lcii-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File Number: 001-13646

LCI INDUSTRIES

(Exact name of registrant as specified in its charter)


Delaware		13-3250533
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

3501 County Road 6 East		46514
Elkhart,	Indiana	(Zip Code)
(Address of principal executive offices)

(574) 535-1125

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report) N/A

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	LCII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date (April 30, 2025) was 25,237,659 shares of common stock.

LCI INDUSTRIES

TABLE OF CONTENTS


		Page
PART I –	FINANCIAL INFORMATION

	ITEM 1 – FINANCIAL STATEMENTS

	CONDENSED CONSOLIDATED STATEMENTS OF INCOME	4

	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONDENSED CONSOLIDATED BALANCE SHEETS	6

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	7

	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	9

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	10

	ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24

	ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33

	ITEM 4 – CONTROLS AND PROCEDURES	33

PART II –	OTHER INFORMATION

	ITEM 1 – LEGAL PROCEEDINGS	34

	ITEM 1A – RISK FACTORS	34

	ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	34

	ITEM 5 – OTHER INFORMATION	35

	ITEM 6 – EXHIBITS	35

SIGNATURES		37

EXHIBIT 31.1 - SECTION 302 CEO CERTIFICATION

EXHIBIT 31.2 - SECTION 302 CFO CERTIFICATION

EXHIBIT 32.1 - SECTION 906 CEO CERTIFICATION

EXHIBIT 32.2 - SECTION 906 CFO CERTIFICATION

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2025		2024
(In thousands, except per share amounts)

Net sales	$	1,045,590	$	968,029
Cost of sales	793,841		744,123
Gross profit	251,749		223,906
Selling, general and administrative expenses	170,432		166,295
Operating profit	81,317		57,611
Interest expense, net	5,991		9,321
Loss on extinguishment of debt	8,053		—
Income before income taxes	67,273		48,290
Provision for income taxes	17,835		11,745
Net income	$	49,438	$	36,545

Net income per common share:
Basic	$	1.94	$	1.44
Diluted	$	1.94	$	1.44

Weighted average common shares outstanding:
Basic	25,426		25,374
Diluted	25,426		25,389

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2025		2024
(In thousands)

Net income	$	49,438	$	36,545
Other comprehensive income:
Net foreign currency translation adjustment	10,429		(3,263)


Total comprehensive income	$	59,867	$	33,282

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31,		December 31,
	2025			2024
(In thousands, except per share amount)

ASSETS
Current assets
Cash and cash equivalents	$	231,243		$	165,756

Accounts receivable, net of allowances of $7,769 and $5,439 at March 31, 2025 and December 31, 2024, respectively	357,138			199,560
Inventories, net	717,438			736,604

Prepaid expenses and other current assets	61,269			58,318
Total current assets	1,367,088			1,160,238
Fixed assets, net	428,046			432,728
Goodwill	590,204			585,773
Other intangible assets, net	393,555			392,018
Operating lease right-of-use assets	222,841			224,313

Other long-term assets	98,264			99,669
Total assets	$	3,099,998		$	2,894,739

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term indebtedness	$	3,646		$	423
Accounts payable, trade	220,768			187,684

Current portion of operating lease obligations	37,543			38,671
Accrued expenses and other current liabilities	199,310			185,275
Total current liabilities	461,267			412,053
Long-term indebtedness	934,632			756,830
Operating lease obligations	199,766			199,929
Deferred taxes	17,716			26,110
Other long-term liabilities	119,904			112,931
Total liabilities	1,733,285			1,507,853
Stockholders' equity
Common stock, par value $.01 per share	289			288
Paid-in capital	235,856			257,486
Retained earnings	1,227,527			1,208,096
Accumulated other comprehensive income	13,661			3,232
Stockholders' equity before treasury stock	1,477,333			1,469,102
Treasury stock, at cost	(110,620)			(82,216)
Total stockholders' equity	1,366,713			1,386,886
Total liabilities and stockholders' equity	$	3,099,998		$	2,894,739

