Good morning, welcome to Camping World Holdings conference call to discuss financial results for the fourth quarter and year ended December 2022. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at the time. Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the company. Participating in the call today are Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Karin Bell, Chief Financial Officer; Matthew Wagner, Chief Operating Officer; Lindsey Christen, Executive Vice President and General Counsel; Tom Curran, Chief Accounting Officer; and Brett Andress, Senior Vice President, Investor Relations. I will turn the call over to Ms. Christen to get us started. Please go ahead. Thank you. Good morning, everyone. A press release covering the company's fourth quarter and year-ended December 31, 2022 financial results was issued yesterday afternoon, and a copy of that press release can be found in the Investor Relations section on the company's website. Management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks may include statements regarding our business goals, plans, abilities and opportunities, our strategic initiatives, acquisitions and planned capital expenditures, anticipated uses of capital, anticipated cost reduction initiatives and related cost savings, industry and customer trends, the expected impact of inflation, interest rates and market conditions, the expected impact of the subsidiary LLC conversions on our ongoing income tax expense and tax distribution requirements, future dividend payments, and anticipated financial performance. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in our Form 10-K, our Forms 10-Q, and other reports on file with the SEC. Any forward-looking statements represent our views only as of today, and we undertake no obligation to update them. Please also note that we will be referring to certain Non-GAAP financial measures on today's call, such as EBITDA, Adjusted EBITDA, and adjusted earnings per share diluted, which we believe may be important to investors to assess our operating performance. Reconciliations of these Non-GAAP financial measures to the most directly comparable GAAP financial statements are included in our earnings release and on our website. All comparisons of our 2022 fourth quarter and fiscal year results are made against the 2021 fourth quarter and fiscal year results, respectively, unless otherwise noted. I'll now turn the call over to Marcus. Thanks, Lindsey. Good morning, and thanks for joining us for Camping World's 2022 fourth quarter and full year earnings call. On today's call, I'm gonna lay out our financial results for both the year and the quarter, discuss our action plan for the current economic environment, and provide some early insights into 2023. Once that's done, I'll turn the call back over to the operator for questions. As many of you are aware, the last several years have been great. While the industry reached new heights, the number of households with RVs grew at a historical level, and this hobby has turned into a modern-day lifestyle. This lifestyle and industry have changed dramatically since I became a part of it over 22 years ago. Through those years, I've seen and experienced it all, from 9/11 to the 2008, 2009 financial crisis, record high gas prices to rocket-like inflation. Lastly, the pandemic. I point that out because through all those times and things, in between, this industry has exploded. In my opinion, while there has been and will be always a temporary speed bump along the way, both the industry and the RVer are not only here to stay, but grow. We're all dedicated to the lifestyle. From our perspective, it's the most affordable vacation in America. The mandate for affordability is here to stay. This historically cottage industry with a rural birthplace is now fashionable for all ages, all cultures, and all interests. No one could have predicted that a worldwide pandemic would bring this lifestyle front and center. During those 22 years, I've fielded all sorts of questions. There are two questions that have survived time. First, do Americans love RVing? Second, can this cyclical industry continue to grow each decade? In my opinion, the answer is an emphatic yes. There are decades of data to substantiate it. 2022 was a solid year for our company, actually the second-best year in our history, with Adjusted EBITDA of $653 million on record sales of almost $7 billion. Those results, after making acquisitions, dividends, tax distributions, interest payments, et cetera, yielded year-end working capital levels that we're very pleased with. We ended the year with roughly $348 million of cash, broken up by $218 million of cash in the floor plan offset account and additionally $130 million of cash on the balance sheet. We also have about $264 million of used inventory net of flooring and $247 million of parts inventory. We also have $129 million of real estate without an associated mortgage. As our management team and board think specifically about 2023 capital deployment goals, we plan to be more constrictive around SG&A, capital expenditures and initiatives, as well as less tolerant around underperforming assets, so that we may remain aggressive in accretive RV acquisitions, prudent about reducing debt, being opportunistic about stock repurchase, and maintaining the dividend. It's no secret that recently the sale of new RVs and its corresponding margins have its temporary challenges. The key to keep at the top of that list is new inventory management. While we have significantly fewer new units on the ground per location compared to any time between 2016 and 2019, we believe that both logistics, supply chain improvements, and tighter planning and forecasting with manufacturers will improve this going forward. We hope to improve turns and levels over the next six months through a combination of the spring and summer selling season, along with a disciplined and opportunistic approach to restocking. Look, historically, our inventory balances go up from year-end to the end of the first quarter. Our plan is to have that new inventory down no less than $140 million by the end of the first quarter. Over the years, I've learned that the new RV sales were less predictable with a wider range of outcomes. That was always a puzzle that we wanted and we're committed to solving. I felt like the key contributor to solving that puzzle was to create a