Winnebago Industries (WGO) 19 Jun 192019 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Winnebago Third Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only-mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Financial Analysis of Investor Director Stuber, Planning and and Relations. Steve may begin. you Sir,

Good joining Chief on you discuss thank Hughes, and morning, and with everyone, and at Officer for This available is by being The Happe, our quarter Bryan call results. will Chief Executive today replay President our be earnings us on Officer. of I'm issued to website call a quarter joined and the and Vice Michael news President Financial third broadcast to live this our third release investor.wgo.net on was results website the and our morning. today. our website later posted call today earlier

uncertain, beyond SEC these many Winnebago I'd Before that factors and I may materially factors, certain from identified a remind operations statements. of control, of made under Industries be like and to you considered encourage that results forward-looking which differ regarding actual involve laws. statements our in Company's are you risks you and to cause are cautions we the The company inherently to statements its number during start, are filings, These number statements which a securities forward-looking read. of call could today's conference

like to turn Michael over With CEO, that, I would now President our to and the call Happe. Mike?

Officer, numbers. then to on related the I listening of I Thank sincerely important detail interest overview to Industries. year you, XXXX will morning Steve, and with behind Winnebago results our to turn to like our Bryan would those call. call We financial in provide begin who will some good the more fiscal quarter of you those your in the third this Hughes, our on an over drivers Chief and appreciate morning Financial as outcomes. context

select Q&A will before offer the then from call with closing some participants. concluding We some comments

journey more a progress our concurrent performance, to and Our today, diversified, set Beginning in retail profitability that reflects a building third specifically quarter company. towards share outdoor early a we stronger, progresses in robust new continued lifestyle on still more XXXX, best of terms mission of outdoor spaces a in increasingly acquire North brands to or revenue vehicle an using that some develop result business adjacent American streams balanced line industry, in initiate market more other portfolio. in the full and out the recreational

for a on can we pursuing staying in goal strides foundation innovation, becoming quality, of our you, begin on As efficiently and profitable to that distinct that run significant brands repeatedly, in stronger are count Winnebago to as By consistently returns. service investors, of growth our company runway opportunities for share focused committed a into truly gaining serve success. and we've and mentioned all smart, have we strengthen organization, future the industries more new our Industries do, lengthens transforming a towards we we made

a strong unexpected This example is can businesses. core new challenges even how of external our approach in of true we incur consolidated our quarter one results, when enterprise provide

year, fiscal the again, not have the set our the outpace industry. of diverse immune position strength North from lines our headwinds American product industry persisted consolidated, enabled our While that we RV during once to, have competitive us are and of

product gains over line Our share basis Design strength Towable by in sustained grown and Grand led revenues our continued our once segment RV year-over-year has XXX again points.

on production. Class in will destocking driven related I X.X% for the by quarter, expand this disruption by impressive down revenues segment of category. level, Motorhome and were On our B signs chassis a momentum driven dealers share, by efforts B stability significant real C our unexpected quarter a supply has Class continued More retail third development a within and gas Class our van and recently, consolidated moment. market grown to

expanding gross segment, by our by margins input revenue progress a Despite our profit basis in further to quarter, increased Towable continued XXX margin slight expanding mitigation in cost efforts of margins. in rising decline costs. and driven offset points driven made increases Consolidated mix price positive revenues, our the success the we and

deliberately we Throughout staying product production value maintain a ensure to year, and levels have to inordinately the been disciplined to stretched. not our market working the quality on approach retail in propositions working focused are

expanding not As the a year-to-date year. result, prior up we flow cash our XX% only are margins, over but is

strength gaining market retail industry were segment of the the of to lower our and market the Despite for declines turning calendar efforts quarter. to detail. Towables by leading the on year-to-date, space. dual-branded to led in dealer share our Unit segments lines inventories most Now, shipments in company's up more wholesale Towables products product XX% to Towable of dealers continuation X.X% competitive lot

adjust For reflecting of order capacity the dealers the prior shorter quarter XX.X% utilizing XXXX from decrease us. XX.X% period. margins increased for lead did over EBITDA order Towables including during increased effectively largely in quarter, increases from delivery and the timing price year, more basis Towable OEMs, added the XXX XXXX, reflecting pressures. Adjusted behavior available managing input by positive the cost backlog revenues points, fiscal to their year of to a the calendar of dollars additional impact shifting times and

net greater segment, is relative stocking to competitors most are future thus likely Towable the activity, retail within than pace retail and order our of confident and our we dealer our replenishment, share. potential shipment Given that

now enhanced remains provide new the Motorized. designs innovative of key to motorized and for Turning products. continues and of launch high an to a with products business quality Invigorating customers lineup this us priority

in continued year largely However, revenues to the industry were this segment C for versus and down products. XX.X% headwinds Class Class A prior due

material a also of mentioned our Class B as of were in chassis our by due supplied had two Class B us popular one impact to and down disruption van units. suppliers, most earlier, sales a strategic which and on temporary shipping Unfortunately, significant

them EBITDA and closely important My their their with supplier on the impact partnership enable disruption situation, top bottom. ability the of to this strategic on issue. multiple the been during and supply to of our eight to quarter on in own have working the confident address We Motorized seven segment feel this adjusted with of the multiple and was figures them figures we this supply remedy line estimate

