Good day, and thank you for standing by. Welcome to the Winnebago Industries Q1 Fiscal 2025 Financial Results conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Ray Posadas, Vice President of Investor Relations and Market Intelligence. Sir, you may begin. Thank you, Damon. Good morning, everyone, and thank you for joining us to discuss our Fiscal 2025 first-quarter earnings results. This call is being broadcast live on our website at investor.wgo.net, and the replay of the call will be available on our website later today. The news release with our first-quarter results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along with our prepared remarks is also available on the Investor Relations section of our website under Quarterly Results. Turning to slide two, 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, and 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 we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures, and the reconciliation of the non-GAAP measures to the comparable GAAP measures is available in our earnings press release. Please turn to slide three. Joining me on today's call are Michael Happe, the President and Chief Executive Officer of Winnebago Industries, and Brian Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our Q1 performance. Brian will discuss the associated drivers of our financial results, in addition to sharing our forward view of the market and our fiscal year 2025 guidance. Mike will conclude our prepared remarks with the business outlook, and management will be happy to take your questions. With that, please turn to slide four as I hand the call over to Mike. Thanks, Ray. Good morning, and thank you for joining us to discuss our first-quarter results. When Brian and I spoke with you on our year-end earnings call in October, we conveyed an expectation that the first half of 2025 would be challenging. The outdoor recreation space continues to face a difficult operating environment marked by soft retail demand and a cautious dealer network, resulting in lower segment revenues and profitability in our towable and motorhome RV segments. Our marine segment was the standout performer in the quarter, delivering revenue and margin growth sequentially and year over year. Barletta and Chris-Craft brands generated retail market share growth through October, outperforming the industry in their respective categories. We've seen some recent signs that consumer confidence is beginning to pick up, and we continue to anticipate an improved demand landscape in the second half of the year. Amid the current market dynamics, we continue to execute a proactive and disciplined approach to managing production capacity, output, and costs. Moreover, we remain focused with our dealer partners on tailoring our incentives, support programs, and inventory management to foster confidence and stimulate future orders. These strategies, complemented by our healthy balance sheet, prudent capital spending, and robust liquidity, position us for an anticipated market recovery in the second half of fiscal 2025. For the most part, the RV industry has done a commendable job managing inventory levels in light of the soft consumer demand and more moderated dealer ordering patterns, and Winnebago Industries is positioned well in terms of field inventory levels as we plan for a market recovery. The bottom line is that we are running the business for the long term. Despite challenges within the industry, the Winnebago Industries team's balanced approach to capital allocation has two primary objectives. The first is to sustain annual profitability and maintain a resilient balance sheet while strengthening our competitive market positions and supporting both lot and retail share across our outdoor portfolio. The second is to emphasize strategic investments that drive the long-term growth and value of our brands and overall business. On our year-end call, Brian and I highlighted the strategic leadership changes to address the operational inefficiencies within our Winnebago-branded motorhome and towable businesses. As a reminder, Don Clark has been promoted to Group President of Towable RVs, leading the Winnebago brand's Towable RV division, in addition to the Grand Design RV brand. Chris West has been promoted to President of Winnebago Motorhomes and Specialty Vehicles. While it will take some time to effectively evaluate the operational changes within these Winnebago-branded businesses, Don and Chris have already begun to lay the groundwork for what we expect to be improved performance and growth for the Winnebago brand in the back half of calendar 2025. Turning to recent RV trends on slide five, from a retail perspective, industry-wide RV shipments were up 2.4% year over year in October. Although one month does not make a trend, positive retail comps after 40 consecutive months of year-over-year declines are an encouraging sign as well. On the wholesale side, RV shipments through October stood at approximately 287,000 units, up 7.7% year-to-date compared with the same period in 2023. We now expect calendar year 2024 RV wholesale shipments of approximately 330,000 units. For calendar year 2025, we continue to forecast wholesale RV shipments in the range of 320,000 to 350,000 units. Our median of 335,000 units is slightly more conservative than the current RV Industry Association projection of 346,100 units. The RVIA expects wholesale shipments to remain relatively flat through mid-2025 before accelerating in the second half of the year. We believe that gross field inventory levels in RVs are well-positioned, both in terms of quantity and aging. While RV dealers remain cautious about committing to new orders, we are seeing early signs of optimism driven by the conclusion of the election, the anticipated further easing of interest rates, improving inventory levels, and stabilizing consumer sentiment. Turning to slide six, for the trailing 12 months ended October 