WGO - Earnings call transcript Q1 2018 | Winnebago Industries, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Winnebago Q1 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the conference over to Steve Stuber, Director of Investor Relations and Financial Planning and Analysis. Sir, you may begin.

Unidentified Company Representative

first morning, Industries' thank the conference for fiscal good us for company's and November the Winnebago ended for call XXXX you, everyone, you and joining results XX, Thank XXXX. which quarter, to review by on Executive and Bryan Vice today and Financial Chief Happe, President President I am and call Officer. Michael joined Hughes, the Chief Officer;

look being to earnings months. For forward will in FP&A at investor.wgo.net, in be results posted October to Industries I joined those was Winnebago is with and hopefully, and of earlier today. you and speaking, the call Relations General our our to on who release the lead later issued morning. Mills website and of live meeting do functions. broadcast website available you A Investor not I our This know me, of on quarter a the from this many first website call news replay coming our

I which over of encourage Michael Happe. to control, statements. filings, With which in and to CEO, Before conference many are that you are these we could beyond may to the forward-looking start, I'd laws. and made our statements results now materially involve I said, differ its turn identified you that forward-looking and a under risks regarding number SEC company's The be a statements would Industries call to our from cause during of number operations considered that securities uncertain, you Mike? the factors, and statements actual certain President These are read. cautions Winnebago company like inherently factors like call of to remind today's

Michael Happe

you know the want have to everyone good here I call. him to have Steve past Winnebago to onboard reiterate several you, to meet I morning many and on pleased how are And the over Thank we at had months. the opportunity Steve, Industries. of

also lead Corporate Bryan engaging efforts, our his with will team, responsibilities investor you. working many Finance to Steve FP&A primary within of relation addition Hughes' In

at excited would to Winnebago to Ashis are here I at continue Relations' sets company. take we as employed Bhattacharya and on like stint as We this here moment the lead thank our have journey. Steve's previous his Investor skill also

fantastic in months. many a role did a new job Ashis [indiscernible] for

planning As is development, Vice on President of to again rebuilding we business this squarely growth focused organization. must Ashis strategic strategies and continue now the employ

period. at and financial As done morning's Hughes for specific for over call begin details to before provide I we on more results, drivers for answers call other for the the call past, turn I outcomes with quarter year in and session. the first overview Bryan of to Industries questions some have will we'll the Winnebago, this play activities fiscal critical XXXX key in an here the this Winnebago then on opening will comments return

We have leadership. the to in parent as Industries we restore portfolio on transform as financial XXXX our plant arena. past and outdoor and here stated Winnebago own, in the company the RV brands brand we transition year are to simply immense well market work for of products that investment both as the at we future an a seeds flagship further to was and Fiscal of lifestyle mission

we market, QX margin growth making are but are the results, sales strong this and again we Our in to fiscal both consolidated of once net progress the improvement. XXXX as positive also reflective attain financially, end,

X Grand versus compared period. increased Design nearly RV full-line a revenues just same XX% of in the RV to competitor healthier, larger, year quarter first significantly us. We runway a with in are more a year of performance ago, full of primarily last QX quarter GD RV driven ahead more by Consolidated weeks profitable of

at in points Operating comp market an units. to as overall profit XX%, for Our our share continue increased also each North income the X just a gross and earnings market to rose basis $X.XX share grow American backlog in positive XXX accelerated Winnebago the per Towable with unit pace. of reached continues overall margin our over new dealers quarter. business Industries' rise orders, also creating placing segment

stated past have and quarters more more events, positioned investor that Winnebago i.e. We our and clearly in and well to RV strategy compete the ahead. balanced, Grand Design years in effectively dual-branded, is profitably

more reporting detail Turning the now. segments in to

superlative here continues revenues RV for will industry's business Let's net start decade. quarter scoring from set repeat transition month margins Association's to the for XX% into fiscal with to and previous of brands truly our Most award, are impressive, this portfolio impressively, catalog Grand very the positions the dealers Award corporate industry brands, market, the lot and up the Confirming than In its market to portfolio. some no be position are only the transformation. dealer GD Grand past recent most celebrated We pleased our bar a leading sub-XX% performance we is share Industries brands first XXX Grand achieved and top Not the other organizations. we advancing get X-year this as were product acquisition years, scored stronger. RV. profitable in all GD of by a be. of difference leadership basis for his They're to there Circle represented and RV our November dealer at Dealer of business EBITDA in XXXX, and maker integration the the the were in quarter Towables' GD continue adjusted million were stronger product over RV the satisfaction survey. continue our anniversary Design during more respective more of in the Winnebago of industry's this with the comments better. the the last the XXXX, with but achievement Quality Design of different growth early improving Clark the Backlogs Design as did RV for Revenues of drive in partner $XXX with couldn't points. this Towables how team were earlier, and Don very

business, as in as our they're experience with the materially a brand in the the that affordable quality the on goal Their other and just market the line on. XX% grow in segment. Towables' product line a excited dealers continues streamlined just Winnebago also the steadily. been mini position in outpace revenue more Winnebago-branded to increase rising. Indiana. at level we continues are product continues over are right of business the Transitioning around progress customer quarter product is We brand providing Motorized commenting and also our the and to price The to customer own making point with the street are positive Profitability long-term to that growth up this backlog Towables being a franchise, high levels service well, a in are direction something head seeing significant has

were While X% rose revenue slightly, year-over-year. over units' shipments down dollars just

Our Junction material were for Intent, profitability results than City, in ramp-up Gas the affecting X and period. Oregon related higher anticipated this the the areas bottom segment ongoing related in to and The were motorhomes primary Class new within our costs rising our line the City Forest of to cost challenges A expenses facility, line disappointing. product

built. improved rationalized partnerships in foundational Winnebago now implemented, line and legacy several and diverse, is with on is and Motorized evolving, and product lean but more development that vibrant being more with a focus being increasing new flagship focused is more on system new culture Singular pull base product is efficient A business. dealer our more designed ERP our changes different manufacturing geographically impactful brand, nimble very and is are a We base both happening, is built. principles is being

are changes results are in believe for business line bottom we stronger the largest the retail and profitable beginning see driving regional an backlog, the inroads products the increased market hitting as these we placing on reposition new in future. pressure We of dealers However, this stronger, with industry. are to more near-term exciting the progress segment some as do street

been step financially do we Motorized results to year Winnebago very to this have customers. XXXX and will validate fiscal for importance With with review its business. our is the quarter Clearly, in the the clear Industries our overview, of key a quarter portfolio that remains that here on fiscal represent in strong We XXXX overall, focus now ongoing. consolidated turn and legs Hughes forward detail. I more to work call to the and first Again, is the significant our segment find for many that ways have transformation Bryan in a over Bryan?

