Lci Industries 10-Q for FY2026 Q3
Lci Industries (LCII)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Lci Industries filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
LCI Industries’ board unanimously determined that Monomoy Capital Partners’ unsolicited, non-binding $101.00-per-share cash proposal was not superior and not reasonably likely to lead to a superior proposal; the pending Patrick merger still requires stockholder and regulatory approvals. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $992.48M
- down 4.2% from $1.04B a year earlier
- Net income
- $50.09M
- down 19.9% from net income of $62.49M a year earlier
- Diluted EPS
- $2.05
- down 19.6% from $2.55 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended: September 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _________________ to _________________
Commission File Number: 001-13646
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |||||||
| incorporation or organization) | Identification Number) | |||||||
| (Zip Code) | ||||||||
| (Address of principal executive offices) | ||||||||
(574 ) 535-1125
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report) N/A
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
1
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (October 30, 2026) was 24,312,075 shares of common stock.
2
LCI INDUSTRIES
TABLE OF CONTENTS
| Page | ||||||||
PART I – | ||||||||
PART II – | ||||||||
| EXHIBIT 31.1 - SECTION 302 CEO CERTIFICATION | ||||||||
| EXHIBIT 31.2 - SECTION 302 CFO CERTIFICATION | ||||||||
| EXHIBIT 32.1 - SECTION 906 CEO CERTIFICATION | ||||||||
| EXHIBIT 32.2 - SECTION 906 CFO CERTIFICATION | ||||||||
3
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Warehouse and transportation | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Operating profit | |||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
| Gain on sale of real estate | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Net foreign currency translation adjustment | ( | ( | ( | ||||||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
LCI INDUSTRIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, | December 31, | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (In thousands, except per share amount) | |||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets | |||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||
Accounts receivable, net of allowances of $ | |||||||||||||||||
| Inventories, net | |||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Total current assets | |||||||||||||||||
| Fixed assets, net | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Other intangible assets, net | |||||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||
| Other long-term assets | |||||||||||||||||
| Total assets | $ | $ | |||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Current maturities of long-term indebtedness | $ | $ | |||||||||||||||
| Accounts payable, trade | |||||||||||||||||
| Current portion of operating lease obligations | |||||||||||||||||
| Accrued expenses and other current liabilities | |||||||||||||||||
| Total current liabilities | |||||||||||||||||
| Long-term indebtedness | |||||||||||||||||
| Operating lease obligations | |||||||||||||||||
| Deferred taxes | |||||||||||||||||
| Other long-term liabilities | |||||||||||||||||
| Total liabilities | |||||||||||||||||
| Stockholders' equity | |||||||||||||||||
Common stock, par value $ | |||||||||||||||||
| Paid-in capital | |||||||||||||||||
| Retained earnings | |||||||||||||||||
| Accumulated other comprehensive income | |||||||||||||||||
| Stockholders' equity before treasury stock | |||||||||||||||||
| Treasury stock, at cost | ( | ( | |||||||||||||||
| Total stockholders' equity | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6
| LCI INDUSTRIES | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (Unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to cash flows provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Loss on extinguishment of debt | |||||||||||
| Gain on sale of real estate | ( | ( | |||||||||
| Other non-cash items | |||||||||||
| Changes in assets and liabilities, net of acquisitions of businesses: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Accounts payable, trade | ( | ||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Net cash flows provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Acquisition of businesses | ( | ||||||||||
| Proceeds from sale of real estate | |||||||||||
| Other investing activities | ( | ||||||||||
| Net cash flows used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Vesting of stock-based awards, net of shares tendered for payment of taxes | ( | ( | |||||||||
| Repayments under revolving credit facility | ( | ||||||||||
| Proceeds from term loan borrowings | |||||||||||
| Repayments under term loan and other borrowings | ( | ( | |||||||||
| Proceeds from issuance of convertible notes | |||||||||||
| Repurchase of convertible notes | ( | ( | |||||||||
| Purchases of convertible note hedge contracts | ( | ||||||||||
| Proceeds from issuance of warrants concurrent with note hedge contracts | |||||||||||
| Payment of dividends | ( | ( | |||||||||
| Repurchases of common stock | ( | ||||||||||
| Other financing activities | ( | ||||||||||
| Net cash flows used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
7
| LCI INDUSTRIES | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (Unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid during the period for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Purchase of property and equipment in accrued expenses | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
8
LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| (In thousands, except shares and per share amounts) | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Purchase of convertible note hedge contracts, net of tax | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of warrants | — | — | — | — | |||||||||||||||||||||||||||||||
| Partial unwind of convertible note hedge and warrants | — | — | — | — | |||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Repurchase of | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - September 30, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
9
LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| (In thousands, except shares and per share amounts) | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - March 31, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - June 30, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents on stock-based awards | — | ( | — | — | |||||||||||||||||||||||||||||||
| Balance - September 30, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
10
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The Condensed Consolidated Financial Statements include the accounts of LCI Industries and its wholly-owned subsidiaries ("LCII" and collectively with its subsidiaries, the "Company," "we," "us," or "our"). LCII has no unconsolidated subsidiaries. All significant intercompany balances and transactions have been eliminated.
LCII, through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI," or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation, transportation, marine, and housing industries. In addition to serving original equipment manufacturers ("OEMs"), the Company also caters to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. At September 30, 2026, the Company operated over 100 manufacturing facilities located throughout North America and Europe.
The Company's results are influenced by seasonal demand patterns, with sales and profits typically strongest in the second quarter and weakest in the fourth quarter. However, economic conditions, dealer inventory fluctuations, and consumer trends can impact these patterns. Additionally, many of the optional upgrades and non-critical replacement parts for recreational vehicles ("RVs") are purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal.
The Company is not aware of any significant events which occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Condensed Consolidated Financial Statements.
In the opinion of management, the information furnished in this Form 10-Q reflects all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented. The Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include some information necessary to conform to annual reporting requirements. Results for interim periods should not be considered indicative of results for the full year.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to product returns, sales and purchase rebates, accounts receivable, inventories, goodwill and other intangible assets, net assets of acquired businesses, income taxes, warranty and product recall obligations, self-insurance obligations, tariff refund receivables and the related pass-through to customers, operating lease right-of-use assets and obligations, asset retirement obligations, long-lived assets, pension and post-retirement benefits, stock-based compensation, segment allocations, contingent consideration, environmental liabilities, contingencies, and litigation. The Company bases its estimates on historical experience, other available information, and various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other resources. Actual results and events could differ significantly from management estimates.
Risks and Uncertainties
Negative conditions in the general economy in the United States or abroad, including conditions resulting from financial and credit market fluctuations, elevated inflation and interest rates, changes in economic policy, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other trade restrictions, geopolitical tensions, armed conflicts, natural disasters or global public health crises, have negatively impacted, and could continue to negatively impact, the Company’s business, liquidity, financial condition and results of operations.
11
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Condensed Consolidated Financial Statements presented herein have been prepared by the Company in accordance with the accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2025 and should be read in conjunction with the Notes to Consolidated Financial Statements which appear in that report.
Tariff Refunds
In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA Tariffs") were not lawful. In March 2026, the Court of International Trade ("CIT") ordered U.S. Customs and Border Protection ("CBP") to begin the refund process for importers subject to IEEPA Tariffs, and in April 2026, CBP established an online portal through which importers may submit refund requests. The Company expects to receive $119.3 million in refunds, which represents the amount of IEEPA Tariffs the Company determined it paid while such tariffs were in effect from February 2025 through February 2026.
The Company accounts for recoveries of previously incurred losses when realization is considered probable. The Company received $19.7 million and $114.6 million of IEEPA Tariff refunds during the three and nine months ended September 30, 2026, respectively. The Company also received $0.7 million and $4.4 million of related interest income during the three and nine months ended September 30, 2026, respectively, which is included in interest expense, net in the Condensed Consolidated Statement of Income. Based on the status of the refund process and information currently available, the Company determined that recovery of the remaining IEEPA Tariffs previously paid was probable and recorded a receivable of $4.7 million at September 30, 2026, which is included in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet. During the nine months ended September 30, 2026, the Company recognized $104.8 million as a reduction of cost of sales, reflecting the reversal of IEEPA Tariff costs previously recognized in connection with inventory sold to customers. At September 30, 2026, the carrying value of inventory on hand includes a reduction of $4.8 million related to refunds of IEEPA Tariff costs previously recognized.
The Company expects to pass through a portion of the IEEPA Tariff refunds received to certain customers. During each of the three and nine months ended September 30, 2026, the Company passed through $57.6 31.2 million, which is included in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet, and reflects the remaining amount of IEEPA Tariff refunds that the Company expects to pass through to certain customers. The Company recorded a corresponding reduction to net sales of $88.8 million during the nine months ended September 30, 2026 related to the total amount of IEEPA Tariff refunds passed through or expected to be passed through to customers.
The ultimate amount and timing of any remaining recovery and related payments to customers remain subject to uncertainty, including the outcome of the U.S. government’s appeal of the CIT order. Any changes in the estimated recovery or related customer pass-through obligations will be recognized in the period in which such changes are determined.
Recent Accounting Pronouncements
Recently issued accounting pronouncements not yet adopted
In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in Accounting Standards Codification 270, Interim Reporting, and clarify when it applies. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project; and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for fiscal years beginning after
12
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the notes to the financial statements for both annual and interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
3. EARNINGS PER SHARE
The following reconciliation details the denominator used in the computation of basic and diluted earnings per share for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Weighted average shares outstanding for basic earnings per share | |||||||||||||||||||||||
| Common stock equivalents pertaining to stock-based awards | |||||||||||||||||||||||
| Weighted average shares outstanding for diluted earnings per share | |||||||||||||||||||||||
| Equity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutive | |||||||||||||||||||||||
2030 Convertible Notes
For the Company's 3.000 percent convertible senior notes due 2030 (the "2030 Convertible Notes") issued in March 2025, the dilutive effect is calculated using the if-converted method. The Company is required, pursuant to the indenture governing the 2030 Convertible Notes, dated March 14, 2025, by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the "2030 Notes Indenture”), to settle the principal amount of the 2030 Convertible Notes in cash and may elect to settle the remaining conversion obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company’s common stock, or a combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the conversion obligation, assuming all the 2030 Convertible Notes are converted. Because the average closing price of the Company’s common stock, which is used as the basis for determining the dilutive effect on earnings per share, for each of the three and nine months ended September 30, 2026 was below the conversion price of $116.62 , the associated shares were considered antidilutive.
In conjunction with the issuance of the 2030 Convertible Notes, the Company, in privately negotiated transactions with certain commercial banks (the “2030 Counterparties”), sold warrants to purchase 3.9 million shares of the Company’s common stock (the “2030 Warrants”). The 2030 Warrants have a strike price of $182.94 per share, subject to customary anti-dilution adjustments. For calculating the dilutive effect of the 2030 Warrants, the Company uses the treasury stock method, which assumes exercise of the 2030 Warrants at the beginning of the period, or at time of issuance if later, and issuance of shares of common stock upon exercise. Proceeds from the exercise of the 2030 Warrants are assumed to be used to repurchase shares of the Company’s common stock at the average market price during the period. The incremental shares, representing the number of shares assumed to be received upon the exercise of the 2030 Warrants less the number of shares repurchased, are included in diluted shares. For each of the three and nine months ended September 30, 2026, the average share price was below the Warrant strike price of $182.94 per share, and therefore 3.9 million shares were considered antidilutive.
In connection with the issuance of the 2030 Convertible Notes, the Company entered into privately negotiated call option contracts on the Company’s common stock (the “2030 Convertible Note Hedge Transactions”) with the 2030 Counterparties. The aggregate cost to the Company of the 2030 Convertible Note Hedge Transactions was $67.6 million
13
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
pursuant to the 2030 Convertible Note Hedge Transactions. The 2030 Convertible Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2030 Convertible Notes, approximately 3.9 million shares of the Company’s common stock, the same number of shares initially underlying the 2030 Convertible Notes, at a strike price of approximately $116.62 , subject to customary anti-dilution adjustments. The 2030 Convertible Note Hedge Transactions will expire upon the maturity of the 2030 Convertible Notes, subject to earlier exercise or termination. Exercise of the 2030 Convertible Note Hedge Transactions would reduce the number of shares of the Company’s common stock outstanding, and therefore would be antidilutive.
2026 Convertible Notes
For the Company's 1.125 percent convertible senior notes due 2026 (the "2026 Convertible Notes") issued in May 2021, the dilutive effect is calculated using the if-converted method. Prior to maturity, the Company was required, pursuant to the indenture governing the 2026 Convertible Notes, dated May 13, 2021, by and between the Company and U.S. Bank National Association, as trustee (the "2026 Notes Indenture"), to settle the principal amount of the 2026 Convertible Notes in cash and could have elected to settle the remaining conversion obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company's common stock, or a combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the conversion obligation, assuming all the 2026 Convertible Notes had been converted. Because the average closing price of the Company's common stock, which is used as the basis for determining the dilutive effect on earnings per share, for the nine months ended September 30, 2026 was less than the adjusted conversion price of $157.01 , all associated shares were antidilutive. The remaining outstanding principal balance of the 2026 Convertible Notes was paid in cash at maturity in May 2026, and no shares of the Company's common stock were issued upon maturity of the 2026 Convertible Notes.
