Q3 2022 Mastercraft Boat Holdings Inc Earnings Call
Thank you for standing by and welcome to the third quarter 2022, Master Craft Holdings, Inc. Earnings Conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone as a reminder, today's program may be recorded.
And now I'd like to introduce your host for today's program, Tim Oxley Chief Financial Officer. Please go ahead Sir.
Thank you operator and welcome everyone. Thank you for joining us today as we discuss mass for <unk> third quarter performance for fiscal 2022 as.
As a reminder, today's call is being webcast live and will also be archived on our website for future listening.
Joining me on todays call are Fred Brightbill, Chief Executive Officer, and Chairman at Georgetown Barker, Our Chief revenue Officer.
Fred will begin with a review of our operational highlights from the third quarter.
I'll then discuss our financial performance for the quarter, then I'll turn the call back to Fred for some closing remarks before we open the call for Q&A.
Before we begin we'd like to remind participants that the information contained in this call is current only as of today may 11 2022.
The company assumes no obligation to update any statements, including forward looking statements statements that are not historical facts are forward looking statements are subject to the safe Harbor disclaimer in todays press release. Additionally on this conference call. We will discuss non-GAAP measures that include or exclude special or items not in there.
<unk> of our ongoing operations for each non-GAAP measure. We also provide the most directly comparable GAAP measure in our fiscal 2022 third quarter earnings release, which includes a reconciliation of these non-GAAP measures to our GAAP results. We would also like to remind listeners that there is a slide deck summarizing our financial results in the invest.
<unk> section of our website with that I'll turn the call over to Fred.
Good morning, everyone. Thank you for joining us today, our business performed extremely well during the third quarter as we delivered our highest net sales gross profit diluted adjusted earnings per share and adjusted EBITDA for any quarter in the company's history.
These results reflect a continuation of exceptional execution against our strategic and operational priorities as we delivered a record setting performance for the sixth consecutive quarter.
Hard work and determination of our team in the face of a challenging environment made this momentous achievement possible.
Principally we grew net sales organically by more than 26% and we grew diluted adjusted earnings per share by nearly 20% year over year.
This represents the fifth consecutive quarter of year over year net sales growth of more than 25%.
Though we achieved another record quarter our growth in net sales and earnings was once again constrained due to supply chain and Covid disruptions logistics challenges combined with shutdowns labor shortages and capacity constraints at our suppliers have caused widespread with largely intermittent component delays and scarcity across the industry.
These disruptions combined with labor challenges associated with Covid limited our unit shipments and created significant production inefficiencies during the quarter. These.
These challenges to lead the conversion of work in process inventory of finished goods and resulted in additional costs not typically experienced in a normal production environment.
Constrained production and higher production costs combined with higher than expected inflation in the quarter has created significant but we believe temporary margin headwinds drew.
Driven by our consumer centric strategy, we are prioritizing product availability and quality over cost to meet the continuing strong retail demand as we head into the summer boating season.
The constrained production environment and a continuing robust demand for our products is keeping dealer inventories are at historic lows for this time of the year.
<unk> dealer inventory has resulted in lower retail sales across the industry, including our brands.
An independent survey of our dealers during the quarter revealed that most of those survey described inventories for our brands as being too low while no dealers in the survey described inventories for any of our brands is too high.
Our dealer inventories at the end of the third quarter to be down year over year by 4% on.
When compared to the end of the third quarters of fiscal 2020, and 2019 dealer inventories were lower by 48% and 52% respectively.
Although we believe product availability is limiting retail sales.
We remain optimistic about the sustainability of consumer demand.
As consumer preferences continue to evolve, we expect that structural changes and where and how people choose to live work and recreate have generated strong consumer demand for the boating lifestyle that will persist.
Activity at boat shows attended by our dealer support our view that there is still a strong consumer interest in the boating lifestyle and our brands.
A recent report by the National Marine Manufacturers Association and MMA reported their first time boat buyer stop 420000 in 2021 on a par with 2020 levels.
This represents two consecutive years of new boater entrants at levels not seen before the great since the great recession.
Investments in consumer acquisition have allowed us to capitalize on the.
Expansion of our industry's addressable market, leading to greater awareness and lead generation across all our brands and driving record levels of retail sold orders in our system.
As a result of continuing robust demand and production rates constrained by supply chain disruption, we expect it will be sometime in fiscal 2024 before dealer inventories reach optimal levels.