31st, our total market share declined 50 basis points to 10.9% compared to the same period in the prior year. In the motorhome RV segment, our Class A and Class C offerings from Winnebago and Newmar are performing well. Grand Design's Lineage Series M is just beginning to ramp, and with two additional models in development, we have high expectations for those products. We continue to maintain strong double-digit market share in Class B, and we have specific actions underway there to drive further share growth through new products and marketing initiatives. In our towable RV segment, Grand Design has done a great job winning in the majority of price points in which it plays. Across the segment and indeed throughout the business, we continue to be in the process of transforming our product portfolio to satisfy a wide range of price points, including lower price point models in many categories. Rather than decontenting, we are refining product features to focus on delivering what consumers truly value without compromising quality or functionality. Slide seven details Barletta's steady gains in the U.S. aluminum pontoon market. Over the 12 months ending October 31, 2024, our market share increased by 180 basis points to reach 9.1% compared to the same period in the prior year. We continue to get high marks from our dealer network related to providing a great product that is truly resonating with our mutual end customers. Moving to recent highlights on slide eight, the overwhelmingly positive response to Grand Design's award-winning new Lineage Series M confirms the demand for the brand's innovative approach to motorized RVs. Earlier this month, Grand Design announced the addition of a Class Super C motorhome to its acclaimed Lineage motorized product lineup. The new addition, Series F, is scheduled to debut next month at the 2025 Florida RV SuperShow in Tampa. The new Series F will be manufactured alongside Series M at Grand Design's cutting-edge motorized facility in Indiana. We are excited to introduce the next iteration of the Lineage line to an RV class that continues to grow and to partner with dealers across the country to bring this product to a new customer base. In the towable RV category, the Super Show will feature products including Grand Design's all-new Momentum 392M, the latest addition to the top-selling Momentum toy hauler lineup, and the Winnebago AXS 18 DBH and 18 RK, the first compact single-axle floor plans in the functional and feature-packed AXS series. As we are entering boat show season, I also want to highlight two marine products: the Barletta Aria 4-Point Fish, a new floor plan for the model year 2025 lineup, and the Chris-Craft 28 Sportster Stern Drive, which debuted recently at the Fort Lauderdale International Boat Show. An outboard propulsion version of the 28 Sportster is scheduled to be unveiled at the Miami International Boat Show in February. Now, let me turn the call over to Brian for the financial review. Thanks, Mike, and good morning, everyone. As a reminder, in my prepared remarks, I will focus on the key drivers of our performance. Please refer to our earnings release and earnings supplement documents for a detailed overview of our key financial results. Starting with our consolidated results on slide nine, as Mike noted, the RV retail demand environment remained soft in the first quarter. Revenues were down 18% compared with the first quarter of fiscal 2024, driven by lower unit volumes in the towable and motorized RV segments and a reduction in ASPs due to a shift in product mix. The resulting volume to leverage increased warranty spend in motorhome related to a couple of recalls in the quarter, and product mix reduced year-over-year gross margin % but was partially offset by operational efficiencies. Operating expenses increased 1.3% from Q1 last year, primarily reflecting increases in spending related to Grand Design Motorhome, Barletta, and our Lithionics businesses, and other investments in digital capabilities. These were partially offset by cost containment efforts. Our SG&A spend is down 4.6% sequentially, driven by sequential spending reductions across most of our business units. As expected, consolidated Q1 Adjusted EBITDA margin was down from the prior year period. Turning to our performance by segment, starting with towable RV on slide 10, the decrease in revenues from last year's first quarter was attributable to lower unit volume and a shift in our product mix towards lower price point models. The lower unit volume was driven by challenging market conditions, but also in part by tightly managing capacity and intentionally lowering field inventory during the quarter. Segment-adjusted EBITDA was down versus last year, reflecting volume deleverage and product mix partially offset by cost containment efforts. Turning to slide 11, motorhome RV segment revenues were down from the same period last year. This year-over-year change was attributable to lower unit volume related to market conditions. Segment-adjusted EBITDA also decreased from last year, reflecting volume deleverage, higher discounts and allowances, and increased warranty experience compared to the prior year. This was partially offset by operational efficiencies. Keep in mind that Q1 marks the first period in which Grand Design Motorized has been incorporated into our motorhome RV segment results. As anticipated, it is exerting near-term pressure on the segment's margins in advance of achieving meaningful revenue contributions. Moving to our marine segment on slide 12, revenue increased year-over-year related to targeted price increases and higher unit volume, partially offset by a reduction in ASP per unit related to product mix. Adjusted EBITDA margin improved 110 basis points from last year's first quarter to 9.3%, reflecting targeted price increases partially offset by product mix and higher warranty expense. Moving now to the balance sheet on slide 13, at fiscal