Bryan Hughes

everyone. morning, good and Mike, Thanks,

of were strong revenues an growth consolidated primarily by quarter $XXX from segment. increase acquisition Grand the and Design year-over-year, XX% RV the million, Towable First organic driven

gross by profit an profit Design Towable was points. strong of fiscal XXXX included increase growth This continued mentioned, XXX% weeks expanding year-over-year, and of was in with the more performance. driven quarter XXX Mike RV by of accelerated million, segment. the increase $XX.X Gross basis As first margins Grand operational productivity profitable X

First operating of first was an share, in income was of and per over an over quarter Reported $XX.X million, of last our $X.XX XX%; increase net per XX%. diluted up million, were income EPS share increase $XX $X.XX quarter earnings year. XX% the

items our to acquisition income, the in were quarter. consolidated X Design significant Grand illustrated impacting there related statements the As of

assets tax. $X.XX First, or amortization $X.X diluted the of expenses acquired related share intangible were net definite-lived to pretax, per million

pretax per will $X XXXX. to amortization million ongoing continue fiscal We expense expect be approximately through quarter

pretax the net for with share the quarter, to Second, interest debt tax. million the related or $X.XX expense of diluted $X.X acquisition was per associated

the plus As rate successful elected month draw of loan. an of Term of of LIBOR ABL to LIBOR B earlier Loan on the $XX between million a facility the to previous of the interest the favorable X.X% amount repricing plus we interest $XXX pay you a rate interest seen, X.X%. in may advantage the B versus at use ABL We have Loan take prior proceeds and to this down our and announced rate Term the term to million the reprice

reviewed. non-GAAP in release performance clearly show to a the provided have items accompanying press and press the our the EBITDA EBITDA. measure reconciliation release schedules as of just EBITDA comparable illustrate effect between adjusted and measures I a income adjusted The net We

EBITDA schedules adjusted was year-over-year. an for the consolidated XXX% million, quarter show, As increase of $XX.X these

largely to segment, start lines year-over-year. and product Turning individual investments by X.X% mix. adjusted related Motorized. XXX segments, I'll in operational Motorized was the startup as not now million impact remainder for were fiscal for growth $XX.X Grand savings the EBITDA Backlog quarter QX Mike remains increased initiatives Adjusted quarter, shifts continue for mix a quarter, increased million up prior net adjusted expect of year-over-year, a for new the over company the in from XX% basis In Design million, will business. as virtue and mitigated through over a $XXX.X XX% down be both of revenues and year. portion while by EBITDA a revenues including continue of quarter organic decreased margin towable mentioned, down rate material industry products, adjusted with and ongoing nearly costs to cost EBITDA which to headwinds the and XXX growing from margins a through new to costs. incurred Grand driven backlog million the year, mentioned basis at as up introduced $XX.X quarters, Design which will points, increased Segment quarter the of to as from outpace products, need improvements. the to driven the direct recently due Towable Segment revenues the $XXX.X as the and $XXX.X $X.X favorable quarter, sales the EBITDA to during quarter, of productivity higher strong, that RV continued for full year-over-year, RV will subsequent points, retail was by addition strong the portion the A volume of earlier. were brands. the and further recur by the in Mike thanks driven we million increased Towable million revenue million $XXX.X well Winnebago-branded acquisition, year-over-year,

to our balance Turning sheet.

reducing million quarter. down during overall approximately pay by $X the continue We debt debt to

the in in the facility, issuance further fourth $XXX and of debt As improving as $XXX company revaluation significant of the working $XXX.X to of we impact will recording million and position. was flow favorable This adoption $XXX.X we in impact of strengthening from of the debt evaluating of balance or legislation facility, quarter-end, in understand the compared positions. points first affected successfully anticipating discrete companies, rate further and million the the The ABL from rate our of of quarter. cost refinanced standard employee We the percentage rate capital uncertain favorable, fiscal in impact million. Cash last of forward. operations affected resolution outstanding December, our going on term Working tax from to net all share-based tax our on are details their payments. from the XX.X% X.X benefited benefited of first amended was are one-time overall to The the the quarter item quarter million the million an the a period related of by Like the we existing deferred The that $XX.X XXXX. are income in million, our be our sheet. financial quarter net quarter, legislative favorable for item costs earlier and $X same million. to and was the changes debt increase the Industries loan ongoing of fiscal million had our a results accounting anticipate mentioned period XX.X% to the borrowing Winnebago of rate we discrete tax $XX.X interest year, the the same for likewise, $XXX.X the for XXXX. And terms

payable approved call to recently of concludes comments. close will per Directors quarterly January XX, dividend $X.XX some quarterly stockholders common of XX, review share, for XXXX, of back record as That to XXXX. cash January a the on I our the on Mike Board our of Finally, business financials. now pass final my of of

Michael Happe

counts shipped RVIA drivers continues more in show for States of levels. consecutive reach is the shipment underlying the the United in growth Thank is value the to American products, month's time are Louisville, to XXXX be you, costs as association record last ultimately conditions access and financing the the to industry. year RVs At Bryan. of the million of over a affordable, consumer X.X eighth and are strong. versatility levels manufacturers that The be RV Kentucky, are are is that their than of Fuel RVs, higher recovery from retail alone. The This and for number to engaging Macroeconomic steady, case available continue to and would use rise, trade industry, robust, prices younger calendar the North great and financing projected the grow industry driving there in RV continue are confidence on equities are markets manufacturers and outdoors, generations focused historic their migrating increasing customers for in reasonable. lifestyle.