In conjunction with the issuance of the 2026 Convertible Notes, the Company, in privately negotiated transactions with certain commercial banks (the "2026 Counterparties"), sold warrants to purchase 2.8 million shares of the Company's common stock (the "2026 Warrants"). The 2026 Warrants have a strike price of $245.41 per share, as adjusted for and subject to customary anti-dilution adjustments. For calculating the dilutive effect of the 2026 Warrants, the Company uses the treasury stock method, which assumes exercise of the 2026 Warrants at the beginning of the period, or at time of issuance if later, and issuance of shares of common stock upon exercise. Proceeds from the exercise of the 2026 Warrants are assumed to be used to repurchase shares of the Company's common stock at the average market price during the period. The incremental shares, representing the number of shares assumed to be received upon the exercise of the 2026 Warrants less the number of shares repurchased, are included in diluted shares. Concurrently with the 2026 Convertible Note Repurchases (as defined below), we entered into agreements to terminate a proportionate amount of the 2026 Warrants, which resulted in a reduction of the number of shares of common stock underlying the 2026 Warrants to an aggregate of 0.6 million shares of common stock. The remaining 2026 Warrants expired unexercised on August 15, 2026. For each of the three and nine months ended September 30, 2026, the average share price was below the 2026 Warrant adjusted strike price of $245.41 per share, and therefore 0.6
In connection with the issuance of the 2026 Convertible Notes, the Company entered into privately negotiated call option contracts on the Company's common stock (the "2026 Convertible Note Hedge Transactions") with the 2026 Counterparties. The Company paid an aggregate amount of $100.1 million to the 2026 Counterparties pursuant to the 2026 Convertible Note Hedge Transactions. The 2026 Convertible Note Hedge Transactions initially covered, subject to anti-dilution adjustments substantially similar to those in the 2026 Convertible Notes, approximately 2.8 million shares of the Company's common stock, the same number of shares initially underlying the 2026 Convertible Notes, at an initial strike price of approximately $165.65 , subject to customary anti-dilution adjustments. Concurrently with the 2026 Convertible Note Repurchases, we entered into agreements to terminate a proportionate amount of the 2026 Convertible Note Hedge Transactions, which resulted in a reduction of the number of shares of common stock underlying the 2026 Convertible Note Hedge Transactions to an aggregate of 0.6 million shares of common stock. The remaining 2026 Convertible Note Hedge Transactions expired unexercised upon the maturity of the 2026 Convertible Notes in May 2026. Exercise of the 2026 Convertible Note Hedge Transactions would have reduced the number of shares of the Company's common stock outstanding, and therefore would have been antidilutive.
14
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Changes in the carrying amount of goodwill by reportable segment were as follows:
| (In thousands) | OEM Segment | Aftermarket Segment | Total | ||||||||||||||
| Net balance – December 31, 2025 | $ | $ | $ | ||||||||||||||
| Purchase accounting adjustments | ( | ( | ( | ||||||||||||||
| Foreign currency translation | ( | ( | ( | ||||||||||||||
Net balance – September 30, 2026 | $ | $ | $ | ||||||||||||||
Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.
Other Intangible Assets
Other intangible assets consisted of the following at September 30, 2026:
| (In thousands) | Gross Cost | Accumulated Amortization | Net Balance | Estimated Useful Life in Years | |||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | to | |||||||||||||||||||||||||
| Patents | to | ||||||||||||||||||||||||||||
| Trade names (finite life) | to | ||||||||||||||||||||||||||||
| Trade names (indefinite life) | — | Indefinite | |||||||||||||||||||||||||||
| Non-compete agreements | to | ||||||||||||||||||||||||||||
| Other | to | ||||||||||||||||||||||||||||
| Other intangible assets | $ | $ | $ | ||||||||||||||||||||||||||
Other intangible assets consisted of the following at December 31, 2025:
| (In thousands) | Gross Cost | Accumulated Amortization | Net Balance | Estimated Useful Life in Years | |||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | to | |||||||||||||||||||||||||
| Patents | to | ||||||||||||||||||||||||||||
| Trade names (finite life) | to | ||||||||||||||||||||||||||||
| Trade names (indefinite life) | — | Indefinite | |||||||||||||||||||||||||||
| Non-compete agreements | to | ||||||||||||||||||||||||||||
| Other | to | ||||||||||||||||||||||||||||
| Other intangible assets | $ | $ | $ | ||||||||||||||||||||||||||
15
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
5. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out (FIFO) method) or net realizable value. Cost includes material, labor, and overhead. Inventories consisted of the following at:
| September 30, | December 31, | ||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||
| Raw materials | $ | $ | |||||||||||||||
| Work in process | |||||||||||||||||
| Finished goods | |||||||||||||||||
| Inventories, net | $ | $ | |||||||||||||||
At September 30, 2026 and December 31, 2025, the Company had recorded inventory obsolescence reserves of $82.8 million and $80.4 million, respectively.
6. FIXED ASSETS
Fixed assets consisted of the following at:
| September 30, | December 31, | ||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||
| Fixed assets, at cost | $ | $ | |||||||||||||||
| Less accumulated depreciation and amortization | |||||||||||||||||
| Fixed assets, net | $ | $ | |||||||||||||||
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following at:
| September 30, | December 31, | ||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||
| Employee compensation and benefits | $ | $ | |||||||||||||||
| Accrued tariff pass-through obligation | |||||||||||||||||
| Current portion of accrued warranty | |||||||||||||||||
| Customer rebates | |||||||||||||||||
| Other | |||||||||||||||||
| Accrued expenses and other current liabilities | $ | $ | |||||||||||||||
Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty obligations, the Company considers various factors, including the Company's historical warranty costs, warranty claim lag, and sales. The following table provides a reconciliation of the activity related to the Company's accrued warranty, including both the current and long-term portions, for the nine months ended September 30:
| (In thousands) | 2026 | 2025 | |||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||
| Provision for warranty expense issued during the period | |||||||||||||||||
| Provision for warranty expense for preexisting warranties | |||||||||||||||||
| Warranty costs paid | ( | ( | |||||||||||||||
| Balance at end of period | |||||||||||||||||
| Less long-term portion | ( | ( | |||||||||||||||
| Current portion of accrued warranty at end of period | $ | $ | |||||||||||||||
16
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. LONG-TERM INDEBTEDNESS
Long-term debt consisted of the following at:
| September 30, | December 31, | ||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||
| 2030 Convertible Notes | $ | $ | |||||||||||||||
| 2026 Convertible Notes | |||||||||||||||||
| Term Loan | |||||||||||||||||
| Revolving Credit Loan | |||||||||||||||||
| Other | |||||||||||||||||
| Unamortized deferred financing fees | ( | ( | |||||||||||||||
| Less current portion | ( | ( | |||||||||||||||
| Long-term indebtedness | $ | $ | |||||||||||||||
Credit Agreement
The Company and certain of its subsidiaries are party to a credit agreement dated March 25, 2025 with JPMorgan Chase, N.A., as a lender and administrative agent, and other bank lenders, which was amended by an Amendment No. 1 dated September 26, 2025 ("Amendment No. 1" and the credit agreement as amended, the "Credit Agreement"). The Credit Agreement provides for a $600.0 million revolving credit facility (of which up to $50.0 million is available for the issuance of letters of credit (the "LC Facility") and up to $400.0 million is available in approved foreign currencies). The Credit Agreement also provides for term loans (the "Term Loans") to the Company in an aggregate principal amount of $400.0 million. The maturity date of the Term Loans is March 25, 2032 and the maturity date of the revolving credit facility is March 25, 2030 or, if earlier, the date that is 91 days prior to the scheduled maturity date of any 2030 Convertible Notes outstanding at any such time or the date on which the revolving commitments are reduced to zero or otherwise terminated. The Term Loans are required to be repaid in equal $1.0 million quarterly installments, which commenced on June 30, 2025. The Credit Agreement also permits the Company to request incremental loans under the Credit Agreement and certain other incremental equivalent debt in an aggregate incremental amount equal to the sum of (A) up to the greater of (i) $371.0 million and (ii) an amount equal to 100% of EBITDA for the most recently ended four consecutive fiscal quarters for which financial statements have been delivered pursuant to the Credit Agreement (the “Fixed Incremental Amount”), (B) the amount of any voluntary prepayments of any term loans, incremental equivalent debt or permanent reductions of the revolving commitments as in effect as of the date of the Credit Agreement (which amount shall replenish, but not exceed, the Fixed Incremental Amount), and (C) an unlimited additional amount of additional debt that meets certain requirements set forth in the Credit Agreement, including limitations on any incremental facility that is secured on a pari passu basis or junior basis with the debt under the Credit Agreement, in each case subject to the willingness of the lenders to fund such increase and other customary conditions as further set forth in the Credit Agreement.
Borrowings under the Credit Agreement in U.S. dollars are designated from time to time by the Company to bear interest at either (i) a base rate plus an applicable margin which (a) for borrowings under the revolving credit facility, ranges from 0.25 percent to 1.00 percent depending on the Company's total net leverage ratio (0.25 percent would have been applicable at September 30, 2026 if the Company had elected base rate loans for any revolving credit facility borrowings) and (b) for Term Loans, is 1.25 percent or (ii) a term Secured Overnight Financing Rate ("SOFR") for an interest period selected by the Company plus an applicable margin, which (a) for borrowings under the revolving credit facility ranges from 1.25 percent to 2.00 percent (1.25 percent would have been applicable at September 30, 2026 if the Company had elected term benchmark loans for any revolving credit facility borrowings) depending on the Company’s total net leverage ratio and (b) for any Term Loans, is 2.25 percent. Foreign currency borrowings bear interest at an index rate available in such currencies plus the same additional interest margins applicable to term SOFR benchmark loans under the revolving credit facility based on the Company's total net leverage ratio. At September 30, 2026, the Company had $4.6 million in issued, but undrawn, standby letters of credit under the LC Facility. A commitment fee ranging from 0.175 percent to 0.275 percent (0.175 percent was applicable at September 30, 2026) depending on the Company's total net leverage ratio accrues on the actual daily amount that the revolving commitment exceeds the revolving credit exposure.
17
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Pursuant to the Credit Agreement, the Company shall not permit its net leverage ratio to exceed certain limits, shall maintain a minimum interest coverage ratio, and must comply with certain other covenants. At September 30, 2026, the Company was in compliance with all financial covenants. The maximum net leverage ratio covenant limits the amount of consolidated outstanding indebtedness that the Company may incur on a trailing twelve-month EBITDA, and there are certain other limitations on the incurrence of indebtedness under the Credit Agreement. Availability under the Company’s revolving credit facility was $595.4 million at September 30, 2026. The Company believes the availability under the revolving credit facility under the Credit Agreement, along with its cash flows from operations, are adequate to finance the Company's anticipated cash requirements for the next twelve months.
At September 30, 2026, the fair value of the Company's floating rate long-term debt under the Credit Agreement approximates the carrying value, as estimated using quoted market prices and discounted future cash flows based on similar borrowing arrangements.
In March 2025, the Company used a portion of the proceeds of the Term Loans to repay the remaining outstanding principal of the term loan under the previous credit agreement of $280.0 million, and the previous credit agreement was terminated. The Company recognized a loss on extinguishment of debt related to the previous term loan of $1.9 million during the nine months ended September 30, 2025. As described above, in September 2025, the Company entered into Amendment No. 1 to reprice the Term Loans, resulting in a reduction in the applicable margins by 0.25 percent.
Convertible Notes
2030 Convertible Notes
On March 14, 2025, the Company issued $460.0 million in aggregate principal amount of 2030 Convertible Notes in a private placement to certain qualified institutional buyers, resulting in net proceeds to the Company of approximately $447.0 million after deducting the initial purchasers’ discounts and offering expenses paid by the Company. The 2030 Convertible Notes bear interest at a coupon rate of 3.000 percent per annum, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2025. The 2030 Convertible Notes will mature on March 1, 2030, unless earlier converted, redeemed, or repurchased, in accordance with their terms.
As of September 30, 2026, the conversion rate of the 2030 Convertible Notes was 8.5745 shares of the Company’s common stock per $1,000 principal amount of the 2030 Convertible Notes. The conversion rate of the 2030 Convertible Notes is subject to further adjustment upon the occurrence of certain specified events. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2030 Notes Indenture) or upon a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2030 Convertible Notes in connection with such make-whole fundamental change or notice of redemption, as the case may be.
Prior to the close of business on the business day immediately preceding November 1, 2029, the 2030 Convertible Notes are convertible at the option of the holders only under certain circumstances as set forth in the 2030 Notes Indenture. On or after November 1, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2030 Convertible Notes at any time. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2030 Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock, or a combination of cash and shares of the Company's common stock, at the Company's election, in respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the 2030 Convertible Notes being converted.
The Company may not redeem the 2030 Convertible Notes prior to March 6, 2028, except in the event of a Cleanup Redemption (as defined below). Beginning on March 6, 2028, the Company may redeem for cash all or any portion of the 2030 Convertible Notes, at the Company's option, if (i) the last reported sale price of the Company's common stock has been at least 130 percent of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (ii) the Liquidity Conditions (as defined in the 2030 Notes Indenture) are met at a redemption price equal to 100 percent of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, the Company may redeem for cash all, but not less than all, of the 2030 Convertible Notes at any time at a redemption price equal to 100 percent of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date if (i) the amount of the 2030 Convertible Notes that remains outstanding is less than 25 percent
18
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
of the aggregate principal amount of the 2030 Convertible Notes initially issued under the 2030 Notes Indenture and (ii) the Liquidity Conditions are met (such redemption, a “Cleanup Redemption”). Upon the occurrence of a fundamental change (as defined in the 2030 Notes Indenture), subject to certain conditions and a limited exception, holders of the 2030 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2030 Convertible Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price equal to 100 percent of the principal amount of the 2030 Convertible Notes to be repurchased, plus accrued and unpaid interest on such 2030 Convertible Notes to, but excluding, the fundamental change repurchase date (as defined in the 2030 Notes Indenture).
