LCI Industries (LCII) 7 Nov 242024 Q3 Earnings call transcript

Good morning or good afternoon, and welcome to the LCI Third Quarter Earnings Call. My name is Adam, and I'll be your operator for today. [Operator Instructions]. I will now hand the floor to Lillian Etzkorn to begin. Lillian, please go ahead when you're ready.

welcome LCI and XXXX Third everyone, call. conference morning, to Industries the Quarter Good on today of the President joined am I call along Kip Treasurer. and with with Emenhiser, and VP Finance CEO; Lippert, Jason

will moment. the just for quarter the We in discuss a results

like considered you that would involve the laws forward-looking today's statements made certain its and a inform LCI risks and regarding under call Industries to and number operations I statements in First, conference may uncertainties. of be securities

other company the of are which beyond except would Form our result, filings Jason. earnings to As forward-looking those that number update the statements. the to the after events you the which described a are the a with undertaking would and over forward-looking our I company date from events occur release These cautions turn SEC. factors, by statements and there or obligation control, like the differ results disclaims to that made, and many are materially factors call of XX-K in as cause in statements in in to required are of actual any law. With to that, reflect or company's circumstances The forward-looking discussed

Good quarter to and you, our morning, everyone, XXXX and welcome thank third earnings call.

execute in RV and the quarter, to improving we headwinds continued margin well third continue during the as marine We some and increasing navigate share sectors.

with our established strategic our to global our innovation, as past aftermarket that products and us recreation, acquisitions leading portfolio, We of building and been of the continued customers. customer engineered win Lippert help product the a industries. has diversified results on components outdoor and with continue Over satisfaction combined transportation OEM X decades, focus highly supplier for the feel

during able RV RV our up These categories, so X to OEM furniture these far particularly market in success been Despite to increased strategy XX% awnings, year-to-date of Marine, million. in content, revenue softness the $X quarter towards of in top and The X% XXXX. total quarter appliances, the organically roughly windows. in only from declined XXXX. products our continued innovative $XXX track OEMs made industry product benefited sales, billion our share gain RV our growth for automotive advantages, aftermarket chassis, we we've With as high-quality and underscoring net sales business also

to product also training increased to basis lower points We Supply quarter. are per while year, the helped industry million reporting shipments $XXX grew on reports, initiatives margin and industry product our offset X% will gains operating technical and market driven initiatives. while towable when its and well quarter. Furthermore, slightly improvements management results year growth and warranty improvement income top RV profit as prior and categories. should business. delivered prior with towards meaningful motorhome of costs year. versus units the now content reduced by shipments primarily levels, RV per chain impact $X,XXX, Operating motorhome Content maintaining versus up in quality down reduce consolidation towable is this aligned delivered slightly $X,XXX, move production OEM RV wholesale there XX%, this we operational $XX in execute more dollars cost costs, on enhanced continue material XXX during unit cost capacity. savings and is to initiatives these consolidate Lillian cost talk were the the believe prior which and facilities us detail was down closely mix our across dealers inventory versus the position footprint structure begins to business further on while quarters. sales net roughly coming shortly. I opportunity was scalable low overall of and Based to our now rebound. types profitability will RV We lower we support million, shift smaller by share about

components XXXX. For period growth our remain industry higher These towables, offset long-term the content. categories. production should XX% accelerate content more key Based and top in begin we should feedback quarter. We believe in on are growth, a retail product X content top demand up by driven an than product by RV what the growth be new to return recover. we added in and This acceleration fourth content OEM trailers, behind was early LCI to organic RV to was driver single-axle a up should we there be primarily content the Furthermore, premium gains from help X%, were innovative to brands XXXX see supply mix the should believe model which dealers, introductions trailers builds, certain content XXXX. expansion new as over in same organic with in as shift which

TCS, seen new doors our XXXX. glass new products house We open new anti-lock in Chill of windows, September. RV showcased wins strong larger have resulting Cube response all already a or in Suspension for customers brakes, and to Coil Air innovative are from business the the at products include Touring we Conditioners, our our which These

Touring and cuts drive road suspension lowering TCS, on its RV the which new units maintenance of satisfaction. gains Coil Suspension vibration of costs extend increasing kind, towable life share Our XX%, customer or and the towable the should by first about by

and should vibration fuel dealers revenue normal be by opportunity. for greater year the unique addressable to We've $XXX the to our more dealers effectiveness TCS' content experience couldn't product is investment that market and compared TCS vehicles, TCS. that demonstrated off, million them in simply OEM significant the believe here that we The add this to last over suspension even their believe with OEMs comes like to major sophisticated consumers made paying demand. The several as TCS difference and made. a this looks having we As

to is key commitment needs. meeting a and ABS, or Brakes of example Anti-Lock customer Our our innovation

for Before cost ABS prohibitive. non-existent RVs was our launch, virtually extremely and

