Hello everyone, welcome to today's conference, LCI Industries Q4 and Full Year 2022 earnings call. My name is Bruno. I will be operating your call today. During the presentation, you can register to ask a question by pressing star one on your telephone keypad. I will now hand over to your host, CFO, Mr. Brian Hall. Please go ahead. Good morning, everyone, and welcome to the LCI Industries fourth quarter and full year 2022 conference call. I am joined on the call today by Jason Lippert, President, CEO, and Director. We will discuss the results for the quarter in just a moment. First, I would like to inform you that certain statements made in today's conference call regarding LCI Industries and its operations may be considered forward-looking statements under the securities laws and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which would cause actual results and events to differ materially from those described in the forward-looking statements. These factors are discussed in our earnings release and in our Form 10-K and other filings with the SEC. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. With that, I would like to turn the call over to Jason Lippert. Jason? Thanks, Brian. Good morning, everyone, and welcome to LCI's fourth quarter and full year 2022 earnings call. Our fiscal year 2022 marks another record year for LCI as we reached all-time high revenues while continuing to deliver strong margins. As we got to the back half of the year, our diversification strategy proved pivotal to our performance, helping to partially offset the impact of RV OEM production shutdowns enacted during the fourth quarter to normalize inventory levels across the country. Thanks to the agility and operational strength of our veteran leadership teams, we were able to make necessary changes quickly in order to adapt to the volatile operating environment. These results are a testament to our cultural strength and long tenured leadership teams, which we believe have been and will continue to be the cornerstone of our long-term success. We closed 2022 with a record $5.2 billion in revenues, up 16% year-over-year. This growth was supported by solid performance in our RV and adjacent industries, driven by overall growth in the outdoor lifestyle and aggressive content expansion and innovation. We completed four acquisitions throughout the year, adding two very strong industry brands to our portfolio, including [Inaudible] Global and Girard Products. Net sales from acquisitions completed in 2021 and 2022 contributed approximately $219 million in 2022. These acquisitions bolstered our innovative portfolio, which we have leveraged to continue our trajectory of record content growth. Looking at North American RV OEM, sales increased 17% during the year compared to 2021, reaching $2.8 billion despite lower production levels in the back half of 2022. Industry wholesale RV shipments for the year totaled roughly 490,000 units. We expect some further softening in 2023 as demand continues to normalize and come off all-time highs. January and December were rightsizing months for the industry, as industry OEMs took the majority of these two months off to allow inventories at the dealers to rebalance. In the interim, we are working closely with the OEMs to keep our capacity aligned with the changing production levels. Despite lower RV OEM production, we have quickly and diligently worked to adjust cost and capacity, leveraging operational improvements implemented in the past years, as well as making some cuts. Overall, we've cut $370 million of costs out of our structure since RV industry volumes started to decline during the second quarter of 2022. Thanks to the agility of our teams and focus on our diversification into other markets, we have been able to shift some of our manufacturing costs to these other areas of our business that are running pretty strong in order to achieve maximum leverage. I do wanna emphasize that retail demand has slowed but is stabilizing to levels that are still historically strong. Data like retail traffic and purchases from recent RV shows have proven to be a bright spot in an otherwise challenging macro environment, giving us confidence in the industry moving forward. Importantly, secular trends such as younger buyers, as well as the growth and popularity and availability of peer-to-peer RV rentals continue to bring new consumers into our lifestyle. Outdoorsy and RVshare, two of the largest peer-to-peer rental companies, have recently said that U.S. campers have rented RVs for over three million collected nights on their platforms. Additionally, RVIA data revealed that 67 million North Americans are planning a trip in an RV this year, up from 58 million in 2022, with 50% of those surveyed RV-ers planning to buy a new RV, underscoring the long-term popularity of RVs and the outdoor lifestyle. Throughout the quarter, we saw heightened input costs, most notably through freight and materials. While it will take us some time to work through the raw material that carry these higher costs, we believe our customers are committed to help us work through these costs. In addition to several continuous improvement projects we have in the pipeline, we remain focused on driving costs out of our business through automation, as we have 10 new projects slated for implementation, largely in the back half of 2023. Our team also achieved record content growth in both towable units and motor homes. Content per towable RV for the full year 2022 increased 45% from the prior year to $6,090, while content per motorhome RV in the full year 2022 increased 43% from the prior year to $4,099, all supported by our long-term focus on innovation and continued investment in R&D capabilities as well as our acquisition strategy. Given the current RV production environment, our diversification strategy is paying dividends and is proving to be critical to driving sustainable growth across our business. In prior down cycles such as 2008 and 2001, our performance was substantially impacted due to majority of our revenues coming from RV. Today, our aftermarket, adjacent markets, and international businesses make up 46% of our total net sales. In December and January, 64% of our sales came from our diversified markets. We have simply never been this diversified while in a down cycle. We believe our ongoing focus on diversification will further cement our leading position into the broader outdoor recreation markets to support consistent, profitable growth in the long term. Revenues in the North American aftermarket grew year-over-year up 7% compared to 2021, largely impacted by a drop in revenues in the automotive aftermarket business. Coming off a strong year in 2022, we are thrilled to see a record number of RVs on the road. As more enthusiasts take to their RVs, we believe we will see more repair and replacement business, which should continue to drive our aftermarket revenues. To accent that point, aftermarket parts revenues were up 65% in January. As we've said in many prior calls, there have been two million RVs added to the system in the past 4 years, there'll be a need for parts and services that we supply, as many of these RVs are now coming into the repair