Jason Lippert: Yes. I think they’ve realized when you look at some of the other public company releases, I think that they realize that they need to really slow production, and they’ve done that, started really tailing of last — or early part of last half of last year. So, we’ll see how quickly the dealers can get through product, but the products have never looked better, and I think that’s what helps sell both. Certainly, there’s product moving out there. It hasn’t completely stopped on the retail side, but we’re kind of playing that same game at the RV OEMs and dealers played last year is like just wait for inventories to catch up and get to a reasonable level, and we’ll get back to business. But it doesn’t feel like it’s going to be as extensive or as long as what we saw on the RV side. So, we’re hopeful that they can get that fixed this year.
Patrick Buckley: Got it. Very helpful. Thanks, guys.
Jason Lippert: Thanks, Patrick.
Operator: The next question comes from Brandon Rolle with D.A. Davidson. Please go ahead.
Brandon Rolle: Good morning. Thank you for taking my questions. First, just on the competitive lands, you had talked about organic market share gains, keeping your market share. With increased competition, are those market share wins or your ability to protect the market share you have coming out of lower margin maybe from people, more people bidding on products or just an overall push in the market to get pricing lower to the consumer?
Jason Lippert: Yes, I think in some cases, yes. In some cases, no, but I think that’s always the case, Brandon. I think that you can always make the argument that if there’s a lot of competition, a lot of pressure that, that definitely forces margins down in some cases. But I’d also say, look, a lot of the stuff we’re doing we take our air conditioner we mentioned, for example, there’s not another product out there like it. So, while we’re competing in the air conditioning space, we’ve got a product that nobody else has. It’s higher capacity. It’s quieter, and we can retain margins on anything that’s got IP or unique properties or unique features and benefits. So, our ABS, certainly, there’s just nothing else out there really that is giving a competition so we can hold margins and things like that, new suspension systems.
But on some commoditized products, for sure, you’re going to experience margin pressure and things like that. But I don’t think it’s really any more than what we’re typically used to, and that’s probably the main stories. We’re competing always and have for the last 30 years, it’s just a matter of — it just seems to be more on everybody’s radar now.
Brandon Rolle: Okay. And then, just lastly, just going back to the fourth quarter, wholesale production was much stronger than I think you guys had forecasted for the quarter, earnings came in a little lighter than expected. What kind of gives you confidence in your ability to forecast margins moving forward, given it seems like throughout the second-half of the year, maybe around the new model year, things got a little squirrely in terms of just accuracy with the forecast. Thank you.
Lillian Etzkorn: Yes. So, to that, I mean, a couple of things to point out with the fourth quarter. So, we were within that range. However, I’d say at the very low end on the RV side. Brandon, the biggest driver there was the marine drop off. I don’t think that was anticipated or expected for the industry itself to drop off so dramatically. And look, when we’re in a time of dramatic volatility in terms of industry expectations, production levels, frankly, it’s difficult to plan and it’s difficult to forecast in that manner. As we’re looking forward to 2024, when I think of the various markets that we’re in, I think we’re anticipating a little bit more stability from the RV side of the business, which is obviously a significant part of the business.
Marine is going to be a challenge. We’re expecting that to be down this year. Again, it’s going to be driven by the industry. It’s not us driving it. We’ll need to flex and respond appropriately. So, taking into account the macros and what we’re hearing from our customers and the dealers, we’re confident in what we’re putting forward. Again, the industry is always going to be a little bit of your wildcard in terms of what actually pulls through for production.
Jason Lippert: And just to add to that, Brandon, I’d just say — the puts were — there was a little bit more warranty than normal, like I mentioned a little bit ago. That will normalize here when we get some volume. Marine was the other big one that Lillian mentioned, but that’s less than — a little less than 10% of our total business. So, that being off doesn’t impact us as much as you might think. And then, RV, like she said, we’ll — we expect to continue to normalize, and aftermarket has been very steady. And as we keep talking, we expect the service and repair part of our business to continue to grow double digits. It’s — we’re just doing more and more repair and service because we’ve got more and more OEM parts in the field as we’ve penetrated market share and OEM content over the last decade.
Those units are all starting to come back and need repair on parts like innings and axles and slide-outs and leveling systems and all the different things that we build. So, hopefully, that’s helpful.
Brandon Rolle: It was. Thank you.
Jason Lippert: Yes, thanks.
Lillian Etzkorn: Yes.
Operator: Our final question comes from Tristan Thomas-Martin with BMO. Please go ahead.
Tristan Thomas-Martin: Hi, good morning.
Jason Lippert: Hi, how are you doing?
Lillian Etzkorn: Good morning.
Tristan Thomas-Martin: Jason, was there — I’m good. How are you? Was there a significant delta between wholesale shipments and wholesale production in fourth quarter?
Jason Lippert: I know for the year, there was. I don’t think — I’m not going to sit here and tell you what the number is because I don’t know, but it doesn’t feel like there was — it might have been a little more a little less, but I don’t know. For the year, we said like you can count on 35,000 to 45,000 units probably if you’re expecting a difference this year to next — last year to this year on a wholesale number of $325-ish.
Tristan Thomas-Martin: Got it. And then, trying to kind of square your — the RV kind of the industry production in January relative to your sales guidance. I’m kind of getting content on the RV side is similar to what it was in 4Q? Is that the right base to kind of use moving forward?
Lillian Etzkorn: Yes, that should be pretty consistent. I’m just trying to think some — thinking of it in a trailing 12-month manner. That should be — overall, it’s pretty consistent.
Jason Lippert: The only difference we noticed was a little bit of a mix shift in single axle trailers versus what’s historical. And of course, you’re out of the shows you feel this — all the entry-level step Bob Martin was on a podcast the other day and said something in fact that he noticed that it shows a lot of the entry-level steps moving. So, we’re seeing a little bit of that trend and — but I think it’s important to note the difference between mix shift and de-contenting while on a mix shift to lower units, we’re going to have a little bit less content there, but we don’t see the de-contenting of our products on units that would make any impact on our content number.
Tristan Thomas-Martin: Okay, got it. And then, just to squeeze in one more. I think you got market share content gains of 8.5%. How is that kind of calculated — what’s behind that?
Jason Lippert: Can you say it again Tristan?
Tristan Thomas-Martin: Did you call out market share content gains of 8.5%? I mean just curious kind of how you calculated that number.
Lillian Etzkorn: Yes. So, what that was, the $8.5 million that Jason quoted it was the organic growth in our product on a trailing 12-month basis, plus the addition of acquisition content.
Jason Lippert: So, the index pricing puts out of there.
Tristan Thomas-Martin: Okay, okay, got it. Thank you.
Operator: We have no further questions. So, I’ll turn the call back over to Jason. Thank you.
Jason Lippert: Thanks, everybody, for joining. We’re really looking forward to next quarter. We’ll see you all then. Thanks. Bye-bye.
Operator: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.
