Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 LCI Industry Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to Victoria Sivrais, Investor Relations. Please go ahead.

Good morning, everyone, and welcome to LCI Industries First Quarter 2020 Conference Call. I am joined on the call today by the members of LCI’s management team, including Jason Lippert, President, CEO and Director; and Brian Hall, Executive Vice President and CFO. Management will be discussing their results in just a moment. But first, I’d like to inform you that certain statements made in today’s conference call regarding LCI Industries and its operations may be considered forward-looking statements under the securities laws 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 would cause actual results and events to differ materially from those described in the forward-looking statements. These factors are discussed in the company’s earnings release and in its Form 10-Q and in its other filings with the SEC. 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. With that, I would like to turn the call over to Jason Lippert. Jason?

Good morning, everyone, and welcome to LCI’s First Quarter 2020 Earnings Call. In what rapidly evolved into most – the most challenging operating environment in our company history, we delivered solid performance during the first quarter. Our first quarter was off to a strong start until the first week of March, so we are very encouraged about our trajectory. I am incredibly proud of the agility of our team and response to the escalated COVID-19 pandemic late in the quarter. Thanks to the team’s efforts, we were able to make necessary steps to protect the health and safety of our team members while effectively managed costs to mitigate downside risk to our business. During the quarter, we reported revenues of $660 million, up 11% compared to last year. This top line growth was largely driven by the successful execution of our diversification strategy and the efficient integration of the nine acquisitions we completed over a 12-month span, in addition to outperforming in the RV OEM space. Before I discuss our results in more detail, let me quickly touch on the impact we have seen as a result of COVID-19 as well as the steps we are taking to confront challenges brought on by the pandemic. To prioritize the well-being of our team members, maintain compliance with better home-stay mandates and better align our production with current demand levels, on March 25, we announced the temporary suspension of our production at select manufacturing facilities across the U.S. and Europe. During the shutdown, 15 of our sites remained active and operational, continuing to produce items deemed essential. At these sites, we’ve operated with a heightened focus on safety, utilizing reduced staff as appropriate, adhering to social distancing guidelines and implementing increased cleaning and sanitization processes. Our team members have always been the…

Thank you, Jason, and good morning, everyone. Our consolidated net sales for the first quarter increased 11% to $660 million compared to the prior year. The increase in year-over-year net sales was driven by continued growth in the company’s Adjacent OEM, Aftermarket and International markets as we continue to integrate our latest acquisitions in each of those markets. This growth was partially offset by temporary production shutdowns related to COVID-19, which resulted in a loss of approximately $45 million in sales during the last two weeks of March. Q1 2020 sales to RV OEMs declined 5% compared to the prior year due to the previously mentioned production shutdowns and lower consumer demand due to COVID-19. Sales to North American RV OEMS, which represents 96% of our RV OEM sales was negatively impacted by the termination of the Furrion distribution agreement and a related loss of $24 million in net sales or 7%. This loss was offset by a 3% increase in content per towable RV unit and a slight increase in wholesale RV shipments for the quarter. The remaining 4% of our RV OEM sales relate to international RV sales, which were negatively impacted by COVID-19 a few weeks prior to North America and declined 12%. Content per towable RV unit increased 3% to $3,354 and per motorized unit decreased 5% to $2,327 compared to the prior year, excluding the impact of Furrion in 2019. Content per unit growth in towable has improved further due to the reversal of the de-contenting trend, while motorized content continues to be impacted by the shift in wholesale mix towards smaller Class C units. As Jason mentioned, we continue to remain focused on product innovation and believe our towable content growth rate can continue in the range of 3% to 5%. Despite a challenging…

[Operator Instructions] The first question comes from Scott Stember with CL King. Go ahead.

Good morning. Thanks for taking my questions.

Good morning, Scott.

Jason, just going back to the comments about your customers coming back online. The comments, I guess, that sales in the – in May, should not be down nearly as much as what we saw in April. And June, it looks like it will probably get a little bit better from there. But can you maybe talk about the – what you’re seeing or hearing on the end demand? You did say that you’re hearing about an abatement in some of the decreases in recent weeks. Can you maybe talk – maybe just frame that out a little bit? Are we talking returning to growth or flatness? Or we just talk about less bad than what we saw early in the month?