by are see challenging in XXX market. in situation month We Class adjusted continued and We as most deleverage to quarter progress B improve basis our the the quarter year, the EBITDA profitable decline, points to to of period. a decline segment margins mixed related normalized chassis versus impact expect fourth our decrease a sales fourth we the products, first return of last to sales Motorized the in Class and driven beginning of the within fiscal bit a through quarter B to competitive discounting saw our related supply this

with segment a to focus we improved the improvements mentioned levels and the will on the to supplier delivering of issue specific As confident fourth implementing costs previously overall manufacturing improve profitability quarter. revert are continued in operational Motorized combined managing efficiency, address we

this a and RVX products a profitability, are retail We considerable March, improved long-term. dedicating in successfully growth to we launched In amount segment Lake City. of the at resources Salt for new and show sustained positioning energy several

City, shift plant our are motorized executing we from manufacturing Forest Iowa. City, against to A campus Class Oregon in diesel Additionally, recent Junction our decision to Winnebago-branded manufacturing our our successfully

several being that which in increase from Class the supply offsetting shipments, X.X% the declines decreased B Partially our QX. in product of dollars, efforts backlog levels. right real to is issue dealers to orders due delivered ongoing size an the inventory delayed mentioned, again, reflects chassis Motorized as their affected

fiscal early part in the June, and Our anniversary strong year Winnebago quarter Industries third another business, Chris-Craft, portfolio during organic as boat the luxury of celebrated quarter period. of its growth one delivered sales

see our We traffic products. to continue demand and strong for

New head our products additional momentum provide quarter. first the will launched XXXX half during as fourth forward, we into of

expectations boating are as within for of overall the a interest market consumer and late, been the our inconsistent strong Chris-Craft this demand business. outpacing we brand has While in remains bit own

will With detail. call XXXX over to the in Financial Officer Bryan? more now that Bryan I our Chief our fiscal to Hughes, quarter financials overview, review third turn

everyone. good and Mike, Thanks, morning

driven million Motorized and a million, offset revenues, fiscal Third compared growth of by revenues $XXX.X Chris-Craft. $XXX.X in decline addition quarter decrease consolidated by to the revenues segment segment Towable were XXXX of for a in period, the the X.X% partially

an the to segment. driven XXX primarily points in Gross XXXX our by $XX.X fiscal quarter, period. the and favorable business profit Towable increased profit compared Gross basis for million, X.X% of million was in pricing $XX.X margin increase mix

Third quarter income third an X.X% was of quarter of last operating the million, compared $XX increase to in million year. $XX.X

City, diluted earnings Our charges previously million in per related results production our of to move our Junction Oregon share. from Iowa, Northern the of $X.X $X.XX include or restructuring amount diesel announced to

last million an $XX.X of period in million, We XX.X% fourth to the of production share XX.X% over were expect this charges additional year. $X.XX, income diluted $X.XX. range And in Net move increase an was same to quarter compared earnings the per of $XX.X $X.XX to year. increase last related

per were $X.X $X.XX estimate in to or million, and share favorably Act, income improved a tax Cuts change by related $X.XX credits Both of per and totaling net impacted the tax from Jobs share. diluted rate, diluted $X.X resulting million earnings and share, Tax earnings an R&D earnings or per

items. to expect rate XX% tax fiscal consideration our tax XXXX our We rate tax tax to XX.X%. and rate we effective for to quarter discrete year before of approximate The in our approximate was full expect XX% currently the forthcoming XX% any

clearly press Consolidated to net a quarter year increase adjusted press for We performance. compared the adjusted our between reconciliation measures comparable EBITDA. and have $XX.X for was last income The accompanying a an release million release illustrate our to provided non-GAAP, million EBITDA performance and measure help adjusted EBITDA of $XX.X EBITDA X.X%. in as the schedules show

To was charges the and at item reconciling third reiterate, $X.X million of production. number third in to diesel attributable in biggest the our The on these $X.X basis. restructuring a announced year-to-date million quarter the quarter adjusted charges previously to our are to arrive to EBITDA amounted related

driven with segment, the starting third to the individual million, XX.X% by turning pricing $XXX.X actions up revenues the Design year-over-year. The and quarter was the unit RV segments; for in business. were Now, sales increase Grand increased Towable

the pricing margins adjusted efficiencies increased million, taken management. the actions good XX% helped was XX-months, adjusted primarily year Segment third by XXX for cost prior $XX.X quarter the past also up and over but reflecting EBITDA points, operational and basis from EBITDA

driven Class decline Motorized the versus to and supplier earlier for Mike a industry-wide unit sales, decrease pricing the down by were last revenues in and Turning in Partially B $XXX.X chassis, efforts Motorized million over comments. taken disruption offset now dealer segment; XX-months. B by actions A his temporary revenue Class due in quarter, to year. Class past The was a our as the discussed destocking XX.X%

quarter year. the our percentage XX growth points We in improvement to of the As of last normalized end supply supply to impact Class will it our we in period percentage Motorhome segment return disruption to seeing as third of flow and the today in fourth of quarter. the quarter the believe our of sales the range as we XX in versus production revenue the are quarter, chassis by of levels C an believe we the issue, of relates points same was current week fourth already in

