts and accessorizing and upgrading and things like that. So, you know, like for example, they do not have recliners in those, and we put recliners in every single unit out there. So, you know, you cannot even fit a recliner in there. You know, there is no furniture to speak of. It is just a dinette, which is a, you know, a wood-based seat with some cushions on it.

yeah, I think that's probably the last

When you look at single-axle trailers specifically, I think that there's less aftermarket opportunity there because you're not... there’s nothing really to fix up on those trailers; they're so bare.

Jason Lippert: So, you know, you might get a mattress here or there, but, you know, the real content, you know, adders and aftermarket come with some of the bigger units. We do not have data that tracks specifically all those buyers. But our, you know, our aftermarket continues to grow, and, you know, we are continuing to do more store sets with Camping World, and, you know, we have got a pretty significant total addressable market in the aftermarket, especially with RV and automotive. So, you know, we are going to focus on continuing to sell dealers more products.

Um when it comes to retail parts and accessorizing and upgrading and things like that, so, you know, like for example, they don't have recliners in those and we put recliners and every single unit out there. So, I mean, you can't even fit a recliner in there. Um, you know, there's no furniture to speak of. It's just a dinette, which is a, you know, a a wooden base seat with some cushions on it. So, um, you know, you might get a mattress here or there but you know, the real content, you know, adders and aftermarket come with some of the some of the bigger units and

Uh, we don't have data that that tracks specifically all those buyers. Um, but our, you know, our aftermarket continues to grow and, you know, we're continuing to do more store sets with camping world. And, you know, we got a pretty significant total addressable market and and the aftermarket special with RV and Automotive. So, you know, we're going to focus on continuing to sell dealers more products.

Daniel Moore: Are you seeing any aftermarket activity from people who purchase, let's say, 2020 or 2021? Is that consumer showing up to upgrade RVs through your aftermarket products?

And I guess just to follow up. Are you seeing any aftermarket activity from people who purchase? Let's say 2020 or 2021. Is that consumer

Showing up to upgrade RVs, you know, through your aftermarket products.

Jason Lippert: It's really hard to tell. I would say that they, you know, they have to be. They have to be repairing and replacing. I mean, that is a big part of our aftermarket business. When, you know, parts and components don't work, they're going to need to come and get it fixed to a dealership, likely, and some do it yourself in some cases. But, you know, I'd say most of the time when our components break, and we've certainly put, I think we keep saying we put 50% more content into OEM vehicles since 2021, the more of those components that need repair and replacement in the aftermarket, the more are going to be likely to be ours. That's our aftermarket to get because they'll replace like for like.

Parts and components don't work, they're going to need to come and get it fixed to a dealership likely, and, and some do it yourself in some cases. But, uh, you know, I'd say most of the time when our components break and we certainly put, I think we, we keep saying we put 50% warrant content into OEM vehicle since 2021. You know the the more those components that need repair and replacement in the aftermarket the more we're going to be likely to be ours, that's our aftermarket to get because they'll replace like for like

Daniel Moore: Got it. Thank you.

got it. Well, thank you.

Jason Lippert: Thanks, Craig.

Thanks rod.

Lucy: The next question comes from Patrick Buckley of Jeffries. Your line is now open. Please go ahead.

The next question comes from Patrick Buckley of Jeffrey's. Your line is now open. Please go ahead.

Daniel Moore: Hey, good morning, guys. Thanks for taking our questions. Within the 5% growth quarter to date in July, how much of that was from acquisitions and how much of that was driven by price?

Hey, good morning guys, thanks for taking our questions.

Within the 5% growth quarter today in in July um how much of that was from Acquisitions and and how much of that was was driven by price?

Kip Emenhiser: I'd say a good portion of it was from the acquisitions. Probably 3% to 4% of that was acquisitions related.

Um, I'd say good good portion of it was from the acquisition probably 3 to 4% of that, um, with Acquisitions related.

Daniel Moore: Got it. That's helpful. Thank you. You touched a bit on this already, but as you try to think about tariff impacts moving forward, are there any specific product categories where you see opportunity to move more of the sourcing domestic, or I guess on the flip side, any categories that are structurally more weighted towards import?

Got it. That's helpful. Thank you. And then you touched a bit on this already. But as we try to think about tariff impact moving forward, are there any specific product categories where you see opportunity to move more of the sourcing domestic? Or, I guess on the flip side, any categories that are structurally more weighted towards import?

Jason Lippert: Yeah, I think, you know, that is always one of the first things we are trying to figure out with, you know, resourcing. If we are going to move a product, if we can move it back to the U.S., it is, you know, where we have the plants and capacity to do that. It is just a matter of does it do the dollars and cents make work and can we stay competitive? You know, I cannot tell you how many resources we have put toward, you know, the resourcing initiatives, you know, with people and, you know, on the quality side specifically, incoming inspection, because we have got a lot of new suppliers in the mix going to, you know, find new suppliers. Then once we find them, we have got to validate them.

