Good day. Thank you for standing by. Welcome to the Winnebago Industries third quarter fiscal year 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. You will hear a message indicating your hand is raised. To withdraw your question, please press star one again. Be advised that today's conference is being recorded. I would now like to turn the call over to Ray Posadas, Vice President of Investor Relations and Market Intelligence. You may begin. Good morning, everyone, thank you for joining us today to discuss our fiscal 2023 third quarter earnings results. I am joined on the call today by Michael Happe, President and Chief Executive Officer, and Bryan Hughes, Senior Vice President and Chief Financial Officer. This call is being broadcast live on our website at investor.wgo.net. A replay of the call will be available on our website later today. This news release with our third quarter results was issued and posted to our website earlier this morning. Before we start, I'd like to remind you that certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities laws. The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain. A number of factors, many of which are beyond the company's control, could cause actual results to differ materially from these statements. These factors are identified in our SEC filings, which I encourage you to read. With that, I would now like to turn the call over to our President and CEO, Michael Happe. Mike? Thanks, Ray. Good morning, as always, thanks to everyone for your interest in Winnebago Industries. I will provide an overview of our fiscal 2023 third quarter earnings results and then pass the call to Bryan Hughes to cover our financial results in more detail. Following Bryan's comments, I will return and offer some closing thoughts before the Q&A portion of the call. Winnebago Industries' third quarter results reflect many of the same macro dynamics we experienced in the second quarter, including subdued consumer demand for RVs and a cautious dealer network, making for challenging RV comparisons to a year-ago period of tremendous growth. While demand for new marine products in the categories we compete in has also slowed, this business segment continues to be more robust and provide valuable financial diversification within our portfolio, bolstering our consolidated results. We are working extremely hard to anticipate and navigate these trends throughout the rest of the fiscal year, and I am very proud of our Winnebago Industries team members for their hard work, determination, and passion during the quarter, and for continuing to reinforce our golden threads of quality, innovation, and service. Overall, for our fiscal third quarter, we achieved $900.8 million in net revenues, consolidated gross margin of 16.8%, and adjusted earnings per diluted share of $2.13. While our results are down from the historic year-ago period, they remain above pre-pandemic levels and continue to demonstrate the strength of our evolving and diversified portfolio of premium outdoor recreation brands and the dual focus our incredible Winnebago Industries teammates have of taking care of our customers and operating the business with discipline. Our consolidated results were resilient as top-line declines in our RV segments were offset by robust profitability in towable RVs and continued dollar growth in our marine businesses. Consistent overall financial performance, despite dynamic market conditions, illustrates the power of our diversified business model and results in ongoing value for our shareholders. While the marine industry in general is not immune to the macro pressures impacting consumers, our brands remained well-positioned within the market. Barletta, in particular, remains a bright spot in our portfolio, delivering sturdy growth and market share gains in aluminum pontoons and exceeding revenue targets, while dealers continue to be excited about this impressive brand. We also continue to manage our consolidated RV retail market share, considering ongoing dynamic and competitive market conditions. In a transitional sense, dealers are effectively working down aging model year 2022 inventory and lower-tier brands they acquired during the peak of the COVID retail frenzy. Both trends have had an interim dilutive effect on our premium RV brands market share, especially as we have less model year 2022 field inventory than most other competitive brands, a sign of our discipline. We anticipate fiscal year 2024 will see less pressure on these two fronts. More structurally and importantly, we are also monitoring the consumer's ability and willingness to pay for premium-priced products at this time in the economic cycle. All our brands are active in both promotional retail support as needed or adjusting product composition in the lower-priced parts of our model lineups to meet the affordability challenge. Increased competition in Class B motorhomes and dealer consolidation trends are also factors we will continue to navigate. We are very intentional in the careful balance of pursuing both stable market share, units, and dollars, and industry-leading OEM profitability. Recent upticks in our shipment share this spring are also positive signs dealers remain committed to our leading brands and bode well for future retail performance. Our long-range RV market share goal is 15%, and each of our three premium RV brands have established solid plans we are actively investing in to pursue and reach this cumulative target in the coming years. These plans will include, amongst other elements, new products, evolving channel strategies, organic brand extension, leadership in the digital customer journey experience, and continued inorganic pursuits if the right opportunity presents itself. We are confident in our ability to compete effectively in the years to come for increased share. We are immensely proud of the portfolio of premium businesses and the family of products we have in the market today, but we are not content to stand still as economic clouds linger. Continuously investing to develop industry-leading innovation remains a core pillar of our strategy. Barletta's recent launches of the new entry-level line, Aria, and its ultra-high-end offering, Reserve, are complemented by their latest award-winning floor plan, the Meridian Lounge, available on the Lusso and the Reserve models. A winner of the Boating Industry 2023 Top Products Award and the Marine Industry Innovation Award, the Meridian Lounge offers an exciting combination of the popular Ultra Lounge and Quad Lounge floor plans and continues to give dealers more reasons to commit increased showroom space to this young, exciting pontoon brand. Turning back to the RV side, our Winnebago brand launched the Roam Open Concept B van just last month as part of our Accessibility Enhanced line, a fresh, open concept design with an extended chassis and pop top. Newmar has recently introduced the smallest Class A luxury motor home in the market, the 2024 Mountain Aire, a 38-foot luxury motor home in a class of its own. There is no other product on the market with this length, a passive tag axle, a Cummins 525 horsepower diesel engine, and incredible torque. All the horsepower, ride, handling, and luxury of a 45-foot motor home in a smaller 38-foot package, allowing customers to continue doing what they love to do in a downsized model. Next, we remain committed to the continuous improvement of our margin performance with a focus on operational excellence, thoughtful production planning, and collaboration with our dealer partners to maintain an appropriate and balanced product mix. We also continue to benefit from our highly variable cost structure and managed SG&A spending, delivering double-digit adjusted EBITDA margin amid challenging RV market conditions. We will also continue to build on our enterprise capabilities in strategic sourcing and adhere to our disciplined production planning philosophy. We are dedicated to leveraging the latest consumer insights to inform our operations and enhance our ability to respond quickly and appropriately to evolving market conditions in ways that allow