Good morning, and welcome to Brunswick Corporation's Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer period. Today's meeting will be recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Brent Dahl, Vice President, Investor Relations. Please go ahead, sir.

Good morning and thank you for joining us. With me on the call this morning are Dave Foulkes, Brunswick's CEO; and Ryan Gwillim, CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call, our comments will include certain forward-looking statements about future results. Please keep in mind that our actual results could differ materially from these expectations. For details on the factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at brunswick.com. During our presentation, we will be referring to certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP financial measures are provided in the appendix to this presentation in the reconciliation sections of the consolidated financial statements accompanying today's results. I will now turn the call over to Dave.

Thanks, Brent, and good morning, everyone. Our businesses had another outstanding quarter. We closed the first half of 2021 by delivering record results as a result of continuing strong retail demand, outstanding operational performance and success in mitigating material supply and labor challenges. All of our businesses delivered exceptional growth during the quarter. Our Propulsion business continued to realize strong outward market share gains, leveraging the strongest product lineup in the industry. Our Parts and Accessories businesses continued to benefit from robust aftermarket demand, driven by elevated boating participation. And our Boat business posted its second consecutive quarter of double-digit adjusted operating margins despite significant supply chain, transportation and labor challenges. Robust retail demand for our products in the first half of the year has driven field inventory levels to the lowest level in decades at approximately nine weeks on hand. And we are progressing our efforts to efficiently increase capacity across several of our facilities to satisfy orders from our global customer base and begin to replenish the pipeline. As many of you know, we've also had a busy few months on the M&A front. At the end of the quarter, our Advanced Systems Group significantly expanded its product and brand portfolio by announcing the signing of a definitive agreement to purchase Navico, an industry leader in marine electronics. In addition, we announced in early July that Freedom has expanded into Spain through the acquisition of Fanautic Club. I'll touch on both these exciting transactions later in our discussion. Given the unique demand and inventory environment, together with continued strong boat usage through the prime season, which drives P&A sales, we have improved visibility on our ability to deliver against an extremely favorable outlook for the remainder of 2021. And consequently, we have increased our 2021 guidance. Before we…

Thanks, Dave, and good morning, everyone. I'm pleased to share with you the results from another fantastic quarter. To provide perspective in the slides that follow, we have included comparisons in certain places to both the second quarters of 2020 and 2019 in order to highlight the outstanding performance in each of our businesses over the past few years. When compared with 2020, second quarter net sales were up 57%, while operating earnings on an as-adjusted basis increased by 126%. Adjusted operating margins were 17.1% and adjusted EPS was $2.52, once again setting new all-time highs for any quarter for which we have available records. Sales and earnings in each segment benefited from strong global demand for marine products, with earnings also positively impacted by favorable factory absorption from increased production and favorable changes in foreign currency exchange rates, partially offset by higher variable compensation costs and increased spending in sales and marketing and ACES and other growth initiatives. Finally, we had free cash flow of $268 million in the second quarter, with a free cash flow conversion of 135%. First half comparisons are equally as favorable. Net sales through the first half of 2021 were up 53% when compared with the first half of 2020, and operating margins of 17% or a 520 basis point improvement from 2020. This resulted in first half EPS of $4.76 and a very robust operating leverage of 27%. Turning to our segments, revenue in the Propulsion business increased 64% versus the second quarter of 2020 as each product category experienced strong demand and market share gains. Consistent with the theme from the first quarter, boat manufacturers continue to ramp up production in the second quarter and our increased capacity enabled continued elevated sales to the independent OEM and international channels. Sales growth was…

