Lazydays Holdings, Inc. (NASDAQ:GORV) Q1 2024 Earnings Call Transcript

Lazydays Holdings, Inc. (NASDAQ:GORV) Q1 2024 Earnings Call Transcript May 16, 2024

Operator: Greetings, and welcome to the Lazydays Holdings First Quarter 2024 Conference Call. As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host, Kelly Porter, Chief Financial Officer. Thank you. You may begin.

Kelly Porter: Good morning, everyone, and thank you for joining us. On the call with me today are John North, CEO; and Amber Dillard, Vice President of Operations. Before we begin, I would like to remind everyone that we will be discussing forward-looking information, including potential future financial performance, which is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from such forward-looking statements and information. Such risks, uncertainties, assumptions and other factors are identified in our earnings release and other periodic filings with the SEC as well as the Investor Relations section of our website. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results and any or all of our forward-looking statements may prove to be inaccurate.

We can make no guarantees about our future performance, and we undertake no obligation to update or revise our forward-looking statements. On this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings release, which is available on our website, for how we define these measures and reconciliations to the closest comparable GAAP measures. With that, I’d like to turn the call over to John North, our Chief Executive Officer.

John North: Thanks, Kelly. Good morning, everybody. Thanks for calling in. As usual, I’ll kick things off. I’ll let Amber talk about operations. Kelly can speak to the financial results, and then we’ll hopefully take a couple of questions. We, along with the rest of the industry, have been working hard to adapt to the current retail environment, namely sales softness coupled with an industry-wide inventory overhang of aging 2022 and 2023 units. To that end, we have been focused on what we can control: first, inventory health; second, increasing use procurement; third, driving finance and insurance performance higher; and fourth, controlling cost. I’m pleased to report we’ve made significant progress in all these areas since we spoke to you about 60 days ago.

The variable in the equation that has been outside of our control is retail demand. The increase in sales velocity we expected through March and April did not materialize. Based on the most recent SSI data, nationwide new unit sales were down in March over 17% from 2023. We performed better than the market but still saw year-over-year declines. We attribute this to three factors: first is lower consumer demand; second is negative equity on many units purchased during the pandemic; and third is dealers that we compete against that were slower to respond and discount aging inventory did so, and that drove consumer traffic towards their better deals and away from our healthier-priced offerings. Fortunately, we have fantastic partners with our OEMs, lenders and investors.

We’ve received continued financial support on our units and inventory, flexibility in our credit facility again this month, and a further injection of liquidity, raising $15 million through an expansion of our mortgage financing. Our cash position today is almost unchanged from where we ended the first quarter and remains almost 20% higher than where we finished the third quarter of 2023. In summary, our inventory is healthy. We are driving operational improvements and vehicle gross profit per unit continues to improve, but increasing unit volume continues to be elusive. Given the start to the year and our outlook for the rest of 2024, we are projecting a pretax loss, but anticipate positive EBITDA and adjusted free cash flow. Finally, the team is engaged, working hard together and continues to identify ways to pursue every retail opportunity that is available in the market.

I want to thank all of our employees for their hard work. And with that, I’ll let Amber take it over.

Amber Dillard: Thanks, John, and good morning, everyone. As previously mentioned, we have continued to focus on improving our inventory health. To recall the journey we have been on, in early November, we had approximately 100 2022 model year units and over 2,000 2023 model year units in stock. As of yesterday, we were down to five 2022 units and just under 300 2023 units remaining. We have also reduced our on-ground new inventory from over 4,700 units in November to under 3,600 today. As of today, more than 90% of our inventory is 2024 or 2025 model year. We believe this is among the healthiest in the industry. Additionally, our OEM partners are thoughtfully and slowly introducing 2025 model year units, of which we currently have less than 50 in stock.

They are slowing model year change where they can to preserve the pricing power on 2024 units. Another area of strength is our approach to our used inventory. We have made a concerted effort to ramp up our internal purchasing activity and the team has acquired more units sequentially every month this year. Given our focus on reducing new inventory at year-end, we slowed our used unit acquisition cadence in the fourth quarter, but have increased it significantly over the last 75 days, with an incremental effort in May that is delivering more than 4 times higher lead volume compared to April. A used unit typically generates 5 times to 6 times more lead volume than a new unit, which therefore drives more potential customers into our sales funnel with fewer units in stock.