and replacement cycle. As the purchasing of RVs decrease for this season, we are already seeing an increase in service at dealerships. In 2022, we had 1.2 million calls to our contact center for service and repair-related activity. This trend should be nothing short of fantastic for the aftermarket products and services businesses that assist RV consumers with repair, replacement, and upgrades. With that being said, we will continue to invest in this part of our strategy as we steer our aftermarket business towards the $1 billion mark. While our aftermarket RV continues to grow, we are maintaining our emphasis on creating a best-in-class customer experience. Engaging and listening to our customers is central to our building long-term relationships and strengthening the Lippert brand with dealers and consumers alike. The Lippert Scouts program, which has grown substantially in membership in the past year, serves to provide valuable insights on our products and services, how customers use them, and most importantly, how we can drive improvements in products and services. We held our second annual event for RVers across the U.S. called the Lippert Getaway during the last week of October in Pine Mountain, Georgia. It was a resounding success and consisted of five full days of learning, repairing, and improving their RVs, as well as listening and fellowship amongst nearly 400 people. We will continue to stay focused on developing relationships with the end consumer to help drive our business to more successful results. Turning to the North American adjacent markets, 2022 revenues rose 26%, driven by demand in the marine, along with solid content growth throughout the other adjacent businesses like bus, specialty vehicles, and power sports vehicles. Our adjacent offerings benefit from the same secular tailwinds driving growth across the RV aftermarket. Unlike RV OEMs, marine production has been relatively stable, reducing pressure as RV demand softens. In marine, we experienced substantially fewer challenges related to macro conditions as the overall market didn't ramp up as hard and as fast, and thus did not create as much excess inventory as the RV business did. Like RV, we are continuing our focus on consumer groups and aftermarket-related activity. We also saw the launch of our seating division for Tracker Marine earlier this year in Missouri. We believe our developing relationship here will provide additional opportunity now that we are located near and supplying the largest pontoon and boat builder in the country. Our marine revenues for 2022 have increased to $493 million, we're anticipating a flatter year on demand, which we believe we will improve through organic growth and market share gains. Our marine production facilities have never been operating at the peak levels they are today, we expect their solid performance to continue as we continue to supply the high demand and offer many new products in the space. As a part of our diversification strategy, we have also been gaining traction in manufactured housing. With rising housing prices impacting people across the country, manufactured housing continues to be an alternative for some that might be priced out of traditional residential homes. Also during the past few years, as residential window suppliers were plagued by demand and in turn created long delays for builders, our team took advantage and started offering entry-level vinyl windows at short lead times to residential builders. We are now starting to build a nice residential window lineup in a market that has over $3 billion annually in addressable market. One other positive note around diversification is that we announced a key partnership last week with ATW, which is now owned by Bain Capital and is the largest utility trailer builder in the country. We launched a collaborative partnership to start supplying the axles to all of their trailers starting this month. We are extremely excited. Our team will strive to bring new products as well as incredible dealer and OEM services that they've never seen before. We believe our adjacent market and expansion is key to our diversification efforts. Our team continues to gain more and more momentum finding new products for the customers in these markets. Looking globally, our international businesses also experienced growth in 2022, with revenues increasing 6% year-over-year, proving to be a stabilizing force in our diversification strategy. Growth in our international businesses was driven by the ongoing introduction of innovative products into E.U. markets. We are encouraged by the backlog in these businesses as we head further into 2023. Issues stemming from global chip shortages are easing slightly, which we feel will lead to more growth in the European RV business in 2023. We expect some of this demand to start breaking loose in the second quarter, as many OEMs are starting to see chassis shipments increase so they can build more motorhome s. In addition, we continue to see great progress toward Lippert European components, such as pop top and acrylic windows that are already popular in Europe being adopted by the U.S. RV OEMs. These opportunities could provide big competitive barriers for our competition because of the ability to utilize European designs, proven products, and production facilities. While the last couple of years have been challenging for the European division, we are optimistic about 2023 being a year in which they are contributing to the overall company in a much more meaningful way. Turning our focus to innovation. Throughout 2022, we had one of our largest product launch years in company history. This should help bolster a challenging in Europe. With 150 people dedicated to innovation and product development in our business, we are committed to making innovation a huge competitive advantage, as few peers and competitors will invest this kind of money into innovation. Our ABS Brakes for our suspension systems, Tire Linc tire pressure management systems, continued development of OneControl and new window, awning, appliance, and door designs have all gained tremendous traction with OEMs, helping to solidify our reputation as a company that continues to refine and innovate our core products. As mentioned earlier, we are thrilled about the acquisition of Girard and Lippert Global. Both add substantial products to our offering that connect our appetite for cutting-edge products with our desire to bring increased utility and aesthetics to each RV. These two acquisitions also make us the largest and most diverse appliance and awning maker in the entire RV industry. One of the other things we are proud of around innovation is that we made several of our new products the new standard. The standout in that category was our instant hot water heater design, taking the place of the older, larger tank water hot heaters that have been around and standard for decades. With respect to capital allocation, we continue to do our part maintaining a balanced deployment strategy. We remain receptive to strategic M&A opportunities when they appear, but are also focused on maintaining ample liquidity and a strong balance sheet with modest leverage. We have also continued