Thanks, Ryan. At our April call, we felt that 2021 was setting up to be an outstanding year for all of our businesses. And the combination of continued robust retail demand during the first half of the year and solid operational execution by our businesses has us squarely on track to deliver against our operating and strategic priorities. Our top priority for the Propulsion segment continues to be satisfying outboard engine demand from new and existing OEM customers and expanding market share, especially in dealer, saltwater, repower and international channels. We are continuing to invest heavily in new product introductions and industry-leading propulsion solutions that we project will enable top line and earnings growth far into the future. And we've also recently taken the decision to accelerate the introduction of incremental capacity. Our Parts and Accessories segment remains focused on optimizing its global operating model, to leverage its distribution and position of strength in areas of battery technology, digital systems and connected products in support of our ACES strategy. We look forward to closing the Navico deal and beginning thoughtful integration into the ASG business. We will continue to focus M&A activity in parts and Accessories, as we look for opportunities to further build out our technology and systems portfolio. The Boat segment will build on its first half successes, by continuing to focus on operational excellence, improving operating margins, launching new products, executing capacity expansion plans and refilling pipelines, in the very robust retail environment. I wanted to leave you today, with an update on the progress we've made towards the next wave of the company's strategy, highlighted during our virtual Investor Day in May and our recent press releases. In addition to the Navico and Freedom Boat Club transactions, and the start of shipments of the V-12 600-horsepower outboard, which I've already discussed, proof points in the quarter included, the launch of the My Whaler and Sea Ray+ apps for Apple and Android users, which advances the ACES Connectivity strategy by improving the boat ownership experience, reducing friction across the entire ownership journey. The initial reception of these products is extremely promising, with more than 2,000 accounts created in the first few weeks and a star rating of 4.9 out of five. And the launch of the Heyday H22 Wake boat, a new leading-edge, wake-surf model, signaling a doubling down on this fast-growing brand appealing to a younger demographic. This model is already sold out through mid-2022. We're tracking well against all our Next Wave strategic goals, including the electrification initiatives outlined in May. Finally, I want to once again offer heartfelt thanks to our global employee population for all their dedication, effort and sacrifices, during what is still a challenging time for our families and communities. Your hard work has enabled us to seamlessly execute our strategic plan and significantly outpace our initial growth and profit expectations. We'll now open the line for questions.

[Operator Instructions] Our first question comes from James Hardiman with Wedbush Securities. Please proceed with your question.

Thanks for taking my call. First, just two very brief clarifications. The slide, I think, its 22, the first half versus second half, I'm trying to take out my ruler here, but it looks like operating income is about flat second half of this year versus second half of last year. But then, Ryan, I thought you may have said that earnings are higher year-over-year there. So, maybe just a clarification there. And then is production up versus how you had previously guided it for 2021?

Yes, second half operating earnings are indeed up over 2020. EPS is up a little greater than operating earnings, but operating earnings themselves are indeed up in the second half. And then production, I would tell you is right on track to what we had guided to earlier in the year. And despite a lot of late nights and hard work with our supply chain and other folks, we're producing exactly as we anticipated.

And so that leads me to my broader question as I think about supply chain and what the bottlenecks are, which is, I think, going to be the - has already been, but I think we'll continue to be the theme of this second quarter earnings season. Obviously, we've heard from some of your power sports peers, it's clear that in a lot of cases, their plants are not necessarily at full utilization, because their supply chain is limiting the flow of parts and components into those plants. Given that your production assumptions seem to be pretty consistent, it doesn't seem like that's necessarily the issue for you guys. I guess is that an accurate characterization of the current situation? And that it's more of a cost issue rather than a part and supply availability issue?

Hi, James, it's Dave. Yes, I would say that's a pretty good characterization. I would say that we deal with the kind of new challenges every day and every week. And so far, we've been able to mitigate them very successfully. I would say the impacts to us really are certainly cost, but we are pricing to cover that. And I did note that we believe our price increases are at the lower end of the industry, but certainly enough to cover the increased cost. I would say that there is productivity impact, though. We are maintaining our production, but I would say that not always in the - we have some boats and other things that we have to take off the line, wait for parts, bring back on the line. Those kinds of production disruptions just mean that there is some productivity impact. But so far, we're able to continue production schedules with some of those kind of manageable impacts.

And then just lastly for me, I don't know if this is even possible, just given all the moving parts. How big of a cost or margin impact do you think that is for you guys this year? Again, obviously, there's some top line impacts, although those seem to be smaller for you guys than all of the expenses associated with expediting and inflation and all those sorts of things.

Yes. Ryan, I don't know if you have a good idea. Clearly, we are on an annual basis, pricing to cover inflation as we understand it right now. Obviously, we're halfway through the year, so we don't necessarily understand everything. But our plan is to continue to do that. I would really measure this in kind of points of productivity, but I don't have it ready, kind of translate or into dollars. Ryan, I don't know if you…

No, the only thing I would mention, James, is obviously the Boat business continues to deliver on margins. And you've seen the guidance creep up. I think the number 10 has made an appearance, the official guidance for the rest - for the full year at 10%. So like Dave said, we're covering over with price, but it certainly is a bit of a headwind.

