Winnebago Industries Inc (WGO) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth-quarter 2013 Winnebago earnings conference call.

My name is Jackie and I will be your coordinator for today.

(Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I will now like to turn the presentation over to Ms. Sheila Davis, Public Relations and Investor Relations Manager.

Please proceed.

Thank you, Jackie.

Good morning and welcome to Winnebago Industries' conference call to review the Company's results for the fourth quarter and fiscal 2013 ended August 31, 2012.

Conducting the call today are Randy Potts, Chairman of the Board, Chief Executive Officer, and President; and Sarah Nielsen, Vice President, Chief Financial Officer.

I trust each of you have received a copy of the news release with our earnings results this morning.

This call is being broadcast live on our website at winnebagoind.com.

A replay of the call will be available on our website at approximately 12 o'clock noon Central Time today.

If you have any questions about accessing any of this information, please call our Investor Relations department at 641-585-6803 following the conference call.

Before we start, it is my duty to inform you that this presentation may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Investors are cautioned that forward-looking statements are inherently uncertain.

A number of factors could cause actual results to differ materially from these statements.

These factors are identified in our filings with the Securities and Exchange Commission over the last 12 months, copies of which are available from the SEC or from the Company upon request.

I will now turn the call over to Randy Potts.

Randy?

Thanks, Sheila.

I think all will agree that we knocked it out of the park in our fourth quarter.

We delivered nearly 30% more motorhome and towable units in the fourth quarter of fiscal 2013 than the fourth quarter of last year.

In fact, we had over 36% growth during the fourth quarter year-over-year in nearly all motorized categories, as well as in the travel trailer segment of towables.

On an annual basis, fiscal 2013 deliveries were the highest we have experienced in five years.

This growth was driven by having fresh new products that meet our customers' needs, in addition to having a great environment for growth within the RV industry.

We have introduced a number of new and innovative products within the past few months, some of which are just now going into production.

We talked previously about the new entry-level Forza and Solei that are in the sweet spot of the fastest growing segment of the Class A diesel market.

We introduced the first 34T floorplan this summer and now have begun to built the new 38R floorplan.

Early results show that these products are being accepted well by both our dealers and retail consumers.

We are also introducing the first motorhomes to be built on the new Ram ProMaster chassis in both Class B and Class C product lines.

We have always prided ourselves on being first to market with innovative, new chassis offerings; and both of these product lines provide Winnebago Industries with tremendous potential for market share growth.

The Class B Travato as well as the Class C Trend and Viva!

are all very fuel-efficient and maneuverable, with unique floorplans and storage opportunities.

Due to the great acceptance of our products in the marketplace, we have had six consecutive quarters of increased sales backlog.

But we are not standing still.

We will continue to be in the forefront of new product development.

In addition to the success we have had in the RV segment, we continue to move forward with our Metro transit bus project and received Best of Show award at the recent BusCon in Chicago.

We are building relationships through our distributor, and we feel confident these will provide us with solid business going forward.

In addition, we have signed a brand licensing agreement with Brandgenuity that will enable us to leverage our well-known Winnebago name for products in new categories including camping gear, apparel, outdoor furniture, and more.

We are very excited about opportunities that await us in the year to come and believe we have even further growth potential in fiscal 2014.

With that I will turn the call over to Sarah for the financial review.

Thank you, Randy.

I am pleased to review the financial performance of the Company's fourth quarter of fiscal 2013.

Net revenues for the fourth quarter were $214.2 million, approximately a 32% increase from the fourth quarter of fiscal 2012.

The primary growth in revenue was a result of a significant increase in motorhome delivery.

Compared to the year-ago quarter, our operating margins expanded by 320 basis points, from 4% to 7.2%.

Our business model delivered increased profitability via improved gross margins and leverage within our SG&A line.

Key factors that positively impacted our margins relate to better variable and fixed-cost absorption due to firmer pricing associated with the new product offering; purchasing leverage achieved through increased volume; and relatively low commodity pressures.

