LCI INDUSTRIES
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
LCII$97.81-4.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0000763744-25-000022
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0000763744-26-000011
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 133 current paragraphs.
56 unchanged; 44 reworded; 30 added; 14 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
•Consolidated operating profit during 2025 was $279.9 million compared to $218.2 million in 2024. Operating profit margin was 6.8 percent in 2025 compared to 5.8 percent in 2024. The increase was primarily due to reduced costs from materials sourcing strategies and leveraging of fixed expenses over higher North American RV sales volumes driven by an increased mix of higher content fifth-wheel units, market share gains, and a 3 percent increase in total North American RV wholesale shipments.
Current report
•Tariff mitigation strategy of diversifying our supply chain, with help from vendors and other sourcing strategies, enabled us to minimize the impact of pricing to our customers as well as support profitability.
Current report
•Interest expense, net in 2025 was $35.7 million compared to $28.9 million in 2024. The increase was primarily due to interest on the 2030 Convertible Notes (as defined in Note 3 of the Notes to Consolidated Financial Statements) and higher interest rates on our adjustable rate Term Loans (as defined in Note 9 to the Notes to Consolidated Financial Statements), partially offset by reduced borrowings outstanding on the revolving credit facility and interest income of $7.3 million earned on investments in money market mutual funds for the year ended December 31, 2025, compared to $5.1 million in the same period of 2024.
Current report
•In 2025, we returned an aggregate of $242.6 million to shareholders, including through share repurchases of $128.6 million and quarterly dividends aggregating $4.60 per share, or $114.0 million.
Current report
Our increase in net sales to RV OEMs during 2025 was driven by sales price increases related to tariffs, an increase in RV sales mix toward higher content fifth-wheel units, market share gains and a 3 percent increase in total North American RV wholesale shipments, partially offset by volume decreases in the European RV market.
Current report
•Reduced costs from materials sourcing strategies, which increased operating profit by $44.5 million compared to 2024.
Current report
•The impact of fixed costs spread over increased sales, which increased operating profit by $14.6 million related to fixed production overhead costs and $13.1 million related to fixed selling, general, and administrative costs.
Current report
•Higher material costs related to tariffs and higher freight costs, which negatively impacted operating profit by $75.8 million compared to 2024.
Current report
•Changes in product sales mix toward lower margin products, which negatively impacted operating profit by $4.3 million compared to 2024.
Current report
•Restructuring costs associated with the closure of the Company's glass operations in Ireland, which negatively impacted operating profit by $3.9 million compared to 2024.
Current report
The increase in net sales of the Aftermarket Segment was primarily driven by product innovations, the expanding Camping World relationship within the RV aftermarket, and sales from acquired businesses, partially offset by lower volumes within the automotive aftermarket.
Current report
•Higher material costs related to tariffs and higher freight costs, which collectively negatively impacted operating profit by $22.7 million compared to 2024.
Current report
•Investments in capacity, distribution and logistics technology to support continued growth in the Aftermarket Segment, which negatively impacted operating profit by $8.7 million compared to 2024.
Current report
•Decreases in automotive aftermarket production volumes in response to lower retail volumes, which led to reduced utilization of fixed production overhead costs, negatively impacting operating profit by $3.9 million compared to 2024.
Current report
•Increases in advertising, customer promotions, and rebates, which negatively impacted operating profit by $3.0 million compared to 2024.
Current report
•Reduced costs from materials sourcing strategies, which increased operating profit by $13.5 million compared to 2024.
Current report
Loss on Extinguishment of Debt
Current report
In 2025, we recorded an $8.9 million loss on extinguishment of debt, consisting of $6.2 million in connection with the repurchase of a portion of our 2026 Convertible Notes, $1.9 million related to the repayment of our previous term loan, and $0.8 million related to the repricing amendment for our Term Loans.
Current report
Gain on Sale of Real Estate
Current report
As part of our footprint optimization efforts, we sold two owned real estate locations during 2025 for combined net cash proceeds of $22.7 million. The sales resulted in a total net gain on the sale of real estate of $19.7 million for the year ended December 31, 2025.
