LCI Industries (LCII) 14 Feb 232022 Q4 Earnings call transcript

Hello, everyone, and welcome to today's conference, LCI Industries Q4 and Full Year 2022 Earnings Call. My name is Bruno, and I will be operating your call today. [Operator Instructions]

I will now hand over to your host, CFO, Mr. Brian Hall. ahead. go Please

and and and everyone, joined the Industries' President, LCI the Good year welcome XXXX quarter CEO Lippert, Jason full today am conference fourth call morning, by to Director. call. on I

laws We under that a would But involve just uncertainties. quarter operations and moment. Industries made statements be the the in will forward-looking inform call first, may you and of regarding results LCI discuss number to the risks in for like securities certain I statements today's considered a conference its and

the are XX-K the number are discussed are As cautions and SEC. which and those Form a result, earnings forward-looking company our company's in the in differ the factors, you would and other which statements. that of These to in there actual with our results from events a factors many cause filings release control, of materially beyond described

undertaking events date to obligation statements to any forward-looking disclaims statements forward-looking by the occur company that as law. are made, or The required update except or after circumstances reflect the

the With Jason? over like would to call that, turn to Jason I Lippert.

call. Thanks, morning, Brian, welcome earnings and LCI's quarter and and XXXX year everyone, fourth full to good

as Our to another year fiscal we while record year revenues reached deliver for XXXX high LCI all-time margins. marked continuing strong

to fourth the across partially the during impact offset normalize got the year, OEM to to helping shutdowns country. our to half enacted the we the As of inventory pivotal of back performance, diversification strategy our proved quarter production levels RV

to which These and our a quickly in have of strength were the continue long-tenured to strength the Thanks success. to and adapt will to changes believe to veteran be able cultural cornerstone leadership agility make of leadership our to environment. testament necessary teams, been results operating long-term our volatile we we operational and are the order teams,

driven $X.X was in by supported RV and revenues, year-over-year. by billion Industries, We a up aggressive Adjacent our the lifestyle content in closed in outdoor XX% performance and solid XXXX and record innovation. overall with growth This growth expansion

year, our Interglobal very acquisitions the content our portfolio, Net approximately leveraged to throughout record acquisitions and to sales adding which four XXXX. including acquisitions industry Way completed in XXXX in bolstered million These brands our contributed strong innovative two XXXX completed continue We $XXX trajectory and growth. we Girard from have Products. portfolio, of

demand during wholesale Looking shipments at Industry compared to and units, further January XX% expect North come the rightsizing to softening XXXX industry, for these XXX,XXX of some to if were for and dealers two despite reaching inventories allow half industry roughly months to we off in XXXX. increased production RV as rebalance. $X.X back XXXX, the majority American the continues took levels normalize off RV in and OEMs highs. as a totaled the sales OEM, lower the months billion year of year all-time December

been to in cuts. order we pretty aligned out started adjust lower of interim, working achieve to the capacity, and our as making cost of implemented industry diligently and into our these million the areas operational to leveraging the OEMs during our of OEM changing with closely cut Overall, quarter the some strong to business of manufacturing are RV to other on the keep production, have in past running our decline XXXX. of diversification of of volumes are markets, able RV worked our costs and as leverage. second structure since that Thanks focus teams levels. Despite with $XXX quickly years, we've maximum well have shift our agility other we costs In we the improvements some production to capacity

from the recent Data confidence giving otherwise moving I stabilizing but challenging the in a still strong. that have and levels environment, an to shows is like historically slowed, demand has us RV are purchases proven macro industry do in emphasize to want bright forward. retail that be retail spot traffic

availability Importantly, RV peer-to-peer of campers continue and X such growth secular consumers rentals our largest said bring for to the that RVs have trends as nights on new Outdoorsy into younger rental and and well lifestyle. as collected as rented of platforms. recently companies, RVshare, million buyers the two have peer-to-peer U.S. popularity over their

XX RVs XXXX, an Additionally, trip up RV and that RV, are RVIA revealed North new a in of in from surveyed buy lifestyle. outdoor XX a RVers those the underscoring this long-term popularity planning with Americans data of year, planning XX% million to million the

the input notably and materials. cost, we Throughout most saw freight through quarter, heightened

to it While are costs, that time work customers us carry we committed costs. help believe to raw material the through higher these our will work take us through some these

the In automation, addition XXXX. cost to implementation of in we improvement continuous pipeline, we of driving business remain through as projects have back XX on our half in several we the out new for projects focused largely slated have

to growth content Content year record while and also the towable Our motorhome full content increased per the prior both XX% our achieved the per from for prior investment in a XX% R&D well as and all year $X,XXX from strategy. in by RVs innovation units team motorhomes. RV towable capabilities focus long-term full to acquisition in $X,XXX, supported continued as year the year on XXXX increased XXXX

January, our is RV. substantially December to prior sustainable our Markets, RV diversified our majority driving from XX% from markets. our performance sales. Today, our Adjacent current came to was up coming due dividends paying Business our diversification such our impacted International XXXX, be our Aftermarket, make revenues sales In across of net of cycles XX% is of and and total down XXXX and growth to as critical business. environment, production proving Given strategy the In

while in consistent, term. down We recreation in on cement markets the a to focus into never broader believe We will this growth position support diversified simply ongoing leading been our have our the cycle. profitable further diversification outdoor long

a XXXX, automotive we by impacted revenues drop strong to the road. the largely Revenues to year-over-year, up see in off in in North thrilled of RVs number a XXXX, in Aftermarket grew year Coming are the a business. record American compared on X% aftermarket

see we repair revenues. [business] to their will enthusiast which we more Aftermarket replacement RVs, continue more As our should drive take believe and to (ph),