The fourth quarter of fiscal 2013 was an exclamation point to a very successful and profitable 2013 for Winnebago Industries.

During the year we experienced significant growth in both the top and bottom lines.

Net revenues grew by over 38%, and our operating profit grew from $9.5 million in 2012 to over $44 million in 2013, a 366% increase.

There are numerous reasons that influenced our success in 2013, but the key driver was our ability to execute on our legacy business strategy -- deliver quality motorhomes that present a high value proposition to our dealers and retail consumers.

In fiscal 2013 we also made considerable advancements in creating future growth opportunities for the business.

Substantial changes were made in our towable operations this past year.

These efforts allowed us to achieve our goal of an operationally breakeven fourth quarter.

Excluding non-cash charges related to the accelerated amortization of several intangible assets, our towable operations made a small operating profit in the fourth quarter of the year.

The towable portion of our business also generated nearly $5 million of cash flow in the second half of fiscal 2013.

While we are pleased that we met this goal, we also understand that breakeven is not an acceptable outcome.

We continue to believe that the towable segment of the RV industry is an opportunity for us to expand and provide future growth for our business.

The fourth quarter also proved to be a strong quarter from a cash flow perspective.

We generated over $17 million of cash from operations.

A portion of the cash generated was returned to our shareholders through share repurchases.

Approximately $1.5 million was returned in the fourth quarter.

This brings our year-to-date share repurchases up to nearly $13 million, which equates to over 3% of our outstanding shares.

Going forward, we will continue our recent practice of repurchasing shares at opportunistic levels.

While many positive things occurred in fiscal 2013, we still encountered challenges.

As I noted earlier, our towable organization is headed in the right direction, but on a full-year basis it was dilutive to earnings.

Another challenge we are still facing is a shortage of Class A gas chassis.

We are working diligently with our supplier to overcome this obstacle.

The Class A gas segment of the motorized industry has shown tremendous growth in 2013; and for us to fully capitalize on this opportunity, the supply constraint needs to be resolved.

As we mentioned earlier, we are pleased with the results of fiscal 2013, but we are even more excited about the outlook for fiscal 2014 and beyond.

The RV industry continues to rebound nicely, and the most notable increases appear to be in the motorized segment, which plays directly to our strength.

To further exploit these industry growth dynamics, we have developed and introduced new motorized products that have created excitement within our distribution network.

This is apparent as we continue to have an extremely strong backlog of nearly 3,400 units at the end of the fiscal year.

When we couple the recovering factors in the motorized segment with our internal growth initiatives, it creates a promising outlook for Winnebago Industries.

As we look forward I would like to remind everyone that the first quarter of fiscal 2014 is a 13-week quarter, rather than the 14-week quarter we experienced in fiscal 2013.

I will now turn the call over to the operator for the question-and-answer portion of the call.

(Operator Instructions) Greg Badishkanian, Citigroup.

Great, thank you.

Really nice quarter.

Just wondering in terms of the backlog, up really strong.

And I am just wondering, would that tell us that the level of discounting and promotions that you have seen through October is on the moderate side?

Absolutely, Greg.

I think we have been saying through this recovery that there hasn't been much pressure, at least on us, for discounting and promotions.

And I think that reflects in our results.

So yes, that is certainly fair to say.

Great.

Also, dealer inventory levels, they seem on a sales -- given the sales step-up they seem pretty reasonable.

What are they telling you about how comfortable they feel about that?

Obviously there is a backlog, so it tells you there is -- they could use a little bit more inventory.

Yes, that is definitely reflected in the order position.

Our dealer inventory is very reasonable in regards to what the retail registration run rate has been.

If you look back on the last year, it means that our dealers are turning inventory at least 2.3 times.

And with retail registrations on a growth trajectory, that means more is needed in the channel.

The inventory is very new and fresh, which is important as well.