The 2030 Convertible Notes are senior unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the 2030 Convertible Notes, equal in right of payment with all the Company's liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's subsidiaries. The 2030 Notes Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the named trustee or the holders of at least 25 percent of the aggregate principal amount of the outstanding 2030 Convertible Notes may declare 100 percent of the principal of, and accrued and unpaid interest, if any, on all the outstanding 2030 Convertible Notes to be due and payable.
The 2030 Convertible Notes are not registered securities nor listed on any securities exchange but may be actively traded by qualified institutional buyers. The fair value of the 2030 Convertible Notes of $457.1 million at September 30, 2026 was estimated using Level 1 inputs, as it is based on quoted prices for these instruments in active markets.
2026 Convertible Notes
On May 13, 2021, the Company issued $460.0 million in aggregate principal amount of 2026 Convertible Notes in a private placement to certain qualified institutional buyers, resulting in net proceeds to the Company of approximately $447.8 million after deducting the initial purchasers' discounts and offering expenses paid by the Company. The 2026 Convertible Notes bore interest at a coupon rate of 1.125 percent per annum, paid semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021.
On March 14, 2025, the Company settled certain separate, privately negotiated transactions (the "2026 Convertible Note Repurchases") with certain holders of the 2026 Convertible Notes to repurchase $368.0 million aggregate principal amount of the 2026 Convertible Notes using $370.3 million of the net proceeds received from the issuance of the 2030 Convertible Notes. In connection with the 2026 Convertible Note Repurchases, the Company recorded a loss on extinguishment of debt of $6.2 million during the nine months ended September 30, 2025. Concurrently with the 2026 Convertible Note Repurchases, the Company entered into agreements to terminate a proportionate amount of the 2026 Warrants and the 2026 Convertible Note Hedge Transactions, which resulted in net proceeds to the Company of $1.4 million.
On May 15, 2026, the Company paid in cash the remaining outstanding principal amount of the 2026 Convertible Notes of $92.0 million at maturity, together with accrued and unpaid interest. No shares of the Company's common stock were issued in connection with the maturity and repayment of the 2026 Convertible Notes. The remaining 2026 Convertible Note Hedge Transactions expired unexercised upon the maturity of the 2026 Convertible Notes in May 2026, and the remaining 2026 Warrants began to expire in August 2026.
19
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9. LEASES
The Company leases certain manufacturing and warehouse facilities, administrative office space, semi-tractors, trailers, forklifts, and other equipment through operating leases with unrelated third parties. The components of lease expense were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Short-term lease expense | |||||||||||||||||||||||||||||||||||
| Variable lease expense | |||||||||||||||||||||||||||||||||||
| Total lease expense | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
10. COMMITMENTS AND CONTINGENCIES
Holdback Payments and Contingent Consideration
From time to time, the Company finances a portion of its business combinations with deferred acquisition payments ("holdback payments") and/or contingent earnout provisions. Holdback payments are accrued at their discounted present value. As required, the liability for contingent consideration is measured at fair value quarterly, considering actual sales of the acquired products, updated sales projections, and the updated market participant weighted average cost of capital. Depending upon the weighted average costs of capital and future sales of the products which are subject to contingent consideration, the Company could record adjustments in future periods. Holdback payment and contingent consideration balances were not material at September 30, 2026.
Product Recalls
From time to time, the Company cooperates with, and assists its customers on, their product recalls and inquiries, and occasionally receives inquiries directly from the National Highway Traffic Safety Administration regarding reported incidents involving the Company’s products. As a result, the Company has incurred expenses associated with product recalls from time to time and may incur expenditures for future investigations or product recalls. Product recall reserves were not material at September 30, 2026.
Environmental
The Company's operations are subject to certain complex Federal, state, and local regulatory requirements governing the use, storage, handling, discharge, transport, and disposal of hazardous materials during the manufacturing processes. Although the Company believes its operations have been consistent with prevailing industry standards and are in substantial compliance with applicable environmental laws and regulations, one or more of the Company’s current or former operating sites, or adjacent sites owned by third-parties, have been affected, and may in the future be affected, by releases of hazardous materials. As a result, the Company may incur expenditures for future investigation and remediation of these sites, including in conjunction with voluntary remediation programs or third-party claims. Environmental reserves were not material at September 30, 2026.
Litigation
In the normal course of business, the Company is subject to proceedings, lawsuits, regulatory agency inquiries, and other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2026, would not be material to the Company's financial position or results of operations.
20
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
11. STOCKHOLDERS' EQUITY
The following table summarizes information about shares of the Company's common stock at:
| September 30, | December 31, | ||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||
| Common stock authorized | |||||||||||||||||
| Common stock issued | |||||||||||||||||
| Treasury stock | |||||||||||||||||
| Common stock outstanding | |||||||||||||||||
The table below summarizes the regular quarterly dividends declared and paid during the periods ended September 30, 2026 and December 31, 2025:
| (In thousands, except per share data) | Per Share | Record Date | Payment Date | Total Paid | |||||||||||||||||||
| First Quarter 2025 | $ | 03/07/25 | 03/21/25 | $ | |||||||||||||||||||
| Second Quarter 2025 | 05/30/25 | 06/13/25 | |||||||||||||||||||||
| Third Quarter 2025 | 08/29/25 | 09/12/25 | |||||||||||||||||||||
| Fourth Quarter 2025 | 11/28/25 | 12/12/25 | |||||||||||||||||||||
| Total 2025 | $ | $ | |||||||||||||||||||||
| First Quarter 2026 | $ | 03/13/26 | 03/27/26 | $ | |||||||||||||||||||
| Second Quarter 2026 | 05/29/26 | 06/12/26 | |||||||||||||||||||||
| Third Quarter 2026 | 08/21/26 | 09/04/26 | |||||||||||||||||||||
| Total 2026 | $ | $ | |||||||||||||||||||||
Amended 2018 Plan
On May 12, 2026, the Company's stockholders approved the LCI Industries Amended 2018 Omnibus Incentive Plan (as amended, the "2018 Plan"). The amended 2018 Plan increased the number of shares available for issuance under the 2018 Plan by an additional 992,898 shares and extended the term of the 2018 Plan by 10 years to May 12, 2036.
Deferred and Restricted Stock Units
The 2018 Plan provides for the grant or issuance of stock units, including those that have deferral periods, such as deferred stock units ("DSUs"), and those with time-based vesting provisions, such as restricted stock units ("RSUs"), to directors, employees, and other eligible persons. Recipients of DSUs and RSUs are entitled to receive shares at the end of a specified vesting or deferral period. Holders of DSUs and RSUs receive dividend equivalents based on dividends granted to holders of the common stock, which dividend equivalents are payable in additional DSUs and RSUs, and are subject to the same vesting criteria as the original grant. DSUs vest (i) ratably over the service period, (ii) at a specified future date, or (iii) for certain officers, based on achievement of specified performance conditions. RSUs vest (i) ratably over the service period or (ii) at a specified future date. In connection with the Company's CEO transition and the termination of employment of certain other employees in the second quarter of 2026, the vesting schedules of certain RSUs were modified or accelerated, as applicable,
21
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
pursuant to contractual obligations. In addition, DSUs are issued in lieu of certain cash compensation. Transactions in DSUs and RSUs under the 2018 Plan are summarized as follows:
| Number of Shares | Weighted Average Price | ||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
| Issued | |||||||||||
| Granted | |||||||||||
| Dividend equivalents | |||||||||||
| Forfeited | ( | ||||||||||
| Vested | ( | ||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||
Performance Stock Units
The 2018 Plan provides for performance stock units ("PSUs") that vest at a specific future date based on achievement of specified performance conditions. In connection with the Company's CEO transition and the termination of employment of certain other employees in the second quarter of 2026, the vesting schedules of certain PSUs were modified pursuant to contractual obligations. Transactions in PSUs under the 2018 Plan are summarized as follows:
| Number of Shares | Weighted Average Price | ||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Dividend equivalents | |||||||||||
| Forfeited | ( | ||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||
Stock Repurchase Programs
In May 2022, the Company's Board of Directors authorized a stock repurchase program (the "2022 Share Repurchase Program") granting the Company authority to repurchase up to $200.0 million of the Company's common stock over a three-year period, which ended on May 19, 2025. The timing of stock repurchases, and the number of shares, were dependent upon market conditions and other factors. Share repurchases could be made in the open market and/or in privately negotiated transactions in accordance with applicable securities laws. The stock repurchase program was subject to modification, suspension, or termination at any time by the Board of Directors. In March 2025, the Company purchased 308,898 shares at a weighted average price of $91.47 per share, totaling $28.4 million, including excise tax, under the 2022 Share Repurchase Program. Following such repurchase, no additional shares were purchased under the 2022 Share Repurchase Program prior to its expiration on May 19, 2025.
In May 2025, the Company's Board of Directors authorized a new stock repurchase program (the "2025 Share Repurchase Program") for the purchase of up to $300.0 million of the Company's common stock over a three-year period ending on May 15, 2028. The timing of stock repurchases, and the number of shares, will depend upon market conditions and other factors. Share repurchases, if any, will be made in privately negotiated and/or open market transactions, such as in compliance with Rule 10b-18 of the Securities Act of 1934, as amended (the "Exchange Act"), and/or pursuant to a trading plan in accordance with Rule 10b5-1 of the Exchange Act, or a combination of methods. The stock repurchase program may be modified, suspended, or terminated at any time by the Board of Directors. No shares were repurchased during the nine months ended September 30, 2026. As of September 30, 2026, there was $200.0 million remaining for the repurchase of shares under the 2025 Share Repurchase Program.
22
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
12. SEGMENT REPORTING
The Company has
The OEM Segment, which accounted for 74 percent and 77 percent of consolidated net sales for the nine months ended September 30, 2026 and 2025, respectively, manufactures and distributes a broad array of highly engineered components for the leading OEMs in the recreation and transportation markets, consisting of RVs and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; trains; manufactured homes; and modular housing. Approximately 47 percent of the Company's OEM Segment net sales for the nine months ended September 30, 2026 were of components for travel trailer and fifth-wheel RVs.
The Aftermarket Segment, which accounted for 26 percent and 23 percent of consolidated net sales for the nine months ended September 30, 2026 and 2025, respectively, supplies engineered components to the related aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. The Aftermarket Segment also includes biminis, covers, buoys, and fenders to the marine industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, tankless water heaters, and the sale of replacement glass and awnings to fulfill insurance claims.
The Company's chief operating decision maker ("CODM") is its Interim Chief Executive Officer. The decisions concerning the allocation of the Company's resources are made by the CODM with oversight by the Board of Directors. The CODM evaluates the performance of each segment and makes decisions concerning the allocation of resources based upon segment operating profit, generally defined as income before interest expense and income taxes. Segment assets are not reviewed by the CODM and therefore are not disclosed below. Management of debt is a corporate function. The accounting policies of the OEM and Aftermarket Segments are the same as those described in Note 2 of the Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
The following tables present the Company's revenues disaggregated by segment and geography based on the billing address of the Company's customers:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In thousands) | U.S. (a) | Int’l (b) | Total | U.S. (a) | Int’l (b) | Total | |||||||||||||||||||||||||||||
| OEM Segment: | |||||||||||||||||||||||||||||||||||
| RV OEMs: | |||||||||||||||||||||||||||||||||||
| Travel trailers and fifth-wheels | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Motorhomes | |||||||||||||||||||||||||||||||||||
| Adjacent Industries OEMs | |||||||||||||||||||||||||||||||||||
| Total OEM Segment net sales | |||||||||||||||||||||||||||||||||||
| Aftermarket Segment: | |||||||||||||||||||||||||||||||||||
| Total Aftermarket Segment net sales | |||||||||||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
23
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In thousands) | U.S. (a) | Int’l (b) | Total | U.S. (a) | Int’l (b) | Total | |||||||||||||||||||||||||||||
| OEM Segment: | |||||||||||||||||||||||||||||||||||
| RV OEMs: | |||||||||||||||||||||||||||||||||||
| Travel trailers and fifth-wheels | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Motorhomes | |||||||||||||||||||||||||||||||||||
| Adjacent Industries OEMs | |||||||||||||||||||||||||||||||||||
| Total OEM Segment net sales | |||||||||||||||||||||||||||||||||||
| Aftermarket Segment: | |||||||||||||||||||||||||||||||||||
| Total Aftermarket Segment net sales | |||||||||||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(a) Net sales to customers in the United States of America
(b) Net sales to customers domiciled in countries outside of the United States of America
(b) Net sales to customers domiciled in countries outside of the United States of America
Corporate expenses are allocated between the segments based upon net sales. Accretion related to contingent consideration and other non-segment items are included in the segment to which they relate. Information relating to segments follows:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In thousands) | OEM | Aftermarket | Total | OEM | Aftermarket | Total | |||||||||||||||||||||||||||||
Net sales to external customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In thousands) | OEM | Aftermarket | Total | OEM | Aftermarket | Total | |||||||||||||||||||||||||||||
Net sales to external customers(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Cost of sales(2) | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(2)
24
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the Company's revenue disaggregated by product:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| OEM Segment: | |||||||||||||||||||||||
| Chassis, chassis parts, and slide-out mechanisms | $ | $ | $ | $ | |||||||||||||||||||
| Windows and doors | |||||||||||||||||||||||
| Furniture and mattresses | |||||||||||||||||||||||
| Axles, ABS, and suspension solutions | |||||||||||||||||||||||
| Appliances | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total OEM Segment net sales | |||||||||||||||||||||||
| Total Aftermarket Segment net sales | |||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | |||||||||||||||||||
13. MERGER
On June 30, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Patrick Industries, Inc. ("Patrick"), Planet First Merger Sub Inc. (a direct wholly-owned subsidiary of Patrick), and Planet Second Merger Sub LLC (a direct wholly-owned subsidiary of Patrick). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of certain closing conditions, Planet First Merger Sub Inc. will merge with and into the Company (the "First Merger"), with the Company surviving as a wholly-owned subsidiary of Patrick, and immediately following the First Merger, and as part of the same overall transaction as the First Merger, the Company will merge with and into Planet Second Merger Sub LLC (the "Second Merger" and, together with the First Merger, the "Mergers"), with Planet Second Merger Sub LLC surviving as a wholly-owned subsidiary of Patrick. The Merger Agreement was unanimously approved by the boards of directors of the Company and Patrick. The Mergers are subject to certain closing conditions, including the approval by the stockholders of each company and the receipt of required regulatory approvals, and are currently expected to close in the first half of 2027. The Company currently operates, and until completion of the Mergers will continue to operate, independently of Patrick.
Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the First Merger, each issued and outstanding share of the Company’s common stock (excluding shares of the Company's common stock held by the Company, Patrick, or any of their respective subsidiaries immediately prior to the effective time of the First Merger) will be converted into the right to receive 1.2440 fully paid and nonassessable shares of Patrick common stock, with cash to be paid in lieu of fractional shares of Patrick common stock that holders of the Company's common stock would otherwise be entitled to receive in the First Merger. Following completion of the Mergers, holders of Patrick common stock immediately prior to the Mergers are expected to own approximately 52 percent of Patrick, and holders of the Company's common stock immediately prior to the Mergers are expected to own approximately 48 percent of Patrick.
The Merger Agreement contains customary representations, warranties, and covenants, including covenants restricting the conduct of each company's business prior to closing and provisions addressing the treatment of the Company's outstanding equity awards and employee benefits. The Merger Agreement may be terminated under certain circumstances, including by mutual consent of the Company and Patrick or if the Mergers are not consummated by March 30, 2027, subject to automatic extensions until as late as September 30, 2027 under certain conditions related to the receipt of regulatory approvals.
In connection with the Mergers, Patrick may be required to pay the Company a termination fee of $94.2 million in specified circumstances, including if the Company terminates the Merger Agreement following a change of recommendation by Patrick's board of directors, and the Company may be required to pay Patrick a termination fee equal to $94.2 million in
25
LCI INDUSTRIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
specified circumstances, including if Patrick terminates the Merger Agreement following a change of recommendation by the Company's Board of Directors, in each case subject to the terms and conditions of the Merger Agreement.
The Company has incurred, and will continue to incur, legal, accounting, consulting, employee-related and other merger-related expenses in connection with the proposed Mergers. During the three and nine months ended September 30, 2026, merger-related expenses of approximately $5.1 million and $19.2 million, respectively, were recorded in selling, general and administrative expenses on the condensed consolidated statements of income. The Company has not recognized any merger-related expenses that are contingent upon consummation of the proposed Mergers. Other than the merger-related expenses recorded through September 30, 2026, the condensed consolidated financial statements were prepared without consideration of the pending Mergers.
26
LCI INDUSTRIES
ITEM 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company's Condensed Consolidated Financial Statements and Notes thereto included in Item 1 of Part I of this report, as well as the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
LCI Industries ("LCII" and collectively with its subsidiaries, the "Company," the "Registrant," "we," "us," or "our"), through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI," or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation, transportation, marine, and housing industries. In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms.
Our diverse portfolio of innovative and high-quality products includes:
•Chassis and Suspension Solutions: Steel chassis, axles, anti-lock braking systems ("ABS"), and suspension systems
•Furniture Solutions: Furniture for RV, marine and other markets, and mattresses
•Window and Glass Solutions: Vinyl, aluminum, and frameless windows, and windshields
•Appliance and Kitchen Solutions: Air conditioners, tankless water heaters, appliances, electronic components, televisions, and thermoformed bath and kitchen products
•Towing and Truck Accessories: Hitches, pin boxes, grill guards, towing electrical, and towing and truck accessories
•Doors, Steps, and Awnings: Entry, luggage, patio, and ramp doors, electric and manual entry steps, and awnings
•Leveling, Stabilization, and Slide-outs: Stabilizer/leveling systems (manual, electric, and hydraulic), and slide-out solutions
At September 30, 2026, we operated over 100 manufacturing facilities located throughout North America and Europe, supporting key industries such as recreational vehicles ("RVs"), transportation, marine, and housing. Our core manufacturing competencies include:
•Metal fabrication and welding | •Glass fabrication | ||||
•Furniture manufacturing | •Electronics | ||||
•Lamination | •Power & motion systems | ||||
•E-Coating and powder coating | •Plastics Forming | ||||
•Appliances | |||||
We operate in two primary segments: OEM and Aftermarket. Together, these segments leverage our manufacturing competencies, leadership expertise, customer relationships, and market insights to drive efficiencies and innovation that enable us to maintain a leading position in the RV market while continuing to expand in adjacent industries and aftermarket channels. Intersegment sales are insignificant. See Note 12 of the Notes to Condensed Consolidated Financial Statements for further information regarding our segments.
OEM Segment: Our OEM Segment services leading OEMs in RV, transportation, marine, and housing markets. Our strategically located manufacturing and distribution facilities across North America and Europe provide efficient service to OEMs. Key markets served by our OEM Segment include RVs and Adjacent Industries.
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the RV, transportation, marine, and automotive markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives additional revenue, deepens customer engagement, and leverages our OEM expertise. Products are sold through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms.
27
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Diversification Strategy: Over the past several years, we have diversified our portfolio beyond the RV OEM market into transportation, marine, housing, and aftermarket sectors. We have also diversified geographically through our international operations. Leveraging our manufacturing competencies in other industries can accelerate profitable growth and help to mitigate seasonal and cyclical market risk. For example, within our Aftermarket Segment, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain sales within this segment to be counter-seasonal.
Most industries where we sell products, or where our products are used, historically have been seasonal and are generally at the highest levels when the weather is moderate. Accordingly, our sales and profits have generally been the highest in the second quarter and lowest in the fourth quarter. However, because of fluctuations in dealer inventories, the impact of international, national, and regional economic conditions, consumer confidence on retail sales of RVs and other products for which we sell our components, the timing of dealer orders, and the impact of severe weather conditions on the timing of industry-wide shipments from time to time, current and future seasonal industry trends have been, and may in the future be, different than in prior years. Additionally, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal.
Negative conditions in the general economy in the United States or abroad, including conditions resulting from financial and credit market fluctuations, elevated inflation and interest rates, changes in economic policy, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other trade restrictions, geopolitical tensions, armed conflicts, natural disasters, or global public health crises, have negatively impacted, and could continue to negatively impact, the Company’s business, liquidity, financial condition, and results of operations.
DEVELOPMENTS IN 2026
Agreement and Plan of Merger: On June 30, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Patrick Industries, Inc. ("Patrick"), Planet First Merger Sub Inc. (a direct wholly-owned subsidiary of Patrick), and Planet Second Merger Sub LLC (a direct wholly-owned subsidiary of Patrick). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of certain closing conditions, Planet First Merger Sub Inc. will merge with and into the Company (the "First Merger"), with the Company surviving as a wholly-owned subsidiary of Patrick, and immediately following the First Merger, and as part of the same overall transaction as the First Merger, the Company will merge with and into Planet Second Merger Sub LLC (the "Second Merger" and, together with the First Merger, the "Mergers"), with Planet Second Merger Sub LLC surviving as a wholly-owned subsidiary of Patrick. The Merger Agreement was unanimously approved by the boards of directors of the Company and Patrick. The Mergers are subject to certain closing conditions, including the approval by the stockholders of each company and the receipt of required regulatory approvals, and are currently expected to close in the first half of 2027.
Additional information regarding the Merger Agreement and the proposed Mergers is included in Note 13 of the Notes to Condensed Consolidated Financial Statements and in other filings made by the Company with the Securities and Exchange Commission (the "SEC") in connection with the proposed Mergers, including the joint proxy statement/prospectus filed by Patrick and the Company on October 19, 2026 and supplement thereto filed by Patrick and the Company on October 30, 2026.
Leadership Transition: On June 3, 2026, Jason D. Lippert retired as Chief Executive Officer of LCI Industries and resigned as a member of the Board of Directors of the Company (the “Board”). Also on June 3, 2026, Tracy D. Graham, the Chair of the Board, resigned as a member of the Board, including all committees thereof. In connection with Mr. Lippert’s retirement as Chief Executive Officer of the Company, the Board appointed Board member John A. Sirpilla to serve as Interim Chief Executive Officer, effective as of June 3, 2026. In connection with Mr. Graham’s resignation from the Board, the Board appointed Virginia L. Henkels, a current member of the Board, to serve as Chair of the Board, effective as of June 3, 2026.
Tariff Updates: In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA Tariffs") were not lawful. In March 2026, the Court of International Trade ("CIT") ordered U.S. Customs and Border Protection ("CBP") to begin the refund process for importers subject to IEEPA Tariffs, and in April 2026, CBP established an online portal through which importers may submit refund requests. We expect to receive $119.3 million in tariff refunds, which represents the amount of IEEPA Tariffs the Company determined it paid while such tariffs were in effect from February 2025 through February 2026, and we received $114.6 million of IEEPA Tariff refunds during the nine months ended September 30, 2026. We expect to pass through approximately $88.8 million of the IEEPA Tariff refunds received to certain customers, of which we have paid $57.6
28
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
payments to customers remain subject to uncertainty, including the outcome of the U.S. government's appeal of the CIT order. See Note 2 of the Notes to Condensed Consolidated Financial Statements for the details of our accounting for IEEPA Tariff refunds, as well as uncertainties related to the IEEPA Tariff refunds, and the Results of Operations discussion below for the impact of IEEPA Tariff refunds and pass-throughs on our operations by segment.
Changes in U.S. trade policies, including the imposition of new or increased tariffs, may increase the cost of certain products, components, and materials we source, which could adversely affect our margins, results of operations, cash flows, and financial condition. The impact of current and potential tariff actions remains uncertain and may vary across our product portfolio. In addition, future governmental actions, regulatory interpretations, supplier responses, changes in sourcing, and other market conditions could affect the extent of any impact. While we continue to evaluate opportunities to mitigate these risks, there can be no assurance that such efforts will be successful or that additional tariffs or related cost increases will not have a material adverse effect on our business.
INDUSTRY BACKGROUND
OEM Segment - North American Recreational Vehicle Industry: RVs are designed as temporary living quarters for recreational, camping, travel, or seasonal use. They can be either motorized, such as motorhomes, or towable, including travel trailers, fifth-wheel trailers, folding camping trailers, and truck campers. The RV industry generally follows a predictable annual sales cycle that starts after the annual fall "Open House" in Elkhart, Indiana:
•October - March: Dealers build inventory, leading wholesale shipments to historically outpace retail sales.
•April - September: Retail sales typically exceed wholesale shipments, driven by spring and summer demand.
In the first nine months of 2026 compared to the same period in 2025, Recreation Vehicle Industry Association ("RVIA") data shows United States wholesale shipments of travel trailer and fifth-wheel RVs, the Company's primary market, decreased 16 percent to 196,300 units. Retail demand for travel trailer and fifth-wheel RVs decreased 15 percent to 215,800 units in the first nine months of 2026 compared to the same period in 2025. Retail registration data is often revised upward in subsequent months due to reporting delays.
While we track our OEM Segment RV sales against wholesale shipment statistics, the health of the RV industry is ultimately determined by retail demand. The table below highlights trends in wholesale shipments, retail sales, and dealer inventory adjustments for travel trailers and fifth-wheel RVs, as reported by Statistical Surveys, Inc. ("Statistical Surveys").
| Estimated | |||||||||||||||||||||||||||||
| Wholesale | Retail | Unit Impact on | |||||||||||||||||||||||||||
| Units | Change | Units | Change | Dealer Inventories | |||||||||||||||||||||||||
| Quarter ended September 30, 2026 | 57,400 | (13)% | 75,600 | (17)% | (18,200) | ||||||||||||||||||||||||
| Quarter ended June 30, 2026 | 65,500 | (20)% | 87,200 | (13)% | (21,700) | ||||||||||||||||||||||||
| Quarter ended March 31, 2026 | 73,400 | (15)% | 53,000 | (15)% | 20,400 | ||||||||||||||||||||||||
| Quarter ended December 31, 2025 | 64,700 | (4)% | 52,200 | (6)% | 12,500 | ||||||||||||||||||||||||
| Twelve months ended September 30, 2026 | 261,000 | (13)% | 268,000 | (13)% | (7,000) | ||||||||||||||||||||||||
29
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
| Estimated | |||||||||||||||||||||||||||||
| Wholesale | Retail | Unit Impact on | |||||||||||||||||||||||||||
| Units | Change | Units | Change | Dealer Inventories | |||||||||||||||||||||||||
| Quarter ended September 30, 2025 | 65,700 | (4)% | 90,700 | 3% | (25,000) | ||||||||||||||||||||||||
| Quarter ended June 30, 2025 | 81,400 | (1)% | 100,700 | 2% | (19,300) | ||||||||||||||||||||||||
| Quarter ended March 31, 2025 | 86,400 | 18% | 62,600 | (4)% | 23,800 | ||||||||||||||||||||||||
| Quarter ended December 31, 2024 | 67,700 | 7% | 55,400 | 3% | 12,300 | ||||||||||||||||||||||||
| Twelve months ended September 30, 2025 | 301,200 | 5% | 309,400 | 1% | (8,200) | ||||||||||||||||||||||||
In the first nine months of 2026 compared to the same period in 2025, RVIA data showed wholesale shipments of motorhome RVs increased 2 percent to 28,200 units. Retail demand for motorhome RVs decreased 8 percent to 27,600 units in the first nine months of 2026 compared to the same period of 2025. The decrease in retail demand has been primarily driven by inflation and higher interest rates impacting retail consumer discretionary spending.
