Welcome to the Winnebago Industries Second Quarter Fiscal 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the call over to Joan Ondala, Vice President, Treasury and Investor Relations. Ms. Ondala, please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us to discuss our fiscal 2026 Second Quarter Results. This call is being broadcast live on our website at investor.wgo.net, and a replay of the call will be available on our website later today. The news release with our second quarter results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along with our prepared remarks is also available on the Investors section of our website under quarterly results. Turning to Slide 2. Certain statements made during today's call -- conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities laws. The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain, and a number of factors, many of which are beyond the company's control, could cause the actual results to differ materially from these statements. These factors are identified in our SEC filings, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures are available in our earnings press release. Please turn to Slide 3. Hosting today's call are Michael Happe, President and Chief Executive Officer of Winnebago Industries; and Bryan Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our second quarter performance as well as a forward view of the market. Bryan will discuss the associated drivers of our financial results and our fiscal year 2026 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions. And with that, please turn to Slide 4 as I hand the call over to Mike.

Thank you, Joan, and good morning, everyone. Winnebago Industries delivered a solid second quarter, reflecting focused execution on our overarching enterprise strategies and our fiscal year 2026 first half objectives. Despite a challenging market environment, our teams performed with discipline, protecting profitability, managing controllable costs and advancing the product and operational priorities that matter most to our long-term competitive positions in the RV and Marine industries. Across our portfolio of premium differentiated brands, we have built a broad and durable outdoor recreation platform that spans multiple customer segments, price points and lifestyle use cases. That breadth is increasingly valuable in a more selective demand environment and positions us well to compete for profitable share as demand conditions improve in the future. We are introducing meaningful new products across our business lineups, especially recently in the Motorhome RV segment within the traditional C category with technological differentiation and targeted focus on affordability and value accessibility to our premium brands. We are also being deliberate about where we invest and grow. Our emphasis on driving share in higher-value segments, such as Class A diesel, Class C diesel and the growing Super C category reflects our strategic focus on retail dollar and profit reach through resilient premium categories. That discipline is evident in our results, even as unit share has fluctuated in certain industry segments, our RV retail dollar share has remained resilient. On the Winnebago-branded Motorhome business, we have made considerable progress in the restoration of this flagship line through the first half of fiscal 2026. The team is on its plan through the first 6 months with much more traction planned in the back half of the year. While several initiatives are still in initial stages, and are expected to build and become more apparent over coming quarters. The prospects for…

Thank you, Mike, and good morning, everyone. Starting with our consolidated results on Slide 11. As Mike noted, our results continue to demonstrate disciplined execution across a diversified portfolio. Even as retail demand across RV and Marine remains uneven. Consolidated net revenues increased 6% year-over-year as a strong performance in the Motorhome RV segment more than offset decreases in Towable RV and Marine. Growth in the Motorhome RV segment was driven by Grand Design RV's continued expansion with strong growth in Winnebago and Newmar brands contributing as well. Gross profit increased due to growth in the topline and when combined with SG&A reductions due to our cost savings initiatives, Operating income improved 51% from the second quarter of fiscal 2025, resulting in adjusted EPS of $0.27, 42% higher than last year. Turning to our segment results, beginning with Towable RV on Slide 12. Net revenues declined by 9%, primarily attributable to a shift in product mix toward lower price point models and lower unit volume, partially offset by selective price adjustments. Segment operating income margin of 4.2% for the second quarter of fiscal 2026 was down 20 basis points from prior year, primarily due to volume deleverage and product mix, largely offset by selective price adjustments and cost containment initiatives. Through the first half of fiscal 2026, segment operating income is up 3% and versus the same period last year on a roughly comparable 3% increase in net revenues. Our dealer inventory increase in the Towable RV segment, is related to the new Thrive in the Winnebago brand and the continued success of the Transcend in the Grand Design lineup. When combined, these 2 lines explain the entire increase in the Towable RV segment's dealer inventory when compared to the prior year. Moving to Slide 13. Our Motorhome RV segment…

