Good morning, and welcome to Brunswick Corporation's First Quarter 2023 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 Neha Clark, Senior Vice President, Enterprise Finance of Brunswick Corporation. Please go ahead.

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 these 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 and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. I will now turn the call over to Dave.

Thanks, Neha, and good morning, everyone. We started the year strongly, delivering record first quarter net sales of more than $1.7 billion and adjusted operating earnings of $262 million. Our business continued to leverage our investments in new products, technology and innovation across the enterprise, high horsepower outboard manufacturing capacity and premium boat manufacturing capacity, while taking significant actions to reduce structural costs in a macroeconomic environment that continues to be challenging. Our first quarter adjusted earnings per share of $2.57 highlights the robustness of our business and the strength of our portfolio. There were notable divisional highlights, including our Propulsion business, delivering outstanding net sales, adjusted operating earnings and operating margin, and our Boat business, delivering double-digit adjusted operating margins for the fourth consecutive quarter despite increased promotion and discounting on certain product lines. Boat field inventory is at an appropriate level in most categories going into the core retail season. And we exited the first quarter with 21,500 global pipeline units. Our boat and engine production levels finished above prior year, despite some supply chain challenges. We made significant gains in free cash flow, improving 55% versus first quarter 2022, largely driven by working capital improvements across the business. In addition, as the overall market and the leisure and recreation sector continued to see valuation pressures, we continue to be aggressive with share repurchases, executing $60 million of repurchases in the quarter. Before I move into the segment overview, let me provide a reminder regarding our recently updated segment reporting. We updated our reportable segments from three segments to four: Propulsion, Engine Parts & Accessories, Navico Group and Boat. The previous Parts & Accessories reportable segment is now split into the Engine Parts & Accessories segment and the Navico Group segment. The Engine Parts & Accessories segment is…

Thanks, Dave, and good morning, everyone. Brunswick delivered an excellent start to 2023, with record sales and EPS for any first quarter in our history. When compared to prior year, first quarter net sales were up 3% and adjusted EPS of $2.57 increased by 2%. As anticipated, adjusted operating earnings and margins were down slightly year-over-year, but both results exceeded our expectations for the quarter. Sales growth resulted from steady demand, new product performance and pricing implemented in previous quarters, partially offset by unfavorable changes in foreign currency exchange rates. The steady earnings and margin performance benefited from the net sales growth and prudent cost containment efforts, offset by elevated input costs versus Q1 of 2022 and spending on growth initiatives. Lastly, although we are always in a net cash usage position coming out of the first quarter as we prepare for the primary selling season, our free cash flow improved by $135 million from Q1 2022, primarily due to less working capital usage. Now we'll look at each reporting segment, starting with our Propulsion business, which delivered yet another quarter of outstanding top-line, earnings and operating margin performance. Revenue increased 7% versus the first quarter of 2022, as higher sales were driven by continued increased sales of high-horsepower outboard product, which more than offset planned reductions in smaller horsepower and sterndrive value. Operating margins were up 230 basis points and operating earnings up 21%, each enabled by the increased sales and manufacturing efficiencies. Note that segment margins and earnings also included the benefit associated with the timing of capitalized inventory variances. This benefit will reverse in the second quarter and have no net impact on the expected full year results. Our Engine Parts & Accessories business delivered a steady quarter, with sales down 13% versus 2022, but up 35%…

Thanks, Ryan. Before we close out, I wanted to share an update on some recent awards and recognition for our company, brands, products and people. We were delighted to be named by Newsweek through its 2023 list of America's Most Trustworthy Companies, where we ranked in the top 20 companies within the Manufacturing and Industrial Equipment category. We were also, again, named by Forbes as one of America's Best Large Employers, ranking second in the Engineering and Manufacturing category. In addition, we've won a record number of product and innovation awards in the first quarter, and look forward to winning many more during the balance of the year. On the subject of sustainability, 12 of our facilities have now earned zero-waste-to-landfill designation with more planned this year. And combined, they diverted 9 million pounds of waste from landfills in 2022. Our MSCI ESG rating was improved from BBB to A, a reflection of our dedication to conducting our business sustainably. And we were recognized by Sustainalytics as a top-rated company for ESG, both in the region and industry. These and many more developments in sustainability will be documented in our 2022 sustainability report, which is scheduled to be released shortly. Turning now to innovation, a key to our future and one of my favorite topics to highlight. We had an outstanding start to the year across our businesses. Earlier this year, we launched the Mercury Avator electric outboard family. And recently, the first group of Avator 7.5e electric outboards shipped to global customers. This award-winning product, the first of a large family of electric products, has been met with an outstanding reception from customers, and supports our commitment to being the industry leader in both internal combustion products and electric propulsion. The recently launched Mercury V10 outboard engines had a…

[Operator Instructions] Our first question comes from the line of Xian Siew with BNP Paribas. Please proceed.

