Winnebago Industries (WGO) 21 Mar 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Second Quarter Fiscal 2024 Winnebago Industries Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the call over to Ray Posadas, Vice President of Investor Relations and Market Intelligence.

You may begin.

thank second joining quarter and our to everyone, XXXX fiscal earnings morning, you us for discuss Good results. be of This on call call replay our live our will the website at later is investor.wgo.net, and being today. available on broadcast website a

release quarter, quarter results with deck using earnings we to will and was note Please that second this with slide remarks. earlier be website morning. our our follows that news issued posted The our beginning prepared along this an

the the on section our access Relations may You results. website deck of Investor under quarterly

to Turning X. Slide

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

addition, reconciliation In measures the management today's earnings our the GAAP refer available press to are GAAP in of comparable measures non-GAAP measures. financial release. on and non-GAAP to call, The will

turn to Please Slide X.

your be performance our growth take future mid-cycle today's our overview Officer underlying and on organic Chief an Officer. management assumptions, to are questions. of me Financial Hughes, and with primary call President Senior Executive during the results our of President Vice Joining will Winnebago happy the share Michael Bryan will Bryan drivers. quarter. and Chief Happe, our Industries; and will Mike discuss begin will Mike the financial targets and then

turn X Mike. Now as over the turn to please Slide call to I

thanking discuss Thank you, by and financial want business. results. us Ray. I morning, you second to to thank start teams everyone, the across fiscal joining quarter our XXXX our for Good

dedication I of RV marine and our on and and exceptional incredibly growth RV, customers commitment Winnebago, delivering am strategy our Barletta your executing day. Grand Newmar, for Chris-Craft, and proud every Lithionics. Design to experiences outdoor

results, diving Before we deeper away call like want take the today. would from X I points into our to that you our main to emphasize

the with performed demonstrated we in expectations line fiscal during and our quarter resilient XXXX of second profitability. First,

and anticipate to QX, Motorhome This in targets. share near-term we softness and optimism Second, our And as and continued confident flow. on is we side fiscal profitability mid-cycle grow move our the dealer capture business, industry amid market cash RV future remain our market particularly our substantially free dynamics, third, reflected ability the in in beyond we marine financial caution. increase new

December Now season. our fiscal February expand selling The results. a lighter typically on ahead sequentially quarter been stronger let a through spring of what is QX seasonally has historically me period retail

face manage closely trends. to the demand in continue dealers levels anticipated, a As in higher environment inventory of interest rate QX seasonal and

RV in Despite continue sequential to in Motorized and profitability macroeconomic that quarter $XXX.X I the were marine revenues we for Net earnings second unwavering reflecting our and million, quarter challenges, commitment and Towable the to and the discipline. an anticipated Brian first softness call. operational year-over-year the businesses demonstrate referenced RV, resilient

in we Our will review a with Bryan decrease financial $X.XX. consolidated more earnings on even a margin of shortly. flat delivered of share $XX revenue. basis, was detail diluted adjusted sequential in EBITDA million per Overall, our X.X% results adjusted

as portfolio new to as of investments premium well our and products speaks performance diversified our brands Our in technologies.

strengthened portfolio X.X and OEM brands the years, significantly to we the our management X Over added offerings with power Lithionics. mobile have acquisition our premium past of

than rather remains across approach collaboration enterprise competition. X of Our brands our

base provide further through us. powerful our we quality, expect great passionate our each portfolio synergy. this innovation excellence to and of We have service come enhance customer from centers makes that In they are enables brands way, and the driving what of with diverse profitability growth and and our

Turning to briefly inventories on X. trends. shipment and I comment will Slide

the direction on RV from Towable the moving total wholesale inventory the XX% data XXXX, RV is enter year Industry an standpoint, half RV positive As The we the most increase back of Association's side. showed in shipments compared recent suggests particularly a the January prior data in an that industry with period.

for down were the Historically, spring quarter and fiscal are in dealers summer of Motorhome XX% destocking our our fourth through Towable season. year-over-year shipments while RV retail by as accelerates quarter the XX%. and higher January, third RVs quarters year the selling RV were

behavior year. calendar be year dealer XX.X% RV However, follows given XXX,XXX seen XXXX normal to the remains At it this patterns. from industry whether units, prior at the macroeconomic seasonal year's level, the ended current environment, shipments down

the XXXX, calendar midrange to RV increase estimate units. a expect RVIA XXX,XXX of to shipments continues For to

While wholesale will to we and/or one-to-one return we recent a on trends, continued this to industry the of timing the for around rate retail remain of full replenishment the Fed mindful year, calendar uncertainty based year, RV quantity cuts ratio. that believe

January, most X-month recently, saw X, Slide Industries in RV, particularly Motorhome Class the On market market improvement basis C, we've On a up a seen end decline in total through are share modest recent our and of XX-month at stood RV trailing X- share. Winnebago Class in which periods. and XX.X%. the A More

on are emphasis holding affordability our we brands consumer up premium believe Given well.