Jason Lippert: You know, then there is a whole process when it comes to, you know, getting those first articles in and proving them at our place. So, you know, there is just a lot of activity there. It is a lot easier when we can, we can do that internally in the U.S. Unfortunately, there are still cost incentives, you know, outside of the U.S. to reshore and resource other countries outside of China.

Yeah, I think, you know, that's always 1 of the first things we're we're trying to figure out with, you know, resourcing. Um, if we're going to move a product, if we can move it back to the US, it's you know, we're we have the plants that capacity to do that. It's just a matter of just to do the dollars and cents make work. And can we stay competitive? But you know, I I I can't tell you how many resources we've put toward, you know, the resourcing initiatives, you know, with with people and you know, on the quality side, specifically incoming inspection because we've got a lot of new suppliers in the mix going to, you know, find new suppliers. And once we find them we've got to validate them and you know, and then there's a whole process when it comes to, you know, getting those first articles in and and proving them at our place. So, you know, there's just a lot of a lot of activity there. It's a lot easier when we can we we can do that internally in the US, but um, unfortunately this there's still cost incentives. You know, outside of the US to to reshore and resource to other other countries outside of

China.

Daniel Moore: Got it. One last quick one from us. Looking ahead to the $5 billion in revenues in 2027, is there a wholesale shipment volume number assumed for that or maybe a range there?

Got it and and then 1 last Quick 1 from us. Uh, looking ahead to the, the 5 billion in revenues in 2027, is there a wholesale, shipment volume number assumed for that or or maybe a range there.

Jason Lippert: Our assessment there is that we just return to a normalized wholesale range. If you look over the last 10 years, it's averaged between $400,000 and $415,000. I think that's the assumption there. We do feel we'll get back there over the course of the next two to three years.

Yeah, our our assessment there is that we just return to a a normalized, uh, a normalized, wholesale range. And if you look over the last 10 years it's averaged between 400 and 415,000. So I I think that's the that's the Assumption there.

And we do feel, we'll get, we do feel, we'll get back there over the over the course of the next 2 to 3 years. So

Daniel Moore: Great. Very helpful. That is all for us. Thanks, guys.

great.

Very helpful. That's all for us. Thanks, guys.

Jason Lippert: Thanks.

Thanks.

Lucy: As a reminder, to ask a question, please press star followed by one on your telephone keypad now. The next question comes from Tristan Thomas-Martin of BMO Capital Markets. Your line is now open. Please go ahead.

For reminding us to ask a question. Please press star. Followed by 1 on your telephone keypad now.

The next question comes from Tristan Thomas Martin of BMO Capital markets. Your line is now open. Please go ahead.

Jason Lippert: Hey, good morning.

Hey, good morning.

Daniel Moore: Hey.

Jason Lippert: I just want to circle back to kind of the full year operating margin. I think last quarter you kind of implied you would see 85 basis points over 2024 is 5.8. How are you thinking about that currently?

hey um, I just I want

Circle back to kind of the full year operating margin. I think last quarter you guys replied, you see 85 base points. Over 2024 is 5.8. How are you thinking about that currently?

Kip Emenhiser: I think, you know, we're still very competent in that from the perspective that we're tracking nicely for those cost saves, you know, that 85 basis points. A lot of that's driven from footprint consolidation. We've already executed a good portion of that consolidation. There's still a little bit more to come as we continue to progress through the year. We're also continuing to focus, I think we talked on the last call, you know, some pretty targeted efforts in terms of indirect spend and RFPs that we've been executing throughout the year. So I feel really confident that we are on track to deliver that for the year.

I think, you know, we're still very confident in that, from the perspective of that, we're tracking nicely. Um, for those cost saves, you know, that 85 basis points a lot of that's driven from footprint consolidation. Uh, we've already executed, uh, a good portion of that consolidation. There's still a little bit more to come as we continue to progress through the year. Um, we're also continuing to focus.

Jason Lippert: Tristan, we have, I do not know how specifically we have talked about it, but we have executed closing California, Chesney, Michigan, and Westville, Indiana. Those are three that we have undergone. Obviously, there are costs and things to close those. We have got a few more on track this year. Then a few more lined up for next year for Q2. We have got a plan there.

I think we talked on the last call, you know, some pretty targeted efforts in terms of indirect spend and rfps that we've been executing, uh, throughout the year. So feel really confident that we are on track to to deliver that for the year.

We've distressed and we've we've you know how specifically we've talked about it, but we've executed closing California chesning. Michigan and Westville Indiana. So those are, those are 3 that we've undergone and obviously there's there's costs and things to close those and we've got, you know, a few more on track this year. Um and then a few more lined up for, for next year, uh, for a second quarter. So we've got a, we've got a plan there.

Daniel Moore: Okay. But I mean, to kind of ask it slightly differently, is it the 85 basis points of kind of improvement slightly offset by a higher expected tariff impact, or does that imply maybe slightly lower than the whatever the six point whatever, or no?

Okay. Um,

Found Improvement slightly all set by a higher expected tariff impact.