Current report
Cash flows used in financing activities of $125.5 million in 2025 were primarily comprised of the following:
Current report
•payments of $368.9 million for the repurchase of a portion of our 2026 Convertible Notes,
Current report
•payments for the repurchase of common stock of $128.6 million,
Current report
•payments of $67.6 million for the purchase of convertible note hedge contracts, and
Current report
•net proceeds from the issuance of our 2030 Convertible Notes of $448.5 million,
Current report
•proceeds from Term Loan borrowings of $391.0 million, and
Current report
•proceeds from the issuance of warrants of $27.6 million.
Current report
In May 2022, our Board of Directors authorized a stock repurchase program (the "2022 Share Repurchase Program") for the purchase of up to $200.0 million of our common stock over a three-year period, which ended on May 19, 2025. Under this stock repurchase program, we purchased 308,898 shares at a weighted average price of $91.47 per share, totaling $28.4 million including excise tax during March 2025, using approximately $28.3 million of the net proceeds from the offering of the 2030 Convertible Notes. Following such repurchase, no additional shares were purchased under the 2022 Share Repurchase Program prior to its expiration on May 19, 2025. No shares were repurchased during the year ended December 31, 2024.
Current report
In May 2025, our Board of Directors authorized a new stock repurchase program (the "2025 Share Repurchase Program") for the purchase of up to $300.0 million of our common stock over a three-year period ending on May 15, 2028. On June 11, 2025, we entered into a Rule 10b5-1 trading plan under the 2025 Share Repurchase Program for the period between June 13, 2025 and August 1, 2025 to repurchase up to $100.0 million of our common stock excluding excise tax, subject to certain parameters. Under this 10b5-1 trading plan, we purchased 1,057,667 shares at a weighted average price of $94.55 per share totaling $101.0 million, including excise tax during the year ended December 31, 2025. As of December 31, 2025, there was $200.0 million remaining for the repurchase of shares under the 2025 Share Repurchase Program.
Current report
RAW MATERIALS INFLATION
Removed paragraphs (14)
Previous report
•Consolidated operating profit during 2024 was $218.2 million compared to $123.4 million in 2023. Operating profit margin was 5.8 percent in 2024 compared to 3.3 percent in 2023. The increase was primarily due to decreases in material, freight, and warranty costs.
Previous report
•The cost of steel and aluminum consumed in certain of our manufactured components decreased in 2024 compared to 2023. Raw material costs are subject to continued fluctuation and impact certain contractual selling prices which are indexed to select commodities.
Previous report
•Interest expense, net in 2024 was $28.9 million compared to $40.4 million in 2023. The decrease was primarily due to net repayments of indebtedness of $89.2 million in 2024 and interest income of $5.1 million earned on cash and cash equivalent balances in 2024.
Previous report
•In 2024, we paid quarterly dividends aggregating $4.30 per share, or $109.5 million.
Previous report
Our increase in net sales to RV OEMs during 2024 was driven by a 13 percent increase in wholesale shipments of travel trailers and fifth wheel units and market share gains, partially offset by a 24 percent decrease in motorhome wholesale shipments and a shift in unit mix towards lower content single axle travel trailers.
Previous report
•A decrease in warranty costs, primarily due to product quality initiatives that resulted in reduced warranty claim payments, which increased operating profit by $28.0 million compared to 2023.
Previous report
Partially offset by:
Previous report
•Decreases in selling prices, which negatively impacted operating profit by $9.0 million related to prices contractually tied to indices of select commodities and $2.0 million related to targeted products.
Previous report
Our net sales to the Aftermarket Segment included lower volumes within the RV and marine aftermarkets, mostly offset by market share gains within the automotive aftermarket.
Previous report
•Pricing changes to targeted products, resulting in an increase in operating profit of $5.1 million compared to 2023.
Previous report
Partially offset by:
Previous report
•Increased production facility costs resulting from investments to expand capacity in the automotive aftermarket over the past year, which reduced operating profit by $6.4 million.