Thank you, Bryan. Winnebago Industries begins the second half of fiscal 2026 on solid footing to drive sustained earnings improvement, a view that holds even if the industry recovery continues to be stubborn. Over the last several quarters, going back to the second half of fiscal 2025, we have been quite intentional about the business improvement changes we are making. We have broadened our portfolio across key segments and price points. We have strengthened the balance sheet and improved financial flexibility. We have made deliberate decisions to better align our fixed cost base and variable expenses, especially within our RV segments to reflect the reality of today's demand environment. Our teams have proactively navigated tariff headwinds and unexpected cost pressures with agility and diligence. And I am especially pleased in our ability to continue executing the controllables and mitigating risk effectively as conditions evolve. We are, again, doing what we said we would do. As we move through fiscal 2026, our focus is clear: execute what we can control; protect profitability, while balancing retail share in our target segments; strengthen our financial flexibility and protect and bolster our ability to invest in our people, brands, products and operational excellence initiatives that we believe will drive sustainable and superior returns in better days ahead. It is worth stepping back and recognizing the broader context. Outdoor recreation remains a large, resilient and economically meaningful sector, contributing more than $1 trillion in direct and indirect economic output and supporting millions of jobs here in the United States, according to the newly released data from the Department of Commerce. Participation in outdoor recreation remains strong and is an integral part of our customers' physical and mental wellness. While our specific industries are operating in a more measured demand environment, amid a dynamic macroeconomic and geopolitical backdrop. The long-term fundamentals of the category and candidly Winnebago Industries continue to support sustained engagement and investment over time. Our lifestyle is strong and Winnebago Industries is strong as well. We are mindful of the evolving situation in the Middle East. And while it is too early to assess any direct impact on our businesses, we are monitoring developments closely and their potential impact on consumer demand and input costs. Notwithstanding that backdrop, our confidence for the future comes from the progress we have already demonstrated and from our team's continued focus on our 5 core enterprise strategies that define how we operate and compete. Now Bryan and I are happy to answer your questions this morning. Operator, please open the line for the Q&A session.

[Operator Instructions] Our first question comes from Joseph Altobello with Raymond James.

First question on inventory. Obviously, you ended this quarter at 1.5 turns. The target is 2 turns by the end of this calendar year. So how much of that is coming from you guys undershipping demand over the balance of the year? And how much of that is what you believe will be improved retail?

Joe, this is Mike. It will be a combination of several factors. Certainly, we anticipate seasonal retail momentum to take place as it does every spring and summer. From an industry wholesale estimate standpoint as you probably are aware from our comments. We are a little bit on the conservative side. And so our assumptions on both industry wholesale shipments for the remainder of our fiscal year and the calendar year and embedded in our guidance is in line with us improving turns to the level that you just cited. Bryan Hughes, in his prepared comments, also mentioned in the Towables RV segment that the significant majority, if not the entire driver behind Towable RV turns at the present time, is the support of the Winnebago-branded Towable line that we're revamping, primarily the Thrive and Access product that is shipping into dealers, many of whom are new to that brand as well as support for Grand Design's Transcend model. And so we anticipate that, that pre-prime retail season load-in will diminish a bit from a shipment standpoint and the natural course of retail and unit replenishment will take over. So we do anticipate our inventory turns on the RV side to improve in both quarter 3 and quarter 4 and throughout the rest of calendar '26.

Got it. Very helpful. And then to follow up on that, you mentioned obviously the geopolitical events. And I know it is early, but any sort of discernible impact on consumer demand here in March from the conflict with Iran?

Joe, we could not draw any straight line to any short-term market performance factors or even input operational costs into our business quite yet from the conflict overseas. We are monitoring that situation very carefully. We certainly understand that, that is weighing on the minds of consumers and dealers as they contemplate obviously, investments in the lifestyle for consumers and in inventory from a dealer standpoint but we have not seen any adverse effects quite yet from the conflict. .

Our next question comes from Alice Wycklendt with Baird.

Maybe I want to dig in a little bit more and see if you can share on the impact of weather, the cadence of trends over the course of the quarter and maybe what you've seen since quarter end some of those weather impacts have eased?

