LCI Industries

today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. It is now my pleasure to hand over to your host, Lillian Edscorn, CFO to begin. Please go ahead.

Good morning, everyone, and welcome to the LCI Industries third quarter 2025 conference call. I am joined on the call today by Jason Lippert, President and CEO, along with Kip Emenheiser, 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. These factors are discussed in our earnings release and in our Form 10-K and in other filings with the SEC. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements are made, except as required by law. In addition, during today's conference call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings release and investor presentation, which have been posted on the investor relations section of our website and are also available in our form 8K filed this morning with the SEC. With that, I would like to turn the call over to Jason.

Thank you, Lillian, and good morning, everyone. Welcome to LCI Industries' third quarter 2025 earnings call. This quarter, we continue to build on our ongoing and successful efforts to drive efficiency and drive benefits from our years of diversification and our relentless focus on growth. To that point, we delivered an exceptionally strong quarter with sales growth of 13% to more than $1 billion, along with solid margin improvement driven by double-digit gains across our RV and adjacent businesses. This demonstrates the continued benefit of our innovation strategy and successful integration of our recent acquisitions. Our entire organization continues to work diligently to optimize productivity, footprint, and resources, positioning the company for outperformance as the industry begins to recover from this prolonged cycle. Operating margins improved 140 basis points year over year to 7.3%, a direct result of our disciplined cost management, sustainable improvements in overhead and G&A, more favorable mix, footprint optimization, and ongoing productivity initiatives. Year to date, we successfully completed three facility consolidations with two more expected by year end. Our facility consolidation actions completed in 2025 alone are expected to generate more than $5 million in annualized savings. Collectively, these initiatives position us to deliver our 85 basis point operating margin improvement goal for the year. On the wholesale front, following a strong Elkhart open house, we expect a near-term uptick in units produced. Our chassis orders in October are up roughly 275 to 300 units per week compared to prior months. An encouraging sign of OEM confidence and proactive dealer restocking ahead of the next selling season. Turning to RV OEM, net sales were approximately 470 million up 11% year over year. This double digit growth underscores the effectiveness of our innovation strategy and the strength of our competitive mode. Total content per unit increased 6% year over year to $5,431 And so we continue to expand share across our top five product categories, chassis, appliances, axles and suspensions, furniture, and windows. Since 2020, our total content has grown an impressive 60%. Recent innovations like the Furion Chill Cube air conditioner, analog braking systems, 4K window series, SunDeck, and TCS suspension systems continue to gain momentum. Together, these platforms have reached a combined 225 million annualized run rate. more than doubling from 100 million just two quarters ago. The enthusiasm around all our new products at the Elkhart open house were tremendous. With strong OEM and dealer engagement as these new innovations showed up on many leading brands. Our ability to deliver high impact innovation supported by our customer relationships, our expansive product portfolio, scale and manufacturing expertise positions us to consistently capture 3 to 5% organic content growth annually. We also saw some easing in product mix pressure this quarter, as smaller single axle trailers declined from the mid 20% range earlier this year to about 19%, supporting both content and margin growth. Looking ahead, we expect North American RV wholesale shipments in the 340,000 to 350,000 range for 2025. As demand returns, our focus on innovation and share growth will continue to drive solid performance. net sales in our adjacent or diversified businesses were 320 million, up 22% year over year. This strong performance reflects growth across our building products, utility trailer, transportation, and marine markets. Of the total increase, approximately 39 million came from acquisitions, specifically Friedman Seeding and Transier, where synergies are tracking well ahead of schedule. Since our acquisition of Friedman Seeding, They have entered the heavy-duty bus seating market, $150 million addressable opportunity, where they are already capturing orders, showcasing our ability to scale our furniture manufacturing expertise. At TransAir, we're streamlining operations and achieving early wins consistent with our proven acquisition playbook. Subsequent to the quarter, we also expanded through the acquisition of Bigfoot Leveling in October, which broadens our hydraulic leveling system offerings, and Moss Supply, which enhances our residential window capabilities, complementing our internal window lines. Utility trailer production remains healthy at around 700,000 units per year. We're accelerating content growth through innovative new products for this market like ABS, coil spring suspension, and tire pressure monitoring systems, all helping to elevate our offerings in this market. We're also