more predictable business model. One that was hyper-focused on the following ideas. The used market, which is more than double the size in terms of transactions compared to the new. A robust fixed operations business, which is essentially service, collision, parts, and accessories. This piece would focus largely on the ever-growing and steady installed base. Lastly, to operate a high-margin recurring annuity business, one that would capture revenue opportunities at multiple points in our business, including our retail centers, our dealership finance and insurance offices, our service counters, our various web and online businesses, our campground network, and our national call center. That's our Good Sam business. In breaking down these three, you will see that they continue to provide a strong opportunity for revenue growth, expanding margin, stability, and most importantly, predictability. In 2022, our used sales approached $1.9 billion, an annual all-time high. We sold over 51,000 units, all while used margins remain within the historical range. While we're happy with the growth in the last three years, we see this white space opportunity for our company as a primary growth agent, both in the dealerships we acquire and the new web platforms that are launched, including RVs.com. The fixed operations business, known as our product, services, and other, generated almost $1 billion in revenue. I want you to take note that when you look at the annual and quarterly results of this segment, please keep in mind that we exited significant categories at the end of 2021, like fishing, hunting, apparel, and footwear. When you exclude that revenue in comparing year-over-year results, service and parts revenue had growth in 2022. We see continued strength and stability through all cycles. Good Sam, with its high margin recurring revenue sources such as roadside assistance, extended service plans, insurance, campground programs, and various other memberships and publications, had a record year, growing its sales by 6% and increasing its gross profit by over 11%. We are very excited about the prospects for 2023. I wanted to emphasize those finer points of the above categories to demonstrate that we understand the pieces of this puzzle and their contributions. Moving to a summary of our fourth quarter results. We recorded revenue of $1.28 billion, down 7% from last year. That was driven primarily by softening in new RV unit sales and margins in late November and December. We sold 10,334 used units in the quarter, compared to 10,669 units last year, down slightly, relatively in line with our expectations. It materially outperformed the broader market, according to stat surveys. Good Sam, our most valuable and predictable business asset, had $47.6 million of revenue for the quarter and $30.2 million of gross profit. Our Adjusted EBITDA for the fourth quarter was $20 million. There were a few items that impacted the profitability for the quarter. We elected as a management team to reduce underperforming retail inventory by $46 million, resulting in compressed margins from heavy discounting while generating cash. We did and continue to aggressively sell through new inventory to avoid inventory aging, resulting in short-term margin compression. Due to higher interest rate environment, we experienced materially higher floor plan expense. As we plan for the remainder of 2023, we believe new RV demand and new RV margins will continue to put short-term pressure on the industry. The start of this year has seen a high level of inquiry from consumers through the web, in stores, and that shows. Conversion to sale on new units has been moderately tougher than last year, with tighter margins. With the temporary softness in new RVs, we continue to remain committed to our legacy game plan of growth. We will do what we can to continue to eliminate waste, convert slow-performing assets, and eliminate non-core, non-income generating businesses to allow for continued scale through acquisitions and new store openings. Currently, we have four locations under a letter of intent or definitive purchase agreements. Those acquisitions are anticipated to close in the second quarter of 2023. It is our goal to continue to look for transactions that add overall value to this company, and it is our belief that those opportunities will be more robust in the coming months, and we also anticipate more favorable pricing as well. Additionally, the company currently has nine locations, either built or soon to be finished. Unlike our historical process, we are waiting on opening those locations until we have more visibility on the trend lines and the current state, so as not to deploy capital or take on any new store opening expenses at this time. We believe in the strength of our business and understand that the temporary softening of both new RV sales and margins demanded action. Last fall, we started the process to reduce headcount, eliminate or reduce underperforming or excess inventory, locations, and business lines. In closing, we remain focused on where our business is going, and we're going to continue to take decisive action on our cost structure while making the necessary investments to intelligently and profitably continue to outperform the market. I'll now turn the call back over to the operator for questions. Ladies and gentlemen, we will now begin the questioning effort session. If you have a question, please press star one. Our first question comes from Joe Altobello with Raymond James. Thanks. Hey, guys. Good morning. I guess first question for Marcus, you've been very clear, both on this call and previously, that margins on new RVs will continue to come under pressure, at least in the near term. If we look historically at your GPUs on new, it's been around $5,000 per unit, give or take a few hundred. I think it peaked over $13,000 a couple of years ago, and last quarter was about $7,400. Where do you think we end up on that spectrum? Do we eventually get back to that $5,000 GPU level on new? Look, it's our opinion when we look at the margin profile of new, while we expect it to be down from 2021, we expect it to be above the 2019 level. Whether that's in the middle of that or somewhere toggling around the middle, we feel pretty confident. I think when we look at the overall year, we see better margin improvement in the back half of the year as we just forecast things. We