Hi, guys. Thanks for the questions. Maybe to start, can you talk about the strength in the engine retail and why it's outperforming maybe powerboat retail that so much? Is it really the repower business that's starting to take off? Or what's going on there? And how are inventory levels from an engine perspective?

Yes, thank you for the question. Yes, there are a couple of things that impact kind of the difference, if you like, between outboard retail and boat retail. Certainly, you mentioned some of them there. We have been able to service some of the aftermarket channel, certainly, the dealer channel. So more -- we have very strong demand for high horsepower in particular. And that has been lean in the aftermarket channel. International, as you saw, also was strong. We're getting more boats with multi engines. So that is part of the difference as well. And you also saw that sterndrive product is down for the quarter. So we're getting some mix away from sterndrive product and towards outboard products. There is also some latency in that, that we don't typically resolve in a quarter or a month, but those are some of the major factors.

Okay. Helpful. Thanks. And then maybe just on the Engine P&A, you talked about the retail stocking levels. I guess can you remind us how it usually works? So as usage starts to pick up maybe in the season, the retailers start to sell through and then they reorder. When should we start to see that? And are you seeing any kind of pickup in sell-through maybe in March, April?

Yes. So we are seeing some pickup in sell-through in March, April. Normally, the stocking follows a bit more of a seasonal pattern than it did last year and to some extent, even the year before. That's typically an inventory build ahead of the main season. But what happened last year was with the supply chain disruptions, retailers were just stocking everything they could. So there was more of a phase advanced really with -- between the wholesale restocking and the -- now we have more product availability and the supply chain is less disrupted. We expect it to follow more of a seasonal pattern. I think the exciting thing for us is that new products are still being demanded at wholesale and selling through strongly at retail. So, we saw, for example, Navico's new HDS Pro product from its Lowrance brand, which is its most important brand, begins to be demanded very strongly at retail and sell through very -- at wholesale and sell through very quickly at retail. So this is not just -- it's not a completely uniform phenomena. If you can get the right product in there, you can get good wholesale orders and good sell-through. And overall, I would say that the kind of destocking or rightsizing of inventories is occurring. So, we're optimistic ahead of the season.

Yes. And the only thing I would add to that, Dave, is that our U.S. products business was actually up in the quarter. And so kind of your reliable, annuity-based P&A sales that we talked about pretty regularly, showed that here in the quarter even in the off-season.

Our next question comes from the line of Joe Altobello with Raymond James. Please proceed.

Hey, thanks, guys. Good morning. I guess first question on boat trends. You mentioned that improved significantly as the quarter progressed, particularly in March. We did not see that, obviously, in the industry trends. So, what's driving that dichotomy, if you will?

Hi, Joe. Yes, it's always a little bit difficult to pinpoint these things, particularly at this point in the season. But I would tell you that registry -- as boats -- as dealers are preparing for the season, they're very busy. They're doing a lot of things. So we tend to get registrations coming through in a bit of a hockey stick through the month. And then also, of course, SSI doesn't have a full complement of states reporting yet. So, we assume that these are industry reporting delays. We're obviously sure about our registrations. There may be also some renewed strength, I would say, in aluminum versus some of the earlier parts of the year and the end of last year. I think where our marketing and promotions came through pretty strongly for us. There may be an impact there with some of the states that are reporting. But normally, over a period, these things converge confidence in our numbers and excited about the trend.

Got it. That's helpful. And maybe a second question on the second quarter guide. It looks a little bit below what we were expecting. Any puts and takes or pull forwards that we have to think about that move into 1Q? And maybe how much is -- how much did the timing of capitalized inventory variances impact propulsion profit?