Our next question comes from Xian Siew with Exane BNP Paribas. Please proceed with your question.

It's Xian Siew. Thanks for taking the question. Just on the pipeline, so it's down a bit quarter-on-quarter. And it seems like availability is still maybe not fully there. Do you think that the industry has enough of availability retail could have been - like, I guess, how much higher could retail have been if there was enough supply? Is there any way to quantify that?

Well, in the - thanks for your question. In the last call, we did indicate that we believe that on an annual basis, retail would likely be up, I would - several more points without retail constraints. It is very clear that people are buying what we can produce at this point in the year. Now we are - as we begin to get through the prime selling season over the next couple of months, we will be planning to build inventory again, assuming that the market develops as we expect. So from nine weeks now, we'd expect to be kind of low to mid-teens by the end of the year. But right now and probably through most of the year, it certainly is a constrained marketplace. I don't know if I could identify exactly what the points are. But I would say there's several points under the free demand - under the free supply.

And then on Freedom, congrats on the acquisition in Europe. Just wondering how big the opportunity could be internationally? And how those kind of boat clubs are received, those concept received in Europe? Any differences between those models in Europe versus the US? Any kind of initial learnings there?

Yes. I would say that the appeal is equal in the right marketplaces. So for example, Spain, France, in some parts of Italy, certainly the UK, Portugal, Southern Portugal, those are all areas where you have very strong interest in boating, enough people with financial capability to join a boat club. The concept is a little earlier in Europe than it is in the US. But really, when you think about it, Freedom Boat Club was around a long time before we bought it and really had reached an inflection point, just probably a couple of years earlier. So as knowledge of the model becomes wider and as we professionalize that space with the same toolkit that we're using in the US, we think that the potential is really substantial. Obviously, Europe is our second biggest market for Brunswick as a whole, very, very long history of recreational boating, both in the Mediterranean and kind of near shore Atlantic. So we'll be working quickly to begin to establish some of the tools and techniques, marketing, kind of professionalize the space. We think the potential is very, very substantial, well beyond where we are right now.

Our next question comes from Scott Stember with CL King & Associates. Please proceed with your question.

Yes. I think I probably know the answer to this, just based on the commentary. But I just wanted to make sure, have you guys - would the lead times continue to get extended ahead of any relief on the supply side? Have you seen any accelerated rates of customer cancellations on boats?

No, we haven't seen anything at all. We know that some of our channel partners have kind of potential second and even third customers signed up for boats, in case the lead customer has a change of mind. So we're not seeing anything in terms of increased cancellations.

All right. And I know it's a little bit further out and probably one that you guys want to give guidance on, but just your initial thoughts on what 2022 could look like, whether from a retail perspective for both. So do you think it could be up here? And if so, how much?

Scott, yes, well, it's probably a bit premature to do a market call on next year, but we do think retail will grow next year. That's our belief still. We talked about that on Investor Day as well as the first quarter call. In terms of guidance, we're not going to update the guidance that we gave on the Navico call. Obviously, $8.25 to $8.75 was our Investor Day outlook for 2022. And then we said that Navico we anticipate would add a net $0.50 or so to that figure, and that's Navico earnings less the anticipated additional financing costs. So that - none of that has changed. I would tell you, though, that obviously, the jumping off point for 2022 looks like it's going to continue to be a little higher because 2021 is coming in nice and strong. So no real changes at all on our view to 2022.

And just last question. Last quarter, you talked about within ASG, you talked about new plans to install about 15,000 of the Fathom e-power systems for internal combustion generators, I guess by 2023. Can you talk about the timing of that and how significant that could be?

Yes. So we're on track with that plan. That the 15, 000 represented two things really, it represented Fathom and Fathom-type generator replacements for marine applications, plus the replacements of generators in recreational vehicle applications, and we're actively doing that. We have a number of ASG team members located on site at RV manufacturers, installing our advanced battery systems and they become so popular that some of the RV manufacturers are changing their standard content to include this battery system instead of a generator. And as soon as you move from being an option to being standard, that somebody has to deliberately change, the volumes go up. Yeah, so we're very much on track. Our Advanced Systems Group Connect business, ASG Connect, which you might remember is that part of the ASG business that works with both boat builders and RV manufacturers and specialty vehicle manufacturers to integrate our systems was up 133% in the first half of the year. So it's a very in-demand service, and people are taking advantage of this great portfolio of technologies that we have and our ability to integrate it on their behalf.