year-end, Winnebago Industries had a net debt-to-EBITDA ratio of approximately three times, above our targeted range of 0.9-1.5 times. In Q1, we reported negative free cash flow of $26.7 million. As I have noted on prior calls, historically, the first and second quarters of the year have not been cash-generating quarters for us because of the seasonal nature of our business. Next month, we will pay a quarterly cash dividend of $0.34 per share, marking the 42nd consecutive quarter that Winnebago Industries has paid a dividend. During the quarter, we repurchased approximately $30 million worth of our stock, and as of November 30th, had $200 million remaining on our repurchase program. Turning to slide 14, we are reaffirming our fiscal year 2025 expectation for consolidated revenues in the range of $2.9-$3.2 billion. We are also slightly revising the top and bottom of our adjusted EPS guidance range while leaving the previously communicated midpoint of $3.75 unchanged. Based on our first quarter fiscal 2025 results and our outlook for the balance of the year, we now expect adjusted EPS of $3.10-$4.40 per diluted share, compared with our prior range of $3.00-$4.50 per diluted share. Looking ahead, although the near-term outlook remains challenging, we are confident in our ability to capitalize on the anticipated rise in demand as the RV and marine markets enter the spring selling season. For Q2, we are expecting sales to be in line with Q1 on a sequential basis, with a modest improvement to profitability. We will continue to manage the balance sheet with prudence, being always mindful of our capital allocation priorities that we have communicated historically. Now, please turn to slide 15 as I turn the call over to Mike for his closing comments. Mike. Thank you, Brian. Looking ahead, our strategy is laser-focused on positioning Winnebago Industries for long-term growth while navigating the current challenges with discipline and agility. We are introducing more affordable, innovative products across our portfolio to meet evolving customer needs and entering new segments, such as the Newmar Super C and the expanding Lineage family of motorhome RVs from Grand Design. At the same time, we're sharpening our focus on operational efficiency, tightening our variable spend model, managing SG&A more aggressively, and aligning production rates to demand, including adjustments to our workforce. To ensure sustained success, we are prioritizing critical investments, consolidating plans to lower fixed operational costs, and creating a step change to drive stronger performance. While certain actions, such as a recent consolidation of manufacturing operations in Iowa, had some financial implications this quarter, they reflect our commitment to building a leaner and even more cost-effective operation. Additionally, we're doubling down our improvements to our product quality processes, ensuring that every product we bring to market delivers on customer expectations. These initiatives underscore our confidence in the future and our determination to emerge from this period as a stronger, more competitive company. Now, Brian and I will be happy to take your questions. Operator, please open the line for Q&A. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we ask that you please limit yourself to one question and one related follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Craig Kenison with Baird. Your line is open. Hey, good morning. Thanks for taking my question. Really relates to dealer health. There's been a lot of stress on your dealer networks in RV and marine industries. A lot of dealers have been hit hard there, including some large and prominent dealers. I'm just wondering if you could frame the health of your RV and marine dealer networks and where you see risk to Winnebago as a result of any pressure there? Good morning, Craig. This is Mike. I'll speak at a more strategic level around dealer health concerning our businesses and then have Brian comment on any financial insight that he might have. Broadly, I believe a high, high majority of our dealers are financially managing through what has been a difficult couple of years on both the RV and the marine industry. We are in regular contact not only with the dealers about their health and their view on the future, but we also are in contact with other sources, including inventory floor plan lenders that might have a perspective as well on key financial trends around overall channel health. In quarter one specifically, we really had a very low level of any financial implications related to dealer health in this last quarter, but we do continue to monitor the situation carefully, knowing, as you stated, that there have been some reports of some dealers expressing some financial turbulence. Brian, any other thoughts? I guess, Craig, the only thing I would add there is the financial impact is pretty muted because if there are a dealer body or a location, for example, that is struggling or needs to shut their doors, our brands are in really high demand, and so it's relatively easy for us to repurpose or relocate any units we have on a troubled dealer's lot over to a competing dealer. It's an efficient process. So because of our strong position in the marketplace, the financial impact of that transaction is really pretty muted. Thanks. And as a follow-up, Brian, have you seen an elevation in your need to move inventory around based on the conditions you described? No, not at this stage, Craig. Thank you. Thank you. Our next question comes from Michael Swartz with Truist Securities. Your line is open. Hey, guys. Good morning. Maybe just to start, I mean, in the quarter, you undershipped the RV industry pretty significantly. I'm wondering maybe just the strategy there, and do you think that's having any implications on retail market share for your brands? Good morning, Mike. We have been very focused on making sure that both the quantity and