our business to sustain strong profitability and financial liquidity through economic and industry cycles. This past quarter, we also successfully announced and closed on the strategic vertical technology acquisition of Lithionics Battery. Lithionics is a lithium-ion battery solutions provider to recreational and specialty vehicle markets, and the addition of this company accelerates our innovation capabilities in diverse house battery solutions and advances our overall electrical supply ecosystem, creating more opportunities for our RV and marine products to capitalize on consumer preferences for fully immersive, off-the-grid outdoor experiences. We have already begun integrating the Lithionics business and their unique platform of electrical capabilities into Winnebago Industries. On the environmental side, we recently partnered with The Nature Conservancy to promote conservation and protect the outdoors. The partnership centers on a land and water impact goal and includes a reforestation initiative that aims to plant trees on previously forested acres throughout Winnebago Industries' headquarter state of Minnesota. Looking ahead for the rest of the fiscal year, we anticipate softened consumer demand for RVs and cautious ordering behavior from dealers to continue as market conditions persist. However, we will maintain our focus on profitability and customer care by leveraging our dealer and supplier relationships and preserving our internal agility to respond to changing market conditions. Despite those current market conditions, it is important to recognize longer-term trends as our innovative premium product portfolio continues to resonate with increasingly diverse populations of outdoor lifestyle consumers. We are confident outdoor participation will continue to rise as Americans increasingly look to the outdoors and road trips to improve mental well-being and to combat the rising costs of flights, lodging, and car rentals. For example, in Winnebago Industries' third annual Spotlight survey, 52% of respondents said they will increase outdoor activity to reduce stress, up from 2022 results. Additionally, Kampgrounds of America recently shared that 65% of campers feel camping is more affordable than hotels or air travel. Despite the uncertain economic climate, our research shows that 70% of respondents have considered using an RV for travel instead of a flight, hotel, or rental car. KOA's research shows that 33% of RVers intend to use their RV for more trips, replacing other modes of travel. Finally, we will continue to capitalize on our strong balance sheet and cash flow generation to make strategic investments in our business and our future, that reinforce our golden threads of quality, innovation, and service, and ensure our increasingly diverse portfolio of premium brands continue to resonate with consumers. Winnebago Industries remains well-positioned to further strengthen our enterprise capabilities, capitalize on growth opportunities through the cycle, and achieve our long-term value creation goals. I will now turn the call over to our Chief Financial Officer, Bryan Hughes, to review our fiscal 2023 third quarter financial results in more detail. Bryan? Thanks, Michael, and good morning, everyone. Fiscal third quarter results lap a record performance in the prior year as a result of pandemic-driven demand, which significantly impacted our year-over-year comparisons. Third quarter consolidated revenues were $900.8 million, and were 38.2% lower than the $1.5 billion recorded during the third quarter of fiscal 2022, driven by lower unit sales related to RV retail market conditions and higher discounts and allowances compared to the prior year, partially offset by favorable carryover price increases. As Michael mentioned, we continue to benefit from our diverse portfolio of premium brands in multiple segments across the outdoor recreation industry, as growth in marine sales mitigated top-line declines in our recreational vehicle segments. The mix of our businesses continues to produce a meaningfully improved consolidated sales result relative to the RV industry. Gross profit for the quarter decreased 44.5% to $151.4 million, versus $273 million during the third quarter of 2022. Gross profit margin of 16.8% was 190 basis points lower than last year. These declines were driven by deleverage and higher discounts and allowances compared to prior year. Despite recent headwinds in the industry, as context, gross profit margin remains above pre-pandemic third quarter 2019 levels. Third quarter operating income was $80.5 million, third quarter net income was $59.1 million, down 54.5% and 49.6% respectively, compared to the prior year period. Reported earnings per diluted share was $1.71, compared to $3.57 in the same period last year. Adjusted earnings per diluted share decreased 48.4% year-over-year, from $4.13 to $2.13. Consolidated adjusted EBITDA was $96.4 million for the quarter, which represents a decrease of 49.7% from $191.7 million in the prior year quarter. As a reminder, we adopted a new accounting standard in the 1st quarter of fiscal 2023, which impacted the accounting treatment for our convertible notes and the calculation of earnings per diluted share. Our adjustment following adoption of this new accounting pronouncement results in adjusted EPS to be an equivalent basis with how we had been doing the adjustment previously. I'll now cover our performance by segment. Revenues for the towable RV segment were $384.1 million for the quarter, down 52.3% compared to the third quarter of 2022. This was primarily driven by a decline in unit volume associated with retail market conditions and higher discounts and allowances compared to prior year. To put our third quarter performance into context, revenues for the towable RV segment are up 10.8% compared to the third quarter of fiscal 2019. We remain confident that the favorable exposure to the RV lifestyle that many people experienced during the pandemic environment, combined with the ability to work remotely due to virtual capabilities, will provide long-term secular tailwinds and propel Winnebago Industries' growth in the coming years.... Towable segment adjusted EBITDA was $53.8 million, down 54.3% from the prior year period, primarily as a result of deleverage and higher discounts and allowances compared to prior year, partially offset by favorable warranty experience. Adjusted EBITDA margin was 14%, down 60 basis points year-over-year, up 250 basis points sequentially, as Towable RV segment profitability demonstrated very solid resiliency during a period of sales decline and margin pressure from deleverage. Backlog decreased to $236 million, down 82% from the prior years, when dealers were focused on replenishing their inventories. Turning to our motor home RV segment, we delivered third quarter revenues of $374.4 million, down 27.5% from the $516.3 million recorded during the prior year period. This decline was the result of lower unit volume and higher discounts and allowances compared to prior year, partially offset by price increases related to higher chassis costs. Segment adjusted EBITDA was $26.8 million, representing a decrease of 58.3% from the prior year. Adjusted EBITDA margin was 7.2%, down 530 basis points from the third quarter of 2022 due to deleverage, higher discounts and allowances, and productivity and operational efficiency challenges, primarily related to some disruptions and inefficiencies resulting from our most recent phase of go live on our ERP system implementation. The go live was largely stabilized by the end of the quarter, we did experience some inefficiencies that cost us approximately 1-1.5 points of EBITDA margin in the quarter. We also lost an estimated $10 million-$15 million of sales in the quarter, but since we do not believe retail sales were impacted by this disruption, as dealer inventories are adequate to support the end customer at the moment, these foregone wholesale shipments are expected to be recovered over the next 2-3 quarters. Backlog for the motorhome segment decreased 65% year-over-year to $800.4 million, driven by normalizing levels