LCI Industries Posts 27% Net Income Gain, Ends Patrick Industries Merger Talks

LCI Industries, a supplier of engineered components to the recreation and transportation markets, has released its financial results for the first quarter of 2026. In addition, it announced that the company and Patrick Industries have terminated discussions regarding a potential merger of equals, as the companies were unable to reach mutually agreeable terms. LCI Industries and Patrick Industries each previously confirmed discussions on April 17, 2026, and noted there could be no assurance that any such agreement would be reached.

LCI Industries Reports First Quarter Financial Results

LCI Industries reported its first quarter 2026 financial results and hosted a conference call to discuss those results on Tuesday, May 5, 2026.

“I am so pleased with our team’s performance across the business, helping get us off to a very strong start despite very challenging retail and wholesale environments in the leisure markets we serve,” said Jason Lippert, president and chief executive officer. “Our focus for the last year, in addition to innovation and growth, has been on plant optimizations, G&A restructuring and other self-help initiatives driving us toward stronger financial health, no matter how tough the environment. As a result, we were able to generate meaningful earnings growth.

“This strong performance and the growth we achieved during a muted quarter for industry output further validates the success of our targeted investments in operational excellence and diversification. Our team’s emphasis on footprint and cost structure optimization efforts has amplified these results, enhancing the long-term earnings power of our platform. Looking ahead, regardless of the macro environment, our key performance drivers include rapid content-per-unit expansion through innovation, a dedicated focus on growing the aftermarket business that is positioned to service nearly every RV on the road and accelerating traction across OEM markets. The updated outlook shared today reflects our confidence in broadening our ability to serve our customers and our team’s consistent execution in driving long-term shareholder value.”

First Quarter 2026 Results

Consolidated net sales increased 4.3% to $1.1 billion in the first quarter of 2026, up from $1.0 billion in the same period of 2025. The $44.9 million increase was primarily driven by a $29.3 million increase in the OEM Segment, reflecting sales price increases to cover higher material costs, sales from acquired businesses during the year ($46.8 million in the first quarter), and an increase in North American RV sales driven by recent innovations and a higher mix of premium fifth-wheel units, partially offset by a decrease in North American travel trailer and fifth-wheel shipments.

Net income was up 27% to $62.9 million, or $2.53 per diluted share, compared to $49.4 million, or $1.94 per diluted share, in the first quarter of 2025. Adjusted net income increased to $62.9 million, or $2.59 per adjusted diluted share, compared to $55.6 million, or $2.19 per adjusted diluted share. Adjusted EBITDA increased 13% to $125.0 million, compared to $110.9 million in the first quarter of 2025. Operating profit margin increased to 8.7% in the first quarter of 2026 compared to 7.8% in the same period of 2025. Year-over-year margin expansion was driven primarily by reduced costs resulting from our materials sourcing strategies and the benefits of other cost improvement actions, such as footprint optimizations.

OEM Segment – First Quarter Performance

OEM net sales increased $29.3 million, or 4%, to $852.8 million for the first quarter of 2026, compared to the same period of 2025. RV OEM net sales decreased 4% to $509.8 million, primarily due to a decrease in North American travel trailer and fifth-wheel shipments, partially offset by sales price increases to cover higher material costs, an increase in RV sales mix toward higher content fifth-wheel units, an increase in North American motorhome RV unit shipments, and recent innovations. Adjacent Industries OEM net sales increased 17% year-over-year to $343.0 million, primarily driven by sales from acquired businesses and higher sales to North American marine OEMs.

Operating profit of the OEM Segment was $76.5 million in the first quarter of 2026, or 9.0% of net sales, compared to $62.0 million, or 7.5% of net sales, in the same period in 2025. The operating profit margin expansion was primarily driven by increases in selling prices to cover increased material costs, and cost improvement actions such as footprint optimizations and material sourcing strategies. These gains were partially offset by higher material costs related to tariffs and increased steel and aluminum costs.

Aftermarket Segment – First Quarter Performance

Aftermarket net sales increased 7% to $237.7 million for the first quarter of 2026, compared to the same period of 2025. The increase was primarily driven by sales price increases to cover higher material costs and sales from acquired businesses, partially offset by volume decreases in the automotive and marine aftermarkets.

Operating profit of the Aftermarket Segment was $18.7 million, or 7.8% of net sales, compared to $19.3 million, or 8.7% of net sales, in the same period of 2025. The operating profit margin decrease was primarily driven by higher material costs related to tariffs and increased steel costs, and investments in capacity and distribution. These pressures were partially offset by increases in selling prices to cover increased material costs, reduced costs as a result of materials sourcing strategies, and a favorable shift in sales mix.

Income Taxes

The Company’s effective tax rate was 26.2% for the quarter ended March 31, 2026, compared to 26.5% for the quarter ended March 31, 2025. The improvement in the effective tax rate for the first quarter 2026 compared to 2025 was primarily due to the recognition of excess tax benefits on stock-based compensation.

Balance Sheet & Other Items

At March 31, 2026, the company’s cash and cash equivalents balance was $142.2 million, relative to $222.6 million at December 31, 2025. The Company used $27.9 million for dividend payments to shareholders and $9.7 million for capital expenditures in the three months ended March 31, 2026.

The Company’s outstanding long-term indebtedness, including current maturities, was $945.0 million at March 31, 2026. As of March 31, 2026, the Company had $595.2 million of borrowing availability under its revolving credit facility.

Outlook

Based on current market and economic conditions, along with existing tariffs, the company expects the following:

• April 2026 net sales of approximately $374 million, down 4% from prior year
• 2026 North American RV wholesale shipments of 315,000 to 330,000, lowering from the previous range of 335,000 to 350,000
• 2026 revenue of $4.2 billion to $4.3 billion
• 2026 operating profit margin of 7.5% to 8.0%
• 2026 adjusted EPS of $8.75 to $9.25, raising the lower end of previous range from $8.25 and reaffirming the upper end

For more detailed information about LCI Industries’ first quarter financial results, click here.