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended March 31,
(In thousands)	2025		2024

Cash flows from operating activities:
Net income	$	49,438	$	36,545
Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
Depreciation and amortization	29,542		32,689
Stock-based compensation expense	4,933		4,327

Loss on extinguishment of debt	8,053		—
Other non-cash items	2,181		1,107
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(149,644)		(131,059)
Inventories, net	39,121		32,892
Prepaid expenses and other assets	5,800		(2,392)
Accounts payable, trade	30,005		12,038
Accrued expenses and other liabilities	23,289		6,199
Net cash flows provided by (used in) operating activities	42,718		(7,654)
Cash flows from investing activities:
Capital expenditures	(9,038)		(8,608)
Acquisition of business	(29,579)		—


Other investing activities	(3,423)		173
Net cash flows used in investing activities	(42,040)		(8,435)
Cash flows from financing activities:
Vesting of stock-based awards, net of shares tendered for payment of taxes	(4,813)		(9,040)
Proceeds from revolving credit facility	—		86,248
Repayments under revolving credit facility	(19,261)		(76,927)
Proceeds from term loan borrowings	391,000		—
Repayments under term loan and other borrowings	(280,093)		(5)
Proceeds from issuance of convertible notes	448,500		—
Repurchase of convertible notes	(368,920)		—
Purchases of convertible note hedge contracts	(67,574)		—
Proceeds from issuance of warrants concurrent with note hedge contracts	27,600		—
Partial unwind of convertible note hedge and warrants	1,378		—
Payment of debt issuance costs	(3,122)		—
Payment of dividends	(29,352)		(26,721)

Repurchases of common stock	(28,255)		—
Other financing activities	(217)		(2)
Net cash flows provided by (used in) financing activities	66,871		(26,447)
Effect of exchange rate changes on cash and cash equivalents	(2,062)		(996)
Net increase (decrease) in cash and cash equivalents	65,487		(43,532)
Cash and cash equivalents at beginning of period	165,756		66,157
Cash and cash equivalents at end of period	$	231,243	$	22,625


LCI INDUSTRIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended March 31,
(In thousands)	2025		2024
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	7,218	$	7,391
Income taxes, net of refunds	$	94	$	359
Non-cash investing and financing activities:
Purchase of property and equipment in accrued expenses	$	993	$	407

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


(In thousands, except shares and per share amounts)	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total Stockholders’ Equity
Balance - December 31, 2023	$	287	$	245,659	$	1,177,034	$	14,272	$	(82,216)	$	1,355,036
Net income	—		—		36,545		—		—		36,545
Issuance of 122,023 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	1		(9,041)		—		—		—		(9,040)
Stock-based compensation expense	—		4,327		—		—		—		4,327
Other comprehensive loss	—		—		—		(3,263)		—		(3,263)
Cash dividends ($1.05 per share)	—		—		(26,721)		—		—		(26,721)
Dividend equivalents on stock-based awards	—		569		(569)		—		—		—
Balance - March 31, 2024	$	288	$	241,514	$	1,186,289	$	11,009	$	(82,216)	$	1,356,884



Balance - December 31, 2024	$	288	$	257,486	$	1,208,096	$	3,232	$	(82,216)	$	1,386,886
Net income	—		—		49,438		—		—		49,438
Issuance of 82,153 shares of common stock pursuant to stock-based awards, net of shares tendered for payment of taxes	1		(4,814)		—		—		—		(4,813)
Stock-based compensation expense	—		4,933		—		—		—		4,933
Purchase of convertible note hedge contracts, net of tax	—		(51,382)		—		—		—		(51,382)
Issuance of warrants	—		27,600		—		—		—		27,600
Partial unwind of convertible note hedge and warrants	—		1,378		—		—		—		1,378
Repurchase of 308,898 shares of common stock, including excise tax	—		—		—		—		(28,404)		(28,404)
Other comprehensive income	—		—		—		10,429		—		10,429
Cash dividends ($1.15 per share)	—		—		(29,352)		—		—		(29,352)
Dividend equivalents on stock-based awards	—		655		(655)		—		—		—
Balance - March 31, 2025	$	289	$	235,856	$	1,227,527	$	13,661	$	(110,620)	$	1,366,713