This provides us with confidence in our wholesale growth visibility in the face of an uncertain macroeconomic backdrop.
We will continue to progress in the pursuit of our overarching objective of driving sustainable accelerated growth by being the most consumer focus recreational boat manufacturer, we remain determined to execute in each of our four strategic priorities consumer experience consumer acquisition operational excellence and humor.
Capital development.
We recently received an acknowledgement of the success of our strategic focus on the consumer and quality.
In February the National Marine Manufacturers Association announced the recipients of the 2021 Marine industry customer satisfaction Index Award for excellence in customer satisfaction.
The annual CSI Award recognizes marine manufacturers, who obtained the highest levels of satisfaction is voted on by consumers we.
We are proud that once again master craft and crest received this award. This is the 11th consecutive year that Master craft has received this honor and the third consecutive year for crest.
Let me now briefly review some of the latest developments across our brands.
Our master craft brand performed well during the quarter and grew net sales to a record $120 million. Despite ongoing part shortages that impacted production volume and cost as we previewed for investors on our fiscal second quarter call.
This tremendous result is due to the extraordinary efforts of the <unk> team and the continued success with Master craft best in class operating model, which we leveraged to mitigate supply chain disruption.
Mr. Kraft has increased production sequentially each quarter this fiscal year, and we expect to be producing at record levels in the fourth quarter.
The ability to ramp up production. During this time of limited product availability, while maintaining our uncompromising quality standards is key to growing market share.
According to the most recent all states reporting Ssi market share data as of the Rolling 12 month period ended December 31, 2021, Master craft increased market share over each of its closest III competitive brands by between $50 and 300 basis points.
This performance solidifies master craft as a number one brand in the fastest growing and highest margin category and the powerboat industry.
And while the official Rolling 12 month March data is not out yet preliminary results reflect continuing market share strength versus our closest three competitive brands.
Master Crafts retail sales remained strong during the quarter when compared to the third quarter of fiscal 2021, and all model year 2022 production slots are sold out.
For model year, 2022, Master craft and build one of the most aggressive model year changes in its history, including the launch of four new boats, which have been incredibly well received by our dealers and consumers. We followed up on that success by announcing an exciting addition to the most powerful tow sport boat engine in the world at the Miami International <unk>.
<unk> show, which will be available only in a master craft beginning in model year 2023.
This 630 horsepower 665 foot pounds of torque supercharged six two liter engine option highlights the unrelenting emphasis on consumer experience innovation and performance, which differentiates master craft from the competition.
Finally, I would like to recognize master crafts attainment of a major workforce safety milestone during the quarter Master craft surpassed 2 million hours worked without a lost time incident.
As of today, we have continued to add onto this impressive safety record, having attained more than $2 4 million hours and 547 days without a lost time incident.
This achievement showcases our unrelenting commitment to safety and essential element of master craft core values and building and delivering world class co sport boats, we salute our workforce for this outstanding achievement.
Now on to crest, which delivered another record setting performance for the fifth consecutive quarter crest.
<unk> shipped the most units of any quarter in the company's history crest also set a quarterly record for net sales, which increased by 28% year over year, primarily driven by a 17% increase in units, while achieving a gross margin of nearly 20%.
<unk> ability to drive topline growth and generate strong margins in this environment demonstrates the success of the crest acquisition and highlights our value enhancing growth strategy.
According to the most recent all states reporting Ssi market share data as of the Rolling 12 month period ended December 31, 2021 crest increased market share by 40 basis points.
Chris retail sales remained robust during the quarter when compared to the third quarter of fiscal 2021, and all model year 2022 production slots are sold out.
At not external supply chain disruption and labor constraints have created operational challenges, which heavily impacted our third quarter production ramp up plans and limited shipments.
Not starts turnaround plan has not progressed at a pace that meets our expectation.
Which resulted in a change in leadership in February .
Functional leaders from Master craft augmented by third party consultants have been deployed to accelerate operational improvements more details about our progress will be shared on future earnings calls.
At <unk> Europe , we continue to ramp up production at the Merritt Island facility to meet exceptionally strong consumer demand.
<unk> ramp up gain additional momentum during the quarter as net sales were up 330% driven by a 263% increase in units.
The increase in overhead due to the new mirrored island facility will continue to have a dilutive near term impact on <unk> margins and profitability.
