Q2 2024 OneWater Marine Inc Earnings Call
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Operator: Good day, and welcome to the Onewater Marine Incorporated second quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press R, then 2.
Good day and welcome to the one water Marine and got paid the second quarter, when you're 24 earnings conference call.
Speaker Change: All participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions.
Speaker Change: So I'll ask a question you May press Star then one on you touched on the phone.
Speaker Change: To withdraw your question. Please press Star then two.
Operator: Please note this event is being recorded. I would now like to turn the conference over to Mr. Jack Ezzell, Chief Financial Officer. Thank you, and over to you. Mr. Ezzell, please go ahead.
Speaker Change: Please note this event is being recorded.
Speaker Change: I would now like to turn the conference over to Mr. Jack is it Chief Financial officer, Thank you and over to you.
Jack: Mr. Xu Please go.
Mr. Xu: It says it.
Mr. Xu: Okay.
Jack: Good morning, and welcome to the one water marine physical second quarter 'twenty 'twenty four earnings conference call I am joined on the call today by Austin, Singleton, Chief Executive Officer, and Anthony Asquith, President and Chief.
Jack P. Ezzell: Good morning, and welcome to OneWater Marine's fiscal second quarter 2024 earnings conference call. I am joined on the call today by Austin Singleton, Chief Executive Officer, and Anthony Aisquith, President and Chief Operating Officer.
Jack Xu: Before we begin I would like to remind you that certain statements made by management. This morning conference call regarding one water marine and its operations may be considered forward looking statements under securities law and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors many of them.
Jack P. Ezzell: Before we begin, I would like to remind you that certain statements made by management in this morning's conference call regarding OneWater Marine and its operations may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking statement.
Jack Xu: Which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward looking statements.
Jack Xu: Factors that might affect future results are discussed in the company's earnings release, which can be found in the rest of relational section of the company's website.
Jack Xu: Its filings with the FTC.
Jack Xu: <unk> disclaims any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur. After the date. The forward looking statements are made except as required by law.
Jack P. Ezzell: Factors that might affect future results are discussed in the company's earnings release, which can be found in the Arrested Relations section of the company's website. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. And with that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin.
Jack Xu: That I'd like to turn the call over to Austin, Singleton, who will begin with a few opening remarks Austin.
Philip Austin Singleton: Thanks, Jack, and thank you everyone for joining today's call. Our second quarter results were in line with our expectations at the start of the year. As we continue to see the industry stabilize towards historical cycles, same store sales were down 5.1%, as anticipated, considering the more normalized demand environment and the return of seasonality. However, we significantly outperformed the industry, which market data indicates was down 16% through March.
Philip Austin Singleton: Thanks, Jack and thank you everyone for joining today's call. Our second quarter results were in line with our expectations at the start of the year.
Philip Austin Singleton: As we continue to see the industry stabilized towards historical cycles same store sales were down 5.1% as anticipated considering the more normalized demand environment and a return to seasonality.
Philip Austin Singleton: Wherever we.
Philip Austin Singleton: We significantly outperformed the industry, which market data indicates was down 16% through March.
Philip Austin Singleton: From where we stand today, consumer settlement is holding, and we continue to sell boats and grow our market share. Sales dynamics from the first quarter largely carried into the second quarter as customer buying patterns mirrored typical seasonality in an increasingly competitive selling environment. Pricing continued to moderate, which we expected through the first half of the year and will continue fluctuating with seasonal trends. Year to date, we have experienced more normalized pricing, solid finance and insurance penetration, and an inventory build peaking in February, all in line with historical standards.
Philip Austin Singleton: From where we stand today consumer sentiment is holding and we continue to sell boats and grow our market share.
Philip Austin Singleton: Sales dynamics from the first quarter largely carried into the second quarter as customer buying patterns in your typical seasonality and an increasingly competitive selling environment.
Philip Austin Singleton: <unk> continued to moderate which.
Philip Austin Singleton: Which we expected through the first half of the year and we'll continue fluctuating with seasonal trends.
Philip Austin Singleton: Year to date, we have experienced more normalized pricing solid finance and insurance penetration and an inventory build peaking in February all in line with historical standards. Thus, we believe we are headed towards a more typical year for one water in the industry.