travel reconfiguration at catalog bringing America The And industry. it at certain, has to also a While does its the best near-term new as with Winnebago Winnebago. introduced competition is decades. quarter. brand platform, B The trailer, robust new Class expansion it's never Industries at result not interior, of also but invest consecutive that the the smartly Winnebago take bring RV of positioned wheel At the business overbuilding that Motorhome contemporary us Industries' end for products Reflection to the allows heels of in is one our that Industries new only brand-new in meet RVIA products. Class of productive to is It ensures Transcend, start, segment in pace been Stick-and-Tin. the launch new only extend to mid-profile The business customer-valued are space, teams shipment many particularly that we launch teams online currently a attention, to introduction advantage the on also and its in Design progressive, are a of growth. most off XX% that dedicated to in probable. mid-September. Horizon XXXX earned, the motorhome for plans late accommodate at announced A relative show investment to well Fiscal allows from still capacity, line. customer but market recently a recipient backlog. The RVIA impact Differentiated in-show competition excellence, present another. a Class by more you're wheel. to much is feet have anticipate The ninth prospects of to always appear and Business business, RV completely doesn't a demand to this very brand design capacity division being new efforts we the We support crossing affordable we've is for will both Transcend, square trophy, certainly Design hottest, announced. in-show a of important products fifth has fast-growing new efforts continue the leverage winning for Campus sent produced best Towables, quite viral with motorhome RV X-figure year expansion been fall. product XXXX. expansion nonlaminated being XxX features, new business, the capacity growth introduced within to most possibly with Towables' the the of assembly-line Towables' Ts underway the gas is And the mini-naming the Grand earned finally, since along around The extending sensations the gaining another eye-catching, strategies to The Intent Winnebago fiscal better Oregon, Towables' the largest the both efforts of the never on to And ever that aware dealer-preferred Year and Winnebago-branded one projects platforms in the a of underway, of, in on Design Series possible, multitude and the North ultimately bar a the day, fifth the RV in the in A in beginning the message product has Winnebago Grand new Gas the its the Two, the of Junction cyclical planned trade resulting in half RVIA second in our that product more start in visible the by be Winnebago that is X and explorer looking market X fiscal all is fiscal the Class the a franchise awards with construction market. Stick-and-Tin projects one, Built this product just new versatile we revenue expansion back Diesel Revel Is the ultimate City, new comes more event, division RV on Grand resulting industry. the continuing Winnebago to the previously have these of the a miniplus but in the the of mainstream setting dotting XXX project at extreme with A any announcing diesel of Forest year creating with one of set and show. its Design are in in grabbed brands its heights expansion benefit and this the Winnebago, Transcend With lamination motorhome also active finally, assembly-line which not the period, concert XXXX City. Transcend magazine the new strong Grand will to At our Revell future time,

our operations, strong and connected customer RV fiscal leverage higher and we in following of development profitable, engagement in our innovation debt excellence businesses on just strengthen reviewed here. described, balance elevate by up Bryan we the Along unique processes and inside which a and places progressed, X quality planning business strategic the allocation the experience. goals focused generated with with employees opportunities we debt RV will toward of North new thanks growth a We our and And community, year, one, from end American of market and to priority build cash blend safety, later XXXX. XXXX shareholders, us possible and in through focus We the core a will we XX%-plus first growth. are driving efforts the to expand strategies internally Three, productivity. but create much Industries levels ramping will Four, for accountability redistribution XXXX X.X% X% of and we sheet, approximate digital culture, end to we that on to recently believe centered Towables' ago, fiscal of high-performance hold organic the have industry, the X-year growth new now the the Winnebago aspire believe have our our giving. year, goals unit the RV will finally, market expand will restructuring is processes share flow Two, more that X we of business of carry capital creating fifth, deliver planning businesses, investing share repayment, at investor the and also communicated for the allows cash up today. and Motorhome we keys new strategy, very we category. and an on markets fiscal As will our profitable held and investigating reenergizing minutes a share we the And horizon. improving a the excess the leadership, long-range we to outside

almost current level. end income XXX basis fiscal than our XXXX, which points by Secondly, we yield end operating is target the fiscal higher XXXX of XX% of

drive XXXX we comments our will higher present would our RV conclude employee this These X like performance of XXXX-plus our of to be drive or be and product employees are in to or asking goals segments X we be financial that, own that related ahead. an years of With of time. which to part revenue we And the fiscal not in the Star productivity activity create today. market quality, our accountable to, we at will in North will Third, from hold new businesses next constellation, formal will ourselves to levels giving all years. we engaged as to of XX% I each safety, fourth,

that more in experience the employees through and and to best X,XXX-plus creating day every the Minnesota, than and very thank Iowa, end that imperative products dedicated are possible Indiana, our passion they Winnebago via display. is to craftsmanship customers for Oregon it our Industries' Importantly, the

brand We our pleased your or a we that geography. shareholders employees Winnebago transitioned the stock very of Thanks regardless of all to the much status a new in plan is today. our time soon December for affiliation can a within especially each employee ensure so are purchase introduction our approved new of owner and of happy of and very wish company, holiday teammates you I wonderful year. all season

We will are are hope of Q&A portion operator call the this very excited the I and about turn the now XXXX over all to you morning's back as to well. of event. begin

Operator

[Operator Instructions].

Our with comes Craig question Baird. the line of first Kennison from

Craig Kennison

back just EBITDA with the your a to order. think fell was to color then Wanted address we business what can a terrific what quarter. on internal hopes. X%-plus Maybe start to well that little in margin that short business and more thought below in Motorized add That in was future, blemish EBIT below what the get maybe one whether you margin you that the happened relatively business. And maybe

Bryan Hughes

give also pressure. to call making new we add half and start is do some not let a the in say, things bit the line -- roughly inflationary as production, principally QX It lines, work in roughly to see prepared new startup Junction as we as products. then our we with for Mike, production inflationary remain form naturally also of plant I'll from will comments. of forward-looking your happened we see would I to it take on if always the he we're a Iowa, any throughput additional that of moderate new are forward. kind thinking little continue as intense in as in comments improved -- the to things QX our We'll margin well. the will this Oregon, the City, abate other those of continue going but performance. what say, mentioned the expect QX forward as QX. North in then gets work the QX obviously, headwinds in decline And during on we repeat I'll introduced that and as drove This I'd We continue how due some any well the serving including are I'd that in headwinds to productivity as other those Bryan. high-level of we to address forward. is on and But drivers those about we the Mike in will that as lines, mentioned to as has you'd on to investments was well recently add? low our move pressures half you

Michael Happe

believe, share on of the line, This in particular the Craig, first start business. of that the beginning I that internally business, the the Yes, order and Motorized thoughts ago. future. questions. being that steps one all, The are we quarter good for take the business any Motorized think market back. to we morning, for both your is we improvement in for performance believe the guess to our top And believe backlog some spite up dealer reflected and base product to remain on I'll is see I improve necessary the there that improvements that year line in we over comment, and starting relationships climb to XX% our of question backlogs you're the quarter runway was a X and very a goals much has thanks in of part second which the same quarter-to-quarter. on the previous

horizon. journey In in XX% we the in that to profitability Motorized to committed operating business which on Motorized, getting very income XXXX terms much are of the absolutely participative to is more or a level

and its remain here for as goals have increasing the a internally But have We share Towable to profitability same. a very with Motorized are the little ways business market concurrent to that along certainly, the we fortunate segment go is increase well.