the quality of inventory levels in both the RV and marine segments are appropriate given current market conditions, but also how we view the foreseeable future, the next six to 12 months. Really, each of our brands is focused on reaching the appropriate level of turns in the field that they think is right. We are certainly always cognizant of share pressure, whether it's shipment share pressure competitively or it's the product needed in the field, as you stated, to be competitive at retail. We are not correlating any retail results at this time to any shipment share trends within our business. We believe we have enough inventory in the field in macro to compete for retail market share, but we are very focused on making sure that the level of inventory in the field continues to trend in the right direction versus what the dealers want, and the quality of that inventory, particularly the aging, is in good shape as well. While our aged inventory is not completely back to what it was pre-COVID, it has taken a major step forward from this time a year ago, and we continue to improve that on a monthly and quarterly basis, so no, we do not link at this time any retail share performance trends to our shipment share. I think we're just trying to do the best we can to balance the inventory levels in the best interest of ourselves and our dealers. Okay. That's helpful. Thank you, Mike. And then maybe for Brian, just, I think you gave some commentary just directionally second quarter in line with the first quarter from a revenue perspective, a little better profitability. Could you maybe dig down a little deeper into that? Maybe what some of the puts, the takes are for us to think about two Q versus one Q production mix, costs, things of that nature? Yeah. I think sequentially, there will be a couple of impacts that we would expect on margin. First, we did have some warranty costs associated with recalls specifically in the first quarter. I expect warranty will improve slightly sequentially. And then I think just some ongoing productivity improvements that we have seen continue to take hold in Q2. And then finally, it's a very competitive discounting practice out there in the marketplace right now, and some of that should start to ease as we get into the new calendar year here and our second quarter. So those are probably sequentially the main things I'd call out. And obviously, a lot of the leverage we're experiencing in both Q1 and Q2 will then start to ease as our seasonality improves in the back half of our fiscal year and we start to see greater sales flowing through. Thank you. And our next question comes from Tristan Thomas-Martin with BMO Capital Markets. Your line is open. Hey, good morning. Could you maybe provide us with maybe some metrics around Lineage? Are we still expecting, I'm sorry, Grand Design Motorized has $100 million in annual sales contribution, kind of what we expect that ramp will be, and then maybe the timing of when Series F is going to start to ramp production-wise? Good morning, Tristan. This is Mike. As you just referenced, we recently announced the next product in the Grand Design Motorized lineup, that being a Super C called the Super F that we will showcase at the Florida RV SuperShow in Tampa here in a few weeks. You will begin to see production of that ramping up here in Q2 and shipments following a few in the quarter, but most of that Series F impact will be in the back couple quarters of fiscal 2025. I don't think we'll share any more specific financial information on the opportunity around Grand Design Motorized other than what Brian shared on the last call, which was $100 million plus in terms of a revenue opportunity in fiscal 2025. The only thing I will say is that we are very pleased with how the market has received the first product, the Class C product that Grand Design put in the market. The feedback on the Series F Super C has also been very positive. Retail has been very solid out of the gate, and we are optimistic about other models in the Grand Design Motorized line that you all should hear about, not too far in the distance here, about how we will continue to expand that line. So all things are on track with Grand Design Motorized in fiscal 2025 at this point. Okay. Maybe just one quick clarification. I'm assuming Series F was included in Brian's initial guidance last quarter? It was, Tristan. Okay. Awesome. Thank you. Thank you. Our next question comes from Sean Wagner with Citi. Your line is open. Hey, guys. Kind of as you touched on, retail has been stronger in recent months. Is there anything tangible you can point to behind that with regard to consumer or dealer sentiment? Kind of how do you see that translating into the second half recovery? And have you seen an uptick in dealer appetite for new orders yet, or will they kind of need to see a more prolonged improvement in demand for that? Good morning, Sean. Many elements to your question there, consumer sentiment, retail, dealer ordering. Let me maybe wrap the first part of my response this way. We are beginning to see what we would consider some important green shoots in multiple ways across the business that give us renewed optimism about what could be possible in fiscal and calendar year 2025 for our business. Let me list a few of those things. First of all, some of the things most of you already know. October RV industry retail turned positive. This was the first time that has happened in around 40, 41 months within the RV industry. We viewed that as a very positive sign from a comp standpoint. Overall RV industry inventory is holding at historically low levels. We may not be at that one-to-one ratio in all segments, particularly on the motorized side, but we are seeing a stabilization of macro inventory levels. And in fact, on the total side, we actually saw in October wholesales outpace retails, which signaled some appetite by dealers to begin a little bit of restocking on the