OEM Segment - Adjacent Industries: Our expertise in RV components extends to adjacent industries, including transportation, marine, and housing. These adjacent industries offer significant growth opportunities, including by helping us leverage our established relationships with OEMs that often operate in multiple sectors. While the potential content per unit we may supply to adjacent industries varies across these markets, and is different than RVs, they represent meaningful diversification opportunities.
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the RV, transportation, marine, and automotive markets by offering discretionary accessories, replacement parts, and upgrades through various channels, including retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. These products support recreation and transportation markets, addressing both routine maintenance needs and customer-driven enhancements.
We also provide comprehensive customer support through multiple customer care centers, offering rapid responses to inquiries related to technical support, product delivery, and critical repair, designed to minimize consumer downtime. Dedicated teams deliver product, technical, and installation training, as well as marketing assistance, to enhance customer engagement and satisfaction.
Aftermarket offerings span a diverse product portfolio, including:
•Marine Products: Biminis, covers, buoys, and fenders.
•Recreation and Transportation Accessories: Towing products, truck accessories, replacement glass, and awnings.
•Core Systems: Appliances, air conditioners, televisions, sound systems, and tankless water heaters.
Aftermarket sales are influenced by seasonal trends, with many non-critical upgrades and replacement parts purchased outside peak selling periods, creating certain counter-seasonal demand.
The U.S. RV ownership base, which reached a record 8.1 million households in 2025 according to the RVIA, drives robust demand for aftermarket products. Owners seek to enhance and maintain their units, replacing components that experience normal wear and tear. This vibrant and growing market represents a key driver of our Aftermarket Segment’s performance.
30
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
RESULTS OF OPERATIONS
Consolidated Highlights
•Consolidated net sales in the third quarter of 2026 were $992.5 million, a decrease of 4.2 percent, from $1,036.5 million in the same period of 2025. The decrease in net sales was primarily due to lower North American RV wholesale shipments, partially offset by increases in selling prices contractually tied to indices of select commodities, growth in the automotive aftermarket, and sales from acquired businesses. Net sales from acquisitions completed in the twelve months ended September 30, 2026 contributed approximately $5.2 million in the third quarter of 2026.
•Consolidated operating profit during the third quarter of 2026 was $75.0 million, compared to $75.4 million in the same period of 2025. Operating profit margin was 7.6 percent in the third quarter of 2026 compared to 7.3 percent in the same period of 2025. The increase in operating profit margin was primarily due to cost improvement actions, including materials sourcing strategies, partially offset by lower absorption of fixed costs due to lower sales volumes and merger-related expenses.
•Net income for the third quarter of 2026 was $50.1 million, or $2.05 per diluted share, compared to net income of $62.5 million, or $2.55 per diluted share, for the same period of 2025.
•In the third quarter of 2026, a quarterly dividend of $1.15 per share was paid, aggregating to $28.0 million.
OEM Segment - Third Quarter
Net sales of the OEM Segment in the third quarter of 2026 decreased by $57.7 million, compared to the same period of 2025. Net sales of components to OEMs were to the following markets for the three months ended September 30:
| (In thousands) | 2026 | 2025 | Change | ||||||||||||||
| RV OEMs: | |||||||||||||||||
| Travel trailers and fifth-wheels | $ | 337,852 | $ | 412,472 | (18) | % | |||||||||||
| Motorhomes | 52,013 | 57,635 | (10) | % | |||||||||||||
| Adjacent Industries OEMs | 342,420 | 319,916 | 7 | % | |||||||||||||
| Total OEM Segment net sales | $ | 732,285 | $ | 790,023 | (7) | % | |||||||||||
According to the RVIA, industry-wide wholesale shipments for the three months ended September 30 were:
| 2026 | 2025 | Change | |||||||||||||||
| Travel trailers and fifth-wheels | 57,400 | 65,700 | (13) | % | |||||||||||||
| Motorhomes | 7,700 | 8,900 | (13) | % | |||||||||||||
The trend in our average product content per RV produced is an indicator of our continued engagement with our RV OEM customers. Our average product content per type of RV, calculated based upon our net sales of components to domestic RV OEMs for the different types of RVs produced for the twelve months ended September 30, divided by the industry-wide wholesale shipments of the different product mix of RVs for the same period, was:
| Content per: | 2026 | 2025 | Change | ||||||||||||||
Travel trailer and fifth-wheel (1) | $ | 5,733 | $ | 5,431 | 6 | % | |||||||||||
Motorhome (1) | $ | 3,873 | $ | 3,839 | 1 | % | |||||||||||
(1) Average product content per RV in 2026 excludes the impact of IEEPA Tariff refunds expected to be passed through to customers.
Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and Adjacent Industries. Content per RV is impacted by changes in selling prices for our products, product innovations, changes in unit mix, and acquisitions. For the twelve months ended September 30, 2026, travel trailer and fifth-wheel RV content increased 6 percent year-over-year due to sales price increases for targeted products and to cover higher material costs, partially offset by shipments exceeding units produced.
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LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Our decrease in net sales to RV OEMs during the third quarter of 2026 was primarily due to a decrease in North American travel trailer and fifth-wheel shipments, and a change in RV sales mix toward more lower content single axle travel trailers, partially offset by sales price increases contractually tied to indices of select commodities.
Our increase in net sales to OEMs in Adjacent Industries during the third quarter of 2026 was primarily due to higher sales to North American transportation, marine, and manufactured housing OEMs.
Operating profit of the OEM Segment was $44.1 million in the third quarter of 2026, an increase of $0.5 million compared to the same period of 2025. The operating profit margin of the OEM Segment increased to 6.0 percent in the third quarter of 2026, compared to 5.5 percent for the same period of 2025, and was positively impacted by:
•Increases in selling prices contractually tied to indices of select commodities, which positively impacted operating profit by $18.4 million compared to the same period in 2025.
•Cost improvement actions, including materials sourcing strategies, which increased operating profit by $15.5 million compared to the same period in 2025.
•A favorable shift in component sales mix, which positively impacted operating profit by $4.5 million compared to the same period in 2025.
Partially offset by:
•The impact of fixed costs spread over decreased production volumes, which decreased operating profit by $12.0 million related to fixed production overhead costs and $5.9 million related to fixed selling, general and administrative costs compared to the same period in 2025.
•Decreases in selling prices for certain products primarily related to changes in tariff costs, which negatively impacted operating profit by $6.5 million compared to the same period in 2025.
•Higher material and freight costs primarily related to higher steel and aluminum costs, and rising fuel costs, which negatively impacted operating profit by $6.3 million compared to the same period in 2025.
•Merger-related expenses, which negatively impacted operating profit by $4.0 million compared to the same period in 2025.
Amortization expense on intangible assets for the OEM Segment was $9.0 million in the third quarter of 2026, compared to $9.9 million in the same period of 2025. Depreciation expense on fixed assets for the OEM Segment was $10.2 million in the third quarter of 2026, compared to $12.0 million in the same period of 2025.
OEM Segment – Year to Date
Net sales of the OEM Segment in the first nine months of 2026 decreased by $193.2 million, compared to the same period of 2025. Net sales of components to OEMs were to the following markets for the nine months ended September 30:
| (In thousands) | 2026 | 2025 | Change | ||||||||||||||
| RV OEMs: | |||||||||||||||||
| Travel trailers and fifth-wheels | $ | 1,062,207 | $ | 1,325,592 | (20) | % | |||||||||||
| Motorhomes | 173,622 | 178,615 | (3) | % | |||||||||||||
| Adjacent Industries OEMs | 1,024,063 | 948,930 | 8 | % | |||||||||||||
| Total OEM Segment net sales | $ | 2,259,892 | $ | 2,453,137 | (8) | % | |||||||||||
According to the RVIA, industry-wide wholesale unit shipments for the nine months ended September 30 were:
| 2026 | 2025 | Change | |||||||||||||||
| Travel trailer and fifth-wheel RVs | 196,300 | 233,500 | (16) | % | |||||||||||||
| Motorhomes | 28,200 | 27,600 | 2 | % | |||||||||||||
Our decrease in net sales to RV OEMs during the first nine months of 2026 was primarily driven by a 16 percent decrease in North American travel trailer and fifth-wheel shipments, a reduction for IEEPA Tariff refunds passed through or
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LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
expected to be passed through to customers, and a change in RV sales mix toward more lower content single axle travel trailers, partially offset by sales price increases for targeted products and to cover higher material costs, and a 2 percent increase in North American motorhome shipments.
Our increase in net sales to OEMs in Adjacent Industries during the first nine months of 2026 was primarily due to sales from acquired businesses, higher sales to North American marine OEMs, and sales price increases for targeted products and to cover higher material costs, partially offset by a reduction for IEEPA Tariff refunds passed through or expected to be passed through to customers.
Operating profit of the OEM Segment was $164.7 million in the first nine months of 2026, an increase of $7.5 million compared to the same period of 2025. The operating profit margin of the OEM Segment increased to 7.3 percent in the first nine months of 2026, compared to 6.4 percent for the same period in 2025, and was positively impacted by:
•Increases in selling prices contractually tied to indices of select commodities, which positively impacted operating profit by $47.8 million compared to the same period in 2025.
•Cost improvement actions, including materials sourcing strategies, which increased operating profit by $42.9 million compared to the same period in 2025.
•Increases in selling prices for targeted products and to cover increased material costs, which positively impacted operating profit by $38.5 million compared to the same period in 2025.
•A favorable shift in component sales mix, which positively impacted operating profit by $20.7 million compared to the same period in 2025.
•A net positive impact of $1.5 million, resulting from a reduction to cost of sales of $86.4 million related to IEEPA Tariff refunds and a reduction to net sales of $84.9 million for IEEPA Tariff refunds passed through or expected to be passed through to customers.
Partially offset by:
•Higher material and freight costs related to tariffs, higher steel and aluminum costs, and rising fuel costs, which negatively impacted operating profit by $64.0 million compared to the same period in 2025.
•The impact of fixed costs spread over decreased production volumes, which decreased operating profit by $39.6 million related to fixed production overhead costs and $18.5 million related to fixed selling, general and administrative costs compared to the same period in 2025.
•Merger-related expenses, which negatively impacted operating profit by $14.9 million compared to the same period in 2025.
Amortization expense on intangible assets for the OEM Segment was $27.5 million in the first nine months of 2026, compared to $28.7 million in the same period of 2025. Depreciation expense on fixed assets for the OEM Segment was $33.7 million in the first nine months of 2026, compared to $36.5 million in the same period of 2025.
Aftermarket Segment - Third Quarter
Net sales of the Aftermarket Segment in the third quarter of 2026 increased by $13.7 million, compared to the same period of 2025. Net sales of components in the Aftermarket Segment were as follows for the three months ended September 30:
| (In thousands) | 2026 | 2025 | Change | ||||||||||||||
| Total Aftermarket Segment net sales | $ | 260,198 | $ | 246,454 | 6 | % | |||||||||||
Our net sales of the Aftermarket Segment for the third quarter of 2026 increased compared to the same period in 2025, primarily driven by increases in volume in the automotive aftermarket.
Operating profit of the Aftermarket Segment was $30.9 million in the third quarter of 2026, a decrease of $1.0 million compared to the same period of 2025. The operating profit margin of the Aftermarket Segment decreased to 11.9 percent in the third quarter of 2026, compared to 12.9 percent in the same period in 2025, and was negatively impacted by:
•Higher material and freight costs related to tariffs, higher steel and aluminum costs, and rising fuel costs, which negatively impacted operating profit by $5.7 million compared to the same period in 2025.
33
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
•Investments in capacity and distribution to support the Aftermarket Segment, which negatively impacted operating profit by $2.4 million compared to the same period in 2025.
•Restructuring costs to support growth in the automotive aftermarket, which negatively impacted operating profit by $1.7 million compared to the same period in 2025.
•Merger-related expenses, which negatively impacted operating profit by $1.2 million compared to the same period in 2025.
Partially offset by:
•The impact of fixed costs spread over increased automotive aftermarket production volumes, which increased operating profit by $2.4 million related to fixed production overhead costs and $0.7 million related to fixed selling, general and administrative costs compared to the same period in 2025.
•Cost improvement actions, including materials sourcing strategies, which increased operating profit by $2.6 million compared to the same period in 2025.
•Increases in selling prices for targeted products and to cover increased material costs, which positively impacted operating profit by $2.1 million compared to the same period in 2025.
Amortization expense on intangible assets for the Aftermarket Segment was $4.0 million in the third quarter of 2026, compared to $3.9 million in the same period of 2025. Depreciation expense on fixed assets for the Aftermarket Segment was $5.8 million in the third quarter of 2026, compared to $4.7 million in the same period of 2025.