we that will So as some are the not be. are now gross costs have to but profit transitional, of will we we in work get some to Bryan needed are of costs you diligently where to periods, margin those that see hopefully, that working internally to that future there mentioned, on and the nature

So back this to couple I've a straight-line been times doing Winnebago Motorized the line. for coming at top go that steps recovery clear to going to on into on the have certainly business, been take very market us and to probably position a probably since share isn't someday, that And we're a backward we've strength and forward. bit a especially of

of as long strong. bottom line a quarter and but This belief well very aspirations, bit on is we care still our impact an term our of candidly, the saw that profitability, take can we

Craig Kennison

And that. a just as up to follow

If products have Motorhomes, you changed look bit. that the has you a at in portfolio little your new

If you that for your is worse there in the motorhome structurally margins? to just margin new overall products, lead gross better there at or mix change would look any the profile

Michael Happe

I new was did discussed think lot the have determined we've shipping. that of the be primarily from new bit, have Motorhome products. X revenue in and business related quarter protected to as to have Most product X to because of Intent, Revel the a you not quarter a Horizon the

Class able -- we in bit quarter very and things but to near Cs relative the good quarter A frame. much those we're to more Class was You benefit with the compete B We've in be see is in to gas, effectively in market Class future. products the There diesel, work will X underway begin more the the three a in revenue new done more had to activity time shift Class Class new X. Cs X, Certainly, Bs. watching little any of Class quarter products have on and A from in the

a of positive product the And it should areas a overall so some on is those category come some for lower and more premium strategic margin it. we really those pressure bit very of and manufacturing certainly the that the Revel, does moving little a it and in new little be well. market But unique to is, up if make is within contributions up driving with and it's can which bit each we a to we price points very of bit And retail candidly, have margin products, history. more type gross drive have ASP, ultimately like put believe the to segments for efficiency probably other up price with of that to continue in to market able of versus us as affordable sourcing products that than the can

a But mix both. the going and probably our to in are levers to, this goals many get same again, we continue we've again, remain go direction. got So of to business the after right going Motorized try to that

Craig Kennison

a range of outcomes issue. quickly And with reform a your respect if I what But range rate, it's about to you the guide on would pass realize tax today. of frame, just annualized kind us then to tax Bryan, had you towards?

Bryan Hughes

givebacks, going you some the the to the do of by can this math don't to I'm down numbers XX on prudent Offset the -- think call the simple Yes, from just can as probably do guys specific it's prepared so. at XX not proposed. time. give I

using of at pretty what get I guts much takes. can think and understand I the and math the that legislation until it am the puts we simple this stage your behind the into the are and estimates

Operator

of the with Seth Research. Woolf comes question next Northcoast from line Our

Seth Woolf

years, of you you the questions expectations? initial in but I you your it to back know guess, first couple the that be? Mike, the is Towable. characterize made you've say would Motorhome is -- if recovery to to or wanted -- X on on a behind Motorized safe liked not where go have is Just you're really to happen would it it it one quick wants the schedule? progress and you [indiscernible], how business on everybody Or Motorized. relative I

Michael Happe

much some quality, terms footprint were service. in And that legacy system implementation to geographic advantage and in relationships, to already that I way product with the our of us combine we business. place are widening I'd underway, a dealing there of through an January to fronts. improve our company, it now. certainly -- near of and live number go probably in my we lot when manufacturing were of that particular on back that, said, XXXX in order The a own are from factors make moves the the perspectives to, we're very a this that particular is regardless is improve then accurate nowhere question less changes the that it ERP of probably joining with. to And morning the dealer and the improve state where of to being that ERP year of working team again, the that progress we're in answer all making Seth, right scheduled product number to, That there implementation that vitality, want think to is appreciate believe, there's Well, customer a you than we be

track only we Our mean not by We to I whole track are that, stay the getting our line product running ultimately going but day, line products that to retail now and business, away in being motorhome significant ones retail of a rationalized the we well. And on retail into active that pace. some our our that know are the products on And on that active, products as Motorized only going future. retail is report total not I'm the at the are comp happy above are stronger.

And so is to of line to the strength importantly, dealer think our the that that we'd very most been an already, we this which I transparent make you're as time. morning we'll think single better. are chunks results getting And But you in XXXX quarter to I talked that over and probably turn. progress been timing But want able have relationships getting never that see. we've product view we've the to important better, see year to going like returning to us believe the see that we is wildcard. as believe And we've you we to

momentum want things. used we Towables' so my I we obviously there. acquisition the can't why business toolbox become we aspire yes, enterprise. just make what and up and Grand a comment I Towables' working -- to word only discouraged see, right to imperative intentionally full-line that certainly, to Winnebago-branded to We because do so, of committing one has will good the businesses flywheels it's That want It battle our have our hard And does that but of stronger we to are in we this our now. Motorhome have continue is ultimately the very And comments, get not so. RV not to right long multiple that disappointing are And And spinning been keep with. accretive, is down believe in well. own not growth important order all we Towables' as those past three And to go but have the to our player, is mean so are get we given the head commitment not transformation do reenergizing Design, tools of the that business that in which our to term. has to to

Seth Woolf

Is anything guess but way, have that on seems And XX% Motorhome I -- quick I to is quarter. well. inventory. How of it Winnebago-branded improvement believe. just business a got, Grand the signs for mean, a Or the issue? I it That's last help of then is any relating showing clarity what's doesn't it's just dealers couple the Yet, are the to is any reason be -- progress the big Is one the all And I've is just the number. seem Design has are Any But if noticed -- backlog but there quarters, the since and quarters. helpful. been it working couple to white you the could, Motorhomes in and understand really adding it the be thing hasn't can phenomenal, of products? segregate would Okay. know that following distribution? but on doing guys Towable fact, real process on then more? side, appreciated. of translate much that, the timing a that? you I I in a Towable just the seem P&L us I is question, same I through. last talk or like Towable, ordering Winnebago, about longer-term just I've would the it's the just you you then it points doing space there Towables of of like know it X,

Michael Happe

first you, to relates Thank part take order that, Seth. combination ultimately is Certainly probably Sure. the a line. backlog, timing. impact here. top opinion a is one The of as of in number My it the I'll that's obviously factors. on Motorized

performance or are X seeing also schedule. We're the months new of from those products Motorized. mix our that cases, orders terms some when within on dealers collecting are either out essentially production our in in We in take them, difference Winnebago's of want timed us, when a terms dealers