Current gross profit per unit on inventory bought from consumers has been consistent with our pre-pandemic historical results. So, we are doing everything we can to generate more leads, more purchases from consumers, and thereby, more traffic and revenue to our stores. Another focus has been F&I. We have been making meaningful improvements in our results due to enhancing our people, process and product. To provide a couple of examples, our F&I per unit on a same-store basis increased $170 per unit year-over-year despite average selling prices on units declining by over 13%. Our financing penetration on units increased from 59% in January to 69% in March and is at 75% so far in May without the benefit of having as many aggressively priced units that are easier to finance due to a lower loan-to-value ratio.

I am proud of our financial services managers for the effort they have shown to increase our gross profit generation in this critical revenue stream. Finally, regarding cost control, relative to last year, we are within 20 basis points of SG&A as a percentage of revenue in the first quarter, while total revenue declined 8.5%, and we have seven more locations in operations compared to 2023. The absolute change in SG&A expense is lower by almost $4 million or over 8.5% on an absolute basis. Overall, the opportunities for self-help and generating optimum performance for our stores remain substantial and achievable. We look forward to providing incremental updates as the operations team has additional times to drive these improvements. Finally, I’d like to echo John’s comments and thank our employees.

We have a mission, culture and focus that is second to none in the industry. We are aligned and all pulling together, and I am both humbled and honored to lead our store personnel. With that, I’ll turn the call over to Kelly.

Kelly Porter: Thank you, Amber. Please note, that unless stated otherwise, the 2024 first quarter comparisons are versus the same period in 2023. Total revenue for the quarter was $270.6 million, a decrease of 8.5%. From this point on, all metrics will be on a same-store basis unless otherwise stated. New unit sales declined 11.1% in the quarter, and gross profit per unit, excluding LIFO, declined 75.7% as a result of our aggressive discounting of 2022 and 2023 model year units. Used retail unit sales decreased 4.6% and gross profit per unit decreased 51.4%. Finance and insurance revenue declined 5.6% during the quarter, primarily due to a decrease in unit volume and higher chargebacks. As Amber mentioned, F&I per unit increased 3.3% despite lower average selling prices and fewer unit sales.

Our service, body and parts revenue decreased 20.6% and our gross profit decreased by 18.9%. Our gross margin on service, body and parts increased to 120 basis points. Adjusted net loss was $21.4 million for the quarter compared to net income of $1.2 million last year. Adjusted fully diluted earnings per share was a loss of $1.63 for the quarter compared to $0 in the prior year. Moving on to liquidity and capital allocation. On May 15, we raised an additional $15 million of capital generated through mortgage financing on owned real estate. The mortgage facility has a current balance of $50 million and includes real estate with a basis of approximately $127 million. We estimate we can generate an additional $45 million in mortgage proceeds by refinancing these locations at a 75% loan-to-value rate, similar to the other properties we financed earlier in 2023.

Working with our syndicated lenders, we received a modification of our financial covenants through the first quarter of 2025. I want to thank our bank partners for their partnerships to allow us the room to navigate the current economic environment and focus on improving operating results throughout 2024. With that, we can open the call to questions. Operator?

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question is coming from Steve Dyer from Craig-Hallum. Your line is now live.

Steve Dyer: Thanks. Good morning. Thanks for taking my question. Just kind of a question on new vehicle gross margin at a level that I don’t think I’ve seen or you’ve imagined probably. Is that just a function of kind of blowing out old model year or fixed cost absorption or all of the above?

John North: Hey, Steve. Good to hear from you. I think in short, you described it well, probably lower than anybody could imagine. But yes, that’s exactly what happened. I mean, we’ve seen our new vehicle gross margins recover pretty dramatically in April and so far into May. I think the big change for us in the first quarter was really needing to get through a lot of that inventory and get healthy, and we saw the writing on the wall and took our pain and moved through it. And that’s what happened. I think what we were hoping would happen in March and April is we would see seasonality pick up and we sell some more units. The grosses are there on the ’24s in particular. We’re paying a lot of attention to the quantity of inventory, and Amber talked about that, we’re down to 3,700 units less than, I think, as of today, which is way light even compared to where we were this time last year with a lot more stores now.