Slide to X. Turning

to on increasing basis through retail soft market inconsistent segment. And and to on while the of to costs were performance. bright expenses second as pontoon X.X% in floor inventory remains within spot brand, end through January. Barletta XX-month work the effects of mindful expected, trailing higher our gain inventory that, the quarter continues a As The address continue share, interest also being dealers orders plan industry Marine elevated of we levels the which

our across intelligent platform. purposeful our and Industries These of is is design outdoor looking Whether highly investments thoughtful and technology to with competitive for future it other the play. and markets customers technology and runway significant that differentiated power in provide Winnebago X, growth. Slide customer-centric or advantages X we serve, Connect, -- On true we here delivering call Lithionics they innovation from delight travel, house what affordable at recreation RV as game-changing us our profitable solutions live, Winnebago work

Florida Turning highlights Winnebago, at at a Grand to the RV Show models has RV and consumer got Super innovative Design the Newmar. from look first-hand in recent January, new

flagship of brand Winnebago and launched in X Our EKKO QX. the all including began RVs, generation new of both newest shipping motor popular homes, the Revel which

Revel Class outdoor with EKKO Sprinter Mercedes adventure and designed enthusiasts. the Class are on extended the new season enhanced B capabilities Built ready for C chassis, Sprinter-XXB

with motor We also showcast equipped the Winnebago homes Winnebago and Navion View Connect. all-new

RV and energy management and systems refrigeration, lighting, major control to door With climate touchscreen, water systems navigate easy from can the consumers slide-outs, and to systems, monitor all locks.

as a We also monitoring automatic diagnostics. service gives access other subscription temperature offer of control and consumers host pet for that remote benefits, a such to

rollout long-term about exciting Winnebago Connect at debuted potential spaciousness affordable category, Towable in The line. Grand its Solitude of new this comparable fifth price point. as stages, to offers the fifth technology. the In Grand Design's is industry-leading are more Influence a early and we amenities of excited but Design packaged wheel, Influence wheel yet

centers commercial with develop command partnering such outdoors to a leading Winnebago's dental as our unique as of clinics vehicles. that Winnebago mobile advocacy leaning is electric medical fully a At recent division battery commercial through electric for partnerships to new sustainable with and Vehicles XOS into our XOS Specialty customized also chassis XOS applications, child commitment our manufacturer alliance more mobile and and will technology such use vehicles. a electronics We're

our cornerstone This Industries of also anticipate corporate business At customers. the growth the Advanced creating our the that Industries, sustainable evolving new for needs agreement mission solutions and commitment to is of profitability. underscores Winnebago long-term in Technology Group Winnebago responsibility

in year. by for named of America's January, second consecutive especially to honored So X were we responsible the most companies Newsweek be

the done corporate we to advance as underscores work recognition have This organization responsibility initiatives. an our

X month's X marine of the Boat International special side, its Launch a be XXXth addition On new products unveiled introduced at iconic this XX, will last Show, Chris-Craft Chris-Craft year. Miami of that anniversary

industry. for mounted recent twin Manufacturers to unique continues boat. Boating brand Barletta International, attention capture of pontoon business. industry's XXXX recognized share. that Minneapolis discovered Association Barletta boating Writers data The National as its with the the engine market The pontoon take Boat the center brand shows Award fastest-growing Innovation our the Marine and recently Meanwhile, its Show expanding SSI continues also is The reach to Barletta

an unique the engine shifts higher design level allowing from performance functionality. This exponentially of mount and transom the tubes to the outer

aligns ahead, with be the of our for premium RV remain and in to creating the of outdoor Looking supports tailwind a demand and strong vision that the leader boating brands recreation. exceptional portfolio in trusted the our lifestyles growth future

to our deliver on relying cost We within to allocation stakeholders. our strategy structure on and capital to balanced control, business flexible for our value diversified focus areas continue continue model, those

Bryan to over hand With that, call will I now the Hughes.

good Thanks, Mike, and everyone. morning,

the starting Please a and on my a of documents will our drivers our key earnings detailed Slide release for refer performance. earnings of results. in X, I As overview reminder, on to supplement financial remarks, key prepared our focus

flexibility cost fiscal variable results us as respond of reflect well advantage highly dynamic with in conditions cost Our dealer to time and critical the our to production our volume a disciplined over swiftly the This supplier network of have structure. that that success changing today's we enables market the and management, cost provides QX environment. and strong and us structure production as XXXX built resilience is

retail revenue product XX.X% to decrease $X.XX. selling partially we to in offset The quarter the current in to revenue lower was compared a second driven sales the market XXXX, to adjusted X.X% shipments during resulting an in EPS unit lower the and result, deleveraging in EBITDA margin conditions a As and adjusted lower given of of able average year prior of due deliver shift decrease prices. effect fiscal mix diluted were by

prior profit year, mix. coupled slowing in compared by decreased By shift with deleveraging XX.X% our of an extension, sales, unfavorable effect to product the gross driven

levels, also margin, in Although sequential sequential that ongoing resilience engineering, be capabilities. dual remained healthy. asset in SG&A data percentage a IT It's to note profit margin of reflecting was attributed and a revenue our to This investments expenses our gross can there our operating decrease compared elevated important of small our reduction to expansion and our expenses. historical a remain relatively the development SG&A as in

million in proceeds our performance In quarter. by that on notes million been covering in bottom we due XXXX. few due the to $XXX XXXX. of refinance convertible Before financial a had of offering issuance senior had used impact highlight notes this a of unusual $XXX.X our convertible line items approximately the January, We the segment, announced of senior I'll that

we million. refinancing, $XX.X this a approximately with loss Associated of recorded

not It's important caused be taxable it loss earnings, impacted did to note elevated. that period our reduce the income, reported negatively while our tax which to for rate our this therefore GAAP

adjustment a to Additionally, related we million $X investment. incurred a debt nonrecurring noncash of fair value

$X.XX. After quarter or $XX.X second for million $X.XX. result, a per GAAP As share earnings these per net was nonrecurring adjusting adjusted GAAP was our diluted loss fiscal share items, and loss nonoperating was XXXX

As a for traditionally it reminder, shipments. quarter industry fiscal to lighter the a QX is relates as

However, model, million even of revenue, with decrease $XX X.X%. to us sequential margins enabled deliver consolidated variable cost in EBITDA operating sequentially our flat the