Previous report
INFLATION
Previous report
While we experienced deflation in the prices of our key raw materials in 2024, inflation on consumer products and elevated interest rates in 2024 impacted retail consumers' discretionary spending, which we believe contributed to our decline in sales, especially in our RV OEM and certain adjacent industries OEM markets, such as marine. Additionally, elevated interest rates in 2023 and through the first half of 2024 impacted retail dealers' cost of floorplan financing, which elevates the carrying cost of inventory on retail dealer lots. Interest rate reductions began in the last four months of 2024, and we expect potential further interest rate reductions in 2025, which we believe would favorably impact retail consumers, as well as retail dealers' floorplan financing.
Reworded paragraphs (44)
Previous wording
We are a global leader in supplying engineered components to the outdoor recreation, transportation, and building products industries. In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online.
Current wording
We are a global leader in supplying engineered components to the outdoor recreation, transportation, marine, and housing industries. In addition to serving original equipment manufacturers ("OEMs"), we also cater to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms.
Previous wording
We have two reportable segments, the OEM Segment and the Aftermarket Segment. At December 31, 2024, we operated over 110 manufacturing and distribution facilities located throughout North America and Europe. Net sales and operating profit were as follows for the years ended December 31:
Current wording
We have two reportable segments, the OEM Segment and the Aftermarket Segment. At December 31, 2025, we operated over 100 manufacturing facilities located throughout North America and Europe. Net sales and operating profit were as follows for the years ended December 31:
Previous wording
Reportable Segments: Our two reportable segments consist of the OEM Segment and the Aftermarket Segment. Our OEM Segment drives innovation and manufacturing expertise, serving leading OEMs in recreation, transportation, and housing markets. Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives recurring revenue, deepens customer engagement, and leverages our OEM expertise.
Current wording
Reportable Segments: Our two reportable segments consist of the OEM Segment and the Aftermarket Segment. Our OEM Segment drives innovation and manufacturing expertise, serving leading OEMs in the RV, transportation, marine, and housing markets. Our Aftermarket Segment enhances the product lifecycle for the RV, transportation, marine, and automotive markets by offering discretionary accessories, replacement parts, and upgrades. This approach drives recurring revenue, deepens customer engagement, and leverages our OEM expertise.
Previous wording
OEM Segment: Manufactures and distributes a broad array of engineered components for the leading OEMs of RVs and adjacent industries, including boats; buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; trains; manufactured homes; and modular housing.
Current wording
OEM Segment: Manufactures and distributes a broad array of engineered components for the leading OEMs of RVs and adjacent industries, including the transportation (buses, trailers, construction, trains, and power sports), marine (pontoon boats, power boats, fishing boats, sailboats, and yachts), and housing (manufactured and modular homes, park models, commercial offices, restroom trailers, and residential housing) markets.
Previous wording
Aftermarket Segment: Supplies many of our engineered components to the related aftermarket channels of the recreation and transportation markets, primarily to retail dealers, wholesale distributors, and service centers, as well as direct to retail customers via the Internet. The Aftermarket Segment also includes biminis, covers, buoys, and fenders to the marine industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, tankless water heaters, and the sale of replacement glass and awnings to fulfill insurance claims.
Current wording
Aftermarket Segment: Supplies many of our engineered components to the related aftermarket channels of the RV, transportation, marine, and automotive markets, primarily through retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. The Aftermarket Segment also includes biminis, covers, buoys, and fenders to the marine industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, tankless water heaters, and the sale of replacement glass and awnings to fulfill insurance claims.
Previous wording
Diversification Strategy: Over the past several years, we have diversified our portfolio beyond the RV OEM market into marine, building products, transportation, international, and aftermarket sectors. Leveraging our manufacturing competencies in other industries can accelerate profitable growth and help to mitigate seasonal and cyclical market risk. For example, within our Aftermarket Segment, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain sales within this segment to be counter-seasonal.
Current wording
Diversification Strategy: Over the past several years, we have diversified our portfolio beyond the RV OEM market into transportation, marine, housing, and aftermarket sectors. We have also diversified geographically through our international operations. Leveraging our manufacturing competencies in other industries can accelerate profitable growth and help to mitigate seasonal and cyclical market risk. For example, within our Aftermarket Segment, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain sales within this segment to be counter-seasonal.