Joe, I'll take this one. Yes, that's a good place to start. It's about a dime, so about $0.10 on the capitalized variance issue. So a good guide in Q1 that will reverse in Q2. So that's part of it. The rest of it, I think, is just a normal seasonality. I think comparatively to last year, you're just going to see more normal sell in and sell out, whereas last year, we saw, like Dave said earlier, just a real rush of restocking in our P&A business. But otherwise, there's no real factors. Still looking for growth on the top line, right, flat to slightly up, with strong pull-through on the EPS line.

Our next question comes from the line of Mike Swartz with Truist Securities. Please proceed.

Hey, guys, good morning. Just a quick question following up on retail. I think in prior calls, you had mentioned your kind of outlook for the year was for industry retail to be down high single digits. Obviously, it was down more than that in the first quarter, particularly for the industry. Have you changed that view for the full year?

Good morning, Mike. No, we haven't really changed the view for the full year. Obviously, we're super early in the season still. March is beginning to be more important, but -- as we go into second quarter, we'll understand a lot more how things are going. I would say just across the industry, we're actually pretty pleased about the resilience of the consumer so far. They're clearly looking for promotions. So they're shopping around a bit more. But there isn't a sense in which there's -- they're really backing away in large numbers. The behavior is just more normal. So there's nothing really that would suggest that we should modify our expectations for the balance of the year at the moment. We think we have the right products. We're very excited about the new products that we've launched, which is always generating excitement. We have the right promotions in place. We have the right events in place. So early in the season, but no real reason to change our perspective.

And Mike, as you probably know, the first quarter comps were the toughest. So, as we go throughout the remainder of the year, I mean we're kind of right in line, maybe a little bit better than where we thought we'd be here three quarters -- three months in.

Okay. Helpful. Thank you, guys. And then just a question on the Propulsion margins, I think this is the second time in history, you guys have done over 20% in a quarter. I'm just trying to understand, is that sustainable given some of the puts and takes that are going on? Obviously, high horsepower is doing well, lower horsepower production probably coming down a bit, and then you have the capitalized inventory benefit in the first quarter. So I'm just wondering maybe how much temporary benefits that you get from that in the first quarter? And then how do we think about that going forward?

It was a very strong quarter. But although there were some kind of timing benefits associated with those variances, I would say, overall, we have a long history now of expanding Propulsion margins on a pretty secular basis. And as you would have seen and many people on the line had an opportunity to see, our newly installed capacity is extremely efficient and automated. And that is a continued march for us. So yes, we have a lot of, I think, very strong secular trends that are supporting increased propulsion margins, although they were assisted a little bit in the quarter. But no, I think that this is a good trend that can be sustained.

Our next question comes from the line of James Hardiman with Citi. Please proceed.

Hey, good morning. So just a point of clarification. The difference between the SSI being down, call it, 21% for the first quarter and your internal number is suggesting down 10%, do you think that's more in tune of the industry number is wrong rather than you're just gaining that much share in the first quarter? And the reason I asked that, as we thought about sort of your industry or your benchmarks for retail, I don't think you were assuming a ton of market share increases this year. And so I don't know if I should think about sort of your flat to down whatever, low double digit sort of range in the context of your guidance and any differently based on what we saw in the first quarter?

Yeah, hi, James. I would say we were assuming some market share increases in select segments this year. So it is possible that some of that differences associated with market share increases if it is. I mean we know that Sea Ray and Whaler had a strong start to the year. We saw that clearly in boat show results. We had some good strength in aluminum product in March, in particular, which is very nice to see. Market share is very unlikely to be the full reason for that substantial difference there. I think more likely to be the major component is the fact that we're in a period of acceleration early in the season. And it's probably more about the amount of retail registrations that have been captured in the industry data and which states are reporting. So I don't think -- I mean it's just a short period of time between the end of the month, until we get the SSI data. And clearly, they identify that there are -- there's partial reporting.

Got it. That makes sense. And then, I guess along the same vein, you talked about how your dealers are cautiously optimistic. Obviously, your biggest dealer just lowered guidance this morning. They're looking for a double-digit decrease in retail this year. Maybe connect the dots if there are dots to connect. I know that their fiscal year is different than the calendar year we're talking about, and I would assume that the fourth quarter is probably going to be the best quarter from a retail perspective just based on the comps. But how do we connect what on the face of things, right, the headline seems to be two pretty disparate outlooks here?