Yes. Well, let me talk about the second quarter retail environment that we witnessed. We did have some good retail shows both on the RV and Marine side. In fact, our largest retail shows happen to be some of our best shows. But apart from those large shows, the rest of the retail show season was candidly in line with general industry retail conditions throughout that particular period for us, the months of December, January and February. We did see some weather events in the months of January and February that did have an impact on specifically some of the retail shows, but in some cases, good portions geographically of the U.S. that hampered retail for a week at a time. These are generally our lowest retail selling months of the calendar year. So we don't anticipate that weather will continue to be a theme for the remainder of our fiscal year or calendar year '26. We'll see how that goes. Concerning retail in the month of March, I would say we are generally seeing a retail environment in March that is healthier than what we saw in the months of January and February. Internally, we have 3 weeks of retail collected already from this particular month. And I would say 2 of those 3 weeks were certainly better. And the third week of those 3 weeks was similar. So net positive in terms of the general direction of retail in March versus what we had seen in January and February. But we're obviously monitoring that every day, every week and hope we continue to see that mini trend continue here in the near future.

Great. And then obviously, a lot to unpack with the Iran conflict, but maybe we can just isolate gas prices and talk about how the RV market has typically reacted to higher prices, at least in the past and maybe what you'd expect here?

Yes. I think you would want to break that topic or question down in 2 ways. One, how does it impact people who are already in the lifestyle and own RVs. And generally, the manner in which we see an impact there is that people don't necessarily take less trips. They just travel less distance to experience the RV lifestyle. And so we believe that the lifestyle itself is healthy from an engagement standpoint and we do not anticipate people doing less camping, but they may go less far to do that camping. Certainly, from a new product purchase standpoint for customers that are in the marketplace. The concern there is that the perceived affordability of the lifestyle is elevated because it costs more to fill up that fuel tank on either your towing vehicle, if you're buying the Towable or that Motorhome coach. But we generally don't see as big of an impact on new purchases as you might expect when gas prices are elevated at the pump. These are generally planned purchases, often associated with life-changing events like retirements or kids getting older, bucket list that need to be checked off. So we're not yet factoring in a significant decline on new product purchases yet. We'll want to see how long gas prices are elevated directly related to the Middle East conflict and discern whether the impact to consumers last. The last topic I do want to mention is that there are some positives when some of these geopolitical events happen historically. There are times when Americans choose to travel differently. They may take less trips to Europe. They may take less cruises across international waters. And instead, they turn to domestic road trips, which actually turns out to be a tailwind for us at times historically. So again, it's too early to come to a conclusion on any of the comments I just made. We are monitoring the situation carefully, but those are some of the opinions we have on possible dynamics and impact.

Our next question comes from James Hardiman with Citigroup.

This is Sean Wagner on for James. I guess, just following up on the inventory. If you're targeting 2x turns at some point in calendar year '26. Is there any color you can give on where you expect Towable and Motorhome turns to finish the fiscal year? Will you get close to 2x this fiscal year?

Sean, thank you for the question. We won't share specifically the future projected breakdown by category. I can just tell you, our business leaders have the same goals in mind. The turns performance of our portfolio varies by brand and business. And it also varies at times, as I mentioned earlier, by the introduction of new products or new strategies. But in macro, our intention and plan for the rest of the year, again, as included in our guidance assumptions, is to drive those field inventory turns back very close to 2.0 by the end of our fiscal year and certainly by the end of our calendar year. There can be things that aid or disrupt that, but that is certainly our intentions at the time. I will take this opportunity to mention the quality of the inventory in the field as well. We track very carefully how much of our inventory is current model year, prior model year and prior 2 model years. And I can tell you from a positive standpoint that we have seen a significant improvement in aged inventory across our RV and Marine portfolio at the end of quarter 2 fiscal '26 versus the end of quarter 2 fiscal '25. The number of units on prior model year and prior 2 model years are meaningfully down as we sit here today. And the number of current model year units as a percentage of the whole is increased which is a good thing because we want consumers looking at the very latest. And often, our sales allowance or sales support dollars for dealers are very targeted at aging inventory. And so the less aging inventory we have, we think we're in a better competitive position in the market, but we're also spending less dollars from an inefficiency standpoint to clear out that old inventory. So our teams are focused on it, and that will be part of the story as we talk about the quantity and the quality of field inventory going forward.

Okay. And I guess on the topic of your unchanged guidance. Have your -- I know you said it's too early to sort of draw any conclusions from the geopolitical events, but have your underlying interest rate assumptions within your guide changed at all based on the current macro environment? And can you remind us what those were?