Previous wording
Approximately 57 percent and 61 percent of net sales for the years ended December 31, 2024 and 2023, respectively, were generated outside of the North American RV OEM market, providing a balanced foundation for continued growth.
Current wording
Approximately 56 percent and 57 percent of net sales for the years ended December 31, 2025 and 2024, respectively, were generated outside of the North American RV OEM market, providing a balanced foundation for continued growth.
Previous wording
In 2024, Recreation Vehicle Industry Association ("RVIA") data shows U.S. wholesale shipments of travel trailers and fifth-wheel RVs, the Company's primary market, increased 13 percent to 291,600 units compared with 2023. Retail demand decreased 6 percent to 307,000 units compared with 2023, reflecting a partial stabilization from the sharp declines of prior years. However, inflation and elevated interest rates continued to pressure consumer discretionary spending, dampening demand. Retail registration data is often revised upward in subsequent months due to reporting delays.
Current wording
In 2025, Recreation Vehicle Industry Association ("RVIA") data shows U.S. wholesale shipments of travel trailers and fifth-wheel RVs, the Company's primary market, increased 2 percent to 298,200 units compared with 2024. Retail demand decreased 1 percent to 305,300 units compared with 2024, reflecting a stabilization from the declines in prior years. However, inflation and elevated interest rates continued to pressure consumer discretionary spending, dampening demand. Retail registration data is often revised upward in subsequent months due to reporting delays.
Previous wording
Motorhomes, another key RV category, experienced a significant 24 percent decline in wholesale shipments to 34,900 units in 2024, while retail demand fell 12 percent, according to RVIA data.
Current wording
Motorhomes, another key RV category, experienced a 3 percent increase in wholesale shipments to 36,000 units in 2025, while retail demand fell 6 percent, according to RVIA data.
Previous wording
OEM Segment - Adjacent Industries: LCI's expertise in RV components extends to adjacent industries, including boats, buses, trailers, trucks, trains, manufactured homes, and modular housing. These adjacent industries offer significant growth opportunities, including by helping us leverage our established relationships with OEMs that often operate in multiple sectors. While the potential content per unit we may supply to adjacent industries varies across these markets, and is different than RVs, they represent meaningful diversification opportunities. Key adjacent industries and the annual retail units sold of each include:
Current wording
OEM Segment - Adjacent Industries: Our expertise in RV components extends to adjacent industries, including transportation, marine, and housing. These adjacent industries offer significant growth opportunities, including by helping us leverage our established relationships with OEMs that often operate in multiple sectors. While the potential content per unit we may supply to adjacent industries varies across these markets, and is different than RVs, they represent meaningful diversification opportunities. Key adjacent markets and the annual retail units sold of each include:
Previous wording
•Enclosed trailers: According to Statistical Surveys, approximately 191,900 units were sold in 2024, down from 200,800 in 2023 and 213,800 in 2022.
Current wording
•Enclosed trailers: According to Statistical Surveys, approximately 201,700 units were sold in 2025, compared to 199,100 in 2024 and 206,800 in 2023.
Previous wording
•Boats: Statistical Surveys also reported approximately 245,800 units were sold in 2024, compared to 269,100 in 2023 and 270,900 in 2022. Pontoon boats, a subset of this market, sold 53,600 units in 2024, compared to 61,300 in 2023 and 62,700 in 2022.
Current wording
•Boats: Statistical Surveys reported approximately 230,400 units were sold in 2025, compared to 250,200 in 2024 and 273,700 in 2023. Pontoon boats, a subset of this market, sold 48,300 units in 2025, compared to 54,300 in 2024 and 62,300 in 2023.
Previous wording
•School buses. According to School Bus Fleet, sales decreased to 40,300 units in 2024, down from 41,200 in 2023 and 40,600 in 2022.
Current wording
•School buses. According to School Bus Fleet, approximately 41,000 units were sold in 2025, compared to 40,300 in 2024 and 41,200 in 2023.
