Good morning, ladies and gentlemen. Welcome to the BRP Inc.’s FY ‘23 First Quarter Results Conference Call. For participants who use the telephone line, it is recommended to turn off the sound on your device. I would now like to turn the meeting over to Mr. Philippe Deschênes. Please go ahead, Mr. Deschênes. Philippe Deschênes: Thank you, Julie. Good morning and welcome to BRP’s conference call for the first quarter of fiscal year ‘23. Joining me this morning are José Boisjoli, President and Chief Executive Officer and Sébastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call and that actual results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties and I invite you to consult BRP’s MD&A for a complete list of these. Also during the call, reference will be made to supporting slides and you can find the presentation on our website at brp.com under the Investor Relations section. So with that, I will turn the call over to José. José Boisjoli: Thank you, Philippe. Good morning, everyone and thank you for joining us. Our team once again demonstrated our ability to succeed in a tough environment. We outperformed the industry in terms of retail and delivered better than expected financial results for the quarter despite supply chain disruption. This solid performance put us in a good position to deliver strong growth for the year as we remain focused on achieving our guidance, which call for a revenue increase of 24% to 29% and EPS growth of 11% to 14% after accounting for the recently completed SIB. Let’s turn to Slide 4 for the key financial…

[Operator Instructions] Your first question comes from Craig Kennison from Baird. Please go ahead.

Hi, good morning and thank you for taking my question. I do take your point that retail trends seem to be the result of supply shortages and that trends would be much better if you could get more product out there. But it does seem like there’s something going on in the larger economy and that the Fed needs to basically curtail demand to get control of inflation. So I’m just curious how you reconcile some of the signals you’re getting with your approval search trends and your web traffic and all of that with what we’re seeing in the broader economy, which is clearly a slowdown. José Boisjoli: Good morning, Craig, to be honest, we had our review with all our division before, obviously, our quarterly results and we challenged the team, and we don’t see right now slowing down in demand. Their customers and maybe it’s because our customers, our household income higher than the average, they don’t feel this impact. Interest rates are getting higher, but still very competitive in the big scheme. The fuel price has some impact. Nobody like the price of the gas at the pump, but the dollar impact on our customer is not so big on the yearly season. Then when we look at all this, we don’t see much reduction in demand. Cancellation of preorder are similar to last year then so far so good. And the way we see it is our plan is continue to run our factory at full production, trying to do right the first time. If we cannot, we retrofit the unit. But we’re trying to meet customer demand as much as we can. And so far, the team are doing a great job to manage to the supply chain volatility.

Great. Thank you.

Your next question comes from Robin Farley from UBS. Please go ahead. José Boisjoli: I don’t hear you, Robin.

Sorry about that. Yes, thanks. Two questions. One is your language around the supply chain disruption. A quarter ago, you talked about expecting it to be outlook to improve in Q2. And now here during Q2, it sounds like it’s going to continue throughout the year. So is that – I don’t know if you’re just being conservative in your outlook or if you’re seeing things continuing to worsen because that’s also a much sort of longer expectation, right? It feels like over the last couple of quarters, it’s always been the idea that it was within two quarters that there would be improvement. And now it sounds much worse than that. So just wondering how much worse – what you’re seeing is in supply chain? And then also just a quick clarification on your EPS guidance, the raise looks primarily just from the share repurchase, is that – does that include just the share repurchase that you have completed already and not share repurchase that you might do that is authorized for later this year? I just want to clarify that. Thank you. José Boisjoli: Then I will take the question on supply chain. And Sébastien will talk about EPS. Then if I give you the big picture on the supply chain, on the commodity side, there is no availability issue and the price start to stabilizing, then this is positive. Microchip has planned remained difficult. And sometimes you can find substitution, but sometimes you cannot. And this is what happened with Watercraft in Q1. Now we have a solution. Logistics is difficult but manageable. When you have a problem with container vessel, you can always airfreight shipment around the world to production facility. What was a bit surprising in Q1 was the lockdown in China with the COVID zero-tolerance. This created more disruption for us but also for some of our suppliers. Then in March, when we talked to you, we were planning H1 to be difficult and improving in H2. Now we see that Q2 will be difficult. Q3 will be difficult, maybe some improvement in Q4, but we’re planning for a difficult year. That being said, overall, we believe that it will remain difficult, but we believe also that we have a good way to manage the situation. With the modular design of our product line, the product seasonality, then we can favor a product versus the other. I believe we are well positioned to manage the supply chain challenge and because of our footprint in Mexico, labor availability is good. Then we believe, overall, we are in a good situation to manage the overall situation. And that’s why we outpaced the industry in Q1. Sébastien Martel: On your EPS guidance adjustment, yes, it only reflects what we’ve done so far this year, and it does not reflect what we could potentially do for the remaining part of the year.