[indiscernible] XX% Aftermarket in point, revenues up January. To that were parts

As added the on calls, to cycle. services and have we coming as prior said so RVs system and the these supply be repair of many million to are for four replacement past years, RVs in need parts we've X there been the will now a there that many

and repair, RVs already should As center be contact an nothing of trend we related activity. This and for calls million season, at we assist X.X aftermarket service of in the our for RV short the and businesses had service the seeing consumers purchasing XXXX, replacement increase dealerships. to In decreased fantastic with services are upgrades. products repair for that

With market. towards to invest said, will part $X being steer we in of Aftermarket this business as billion that our continue strategy our we

are building Aftermarket grow, and central we strengthening our creating best-in-class our relationships long-term to the RV on continues our While a customers Lippert as to listening experience, is maintaining alike. consumers customer brand emphasis dealers and our and to engaging with

importantly, Mountain, of success product past program, improvements on membership Lippert how as October Scouts Further, use people. their in annual amongst full during for the last provide repairing services, in well learning, we It Getaway and the week as nearly products improving services. days consisted U.S. and and Georgia. of the RVs, and valuable year, RVers fellowship our event which drive to and Lippert Pine in serves customers how second has and a held across the most was substantially resounding them, of insights grown in five can listening our we The XXX called

continue stay focused with will drive end to and our consumer the successful results. business developing to We help relationships on more

rose North the other by content in with adjacent growth throughout to like specialty and Markets, XX%, demand powersports along solid XXXX Marine Turning American businesses bus, driven vehicles. Adjacent vehicles revenues the

growth secular across benefit from aftermarket. RV adjacent the same Our the in offerings driving tailwinds

been Marine fast, create stable, fewer OEMs, didn't the market hard producing business pressure macro In conditions, did. as softens. ramp RV Unlike as up much RV as as and as demand Marine, overall and inventory substantially experienced RV thus not relatively did has to related excess as we the challenges production

Like RV, and on we aftermarket are related groups our focus consumer continuing activity.

We seating provide are in We located opportunity and launch of boat will near relationship additional we believe our largest and supplying developing builder also TRACKER the here in for year this earlier that division Missouri. now Marine pontoon our saw country. the the

Marine increased through year-on-demand, revenues will gains. XXXX flatter to and anticipating Our have for $XXX and a we million which share organic market growth believe we're improve we

they operating as offer demand at been this supply space. never levels their many peak expect today continue the to have continue solid and and facilities in high the performance to we are production products we new Marine Our

diversification been our As gaining in also traction manufactured we strategy, a have housing. of part

might impacting residential be the prices alternative continues an of priced be housing traditional out people some for rising With the housing manufactured that country, to across homes.

market. billion as demand to advantage residential started market were builders. a times residential suppliers Also, X team in plagued addressable created now to annually for turn offering during took the that's window few past build level short by our residential lead and a entry long windows window and over a builders, delay at vinyl We're in starting years, lineup nice in

them a And in Capital trailer We positive all to axles largest which partnership starting to ATW, key of diversification and trailer a Bain now start the one week we owned partnership is builder collaborative announced country. this other supplying last around by note with launched that is their is utility month. the

(ph). excited bring We [seen that products before] and as new OEM as they strive are well to our will services extremely dealer and team never incredible

our these believe new diversification the gain more customers more We for is markets. our to efforts team market and momentum expansion in our adjacent products continues and finding key and to

proving International into we strategy. to growth of increasing are innovative markets globally, head the XXXX we was in in as our backlog diversification further Businesses encouraged our Growth ongoing by with International XXXX. revenues experienced stabilizing introduction in these products a Looking Businesses X% also our the be driven into businesses force in and by EU year-over-year,

feel growth to in slightly, RV Issues stemming global will more XXXX. from business we the European are shortages lead easing chip which in

quarter this motor build breaking to of the demand some are chassis see start in second increase, they expect OEMs We more shipments can many starting to as so loose caravans.

RV to pop-top that already are Europe In components windows in European U.S. and popular the by as addition, we such toward acrylic adopted being continue great progress Lippert OEMs. see

because competition, designs, competitive European provide of our products for the opportunities These big utilize facilities. proven could to and ability production barriers

couple the optimistic of we which overall in company for a challenging more European way. been contributing meaningful the to being are about year they much years XXXX While the division, are the last have in

peers innovation. (ph). bolster product XXX people about a Turning launch challenging XXXX, Throughout few and With years in to we of should making kind [year] who had to company product our this and innovation invest committed dedicated a this in history, focus competitors innovation. innovation as one to into are and we competitive huge our money our development help business, largest XXXX of advantage

ABS window, to our traction our systems, company to and of tire development all continued that brakes and reputation systems, core appliance getting OEMs, continues and solidify suspension pressure products. door a Our awning, Linc for Tire Onecontrol tremendous designs management new have helping as our innovate with refine

we largest Interglobal, about acquisitions the As maker both These are that for and aesthetics products add of us substantial two products mentioned edge connects Way thrilled RV and RV. acquisition the and Girard make each in our entire most bring appliance offering increased cutting also earlier, desire awning the to diverse utility our our with and appetite to industry. to

water innovation we are have place of products our is been our that design taking things the proud standard. of for out heater standard other water the that the decades. The in own stand we heaters new of older, new instant made our was category hot of the that tank several and around larger, One

With are a but respect they ample receptive continue to when on a also part strategy. capital our to We to do sheet modest strategic maintaining allocation, focused with balanced deployment liquidity M&A and we opportunities remain leverage. maintaining balance strong appear,

