Brian Hall: Yes, Brad, I would add, on the contractual one, July one, as we discussed previously, it was a very meaningful decrease for our customers. January one is another one. October was actually a slight increase, very nominal. But it’s — so given the volatility in that — in this space, we’ve seen it move up and down, but some of the more meaningful decreases on a contractual basis have already been given at this point.
Bret Jordan: Okay, great. Thank you.
Operator: Our next question is from Daniel Moore from CJS Securities. Daniel, please go ahead. Your line is now open.
Daniel Moore: Thank you. Thank you for all the color. Greatly appreciate it. Just maybe to crystallize for aftermarket, what are you thinking about for growth for the full year? You gave a lot of color and commentary about some of the buying patterns for January. But what are your expectations for growth? And second, in addition to the CapEx, just talk about how much working capital do you think you can take out this year? And what a free cash flow number might look like for ’23? Thanks.
Brian Hall: Yes, I mean from a full year aftermarket perspective, Dan, I would say after we work through these first — the first quarter, we would — like I mentioned, towards the back half of the year, we’d get into the double-digit percentage growth rates. I think overall, it probably averages out to high single digit type growth for full year. So, a little under what we’ve seen historically. But certainly, given the current headwinds we’ve been seeing, that we should see a lot of improvement there. From a cash perspective, I think that we’ll have a better operating cash flow year in 2023 than we had in 2022 assuming we continue to bring inventories down. So, based on the guidance that were given on the overall expectations for the business, plus an additional $300-plus million type reduction in inventories for the year, you should be in excess of $700 million of operating cash flow, so — which is actually slightly north of what we experienced in 2022.
So, from a cash perspective, we’re expecting really, really strong 2023.
Daniel Moore: Appreciate the color, again. Thank you.
Brian Hall: Thanks, Dan.
Jason Lippert: Thanks.
Operator: Our next question is from Brandon Rolle from D.A. Davidson. Brandon, your line is now open. Please go ahead.
Brandon Rolle: Thank you. I just had a quick question on your shipment outlook. Did that change at all since your pre-announcement a couple of weeks ago?
Brian Hall: No, I don’t think so.
Brandon Rolle: Okay. And then on just the content per unit and de-contenting, given pricing seems to be the biggest impediment to retail right now, how much de-contenting are you expecting in this upcoming model year 2024? I think, a lot of people are expecting ’24 to be cheaper than ’23 and ’22. I don’t know if you’re able to gauge that or if it’s on a brand-by-brand basis, but on average I guess how much de-contenting do you expect to take place in this upcoming model year?
Jason Lippert: I mean, not a ton honestly. I mean, we expect some de-contenting to happen, but now it’s time to show the value you got in your units. And I mean, we’ve got — I mean, I’ll just give you an example. ABS brakes, we launched this year. We’ve got a ton of interest in that. And that’s actually doubling the cost of axle products in the units. So, as I’ve said on a lot of our prior calls, the innovative products that we supply to the industry due to the fact that they not really commoditized, they’re really special. We tend to have more of these types of options and sell the stuff into the units, whether the industry is good or bad, they tend to take out the commoditized type products. The commodities of the units and replace them with better features and values and take cost out that way and we just don’t supply a lot of commodity type products to the industry.
So, while they may do that, it tends not to affect us much, because if you need an axillary slide out on the unit, you’re going to use an axillary slide or leveling systems and things like that. You’re not going to take that stuff that the consumer needs off the unit. So, that’s a short answer.
Brandon Rolle: Okay. All right, thank you.
Operator: Our next question is from Tristan Thomas-Martin from BMO Capital Markets, Tristan, your line is now open. Please go ahead.
Tristan Thomas-Martin: Good morning. I just had a question on your industry production outlook for the first quarter, I believe is at 45,000 to 50,000 units. If in — January was at 14,000 and it seems like production started to come back in February, it’s probably going to ramp up little more in March, what are the odds the industry ends up coming in ahead of your expectation?
Brian Hall: Well, there is always a chance. So, as we’ve said before, we usually don’t have great visibility out beyond three, four weeks from an order perspective. So, it’s a hard question to answer, but it’s all going to depend. And at this point where we’re at on February 14, dealers that have to be putting through a lot of orders, and that’s going to take time for them to produce, that hasn’t really been happening yet. So, I wouldn’t expect it to vary greatly. But there’s always a chance to…
Jason Lippert: Better — our 325,000 to 350,000, we bet on. We feel that’s what a good number is. But at the end of the day, there’s a lot of positives out there. I mean, unlike ’08, you go back to the last big dip we’ve had in production, we — the economy was really unhealthy. I mean, this time around the economy is pretty healthy. The retail consumer is pretty healthy. The OEMs are consolidated and pretty healthy. The dealers are much more consolidated and pretty healthy. Unemployment is low. There’s just a lot of good things. There might be some pieces of the economy that get hit over the next six to 12 months. But the fact that it’s not getting hit all at once, I think is a good sign. And the fact that retail staying relatively healthy right now, consumers healthy, it’s — I think we’re in a good spot. We’re in a good spot to get at or above what we’re talking. I don’t — I wouldn’t bet on below.
Tristan Thomas-Martin: Awesome. That all makes sense. Thank you.