'XX. X more of and top Fifth-Wheel the over Now Kruger with brands, Reflection, year brands XX in have towable including adopted fiscal leading RV X it, expected

it RV even To in seem industry because with an capture million over shorter largely consumers which to million to date, RV distances be standard orders expect while $XXX understand stop time us means will $XXX to been this emergency have addressable significant purchasing a improving braking. can that We position that market. share strong, should an brakes of anti-lock that the

We year. about are and the there towards going also We're starting gravitate that to market We are trailer are manufacture that believe to utility approximately opportunity trailers cargo this product XXX,XXX utility product. to manufactured every cargo as customers. this excited this trailer trailers OEMs utility carry expensive our

light entry content the and on for to consumers the XXXX for happily will as motorhome we enable increase both XK us new purchased and believe should chains. Series pay Our glass use like units products of the of and more towable with Window larger doors being windows premium in our functionality models that integrated a natural many

X new part launched square as bonded years new Brinkley their brand ago windows example, their with look. trademark of our For

build Lastly, OEMs Arizona have taking we've Cube highest been with talented be on and will worth Air we our launch, out this AC to the interest HVAC the at market share in the designed based noting in North quietest our is Upon BTUs. Chill from the seen many industry's real the immediate of the XX,XXX was make the innovation up market team capacity Conditioner, which by press showroom as release. the launched experience. people like that or revenues mentioned, X ultimately only help the into and improve concepts years. just end customers' products creating over this a category ideas Many vehicles, new innovation in believe We innovation to I require talk their products a about that newly last meaningful have American it

sales RVIA projecting as of content shipments and normalize, the on numbers. XXXX mix million we basis. The in XXX,XXX we wholesale growth our for content in business range, to to current wholesale annualized As at to more X% return shipments the organic opportunities roughly $XXX over midpoint at content translate which to expect capture should and its X% an is additional

to Moving aftermarket.

Our sales and for softness division the in our offset RV the $XXX net flat year aftermarket was was Operating profit quarter. by an automotive strength the aftermarkets. aftermarket aftermarket million, marine XX.X% some outstanding as in versus prior were for

Our equaling hitches, impact of total and outperform, efforts. aftermarket products, accessories to our X% of the sales highlighting increase revenues, which truck in towing includes XX% CURT delivering a diversification our during and quarter family of products continued the

we in additional through Lippert to World expect our grow increased work stores Camping which only the we Lippert to selection but and acquired in also location. of here since driving our with World also growth team are stores over our Camping and Sales furniture upfitted past of through have XX retail revenues online business as together aftermarket we partnership stores, in its those expanded and the this products, We quarter, RV increase products its parts May. the World not retail we an World with Camping XX% Camping collaboration

through water furnaces In continues support contributing our XX% in replacement upgrade ovens, just and air appliances, $XX addition, a up content cycle, of microwaves, from including suite year-to-date, hot growth year repair million refrigerators, the conditioners and revenues Furrion aftermarket to heaters, ago. aftermarket

are have top-selling For products replacement of high rate RV Furrion's one conditioners, example, the air aftermarket. which the in a

sales and begins the set should repair conditioners RV air up for us OEM owner. of cycle an in the once Our products aftermarket for other replacement direct

OEM content also sale should aftermarket product, increases the our those get we on As each on components likelihood increase. the

OEM our in up example, XXXX ability to business only gain conditioners air XXXX, not repair our first on the and as replacement XX%, believe replacement new air of compared well very content, coming but in bodes for we is the nine months shows conditioner share to For which Furrion cycles.

marine, continue almost inventory to to Net $XXX markets. sales were entirely year, to International the some adjacent prior and right XX% decreased inventory to shutdowns. in due dealers X% weak down million where sales size OEM due extended high to Turning levels. demand versus

the aggressively RV, the products the made share and expanding focused have and markets market are using leader playbook We same that in internationally North in America. us rail on marine

adjacent product delivery. and new category launch us in market and believe working appliances be will Europe. Elsewhere are a markets, We markets in introducing we on-time caravan European the be product by which to service, transportation and products the substantial gaining are XXXX, quality superior in share in for building offering to also in we market what

leveraged example, trailer others. Big core and competency expand trailers in For into many we've the top utility to manufacturing our Tex supplying like brands axle ATW's, market,

see significant years, and couple more gain these and of share meaningful have built there such we upgrades growth headway our And potential as annually. axles I trailers to last we ABS We made to XXX,XXX we are suspension. plan as approximately TCS for that trailer utility here, as earlier offer here. mentioned cargo the Over utility

glass As I've are calls, driving as mentioned revenue window in transit our and well as off-road also prior vehicles buses. products school and on meaningful

which gaining windows, for our a also more housing different manufactured residential ground are windows. category are We meaningful than on opportunity a legacy

and years having few this business and experience finding grown and are million in products. have just last with builders We vinyl $XX window a distributors entry-level new are residential that by great more the more our