So that is not a metric that we look to be of concern whatsoever.

Just -- I know you don't necessarily get very specific guidance, so maybe qualitatively if you could, how should we think about if you have another solid year -- maybe not as strong as it was in fiscal 2013.

But if you do see some sort of 10% to 20% sales growth, how should we think about margins and levering that sales growth in incremental margin?

Well, what we have seen play out in this past year, as the volumes have notably increased from a production standpoint, that has provided significant leverage.

A lot of that variable margin drops to the bottom line.

So there are still more opportunities on that front prospectively.

When you look at our fixed-cost structure, those fixed costs have come down as a percentage of revenue.

When you look at on a fiscal year basis, we are under total fixed costs of 6% of net revenues; and a year ago at this time they were over 7%.

So fixed is an opportunity, but we are also seeing the mix dynamic create -- in a different profile, depending on where the demand is with the product.

And we have offered a lot of exciting new products to the market that we are really starting to deliver now in fiscal 2014.

So those margin profiles are going to be a part of our future.

So there's opportunities for further leverage with further volume increases and opportunities in regards to new product in the marketplace.

Right.

Yes, that's helpful.

So there is no maybe stepped up level of investment somewhere that is going to eat into potential upside to profits, if you continue to see strong sales growth.

You will still be able to leverage it like you have this year, right?

That's fair.

We always have an R&D investment on an annual basis, and we have done a lot, and that is reflective of the products we are bringing to the marketplace.

But we are pretty excited about the outlook.

Right, right, good.

Thank you very much.

Morris Ajzenman.

Hi, guys.

Just curious, our government finally came together and made an agreement last night.

Have you seen any changes -- and again this would be just an interim, short-term phenomena -- but the consumer reacting to that?

Have you seen anything in October?

I know numbers out yet; but any sort of reverberation from that?

I can't say that we have tied anything directly to that.

I think if it were to create a dramatic rise in interest rates, that could affect business) a certain percent of our retail buyers borrow the money to make the purchase.

If it were to affect the value of stocks, if it were to affect the stock market, that would potentially affect people's sense of wealth, and that could have an effect.

But neither of those things is happening at this point.

So the answer is no.

Thank you.

Switching gears, chassis, how long do you think this shortage allocation plays out, or continues?

We are -- the plan is that it should clear up over the winter.

Our supplier has a plan to increase production.

The unknown is if demand continues to increase, will their production increase satisfy that?

And we simply don't know that.

But we are assured that more chassis will be available midwinter.

Okay.

Last question again, jumping around.

For the fiscal year, albeit you generated cash in the fourth quarter, but for the full year -- and for good reason -- working capital was up $28 million.

So you didn't generate that much free cash flow.

How does it play out for this coming year?

Again, it is all dependent on top line growing.

But if top-line grows moderately, whatever that means, how should we look at working capital for fiscal 2014 versus fiscal 2013?

Well, we definitely had an investment this past year in inventories, in light of the increase of our business.

And depending on the growth that is continuing to be experienced on a prospective basis, that could require more inventories at a higher level.

But we do see that there is an opportunity to have a stronger free cash flow environment in fiscal 2014, in light of what we have invested this past year.

Let me ask one last follow-up to that, and I'll get back in queue, on the cash flow perspective.

Let's take an assumption.

Let's say revenues hypothetically are up 10% fiscal 2014 versus 2013.

With a 10% gain, what sort of change would you extrapolate working capital would have?

Well, maybe I will approach that a little bit differently.

When you look at fiscal 2013, and I will just use cash generated by operating activities, we had net income over $30 million and a third of that flowed through in regards to operating activities.

On a go-forward basis, I think there is an opportunity, not necessarily one-to-one in light of where the growth is on the revenue side and net income.

But I think a more significant portion of net income should flow through, down to operating activities than what we saw this past year.

However, when you look at investing in ourselves, we invested over $4 million in CapEx this past year.