Yes. I think the -- a couple of things to think about is I don't -- MarineMax does not say specifically which brands are selling well and which ones are not selling well. But we know we had good sales through MarineMax of the brands for which they are our channel partner. Whaler and Sea Ray both had a strong start to the year. And then MarineMax overlaps a portion of our portfolio, but not all of our portfolio. And so there's a potential source of difference there. It's really -- we overlap just on a couple of our brands. So it's difficult to exactly compare their view of the world with our view of the world. But I would say that our premium back brands are probably performing ahead of the market at the moment.

Our next question comes from the line of Fred Wightman with Wolfe Research. Please proceed.

Hey, guys. I just wanted to follow up on that disconnect between the internal registration data and what we're seeing from SSI. I get it for 1Q, but if we look at the March numbers specifically, I mean, down 20% versus up low to mid-single digits is kind of a different story. So is that -- was there anything specific in March? Like did things get better in March per year data and into April? It just seems like we're kind of getting some mixed signals on the retail side.

Yes. I agree with the fact that we're getting some mixed signals on the retail side. And we can report obviously only our retail. And obviously, there is partial reporting of the industry. Our retail has sequentially improved through the first quarter. So not entirely sure what the source of the disconnect is. But I would say that, once again, retail registrations tend to come in somewhat late in the month and later in the quarter. So if there is a delay in reporting or partial reporting of end of quarter retail, we would likely capture it and they may not. That's about the best I can say at the moment. Things will become clearer as we go more into the second quarter when things stabilize. We're just in a period of extremely rapid sales acceleration at the moment. This is the inflection point in the quarter as you go through March and into April.

And Fred, just a reminder, I mean, percentages here, we're talking a couple of hundred units, give or take, on a various brand, right, because of where we are in the early part of the season. So it doesn't take a lot to move the numbers, especially when SSI is only reporting 52% or so a little bit over half of the saves.

Yes. Okay. That's fair. But I guess to summarize, Dave, what you were just saying, the inflection that you saw throughout the quarter, that trend has sort of continued into April?

Yes, I think we're seeing a good solid trend. Once again, we'll get a better view of April after we get out through the full month. But I would say that we're -- we continue to be encouraged.

Okay. That's fair. And then, you guys also made some comments about Navico improving in March. Was that just a comment about some of the inventories getting worked down? Was it a comment on consumer takeaway? What exactly did you mean there?

Yes. Well, Navico's op margin for the month was about 11%. As we went -- the March was in the kind of mid-teens, I would say -- low to mid-teens, which is more consistent with the full year trends from last year. We actually -- a couple of things that are coming through from Navico at the moment. Obviously, we took a lot of restructuring actions which affected mainly March versus the early part of the quarter. And actually, the full effect will only be felt in subsequent months and quarters. And then, we had a -- when we launched the HDS Pro, which is a big product for us, it's -- the ramp-up was slower than we had expected. And we ended up in a situation where we're replacing a lower margin product that we were discounting out with a higher-margin product with no discounts, but it just happened slower than we anticipated. So essentially, we're in the market with a lower margin product that should have been replaced by a higher-margin product. And now that launch is complete, we'd expect that full impact to flow through in Q2.

Our next question comes from the line of Eric Wold, a private investor. Please proceed.

Hey, still would be Riley Securities. Just a heads-up. So, two follow-up questions. I guess one on the propulsion capacity expansion now being complete, can you just kind of update us on where you are with manufacturing lead times on the higher-end products versus where you ultimately want to be maybe kind of towards the end of the year?

Yes. I think as we've gone into the quarter, we've really now kind of shaken off the few remaining the kind of supplier constraints that we would continuing to have to deal with. We feel in good shape both internally in terms of operations and also are well supported by the supply base now with a really good flow of product. So, we feel good. We're working through making sure that we fully supply our existing OEM customers, and we're beginning to prepare to take on new OEMs, and that transition is already occurring and will begin to be seen more clearly as we go into the model year. So yes, good progress with improving delivery, particularly of the high horsepower engines. And I think we'll be in really good shape as we get into Q2 to take on those additional OEM customers and continue to supply aftermarket channels.

Perfect. And then, a follow-up on the Engine P&A segment. I guess aside from the retailer returning to kind of more inventory restocking patterns and you talked about seeing retail sell through kind of improving in March and April, anything that you drill down -- I'm not sure much data kind of tell you on a more real-time basis, but maybe if you drill down into what is selling through? Is this like you talked about kind of upgrade maybe nice to have products that people are adding on the boats? Or are you seeing any kind of shift in purchases of kind of deep maintenance and replacement products that indicate people are kind of holding on to boats a little bit longer, maybe kind of waiting on replacements?