It since we capacity have recapture fourth is that in third down for expectation additional quarter, Segment $X.X was quarter, our see our so. third from and XX.X% quarter the will we the production year-over-year. sales do the XXXX, foregone current during to impact adjusted we EBITDA million any fiscal

pace competitive XXX sales continued business keep the from basis deleverage the discounting within by driven points, that decreased margin and necessary very EBITDA mix by in primarily has segment, unfavorable to landscape. been Motorhome a reduction, Adjusted

Turning outstanding million. to debt $XXX.X issuance Company the million. quarter, of of as of the our end debt capital million, third had cost $X net $XXX.X Working was sheet, the balance of of

times, ratio leverage current back to within net X.X times our X.X debt is to range targeted adjusted times. X.X EBITDA Our of ratio

Act flow rate year-to-date tax $XX.X effective was million same fiscal XX% The third to for Cash period, period the $XX.X from or last the period million quarter operations the or same for R&D credits. The XXXX. drivers up corporate with XX.X% in of rate compared approximately to year. the in Cuts of tax income the was change Tax federal for were reduction XX.X% associated decrease in income the TCJA; impact tax related estimates and and in rate in a the the the year-over-year the effective Jobs tax

ongoing share. to or rate in and tax tax as items the in any $X.X items quarter. per estimates, our including earnings current related The the year-to-date impact all diluted in expect change change year, credits remainder $X.XX tax the Considering R&D impact our discrete for tax we as XX% estimate from TCJA the totaled the of favorable fourth well our earnings was $X.XX per to diluted fiscal approximately discrete before full-year assumptions XXXX million to rate be of share. consideration of provision, tax to The

fiscal be the expect tax and range any tax Under of tax to our of to items. before ongoing XX%, code, discrete beyond we XXXX consideration XX% the rate again, current in in

approved close XXth, of Finally, per XXXX. XXXX common our cash Board at the share, of payable on dividend the July to $X.XX record Directors of stockholders business Xrd, quarterly on June of

That now Mike? financials. back our concludes closing that, some quarterly my review provide to with Mike will And comments. of call the turn I to

Bryan. Thanks,

us quarter results morning, As have XXXX. build the you've year that third heard mentioned this on fiscal established first the to our we we continued half momentum demonstrate of in

Company's challenges, can While these that at weighs to consumers, shipments dealers to have brands this discretionary wholesale We've the industry of but and our only as and succeed RV can pertains consumer time. reducing macroeconomic share demonstrated it growing noise due we endure broader inventory not in levels declined products. that their further on especially profits

channel resilient as organization, our evident, navigate able to we to Company initiatives improve RV strengthening have on are the producing profitable they of our affecting our products partners. products, deliver efficiency these which position. and dedicated while are continue high more the consistency, portfolio the to The our to headwinds value to our will in we industry, innovative and Across our quality, competitive employees execute transformation our efforts internal and and benefits made

confident of select our This than years. there the be operations. for is markets next nature line Vehicle each the resiliency which large in is business significant Marine, global expansion due over part with We and will diversified those remain share to that platform, active to full in Specialty opportunities of RV, ever, five more expanded XX

look arenas. each will We to both those of in industry inorganically grow and organically

efforts am announce to to that prospects I expansion announce enough fact, today. important In capacity two confidence future we have business our pleased in

in manufacturing with RV First, expected be be footprint Middlebury, to in adding assembly year our fiscal our the to campus Design within we of new Grand completed will is XXXX. our a middle Indiana, which building

new to the addition this in XXXX recent growth facility RV, In XXX,XXX this at the experiencing. is two square brand calendar of validation foot expansions fast Grand Design is

we a As Chris-Craft square that well the Sarasota dollar pleased capacity to business I campus. announce mentioned continues have perform am which on add add proceedings multi-million XX,XXX feet also. our manufacturing previously, new initiated additional will to complex, to of

build time to as launching of exciting for and team in new This into Chris-Craft the in years success brand in is an the Florida, products several marketplace look the their we the on the market come. to

market share wholesale to the my some facing you like for RV I'd with the Next, thoughts XXXX. on remainder of and the of environment the industry both challenges retail

trajectory retail in consumer the is market in the While we from over last the RV have year, the to for sentiment remain long-term we the yet broader RV bearish prospects recover confident witnessed industry.

conditions And and volatility and/or use increases weather policies. we consumers, while of the market certainly tariffs an of the some that excuse, recent are of some most season, were on XXXX price no not spring Stock singular it the the northern political our impact potential to weighing challenging the of the and especially uncertainty in increases half memory. combined to related overt country, rate selling kick-off new with as in secret is will of

will sales levels of it stable. this the and prospects XXXX down we recovery sentiment industry. in be believe of mid-single-digit the consumer of and However, wages That period are retail and the for levels employment potential will the for versus keep interest industry year growth appears elongate last easing rate tailwinds will range RV that hikes year in said, calendar

and their seeing discretionary that to valuable voting as XXXX on the to in technology more our with and still their ticket confidence experience leverage resources are consumers large family exercise outdoor and continue customers More items. levels, products seamless invest also ensure discipline RV While at they on are a increased focused value friends. we consumer stable latest and

back to signs that will improve continue during half are year the seeing, calendar There XXXX. of destocking are we the

industry versus down XX%. last with industry calendar XX% book-ins wholesale Next, forecasting down a down shipments of the RV to range is be XX% to association or year,

to their aligned generally of point are We view.