do anticipate that we as a company will continue to be aggressive in moving through the flywheel new RV inventory. While we don't necessarily have a lot of trepidation about where our new inventory sits today, it's a little higher than we'd like it to be. The good news is we're going into the spring and summer selling season. We've been far more disciplined than we have been in years past at working with the manufacturers on what we're gonna bring in. More importantly, of what we're going to bring in, we're being more opportunistic to ensure that we're gonna pick up some margin to help offset the elimination of some of that older inventory. Just to follow up on that point, are you starting to see OEMs rethink their pricing strategy with respect to rebates and discounting? You know, we've seen a little bit more discounting than we have in the last couple of years. That's obvious. We're very proud of how the manufacturers have wound down production in the fourth quarter and even at the beginning of this current year. As I was in Elkhart a couple of days ago, I was pleased with driving through some of those yards and not seeing thousands and thousands of units. I give the manufacturers, particularly Thor, Forest River, and Winnebago, a lot of credit for working more closely with the dealers. This is an everyday thing, and we have to stay disciplined to ensure that the orders that dealers like ourselves are placing and the units that RV manufacturers are making are closer together. I think in the short term, the manufacturers have recognized that for the next three, four, five months. They need to have RV retail registrations outpace the number of units that are being delivered. We expect that RV retail registrations should and hopefully will outpace the RV shipments for 2023, bringing those stocking levels back in line, we believe, in the next three to four months. Got it. Thank you. Our next question comes from Mike Swartz with Truist Securities. Hey, good morning, everyone. I apologize now that I missed this, but I think on the third quarter call, Marcus, you said you were anticipating, I think, a retail market of around 360,000-370,000 units for 2023. Has that changed at all since we last spoke with you? Maybe give us a sense of how the fourth quarter played out from a retail perspective and maybe how that's carried into early 2023. Yep. That number of 360,000 was our best estimate as a company of what we thought shipments would be from the manufacturers. We're hoping that the retail numbers are better than that so that we can fix the stocking levels. Our number that we predicted, quite frankly, last summer when associations and manufacturers were calling for 2,400 still remains in that 360 range. It could be up 5 or down 5. For the most part, we believe that we've seen an unbelievable amount of discipline, quite frankly, discipline that I haven't seen in my 22 years, that the manufacturers have instituted to ensure that we rightsize that. We're pretty comfortable with that original in that 360 range shipment. It relates to retail registrations, the first part of the fourth quarter was not terrible. As we got to the middle of November and Thanksgiving and December, things started to decelerate pretty quickly. We had to remind ourselves that that deceleration was nothing more than potentially a reminder of what fourth quarters were historically like in this industry. Whether it's any manufacturer, any dealer, the fourth quarter always had a pretty material drop-off. The other piece that's important to note is that that rocket ship that takes us back into selling season didn't necessarily start in January or even, quite frankly, February. We saw that maybe the last week of February and then accelerated in through March and then took off in April. In the previous two or three years, we experienced Januarys and Februaries that this industry hadn't seen, quite frankly, ever before. We believe that we've seen a return to the normal seasonality that exists. In this particular calendar year, 2023, that seasonality also came with slightly more margin compression than we had historically seen. We know that that's really a cleansing of 2022s that the industry has to go through. We think the manufacturers are being far more thoughtful about bringing 2024s in, pushing it into mid to hopefully late summer. We think those things are going to correct themselves. In summation, the fourth quarter was softer, but it accelerated at the end. The first quarter has, quite frankly, not taken off as the industry had hoped. While there seems to be a lot of demand, and I call demand, I'm excited about the industry, I'm interested in about learning at RVs, I'm going to shows, I'm sending web inquiries. Consumers are shopping more, and they're commoditizing the new RVs more, and they're expecting bigger discounts, which is what's leading to a slight drag in RV retail sales as an industry and a compression on the margin side. We hope that we're outperforming the market, but at this point, other than our fourth quarter outperformance of the market, we don't have any data to support yet that we're doing the same in the first quarter. That's helpful. Thank you, Marcus. Maybe I think you had mentioned a number of cost reduction initiatives that were undertaken later in 2022, including store closures and headcount reductions and cutting back on, I think, CapEx and advertising, things of that nature. Maybe give us a sense of, you know, of the actions you've taken today, you know, as we sit here in late February. How do we think about the annualized run rate maybe for the cost reductions that you've put through the system? I obviously wanna be careful because we don't provide guidance as a company, we don't tick and tie these sort of cost reductions in our disclosures. To give you a little bit of context, we unfortunately and sadly had to have a pretty significant reduction in headcount, almost 1,000 people. While we made acquisitions in the fourth quarter, the net-net effect of it all was pretty material in terms of size. If it netted out in somewhere in the $850 range at an average wage, it's a pretty significant number. We prefer not to quantify it just because, you know, there's obviously human capital involved in this discussion. As part of that process, though, we did redeploy some of those savings into investing into our remaining talent pool, both in