Okay, great. Thank you.

Your next question comes from Martin Landry from Stifel GMP. Please go ahead.

Hi, good morning. You do talk a lot about supply chain that constrain your capacity. So I was wondering if you can give us a little bit of a picture of your capacity utilization during the quarter. And also what you are assuming in your guidance in terms of capacity utilization for the remainder of the year? José Boisjoli: Yes. The capacity, snowmobile was down. Watercraft was running production at full capacity. Supply was different because of shortage. ATV side by side, we’re about 70%. Our plan for the remaining – the whole year for all product line is about 85% of capacity.

Okay. And what would you consider full capacity? Would it be like 90% or something like that or... José Boisjoli: Full capacity is 100%. But let’s say, when you operate above 90%, 95%, we consider that full capacity.

Okay. Okay. And my other question is where we’re seeing interest rates rising and maybe they are expected to continue to rise, I was wondering if you can remind us what’s the proportion of your units which are sold using credit rather than cash? Sébastien Martel: Yes. I must say about 60% to 70% of all the units that we sell are financed either through the partners that we have agreements with or local partners with the dealer. And so obviously, it is a big ticket item, so it’s normal that financing is used as a tool to close the transaction. But one thing that is encouraging is when we look at the overall FICO scores, the scores are higher than what they were 2 years ago pre-COVID. We were hovering in the range of 720 pre-COVID and now last year, we finished at about 745 and that trend is continuing from a credit rating point of view. So obviously, people that are buying our products seem to be better off financially as well.

Okay. And do you expect the rising rates to have an impact on your volume on a go-forward basis? Sébastien Martel: Well, the rates are still relatively low when you look at the overall cost of financing. And yes, it’s a big ticket item, but it’s – we’re talking about items above $15,000, $20,000. So it does not have a significant impact on the monthly payment that the consumers make when they decide to finance the product.

Okay, thank you and congrats on your results. José Boisjoli: Thank you, Martin.

Your next question comes from George Doumet from Scotiabank. Please go ahead.

Hi, good morning, guys. I think, José, on Slide 6, you spoke about preorders being flat on a like-for-like basis. Just wondering, are you – would you expect that to maybe be up a little bit, just your thoughts there? And maybe talk a little bit about what we’re seeing under the hoods on maybe demand patterns and what categories, what geographies are maybe stronger or weaker than expected? José Boisjoli: No. I mean, first, the preorders, we’re very happy because snowmobile last season and this season is at an all-time high. Like I said in my script, 70% of our snowmobile production is sold to North America and 40% in Scandinavia. And Scandinavia, just to give you a sense, historically, it was more about 10%, 15%, now 40%, we’re very happy. Then the point was on snowmobile all-time high, on the watercraft, all-time high. Obviously, the 80% we show here was because last year, we didn’t report Switch, Switch is basically sold out in North America and for ATV side-by-side, again, different than our competitor. We allow our dealers to only pre-sell what we allocate to them. Then basically, we give an allocation for the next 3 months, then they are able to pre-sell only those 3 months to consumers. They are not allowed to pre-sell something that they will receive in the 6 months. And we do that not to disappoint customers if something happen. Then overall, we’re very, very happy with the presales level. And like we – like we say on snowmobile, when it’s a call to action like on snowmobile, the consumer new – with the new lineup we introduced in February that if they would order, we would produce their unit. There is a customer or a change in the trend. This customer are ready to put their money down to secure the delivery of their units.