Aftermarket Segment – Year to Date
Net sales of the Aftermarket Segment in the first nine months of 2026 increased by $55.6 million, compared to the same period of 2025. Net sales of components in the Aftermarket Segment were as follows for the nine months ended September 30:
| (In thousands) | 2026 | 2025 | Change | ||||||||||||||
| Total Aftermarket Segment net sales | $ | 791,783 | $ | 736,180 | 8 | % | |||||||||||
Net sales of the Aftermarket Segment increased during the first nine months of 2026, primarily driven by price increases for targeted products and to cover higher material costs, sales from acquired businesses, and increases in volume in the automotive aftermarket, partially offset by a reduction for IEEPA Tariff refunds passed through or expected to be passed through to customers.
Operating profit of the Aftermarket Segment was $101.4 million in the first nine months of 2026, an increase of $14.1 million compared to the same period of 2025. The operating profit margin of the Aftermarket Segment increased to 12.8 percent in the first nine months of 2026, compared to 11.9 percent in the same period in 2025, and was positively impacted by:
•Increases in selling prices for targeted products and to cover increased material costs, which positively impacted operating profit by $26.9 million compared to the same period in 2025.
•A net positive impact of $14.5 million, resulting from a reduction to cost of sales of $18.4 million related to IEEPA Tariff refunds and a reduction to net sales of $3.9 million for IEEPA Tariff refunds passed through or expected to be passed through to customers.
•Cost improvement actions, including materials sourcing strategies, which increased operating profit by $8.7 million compared to the same period in 2025.
Partially offset by:
•Higher material and freight costs related to tariffs, higher steel and aluminum costs, and rising fuel costs, which negatively impacted operating profit by $28.3 million compared to the same period in 2025.
•Investments in capacity and distribution to support the Aftermarket Segment, which negatively impacted operating profit by $9.4 million compared to the same period in 2025.
•Merger-related expenses, which negatively impacted operating profit by $4.3 million compared to the same period in 2025.
•Restructuring costs to support growth in the automotive aftermarket, which negatively impacted operating profit by $2.9 million compared to the same period in 2025.
34
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Amortization expense on intangible assets for the Aftermarket Segment was $12.1 million in the first nine months of 2026, compared to $11.5 million in the same period of 2025. Depreciation expense on fixed assets for the Aftermarket Segment was $16.3 million in the first nine months of 2026, compared to $13.7 million in the same period of 2025.
Interest Expense
Interest expense, net was $24.6 million for the nine months ended September 30, 2026, compared to $26.0 million in the same period of 2025. The decrease in net interest expense was primarily due to interest received on IEEPA Tariff refunds in the second and third quarters of 2026, partially offset by interest on the 2030 Convertible Notes and increased principal borrowed on our Term Loans (as defined in Note 8 of the Notes to Condensed Consolidated Financial Statements) following our refinancing in March 2025.
See Note 8 of the Notes to Condensed Consolidated Financial Statements for a description of our credit facilities.
Loss on Extinguishment of Debt
In the nine months ended September 30, 2025, we recorded an $8.9 million loss on extinguishment of debt, consisting of $6.2 million in connection with the repurchase of a portion of our 2026 Convertible Notes, $1.9 million related to the repayment of our previous term loan, and $0.8 million related to the repricing amendment for our Term Loans. No loss on extinguishment of debt was recorded for the nine months ended September 30, 2026.
Gain on Sale of Real Estate
We sold three owned real estate locations during the nine months ended September 30, 2026 for combined net cash proceeds of $3.7 million. The sales resulted in a total net gain on the sale of real estate of $2.2 million for the nine months ended September 30, 2026. We sold two owned real estate locations during the nine months ended September 30, 2025 for combined net cash proceeds of $22.7 million. The sales resulted in a total net gain on the sale of real estate of $19.7 million for the nine months ended September 30, 2025.
Income Taxes
The effective income tax rate for each of the nine months ended September 30, 2026 and 2025 was 26.1 percent. The effective tax rate for the nine months ended September 30, 2026 remained consistent with the same period of 2025, and differed from the Federal statutory rate primarily due to state taxes, foreign taxes, and non-deductible expenses, offset by Federal and Indiana research and development credits.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
We maintain a level of cash and liquidity sufficient to allow us to meet our cash needs in the short term. Over the long term, we manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility for our future strategic investments. We continuously assess our capital requirements, working capital needs, debt and leverage levels, debt and lease maturity schedules, capital expenditure requirements, dividends, future investments or acquisitions, and potential share repurchases. We believe our operating cash flows, credit facilities, as well as any potential future borrowings, will be sufficient to fund our future payments and long-term initiatives.
As of September 30, 2026, we had $245.6 million in cash and cash equivalents, and $595.4 million of availability under our revolving credit facility under the Credit Agreement. We also have the ability to request an increase to the revolving and/or incremental term loan facilities by up to an additional $371.0 million in the aggregate upon approval of the lenders providing any such increase and the satisfaction of certain other conditions. See Note 8 of the Notes to Condensed Consolidated Financial Statements for a description of our credit facilities.
We believe the availability under the revolving credit facility under the Credit Agreement, along with our cash flows from operations, are adequate to finance our anticipated cash requirements for the next twelve months.
35
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Condensed Consolidated Statements of Cash Flows reflect the following for the nine months ended September 30:
| (In thousands) | 2026 | 2025 | |||||||||
| Net cash flows provided by operating activities | $ | 237,275 | $ | 252,104 | |||||||
| Net cash flows used in investing activities | (30,495) | (121,636) | |||||||||
| Net cash flows used in financing activities | (185,781) | (96,216) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 2,004 | (287) | |||||||||
| Net increase in cash and cash equivalents | $ | 23,003 | $ | 33,965 | |||||||
Cash Flows from Operating Activities
Net cash flows provided by operating activities were $237.3 million in the first nine months of 2026, compared to $252.1 million in the first nine months of 2025. The change in net cash flows provided by operating activities was primarily due the net change in assets and liabilities, which used $30.4 million more cash in the first nine months of 2026 compared to the same period in 2025, partially offset by an increase in net income of $10.6 million. The primary use of cash in net assets was the increase of $144.3 million in accounts receivable due to seasonally higher sales in the first nine months of 2026.
Depreciation and amortization was $89.6 million in the first nine months of 2026, and is expected to be approximately $115 to $125 million for the full year 2026. Non-cash stock-based compensation expense in the first nine months of 2026 was $17.0 million. Non-cash stock-based compensation expense is expected to be approximately $22 to $25 million for the full year 2026.
Cash Flows from Investing Activities
Cash flows used in investing activities of $30.5 million in the first nine months of 2026 were primarily comprised of $41.9 million for capital expenditures. Cash flows used in investing activities of $121.6 million in the first nine months of 2025 were primarily comprised of $103.0 million for the acquisition of businesses and $38.1 million for capital expenditures, partially offset by proceeds from the sale of real estate of $22.7 million.
Our capital expenditures are primarily for replacement and growth. Over the long term, based on our historical capital expenditures, the replacement portion has averaged approximately one to two percent of net sales, while the growth portion has averaged approximately two to three percent of net sales. However, there are many factors that can impact the actual spending compared to these historical averages. We estimate full year 2026 capital expenditures of $55 to $65 million, including investments in automation and lean projects, which we expect to fund with cash flows from operations or periodic borrowings under the revolving credit facility.
Capital expenditures in the first nine months of 2026 were funded by cash on hand. Capital expenditures and any acquisitions in the remainder of fiscal year 2026 are expected to be funded primarily from cash generated from operations, as well as periodic borrowings under our revolving credit facility.
Cash Flows from Financing Activities
Cash flows used in financing activities of $185.8 million in the first nine months of 2026 were primarily comprised of the $92.0 million payoff of our 2026 Convertible Notes at maturity, payments of quarterly dividends of $83.8 million, cash outflows of $6.7 million related to the vesting of stock-based awards, net of shares tendered for payment of taxes, and net debt repayments of $3.2 million under our Term Loans and other borrowings.
Cash flows used in financing activities of $96.2 million in the first nine months of 2025 were primarily comprised of the following:
•payments of $368.9 million for the repurchase of a portion of our 2026 Convertible Notes,
•debt repayments of $301.8 million under our revolving credit facility, Term Loan, and other borrowings,
•payments for the repurchase of common stock of $128.6 million,
36
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
•payments of quarterly dividends of $86.2 million,
•payments of $67.6 million for the purchase of convertible note hedge contracts, and
•cash outflows of $5.2 million related to the vesting of stock-based awards, net of shares tendered for payment of taxes,
Partially offset by:
•net proceeds from the issuance of our 2030 Convertible Notes of $448.5 million,
•proceeds from Term Loan borrowings of $391.0 million, and
•proceeds from the issuance of warrants of $27.6 million.
The Credit Agreement includes both financial and non-financial covenants. The covenants dictate we shall not permit our net leverage ratio to exceed certain limits, shall maintain a minimum debt service coverage ratio, and must meet certain other financial requirements. At September 30, 2026, we were in compliance with all financial covenants.
We have paid regular quarterly dividends since 2016. Future dividend policy with respect to our common stock will be determined by our Board of Directors in light of our prevailing financial needs, earnings, and other relevant factors, including any limitations in our debt agreements, such as maintenance of certain financial ratios.
In May 2022, our Board of Directors authorized a stock repurchase program (the "2022 Share Repurchase Program") for the purchase of up to $200.0 million of our common stock over a three-year period, which ended on May 19, 2025. Under this stock repurchase program, we purchased 308,898 shares at a weighted average price of $91.47 per share during the three months ended March 31, 2025, using approximately $28.3 million of the net proceeds from the offering of the 2030 Convertible Notes. Following such repurchase, no additional shares were purchased under the 2022 Share Repurchase Program prior to its expiration on May 19, 2025.
In May 2025, our Board of Directors authorized a new stock repurchase program (the "2025 Share Repurchase Program") for the purchase of up to $300.0 million of our common stock over a three-year period ending on May 15, 2028. No shares were repurchased during the nine months ended September 30, 2026. As of September 30, 2026, there was $200.0 million remaining for the repurchase of shares under the 2025 Share Repurchase Program.
CORPORATE GOVERNANCE
We are in compliance with the corporate governance requirements of the SEC and the New York Stock Exchange. Our governance documents, committee charters, and key practices have been posted to the "Investors" section of our website (www.lci1.com) and are updated periodically. The website also contains, or provides direct links to, all SEC filings, press releases and investor presentations. We have also established a Whistleblower Policy, which includes a toll-free hotline (800-461-9330) to report complaints about our accounting, internal controls, auditing matters or other concerns. The Whistleblower Policy and procedure for complaints can be found on our website (www.lci1.com).
CONTINGENCIES
Information required by this item is included in Note 10 of the Notes to Condensed Consolidated Financial Statements and is incorporated herein by reference.
RAW MATERIALS INFLATION
The prices of key raw materials, consisting primarily of steel and aluminum, and components used by us which are made from these raw materials, are influenced by demand and other factors specific to these commodities, including tariffs for materials sourced internationally. The prices for steel and aluminum consumed in certain of our manufactured components were higher during the first nine months of 2026 compared to the same period of 2025. Prices of these commodities have historically been volatile and there can be no assurances of future prices. Please see "Results of Operations" above for additional information regarding the impact of raw material costs, including related to tariffs, on our results of operations for the first nine months of 2026.
37
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
NEW ACCOUNTING PRONOUNCEMENTS
Information required by this item is included in Note 2 of the Notes to Condensed Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
Our Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which requires certain estimates and assumptions to be made that affect amounts and disclosures reported in those financial statements and the related accompanying notes. Actual results could differ from these estimates and assumptions.
For a discussion of our critical accounting estimates, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting estimates as described in that Annual Report.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain "forward-looking statements" with respect to our financial condition, results of operations, profitability, margins, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of management, markets for the Company's common stock, the impact of legal proceedings, and other matters. Statements in this Form 10-Q 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 (the "Exchange Act"), 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 the Company's production levels, future business prospects, net sales, expenses and income (loss), capital expenditures, tax rate, cash flow, financial condition, liquidity, covenant compliance, retail and wholesale demand, integration of acquisitions, R&D investments, commodity prices, addressable markets, industry trends, and the Mergers, whenever they occur in this Form 10-Q, 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 Form 10-Q, (1) the impacts of costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, (2) tariff refunds and related pass through to customers, (3) future pandemics, geopolitical tensions, armed conflicts, or natural disasters on the global economy and on the Company's customers, suppliers, team members, business and cash flows, (4) pricing pressures due to domestic and foreign competition, (5) seasonality and cyclicality in the industries to which we sell our products, (6) availability of credit for financing the retail and wholesale purchase of products for which we sell our components, (7) inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, (8) the financial condition of our customers, (9) the financial condition of retail dealers of products for which we sell our components, (10) retention and concentration of significant customers, (11) the costs, pace of, and successful integration of acquisitions and other growth initiatives, (12) availability and costs of production facilities and labor, team member benefits, team member retention, realization and impact of expansion plans, (13) efficiency improvements and cost reductions, (14) the disruption of business resulting from natural disasters or other unforeseen events, (15) the successful entry into new markets, (16) the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational and financial risks related to conducting business internationally, and increased governmental regulation and oversight, (17) information technology performance and security, (18) the ability to protect intellectual property, (19) warranty and product liability claims or product recalls, (20) interest rates, oil and gasoline prices, and availability, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, (21) risks related to the pending Mergers, including (a) the risk that the cost savings and any revenue synergies from the Mergers may not be fully realized or may take longer than anticipated to be realized, (b) disruption to each party’s business as a result of the announcement and pendency of the Mergers, (c) the risk that the integration of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate as a result of unexpected factors or events, (d) the failure to obtain the necessary approvals by the stockholders of the Company or Patrick, (e) the ability by each of the Company and Patrick to obtain required governmental approvals of the Mergers on the timeline expected, or at all, and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Mergers, (f) reputational risk and the reaction of each party’s customers, suppliers, employees or other business partners to the Mergers, (g) the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in closing the Mergers or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (h) the possibility
38
LCI INDUSTRIES
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
that the Mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (i) risks related to management and oversight of the expanded business and operations of the combined company due to the increased size and complexity, (j) the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Mergers or the size, scope and complexity of the combined company’s business operations, and (k) the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against the Company, Patrick or the combined company before or after the Mergers, and (22) 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, 2025 and in this Quarterly Report on Form 10-Q, and in the Company's subsequent filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. Readers of this report are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. 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.