Moving on to allocation. capital

management operating Xx. generation XX Our we our past meaningful million and leverage $XXX cash the operating of over inventory have have performance to reduced months, driven and

We RV, continue sheet in we opportunities right to evaluate those on and well are markets and our M&A marine arise believe transportation positions that as balance for they opportunities us us. the aftermarket,

great We by creating growth value with success acquiring prioritize plan significant products and and had opportunities in have these criteria. teams, continue to acquisitions with companies experienced to leadership

believe allow As widen continues portfolio our moat. we this, that to we enhancing us product do our competitive to

return to continue the to of of our shareholders. fund to operational sheet to we business balance our order in use plan improvements to addition capital M&A, the and maximize innovation In to

and I Lippert, this XXXX I'll we're how corporate Culture our from Award with force quarter. of close, committed as Community couple our base to engage co-workers, Before a recognizing healthy for Impact a we dedication reflected using of touch communities. At for and the and solid In business to a is we received in this achievements customers culture cultural good, Good, citizenship. August, on

Star X as engagement of highlighting the AchieveWELL focus and Council on Wellness the from driver our earned a wellness performance. workplace Award also of We Indiana,

since of like of service XXXX. our members is this our at most we of we In millionth their members Lastly, closing, team to back have community for of our we our serve service experienced I'd success. our long-term in our milestones are plenty proud community team to proud were hour one and a community our given live communities have XXX,XXX members program Guided which crossed hard teams started where quarter. remain project, hours one the fellow XX% organized work we committed company's regularly thank the to least ensuring team October, poised team. these for leadership community service This by work in to We're our believe year, fantastic serve we of impact year by in the team of with Lippert team, opportunity to announce Lippert communities. members in and

give product competitive to group as results. color our ability for progress Our should retail close and and help not to environment of turn to out mention going forward. in we forward across on operational the our and is market focus The when should products we with our position value and of so look SKUs, our our that flexible We our on moat made continuing meaningful leaders, that a our of I capture of of hundreds experienced we will continued financial our large acquisitions relationships now decades-long Lillian customer solid expansive share well delivering industries. stakeholders a of be breadth satisfaction to our rebounds, confident understanding many XXXX. up with to customers a difficult more all deep meaningful gains remain made improvements demand innovation, of us growth and us to and our strategic share industry thousands

Thank you, Jason.

Our revenue the remains growth RV innovative quality pressured service and as share demand for and and drove best-in-class softness continued navigate quarter, marine gains portfolio retail market. the in during but we reputation

quarter an while Our wholesale led from content partially for shipments down down mix third RV towards retail were units motorhome wholesale net compared of period, $XXX the net an reduction. were XXX,XXX, for by were in XXXX were fifth-wheel quarter American third period year-to-date of and were million, wholesale XX% same of lower and sales units, market net the consolidated million, the a X% million, X% gains. to shipments XXXX quarter trailer North from shift third in trailers. units $XXX the prior XXXX. sales the through OEM Year-to-date, third by increase decrease decrease XXXX These healthier impacts XXXX. increasing XXX,XXX dealer quarter single-axle year of a of offset overall QX OEM signaling sales the X% for and inventory share travel XX% were $XXX

top line and offset growth aftermarket, XXXX million, in XXXX, aftermarket, windows. the in with the we supply in driven quarter the continued by OEMs, $XXX the chassis, furniture third overall in sales of period XX% axle has for would to the by furniture automotive in of Content share production single of unit to primarily windows Specifically, was year-over-year, awnings, per chassis, in categories top retail period, negatively of both net shift the product unit content less partially see a awnings, discretionary towable softness the XXXX Industries compared we prior X%, trailer Aftermarket per down RV which content gains sales towable trailers down year-to-date XXXX. per inflation to QX impacted motorized XX% These RV been up were Adjacent by year Organic appliances, through RV primarily net third September accounted to trailers, to $XXX XX% of primarily XX% marine XX% consumer range supported to gained high categories, American Content lower delivered unit compared in were for which to due XXXX product on prior for sales while and about in had for and still to impact down our spend. XX, these was share RV the demand. appliances, quarter content. the five Marine rates utility lower sequentially due year and RV of were $X,XXX. was North $X,XXX, down units. sales slightly interest marginally to we the OEMs. year-over-year, XX%. we million, by mix OEM and same increased due Typically,

to marine the softness well. in the XXXX expect of into and continue XXXX We as for remainder industry