Previous wording
•Manufactured housing. According to the Institute for Building Technology and Safety, wholesale shipments totaled 102,600 units in 2024, up from 89,200 in 2023 but down from 112,900 in 2022.
Current wording
•Manufactured housing. According to the Institute for Building Technology and Safety, wholesale shipments were approximately 102,700 units in 2025, compared to 103,300 in 2024 and 89,200 in 2023.
Previous wording
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the recreation and transportation markets by offering discretionary accessories, replacement parts, and upgrades through various channels, including retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer platforms. These products support recreation and transportation markets, addressing both routine maintenance needs and customer-driven enhancements.
Current wording
Aftermarket Segment: Our Aftermarket Segment enhances the product lifecycle for the RV, transportation, marine, and automotive markets by offering discretionary accessories, replacement parts, and upgrades through various channels, including retail dealers, wholesale distributors, and service centers, as well as direct-to-consumer sales through online platforms. These products support recreation and transportation markets, addressing both routine maintenance needs and customer-driven enhancements.
Previous wording
CURT Manufacturing LLC: Acquired in 2019, CURT is a leading manufacturer of towing products and truck accessories, complementing our OEM markets. CURT contributed approximately 50% of Aftermarket Segment net sales in both 2024 and 2023, selling 1,061,000 hitches in 2024, up from 910,000 in 2023.
Current wording
CURT Manufacturing LLC: Acquired in 2019, CURT is a leading manufacturer of towing products and truck accessories, complementing our OEM markets. CURT contributed approximately half of Aftermarket Segment net sales in both 2025 and 2024, selling 907,000 hitches in 2025, down from 1,061,000 in 2024.
Previous wording
•Consolidated net sales for 2024 were $3.7 billion, 1 percent lower than consolidated net sales for 2023 of $3.8 billion. The decrease was primarily driven by decreased industry production levels in the North American marine and utility trailer markets and the European RV market, mostly offset by a 7 percent increase in total North American RV wholesale shipments and sales from acquisitions. Net sales from acquisitions completed in 2023 and 2024 contributed approximately $21.4 million in 2024.
Current wording
•Consolidated net sales for 2025 were $4.1 billion, 10 percent higher than consolidated net sales for 2024 of $3.7 billion. The increase was primarily driven by sales from acquired businesses during the year, sales price increases due to higher material costs, and higher North American RV sales driven by an increased mix of higher content fifth-wheel units, market share gains, and a 3 percent increase in total North American RV wholesale shipments. Net sales from acquisitions completed in 2024 and 2025 contributed approximately $124.5 million in 2025.
Previous wording
•Net income for 2024 was $142.9 million, or $5.60 per diluted share, compared to net income of $64.2 million, or $2.52 per diluted share, for 2023.
Current wording
•Net income for 2025 was $188.3 million, or $7.57 per diluted share, compared to net income of $142.9 million, or $5.60 per diluted share, for 2024.
Previous wording
•The effective tax rate of 24.5 percent for 2024 was higher than the prior year, primarily due to tax adjustments as discussed below under "Income Taxes."
Current wording
•The effective tax rate of 26.2 percent for 2025 was higher than the prior year, primarily due to increases in the state effective tax rate as discussed below under "Income Taxes."
Previous wording
Net sales of the OEM Segment in 2024 decreased 1 percent, or $43.3 million, compared to 2023. Net sales of components to OEMs were to the following markets for the years ended December 31:
Current wording
Net sales of the OEM Segment in 2025 increased 12 percent, or $329.2 million, compared to 2024. Net sales of components to OEMs were to the following markets for the years ended December 31:
Previous wording
Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and Adjacent Industries. Content per RV is impacted by changes in selling prices for our products, market share gains, and acquisitions. The increase in travel trailer and fifth-wheel content in 2024 compared to 2023 was driven primarily by market share gains and alignment in wholesale unit production and shipments, compared to wholesale unit shipments outpacing production as a result of inventory de-stocking efforts in 2023, partially offset by an increasing shift in unit mix towards lower content single axle travel trailers and pricing decreases indexed to commodity and freight indices.
