Sustained growth in marine segment partially offsets continuing declines in RV market

US-based parts and components manufacturer Lippert Industries (LCI) released its third-quarter results yesterday, showing declines in its core RV OEM business being partially offset by growth in new markets including marine.

Lippert Sign

Increased penetration into new markets including marine has helped Lippert Industries offset a general slowdown in its core RV parts business

The company reported consolidated net sales of US$586.2m for the quarter ended September 30, representing a 3% decline from sales of $604.2m for the third quarter of 2018. The decline was attributed to continued double-digit wholesale shipment declines in the US domestic RV industry, as trailer and motorhome manufacturers reduce output in the face of a slowing market compounded by a bulged inventory pipeline.

A year-over-year decline in cost of sales for the quarter – $450.7m in 2019, compared against $478.3m in 2018 – produced net income for the 2019 Q3 of $35.8m, compared to net income of $33.8m for the previous year period.

On a by-segment basis, Q3 revenues for LCI’s RV OEM business were down by 9% year-over-year, and now account for 59% of the company’s total net sales as it continues on a targeted diversification strategy. Declines in RV revenues were partially offset by advancing sales penetration into new markets including equestrian, commercial vehicles and marine.

Adjacent market revenues were reported as $162.6m for the third quarter of 2019, marking a 3% YOY increase over the $157.9m reported for Q3 of 2018. This gain was augmented by growth in the net sales of aftermarket products, reported as $74.6m for the quarter and marking a 16% gain over revenues of $64.2m for the previous Q3.

Although not broken out by segment, net sales to international (i.e. non-US) markets were reported to be up by 32% overall.

LCI Industries CEO, Jason Lippert, was pleased with the company’s third-quarter performance. “We executed further on our diversification strategy in the third quarter, again delivering notable growth in our aftermarket and international sales, which now together make up over 41% of our last 12-months sales,” he said. “Importantly, we have been able to grow these businesses despite decreased recreational vehicle and marine volumes as dealers move closer to more normalised inventory levels.”