Yes, this is Bryan. I think as we all know, some of the interest rate expectations, including the reductions that we're pricing in the market previously are easing and are turning the other direction. A lot of it -- it's too early to tell what the impact of the geopolitical events right now will be on oil prices, interest rates, labor market and things of that nature. So I would not say that we made a significant adjustment of any kind underneath our guidance that is anticipating at an extremely different interest rate environment right now. It's just too early to tell on what direction things will go.

Okay. But I guess if interest rates aren't cut this year or are even raised, let's say, does that drastically change your thinking for the industry and for the year?

No, I mean that's one of the factors we would consider as we come forward with our range on the industry. And so that would impact ultimately the outcome in all likelihood. But that's why we have the range that we do from 315,000 to 345,000 units of wholesale shipments. .

Our next question comes from Patrick Scholes with Truist.

With elevated gas and oil prices in the news, could you just give us an update on where you stand with progress with your eRV 2 electric prototype?

Patrick, thank you for the question. We do not have a commercial strategy in place currently for an all-electric Motorhome vehicle. As you recall, by your question, several years ago, we were active with, first, the pilot of all-electric Ford platform. And we did, in fact, produce a very small number of those and engage a few dealers on consumer engagement around those. We have made the decision more than a year ago now to not proceed Ford in the present environment with an all-electric Motorhome platform at this time. And that was a combination of, candidly, chassis partner feasibility on the right platform, combined with learnings from consumers about what was acceptable from a functional standpoint, but also a value standpoint in the market. So at this time, we are not competing with any alternate power technologies from a propulsion standpoint, but as you know, we are very focused through our Lithionics brand on doing everything we can to play our part in the electrification of house power that is oftentimes the removal of the generators from the house platforms on an RV or a boat and substitute that with the lithium battery power package. So that really is our electrification strategy right now, the House power platform that we have through -- in Lithionics.

Our next question comes from Tristan Thomas with BMO Capital Markets.

Mike, just a clarification question. When you said 2 or 3 weeks so far in March were better. Is that relative to year-over-year or better than January and February?

From our perception standpoint, the months of January and February were actually quite similar from a retail standpoint. I know the industry has not released February retail yet for RVs. But we anticipate that when that information is released, that you'll see retail be very similar at the industry level to January. My comments around our internal Winnebago Industries RV and Marine retail for the month of March is that we have seen a net positive 3-week trend as compared to the months of January and February, meaning March is better, not quite where we'd like it to be ultimately, but certainly a better start to the early spring period than what we were seeing earlier. And I will tell you there are some bright spots in some of those early results, including our Winnebago Towables brand, which we're very energized about. We've seen very strong early results on Winnebago Towables in March that validates some of the dealer support we're getting and some of the new products that we've launched. So very early signs. Things can change from a volatility standpoint week-to-week based on our reporting processes and the way that we capture retail. But I think what I'm mentioning this morning is in line with a few of the RV dealer surveys that have happened by some of the sell side here within the last couple of weeks. So let's cross our fingers and hope that trend continues.

Tristan, just I'll add to that. This is Bryan. I think you're inquiring not about the absolute so much as the growth rates year-over-year. And that's what Mike is referring to in March that the year-over-year comps are showing some stability for those first 3 weeks.

Okay. But not up year-over-year. Is that accurate based on your comments?

We won't share specific numbers, Tristan. They are improved versus January and February.

Okay. And then just a question around Grand Design share trends in the quarter, a little bit under some pressure. What's driving that? And then kind of how do you reverse that, specifically the Towable side?