to make strategic internal investments, specifically in automation, to add further flexibility to our cost structure. In 2022, we allocated over $70 million to growth in automation CapEx, and we anticipate allocating even more dollars to these important projects in 2023. I'll now move on to our cultural highlights for the year. Here at Lippert, a well-rounded culture is our core focus, fostering an environment that values all team members and enables each team member to grow. We believe a strong culture starts with experienced leaders at the top, but also creates opportunities for all team members to become leaders in their own right. To this end, we have a group of leadership coaches that is tasked with creating and executing programs focused on developing and training leaders throughout the front lines of our manufacturing business. This group of 30 individuals are focused on coaching team members across the business in personal and professional leadership development, giving all team members the power to make LCI a better place and impact team members around them more positively. In the end, we believe our great culture and focus of real resources on leadership development is the key to retaining people. We also believe that when people are retained over the long term, there is no question that quality, safety, efficiency, and innovation, the key fundamentals of the business, all improve. Our culture focuses not only on how we can support our team members, but also how we impact the communities around us. Over 2022, Lippert team members performed over 150,000 hours of community service through serving in various charitable organizations and mission work around the country. Over the last six years, our team members have collectively served over 700,000 hours of community service. We could not be prouder of this accomplishment and our team's effort to give back to those in need and look forward to our culture initiatives having even more of an impact in 2023. In closing, as always, I'd like to thank all of our team members for their hardworking commitment in driving our business forward while upholding our company values and leading strong. We could not have achieved such amazing results without this incredible dedication, coupled with the strength and guidance of our leadership team. We look forward to continuing our progress in 2023, while we may not be setting volume records, we are dedicated to setting many other records such as safety, efficiency, continuous improvement, and community impact records. We believe that we are in a great position, even in the face of RV volume challenges, to come out strong and resolve and excited to continue our efforts in delivering long-term value for our customers and shareholders. I will now turn to Brian Hall, our CFO, to discuss in more detail our fourth quarter and full year financial results. Thanks, Jason. Our consolidated net sales for the fourth quarter decreased 26% to $894 million compared to the prior year period, impacted by a reduction in RV production, partially offset by growth in our other end markets. January sales were down 48% to $273 million versus January 2022 due to the continued decline in wholesale RV shipments, as we estimate the industry shipped less than 14,000 units in the month, many of which were produced in prior months. This was partially offset by continued diversification success with growth in adjacent industries, including marine. Q4 2022 sales to North American RV OEMs decreased 42% compared to the prior year period, driven by a decrease in wholesale shipments, partially offset by record content expansion in towables and motor homes. Content per towable RV unit increased 45% to a record $6,090, while content per motorized unit increased 43% to $4,099 compared to the prior year period. Towable content growth can be attributed to organic market share gains of 15%, while acquired revenues contributed 7% of the year-over-year growth. We saw positive performance from our other end markets, which helped to partially mitigate the impact of softened RV demand. In the quarter, North American marine sales increased 4%, with our estimated content per power boat increasing 19% to $1,712, driven by market share gains. Overall, sales to adjacent industries grew 3% versus the prior year period, supported by the aforementioned growth in marine sales. Q4 2022 sales to the aftermarket decreased 17% compared to the prior year period, driven by a decline in automotive aftermarket sales, partially offset by strength in RV aftermarket sales. International sales decreased 1% year-over-year, representing 10% of our total company revenue, as exchange rates negatively impacted results by approximately 9% due to the strength of the dollar compared to the euro and British pound. Excluding the exchange impact, organic growth would have been 8%, led by the strength seen in our rail markets. Gross margins were 16.4% compared to 24.1% in the prior year period, driven down by one-time charges, production inefficiencies, and elevated input costs in aluminum, steel, and freight. Our one-time charges were a key contributing factor to margin compression and our EPS variance for this quarter. These one-time costs consisted of severance and inventory expenses, leading to a negative impact of $0.62 per share. Severance expense was incurred as we worked to improve our cost structure and remove redundancies within our operations. Our one-time inventory charges primarily related to the difference in price at which we purchased these commodities, such as aluminum, versus the selling price, as well as adjustments for excess and obsolescence reserves. Typically, the pricing variance is accounted for by our quarterly lagged pricing adjustments. However, given high volatility seen in the recent prices for some commodities, we incurred a one-time charge to earnings. Although these write-offs hinder near-term margins, we expect reduced margin pressure in the second half of 2023 as production ramps, supporting profitability during the year. Looking ahead, we are primed to deliver profitability despite the macroeconomic conditions moving into 2023. SG&A costs as a% of sales increased year-over-year due to the one-time costs noted previously. Operating margins decreased compared to the prior year period in line with expectations as we absorbed fixed costs on a lower sales base and consumed the aforementioned high-cost inventory layers. GAAP net loss in Q4 2022 was $17.1 million or $0.68 per diluted share compared to net income of $82.3 million or $3.22 per share in Q4 2021. This decrease was a reflection of lower RV demand. EBITDA decreased 93% to $10.2 million in the fourth quarter compared to the prior year period. Moving on to full year 2022 results. Sales to North American RV OEMs increased 17%, driven by increased interest in the outdoor lifestyle and content expansion. Sales to North American adjacent markets increased 26% to $1.2 billion in 2022, North American aftermarket increased its total sales by 7% to $825 million, while international sales increased 6% to $398 million compared to the prior year period. Acquired revenues were approximately $219 million for full year 2022. Non-cash depreciation