And we did that for a couple of reasons. Number one, we want to make sure we’re really careful with the high end and the motorized pieces because those have been even slower to move. I think everybody has seen the low-end towables are where it’s at. Amber shared with me this morning over 30% of what we sold this year in the travel trailer segment is under $30,000, which is way different than our mix has been historically. And we’re focused on that intentionally because that’s also where the market is, to be frank. I mean I think Coleman has been the #1 trailer from SSI three months in a row this year, and that’s like a $12,000 or $15,000 unit. So, we’ve been thoughtful about the high-end and heavy product as well, the motorized product, and that doesn’t generate the grosses that it has historically because we’ve been trying to turn it faster with floor plan financing at 8%, funding of $500,000 or $700,000 unit gets pretty costly every month if you’re not turning them.

So, it’s a combination of all those things. I think in short, we feel really good at where the inventory is, the grosses are there. We’re just hoping and trying to do everything we can to drive more retail sales and really leaning into use because that’s where the market is.

Steve Dyer: Yes, that’s really helpful. Thanks, John. I mean as it relates to mix, it sounds like you have the late model stuff where you want it. Do you have the mix through the Colemans of the world where it needs to be relative to demand right now?

John North: Yeah. I mean fortunately, Amber has run our supply chain for better part of a decade and has really good relationships with OEMs and is able to get product at the right price points, I mean, I call out a couple of things we’ve got the product, the Catalina stuff that’s done for us. That’s a really good price point, pretty competitive at that country level, first-time buyer price point. And then even like Grand Design, they’re coming out with the low-end stuff that’s more affordable because they see where the market is, and they’re our number one partner in terms of units. I mean I think 40% of what we sold in ’23 was Grand Design. So, yes, we can get it. That’s where the market is. You see the margin differences when you look at us versus Camping World.

So, obviously, on a much lower ASP, you can see a margin in the teens, but there’s a balance there because we are also a really good partner with an Entegra and Newmar, and Tiffin that sells the higher-end motorized stuff for, has been phenomenal to us. And so, we want to keep everybody happy as best we can. We’re trying to buy units and keep their factories moving and be a good partner. And also be really careful to protect ourselves because when you get heavy on inventory, it starts to age, you end up having the last six months that we’ve had and that’s not very much fun. And I think that’s where the industry has been. I just think a lot of dealers do it in private because they don’t put their quarterly results out like we do.

Steve Dyer: Aren’t you happy they get to do that? When you started, just kind of with your background and so forth, parts and service was sort of a focus. And I don’t know to the degree you’ve been able to do what you want to do, just given you’ve been triaging in some of these other areas. But can you kind of give a little bit of color kind of what you’re working on there and how that’s going relative to expectations?

John North: Sure. I mean, I think you’re right. We’ve had to focus on the sales side of the organization, and we leaned in pretty heavy starting about, I would say, August of last year, and we’re really laser-focused on sales. I think, obviously, there’s always incremental things you’re doing on the sales side or any part of the business, but in particular, like F&I, which is such an opportunity for us, we needed to start there. I mean, there’s thousands of dollars per unit being left on the table if we can continue to drive performance and improvement there. But I think as we got through the end of the year and into January, we’ve been pivoting our focus now into service. And you’re exactly right. I mean that to me is one of the foundational things that is more consistent in this business, and there’s a reason that we call it fixed operations, it’s supposed to help cover your fixed costs.

And if you think about sizing it, I mean I think rough justice, we’re at 5.5% of revenue was serviced of the total. That should be 10%-plus. So that’s an area where there is tremendous opportunity in capacity. And we’ve done so many things behind the scenes. We just brought in new recruiters, technical recruiters. We’re partnering with trade schools to get more technicians. There’s so much low-hanging fruit there and opportunity. But any time you’re making people changes at any level, it always takes longer to really see that pay off. And so, it’s probably not going to be something we’re going to turn on in a quarter. And so, as everybody is thinking about their model, I think be gentle. But in terms of where the long term for this business could be, I think it easily be 10%-plus.

And the gross margin is higher than automotive. I mean it’s typical to see a 60% gross margin. And in a well-run service department, you can do a 25% to 30% operating margin. I mean that’s a really, really good, consistent business. And I think for whatever reason, where we find ourselves, we just haven’t emphasized it the way that we should. And what we kind of jokingly say in the business is sales sells the first one and service sells second and third. And if you take care of customers and you make their product usable and unfortunately, these are homes on wheels, they get towed at 75 miles an hour and things go wrong. If you can overcome those things, you create really good value prop. And the OEMs love you. The customers are happy. There’s really good recurring revenue.