Or implies maybe a slightly lower than the, whatever the 6 point, whatever or no.

Kip Emenhiser: Yeah, as I mentioned earlier in the call, the tariffs, because we're focusing on the dollar mitigation, there is some margin compression from that just naturally, right? We're not going to put margin on top of the tariff cost and try to hold that. So there is some margin deterioration because of the percentage, because we're focused on mitigating the dollars.

Yeah. So um, as I mentioned earlier in the call, so the tariffs because we're focusing on the dollar mitigation, there is some margin compression from that just naturally, right? We're not going to put margin on top of the Tariff costs and, and, uh, try to hold that. So, there is some margin deterioration because percentage on the percentage because we're

on mitigating the

Daniel Moore: Okay, got it. Then just a two-part industry question. First, how are you thinking about retail demand this year? Although if we kind of take your 320 to 350 wholesale range that I put up, I kind of factor in your RV OEM sales plus 4% to 5% comment, which I am assuming does assume some kind of price and content shared. Does that just imply a very weak or acute production volume?

Okay, got it and then just a 2-part industry question. Um, first kind of, what, how are you thinking about retail demand?

This year.

And then also, if we kind of take your 320 to 350 wholesale range,

Put up like on a factory in your RV, OEM Sales Plus 4 to 5% comment which I'm assuming does assume some kind of price and content shared is that just imply a very weak or EQ production volume.

Jason Lippert: On the retail, you know, it's obviously, we had some negative comps year over year last year and then coming into this year. So, it looks like it's stabilizing. Our plan is, our thoughts are that wholesale and retail will be pretty similar this year. So kind of that's where we're at on, that's where we're at on our retail thoughts.

So on the retail, you know, it's obviously you know we had some, some negative comps year-over-year last year and then coming into this year. So, you know, it looks like it's stabilizing and our, our plan is, you know, our thoughts are the wholesale and and Retail will be pretty similar

Um, this year.

So the kind of, that's where we're at on, that's where we're at on our retail thoughts.

Daniel Moore: Okay. Then kind of like Q4 kind of implied wholesale production?

Okay, and then kind of like Force 4 q kind of implied wholesale production.

Jason Lippert: Say that again?

Say that again.

Daniel Moore: 4Q implied wholesale production, right? The 320 to 350 range you gave kind of adjusting for the RV OEM up, I think 4 to 5 in 3Q. We are always finding that that implies a fairly soft 4Q for the industry. Is that right?

4 q, implied wholesale production, right? The 320 to 350 range. You gave kind of adjusting for the RV OEM up. I think 4 to 5 and 3 Q. We always find that that implies a fairly soft 42 for the industry.

Jason Lippert: Yeah. Yeah.

Kip Emenhiser: Yeah. Typically, that's pretty normal from a seasonality perspective. So we're not expecting anything unusual in that regard.

Jason Lippert: A lot of it is going to depend on these macro factors we keep talking about. If the environment starts to improve toward the end of the year, we could see some heavier restock by the dealers coming into the next selling season. We are hopeful for that. We are not banking on it. But we have been in this rut for two years since the fall off in late 2022. So we keep getting closer to the end of this, and the lift is coming in the next two to three quarters, likely.

Is that right? Yeah, yeah. Typically, that's pretty normal from a seasonality perspective, so we're not expecting anything unusual in that regard.

A lot of us going to depend on these macro factors, we keep talking about, you know, if if uh, you know the environment starts to improve, you know, towards the end of the year, we could, we could see some some heavier restock by the dealers coming into the, the next selling season. You know, we're hopeful for that we're not banking on it. But, uh, you know, we've been in this, we've been in this rut for, for 2 years since the the fall off in late 22. So, um, you know, we keep getting closer to the end of this and, you know, the lift is Lyft, is coming and the next

Daniel Moore: Okay. Thanks for taking all my questions.

2 to 3 quarters, likely

Okay, thanks for taking all my questions.

Jason Lippert: Thanks, Tristan.

Kip Emenhiser: Thank you.

Thanks Tristan. Thank you.

Lucy: We currently have no further questions, so I would like to hand back to Jason for any final remarks.

We currently have no further questions. I'd like to hand back to Jason for any final remarks.

Jason Lippert: Yeah, I just want to say I am really proud of the teams. I just had mentioned that we spent the last couple of years really right-sizing the business and working hard to recover from the dip that we had in the industry. So I am thankful to our teams, and it is good to see our ROIC and EBITDA in the double digits now. We are going to keep working to improve that. So thanks all for coming to the call.

Yeah, I just want to say, I'm really proud of the teams. I just did mention that we spent the last couple years really right sizing the business and working hard to recover from the, the dip that we had in the industry. So I'm thankful thankful to our teams and uh, it's good to see our roic and IBA and to double digits. Now, we're going to keep working doing that. So thanks, thanks, all for coming to the call.

Lucy: This concludes today's call. Thank you for joining. You may now disconnect.

This concludes today's call, thank you for joining. You may now disconnect your line.