Yes. So, I mean, our experience is probably really similar to what the OEMs are telling us right now. I mean, they’ve got a very close connection with the dealer base and the dealer body. And I think that they looked at things at the end of March, beginning of April, and started calling dealers and zeroing out all the orders that they had and trying to figure out by the end of April what was – what a real backlog actually looks like. So – and that’s how we ended up with where we’re at in May. And I think we said that we’ve – our May looks like about 70% of what we were in February, early March before this whole thing hit. So that’s a lot better than what we would have anticipated. I mean, in early April, we were hoping we could start out at 40% or 50% of where we were. So 70% feels good. It feels right now like June could be a little bit better. Just the temperature and a lot of the bigger dealers out there is that late April activity was pretty solid considering the circumstances. There seems to be a lot more internet traffic and leads, and everybody is having to work a little bit harder for converting those leads into actual sales. But like we also said in our comments, I think that there’s an unprecedented opportunity for the RV business and the marine business. I like to take advantage of just where consumers are positioned today with respect to how they’re going to vacation in the new vacation normal. Does that help?

Yes. Very good. And on the Aftermarket side, there was a comment about how, in recent weeks, I guess, in April, that sales were down 35%. Was that organic? Or is that including CURT in the mix?

So that was more organic. I mean, our Aftermarket divisions in general were down about 35%. We didn’t know what to expect coming in to April just because we didn’t know how active consumers were going to be, but consumers stay pretty active as to – most people’s count, there’s about 1 million full-time RV-ers on the road. So you’ve got the service that needs to continue to be maintained on those units, and people that are readying for vacation or maybe have just finished with a trip on an RV. So whether it was an upgrade or service, there was quite a bit of activity on the Aftermarket side, which was good to see.

Yes. I think, Scott, I would add there that we were very encouraged. If you really looked at it on a weekly basis, when we entered April, there was a thought that Aftermarket sales could decline all the way down to 70%, 80% of what it had been running, and we really never saw it get to those levels. So that was very encouraging. And we’re excited to see the investments we’ve made in the Aftermarket business bear some fruit during this type of time. It probably got down to maybe during a week at 50% of prior rates, but then quickly flattened out and started to climb back up towards the end of the month.

And total Aftermarket numbers after acquisitions is more than double what we had in the same period last year. So...

Got it. And just last question, just on costs. You talked about high variable cost structure. Just remind us how much of your cost structure is variable? And then just lastly, on your comments about April not being profitable, but May should at least offset that. Your view about being profitable, the possibilities of being profitable and free cash flow positive in the second quarter?

Yes. Scott, it’s Brian. First of all, from a cost structure, we’ve always talked about our incremental margins being around 20% to 25%, but that’s kind of in a normal case scenario. When you really break down all of our costs, 80% to 90% of them are variable costs, meaning they can be adjusted. So we cut deep. As I said in our prepared remarks, for just second quarter alone, we went – we let variable costs flex like they normally would and then took out an additional $30 million worth of cost just for the second quarter. So we made some pretty significant swings there to rightsize the business. So from a profitability perspective, yes, at $52 million worth of sales during the month of April, not possible to be profitable at that rate. But we were very encouraged by the cash flow burn rate. I mentioned around $15 million, $16 million worth of cash burn during the month of April. You’ve heard me say in the past probably pre-entering into this COVID-19 world that our cash burn rate was somewhere around $40 million. So we took quite a bit of an adjustment there. And then given the added volume and really managing our costs well for the month of May, we think that we can offset that completely from a cash perspective during the month of May and return to some profitability. So to give you an idea, I think I said in the prepared remarks that we should be around – at least we’re estimating around 20% of prior year sales for the month of May. So very nice rebound from being down 76% in the month of April. A typical December for us, we’re really not that far off from breakeven at those kind of sales months. So the cost adjustments that we’ve made, I would tell you the month of May would probably under old Lippert cost structure be about a breakeven month, but we’re looking to show some profitability and generate some cash because of the adjustments we made. Hopefully, that gives you a little more color.