Philip Austin Singleton: Thus, we believe we are headed towards a more typical year for Onewater in the industry. As a reminder, we historically build inventory levels during the winter months. From there, volumes ramp up starting with the winter boat shows and through the summer selling season. Through the coming summer months, we expect to work inventory down to an appropriate level in preparation for the next model year boat.
Philip Austin Singleton: As a reminder, we historically build inventory levels during the winter months from their volumes ramp starting with the winter boat shows and through the summer selling season.
Philip Austin Singleton: They're going to come in the summer months, we expect to work inventory down to an appropriate level in preparation for the next model year boats.
Philip Austin Singleton: As we assess the business with where we are in this yearly cycle. Our performance is tracking in line with seasonal pre COVID-19 metrics reinforcing the strength and durability of our business model.
Philip Austin Singleton: As we assess the business at where we are in this yearly cycle, our performance is tracking in line with seasonal pre-COVID metrics, reinforcing the strength and durability of our business. As we have said before, we have grown significantly since 2019 through strategic acquisitions and strong execution of our integration playbook. As a result, we expect our baseline to reset higher than what we saw pre-COVID as the industry normalizes, though we continue to manage the business prudently with our ongoing focus on expense management.
Philip Austin Singleton: As we have said before we have grown significantly since 2019 through strategic acquisitions and strong execution.
Philip Austin Singleton: Of our integration playbook as a result, we expect our baseline to reset higher than what we saw pre COVID-19 as the industry normalizes, though we continue to manage the business prudently with our ongoing focus on expense management.
Philip Austin Singleton: We had a solid first half of the year, and our variable cost structure allowed us to better align our SG&A expenses with market demand. However, given the degree of uncertainty in the marketplace, we found it prudent to proactively take further action to reduce costs. These actions went into effect late in the quarter, but we expect to see results in the back half of the year. We have additional flexibility should we need it, and we continue to monitor our expense structure to adjust for changes in retail activity.
Philip Austin Singleton: We had a solid first half of the year and our variable cost structure allowed us to better align our SG&A expenses with market demand.
Philip Austin Singleton: However, given the degree of uncertainty in the marketplace. We found it prudent to proactively take further action to reduce costs.
Philip Austin Singleton: Actions went into effect late in the quarter, but we expect to see results in the back half of the year.
Philip Austin Singleton: We have additional flexibility should we need it and we continue to monitor our expense structure to adjust for changes in retail activity.
Philip Austin Singleton: Accordingly, we remain cautiously optimistic and are maintaining our previously issued guidance. Turning to M&A, the deal pipeline remains active, and we continue to monitor the market for opportunities to support our growth objective. As announced in yesterday's press release, we have closed on the acquisition of Garden State Yacht Sales, a premium sales, parts, and service, and marina facility. The acquisition bolsters our presence in the Mid-Atlantic U.S. through a low-risk, low-cost transaction that complements our Stone Harbor location.
Philip Austin Singleton: Accordingly, we remain cautiously optimistic and are.
Philip Austin Singleton: Maintaining our previously issued guidance.
Philip Austin Singleton: Turning to M&A the deal pipeline remains active and we continue to monitor the market for opportunities to support our growth objectives.
Philip Austin Singleton: As announced in yesterday's press release, we have closed on the acquisition of Garden state yacht sales or premium sales parts and service and Marina facility.
Philip Austin Singleton: The acquisition bolsters, our presence in the mid Atlantic U S through a low risk low cost transaction complements our stone harbor location.
Philip Austin Singleton: We are excited to put our proven integration playbook to work and capitalize on the strong upside potential of this acquisition. As we move through the back half of the year, we believe we are on the right trajectory for our business. While we continue to monitor various macroeconomic headwinds, I am confident we will extend Onewater's track record of successfully navigating through various economic cycles. With that said, I will turn it over to Anthony to discuss business operations.
Philip Austin Singleton: We are excited to put our proven integration playbook to work and capitalize on the strong upside potential of this acquisition.
Philip Austin Singleton: As we move through the back half of the year. We believe we are on the right trajectory for our business. While we continue to monitor monitor various macro economic headwinds I'm confident we will extend one waters track record of successfully navigating through various economic cycles.