X% our During this softening was sales market sales was for decrease in products year-over-year. and of markets, by decreased building the by quarter, International housing. core for chassis in the manufactured demand by products decline marine and rail partially like expanding as The increased offset continue by RV this for primarily market. we offset strength capturing driven partially footprint windows

to North the popular fact also strategies the compared by pop market. Operating the by in decreased aftermarket XX% period. year that quarter. in primarily warranty related prior EBITDA of costs during the expand segment or X.X% the same share supported prior like reduced focus This prices, in $XX lower period a profit, third I margins to $XX period XX.X% prior the products net variance continue income to year period. as heightened highlight period, X% over $X.XX warranty impact costs input earnings to a the over XX% during a increased $XX diluted million, The blinds was growth decrease during operating the for $XXX prior year basis costs quarter $XX was an million. to in for prior $XXX supported to introducing margin period. net was implemented XXXX. depreciation to was the by costs. we would quarter on ended Year-to-date, interest was markets to X quarter compared operating profit and Gross due facility the noted, compared earnings XX, for compared of million expense operational $XX our RV point about income we of in point million million in stock-based inbound cash expansion to equivalents Jason basis is freight and the of decreased profit of million investments material the of share We such aftermarket XX% net million months Non-cash prior mix in have third lower and same GAAP European improvement diluted to steel while the X.X% As tops temporary improvements. and to OEM capacity we've XXX million the million window per in have margin and is or was year EBITDA September American X.X%, the compared full million and Consolidated was to sourcing or contraction reflecting operating The over per increase in period, anticipate the of third XXXX. year between quarter the the prior related by for amortization of a year XXX shifts were XX, million XXXX, delivered non-cash The costs period. $XX made to and automotive quarter the year compared compensation the business. year to levels company's September third at $X.XX income to December XX, was in million range lower $XX $XXX the our At balance cash our amortization period. $XX the the XXXX. XXXX. expense debt XXXX. $XX This the depreciation XXXX, during

the provided dividends. with million. the XX, $XX shareholders $XXX For ended for activities million used On cash capital used provided the by was flows acquisitions was million in XXXX, X $XX and form expenditures, September an operations to returned of basis, months operating million million $XX $XXX cash for by LTM

December million, million inventory As of and $XXX was September XXXX. million $XXX at net XX, balance down XX, XXXX, from XX, September at our XXXX, $XXX

acquired $XXX outstanding by Xx this business of LTM items of of before, EBITDA forma net EBITDA stated agreement. non-cash impact the adjusted and quarter, I've strong and pro businesses the the to we cash. defined had our a million, of third At is As credit debt as of other generator end include

XXXX, a due sales. and decrease X% X% October, American marine year-over-year down sales month approximate production in primarily North the decline For XX% an year-over-year about to in of October versus were RV

wholesale for We performance, to consumer to reductions headwinds as costs are of improving full lingering continue retail are begin range financing rate impact interest XXX,XXX to XXX,XXX shipment made, expect which we additional our maintaining demand year estimated units as lowering consumers.

X% about think we expect to revenue be down to year-over-year. overall we QX, As X%

fairly QX prior RV with OEM to sales be consistent expect levels. We

related last We from also and which be year and QX QX, sale to primarily seasonality. lower of X%, about to expand to down in at expect operating versus margin would come

income from cash net flow net in along QX, are We projecting with continued positive positive operations.

capital full XXXX, the the in $XX anticipated year are For of million to million. to expenditures of be range $XX

X.Xx to to debt a deliver our opportunities continue leverage long-term utilize Looking us pursue ahead, help EBITDA. we sheet shareholder profitable to net balance to and maintaining value target capture to aim growth while strategic of

expansion profile We operational capturing across consistent while financial by business. our improvements which strengthen in continue our resulting making innovative demand is share products, to business for to our the market

prepared progress, That the expansion. several to advance continuing towards to recovery We you. to our share expect markets driving sustained target is look over profitable this billion by fueled addition we growth revenue to are growth Thank XXXX. next We see end market of organic as forward the our years in we $X serve ready in industry we the Operator, take our remarks. questions. across

today Research. And Instructions] question Wolfe [Operator our comes from Fred first Wightman from

Hey the the the get help I'm of but could relevant, it's Helpful just with as wholesale headwinds next you to and if us year, guys. then too? if wondering maybe mix well, that, commodity shipment outlook for components

say components, the of talking you types? about mix just mix When RV you're

Yep. Correct.

it's in ago, know feel hard it I look last go more. up from of makeup it single I -- mix we little towable, was mean, quarter. standpoint around a remarks, to the the the don't axle it content of XX% ever a that we like will back of like of at total trailers we over say. a to that amount years should XX% in XX% that prepared normalize lowest back said our it's So here have couple to jumped and and bit

of off bit better up down. it feel XX%, We'll we're a as feel this the increase we as next know get today. I a is what somewhere go back range. to So than it goes outlook, like I far year. increase don't XXX off it XX% if to going back But of high down looking will should but but tighten little quarter, to it's there to XXX, or at wholesale that single-digit in single-digit that be

pricing through plans for of to been gone calendar pass-throughs, we've year as next question commodity our We're in together the pricing mitigate seeing that year. as we've that we're would But at this terms really Fred, we pass-throughs in still your as next year clearly into I putting XXXX And be material expect stage. to anything the budget have not we're mitigated season looking right now. as