Okay. That’s helpful, thanks. And just maybe one last one for Séb, I think last call, you spoke to better manage retail sales programs like some learnings we did through COVID, can you maybe talk a little bit to what those are? And I think you also called out 100 basis points, beating the margin headwind for sales program. If you look at next year, is that expected to be less or maybe a similar kind of drag? Thanks. Sébastien Martel: Good morning. When we talked back in March, we talked about the margin – expect the margin decline this year about 200 basis points. And so obviously, with the guidance unchanged, that remains in terms of expectation. My expectation is that we would obviously be impacted favorably by higher volume by above 100 basis points in efficiencies by 200, saving on sales program by 100 – not a saving, but a deterioration of sales programs by 100. Based on what we see today with the supply chain and the low inventory in the network, our expectation is that, that potential headwind from programs this year will not happen, but it’s going to be offset by higher inflation and efficiency. So call it, 300 basis points in efficiencies this year. From the learnings from COVID, obviously there’s better tools that are available to manage your retail programs regionally. And so using better analytics, targeted programs as well from a skew level, the teams are able to be more efficient in how they attribute incentive on a regional and a product line basis, and that’s driving efficiencies.

Okay, thanks for your answers.

Your next question comes from Xian Siew from BNP Paribas. Please go ahead.

Hi, guys. Thanks for the question. You talked about increasing capacity out of the Juárez and how that’s kind of helping, but I think I’m curious, how are you able to get some of the more components to use that incremental facility given where supply chain is? I guess, maybe some help there. José Boisjoli: Yes, a few things. Before we were producing everything on one side and the complexity of the factory, the complexity of the models we’re producing there were high. We had a lot of different platform, the Maverick Trail, the Maverick Sport, the Maverick Exchange, the Maverick Defender. And into the Defender, the utility you have the base and you have the one with cabin air conditioning. This is super complex. Then the fact that having two factory now, one is focusing on the utility. The other one is focusing on the sport platform, and this has improved efficiency. And we believe even if we’re not running those two facilities at 100%, we believe this has improved efficiency and in terms of right the first time and in terms of quality. Sébastien Martel: And maybe just some color on the supply chain. And it’s – when we build incomplete units, it’s one, two or three components that are missing on these units. So the supply chain is able to when we work with them and say, well down the road, we want to increase by 10%, 15%, 20%. You’ll get 99% of the components, and we know which components are more troublesome, and so proactively, we’re working with our suppliers to make sure that they source from their Tier 2 and Tier 3 suppliers, the necessary components so that when we do ramp up production, they’re able to supply these goods as well. And obviously, we have that flexibility with substantially completed units. If we don’t get it a week, whatever, 43 of the year, we’ll get them in a week 46 or 47 and retrofit these units. José Boisjoli: Also the two factories gave us a chance to retrofit more units in both factory instead of one.

Okay. That’s really helpful. And then maybe on that point on the retrofit, maybe an update on where we are. It sounds like you’re making progress towards the ones that are outstanding and you’ve got a nice boost at the end of the quarter. So maybe are there less out there? How should we think about that flowing through in terms of timing was there any shift between the two. Sébastien Martel: Yes. As I said in my prepared remarks, we did ship quite a few components in the last few weeks of the quarters which allowed us to get the components to the dealers, and they’ll be able to work on these units early Q2, and obviously, it’s going to help retail in the second quarter. If you exclude these components that we shipped in the last few weeks, actually, our inventory would be down 25% instead of up 20%. And so we’ve done very good progress. But again, as we said, we expect that we will be running with a high level of retrofit inventory throughout the year until the situation, I guess get back to a more normal level.

Okay, got it. Very helpful. Thank you, guys.

Your next question comes from Joe Altobello from Raymond James. Please go ahead.

Thanks. Hey, guys. Good morning. I guess first question, big picture. Obviously, the industry was down low 20s as you mentioned this quarter. What are you guys baking in, in terms of the industry for fiscal ‘23? Sébastien Martel: Good morning, Joe. It’s a tough one to call because it’s very dependent on how the other OEMs are performing as well. And if I go back to Q4 results, the industry was down low teens. We were down minus 7%. This year, this quarter, as you mentioned, low 20s, we were down minus 9%. So we seem to have found a way to navigate through the supply chain uncertainty. But it’s really a question of how other OEMs are performing and how we’re performing as well, which will drive overall industry retail. We are calling for, obviously, strong wholesale in our guidance this year. And obviously, this should translate in good retail for us as well.

Okay. Understood. Just kind of on that last point in terms of guidance, obviously, coming into this quarter, the thinking was that things started to get better. In Q2, it sounds like that’s more like a Q4 event, yet your revenue guide, your EBITDA guide has not changed. Does that reduce your visibility, at least your confidence in the outlook this year given that churn has been pushed out effectively two quarters? Sébastien Martel: Well, from an overall consumer demand, obviously, we have a strong order book, strong order book from the dealers, strong low level of inventory. So, in our ability, if we produce these units to get them sold is very high, that confidence. But obviously, we are dependent on many suppliers, and we are working proactively with them to make sure we get the components. But could there be an event in two months, three months, four months, that’s beyond our control, which influences our output absolutely. But from what we see today, we are obviously confident in our ability to deliver the guidance for the full year.