Slide Turning to Towable with our performance segment. RV XX. by Starting on

our had selling dealers to given last that levels. increase been the an retail retail additional call, preferring environment. we committing in their evaluate on Dealers into inventory before cautious spring, noted inventory reluctant the uncertain spring During season's heading performance to earnings take to the remain

were to down average mix year-over-year. market and unfavorable by per for offset year. targeted to allowances. prior down and to Towable points XX.X% and was a was Revenues primarily due warranty unit the product experience RV to comparing in and partially year-over-year, adjusted the which Due unit EBITDA deleverage segment discounts related price was against reduction reductions, conditions experience, selling warranty volumes lower down favorable price basis lower adjusted Towable and related EBITDA segment XXX XX.X% RV margin in

These network. decreased dealer unfavorable a due by drivers and allowances. the were and lower prior to discounts current partially compared to market offset conditions year Backlog cautious

higher to volumes on Revel as to and unit XX. costs. from and segment products related resonated compared price prior Motorhome Revenues EKKO were year-over-year chassis allowances for levels down launched with market including increases to driven Slide but related partially RV the offset and by year up well Mercedes conditions, chassis product a decline the customers. the to X.X mix, slightly was lower prior the of year XX.X% The unfavorable that higher we discounts by Motorized Turning sequentially new several

discounts points XX.X% EBITDA warranty year basis and XXX XXX adjusted labor down Segment volume adjusted higher and EBITDA EBITDA inefficiencies. adjusted due improved deleverage, prior productivity margin basis and down operational to was increased points Sequentially, cost our efforts. margin higher due and versus the to containment experience, allowances was

as dealer cautious year of due the year volume the XX.X% Please from XX. and to year. network. to to of prior and lower product Revenues higher conditions Marine the market market were Backlog from prior decreased allowances current due conditions, turn of the a related segment unfavorable a a levels decline to to RVIA launch prior for point down unit and result compared in Barletta price mix Slide discounts

Marine allowances versus due Backlog This points incentive-based related segment to partially decreased the Marine adjusted lower and EBITDA prior the for basis deleverage compensation due cautious operating margin to dealer year was was from down XXX primarily discounts and prior by performance. higher volume network. offset segment period a the to year.

the Moving on sheet to balance XX. now Slide

investment sheet our of Industries range capital core net on our end targeted had of and the Industries the of us Maintaining strong execute the slightly X.Xx. balance As to above X.Xx, debt-to-EBITDA ratio a thesis Winnebago to to of is quarter, X.Xx strategy. well-balanced enables allocation Winnebago remains approximately which a

completed a of This convertible refinancing performance growth. maturities. quarter strong notes million for $XXX financial flexibility credit us refinancing discussed, offering and for and the As future provides this with underscores we operating our XXXX successful senior profile

capital of example, or business, continue investments returning like Advanced the opening acquisitions like Innovation We shareholders. for in digital prioritize Technology the strategic and Group Lithionics, to Center, ATG strategic our while to

second paid quarter, dividend quarterly the $X.XX of a per During cash share. we

underscore in These commitment dividend market we business. to the trajectory XX% years. capitalize by our to new a further our quarterly grow our actions long-term coming confidence reflecting in gain the As we our first strength and increased revenues have quarter, reminder, on and the profitably ability share of opportunities the during

to conditions, the turning anticipate quarter. We and retail consolidated call on softness digits third color back let with down single provide upper to sales inventory. to some basis. Before on to but Mike, sequentially high market in the revenues higher QX reluctance dealer for on expectations me fiscal net year-over-year our current a Based mid- be carry

we aged towable On our view that complete. the the largely was QX of expressed destocking RV December, call in side on inventory

While the dealers reports left from some remaining excess lots. inventory has to do. suggest motorhome also some Recent RV category industry had still dealer on the marine destocking marine

roughly QX result, be RV sequential both RV modestly increase continue segment expected revenue As the on to we flat Motorhome Marine versus to manage in while we towable segment and a anticipate a basis. to as sequentially is inventory, the aggressively QX revenue

be volumes of challenged and impact continue will consolidated expect Profitability quarter. prior versus the be deleveraging to down by the we, therefore, lower year-over-year year to margins sales

EBITDA We modest will expect that margin consolidated QX profitability perspective. reflect improvement sequentially from an

to growth let back closing me Mike our provide back future and Now turn Mike, call you. mid-cycle targets to to the some discuss comments.

Thanks, Bryan.

morning. XX-month to turn with QX targets trailing announced XX targets comparison addition also growth fiscal Slide for in financial mid-cycle an results, future our of our overview In this Please financials. we organic our to

fiscal XX,XXX Market volume a XXX,XXX mid-cycle targets range mid-cycle assumptions cash for retail updated at expansion I range aluminum potential EBITDA financial our underlying pontoon North of model. inherent margin business retail American fiscal flow year XX,XXX to the include to RV our units year in targets, and to and like emphasize U.S. at would reviewing free XXX,XXX volume a the of units. generation In

in As towards we we by to fiscal compared approximately the range move results. of XX% XX-month revenue our trailing midpoint years, with QX coming expect at our increase the mid-cycle

increase XX% flow in expected our This and operating increase underscoring leverage. substantial EBITDA free Xx adjusted translates a nearly to in a cash

opportunity both market share pontoon and there believe ample our is Additionally, industry. we RV to the the in broaden

ranges annualized we anticipate believe reflect do rates. consistent improvement achievable we expansion year, points While a basis every average in not these

the giving and employees play. communities plan to Finally, expand live, our where in our we the philanthropic to work meaningfully coming years,

eliminate all mental with our access outdoors. that people programs benefits barriers, social, physical connect the promote of and We are and of extremely the health proud

of Please variable through turn operational expect EBITDA I margin expand expected and expansion flexible, well to to business excellence cost margin product points. range, efficiency Slide This EBITDA our improvements operating on opportunity is XX. basis leverage improved margin driven in high model briefly by as initiatives. midpoint operating by new part and ahead. the as touched the our we At adjusted our XXX

in a anticipate We illustrated Slide as flow increase substantial XX. cash on free