Gas happy C. B Class to come Class A while So to shifts seeing Class also some we're we're seeing and start back, related

is right and our So believe earlier, right working be, But on where performance our particular Class it. very go healthy it that Cs, we're category, not that will I Class is now. business continue as the part mentioned that, to of the needs value and We on market in B the to company direction. especially

to start are top we happen. on units unit line increase -- the So the the seeing

I changes. market. the for as up to the still down the mid-XXs. shipped new is mix brand a think Itasca new market, we that the a products, say with coming these this get the market Winnebago behind really the of brands, to some little the the And that's example, to amount tremendous the able or diesel, but some first, dollars further Those are going under then to of lag small we we've the we're Revels is Horizon, ramp left out we as so got part a now that think, intent I amount started the small brand, orders and And other ship there shipped still were I product timing. we to to journey brands. of might I think, names the of We one amount and bit either product XX to

we line that to so that's we there are teens end the costs cradle line something on probably the end sorted of those products and and down to potentially, to high top rationalize going life. And essentially as in transitional impact some some transition as up

don't of And surface, very subsequently, regard. shipment think carefully disagree we're so number. businesses, retail similar certainly, probably and well. large the Towables' that what's is in it's are its that those looking I that both at inventory, the as very a Good on number. I XX% that's is performance And news a performance dealer to happening number that

for competitors but also product Design stronger while the showing success the a continue We're where new months, backlogs is get to shift inventory both dealers is their up really dealer tremendous see in XX consider Imagine that they other in but still still to had in as example really rise also of the with to Design are are well from you're travel of that not in here still lot carrying. so the have ordering, trailer lot share a other businesses. Grand And starting Winnebago And that's on I Transcend think with Grand as introduction the yet, -- then a it's the Grand both last brands lightweight stocking. the the the they segment. taking Towables' and dealers good all you whether need Design allowing

to Winnebago as lot carry dealer X less Design both over be might brands X and they and hope that that us. or catalogs of best Grand our can their lots so the we shift to more space or get And full, partners is on that some convince our able

report for are is that So our to Towables the pleased And is on are market actually we overall, been businesses comfortable decreasing something has extremely business. believe business and our type turns watch share-accretive to the fast-growing on at a turns those in we aging we I'm place we that addition are level a in good which the with. of inventory a aging. have,

to So continue one we'll very carefully. Certainly in ourselves turns good watch about and thinking inventory we're and aging question. that

Operator

of comes the with King. Stember question next Scott CL from Our line

Scott Stember

imagine the about side, how And looking that costs the more the are are just Motorized maybe just talk ones bit agreements, the Can on issues about price increases persist. out be in you that a of you are going You just little flush that quarter which supply which you at will through at are side? maybe ones how addressing will least transitory? that. are talk about and I half sticking? that place about took that inflationary Maybe you've away. or the talked at the -- maybe talked look Which them

Michael Happe

Yes.

of So the Northern startup as not is margin City, the that both lines, would recur to in I in I Junction spoke and one Scott, really half related the well to expect the those investments Oregon, of erosion as Iowa. to EBITDA

that And that up, line those ramp-up. as is so labor quantified the on are of are When we what the nonrecurring. starting and we've case to with unit have Horizon believe producing the Intent, we new and productivity The the think ones costs be historically units will those have headwinds you continue startup-related you be what you're of might per is lines. had hour with number much the another lower than will

And so to if headwinds. that that to, continue be will productivity draw referring I'm that

new and will you occur period quarters. in ramp these get to Now a over get mitigated not that It's flip. start coming the It's with more efficient of that expect obviously we something to several quarters. as production an up lines, immediate

wood as Now industry various inflationary I characterize several products. moderate increases steel, seen all including relates aluminum across those We've as would commodities of as it businesses. in to our has the and seen pressures,

to have and parts, our those subassemblies. an of our several of All impact components

the we bear we our so necessary it, floor pricing. manage by And modifying inflationary with new where will benefits, changing vendors, and plans, pressures where and components, features negotiating and take the market

pressures those customers. offset to dealers now, pricing components changes immediately positioned to is offering what position product good floor market businesses in offering to there level such the and where with appropriate businesses those and our make less And over those plans that from quickly in we more term. is place take rely as the ensure our of product inflationary imagine, other necessary profit standpoint, and well case are In parts, we'll cost-savings as fully are favorable Motorhome initiatives, right we allows, we're not and can and market you able a receiving as developing so and ultimately enhancements and able we're And product the a offset end to to we're for pressures. to profitability in strong those to right where on pressures longer our where too, offset the those

Motorhome So we I going our inflationary guess pressures. quarter first in expect that's say the performance it would what and what the I to as about relates forward

Scott Stember

the in could for what thing the quarter? XX%. up anniversaried the to Got to about it. a is growth rate trying What's forward you organic get talked Just once do brand fully Design? second Towables being looking this Grand of And Winnebago flavor we

Michael Happe

the but range. to queue such the in in of kind Towables pro footnotes be a rate I is organic let yourself, forma laid a that basis out you'll would our on will way growth know that able so Yes, you for that the in calculate XX%

by both So Winnebago-branded and an the business. incredibly strong Design Grand Towables QX

Scott Stember

XX% [indiscernible]. forma were pro That

Michael Happe

our Yes, pro disclosures. exactly. able That's to off the of one forma calculate be you'll based

take So increase inventory more the in it sense and compare bit maybe and that a makes little levels to even the a then. to that you

Scott Stember

Got it.

about maybe been the Okay. ERP operating talking or just And system talk about the cost.

the plus last Just and puts minuses remind and us and takes year.

think you cost transaction to had related all Grand Design. I those

[indiscernible] looking net-net or of talk with could also Design. this reversal You maybe part operating you like items of about a had be of just had rate on there's first a Maybe other you healthcare quarterly backlog the the Grand expenses? accelerated the the year, which for, don't we last year. run But for the in have amortization few what

Bryan Hughes

there, your ups And disclosures as think in Scott. Yes, comments hit them we you out and well. our of downs I in earnings the so the call the release in most

and from transaction of last quarter had about costs, related and in million health little cost -- postretirement $X.X that million. $X So X $XX.X got the million. you year of over favorability we Design mentioned you cost to transaction the last Grand the acquisition the In year the

the a obviously quarter the and cost annualization having from got acquisition full last year You've this year. the partial versus quarter new Grand of Design

And a what quarter-over-quarter. that The while our in of an expenses, a referenced, on with rate all pretty that you was item increase see for and things, disclosures, adjust those material you our is that organic nominal ERP one so you're terribly you'll not more that's expenses. left selling in another

run as the of then in and into continuing XXXX ERP remainder of QX in rate a to continue we'll XXXX of each quarter have expenses procure we and fiscal the for finalize So implementation.

the And trend that's the health, organic SG&A you out from well. spend SG&A the acquisition get a you expect rate. So noise the to see stable net expenses, transaction relatively as forward the annualization, postretirement what you cost, and strip kind would of to going

Scott Stember

last it. question the Got tax one quick just rate. And on

full are for them? cash guys taxpayers You

Bryan Hughes

Yes.

