Mike Swartz: Hey guys, good morning. Maybe to start. Just on the — I think, Jason you called out the $370 million cost reduction program that was put in place in 2022, maybe give us a feel for how much of that was actually realized in 2022 and how much, I guess, the remainder we’ll see in 2023?
Brian Hall: Yes, I mean, I’ll jump in there, Mike. I’d say we realized most of it. We’ve had to make as you’ve watched the RV industry production rates decline really ever since the first quarter of 2022, we’ve been taken cost out of the business ever since that point, whether it’s labor or adjusting our fixed cost structure to the best of our abilities. So, I would say that’s what’s been realized at this point. We probably have a little bit more to go, but probably not meaningful enough until we really see what sales levels are going to be I think here in the short term. Like I mentioned earlier, we’ve taken some additional cost out in January based on changing forecast, but we’re really looking forward to the second and third, fourth quarter as to what levels, the cost structure we need to target.
Jason Lippert: Yes, I think just to add to that, it’s — when you get into cost-cutting mode, you just keep going. So, there’s things that we’re looking at every single day, we’re on cost cutting mode right now all over the business. And we’re just trying to make sure that we’re not cutting too deep, because we do feel that we’re going to be to a 400,000 unit-ish run-rate towards the middle of the year. That’s what we feel we’re going to get back to. So, we don’t want to cut so deep that we can’t sustain higher levels of production once we see it. And then — that’s what I’d add there.
Mike Swartz: Okay. That’s very helpful. And then just on the Marine business, I think you made some comments that you think will be flattish in 2023. Is that including market share gains, or is that what you see just from industry production?
Brian Hall: Yes. I think that starting now early in the year, at least what visibility we have from the manufacturers is that run rates aren’t changing a great deal, some up, some down, so overall for us we’re expecting pretty flat through the first quarter and into the second quarter. I think it’s yet to be determined as to how much that varies throughout the year. Certainly, there is going to be some pricing adjustments that will see some declines there as aluminum costs have come down, et cetera, et cetera. But I think from — our organic growth should help to mitigate some of those declines on the pricing side of things, but it’s yet to be determined, I would say, on what the volumes will be on — for the manufacturers as you get further into the year.
Jason Lippert: It feels steady right now. They’ve been running at a good click for a while. And we anticipate at some point in time, it will cool off, but we’re not seeing at this point in time.
Mike Swartz: Okay, great. Thank you.
Operator: Our next question is from Bret Jordan from Jefferies. Bret, your line is now open. Please go ahead.
Bret Jordan: Hey, good morning, guys.
Jason Lippert: Good morning.
Bret Jordan: Quick question on — you maybe you said this, but did you talk about your expectation on ’23 retail and RV just sort of — so we can line up what shipments might be versus clearing inventor?
Brian Hall: Yes. We said on retail 370,000 to 390,000 is our expectation. Wholesale 325,000 to 350,000.
Bret Jordan: And then, on Marine, the same question, I guess. Are you seeing that retail demand is clearing the inventory or is inventory building on the Marine side? Obviously, there is a backlog there because of supply problems, but is retail still as strong as it had been?
Brian Hall: Yes, I think they have been building some inventory and retail has fallen off just a little bit. But again, like I just mentioned a minute ago, we’re not seeing the production rates change much on the OEM side. We anticipate that that’ll happen at some point in time this year. But with the introduction of electric Biminis, lot of seating content, we got plenty of new business there to override any way the business might soften or the market might soften.
Bret Jordan: Okay. And then a really big picture question. I guess you commented in the beginning about the RVIA forecast of 63 million RV trips this year and I think you talked about peer-to-peer RVshare, because I’m just trying to do the math. If there’s 11 million RVs in the population, we’re going to have 63 million people using them, is this peer-to-peer sharing to get this utilization? And I guess at some point is peer-to-peer a risk to the industry and that one RV can service 10 people as opposed to 10 people buying an RV, does it impact demand at some level?
Brian Hall: Yes. It’s certainly both. When you look at the 3 million rental nights that RVshare and Outdoorsy have both have gone public with over the last — talking about over the last few years, I mean that’s a significant amount of rentals compared to what we would see in years pass before the marketplace existed. So, yes, but I don’t — I really feel that — in talking to a lot of consumers and we talk to a ton of consumers, I feel that there — they use rentals as a way to gauge whether or not they want to buy an RV. Certainly you’ll have families that want to rent anytime they use it, but you’re going to have families that jump into the lifestyle and want to have their own and not use somebody else’s every time they take a trip, especially if you’re going to use it often.
So that’s kind of the some of the feedback we hear from consumers — from our customer experience team. I think it’s really healthy for the industry. And then the rental individuals, the individuals that are running these RVs to the consumers, I mean some of these guys and gals are buying five, 10, 50 units and having a fleet and running them out and servicing them that way.
Bret Jordan: Right, okay. And then, one last question, I guess, on the cadence of pricing. Obviously, I think you talked about how we are going to be giving some of the price back that had been 30%-plus. Is it — is most of the price decline already been seen or does it sort of staggered out through Q1 and Q2 on the RV OE price side?
Jason Lippert: It really depends on what commodities end up doing over the next couple of quarters, but we feel like most of it is there. We actually — I was going to mention this on a comment a minute ago, but there is actually some price increases going on too. So, other areas where we didn’t have indexes, we’re holding price as long as we can. So, I mean we’re going to manage margin the very best we can to hit the target numbers we talked about a little bit ago, which we feel for a really down year are pretty solid.
