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Elkhart, Indiana - February 7, 2019 - LCI Industries (NYSE: LCII) (“LCI”, or the “Company”), through its wholly-owned subsidiary, Lippert Components, Inc., supplies domestically and internationally, a broad array of engineered components for the leading original equipment manufacturers (“OEMs”) in the recreation and industrial product markets, and the related aftermarkets of those industries, today reported full year and fourth quarter 2018 results.

“We delivered another record year with net sales reaching nearly $2.5 billion, a year-over-year increase of 15 percent. Our strategy to diversify our business through adjacent markets, the aftermarket, and internationally is clearly paying off. We saw strong growth in each of these markets, as well as a substantial increase in content per vehicle in our RV OEM segment supporting our outperformance of the industry,” said LCI Industries’ Chief Executive Officer, Jason Lippert. “While we are confident in our ability to further execute on our strategy going forward, we are cognizant of the challenges that our business and industry have faced over the last twelve months. As such, we have taken a number of actions to enhance our business in a short-term lower volume environment, including price increases to offset tariffs and higher commodity pricing and scaling back capital expenditures to boost return on investment and cash flows. As we look to 2019, we are confident we will continue to deliver solid financial and operating performance, as our entire team remains laser-focused on growth, penetrating new markets, and driving more value to our customers through unmatched innovation.”

Consolidated net sales for the full year 2018 were $2,475.8 million, an increase of 15 percent over the prior year net sales of $2,147.8 million. Net income for the full year 2018 was $148.6 million, or $5.83 per diluted share, compared to net income of $132.9 million, or $5.24 per diluted share, in 2017. Net income for 2018 and 2017 included one-time non-cash charges of $612,000 ($0.03 per diluted share) and $13.2 million ($0.52 per diluted share), respectively, related to the impact of the Tax Cuts and Jobs Act (the "TCJA"). Excluding the impact of the TCJA, adjusted net income was $149.2 million, or $5.86 per diluted share, for the full year 2018 compared to $146.1 million, or $5.76 per diluted share, for the full year 2017, as referenced in the "Supplementary Information Non-GAAP Measures" section.

Consolidated net sales for the fourth quarter of 2018 were $536.6 million, a decline of two percent from 2017 fourth quarter net sales of $547.1 million. Net income in the fourth quarter of 2018 was $20.2 million, or $0.80 per diluted share, compared to net income of $17.5 million, or $0.68 per diluted share, in the fourth quarter of 2017. Net income in the fourth quarter of 2018 and 2017 included one-time non-cash charges of $612,000 ($0.02 per diluted share) and $13.2 million ($0.52 per diluted share), respectively, related to the impact of the Tax Cuts and Jobs Act (the "TCJA"). Excluding the impact of the TCJA, adjusted net income was $20.8 million, or $0.82 per diluted share, for the fourth quarter of 2018, compared to $30.7 million, or $1.20 per diluted share, for the fourth quarter of 2017, as referenced in the "Supplementary Information Non-GAAP Measures" section.

The decrease in year-over-year net sales for the fourth quarter of 2018 reflects lower RV wholesale shipments as dealers normalize their inventory levels, offset by continued growth in the Company’s adjacent industries OEM, aftermarket, and international markets. Net sales from acquisitions completed by the Company over the twelve months ended December 31, 2018, contributed $59.2 million in the fourth quarter of 2018.

The Company’s content per travel trailer and fifth-wheel RV for the twelve months ended December 31, 2018, increased $187 to $3,450, compared to the twelve months ended December 31, 2017, of $3,263. The Company’s content per motorhome RV for the twelve months ended December 31, 2018, increased $272 to $2,491, compared to the twelve months ended December 31, 2017, of $2,219. The content increases are a result of organic growth, including new product introductions, as well as acquisitions.

