Hello, everyone, and thank you for joining us today for the LCI Industries Third Quarter Earnings Call. My name is Lucy, and I'll be coordinating your call today. [Operator Instructions] It is now my pleasure to hand over to your host, Lillian Etzkorn, CFO, to begin. Please go ahead.

Good morning, everyone, and welcome to the LCI Industries Third Quarter 2025 Conference Call. I am joined on the call today by Jason Lippert, President and CEO; along with Kip Emenhiser, VP of Finance and Treasurer. We will discuss the results for the quarter in just a moment. But first, I would like to inform you that certain statements made in today's conference call regarding LCI Industries and its operations may be considered forward-looking statements under the securities laws and involve a number of risks and uncertainties. As a result, the company cautions you that 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 are discussed in our earnings release and in our Form 10-K and in other filings with the SEC. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements are made, except as required by law. In addition, during today's conference call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings release and investor presentation, which have been posted on the Investor Relations section of our website and are also available in our Form 8-K filed this morning with the SEC. With that, I would like to turn the call over to Jason.

Thank you, Lillian, and good morning, everyone. Welcome to LCI Industries' Third Quarter 2025 Earnings Call. This quarter, we continued to build on our ongoing and successful efforts to drive efficiency and drive benefits from our years of diversification and our relentless focus on growth. To that point, we delivered an exceptionally strong quarter with sales growth of 13% to more than $1 billion, along with solid margin improvement, driven by double-digit gains across our RV and Adjacent businesses. This demonstrates the continued benefit of our innovation strategy and successful integration of our recent acquisitions. Our entire organization continues to work diligently to optimize productivity, footprint and resources, positioning the company for outperformance as the industry begins to recover from this prolonged cycle. Operating margins improved 140 basis points year-over-year to 7.3%, a direct result of our disciplined cost management, sustainable improvements in overhead and G&A, more favorable mix, footprint optimization and ongoing productivity initiatives. Year-to-date, we successfully completed 3 facility consolidations with 2 more expected by year-end. Our facility consolidation actions completed in 2025 alone are expected to generate more than $5 million in annualized savings. Collectively, these initiatives position us to deliver our 85-basis-point operating margin improvement goal for the year. On the wholesale front, following a strong Elkhart Open House, we expect a near-term uptick in units produced. Our chassis orders in October are up roughly 275 to 300 units per week compared to prior months, an encouraging sign of OEM confidence and proactive dealer restocking ahead of the next selling season. Turning to RV OEM. Net sales were approximately $470 million, up 11% year-over-year. This double-digit growth underscores the effectiveness of our innovation strategy and the strength of our competitive moat. Total content per unit increased 6% year-over-year to $5,431 as we continue to expand share…

Thank you, Jason. Lippert's innovation, competitive strengths and successful M&A supported double-digit net sales growth this quarter, while sustainable operational improvement initiatives translated into meaningful margin expansion. Our consolidated net sales for the third quarter were $1 billion, an increase of 13% from the third quarter of 2024. OEM net sales for the third quarter of 2025 were $790 million, up 15% from the same period of 2024, driven by RV OEM net sales of $470 million, which were up 11% compared to the prior-year period. This increase was a result of market share gains and an increased mix of higher content fifth-wheel units. Content per towable RV unit increased 6% year-over-year to 5,431 and content per motorized unit increased 2% year-over-year to 3,839. Towable RV organic content grew 3% year-over-year and 1% sequentially, supported by the share gains we delivered in the top product categories we supply to RV OEMs, specifically appliances, axles and suspension, chassis, furniture and windows as well as the continued adoption of recent innovations like our ABS, TCS, appliances, Furrion Chill Cube and the SunDeck. Adjacent Industries OEM net sales were $320 million, up 22% year-over-year, primarily due to acquisitions within the transportation market, which represented $39 million in the quarter. This increase was also supported by other markets such as utility trailers, where net sales grew 22% and marine, where net sales rose 9%. We continue to further expand our presence across numerous diversified markets. Aftermarket net sales were $246 million, an increase of 7% compared to the same period in 2024, primarily driven by product innovations and the expanding Camping World relationship within the RV aftermarket, partially offset by lower volumes within the automotive aftermarket. Consolidated operating profit during the third quarter was $75 million or 7.3%, a 140-basis-point expansion over the prior-year…

[Operator Instructions] The first question comes from Daniel Moore of CJS Securities.