So, we’re working on it. It’s just, to your point, we’ve had to triage some other things, but it’s been a big focus here in the last 30, 45 days for us. And I can tell you, there’s just as much opportunity there. There’s a lot we can go get. It’s just going to take time.

Steve Dyer: Got it. Thanks a lot for all the color. I’ll hop back in queue.

John North: Thanks, Steve.

Operator: Thank you. Next question today is coming from Dan Moore from CJS Securities. Your line is now live.

Unidentified Analyst: Hi. This is Will on for Dan. Has there been any noticeable pickup in demand for used units relative to what you and the industry is experiencing in terms of retail demand for new units?

John North: 100%. I mean that — there is so much demand for used units. In particular, if you can find like 2016 to 2021, that stuff is liquid gold. And we’re seeing gigantic grosses, really, really quick turns. I was looking at our sales reports last night and the buying team bought a 2018 Tiffin bus, and I think we made a $30,000 gross profit on it, sold in five days. And that’s just on the front. That’s not even the financing piece. So, I mean, when you can buy those units the right way, that’s what customers want. That’s where affordability is much better. They don’t have the price inflation that you saw through the pandemic and through today. And on the motorized side, in particular, I mean, the chassis manufacturers haven’t dropped their pricing.

And so yes, towable costs are coming down on the new vehicle side. But the motorized piece has been a lot tougher not to crack. So yes, in short, without being too long-winded, all the used we can buy that we can buy right is — get snapped up really, really quickly and for a healthy gross margin, and that’s why we’re so focused on it.

Unidentified Analyst: All right. That’s very helpful. Thank you for the color. And then what are your expectations for gross profit per unit for both new and used for Q2 relative to Q1? And then, how should we think about the cadence over the balance of the year?

John North: Well, that’s a tough question. I mean we typically don’t provide detailed guidance. And I would say in this environment, that’s an even tougher question to answer, because I think the balance that we’re trying to figure out here is volume versus price and what happens in the market. I think what we talked about in April and March, in particular, as we started to put pricing back up because inventory got healthy on the new side, demand wasn’t where we wanted it to be. And I think that’s because there’s still a lot of dealers that have 2022s and 2023s on the ground, and they’re significantly discounted, in many cases, below the dealer’s cost. And that problem is not getting any better every month. And so, I think the incremental marginal customer that doesn’t have a preference for a new unit that’s a current model year is going to go take those bargains.

And so that’s been the part we’ve had to really balance because as we started to bring grosses up on the new side, what we saw is the volume started to suffer. And that’s kind of a difficult question to answer going forward, because I don’t know how long that inventory issue is going to be in the competitors’ lot traffic. So, I’m going to be careful on that one. I think what I said is we saw improvement in April. We saw improvement in May. Our inventory is very healthy. So, I don’t think it’s going to be anything like what we saw in Q1. I’m not sure it’s going to go back to where it was in the second quarter of last year. On the used side, that feels a lot more like it’s been historically. We had some aged used pieces that we needed to work through in the first quarter or two.

And so that suppressed our used margin a little bit as well. And I think we’re in really good shape there, too. And I mean we took our loss, you can see on wholesale line on the P&L and we took losses in the first quarter to move through some stuff that we needed to get rid of. And we did all that. So used, I would say, is going to be more normal as you’re thinking about the modeling, but new is probably worth still being a little bit conservative on just because we’ve got to continue to work the volume piece, and that’s why we’re so focused on F&I.

Unidentified Analyst: Okay. Great. Thank you for the color. And then, what are your expectations for operating cash flow as well as CapEx for Q2 and the balance of the year?

John North: CapEx, we’ve got some pieces that we’re working through that were in flight, that’s tapering off. And I would suspect that you’ll see something similar in the second quarter to what you saw in the first, and then it should be pretty much done. From a cash flow perspective, I think our expectation is that we’re going to be on an operating cash flow basis, the adjusted operating cash flow that we take into effect, the floor plan financing, and we break out that in our earnings release, you can see that calculation, but our expectation is that’s positive for the year. I’m not sure that I can give you a quarter-by-quarter because some of it’s timing-related with floor plan and AP and things that can swing and fluctuate just depending on when a month ends or whatever happens.

Unidentified Analyst: All right. Great. Thank you for taking my questions.