and amortization was $129.2 million for the 12 months ended December 31, 2022, while non-cash stock-based compensation expense was $23.7 million for the same period. We anticipate depreciation and amortization in the range of $130 million-$140 million during full year 2023, primarily due to amortization from recent acquisitions. For the 12 months ended December 31, 2022, cash generated from operating activities was $603 million, with $131 million used for capital expenditures, $108 million used for business acquisitions, and $127 million returned to shareholders through $103 million of dividends and $24 million in share repurchases. Operating cash flows were positively impacted by increased earnings and as inventories continued to normalize, we anticipate a further reduction in the impact of working capital on cash generation. Driven by our strong operating cash flows, we further pursued our capital allocation strategy of de-leveraging our balance sheet, making net payments of $178 million on outstanding borrowings during 2022. At the end of the fourth quarter, we had an outstanding net debt position of $1.1 billion or 1.5 times pro forma EBITDA, adjusted to include LTM EBITDA of acquired businesses. As the greater macro environment remains uncertain, we are focused on maintaining a strong balance sheet and continue to target a long-term leverage of 1.5x net debt to EBITDA. In the near term, we are working to integrate recently completed acquisitions, which we expect to positively impact our operating cash flows. Full year 2023 capital expenditures are anticipated in the range of $80 million-$100 million. Given the uncertainty in the marketplace, we anticipate RV production levels to remain volatile in the short term. As a result, we estimate the January consolidated sales results of down 48% to be indicative of full Q1 2023 results as RV OEM production remains suppressed while the dealer base seeks the right inventory levels for expected demand. The sales decline is primarily driven by the reduction in RV production as we anticipate Q1 2023 RV shipments between 45,000 and 50,000 units. Looking forward to Q2 and beyond, we are anticipating RV shipments to improve more in line with those experienced in the back half of 2019, which results in an estimated RV shipment range of 330,000-350,000 units for full year 2023. While we have responded quickly to reduce our cost structure, material cost headwinds, as discussed in prior quarters, will continue to limit profitability through the first quarter, and we anticipate operating profit margins to return to mid to high single digits. 2023. That is the end of our prepared remarks. Operator, we're ready to take questions. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star followed by one on your telephone keypad now. If you'd like to cancel the question, please press star followed by two. Please do also remember to unmute your microphone. Our first question is from Kathryn Thompson from Thompson Research Group. Kathryn, your line's now open. Please go ahead. Hi, thank you for taking my questions today. First I'm gonna focus on the OEM ramp up, and if you could give some cadence to that. Then also just clarify, you know, as you said in your prepared commentary, you're seeing some good, strong demand for maintenance at RV dealers just for units that are already sold. Could you talk about what trends you've seen historically with maintenance versus sales? Is there a divergence in that trend that you're seeing in today's market that could be positive for the outlook? Yeah. I'll start, Kathryn. you know, regarding the ramp up or just, you know, where the industry's going from where we're at, obviously we've been in ramp down mode and just, you know, trying to get to a pace where the industry is, you know, where wholesale is being outpaced by retail. We've had a couple hiccups there in November and December, but, you know, for the most part it feels like, you know, the next couple months will be, you know, retail outpacing wholesale, hopefully longer than that, but by a pretty fair margin. you know, still trying to find the bottom, I think, where we've got some customers that are taking, you know, weeks at a time down between now and into March, it feels like. Kind of we're hoping after that and in March, April timeframe, things start to tick up. You know, certainly the, you know, all the retail outpacing wholesale that's going on today is just taking chunks out of dealer inventory, which is where we need to get to to see some wholesale orders again. On the aftermarket piece, I'd just say that, you know, we track all that activity, you know, by the minute and, you know, January, you know, just on parts orders from dealers was up 65%, I think, as we said in prepared remarks. That's dealers calling in, needing replacement parts and parts for service, and we just see that activity up significantly right now. We know that trend will continue, especially as they have more time to service units and more service bays have come online over the last 12 months. Brian, I don't know if you want to add to the aftermarket piece. I think, maybe not so much on the aftermarket piece, but to give you some additional clarity around our expectations. I mean, obviously, Kathryn, there's a lot of uncertainty in the marketplace today. As we said in our prepared remarks, you know, we're expecting, you know, somewhere between 45,000 and 50,000 units for the first quarter. I mean, that's far off from when you think about Q1 of last year at 170,000+ units. As the OEMs, you know, hold production levels pretty, Well, hold them down or suppressed here temporarily, as Jason said, to let the inventories, deplete some. We would expect that to start to come back up. Like we said, the, you know, if you look more in line with 2019 from Q2 through Q4, you know, you're certainly looking at 85,000-100,000 units a quarter, is kind of what our current expectation is. I mean, we continue to hear a lot of positivity from a lot of the dealer base. You know, there are retail sales occurring, so at some point as they continue to deplete inventory, there's gonna have to be orders and production to follow suit and replenish inventories in the system. Okay. That's helpful. As a follow-up to that, there's several larger retail shows that have occurred at the beginning of this year. Any color on trends from those and what this could portend for the future? Yeah. Yeah. We've talked to a lot of OEMs and a lot of dealers over the last handful of weeks that they've had big shows since Tampa in January. You know, all the traffic commentary around retail traffic and purchases have been really healthy. I think, you know, we're seeing that take out of inventories to rebalance dealer inventories. Like Brian said, there's been a lot of positive remarks. Dealers seeing inventories come down to a healthy level where we can see, you know, they're gonna have to buy for summer, for the summer selling season. They know it. I think everybody's just positioning to get dealers in the best position they can before that starts to happen. I think, you know, around the shows, all signs and commentary have been positive. Retails, you know, seems to have stabilized. I