Okay. Thanks guys.

Your next question comes from Benoit Poirier from Desjardins. Please go ahead.

Yes. Good morning everyone. First question, I am just wondering what led you to stronger than expected normalized EBITDA versus earlier comments made back in Q4 about EBITDA could be down 40%, 50%. And just wondering why the EPS beat in Q1 does not flow into the guidance raise for the full year? Is it mostly a timing issue? Sébastien Martel: Well, Benoit, obviously, we are managing operations tightly, and we finished the quarter better from an OpEx point of view, so, less expenses coming from tight management. So, that’s a timing element. And the other one, the mix was also more favorable from a side-by-side point of view, and that’s also a timing element. So, that’s the reason why we do not feel it was the right time to adjust the guidance.

Okay. Perfect. Okay. And given your comments made on the – no big inventory replenishment for the year, I was just wondering if you could talk about the potential working capital release we might expect for the full year. And in light of your comments about the inventory which should we more expect a working capital release to happen next year, or any thought about the movement in the working capital expected for the coming quarter? Sébastien Martel: Yes. As you saw in the first quarter, we did invest quite a bit in working capital. We expect to run at high levels of working capital investments as we said in our prepared remarks and some of the questions we answered. And so I am not expecting a cash flow release coming from a reduction of working cap this year. Obviously, hopefully, would happen next year as the supply chain normalizes.

Okay. Perfect. And any thoughts about the – how the supply chain issues impact your electrification strategy and ability to deliver the Project Ghost? José Boisjoli: No impact, Benoit. Project Ghost is going in production this fall. We have no issue there. And electrification, which still obviously the – we are planning in 2 years. And I hope the supply chain will get better by that time.

Okay. Thank you very much. José Boisjoli: Thank you.

Your next question comes from Joseph Spak from RBC Capital Markets. Please go ahead.

Thank you. Maybe just in the quarter of the 1.5 points of organic growth, I know you said a lot of that was price-driven. Can you give us the breakout between price and volume? And then how much of that – of the inflationary cost you incurred in the quarter, did that price offset? Sébastien Martel: When I look at the overall margin bridge, obviously, margin is down 490 basis points in the quarter. Mix was unfavorable by 240 basis points. Pricing was 500 basis points. That compensated the inflationary and turbulence costs we had from the supply chain for a negative 500. And we were not running our plants at full capacity. So, obviously, less efficient for about minus 250 basis points.

Okay. And so you talked about some of the supply chain issues lasting a little bit longer than you expected. The pricing you have put in place to-date compensates for that, or are there potentially sort of additional actions needed? Sébastien Martel: It should compensate for it. If you look at what we have done from a pricing point of view last quarter, I talked about MSRP increases by 4% versus a year ago. And we have surcharge as well, which is another about 2%. So, that grows 6%, call it, pricing increase. And that should offset the inflationary costs that we are being hit with and the turbulence cost as well for the year.

Okay. And then just one more on rates, but maybe from a different perspective because I believe most of your financing costs are from the term facility, which is variable. And I know you have hedges in place, but you did raise your net financing cost. Is that just a mark-to-market on current rates, or are you also embedding a continued rise in rates? Sébastien Martel: No. When I compare to versus the guidance we issued back in March, obviously, we did not factor in for the SIB, so that’s the cash use and also a higher level of working capital use. So, we will be using the revolver more than what we were planning back in March. So, the adjustment that we did on financing cost is a reflection of that.

So, it’s just a greater use of revolver or not an increase in the cost of that revolver? Sébastien Martel: That’s correct. Maybe a bit of cost there, but the majority of the variation comes from greater usage.

Okay. Thank you.

Your next question comes from Cameron Doerksen from National Bank Financial. Please go ahead.

