Higher sales to North American marine manufacturers helped LCI Industries’ adjacent industries business grow in the third quarter of 2026, while weaker recreational vehicle (RV) demand reduced group sales.
LCI supplies engineered components to manufacturers and aftermarket customers in the outdoor recreation and transport sectors through its Lippert subsidiary.
Adjacent industries OEM net sales increased 7 per cent year on year to $342.4m, supported by higher sales to marine, transportation and manufactured housing manufacturers.
Group net sales fell to $992.5m from $1,036.5m a year earlier. Net income declined to $50.1m, or $2.05 per diluted share, from $62.5m, or $2.55 per diluted share.
Operating profit margin nevertheless increased to 7.6 per cent from 7.3 per cent, mainly through cost improvements, including changes to materials sourcing. Adjusted operating profit margin, which excludes merger-related expenses and restructuring costs, rose to 8.3 per cent from 7.3 per cent.
Adjusted net income increased to $54.0m from $48.1m, while adjusted diluted earnings per share rose to $2.21 from $1.97. Adjusted EBITDA reached $111.5m, compared with $105.9m a year earlier.
The news follows LCI’s board urging shareholders to reject an unsolicited, non-binding proposal from Monomoy Capital Partners to buy the company for $101 per share in cash.
The company is currently planning an all-stock merger with Patrick Industries. The transaction is expected to close during the first half of 2027. A special shareholder meeting is scheduled for 18 November 2026.
“Our third-quarter results reflect continued progress in improving profitability in a soft outdoor recreation market. Margin expansion and 6 per cent growth in product content per unit contributed to our performance and position us to achieve our updated full-year outlook,” says Johnny Sirpilla, interim CEO.
“Our 2026 performance has been driven by taking actions on those areas within our control. This includes the ongoing pursuit of operational efficiencies and strategic cost reductions. Our cost management and growth in adjacent industries and aftermarket sales contributed to our bottom line results, and we believe leave us well-positioned as conditions normalise.”
RV sales decline as aftermarket grows
RV OEM sales fell 17 per cent to $389.9m, mainly reflecting lower North American travel trailer and fifth-wheel shipments and a shift towards single-axle travel trailers with lower component content. Total OEM sales, including adjacent industries, declined 7 per cent to $732.3m, although operating profit increased to $44.1m from $43.6m.
Aftermarket sales rose 6 per cent to $260.2m, driven mainly by higher automotive aftermarket volumes. Operating profit fell to $30.9m from $31.9m as higher costs, including materials and freight, weighed on margins.
Sirpilla continues: “Our new product pipeline and the repair and replacement needs of the installed RV base provide opportunities to serve customers even as demand for new units remains constrained. We are also advancing toward the proposed merger with Patrick Industries, which we continue to expect to close in the first half of 2027. Until that time, our focus remains on disciplined execution and strengthening the business under current market conditions, while driving long-term shareholder value.”
The company generated $316m in operating cash flow over the 12 months ended 30 September 2026. At that date, liquidity totalled $841m, comprising $245.6m in cash and cash equivalents and $595.4m available under its revolving credit facility. Outstanding long-term debt, including current maturities, was $852.4m.
LCI expects full-year revenue of $3.9bn to $4.0bn, an adjusted operating profit margin of 7.5 per cent to 8.0 per cent and adjusted earnings per share of $8.25 to $8.50. October net sales are expected to be approximately $341m, down 10 per cent year on year.
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