total side. Consumer confidence through here, I think, believe in December, improved for the third straight month, reaching its highest point since, I believe, November of 2021. The election's behind us. The Fed did lower their rate, the Fed funds rate, another 25 basis points this week. And while they signaled some conservatism in 2025, there does remain the prospects for at least a couple more cuts in 2025. From an internal retail standpoint, our data in November and December is promising. Our internal November RV retail data actually was improved versus our internal RV retail data for October, and the first two months of December for RV retail, our internal data showed further improvement from November, so we are beginning to see, at least in our internal data, some comp retail trends that are increasingly positive. I will note the December retail to date in the first two weeks has also been very solid for our two marine brands as well. Again, it's a very low month from an overall seasonal volume standpoint, but the comp numbers have continued to trend in the right place. So as the financial community asks good questions about our guidance for the remainder of the year and why we are continuing to hold to a midpoint of $3.75, some of the things I just mentioned would be some of the reasons why we continue to feel that there's a chance that 2025 could have a nice upward trend to it from where 2024 has been. That was very helpful. Just to clarify, the November and December improvement from October is on a year-over-year basis? It is on a year-over-year basis for each period, for each month, i.e., November, and then the first two weeks of December. One other element to your question I failed to answer is around dealer ordering. We have not seen quite yet robust increases in our backlogs across all of our businesses from a dealer ordering standpoint, except for our total business, which has seen an uptick in the backlog here recently that we view as a positive trend, both from an industry standpoint, but also because of the really good work that the Grand Design RV team is doing specifically on improving the presence of affordable price points and models in their line that the dealers are positively reacting to. Thank you very much. Thank you. Our next question comes from Fred Wightman with Wolfe Research. Your line is open. Hey, guys. Good morning. I just wanted to sort of contextualize the guidance. So if we think about the first quarter, it came in below street numbers. It sounds like two Q numbers need to come down based on Brian's commentary, but the full year is unchanged, right? So did the street just have numbers wrong? Has the first half been a little bit weaker than you guys sort of thought, but you're encouraged by some of those green shoots that Mike just mentioned? How should we sort of evaluate the setup of the year versus how you thought it would shape up at the start? Fred, I won't comment on whether the street is right or wrong about your estimates. Time will tell on all of that. I can just tell you that the guidance range that we provided with this week's earnings release has been thoughtfully considered. We did narrow it a little bit on the bottom end. I want to note specifically, which should be a signal to all of you that we do have confidence that the bottom end of our guidance range does capture that scenario, which is not quite as optimistic as we think things can be. And then we did trim a little bit off the top end, particularly because the first quarter results were not what we expected as well. And we wanted to acknowledge that from a squeeze for the back half of the year. But the green shoots that I just walked through minutes ago do reflect a good part of the optimism about the next three quarters, particularly quarters three and four. And I can tell you, Brian and his team go through a very detailed process regularly, and especially before we revise guidance with our businesses about their forecasts for the rest of the year. So we believe that the range adequately captures the scenarios that could happen, but that the midpoint of that range is a fair estimate for what you could be looking at. Okay. Understood. And then on motorized, to your point, this is the first quarter that's kind of the Grand Design startup. Inefficiencies are shifting there. So could you help us think about what the drag was on that motorized margin in the quarter? I think you've given some numbers previously, but is it better, worse, unchanged versus that sort of corporate drag that we saw last quarter? Yeah. I'll speak to kind of the holistic performance at EBITDA margin for Motorhome. The biggest impact by far is the deleverage impact from the lower sales. That's worth a good four and a half points there. The discounting that we're seeing out in the marketplace is impacting the segment by a good three points to the negative. I called out some warranty impacts that we were seeing in motorized. Those are primarily driven by some recall activity that we had in the quarter. That was, call it a point to a point and a half of margin impact. We did have some operational improvements year over year, so those were welcomed and good to see from the team's efforts. And then we didn't call out specifically in the earnings release the Grand Design Motorhome. I did in my prepared remarks, but think of that as less than a point in the half to one point impact as it is still in the early stages of its output and sales recognition, so we expect that, as we said in some earlier calls, to be accretive to the motorhome segment as we wrap up fiscal year 2025. Perfect. Thanks a lot. Thank you. Our next question comes from Brett Jordan with Jefferies. Your line is open. Hey, good morning, guys. Hey, Brett. Good morning. On the marine segment, I guess outperformance within the portfolio, is that something that you're seeing underlying improvement there at a greater rate than what you're seeing