Yes. Thanks. Good morning. Wondering if you could talk a little bit more about the seasonal products, I guess how the revenue is going to play out, I guess for the remainder of the year. I think the guide is up 22%, 27%, but you had obviously, negative year-over-year in Q1. So, it sort of implies a really huge sort of second half of the year for seasonal products. So, maybe you can just talk a bit about how you are going to get to that number. Sébastien Martel: Yes. Good morning. Obviously, the – when you look at the remaining part of the year, obviously, the revenue growth probably in the range of between 32% and 38% overall for BRP, year-round much higher, but a strong growth for seasonal. It will be more towards Q3 and Q4. Q4 will be strong with snowmobile deliveries. Q3 is going to be personal watercraft and also personal watercraft in Q4. So, we expect it to be more skewed towards Q3 and Q4.

Okay. No, that’s helpful. And just a question maybe on the – I guess the inventory levels at the dealer. Do you have, I guess an idea of where you stand relative to some of your big competitors? I mean are you in a better position on the dealer inventory, worst position? I am just trying to get a sense of kind of what the retail performance might be relatively as it’s driven by to some extent the – what’s available at the dealer level. So, do you have an idea of kind of where you stand relative to your peers? José Boisjoli: Us, we are about 70% versus pre-COVID, but we believe we are at the same level than the competition.

Okay. That’s helpful. Thanks very much. José Boisjoli: Thank you.

Your next question comes from Fred Wightman from Wolfe Research. Please go ahead.

Hey guys. Good morning. I just wanted to follow-up on the comments about the component shipments late in the quarter. I mean that’s pretty similar to what you saw last quarter as well. The language looks pretty much unchanged. Just wondering if you are actually seeing an uptick in retail and if we should expect sort of similar outsized market share gains this quarter as well? Sébastien Martel: Well, the expectation on deliveries this quarter is, from a wholesale perspective, is better than Q1. And so obviously, starting out the quarter with some inventory that is – will be available. When we look at the retail numbers for the quarter, at the start of the quarter, they are very good. Obviously, a lot of consumers are waiting for their personal watercraft, and that’s what we are delivering in May and they are happy to obviously receive them.

Perfect. And then you guys have included data points in slides on new entrants for a while now, but it didn’t look like there was anything in this quarter’s slides. Is there any way you could just give a comment about new entrants and what you are sort of seeing versus plan or what you have seen in recent history? José Boisjoli: Yes. Just to give you a sense, new entrant, if we look at it by product line, it’s same than the previous 2 years. Then just to give you a summary. Historically, about 20% new entrant last 2 years, 30%, in Q1 we were low 20%. But if you look at it, it’s a product mix. If you look at it by product line, snowmobile is historically low new entrant when watercraft and three-wheel is close to 50%. And it’s just a question of product mix. When we look at it by product line, is the same level than what happened in the last 2 years.

Perfect. Thanks guys. José Boisjoli: Thank you.

Your next question comes from Brian Morrison from TD Securities. Please go ahead.

Yes. Good morning. I just want to ask a follow-up question maybe for just say, on Slide 7 and go back to the supply chain challenges. I understand you have the heightened supply chain challenges. But within other components, when you are seeking alternative sources, what are those key components? And can you provide some insight into your visibility into securing timely supply in order to meet your targets, which are there for a big second half. José Boisjoli: Yes. Then basically, first, we are working hand-on-hand with suppliers and because we have good visibility on our direct supplier, but sometimes on the Tier 2, we don’t have visibility. Then we said to our supplier, if you have a problem or if one of your suppliers have a problem, let us know, we will try to help. And we have three consultant companies in the world working for us to find alternative. Then I mean, if you have a problem, a shortage with commodity, now it’s quite easy to find a replacement. And even in microchip sometime, when it’s a generic microchip, you can find alternative. When it’s a more specific microchip, it’s more difficult. Then basically, it’s working with our suppliers, Tier 1 and Tier 2 to have a good communication and try to work together to find alternative. The advantage that we have versus I believe some of our competition, I give you an example. In Q1, we had a shortage in a specific component for watercraft. Then when we assemble those watercrafts, we didn’t put the cluster. The cluster was available for side-by-side and ATVs, then that helped the overall. Then I think this is an advantage, the fact that we have modular design and the fact that we have seasonality, this is an advantage that we have versus some of our competition.

So José, is there more work to be done or you have good visibility into securing timely supply for the second half? José Boisjoli: We have good visibility. The thing is sometimes it change, but we have good visibility.