And I’d just add to that that probably the best news of the day is that we’re pretty blessed and fortunate to be sitting maybe at the end of the May based on current volume and orders for the May bookings, that we can sit and say that cash is neutral or around neutral considering what we’ve all been through. There’s not many businesses that can claim – probably claim that after the next 30 days from now. So good news on that front that we’ve been aggressive with the cost cutting, and we’ve got a fairly solid order booking for May.

Got it. That’s all I have. And thanks. A great job, guys.

Thanks, Scott.

Next question comes from Kathryn Thompson with Thompson Research.

Hey, good morning. This is actually Brian Biros on for Kathryn. First one, I guess, could you touch more on what you’re hearing from the RV OEM production levels, as they get back to operations in May? We’ve heard roughly 50% capacity floated around. I guess, what are you guys hearing? Are there differences between product types for that capacity? And then if they are at 50% or whatever the level is, do you guys match that level? Or how do you operate based on what they’re doing?

Yes. So for the RV business, we look at it kind of weighted with all customers. And we – unlike many suppliers, and we supply every single customer a bunch of products. So we looked at our May bookings for orders that we have for May. It shows that they’re right around 69% for where they were – compared to where they were beginning of March before COVID hit. So we’ve scraped it and scraped it and scraped it, and the OEMs have been revising production schedules up until this week when they launch production, which is when we launch production. So we feel pretty comfortable that, that number is going to stick for May, and we feel optimistic that it could be maybe a little bit better for June based on how the selling season comes along and how many buyers get out, how much pent-up demand there is, how much new demand there is. So we’ll be able to update that in the coming months.

And I guess following up on the strong trends, or I guess, better-than-expected trends so far and expected throughout May and hopefully into June. Are you hearing any differences among product types, towables versus motorhomes or even marine? I mean, how does that break down?

I don’t think that there’s any new trends there. I mean, entry-level stuff continues to be probably pretty dominant. And I think that if we do see an influx of demand from new buyers that are considering new ways to vacation, I really think that that will continue to play on the entry-level products. They’re very affordable, like we’ve talked about, the average – our towable RV is a $22,000 RV that you can get a couple of hundred dollar a month payment on. When you do the math or backwards math on what it costs to take a family on airfare or in a long trip and stay in a hotel, you’re easily matching that on one vacation a year. So it’s affordable. We feel that the entry-level products will continue to be popular. Certainly, you can buy an RV for a couple – if there’s two people RV-ing an entry-level product for $10,000, but most of the products we see are in that $22,000 range.

Hey, Brian, going back to the second part of your previous question, I think we missed answering that. As we’re hearing RV OEMs come back around – approaching 70%, that’s not very – it’s not consistent across all brands. It varies by week. So we’re being very intentional about bringing our costs back slightly slower than that so that we can work through it efficiently and effectively. And so I think that’s an important point. So we’re not anticipating having 70% of our costs come back. We’re going to be below that.

That’s right.

Okay. Yes. Very helpful. Thank you.

Next question comes from Craig Kennison with Baird.

Hey, good morning. Thanks for taking my questions. Jason, what’s your best guess at wholesale shipments for the RV and marine industries for 2020?

That’s a loaded question, Craig. I don’t know. I don’t really feel comfortable answering that. Like I said, I’m optimistic. I think that we were on a north of $400,000 unit-to-year trend. So we would love to end up in that – if you peel April, April out of the equation, I’d love to be 85% of that. So – but we’ll see. I think that we have to see how the next several months play out with respect to some of this new buying opportunity that we see that is definitely going to be in the mix. So – and on the marine side, I think you might see – if optimistic view is 85% on RV, for example, and I’m not saying that’s where it plays out. But marine might be a little bit less than that because the products are generally a little bit more expensive. But you can certainly get into towable RVs, a lot cheaper than you can on an entry-level powerboat or something like that. So April is obviously going to take a huge chunk out of the total units for this year. So I think you have to kind of factor April, a lot of it and look at what’s the best guess for the remaining months.

And I think, Craig, to add to that. I’ve looked at your estimates and have always been relatively close to them. But to Jason’s point, a lot of it just depends on the rate that it increases once we get beyond this May, June timeframe. Unfortunately, we got to see the consumer come back. We got to determine how healthy they are and what buying rate they return with. So there’s a lot of uncertainty beyond June. But at this point, at least the modeling that we do internally is not too far off from the numbers that you’ve published.