Definitely stabilized. more

I'm if just remind import we post-election, think going exposure us you that maybe have the about how specifically wondering you then potentially And forward? could COGS that to guys should China sense. Makes impacting and

without we of Well, giving lot actual tell of China since you tariff started when in our the that first can specifically. I XXXX, the a you activity numbers, we've dealing lot mitigated with a happened, risk that

So since we've directives of to then had company out some de-risk China.

assume months what for still it's we and the much of more back and some ago. less years offshore but few have to the plans respond -- was time, few portion then a plan, So of did it US include our a to we'll Asia, manufacturing. production a And last and taking those to activity if it the bringing tariff obviously like here significant nearshoring spend, going happens we're than

So -- and to then what we can't we through. work pass mitigate,

those kind our playbook. are So of

from next go Baird. comes from Craig ahead. The question Please Kennison

morning. Good

Fred's to was or follow up your the years? share tariff able on been in Are last tariffs. has Just you there tax topic what on few to

find Craig, separately. if can and front of back that me. follow take can you I up we with no, in have and see don't that something I

ask and might it to getting that the you feel competition at look obviously, be like tariffs, more different you wanted perspective And it? holistically, you lot if context we're I you, a whether on have in there's of Jason, a And disadvantaged whether questions of than just it. on maybe you maybe

Yeah, which is have lot some build I sourced chassis, components for obviously largest the product in there XXX% the around are Almost feel we products I of lines. company and like even of that the mean way domestically. a for line our of products product RV. sure

out product issue like ago, de-risking minute But, China. an I a said not of for that's So some we're lines.

out we're to several planted get importing that Not and been competitors partners advantage have not bolster not won't a as already that, are things well, tariff where products for some our as China. as specifically. like that like And huge in We likely us gives appliances years, because partners there. on still several some those are of furniture we and can our of continue and of say some to China other much that but firmly

X your then X% prior question. a look that, pandemic to X average years at you to just the was ingredients getting big or maybe to level? EBITDA that are to maybe What margin to range, And picture looking XX% the prior that shutdown, in I If X%. back

Yes, of RV different on thoughts well. go there. sure ways. of a more so if heavily were it I'll couple a to concentrated answer has as we But, Lillian couple much XXXX, I'm you an that back XXXX, perspective from

businesses period some diversified since there that of we've has mature So time, added business the which significantly got caused of the cost now. We've structure.

kind of see talked margin mature cost businesses for and great calls, around other cost structure become shooting of kind and we've in over last the we years. last this XX RV wholesale so XXX,XXX ourselves normalization XXX,XXX those Then work of additive to next soon and become are starting been the where we've our that soon putting in we a when margins to it's get quarters done the range the that much just with in for. RV, business couple side to will show feel averaged specifically, XX, as in double-digit the up. couple of really on point margins to it in But, RVs and we've about inflection think unit as back start consider double-digit position the we're as better I to business, of normalizes to work we going as that

Securities. Daniel from from CJS Moore comes question next The

the taking for Thanks question.

units. You mentioned, again, XXX,XXX wholesale to XXX,XXX

X% a axle X% the more to entry-level level XX get trailers Do Just 'XX? that content. about versus then cadence, you'd the you range kind think wondering bit on I the the little little over appreciate expect dependent single be in next content color and to HX? could of you of will within mix Or that can if And growth you months? back bit talk on HX a

would a have Definitely I the we're and dependent might with days inflation different rates, already the me there. on a pending in the improvement, -- reduction you today, Dan. ago, the mix, think if I few had improvement think answer than had yeah, But interest ask I we've current deceleration inflation but

saw is think we dealer think -- the you I the I that on thing decade consumer is biggest levels thing record most looks then than low yesterday have anticipated, important confidence, at we're we might which is better the probably seeing the look and inventory lots. just

poised restock. So think their and inventories a are for ready really depressed, we're and I

I think when we sooner that, than the two. a to next this, It's or pretty more back So feel have definitely in be looked on comfortable that's strong. And today. later, a then but you quarter at again, hopefully, half going depending I lot

Very but helpful. ball quarter. of is of Obviously, 'XX. maybe for I exiting in a or put crystal bit operating But a question, terms around margin when know this terms solid a margin little QX absorption. guidance you then together, in X% has this And operating less improvement somewhere it

modestly let's that in given do that what kind you've outlook in of for we and might for like think RV, uplift marine is that range margin a say, you how is described? down the potential RV 'XX, Given about look

Yes.