$XXX of capital cash our at To the generate higher we offset growth, profitability. realize million million to free revenue by support increase we efficiencies. representing requirements to our that expect higher We working a flow midpoint driven range, in future expect $XXX largely will partially be XX% as

be total or we taken revenue Finally, capital X% and around maintenance to expect X% both of which consistent, would in each capital when together. of growth remain

with XX you Before turn your unique. the things our to up us well X that we I highlighting business as Slide to the morning, sum leave makes aspects as this questions of I'll on want by

you We second RV the quarter is heard operational today, as markets. expectations in of navigating with effects profitability ongoing we line unwavering underscored our marine and to the First, resilient performed demonstrated an that for our and by in softness the commitment results. discipline

continued anticipate to Towable flat to Motorhome softness expected we revenues QX. RV expected be are basis. segment increase industry in revenues while sequential a and segment Marine RV sequentially, roughly on fiscal Second, modestly are

move are increase our market business, Third, flow. confident in and to dynamics, grow our and near-term as capture cash we beyond market share free we profitability ability our

enterprise secular outdoor brings long-term make synergy. each bring brands. that of drive expect in operational include diversified brands the the elements and Each and lifestyle a number us our best centers unique. collaboration portfolio and of are functional of across capitalize excellence portfolio unique combined and of attributes trends strengths These brand to industry-leading our approach our out We strong we following: business to growth leveraging on an promote of a

brand strong equity We dealer go-to-market leverages that consumers. proven have within and a business trusted relationships model

us long-term secular trends despite investment in capabilities innovation enterprise Our fluctuations any in are commitment to and on short-term demand. enabling our capitalize to our

the finally, variable model profitable has our operating current balance been future strategy that balanced capital highly trough. allocation integrated enabling resiliency long-term growth, And have cost results and navigate returns. sheet a we is we shareholder flexible a and through the healthy structure demonstrated as accretive and in M&A cyclical supports that Our

open who will back the I to operator turn for questions. will up call your that, the With line over the

question [Operator MKM. Stember Instructions] And ROTH from our comes Scott of first

you that the that -- the bigger calendar the air what going to but between probably year to we're have a to is one-for-one 'XX expecting normal than model sell-in timing pocket talked resume of fact given about Mike, changeover, in the exactly? sell-through

Scott, I are of Are about you on Or about you X:X? want to year asking your timing clarify asking timing the the question. model changeover.

about is for on X given a models I'm timing asking dealers or X? No, are to be be waiting the what the your expectation of -- X this saying introduced, that I'm of X. on basically going year, to for

for Yes. clarification, Scott. Thanks the

is half statement is believe calendar in of by the the be year. the the different believe that ultimately second XX-month going end I period the the the of first year. today the XXXX equal be year for shipments can by year. total that year to Obviously, composition think our could probably in end of in that the reached total retail we that we of half in But equilibrium than that,

Got it.

quarters? Next be extended the talk you what about is will next on warranty of an there the And tail through expense. And that? the maybe RV side, couple on drove

is Scott, Yes, of that is this I a issue. anticipate systemic type this Bryan. don't

up is now, right I peaks expense sales unfavorable that and acknowledge the can that favorable analyst to X community industry appreciate you a as ratio the through going needs quarter. when like sometimes think valleys through go show another quarter to and warranty

year versus as some reduced year, ratio QX. sales that elevated to warranty in This last it's had as a we that. experience fact, came a In favorable

want it's don't here. convey that year-over-year So to driver issue a of but I it's a systemic margin,

some You our particular as that through also the to some will in in up you come expense lumpiness business. from have campaigns time time manage

It an I elevation. So to this us. specifically, question for answer be don't as was quarterly but challenge your a see driver an expected ongoing to not ongoing

of last Grand Design Has now. the motorized just of at amount all? challenges of And the in quick rollout right With Motorized one. it. some the Got of timing change X

over our fiscal happen for year Scott, last the the fourth the the in fiscal in majority remains year quarter of some our We this But Design Grand the timing motorized Design, sales track see preparation. expectations ramp anticipate of 'XX, revenue will 'XX. ramp-up motorized -- on that of Motorized that of Grand versus of Grand Design, period. we'll

we quarter shipping year. will will at shipping motorized fiscal But begin begin fourth in as we motorized least our of this today,

of question And from Tristan our next Capital Martin BMO Thomas Markets. comes

then Can also you kind cadence the ASPs? of your model the year of for expectations about and talk 'XX rollout

Tristan, and the I'll speak thoughts cadence, speak to there. I'll Bryan ask to some to ASP

for last I transitions. this. we that window and year We behavior several to model of in have First model same transition our planning to on speak year not businesses competitive the But 'XX will cannot all, X RV will executed in say years. are the that

we pull change any So when But XX year they bit timing does not those by of a are significant introductions. little shipments. forward not significant to vary year shift ahead over. That model we brand planning are in a as our model anticipating model years

Yes.

at it Tristan, it's pretty increases ASP, you have motorhome, Not to look the segment decreases. big right? or neutral, segment, of course. In by On

higher pricing For part, been that seeing. meaning got that you've to increases offsetting offset are discounts initiatives some the allowances or the that are chassis and most some we've

on net-net, motorhome. So neutral pretty

now. in but on that ASP It shows that's are down an products there approaching XX% at the at up right to is reduction introduce our really On single is news basis. customer as than targeted big mix efforts The a high digits, anything. Towables, more ASP, where

negative do reductions some some you have So There's mild models. targeted price certain mix. on

reductions. So some apples-to-apples in other words,

But to that high X% I that single-digit decline X% range that is ASP probably referenced. in range, the