in these green shoots in the RV space? Is that inflecting more dramatically in helping your outperformance, or is it really just share gain in an otherwise still sluggish segment? Brett, two thoughts there. One, overall retail on our marine business for quarter one was about where we expected for both brands. The brands have then subsequently been able to ship at a fair pace to the dealers on the backs of decent retail, all things considered, with current marine industry conditions. As I mentioned, the last couple of weeks, the first two weeks of December, we've been really pleased with some of the internal data on the marine side. We are taking share with both brands. Barletta is much bigger from a volume standpoint than Chris-Craft. The last SSI report for marine retail share showed Barletta taking another step forward last month. It is now the third largest aluminum pontoon brand in the U.S. and continues to take share on a trailing three, 6, and 12-month period. Chris-Craft, the smaller of the businesses, the higher-end brand, certainly lower volume, also continues to take retail share as their team continues to improve their product line, especially around more affordable price points within that luxury brand in the market. So I would not classify the marine industry as turning any corners in the two segments that we compete in. I think we're just hitting the expectations internally that we had and executing at a decent level within both of those businesses. Okay. Great. And then could you give us any quick updates on what's going on in the motorhome around the CARB legislation? And I guess, are there any signs that they'll give you some kind of break on that restriction? And I guess, how does that set up with the Grand Design Super C? Is that a chassis supplier that you could sell in a CARB state, or is that a Freightliner somebody else is restricting? We have been very engaged on the CARB regulations as it pertains to our business, working hand in glove with the RV Industry Association and really a consortium of other industry allies around this topic. There have been very frank, honest, respectful discussions with the California Air Resources Board personnel, and we continue to get further clarity on how we can navigate the situation. At this time, we don't anticipate many changes from CARB as to the current regulations, and there are really two aspects to this: the Advanced Clean Trucks portion and the Omnibus portion. Our teams are aware of the plain rules, so to speak, on what we have to manage now going forward, and we are working with our chassis suppliers and engine manufacturers to navigate that. The guidance that we have provided for fiscal 2025 does incorporate any impact from CARB on our business. We believe we will be able to manage through most of fiscal year 2025 and calendar 2025 and continue to serve our motorized dealers and our end customers. Each OEM will have to find their own solution given their different mix of products, but while it's a serious issue and we would prefer less regulation around the sale of our products, our teams are working hard to mitigate any negative impact to the business in the next 12 months. Specific to the Grand Design motorhome Super C you referenced, Brett, we do have a solution for that as well that complies with the CARB requirements. Great. Thank you. Thank you. Our next question comes from Joe Altobello with Raymond James. Your line is open. Thanks. Hey, guys. Good morning. Just a couple of questions on affordability, if I could. You mentioned the recent Fed rate cuts as offering some optimism for retail in the back half of the year. But I feel like with the 10-year, for example, the yield on the 10-year has moved higher since the Fed started cutting rates. So I guess first question is, what are you guys seeing in terms of the typical borrowing rate that buyers are paying in the market today? Yeah. You're exactly right, Joel, and good morning. We're not seeing movements yet in that 10-year, which is what most retail rates are tied to. I guess I would point out that the current retail environment and what we are seeing in terms of the green shoots that Mike talked about earlier, those are all in the context of the current rate environment. I think perhaps it could be, I hypothesize that consumers have been waiting for improvements to the retail lending rates before buying, but nonetheless, I guess we're encouraged by some of those green shoots and retail activity and the year-over-year stabilization, which is much of what we are counting on: a flattish retail performance in 2025, which we're seeing some good trends towards that, as Mike mentioned earlier, so there's many variables we talk about impacting retail demand, interest rates being one of them. Certainly, consumer confidence and many other factors as well impact that, and I think based on the current language the Fed is using that's hinting at another couple of cuts in 2025, I think our expectations that we're building into our guidance capture that environment. Okay? It's very hard for us to correlate with accuracy the impact of two more rates versus two more rate cuts versus three more rate cuts, but as I said, I think our guidance appropriately captures the current environment. That's very helpful, Brian. Thank you. And I guess just to follow up on that, are you still seeing a fair amount of buyers who may have bought a unit in, let's say, 2021 or 2022 that might be upside down on their loan? And so that might discourage them from trading up? We hear some instance of that. They are, as you can imagine, anecdotal. And so it doesn't give us a lot of broad metrics, which we can then make conclusions on. I think it's fair to say that there are certain trade-in situations where they're upside down in equity. And I note that there's also situations anecdotally where a dealer is helping them overcome that situation with other forms of incentives to continue that