Operator

Steve next question from Sidoti Our comes & O'Hara Company. with

Stephen O'Hara

you assuming talk Can -- through maybe set about the of flow? goes of at just maybe [indiscernible] the just flow. that you you're there opposite your tax big -- allocation maybe cash benefit reform given and you outline should kind talk fact Or rates to decline cash taxpayer, Investor be Can cash out about a the Day?

Bryan Hughes

We from new to case to continued share return I extent we'd growth wouldn't appropriately, position. we started with all obviously, the -- debt capital-allocation the ongoing be with dividend answer evaluating an have inorganic, how as our strategy then, to on would opportunities, that we some paydown basis shared excess -- liquidity immediate increased we and cash we in organic is the legislation. question, would regular both or deviate our focus be the exactly And Steve, repurchase expect the favorable we [indiscernible] and the and through our wouldn't that cash, that our that shareholders extent it either That's activity. that priorities. an Those have on you. that, would We we

you. with early share strategy November. Day with consistent very in communicated Investor that our shocking to So nothing we a at All

Stephen O'Hara

kind was quarter you still that the I XXXX here quarter. or in kind are expect kind we the you be Okay. like to the XXXX bottom just that of talked at mean, -- hit some first the results bottom that it I be And that the -- of terms this Obviously, of extent, but mean, bottom? the bottom I be things onetime were that will guess expectation think bottoming the then do just had point, moving of you've the and might maybe to you for the about to Motorized Motorized. segment. disappointing, some hit seems noted

Michael Happe

currently I specificity give different the business. a not quarter here on market a pressure years it under It's business, or in of components bottom. we And intent would time, well. question. of you month the X to integration to working definition terms just pressure. play legacy and got respect, on last candidly morning this legacy There's in that be many position things the so or of which much in of that of for We're share as terms it's obviously, today in that like particular been to are some at has be what X proud the going some vertical

And so to not of -- on QX forward. think and is QX bottom we're and the going was definition we just comment whether the going

a I I As be said, think mixed bag. it'll

that, our see we'd operating part where, we plan being You'll are issues but some of the of that in still hopefully, years the as is competitor like. in we're present, model, many financial wise, be validated. the long-range both not elements, Motorized manifest over where hopefully, And in timing And efficiently better will fact, themselves us. our on But there it's lot there future. a working transitionally then a in XXXX we've some a for future. But be may, got areas business as progress significant that we're plans into in are to somewhat short-term strong good guiding results

to respect going probably again, you the I to give a we're able not just question, time. be So specific but

as is better, we're working Sooner as best we can. it always as certainly and on

Operator

with comes Johnson markets. question next line of the BMO from Gerrick capital Our

Gerrick Johnson

I've two questions.

inventory on XX%. you Towables, shipment XX% are up First organic and

XQ on there Just but as been timing fact anything in from price question, dealers? pulled touched maybe price any to your you forward you have And to second XQ. there, wondering shift before on to increase my increases, if able then

Michael Happe

morning, is this first then the second it to I'll speak Mike, Bryan I'll to for So this Gerrick, half. the and comment, over turn

introduced trade the sense build, inventories some the to Northern of fall bit shows in the little a dealer during time, as that time a are little seasonal market. well. this it models from fact, bit year, is the this of probably As inventory in new is bit is timing there as relates in to the a where markets Towables retail Certainly the of rise especially

said, dealer we're what's essentially has we building you of really see year. the order. being those got bit inventory a that almost incredibly So is time backlogs on efficiency the about We've name wise a during of Towables literally building of and businesses businesses, this that each products build nice do on strong it. are But both that of to

come those are as soon as they so has are inspection lot, they occurred. that products transported shipped And product the ready off quality as or final dealers to and

them hopefully, So is is, instances, fast why the as we which fast the they aging We as now. they're we can. many right to as dealers can can, them in as as inventory timing build fast mentioned get we And as retailed earlier. being we

which future down, which it's there. a side, all We for was is very sign. high sign good are seeing a is with. Towable not good to aging inventory the going turns It begin But better at getting even on

travel the the Plus of new Minnie coming and fifth Grand unit products, for introduction Imagine new trailer Transcend now the lightweight Grand the Design, like Winnebago, wheel So Design. up, new Stick-and-Tin for

As a durable new some you base to obviously, sell see as as you're secure X as product businesses, units. but fill look they most or that space goods Certainly, products with would to, dealers to to shelf retail take they're first or sort they're looking in occurs to can, of going going expect from. of their those X best X

businesses have it's some will at probably mostly again, think time Towables recognize catch lot as that. number. up think it's those momentum reflective the these we in businesses. We watching big We're the grow. numbers We we So positive of And carefully. a it

are like high as things they on as dealer probably be You'll not see ways inventory just in today. comps some

Bryan Hughes

And question Bryan. the part your sure Yes, that I And that to our our guess we plans, This is the it appropriate to increase is So product X% shipments more of on let's we would you manage say, bringing Where okay? pricing. where where that benefits or to is we existing or features features second or former pricing. I'd will dealing that that scenario profit we this take common it. we're like new changes that's you the of offering, need our for the equation build consistent and looks profit constantly And on do and predominant we activity or would customers, profit maintain the that do is how have price that to form as our I rare that profile fresh make marketplace. is no pricing. the with, say that it those are where okay, that X% that, take ongoing well, goals, latest through we you've plan an a do the got accordingly. is, that's address we new we floor we in model way I'll is of an It to this floor happens benefit us, way and say,

doing a a that we that, we'll would consistent actions pricing does our looking of but are on plan, model. be those QX to those where impact We looking say not results, type I forward. consistent also just floor favorably at situations need at going take

Operator

the comes of question next Our line SunTrust. Swartz from of Micahel

Michael Swartz

the you're past into they're laying allocation value-oriented of Motorized the some what general know motorhomes away of the seeing several of talk lots? some Towable from and touch been maybe there of dealers in years from over terms I wanted into higher-priced there's Just a out how maybe to on lines.

then is, question innovation the seeing that guess change you strategic in product the I in a that pipeline? your from development dealers? And does are cadence inform how maybe So that plan