Yes. We have seen some Grand Design unit retail share pressure in the last year, a good chunk of that comes from the intense competition we're seeing on fifth wheels in the market with several good competitors, both from a legacy standpoint, but also some of the newer competitors in the last 4 or 5 years. The team at Grand Design is very engaged in the fifth wheel segment. We've introduced the Omega Frame, which we believe is one of the most durable, strongest frames now in the market. We recently came out with a composite leakproof roof that is beginning to be rolled out across the Grand Design line, but beginning with, I believe, the Solitude line on the fifth wheel side. We have partnered closely with many of our dealers on rightsizing the programmatic and promotional support around those fifth wheel models in the retail environment. We have seen less degradation of share on the travel trailer side. And in fact, Grand Design over the last 5 years has generally been gaining share on travel trailers over an extended period of time, but we've seen a little bit of share dilution there as well, primarily due to the emphasis on affordability and some of our competitors who have much higher capability in high-volume, load differentiation mix products. So we're probably battling affordability, primarily on travel trailers. We're battling some competitive intensity on fifth wheels. And so the team is working on brand strength, product strength, dealer improvements in terms of support just across the line. I will tell you that we do have plans in the future to expand the Winnebago Towables line into fifth wheel products at some point. We have not announced what that first product would be, nor the timing of that, but that is on the roadmap. So we'll compete even differently in the future with 2 Towable brands in some of these spaces, not just one primary large one. So thanks for the question.

Our next question comes from Bret Jordan with Jefferies.

On the fifth wheel category, and obviously, it's a tough market from a share competition standpoint, is that -- is the broader category under similar pressure in the sense that you're talking about people looking for a lower price point access to RV?

Well, I think that theme, Bret, exists candidly probably across the whole of the RV industry, value affordability. People certainly are still shopping for premium brands, but looking for a sharper accessibility from a value standpoint to those brands. We are seeing some activity on fifth wheels around private labels with some of the larger retailers in the RV space. That is a strategy that is a little less mature than you see on the travel trailer side, but that is ramping up a bit. So it's a combination of factors. I believe consumers looking for value, really good competition. Dealers thinking about the category in the evolving way as well. And our teams will have to continue to adapt. I want to make this point, though. Winnebago Industries is not the Grand Design fifth wheel company. And our share and opportunities to drive our business forward come from 9 different revenue streams within the company. And fifth wheels right now is just one of those 9. And so I am very pleased with the diversification and the breadth of Winnebago Industries and our ability to use certain parts of our portfolio that do have momentum like Newmar, like Barletta, lately here like Winnebago Towables to offset some of the softness we see from time to time in different parts of the portfolio. We've also been doing some work recently on unit share versus retail dollar share. At our quarter 3 earnings call in June, we will unveil some of the data from some of that analysis. But our retail dollar share at an enterprise level, particularly for the RV industry is very competitive, and in fact, is much more resilient than our recent unit share. And that comes from some of the great work that's happening in the Motorhome segment, specifically, with new business launches like Grand Design Motorhome racing to 4% plus share here recently after 2 years of being in the market. So we're going to be very focused. Don't get me wrong. We're going to be very focused on addressing some of the share pressure that we're seeing on fifth wheels, but I can also assure our investors that we are going to be very focused on driving good news and positive momentum across the other 8 revenue streams that we have in our portfolio as well. And that is, I think, part of the secret sauce as to why we are maintaining our guidance for the back half of the year because we believe that the whole is healthy enough to maintain a statement of confidence here this morning.

Okay. And then in Marine, I think you called out warranty and volume deleverage as impacting margin. Could you sort of parse those 2 out? Is there anything that's extraordinary going on the warranty side of Barletta?

No, nothing extraordinary, but not like a larger single event that caused us to do a recall or anything. It was just a few that aggregated into a higher current quarter warranty expense recognition. So that's really the driver there.

Our next question comes from Noah Zatzkin with KeyBanc Capital Markets.

I guess, first, could you kind of comment on the margin improvement initiatives in Motorhome and provide an update there?

We've talked about this in the past, Noah, that there are several things underway. And brand by brand, we are undertaking those initiatives. I'd say, as we've said in past quarters, the Winnebago Motorhome transition to profitability is probably longer in nature and did not have a significant impact in the current quarter, but we expect it to have improving impacts in the several quarters ahead of us. We are still enjoying the ramp-up of the Grand Design Motorhome entry, and that entry has gone very well. And then similarly, on the Newmar side, the margin enhancement in that business over the past several years and in the more recent quarters have continued to bear fruit. So we're very pleased with that. I would say, in general, that's the storyline. We have further improvements we're expecting in the Winnebago Motorhome business as it relates to margins, specifically. Some actions have already been taken. Others are underway. Certainly, important in that evolution on margins in the Winnebago brand is continued product introductions that demonstrate innovation, differentiation in the marketplace, and we look forward to those in coming quarters.