trade transaction. So it's a bit of a storyline that we continue to hear. But I think all things considered, we're figuring out ways as an industry, OEMs and dealers combined, to make some of those transactions happen where indeed they are underwater. Got it. Okay. Thank you. Thank you. Our next question comes from Scott Stember with Roth MKM. Your line is open. Good morning, guys. Thanks for taking my questions as well. Good morning, Scott. Going over to motorized, you mentioned, I guess, the North Iowa operations having some challenges. Can you maybe just walk us through some of the things that are being done? You talked about some facility consolidations, maybe talk about that, maybe talk about product development and anything else that we could expect to help improve the margins here going forward. Yeah. This is Mike. I'll take first crack at that, and Brian can add some financial perspective as well. In quarter one, from my view, the elements that were under particular pressure around the Winnebago motorized business in particular were very competitive discounts in the marketplace. Newmar doesn't seek quite as much of this as the Winnebago brand does. The Winnebago brand of motorized covers more segments within motorized and more price points. We saw very fierce market sales discounts in quarter one from competition that at times our team felt that we had to match to sustain some presence of shipment share in the market. So that's number one. Number two, we saw an increased level of warranty expense in quarter one specific to our motorized segment. Particularly in the Winnebago branded motorhome business, there have been some quality issues that we have been working through and have unfortunately been more expensive than we had initially anticipated. You saw some financial impact of that in quarter one. Lastly, from an operational efficiency standpoint, we continue to make very strong strides within the North Iowa campus, particularly under the leadership of a new operations leader in the last year. Productivity is improving. Throughput's improving. However, there remains significant opportunity to drive inefficiency out of those operations and waste. We will continue to review and rationalize fixed costs around the North Iowa business as well. We did make the change in Charles City, Iowa, a few quarters ago when we officially closed one of the facilities there. Quarter one had a few financial remnants of that transaction as well. So those are the main themes around some of the pressure around the motorized business, particularly on the Winnebago side. I will say the Newmar business, albeit facing top-line pressure because of the Class A segment being difficult right now, the Newmar business performed at our expectations, if not a little above, candidly, in quarter one. Yeah, and both the Newmar and Winnebago businesses have managed their fixed costs, as we would call it, fixed cost structure accordingly given the trough that we are going through. Got it. And then the last question on the balance sheet, we're at three times levered now, expecting, I guess, free cash flow in the next few quarters to pick up. But your commentary about the second quarter leads one to believe that we might go a little bit higher than the three times in the next quarter or so before things go back down. Are there any covenant restrictions or anything that we need to consider? No. There really aren't. We have incurrence-based covenants, but we don't anticipate any issues with maintenance type of covenants. And I think your assessment's correct there that maybe it will nudge up a little bit higher with the year-over-year erosion in EBITDA or the denominator in that equation. But we still see a path of nice recovery as we get from Q2 through Q4. Got it. That's all I have. Thank you. Thank you. Our next question comes from Noah Zatskin with KeyBank Capital Markets. Your line is open. Hi. Thanks for taking my questions. I guess first, just in terms of ASPs, when we look out across the rest of the year, is one Q kind of a good marker for how to think about ASPs shaping up by segment? And then second, you guys gave good color on how you're kind of thinking about the state of the RV industry shaping up. Any thoughts around marine dynamics looking out through the rest of the year? Any anecdotes or kind of green shoots from an industry perspective in marine that you could share would be helpful as well. Thanks. I'll take the first part on ASPs, Noah, and then Mike can comment on the marine market. ASPs are most notably impacted in towables as they continue to have a preference by the end customer towards affordability. And so we continue to ship an overweighted part of our affordable lineup as a result of that. Most notably, the Transcend and Grand Design is having some very strong success, and that tilts the ASP towards that decline. I think that will continue likely through Q2 and then start to ease a bit as we get into the selling season and start to see a pickup in some of the broader market, which should ease the ASP decline. I don't expect a whole lot of ASP decline in the marine side or in the motorhome side. Not anything of note or a meaningful decline there. Mike, on the marine side, do you want to comment? Yeah. Noah, from a marine standpoint, I'm really not probably going to be offering any signs of meaningful change here recently in sort of marine conditions. It continues to be very challenging from a retail environment across most segments. If you're an end customer, now is a really good time to go in and look for a boat as dealers are working through multiple model years of inventory and in many cases are willing to work with that customer on the right product and price to get them into the boating lifestyle. But I do anticipate there will be some noise in the marine industry in the next couple of quarters. But what I mean by that is noise related to dealers working through aging