Our next question comes from Fred Wightman with Wolfe Research. Please proceed with your question.

Thanks for taking my taking my question. I was wondering if you could dig into the Mercury capacity a little bit more that you outlined. Is that incremental to sort of what you had hinted at last quarter? What type of capacity uptick are you sort of planning for? Where is it targeted sort of that mid-horsepower, high horsepower? Anything that you could provide there would be super helpful.

Yes, sure. Thank you for the question. Yes. So yes, it is all incremental to what we'd originally talked about, and it's being driven by very strong demand for our products. It is roughly the same additional incremental capacity as the prior incremental capacity that we put in during 2018 and 2019. And I would say, yes, it is overweighted to mid- to high horsepower engines and it's mainly in our Fond du Lac facility, which is where we produce most of our high horsepower engines and also in the supply base that supports it. We have to make sure that our supply base is scaled just the same as our internal facilities. We're just kind of connecting a few things. We remain in very active discussions with potential new customers for Mercury. But our priority, obviously, is to support our existing OEM and other customers. And what that means right now is all of our existing - or the vast majority of our existing customers are ramping up their production and they need more engines from us. That means we have to be careful about how we add new customers. It also means - and I'm kind of connecting with something that Ryan said earlier about the second half of the year that we don't have as many engines right now as we would like to provide dealers for repower, for example, which is a very profitable channel for us. So top priority is to serve our existing customers whose demands are going up and up and up. And so it's the right time for us now to add more capacity so that we can continue to bring on board new OEM customers, and also have enough engines so that we can satisfy those high-margin dealer repower and international channels, commercial channels, et cetera, that tend to tend have to fall after some of the big OEM customers as we satisfy their demand.

And just another capacity question on the boat side. I think that you mentioned you at 50, 000 units in terms of capacity by 2023 now. I think that number in the past was something in the low-40s that you were targeting. So sort of a two-part question. Are those numbers apples-to-apples? And then secondly, when could those start to hit? Is that something that could show up later in 2022? Or is it really a 2023 story?

Yes. So this is new again. So we had - we have detailed plans that we're executing. And in fact, we're along way - along the way now to implement that capacity around 43,000 to 44,000 units, which is up from the kind of high 30s that we had earlier or last year, if you like. So that is reopening the plant that we call it, a Flagler or Palm Coast sometimes and then expanding our Reynosa and the Lenovo facility in Portugal. That drives up to 44,000, but it is very clear that with the pipelines where they are and with retail demand where it is, and with things like Freedom Boat Club, expanding really, really quickly and demanding more and more boats, that might - that 44,000 might not be enough. And so we have begun a series of steps to increment that 44,000 up to around 50,000 that will require modest additional investment, but is, in most cases, not a significant footprint increases. In a couple of cases, there is footprint inside mostly our existing kind of land. But yeah, this is - the 44,000 to 50,000 is incremental and we'll be working on making sure that we can introduce it as quickly as we can, but 2023 is currently the target. I would say that what we - I don't know if we'll need 50,000 units, but I know that the signs are that we might, and I would not want to lose market share certainly, don't want to short Freedom, which is growing like crazy. So we think it's prudent at this time to cost effectively build out that additional optionality.

Our next question comes from Anna Glaessgen with Jefferies. Please proceed with your question.

Thanks for taking my questions. First, on the Verado with production sold out through 2021, could you maybe contextualize this versus what your preliminary expectations were the performance of that engine?

Yes. Thank you for the question. Yes. The demand for the V-12 is going - is very high. I think it's attracting a lot of interest. It's causing a number of boat builders to rethink their portfolio and put in outboards where they might have put in inboard engines on bigger boats. So yes, the demand is certainly higher than our original expectations. So, we'll kind of work our way through this second half of the year. I think the comment that we made earlier was without being very explicit about numbers to indicate earlier, there were some other higher horsepower engines in the marketplace, but this is different. As I mentioned earlier, we expect in the back half of this year, we'll produce more outboard engines above 500-horsepower than we'll produce in the entire prior history of the industry. So the scale of this engine at this horsepower level is substantially higher than anything else. And yeah, we're seeing very robust demand and a lot of interest, and it is certainly higher than we originally anticipated.