Congrats on the solid results. I want to maybe just parse out -- so in the quarter, adjusted operating margins rebounded quite a bit faster than expected. Can you maybe bucket or just rank order those improvements between leverage to higher volumes, optimization, mix? And I'm wondering if there -- if maybe tariffs didn't have quite as much of an impact as expected as well.

Yes. So let me, Dan. So I'll start actually with the end of your question first. I'd say from the tariff perspective, things continue to progress through the year as we had expected. And frankly, as we are foreshadowing previously, the team has done a really solid job of mitigating the tariff impact to the business, both from the resourcing, working with our vendors for options there to help drive the cost down. And then to the extent that we needed to, we've been negotiating with our customers to pass along pricing. So that definitely helped the results that we were able to effectively mitigate the tariffs. Clearly, we saw the volume uplift. We've been seeing the strength in the industries, and I say that broadly, not just the RV, but also strength in other industries as we've been moving through the quarter. And that definitely helped. And you saw as well on the RV side of the business, the content expansion as our newer products continue to be very well received. And as we are going through the model changeover and through open house, we've continued to be very successful in penetrating market share with those products.

And Dan, productivity was a huge boost, too. I just to give you a quick example. I think we're down 50 team members year-to-date from the beginning of the year. And with all the acquisitions, especially the 2 large ones we did, we've added 1,000 people there. So to be up 1,000 with acquisitions, but down net 50 for the year kind of shows you the productivity gains we've experienced through some of the footprint optimization and other productivity initiatives we've been working on.

Really helpful. I wanted to clarify the Q4 outlook, revenue up mid-teens. Can you maybe break that down by end market a little bit? Obviously, a little bit better outlook in RV is helpful. And then on the margin side, you mentioned similar improvements year-over-year. I'm assuming that's about 150 basis points adjusted, putting us in the 4% range. Just want to make sure I'm understanding your thoughts on Q4 margin profile, Lillian.

Sure. So yes, I think you're getting to the right ZIP code with that in terms of that year-over-year margin expansion. In terms of more specific market clarity, I guess, best way to characterize that without getting into specific numbers, we expect to see continued strength in the RV industry as we're going through the fourth quarter. We're seeing continued strength, as Jason was commenting about in his comments around the mix of product, having less of the single-axle units and more of the fifth-wheels coming through is definitely beneficial as well from a top line perspective and for the business. Also keep in mind, as we look at the fourth quarter, that does tend to be a seasonally low time period for some parts of our business, specifically aftermarket. That's a light quarter for us and as well for international tends to be a little bit light, too.

It appears that volume lift and productivity gains will help as we've mentioned. It doesn't appear that there's any downtime that would be more than normal. I mean everybody is taking off kind of normal off times during the seasonality holidays. So I think those are the biggies.

Really helpful. And I appreciate the color on the margin uplift from some of the divestitures and optimization steps that you continue to take. You generated a $20 million gain in the quarter. You've got 2 more facilities consolidation this year, 8 to 10 next year. Are there -- any sense for the potential proceeds and/or gains from those sales? I know they're onetime, but that could be a nice cash benefit.

Some of the facilities are leased there. Some of them are owned. So to the extent we can -- we're going to fully get out of the facility and not use it for something else, then we'll certainly look to put those on the market. So there'll be probably a couple of those, but we don't have any dollars attached to those yet till we get that done. But we definitely have significant momentum in that category as we continue to really drive hard to consolidate and simplify the business.

Absolutely. Last, I appreciate the outlook for the RV wholesale shipments, the preliminary outlook for '26. Do you have kind of a similar outlook for marine at this stage?

At this stage, Dan, we don't. I think when we come out with the fourth quarter results, we'll have a more comprehensive outlook for next year.

And our big opportunity in marine right now is just content growth through some of the innovation we've launched here in the last couple of quarters.

Got it. All right. Well, hopefully, all of the share gains that we're seeing come through, but some of that chatter to rest.

The next question comes from Joe Altobello of Raymond James.

I guess first question on the industry outlook. You mentioned wholesale looks to be up modestly next year. Would you also expect retail to be up next year?

I think we're kind of expecting the same -- for them to kind of stay in line as they have in the last couple of years. We're not forecasting any kind of big jump in retail at this point.

Okay. Got it. And then just in terms of the quarter, the 13% revenue growth, could you parse out how much of that was pricing related?

So we haven't parsed it out specifically on that, Joe. I mean it is -- there is pricing elements to that, but it's also the overall volume uplift as well and the acquisitions that we identified the $42 million.