attracting new talent and retaining it. We had to, quite frankly, put a lot of wage increases through our system as our employees, which happen to be consumers in the marketplace, were experiencing pretty high inflation. We raised a pretty significant amount of our base wages, particularly in the service parts and those definitive stable cash flow environments. From a other cost standpoint, we cut out about $20 million of annualized marketing. Those are things that we don't expect to recur, and those were through the elimination of long-time, in some cases, decade-long agreements with big national partners. We got out of those because we understood that in 2023 and 2024, we needed to reinvest that capital into buying stock back, retiring debt, giving our employees better wages, et cetera. In addition to that, when we think about how our capital is deployed, shutting down a big distribution center, which is material, eliminating non-performing assets, and getting rid of exploratory teams around initiatives all brought costs down. Like, if I was gonna quantify it in a rounded way, I would say that from my perspective, it's no less than $50 million on an annual basis. One of the things that we're fighting against is how that floor plan interest expense just continues to put some temporary headwind in front of us. As an example, I think just in the fourth quarter alone on a year-over-year basis, it's about $7 million because of the explosive rates. Some of that, a small amount of that is 'cause the inventory is higher. Most of that is because the rate is higher. Hopefully, in the back half of this year and in 2024, as rates come back down, those savings fall right to the bottom line. Okay, great. Thanks, Marcus. Our next question comes from Craig Kennison with Baird. Hey, good morning. Thanks for taking my question. Wanted to ask about the used market. That's a market over which you have a little more control, and obviously, you said it's a larger market. I'm curious, you know, what your outlook is for your own volume in that market. Is that a business that could grow even if new retail does not? I think the way we're thinking about it, Craig, how much can that used market outperform the new market? The reality of it is, in this kind of giant macro environment, there's going to be headwinds, and we're really working hard to have that used business maintain on a same-store basis as close to comp as possible. We think there's a little bit of headwind in that, but we think it's going to materially outperform the new. I think the special part of the used isn't just where that volume is, and we know that that white space is huge. If the used registrations in 2021 were somewhere in that 900,000 range, we think that that used number could drop somewhere in the 750 to 760 range. I could be off, but that's just a projection. There is some softening in that overall piece. We think we can hold on to something better than that. The special sauce in that business for me is the margin contribution that that asset provides to our overall business. Whether that's the front-end margin that is materially better than new and relatively sustainable on an annual basis from a historical basis, the contribution to our service parts business through reconditioning and parts and replacement things, and/or the ability to have great performance on F&I, we expect the overall GPUs of that business to be within a very tight band. While they may be a little softer, some of that softness is self-inflicted. The reason that I say that is with the launch of the RV Evaluator, we have become more aggressive with procurement. Anytime you're gonna be more aggressive, you need to have a very stringent discipline around your aging policies and be willing to acknowledge that a mistake is a mistake, and you take your losses and move on. As a company, we've always been religiously disciplined about what I call not hiding the weenie, which is allowing things to get old, which is allowing assets to depreciate without recognizing its loss. As we look towards that, we always wanna mitigate our risk by doing that. For example, in the 4th quarter, while we saw the new RV market demand dropping, we pumped the brakes a little bit on the RV Evaluator values. The reason we did that is we wanted to have a bigger windshield looking forward at what would possibly happen to those values. As we pulled back some of our acquisitions to slow down the acquisition, slow down the marketing, we wanted to see what would happen to the used values. Were we the ones that were making the market, or were we validating our thesis? In doing so, we did not see a drop in values or a drop in demand, even when we pulled back our values a little bit. That further supported our thesis. In the first 10 days of January, we reinstituted our acceleration. We think that 30-45 day slowdown in acquisition, it may have cost us 300, 400, 500 units. The knowledge that we gained from it and the risk that we believe we avoided from it will pay us much greater dividends than 300 or 400 units that may have evolved from it. That's really helpful. On the F&I side, just another category where you've been able to, you know, maximize your kind of F&I profit per unit. Is that something that we should see revert back to historical levels as well, or find its way somewhere in between where it peaked and where it was pre-pandemic? You know, I have to be honest. This is one part of our business that I don't see a lot of risk in, very similar to the Good Sam business. I think what has really driven the growth of this business is not only the process that we have in F&I, but when you're presenting products that are driven by and enforced by and administered by a brand like Good Sam, we have seen the attachment dramatically improve. Every single time we make an acquisition, and let's say we buy that acquisition at a historical 2 times, 3 times, 4 time earnings multiple, when we install our process and when we install the Good Sam products, the growth that we see in F&I is pretty dramatic. I don't see a lot of risk with this number. Even with ASPs moving around, even going up or slightly down through discounting or whatever contraction of mix may happen, I predict that this will stay within a tight band. Could there be a half a percent of flexibility inside that number in terms of like the range? Sure. We haven't experienced that, even in