just look at, you know, how bad Q4 felt at 77,000 or 70,000 units retail wholesale, roughly. If you annualize that's, you know, that's 300,000 units. That's, you know, that's a layup. You know, that's where we feel 330,000-350,000 units is a good number. And for a down year, that's a pretty damn good number. I think it's, you know, I think that's healthy and, you know, we can adjust our cost to get into a good position with those, with that type of volume. Retail staying healthy is the most important thing we have looking for our industry right now, and it's appearing to stay that way. Okay, final question for the day, on inflation. You know, you said you're prepared to mark, freight and raws were up in Q4, what we're seeing in other industries, you know, a wide variety of industries is definitely you're having certain costs, natural gas, other labor, including, pulling back. How do you think about the balance of inflation or even deflation as you look out in 2023? Thank you. Yeah, I mean, I'd start first with, from a pricing perspective, you know, to our customers, you know, we've been saying throughout a lot of 2022, we've had some pretty meaningful price decreases, which I think is consistent with your commentary about what we're seeing in the marketplace for steel, aluminum, freight. We are seeing those costs come down from the all-time highs that we experienced these last couple years. We've been given price decreases, but, you know, from a consumption perspective for us and our income statement results, you know, we've talked that we've been heavy on inventories. Some of those costing layers are some of the all-time high costs that we're consuming today. That certainly was a headwind for the fourth quarter, and as we, I think, communicated at the end of the third quarter, I expect that to continue into the first quarter. We certainly are starting, you know, to see improvement in our inventory layers. But with the little volume that we're seeing here in the first quarter, it's taken some time to chew through that. But I do expect that to be I expect us to be through most of that through the first quarter, and as we get into the second quarter, we should start to get back on par with where I think we would expect us to. You know, from a margin perspective, 'cause that's the biggest needle mover, I would say, you know, as Jason said, obviously we've had to respond quickly and take a lot of costs out of the business, and we'll continue to do whatever is necessary, you know, from a fixed and variable cost perspective. But materials is the biggest needle mover, and I expect that as we move through that and get back to some more normalized volumes in the second quarter and beyond in 2023, we should be back into a, you know, more of a high single digit type or mid to high single digit type margin view for operating income. Great. Thank you very much. Our next question is from Scott Stember from ROTH MKM. Scott, your line's now open. Please go ahead. Welcome. Morning, guys. Thanks for taking my questions. Morning. Brian, from what you're saying, about the, I guess, the lag of, getting that higher priced inventory through the channel and matching things up, it sounds like the first quarter could be challenged from a profit standpoint, or do you think it will be profitable in the first quarter? I think that as we look at Q4, I'd contrast Q4 with Q1. Q4, you know, you had the one-timers in there like we talked about, $0.62 EPS impact. I'd say from a margin perspective, if you take those out, you're pretty darn close to break even for fourth quarter. I expect that given, you know, January's performance, and we think that that's gonna be a bit indicative of what the first quarter looks like, we'll see a little bit of ramp up here in February and a little bit more in March. You know, pretty consistent with the declines we saw throughout the fourth quarter. I think they're pretty similar, from a quarter view perspective, once you take those one-time hits out of there. I think it'll be close to break even and, you know, possibly, at least we would target a little bit better than that. Once volumes come back in the second quarter and we really chew through these inventory layers, which, you know, as I'd been saying previously, those, you know, that's anywhere from four to five percentage points of margin headwind that we've been experiencing these last couple quarters as we consume those layers of inventory. Okay, back to the aftermarket. You talked about how the automotive side really drove the decline in the quarter. Can you maybe, give a little bit more content on that? The other side of the business, the RV, how did that perform in the quarter? Yeah. The RV business is, you know, exceeding expectations in terms of just volume, no problems there. Again, it's all service and repair parts related. I mean, there's some upgrade and just normal aftermarket, you know, business through, you know, all channels, you know, consumer, e-tail, Amazon, dealers and all the distributors that we do business with there. We expect that to continue through this year. On the automotive side, it's largely driven by new car sales. As everybody knows, there's just a, you know, a glut of availability for new cars. There just isn't being... You know, trucks aren't being produced like they were three years ago. You know, when new cars are down, new automobile sales are down and production's down, then our hitch business is impacted by that. We expect that to start, you know, slowly coming back. We've adjusted our business. We chased materials down all last year on steel 'cause, you know, steel's mostly the content we have on the current automotive side of our business. As all of the indexes adjust positively and we work through inventories, we'll see that possibly impact margins through the whole course of this year. I'd add to that, Scott. If you look full year, yeah, we really started, I think, seeing a disconnect in the back half of 2022 between the automotive side and the RV/marine side of the business. If you look full year, automotive it was off 3%. The rest of the business was up 19%. You can certainly see there were a sharp contrast in the performance. When you looked at the fourth quarter as the automotive side began to slip more and more, it was off about 24%, almost 25% for the fourth quarter. You can see that that's the side of the business which it was running about half. Mm-hmm. What we experienced in the back half of the year, it's now to less than half of our overall aftermarket business. Okay. In the first quarter, or at least in January, you talked about that 65% increase. That's just from, I guess, orders from dealers or for parts, service parts. Yeah ... the whole aftermarket doing in January? Yeah. I mean, for January, everything's still suppressed. I would tell you the automotive side did get slightly better. We started to see some orders come in there. Instead of 24%, 25% off like it was in the fourth quarter, it was only off 17%. You know, the RV/marine side of the business was better than that, but still down slightly in January. You know, I think that what our expectation is on that side of the business, a lot of it is our sales to