We there. of point product. great of targeted with example the on the some but lower likewise, an shows some Barletta it mix. most decline, And as Marine us entering price there's up of in introduction that referenced the side, that then mix So price

we on, referenced allowances So discounts some also that and some attributing we ASP then too. that that going and of the are of

in it retail been did the And trend then how far just how March? then And so has over Okay. quarter?

been of release the some earnings here has results the during numbers of the with the generally by QX. industry in that felt tell share line in quarter. our actually can about the rest in better We retail you trailing think I recently

date I a better, with the on in little of RV start most the has when seasonal bit retail business, obviously, time of than where May the but more to know us, here industry in of would retail see. we X commentary QX, in about we'll of April April speculated March month based it's weeks time began have would the positive period there's and to the time with like in see which some here our we've on been nature behind the still that sit sequentially been today, in to probably comps period. the see the the say My side guess, to I us as you'll probably industry first March. on seen May is what period for

comes Kennison Our of Craig next question from Baird.

be? talk Thanks initiatives. about on commentary shed for you I XX, those Could you the targets. slides on to light ask profitability Slide on about, might and wanted mid-cycle the what

Those this Craig, some range Mike. examples. cover a is offer and I'll will of activities,

as We see X we the well. years X pipeline based will we in over margin expect the to demonstrate course have to new improved XX. indicated also But believe as Slide on some volume, products next that also the recovering on certainly improvement our of that of margin we

particular the somewhere tracking and these some that continued million we targets margin of this sourcing manufacturing from in our strategic neighborhood the of We some of constant have of some 'XX to savings would business. internally estimates from date, We've side, efficiency are as around that manufacturing $XX benefits productivity we're And million operations campuses. -- in have center of $XX and of in year the we each initiatives say, I also the from then our area. on in those strategic to And contribution success ongoing the mid-cycle efficiency. company excellence. anticipate activities We on offered to fiscal morning to productivity of focused as EBITDA sourcing

it volume of manufacturing and combination of details will of but products into and won't So chain and a we there, combination get operational the be supply a specific efficiency. new combination

play a Lithionics is role can enough context? large follow-up, in matter to a not margin Or it that EBIT expansion? As in meaningful

the to will growth and incremental in can timing industry for mobile overall contribute adoption improvement Lithionics depend and marine the and that certainly margin and how of will the business. segments. RV, be Lithionics specialty that of The degree will much lithium-ion of of battery on our overall the packs

Lithionics year impact when ago, made and a almost it But strategic line we time. have acquisition indicated the acquisition that of was meaningful contribution only X some on it XXXX, a also now to we financial acquisition April bottom but the not expected we that technology over

more And so to do again, bit year we a assign in anticipate yes, contribute this of every we're will bottom not to going But lithic morning. little to a it terms value that begin its line impact.

X% X, an pontoon market. amazing the of just Barletta run, market share And it has almost getting Slide to relates finally, had as

small not Your behind by give us much? here. is is reasons just leap Could goal your which that XX%, confidence you a expanding in from share some

there at best very our just partners leaders day Caribbean who our customer the Barletta. end and are have confidence begins We in the passionate market. foremost, of first Well, employees building channel the and every the team on a team focused tremendous feel with pontoons and we

Craig, recent our share market results have Barletta been impressive. with very

believe that for pontoons share received we here In that in double-digit from on market month. stand-alone was fact, Barletta just I recently SSI the month particular

on X we trailing what so a here here trailing have the XX% and months we early that aggressive for, in shoot indicated fiscal is Slide 'XX. intend is And for XX XX-month number versus while to that

digits. X trailing recent months approaching The in stand-alone actually month numbers share are market double

right focused far paranoid category top time. as and and over stay to a not or may gap as away that the think, So but we remain be in position and humble X thing doing driving we'll X on the

question next James our from of And comes Citi. Hardiman

on looks are a business, they're it the like in I dig level to for absolute like little So good first, of in inventories guess, shape. I inventories pretty wanted bit. your it seems

have an aging us be year terms in numbers to Maybe inventory. in perspective, walk channel? model 'XXs industry the you of bigger concern through point at this the from seems versus the the 'XXs think I of any

where like be is to then how last sort year to the you And Where compare would where -- it would comparisons were would where great. any great. and any be? on then thoughts mix mix of historically be industry that those you was that And

model Mike. Grand brands largest February, had was start a model meant X Well, the of model field. of standpoint, year year, businesses for our the for probably I February let's RV XX% model Design, our inventory the RV approaching that X% this and at in from year specifically. may James, XX% of 'XX would those unit we're we in end 'XX X especially the Winnebago which the with to the At end at is In say 'XX XX% year of have end the February, range. inventory range

higher on year category little is. probably think that range competitors Class But overall, I year on numbers A range largest to XX% XX% XX% is just based of reported. which Newmar The and similar on are in what our almost very a it's a to the that model on type 'XX, model of X 'XX recently

and those Winnebago to a the aged actually this a bit year Winnebago Now ago little on numbers little our that are a you more brand. lighter time, brand. compare We're for at

brand, is Design mix the it year actually X was biggest healthier that RV on Grand than But year our ago. is which this business, actually

in, an just but OEM, both is stated the or the XXXX say, aged probably more than the in a let's to whole sitting here inventory industry compare with as pre-COVID us we had I XXXX numbers XXXX. on as RVs periods you If

to retail some this see we'll cycle. head pick X the up I in back regain we over as continue RV those momentum some begin an so mix. start overall or saw and numbers of that anticipate anticipate years, I terms to industry to the we'll we through cycle that work as next And aging of to pre-COVID

focused we're March. So bottom into as would We're X to line we very imagine I RV on James, feel it. side comfortable, on the weeks at. where

