General IR Questions:

  1. What are the long-term growth drivers for the RV industry? Where does Lippert fit into this?

    • The fundamentals of the RV and boating industries are quite strong, and the RV lifestyle continues to increase in popularity among younger demographics. As Lippert continues to introduce innovative and technologically advanced products to meet the demands of these demographics, we believe there are promising growth opportunities for both Lippert and the broader RV industry.

    • As people cut back on air travel, hotel stays, cruises, and travel to large metro areas, RVs and boats provide a wonderful alternative for people to get outside and vacation safely with their families in this “new normal” environment, providing an opportunity to introduce more people to RVing and boating than ever before.

    • Whether being used for short or long trips, RVs and boats allow families to control the destination, who they are around, and, most importantly, the place where they stay, making this an ideal time to consider purchasing a boat or RV.

    • The current economic environment with favorable interest rates and low fuel prices makes RV and boat ownership more affordable to the retail consumer.

  2. How is the integration of the recent CURT acquisition progressing? Is Lippert realizing synergies as expected?

    • The integration of CURT is progressing as planned. We have continued to take advantage of new cost synergies and have already benefited from some of the cross-selling synergies, including new distribution channels, expanded dealer and customer networks, and broadened product offerings.

    • CURT has an incredibly strong reputation for product innovation, engineering, and brand excellence. We are excited about the innovation, strategy, and R&D capabilities of the overall business, and are seeing success with its latest products including BetterWeigh and Echo.

  3. How has the Aftermarket business been performing? What are your growth expectations for the segment?

    • With the addition of CURT, we more than doubled our revenues in our Aftermarket business in 2020, expanding our presence outside of our core OEM markets, serving as a key competitive advantage for Lippert as part of our diversification strategy.

    • As we continue to grow the business, and innovate new products within the aftermarket, we are confident we will be able to drive market share growth and use our size, product breadth, and customer relationships to strengthen our leadership position here.

  4. What is Lippert’s positioning and growth strategy in the Marine industry?

    • We continue to execute on the strategy that proved so successful when we transitioned from a supplier to the manufactured housing industry into a supplier to the recreational vehicle industry, leveraging existing product knowledge and expertise to deliver a wide offering of engineered components.

    • Our strategic acquisitions of prominent brands such as Taylor Made, Lewmar, and Veada have strengthened our presence in Marine, which has become our largest channel in the adjacent market category, and is a continued area of focus for portfolio expansion.

    • Lippert is also well-established as a leading supplier of marine furniture, which has been a substantial driver in adding content across our marine businesses.

    • In addition, with the acquisitions of SureShade and the PWR-ARM brand of electric biminis, Lippert is now a predominant player in North America and Europe for marine shade solutions.

COVID-19 / Recent Business Impact:

  1. Do you anticipate closing any more manufacturing facilities due to business interruptions from the COVID-19 pandemic?

    • We are not currently planning on any further temporary suspension of production, but are continuously monitoring the situation on a plant-by-plant basis to ensure the safety of our team members. Any further closures will be consistent with government mandates or due to customer closures.
  2. What is your minimum required debt payment for this fiscal year?

    • Lippert has no significant debt maturities until 2022, and we remain in compliance with our loan covenants.

  3. What does your current liquidity look like in terms of cash on-hand and credit facility availability?

    • We maintain a strong financial position supported by ample liquidity, with a current net debt position of approximately $730 million, with a cash balance of $63 million as of March 31, 2021.

    • As of March 31, 2021, we had outstanding borrowings of approximately $455 million under our existing revolving credit facility, and remaining availability of approximately $142 million under that same facility.

  4. What levers are you able to pull to reduce operating costs and preserve margins in a downturn?

    • We have pursued several actions to manage our current operating costs and generate additional efficiencies, including the following:

    • Material Costs: We are engaging in ongoing discussions with customers and vendors to determine pricing and input cost adjustments where possible.

    • Labor and Overhead Costs: We are evaluating further steps to right-size our workforce to match current demand levels and resumed production at most of our plants starting in early May. We also temporarily reduced compensation for our Executive Leadership Team and Board of Directors and reviewed other salaried personnel costs. Since the recovery in retail demand following the shutdowns early in the second quarter, most of these cost reduction measures have been reversed, yet we remain disciplined with our labor and overhead spend.

    • Working Capital Management: We closely monitored inventories and implemented aggressive strategies around working capital management to preserve our cash flow generation. Many of these working capital management measures continue currently following the rebound in retail demand experienced following the initial COVID-related shutdowns.

  5. What are your maintenance capital expenditure requirements?

    • Our annual maintenance capital expenditure requirements within a normal operating environment typically range between $25 to $30 million. We are currently evaluating these requirements to defer maintenance capital expenditure where possible.

  6. How does your business strategy change in a downturn?

    • Our business strategy does not change during a downturn. Our diversification strategy not only remains the same during a slowdown but is also a strong competitive differentiator for our business.

    • Lippert has historically gained market share during downturns due to underperformance by key competitors.

    • Our leadership team has been together more than 20 years and has a proven ability to navigate challenging operating environments, such as September 11th and the 2008 great recession. In those times, we emerged faster and stronger than our supply side peers.

  7. Are you still planning on pursuing acquisitions in the near-term?

    • Our view towards acquisitions remains unchanged, but considering the current operating environment, we are more focused on preserving cash, paying down debt, and realizing synergies from our most recent acquisitions in the near-term.

  8. Do you have any anticipated changes to your quarterly cash dividend policy?

    • We have not made any changes to our stated quarterly cash dividend policy. Our Board of Directors continually evaluates our capital allocation priorities.