finalizing about year, next next of year. think we process for this at are our mentioned, as in we and the I budget as So point

look focusing takes. more business about the year think the and So puts that When a different and for towards side my work we'll the from the as as fixed uplift, But we're modest to we to progression call. revenue within consolidation the and out in of of said, in of probably see will facilities. profitability this think One, just year a terms and going little margin about the next progression the of going our reduce Clearly, side adjacent be about marine on some absorption there's some continued things. system, some growth our next perspective of on get optimization. footprint of next, footprint reducing the takes cost with of We're the puts provide and I the continue modest business. bit We've couple of Dan, overhead to which clearly, and the RV expecting the increase more with we of the That talked our to year couple to to few just costs the also our on would a of business, businesses. in we tepid our of next better well. a be take other terms past, continue a cost it's the towards as expectation our of for more color from

improve our as several trying So we on continuing move also different and first foremost, being focusing attack to volume fronts, benefits costs to and really forward. it then on

some kind little axles, about that to over and look to few at where talked we when I our double and based talked on bouncing pretty of ends addressable with I'd bottom depending here product on got And a a market we've out cost our we've chassis, up for cost top kind we've year, where make. QX, next there. along we've just us other say we the couple of headed that billion nice probably is for continue there call going I'd of the about that in normalizes after. still you with market of Yes. been that cost talk would got outs. share on probably. some going on opportunity improvement. that categories, significant we on do X and appliances, It's the mix tailwind we'll felt be and not to say especially in share categories I quarters we've that improvement our ABS about comment gain little total to going talking can $X.X years bit along come slide In mix But the some big we industry can innovations we're those market improvements the as of now, about we're also down last the I momentum structure chassis We're a bit. – structure that feel window go a just the in of mean there. to bottom. our some mean a leveling feel of of windows, if TCS, top

down obviously, over and cash generation the one, hopefully, come nicely the Last But is And with bottoming you has months, we've I'll helpful. back. mentioned significant leverage XX and EBITDA M&A. Really seen last here. jump

for X and but your months last talk X it XX? M&A XX outlook the two relative of the pipeline about to to So kind over takes next the to tango, to

obviously been things Yes. the We've years things just last fairly inactive couple right smart the there. of in the to cash do preserve and and

quarters. of a had have the last with several lot We targets different lot of in a conversations

closer the come definitely things activity more seen about But that starting is hopefully couple and more M&A some about the what next we're good year to to So get expect feel in of than quarters. hoping year, it. I next obviously. this calendar active on we've

question Securities. is Mike Truist from next from The Swartz

I think help contributed was you content the on content reported us had down of bridge Maybe the have Can mentioned Jason the might you the and to mix, to and Lillian some variables up in X% quarter? towable gap the of had that some just organic mentioned business was you X%. what start, M&A, pricing, other about other

Sure, to contributor downward quarter Mike. is say the biggest this mix. the pressure I'd

up XX% I mitigated prepared at Typically, is from the my It pressured trailers alone anything pretty perspective, number in by remarks, positive content about was XX% in came XX-month headwind in on a at at in this again. The to the prices the percentage That point. commodity actually the this trailing point, mentioned X.X% us we had in really pass-through the we'd quarter quarter was for quarter that an From basis. seen for the what organic is see X%. XX%. that single-axle As we historically. about saw

talking progress and products again, content then of that good on organic with year, organic We'll a quarter was up we're more as a content come next on open as Jason been a start predominantly picks as what we innovative we offsetting we're the the highlighted chunk about that of of at some is we in really, up to, that fourth mix seeing dealing we pickup the So the well. basis, about number house. seeing that that production that seeing. move think growth start that quarter into has into referring the And as presuming we'll I the fourth go-forward

a need this that but headwind going the to watching be as number commenting we is feel Jason be mix XXXX, into still to because on, pickup think will continue We organic point. do as at move the I was to good about

would to driver mean they year. of World comments those the versus average of some thing. look I first-time when been, mean that is price XX% to buyers, echo into content a around today. lot just a travel And But on a last pushed you in is on $XX-ish those Lillian's I it's trailers and you kind the single-axle the trailer, typically from up good it's think, big unit. a Camping trailers. see of what at market trailer entice travel the I thousand

$X,XXX And some selling to of are those $XX,XXX. for

So you in content imagine those can trailers. the of a just of lot lack

So of they've that content. the to us with some ordering quarters trailers indication given some more patterns normalized more couple going next see with are

added but may just then Lillian, did it, what quarter? I you And helpful. follow-up. to have a missed cite That's M&A Okay. the

In terms of sale?

yes. Yes,

M&A, that pretty the the terms it this only as Furniture had World the not, of consolidated We sales... comment the made in years. to one couple it's to I In year but it's Camping pretty related small. been last of acquisition terms of earlier we quiet did Again, business.

single M&A So it, the call digits. really, sales related to

on projects of bit. pulled And that a that just CapEx. falling I those final you question, capital just some in XXXX? Is now issue a noticed timing little then with down

spend. part has last flows and the necessary while be next timing. year, year this frankly, maintenance have focused it from been expect year. what's It's would perspective. tick we on And the of focusing generating truly the on been strong a Yes. I'd very of will team CapEx I say to spend up cadence throughout cash the

extent, where we'll So and spend, we need to next a that year. timing of more bit to it's little I'd uptick a more that that spending say we're into see