of dealer inventories. Dealer inventories and motorhomes are gradually returning to more appropriate levels, though pockets of replenishment opportunities remain. As always, we continue to work closely with our dealer partners to ensure that they have the products they need at the appropriate time to meet consumer demand. Let's turn to our Marine segment, which continued to mitigate some of the demand softness in our RV segments. Revenues were $129 million, up slightly from the $126.5 million recorded during the prior year period, due to carryover price increases, partially offset by a slight decline in unit volume. We remain encouraged by the performance of Barletta, which continues to gain market share and outperform the broader aluminum pontoon category. Recall that our long-term targets included a business mix goal of 15% of our revenues coming from non-RV sources. This quarter, non-RV revenue accounted for roughly 15.8% of our overall revenues, compared to 9.3% at this time last year, and approximately 1% in fiscal 2016. While we don't necessarily expect non-RV revenue contribution to remain at this level every quarter moving forward, it demonstrates the increasing impact of our diversified revenue streams on our business. Marine segment adjusted EBITDA was $17.3 million, 12.5% lower than the same period last year, and adjusted EBITDA margin was 13.4%, 230 basis points lower, primarily due to higher discounts and allowances compared to last year. Marine backlogs were down 40.4% compared to the third quarter of the prior year, primarily due to normalizing levels of dealer inventories. Dealer inventory, as reported for Marine, is up 67.4%. Please note that this increase includes retailed units, not yet delivered, which typically makes up a higher percentage of total dealer inventory for the Marine segment. As always, we will continue to closely monitor demand trends in our Marine markets and manage our production accordingly. Moving now to the balance sheet. At the end of the quarter, Winnebago Industries had approximately $591.7 million in outstanding debt, representing a net debt to EBITDA ratio of approximately 0.9 times. Working capital was reduced by $80 million in the quarter, and we generated $140 million in cash from operating activities in the third quarter. Our healthy balance sheet continues to be a strength for us and supports our balanced capital allocation strategy, focused on delivering value through strategic investments in our business to drive growth, as evidenced by our recent acquisition of Lithionics Battery, and to improve our operations or increase our capacity, as well as returning capital to shareholders. During the third quarter, we repurchased roughly $20 million worth of our outstanding shares, underscoring our confidence in our ability to drive long-term, profitable, and sustainable growth. We also maintained our regular quarterly dividend, which, as a reminder, was increased by 50% to $0.27 per share during the fourth quarter of fiscal 2022. Finally, I wanted to briefly touch on how Lithionics results are reflected in our financial statements. As Mike mentioned, we closed our acquisition of Lithionics at the end of April. We have 1 month of results included in our Q3 financials. Lithionics does not have a significant impact on our consolidated results. As Lithionics is also a supplier to our RV and marine businesses, the sales and profitability of Lithionics products sold through Winnebago Industries businesses will be reflected in those respective segments as RV and marine products with Lithionics solutions installed on them are sold to our dealer network. Additionally, financial results from Lithionics battery solutions that are sold directly to external customers will be reflected in the corporate all other category. With that, I will now turn the call back to Mike to provide some closing comments. Mike, back to you. Thanks, Bryan. Now a few closing comments before we get to the Q&A session. Looking ahead, we will continue to actively manage production levels through ongoing macro challenges and a dynamic demand environment for our outdoor products. We are committed to controlling what we can through ongoing efficiency enhancements, disciplined execution, and cost management as we continue our work to drive long-term value creation for all of our stakeholders. Regarding questions we receive from the investment community every quarter about future RV industry, retail, and wholesale forecasts, here is where we stand today. Winnebago Industries supports the recent RV Industry Association shipment forecast range for the calendar year 2023 period. We will withhold comment on the RV Industry Association's 2024 calendar year shipment estimate at this time, as we wait to see the remainder of the calendar 23 year play out. On the retail side for RVs in calendar 2023, we are generally seeing multiple industry stakeholder views align currently around 350,000 estimated retail units for this calendar year, and that feels appropriate to us as well at this time. We are entering our fourth and final quarter of fiscal 2023 with a strong balance sheet, having completed multiple inorganic and organic investments in support of future growth strategies and a sequentially improved inventory and working capital position. We are closely tracking and adjusting to market conditions with a focus on profitability, market competitiveness, and a preferred lot position for our premium brands with our channel partners. Our ongoing share repurchase activity and regular quarterly dividend underscores our confidence in the long-term strength of our business. Our people are also what sets Winnebago Industries apart from the rest, driving our results and positioning us for long-term success. I am excited about the overall health of the portfolio as we head into the final stretch of fiscal 2023. We are confident in our ability to continue to deliver for all our stakeholders. We remain resolute in building a premium outdoor lifestyle company that delivers value to customers and shareholders for the long term. That concludes our prepared remarks for this morning. I will now turn the call back over to the operator, who will open the line to your questions. Thank you. As a reminder, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To withdraw the question, please press star 11 again. Please stand by while we compile the Q&A roster. Thank you. Our first question comes from the line of Craig Kennison with Baird. Please go ahead. Hey, good morning. Thank you for taking my questions. I guess I wanted to start with the RV inventory. How much more RV industry destocking is needed in your view, and what% of your RV dealer inventory is still model year 2023? Good morning, Craig. This is Mike. I'm going to start with the latter part of your two-part question. You stated model year 2023. I'm assuming you may mean model year 2022. Yes. Okay. That is the aging inventory that we most often get asked about. On the RV side, we actually feel quite good about where we're at currently with model year 2022 field inventory. If I were to aggregate all three of our brands, we think we're probably somewhere in the 10%-15% range of total current RV field inventory that is model year 2022, which we believe is considerably lower than the industry average at this time. That is probably one of the reasons, candidly, we're seeing dealers put a little bit more emphasis on some other competitive brands' 2022 inventory, in trying to clear those out before the model year 2024 shipments begin here in the next couple of months. Again, we feel good. In terms of where we're at in the destocking phase, if you noticed in our comments this morning, we referenced support for the RVIA shipment number in calendar 2023, of that midpoint of 297,000 units. We referenced support with roughly 350,000 units of retail in calendar 2023, which obviously mathematically would, you know, show about 50,000 units being destocked. We believe we're closer to the end of the destocking phase in the RV industry today, than we certainly are to the beginning. Our hope is by the end of this calendar year, you