CapEx and important in In further to $XX also allocated these growth have projects continued specifically even to XXXX, flexibility our over XXXX. cost in automation, we add structure. to dollars and anticipate to strategic more allocating to We million we make internal automation investments,

on I'll year. move now our cultural highlights to the for

own experienced all Lippert, at to leaders creates team at values well-rounded opportunities culture starts enables that with is and their our for top, member a culture core all the also each team team strong members fostering but (ph). Here focus, We to members believe grow. leaders the in become an environment [role]

business. end, leadership we This a on of programs group that this coaches manufacturing have developing training the members front lines team XX with is leaders LCI tasked To and and group the to focused more them coaching our and creating make throughout better of of business the around a leadership team impact positively. across focused members are getting all professional in development, members place individuals on personal power and team executing

our a people. great to and In leadership the key believe retaining the on focus, culture is end, we real development, resource

believe also retained safety, quality, that key We that question improve. long business, innovation, are the term, over the no fundamentals of when people the efficiency is there all and

members, and our Our the culture focus mission we through how team is on over Lippert how we but us. serving around not country. impact team communities around the various in can only work Over community support hours of XXX,XXX charitable organizations service also members performed XXXX,

to to prouder of forward this of in over of an last of collectively accomplishment culture the have years, six having effort give more and not team's back our need be service. XXX,XXX hours served our look our even Over could team in impact initiatives XXXX. members those community We to

In I'd strength business members the and team company results thank all upholding hard closing, such guidance like have dedication and achieved this could leadership without and while our coupled our with for in of values strong. to driving team. work amazing We always, not our incredible of our their forward, as commitment leading

our continuing in to forward look XXXX. progress We

and RV value strong dedicated come excited customers to we our records. improvement great believe position continuous volume (ph), we to and efforts not delivering in setting challenges the even While long-term community [resolve] are efficiency, shareholders. face volume and our be in may continue impact as such in to many and records We we a other records, safety, are for setting of that out

Hall, detail our year our full I to will Brian quarter fourth results. turn in CFO, to now discuss more and financial

Thanks, Jason.

to end the our growth offset prior sales RV $XXX partially a net XX% consolidated compared impacted Our million for other period, to by reduction by fourth year decreased the production, quarter markets. in in

XX,XXX the due industry continued month, wholesale Industries, the which in shipped sales $XXX to months. with were was XXXX many of prior million XX% as success by partially were units offset decline to continued less down shipments, January Marine. versus in RV January including than the growth estimate we in produced Adjacent in This diversification

driven shipments, XXXX period, motor OEMs to by the prior sales North year to by compared decreased wholesale expansion decrease towables offset and homes. RV XX% QX record partially a in American content in

while market growth XX% year period. share Content XX%, $X,XXX year-over-year content per towable growth. motorized RV unit record organic the increased to unit compared per a increased gains attributed to XX% $X,XXX, be prior revenues while to of content contributed can to the Towable acquired X% of

markets, powerboat driven mitigate saw our RV We with by end helped of $X,XXX, gains. content the to sales impact per from share XX% a In positive Marine North American increasing partially increased the to our other quarter, X% performance softened estimated market which demand.

period, X% aforementioned Overall, sales versus year supported growth Marine to grew the sales. by in Industries prior Adjacent the

[Technical strength period, the prior by to sales in partially year aftermarket by XXXX sales, RV offset driven the compared decline QX Aftermarket aftermarket Difficulty] to a in automotive XX% sales. decreased

rates to to year-over-year, of impacted company British X% and the XX% approximately of the the our X% exchange results decreased due revenue, sales dollar by as euro negatively total compared International strength representing pound.

would impact, X%, exchange growth by strength markets. led the our been the Excluding seen in rail organic have

Gross margins one-time production XX.X% the and costs steel and to year freight. down were compared prior period, aluminum, XX.X% elevated in in inefficiencies by input driven charges,

worked within EPS our quarter. inventory variance impact one-time and we our negative operation. remove key compression share. to incurred and expense Our consisted leading cost contributing per These structure improve of severance costs of was for our margin one-time to to and $X.XX redundancies Severance a were a factor charges this as expenses,

at aluminum for the the versus as adjustments by for lag price these purchase as to Typically, quarterly charges and reserves. commodities inventory one-time well price as is difference adjustments. primarily our which obsolescence pricing selling such we the Our excess in related variance pricing accounted

volatility high for prices earnings. charge given we a the However, recent one-time incurred some in to seen commodities,

XXXX, second profitability as Although in margins, half this the supporting during of the we near-term write-off expect reduced pressure margin year. production ramps hindered

prime profitability we deliver into moving are despite macroeconomic ahead, to XXXX. the Looking conditions

compared Operating the of as decreased a noted the costs on period, the margins with lower SG&A fixed sales in due line costs prior and we layers. a inventory [Technical Difficulty] aforementioned one-time to costs previously. absorb base as consuming to cost percentage expectations year-over-year increased sales year

was in $XX.X or to decrease of in GAAP income lower QX net reflection per loss $X.XX million diluted XXXX net $X.XX million This compared per demand. share $XX.X XXXX. share or a was RV QX of

prior the the period. to quarter decreased fourth million EBITDA in year to XX% $XX.X compared

Sales outdoor results. American to in content Aftermarket total American Markets XXXX expansion. year XX% Adjacent $XXX by American increased $X.X full And North to its XX%, the to million. sales XXXX. Sales by in North RV on and increased driven interest to OEMs increased to lifestyle Moving billion North increased X%

increased sales X% International $XXX revenues XXXX. Acquired $XXX While million approximately for prior were compared full to year period. the year to million