wholesale distributors. You know, their orders are gonna be a little bit spotty. We've seen from month to month some pretty meaningful variances, when we're looking at how their orders are coming in, but it's at least it's not down as meaningful as what the automotive side is. We expect that as we move through the winter months, and people get their units out for the season, that we'll start to see that continue to improve. When we get to the back half of the year, we're definitely anticipating all the aftermarket to be up, you know, start probably in the summer months at some single-digit growth rates, but then be back to double digits when we get towards the end of the year. The two other things I'd add, Scott, is that automotive's about half of the aftermarket business, so it weights heavy when it weights one way or the other. Then we've got the on the RV side, it's just, you know, there's all sorts of opportunities with service parts, but that's through largely retail and dealers. The big chunk of our aftermarket business on the RV side is wholesale distributors, and they've got inventories to work through as well, so. Just last question on the aftermarket. There was a slight operating loss within aftermarket in the quarter. That was strictly related to the auto side, and it sounds like probably having to do with input costs as well. Yep, you're correct on both fronts. Definitely as at the volumes that we were experiencing on the automotive side and the seasonality, when you get into the fourth quarter and first quarter for automotive, it typically is, you know, extremely low margin. I would call that normally in the off-season low single digit type margin. To see that flip to a loss is not much of a surprise. Couple that with, like you just mentioned, the consuming some of the high cost steel layers in a lot of those hitch products. We've certainly seen, you know, very consistent with what we've seen across the entire business, where it's quite a bit of a headwind through the back half of 2022 and into this first quarter or so of 2023. Okay. Thanks, guys. Take my questions again. Thanks, Scott. Our next question is from Fred Wightman from Wolfe Research. Fred, your line is now open. Please go ahead. Hey, guys. Good morning. I was hoping you could just give a comment on the timing of the model year changeover as we see this depressed production level extend farther and farther versus where people might have planned. Do you think that your customers are just gonna move to model year 2024 products when they resume production, or is it gonna be continued production of 2023? I think there's a lot, there's a lot of talk around that. There's a lot of, you know, the biggest problem right now probably is just the 2022 model year. It was the largest produced model year in the history of RVs. Obviously volumes have been, you know, retail's been depleting since, you know, more or less July of last year. There's a lot of that product in the pipeline, but, you know, we've heard all sorts of stories over the last couple of months where, you know, the OEMs are doing what they need to do to blow that product out to the dealers and get it, you know, get it in the hands of the retail so that it's just flushing through the system. On the other hand, the20 23s are just, you know, there's not a lot of that product being built, so I don't anticipate that's gonna be a big issue. Certainly you'll have some of what you're talking about, but I think that the OEMs and dealers do a really good job working together to. They both have the same common issue here and both have to collaborate to figure it out. I think in the past they've done a really good job of that when there's been that kind of a headwind, but they'll get through it. Okay. Brian, you gave us the total number for the one-time costs in the quarter. I think you sized it as a $0.62 headwind. Can you just break that down between severance and then, the inventory hit? I can, Fred. I got it right here. It's about the from an inventory perspective as a bulk of it is about $0.44. The remainder is the $0.19, which is severance. Perfect. Thank you so much. Our next question is from Craig Kennison from Baird. Craig, your line is now open. Please go ahead. Thanks for taking my question as well. Wanted to follow up on Fred's last question regarding your cost structure going forward. How should we think about SG&A in Q1 and on a go-forward basis following the actions you took in Q4? Hey, Fred or Craig. I would say that we've continued to make adjustments to our cost structure. You know, we really started having to make some bigger swings at it in November and December as we saw what production schedules looked like. There's been additional adjustments that we'll continue to make as we right size and get better visibility into the coming months. I do think that obviously from a percentage of sales perspective here in the fourth quarter and first quarter, to see our SG&A costs slightly elevated, is certainly the expectation, and then resume or head back to the more normalized levels when we get the volume in the second quarter. I don't think it's gonna vary too meaningfully, but we have taken some additional costs out of it. obviously from a you know, compensation perspective, as you would weight things more with where the, when the profits are actually incurred, you know, given the expectations we have for the first quarter, that will be a much lighter quarter from that perspective. I think it'll come down some from the fourth quarter, but probably not in a major meaningful way. Thanks. Brian, I think I heard you make a few comments around your margin expectations for the full year, and then you commented on maybe a break-even scenario for the first quarter. Could you just give us a sense for the cadence of margin and where you expect the full year margin to be, at least what range might you expect that to be in? I mean, I think that, you know, it really, 2021 is a good year for comparison. When I look at, you know, and I, it's a little bit by chance when you look at top line expectations and then look at kind of the what type of margin we were running throughout 2021. Our expectations would be that that's pretty similar when we have the volume. Once you take first quarter out, which as I mentioned is, you know, we're expecting break-even to a small slight profit there. Once you move past that and we get volumes resuming to more normalized levels, we would expect a mid to high single-digit type margins. I think that, you know, at least the way we're seeing unit production play out today, which there's a lot of uncertainty in that, you know, Q2 would be, you know, I would call it 8%-10% type margin, and then that improving throughout the remainder of the year with as volume increases. Fourth quarter normally would be a little seasonally different, but at least through the second and third quarter, which would be the meaningful quarters for the year, I would expect them to be in that range. Our diversified businesses are really adding a huge lift to our profit improvement through the year. You know, most of our businesses there are having really solid years, off to a good start and all those. The diversification