The Company’s effective tax rate was 27 percent and 23 percent for the quarter and year ended December 31, 2018, compared to 60 percent and 38 percent for the quarter and year ended December 31, 2017. During the quarter ended December 31, 2018, the Company finalized its tax accounting for the TCJA and pursuant to SAB 118 and recorded a one-time non-cash charge of $612,000 ($0.02 per diluted share in the fourth quarter and $0.03 per diluted share in 2018) related to adjustments to deferred tax amounts provisionally recorded in the prior year. During the quarter ended December 31, 2017, the Company recorded a one-time non-cash charge of $13.2 million ($0.52 per diluted share in the fourth quarter and $0.52 per diluted share in 2017) related to the enactment of the TCJA which resulted in the re-measurement of certain deferred tax assets using the lower U.S. corporate income tax rate.

At December 31, 2018, the Company’s cash and cash equivalents balance was $14.9 million, a decrease of $11.1 from its balance of $26.0 million at the beginning of the year. The Company generated cash flow from operations of $156.6 million and invested $119.8 million in capital expenditures for the twelve months ended December 31, 2018. Other cash outflows included $184.8 million for acquisitions and $59.3 million for dividend payments to shareholders, and were funded primarily by net borrowings of $240.1 million on the Company’s line of credit for the twelve months ended December 31, 2018. The Company’s outstanding debt was $293.5 million at December 31, 2018.

From over 65 manufacturing and distribution facilities located throughout the United States and in Canada, Ireland, Italy, and the United Kingdom, LCI Industries, through its wholly-owned subsidiary, Lippert Components Inc., supplies, domestically and internationally, a broad array of engineered components for the leading original equipment manufacturers (“OEMs”) in the recreation and industrial product markets, consisting of recreational vehicles (“RVs”) and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing. The Company also supplies components to the related aftermarkets of these industries primarily by selling to retail dealers, wholesale distributors, and service centers. LCI’s products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; furniture and mattresses; entry, luggage, patio, and ramp doors; electric and manual entry steps; awnings and awning accessories; electronic components; televisions and sound systems; navigation systems; backup cameras; appliances; and other accessories. Additional information about LCI and its products can be found at www.lci1.com.

This press release contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company’s common stock and other matters. Statements in this press release that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.

Forward-looking statements, including, without limitation, those relating to our future business prospects, net sales, expenses and income (loss), cash flow, and financial condition, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company’s senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, in addition to other matters described in this press release, pricing pressures due to domestic and foreign competition, costs and availability of raw materials (particularly

steel and aluminum) and other components, seasonality and cyclicality in the industries to which we sell our products, availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, employee benefits, employee retention, realization and impact of expansion plans, efficiency improvements and cost reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, and increased governmental regulation and oversight, information technology performance and security, the ability to protect intellectual property, warranty and product liability claims or product recalls, interest rates, oil and gasoline prices, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and in the Company’s subsequent filings with the Securities and Exchange Commission. 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.


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2018		2017		2018		2017
(In thousands, except per share amounts)

Net sales	$	536,616	$	547,137	$	2,475,807	$	2,147,770
Cost of sales	433,362		430,344		1,955,463		1,654,656
Gross profit	103,254		116,793		520,344		493,114
Selling, general and administrative expenses	73,727		72,608		321,556		278,833

Operating profit	29,527		44,185		198,788		214,281
Interest expense, net	1,955		275		6,436		1,437
Income before income taxes	27,572		43,910		192,352		212,844
Provision for income taxes	7,393		26,446		43,801		79,960
Net income	$	20,179	$	17,464	$	148,551	$	132,884

Net income per common share:
Basic	$	0.80	$	0.70	$	5.90	$	5.31
Diluted	$	0.80	$	0.68	$	5.83	$	5.24

Weighted average common shares outstanding:
Basic	25,123		25,094		25,178		25,020
Diluted	25,305		25,505		25,463		25,375