dealing also is industry the The looming of tariffs. threat increased with

imported the trade a have will XXX to pending tariffs tariffs inputs. be of a products more of While to has China material list dollar tariffs and impact combined Mexico appears additional from threat related with lasting. List passed, war for to on cost our III

While tariffs the combined. our dollars prepare potential than XXXX. of and double-digits of tariff impact minimized is XXXX plans diligently impact 'XX to in to working fiscal range are the for previous half the more could or of of that fiscal impacts back 'XX, our Similar results during successfully timing, fiscal be to for now of XXXX the fiscal of by how the millions teams we our addressed fiscal

For to gains. to the are poised of as percentage the RV year remainder top XXXX fiscal share growth, into sales and continue XXXX, to we industry, outpace and fiscal profitability relates it line

Although, done. far that have made progress priorities, more understand there we work against we be is our to strategic great thus

management Winnebago working their Industries investors team are place quality a in. can and trust to that Our employees relentlessly make company high

continue vigorously complement Group in networks more channel our for and to our to extremely our candidates terms possible new team, active existing of improving industries be acquisition to of relationships also We adding brands. the and scanning businesses, across talent

beginning incremental growth. and financial of expanded, and The an benefits to are results, strategic to more more consistent having product diversified translate portfolio driving

our value promises years We are maximizing to for to committed the come. and in shareholders our on and delivering customers

my that, wrap comments With for to up today. I'll begin

for helping and for to As navigate hard Winnebago industries, employees to and changing work company. end and we transform during our our would always, their the like as ever I all quarter, Industries' by flexibility Marine thanking RV

Tuesday business campuses the four in business more you can call this last what none last Unfortunately, the see this long of never of been had saw And of why privilege North the within week spending bullish days, these on I Motorhome that's two two Iowa. at and building here days. of term. what Monday I I've on we're our

am customer's new working already on differentiated years. for I future next unmet problems sincerely optimistic next-generation are the in truly are about many teams the our pipeline in which the our or thinking needs and several of products, because of solutions about form

productivity. because and because and improving we am after becoming for initiatives I of Both taking I sale, wrong. tiebreakers get customers commitment workplaces the to am optimistic, quality our safety optimistic taking of care and quickly some product employee industries, in safest absolute hold are driving it the are our our of do are true our morale us. if

am by because the generated improvement of the for optimistic organization, which levels business. quick our I thousands the benefit continuous our all wins are ideas, literally of teammates being at of being executed are or of and

am and These company commitment brands participating make seen I've to are because the photos communities will our employees and in what stronger. work efforts to I give plan, here the of back our Winnebago those which friends our in improvement continue and business employees, and other families optimistic many of the in many to live, Industries and increased events.

your for Q&A today. time operator will much the I very Thanks back the session. now the turn for to line

[Operator Craig first Our Kennison with you. Baird. from Instructions] Thank comes question

open. line is Your now

these on questions. good markets dig the has Good us A northern that, the thanks a you might on. commentary lot know I can been taking morning, dynamic? issue weather Wanted May for far focused in, call. but everyone's that especially detail retail about more an about what light into to that's and shed since on my of doubt no June and there's tell so that factor,

a better the performing several selling certain think Certainly, and about it the in weeks. of basis has probably consistent the the the and several of describe of been begun I is more summer This in moisture the Yeah, best has down, good season here Craig. we of going places, way morning, The last There I feel Mike. bit on settled would of I generally a the -- summer has variability country. variability has in but forward. rain quite is retail been it, parts parts northern think retail

industry. represent we XX% about know, of today only X% to you the As total

don't to they that on of you call. while. data and many or excuse. But attempt But dealers tough. wasn't well that them later country, industry, particularly most we quantify don't as again, use bit didn't get it generally summer of see to talk the the to formal an all parts like say morning's start. this -- in if greatest was of the even, it springs of little off We So, a of you customers, for will in a and as homeowners to the the even some end We got spring

a at good in particular see as in a in So, we're seasonally retail retail months, so they event position September the business. as good good the open that house into the over you important that to know, It's are several reorder next we very driven event. here a go that RV consider position the industry dealers

you Thanks. but And and the How The taking the reconcile basically comfortable deteriorate, about then, in you're did all your backlog prepared remarks, the backlog trends. share? you do order that answer is pace orders. of of also with of you and sort talked seem

Yeah.

know, segment, Design specifically, in those end more and as Grand our of choose metric, day, is, our for long we Motorized of other You us, the will parts B Winnebago-branded categories long that ultimate that examples, business our very Class certain retail to market as brands RV confident as consumers as than follow. brands the the and orders -- continue in as performance feel the at

much from of an you've shipments, in wholesale in over six three during of extended many I months you think the heard past manufacturers period saw Craig, time. months were putting decade dealers but this ordering this They other products with runup out, RV orders that's orders dealers the comfortable the my slowdown, time are shorter in much their more to OEMs mentioned Certainly, the in I the been market a farther. the freed due period. as capacity up giving out, industry in potentially even comments,

terms struggling in notice we they're But, short acceptable our now when with, the again, should them. to want relatively the stocking are retail those both so orders, be a we activity it's have robust, call lines product because retail or we momentum, where very And of are those in coming order now as you not The order in of again, surprising. not sometimes activity lead probably dealer isn't whether differentiate seeing difficult where marketplace. orders are dealers we know -- and replenishment