Michael Happe

doing But customers we in -- dealers have I as time. probably that that you're dealer right end as you that not Michael, sure for the Well, direction. been much are going what the described and think, I'm some base are are the seeing

have call generally, parts the what good/better/best healthy, OEMs, probably their is But products the RV kind value in more point. sign is believe, to has this I adding price of think collectively stronger think per done market, the I one at good/better are ladder. been recovery competitive well of the value industry things And of more a that segment. a of relatively with the that products competitive very OEMs, and I introducing I

have call Winnebago, better/best, And so that more strong organizations offer gets historically quickly to that lower-priced been had that move value rounded portfolio to I who have here good. a on like more segment into

And certainly The so is A on one of Intent been Class those we've that. Gas examples. working

price diesel [indiscernible]. point I the think you're correct. diesel, the opening retailing is fastest But Our generally,

very seen though, the on slowed value, but for well. Fifth recovery the were down. a move products towards side Motorized the RV market, they've have during this hot as candidly You Towable feature-rich a wheels both while, side, more on on

brands in industry in by market. have travel growth rate wheel fifth Design's into one trailers We are now driven being segment. the the of is But best they're in that putting Grand the fortunate Design mostly to the very Grand the

had so points multigenerational anticipative our be we catalog that diversified product make definitely need needs we that of we ever product is terms of sure customer price to have planning probably in general. before. to And than are But in to has more able have a

Michael Swartz

Okay, that’s helpful. Thanks for the color.

trying year, think to Just was I to that right? Is cost to ERP maybe of about get a in heard first if the for the Bryan, And how forward? last just year? last similar think going I for quarterly cost a sense quarter I one on basis ERP that you collectively,

Bryan Hughes

than that of capital little probably way a to that 'XX. in $X.X this and $X.X spend expense costs million spread spread. million generally Yes, capital of million less and year. they per dollars the about We'll rate this QX quarter are expense is have to remainder between And a speaking, total XX-XX quarter million approximates $X those the we've

think how I'd you to advise So about that's that.

Michael Swartz

XX% XX-XX then And being capitalized?

Bryan Hughes

Yes. expense. XX XX capital,

Michael Swartz

segment that, on think costs into just follow ERP a all the be segment? basis Motorized May I going going? the where on up Okay. those

Bryan Hughes

effectively. Yes,

Operator

of comes line the David question from next Our with Whiston MorningStar.

David Whiston

brand up I'm Winnebago move coming but stay see I not for remaining you the in a still up on Or GD Towable up trying you to something down coming but follow day, not brand. to premium? the brand Are Winnebago relative Winnebago strategy GD? analyst do Grand guess very from clear below the brand Design

Michael Happe

sort we Towable premium RV brand the product Design the two brand terms David, is the is this product from round maturity, a will offering of more an younger brand that having Winnebago end-customer Towables is have we my of probably, some brand in on of The its standpoint brand believe, well-known its out more Well, of all, across separate ways, multiple is Mike. of in the in question. sub-segments product is that because Thanks continue brands Towables. portfolio intent legacy, with certainly, for line opinion. to of a it Grand overall but the The expansive first the segment.

the And subsegment of Transcend that very moving differentiated yet Stick-and-Tins, terms so very product of Towables the most point, offers. into the it a to is will of largest price it of the brand for the other a Stick-and-Tin, the category, Transcend example Design a in the competitive but but demand premium product Grand the relative good is features be is

Grand track be last strong probably little the those We I well. both go to it's Grand probably in vitality of we're X less product record we of And to brands each the a in is continue a Design at market the Design we that So or their unique candidly, look we really don't don't look versus as don't XX% -- very dealer And how create sales We versus years Grand have less after. can of introduced. dealers that good make Grand of on Towables base the the of Winnebago base. want has the strong Design at those. Winnebago the own able will dealer Winnebago. to believe will really Design on to Transcend, proposition strength working in relative of versus terms and money the it's and

we're I that's mean, so -- And do. what really trying to that's

terms I just in don't about other. think against each them of So [indiscernible]

will clone We products. not

place in the Design, some But more see bit more will we premium from work than Winnebago the between to need market with do their rounding the strategic catalog but products at is, Grand their builds their You own that on times a as not component affordable want. share, synergy both common sourcing little the product that line. supplier Towables the team they reality can products teams preclude products Winnebago to up with earn a Generally, are they'll with based we be on where that well. will going

David Whiston

then for two, Bryan. And Okay. hopefully just ones, short

risky and or other XXX of is think bps First lenders recognizing get when on reduction, are the you company debt a refi, you less the factors? more lend a that's do Winnebago to function to fact there that diversed therefore

Bryan Hughes

Yes, think it's bad.

landed a certainly, it's But think gone pricing at the we most end had range favorable into. favorable seeking. the of marketplace, to the market the I that entering we that we're

ability Grand of investors Winnebago, I to And opportunities, for flow that Design think opportunities positive has, of the was cash very favorable a looking think, so that flow, certainly market. cash and momentum it's as they're our proven favorable generate of the favorable performance or looking I They're for of -- acquisition. reception our such business result the since

So helped lot combined favorable of things I think those that that yield it's price. us a

David Whiston

can big what's talk that accretive the accounts statement, a cash striving free cash favorable contribution flow from in about flow really on swing expenses, there's change? And you

Bryan Hughes

is don't anything think I Yes, there systemic that there.

than I in to the that there's big think that that we don't should any watch we've And DPO. been think big metric our you change, model And payable, is just differently outstanding some I timing. I think there's debt and don't is the anything past. there, expect

Operator

Citi. line the with comes Badishkanian from of question next Our Greg with

Gregory Badishkanian

with Towable people follow-up inventory brand, and about of the to quick on where comfortable Because one issues which too looking it's basically you are like you overall issue if question, inventory Is field, all talked Just the or dealers talk for a terms you dealers could your the have of one, have the you a much you when stand. the even in is any there to if inventory what that competitors. an Towables? that But lead inventory? in obviously,

Michael Happe

thanks inventory-level difficult see market standpoint. whole the of It is Greg, somewhat from for to the the for an us question.