Current wording
Our average product content per type of RV excludes international sales and sales to the Aftermarket Segment and Adjacent Industries. Content per RV is impacted by changes in selling prices for our products, market share gains, and acquisitions. The increase in travel trailer and fifth-wheel RV content in 2025 compared to 2024 was driven primarily by sales price increases related to tariffs, an increase in RV sales mix toward higher content fifth-wheel units, and market share gains, partially offset by wholesale unit shipments outpacing units produced.
Previous wording
Our decrease in net sales to OEMs in Adjacent Industries during 2024 was primarily due to lower sales to North American marine and utility trailer OEMs, driven by current dealer inventory levels, inflation, and elevated interest rates impacting retail consumers. North American marine OEM sales totaled $245.6 million, down 30% from 2023.
Current wording
Our increase in net sales to OEMs in Adjacent Industries during 2025 was primarily due to sales from acquired businesses and higher sales to North American utility trailer OEMs.
Previous wording
Operating profit of the OEM Segment was $107.1 million in 2024, an increase of $89.7 million compared to 2023. The operating profit margin of the OEM Segment increased to 3.7 percent in 2024 compared to 0.6 percent in 2023, and was positively impacted by:
Current wording
Operating profit of the OEM Segment was $184.1 million in 2025, an increase of $77.0 million compared to 2024. The operating profit margin of the OEM Segment increased to 5.8 percent in 2025 compared to 3.7 percent in 2024, and was positively impacted by:
Previous wording
•Decreases in material costs, which positively impacted operating profit by $97.8 million compared to 2023, primarily related to lower in-bound freight costs, decreased steel prices, and material sourcing strategies.
Current wording
•Increases in selling prices primarily related to increased material costs, which positively impacted operating profit by $80.9 million compared to 2024.
Previous wording
•Increases in production labor costs due to product mix, which negatively impacted operating profit by $10.2 million compared to 2023.
Current wording
•Increases in production labor efficiencies, which positively impacted operating profit by $8.8 million compared to 2024.
Previous wording
Amortization expense on intangible assets for the OEM Segment was $39.8 million in 2024, compared to $41.6 million in 2023. Depreciation expense on fixed assets for the OEM Segment was $53.5 million in 2024, compared to $58.4 million in 2023.
Current wording
Amortization expense on intangible assets for the OEM Segment was $38.7 million in 2025, compared to $39.8 million in 2024. Depreciation expense on fixed assets for the OEM Segment was $48.3 million in 2025, compared to $53.5 million in 2024.
Previous wording
Net sales of the Aftermarket Segment in 2024 were consistent with 2023. Net sales of components in the Aftermarket Segment were as follows for the years ended December 31:
Current wording
Net sales of the Aftermarket Segment in 2025 increased 6 percent, or $51.6 million, compared to 2024. Net sales of components in the Aftermarket Segment were as follows for the years ended December 31:
Previous wording
Operating profit of the Aftermarket Segment was $111.2 million in 2024, an increase of $5.1 million compared to 2023. The operating profit margin of the Aftermarket Segment was 12.6 percent in 2024, compared to 12.0 percent in 2023, and was positively impacted by:
Current wording
Operating profit of the Aftermarket Segment was $95.8 million in 2025, a decrease of $15.4 million compared to 2024. The operating profit margin of the Aftermarket Segment was 10.3 percent in 2025, compared to 12.6 percent in 2024, and was negatively impacted by:
Previous wording
•Sales mix increase of lower margin products, which negatively impacted operating profit by $12.1 million compared to 2023.
Current wording
•Increases in sales mix toward lower margin products, which negatively impacted operating profit by $12.4 million compared to 2024.
Previous wording
•Decreases in material costs, which positively impacted operating profit by $16.8 million compared to 2023, primarily related to decreased steel prices, lower in-bound freight costs, product mix, and material sourcing strategies.
Current wording
•Increases in selling prices for targeted products primarily related to increased material costs, which positively impacted operating profit by $21.8 million compared to 2024.