And then how sensitive do you think demand is going to be to the timing of these economic reopenings across the country? It just seems to me, there might be a point at which the average consumer says, It’s too late to do this in 2020, but I’ll consider this for 2021. Do you think there’s a lot of sensitivity to the timing of the reopen given how seasonal your business is?

I think as for me – I mean, the way I think about it is how bad are people to get out and do something different. If there – if you’re in an area where you’ve been literally locked down and there’s nothing to do, I would say that you’re going to start looking around for opportunities that if you’re talking about a summer vacation, for instance, I mean, we’ve canceled a couple of trips, and I know a lot of other families are, and I sit and think about this as – there’s hundreds of thousands of families across the country – they’re saying, gee, we have to cancel our vacation, what are we going to do? RV-ing and boating certainly fit into the opportunities that are available. The question is, it’s just how bad the people want to get out? And I think that it’s going to be a few months before we see how that all plays out. But I think that you can certainly make the argument with limited things to do over the next couple of months, and certainly, some states are going to pause a lot of the openings and delay. In some of the states that have opened up like Indiana, certainly not everything is open to the public, and some things won’t be open until July, August for us. So I think people are going to be really considering what their options are, and RV-ing and boating certainly play into it. So we’re anxious to see how it plays out, for sure.

And then just one question on your Aftermarket business. Obviously, you’ve worked really hard to diversify the business, which will serve you well down the road. I’m curious just to what extent do you have direct-to-consumer options with CURT or other brands, so that as some of these channels may be shut down just due to social distancing? You can still get product to consumers. And to what extent do you think maybe this pandemia creates an opportunity for you really to invest in some of these direct-to-consumer options?

Yes. So I think we’re not too different from a lot of the other businesses out there that this whole pandemic is expedited, a lot of the online purchasing, which is going to push companies to get online quicker. So we’re no different. Over the last month or so, we’ve put several thousand SKUs online. So the people that are roaming around, looking for products, whether they’re upgrades or service parts that we can supply for RV’s, boats and other vehicles, we’re more available than we ever have been, and probably that’s going to continue to – I mean, not probably, it’s going to continue to move forward where we put more and more of our SKUs online and make them available to consumers that are trying to get that. And likewise, we’re doing more marketing around upgradable products, how to upgrade your RV, how to upgrade your boat with certain components that we supply.

Great. Well, thank you.

Thanks, Craig.

Next question comes from Fred Wightman with Wolfe Research.

Hey guys, good morning. Jason, in your prepared remarks, you’d mentioned some pricing and input cost discussions with customers, can you just give a bit more detail on what those conversations have been like and what segments they cover?

Yes. So we’re priming the pump right now and evaluating where all of our costs are. So certainly, with volumes where they’re at, the change volumes and some of the new normal costs, we’re going – we’ve got to figure out how to mitigate those. So we’ll be having those conversations with vendors and with our customers over the coming months and probably have a lot more to give you an update on next quarter.

Okay. And then as you guys restart production and the OEMs restart production, are there any signs of labor staffing issues or people who don’t want to come back to work?

No. I mean, in terms of – I wouldn’t anticipate anybody has staffing issues. There are so many people sitting on the sidelines right now, unfortunately, waiting to get called back. And even by August, there’s probably still going to be people waiting. So I don’t anticipate any labor shortages or issues. And from what we’ve seen and some of the peers around the industry that we’ve talked to over the last couple of weeks that people have been slowly coming back online in the RV and boat businesses. People are excited to come back to work. I was talking to one of our general managers this morning, and he said that he was – he came into work at 5:00 a.m. early to make sure he was there to greet everybody that came in the door, and there were – there was a guy waiting and he was crying. He was so happy to be back to work. So I think people, in general, are excited to be back around their work peers and work family and break up the mundane routine that they’ve had sitting at home with nothing to do for the last month or so.

Great. Thanks a lot.

Next question comes from Daniel Moore with CJS Securities.

