Christi Cowdin - IR, Lambert Edwards Jason Lippert - CEO & Director Scott Mereness - President Brian Hall - CFO.

Daniel Moore - CJS Securities Scott Stember - C.L. King.

Good day, ladies and gentlemen, and welcome to the Drew Industries’ 2016 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, this conference call is being recorded.

I'd now like to introduce your host for today's conference Ms. Christi Cowdin of Investor Relations with Lambert Edwards. Ma'am, you may begin..

Thank you very much. Good morning everyone and welcome to the Drew Industries 2016 third quarter conference call. I'm Christi Cowdin with Lambert Edwards, Drew's Investor Relations firm. And I am joined on the call today by members of Drew's management team, including Jason Lippert, CEO and a Director; Scott Mereness, President; and Brian Hall, CFO.

Management will be discussing third quarter results in just a moment. But first, they have asked me to inform you that certain statements made in today's conference call regarding Drew Industries and its operations, may be considered forward-looking statements under the securities laws and involve a number of risks and uncertainties.

As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements.

These factors are discussed in the company's earnings release, in its Annual Report on Form 10-K and in its other filings with the SEC.

The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by securities law. With that all being said, I would like to turn the call over to Jason Lippert.

Jason?.

Thanks, Christi, good morning everyone. We are happy to announce, again announce the record results for the third quarter of 2016. The highlights for this most recent quarter were sales of $412 million compared to $345 million in 2015 and $1.3 billion year-to-date versus $1.1 billion last year-to-date.

Operating margins were 10.9% in quarter three versus 7.9% last year quarter three, a 38% improvement. Year-to-date operating margins are 12.6% while last year's were 8.7% representing a 45% improvement over last year-to-date.

Wholesale demand for total RVs has far exceeded initial industry expectations especially in the third quarter where we saw 32% and 21% increases in wholesale demand over prior year in August and September respectively.

In addition RV retail activity has remained strong throughout the year and expected to continue based on what we are hearing from our customers and the dealer body. Our margin improvement year-over-year is coming largely from several areas.

Higher incremental margin of higher sales, purchasing businesses with higher than historical margins, improvement in medical and work time costs, attrition improvement, continued lean and efficiency improvements, commodities, focus on higher margin products and online markets and adding content are all contributing significantly to our improvement in margins year-over-year.

In addition as we continue to make acquisitions and further R&D efforts we are focusing more intensely than ever on unique products with potential IP which ultimately drives higher margins. As most of you know, the annual Elkhart open house dealer show took place in mid September and it was a huge event with many successes.

All of our customers reported great activity with respective orders, in many cases dealers reported having record years while also commenting that retail traffic remains very solid. Most OEMs including Thor reported record backlogs due to a strong open-house.

In addition and maybe most importantly, RV OEMs have announced in the last several months that they’re adding approximately 16 more facilities in Northern Indiana and in the west to help address the increasing demand for travel trailers.

These facilities could add another 10% plus in production for the industry and will likely all be fully operational over the course of the next year.

As I said in the past quarter, we along with other industry leadership feel that the RV industry is heading towards wholesale production of 500,000 units over the next three to five years and the capacity additions that are taking place in the RV business are certainly helping to make that a case.

Canada’s volume has been significantly off in the prior 24 months, so it's important to know that we are hitting record volumes without Canada's normal purchasing volumes. Canada will likely come back when their currency strengthens and when they do it will be another shot in the arm for our business.

So all in all things look very positive for our core business, we are going to be focusing heavily in the coming quarters and actions we need to take to stay ahead of demand.

Smaller and more affordable RVs and all price points and categories, new core plans, features and benefits along with the changing demographic where the younger RV buyers are certainly participating seem to all be helping the continued year-over-year improvements in shipments in the RV business.

Content was up 2.5% per travel, $73 improvement year-over-year and 8.3% at the motorhome which represented $150 year-over-year improvement.

While these numbers on the surface demonstrate modest improvements year-over-year content clearly is being impacted by the fact that all units, motorhome, fifth wheels and travel trailers are all selling more products at the entry level price points.