Okay. And maybe one last one for me. You talked about the mix improving. And I know this time of the year with the model year changeover, you usually see a little bit of a richer mix of larger units. Are you seeing an improvement beyond what you would expect normally from a seasonal perspective?

Well, I'd say that the mix to single-axle trailers has changed significantly over the last. It's been in process for the last 8 years or so. But I think what we've seen is the momentum slow down and start to retreat the other way in a meaningful way quarter-to-quarter. So it could change next year. It could go back up a little bit, but our expectation is that it's going to kind of stick around where it's at with all the conversations we've had with the dealer -- the dealers are driving and seeing a lot of this retail activity. There's a lot of those units out in the market. So that, I think, is one of the things that's going to hold that number down. You can only sell so many of those. So that's the short answer, Joe.

The next question comes from Scott Stember of ROTH Capital.

Congrats on the very strong results as well. I just want to square something away with what the largest dealer indicated on their conference call yesterday, pretty much saying that they're starting to see some elasticity issues, particularly given some of the price increases that have been put through, I guess, related to tariffs. Have you seen any change or any commentary from your OEM customers of any potential change in behavior suggesting that maybe they want to pull back a little bit? Or is the comments we heard yesterday probably just more episodic or related to that dealer?

Yes. I think it's a little bit to the latter, the last comment you made. I think some of that might be there. But there's definitely overall price sensitivity in the market around how much RVs have gone up. And it's really -- there's a few things going on. I think what's going to drive volume next year a little bit is the fact that suppliers, OEMs, they have reduced capacity. So there's less capacity if dealers want to get to have product in their lots for the spring selling season, they have to think about ordering a little bit differently and a little bit further ahead because some of that capacity is restricted. And then Camping World, they don't supply, I guess, every single OEM. So I mean, there's winners and losers out there in terms of the brands. The good thing about Lippert and our whole strategy, and we supply the whole market. So when you look at the Forest Rivers and the Brinkleys and the alliances, we're supplying a lot of content to those brands. So when I look at those -- the types of comments you're making, I talk to a lot of dealers, not just Camping World, and that's kind of how we're coming up with our assumptions for the next year. There's a lot of positives there.

Got it. Awesome. And maybe just talking about, I guess, one of the bigger components that you had to put price increases through for was steel and aluminum. And in the past, there's usually been a timing delay of when you get those prices through. It seems as if you were pretty successful in getting those through. I just want to see how this time -- if it is different than the last time that we saw steel and aluminum prices running up.

Yes, nothing's really changed there. I mean those 2 commodities are the largest components of our BOMs, at least on the RV side. So they are all controlled largely by these indexes. So right now, steel is a good guy and aluminum is a bad guy. Aluminum pricing is going to be going up here for the next couple of quarters and steel pricing is starting to come down. So there'll be a little bit of offset there. There were some tariff announcements this morning that there will be some favorability. Hopefully, we don't have timing on that yet as it was just announced here in the last 24 hours. So I think the big headline for cost next year is the fact that tariffs seem to be at least settled in place where things are predictable, and we can start working on costs better, and we're going to work with our OEMs the best we can and the discipline that they've had to get real production back to make sure that we're getting them the best we can for costs and as they redo bill materials and recontent and decontent that we're a bigger part of the solution as possible.

Got it. And last one for me on the Aftermarket, very strong results, very resilient. I know you have a lot of traction from previous OEM introductions that you're working into the aftermarket. But just trying to get a sense of a breakdown of the business between the automotive side and the RV side. Is there a big difference in growth between the 2 right now?

So the RV aftermarket for us has grown sequentially almost since we've started it 10 years ago, a little over 10 years ago. The repair and replacement service business is growing always for us because we're always putting more content in the RV. So I'll go back to the example I used in my opening remarks of we launched air conditioning. We've launched a lot of products in the last 5 years, but we launched air conditioners a few years ago, I think I said in '22, we had maybe 5% of the total OEM content, but we had no aftermarket business in ACs. And today, if you fast forward, we've got probably 50% market share OEM, which is fantastic. But now we're seeing close to -- we'll see close to $20 million in AC aftermarket business this year. So again, the point is that when we launch new products, for most of the products we launch, there's a meaningful aftermarket once we penetrate the OEM business. So we expect the aftermarket business to continue to grow, especially with the tsunami of units that were built in 2020 to 2022 that like you're going to start hitting the repair and replacement cycle here in the next couple of years. And on the auto side, we've had a lot of great success against our largest competitor, who used to be Horizon Global, went to First Brands. And if you read anything about First Brands in the last month, they've got some serious issues. So our largest competitor, we're already starting to make some huge inroads here recently just because there's a lot of uncertainty around whether that business is going to continue to exist and who's going to own it. You look at the brands they have like Reese and Fulton and Bulldog, I mean, CURT is their largest competitor. So we've got some significant upside on that part of our business as it relates to the auto pitch and trailering components. So hopefully, that's helpful, Scott.