But -- time. of yeah, the certainly and very so aging different that backward the inventory steadily backlog about focused again, continue the those a staying turns managing just this Bryan is are so I losing but lot place forward. position year-over-year at hopefully not a We're at sleep in the on retail orders can and dealers, going

the Mike Thanks, And know and associated CapEx I on provide year guidance, the see implications this through can of lastly, margin capacity broadly we any just trending. this on where for around just and be the got implications comment but your next fiscal comment think the think capacity, of you expansion, XXXX, so margin don't Bryan, frame more as to would CapEx with new we then capacity all you mentioned. we've when about well should helpful?

to In to $XX in our the we're million projecting range. CapEx that current Yeah. be million year, $XX

For will online But it as have relates as next the regard Mike for in do year, provided stated. Design coming you be timing, haven't yet alluded the that as to, that Grand mid-XXXX. to we facility we guidance

And related will facility occur so, of spending in the to fiscal the that XXXX. bulk

projects will We expansion spending be Mike be in capital to some capacity what But spending. that alluded with will Likewise, well that have did those outlied drive square -- XXXX foot XXXX of XXXX, our in expansion, Chris-Craft versus the will XX,XXX XXXX. CapEx facility hit neither course. as of the

drive either year. facilities CapEx noted in to expect next don't those of I increase So, a

Great. you. thank Hey,

from CL comes Thank you. next And King. question with Stember our Scott

is open. now line Your

morning and for well. thanks Good my questions as guys, taking

Good Scott. morning,

demand that about Design fast increase Let's just filling Towables so tell is how the year, explain the for to talk and the strong great maybe offerings, offerings any news. announcement that maybe just at is you right had now? just because is have But again. up add rather expansion product you're this we current Grand last also the expecting in you just Obviously, are us capacity or sizable

Mike. certainly a and considered Design this specifically projected the to would effort the that growth you stay do can so. of that if is carefully Scott, wants Yeah Bryan Grand expansion I in, to answer that he business. I'll is just jump up at with tell

throttled the facilities times back certain on of I during the lines several production in at fiscal existing year, appropriately including in while, Design calendar plant XXXX. that the two believe current rates the came the have Grand And online, we expansions

Our have to expansion to almost calls projections really with Towables to that consider us exclusively business related existing of the there. their business for more growth and

of back has. we capacity in happening, conditions that Now, capacity certainly a of managing recognize is about the that particular seem may are some brand our RV highlighting that, of the when at expansion reflective odds current momentum project the their talking midst competitors with what's but it

But lot do growth. our continue they will they and share is talented team that can deliver more to and great do in what that resulting dealers and end customers, retail for that also belief our say more products

manage lot factors angst. And decisions the And should I we deliberation construction these reserve and so, believe me, market take without a negative pace other those come hard direction. guess and to, don't always times a right the a during turn of types the of in of

time. of ways beginning applies and to of in prospects have those are and their expansion going at it I not forward. are we healthy those I running from standpoint both of new a Scott, this yet product you the the same list see products business certainly tell significant of there. you'll work view But, a public guess facilities. underpinning businesses, market on to But, that's that And terms Chris-Craft construction our those some the how are thing grow projected through that I volume would

That's great.

fill have Grand their to well out as some Design products continue We new do as out coming they of line.

an As out, coming S-Class. of example, Transcend continue extension and the the as likewise the toy hauler, expansion that has they the expand the Momentum an to Solitude as well line

Grand we on part and of the in you that the in expansion terms So, driver how would expansion Design with of of line and grow well. as there's as expect continued to continue made of we've business in that's will line the past comments the

maybe it, Roadtrek Got brand. you B, very about once some consternation you maybe couple some know to on impact update to retail, over caused near-term, even just was dislocation highlight been the -- but level, us of at next chassis, that and going forward the of what an update helpful. give of with dealer know it at wholesale, at I maybe give I dislocation out the definitely the just in the but clears Class the that spoke the us issues And just at with months? the least going an opportunities on transitory has

continues America, less that to opportunity. dealers, the comments looking and at at challenges of many carried an last the be some brands so more that within I'll six our them, the months opportunity certainly But it Roadtrek probably North that sent have and ran has or nine in challenged into to alternate HYMER solutions. obviously for particular us, the so competitor, Yeah, who turn for

Winnebago-branded product Roadtrek to of existing this the opportunity Now for in share take them in good HYMER steal have market for already cases, it's brands. to front And potentially opportunity most dealers, in to from existing and our continue dealers we markets. put of us that those an and advantage

I that. done think we've

moment market Bs, we believe as the category complete the we a of are always took period. that those in settle. neighborhood five time share and at report looked retail points Class in last I they're more those out But there's that here the of as recently share somewhere that in results they little and that flow have come in from in on know, you've the ebb released, SSI, If all and not retail market

So are taking we share there.