Non-cash of depreciation XX, XX while anticipate to XXXX, amortization and to primarily amortization stock-based during expense non-cash recent was $XXX acquisitions. amortization million period. range the We months was and depreciation for in the XXXX, the compensation $XXX.X million $XXX same million from million due year $XX.X for ended full December

the were of working reduction million XX, a capital capital [Technical in used dividends million For and for to months from generation. impacted share flows of XX by $XXX shareholders through returned business $XXX to Operating a cash cash earnings, positively on $XX operating with $XXX repurchases. the Difficulty] anticipate ended $XXX normalize, we as continue was in and acquisitions increased cash for impact inventories December million, million million used million $XXX and activities expenditures, XXXX, generated

XXXX. million times $XXX operating outstanding adjusted pro strong had pursued Driven LTM making of strategy $X.X of forma quarter, we businesses. our the deleveraging by during allocation flows, EBITDA net position or X.X our debt include to the billion end of our of on sheet, an capital net outstanding further of EBITDA we At fourth cash borrowings payments balance acquired

environment balance which a greater we we target net term, flows. debt recently continue remains the expect and positively cash to acquisitions, As integrate working are sheet to uncertain, a macro focused to maintaining long-term near operating completed In on of the impact we X.Xx EBITDA. are strong leverage to our

year Full $XXX to expenditures $XX are range million anticipated the million. of in capital XXXX

marketplace, the term. the in production levels RV uncertainty volatile to the short Given in anticipate remain we

suppressed RV As demand. results, expected for a seeks down results of full result, QX to levels production right OEM estimate remain consolidated January the be as indicative the sales we inventory of dealer the XX% XXXX base while

decline driven in shipments between QX the The anticipate primarily and as is reduction sales units. production XXXX by RV RV XX,XXX we XX,XXX

Looking of XXX,XXX QX beyond, anticipating and shipments forward XXXX. units experienced line back in are of RV XXX,XXX half shipment XXXX, in those an to in improve full year to with which results we range RV to for estimated more the

While first [Technical structure, material mid- to return to responded to we our we reduce prior cost in cost the continue quarter, profitability quarters, as high-single to have to Difficulty] headwinds, margins profit operating anticipate XXXX. limit through and quickly will discussed digits

remarks. That ready is questions. take Thank to Operator, the of you. our we're prepared end

question now Kathryn, is Group. [Operator Kathryn Please open. your Thompson line first from Instructions] Research from Our is Thompson go ahead.

Hi. you Thank today. taking my questions for

to that your going a what divergence in you're I'm maintenance you talk could commentary, -- are at that be And with and up, trends in for the seeing that in historically is just that as versus maintenance First, if trend seeing prepared ramp market there some for you demand units outlook? about that? you give seen then, sold. already Could RV also just cadence dealers today's you've for OEM And strong positive said that sales? clarify to on good you're the some focus could you're

I'll Yes, start, Kathryn.

just at, ramp-down where obviously, or -- a get from where is and outpaced the to been is where is pace industry to up going industry trying just Regarding being mode the retail. the we've where in wholesale we're ramp by

part, couple retail a of than longer most couple that had be the margin. wholesale like December, November it will of outpacing and here we've in pretty So, hiccups hopefully for but feels months by fair a next the

chunks need time start tick timeframe feels find hoping retail which to trying weeks like. taking outpacing where the we've I now still customers of March-April is certainly, And some after dealer we are -- to things see that on bottom, where inventory, at all just some of in to and today getting up. into We're the that's get down wholesale out taking wholesale a it that between again. to going kind orders is March, got think, Still

service over for we from and aftermarket we And that's I'd parts just know dealers they service, have the XX%, prepared needing as replacement just on time the up up just And minute. activity all more that as and dealers, XX service track by the say especially calling will we see that was base January, I right in, in parts But think, And we orders piece, more said to have continue trend come activity parts significantly that remarks. and that last now. online units months. on

I So, know the if don't Brian, you add want aftermarket to to piece.

as there's think I -- aftermarket you when to would as Kathryn, I year uncertainty or the come for OEMs let a mean, said, to we piece, but QX levels said pretty in that's expectations, remarks, the XX,XXX off the prepared deplete here expect back about then of first expecting some, XX,XXX start somewhere clarity much that the hold today. But so up. to we're from at to suppress far around XXX,XXX-plus as marketplace well, obviously, units. of our inventories mean, not them Jason last lot quarter. some down production think to give But we you our between units temporarily, in the hold maybe additional I on

quarter sales a of base. kind lot a from if retail you of is. with current in look dealer we hear expectation the from continue are we what to line you're is certainly like XXXX, mean, I through our to QX XXX,XXX more at There And QX, looking lot XX,XXX positivity of occurring. said, units a

follow going the to there's inventories So, production at system. deplete continue suit to have in some orders point, as to and replenish inventory, to and be they

That's Okay. helpful.

that at trends beginning larger the there's on Any to occurred color As this the what shows could a of year. that, from And this future? for retail portends follow-up have those? several

said. the Yes. we're and lot have of traffic remarks, And a I position retail think before a positive purchases January. in inventories last -- that I take a happen. just inventories Brian to healthy big since commentary get we around shows lot down to can rebalance to that level -- really handful the for seeing dealers weeks it. over everybody's best lot they're the dealer There's out know the been a to inventories, starts can of dealers of positioned talked We've All buy going And come dealers they've of had and seeing of healthy. see they have before to where OEMs to summer selling been They to Tampa season. traffic like that in they think

XX,XXX all think units, seems the roughly. XX,XXX signs look bad fell, retail/wholesale or positive. at QX commentary it's and I But we're stabilized. how have shows, I on Retails been to have just

that's annualize layup. That's XXX,XXX a If that, you units.