Thanks, Jason and Brian for the color. Maybe just an updated view – your updated view on inventory levels, particularly after the OEMs essentially obviously shut production in March. As we look forward, do you expect wholesale to be more in line with retail? Do you see an opportunity for wholesale to outpace, if things are a little better than maybe expected? Any thoughts there would be great.

I think certainly coming into it, there was a sense that inventories were where they needed to be. Now depending on the region of the country, it’s a different story right now. We certainly have touch points within some of the Midwest and mid-Southern states where inventory has continued to move, there’s certainly demand there and wholesale should perk right up to match that retail demand. There’s going to be other parts of the country that it’s not going to be the same case. I mean I’m sure New York is going to have a different scenario versus what maybe a Texas does or a California. So it’s really varying by state. So we’ve got to see a lot of that play out. But certainly, I think if you went back to last time we all talked, there was a sense that we were in a good position. I think as that progressed, we all knew that we were in a good position. I mean, retail was outpacing the prior year, which was the first time in quite a few months. So inventories, certainly, I think we’re in the right place. So now I think we’ve got to see it play out a little bit. But I don’t think it’s too far off. Certainly, nothing to the extent like we’ve been dealing with for the last 18 months. If it is a little heavy right now, I think we can move through it quicker than we did in the last cycle.

Helpful. And you mentioned in the prepared remarks, I think it was Jason, the opportunity to perhaps pick up incremental revenue or share. If you look back at prior downturns, 9/11, the Great Recession, can you give us any color or sense of, either from a dollar revenue or percentage revenue, the opportunity that you saw coming out of those prior downturns, maybe picking up share from some more distressed smaller players?

Yes, I can’t give you the numbers because I don’t have that at my fingertips. But certainly, after both of those devastating events, we increased share coming out of both. And as we’ve said in our prepared remarks, we anticipate more of that. I mean, there were a few people that were – a few supplier peers that were wounded coming into this. I have no doubt that they’ll be – they’ll be in a worse position coming out of it, and there’ll be opportunities there. We’ve done a really good job and have a really good playbook for picking up those pieces. We’re obviously close to the customers. We do business with every customer. So we’re not going to come up on a customer we don’t have that’s being supplied by one of these businesses. So we’ll be right there as the pieces are ready to pick up. And certainly, again, from the perspective of cash, I mean, there’s not too many companies coming out of May that will be sitting here and saying, man, we were cash neutral after the last two months. I mean, there’ll be a lot of companies hurting pretty badly. So like I said, we’re fortunate, but at the same time, we’re going to take advantage and be opportunistic of some of these opportunities that pop up, whether they’re market share or acquisition opportunities down the road that there’s – there’ll be both.

I would add to that, Dan, just from an RV content perspective, we stated that towable content was up 3%. And as we’ve been saying for a number of quarters now, that’s against the headwind of price reductions that we’ve been giving as steel and aluminum has decreased over the last 12 to 18 months. So we’re turning in some nice content growth numbers despite that headwind.

Well, that kind of leads to my last question, which is looking back again at prior downturns, maybe the impact of – we know what shipments did. But in terms of content, remind us, do you expect to kind of level set at a potentially lower level? Do you see that maybe being a little bit more neutral? Obviously it’s a difficult crystal ball question, but what have we seen in prior downturns in terms of the impact on content.

Yes. I mean, I still think – I mean, focus on towables. Towables, 3% to 5% is still very reasonable for us given the innovation, new products in the pipeline, just the landscape that we’re all faced with, given some of the comments that Jason made. So I still think that 3% to 5% is very reasonable for us even in this time. Probably the big unknown is, is there a further shift towards more entry level products? That certainly can have an impact on it, but I don’t think in a meaningful enough way to take us well outside of that net range.

Yes. And I’d also add that I could argue pretty easily that after whatever, in 2001, we were pretty small, a few hundred million. In 2008, 2009, we were maybe a little bit bigger than that, but we’ve got such breadth and size today that when it comes to these types of opportunities, our innovation machine, there’s just a lot more going on. There’s a lot more opportunities we’re able to take advantage of the day versus 10 or 20 years ago if you go back that far at these last two disasters. So I think we’re in a better position to pick up more content, market share, organic growth and an acquisition opportunity than we were in the last couple of devastating times we went through.