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

LCI INDUSTRIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The Condensed Consolidated Financial Statements include the accounts of LCI Industries and its wholly-owned subsidiaries ("LCII" and collectively with its subsidiaries, the "Company," "we," "us," or "our"). LCII has no unconsolidated subsidiaries. All significant intercompany balances and transactions have been eliminated.

LCII, through its wholly-owned subsidiary, Lippert Components, Inc. and its subsidiaries (collectively, "Lippert Components," "LCI," or "Lippert"), is a global leader in supplying engineered components to the outdoor recreation, transportation, and building products industries. In addition to serving original equipment manufacturers ("OEMs"), the Company also caters to aftermarket needs, selling through retail dealers, wholesale distributors, and service centers, as well as directly to consumers online. At March 31, 2025, the Company operated over 110 manufacturing and distribution facilities located throughout North America and Europe.

The Company's results are influenced by seasonal demand patterns, with sales and profits typically strongest in the second quarter and weakest in the fourth quarter. However, economic conditions, dealer inventory fluctuations, and consumer trends can impact these patterns. Additionally, many of the optional upgrades and non-critical replacement parts for RVs are purchased outside the normal product selling season, thereby causing certain Aftermarket Segment sales to be counter-seasonal.

The Company is not aware of any significant events, except as disclosed in these Notes to Condensed Consolidated Financial Statements, which occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Condensed Consolidated Financial Statements.

In the opinion of management, the information furnished in this Form 10-Q reflects all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented. The Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include some information necessary to conform to annual reporting requirements. Results for interim periods should not be considered indicative of results for the full year.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to product returns, sales and purchase rebates, accounts receivable, inventories, goodwill and other intangible assets, net assets of acquired businesses, income taxes, warranty and product recall obligations, self-insurance obligations, operating lease right-of-use assets and obligations, asset retirement obligations, long-lived assets, pension and post-retirement benefits, stock-based compensation, segment allocations, contingent consideration, environmental liabilities, contingencies, and litigation. The Company bases its estimates on historical experience, other available information, and various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other resources. Actual results and events could differ significantly from management estimates.

Risks and Uncertainties

Negative conditions in the general economy in the United States or abroad, including conditions resulting from financial and credit market fluctuations, increased inflation and interest rates, changes in economic policy, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other trade restrictions, geopolitical tensions, armed conflicts, natural disasters or global public health crises, have negatively impacted, and could continue to negatively impact, the Company’s business, liquidity, financial condition and results of operations.

LCI INDUSTRIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Condensed Consolidated Financial Statements presented herein have been prepared by the Company in accordance with the accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2024 and should be read in conjunction with the Notes to Consolidated Financial Statements which appear in that report.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion rather than as debt extinguishments. This ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the notes to the financial statements for both annual and interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company will adopt this ASU for the year ending December 31, 2025, and it will only impact the Company's disclosures with no impacts to its financial condition or results of operations.