the back half of 2022, or even the start of 2023. Super helpful. Then just on the dividend, I think you commented on that in your prepared remarks, just what's your level of conviction behind maintaining that dividend in most foreseeable environments? The management team spends a lot of time with the board talking about capital allocation and where we think our shareholders are going to get the best return on capital. Clearly, our historical path towards acquisitions and towards reducing debt or making opportunistic stock buybacks, that's all in the equation. Returning value to our shareholders on a regular basis is also part of that equation. When long-term holders invest in our stock, they like to see a level of predictability with their returns. They understand that there are small segments of our business or segments of our business that have some volatility to that. When they look at the predictability of Good Sam and the predictability of Service and the predictability of Used, it's our expectation that they're also looking for the predictability of returns. At this moment in time, we don't see anything in front of us that would cause us to modify our strategy. It is important to note that we do have this conversation on an annual basis. Perfect. Thank you. Our next question comes from John Healy with MoffettNathanson. Hi there. Quick question for me. Just wanted to ask on the used side of things. What do you think the relationship is between discounting on the new side and when you may see risk to the values on the used side? I understand the comments that you made about the pullback early this year and how you the lessons learned, but just seems like to me that, you know, that could be an item that has some variability to it as the year plays out. Just wanna get your thoughts on, you know, what's the right spread between a new price and a used price and maybe the timing of when those, you know, separate markets may converge to each other. Morning, John. This is Matt speaking. Great question. It's a question that we have worked very diligently to ensure that we have the solutions for, given that the RV Evaluator was designed in such a way where we are predicting what the retail value will be. That is to suggest that we are anticipating the residual value of what a retail consumer would be buying that asset for. We're factoring in short-term modifications, short-term trends, as well as long-term trends to suggest that we're anticipating exactly what those results should be in these tight windows. We know that used assets are traditionally gonna sell in about 60-90 days. We know at different times, there's certain assets where, as Marcus suggested earlier in the Q&A, we could potentially make mistakes, and it could potentially take a little bit longer to sell through those assets. We are so disciplined about keeping a close eye on understanding that first loss will be our best loss when we have an opportunity to sell an asset that perhaps we are a little bit overvalued on. However, as you brought up, this spread between new and used is certainly a consideration where we are very closely monitoring what that could be in the future. These changes are far more gradual than people realize oftentimes when they look at our industry, where it's not necessarily gonna be an overnight sensation. We understand that we have to project out based upon the current trends of what could happen over the next two years. Generally speaking, it takes about two years, though, for said model years to actually start to hit circulation in the used market. We generally have a lot more time to understand what sort of information are we collecting and gathering to start to predict what those future residual value counts would be. Typically, a sweet spot between new and used at just 1 model year removed is about 15% or so, give or take 5 percentage points, depending upon the asset, depending upon the type code, model year, what have you, and general supplies, of what we like to have as a spread between new retail pricing and used retail pricing. As Marcus spoke earlier about when we were entering into Q4, we noticed some of the trends started to be a little bit shaky within the new and used market, and we wanted to be very conservative, as he suggested earlier, just to learn what the opportunity will be and to test our thesis out. Through that process, we realized that we could toggle that value, the actual value that we as a dealer are assigning to it and figure out what that spread should or shouldn't be, just to afford ourselves some flexibility heading into this year. We feel very confident with what our used inventory position is. That's where we've really changed gears here over the past month and a half. To ensure that we're starting to ramp back up these used efforts because we feel like we have a very firm grasp on what the opportunity is within the used marketplace this year. Great. No, I appreciate that. Thank you. And then just one question on the new inventory. Could you give us some perspective on what it looks like from a model year standpoint, the percentage that's 2022 versus 2023, and maybe how that compares to any given normal year? One thing that I want to mention, right, we're sitting at the end of, call it January, with about 185 new units per location. When I look back over the last five years, I can't think of ever been this low other than December of 2020 when the supply chain was just shut off. From a per store new unit standpoint, we're pleased. From a model year standpoint, we have been very confident that we'll be able to work through this. However, we have more 2022 model year units than we traditionally would have in terms of a 1 model year removed sequence. We're entering into the year. Typically, our mix would be about 20-ish percent of one model year removed. Entering into this period, we have a little bit more that we know we're going to have to work through. Luckily, the manufacturers and us have worked very closely to ensure that we are working together to sell through these aged assets, the manufacturers have had a willingness to help offset what could potentially be some margin degradation to ensure that we'll make certain that we are prepared for the introduction of 2024s. There's been some chatter amongst some industry insiders and outsiders about when is this model year change going to actually occur heading