Next question comes from Mark Jordan with Jefferies. Please go ahead.

Good morning and thank you for taking my questions. Thinking about the Aftermarket segment, it had a strong quarter. And I was just wondering if you can give some additional detail on how the CURT Group performed? And maybe what makes of the Aftermarket channel is related to more nondiscretionary demand?

Yes. So CURT saw the disruption right about the same time the rest of our business did. People just froze. So fast forward to this past week, numbers started getting close to – on the CURT side of things back close to our budget plan. So that’s good to see. Consumers are freeing up and starting to look around and spend money on their products. So we’re working on synergies there. We continue to look at purchasing synergies, cross-functional synergies between our operations, between the CURT and LCI groups, we’ve got selling synergies on both sides of the business, and we’re really trying to pull in RV dealers. They sell a lot of hitch and towing products, and that’s a huge opportunity for us. Those would be the highlights on CURT.

Yes. I think we’ve talked initially about at least an initial expectation in the beginning of the year of high single-digit-type percentage growth for them, and they were certainly performing at that level and above. So they were performing exactly as we expected them to. From a cost perspective and some of the synergies that we had talked about, we hadn’t given a ton of color on that. But certainly, as we’ve dug in and identified opportunities there to get a couple, 2% to 3% of sales in synergies, which would be pretty typical for us. We’ve certainly seen those opportunities. So I would say everything on CURT’s performing at or above what we had originally anticipated.

Big difference on that side of the business is there’s a huge cyclical swing in the summertime. So their peak season is – we’re coming into it right now. And their winter months are lower – much lower volume.

Okay. Great. And then given the kind of scale and magnitude of some of the recent business disruptions, are you seeing any sourcing headwinds in the current environment?

No. I’d tell you that things are pretty smooth there. I mean, China was running through some problems in February, would have caused some disruptions for us certainly in the springtime. But because we had the disruption and fell back on volume, there’s less risk there. We also sourced outside of some of our Asian suppliers. We sourced offshore Asia quite significantly after the tariffs hit. So we reduced some of our risk there. But all in all, I mean we have meetings every week on where our supply base is and how sourcing looks, and we look pretty good right now. But a lot of that’s due to the reduced volumes that we’ve got on the OEM side of the business. If we were – run in to the 100% or 100-plus-percent, we’d have – we probably have a couple of issues, but we’re okay right now.

Okay. Great. Thank you very much, guys.

Thanks, Mark.

Next question comes from Brandon Rolle with Northcoast Research.

Good morning. Thank you for taking my questions. I was hoping you could comment on the market trends you’re seeing internationally for RV and marine versus what you’re seeing in North America? And as a follow-up also I was hoping you could touch on used inventory levels in North America for RV and marine with people moving down the price spectrum?

Yes. I have talked to a few dealers over the last couple of weeks. And it sounds like used – I don’t know where used inventory is, but used sales is probably up just a little bit. So – and as far as the European products go and consumers and OEMs it feels pretty similar to what – for marine and RV what – where the industries are there compared to here. So they might be a little bit more bullish on volume, and we’ve got some OEMs over there that are looking at 80% as they come back here, and they’ve got others that are a little bit less than that. But I think we just have to wait and see how things play out. We have May in the book certainly for both areas, both regions, but June could be better. It could be a little bit worse. We just won’t know until we see how the consumer is going to react over the course of the next 30 days or so.

Okay. Great. Thank you

[Operator Instructions] Next question is from Steve O’Hara with Sidoti. Steve O’Hara: Yes. Hi, good morning. Thanks for taking the question. Just going to the Aftermarket, maybe you touched on this, but in terms of the margins that were put up, it looks like operating profit, I mean I assume that the $6.3 million kind of hits within the Aftermarket segment. I mean, even with that, you’ve had kind of a, I think, basically doubling of Aftermarket sales and operating profit in that segment, assuming that adjustment is flat. I mean, is it right way to think about maybe, and I guess, under a normal scenario, where those aftermarket margins should be maybe shorter-term and then longer-term assuming you kind of get back to more normalized business environment?