leveraging our manufacturing expertise to expand into high growth sectors like OEM and aftermarket golf cart seating, an area experiencing strong growth in residential and community living markets. Collectively, LCI's total addressable market opportunity is approximately $16 billion and strategically aligned with our core manufacturing strengths. Turning to aftermarket, net sales were $246 million, up 7% year-over-year, as our strong OEM content continues to fuel aftermarket growth. The growth in OEM content directly fuels additional revenue streams with increased demand for product enhancement and service in the aftermarket. A great example of this is our Furion air conditioners. In 2022, our OEM share was less than 5% with virtually no aftermarket presence. Today, just three years later, we've captured over 50% OEM market share, and we expect more than 20 million in aftermarket air conditioner sales this year. This formula is clear. OEM success and momentum drive aftermarket growth. To support our continued growth in the service portion of our aftermarket business, We continue to invest in service infrastructure. Year to date, over 28,000 dealer service personnel have completed our technical training programs with thousands of in-person sessions and over 1 million visits to our online tech pages. These training efforts are driving higher quality service and strong dealer partnerships. We've also expanded our service footprint, adding three new facility sites in 2025 and doubling our mobile tech staff. These investments have already increased service completions by double digits, improving speed, convenience, and customer satisfaction. All in all, LCI is a huge right to win in the aftermarket. LCI is one of the only players in the industry that truly touches every RV consumer as our components are present in nearly every unit on the road. That unmatched footprint fuels long-term aftermarket growth and positions us as a trusted partner across the entire lifecycle of RV ownership. We're also leading into new opportunities like upfitting solutions, allowing customers to add features like leveling and TCS if it wasn't included in their OEM packages. We are also partnering with campgrounds and storage centers to enhance service accessibility and convenience for our customers. With roughly 1 million RVs entering the service cycle over the next few years, we are exceptionally well positioned to capture recurring aftermarket demand. To meet rising demand in the aftermarket, we've recently opened a new state-of-the-art 600,000-square-foot distribution center in South Bend, Indiana. This facility further enhances our logistics capabilities, boosting speed, accuracy, and overall capacity while supporting our margin performance as we transition from our older, less efficient Mishawaka location. We remain disciplined in capital allocation, maintaining our industry-leading dividend yield and executing meaningful share repurchases. Here today, we have returned $215 million to shareholders with a repurchase of $129 million of stock and have paid $86 million in dividends. We have a solid balance sheet, having refinanced our convertible notes and other long-term debt earlier this year. In the third quarter, we refreshed and repriced our term loan, reducing annual interest expense by roughly $1 million and improving free cash flow. CapEx for the year is now expected to land between 45 million and 55 million, better than our prior range of 50 million to 70 million, reflecting disciplined capital project management. Looking ahead, our team's confidence continues to build given the multitude of innovation and efficiency efforts we have delivered and will continue to deliver. This should result in a sustained future growth and enhanced financial performance. As we look beyond the end of the year into 2026, we expect Continue three to 5% organic content growth from innovation and our competitive advantages, driven in part by a 225 million run rate in our top five product innovations. Manufacturing optimization, including 5 million in annual run rate savings from 2025 consolidations and eight to 10 additional consolidations planned for 2026. Better product mix normalization as single axle trailers decline. RV wholesale shipments to lift to 345,000 to 360,000 units in 2026, with near-term strength already evident, aftermarket tailwinds with approximately 1 million RVs entering the service cycle, and exploring divestiture opportunities of approximately 75 million in revenues that are diluted to the business in 2026. Together, we expect these targeted initiatives to lift operating margins to 7% to 8% in 2026. Most importantly, none of this would be possible without our incredible team, the dedication, resilience, and commitment of our 12,000 team members remain the foundation of our success. Over the past three years, we have navigated through some tremendous challenges. And today, we're operating from a position of real strength, solid cash flow and balance sheet, healthy margins, and strong customer sentiment. I'd also like to recognize the passing of our founder, my grandfather, Larry Lippert, whose vision, ingenuity, and perseverance built this company from the ground up. This culture of grit, innovation, and courage continues to define who we are today. To our teams across the globe, thank you for relentlessly serving our customers and community every day. Together, we are building a stronger, more resilient, and a truly differentiated LCI Industries. I'll now turn it over to Lillian, who will provide more detail on our financial results.