John North: Sure.

Operator: Thank you. Next question today is coming from Mike Swartz from Truist Securities. Your line is now live.

Mike Swartz: Hey, good morning, guys. And maybe, John, just to follow up on an answer that you had to a prior question, maybe just a strategic level, in terms of your new product portfolio, I guess, how do you think about the balance between motorized versus towable? I know this is a business that has gone and leaned more heavily into towable over the past decade certainly. But just given some of the challenges in motorized, it seemed maybe a little more structural near term in terms of cost inflation, affordability, residual values. How do you think about the right way to kind of balance towable, motorized stocking going forward?

John North: Well, I think it depends. It’s a pretty nuanced question. So I mean, I can try to unpack it a couple of ways. I think if you take a dealership like our store in Tampa, that’s been known for literally decades as one of the places, the premier places to buy motorized units. I think something like 30% of what Tampa sells is to out-of-state customers, and people will travel and destination shop for this product and come a long way. And so, I think in a store like that, having a 25% or 30% motorized mix is totally fine. I think conversely, if you take our store in Tulsa, Oklahoma, I’m not sure that stocking a lot of motorized units there makes as much sense, as really leaning into the towables and travel trailers and fifth wheels.

So, I think it depends a little bit on where we are in the country, the brands that we represent and what the store has been known for. So that’s how I think about it in our kind of business. But as it pertains to like the more industry-wide conversation, what I would say is there are still some pockets of motorized that are really, really important. For example, if you look at like Class C stuff, which is like a larger unit than a B van, which is kind of unusual to me, not being super familiar with the industry, but the C stuff has been really profitable for us a whole time. I would say we’ve seen A, the big diesel pushers, in particular, have been really, really slow this year. Those are really typically very expensive units. And I think we’re being very careful there.

And then the B vans were historically incredibly profitable, and there were a couple of OEMs that were early to come out with the Sprinter van that they converted into a unit you could camp in. But I would say over the last 24 months, that’s become very saturated and everybody has B van product. And so, I think you’ve got to be very careful in that segment, too. But in short, I mean, we’re pretty committed to motorized. I think what we’re seeing right now is that a lot of people who’ve been in the lifestyle are locked out, because they have negative equity. And so, you’re seeing a shift to the low-end stuff because it’s first-time buyers that can just come in and they want a camp for $5 a day or whatever the advertisement is. And that’s why they’ve been taking share.

But I don’t think that’s a structural change in the market. I think motorized will always be there. I just think we have to be really thoughtful in terms of how we pursue it. And we’ll see how the market develops. But I don’t think you’re going to see us move away from it. I think we just are being careful because there’s definitely slowdown in some of those segments in terms of demand right now. But that’s not any different than high-end fifth wheels or really expensive travel trailers, too. I mean that stuff also you need to be careful on.

Mike Swartz: Okay. Thank you. And just maybe to parse some of the commentary, I think, you made another question previously on the retail environment as we’ve gone into April, May, I think it sounds like nothing has really changed maybe. But is there a way to think about — the comparable new unit volume was down 11% in the first quarter. Is there any way to think about how that looks thus far in the second quarter relative to that first quarter number?

John North: I think it’s too soon to tell. And to be frank with you, it’s not something that I monitor on a daily basis in terms of that percentage change. So, I’m not sure I can even commit it to memory. What I would say is that we’re seeing definitely some improved traffic as we move into the summer. And seasonally, as you get into the spring and May, in particular, you do see a pickup. And I would say just anecdotally, I would say, relative to April, May feels like it’s a little stronger in terms of demand. But I don’t know if that’s because there are fewer deals out there for other dealers that we didn’t see or if the market is getting better. I mean we’re just one data point here in a pretty rich tapestry. So, I don’t know that I want to call a trend.

We’d obviously like to see more demand. And I think from what I read at least from the OEM side, it seems like they’re all 325 to 350 in terms of retail sales and those numbers seem to tick down every time they talk about it. They’ve got a better perspective than we do because they see the whole country. But we remain optimistic that we’ll continue to see the strength that we’ve seen so far in May. And we’re obviously pushing and pivoting and trying new strategies with marketing and other things that could hopefully differentiate our results relative to the competition as well. So, we’re going to keep grinding on it. I think there’s an opportunity for us to continue to see the momentum improve. That’s what we’re focused on.