Hey, Steve, it’s Brian. A couple of things. First off, because we haven’t talked about it a whole lot. We provided a lot of additional color within this release in the prepared remarks than what we had in the past. One being the focus on the EBITDA because I know initially when you look at the results it looks like there’s quite a bit of decline there. But from an EBITDA perspective, we’ve actually improved over 14% from the prior year. So we’ve seen significant growth there because of efficient – our own efficiencies. And then the CURT business is a pretty high EBITDA margin business as well. Now from a straight GAAP financial perspective, there’s quite a bit of amortization. So the additional thing that we provided within the release that I’d point you to is we’ve split up the amortization and the depreciation by both the segments so that you can see the weighting between the two. So I think that should help you get a little bit of color there. I think that the – I lost my train of thought – oh, and then the additional step-up on the inventory, yes, you’re correct. That is all 100% sitting in the Aftermarket segment. So going into this year, we talked quite a bit about all of those items and the impact that it would have on our Aftermarket margins because when you weight in all that amortization, the CURT business margin from a GAAP perspective is very similar to our overall consolidated margin. So it certainly does dilute our traditional aftermarket margin and bring it down to that level. The other thing to note is that it’s very seasonal. So as Jason mentioned, the winter months, it’s much lower-margin business, but then during the summer there are peak volumes, that’s when they tend to make more money. So anyways, that’s a lot of the moving pieces there. I know I just threw a lot at you, but I think we’ve tried to provide more color within the release to help kind of bridge that gap some.

It’s probably important to note also, Steve, that the business is only six to seven years young. So there’s still a lot of organic opportunity there. There’s still acquisition opportunity there. Not that we’ve run our course on the OEM side, but we certainly had a lot more activity over the last 20 years on OEMs than we’ve seen in the last six or seven years on the Aftermarket side as we’ve grown and developed that business. So we still feel there’s a lot of runway there. Steve O’Hara: Okay. All right. That’s helpful. And then when you talk about picking up share in downturns, let’s say, if you expect to pick up 5 or 10 points a share, I mean, how much of that do you expect to come from essentially taking over someone’s business because they can no longer provide that activity anymore versus acquisitions and things like that. Just wondering what your maybe outlook on acquisitions is here given there may be some opportunities that come up for availability?

Help me make sure I answer your question right here. But so I’d say that overall you look at the opportunity we’ve had just this year so far. I mean, if you take – peel Furrion sales out of our revenues, we’re almost 18% up, which is incredible for our first quarter. We did say, as we mentioned earlier, we’ve got suppliers that we know were wounded coming into this event. They’re going to have problems coming out. I can’t tell you what the market share gains could or should be. We just know that there’s plenty of opportunity to grow. And we’ll give more color on that in the next quarter as – if we were able to take advantage of that and show that in this product area or that product area, we’ve taken business or gain share. As far as acquisitions go, I just don’t see anybody being open to it right now because their businesses have changed so much. So whether it’s a valuation problem or whether it’s an issue where they just have to get their arms around the business to figure out what they’re left with. There’s probably going to be some delay there. But when the discussions are ready to be had, we’re going to be one of the first to the table, where our balance sheet is strong. Like I said, there’s no – not many businesses right now that are sitting – that will be sitting into May in a position where they could say, based on may bookings, cash flow is neutral between April and May, which is what it looks like right now. So we’ll be in a prime position to take advantage of – if we got to fire up some new product lines, to take advantage of a supplier that can’t supply or whether we’ve got to look at taking a look at a strategic acquisition later this summer or later this year, when companies decide they’re ready to sell or if they have to sell. So we’re excited either way. Does that answer your question? Steve O’Hara: Okay. No, that’s very helpful. Yes, that’s exactly what I was wondering. But thank you. Appreciate the time.

Thanks. Have a great week.

Thanks, Steve.

At this time, I’ll turn the call over to Mr. Jason Lippert.

Yes. So I just want to thank everybody for tuning in the call today. It’s been an extremely challenging time in the last six weeks. I think that our management team has done an exceptional job getting through this as we did the last couple of acquisitions. I’m certainly proud of everybody. We’ve had extraordinary efforts from everybody in our leadership team to get us through this in the shape that we described and color today. So we appreciate your time, and we’ll see you next quarter. Thank you.

This concludes today’s conference call. You may now disconnect.