ITEM 3 – QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk related to changes in short-term interest rates on our variable rate debt. Depending on the interest rate option selected as further described in Note 8 of the Notes to Condensed Consolidated Financial Statements, interest is charged based on an indexed rate plus an applicable margin. Assuming a hypothetical increase of 0.25 percent in the indexed interest rate (which approximates a six percent increase of the weighted-average interest rate on our borrowings as of September 30, 2026), our results of operations would not be materially affected.
We are also exposed to changes in the prices of raw materials, specifically steel and aluminum. We have, from time to time, entered into derivative instruments for the purpose of managing a portion of the exposures associated with fluctuations in steel and aluminum prices. While these derivative instruments are subject to fluctuations in value, these fluctuations are generally offset by the changes in fair value of the underlying exposures. We had no outstanding derivative instruments on commodities at September 30, 2026 and December 31, 2025.
We have historically been able to obtain sales price increases to partially offset the majority of raw material cost increases. However, there can be no assurance future cost increases, if any, can be partially or fully passed on to customers, or that the timing of such sales price increases will match raw material cost increases. 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 profitability in the third quarter of 2026.
Additional information required by this item is included under the caption "Raw Materials Inflation" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this report.
ITEM 4 – CONTROLS AND PROCEDURES
a.Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, in accordance with the definition of "disclosure controls and procedures" in Rule 13a-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the desired control objectives. Management included in its evaluation the cost-benefit relationship of possible controls and procedures. We continually evaluate our disclosure controls and procedures to determine if changes are appropriate based upon changes in our operations or the business environment in which we operate.
As of the end of the period covered by this Form 10-Q, we performed an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.
b.Changes in Internal Control over Financial Reporting
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There were no changes in our internal control over financial reporting during the quarter ended September 30, 2026, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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LCI INDUSTRIES
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
In the normal course of business, we are subject to proceedings, lawsuits, regulatory agency inquiries, and other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided for in the Condensed Consolidated Balance Sheet as of September 30, 2026, would not be material to our financial position or results of operations.
ITEM 1A – RISK FACTORS
Other than the risk factors set forth below, there have been no material changes to the matters discussed in Part I, Item 1A – Risk Factors in our Annual Report on Form 10-K as filed with the SEC on February 26, 2026.
Risks Relating to the Mergers with Patrick
We have identified certain additional risk factors in connection with the Merger Agreement and the Mergers. These risks and the other risks associated with the Mergers are more fully discussed in the joint proxy statement/prospectus Patrick and we filed with the SEC on October 19, 2026 in connection with the Mergers.
The Mergers are subject to conditions, including certain conditions that are beyond our and Patrick’s control and may not be satisfied at all or on a timely basis. Failure to complete the Mergers could have material and adverse effects on us.
Completion of the Mergers is subject to a number of conditions set forth in the Merger Agreement. Some of the conditions, such as approval by our stockholders and by Patrick stockholders and certain regulatory approvals, are beyond our and Patrick’s control, which make the completion and timing of the completion of the Mergers uncertain. In addition, the Merger Agreement contains certain termination rights for both us and Patrick, which if exercised, will also result in the Mergers not being consummated. Furthermore, the governmental authorities from which the regulatory approvals are required may impose conditions on the completion of the Mergers or require changes to the terms of the Merger Agreement.
If the Mergers are not completed for any reason, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Mergers, we would be subject to a number of risks, including the following:
•we may experience negative reactions from the financial markets, including negative effects on our stock price;
•we may experience negative reactions from our customers and vendors;
•we will have incurred substantial expenses and will be required to pay certain costs relating to the Mergers, including legal, accounting and other fees, whether or not the Mergers are completed; and
•our management team will have devoted substantial time and resources to matters relating to the Mergers, and would otherwise have devoted such time and resources to other opportunities that may have been beneficial to us, which could cause us to lag competitor advances.
In addition, if the Merger Agreement is terminated and we seek another merger or business combination, our stock price could decline, which could make it more difficult to find a party willing to offer equivalent or more attractive consideration than the consideration Patrick has agreed to provide in the Mergers.
We will be subject to business uncertainties and contractual restrictions while the Mergers are pending.
Uncertainty about the effect of the Mergers on our employees and customers may have an adverse effect on us. These uncertainties may impair our ability to attract, retain, and motivate key personnel until the Mergers are completed and could cause customers and others that deal with us to seek to change existing business relationships with us. In addition, subject to certain exceptions, we have agreed to operate our business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect our ability to consummate the transactions contemplated by the Merger Agreement on a timely basis without the consent of Patrick. These restrictions may prevent us from pursuing attractive business
41
opportunities that may arise prior to the completion of the Mergers. Employee retention may be particularly challenging during the pendency of the Mergers, as employees may experience uncertainty about their roles with the combined company following the Mergers.
The Merger Agreement limits our and Patrick’s abilities to pursue alternatives to the Mergers and could discourage a potential competing acquiror or other strategic transaction partner from making a favorable alternative transaction proposal.
In the Merger Agreement, we and Patrick have agreed, subject to certain exceptions, not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative acquisition proposals. In addition, upon termination of the Merger Agreement under certain circumstances specified therein, we or Patrick would be required to pay the other party a termination fee equal to $94.2 million. These provisions could discourage a potential acquirer or other strategic transaction partner that might have an interest in acquiring all or a significant portion of our company from considering or pursuing an alternative transaction with us or proposing such a transaction. These provisions might also result in a potential acquirer or other strategic transaction partner proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.
Shareholder litigation could prevent or delay the closing of the Mergers or otherwise negatively affect our business and operations.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition or merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our and Patrick’s respective liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Mergers, that injunction may delay or prevent the Mergers from being completed, which may adversely affect our and Patrick’s businesses, financial positions and results of operations, as described above under “The Mergers are subject to conditions, including certain conditions that are beyond our and Patrick’s control and may not be satisfied at all or on a timely basis. Failure to complete the Mergers could have material and adverse effects on us.” Although neither we nor Patrick are aware of any pending lawsuits relating to the Mergers, lawsuits arising out of or in connection with the Mergers could be filed in the future, and we and Patrick have both received demand letters from purported shareholders that allege deficiencies and/or omissions in the preliminary joint proxy statement/prospectus filed by Patrick with the SEC on September 23, 2026 or the joint proxy statement/prospectus filed by Patrick and the Company on October 19, 2026 and seek additional disclosures to remedy these purported deficiencies.
Actions taken by parties who oppose the Mergers could, among other things, negatively impact our ability to complete the Mergers or the timing thereof.
On October 22, 2026, we received an unsolicited, non-binding proposal from Monomoy Capital Partners (“Monomoy”) to acquire all of the outstanding shares of our common stock for $101.00 per share in cash (the “Monomoy Proposal”), and on October 30, 2026, we announced that our Board of Directors, in consultation with outside financial and legal advisors, unanimously determined that the Monomoy Proposal does not constitute a superior proposal and is not reasonably likely to lead to a superior proposal. At this time, we are not aware of what, if any, actions Monomoy will take to further its unsolicited proposal or more generally express its opposition to the Mergers. Any actions taken by Monomoy or other third parties who oppose the Mergers, even if ultimately unsuccessful, could negatively impact our ability to complete the Mergers or the timing thereof. Some of our stockholders may be persuaded to vote against approval of the Mergers as a result of the Monomoy Proposal or other actions that may be taken by Monomoy or other third parties who oppose the Mergers, and consequently, the required stockholder approval may not be obtained. Moreover, the review and consideration of the Monomoy Proposal (and any similar proposal that Monomoy or another party may make in the future) has been, and may continue to be, a distraction for our management and employees, and have required, and may continue to require, the expenditure of time and resources by us. The Monomoy Proposal may also result in uncertainty for our current and potential business partners, which may cause them to change their business relationship with us or otherwise disrupt our business.
We have incurred and are expected to incur substantial costs related to the Mergers.
We have incurred and expect to incur a number of non-recurring costs associated with the Mergers. These costs include, or will include, legal, financial advisory, accounting, consulting and other advisory fees, retention, severance and employee benefit-related costs, public company filings fees and other regulatory fees, financial printing and other printing costs. Some of these costs are payable by us regardless of whether or not the Mergers are completed.
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Because the market price of Patrick common stock may fluctuate, our stockholders cannot be certain of the precise value of the consideration they may receive in the Mergers.
At the time the First Merger is completed, each issued and outstanding share of our common stock (other than certain shares held by us, Patrick or any of our respective subsidiaries) will be converted into the right to receive 1.2440 shares of Patrick common stock. Because such exchange ratio is fixed (subject to adjustments in accordance with the terms of the Merger Agreement), it will not change between now and the time the First Merger is completed, regardless of whether the market price of our common stock or Patrick common stock changes, and the value of the consideration our stockholders will receive in the Mergers will depend on the market price of Patrick common stock at the time the First Merger is completed. This market value may be less or more than the value used to determine the exchange ratio stated in the Merger Agreement. The market price of our common stock and Patrick common stock have fluctuated since the date of the announcement of the parties’ entry into the Merger Agreement and will continue to fluctuate as a result of a variety of factors, including general market and economic conditions, changes in our and Patrick’s businesses, operations and prospects, and regulatory considerations. Many of these factors are outside of our and Patrick’s control. Because the market prices of our common stock and Patrick common stock will fluctuate prior to the consummation of the Mergers, our stockholders will not know, or be able to determine, the market value of shares of Patrick common stock that they will receive in the Mergers as compared to the market value of our common stock immediately prior to the Mergers.
The Merger Agreement between us and Patrick may be terminated in accordance with its terms and the Mergers may not be completed.
The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Mergers. Those conditions include, among other things: (i) adoption of the Merger Agreement by our stockholders, (ii) approval by Patrick stockholders of (a) the issuance of shares of Patrick common stock in connection with the First Merger and (b) an amendment to the articles of incorporation of Patrick to, among other things, increase the number of authorized shares set forth therein and (iii) receipt of required regulatory approvals. These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the Mergers may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after the requisite stockholder approvals, or we or Patrick may elect to terminate the Merger Agreement in certain other circumstances.
Combining us and Patrick may be more difficult, costly or time-consuming than expected, and the combined company may fail to realize the anticipated benefits of the Mergers.
The success of the Mergers will depend, in part, on the ability to realize the anticipated synergies from combining the businesses of us and Patrick. To realize the anticipated synergies from the Mergers, we and Patrick must successfully integrate and combine businesses in a manner that permits those synergies to be realized without adversely affecting current revenues and future growth. If we and Patrick are not able to successfully achieve these objectives, the anticipated benefits of the Mergers may not be realized fully or at all or may take longer to realize than expected. In addition, the synergies of the Mergers could be less than anticipated, and integration may result in additional and unforeseen expenses.
An inability to realize the full extent of the anticipated benefits of the Mergers, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company following the completion of the Mergers, which may adversely affect the value of the common stock of the combined company following the completion of the Mergers.
We and Patrick have operated and, until the completion of the Mergers, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees or the disruption of each company’s ongoing businesses. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on us during this transition period and for an undetermined period after completion of the Mergers on the combined company.
The combined company may be unable to retain our and/or Patrick personnel successfully after the Mergers are completed.
The success of the Mergers will depend in part on the combined company’s ability to retain the talent and dedication of key employees currently employed by us and Patrick. It is possible that these employees may decide not to remain with us or Patrick, as applicable, while the Mergers are pending or with the combined company after the Mergers are consummated. If we and Patrick are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, we and Patrick could face disruptions in operations, loss of existing customers, loss of key
43
information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the Mergers, if key employees terminate their employment, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer. We and Patrick also may not be able to locate or retain suitable replacements for any key employees who leave either company.
