So we’re talking to our OEM partners today about production and where their expectations are to make sure that we’re positioned to be able to flex up if we need to add some working capital. So again, I think across the platform, our team has done a fabulous job of managing working capital
Operator: Thank you. Our next question is from the line of Mike Swartz with Truist Securities. Please proceed with your questions.
Michael Swartz: Hey, good morning, guys. Maybe just to start on the commentary around your outlook for the marine market for 2024. I think if I heard you right, you said you expect retail to be down 15%. I think that’s one of the more bearish views I’ve heard, and I think that would put us right on the cusp of kind of the depth of great recession demand levels. So maybe just a little color on maybe how you’re thinking about the year in Marine and maybe how you got to that number?
Andy Nemeth: Sure, Mike. This is Andy. I think as we look out, right now, we feel, again, that production and retail are very well aligned to kind of one for one. And we’re being cautious. As we noted, marine retail has been stronger than we expected. So I would tell you that we’re being cautious in modeling our business around that number. And we certainly think that there’s some upside potential as you look at the numbers that are there, but we want to make sure that we’re thoughtful, as I talked, our business is balanced as it relates to the revenue stream matched against our cost structure. And so as we look at Marine right now, production levels that we’re seeing, tremendous discipline is what I would say in the space. So we’re not concerned about over inventory or the ability to produce.
We’re just staying cautious as it relates to what it could look like in this environment and that’s how we are building our model with upside potential to flex very easily in the event that shipments are better than that. So we’ve got a cautious outlook, but the caution is just simply around where we’re centered today and the ability to flex up very quickly if we need to.
Michael Swartz: Okay. That’s perfect. And then just on — with — we’ve all heard the stories of where model year ’24 pricing has gone in RV in some instances, down double digits in towables, there’s a lot of talk about de-contenting to hit some of those price points. Maybe give us just a back drop of what you’re seeing? And I guess, how much risk do you think the de-contenting dynamic presents to Patrick in terms of your content loads going forward?
Jeffrey Rodino: Yeah, Mike, this is Jeff. I think what we’ve really seen after the model change was not necessarily a lot of de-contenting, but the offering or bringing in smaller floor plans — introductory floor plans and trying to hit that lower end of the market. We’ve seen a little bit more of that in the production levels over the last couple of months, really kind of the end of the third quarter and into the fourth quarter. So to that sense, it’s not necessarily de-contenting as much as not as much content in some of the units that are being built on the smaller range. From a Patrick perspective, I believe, we’re in pretty good shape with our content per unit, primarily because of the business we picked up and the market share we’ve been able to gain over the last 12 months.
It’s been pretty incredible what our team has done. They’ve gone out. Really pushed hard in that area and we’ve seen significant growth in the range of about $150 million over the last 12 months. So I think that’s going to really offset anything that is in the lower end units, but we — in our normal standard units, we haven’t seen a ton of de-contenting. So we feel pretty good about where we stand today.
Michael Swartz: And clarification, that $150 million is something that you anticipate going forward? Or is that something that’s already been realized?
Jeffrey Rodino: Annualized.
Michael Swartz: Okay. Perfect. And then just one more for me, if you will, just the typical breakout between M&A, share, price, and I think you said industry volume was off 22%. So that’s easy.