know, probably sometime in the, you know, in the late fall, as we, as we turn the calendar page into 2024, that dealer inventory in total, quantity and mix, will be in good shape as we begin the calendar 2024 year. Thank you. Then I'll have, I'll ask the same question really on the marine category. It looks like you added significantly to dealer inventory. I'm wondering, you know, what accounts for that increase? I'm sure you've added dealers, I'm sure there's been some restocking, and you mentioned something about some retail sold units that are still not counted as retail units. Maybe you could just expand on that. Absolutely. The majority of the field inventory unit increase in the marine segment is due to the Barletta pontoon business. There's a couple factors at play here. One is the Barletta pontoon business is still young, and we continue to expand that business in two distinct ways. First of all, in product. We have recently introduced two new products to the Barletta catalog in the Aria, a more volume-driven, lower-priced offering, and the Reserve, which is now the very high end of the Barletta pontoon menu. Both of those brands have seen load in stocking inventory, you know, year to date, versus no shipments on either of those two brands a year ago. Secondly, we continue to expand dealers within the Barletta business. In 2021 and 2022, we virtually halted any dealer geographic expansion of the Barletta brand because of the supply chain challenges that restricted a normal flow of shipments to our existing dealers. We did not think it was fair to set up new Barletta dealers if we couldn't serve our existing dealers well from a supply standpoint. In this 2023 year, we have begun to open up new markets with the Barletta brand, and we have begun shipping stocking inventory to some of those markets as well. The last thing I'll mention with Barletta inventory, and Bryan mentioned this, I believe in his comments. The unit number you see in field inventory today, has roughly 600 units of retail sold, but not delivered units for the Barletta brand as of the end of our 3rd quarter. You know, we feel even better about the field inventory position in light of those units being subtracted from that field inventory number you see in our materials today. Just to add to that a little bit, Craig. We're giving that insight primarily, so you're thinking about the calculation of turns the right way. It's particularly true every May. You know, the seasonality of the marine business will always have a chunk of retail sold, not yet delivered, each May we report. That was true last year, it's true this year. Sequentially, though, sequentially from February to May, it's going to have an impact on that turns calculation. We just wanted to make sure we provided that additional insight. As you're calculating turns, you're taking that into consideration appropriately. Great. Thank you. Thanks. Thank you. One moment for our next question, please. It comes from the line of Tristan Thomas-Martin, with BMO Capital Markets. Please go ahead. Good morning. Good morning. Morning. How did retail trend over the quarter? What are you seeing so far in June? Tristan, good morning. This is Mike. I will speak a bit to the flow of retail in Q3. We won't offer much insight into June at this time. From a May standpoint, our May retail results for the RV business were slightly improved, but similar to what we saw in April. What was notable was one of the last weeks of the month of May, we saw a much better RV retail week in the last week of May than we had seen in the previous weeks of May. If you're looking for green shoots of a little bit stronger year-over-year comparisons, we saw a little bit of that at the end of May. Cumulatively, May was similar, if not slightly improved, versus April RV results. On the marine side, we did see a further degradation of, particularly pontoon retail from a comp year-over-year percentage standpoint in May than we did in April. We still saw a seasonal increase, as we generally do, but we did not see retail hold on the pontoon side as much as we would have liked in the month of May. Hope that helps, Tristan. Okay. Thank you. Maybe a longer term kind of philosophical question: How are you looking at your ASPs and kind of affordability, given you are a premium brand and premium portfolio as we kind of enter fiscal year 2024? Obviously, as you stated, you know, we are a portfolio of premium brands. As really part of our business model, we are justifying to dealers and to end customers constantly, that price gap between our premium brands products and the lower priced products in the market. There's always healthy tension as to what that step-up difference is between us and a competitive, you know, less premium brand or product offering. Our businesses today are still razor focused on managing that premium gap. Because of the size that we are in our respective industries, we tend to not always be the price leader in terms of movement. Therefore, you know, we do our best to monitor competitive pricing activity, street, retail price activity through the dealers, and adjust pricing accordingly in ways that are traditionally, aligned or comfortable with each brand. Some brands we have in our portfolio have a, have a little bit more honed practice of retail discounting or support, and some of our brands tend to shy away from that and focus more on invoice pricing or support to the dealer. We're watching that carefully, given that many around the RV and marine industries have questioned the affordability concerns of the lifestyle, with both the price of goods rising and the cost of retail financing. Our businesses are managing that in various ways. You can see in our results of this quarter, that in some cases, within some of our segments, the ASPs went up. I believe in our towables RV segment, the ASP actually was a little lower per unit than, you know, than at least in the recent past. You know, that's a dynamic topic and one that our businesses are certainly trying to stay on top of. I'll just add one more thing to that, Tristan. As you can appreciate, the more disciplined you are in your production or capacity utilization and forward-looking that you are, the less of a challenge or problem you create for yourselves in your own finished goods and the need to move product. We take great pride in also having a good forward view, a very disciplined approach to our build schedule, and that helps us as well, we believe. It also does show up in the pricing and the discounting that's necessary for us to do relative to others, perhaps. All right. I'll Got it. Thank you. One moment for our next question, please. It comes from the line of Scott Stember with ROTH Capital MKM. Scott, please go ahead. Good morning, guys, and thanks for taking my questions. Good morning. Yeah, good morning, Scott. In the release, you guys talked about how your margins benefited from some carryover pricing. Can you talk about, you know, how we should expect that to flow over into Q4, particularly, I guess, with the final purge of 22 models? If you're expecting any discounting on 23s ahead of the 24s coming up? Yes, Scott, good morning. This is Bryan. I'll take the initial stab at that, and Michael can pile on if needed. We're seeing still inflationary pressures on two segments from a year-over-year perspective. The motorized segment and the marine segment are both seeing year-over-year inflation. Likewise, that carryover pricing, that largely offsets that inflation. On the towable side, we're starting to see actual declines year-over-year, and so some of the pricing will reflect that... inflation year-over-year as well, or deflation, if you will. On a sequential basis, it's become pretty neutral. You know, the cost environment sequentially is flat for both motor home and marine. We're actually seeing on the towable side, some stability as well now, sequentially. I think what you can expect from us going forward is pricing that mimics or follows that year-over-year inflation, such that that net equation is pretty neutral. We expect that likewise for Q4. All right. Just for modeling