And if you look at the last five years we haven't collectively invested a lot in PP&E from a Winnebago total standpoint, and we are looking at that being a need in regards to our cash for 2014.

We are anticipating that we could be spending CapEx in the range of $10 million this next year.

So that would be an investing activity that is fair to consider outside of cash flows from operations.

And then we used, as I touched upon in my opening remarks, this past 12 months almost $13 million from a financing standpoint in our activities on the cash flow, buying back stock.

That remains to be seen as to how that will play out this next year.

But the increase in our inventories this past year was a function of such substantial growth, and I don't expect that we should have that phenomenon play out nearly to that degree on a go-forward basis.

Thank you.

Kathryn Thompson, Thompson Research Group.

Hi.

Thanks for taking my questions today.

My first question for me, could you give a little more granularity for the driver of gross margin expansion in the quarter?

How much would was due to pure volume growth versus mix?

And maybe getting a better sense of overall mix in terms of pricing.

And then also to what extent towables also contributed or didn't contribute to gross margins?

Good morning, Kathryn.

From a margin standpoint, you look at on a year-over-year basis the fourth-quarter expansion was 190 basis points.

If you look at the two key drivers that really were a function of that, probably almost 70% of that was a reduction in the variable costs and the remainder was our fixed component.

Now, we have an element of costs you could attribute in our variable costs that are more fixed-like because it is people related.

And as you look at benefits, healthcare, etc., there are some fixed components there.

But we saw upside in the fourth quarter that was a function of inflation that didn't occur.

We have been looking at inflation to be an assumption in our pricing and it hasn't yet materialized.

So that was a positive.

The mix of the products can move the material content around.

But that was a key part of why the variable cost dropped.

Now from the standpoint of our increase in production, we sold a lot more units; and at that same time that is exactly what the production schedule was increased by.

And we are continuing to see that leverage play out in better absorption on the fixed-cost front.

So that is still a key reason, if you want to attribute about 30% to that improvement there.

But the new products that we are introducing to the marketplace are a facet, as well, in relation to -- we are establishing the price points and there is on a go-forward basis some products that we are bringing that is entirely new.

And until competition catches up to that, we kind of set that stage.

Okay.

Pulling the string on that new product in the backlog, could you talk about the margin profile of the current backlog?

Is it a similar profile to the products you sold in the quarter?

Or is there any change in terms of higher mix of products with higher margins?

From a backlog standpoint, I think there is some upside opportunity, when you look at what is in the backlog.

There is a lot of new offerings there, as I was mentioning.

And Randy touched upon it in regards to the products in the standpoint of what we are building on, the ProMaster chassis, and then also our new product offering in the lower-priced diesel segment.

So there is -- let's say approximately 20% of our backlog relates to new products on a go-forward basis.

A lot of that is in production and being shipped now into the marketplace here in this first quarter.

So I don't -- there is not a very significant movement in the margin profile.

Going back now into Q3, we had more of the Class C rental kinds of products sold there.

So in the third quarter, I would say that there was a different margin profile at that time.

But in quarter four and then going forward in quarter one and even into quarter two, because we are defining our backlog to be products we will ship in the next six months, not necessarily all in the next quarter, I don't think you see a really dramatic shift.

But there are some opportunities for us there.

Thanks.

That was very helpful.

Then finally, when you look at statistical surveys -- and understanding that we know all the shortcomings of some of the data that happens with statistical surveys -- but nonetheless, it is something that we in the industry use to track industry retail sales.

It appears that your Class A retail sales, the momentum wasn't as large as some of your peers in July and August.

It would raise the question of how much discounting from some of those peers there were.

Could you maybe give a little bit more color on why the delta, the potential cause, and what we can expect going forward?

Yes, Kathryn, I think there's a few things at play there.

One of them I addressed in my mentioning of our new offerings in the entry-level diesel pusher products.