number. a for So -- that's where we damn number. XXX,XXX it's is pretty XXX,XXX a feel a a good to good And that's year, down

our healthy, that I I of into with we type those can think it's -- adjust think good a -- with to get and position volume. that's cost

way. to staying it's have retail right important for but and preparing healthy -- looking is thing our most stay that the So industry we now

back. what industries, And On Okay. industries, we're seeing final in raws remarks, wide in certain of day. QX. the inflation, do question But costs, prepared variety Thank or were you of the even in said other freight labor then pulling but gas, inflation for in definitely including you How up you and other think balance you. out as XXXX? deflation natural look having you're about

been pricing in lot first marketplace we've To decreases, saying commentary which from price I'd about Yes. our perspective. meaningful some of XXXX, I with we're for had a the pretty mean, your aluminum, steel, what consistent customers, freight. with a is throughout think seeing we've start I

from We all-time highs come are couple of last seeing these down the those that experienced we costs years.

given been we've decreases. price So,

statement that heavy were and results, we income inventories. But perspective from talked -- us for been our a we've we've consumption on

some think, certainly the consuming quarter, costing those of of that the expect in continue first taken our I quarter. improvement or in certainly little that we, volume today, to for the the quarter. that. end third starting Some to layers of was the costs -- headwind time I that that layers. first We we're all-time that to do are fourth see quarter, as inventory some here at the But we're the into a And expected we with seeing high communicated it's

but to do -- through into to get would to -- and expect on expect as So think first I us should quarter, get we be second us with I I that most the the to. we start expect that of we through quarter, be back par where

to a out from digit Jason that's cost expect is be materials but and to into needle the and I So, margin biggest quarter more as from mid- for we've is necessary of move do mover, a obviously, continue the to a income. variable and the or say, business margin perspective, perspective, digit normalized because costs as volumes type would we'll some said, of whatever get needle biggest and mover. had respond second And quickly that back fixed high-single take lot should type high-single to of -- XXXX, more through beyond we in we that back operating I the and view in a

very Great. Thank much. you

line Scott, from Please your next now open. question is is MKM. Stember Scott ROTH ahead. Our from go

my morning, questions. guys. Thanks for Good taking

morning. Good

it like and from standpoint, first higher profitable the channel up, be first you're matching the getting quarter? could challenged the inventory think or Brian, from be saying things a of will sounds profit what that priced in it the quarter through I lag guess, you about, do

bit QX. pretty you're and for performance with QX throughout a fourth little we the I'd what perspective, about breakeven QX a contrast a margin fourth here I look quarter. in bit EPS we'll that take going like one-timers -- but to ramp of I February quarter from close January's saw we we darn the consistent if quarter. bit little of talked to given indicative that expect first more think up pretty like, declines the with in as say I'd out, March, we think impact. in looks the at those that's see that you be QX, a you had $X.XX there and

So, I think hits they're there. take pretty similar out view from of one-time a you perspective, quarter those once

target close to So, that's quarters But we bit we've headwind and which we in least last breakeven I chew saying I've inventory experiencing layers points consume and X little think inventory. be from we better these back couple that. been a once volumes layers, really possibly second points margin would then -- anywhere at been as through than it'll that X quarter percentage these as the come those those previously, percentage of of to of

then, And back the to aftermarket. Okay.

side the You business, talked that Can content the about And in on more the quarter? really of how you the maybe perform in the the side bit the other automotive that? give quarter. did little decline a RV, drove how

Yes.

business the So, RV terms exceeding volume. in of just is expectations

problems there. through through e-tail, And And repair there's that I business we dealers all and we expect it's again, consumer, no there. year. some continue normal channels, and So, this that all do to all upgrade mean, business service distributors and just Amazon parts related. the aftermarket with

new car side, On it's largely the by sales. automotive driven

aren't a of availability years So, ago. being just cars. they three as glut new everybody just for trucks -- like isn't There being knows, produced there's were

to business So, expect that. we when our down are slowly sales hedge production is down and start by automobile down, impacted new and that coming cars is back. But new are

down we steel we've last year business. chased business. materials steel, mostly our adjusted is on the have kind all our side content because of of the automotive current And We

this we'll positively, margins the course adjust that So, inventories, whole year. as impact indexes of all we of positively through the see through work

Scott. that, to add I'd And

look you full But side automotive XX%. the RV -- you the X%, of XXXX it I of between back automotive and we year, seeing If up of disconnect business. half started, look off in year, business the the but full only the the was side was rest was the Marine think, really if

sharp see -- there can were contrast performance. in certainly So, you was the a there

slip from and When to off quarter. more, fourth as you the side more almost XX% fourth quarter, began about to it the the look XX%, was automotive

side the and the we of that's -- business. than it's the aftermarket of that, So, back experienced to year, our it now what overall in of running which half the you business can was less half about see half

dealers Okay. doing at That's parts, from, in I quarter that orders the the first increase. from or talked in January? whole doing then, January, in parts, guess, you is for And just aftermarket least overall what -- aftermarket service XX% the about in

everything get to orders Yes, still see I started suppressed. is side We I there. January, you tell some slightly come for the mean, did better. in automotive would

off still XX%, Marine RV XX%. of business it off better was the down only quarter, fourth XX% side like January. slightly instead was The that, was it than but the in of So, in

a of I going is think it's be to are on that -- sales our that orders to the is side lot expectation business, it, little spotty. distributors. a bit of our wholesale Their

we move and the improve. we've get as is, see to are and some their season, expect seen at continue So, we meaningful that start we'll from people for that out month orders through winter down automotive it's their the in, pretty when that month meaningful how but as side looking to variances coming units what the months, to we're at as least not

to up get the digits So, the the all year, anticipating rates, when we but some double to we're definitely of we end then towards when months digit be digit back to in double the the probably the year. -- at single of be summer get -- aftermarket growth start back half

I'd half the is add automotive And of is business. two things other about aftermarket Scott the

parts, the when just way service it's opportunities weights heavy weights on of we've -- sorts And it got or with got the business the distributors all is wholesale well. other. side as dealers -- it inventories and to side, aftermarket RV of through the on our but there's one retail and So, the RV they've and work through chunk that's big then, largely

So...

