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.