However, we expect <unk> production to steadily increase and margins to improve as we finished fiscal 2022 and continue into fiscal 2023.
<unk> the introduction of new models in the near future will position the brand for accelerated revenue and margin growth.
We continue to anticipate our capacity at of Euro facility will support at least $100 million of annual sales over time.
According to the most recent all states reporting Ssi market share data as of the Rolling 12 months period ended December 31, 2021 of your increased its market share by 310 basis points in the 30 to 43 foot premium day bulk segment.
We are very pleased with the overall performance of the company. Despite the many challenges facing the industry. We remain on track for a record setting fiscal 2022 and continue to see sustained industry, leading organic net sales growth, while gaining market share.
We expect to build on that success as we wrap up the year and head into fiscal 2023.
I will now turn the call over to Tim who will provide more color on our financial results Tim. Thanks, Brad looking at the topline net sales for the third quarter were a record $186 7 million, an increase of $38 9 million or 26, 3%.
Compared to $147 9 million for the prior year period. This.
This increase was due to higher prices favorable model mix higher option sales and higher wholesale unit volume.
As Fred mentioned this was the most profitable quarter in the company's history gross profit for the quarter increased $4 8 million to $42 million compared to $37 2 million for the prior year period.
Driven by higher net sales this.
This favorability was partially offset by higher input costs, driven by inflationary pressures and production inefficiencies from supply chain disruption.
Our gross margin was 22, 5% for the quarter, a decrease of 270 basis points compared to the prior year period, lower margins, particularly at Nordic Star, whether as a result of supply chain disruptions and inflationary pressures that limited production and drove input costs higher.
Price increases partially offset these higher costs for the quarter as our gross margin increased by 40 basis points sequentially from our second quarter.
Operating expenses were $14 $5 million for the quarter.
Decrease of 100000 or approximately 1% compared to the prior year period SG.
SG&A as a percentage of net sales was once again, the lowest for any quarter since becoming a public company as we continued to prudently manage costs.
Turning to the bottom line adjusted net income for the quarter increased to a record $22 4 million for $1 21 per diluted share computed using the company's estimated annual effective tax rate of approximately 23%.
This compares to an adjusted net income of $19 1 million or $1 <unk> per diluted share in the prior year period.
Adjusted EBITDA was a record $32 1 million for the third quarter compared to $27 5 million for the prior year period, adjusted EBITDA margins were higher year over year for each of our segments, except narcotic star, which was heavily impacted by supply chain disruption and inflationary pressures and other operational.
<unk>.
Dilutive impact on margins from not at Starwood more than offset the margin improvement and master craft crest and <unk>.
As a result of our consolidated adjusted net adjusted EBITDA margin was 17, 2% for the third quarter down from 18, 6% for the prior year period.
Turning to our balance sheet, we ended the quarter with nearly $106 million of total liquidity, including $13 8 million of cash and more than $92 million of availability under our revolving credit facility.
Working capital has increased by $28 million during the fiscal year to date.
Was primarily driven by higher raw material and work in process inventories due to increased production and increased safety stock to mitigate supply chain disruption and the delayed conversion of web to finished goods.
Fiscal year to date, we reduced our outstanding debt by more than $28 million. We ended the quarter with net leverage of five times adjusted EBITDA on a trailing 12 month basis.
Given our recent operating performance financial results and the unprecedented a wholesale visibility. We currently have we believe our stock represents an outstanding value at recent prices.
Because of this view is split approximately $21 $5 million to repurchase nearly 811000 shares of our common stock fiscal year to date. This.
This represents more than 40% of our $50 million program authorized in June of 2021.
We expect to continue to Opportunistically return cash to shareholders through the program, while prioritizing financial resiliency and high return investments in the business that create long term shareholder value.
Looking forward, we once again.
Raised our net sales guidance for the full year on the strength of our operating performance continuing strong retail demand and then crested wholesale visibility while we believe our team can continue to expertly navigate the challenging environment, we are expecting a supply chain to remain constrained and inflationary pressures and production inefficiencies.
Production inefficiencies to continue to weigh on margins, we will continue to prioritize delivering consumers their boats heading into the summer season.
Higher than previous previously expected inflation is partially being driven by recent geopolitical events, including the Ukraine Russian War.
For the full year fiscal 2022.
Holiday that sales growth is expected to be up in the 30% range.