Mike Swartz: Thank you.

John North: Sure.

Operator: Thank you. Next question is coming from Brandon Rolle from D.A. Davidson. Your line is now live.

Brandon Rolle: Good morning. Thank you for taking my questions.

John North: Sure.

Brandon Rolle: First, just on the restocking in this environment, could you talk about your rationale for kind of leaning in to taking on more new and used inventory ahead of the model year ’25 rollout? I know on the used side, it seems like one of your larger competitors has actually been pulling back on used procurement throughout the first part of the year. But on the new side, it seemed like you guys were — I think you had talked about helping the OEMs continue to run their factories. Could you just talk about rationale there on both sides? Thank you.

John North: Sure. I would say we’re being pretty careful on the new side. I mean we’re at 3,600 units on the ground today, new. And compared to November of last year, we were at 4,700. So that’s a pretty significant change. If you don’t have it, you can’t sell it. And so, you got to be thoughtful about that. And a lot of our partnerships with our OEMs at this point stretch decades back. And they’re doing their best to try to be thoughtful and cut production where they can and give us incentives, and we try to be thoughtful and where we can commit to take certain models that we think we can turn and keep that spirit of partnership alive. But I would say, in general, we’re really careful. Our inventory is really healthy, and we’ve been thinking a lot about making sure that when ’25s do hit, we’ve got the capacity to take those on.

On the used side, I’m not sure I understand behind the curtain at our competitors, and that’s always a dangerous thing to speculate about. What I can tell you we’ve experienced is the 6 times lead volume on used units that are on our website versus new and customers that are looking for affordable options as long as you can buy things correctly. And so, I think we’re being really targeted around the used inventory we are purchasing. I would say, in general, you’re not seeing us buy a lot of really late model used stuff. We’re tending to avoid that. It has a little bit of a maybe overhang on it in the consumers’ mind in terms of quality, it was built during the pandemic. But the stuff that’s earlier than that is, like I said earlier, I think I used the expression, liquid gold.

I mean that stuff goes quick. So that’s, I would say, a little more nuanced. It’s not just buy used or don’t buy used, and we don’t make crazy whipsaw adjustments here. I mean this is targeted. And I mean literally, Amber approves almost every used unit we buy, especially when you get into the higher-end stuff, it’s certainly going to her. So I mean, this is like a tactical thing that’s executed literally piece by piece in our inventory. That’s how much of the laser-focus we have on it.

Brandon Rolle: Okay. Great. And just on the model year ’25 rollout, I know the model your ’25 bidding process is going on right now or closing relatively shortly. What’s your best guess on where pricing is going for the new model year based on what you’ve heard from your OEM partners and given the current retail environment, obviously, a very price-conscious consumer?

John North: Yeah. I think on the towable side, we expect maybe a couple of percent increase, at least from what we’ve heard early on from some of our partners. So, not a significant increase, but definitely — excuse me, a little higher. And then, on the motorized side — hold on, excuse me, on the motorized side, it will be higher than that just because of the chassis prices. The chassis manufacturers, I think, are still trying to build to their capacity, and they haven’t yet restocked their channel. And so, those prices haven’t come down, and that’s the majority of the cost in that motorized unit. So, I would expect that’s going to be higher. And so that’s why you’re seeing some new models come out. And that’s why we’re really focused on used in the towable side.

Brandon Rolle: Okay. Great. And just finally, you have exposure to Grand Design. Obviously, there’s been more publicity about the flex frame issues and kind of just people seeing their chassis crack or the welding in the frames. Could you comment on your experience with the flex frame issues? And any, I guess, service or, I guess, maintenance concerns from it?

John North: No. I don’t know if you saw this, but Grand Design just came out with a five-year warranty retroactive for all their customers. And I tip my hat to Don and the whole team there. I mean they really stepped up and handled things exactly the way that they should have. And I think to whatever extent an issue, and I’m not sitting in the service department to see it every day, but I think they took a lot of the concerns off the table because they stood behind their product. And that’s why they’re such an important partner to us. And we have a lot of important partners, but Grand Design is near or at the top of the list for us. And it’s because they do things like that and they stand behind their product, and they make good stuff. And so, we remain supportive of vans of Grand Design.

Brandon Rolle: Great. Thank you.

Operator: Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over for any further or closing comments.

John North: Thanks for tuning in. We’ll talk to you guys soon.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.