Philip Austin Singleton: With that I will turn it over to Anthony to discuss business operations.
Anthony Asquith: Thanks Austin.
Anthony K. Aisquith: We continue to see buying patterns at a good pace following the start of the fiscal year. The promotional environment is holding steady, and with inventory peaking in February, we are confident in our position as we move into the summer selling season. With the return of seasonality, new and pre-owned boat sales are holding up well, as expected. Demand for larger boat offerings remains healthy, and is in line with the typical mix seen during the winter months.
Anthony Asquith: We continue to see buying patterns on a good pace. Following the start of the fiscal year. The promotional environment is holding steady and with inventory, peaking in February we are confident in our position as we move into the summer selling season.
Anthony Asquith: With the return of seasonality, new and pre owned boat sales are holding up well as expected.
Anthony Asquith: Demand for larger boat offerings remained healthy.
Anthony Asquith: And this is in line with the typical mix seen during the winter months.
Anthony K. Aisquith: I am pleased that our finance and insurance sales appear to be stabilizing. Credit continues to be available, and customers are using it. As we have mentioned before, we have historically targeted finance penetration at north of 60% of NUBO customers.
Anthony Asquith: I am pleased that our finance and insurance sales appear to be stabilizing credit continues to be available and customers are using it.
Anthony Asquith: As we have mentioned before we have historically targeted finance penetration north of 60% of new boat customers.
Anthony K. Aisquith: We are still tracking above this range, giving us confidence as we move forward in this operating environment. Our service and parts and other sales businesses continue to do well, factoring out the impact of the businesses we disposed of last year. Our dealership segment, service parts, and other sales are up. However, our distribution segment continues to be challenged by lower sales to boat manufacturers who have reduced production for 2024 in response to excess dealer inventory throughout the industry.
Anthony Asquith: We are still tracking above this range, giving us confidence as we move forward in this operating environment.
Anthony Asquith: Our service and parts and other sales businesses continued to do well factoring out the impact of the businesses. We disposed of last year, our dealership segment service parts and other sales are up.
Anthony Asquith: Our distribution segment continues to be challenged by lower sales to both manufacturers, who have reduced production for 2024 and response to excess dealer inventory throughout the industry. We expect this to continue to pressure results for the remainder of the year.
Anthony K. Aisquith: We expect this to continue to pressure results for the remainder of the year. For the long term, we are encouraged by our large installed base as a wave of new boaters have embraced the boating lifestyle over the last several years. We expect to benefit from this COVID-era tailwind for many years to come. Leveraging our expanded breadth of offerings, we look forward to providing our customers with products and solutions for all of their needs.
Anthony Asquith: For the long term, we are encouraged by our large installed base as a wave of new boaters as embraced the boating lifestyle over the last several years.
Anthony Asquith: We expect to benefit from this COVID-19 era tailwind for many years to come.
Anthony Asquith: Leveraging our expanded breadth of offerings, we look forward to providing our customers the products and solutions for all of their needs April same store sales were positive. So we're off to a good start to the quarter.
Anthony K. Aisquith: April's same-store sales were positive, so we're off to a good start to the quarter. The consumer is holding tight, floor traffic is solid, and we continue to do what we do best and sell boats. And with that, I'll turn the call over to Jack to go over the financials in more detail.
Anthony Asquith: Humor's holding tight for traffic is solid and we continue to do what we do best and sell boats and with that I'll turn the call over to Jack to go with the financials in more detail.
Jack P. Ezzell: Thanks, Anthony. Fiscal second quarter revenue decreased 7% to $488 million in 2024 from $524 million in the prior year quarter. New boat sales were down 8% to $327 million in the fiscal second quarter of 2024, while pre-owned boat sales increased 4% to $79 million. The decrease in new boat sales was expected due to both the return of seasonality and the fact that we are up against a strong comparable sales comparable from the prior year quarter.
Jack Xu: Thanks, Anthony physical second quarter revenue decreased 7% to 488 million in 2024 from $524 million in the prior year quarter.
Jack Xu: <unk> sales were down 8% to $327 million in the fiscal second quarter of 2024, while pre owned boat sales increased 4% to 79.
Jack Xu: The decrease in new boat sales was expected.