Because the supply chain disruption and inflationary pressures combined with the operational challenges Nordic Star, We expect our adjusted EBITDA margins to be in the high 16% range.
We expect adjusted earnings.
Adjusted earnings per share growth to be up in the 30% range year over year.
Due to project delays driven by supply chain and labor disruptions, we are lowering our capital expenditures estimate to $20 million for the year.
Our guidance assumes minimal improvements in the supply chain environment for the remainder of our fiscal year. Despite the supply chain and profitability headwinds we are confident in delivering another record year for our shareholders.
I will now turn the call back to Fred Thanks, Tim.
We are pleased by our record setting pace for fiscal 2022, despite severe levels of disruption faced by the industry, we definitely manage the supply chain to increase production year over year. This exceptional execution once again resulted in industry.
<unk> organic net sales growth and market share gains.
We expect demand from consumers seeking the boating lifestyle to endure.
And lead to continued strong growth for our company.
As we manage through an unprecedented and dynamic business environment near term, we remain committed to long term value creation for our shareholders and all stakeholders. We will continue to be a purpose driven business committed to our consumers dealer and vendor partners and people.
Operator, you May now open the line for questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one if your question has been answered and you'd like to move yourself from the queue. Please press the pound key.
First question comes from the line of Joe <unk> from Raymond James Your question. Please.
Thanks, guys good morning.
So first question kind of on.
Kind of trying to understand the commentary this morning on supply chain not a surprise.
Good results in the quarter, because if I look at my model and I look at your estimates and I look at the guidance.
Sales were well above.
EBITDA margin slightly above.
It sounds like supply chain issues weren't that big of a deal in the quarter.
But perhaps got worse in April and May be early may so hops understand did.
Did the commentary versus what you delivered this morning for <unk>.
While we met our guidance and supply chain was disruptive and created inefficiencies.
And so while it's been intermittent.
It's got a bit worse than the last.
A month or so.
And we continue to meet those challenges and we're very pleased that we delivered on the guidance, but make no mistake supply chain was disrupted during the quarter.
Okay, but if you get a little bit worse.
Any areas I know you guys have.
Talked about things like engines and when she wants.
And computer screens in the past.
One specific area or is it pretty pretty widespread and it sounds like its largely not explore or am I misinterpreting that no its across the products.
Certainly affecting master craft significantly as well as not external not start it can be items like engines as well as other items, but Ed Master craft, it's been a whole range of different items and they tend to we tend to solve the problem and move on but it creates a disruption during that period.
So it's not any one item its been a variety of different items and master craft case, though it is not engine supply, it's more like screens or windshields or tanks are a whole variety of items with different times anything that has a chip in it is.
Is likely to have.
Certainly inflationary pressures.
Subject to disruption.
Okay, one last one for me.
More on the on the manufacturing side from your suppliers more on the logistics side in getting those components and parts to the facilities with both.
It's more on the manufacturer side, but certainly there have been logistics challenges, but again those tend to be.
Short term intermittent disruptions.
Of course, what's going on in China, with the Lockdowns and so on has a ripple effect through the supply chain and so we have to work hard sometimes with our suppliers to help them source their components.
The other logistics side, certainly we've spend more on expedited freight than we have in the past and that is one of the inefficiencies associated with the supply chain disruption.
Okay. Okay, great. Thank you guys.
Thanks, Joe.
Thank you. Our next question comes from the line of Craig Kennison from Baird. Your question. Please.
Hey, good morning, Thanks for taking my questions as well I guess I wanted to understand demand trends a little bit better I think first of all you said you were sold out of some brands, which brands are you sold out of for this model year.
Sold out in all brands.
Okay.
And do you at this point then are you taking.
I guess preorders or are you putting deposit taking deposits down on future.
Model years.
No we have not yet released pricing on.
2023 model years, so that will happen shortly.
Which point, we will start booking those orders.
Having said that out of the orders that are booked most of them are retail sold but not all of them. So some dealers still have the opportunity to convert what would've been a stock order to a consumer order and give delivery.
This model year.
And I think video sessions start Greg.
You say.
No go ahead.
Just going to say really our leading indicator of the demand is having discussions with our dealers.
They would like to buy for the upcoming fiscal year.
And that demand is very strong and they are that they are the closest to the action as far as the consumer demand. So.
Very strong indications of demand for fiscal 'twenty three.
