Elkhart, Ind.-based LCI Industries, parent to Lippert Components Inc., reported that consolidated net sales for the second quarter, ended June 30, were $629.1 million, representing an 8% decline from 2018 second quarter net sales of $684.5 million.
Net income during the three-month period was $47.5 million, or $1.89 per diluted share, compared to net income of $47.2 million, or $1.86 per diluted share, in the second quarter of 2018.
The company noted that the decrease in year-over-year net sales for the second quarter of 2019 reflects lower RV wholesale shipments as dealers normalize their inventory levels —which Lippert believes to be in the final stages of correction — offset by continued growth in the company’s aftermarket and international markets. Net sales from acquisitions completed by the company over the 12 months contributed $8.6 million in the second quarter of 2019.
The company’s content per travel trailer and fifth-wheel RV for the 12 months increased $74 to $3,486, compared to $3,412 the year prior. The company’s content per motorhome RV for the 12 months increased $30 to $2,468 from $2,438 a year ago. The content increases are a result of organic growth, including new product introductions and price increases, as well as acquisitions, Lippert reported.
“In the second quarter, we delivered solid performance led by growth in aftermarket, as well as sequential margin expansion driven by market share gains, operational efficiencies, and material cost improvements,” noted LCI CEO Jason Lippert. “While the North American RV market remains challenging, our diversification strategy continues to generate solid momentum.
As of June 30, our adjacent, aftermarket, and international sales comprised over 40% of our last 12-month sales, which was supported by 29% growth in domestic aftermarket sales over the first quarter and 13% year-over-year. In addition, our aftermarket segment operating margin has expanded to 17.1% in the second quarter and 14.9% year-to-date.
Lippert reported that the company also benefited from the implementation of initiatives to enhance manufacturing efficiencies through several continuous improvement, lean, and automation projects, which drove lower labor costs for the quarter and enhanced margins.
“Supplementing our investments in innovation, content growth, and market share gains, we also announced two exciting transactions during the quarter, Lewmar Marine and Lavet, which will further enhance our offerings to the marine and the international RV market, respectively,” Lippert stated. “As we look to the back half of 2019, while the domestic RV market will remain somewhat pressured, we believe we have the opportunity to further drive value for our shareholders through a continued focus on diversifying our business as we remain committed to core industry leadership, innovation, and growth into new markets.”
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