Previous wording
Amortization expense on intangible assets for the Aftermarket Segment was $15.5 million in 2024, consistent with 2023. Depreciation expense on fixed assets for the Aftermarket Segment was $16.9 million in 2024, compared to $16.3 million in 2023.
Current wording
Amortization expense on intangible assets for the Aftermarket Segment was $15.5 million in 2025, consistent with 2024. Depreciation expense on fixed assets for the Aftermarket Segment was $18.7 million in 2025, compared to $16.9 million in 2024.
Previous wording
Interest expense, net was $28.9 million in 2024, compared to $40.4 million in 2023. The decrease in net interest expense was primarily due to net repayments on our revolving credit facility, principal payments on the Term Loan (as defined in Note 9 of the Notes to Consolidated Financial Statements), and $5.1 million of interest income earned on investments in money market mutual funds, partially offset by higher global interest rates early in 2024 on our adjustable rate Term Loan and revolving credit facility. We prepaid $35.0 million of principal on the Term Loan during 2024. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2026. See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities.
Current wording
Interest expense, net was $35.7 million in 2025, compared to $28.9 million in 2024. The increase was primarily due to interest on the 2030 Convertible Notes and higher outstanding principal and interest rates on our adjustable rate Term Loans, partially offset by reduced borrowings outstanding on the revolving credit facility, the partial payoff of the 2026 Convertible Notes (as defined in Note 3 of the Notes to Consolidated Financial Statements), and interest income of $7.3 million earned on investments in money market mutual funds for the year ended December 31, 2025, compared to $5.1 million in 2024. See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities.
Previous wording
The effective income tax rate for 2024 was 24.5 percent compared to 22.7 percent in 2023. The higher effective tax rate for 2024 was primarily due to increases in non-deductible executive compensation expenses and increases in the state effective tax rate. We estimate the 2025 effective income tax rate will be approximately 24 to 26 percent.
Current wording
The effective income tax rate for 2025 was 26.2 percent compared to 24.5 percent in 2024. The higher effective tax rate for 2025 was primarily due to increases in the state effective tax rate. We estimate the 2026 effective income tax rate will be approximately 25 to 27 percent.
Previous wording
We maintain a level of liquidity sufficient to allow us to meet our cash needs in the short term. Over the long term, we manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility for our future strategic investments. We continuously assess our capital requirements, working capital needs, debt and leverage levels, debt and lease maturity schedules, capital expenditure requirements, dividends, future investments or acquisitions, and potential share repurchases. We believe our operating cash flows, credit facilities, as well as any potential future borrowings, will be sufficient to fund our future payments and long-term initiatives.
Current wording
We maintain a level of cash and liquidity sufficient to allow us to meet our cash needs in the short term. Over the long term, we manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility for our future strategic investments. We continuously assess our capital requirements, working capital needs, debt and leverage levels, debt and lease maturity schedules, capital expenditure requirements, dividends, future investments or acquisitions, and potential share repurchases. We believe our operating cash flows, credit facilities, as well as any potential future borrowings, will be sufficient to fund our future payments and long-term initiatives.
Previous wording
As of December 31, 2024, we had $165.8 million in cash and cash equivalents, and $452.5 million of availability under our revolving credit facility under the Credit Agreement (as defined in Note 9 of the Notes to Consolidated Financial Statements). We also have the ability to request an increase to the revolving and/or incremental term loan facilities by up to an additional $400.0 million in the aggregate upon approval of the lenders providing any such increase and the satisfaction of certain other conditions. See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities.
Current wording
As of December 31, 2025, we had $222.6 million in cash and cash equivalents and $595.2 million of availability under our revolving credit facility under the Credit Agreement (as defined in Note 9 of the Notes to Consolidated Financial Statements). We also have the ability to request an increase to the revolving and/or incremental term loan facilities upon approval of the lenders providing any such increase and the satisfaction of certain other conditions. See Note 9 of the Notes to Consolidated Financial Statements for a description of our credit facilities.