X me, we're ago. were I situation the a don't have probably of numbers front better than today in we in but weeks obviously

certainly, than aged great Barletta we forward, more dealers would well, I also about On very to the X today as we continuing momentum and Brian pontoon move and that But side, the on quickly. as retail anticipate think ourselves like. we commented have as quarter have we through look inventory

there, in Barletta we 'XX XX% at So business. 'XX, end say, of XX% probably closer to February were model let's the the model

will continue that if continues over here are be way and a to the And they're shift seen. and nicely brand cautious dealers, right shipment still down with are than higher to months. any spring to Barletta pontoon they summer but pontoon And they in story share great choosing retail inventory, we especially But inventory share and going brand. being now, overall work we've that their retail to put believe they're its Again, a those little Barletta.

managing our to just James, that, detailed very thing other to approach. is to of a add take related I'd process and targeted which is One inventory, aging the

their So if lot. we that targeted have are help is want with incentives the in that them, feel introducing. we we to It those off units dealers move partnership at we retail

We're tracking our are that. a take certainly that approach unit-by-unit aging. incentives moving to at every -- we unit is So targeted anything and

I aware you process be well. So that of wanted as to

you margins but maybe QX down being, gave outlook you question, at a sort that, the guess, those next 'XX on sequentially, early better color, of part That's make least of it dovetails what's weighing trying year-over-year I'm as mean, year it's somewhat and and guess is, I question Got to my margin too I it. units, on right? -- QX. assuming move that's talked so to you're call into great that I my model about

you -- grow out those margins? model guessing year-over-year. the is should of that with could clearing -- how effectiveness QX a chance there do think the a those do that has in year it XXXX But I'm meantime. lot chance to we Is there a about

aged certainly, it Mike wane is of then Yes, we the we're and case inventory to leverage And referring as to, to continue that here rightsize was just citing cycle with year-over-year as we But the our the your then does. will discounts as start will spits go the inventory point, allowances, the going forward, retail through be of to well. we and the performance. and those deleverage That allowances discounts margin driver biggest deal as course.

we should through that the quarters. coming So as go help

too or itself? that could plausible early in margins QX it's year-over-year think grow you Do way

Yes. We're refrain that going from stage. on this to at commenting

enough. Fair

I it. on. going that's everything Given get

Jordan And our next from question comes Bret of Jefferies.

dealer going we question Little in to I is in be cadence the of forward into there's seeing was what to really Should the of spring? spring. Are surge a X support not sort up guess, clean around we the going the support to sort follow-up, environment. here on see with consistent expect promotion? days the going try going inventory we're marine promotional to hit the to we're summer what I -- technically with last we're pick guess

with in already Bret, the for with a bit the probably say, on our we little try we've pontoon don't support, question. as shift certain for the working seen spring support certainly, Barletta We we and arguably, particular surgical certain say models the be summer well. would Thanks surged support age go And market. to OEMs. and I this Obviously, surge to would by a into as that we've seasons. a dramatic upward in dealers see is Mike. selling I

As have on our in today. been very we'd target -- we're going work dealers a higher to in and response, years I indicated -- think, support than that we like the on the brand. team's right continue it activities a they don't be as market previous than aged certainly to certainly But been, rational with that and brand in little it is inventory has I past higher

on our rest So comment no, see by the will what of think our do. a I the significant competition but industry we'll I surge business, can't or don't

economist. question your guess I a chief And Okay. for

a -- mid-cycle you May. recovery about timing the talked of Sort retail in possible comp environment, of comp

maybe the magnitude it, hard just history it. you know, I at to surge guess, be? the mid-cycle it's Given in that Is I but the how something about happen industry long magnitude that could you the 'XX? recovery might looking and of the thinking downturn do being think preceded with your the of it Are and the 'XX? mean

question. Yes. the In target we years fiscal those appreciate assigned Bret, specific Day releases, past have let's to call we Investor targets. it,

what on think all of is segments going and to been As fluidity call difficult us of give aware, market and this volatility both exactly or is industry I bad. the outdoor very well the short has for term it's forecast to and high. And recreation dynamics good us these who's been long everybody term,

so the terms the American of industry the timing levels. And to we of framing for RV that But North something don't you years. and these of are say sooner rooting in over retail certainly is what exactly some reasons targets when will the later. those We industry or of one we've pontoon to industry mid-cycle X-plus labeled mid-cycle the next probably return are these targets that know size, achieve means I would than rather given hope organic we

happens sooner, a because are to of we confident, know trying retail on in back reiterate cadence quite that fantastic. those return year to we simply based just time. does when at humble not retail. we it into to how in the be they me that very industry that dealer But terms bring let normal inventory don't If as more assigning with levels, though, this types of products and we're are well

give, those are achievable those that's we We especially numbers. to today wanted numbers all confident are why and you that very

comes And Research. from of Wightman Wolfe our next question Fred

make are Tristan's but trend perspective, a fiscal mix 'XX category, response going are on like comment for to that, towable whether come particularly headwinds to model were Bryan. for to the year-over-year from 'XX talking you about ASPs, you how back on to ASPs. also too? in wanted year just your I could a like to ASP persist the basis, And expected next the year, In any question, you also both think those

quarter. I prior of numbers community analyst to answer referring on lot, I really to referring I basis QX because that really was that, assume seeing we Yes, were the year-over-year is Bret. most what recent how was year thanks that's a and In versus earlier, were my The our tracking. a most the