And then, turning back to the capacity investments to reach that 50,000 boat unit number. So, I think in the deck, it was kind of presented as you've identified the ability to ramp to that. I guess are you committing to kind of those investments? Or when would that decision have to be made in order to ramp up to that by 2023?

So the investments are phased overtime. And we can continue to monitor the marketplace. And any other developments that are relevant. There are some early pieces of investment, that we'll be funding even as early as this year, but it will be spread over the next couple of years.

Our next question comes from Matthew Boss with JPMorgan. Please proceed with your question.

This is Kevin Heenan on for Matt. Congrats on a strong quarter. I just wanted to ask about the Boat segment margins, strong again this quarter in the double digits. I was wondering if you could maybe rank order the drivers of the Boat segment EBIT margin strength. And how you're thinking about the sustainability of those drivers as we move out of the pandemic environment? Thanks.

Hi Kevin, thanks for the question. It's pretty straightforward, to be honest. It is volume, improved volume, which allows for better absorption. It is operating more efficiently throughout the facilities. And at least in the last couple of quarters, it is a bit of lower discounting environment, given that we do not need to provide support or much support to the dealer network in order to sell product. But in general, it is certainly those factors. The other thing I would mention is, the new products that are coming out that we talked about on the Investor Day, 122 new or refreshed products, all of those are being designed for manufacturer at a higher margin end products that they are replacing. And that's something you've heard from us for years on the Mercury side as we roll out new engines, but that same philosophy has now moved to the Boat business. And the new products coming out are really going to be margin drivers for us.

And if I could ask one follow-up just on the P&A side, could you talk about the long-term opportunity for this business now that you're adding Navico? I think you've cited a $6 billion market in the U.S. I mean, how best to think about your ability to scale and remaining drivers of opportunity here, I guess, both in the U.S. and globally? Thanks very much.

Thank you. No, great question, yeah. So I think Navico was an important addition to our portfolio and our brands. It enables us to do a lot of things, but there are plenty of other opportunities in that marketplace, for us to build out our portfolio. I would say that as we have noted, our Advanced Systems Group currently sells about 25% of its products into recreational vehicle and specialty vehicle. And the $6 billion is only the marine portion of P&A. So as we become more and more successful in, for example, installing those advanced battery systems into a recreational and specialty vehicle. We feel as a right to win some other areas of RV and specialty vehicle, leveraging the same or modified systems and technology that we use in marine. So I would say, that there's room to run in marine, certainly, plenty of room to run in marine, but also room to run in adjacent spaces as well.

And Kevin, one thing, just to put a bow on this. One thing that we're proving out is the growth of our P&A business and the strength then of the aftermarket annuity revenue and earnings that, that business provides. This is going to be approximately $2 billion and still growing organically starting in 2022, which is obviously four times or five times larger than it was coming out of the downturn in 2008, 2009. So just a reminder that the mix of our businesses continues to trend positive and towards the aftermarket and countercyclical portions of our business.

Our next question comes from Mike Swartz with Truist. Please proceed with question.

Just maybe a broader question about how you think about product development and launch strategy, maybe portfolio strategy within the Boat business, just given some of the dynamics we have in the market today with capacity constraints and supply chain issues and just elevated demand and backlogs out until 2022. I mean how does that play into your strategy in the near term and maybe longer-term?

I think - good question, Mike. We always believe that over the long run, new product wins. So we are not pausing new product introductions, not pausing up our product development activities. But because of this somewhat unique situation, except in some really exceptional situations where we just - we can't get parts or something, one of our suppliers says, you can either have a production lag or a development part. But in terms of what our intention is, is we know this marketplace, new product wins over the long-term, and we will continue to invest and not intentionally at least, pause any of our key programs. We - one of the ways that we are attracting into - attracting new people into new boats is by providing new technology, by providing new models with content they can't get in the pre-owned marketplace, new form factors, new wholes, new connectivity, new solutions. So I think we have to continue to differentiate new product from pre-owned product, both from a design and aesthetic perspective and from a technology content perspective, and we will continue to do that. I'm particularly excited about some of the stuff that's coming out, we've already seen them. The H22 from Heyday has been - I mean the reception has been great. It's really - as you look at the wake sports market, it's really the value portion of that market that's been really growing. And so the ability to put a new product into that marketplace already sold out through 2022, it's been excellent. And we will selectively evaluate expanding our portfolio into areas that we think where we can really make a difference. So that's essentially our philosophy. New product wins over the long-term. We need to differentiate new product from pre-owned product. And we'll get into more and more white spaces where we think the customer base is moving.