Okay. And then last question, maybe for Séb. In terms of – or just say, you mentioned that cancellations were flat. Just in terms of consumer – customer pre-orders, what are typical for deposits and [indiscernible] for deposits? I see from your peers that cancellations remain very low. Sébastien Martel: I mean us, the way it worked, the customer gave a $500 deposit, and this is refundable until the product is planned in the load building, the shipments. Then historically, we always had, let’s say, mid-single digit overall. Then right now, if you look at the cancellation on the global retail is low-single digit. If you took it on certificate, it’s mid-single digit, in line with what we had in the last 2 years.

Thank you very much.

Your next question comes from Chris Hodson from Edgewater Research. Please go ahead.

Yes. Guys, thanks. Question on dealer inventory, I was curious if you would differentiate at all by product segment there. It seems like at least on a year-over-year basis, side-by-side product flow got a little better, three-wheel and personal watercraft a little different. But I know year-over-year basis isn’t the perfect way to evaluate it right now. So, curious with the bigger picture view, if you differentiate at all between any categories getting a little bit better or still notably more challenged. Thanks. Sébastien Martel: Yes, I could comment overall from an inventory point of view, it’s still extremely low. Yes, a slightly better first side-by-side and ATV, but three-wheel down, and we would like to have more three-wheels in the network today. And personal watercraft is flat year-over-year, but it’s a unit that turns quite quickly when it gets to the dealership. And so we shipped less in the first quarter. These units would have been retailed anyhow. And the expectation is that’s going to improve this quarter as we ship more personal watercraft than three-wheel.

Great. Thanks.

Your next question comes from Brandon Rolle from D.A. Davidson. Please go ahead.

Good morning. Congrats on the strong quarter. I had a couple of questions around your cost of goods sold. Can you break out what percentage of your shipping costs diesel represents? And maybe what percentage of total cost of goods sold your ship costs represent? Sébastien Martel: Oh, it’s a good one this morning. I don’t have that granularity. But when I look at the overall increase that we have had in the quarter, just coming from, we will call it, supply chain disruption, not necessarily related to fuel because fuel-related costs were able to pass as a surcharge. But the overall freight is up approximately 40%, if I could compare it this quarter 2 years ago. So, it’s obviously quite a sizable increase. And overall freight total, you are probably looking at on a quarterly basis, freight-in and freight-out as well, probably in the range of $175 million to $200 million a quarter. But that includes everything, the goods coming in from our suppliers and when we ship to our consumers as well.

Okay. Great. And then just finally, on the Marine segment, could you talk about some of the demand trends you are seeing there in the markets you participate in? Thank you. José Boisjoli: Same than powersports. demand is very, very high. To give you a sense, in Australia, we just ended the season or we are ending the season right now and the inventory level is very, very low. And it’s well positioned for next year in Australia. And in North America, obviously, it’s all about supply. Many boat builders like us are struggling with their suppliers, typically in the boat business suppliers are smaller and we had some difficulty, but demand remained very strong.

Your next question comes from Gerrick Johnson from BMO Capital Markets. Please go ahead.

Good morning. Sébastien, I was curious about your comments on the negative mix shift affecting gross margin as side-by-side and P&A seem to outperform. So, what was the mix shift impact? Sébastien Martel: The major one was personal watercraft. It’s obviously a very good product line for us. And given the lower level of deliveries that we have had in the second quarter, that obviously had an impact on the mix. And from side-by-side, it was more the – obviously, the product line on a standalone basis is very good. But the margin varies by the models we ship, and so the model mix was not as rich this quarter for side-by-side.

Okay. Which are the less rich models in side-by-side? Sébastien Martel: That is something we will keep for ourselves. Confidential for us. But obviously, the lower end or pricing models usually have a lower margin than the higher ramp-up.

Okay. And then on Switch, any shipments in the quarter, what’s the cadence for Switch going forward? José Boisjoli: Yes. We had same in watercraft. There was a component that affects both. And we will – we are accelerating right now the shipment of Switch, and it will be front quarter for Switch in Q2.

Okay. Great. Thank you. José Boisjoli: Thank you.

And there are no further questions at this time. I will turn the call back over to Mr. Deschênes to close the meeting. Philippe Deschênes: Thank you, Julie, and thanks, everyone, for joining us this morning and for your interest in BRP. As José mentioned, we will be hosting our Investor Day on June 14th and 15th in Orlando, Florida where we will be providing an update on our M25 strategy. Note that the presentation will be available online, you will be able to find more information on this next week. Also note that our Q2 earnings call is planned for September 14. Thanks again, everyone, and have a good day.