3. EARNINGS PER SHARE

The following reconciliation details the denominator used in the computation of basic and diluted earnings per share for the periods indicated:


	Three Months Ended March 31,
(In thousands)	2025	2024
Weighted average shares outstanding for basic earnings per share	25,426	25,374
Common stock equivalents pertaining to stock-based awards	—	15
Weighted average shares outstanding for diluted earnings per share	25,426	25,389

Equity instruments excluded from diluted net earnings per share calculation as the effect would have been antidilutive	306	291

2030 Convertible Notes

For the Company's 3.000 percent convertible senior notes due 2030 (the "2030 Convertible Notes") issued in March 2025, the dilutive effect is calculated using the if-converted method. The Company is required, pursuant to the indenture governing the 2030 Convertible Notes, dated March 14, 2025, by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the "2030 Notes Indenture”), to settle the principal amount of the 2030 Convertible Notes in cash and may elect to settle the remaining conversion obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company’s common stock, or a combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the conversion obligation, assuming all the 2030 Convertible Notes are converted. Because

LCI INDUSTRIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

the average closing price of the Company’s common stock for the period from issuance through March 31, 2025, which is used as the basis for determining the dilutive effect on earnings per share, was less than the conversion price of $116.62, all associated shares were antidilutive.

In conjunction with the issuance of the 2030 Convertible Notes, the Company, in privately negotiated transactions with certain commercial banks (the “2030 Counterparties”), sold warrants to purchase 3.9 million shares of the Company’s common stock (the “2030 Warrants”). The 2030 Warrants have a strike price of $182.94 per share, subject to customary anti-dilution adjustments. For calculating the dilutive effect of the 2030 Warrants, the Company uses the treasury stock method. With this method, the Company assumes exercise of the 2030 Warrants at the beginning of the period, or at time of issuance if later, and issuance of shares of common stock upon exercise. Proceeds from the exercise of the 2030 Warrants are assumed to be used to repurchase shares of the Company’s common stock at the average market price during the period. The incremental shares, representing the number of shares assumed to be received upon the exercise of the 2030 Warrants less the number of shares repurchased, are included in diluted shares. For the period from issuance through March 31, 2025, the average share price was below the Warrant strike price of $182.94 per share, and therefore 3.9 million shares were considered antidilutive.

In connection with the issuance of the 2030 Convertible Notes, the Company entered into privately negotiated call option contracts on the Company’s common stock (the “2030 Convertible Note Hedge Transactions”) with the 2030 Counterparties. The aggregate cost to the Company of the 2030 Convertible Note Hedge Transactions was $67.6 million pursuant to the 2030 Convertible Note Hedge Transactions. The 2030 Convertible Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2030 Convertible Notes, approximately 3.9 million shares of the Company’s common stock, the same number of shares initially underlying the 2030 Convertible Notes, at a strike price of approximately $116.62, subject to customary anti-dilution adjustments. The 2030 Convertible Note Hedge Transactions will expire upon the maturity of the 2030 Convertible Notes, subject to earlier exercise or termination. Exercise of the 2030 Convertible Note Hedge Transactions would reduce the number of shares of the Company’s common stock outstanding, and therefore would be antidilutive.

2026 Convertible Notes

For the Company's 1.125 percent convertible senior notes due 2026 (the "2026 Convertible Notes") issued in May 2021, the dilutive effect is calculated using the if-converted method. The Company is required, pursuant to the indenture governing the 2026 Convertible Notes, dated May 13, 2021, by and between the Company and U.S. Bank National Association, as trustee (the "2026 Notes Indenture"), to settle the principal amount of the 2026 Convertible Notes in cash and may elect to settle the remaining conversion obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company's common stock, or a combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the conversion obligation, assuming all the 2026 Convertible Notes are converted. Because the average closing price of the Company's common stock for the three months ended March 31, 2025, which is used as the basis for determining the dilutive effect on earnings per share, was less than the conversion price of $165.65, all associated shares were antidilutive.