world [indiscernible] shipments and of industry addition to that in partners retail some like. us our the to stakeholders number visibility give finance that factors, in like Our generally are could the a inventory some other and triangulating certainly

standpoint any amount signs hearing base, order product a fortunately all by in vigilant inventory that's we share down supported the a brands, being by we good said, everyone is We cycle the upward channel. are dealer are an this the market. are is seeing here about in supported be That good of of an Again, growth, market dramatic we the not is the our and from velocity concerns X end-customer lines story. for retail ultimately dealer could that we see very about from year that our being slow which strong cognizant ninth Towables being to base that total very enter have to and about which

us. led question, inventory managing dealers and from partners positive I'm and in carefully so they hearing increase very that of amount our And Towables which we went aging believe of generally see your about brands. about Williams the are within they our earlier, aging journey of inventory concern multiple is veered the finance OEMs, we with increase the their have think years for the that increasingly, both a you'll not a boundaries through expect segment reporting that type I But dealers player sort in to Like not godlike I Williams here said sure that watch be stronger of for inventory inventory. particular of we

the get doesn't of issues parties. cause that So too within any and stale

Operator

comes question Securities. of Ajzenman line from Our Morris the Griffin with next

Morris Ajzenman

kind an you annual what where related to motorhomes Grand be on Previous acquisition question margins proceeding $X.XX you gross [indiscernible] the particularly get to and My question basis. margins. about few of with A to probably averaged with -- relates that, sort to of a want of Design gross previous in years you more customers. gross in secondly, do gross profile profile relates as to proposition motorhomes. sort going XX% XX.X%, do quarter, sort it What margins for company you then And see gross margins value this overall, for margins of forward for for overall? vision the of quarter. What the

Michael Happe

Again, Bryan comments call. like. then Good I'll here your some morning. add can thanks, he'd Well, for Morris. if initial and jump in and

total mid-XXXXs largely for time aware, portfolio the were As where coming Motorized gross more believe gross Motorized, and results. a its And high the that in dominant with business no the X%, you business as consolidated Winnebago was been where I XX. that factor in that driven. profit was the that's revenues from company doubt high the of watermark for with historically XX% profit plus being almost Motorized a was probably was for Industries the the so there as

the that day. I aspiration back want team, future would any timing heard the our into giving back so not we've gross Motorhome for to but to future, get the And unreasonable care, us down in climb expect in we think for to mid-teens don't we're some I'm profitability. it's Motorized --

you the certainly, see are results that. far today cry so And from

to profitability expectations to all there's elements to that some but more of that But future. described, And that Bryan to of my headwinds will need they with business that, absolutely levels it probably manage genuinely are the business all and But from play, As to our also in rest particular so some on where operate to systemically prove be this of seeing believe growth there's our for take achieve investor some in need digits. not are and transitional again. we order need progress we will segment have again, that order profit will we'll the to will Motorized model time us going forward. we standpoint, you're gross in we get few area. the need elements but that the the in for you mid-teens into quarter the But show base double in

Bryan Hughes

question QX question, QX... second of And of that right? might margin part and the your a sequential I'd add, I have the only is thing part been -- gross think

Morris Ajzenman

Yes.

Just handle, guess. sort trying some to I of get

the a side What the [indiscernible] margins gross of called component can for margins business? mid-teens on sustainable Motorhomes, [indiscernible] have Towables. sort in of what You you of Towable -- gross the sort attain sustainable

Bryan Hughes

sustainable to mechanisms now, in heard trends positive on gross that different just occur got we've we've pricing anything positive I things QX I'll had primarily going if some seasonal momentum down in going that question always expect types your done. Towable here, of is which QX, in incentives, positive disrupt margins at The that in to look, the got cetera, there leave QX it I Okay. side. see I momentum we've margins continue. of the Towables, XX% don't really that et that. could XX% right

Morris Ajzenman

it Can exceed mid-teens? the

Bryan Hughes

I margin? margin? it Is gross gross that so, if your At question I on assume can. believe is. it And

Operator

Woolf Our come next from with question line will the Seth Northcoast of Research.

Seth Woolf

is categories, prices. for quickly, wanted side, about really consolidated the wanted while not that commodity especially so going and touch expansion didn't transcript, guys gross So this there be going -- be an Towable be margin the room moving moment, lower margin on growth, there of possibly gross wasn't a margin you you I I already on gross into so issue, are to the -- a just just that margins Towables -- with check for because was going to lot there to to call apologize I was my And I the and would into this, year. if it's sense but off brief said was year

with some have on to And the have product you side. of the maybe the as units. that dealers use take However, in there was a get incentives place to the efficiencies up, to freshened wouldn't been recently huge opportunity these Motorized

first And any I clarity the think it. the still on way other then a to that about quarter that given So or appreciate or is should valid can year results, mean, really I helpful, provide rethink should we that? would margins I Towable's be rethink you

Michael Happe

important know those. business to those positive to try will of on And the constantly for most on eye retail that line said the positive as variable is to velocity. I is be And we're year-to-date. the product call, products keep I'll in earlier the seeing in especially we future. an Really, retail us, more retail the in both on speak Motorized

so to believe allowance level the and line evolve seeing they're we us, from we with business hopefully, that the more a the momentum dealers that something fit about will flow somewhat or level Motorhome into support a of from narrative that product and Winnebago's optimistic that, that And sales, retail that have. becoming from the is shipment

signs the that only that not do need we're earn any that we business but move and more at we little aging or future optimistic certainly with of do backlog Motorized a incentives as headwinds Towables we're not we believe and earning about some that carefully times side, did dealers to but margin, have see we terms in the that continue there. of discounts going growth, drive those watch in even to profitability. good but to inventory, previously, business also two we businesses bit to market increase we so talk And probably see on the retail share

Now is moving with rounding moving and catalogs segment their line here product is up the wise ways. recently business into up Winnebago are different Grand in down both businesses fifth some developments, The Design Stick-and-Tin. the wheel

And the volume come some cost be of into increasing the see in we some away over time expansion, to ultimately go believe some naturally with will capacity well. mix there'll you'll shifts then So of as business, those happen. that and addition

variety can as to a today Towables the the we be or, they there'll hopefully, the businesses of continue with but at So factors, are well. slightly optimistic that gross improved levels profitability be in future operate

very work we've quarters. as a gross stories So those been pleased in driven there certainly and do margin last unfold, to positive more favorite X, but have hall the X certainly businesses those

Operator

Stuber the like would over remarks. I back to time. for this at questions turn further Steve closing conference no showing to I'm

Unidentified Company Representative

for discussion. free If our good give to questions great e-mail srstuber@wgo.net. Lots everyone really myself questions Thanks, call and joining or today. at are you Great. any of that call have, me unanswered a there

the we As for new Mike earlier, Thank all wish you. holidays year. said and happy you best

Operator

you participation Ladies and gentlemen, program. This concludes thank today's in conference. your for today's

day. great a have Everyone, disconnect. now may You

Winnebago Industries (WGO) 20 Dec 172018 Q1 Earnings call transcript