That said we do feel more of our new products will have a positive long term impact on content despite the trend and demand for the lower cost RV.

Our launch of new products such as travel trailers leveling and My RV specifically have the potential to add another $1,200 to $1,400 in the travel trailer category which would take our content up another 50% on travel trailers. This is huge considering that travel trailers make up over 60% of the RV market.

As we have in the past we will continue to focus on R&D to create new products that will be desirable on all trailers no matter how entry level the products. Travel trailer leveling alone could conservatively be $200 million plus market at approximately half of the travel trailers adapt leveling.

At open-house we launched travel trailer leveling with 15 travel trailer brands so the movement is starting to happen. As we head towards next season, we continue to be focused on the new products initiatives including leveling in My IRV and other featured new products.

We have been saying now for the past couple of years that our acquisition pipeline has been more full than ever due to our enhanced focus on our strategy outside the core RV business. We announced just last week our plans to acquire Atwood Seating and Chassis Hardware from [indiscernible].

If you were to go back prior to four years ago, our only acquisition focus was in RV. Today with our more diverse market strategy, our addressable market is $3.4 billion and our acquisition pipeline has increased fivefold with businesses and other markets like horse and cargo trailer, buses, heavy truck, marine, European RV, and RV aftermarket.

This year we have announced four acquisitions and three of them were outside of our core RV market.

Focusing on adjacent markets and aftermarket strategies will do many things including helping us continue our goal to drive diversification outside our core business from the RV industry cycles in the future as well as drive our overall margin potential higher.

Today we now have approximately $560 million of our trailing 12 months sales outside of our core towable RV OEM sales.

Our focus here will continue to center around the transit bus, school bus and commercial bus markets, cargo trailers, and [indiscernible] trailer markets, the marine markets, and heavy truck as well as the European RV and aftermarkets that relate to the industries that we serve.

We have acquired some great companies outside of the core North American RV space including our first European RV component supplier Project 2000 acquired in May of 2016. Our smaller business, the sales are up year-over-year approximately 33%.

It is important to note that most of their products are protected by patents and other intellectual property which again produce better than historical margins for us. Also we have already started cross selling net products in the U.S.

RV market, our goal is to find other companies like Project 2000 in Europe that will allow us to build the portfolio great companies and strategy in Europe that will mirror what we have done in the U.S. With respect to the aftermarket this business is still experiencing high growth with our total aftermarket business up 31%.

We are putting $1 billion in component products in the new RV vehicles every year and now we expect the need for our products in the aftermarket to continue to grow at a great pace as a result especially as we continue our intense focus on dealers and retail customers.

All in all, we are continuing to focus on a strategy that turbo-charges revenues in these other important markets driver further growth and margin improvement. Our team has resolved to continue to improve our results.

We have been saying for the last few years that we stuck to our core market, adjacent market and aftermarket strategies that we would be able to get back to our peak operating markets than we have. Furthermore, we feel we can go even farther with our added focus on lean, attrition, and more products innovation.

We are excited about the future and we will keep you updated on our progress with our key strategies. It's an exciting time for the business as the RV industry is preparing for an expansion over the next couple of years. I want to take the last part of my comments to thank the fantastic employees and customers.

This year LCI Drew's only operating company celebrated the 60th anniversary. I am continually impressed by how much our workforce is capable of and the more experience we get the more we are accomplishing. We have a great and loyal customer base that is another big key to our success and we are fortunate to be able to work for such great partners.

As many of you know we are in the process of selecting a new CFO and I would like to introduce Brian Hall, who is our interim CFO. Brian has been with us for almost four years now as our corporate controller and has done a great job leading it through the last CFO transition.

I will not turn things over to Brian for some color on the financial side of our business..

Thanks Jason and good morning to everyone on the call. I would like to first pause and personally thank everyone for their support and express my excitement for the opportunity that I have in front of me.

This company has done some amazing things accredit to the direction of its board of directors and the talent of the various teams throughout their organization. And I am excited to play in any role in its success.

I will now take the few minutes to provide some additional color regarding the financial results as well as point out some highlights of our cash flows and financial position. First, our net sales for Q3, 2016 compared to Q3 2015 increased by over $67 million or 19%. As Jason just mentioned this was driven significantly by RV industry growth.