Previous wording
Net cash flows provided by operating activities were $370.3 million in 2024, compared to $527.2 million in 2023. The decrease in net cash flows provided by operating activities was primarily due to the decrease in inventory in 2023 of $235.3 million driven by decreasing commodity costs and initiatives to reduce inventory levels, compared to the decrease in inventories in 2024 of $46.3 million. The decrease in net cash flows provided by operating activities was partially offset by the $78.7 million increase in net income in 2024 compared to 2023.
Current wording
Net cash flows provided by operating activities were $331.0 million in 2025, compared to $370.3 million in 2024. The decrease in net cash flows provided by operating activities was primarily due to the increase in inventories in 2025 of $35.0 million driven by higher inventory levels to support increased sales volume and higher material costs compared to the decrease in inventory in 2024 of $46.3 million driven by lower commodity costs and initiatives to reduce inventory levels. The decrease in net cash flows provided by operating activities was partially offset by the $45.4 million increase in net income in 2025 compared to 2024.
Previous wording
Depreciation and amortization was $125.7 million and $131.8 million in 2024 and 2023, respectively, and is expected to be approximately $115 to $125 million in 2025. Non-cash stock-based compensation expense was $18.7 million and $18.2 million in 2024 and 2023, respectively, and is expected to be approximately $18 to $23 million in 2025.
Current wording
Depreciation and amortization was $121.2 million and $125.7 million in 2025 and 2024, respectively, and is expected to be approximately $115 to $125 million in 2026. Non-cash stock-based compensation expense was $22.7 million and $18.7 million in 2025 and 2024, respectively, and is expected to be approximately $24 to $27 million in 2026.
Previous wording
Cash flows used in investing activities of $61.1 million in 2024 were primarily comprised of $42.3 million for capital expenditures and $20.0 million for a business acquisition. Cash flows used in investing activities of $83.7 million in 2023 were primarily comprised of $62.2 million for capital expenditures and $25.9 million for the acquisition of businesses.
Current wording
Cash flows used in investing activities of $147.1 million in 2025 were primarily comprised of $112.7 million for business acquisitions and $52.6 million for capital expenditures. Cash flows used in investing activities of $61.1 million in 2024 were primarily comprised of $42.3 million for capital expenditures and $20.0 million for the acquisition of a business.
Previous wording
Our capital expenditures are primarily for replacement and growth. Over the long term, based on our historical capital expenditures, the replacement portion has averaged approximately one to two percent of net sales, while the growth portion has averaged approximately two to three percent of net sales. However, there are many factors that can impact the actual spending compared to these historical averages. We estimate 2025 capital expenditures (excluding any potential business combinations) of $50 to $70 million, including investments in automation and lean projects, which we expect to fund with cash flows from operations or periodic borrowings under the revolving credit facility as needed.
Current wording
Our capital expenditures are primarily for replacement and growth. Over the long term, based on our historical capital expenditures, the replacement portion has averaged approximately one to two percent of net sales, while the growth portion has averaged approximately two to three percent of net sales. However, there are many factors that can impact the actual spending compared to these historical averages. We estimate 2026 capital expenditures (excluding any potential business combinations) of $60 to $80 million, including investments in automation and lean projects, which we expect to fund with cash flows from operations or periodic borrowings under the revolving credit facility as needed.
Previous wording
Cash flows used in financing activities of $208.2 million in 2024 were primarily comprised of payments of quarterly dividends of $109.5 million, $52.5 million in net repayments under our revolving credit facility, $36.7 million in repayments under our Term Loan and other borrowings, and cash outflows of $9.2 million related to vesting of stock-based awards, net of shares tendered for payment of taxes. Included in the repayments under our Term Loan were $35.0 million of principal prepayments in 2024. These prepayments were applied to pay in full the scheduled principal amortization payments due through March 31, 2026.
Current wording
•$303.0 million in repayments under our revolving credit facility, Term Loan, and other borrowings,
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•payments of quarterly dividends of $114.0 million,
Current report — wording carried from elsewhere
•cash outflows of $5.3 million related to vesting of stock-based awards, net of shares tendered for payment of taxes,
Current report — wording carried from elsewhere
See Note 13 of the Notes to Consolidated Financial Statements for additional information related to our dividend and share repurchase programs.