Depreciation and amortization	$	17,787	$	14,871	$	67,526	$	54,727
Capital expenditures	$	27,305	$	26,879	$	119,827	$	87,221


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2018		2017		2018		2017
(In thousands)
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	297,479	$	360,518	$	1,440,730	$	1,405,983
Motorhomes	42,067		44,530		187,297		159,417
Adjacent industries OEMs	145,995		100,850		614,589		411,223
Total OEM Segment net sales	485,541		505,898		2,242,616		1,976,623
Aftermarket Segment:
Total Aftermarket Segment net sales	51,075		41,239		233,191		171,147
Total net sales	$	536,616	$	547,137	$	2,475,807	$	2,147,770

Operating profit:
OEM Segment	$	23,040	$	38,409	$	167,459	$	190,276
Aftermarket Segment	6,487		5,776		31,329		24,005


Total operating profit	$	29,527	$	44,185	$	198,788	$	214,281


	December 31,
	2018		2017
(In thousands)

ASSETS
Current assets
Cash and cash equivalents	$	14,928	$	26,049
Accounts receivable, net of allowances of $1,895 and $1,536 at December 31, 2018 and 2017, respectively	121,812		82,157
Inventories, net	340,615		274,748
Prepaid expenses and other current assets	49,296		34,125
Total current assets	526,651		417,079
Fixed assets, net	322,876		228,950
Goodwill	180,168		124,183
Other intangible assets, net	176,342		130,132
Deferred taxes	10,948		24,156
Other assets	26,908		21,358
Total assets	$	1,243,893	$	945,858

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities

Accounts payable, trade	$	78,354	$	79,164

Accrued expenses and other current liabilities	99,228		102,849
Total current liabilities	177,582		182,013
Long-term indebtedness	293,528		49,924
Other long-term liabilities	66,528		61,176
Total liabilities	537,638		293,113







Total stockholders’ equity	706,255		652,745
Total liabilities and stockholders’ equity	$	1,243,893	$	945,858


	Twelve Months Ended December 31,
	2018		2017
(In thousands)
Cash flows from operating activities:
Net income	$	148,551	$	132,884
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	67,526		54,727
Stock-based compensation expense	14,065		20,036
Deferred taxes	13,874		6,808
Other non-cash items	(13)		4,371
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(11,352)		(12,601)
Inventories, net	(34,730)		(78,698)
Prepaid expenses and other assets	(17,691)		(10,898)
Accounts payable, trade	(17,335)		20,727
Accrued expenses and other liabilities	(6,287)		15,346
Net cash flows provided by operating activities	156,608		152,702
Cash flows from investing activities:
Capital expenditures	(119,827)		(87,221)
Acquisitions of businesses, net of cash acquired	(184,792)		(60,588)
Proceeds from note receivable	2,000		1,500

Other investing activities	(176)		434
Net cash flows used in investing activities	(302,795)		(145,875)
Cash flows from financing activities:
Exercise of stock-based awards, net of shares tendered for payment of taxes	(16,097)		(10,531)
Proceeds from line of credit borrowings	1,387,013		28,130
Repayments under line of credit borrowings	(1,146,953)		(28,130)
Proceeds from other borrowings	4,509		—
Payment of dividends	(59,270)		(51,057)
Payment of contingent consideration related to acquisitions	(3,068)		(5,301)
Repurchases of common stock	(28,695)		—
Other financing activities	(2,373)		(59)
Net cash flows provided by (used in) financing activities	135,066		(66,948)
Net (decrease) increase in cash and cash equivalents	(11,121)		(60,121)
Cash and cash equivalents at beginning of period	26,049		86,170
Cash and cash equivalents at end of period	$	14,928	$	26,049