Jack Xu: Due to both the return to seasonality and the fact that we are up against a strong same store sales comparable from the prior year quarter.
Jack Xu: While we saw the decline in sales split between units and price. We were pleased to see an increase in pre owned boat sales as inventory becomes more readily available.
Jack P. Ezzell: While we saw the decline in sales split between units and price, we were pleased to see an increase in pre-owned boat sales as inventory becomes more readily available. Revenue from service parts and other sales for the quarter decreased 14% to $68 million compared to the prior year. Excluding the impact of the disposal of Rothfield Yachting Center and Lookout Marine, which occurred in the fourth quarter of 2023, the dealership segment, service parts, and other sales were up.
Jack Xu: Revenue from service parts and other sales for the quarter decreased 14% to 68 million compared to the prior year, excluding the impact from the disposal of Brasilia Yachting Center and Lookout Marine which occurred in the fourth quarter of 2023, the dealership segment service parts and other sales were up the <unk>.
Jack P. Ezzell: The distribution segment service parts and other sales were lower due to reduced boat manufacturer production. Finance insurance revenue decreased 4% to $15 million in the second quarter, but was in line with the prior year as a percentage of total vote sales.
Jack Xu: Distribution segment service parts and other sales were lower due to reduced boat manufacturer production.
Jack Xu: <unk> insurance revenue decreased 4% to $15 million in the second quarter, but was in line with the prior year as a percentage of total sales.
Jack P. Ezzell: Gross profit decreased 18% to $120 million in the second quarter compared to $147 million in the prior year, driven by the continued normalization of gross margins on both sold. Second quarter 2024 selling general administrative expenses decreased to $87 million from $90 million. SG&A's percentage of sales was 17.7 percent, about 50 basis points from the prior year on lower sales. As Austin mentioned, we took actions to reduce our costs during the quarter as part of our ongoing expense management and focus on improving our operating levels.
Jack Xu: Gross profit decreased 18% to $120 million in the second quarter compared to $147 million in the prior year driven by the continued normalization of gross margins, but sold.
Jack Xu: Second quarter 2020 for selling general and administrative expenses decreased to $87 million from $90 million.
Jack Xu: G&A as a percentage of sales was 17, 7% up 50 basis points from the prior year on lower sales.
Jack Xu: As Austin mentioned, we took actions to reduce our cost during the quarter as part of our ongoing expense management and focus on improving our operating leverage.
Jack P. Ezzell: These actions included a reduction in headcount, closing certain satellite retail locations, discontinuing sales of certain brands, and abandoning IT projects that are no longer considered strategic. While these initiatives were proactive in nature, we have the flexibility to reduce our costs further should the need arise.
Jack Xu: These actions included a reduction in head count closing certain satellite retail locations discontinuing sales of certain brands and abandoning it projects are no longer consider strategic while these initiatives were proactive in nature.
Jack Xu: We have the flexibility to flex our costs further should the need arise.
Jack P. Ezzell: Operating income decreased to $14 million from $49 million in the prior year period, which was impacted by a restructuring impairment charge associated with the aforementioned cost act. Additionally, during the quarter, we recorded approximately $2 million in other expenses due to the impact of two separate EF3 tornado events that significantly impacted our operations. Our location in Russells Point, Ohio, was directly impacted by a tornado, and our Panama City Beach location was just outside the path of the tornado.
Jack Xu: Operating income decreased 14 million from 49 million in the prior year period.
Jack Xu: Which was impacted by a restructuring and impairment charge associated with the aforementioned cost actions.
Jack Xu: During the quarter, we recorded approximately 2 million other expenses due to the impact of two separate E. F. Three tornado events that significantly impacted our operations.
Jack Xu: Our location in Brussels pointed, Ohio was directly impacted by a tornado and the Panama City Beach location was just outside the path of the tornado.
Jack P. Ezzell: The team has rallied together with the communities and our rebuilding efforts to be ready for the upcoming sowing season. For the quarter, adjusted EBITDA was $28 million compared to $54 million in the prior year period. The decline in adjusted EBITDA was primarily due to lower gross profit in the quarter. Net loss for the fiscal second quarter totaled $5 million, or $0.27 per diluted share, compared to net income of $27 million, or $1.56 per diluted share, in the prior year.