And maybe a question for Ryan, just on some of the commentary around product mix, I guess, being less favorable in the back half of the year. You've talked about some of your premium boat brands with extended backlog. You've talked about the launch of the V-12 engine that will pick up pace here in the back half of the year. So I guess, what exactly is weighing on product mix? Is it just OEM - just the OEM mix within the engine business?

Yes. It's really two things, Mike. It's the way the forecast looks for the rest of the year, our kind of core OEM customers look to be getting more percentage of the engines than potentially our dealer network or international markets, which tend to be a little bit richer in terms of margin. And then just as a company overall, the Boat business continues to be a kind of a consistent chunk of the revenue and earnings. And as P&A exhibits a little bit more normal seasonality really in the fourth quarter, that's just kind of a mix headwind. But again, these are - this is a growth story, even in the second half. We're comping against the best second half that the company ever had last year and we're still growing topline and earnings. So, we wanted to give a little bit more detail around it, but it's still a very positive story, trending into '22, which, again, we feel is going to be another fantastic year.

Our next question comes from Joe Altobello with Raymond James. Please proceed with your question.

First question, I wanted to kind of delve into your industry outlook, which you revised today to up high singles for the year. And I think based on the first half; it implies roughly flattish industry retail in the second half. Is that a little bit aggressive, given the tougher compares that we'll be facing as well as the inventory situation as it seems like supply is the bigger issue rather than demand right now?

Yes. I mean, Joe, that's how the numbers are shaking out. I mean a very strong first half. Your math is right, kind of a flattish back half, which is flat to a very strong back half, obviously, last year post-COVID. But again, our retail sales are up just from boats leaving the facility. So 40% of our boats leaving our facilities are retail sold, which is continue to buoy that number and keep it where we think it's going to land. But yes, that's exactly the thought process.

Joe, we also do - we would expect to build some weeks on hand from now through the end of the year. As I mentioned, we're in nine right now and hope to be in the kind of low to mid-teens. So, we are building inventory through a part of the season that obviously, where the demand naturally seasonally drops a bit. So yes, trying to get the right balance is a bit tricky, but we think it's going to end up in the high singles.

And just shifting over to outboards, your market share gains there have been obviously very impressive for years now. It does sound like we could see additional capacity or additional supply, I should say, from your largest competitor coming in the next few weeks. Might that impact or have an impact on the pace of your share gains in the second half?

Well, I think that if you look at our - what we just described when we talk about share gains, we're really talking about OEM share gains mostly. And we're continuing to drive those forward and make sure that we prioritize our OEMs. A lot of the share gains that we're seeing from OEMs that we already signed up. So we have commitments from OEMs. I would say that, in contrast to some of our competitors who have come out and said, they are not adding more capacity. We have come out and said, we are adding more capacity. And I think if you're an OEM looking to the future of your business in a growth environment, you would want to go with a person who says they're going to add capacity, and has demonstrated that indeed, they do. So I think we have a very - we have very strong momentum. And I think that our story around capacity and product is very compelling and will lead to continued share gains.

Thank you. Ladies and gentlemen, that is all the time we have today for questions. At this time, we would like to turn the call back to Dave for some concluding remarks.

Well, thank you all very much for joining us. I really appreciate it. We're very excited about the continuing very strong operational and financial performance of the business. Obviously, we'll continue to work hard with our supply chain partners to make sure that we continue to mitigate issues, including things like COVID and the Delta variants. We're also very excited about the significant early proof points, that we've been able to establish on our Next Wave and ACES strategies. It's going to be a busy second half. We're welcoming probably 2,000 employees of Navico to the Brunswick team, when we close the deal later this year. And look forward very much to delivering on the synergies and opportunities between our two businesses. So look out for more strong performance, look out for some more exciting developments, as we work our way through the next quarter. Thank you all very, very much.

Ladies and gentlemen, this concludes today's webcast. You may now disconnect your lines at this time. Thank you for your participation. And have a great day.