And I would add acquisitions also contributed over $13 million to the quarter and our aftermarket segment grew net sales over 21% when compared to the prior year same period.

Our net sales for year-to-date 2016 compared to year-to-date 2015 increased $207 million or 19%, again driven significantly by industry growth, acquisitions contributed over $47 million and almost 31% growth in aftermarket net sales. Regarding profit, Q3, 2016 earnings per share increased 70% when compared to Q3, 2015.

Year-to-date earnings per share is $4.15 a share compared to full year 2016 of $3.02 per diluted share. This improvement was driven primarily by five items many of which we have previously discussed. First, the incremental margin mentioned by Jason on the increase in net sales.

Second, lower steel and aluminum prices and strategic purchases of these commodities. I will note that year-over-year comps on steel and aluminum pricing had less of an impact in Q3 versus the prior few quarters and we expect this to be flat during Q4. Additionally, no headwinds are currently expected for the next couple of quarters.

Third, the headcount reductions made in Q4 of 2015 while we have since have had additional personnel to keep up with the growth we have experienced. We have been able to limit them to strategic areas. Fourth, investments and lean. This has been key along with the change in sales mix to drive 40 basis point improvement in our direct labor along.

And just as important allowed us to free up increase capacity, the current year alone we have increased square footage by over 150,000 square feet.

Last would be other items such as sales mix, medical cost, fixed cost leverage, our team has done an outstanding job and has seen tremendous success in winning higher margin business, redesigning our medical plan and the reduction in employee turnover just a name of few. Last, I will speak briefly on our cash flows and financial position.

Net cash has increased from net debt of $38 million at December 31, 2015 to net cash of $45 million at September 30. This increase is driven primarily as a result of strong operating results and reduction in inventories by over $10 million.

This cash was used to return over $22 million to shareholders in the form of cash dividends fund capital expenditures of $22 million and fund acquisitions of over $34 million net of cash acquired.

The strength in our balance sheet allows us to stand poise to take advantage of any strategic investment opportunities as well as position us for some growth CapEx which we are looking to experience over the next couple of years. That is the end of our prepared remarks. Luanne we are ready to take questions. Thank you..

Thank you. [Operator Instructions] And our first question comes from the line of Kathryn Thompson with Thompson Research Group. Your line is now open..

Good morning. This is Winston covering for Kathryn.

My first question can you provide more color on how smaller volume growth magnitude this quarter and how raw material and product mix drive your growth margin in Q3?.

Are you looking at Q2 versus Q3?.

Yes and the volume growth magnitude of smaller versus industry this quarter?.

Right. Our sales declined in Q3 versus Q2 by roughly $30 million. So as expected our operating margins came down with that when you look at the fixed cost combined with the lower sales, this would be both the focus in cost to goods sold or manufacturing cost.

As we look to maintain our improvement in turnover and we had a true focus on labor in those areas. The same would be true for SG&A. Our labor costs there remain relatively fixed during the period of lower sales.

And then, if you couple with that the combination of the focus on our profitability and the slowed capital spend that we have seen over the last 12 months this has resulted in a significant increase in our return on invested capital, our ROIC.

If you look at that over a trailing 12 months period ended September 30 we are roughly around 37% to where when you look at 2015 we were around mid 20s, 25%-26%. This significant increase in ROIC is the key driver for our incentive comp internally. So we are seeing some increased costs there..

Okay.

Was the quarterly industry shipment pretty strong particularly on the [indiscernible] side? And what are the drivers behind the volume decline in Q3 and then how should we think about it going forward over the next couple of quarters?.

Can you ask the first question again?.

Yes. So industry shipment in Q3 is pretty strong.

And so my question is, how should we think about it going forward the kind of impact on your performance?.

So, this is Scott. So from when you look at on an LCM basis, when you look at wholesale versus retail inventories have grown now 5810 units over the last 12 months. The month prior was actually negative number. So when you think about the total retail units of well over 340,000 units.