committed. as tries we this elevate will that them we And parent available. to has stabilize from Roadtrek a Winnebago and and to coming our further have even just manufacturers has It's what up RV business, it in really and to form trying or opposed -- game to way are play in anything more We shape negative or shape any no about ramp or other that way anticipate be very, market Roadtrek saying form about as into HYMER. or that new very competition

That's can months, our could some third because deliver. was had and/or chain that share why the coming deliver that been we make this especially in of in the quarter, disruption in disappointing, you we to higher been retail have third supply even product hoped argument have to gains our the quarter able our

So of that for unfortunate is the particularly us. timing

the it's perfect, And both so continue being that a albeit said, of work view our back situation through market, I in I systemic. that, week, from not hopefully think But to orders, getting we fulfill. been we'll products we'll and retail have to that want cases, compete some end far we and with have that hundreds of to we that as Bryan customers back literally space. appears And that, able continue and as be that and temporary get better through very to in we'll every not do situation vigorously very orders,

right. All

for last if tariffs. maybe could quick little give on you Just detail just, more your granular one one, a expectations bit

is potentially List had a with of XX% IV, of List about List III pretty onerous the more III -- wouldn't and that talked but List concerns, really even that be IV rate commentary being bad. that understanding my the because impacts, You some

trying more just about I'm a sense cautious of tariffs? tone So you this what gives to get

Scott, I Yeah, it and to more IV. IV. our that List Bryan, alluded both And Mike take I is weighted wouldn't It's to List this III one. List as II estimate that XXX. characterize I'll heavily List those and what prior List for had been; effect here tariffs will big the of as at soon to be XXX the as new take tariffs least in

our working so, it. are teams mitigate to And hard

on the Just be vendors ultimately negotiating then and where with pricing those the suppliers, and cost tariffs, some with did we cost mitigation necessary. as of previous the pursuing reengineering opportunities, will they

to aren't whenever So, the there's be risk, there But will indicate we new that certainly, we the an to it's not tariffs, offset meaning we certainly will a offset them there sizable. is to tariffs fully strive and from always and can.

I all thank you. That's it. Got have,

Yeah. Thanks Scott.

question Tristan from Capital Markets. Thank you. with And our comes Thomas BMO next

open. now is line Your

morning. Good Thanks.

morning. Good

Class maybe, just XX% chassis total this, revenue misheard B I was revenue? that from you impact, Motorhome to the the Can -- XX% not a

total That segment, yes. Motorhome was

B. And future? changing What make seeing just got to really in of strong shortages moving forward the demand. Class don't entrants chassis sure a are that, Okay, you of then, new you it. on consumer in There have lot is kind we're

just in I new very some the working never challenges has increased had we've but certainly the particular this are will we we've that in closely been others Class mean Motorized with and all which and in category. I business not been though B, understand supplier from -- Well, for there this our the several the and entire last competitive with would activity on market. months be chassis suppliers of one of our We argue closer several pioneers

and space that proposition develop key to relationships will we'll but only from to that there capacity chassis know will to some for, we not platforms. combined resources and think put expansion but competitive these able not our with industry, engineers use our been believe many RV share But, of in product and our of these the other that sourcing from with should the good value probably that so fair might positive us probably you the and these be chassis position have we of in this manufacturers development just industries investments our be continue that suppliers manufacturers get be

good disruption and business, time we to with will confident of couple exception on fair ahead been So, turn forecasts. months. do job basis in last the think and we stay feel of we -- companies that that they'll we've -- be a tell, this our but suppliers in of if having good relationship one and question we them and able with of it's give a the will a our that they to-date, ensure meet strategic Again, that, the it's But it. forecasts regular do stay just about ahead these

I it. Scott's you got know on tariffs. Thanks, mentioned Piggybacking question,

possible is pricing the having was you without impact offsets of One raising wondering increase retail. on an more prices. how much I just can

you manufacturers other industries goods potential Yes, great probably materials million and and to due tell that's question. Winnebago is by not durable well, that -- tariffs, for all Industries dollar rising and as other but costs that question it for a just the I'll that are impacted

years at to three to to price We a price market try taken least to stance cost. the last opposed at to have always the here in as Winnebago

company to for devise that. more terms asking am ago, a have two you was today costs, concerned easy over than but that because of certainly we limits you're probably competitive as that's I cognizant say with reached brands is your both in pricing our strategies. outer that as years Now, brands, some of our elasticity a your of price so pricing of our it of and of limited potential to premium the some

an the the goes sure a up in the in generally there $X,XXX not I also that's I price every the about product RVs think think every the $XX, lot of retail price in And generally broader is end RV does being I that in been customer. raises case have an and it 'XX to And results to-date especially -- market, while and that had in a broader the yet. have just US the not it it's in there overall issue comments economy are do concern am industry of impact calendar the $XXX, that, on impact. industry. inflation personally every an

product the price retail has manufacturers the think do light last impact forward year and very be slowing with I intentional are had of some the in an this. of I pricing in on going and to going RV here think inflation all of they how

is it been. a forward bigger has challenge So, yes, going it ever than for so us

Okay. going in here. to sneak I'm one more

lot inventory is. a the destocking where about talked of that dealer kind You

where So guys think curious I just stand? you was you

most and do recently probably on IR has an We that we better consolidated our I fall position, haven't continued a a But done tell year-ago. chart quarter-over-quarter, position all of this been a have standpoint And basis, maintained comparisons terms versus it. you, to would in than our competitors. probably company along inventory we've we in of here from can

inventory success have. And tell it's particularly Design the year continues I the business, you, our businesses, because the would brand saw in remains year-ago, retail than that's, higher than that ago, Grand the Winnebago-branded especially Grand still In Design but it incredible lower a of in a is behind to year-ago.