into a 2024 model year. We work closely with the manufacturers to ensure that it's going to be in the middle of the summer. I've heard some other suggestions that it could be a little earlier. That is not the case. I can assure everyone that by July, August timeframe, we'll start to see the introduction of those model year 2024s. It starts to take a little bit more time for those productions to even ramp up. It's always a gradual cycle by which those newer model years of 2024 will be introduced, which will afford us ample time in the selling season to sell through a 2022 model year. Appreciate it. Thank you, guys. Next question. Our next question comes from Bret Jordan with Jefferies. Hey, good morning, guys. Morning. On the prior topic, I guess as far as model year inventory, I guess you guys are a little bit overweight 2022 versus normal. Could you talk about how you see the broader retail market, you know, model year exposure? Do you think most of your peers are more overweight in 2022s than you are? You know, we never want to speculate, where their position is. From the research and the intel that we've done, we seem to be far outpacing everybody's ratio of 22s to 23s. We're aware that we need to be first to market in terms of exiting those 2022s, which gives us the competitive advantage once we get past that. The reason that we have been so clear about continuing to aggressively sell down the new inventory both in the fourth quarter and the first quarter, and potentially in a good chunk of the second quarter, is because we want to actually get to the point where we can get back to some normalized margin. We think that the elimination of those 2022s, while it may have some short-term temporary pain, the other side of that rainbow looks pretty damn good because our used business continues to be strong and our ability to opportunistically restock with planning in an environment where manufacturers are looking to earn business should help mitigate margins for the full year. Okay. I guess from a consumer standpoint, are you seeing any sort of differentiation between the consumer who's at the lower end, towable product versus maybe the fifth wheels or motor home products as far as just sort of strength or, you know, consumption trends? You know, we believed a long time ago that the entry-level portion of the market, that $20,000-$35,000, is really the sweet spot of the industry. The funny thing about being in the industry for 22 years is that you see all these events happen, and you see the segments that get the most affected by it. Unfortunately, motorized is usually the first to get affected, particularly in a rate-rising environment, because that monthly payment gets more expensive. When you're financing a $25,000 unit, while the rate increases matter, the modification of payment between a $25,000 unit at 6% or a $25,000 unit at 7.9% isn't material enough to dissuade them. Part of our ability to fight that is when you go out and you look at other vacation alternatives or other family activity alternatives, a $200 or $250 monthly payment is still far less than a $250 night out at the ballpark. Got it. For us, we aren't seeing that customer go away. More importantly, because this hasn't been asked yet, we haven't seen the retail lenders change their credit approvals on that consumer at this time either. From that standpoint, I guess, is negative equity impacting affordability? Are these customers who are coming in maybe to trade in a unit, you know, are they from an affordability standpoint, able to finance that negative equity into the next trade? Negative equity, unfortunately, doesn't just affect affordability, it affects accessibility. Your ability to take that negative equity with very little money down and convert that into a new transaction is tougher. One of the things that we've worked very hard with is to work with manufacturers on creating special units, big runs with more sizable discounting that allows us to take some of that negative equity and allow for the consumer to finance that transaction. The manufacturer has been very aware and very helpful in helping us solve that problem, but we're having to commit to large batch orders in the 300, 400, 500, 600, 700, 1,000 unit orders to give us that flexibility. Negative equity is something that a traditional dealer definitely would be struggling with right now. Great. Thank you. Our next question comes from Brandon Rolle with D.A. Davidson. Good morning. Thank you for taking my questions. One, just on, you know, you had mentioned that the OEMs are helping you guys out to kind of soften the blow of, you know, the margin deterioration on the elevated model year 2022 inventory. Could you talk about what you're seeing there and, or, you know, the magnitude maybe of the support you're seeing from the OEMs and also, you know, I guess their urgency to help you out knowing, you know, there's cheaper, maybe decontented product coming down the pipeline? I think there's two separate issues. One, the manufacturers have been very responsive, all of them, at identifying any aging issues that exist, not only in our business, but every RV dealer in America. I don't think we're special in that regard. They're bifurcating their assistance two specific ways. In, in one form, they're providing floor plan assistance or marketing co-op or assistance for salespersons incentives, really recognizing that we have to move through what's already on the ground. On the other side, they're starting to recognize the need to be slightly more promotional to entice orders. That's no different than we're being slightly more promotional to entice transactions with retail customers. The one thing that I'm noticing that is different than any other soft period that I've seen in the 20 years is that they're not just making inventory on speculation, hoping that they're gonna be able to discount their way through flushing it through the system. They're taking a more measured approach to manufacturing more to just-in-time retail demand. That, in my opinion, is helping mitigate some of that. Probably, if I was speculating, the November, December, January timeframe for manufacturers, we're probably exaggerating the slowdown and exaggerating the losses or compression that they may be taking because they decided to take a finite period of time to give the RV dealers some breathing room to exit some of that inventory