LCI Industries (LCII)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	123,428	97,770	139,755	303,370	553,028	690,038	691,487	566,680	398,410	347,890	353,299	280,099	222,934	197,126	151,846	196,721	200,210	192,092	188,292	186,723
Interest expense (ttm)	US$ in thousands	40,424	39,188	35,773	31,715	27,573	24,875	22,632	19,913	16,366	13,454	10,735	10,961	13,453	13,133	13,085	11,486	8,796	8,461	8,281	7,842
Interest coverage		3.05	2.49	3.91	9.57	20.06	27.74	30.55	28.46	24.34	25.86	32.91	25.55	16.57	15.01	11.60	17.13	22.76	22.70	22.74	23.81

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $123,428K ÷ $40,424K
= 3.05

The interest coverage ratio for LCI Industries has exhibited fluctuations over the past eight quarters. In Q4 2023, the ratio stood at 3.05, indicating that the company generated 3.05 times the earnings needed to cover its interest expenses for that period. This marked a slight improvement from the previous quarter where the ratio was 2.49.

Looking further back, in Q2 2023, the interest coverage ratio significantly rose to 3.91, showcasing the company's improved ability to meet its interest obligations through its earnings. The highest interest coverage ratio recorded in the provided data is in Q1 2023, at 9.57, reflecting a robust financial position where the company's earnings were nearly ten times the amount required to cover its interest expenses.

Comparing these recent figures to those of the same periods in 2022, there has been a notable decline in the interest coverage ratio from exceptionally high levels. Throughout 2022, the company consistently demonstrated strong interest coverage, with ratios well above 20. However, in 2023, the interest coverage ratios have shown a decreasing trend.

Overall, while LCI Industries maintained a reasonable level of interest coverage in Q4 2023, its ratio has been declining from the extremely high levels seen in 2022. This trend may indicate a potential decrease in the company's ability to comfortably cover its interest expenses solely through its earnings. It would be important for stakeholders to monitor this metric closely in upcoming periods to assess the company's financial health and debt repayment capacity.