The recreational vehicle market has been on fire lately, and LCI Industries (NYSE:LCII) has taken full advantage by seeking to provide more of the accessories and components that go into RVs. The boom in RV sales helped make LCI extremely successful throughout the past year, and industry trends have thus far remained strong in the opening weeks of 2018.

Coming into Thursday's fourth-quarter financial report, LCI investors fully expected that the company would continue to cash in on the rising popularity of recreational vehicles. LCI didn't disappoint them, with even faster growth than most had anticipated. Let's look more closely at LCI Industries and what its latest numbers say about the year to come.

Travel trailer with diagram showing features related to jack system.

Image source: LCI Industries.

LCI Industries hits the gas

LCI Industries' fourth-quarter results showed that demand for recreational vehicles has stayed robust. Revenue of $547 million was higher by 36% compared to the year-earlier period, and that was even better than the 27% growth that most of those following the stock were expecting to see. Adjusted net income came in at $30.7 million, up 22% from year-ago levels, and the resulting adjusted earnings of $1.20 per share was better than the consensus analyst forecast for $1.16 per share.

Tax reform gave LCI a one-time hit. The RV component maker said that it took a $13.2 million charge because of items like the change in valuation in deferred tax assets, which worked out to about $0.52 per share. However, LCI should see benefits from lower corporate tax rates on profits in the future.

Fundamentally, LCI's performance remained strong. Wholesale RV shipments of towable RVs rose 20% and motorized RV shipments were up 16%, according to original equipment manufacturer data. That helped support a 28% rise in OEM-related revenue, with the biggest percentage increase of 37% coming from the relatively small motorhome segment. Yet travel trailers and fifth-wheels also saw healthy growth rates in the high 20% range. The aftermarket segment also did well for LCI, with gains of more than 30% on its top line. Aftermarket also showed more favorable performance in terms of operating profit, which rose 20% for the segment compared to just a 5% rise for OEM.

Most of LCI's growth came organically, but acquisitions also played a role. The company attributed $20 million in fourth-quarter revenue to recently acquired businesses, which provided a 5-percentage-point lift to sales growth.

LCI kept doing a better job of getting its products integrated into RV production. Typical travel trailers and fifth-wheels had $3,263 worth of LCI components on average, up $241 from year-ago levels. Motorhome RVs showed a $208 gain to $2,219.

CEO Jason Lippert was especially happy with the way LCI has stood out. "We are achieving record top and bottom line numbers," Lippert said, "and we're doing it at a time when labor and materials environments are particularly challenging." The CEO pointed to continued industry growth as a driver of success for the company.

Can LCI Industries keep accelerating?

LCI is optimistic about the future. Orders looked strong at recent trade shows, where dealers seem to be ready for seasonal orders and RV manufacturers are adding capacity to meet demand. Early results from January showed a 35% jump from January 2017 levels, suggesting that positive momentum is continuing.

The RV specialist is especially encouraged by the strategic move it made last month, closing on its purchase of recreational marine industry supplier Taylor Made Group. The move will diversify LCI's exposure into the marine and industrial markets and provide significant exposure to aftermarket and international opportunities. Areas of overlap, such as production of windows, glass, and windshields, could also produce synergies for the two companies while boosting LCI's top line.

LCI Industries has seen its shares lose ground recently as some question the sustainability of the boom in recreational vehicle sales. Yet with strong economic conditions, LCI has the potential to grow its core business while expanding into other lucrative niches, and that says good things about its fundamental prospects in 2018 and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.