LCI Industries has announced additional actions and support activities in response to the COVID-19 pandemic. In addition, the company will be establishing an emergency fund for team members in crisis.
“During this unprecedented crisis, the health and safety of our team members remains our top priority,” said LCI Industries President and CEO Jason Lippert. “At the same time, we are taking the necessary steps to mitigate the long-term impact of this prolonged macro-economic uncertainty on our business stemming from the COVID-19 pandemic. As a result, we have taken substantial actions in response to this rapidly changing environment, including implementing broad-based reductions in compensation, delaying non-essential capital expenditures, and eliminating discretionary spending. We believe these steps will be critical to maintaining a strong, flexible financial position. Now more than ever, our operational discipline and track record of successfully navigating various economic cycles will prove critical to ensuring we emerge from this crisis a stronger, more nimble company.”
As previously announced on March 25, the company announced the temporary suspension of production at select manufacturing facilities across the U.S. and Europe. In addition, LCI Industries is making the following temporary compensation adjustments:
- Lippert, as well as Ryan Smith, senior VP of operations, will reduce their base salaries by 25 percent.
- The executive leadership team, general managers and other executives across the company will reduce their respective base salaries.
- The LCI Industries board of directors will reduce their quarterly retainer by 25 percent.
“Many of our team members on the front lines are experiencing personal and financial difficulties as our economy has ground to a rapid halt,” said Lippert. “As a result, we will be establishing a temporary emergency fund to support extreme needs of team members, if needed. In this difficult period, I want to again express my gratitude to all our team members for their extraordinary leadership.”
The company will continue to carefully review executive and director compensation, as well as other salaried personnel costs, to identify other potential cost saving opportunities.
LCI has implemented further cost saving measures, and is evaluating additional actions, including:
- Rightsizing workforce to match current demand levels.
- Delaying certain capital expenses and reducing or eliminating non-critical business expenses.
- Temporary hiring freezes in all locations and furloughs for non-critical team members.
- Postponing merit increases for salaried employees until the end of the fiscal year.
- Continually engaging with our strategic banking partners regarding appropriate options relative to future financial liquidity.
LCI Industries stated that it maintains a strong financial position supported by liquidity, with a current net debt position of about $700 million, net of about $100 million of cash available on its balance sheet and borrowing availability of more than $190 million at March 31.
The company has no significant debt maturities until 2022, and as of the most recent quarter end, the company was well within its loan covenant which requires a leverage ratio under 3.0.