That is a market that really until we came out with this offering, we just didn't participate in that market at all.

And that market grew very fast in this last year.

So that is a big part of it.

We are really seeing good success with our new products in that market and we think we are going to plug those holes.

But that is certainly a piece of it.

Another piece of it has to do with this supply constraint of Class A gas chassis.

I think most everybody in the business right now is selling everything they can get their hands on.

There was a smart play by one of our competitors to buy some chassis from another competitor that was recently sold.

So I think they got a boost out of that, and they were able to put more Class A gas products on the market than we were.

I don't know that it really has anything to do with discounting.

I truly don't know.

I suspect it doesn't, because the market is very strong right now and those products are in demand.

So I think those are the two main drivers.

Last, I appreciate you prefacing the question with some uncertainty about the stats, because there are a lot of things that play out there.

There are times that survey underrepresents what we really see was retailed; and then there's times that it over-represents it.

And those differences are constantly in play, so you do have to give it some time to smooth out, because it does catch up over time.

Okay.

Thanks.

For what it's worth, our dealer surveys are not showing above-normal discounting at all from other (multiple speakers)

Yes, that is what I would expect, too.

All right.

Thanks.

That's the questions I have for today.

Thank you.

Craig Kennison, Robert W. Baird.

Good morning.

Thanks for taking my questions as well.

Maybe, Sarah, I will start with you.

Could you give us the ASP by category for each unit?

Certainly.

I'll start on the motorized side in the fourth quarter.

Our Class A gas average selling price was $91,807, compared to $90,701 last year; so we were up 1.2%.

From a Class A diesel standpoint, $190,774 versus $199,975.

So we saw a 4.6% decrease in our average selling price on Class A diesel, and that is strictly driven by mix.

So our blended Class A average selling price was $124,297, compared to $125,852 last year.

So down 1.2%.

On the Class C front, our average selling price was $73,186 as compared to $78,658.

So we saw a 7% decline there, and again very much a function of mix and new product offerings at a lower price point.

Our blended A and C average selling price was $106,683 as compared to $106,385 a year ago, which is down 4.4%.

From a Class B standpoint, our average selling price was $79,045 versus $76,380; so that was up 3.5%.

So our blended motorized ASP was $100,377 versus $104,023.

And then on the towables side, our travel trailer ASP inside the fourth quarter was $19,947 versus $18,557; so that was up 7.5%.

Our fifth wheel ASP was $28,131 as compared to $29,504, so down 4.7%.

The ASP blended then for travel trailers was $21,226 versus $22,510 last year.

Great.

Thank you for that.

Then, Randy, could you help us understand the backlog?

Obviously it is a huge backlog, and in a perfect world you would likely want to produce more units.

I am trying to understand what your primary constraint is.

Is it that you can't get enough chassis or that, even if you did have enough chassis, you wouldn't really have the people to produce enough units per day to meet that demand?

It is a real mix of things, Craig.

The chassis constraint is certainly one of them.

We are building -- as it pertains to Class A gas chassis, we are really hand-to-mouth with the supplier.

We are building on those chassis as soon as they arrive, always pushing for more.

But it is also true that if they all arrived on our doorstep in the next month, I mean, if the entire backlog of chassis supply arrived on our doorstep in the next month we couldn't respond to that.

You simply can't move the business that fast.

So both of those are very real; but there's other things going on.

Some orders are forward-placed by dealers.

They know that the market has become more robust, so they are reserving their place in line.

They are placing orders for future delivery.

So some of that is intentional.

I don't have in front of me exactly what percent of the backlog that is, but it is a piece of it.

Another piece of it is chassis -- I don't want to say constraints.

But some of our chassis that -- well, the Sprinter chassis that come from Europe, we have to have pretty long forward-order positions on those.

Those chassis have a long lead time because they are built in Europe.

So in a growing market we are always trying to catch up with that, too.

And that is not to say that they can't produce more, but we are using more than we would have anticipated, possibly six months ago, and so on.