And then just maybe any updated thoughts on tariffs and maybe the expected impact versus prior? I know everything is still fluid.

Yes, pretty fluid environment, as you suggested there. I think the teams have done a very good job, I'll say, specific to the margin conversation. The teams have done a very good job of assessing the impact of tariffs, monitoring them very closely quarter by quarter, month by month, mitigating the impacts with vendors, as partners, and doing a very good job of minimizing the impact of tariffs and then where necessary pricing for those tariffs and making sure that the pricing matches the overall inflationary impacts. So that is ongoing work. I'd say the recent decision by the Supreme Court on IEEPA to be offset in many respects by new tariffs in the 122 category. Our still being evaluated. I do not expect that transition from IEEPA to 122 to have a material impact on our margin story or on pricing. I think that they will largely offset each other if not even be a little bit favorable, but that too is something that we're monitoring very closely.

And our final question comes from Mike Albanese with StoneX.

I know it can be difficult to discern amongst various macro factors, but any implications you're seeing from expected tax refunds within dealer traffic or lead generation essentially setting the table for higher conversion, into Q3, particularly in regions where the SALT cap was increased or really, is that just too difficult to parse out from typical seasonality?

Yes. Good question, Mike, and thanks for that question. We do track through various sources, some of the tax refund trends that are happening in that particular sort of season. And it does appear that the size of tax refunds are in a positive way elevated for citizens and possible consumers versus a year ago. It is probably too early as those checks or deposits are arriving from a refund standpoint to understand if that will impact us materially. It certainly can't hurt as consumers claw back a few more dollars and decide what to do with that. So there's -- as you know, there's a lot of noise in the environment in terms of elements weighing on consumers' mind from a sentiment standpoint, but also some of the inflationary pressures some of which were mentioned on the call with possible gas price elevation. So we'll see how that goes. We'll have a better idea here probably in the next 60 to 90 days. There have been times, though in -- with past policy legislation that has been tax friendly to consumers where dealers have cited that consumers do have a little bit more breathing room to be able to throw at a down payment on a new RV or boat. But a little early to tell, but early signs in the tax season are positive from a refund size standpoint. So we'll continue to monitor.

That's good context. And then hopefully, a good one to end it on here, but since you decided to highlight Lithionics this morning, can you just provide more color on it as a competitive differentiator? What's out there? Why is it better, I guess? And then are you seeing that translate or can you attribute any share gains directly to that, whether that be a lot wins with dealers or resonating with the consumer, et cetera?

Yes. Thank you for the question, and it's a good topic to end on. We acquired Lithionics in the middle of 2023. And the reason we acquired Lithionics, there were multiple reasons, but one of which was that they were really and are really the gold standard in lithium battery packs, battery management systems. Since 2023, their penetration into the RV market has expanded. We have picked up new customers, including several of our OEM competitors, and we have very good working relationships between Lithionics and several RV OEM. We've expanded our product line significantly from primarily battery pack systems and BMS to include other types of mobile power products. battery starter generators, alternators, inverters and the like. We have also begun to certify some of our product catalog for use in the Marine industry. There are similar applications for these types of products in the Marine industry, and we've begun to accelerate expansion of Lithionics business development into other categories, including work trucks and other specialty applications. There's also an aftermarket element to the Lithionics business. If you either have a different battery system or no battery system at all, you can work through a qualified installer to install a Lithionics system. They are safe. They are reliable, they are durable. They are constructed like very few other battery packs in the market are. And the team just does business the right way. The last thing I'll mention that should be of note to the investor community is the profitability on this small business from a yield standpoint is significantly higher than our Finished Goods business. It is a strategic technology vertical. Certainly, some of the business we do is captive to our own brands. But the business we do on the outside comes at a fair healthy margin that allows us to contribute back to enterprise profitability, but also reinvest in the Lithionics business. So we view the blue ocean for Lithionics products as significant in the future. And we'll stay very focused on being the quality supplier in that space and not the low-cost supplier. Reliability and safety are very valued by consumers around battery products. So thank you for the question.

Thank you. This concludes the question-and-answer session. I would now like to turn it back to Joan Ondala for closing remarks.

Thank you all for joining us this morning. We look forward to keeping you all updated on our progress.

This concludes today's conference call. Thank you for participating. You may now disconnect.