Jack Xu: The team has rallied together with the communities and are rebuilding can be ready for the upcoming selling season.
Jack Xu: For the quarter, adjusted EBITDA was $28 million compared to $54 million in the prior year period. The decline in adjusted EBITDA was primarily due to lower gross profit in the quarter.
Jack Xu: Net loss for the fiscal second quarter totaled $5 million or 27 cents per diluted share compared to net income of 27 million or $1 56 per diluted share in the prior year.
Jack Xu: In the fiscal second quarter adjusted earnings per diluted share was <unk> 67.
Jack Xu: Compared to adjusted earnings per diluted share of $1 81 and 2023.
Jack Xu: Turning now to the balance sheet on March 31, 2020 for a total liquidity was in excess of $80 million, including $47 million of cash and additional availability under our credit facilities total.
Jack P. Ezzell: In the fiscal second quarter, adjusted earnings per diluted share was $0.67 compared to adjusted earnings per diluted share of $1.81 in 2020. Turning now to the balance sheet, on March 31st, 2024, our total liquidity was in excess of $80 million, including $47 million of cash and additional availability under our credit facility. Total inventory at March 31, 2024 was $687 million, compared to $707 million in the December quarter.
Jack Xu: Total inventory at March 31st 2024, with $687 million compared to $707 million at the December quarter.
Jack P. Ezzell: We are comfortable with our inventory position and expect to continue working our inventory levels down throughout the remainder of the fiscal year. Now turning to our outlook, we are maintaining our fiscal 2024 guidance. We are cautiously optimistic about the demand environment and feel we have reached a level of stabilization around pricing and margin. However, fluctuations outside of seasonal trends could push us to the lower end of our range.
Jack Xu: We are comfortable with our inventory position and expect to continue working down our inventory levels down throughout the remainder of the fiscal year.
Jack Xu: Now turning to our outlook, we are maintaining our fiscal 2020 for guidance.
Jack Xu: We are cautiously optimistic about the demand environment. If you we have reached a level of stabilization around pricing and margins. However, fluctuations outside of seasonal trends could push us to the lower end of our ranges.
Jack P. Ezzell: We are still anticipating same-source sales to be up low to mid-single digits, and we expect adjusted EBITDA to be in the range of $130 million to $155 million and adjusted earnings per diluted share to be in the range of $3.25 to $3.75. To conclude, we are pleased with the progress we have made toward our strategic objectives; we are sticking to our proven playbook and positioning Onewater for success in any environment. This concludes our prepared remarks. Operator, would you please open the line for questions? Thank you. We will now begin.
Jack Xu: We are still anticipating same store sales to be up low to mid single digits and we expect adjusted EBITDA to be in the range of 130 million to $155 million.
Jack Xu: And adjusted earnings per diluted share to be in the range of $3 25 to $3 75 shops.
Jack Xu: To conclude we are pleased with the progress we have made towards our strategic objectives.
Jack Xu: We are sticking to our proven playbook and positioning one water for success in any environment. This concludes our prepared remarks, operator would you. Please open the line for questions.
Speaker Change: Thank you.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. We'll take a question from Drew Crum with Stifel, please go ahead.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on you touched on phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: We draw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: We'll take a question from drew Crum with Stifel. Please go ahead.
Andrew Edward Crum: Okay. Thanks, Hey, guys. Good morning, I'm wondering if you could comment on your expectations for gross margin 24, 6% reported in the quarter was only down 50 bps versus <unk>.
Andrew Edward Crum: Okay, thanks. Hey guys, good morning. I wonder if you could comment on your expectations for gross margin. 24.6% reported in the quarter; it was only down 50 BIP versus 1Q. Should we anticipate this leveling out further in the second half?
Andrew Edward Crum: And assuming that's correct, who would be the driver?
Andrew Edward Crum: Should we anticipate this leveling out further in the second half and assuming that's correct what would be the drivers.
Speaker Change: Yes, I think that's right drew I think we plan on seeing.
Jack P. Ezzell: Yeah, I think that's right, Drew. I think we plan on seeing, you know, the boat margins. They feel like they're stabilizing. You know, new boat sales were just ever so slightly less than last quarter. Pre-owned fluctuated a little bit with the mix between brokerage consignment and trades. And so I think that largely drives our margins. So I think as we move forward, we'll expect to see them kind of in that mid-20s range.