So that is another piece of it.

There's certainly a lot of pieces to it.

The one thing I would want to add is, as it relates to the new product development or the new product launches, that creates pretty specific timing on our side, based on all the things that have to happen to start up a new product.

That is a very good point.

So when you look at Class A diesel, our new offerings are the Forza and the Solei.

We have a strong backlog position in diesel, because there is great demand and interest in that new product offering.

And we began production of that in September.

Yes, so it is basically the pipefill phenomenon, that the orders are there and we have to ramp up production on those new products to fill them.

And there is an element, when you look at the Class C order position or backlog position, our Trend and Viva!

is a new product offering there, which is also very, very much on our side timing of -- as soon as we can have that product in our production schedule we are building that.

But it is a planned process.

Yes, and we are just beginning production of those products on that ProMaster chassis.

Then the last component would be the Travato, which is a Class B product.

Same dynamic, and that is -- both the Travato and the Trend are a good portion of the orders that we have on hand at the end of August that you are seeing.

So we are planning from a labor standpoint to have all the people we need when we need them, based on what we know we can build due to timing of the products launches, and then also considering the constraints on the Ford that Randy already covered.

So at this point we haven't had a labor constraint that has impacted us from a production perspective.

We have adequate supply from a resource standpoint.

It is more timing of new product launches and one particular constraint.

That's really helpful.

As we look at your daily production, if you will, do you see any changes in what you are capable of producing of producing on a daily basis?

I know the mix of A and C, for example, can vary, and that can vary your daily production level.

But are you staffed today the way you have been staffed for the last few months in order to produce roughly the same number of units on a daily basis?

No.

Our employment level continues to climb gradually as we have increased production.

I don't want to look too far ahead, but that will be our goal as the market continues to come back, to heal.

Then just as you look at the production mix, sometimes we would look to the backlog to say that will be a rough mix of what your production will be.

But, Randy, based on your comment that there are some forward orders from dealers trying to get a spot in line, is it probably the case that your A, backlog is a little bit over-representative of what you are producing, from a mix standpoint?

The gas A backlog is probably the furthest out, yes.

Then my last question.

Sarah, any LIFO impact on gross margin in the quarter?

That is a very fair question.

We do that analysis on an annual basis; and yes, there was a LIFO impact.

It is very similar, actually, to what we experienced a year ago in the same quarter.

So on a year-over-year basis, not a notable item.

But on a sequential basis, a relevant component.

Kind of similar to some of the commentary I had on a previous question, the materials side of our cost structure we have not seen inflation on a year-over-year basis.

And then adding to that the lower cost associated with us on a standard variable and fixed overhead perspective, and our average hourly rate with hiring more newer employees -- all in, we have a deflation environment year-over-year.

So when you look at an annual basis we had a LIFO reduction in our reserves of over $1 million.

So very fair question.

Great.

Thanks a lot for taking my questions.

(Operator Instructions) David Whiston, Morningstar.

Good morning.

Can you say what your capacity utilization was for the quarter?

We currently calculate it at just a little over 70% utilization, roughly 70%.

Maybe it's slightly north.

And maybe just to say for informational purposes, similar to what we have said on previous conference calls, that is a physical plant look at our capacity.

But we are working -- from the standpoint of our labor resources, everyone is working and there's a lot of areas working overtime.

So we are utilizing all of the facilities, but we have the ability to run faster on a prospective basis if we continue to see the ramp.

And that is the goal and objective, based on the demand we see out there.

Yes.

We use the final assembly process, our final assembly lines as our constraint.

That is how we measure it.

I guess somewhat related to that then is, I know you guys had to close some plants in the downturn.

Is there a point a few years out where you think, if deliveries need to get the axe, that we would need to open another plant?

Well, that is certainly possible.

And if and when that time comes, I think we will try to approach it in a way that we might be more flexible than we were able to before.