purposes, I know you guys don't guide, but, obviously, you have some very dynamic market conditions going on right now, lots of reports of, you know, June and July, a lot of time being taken down just to make sure we get these 2022s out. Maybe just give us a little help on, you know, what to expect from a production standpoint in the fourth quarter. Second part of that is, when will you be starting to produce 2024s and shipping them out? Good morning, Scott. This is Mike. We generally do not share production downtime information specifically. Those decisions, as you might expect, are made on a brand-by-brand basis. It is likely, however, that Q4 of fiscal year 2023 will see more down weeks than we saw in Q4 of fiscal 2022. We worked very diligently in Q3 to try to move as many of our remaining model year 2023 products across all of our businesses as much as we could. There is some remaining model year 2023 product that we continue to move, particularly in the RV businesses here in the month of June. It is important to us that we get rid of our internal model year 2023 product before we start shipping model year 2024 product, because it's highly likely we would see dealer pushback on 2023 pricing if we wanted to start shipping 2024 product too prematurely. In several of our businesses, we have already begun to make model year 2024 product, but we have not yet started to ship in most of those businesses that product yet. That will be happening here over the course of Q4. We do imagine that Q4 will see some pressure on the top line due to the fact that dealers are resistant in taking much more model year 2023 product before the model year 2024 product hits the market. That's in line with both their destocking mentality currently, but also their desire to obviously protect their margins, and not take any further, quote-unquote, you know, "aged product." Again, we anticipate Q4 could see some top-line pressure due to that transition, especially in the first half of our Q4 period. Yeah, I think the only other detail I would add behind that, Scott, is the marine segment in particular, as Mike alluded to, is seeing that slowdown in retail. We were in pretty heavy inventory build mode in the marine business last year in Q4. I think the comparisons get tougher as a result of the combination of those two events. If I could just sneak one last one in. Your backlog, does that have much, if any, 2024 orders, or is that more just 2023s? It depends by business. Scott, as an example, we had a Newmar dealer meeting in, I believe it was late April, where the Newmar team essentially pitched and took orders on future model year 2024 products. Some of the backlog in the motorized segment, as an example, includes those Newmar orders on 2024 product, which is generally the first probably 3 to 6 months of the Newmar model year 2024 year. I would say the other brands, the product was probably ordered under the guise of a 2023, you know, timing, but that unit will be delivered most likely in Q4 or Q1, you know, as a 2024 model year product. Even if the order was written as 2023, most likely it will be supplied as a 2024. Got it. Thanks again, guys. Thanks, Scott. Thank you. One moment for our next question, please. It comes from the line of Fred Wightman with Wolfe Research. Please proceed. Hey, guys. Good morning. Mike, I'm hoping you could just help us rationalize. You sort of laid out the expectation for softer consumer demand and cautious dealer orders here going forward, but then you also talked about some really strong demand at the end of May. Can you just sort of help us rationalize those two thoughts? Good morning, Fred, you know, I think it depends on, you know, one is retail that I referenced in terms of a good single week of retail comp-wise that we saw in that last week of May that was promising going into June. Whether that's the sign of a sustained trend in terms of stronger comps year-over-year, less down, as an example, is yet to be seen as we continue to travel, you know, through the summer selling months. I would say the top line shipment demand is more predicated in both the RV segments, but also now the marine segment on dealers' appetite for inventory. As I commented earlier in the Q&A, I do believe we're in the later stages of the destocking cycle here with dealers, especially on the RV side. Dealers continue to be very focused on moving model year 22 product, limiting further exposure of model year 23, and then being very careful about their opening model year 2024 products that they will take. The good news is, Winnebago Industries is in excellent shape on model year 2022 product. We are also beginning to see some of those second or third-tier branded inventory begin to clear from some of our dealers' lots. We feel we will be in a good position, timing-wise, hopefully again, later in the calendar year 2023, and especially as we move into calendar 2024, to begin to see some benefits from a more one-to-one, shipment to retail reordering, cycle that we hope to transition into. I can't reconcile a single week of retail and some of the top-line demand dynamics, but we'll just continue to monitor it as best we can. Fair enough. Can you just sort of walk through the differing margin performance across the two RV segments? I mean, towables was pretty good on a year-over-year basis, despite all the volume declines. Looks like motorized took a step down, and it sounds like part of that's due to the ERP issues. What exactly explains the differing trajectory between the two RV sectors? Yeah, Fred Wightman, this is Bryan Hughes. I'll take that one. On the towable side and the motorized side, the biggest lever by far is volume and the deleverage that happens. I'd say the towables segment has a higher% of variable cost than the motorized segment. That's by virtue of several factors, but that I'm not going to get into. I think you have to assume a higher variable cost structure on the towable side than the motorized. Deleverage and the volume declines associated with it is the biggest driver by far. I'd say the allowances and discounts, we mentioned that in both segments as well. That's the next largest impact. The difference that you had in the quarter between towables and motorized is towables had a favorable experience in the warranty costs. Continue to see some good results from Grand Design in particular, and the focus on their quality in their production and how that translates into warranty costs in the long term. We had some favorable experience there in Q3 for towables that helped that segment in particular, and that's why we called that out. It helped that segment deliver higher margins. As you mentioned, on the motorized side, we did have the ERP implementation. This is our third phase. First couple of phases were in prior years, and they went quite well. This third phase stood up several of our verticals. One vertical in particular struggled with that ERP implementation, that caused some disruption for us in the quarter. I called out 1 to 1.5 points of margin degradation, EBITDA margin degradation as a result of that implementation. We think we're largely through the worst of it here, sitting here today. It was something that we felt we should call out, though, for our quarterly results. Those are the biggest differences. You know, the deleverage dwarfs pretty much all other drivers as it relates to the margin%. Got it. Thank you. One moment for our next question, please. It comes from the line of Michael Swartz with Truist Securities. Please proceed. Hey, guys. Good morning. Just maybe following up on Fred's comments. Maybe at a more holistic level. Just the last 3 quarters, we've seen you pretty consistently in this gross margin range of the high 16s. That comes despite obviously the volume deleverage and some of the input price aspects and now allowances coming back. I guess my question is, knowing you don't give guidance, but is kind of 16, high 16s, a floor level to think about as we try to model out for fiscal 2024 and 2025? Good morning, Mike. Thanks for the question. This is Bryan. you know, I think the sustainability of our margins, we've