So that makes sense from a consumer perspective.
All of those boats spoken for is that.
Or are there all of which goes to.
2022, yes, no they're not all retail sold.
Consumers still has the opportunity in some dealers to be able to convert what would have been a stock order to their specific order got it okay disproportionate number of the boats are retail sold.
So even though theyre not all retail sold its higher than the norm.
Makes sense, Okay, and then I guess I'm just reading the newspaper like everybody else and would love your perspective on.
The potential for a recession and how you prepare your business for what seems like an inevitable part of the business cycle.
Well, we think that our strategic pillars are a big part of that and if you think about the way.
We're spending our money now and making investments in dealer acquisition and building up our marketing and lead management capabilities and what we're doing to continue to build the brand.
The introduction of new models, we've been very aggressive there.
And the recent models, while this year we're experiencing.
The results of having completed some.
Introductions are fairly large models, we've beefed up the smaller end of our product line and we will continue to do so so that positions us very well for a broad spectrum of price points.
As we head into the future and remember we have.
Are quite variable cost structure underlying but in the near term make no mistake, we're making investments today in dealer training and in distribution expansion and upgrading that's going to position us very well and there is still markets. It.
We're relatively under serving like international.
Yes, and Greg I would add.
As we stated in the prepared remarks, if you look at where our inventory our dealer inventories are relative to historical levels. I think we quoted somewhere right around 50% down from 2019 and 2020 levels.
<unk> business as a whole has never been better positioned to withstand an economic downturn.
So we still have the ability to to.
To produce at wholesale even with a significant decline in retail. So we'll obviously make sure that we don't ever go back to a situation, where we've got too much inventory in the channel, but because we have such an empty basket. It does insulate us and give us the ability to continue to deliver at wholesale.
Thanks, George and I guess lastly, if you don't mind, just curious what you've seen in terms of recent demand trends.
April and May post quarter.
We've heard some noise about weather being a factor in some markets, but I'm curious if you've seen any any evidence of a slowdown yet based on some of the economic headlines.
We haven't I mean, obviously I think the weather has impacted the delivery of some boats that we have shipped but what we're hearing from dealers is that we're not seeing any orders.
Commitments from consumers to no longer take delivery of the boats. So from our perspective. The demand continues to remain strong. The consumer is still is very interested in the boating lifestyle, we talk about some of the structural reasons behind.
People, where they are living and how they choose to work and spend time with our family. We think all of those things remain very strong and position us we think our consumer tends to be healthier overall, but we've not seen any or heard any orders being canceled if.
If anything the weather is just more delayed the delivery of the boat to the end consumer but not impacting overall demand.
Craig There was and there was an interesting article last week in the Wall Street Journal talking about the migration of people too.
Rural areas and in particular.
That over 55 group, which obviously tends to be.
Very wealthy group moving to specifically.
Both centric areas.
They were targeting around the country the areas of high migration.
It plays right into our strengths.
Perfect Hey, thank you.
Thanks Barry.
Thank you. Our next question comes from the line of Mike Swartz from true Securities. Your question. Please.
Hey, guys. Good morning, just maybe.
First start off with just a point of clarification I think Fred maybe in your remarks, you had indicated in the third quarter that.
EBITDA margins for all brands were up year over year, except for non <unk> is that what I heard.
Yes.
Okay.
So just a follow up to that I guess not extra 10% of your consolidated revenue, but it would appear that I mean.
I guess, the math would tell me that not istar actually loss.
In the quarter or is that is that a fair observation, yes, that's true.
Okay.
Did things I guess as it pertains to not expect did things progressive we get worse throughout the quarter I know there is some supply issues and particularly related to engines, but just maybe diagnose what's happened there and I know you have new leadership coming in but maybe what the what the strategic plan is there going forward.
Fundamental focuses on proof is on improving the operation.
It was a company we acquired that was.
Sole proprietor kind of business very thin and converting it to be a subsidiary of a public company was something that we frankly didn't do a good job of initially we ramped up production in.
The systems that existed at the company essentially imploded on themselves and so we have to rebuild all of the fundamental operating systems from the ground up and that's what we've been doing there.
Thought we had the right leader in there to be able to do it turns out we didn't so we made that change. We now have are strong our strongest process leadership function by function involved in doing that as well as some external resources. So.