Scott The next from question ROTH. Stember from comes

the or to then doing that side, what and Just the it's a do the the sense business I view business on how business assuming market pandemic maybe as RV for and have there. trying talk to X of all aftermarket. you could year RVs year, fix look get wear Jason, on in the about net flatten brake business into starts the do, But out we supposed for come to right, the the the what times. of since side attachment on these of these next that tear? -- the maybe a in the next we basis specifically tough side Obviously, guess, this is

Yes.

a we'll good just like the continue the the nicely year. a it anticipate because you accessory tailwinds On to RV, real side, But truck had past grow automotive lot we with it's quick, this good We've there. and question to of asked I'm one. respect did glad

XXXX XXXX, of warranty warranty, of cycle amount that the RVs. million of at it's look million you about If X.X are from the coming RVs out to $X.X out --

a are be -- that in lot that's on those warranties are going of expired XXXX. So the RVs completely to

lot a of drive to going pay age. to is means that what So those customer opportunities as continue

standpoint and warranty cycle XXXX. -- had cost got compared you've enter to standpoint, the from starting now years and got you've then or 'XXs 'XXs So warranty XXXX we a -- to in a high-volume to the

the downward when see pressure some amount to where we have should massive just there going a not warranty we're RVs saw warranty was of being of So kind built.

good for those and dollars as business X.X at RVs cycle, It's opportunity warranty upgrade. and for which really you're the and that completely our on we replacement looking So and us where aftermarket coming pay replacement our repair are into make it's a million customer dynamic repair is upgrade.

in or that ago, would or you suggest be advancing aggressively into versus still that aftermarket Last go on years the X could the margins this guys the And high X could that business case? Is back this margin XX%? the was Xx I pushing When also aftermarket. the OEM in, on the X narrative were question teens, that business. the guess,

aftermarket -- mean, that mix. our total in you less, margins our It our quarters XX% I past at the on look depends or we've the are if XX% about automotive and of it's aftermarket said revenues.

margins I customer those huge have to happen, for and keep with that We're the started years. into this mean, it's And demonstrated the how to seeing over out and it's We've that's to play. a we're run warranty XX obviously opportunity aftermarket to we as that like come last of all into start since cycle, mix, we're coming pay division nice just business, margins. great we but good the still and really driving we've the X years we going I next to X going know opportunity. -- now, mature mentioned, not long as units us going likely, the So over

So...

The next question comes from from Thomas-Martin BMO Tristan Markets. Capital

potential impact. Trying tariff a to quantify

year, you imported. Jason, I was ] called out significant XX% is from then tariff [ amount raw think I said last a think components And China. and about materials you

the XX-ish-plus So of imported from does way? of mean China? like not percent raw that north about thinking that am components right Or materials and I

last way nearshoring a products which away. of right And think here in and we're started years this tariff I like manufacturing, right X that around. for a, months process offshoring again, don't action are the margins because tariff process go said more the of like likely be that is, -- have way than what this, ago. I because was few to China then number we considering matter the all have significantly of off looking react. then but high you're at I suffer level didn't head, last a actively today, And are some more U.S. of it And our the already was it to than at a back if But we're those we the in less of the might now. in U.S. potential earlier, we're my look those the to It really think top some took time we look what time actions at I had to the kind the it's XXXX. and bringing we

obviously, did And some to out. fourth tariff. think fine the is to along, tariffs pass it I option, we the came that which we'll cost be we when of did when comes last

actually So look go with to -- the we is how dealing last know around. practice had I it a of to we've think at that the lot way

So fine this we'll time. be I think

Okay.

to on those you steps? are -- think just of you think. some going do proactively tariff, I So try Or… to take

started -- move ago, offshoring few been of China to that out once China. Yes, goals and have product been actively that. we've a been some that to we company already doing We've program continuing do we've around the years

we at way doing that's I today. it, specific of more know look once more. So is that We'll we're to that practice one get color you things think, in the on

quick, helpful that more I story? the No a year really election. color with be would really 'XX definitely something like Yes. 'XX a 'XX can benefit? Or beyond considering And quickly post how model is change is things then like just like feel that TCS, and

we quick I it. on think innovation it right some launched 'XX is quick. it a return got mean good the brands beyond. this return year, and really on really brands getting And and good you you on and innovation it's I get we've obviously, really that's and how promote

brands at and top-notch we've Design. got Brinkley really already brands are some got that it, the looking it got we've today. Alliance, using majors So but other like Grand We've

and it more a couple depends year when programs is industry of to model the an next ABS over of standard. want they on but change, or make change a our it's the others some to product So put really of this implement on goal whether of it, and with running steroids it a couple years