And we is probably, thing that we to inventory. are on in a aging to make place number see in places, dealer particularly So aging the the Winnebago that the some do the the that inventory of have today paid addressed. we channels, side sure programs biggest attention in

rest elevated than on industry. from the Grand the little side is a Design of pleased to significantly I'm a that year-ago report while aging the probably of inventory, lower most

still at with, and watching comfortable -- feel this that we're a time. it's So, we both but position

thanks. it, Got

Thank Michael you. SunTrust. next And question comes Swartz our with from

open. now is line Your

you? on guys, are is Hey for Lucas This good How Mike. morning.

morning. Good

quantify had pulling pricing guys upcoming just of do recently, you commodities the and and raw any one you back expect material I on major in a some see are import able quick the on quarters of benefit With to to that it? costs.

Yes.

have inputs. been has has right at on overall guess will a think year-to-date as eased. the of certainly blended tariffs, speaking, basis. I and I one helped way, expect our continue. on that place, I'm overall calendar I case, help cost it the easing here those have it the the in in equation basis to look that's and year-to-date 'XX now, that offset some -- in looking I been tariffs commodities in impacts our will of you and basis commodities at That a those It mitigating broadly

in So got areas. you've and commodities other some then easing pressure you've got

thank I right, you, all it, all that's had. Got

Thanks Lucas.

Thank And our with next Sidoti O'Hara Steve you. question & Company. from comes

is line Your now open.

hear me? can you Hi,

We can Steve. Good morning.

But...? figure was get I feet I you in Roughly, capacity increase capacity? production morning. can good or Hi, frame around. kind to the you about; the on a it's square of, increase maybe talked expansion in know curious, the maybe of just terms that separate that in

that depending is, I'll and think many I with probably we we'll others Stuber information. gain increase give Steve will in sure do think It's -- touch what base production way But could square here footage. I'm in on of call overall ask to about to you ramp a rates want up that not on to you There product the Steve, yet. probably vary. terms that be right the can in a quite percentage that that's

the that than their is Design increase, business a as much is brand's say, Chris-Craft increase bigger a would capacity of business. Grand particular I percentage But the percentage of

for obviously, Chris-Craft the material so undoubtedly. move the is But one business. And major than It's the a for Design a business. bigger it's move Grand much other,

our figure try that we in Steve both to can I'll But of So how some capacity. important. they're you we'll context out give to terms more -- overall on ask yes, maybe

I Thank the just road of some maybe process tariff guys the with are industry is benefit then, be and question. point? And on it what's at potential is commodities these Where tariff some sourcing follow-up you. for that mean, the working may the down related the alternate in -- side. we on a concerned that how on hard are you

as Yeah, question, also obviously realized well. that as very a you popular is

we is those speak, company countries particular that have also are looking tariff those -- as at on. of for choices other products some been In we and cases, Our from do exploring has choices options. that come some implemented we

that take in would or part not other in time of are potentially and there terms But the are business that either of alternatives into new the and reasonable limited supplier move. terms the just categories relocate and products is where find true legitimate investment -- the options of put making it to

assured can and some our those that where investors are, much harder do unfortunately, looking teams at alternatives but other it's to components, our than You that there be are others.

not of do manufacturer, move We own so in cases don't China. up in As an we many and in we those the ourselves. have to don't ability overall own plants Mexico, plants kind

usually about as thinking themselves, suppliers customers with fact, important conversations our have question that good suppliers are these and These having some to our they're our are in with about alternatives and their same as well. conversations of

much. right, very All Okay. thank you

Jordan Thank Bret you. from our question comes Jefferies. next And with

line now open. Your is

morning good guys. Hey,

the Hey, Bret. good team. to Welcome morning,

Thanks.

any about on the sounds they of but do last show It the talked retail probability commentary? up retail On feedback because you didn't maybe have raining, sort sequential people conversion have at trends guess, show I buying the like any was and up of at did do you you it when quarter level?

that recreational would No, any sort tracking We but the I to on also the side retail consumer standpoint. a have a not data traffic hard from retail that. quantitative very in higher time vehicle for general, I ticket, year goods, environment hard generally do of just discretionary say, the even side have a just conversion both on to end close the my the bit that has this In that out exactly of dealers, the with sale. is, the difficult consumer many that except to often boarding why principles just -- articulate at -- close. conversations and struggle sales managers the take been more cuts doesn't their card little credit

anxiety, that volatile, we've late. to factors, -- of increased continuing the vehicles, be although markets be hypothesized any rates it general could prices, being number so, And of on financing they've raising equity done the better as

data any lot whole no, it's to we give anecdotally; great not have you on other on a dissimilar don't than April. in was unfortunately, So than that probably here June it

was, standpoint? that? of than you your of socioeconomic sort your guess And quarter on take the higher the what's guess, I Marine cyclicality less of was now cyclicality from the another that follow-up of how my Okay, buyer? do two a I with RV, belt, under I because Marine Or question guess -- compare Recreational is great.