Okay.

well? Just last strictly operating with a was There quarter. the like do loss That the side? as sounds aftermarket the to aftermarket. related input in to auto question having it was costs And on within slight probably

both you as first fourth quarter seasonality, the for on the margin. fronts, were extremely -- get the it low On quarter and experiencing and we correct. volumes typically the definitely at the automotive, into when is you're automotive Yes, side that

in single type call season, the I So, margin. digit would off that low normally

-- the it's headwind certainly of bit where entire we've through and of in very just much a so we've you a is across of steel flip what So, with, mentioned, to XXXX. quarter then, to like see hitch of business some seen with a couple into those seen XXXX of consistent lot loss a the that a or of layers And quite not back surprise. products, that half this consuming the high-cost first

questions my Thanks, again. for guys, taking Okay.

Scott. Thanks,

is Our Research. from Fred next Wightman your go now Please line open. ahead. question Wolfe is Fred, from

depressed think on morning. you farther Good 'XX customers to are year it a or going versus to of this timing you year move when and at resume be guys. we the products farther is as just model just comment level where Do going continued planned? that production model production have changeover I see might Hey, they people to the your hoping could 'XX? give was production extend

the I probably lot And, talk the have year. less think July a model of of -- just or problem that. last a more the model depleting produced of was been the biggest -- is It in year retail RVs. volumes obviously, of year. lot now there's since around XXXX history largest spend There's right

in just dealers we've months sorts hands the a heard that that it there's are system. the need lot the the through so in of stories they do product pipeline, doing that product to out So, retail, last blow but the of flushing to where over it's of and get of the to what all the OEMs couple

is other there's hand, 'XX being the of just the not lot On that product -- built. a

a anticipate issue. big going don't So, to that's be I

you're collaborate together I of and the doing to to that issue working here job talking the have but both have good they think to a Certainly, dealers -- it you'll some same and about, really both have common what out. OEMs figure

get So, job headwind, good they've of that in when past, there's I that kind of it. a but been through the think they'll a done really

Brian, the for in the quarter. then, And total one-time you costs the Okay. us number gave

Can severance as and headwind. cited a $X.XX the it then think, you hit? inventory I you between just break that down

right It's $X.XX. I inventory can, about perspective, there's it from an got it's of it, I bulk a here. -- the about Fred.

is the So, $X.XX, which severance. is remainder the

much. so you Thank Perfect.

Our Craig, now ahead. Kennison open. go Please is your Craig is Baird. from question from next line

for last Fred's follow-up question thanks as well. on my Hey, I to taking Yes. question. wanted

a we Regarding and took on your think SG&A the you basis actions cost about structure in should go-forward in going forward, QX? how QX following

Hey, like. Fred our saw -- production December to at or adjustments Craig, schedules what it the -- We as so, make bigger started in I continued we really and make structure. cost to would having say look that swings November some we've to

that So, as and we'll additional adjustments to into months. we there's rightsize continue coming better the visibility been make get

to and the a do here the back I think we that, get head quarter or costs when it's normalized second levels then in our elevated, the and first SG&A perspective of quarter quarter. percentage more expectation, the from to obviously, sales see the slightly resume volume certainly fourth in

think don't but have of it's to I vary it. So, meaningfully, we out going some additional taken costs too

quarter, -- obviously, quarter a compensation more we perspective, as lighter things the are And, that a the you will weigh would when first be incurred expectations given from perspective. have from profits with that where much actually the for

it but down the major a think come probably meaningful from not way. in will So, I quarter, fourth some

on year be, I your expect full at give few range for of in? least think make you a Brian, first what a where year, expectations then, then the maybe just and around margin, of expect that breakeven you Thanks. I you for quarter. to us Could margin be cadence sense margin a the to commented the comments full you might heard and the you And scenario

we Yes. running XXXX, is at type pretty expectations what good our chance, I XXXX were the we say throughout of similar look at top-line that year -- have that and look I for mean, -- you when that's expectations volume. be I'd comparison. when the then and think a at by little bit really When will I kind look of margin

once profit So, mid- mentioned, type out, more slight levels, would resuming to that small you get margins. move volumes I which digit we're quarter as past expecting you to and first high-single Once we a normalized to breakeven take expect there. we

with XX% which that, it, the X% to type And and Fourth in lot QX a for year, would to out there's be, that but the would I seeing throughout uncertainty meaningful unit of at at increases. production call least we're and I that way then of remainder would think the would be least in range. the a expect quarters normally as margin, improving would play be quarter, year volume that I today, third the seasonally be little through second the which quarter them different,

a lift through And year. our huge profit the adding our to really diversified are businesses improvement

years, most a start our all So, having are solid those. really there to of good and businesses off

is of diversification story the part the as So, a big well, Craig.

then Thank changes. you And price some content mentioned per cost metric, unit on back Great. your as you. giving

that growth? enough Just something and curious, is is that is that would you down continued other to drivers could figure go see there Or sequentially? such that innovation metrics

past quarters you basis, grow at year-over-year Craig, back saw were in to the you look Yes, if certainly it on and contrast you start highs some a is rate to to in tenure dig today. that if my few all-time -- the seeing highest We're XX% the of XX%-plus the here. you remember that, When range. at growth into organic details I our of go

acquisitions XX%, at adding another So, X%.