is a big part of the story as well, Craig. Yeah. Great. Thank you. On content per unit metric, you've mentioned, you know, giving some price back as your cost changes. Just curious, is that figure something that would go down sequentially, or is there enough, you know, innovation and other drivers to that metric such that you could see, you know, continued growth? Yeah, Craig. If you look at it, you know, and if you were to go back and contrast the past few quarters on a year-over-year basis, you know, you certainly saw that grow to all-time highs, you know, in the 50+% range. We're at 45% today. When you start to dig into the details of that, our organic growth rate is some of the highest I remember seeing in, you know, my tenure here. So at 15%, acquisitions adding another 7%. As you fast-forward into the next quarter or two, I would expect those acquired revenues to probably not vary too much. I think that we're going to, you know, we've won enough business and expect to continue gaining share during 2023 that I would expect that double-digit type organic growth rate for us to continue, at least here in the near term, which is far greater than our historical 3%-5% average. If you look at the remainder of that's price. You know, as we've talked over the last couple years, you know, to see the 35%+ type inflationary numbers pushing through the system has certainly been the case, but that's retracted. You know, if you look at the balance of it for the fourth quarter numbers that we saw, that's way down from where it was in the third quarter. As you fast-forward into the first and second quarter, I would expect that price number to continue to come down as we give those price, the price adjustments back to our customers, to where that would be on a more normalized basis. You should be back by the first, second quarter to where you're really just price is not a part of the picture, and it's more about the organic and acquired revenue growth. Great. Hey, thank you. Thanks, Craig. Our next question is from Mike Swartz from Truist. Mike, your line is now open. Please go ahead. Hey, guys. Good morning. Maybe to start, I think, Jason, you called out a $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. Yeah, I mean, I'll jump in there, Mike. I'd say we realized most of it. You know, 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 taking costs out of the business ever since that point, whether it's, you know, labor or adjusting our fixed cost structure to the best of our abilities. You know, I would say that's what's been realized at this point. We probably, you know, have a little bit more to go, but probably not meaningful enough until we really see what sales levels are gonna be. I think here in the short term, you know, like I mentioned earlier, we've taken some additional costs out in January based on changing forecasts. you know, we're really looking forward to the second and third, fourth quarter as to what levels of a cost structure we need to target. Yeah, I think to just to add to that, it's, you know, we're. You know, when you get into cost cutting mode, you just keep going. There's things that we're looking at, you know, every single day. We're in, you know, cost cutting mode right now all over the business. You know, we're just trying to make sure that we're not cutting too deep because we do feel that we're gonna be to a, you know, a 400,000 unit-ish run rate, you know, toward the middle of the year. That's what we feel we're gonna get back to. We don't wanna cut so deep that we can't sustain, you know, higher levels of production once we see it. You know, that's what I'd add there. Okay. That's, that's helpful. Then just on the marine business, I think you made some comments that you think it'll be flattish in 2023. Is that including market share gains, or is that what you see just from industry production? Yeah. I think that starting out early in the year, at least what visibility we have from the manufacturers, is that run rates aren't changing a great deal. There's some up, some down. 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's gonna be some pricing adjustments that we'll see some declines there as aluminum costs have come down, et cetera, et cetera. You know, I think from our organic growth should help to mitigate- Yeah ... some of those declines on the pricing side of things. It's yet to be determined, I would say, on what the volumes will be for the manufacturers as you get further into the year. You know, feels steady right now. I mean, they've been running at a good clip for a while and, you know, we anticipate at some point in time it'll cool off, but we're not seeing it at this point in time. Okay, great. Thank you. Our next question is from Bret Jordan from Jefferies. Brett, your line is now open. Please go ahead. Hey, good morning, guys. Morning. Quick question on, and maybe you said this, but did you talk about your expectation on 2023 retail and RV, just sort of so we can line up what shipments might be versus clearing inventory? Yeah, we said on retail, 370-390 is our expectation. Wholesale, 325-350. Okay. 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 was a backlog there because of supply problems, is retail still as strong as it had been? Yeah, I think that they had been building some inventory, and retail's fallen off just a little bit. 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. You know, with the introduction of electric biminis and a lot of seating content, you know, we've got plenty of new business there to override any way the business might soften or the market might soften. Okay. 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 RV share. I'm just trying to do the math. If there's 11 million RVs in the population, we're gonna have 63 million people using them. Is this peer-to-peer sharing to get this utilization? I guess at some point, is peer-to-peer a risk to the industry in that one RV can service 10 people as opposed to 10 people buying an RV? You know, does it impact demand at some level? Yeah, certainly both. It's certainly both. I mean, when you look at the, you know, 3 million rental nights that RVshare and Outdoorsy have both, you know, have gone public with over the last few years, I mean, that's a significant amount of rentals compared to what we would see in years past before the marketplace existed. Yeah. I don't... You know, I really feel that, you know, in talking to a lot of consumers, and we talk to a ton of consumers, I feel that, you know, 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 gonna have families that jump into the lifestyle and wanna have their own and not use somebody else's every time they take a trip, especially if they're gonna use it often. You know, that's kind of some of the feedback we hear from the consumers, from our customer experience team. I think it's really healthy for the industry. The, you know, the rental individuals, the individuals, that are renting these RVs to the consumers. I mean, some of these guys and gals are buying five, 10, 50, you know, units and having a fleet and renting them out and servicing them that way. Right. Okay. One last question, I guess, on the cadence of pricing. Obviously, I