The next question comes from Tristan Thomas of BMO.

Can I confirm, I think you said $2 million from acquisitions in the quarter. And then have you quantified what you expect Bigfoot to contribute on an annual basis?

We've not. It's smaller. I mean MAS and Bigfoot are less than $25 million combined. And then for the quarter on acquisitions was $30 million.

$42 million total.

$42 million.

Okay. Great. And then for next year, how are you thinking about kind of the annualized tariff impact either on a gross or net basis or maybe both?

I think as we think about the tariffs for next year, really in terms of what we would expect is really a continuation of this year in terms of that mitigation. We've got the actions in place so that they're not impactful. So again, assuming that there's no changes with the global tariffs and they seem to have stabilized, I'd expect that we continue to have that full mitigation that we do presently going into next year.

It should be a lot easier.

Okay. And then just one last question. How long do you think it's going to take to kind of get that single-axle versus multi-axle and fifth-wheel mix kind of back to that, call it, 84-ish percent range?

It's hard to say. Camping World is doing a great job pushing that product in the market. They're the single largest producer of that type of trailer. The strategy is to get more first-time buyers in the RV lifestyle because of the price point entry on that of less than $12,000 in a lot of cases. So it's really hard to say, Tristan. But our expectation is that it will normalize. It won't go back to where it was probably 10 years ago, but we think it has a good chance of getting back into that 16% range, especially as all the people that have bought that type of unit over the last 5 years decide to -- whatever portion of them decide to re-up and buy another RV, they're going to buy a bigger one.

[Operator Instructions] The next question comes from Bret Jordan of Jefferies.

This is CJ Dipollino on for Bret Jordan. I wanted to circle back to dealers real quick. Could you just give us any color into dealer sentiment and any insight into the probable timing of the restocking cycle as we move into the new year?

Yes. I mean, like I said earlier, we talk to a lot of the big dealers just to try to get a feel for where everybody is at because all the dealers have a little bit different strategy, and they play in different markets. And I would just say that there is a sentiment that inventories are low. The OEMs have had good discipline, like I said earlier, that's helped keep inventories low, but dealers have been just not ordering a ton of inventory. But again, like I said, it's not just us that has simplified our footprint and optimized. I mean a lot of suppliers and OEMs have. So the capacity is less than the industry today. And I think that the dealers know that. And they're being -- they've got to be a little bit cautious on how they look at restocking and not trying to get inventory is too low because they're not going to be able to get the product when people need it for spring selling season. So I think that's why we're seeing a little bit of this. And again, our forecast is very modest for next year. 345,000 to 360,000 is not a huge lift, but every 5,000 units that get added to the wholesale production is a really big deal for us considering our content at $5,400 so -- and the innovation that's coming.

Okay. Great. And then could you just comment on trends in contenting that you're seeing? More specifically, I just want to see if the decontenting of RVs has started to stabilize.

I feel it has. And again, I've always said that we're a little immune to that just from the standpoint that we tend to have a lot of the products that that customers need to differentiate their products from others. And those would be things like the Chill Cube AC that we've talked about, the bus dial, square windows that we've launched in the last 1.5 years with the different colors on the exteriors, TCS and ABS and things like that, they tend not to decontent those things. So the biggest thing that hurts us is mix when it comes to decontenting. It's just the biggest negative and content for us would be a mix shift. But like I said, we're seeing a shift to the positive at this point in time. And just another anecdotal thing I was just thinking about with the dealers. I was talking to a dealer the other day and their multisite dealer, their most popular floor plan they had or what they sell, they had 6 on the ground, which doesn't lend itself to good sales for the dealers if they don't have really popular floor plans in the right geographies. So I think that that's another reason we're seeing a little bit of positivity out there from some of the dealers that we're talking to.

We currently have no further questions. I'd like to hand back to Jason for any closing remarks.

Well, the last 3 years have been tough being at the bottom of the cycle, but we figured out how to peak operating performance here in the trough. We're really proud and happy with the results we've -- the solid results that we put out here in the last quarter, and I look forward to talking about that continued momentum next quarter. Thanks for the call.

This concludes today's call. Thank you all for joining. You may now disconnect your lines.