demonstrated that over the longer term. I hate to, you know, comment on Q4 in particular, as you're thinking about Q4. We're going to continue to have pressures from the retail environment, from the inventory levels, as Mike was just talking about, and the associated environment overall for pricing and discounting. That's going to be a headwind that we continue to face in the near term. Obviously, over the long term, we're going to differentiate through the focus that we have on quality, on service, a differentiated product through innovation, things such as Lithionics and the upside that should deliver to us in the long term will be tailwinds. I think that near term, between the deleverage and the sales declines that we have, as well as the market pressures on pricing, those headwinds will be tough to maintain in the near term, the kind of margins that we've had historically. We're gonna continue to work very hard at it, finding the operational efficiencies as well, and being very disciplined in our production schedules. We think, as I mentioned earlier, that that discipline helps to mitigate some of the challenges in the discounts and allowances, but yet we're still subject to the overall market there. I think headwinds are gonna be pretty prevalent. Two additional comments, Mike, from my end, very quickly. One is, as you may recall, we did communicate last fall that a long-range goal for us in terms of gross margins is 19%. We, Bryan and I, don't structurally see anything long term that dissuades us from thinking that that isn't a reasonable target, you know, some years down the road, especially in a more healthy demand environment. The other thing I would just like to point out again, is at a consolidated level, our portfolio continues to benefit from the work we've done in the last seven or eight years around driving now a very meaningful towables business and now an increasingly material marine business. Both of those could still certainly see margin volatility based on the factors that Bryan referenced, especially in the short term. The general benefits of our diversification from a profitability floor standpoint, that floor has definitely been improved versus pre-COVID Winnebago Industries because of those businesses and our investments through the years. Okay, thank you for the color. Maybe just a follow-up, just on the promotion and kind of discounting allowance front that you've referenced a number of times in this call. Can you maybe just give us a little context? Obviously, promotion discounting is higher year-over-year, but a little context of maybe where that stands versus pre-pandemic levels. Yeah, Mike, I would say that to characterize it further, a good context, it's very similar in the levels that we did pre-pandemic. We are not at elevated levels sitting here today versus where we were in 2018 and 2019. Okay, great. Thank you. Thank you. One moment for our next question, please. All right, our next question comes from Bret Jordan with Jefferies. Please proceed. Hey, good morning, guys. This is Patrick Buckley on for Bret Jordan. Thanks for taking our questions. Good morning, Patrick. Good morning. Could you guys talk a little bit more about the current levels of finished goods inventory, and how you guys compare to the peers? Have trends generally improved there to start the year? Patrick, this is Mike. As you may expect, we don't have great visibility to competitive inventory levels, per se. We believe that our businesses have been destocking at probably similar levels versus competition, but candidly, percentage-wise, we may be destocking less for these reasons. One, we had less aged inventory as we began calendar year 2023. Secondly, over the course of the last couple of years, because of our market share gains, particularly in the Grand Design business on the RV side, you know, we had a strong rationale for our field inventories growing for, you know, for periods of time. We do not believe that our field inventory levels in any way, shape, or form are inordinately higher, as a percent of either past or forward retail than our competitors. In fact, and we may be biased here, but we believe they're potentially, in some cases, in better shape. Where we are not advantaged in the extreme short term is if our competitors have higher levels of model year 2022 inventory, and there remain second or third-tier brands in the market, the dealers are very much emphasizing moving those at the current time. If you look at FSI retail for RV towables, as an example, particularly travel trailers, most of the top 10 brands in the industry were not the brands that gained share in some of the recent FSI results. It was actually brands 11 through 30, that were gaining a little bit of share, and we believe that was a function of those brands, being higher in inventory, and/or being rationalized off the lot, eventually here. Got it. Bryan, just to follow up a little bit there, were you asking about our finished goods on our lots? Yes. Okay. Yeah, because I think Mike was addressing the field inventory. Finished goods, just would reiterate that our approach, generally speaking, is a build-to-order approach. That is, when we start a chassis into production, or a boat into production, it is tied directly to a dealer order. Our finished goods right now is slightly elevated versus the history, because you have situations where we start a production or a unit into production, that dealer may subsequently back out of that order. That has happened more frequently in the recent past than it has, you know, versus a year ago, for example. Our finished goods are up slightly. I'd say they're still in a very comfortable position, relative to the industry, largely speaking. Got it. That's helpful. Thank you. I guess as you know, look into the competitive landscape, and you mentioned, you know, some shifts recently, has pricing remained generally rational from what you guys can see on the competitive landscape? I would say we would state that, you know, pricing has been rational, but, you know, all players in the industry are considering opportunities to address the affordability concerns, particularly on the RV side. You are seeing, at times, for new models introduced from various OEMs that are trying to ensure that consumers have an affordable entrance into their product lineups. That can happen through decontenting a product, you know, taking off a few features or functions, thus removing some costs for the bill of material and being able to put a cheaper price unit in the market. You know, or in some cases, OEMs are extending their product lineups, you know, a little bit lower, like we did with Aria on the Barletta Pontoon business, to price points that maybe they haven't had a presence in before. Our businesses will continue to focus on, yes, still offering premium options, to the competition through our brands, but our brands are also working intentionally, to provide products that our dealers can use to reach consumers who may be more price sensitive. I think you'll see some evidence of that and some announcements and displays of that in the coming months, as our businesses continue forward with those plans. I would imagine you'll see some of that product at the open house event in Elkhart in September. Great. That's all for us. Thanks, guys. Thank you. Thank you. One moment for our next question, please. It comes from the line of David Whiston with Morningstar. Please proceed. Thanks. Good morning. Just curious, with the Lithionics deal done, do you still have any significant R&D tech holes that you're looking to fill, possibly via M&A? Good morning, David. This is Mike. As we've stated, the Lithionics acquisition was a new form of acquisition for Winnebago Industries, at least in our recent history, in the sense that it was obviously an investment in a strategic technology vertical that we believe is an important area for the future. That being the electrification of house power and candidly, you know, the further minimization of components like gas or diesel generators in RVs or boats in the future. ssessing, you know, the rest of our electrical