without piling inventory on top of it. I would expect that as we get through the spring and the summer, their level of management and their level of temperance will pay dividends in the back half, both for them and for us. Okay. Great. Another question. There's been a lot of consolidation in the industry over the last two years with a lot of regional dealership roll-ups. Now it seems like, you know, maybe their balance sheets could be stressed here to clear model year 2022 inventory. How are you planning the business in these markets and, you know, where you overlap with maybe some of these more stressed chains? On the other side of this cycle, could, you know, some of these dealership chains, seeing additional stress, be potential acquisition targets? We built this entire business model off the premise that we are a growth company, and we always can't rely on just growing through different channels and different segments of our business. Acquisitions and new store openings were really the founding principles of how this business is built. Those founding principles come to the forefront more often in a time like this. When you see us start eliminating categories, liquidating certain non-performing assets, closing locations, it isn't because we're feeling the stress, it's 'cause we're looking to collect acorns. We're looking to tighten up CapEx and build cash reserves, both in our inventory and our bank account. We are a business that will continue to grow based on acquisitions. In these periods of time, we like to accelerate that. I think that if we continue to see some level of normalization in the marketplace, we accept the fact that the new margins are gonna be softer for a while and the new demand is gonna be softer for a while. As long as we continue to see some level of stability on used, on service, on Good Sam, you could expect us to continue to accelerate that. As I mentioned earlier, we have four locations under LOI and/or definitive agreements. We have nine locations that are built or ready to build. You could expect us to continue to be very inquisitive, but we're gonna be far more opportunistic and work with those dealers on ways to help them exit stage left without a lot of maybe disruption to their family or to their own personal balance sheets, getting them out in a clean and safe way. Great. Thanks. Our next question comes from Tristan Thomas-Martin with BMO Capital Markets. Hey, good morning. Good morning. This was alluded to a couple times in the, in the questions. How do you think the RV OEMs are gonna handle new model year pricing in 2024, model year 2024? In the discussions that we've had, I wanna remind everybody that the OEMs, which are great innovators and great creators, are assemblers, and they're subjected to a lot of the supply chain. I would imagine that the relationship that they have with some of their suppliers is probably where some of that pressure is going to exist, and it starts with things like frames and fiberglass and all those other pieces. It's our opinion that we hope that the manufacturers don't find their way to simply lowering prices by decontenting units. We think that takes away some of the sizzle for the consumers. Our company is uniquely positioned more than any other company in the RV marketplace to take advantage of any decontenting that would happen because the lion's share of our parts and accessory business is the installation of those items that historically get decontented. Whether that's electronics, or awnings, or furniture, or cabinetry, or whatever it may be, we believe that we have a hedge to play on both sides. We're encouraging the manufacturers to look for innovation. We're encouraging to have the manufacturers find items to eliminate that don't necessarily take away value for the customer. Technology trinkets that may add value in the long term, but don't add margin in the short term. Association fees that pay into associations that may provide value in the long term, but don't provide value in the short term. Look for the intangible things that are attached to the cost of goods on those units that don't take value away from the end consumer. I believe every single manufacturer, not with pressure but with thought, are looking at all those intangible ads on every single invoice. $100 here, $200 there to extract expenses to bring those units to market. Inflation is inflation, whether it's happening at a rapid rate or the smallest of rates, rarely do prices go backwards. If they do, they only do to correct the supply and demand curve. Once that's corrected, they maintain themselves, and they grow over time. I'm not sure that we're going to see dramatic reductions in ASPs. We might see a normalization. We may see some temporary discounting off of that. At the end, it's gonna settle in, unfortunately, right where it is from our perspective. Okay. Just one more. What do you think in terms of trading activity? Also, how is RVs.com doing? Sorry, I thought there was gonna be an additional question there. Related to your first question about trade-in activity, it's become a relatively predictable science over the past few years, where we understand the ebbs and flows of trade-in activity generally accelerates during what we would regard as motorized or high profile fifth wheel season, which is in the fall, which we saw that. That normally translates into continued elevated trade-in rates in January, February, March. Then by back half of March, April, May, that's where we start to see the trade-in rates start to decline slightly. It always remains within this 20%-30% range throughout the course of the year, month by month, of assets that we sell. We can anticipate a trade-in on roughly 20%-30% of the assets. It'll largely be contingent upon, though, whatever season we're in and the rate at which we are going to be selling certain assets, like a bunk house travel trailer as an example. In the way of RVs.com, which you cut off for a moment, but I believe that was your second question, Tristan. Is that correct? Yeah, that's correct. Thank you. RVs.com, we have made that a live site for going on, goodness, about seven to eight months now, and we have been modifying it on an ongoing basis and constantly iterating. We understand the value that this is going to bring, which is why we have been so cautious about ensuring that the customer experience is absolutely impeccable before