inventory, especially during some of these softer months of the year, particularly for northern states' freshwater dealers. They will likely be aggressive in moving through some of that inventory at some pretty hot price points. But we are focused on making sure that our two brands have a product lineup that the dealers think is right for this environment and, again, working to make sure that their field inventory is in the best shape it possibly can be as we go into the spring selling season. As you all know, the RV and marine boat show season is about to launch here in January in a significant way. I think we'll be able to have some better evidence of how the marine market might be shaping up for 2025 after we get to some boat shows in January and February. Thank you. Thank you. Our next question comes from Michael Albanese with The Benchmark Company. Your line is open. Yeah. Hey, good morning, guys. And thanks for taking my questions here. Just two quick ones. First, as it relates to consumer affordability, obviously, we talked about rates and borrowing costs. What are you seeing in terms of insurance and insurance premiums, inflationary pressures, stabilizing, decelerating? Really, any color you could provide around that would be helpful. Michael, the one note I might make is that we are hearing a little bit of chatter around boat insurance in parts of Florida that have been hit with some of the storms recently, particularly on the West Coast of Florida. There's a stretch that has been hit in multiple years in a row now, and the insurance industry is working through its appetite, candidly, to insure new boats that are sold as they've seen some losses in past years. I can't tell you on the RV side that Brian and I probably can think of any notable changes. Your question probably spurs us to look into that a little bit, but for this call this morning, I can't think of any new developments there from an affordability pressure standpoint. Certainly not a material impact to our portfolio, as you can appreciate, the Barletta brand, which is by far our biggest marine brand that Mike referenced, the insurance challenges on the marine side along the Gulf Coast of Florida. That is just not a material part of our business, and so certainly not worth calling out in our financial performance, and like Mike said, we're not seeing or hearing about incidents of having challenges insuring RVs. Got it. That's helpful. Thank you. And then just a clarifying question on marine. Obviously, Barletta and Chris-Craft both taking share. And sorry if I missed this, but are unit volumes positive across both brands, or is one a bigger driver than the other? Obviously, Barletta is a bigger piece of the business, but. Unit deliveries, if you look at the earnings release, unit deliveries in quarter one in total. So combining both brands were slightly positive in quarter one of fiscal 2025, than quarter one of fiscal 2024. I would just suggest that it's pretty steady right now. And yes, Barletta is obviously the bigger piece of that. I don't know that we're building our marine financial projections for 2025, as Brian said, around any significant retail increases. It is share gains and trying to get the dealers back to that one-to-one replenishment ratio in the next two to three quarters there. So overall volume's pretty steady. Yeah. And part of that 4.7% increase in units certainly driven by a comparison to the prior year that was in destocking mode as well. So you've got that impact that might influence the year-over-year comparison. Got it. Yeah. That's helpful. I mean, really, what I was trying to parse out was within recreational boating, right, there's kind of a few different stories depending on how you break down into the data, whether you're looking at pontoons, ski wakes, salt water, etc. So I was just trying to get a sense around that. Right. That's helpful. Thank you. You're welcome. Thank you. Our next question comes from David Wiston with Morningstar. Your line is open. Thanks. Good morning. Mike, you made a comment earlier about how you're not de-contenting. You're focusing on what consumers value. So I'm just curious, what features do they value most right now, and then how is that different from not de-contenting? Yeah. Good morning, David. Decontenting, in our opinion, from a definition standpoint, is really taking an existing unit and deleting features from it in a meaningful way. We really ask our businesses, and our leaders are doing this, is we really ask our businesses to redefine value within a product as opposed to cut value. And so you may end up seeing some features de-emphasized, but what we try to do within that same coach, for example, or trailer on the RV side is find a way to add some value as well. So candidly, price remains number one. And then the comfort features inside the coach seem to be most important right now. A few years ago, you saw a lot of emphasis around outdoor kitchens, outdoor porches, and emphasis on lighting outdoors and entertainment outdoors. While all of that is still present in the high-end of the RV, sort of the better-best elements of the RV industry, our teams have been focusing a lot on making sure that the fit and finish, comfort inside the coaches, aesthetically, functionally, is really on point here. That's how I would ask you to think about that. Teams are very focused on making sure that the price points in our lineup that need to be addressed in this environment are being met and delivered on. Operator, I'll just interject here. We are at the top of the hour, and in our commitment to our audience of limiting this to an hour, let's close this call, if you would, please. This concludes the Q&A portion of today's conference. I'd like to turn the call back over to Mr. Posadas. This is the end of our first quarter earnings call. Thank you for joining us, everyone, and have a wonderful holiday season. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.