question Our Davidson. final D.A. Rollé today from comes from Brandon

has about materials and heading imported looking XXXX? XX% is think just of into globally, following or the up the way Or still components decreased question. mix First, Globally, just that on increased China? Tristan's your business to any right not just raw

the Brandon, But our either initiatives is and to decreasing we'll you Tristan, number I on right matter. get that to to bring America say Asia. that know would number, back that, don't for more I because offshore North or of and

just we're through price-conscious given mentioned be in with effort you Okay. different market? those in Do mitigation so and challenged now had And you that environment of consumer think -- passing you one right interest a the Do pricing might is a now mitigation the rates. little important elevated the efforts I like was like feel obviously, potentially consumer. to a feel cost more

that's last our Well, it be I let pass mean to is along. clear. me priority

way the to find picture domestically. to Our domestically with back suppliers, finding mitigate find components always and the work that is picture look countries out finding it it's it it's going we we're again, the product and in whether along once through OEMs, different of overall what consumer, to portion to whether a to building usually like first what or suppliers last the we they're actually or bringing resort But priority and the a new is. small pass a here is

mentioned certain market in share about think market within you Can within I the finally, It market. you're for that forward. a in chassis gone had gains just talk OEMs gains couple needed business mentioned chassis? release, moving suppliers seeing you maybe press And like Okay. strong to of maybe the supplier market traditional seemed even products maybe had had and to earn share one the their the another

So any if the share color possible? means there where it at maybe market today is on was what where of quarter, strong and end versus your last

Yes.

and give you a of of Wheel we're today. couple I'll the more XX% examples. Wheels different -- manufacturers, think Fifth I But Fifth literally the supplying of

the using looking just more. the and are them full more, taking more they're of using Wheel fact off for living of So them necessarily in not units that are chassis them more people They're more. durable foundations Fifth road. timing manufacturers more They're the but because

fewer, a by have desire build the lot significant brands lot OEMs chassis. of wheel a of some been bigger there's and to a So the be that fifth

a with of steel doing about been about lost been there, going that and there that. puts improvement takes. think all just That's every a market talk chassis. just things We we've the to business look changed couple year, Yes, things mechanisms. you're adding like put drive we're couple about and significantly, that the So the we're there. in chassis. lot a and TCS you if at offering. that maybe our about the to it you market increases way new mean, has share I leveling where the of We slide-out Those come share. But you and the comment steadily we've if suspensions there's of in content your talked working have traded which can some some of We

that each So of lost might up a I think couple yes, a if we've net year, all each the no even year, And the brands X revenues at year. you picked like X givebacks there's some improved chassis the years, with that XX couple of last year-to-date, last and more.. is months also Hopefully, we've our last things we the have of cost brands that. of look over months but

that from Just types build manufacturing the types nobody capabilities building. a units do capabilities chassis and to and of chassis we all has of does the of total the and package, flexibility design we're that there's different some the today that

the all you're large most brands manufacturer if have small or really from there do haulers, trailers of to it. travel and So only can out ranges we're tow that across

puts. and Great. you the I of maybe any was just on offset if of some focusing examples puts some the takes to takes had

us share that market there's of the of there. most calls -- brands about from on lot where brands prior talked having I've came were we're brands say I'd that that Yes. winning. out having the And a

the share it's market account, if are production You building an gain but adding to then the units, better year. that you're can many gaining to brands not every volume and have

So I you're than more maybe that the at at that it think way it. looking Is helpful? way look I'd

lastly, Fifth time? where at the just and in there Wheels. market you have is share this I like you than to how if said -- more you're gain a because that much gaining market XX% is that had No, that's share category Okay. within guess most share

You answered Brandon. question, own your

Design to there that to units in the steel beef -- terms the up way It's just a more I significant people market months. to added that think longer some solid. share them at and units like last I of is foundation to say, so that, the be just has going good example. in Grand my got spend be not They've time to look said, to there's their want I X got volume is to

into all to Wheels content of some specific that right of the significant out Fifth way we're Wheels reason. for well. a are the there now down goes mid-profile as That So that putting Fifth amount

way, do brands going other pretty are once they've founds, the done. and look they're brands market chassis do at So increases I to they've to that, got as And they've the it to content and here's that, that that significantly. improves start all brands got think units that going bigger because stronger what

or the dollar is actual lot of to but gain there's from things be market grows, they're suspension. to well. obviously, all in So the the that added in X% need is, number including that's unless not that X% chassis, these or that TCS TCS where content to a whatever accept chassis units to the chassis as putting system There's because happen improvements on going that to need that to gain

So hopefully, that's helpful.

We have no further questions.

back So over I'll Jason closing call for turn the to remarks.

on forward giving appreciate in call quarterly you tuning We Thanks. today. the in to for a next right. of We months. color everybody couple All look more

much attendance. for you call. This Thank concludes very your today's

may disconnect You your now lines.