we go through a marketing rollout that's more widespread. I can tell you just last week, we made certain that we cleaned up all of our product listing pages, our product display pages, and we have all of our used assets over the entire enterprise listed there. We have been generating on a weekly, monthly basis hundreds of thousands of unique visitors without even any marketing efforts behind it. We understand that the appetite exists out there for this online digital retailing buying experience, and we are live right now in two states, in Texas and Tennessee, with digital retailing, where a consumer can set up their own login and profile and transact completely online, secure their financing online, and accept a home delivery. We have the documents and the information and gone through all of the diligence to understand the risk as well as the rewards to have digital financing capabilities in 38 of the 48 contiguous states. We will have those 38 states completely uploaded and prepared to accept digital financing, retail financing by middle of the summer. I would anticipate by the end of the year, we will be prepared for a full nationwide aggressive strategy so that by 2024, we will start to yield more incremental business to tap into those white space opportunities outside of our local markets. That's really the thesis here, is that we understand there's a contingency of consumers that live beyond the 100 miles or so that customers travel on average to buy a new or used asset. We're trying to satisfy that customer base that has a specific interest in our used assets and our new private label assets, especially, where we can deliver all new private label and used assets all across the country. That is truly what differentiates us from any of these other online buying experiences. Okay. Got it. Thank you. Our next question comes from James Chartier with Monness, Crespi, Hardt. Morning. Thanks for taking my question. Just wanna talk about used. You know sales were down in the used business, but inventory grew and continues to grow, and you're talking about kind of flattish comps for next year. How should we think about inventory turns in used for 2023 and beyond? Our goal is to have used inventory turns that range from 3.5 to 4 times. Obviously, there are certain quarters where that will look more accelerated. When we get into the first fourth quarter, remember that we're always building inventory as we head into the top of the year, and so it exaggerates a slowdown in the turn. When we get into the middle of summer, it also exaggerates the acceleration of that turn. The blended annual average is anywhere between 3.5 to 4. The reason that I've created that much of a wide window inside of that turn is 'cause we're testing certain markets. As we launch potentially standalone used stores, or we flip certain locations to be 70% used as opposed to 70% new, we wanna try some things. It may drag that turn down to three and a half as we learn. We expect that to accelerate once we understand where that right level is. Great. Historically, I think you've talked about SG&A to gross profit ratio being between 60% and 70%. You were at the high end of that, you know, in 2022. How are you thinking about that for 2023? Yeah. We have never, in the history of me having this business, ever talked about having a range of 60%-70% for SG&A. It's always been 70%-72%. We were very blessed that there were periods in 2021 and 2022 where we saw, you know, 62%. We also, in historical years, pre-pandemic years like 2019, saw 87% and 88%. It is our expectation that in 2023, based on the compressed margins that we're experiencing, that our SG&A on an annualized basis could be between the mid-70s to high-70s. We could outsurprise that, but from a forecasting standpoint, that's how we're thinking about it. Most people have come at me very hard on that particular topic saying, "Just let go of more people. Cut this. Cut that." I wanna remind people that in order to make lots of acquisitions and to order open lots of stores and to keep our service parts employees engaged in our business when it's typically a high turnover business, we tend to have to spend a little bit more money in those periods. We also wanna remind people that the softening that exists on new demand and the softening that exists in new margins in my 20-year history is a very finite period of time. We wanna cut the flesh but not break the bone. While we will continue to look how to drive that number down, we wanna set that expectation properly. I believe that after we get through 2023 and margins stabilize, we'll be right back in that 68%-72% range, which is where we believe that our EBITDA margins perform at the highest level. By the way, materially better than any public auto has ever performed, even at an average level for us. Great. Thank you. Our next question comes from Joseph Enderlin with Stephens Inc. Hey, good morning, guys. Thanks for taking the question. Looking at parts service and other, I heard the comment around growth for the full year ex the divestiture. You noted back in 1Q that you would have to work through all customers and revenue associated with the divestiture through 3Q of this year. With the decline again in parts service and other, is cleansing of those customers taking longer than expected, or are we seeing another headwind impact results? Thanks. Are we speaking specifically about the club or the revenue? The revenue. What we were lapping from 2021 over 2022 was we actually had that full assortment in our entire business through the bulk of 2022. We started that liquidation process at an aggressive level at the end of Q3, it leaked over into some of Q4 in 2022. We had some of those pieces out there. In 2023, those were big numbers to lap. I think as we get into, as 2022, those were big numbers to lap. As we get into 2023, we don't have the headwind of those categories like we did in the previous year, we're expecting that the purest, most accurate depiction of our service parts and other business will exist in 2023 because there's no 2021, 2020 noise in those numbers. Thank you. That's super helpful. That's all for me. Okay. If there are no more questions, thank you very much for joining today's call. We'll obviously be prepared for the follow-up calls from here. Thank you so much. This concludes our conference for today. Thank you for participation, and have a good day.