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 5 - OTHER INFORMATION
During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
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ITEM 6 – EXHIBITS
a) Exhibits as required by Item 601 of Regulation S-K:
| 1 | 2.1+ | Agreement and Plan of Merger, dated June 30, 2026, by and among LCI Industries, Patrick Industries, Inc., Planet First Merger Sub Inc., and Planet Second Merger Sub LLC (incorporated by reference to Exhibit 2.1 included in the Registrant's Form 8-K filed on June 30, 2026). | ||||||
| 2 | Amended and Restated Certificate of Incorporation of LCI Industries, conformed version that includes all amendments through May 16, 2024 (incorporated by reference to Exhibit 3.3 included in the Registrant's Form 10-Q filed on August 6, 2024). | |||||||
| 3 | Amended and Restated Bylaws of LCI Industries, effective March 9, 2023 (incorporated by reference to Exhibit 3.2 included in the Registrant's Form 10-Q filed on May 9, 2023). | |||||||
| 4 | Amendment to Separation Agreement and General Release, dated August 25, 2026, between Jason D. Lippert and Lippert Components, Inc. | |||||||
| 5 | Certification of Chief Executive Officer required by Rule 13a-14(a). | |||||||
| 6 | Certification of Chief Financial Officer required by Rule 13a-14(a). | |||||||
| 7 | Certification of Chief Executive Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code. | |||||||
| 8 | Certification of Chief Financial Officer required by Rule 13a-14(b) and Section 1350 Chapter 63 of Title 18 of the United States Code. | |||||||
| 9 | 101 | The following information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Stockholders’ Equity; (vi) Notes to Condensed Consolidated Financial Statements; and (vii) information in Part II, Item 5. | ||||||
| 10 | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||||
+ Certain schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. LCI Industries agrees to furnish a copy of such schedules and similar attachments to the SEC upon request.
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LCI INDUSTRIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LCI INDUSTRIES | |||||
| Registrant | |||||
| By | /s/ Lillian D. Etzkorn | ||||
| Lillian D. Etzkorn | |||||
| Chief Financial Officer | |||||
| November 5, 2026 | |||||
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August 25, 2026
Dear Jason (“you”),
This amendment agreement (this “Amendment”) amends that certain Separation Agreement and General Release you executed on June 4, 2026 (the “Separation Agreement”) with Lippert Components, Inc. (the “Company”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Separation Agreement or your Employment Agreement (as defined in the Separation Agreement), as applicable.
The Company and LCI Industries agree that your non-competition and related non-solicitation of customers obligations referenced in Section 12(a) of the Separation Agreement, including those contained in (i) Sections 5(D)(i)(a) and (b) and Section 5(D)(ii) of the Employment Agreement, (ii) Sections 8(c)(2) and (5) of the Terms and Conditions of your Performance Stock Unit Award Agreement with LCI Industries (the “PSUA Agreement”), and (iii) Sections 9(c)(2) and (5) of the Terms and Conditions of your Restricted Stock Unit Award Agreement with LCI Industries (the “RSUA Agreement”) (collectively, the “Non-Competition Obligations”), shall be waived solely with respect to your employment as the Chief Executive Officer of Bullion TX Holdings, LLC and its subsidiaries (“Fun Town”), and solely with respect to your ability to assist, provide, sell and market competitive products and perform competitive services in connection with Fun Town’s aftermarket business (which business includes the sale of retail accessories and parts and service of RVs, including with respect to products of the Company and competitive products) as conducted by Fun Town as of the date hereof; provided, however, that the Company and LCI Industries do not waive any other restrictive covenants or obligations, including the non - solicitation provisions contained in (i) Sections 5(D)(i)(c) through (h) of the Employment Agreement, (ii) Sections 8(c)(3) and (4) of the PSUA Agreement, and (iii) Sections 9(c)(3) and (4) of the RSUA Agreement (collectively, the “Non-Solicitation Obligations”). The business of Fun Town, as of the date hereof, includes the following: (i) owning and operating its RV dealerships, including owning the real estate associated with such dealerships, and providing parts and services, (ii) buying and selling RVs, camping equipment, management software and similar items, (iii) issuing insurance for RVs and (iv) renting RVs and bathroom trailers. Fun Town does not manufacture the RVs or related parts and equipment it sells.
The Company acknowledges and agrees that its chairperson of the Board has provided written approval of you becoming employed by and accepting the position of CEO of Fun Town as provided for in Section 12(a) of the Separation Agreement; a copy of which is attached hereto as Exhibit A.
Further, the Separation Agreement provided that you would be paid $100,000 per month for providing the Services during the Transition Period (the “Consulting Arrangement”). The Company agrees that your obligation to provide the Services under the Consulting Arrangement shall be terminated as of the date hereof, but notwithstanding such termination, you will continue to receive the monthly payment of $100,000 set forth in and in accordance with the Consulting Arrangement for the duration of the Transition Period. Such payments shall cease upon the end
Corporate Headquarters I 2917 Independence Ct., Elkhart, IN 46514 I Phone 574.535.1125
Docusign Envelope ID: E5E197CF-DDEF-86DC-835E-AC5A6AC5C077 | ||
of the Transition Period (unless terminated earlier pursuant to the terms of the Consulting Arrangement), and you will not be eligible for further payments under the Consulting Arrangement thereafter.
In consideration of the above, the duration of the restricted periods for all of the Non - Competition Obligations and the Non-Solicitation Obligations shall be extended until four years following your Separation Date (i.e., June 30, 2030). You agree that such extension is fair and reasonable under the circumstances and agree not to challenge it in any respect. If June 30, 2030 is held by a court or arbitrator of competent jurisdiction to be unenforceable, then the parties agree to modify such restricted periods to three years following your Separation Date. If three years following your Separation Date is held by a court or arbitrator of competent jurisdiction to be unenforceable, then the parties agree to modify such restricted periods to two years following your Separation Date. If two years following your Separation Date is held by a court or arbitrator of competent jurisdiction to be unenforceable, then the parties agree to modify such restricted periods to one year following your Separation Date.
You hereby reaffirm your releases and obligations set forth in the Separation Agreement as of the date you sign below. You agree that Fun Town has been provided with copies of your Non-Competition Obligations and Non-Solicitation Obligations as set forth in your Employment Agreement, PSUA Agreement and RSUA Agreement. and that you will cause Fun Town to confirm the same in writing to the Company not later than 15 days hereafter.
Attached hereto as Exhibit B is a copy of the press release that Fun Town intends to release in connection with announcing your new position with Fun Town. Any additional communications made by you in connection with announcing your new position with Fun Town will be consistent with such press release and will direct Fun Town to do the same.
This Amendment will become null and void ab initio if you do not become the CEO of Fun Town prior to October 25, 2026.
Lippert Components, Inc.
8/25/26 Date
LCI Industries
8/25/26 Date
8/25/2026 
Jason D. Lippert Date
Docusign Envelope ID: E5E197CF-DDEF-86DC-835E-AC5A6AC5C077 | ||
Exhibit A
(see attached)
Docusign Envelope ID: E5E197CF-DDEF-86DC-835E-AC5A6AC5C077 | ||
Jason D. Lippert
August 25, 2026
Dear Jason (“You”)
Reference is made to that certain Separation Agreement and General Release entered into by and between Lippert Components (the “Company”) and You dated June 4, 2026, as amended (the “Separation Agreement”). In further reference to the second sentence of Section 12(a) of the Separation Agreement, this letter constitutes my written approval as chairperson of the board of the Company of you becoming an employee and CEO of Bullion TX Holdings, LLC and its Subsidiaries (“Fun Town”).
Very truly yours,
Virginia Henkels Chairperson
Docusign Envelope ID: E5E197CF-DDEF-86DC-835E-AC5A6AC5C077 | ||
Exhibit B
(see attached)
Docusign Envelope ID: E5E197CF-DDEF-86DC-835E-AC5A6AC5C077 | ||
Press release
FUN TOWN RV NAMES JASON LIPPERT CHIEF EXECUTIVE OFFICER
Longtime LCI Industries CEO Brings More Than Three Decades of Leadership and Industry Experience to One of the Nation’s Fastest-Growing Family-Owned RV Dealership Groups
CLEBURNE, Texas — [DATE] — Fun Town RV, one of the nation’s largest family-owned recreational vehicle dealership groups, today announced that Jason Lippert has been named Chief Executive Officer. Current Founder and CEO Jarrod McGhee will move to the role of Founder/ Chairman of Funtown. Lippert joins Fun Town RV following an extraordinary 32-year career with LCI Industries, where he started on the manufacturing floor and with his team, built LCI Industries into one of the world’s most prominent suppliers to the recreational vehicle, marine and transportation industries.
The appointment brings together two highly accomplished leaders with distinctly complementary backgrounds: Lippert, a seasoned executive who spent decades building and leading a multibillion-dollar public company, and Fun Town RV founder Jarrod McGhee, a self-made entrepreneur who built Fun Town from a single dealership into a 32-location organization with operations across multiple states.
Together, Lippert and McGhee intend to build upon Fun Town RV’s entrepreneurial business and strong foundation while developing the people, processes, technology and operating capabilities required to support the company’s next stage of growth.
“This is an important new chapter for Fun Town RV,” said McGhee. “We have built this company by working hard, moving quickly, taking care of our customers and never losing the entrepreneurial spirit that got us here. Jason understands this industry at a level very few people do, even more importantly, he understands people, structure, , leadership, culture and what it takes to build an organization for long-term success and sustainability. Bringing his experience and leadership to Fun Town gives us an opportunity to take what we have built and make it significantly stronger. Getting from one store to 32 required one set of skills,” McGhee said. “Getting from where we are today to where we believe Fun Town can ultimately go requires us to keep evolving. Jason has already helped build and lead an organization at a scale far beyond where we are today. That experience is incredibly valuable as we think about the next decade of Fun Town.”
From the Weld Shop to the CEO’s Office
Lippert’s career represents one of the RV industry’s more remarkable leadership journeys.
He began his career approximately 32 years ago working in the weld shop of his family’s business, learning manufacturing and the supply industry from the ground up. After the family business was acquired by a publicly traded company, Lippert continued to advance through the organization, ultimately becoming CEO in 2003.
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Under his leadership, LCI Industries grew from approximately $100 million in annual revenue to revenues reaching approximately $5 billion at their peak. During that period, the company expanded its product portfolio, capabilities and geographic reach and became a leading global supplier to the RV industry while establishing significant positions in the marine and broader transportation markets. Lippert helped orchestrate significant organic growth but also led over 75 acquisitions during his 23 years as CEO.
Lippert’s tenure was defined not only by substantial financial growth, but also by an emphasis on leadership development, organizational culture, operational excellence, customer relationships and strategic expansion.
“Fun Town RV is a remarkable entrepreneurial success story, and what Jarrod and his team have built is extremely difficult to replicate,” said Lippert. “To grow from one location to 32 dealerships, largely through organic growth, requires tremendous energy, conviction and an exceptional understanding of the consumer. I have known and collaborated with Jarrod for over a decade and watched them become one of the dominant players in the retail side of this great industry, and I see an enormous opportunity to combine Fun Town’s entrepreneurial DNA with the operating disciplines and organizational capabilities that can help a great company become even better. I feel I will bring an energy level, experience and passion to the Funtown family that will help get them to the next level.”
Lippert added, “I’m excited to work alongside Jarrod and the entire Fun Town team. My focus will be on our people, our customers and building the infrastructure that allows Fun Town to continue growing without losing what makes their business unique. I know I can help Funtown become one of the most coveted and respected dealership franchises in the entire industry as we look to innovate and improve the entire customer ownership experience.
An Entrepreneurial Growth Story
McGhee founded Fun Town RV in 2011 with a single dealership and a vision to build a different kind of RV retailer. Rather than relying primarily on acquisitions to create scale, Fun Town has grown predominantly through organic expansion, developing new locations and building its brand one market at a time.
Today, Fun Town RV operates 32 dealerships across multiple states. In Texas — the largest RV retail market in the United States — Fun Town has established an especially strong presence, with seven of the state’s top 20 dealerships.
The company’s growth has made Fun Town one of the most significant family-owned RV dealership organizations in the country while retaining the entrepreneurial approach established by McGhee.
As Fun Town enters its next stage, McGhee will continue to play an important leadership role in the business, working closely with Lippert on the company’s long-term vision, strategy and growth opportunities.
Building the Next Generation of Fun Town RV
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Lippert’s appointment reflects Fun Town RV’s ambition to build upon its successful entrepreneurial foundation and create an organization capable of operating at substantially greater scale.
For Lippert, the opportunity represents a return to the entrepreneurial environment in which his career began, now informed by more than three decades of experience building and leading at scale.
“I’ve spent my career believing that great businesses are ultimately built by great people who are aligned around a clear purpose and take exceptional care of their customers,” Lippert said. “Fun Town has the entrepreneurial foundation, market presence and ambition to build something truly special. I’m looking forward to helping write an incredible next chapter.”
About Fun Town RV
Founded in 2011 by Jarrod McGhee, Fun Town RV has grown from a single Texas dealership into one of the largest family-owned RV dealership groups in the United States. The company operates 32 dealerships across multiple states and offers a broad selection of recreational vehicles, parts, service and related products and services. Fun Town RV has built its business around customer service, entrepreneurial leadership and a commitment to the RV lifestyle.EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, John A. Sirpilla, Interim Chief Executive Officer, certify that:
1.I have reviewed this quarterly report on Form 10-Q of LCI Industries;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026
By /s/ John A. Sirpilla
John A. Sirpilla, Interim Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 13a-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Lillian D. Etzkorn, Chief Financial Officer, certify that:
1.I have reviewed this quarterly report on Form 10-Q of LCI Industries;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026
By /s/ Lillian D. Etzkorn
Lillian D. Etzkorn, Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of LCI Industries (the “Company”) for the period ended September 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John A. Sirpilla, Interim Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ John A. Sirpilla | ||
| Interim Chief Executive Officer | ||
| Principal Executive Officer | ||
| November 5, 2026 | ||
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of LCI Industries (the “Company”) for the period ended September 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Lillian D. Etzkorn, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ Lillian D. Etzkorn | ||
| Chief Financial Officer | ||
| Principal Financial Officer | ||
| November 5, 2026 | ||