It's a bootstrap ground up rebuilding the business activity and that's what we've been focused on during the quarter and of course, sometimes when you undertake those activities because of that change was made in the third quarter, we're talking about.
It doesn't always get better before you uncover some of the rocks and deal with those.
Right and I fully appreciate that the supply chain the operational environment has certainly gone against not <unk> as it is.
Every company, but when I look back that company was acquired I think it was about five years ago. I think revenue is basically flat versus where it was back then I mean is there a point in time, where you begin to consider maybe strategic alternatives does it fit with the portfolio is it worth being part of a public company.
Et cetera.
Alternatives are evaluated and considered by management as well as by the board.
Okay. Thank you.
And just maybe another question quickly just just.
Some color or sense of just your I guess your pricing strategy going forward and specifically as you move into model year. 'twenty. Three are you have you have you.
I guess are you considering more kind of.
Cycle or mid cycle price increases it sounds like something went through in the March quarter. So maybe talk about how you how you think about pricing over the next 12 months yes.
Yeah, Hey, Mike It's George so.
Our our preference strong preference and I think this goes for the dealers and the end consumer as well as to not have to.
Implement a mid cycle price increase so.
We're spending a lot of time and doing a lot of work with our internal team and our vendor partners to to try to estimate what the inflation for all of our material and labor is going to be for this upcoming model year and try to bake that into our price increase here effective July one for all of our brands. So that we're going to do everything we can to.
Avoid having to do anything mid cycle. It creates a lot of disruption both internally, but obviously with the end consumer and so.
We are very focused on delivering on that and doing the work now to make sure we get that nailed down as best as possible.
Okay, great. Thank you.
Thank you and as a reminder, if you have a question at this time. Please press Star then one.
Our next question comes from the line of Eric <unk> from B Riley Your question. Please.
Thank you good morning, a couple.
Couple of questions I guess wanted to follow up on <unk>.
To start I know you've kind of.
Looking at everything there.
Back up but just on the engine side.
Knowing that you made.
The switch or the.
Configuration to be like Mercury engines, yes, how quickly can you push that through to maybe offset some of the Yamaha logistics.
We have consumers and dealers has been to this and how likely.
Will you be getting being able to get into the order book of Brunswick to get what you would need.
Well.
They have made the modifications for many of the products and many of the engine offerings.
We never expected mercury to be a dominant proportion of their engine but.
Strong secondary source.
Mercury was committed to to increase that volume over time.
As they ramped up their capability, having said all of that Mercury. Just recently has become very constrained in terms of their production output they've done a fantastic job of supporting crest, a longtime customer, but as you can imagine new customers that are growing are not necessarily on top of that food chain. So that is.
Been a much more limited alternative to us more recently again due to the very recent.
Extensions of issues that Mercury's, having and getting some of their components from offshore so having said that back up it's primarily again.
As it relates to not extraordinary Yamaha problem.
Got it.
So I was wondering if the comment you made you've made that you expect the master craft to be producing at record levels in the fourth quarter I guess.
So I'm assuming that means if.
If I look back historically much better than it was in Q3, I guess whats changed around the supply chain or your production ability between Q3 and Q4 for mass transit to make that happen and when you say producing at record does that also mean shipping at record or is there a risk that there could be further buildup of wet because of that.
Expect a record quarter hands down.
And whichever dimension you choose to measure it by.
And so it's been a stair step increase not without scrambled and fighting and disruption et cetera, but thats a way of life something that we've come to accept having said that we've seen enough marginal improvement.
As the supply chain made some marginal improvements.
<unk> been able to adapt to that and expand our volume. So if you remember it was fourth quarter last year, when we got hit really hard by the supply chain disruptions.
So.
The fourth quarter last year compared to this year is an easier comp but.
Sequentially, we expect very significant increase also from the third quarter.
So we're already seeing that and it's something that.
Resolutely committed to but feel very confident about the fourth quarter.
Keep in mind.
Model year to date basis, Eric This is Tim.
We're up almost 10% and unit volume at match scrap. So we've had nice nice increases sequentially quarter to quarter, and we're going to we're committed to overcoming the supply chain challenges to deliver on us on another record quarter for our fourth quarter and fiscal year.
Perfect. Thank you both.
Youre welcome.
Thank you.
This concludes the question and answer session is today's program as well as today's conference. Thank you, ladies and gentlemen for your participation you may now disconnect. Good day.
Okay.
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