I know that is pretty foggy, pretty gray, but closing those plants was very painful for a number of reasons.

When the time comes to increase capacity we are going to try to be more creative.

I know that is a very, very vague perspective.

But I guess what I am trying to convey is that we are going to try to look at this business in a different way going forward.

We need to find ways to grow the business while being more flexible to the economic cycles.

That actually feeds well into my next question which is, as growth continues to ramp up in fiscal 2014, on the outside you have got your chassis issue with the Class A constraint; but what about internally?

Is there an area of your manufacturing process, your design process, that is a bit of a bottleneck, or just something that you think you could do better?

Yes, we are always bumping up against constraints internally and addressing them in the best way we see fit.

If they are a design-related, engineering-related constraint, as you mentioned, we will address that either by changing the staffing levels or potentially outsourcing that work to engineering firms.

That is another way.

There is temporary help available.

There is a lot of ways we can address that kind of thing.

As far as in the factory, kind of a similar thing.

We can increase capacity in some areas by adding shifts that aren't working, three shifts.

In some cases it is a matter of updating machinery that is more efficient.

And in some cases it is outsourcing that excess capacity.

So we are keeping all those things on the plate.

Again, it is all in the vein of being flexible going forward.

We learned some very hard lessons in the recession.

Okay.

Finally, any color on what the noticeably higher CapEx spend will be?

What is that for?

Well, actually directly attributed to Randy's comments there, there are investments we see that can help us be more efficient and eliminate labor in some of the areas from a manufacturing perspective.

So we are looking at investing more in our self to some degree in that regard.

And also on the IT front, updating systems and investing more in that area is part of our plans for 2014.

We recognized a long-term need to modernize our IT system, and it will be an evolutionary process for us.

Okay.

Thanks so much.

Morris Ajzenman, Griffin Securities.

Hi, as a follow-up to one of the previous questions asking about capacity utilization and throughput, etc., either one or two calls in the past you guys threw out that, on the current infrastructure, potential revenues could approach -- at a peak, I presume, running full out -- about $1.1 billion in revenues.

Then I think another comment was put out that you believe the industry can ultimately approach 55,000 to 60,000 units per annum.

Are those numbers that you guys are still comfortable with?

Well, those industry volume numbers were based on the history of the industry.

We're consistent in saying that for over 25 years, prerecession, the industry was in that 55,000 to 60,000 unit market.

Sarah has got her calculator out and she is checking that.

First part of the question you had, I will let Sarah handle that.

When you look at the business maybe in a couple different lights, on the motorized side we calculate that we have the capacity -- certain assumption on mix, etc.

-- that we can produce in that 10,000 unit per year.

Maybe higher, maybe lower, depending on mix.

And if I just use the ASP we just highlighted as our fourth-quarter average, that is $1 billion just on the motorized side.

There's other revenue streams that are relevant on top of that, notably towables, and other elements from a business development standpoint that we touched upon that we are concentrating efforts.

So to answer simply, I think that is still a fair way to look at that.

ASPs obviously can impact that up or down.

And what the other revenue streams do from a growth standpoint is relevant, too.

Thank you.

Ladies and gentlemen, with no further questions, I would like to turn over the call to Mr. Randy Potts for closing remarks.

Mr. Potts, you may proceed.

Thank you.

As Sarah said earlier, we are optimistic about our future.

Over the past three years the industry outlook catchphrase has been -- we are cautiously optimistic.

Based on the results of fiscal 2013 and the outlook for the future, we are ready to drop cautiously from our perspective on the future.

We believe there are great opportunities for growth going forward in both our traditional RV market as well as the new prospects provided in transit buses, licensing our name, and elsewhere.

We are forging new paths for success and excited about the possibilities they present.

Thank you for joining our call today.

We look forward to speaking with you when we report our first-quarter fiscal 2014 results on Thursday, December 19.

Ladies and gentlemen, thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect and have a great day.