I would revenues not and those next business probably As I two, or much, vary think you going enough we've -- greater is continue historical near quarter the would to and too to expect rate us fast we're the X% gaining won forward to here to into type share to acquired expect term, X% during double-digit that at expect growth for that which our least organic XXXX I average. that continue in than far

through XX%-plus over remainder certainly talked inflationary numbers that's if of type see But that's been the the the system the of retracted. at last we've pushing couple price. Now, look has And as that, the case. years to you

not as If saw, into in be that a the the is -- about where to was you back first the of come it where would price it as to forward basis from be of balance where revenue part fast more price to we and number quarter, those picture customers. you continue And down third price a way really you that's expect numbers growth. by just would on normalized that look and and back price down I we first, second give the it's adjustments quarter second for the at our you acquired organic more To should fourth quarter. quarter the that to the and

you. Great. Thank

Craig. Thanks,

from Our Truist. Mike, next your is go Mike Swartz is ahead. from open. now question Please line

to morning. Hey Maybe start. guys, good

was remainder you -- put Just in million think, realized in I maybe XXXX for reduction Jason on the of I program and in we'll $XXX that give how actually guess, much, a how was called in that XXXX, see cost feel out us much the the XXXX? place

Yes, you've of RV mean, business We've decline cost labor industry out rates of ever best production we quarter we've most taken abilities. of to say it's the the I'll had our fixed cost or realized I Mike. our ever XXXX, since to structure first the really as I'd watched it. been adjusting make jump that there, in the whether since point, of

sales forward what be meaningful So, say bit until short the forecast, earlier, that's based to changing we term. I are we're more this realized been what's a little here not cost We I enough taken go, would have we've cost we really Like third, the in quarter think and at point. going but in probably to what fourth to some need levels, really probably to second but January to target. structure out see looking on the as levels additional mentioned I

into just think keep to cost-cutting mode, -- when you add I to get going. you just it's that, Yes,

towards do feel things we're we right year. a we're just looking every of XXX,XXX what at run-rate back going to middle that not unit-ish to on because we're get business. deep, too cost That's trying So, be we going mode to. to the feel to the day, cutting make we're we're we're now sure single that the that cutting there's over all And

sustain we see So, we higher add it. can't to of And that's levels what that want we production there. once don't deep -- then so cut I'd

just Is some from made you that think see industry flattish think including I on just production? And business, helpful. then the is in XXXX. you or Okay. that Marine share you comments will gains, what that be That's very market

Yes.

flat aren't a some into starting early the quarter least through run what the rates so year, down, now quarter. that have at overall pretty that visibility we think manufacturers expecting great up, us from the changing I and for is in the first some second we're deal,

pricing determined that et some what come see I as how will is throughout help think think the that get cetera. adjustments the to I be organic down, mitigate year. for as some from yet be cetera, on volumes of much some the to varies to year. going you growth the it's have be would But say, there the declines of to further aluminum our declines as yet costs on et determined, Certainly, there to should manufacturers into those on -- pricing I it's but side will -- things, be

running feels we're a a It in at off, this at it now. seeing will steady point right good in been time. point They've click but cool at some And for time, not anticipate while. we

great. Thank you. Okay,

Jefferies. Jordan Bret, open. line is from Bret next from Our go your is Please ahead. question now

Hey, guys. good morning,

morning. Good

-- your but you be you expectation sort so talk 'XX this, maybe up might can what said shipments versus about you of RV retail and Quick did on -- we just clearing question inventor? on line

XXX,XXX. Yes. to XXX,XXX to our expectation. We is retail on said Wholesale XXX,XXX XXX,XXX

as question, it you because a inventory retail Obviously, there Are is problems, the the retail strong that same I of supply is the been? Marine, is clearing seeing on then, demand Marine backlog there still side? And on is guess. or building inventory but as had

the at on some any new business just been the anticipate just much a content, lot time year. this seating or we introduction got of the with way there to business of point electric might market happen in that'll plenty Biminis, soften. override that the soften might of But side. I think retail off We a the production change they I Yes, like building mentioned minute we're OEM bit. again, some has ago, rates But fallen inventory have little not and seeing

to trying RVshare, RVIA talked I And then guess peer-to-peer just the you RV I people them, XX sharing million using guess trips industry of is that picture to to people commented level? year Okay. opposed get an because beginning math. at there's this does is in some demand the buying one people you going million think this a risk a service can RV RVs peer-to-peer the in point to question. the XX to peer-to-peer And million utilization? If this and some about do about I I'm impact at the XX as and really forecast XX big have it XX RV, population, we're

we existed. -- the that's public over both. I It's the rentals the you in gone RVshare last last When years, million see of to talking nights few years amount about have the before significant compared at pass both Outdoorsy mean with would rental Yes. X and certainly what have look a that marketplace over

it, they lot talking to So, feel really don't often. want to buy take of time Certainly and feel you'll consumers a you're have -- they way use RV. talk else's use especially a want to have not I of trip, jump but to families as ton somebody if they -- yes, lifestyle that I it anytime use an have whether rentals to a to they not we going the that rent their use but to own and a -- I you're or every families that there gauge and that in into consumers, to going want

we the feedback the of -- of customer some team. hear kind that's from from consumers So experience our

guys five, them of consumers, individuals XX the individuals, RVs gals them the these out then the I mean fleet some that servicing running these having are a think and industry. that And for it's really units and are XX, and way. and buying healthy running rental the to I

already XX%-plus. Right, you pricing. Is through back think be the or side? I the guess, I been of are seen is that does OE last giving Obviously, and of of price decline RV sort cadence we talked QX had going to then, QX been price on staggered okay. about out some one it price the on most And question, it how -- the of

price what minute on up like end we some on going the there -- too. is was next couple over a It most but doing mention of increases commodities actually but really depends a We this comment feel there. going on actually ago, it of quarters, I is to

have long as areas price can. we other we're So, we indexes, as where holding didn't

we margin for ago, manage we're we mean which bit very year So, the we down a going to target to I the a can are really little best pretty solid. hit numbers about feel talked

point. we contractual it volatility add, very and very was on the we've -- discussed previously, so actually been would slight meaningful the customers. a seen -- one, but one, down, it's July I given January Brad, given of this our space, one. up But another in the Yes, is at a in meaningful October for have move basis on this it a that some already nominal. more as decreases increase, decrease was contractual one