ecosystem from a supply chain standpoint to ensure that we have access to components, which we believe are important to advantaging our products and brands, differentiating us in the future and offering the consumer great experiences as, again, more products become electrified, especially on house power. We have no news to announce. That could be anything from just having a stronger second or third source of components in that electrical ecosystem, or it could be considering further vertical investments in the future. But we believe that is a key area of our business model to assess and protect and create an advantage in going forward here over the next decade, for sure. Okay. Marine, have you noticed any difference between, any major difference between the Chris-Craft and the Barletta customers' consumer confidence right now? They are two different customers, for the most part. You know, there could be a few Chris-Craft customers that also own pontoons, particularly in the freshwater markets. As we've stated before, the Chris-Craft customer is exceptionally affluent, often paying cash, you know, a high majority of the time for their purchases. They have a general ability to make investments in high-end discretionary outdoor products during even very difficult, you know, downcycle moments. Even that business has seen, you know, pressure in terms of retail performance, as well. That may be due to a number of factors, you know, whether it's the volatility of the stock markets, or it's the fact that, you know, some of those consumers may personally be involved in businesses that are, you know, tightening their belt as well, and they want to lead by example, even personally. The Barletta business is definitely a more price-conscious consumer, albeit it's a higher-end consumer in the pontoon segment, but you see more middle-income families, and folks that, you know, don't have the ability to spend, you know, what a Chris-Craft customer can. We see more retail financing on pontoons. Again, the cost of retail financing at a rate standpoint is probably 2 to 2.5 times higher than it was a year ago. That being said, the Barletta business is still quite resilient for the reasons we mentioned earlier in the call. Our market share has now risen to around 7.5% in recent months on aluminum pontoons. It's still a business that is swimming a little bit against the current in terms of share in a positive sense. We still have to be very conscious with the affordability factor on that line over time as well. I guess just extending on that, I mean, given the Chris-Craft customers' wealth, stock market is now doing quite well again, we still haven't had this recession that everyone keeps waiting for, it just doesn't seem to be happening. The Barletta continues to overperform relative to your expectations. I mean, it's probably fair to say you're not too worried about your marine business relative to the RVs, right? Well, as Bryan indicated a little bit earlier, I do think you're going to see the marine industry overall travel a little bit further, deeper into the down cycle than it has to date. We anticipate continuing to see some pressure, at least probably in the next couple of quarters to that end, especially as dealers continue to rationalize their inventories. We are ecstatic about the two brands that we have in the marine industry, in Chris-Craft and Barletta. Most of you on the call know we've expressed a continued interest to assess and potentially invest in further marine assets. For the long term, both of these businesses have bright prospects. We're investing in people, technology, infrastructure, to ensure that under healthy market conditions, they can outpace the competition. you know, in many respects, they've stayed a little bit ahead of the RV businesses here recently. I think there's some further pressure in marine to go through before we reach a downcycle trough there and start to find some tailwinds again someday. Okay. Thank you. Thank you. One moment for our next question, please. It comes from the line of Joe Altobello with Raymond James. Please proceed. Thanks. Hey, guys, good morning. I just want to go back to your comments earlier regarding towable pricing. I think you mentioned that costs are coming down, and that pricing should follow. I assume you don't mean that like-for-like MSRPs will be coming down in model year 24, but rather that your realized ASPs may be going down, given higher discounts and allowances and maybe the mix to lower price models. Just want to get a better sense of how you're thinking about, you know, pricing in 24. Joe, this is Mike. I'll address that first, and Bryan, please support as needed. You know, we are very focused on ensuring that we have competitive pricing in the market for both our Grand Design and Winnebago towables businesses. As Bryan alluded to, where the bill of material and cost trends allow us to consider lowering invoice price to the dealer, as part of our model, you know, year 2024 strategies, we will very seriously consider that. We cannot depend solely on the dealer to absorb the margin, you know, hit, to hit the street retails that may be necessary to, you know, keep our market share where we want it on those two businesses. The Winnebago brand has tended to be a little bit more promotional and rebate active, whereas the Grand Design business has been a little bit more pure historically, in terms of focusing on making sure we have the right invoice price. Both of those invoices may reach similar places in different ways, but we will be active in adjusting invoice price, particularly on Grand Design, if we need to make sure that the ultimate, you know, retail that we need to be at in the market, is competitive. Particularly on the Winnebago brand, where we need to be promotionally active as well, you know, we'll consider that. You know, I would say, you know, we need to remain on the offensive in terms of market share, stability, and, you know, someday progression again. That does mean that we, you know, have to probably be more agile from a pricing standpoint as we see costs shift. Got it. It's very helpful. Maybe just to shift over to the credit environment, have you seen any changes lately? Are you hearing of any lenders exiting either the RV or marine spaces? On the retail side or the floor plan financing side, we are not seeing any exits. It seems to be a pretty stable environment. We're certainly seeing costs go up or interest rates go up in the range of 400 points, probably on the retail side. Not quite as much on the floor plan financing side, but it could get to that point. Certainly, you're seeing pressure from the cost side. Availability and willingness to lend, you know, I've been expecting to see some tightening on the retail side. I think you're seeing a little bit of that in terms of FICO score and creditworthiness, and retail lenders maybe being a little bit more selective. We are not hearing these anecdotal examples from dealers where they had a sale in hand and it fell through due to financing. Not often, you know? It seems to be that the availability of credit is still there. It's just at a more costly level. Got it. Okay. Thank you, guys. Thanks, Joe. Thank you. One moment for our next question, please. It comes from the line of James Hardiman with Citi. Please proceed. Hi, good morning. Thanks for taking my call. I think most of my questions have been answered. Maybe help me connect the dots here. Obviously, the RVIA numbers have come down quite a bit since your last update. It sounds like you agree with those numbers. I'm trying to figure out how, if at all, your own expectations for your own business have changed, in recent months? Good morning, James Hardiman. This is Michael Happe. Yeah, I would say what we expressed this morning, you know, correlates, you know, closely to obviously the internal discussions we're having with our businesses, you know, about, you know, current market conditions in calendar 2023. You know, our fiscal year ends, as all of you know, at the end of August. Subsequently, we are very much in the annual planning process for our fiscal year 