in been very late. I better similar and to to real looking terms Surf continue at, has one. little that probably they've in hanging ran there in the are stronger generally RV take but segments mean, industry as Pontoons that which what been the the have Yeah, inconsistent, industry you're have there you Marine a wake we has and category bit cyclicality I last been year. and are in think particular of and the that of mindset question, to answer you boating down drill industry to the know the

our brand, the Most that in remember, improvements dealers outboard and Martin still with markets certain current that is What customers fiberglass inboard Aston we're we with terms of category resulting business are the of dealers robust that our cash in pay XX present. upgrading working we're that Chris-Craft business dealer XX a the in and of our there. making in and foot the still our found with generally and to customers

again, well. of to those so other that And into flow have -- those been countries tariffs the be of we can some some pleased rescinded, from were the Canada as that back products also countries, particularly

RV Chris-Craft both similar Design sectors. to momentum right cyclicality So, recent in they of able have yes challenges enough in against they're those the are the is in business, our current that probably enough in Grand and some things that swim of very but like doing of

Okay, you. thank great,

Research. Thank And our next you. Rolle question Brandon with comes from Northcoast

Your line now is open.

you retail market see ask, was Good right but out the of asked, could have talk the playing how been improves side, and the year? now Most that going morning. Thanks. you I hopefully activity about in promotional throughout RV on as the my questions to

Yeah, noticed enter to I think bit in a the RV activity albeit very the continues as promotional we change present, months. of we market little be here summer the a have

at targeted around products. the think activity the some specifically I promotional aging of becoming retail, more is

We normalize slight their have on deceleration into a done on dealer's some seen, both the also believe, of of of their market I product some as in I the competitors, of think larger a pushing our lots, but their lots. have better job seeing inventories

you're a model, seeing either activity the you're to in starting have get out. a specific overbuilt seeing for OEM specific inventory that think people a may a product little aging dealer, a you're trend sales or spiffs bit particular I a dealer now product on stuck particular so, seeing and and floor or or brand push against more an is plan towards are lot that to And OEM on lot or promotional products

we're that market next vehicle event the house continues dealers Hopefully, At the back in on potentially continue OEMs. think way gearing field the stocking summer down. of think generally side. their the to for ride industry summer retail, is September or months. months industry as the for the I retail levels to to the and up I really wait inventory to work strong open bring lot potentially And orders of going the quite to improve through recreational a back slightly interesting a out to in

Okay great, thank you.

Whiston Morningstar. comes Thank from you. And our next David with question

is line Your open.

morning. Good in. Thanks me for getting

pretty third on around the Just looks receivables. something issue B that else? And was like Class two there or looking quarter at and cash is primarily is just a bad particularly doing statement, first it year-over-year, the headwind the math, questions, working isolate capital, flow

month David. shift of thanks receivables our the is end the notably business, was at issue Yes, of This Bryan. related the the end towards The to rental particular which quarter. in

or in quarter terms receivables right the timeline the -- in typically of to May spike end Our of related rental a April, in is at is of time that when focused frame, in the end business May, particular. it business -- our at

specific or finger And characterize jumped your so we to point one it. thing, but at was it's an out, hard that that item as analyzed

consumer Okay, is this segments from does the groups? Millennial, customer briefly just Mike, maybe about different talk other Can RV Baby thanks. probably Millennial your what that's just you Boomer one And customer very other for etcetera. your want on

David. Yes,

but it's that products camp the only One touch the the I their think from their out and affecting we things, system, question. the Park friends are which so to affecting as and right their technology, two holes National has design, that stay. broadband they thing of mind sort thinking desire off to with and road, or well. that comes certainly be which not bat, grounds loud also And that family is in Wi-Fi is with in comfort the the to in infrastructure

that's So one thing.

with spend doing order would younger say works I a is, to themselves stereotype, hate to sure of in but generally that less product thing time the make I work the liking. the about we to comfortable other lot are their consumers thinking

different will what think open we serviceability way touch. and are the so, the and what touch And today and dealer way the about cabinets just will the customer

they're try that viewed are it as we which not a of of trend disposable automobiles. know in I to this like lot you in a products to Outdoorsy before companies are buy written, would about RVs say are it, there's articles been categories much yet lot than probably and there closer I other but and including

phenomenon we're can this -- of that sure maintenance experience product they the a free a potentially almost they that they can things tracking. it, that before experience are making -- buy getting so, and they're that And

some terms fact at the be RV of that talked have Millennials in deferred we time, as ownership home in watch, larger a trend segment. that have about well may some to particularly ownership of for Motorhome People on

segment of probably those mind maintenance, buy. you about we're are are So, can try that of that technology, I three before think things David that thinking about Those terms that things customer. come to in

you. Okay, helpful. Thank

turn to I'm for not the I'd at any further showing time. you. remarks. closing now like this Thank back call to any questions over Stuber Steve

throughout for to the Thank you many We with our look joining Great. a forward day. of you great today. everyone quarter. speaking call Have

you you participating disconnect. a Ladies may today's in conclude for and and conference. wonderful This day. gentlemen, Everyone have all thank program does today's