Okay, great. you. Thank

[Operator Securities. go Instructions] Daniel Moore Our ahead. please is question CJS from next Daniel, from

is now open. line Your

color. Thank the you. it. Thank Greatly you for appreciate all

for for Just But full growth? you are thinking the maybe for what January. a color crystallize the growth some patterns buying to for and You your year? aftermarket, of of for about lot about what are expectations gave commentary

capital how much think do working about talk just can CapEx, flow cash number the take look free might to And year? 'XX? for you this you addition in what second, And like Thanks. out a

-- from full would the half mentioned, the we towards first Dan, say after double-digit like growth first would quarter, I we Yes, -- I into percentage the perspective, a through of work rates. mean we'd I the these year year, aftermarket get back

growth single for I probably type high think it overall, year. full out averages digit to

headwinds So, certainly, historically. improvement should we've of lot been little given there. seeing, seen see under we've a the But we what that a current

I year assuming continue we'll a cash we inventories than we flow a perspective, in better XXXX From to bring that have think XXXX operating cash had in down.

excess type So, an overall $XXX million for in be given guidance you XXXX. in that operating -- plus should cash on of business, flow, on $XXX-plus the of actually were the north based year, inventories is for million we the slightly of additional expectations the so reduction what in which experienced

cash expecting really strong from perspective, So, XXXX. really, a we're

the again. Appreciate Thank you. color,

Dan. Thanks,

Thanks.

Our open. from go now Brandon, next question from is D.A. your Please is Davidson. Rolle ahead. Brandon line

at just weeks all that question your pre-announcement had a couple on ago? of quick a change since shipment your you. Did I outlook. Thank

think don't so. I No,

you Okay. people much are be per seems on I cheaper you're unit and given place much if be a upcoming on year? to retail but de-contenting are this content a XXXX? just 'XX average then on or model you de-contenting impediment now, how to if de-contenting, it's the 'XX. to 'XX able this expecting of And basis, right guess don't I upcoming how expect the and think, brand-by-brand to than know that to biggest pricing model do lot year expecting gauge take I in in

I'll launched that's time we just I mean, products we a an doubling this interest we've some units. it's de-contenting value ton in to a that. example. ABS give in but year. And the expect honestly. got We've actually to got the mean, I axle the And mean, I brakes, you of not in happen, show got your you cost now -- of ton mean, units. I

them out products. or supply to out features way of the commodities really type industry type The products We and to stuff just don't units cost tend really the the on these special. values not that they lot bad, tend lot commodity have commoditized, they a as So, of the commoditized take the industry and that options of we the take prior calls, that said we types and is the replace of our the a and whether products good industry. of I've supply more due and to with better units, fact they're to sell into the innovative to

axillary that. it out unit, may to an on us things slide not like affect leveling an So, much, you're if do going to you because need or use they that, and axillary while the tends systems slide

to off the going take unit. the consumer stuff You're that not needs that

short a answer. that's So,

Okay. thank All you. right,

ahead. question is Thomas-Martin your is go next now from Please Our Capital from Markets, BMO open. Tristan, line Tristan

just coming XX,XXX and Good ends back seems more at first units. what -- industry like of a in believe quarter, to If it ahead the for your production XX,XXX in ramp question had expectation? on the little March, probably up I come morning. outlook XX,XXX going was January to is are at to I it's production February, up industry started in odds in the your

chance. a always is there Well,

we visibility we've weeks three, So, before, don't beyond usually out from an four as perspective. have great order said

where we're through orders, it's depend. at hard And yet. that's point that to to but this lot take So, be to for February that dealers going XX, question all happening have of answer, really to hasn't going been it's on a them time a at to putting produce, and

always a greatly. expect But So, to to... chance it I there's wouldn't vary

that's to day, back the big But unlike to XXX,XXX, 'XX, good bet a XXX,XXX consolidated this lot is OEMs the good healthy. really is dip on. -- are there. and economy Better of the a and pretty dealers end production, what the was we mean, are We pretty number in healthy. consolidated at we economy unhealthy. is The The around mean, -- last healthy. pretty low. just a Unemployment is. healthy. consumer pretty lot much our time There's the had there's feel we've positives go you I of out retail The more of I things.

relatively good a a in talking. healthy now, right XX I hit the the that that sign. next what to the not wouldn't at get that is healthy, be I might think think spot. pieces don't staying six We're months. at economy it's it's bet consumers to the There on fact good hit fact -- I above over -- of in And retail some a getting all good once, we're we're spot get below. or I But

all Thank you. That Awesome. makes sense.

ahead. hand have Lippert, will I go please comments. currently for Jason final our questions. further back speaker to no We Mr. now

get second talking Thanks again, what everybody again. on And I on about. just the

diversified the a XX, to ago much through us it through are when doesn't been went solid years through around, business also we've the got and we've We last going today it was a feel that's cycle more leadership, is now, business. the we XX as a than nice right lift This but time went we before, last in and period time as RV the the in on time, give it bad nearly difficult recession.

relatively said, I and OEMs healthy. as consumers the are the So dealers and -- the and

good to the the know RV We'll and a time headed forward where much business next So, updating I spot. a about market think call. look we more We you. we're in is the have

for joining thanks So, next time. us. See you

Ladies you gentlemen, Thank today's this concludes joining. for and call.

lines. your disconnect now may You