So first that's how question. I was that answering

pass-through extensively Sitting chassis I going model here today to going to commenting refrain the on some we're Motorhome think on to I'm we're what side, in of inflation. see seeing continue from 'XX. year

ASPs term. our downward the continue see see that about entering talked And we'll some On likewise, that lineup. downward the by Marine Towable the in earlier influenced think ASP business, near mix continue the with as we I pushes side, ARIA we'll product for to mix to some

I on So that's I'd what ASP. guess say

because I know I analyst the color margin. will in interested community other The give is highly

deleverage by impacted the most are in margins sales lower Our dollars.

is environment our cost a offset not initiatives. being calling driver that appropriately are We not out as margin, of a by pricing

with a that that we're example, equation, seeing true terms relatively a not price for them associated across and margin. lower negative lower new is segments neutral our in drawdown mix as have we that introduce that's as points products, of EBITDA that or or So yield shifts

So delivery acknowledge. I think that's that, of financial an attribute important our to

the Makes the And then plus. If XX% guys for gears you mid-cycle at shifting sense. specifically, market are -- the targets. share little a numbers, sorry, about talking bit just or look midterm we

the we you XXXX, something about targets XX% talked you back think the about If late in to in talked go calendar range. I

coming So to the decide can announced little you motorized especially just you considering a platform help that. Why target down us grand bridge that the gap subsequent bit, is that there?

a why? if aspirations understand RVs have or us and help if the for down So targets bit so, maybe come

think a share RV seen transparent, use I target of we've plus. the targets. RV little fair the we Fred. mid-cycle we XX% share question. It's was market current X.X American in today and since be Yes. market offered And our last years regression on To quite a bit fact, in North Thanks, over language those honest

environment branded actually pressure that seen in OEM. term. And we've target of a priced attributable that to so in then now affordability well within terms some a fared in the industry we hyperinflation we're considering premium challenge and pretty the premium bit particularly and little first of a released dramatic future market share been somewhat RV an the of we we've short today that feel We in the that lower is

has And we in the have, so reasonable especially believe the to last we're hang XX but share market we that, pretty months, performance. been that not also on that satisfied, to

there's -- probably we candidly, challenges I associated to overdelivering with forward, be think the in we that's a want look I more about referenced, as market. of just bit just that where what underpromising honest and And the target. we're and we sit affordability

the American business get we more But We like related as we probably, growth market to North mid-cycle share initiatives think then someday RV for Motorized and strategic here time be you in couple to will to future. the that grab above we like. the XX% Design, a still aspire and points back said, to can by anything XX% the -- Grand

of at range. targets when released Just for did that was speak of, a reminder, year it did not our additions of We 'XX end XXXX, fiscal detail we time. November the in the inorganic include targets I in those we the think some to some

this and framed nonfinancial in So only. inorganic These at targets addition being those targets some financial did aspirations have mid-cycle to time, of in there. organic some are

would any to And so M&A or incremental be that RV we activity we've this do morning. what marine either would in released

Michael Swartz Truist And our of from comes question next Securities.

as kind to of just comment called talked positive within being about prepared your on RV in press you think out the promotion -- I remarks you unit margins. allowance Maybe a and the release, total lower

can quarter. think X a their you the your in there's kind us as commentary And your why couple any weighing discounting I of commentary and larger think give of competitors. weeks yourself competitors divergence a on you between allowances Maybe ago higher cited of

answer weight just to of rational aging for support Mike, offer the this that don't the particularly we inventory. question. don't market, team with Grand been, we has know targeted really again, I Mike. if true obviously, is bears and other very Thanks the that segment. if our Towable the And lion's the Design around I than, know know very the the

inventory position I field would our the a Mike, of very combination So reasonable. it's being hope, that in

well. to good to make way we point partner the move all price we just at certainly being that still shape, and profitable this considered a relatively some Our dealers -- allows aging And with as keeps the in in them products inventory environment. things us money

segment Towable is very our focused. So

big X brands, small X X X one, have in that We segment.

being bit see It doesn't That focused going to versus about a on we're But that we're appropriate X pleased turning stay it. to mean we're QX last we're from away So has support. just little that allowance means smart that, X or quarters. tempered in the it.

on businesses So inside that further comparisons we because -- candidly what's don't competition to their any know offer just in and I won't way. going

a just I then but second disclosed. did And Understood. I question, you missed if apologize this, Yes.

in you talked quarter. the inefficiencies and in costs prior Grand the some did the prior But quarter, motorized Design, to some and start-up related on is I about think business Motorized the -- fiscal weighing think you range of Design, about million quantify in we then million And investment full still for what $XX that was year? for should $XX Grand incremental quarter? the this being to Motorized the that

still expectation. Yes, Mike, that's our

I million was ramp couple our think get ago $X QX. up $X the what during investment to that would of and range we a quarters fiscal by it to million said year here

to we're so our So do and ramping the up in year. continue we accordance earlier in that with expected timing we

on million $X earlier million still we're by $X up So million disclosed we that. year from and $X with QX, the a you're this investment to track going to

Okay.

did And of as well? last in you quarter you the those experience some second quarter, inefficiencies the called that out

improved current We year We're QX less versus last efficient still versus the from year. in QX.

forward, that it that way versus believe to this I us we going convey So good think year -- and is an further we productivity we our improve year-over-year last. a opportunity have dragged still to

question Otello comes next of our And from Joe Raymond James.

much the by follow-ups. launch. of mid-cycle. questions of been from here. first that Most of the X did is Grand impact have guys plus Design targeting that I net I Motorized XX% my guess answered you quick are have the share market RV How

on I disclose is offer will lead contribute doubt no probably number category, how business math it to but brand some we that by calculations number. because don't Joe, that will and is we big a to think don't we won't that be, that Mike. specific reverse -- it would this