Yes. Well, as Ryan mentioned earlier, on the Engine P&A side, we were actually up slightly on our product sales in Q1 of this year versus Q1 of last year. And those are the kind of products that you mentioned that are the more essential maintenance or brake fix type products. So clearly, given the fact that last year and the first quarter of last year, in particular, was a banner quarter in that area, it's great that we comped really well in that area. We definitely say that the kind of willingness to restock depends, to some extent, on the product category. But technology-related products continue to be extremely strong. We've said before that people are willing to hold a boat a bit longer, but they don't really want last year's electronics on it. So when we launched the HDS Pro from Lowrance, we were extremely pleased. The pull-through was really strong. If you have a superior product, it's going to get pulled through right now, especially as we go into the season. We talk about saltwater shows a lot because it correlates really well with high horsepower. But one of our Pro anglers, Jeff Gustafson, who's a Lund Pro and Mercury Pro, won Bassmaster this year, with a Lund boats and with a Mercury engine on the back, why is that relevant? But the top -- of the top 10 finishers, nine were powered by Mercury and seven had Lowrance electronics. So, those kind of events that are like the Super Bowl events of freshwater fishing, they attract a lot of attention, but there are tens of thousands of people attending those events, looking at the Mercury engines and looking at the Lowrance electronics on those boats, and they will get a lot of traction and pull-through. So, we're very excited about the kind of technology that we're bringing to market, and it really is getting a strong pull-through. So we're seeing, I think, technology is being pulled through. And of course, as you mentioned earlier, consumables and kind of break fix parts will continue to get pull through.

Our next question comes from the line of Scott Stember with MKM Partners. Please proceed.

Good morning, and thanks for taking my questions.

You're welcome.

Going back to Engine P&A, could you talk about the POS? I know you said it was improving in March and April, but was it up in the first quarter?

Yes, Scott, we don't have the accuracy necessary for that kind of answer, to be honest. We get bits and pieces of information from certain of our channel partners, but not enough to know whether we were technically up or flat or slightly down wherever you'd be. But we can tell from wholesale ordering patterns that the wholesale orders are picking up. So we can infer that -- and we know that retail has been solid. It's been steady. So we can infer that the channel is clearing up and wholesale and retail will, once again, kind of be hand-in-hand.

We can -- one thing we can say is that one of our biggest partners holds a lot of events at this point in the year. And they have been extremely well attended and generated a lot of pull-through, but we only have partial data. But -- yeah.

Got it. And then, looking at Freedom, I know you've had this for three-plus years, maybe a little bit longer. And we've gone through a very nice growth cycle coming out of the pandemic. But what are you seeing as far as retention rates of people that either are just renting a boat or deciding to trade up and actually buy a boat? Can you talk about how Freedom is helping that narrative?

Yes, that's a good question. There's no change in retention rates. They continue to be extremely strong and -- very, very strong, particularly for kind of a franchise -- subscription business like this. Freedom -- interestingly, when there's a lot of inflation around, when interest rates are higher, Freedom members or prospective members are not looking at the same level of increased pricing. They're not looking at interest rates as a potential inhibitor. So, Freedom becomes a comparatively even more attractive option. And we have grown, I think, quarter-over-quarter, 13%. Remember the quarter is 23% versus 22%, up 13%, I think about 6,000 net members. So yes, growth continues to be strong. And I think potentially not only benefiting from the proposition that Freedom presents, but also the relative lack of impact of pricing and interest rates on Freedom membership.

Our next question comes from the line of Gerrick Johnson with BMO Capital Markets. Please proceed.

Great. Thank you. Good morning. So, you're increasing -- Ryan, you're increasing the low end of Boat revenue guidance, the low end of Propulsion margin guidance, upsizing your share repurchase. So how can the bottom end of your consolidated guidance does not come up?

That's a good question, Gerrick. And I'm not surprised you -- coming from you. Listen, we are -- and you know us very well. It's early in the year. We still have 90% or so of the retail season left. We have an uncertain marketplace where macroeconomic environment that we're dealing with. So we simply believe that we can hit the scenarios where both ends of the range are in play. I think we're probably a little bit more optimistic given the good first quarter, but not -- it didn't make a whole lot of sense to change the guidance when we have so much of the year left to come.