Speaker Change: Boat margins, they feel like they're stabilizing.
Speaker Change: New boat sales were just ever so slightly less than last quarter pre.
Speaker Change: Pre owned fluctuated, a little bit with the with the mix between brokerage consignment and and trades.
Speaker Change: And so I think it largely drives our margins. So I think as we move forward, we will expect to see them kind of in that mid 20 range.
Andrew Edward Crum: Got it. Okay.
Speaker Change: Got it Okay, and then Austin you mentioned in your preamble that the close of the Garden State yacht sales acquisition.
Philip Austin Singleton: And then, Austin, you mentioned in your preamble the close of the Garden State yacht sales acquisition. What are your updated thoughts concerning M&A for the company? What are you seeing in terms of valuations? And just, you know, give us a sense as to what your appetite is to do more deals in this environment.
Philip Austin Singleton: What are your updated thoughts concerning M&A for the company what are you seeing in terms of valuations and just.
Philip Austin Singleton: Give us a sense as to what your appetite is to do more deals in this environment. Thanks.
Philip Austin Singleton: It's time to get back to doing business. We've got a lot of stuff we're looking at, and we're going to get back to some sort of cadence similar to what we had during COVID or pre-COVID, as margins just kind of, you know, the two things that we were, have been concerned about over probably the last 12 months have just been where to margin stabilize that, what's the new normal, and then this inventory glut that's out there.
Philip Austin Singleton: It's time to get back to doing deals.
Philip Austin Singleton: We've got a lot of stuff, we're looking at and we're going to get back to some sort of cadence similar to what we had.
Philip Austin Singleton: Erinn Covid are pre COVID-19.
Philip Austin Singleton: Margins, just kind of the two things that we were had been concerned about over probably the last 12 months has just been where the margins stabilize that what's the new normal and then the inventory glut that's out there.
Philip Austin Singleton: You know, margins seem to have stabilized, and so that gets everything kind of where we want it to be. This quarter that we just finished was kind of the last what we felt the COVID hangover quarter was, so when you look at a trailing 12, you kind of get all that COVID noise based out of it. So, those two things kind of were, I wouldn't use those as our excuses, but those were the things that we were waiting to kind of get to where we were comfortable before we got into really, you know, really pushing on the M&A side. That's there now, so it's time to start doing some M&A, and, you know, we look forward to it. I've been kind of bored, so we'll be back at it shortly. Okay, thanks guys.
Philip Austin Singleton: Margins seem to have stabilized and so that gives him retain kind of where we wanted to be this quarter that we just finished was kind of a last what we felt the COVID-19 hangover quarter was so when you look at a trailing 12, you kind of got all that COVID-19 noise based out of it.
Philip Austin Singleton: And then from an inventory perspective.
Philip Austin Singleton: Still some challenges out there, but we're encouraged that manufacturers have been really good over there.
Philip Austin Singleton: This whole time doing great for from a promotional standpoint, they're continuing to do that and they've also backed off of production and are steadfast with that so.
Speaker Change: What I am hearing from Wells Fargo is.
Speaker Change: Bodies doing what needs to be done to get inventory write at model year change as we go into the fall. So those two things kind of work.
Speaker Change: We're I wouldn't use the doses are excuses, but those were the things that we were waiting to kind of get to where we were comfortable before we got into really really pushing on the M&A side.
Speaker Change: They are now so its time to start doing some M&A and.
Speaker Change: Look forward to it and then kind of board so we.
Speaker Change: We will be back at it shortly.
Andrew Edward Crum: I got it. Okay, thanks guys. Thanks Drew. Thank you. Again, if you have a question, please press star 1.
Speaker Change: Got it okay. Thanks, guys.
Speaker Change: Thanks sure.
Speaker Change: Thank you.
Speaker Change: Again, if you have a question. Please press Star then one on your phone.
Operator: Again, if you have a question, please press star, then 1 on your phone. The conference has now concluded. Thank you for attending today's presentation, Human Heart Disconnect.
Speaker Change: Okay.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yeah.