In conjunction with the issuance of the 2026 Convertible Notes, the Company, in privately negotiated transactions with certain commercial banks (the "2026 Counterparties"), sold warrants to purchase 2.8 million shares of the Company's common stock (the "2026 Warrants"). The 2026 Warrants have a strike price of $259.84 per share, subject to customary anti-dilution adjustments. For calculating the dilutive effect of the 2026 Warrants, the Company uses the treasury stock method. With this method, the Company assumes exercise of the 2026 Warrants at the beginning of the period, or at time of issuance if later, and issuance of shares of common stock upon exercise. Proceeds from the exercise of the 2026 Warrants are assumed to be used to repurchase shares of the Company's common stock at the average market price during the period. The incremental shares, representing the number of shares assumed to be received upon the exercise of the 2026 Warrants less the number of shares repurchased, are included in diluted shares. Concurrently with the 2026 Convertible Note Repurchases (as defined below), we entered into agreements to terminate a proportionate amount of the 2026 Warrants, which resulted in a reduction of the number of shares of common stock underlying the 2026 Warrants to an aggregate of 0.6 million shares of common stock. For the three months ended March 31, 2025, the average share price was below the Warrant strike price of $259.84 per share, and therefore 2.8 million shares were considered antidilutive.

In connection with the issuance of the 2026 Convertible Notes, the Company entered into privately negotiated call option contracts on the Company's common stock (the "2026 Convertible Note Hedge Transactions") with the 2026 Counterparties. The Company paid an aggregate amount of $100.1 million to the 2026 Counterparties pursuant to the 2026 Convertible Note Hedge Transactions. The 2026 Convertible Note Hedge Transactions initially covered, subject to anti-dilution adjustments substantially similar to those in the 2026 Convertible Notes, approximately 2.8 million shares of the Company's common stock, the same number of shares initially underlying the 2026 Convertible Notes, at a strike price of approximately

LCI INDUSTRIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$165.65, subject to customary anti-dilution adjustments. The 2026 Convertible Note Hedge Transactions will expire upon the maturity of the 2026 Convertible Notes, subject to earlier exercise or termination. Concurrently with the 2026 Convertible Note Repurchases, we entered into agreements to terminate a proportionate amount of the 2026 Convertible Note Hedge Transactions, which resulted in a reduction of the number of shares of common stock underlying the 2026 Convertible Note Hedge Transactions to an aggregate of 0.6 million shares of common stock. Exercise of the 2026 Convertible Note Hedge Transactions would reduce the number of shares of the Company's common stock outstanding, and therefore would be antidilutive.

4. ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Subsequent Event

Freedman Seating Company

In April 2025, the Company acquired substantially all of the business assets of Freedman Seating Company, a manufacturer of transportation seating solutions to the bus, rail, marine, delivery truck, and specialty and commercial vehicle markets. The purchase price was approximately $78.7 million, subject to customary adjustments related to working capital and indebtedness. The results of the acquired business will be included primarily in the OEM segment.

Acquisitions Completed During the Three Months Ended March 31, 2025

Trans/Air Manufacturing Corporation

In March 2025, the Company acquired substantially all of the business assets of Trans/Air Manufacturing Corporation, a manufacturer of climate control systems for the school, commercial, and electric/hybrid vehicle markets. The Company paid $29.6 million in cash consideration at closing with contingent consideration up to a maximum of $2.0 million. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the OEM segment. As this acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented.

Goodwill

Changes in the carrying amount of goodwill by reportable segment were as follows:


(In thousands)	OEM Segment		Aftermarket Segment		Total
Net balance – December 31, 2024	$	418,220	$	167,553	$	585,773
Acquisitions	218		—		218

Foreign currency translation	3,707		506		4,213
Net balance – March 31, 2025	$	422,145	$	168,059	$	590,204

Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.

LCI INDUSTRIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other Intangible Assets

Other intangible assets consisted of the following at March 31, 2025:


(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	518,072	$	237,189	$	280,883	6	to	20
Patents	110,127		72,183		37,944		3	to	20
Trade names (finite life)	97,566		30,895		66,671		3	to	20
Trade names (indefinite life)	7,432		—		7,432		Indefinite
Non-compete agreements	5,154		4,793		361		3	to	6
Other	609		345		264		2	to	12

Other intangible assets	$

SEC Form 10-Q filed by LCI Industries