Okay. I didn't think that question would come. I figured James would ask it first. Dave -- how about a softball for you, Dave. When I was at the last addition of the Palm Beach show, looked at the Chris-Craft Calypso 32. And I was impressed that had dual Mercury engines, Navico touch screen, Fathom e-Power. Can you start talking about like your content per boat from a supplier side? And any metrics you can share there?

Yes, that's a good question, Gerrick. Thank you for asking it. I think we've already said that in Brunswick boats, about 50% of the bill of material now is from our own products and brands supplied inside the company. And we have some of the leading brands. So they set market expectations in a lot of ways. And we're developing relationships and building our muscles really with how to replicate that in third parties. Mercury, because of its penetration, is a fantastic foundation for that. But our ability to deliver the system solutions is really important to builders, especially as they're very conscious of costs. We can do a lot of things for them that other providers cannot do in terms of integrated solutions, doing portions of their engineering for them. So yes, I think you -- what's great to see is those independent customers of ours who are trusting us to do so much now. And the more growing customers like Chris-Craft that do it, the more others do it. So we're doing similar things for other customer than expect to do it more and more because we're a great partner in that respect. Nobody else has anything like the Fathom e-Power system, fully integrated. So we have some unique propositions, I think, that are going to continue to make that attractive. I would say you saw it in Chris-Craft, but you will see it and can see it more and more in the RV industry as well. And as that recovers, you'll see us doing a lot more of those kind of engineering solutions outside Marine, too.

Our next question comes from the line Craig Kennison with Baird. Please proceed.

Hi, thanks for taking my question. I appreciate it. This hopefully is not a tough one. But it goes back to your 2022 Analyst Day. And one of your P&A slides, you had the goal in 2025. For your P&A business to achieve, I think, $3.25 billion in revenue, excluding acquisitions. I know you don't have the deck, but it was Slide 143. Just with the restatement and whatnot, I'm just wondering if you can give us a split between Navico and your Engine P&A business as you try to achieve that $3.25 billion goal? And maybe what are the key drivers if you still think that goal is attainable? We've had that question a few times.

Yes. Thank you, Craig. It's a good question. Obviously, we have in the third quarter another Investor Day. And we'll be trying to answer more of those questions in detail at that point in time. But if you look across our P&A portfolio, obviously, there's a real kind of confluence of a lot of factors at the moment. There is the -- I think really strong increase versus 2019. There's restocking phenomena that we're experience -- experiencing this early in the season. We've still got weather-related factors. So there is a lot of time between now and 2025 to get to those kind of targets. Ryan, I don't know if you have any more specifics?

I mean, in terms of the two now new segments, I mean, they are basically the same size, give or take a couple of hundred million in top-line. I think you would anticipate Navico to be a bit of a faster grower. That's just the kind of business that is, more technology, like they said more channels, including RV. Engine P&A has always been the steady business that continues to drive margin growth and be very recurring and annuity based. But the kind of CAGR there, the long-term target CAGR, is more low- to mid-single digits of revenue growth. So you can envision Navico growing a little faster, Engine P&A continue to be very steady, but I don't think anyone is taking those targets off the table.

Okay. Thanks a lot.

This concludes the question-and-answer session. Dave, back to you.

Thank you very much, indeed. Thank you for joining us. Thank you for your questions. As you have seen, despite the extremely dynamic environment, we delivered another very strong quarter, record revenue and EPS for any first quarter. I think having the strongest brands in the market matters, particularly at the moment. And also our recent investments in products and capacity have been right on target in the most resilient parts of the market, high-horsepower engines, premium boats, technology and Freedom Boat Club. And all of those represent the strengths of the market at the moment. We're also maintaining strict cost control, and you have seen the restructuring actions that are completed already in Q1 of 2023 in the Navico Group, which will flow through to the rest of the year. As Ryan said earlier and relative to the question, we maintained our unusually large guidance window entirely because of the external environment, which just is very dynamic. But we have a clear path build to the upper end of that guidance range. And as we go through the year, clearly, the upper half becomes more likely and the lower half becomes less likely. We just didn't think it was appropriate so early in the year to adjust the guidance, but we continue to be excited for the prospects of the company. And really, nothing has changed about our understanding of what's possible for the company in the year. We are, in the end, to a large extent, a product-based company, and you can expect some very exciting new products from us in Q2. So, please look forward to that. Thank you again for joining us. I appreciate it very much. Bye for now.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.