	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2018		2017	2018			2017
Industry Data⁽¹⁾ (in thousands of units):
Industry Wholesale Production:
Travel trailer and fifth-wheel RVs	90.3		108.2	415.0			429.5
Motorhome RVs	12.1		15.3	57.6			62.6
Industry Retail Sales:
Travel trailer and fifth-wheel RVs	63.1	(2)	68.1	416.4		(2)	401.0
Impact on dealer inventories	27.2	(2)	40.1	(1.4)		(2)	28.5
Motorhome RVs	9.0	(2)	10.1	51.7		(2)	52.8


				Twelve Months Ended
				December 31,
				2018			2017
LCI Content Per Industry Unit Produced:
Travel trailer and fifth-wheel RV				$	3,450		$	3,263
Motorhome RV				$	2,491		$	2,219


				December 31,
				2018			2017
Balance Sheet Data:
Current ratio				3.0			2.3
Total indebtedness to stockholders’ equity									0.4	0.1
Days sales in accounts receivable				27.7			17.8
Inventory turns, based on last twelve months									6.2	7.7


				2019
Estimated Full Year Data:
Capital expenditures				$ 55 - $ 65 million
Depreciation and amortization				$ 73 - $ 78 million
Stock-based compensation expense				$ 16 - $ 18 million
Annual tax rate				24% - 26%


	Three months ended December 31, 2018
(In thousands, except per share amounts)	Income before income taxes		Provision for income taxes		Net income		Effective tax rate		Diluted earnings per share
As reported GAAP	$	27,572	$	7,393	$	20,179	27	%	$	0.80
Impact of TCJA	—		(612)		612		(2)	%	0.02
Adjusted non-GAAP ⁽³⁾	$	27,572	$	6,781	$	20,791	25	%	$	0.82

	Three months ended December 31, 2017
(In thousands, except per share amounts)	Income before income taxes		Provision for income taxes		Net income		Effective tax rate		Diluted earnings per share
As reported GAAP	$	43,910	$	26,446	$	17,464	60	%	$	0.68
Impact of TCJA	—		(13,209)		13,209		(30)	%	0.52
Adjusted non-GAAP ⁽³⁾	$	43,910	$	13,237	$	30,673	30	%	$	1.20

	Twelve months ended December 31, 2018
(In thousands, except per share amounts)	Income before income taxes		Provision for income taxes		Net income		Effective tax rate		Diluted earnings per share
As reported GAAP	$	192,352	$	43,801	$	148,551	23	%	$	5.83
Impact of TCJA	—		(612)		612		(1)	%	0.03
Adjusted non-GAAP ⁽³⁾	$	192,352	$	43,189	$	149,163	22	%	$	5.86

	Twelve months ended December 31, 2017
(In thousands, except per share amounts)	Income before income taxes		Provision for income taxes		Net income		Effective tax rate		Diluted earnings per share
As reported GAAP	$	212,844	$	79,960	$	132,884	38	%	$	5.24
Impact of TCJA	—		(13,209)		13,209		(7)	%	0.52
Adjusted non-GAAP ⁽³⁾	$	212,844	$	66,751	$	146,093	31	%	$	5.76

⁽³⁾ During the fourth quarter of 2018, the Company finalized its tax accounting for the Tax Cuts and Jobs Act (the “TCJA”) and pursuant to SAB 118 recorded a one-time non-cash charge of $612,000 related to adjustments to deferred tax amounts provisionally recorded in the prior year. During the fourth quarter of 2017, the Company recorded a provisional one-time non-cash charge of $13.2 million related to the enactment of the TCJA. The charge resulted from the re-measurement of the Company’s deferred tax assets considering the TCJA’s newly enacted tax rates. This provisional amount was subject to adjustment during the measurement period of up to one year following the December 2017 enactment of the TCJA, as provided by recent SEC guidance. In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impact of enactment of the TCJA. These items represent significant charges that impacted the Company’s financial results. Net income, earnings per diluted share, and the effective tax rate are all measures for which the Company provides the reported GAAP measure and an adjusted measure. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing the Company’s operations. The Company believes that discussion of results adjusted for these items is meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.