think you talked about how we are gonna be giving some of the price back that had been 30%+. Is most of the price decline already been seen, or does it sort of stagger out through Q1 and Q2, on the RV OE price side? It really depends on what commodities end up doing over the next couple of quarters, but we feel like most of it's there. You know, I was gonna mention this on a comment a minute ago, but there's actually some price increases going on, too. Other areas where we didn't have indexes, we're holding price as long as we can. I mean, we're gonna 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. Yeah. Brad, I would add it on the, on the contractual one. July 1, as we had discussed previously, was a very meaningful decrease for our customers. January 1 is another one. October was actually a slight increase, very nominal. Given the volatility in the 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. Okay, great. Thank you. Ladies and gentlemen, just a reminder, if you'd still like to ask a question, please press star one on your telephone keypad. Our next question is from Daniel Moore from CJS Securities. Daniel, please go ahead. Your line is now open. Thank you. Thank you for all the color. Greatly appreciated. Just maybe, to crystallize for aftermarket, what are you thinking about for, you know, growth for the full year? You gave a lot of color and commentary about, you know, sort of the, some of the buying patterns for January, but what are your expectations for growth? Second, in addition to the CapEx, just talk about, you know, how much working capital you think you can take out this year, and what a free cash flow number might look like for 2023. Thanks. Yeah, I mean, from a over full year, aftermarket perspective, Dan, I would say, you know, after we work through these first, the first quarter, Like I mentioned, towards the back half of the year, we'd get into the double-digit% growth rates. I think overall it probably averages out to high single-digit type growth for full year. You know, so a little under what we've seen historically, but certainly given the current headwinds we're, we've been seeing that, you know, that we should see a lot of improvement there. From a cash perspective, you know, 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. Based on the guidance that we're given on the overall expectations for the business, plus an additional $300+ million type reduction in inventories for the year, you should be in excess of $700 million operating cash flow. Which is actually slightly north of what we experienced in 2022. From a cash perspective, we're expecting a really strong 2023. Appreciate the color again. Thank you. Thanks, Dan. Thanks. Our next question is from Brandon Rollé from D.A. Davidson. Brandon, your line is now open. Please go ahead. Thank you. I just had a quick question on your shipment outlook. Did that change at all since your pre-announcement a couple weeks ago? No, I don't think so. Okay. On just the content per unit and decontenting, you know, given pricing seems to be the biggest impediment to retail right now, how much decontenting are you expecting, you know, in this upcoming model year 2024? I think a lot of people are expecting, 2024 to be cheaper than 2023 and 2022. I don't know if you're able to gauge that or if it's on a brand-by-brand basis. You know, on average, I guess, how much, decontenting do you expect to take place, in this upcoming model year? I mean, not a ton, honestly. I mean, I expect some decontenting to happen. You know, now it's time to show the value you've got in your units. 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, you know, that's actually doubling the cost of axle products in the unit. As I've said on a lot of our prior calls, you know, the innovative products that we supply to the industry, due to the fact that they're not really commoditized, they're really special, we tend to have more of these types of options and sell the stuff into, you know, 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, you know, better features and values and take cost out that way. We just don't supply a lot of commodity type products to the industry. While they may do that, it tends not to affect us much because, you know, if you need an axle or a slide out on a unit, you know, you're gonna use an axle or a slide or, you know, a leveling system or things like that. You're not gonna take that stuff that the consumer needs off the unit. That's a short answer. Okay. All right. Thank you. Our next question is from Tristan Thomas-Martin from BMO Capital Markets. Tristan, your line is now open. Please go ahead. Morning. I just had a question on your industry production outlook for the first quarter. I believe you said 45,000-50,000 units. January was at 14,000 units. It seems like production started to come back in February. It's probably gonna ramp up a little more in March. What are the odds the industry ends up coming in ahead of your expectation? Well, there's always a chance. You know, as we've said before, we usually don't have great visibility out beyond three, four weeks from an order perspective. It's, it's a hard question to answer. But you know, it's all gonna depend. At this point where we're at on February 14th, the dealers would have to be putting through a lot of orders, and that's gonna take time for them to produce. That hasn't really been happening yet, so I wouldn't expect, you know, it to vary greatly. There's always a chance to. Yeah. Better, you know, our 325-350, we'd bet on. You know, we feel that's what a good number is. But at the end of the day, it's, you know, there's a lot of positives out there. I mean, unlike 2008, you go back to the last big dip we've had in production, you know, 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. You know, unemployment's 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, you know, the fact that it's not getting hit all at once, I think is a good sign, you know. The fact that retail is staying relatively healthy right now, consumer is healthy. I think we're in a good spot. You know, we're in a good spot to get at or above where we're talking. I don't. I wouldn't bet on below. Awesome. That all makes sense. Thank you. We currently have no further questions. I will now hand back to our speaker for final comments. Mr. Jason Lippert, please go ahead. Thanks everybody again. Again, I'll just echo what I just got on talking about. you know, we're in a difficult period in the RV cycle right now, but we've been through it before. We've got solid leadership. you know, the business is also much more diversified today than what it was 10, 12 years ago when we went through it the last time. that's, it's gonna, you know, give us a nice lift on the business this time around. It doesn't feel nearly as bad as the last time we went through a recession. as I said, the OEMs and the dealers and the consumers are relatively healthy. I think we're in a good spot, and we look forward to updating you. We'll know much more about the market and where the RV business is headed, the next time we have a call. Thanks for joining us. See you next time. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your line.