Design when we in knew last We offered motorized XXXX. Grand our in was targets play

company. will be and the mean, Grand the to financial a I yes, strategy our So Design here share Motorized future contribution at material

'XX what number in majority through year that So you'll be. see I But specifically won't the of 'XX. will offer fiscal ramp up that

the their we door very plan. here X quarter. over fourth can motorized the units Grand for fiscal that have execute high Design years. X Grand team get in a we robust We'll confidence some strategy business out Motorized to have But And the Design next

just XX.X% Understood. of up the target I assume XX% follow margins that digits. your in to to that The single EBITDA assumes And that. high margin that, on Motorhome remain

acceptable going a believe in response of contributor forward Design today our will very a we also Bryan of Motorized that much but a here little margins inferred there and segment where well. as good with existing to We volume that ago that businesses, financially while yield Yes. terms the that, stand anticipate Grand motorized upside from on is as benefits we in both be the

we very our talked all operate and to that mean zone Newmar with our double-digit in we term, our future. businesses and public be of of EBITDA segments believe brands, So of can in that we've yield long Winnebago, adjusted Design, the I X been Grand all expect all about. that saying you

Motorized its And so will the aspiration. that's time. segment our long-term expect way And that work we there over

Davidson. Rolle And our next question comes from Brandon of D.A.

sales? most two, And need reductions getting to price back identify going One, just they X segments right to largest supplier as you on the within business affordability, competitors conversation, mentioned to those like First, the possible. their Do how improved progressed? your improve partners conversations costs three, pricing opportunities your reduce of had retail were to back of the had and where you have they feel need which their to most now? or late;

Mike. is this Brandon,

with relationships great our supply have We partners. chain

our X We competitors do. RV have scale than largest less

the We have than some less larger scale other marine candidly, of players.

less have to route component throw be and a volume pricing. to to little material we And able a negotiate of terms leverage in so

and those believe, our proactive very we're in with But we fair have certainly discussions suppliers to work well pricing.

me, So to well. scale create this of as And to that will and our benefits we organically continue suppliers inorganically from that. in come do the believe will will we continue expect that company, we as

begin which cost model motorized point to for in pricing chassis RVs the need going of with we affordability. those greatest can current will challenge partners what to costs is very then the improve business work we've whole the terms pain we do the of addressing think probably and we upfront see biggest chassis. As -- the probably to to forward. those in motorized chassis to as right see going that need to portfolio far affordability need in cost been that if will our improve now today stabilize are I motorized industry, we But of parts of reductions, single closely business listen, is forward, our And the

little I'll on that, Brandon. a bit add just to

-- certain not some or our or contractually notably. commodities. all, to categories are supply in tied space, of the Some indexes of but We've aluminum, our steel, purchases lot a of stability lumber, commodity seen more

stability some so seeing And we're cost in a the result, as input. likewise

not we've couple So volatility the years. seen the past of over that nearly

of not being forward. where We'll that out we an to, appropriately we're driver alluded costs, have think that. seeing as continue, vendors smoothing a for with opportunity obviously, big we negotiate Mike going So our

comes Whiston question our of And next from David Morningstar.

so, concerns? primary hesitation Just interest rates most inventory dealers, consumer in industry And kind improvement change and get curious meaningful are they the to we the X and by see really their if many to terms rate RV in confidence. But any the before of see need of continued their I dealer understand of rightsized. cuts how or want still does

is X consumers the down Mike. to stronger interesting Yes, interest our speak. retail this or are rates amongst costs factors inhibiting are associated is the and David, X spring. end this retail they that obviously, It top or slowing as we say

some We were X higher rates the that future beginning or here going are while be signs than years understand higher meaningfully X in are for or are consumers that a hearing they to little a into to ago.

effect by or a to is We the a both rate sensitive get while. any of just rate they that. cuts point, acceptance for And doubt a forward. we terms no where deal could affordability are where on way this that consumer this effect that have afford to bit buying be from see in we'll and an are appetite want they in also little find at RV standpoint, potentially decision-making be our to could little some things terms will And consumer products and at into of believe of real that headed there have they'll for there confidence going that. have but interest an of with if both our and so boat consumers businesses lifestyle, retail But a rates is

And or how happens, year, And basis we'll number offer can't see or are, the funds -- the half exact X yesterday to We back quarter Any of little while many Fed David, I percentage rate X think as help. still that sure. we the of an that more were pleased will that a signaled Fed of you the a XX we as could that to in cuts. as cuts take give bit of active trigger consumers XX large points. again. they will movement a If becoming for basis quantity

That's is between helpful. the pontoon the there difference And and Chris-Craft ultra-wealthy customer Marine, perhaps any confidence on major then customer? in

-- they're buyer, economic a as in in air that cash smart of is pretty well. times also the I these time. would Chris-Craft say -- and that tricky the operates XX% first a But thin they're foremost,

than we've reasons. has retail on probably what robust the we've of been seen variety that a seen so Chris-Craft less on And Barletta, for

is highly entering confidence. of mature customers. introducing for Barletta -- has We're a markets. targeted, with affluent factors, dealer We're products. a open business very got Chris-Craft because of great number momentum a more

So act differently there's during the customers crossover not periods they cycle. similar a lot bit of of between those little and a

market only with cycle marine back, also we as as that grow as Barletta XX% forward But comes not Chris-Craft business anticipate grow, we long-range our indicated anticipate will well. we But that of share. the going will target

question-and-answer Ray to turn Posadas I to closing this it for At would like back This session. time, concludes our remarks.

you, call. on look keeping forward updated second in everyone, quarter to earnings our you That Thank is the Thank us. our joining for of progress future. end We the you.

you now and conference concludes disconnect. call. for today's may you participating, Thank This