24 period. We're having internal discussions of some significance on, you know, how we think the market will act, not just through calendar 23, but through obviously most of calendar year 2024. We're not ready to share any observations or I guess, you know, forecasts or projections about that period at this time. I think the bigger discussion, James, is potentially less what 2023 is going to look like at this point. We don't see a ton changing, inflection-wise in 2023 versus the current momentum. What we do believe is we're nearing a point here in the next, you know, 6 months, especially on the RV business, where most, if not all, of that destocking appetite from dealers, will probably be, you know, filled. Then now you're talking about the timing to potentially turn the corner and see market conditions be more supportive of a one-for-one, you know, refill environment on the RV side. That then changes the math a bit, obviously on wholesale shipments going forward if we can see some level of retail stability, and then over time, obviously see retail continue to grow again. We're optimistic, you know, that the industry has ridden through this down cycle in a relatively healthy manner. I think OEMs, suppliers, and dealers have been rational and probably as disciplined as we've seen in this down cycle than in most or any previous down cycles. That should bode well for a relatively, you know, quick turn back to some wholesale velocity once, you know, once retail is stable and the inventories are finished being right-sized. I'm optimistic, you know, continue to be optimistic about, you know, our prospects in the future. I'm also very bullish on consumer engagement in the outdoors. We tried to highlight that throughout the call, several slides in our supplement deck. Consumer engagement in the outdoors is strong. While that's not necessarily resulting today in the type of retail or wholesale activity that, you know, we'd like to see, that underlying foundational momentum is still there, and we anticipate that we'll be able to tap into that, you know, in the not too distant future, in a way that's more meaningful to our financial results. That's very, really helpful. Makes a lot of sense. If I sort of piece together what you've said here, it sounds like, you know, by the end of the year, you're hoping that things are a little bit more normal, more of a one-to-one wholesale to retail. If I think about the nearer term, right? Your fourth quarter in the next few months, it sounds like what you're saying is, and what we're hearing everywhere, is that the focus is going to be clearing out these model year 22s and lower-tier brands, of which you have very little, very few of those units left to sell. How should we expect that to manifest itself in terms of some of the numbers? It seems like maybe we should expect your retail share to be lower in this quarter as dealers focus on stuff that you don't have, but as they replenish, maybe your shipment share is higher, or am I making too much of a leap there? James, our shipment share actually in the last, you know, 3-6 months, has been trending a little bit higher than previous years, which we believe is a good foreshadowing of, you know, a potential, you know, retail share increase at some point in the future. I think both Bryan and I have commented in different ways on the call that there are various reasons why our market share is what it is in the short term. In some cases, we continue to gain share in certain spots, and in other cases, we've lost a little share. Some of that are due to potentially reasons that aren't as much in our control as we'd like. You know, other reasons for any share dilution that are in our control, we're working vigorously hard to address. I mentioned that in the first half of my comments this morning. We're not going to comment specifically, obviously, for Q4, you know, on the top line, but I think you've heard from both Bryan and I this morning that, you know, the top line conditions for Q4 for both the RV and marine segment could be a little bit more challenged than they, you know, than they were on a year-over-year basis than in Q3. That's probably, you know, what we'll limit our statement to today. Got it. That's really good color. Thank you. Thank you. Thank you. One moment, please, for our next question. It comes from the line of Brandon Rollé with D.A. Davidson. Please proceed. Good morning. Thank you for taking my questions. I think you had mentioned earlier in your prepared remarks, you were watching dealer consolidation. Obviously, Camping World has been very aggressive acquiring dealerships. Do you feel like your absence from their dealer network could limit your market share upside in the upcoming years? Thanks. Good morning, Brandon. This is Mike. We continue to watch dealer consolidation very intently in all of our businesses. We're seeing dealer consolidation on the marine side as well, maybe not to the degree we've seen it recently on the RV side. Each of our businesses, you know, has, you know, frontline relationships with all of our dealers. Camping World specifically does business with our Winnebago brand in dozens of markets today. We do not have a presence with the Grand Design brand or the Newmar brand in Camping World stores at this time. Each of our businesses does have an open dialogue and relationship with Camping World, as they do with other dealer groups. We really, you know, take those conversations on a market-by-market basis in many cases. We respect what Camping World and other large dealer groups are attempting to do to create successful businesses. Where there's an opportunity to have a win-win relationship between any retailer and any of our brands, we are very open to considering that. I would tell you that there is no hard and fast line here at Winnebago Industries that, you know, we will or we won't do business with certain dealers. Our business unit leaders are on point to make the best decisions in the interest of our company, but also try to find win-win solutions with, you know, all of the dealer groups on a market-by-market basis. We're watching all of those trends carefully and have active discussions with many dealer groups as to, you know, as to how we can help each other succeed. Great. Just finally, on the excess model year 23 inventory, at the factory level, I guess, how does that promotional activity for those units evolve, say, you know, throughout the end of June, if dealers still don't want inventory? Obviously, it seems like the industry is going to move ahead with model year 24 sometime in, you know, early to mid-July. You know, how aggressive promotionally could you get there to move those units ahead of the 24 shipments? Thanks. Yeah. As Bryan indicated earlier, you know, the amount of discounting, whether it's to move our open inventory, or to support actions in the field, is generally in line with what we saw, you know, back pre-pandemic. You know, we don't anticipate, you know, probably material change in that sort of sales allowance line, you know, or sort of off invoice line, to move the remainder of our model year 2023 inventory. You know, as Bryan stated, we're not, you know, excessively, you know, high on model year 2023 inventory at this time. Our businesses did a really good job in moving that in Q3. They continued to do a good job of moving that here early in Q4. I think we'll be able to move through most of that with reasonable support, as we introduce our model year 2024 inventory. That's actually a commitment from our businesses to our dealers as well, is to work with them to take care of that, so that we can both make a smooth transition to 2024 products. I don't, I don't think you'll see, you know, abnormal impact to our financials because of that topic alone. Thank you. Thank you. This concludes the Q&A portion of today's conference. I'd like to turn the call back over to management for any final thoughts. Thank you. This is the end of our third quarter earnings call. Thank you to everyone for joining us. Enjoy your day. Thank you, ladies and gentlemen. This concludes the conference. You may now disconnect.