It's really just over a percent delta when you look at 5810 number there. So we think about what’s going on last month or two from a wholesale versus retail number. We think it to be expected. There is less inventory in the pipeline just a few months ago and now with maybe a little bit more inventories to be expected as dealer replenish the pipeline.

So we feel like again it still looks like a normal environment even though last two months had strong year-over-year numbers compared to August and September of 2015 things are good and appear to be normal from an inventory standpoint..

This is Jason, I would add that typically November is when the OEM start building, the RV OEM start building all of the open-house orders. That's when things kind of start to pick up. So we have to keep our labor force around and engaged through that slower period which is typically in third quarter until the OEMs ramp up.

So we have been talking a lot about attrition and focusing on attrition and keeping employees and part of that is keeping the workforce engaged even when volumes dip a little like they did last quarter.

Volumes were up and our sales were down so that point is right to mix and more the entry level type units being build that are ultimately lower content..

Okay.

Thanks for the clarification and for adjacent industry OEM could you provide color on the contribution from acquisitions versus organic growth and can you also comment on the current acquisition pipeline for this segment?.

Yes. Looking at the OEM adjacent industries I would look at that as maybe 75:25 split on acquisition being 75% of the growth and organic being the remaining 25% for the adjacent industries.

Within the adjacent industries three out of the four were adjacent for this year, I think that was your question Winston wasn't it?.

Yes.

And how is the acquisition pipeline right now?.

Well, we talked about it. If you go back three or four years ago right now it's a fivefold increase in terms of the numbers of companies that we are looking at which is great part of our story. $3.4 billion worth of addressable market, just a few years ago we talked about a number of $1.6 billion.

So we have done a great, our team has done a great job of identifying new and different markets to be able to grow into profitably and as we continue to deploy capital into these new markets we usually find even newer markets for example, Atwood that we just announced last week has a new adjacent market in the side-by-side vehicle industry.

So we are looking forward to identifying whether or not that has other opportunities there. And certainly when we get a company that is already in our core adjacency that has one new one we have got that's definitely a bonus when we look at an acquisition..

Okay. Thank you so much. That's all my question for today..

Thanks..

And our next question comes from the line Daniel Moore with CJS Securities. Your line is now open..

Good morning..

Morning, Dan..

I wanted to drill in a little bit on gross margin. You gave very good color obviously. Looking at the share price reactions there it seems like, it was perhaps disappointing to some but it was certainly ahead of our expectations.

Given moderate input cost headwinds or inflation how would you rate the quarter relative to your internal expectations and as we look out to 2017 do you think the levels of gross margin that we put up this year or year-to-date are those sustainable, do you think you can retain and build off those barring significant spikes and input costs?.

Yes, I think when we look at the gross margin and how we set our expectations for this year, if you look at – if you go back and look at 2015 when you move from Q2 to Q3 we roughly lost 120 basis points in our margin then. This year we lost only 90 basis points.

So that's how we would look at and set our expectations and felt pretty good about the decline..

And then Dan to further qualify, I mean, the way we look at the businesses, we're operating on all cylinders in lighter green for the industry, lighter green for all the improvements that we made, our teams adjusted well this year as we made some drastic improvements in operating margins obviously year-over-year as we talked about in the opening comments.

So I mean, we feel really good about the business and where we're going and the fact that our core business, the RV business except for an expansion heading into next year with all those capacity being added, so I can trust enough how well we feel the business is being operated and the outlook for the coming quarters..

One more quick number Dan, just to look at, when you look at Q2 year-on-year, Q2 was expanded 380 bips in gross margin, Q3 was actually expanded 410 bips. So we've actually expanded gross margins better than what we did year on year in Q2 which we are proud of.

Even though if you look at it sequentially from quarter-to-quarter it's down 90, it's actually up 410, which is greater than the 380 in Q2.

So we look at that, we look at third quarter and we say to ourselves, we did a lot of great things and it was to be expected, it's right, its right where we want to be from a gross margin standpoint, so we are proud of our team and the expectation was right in-line there..

Very helpful and may be one more on that topic as we look out to next year, if we isolated sort of steel and aluminium and input cost alone.

Is there anything else that the remainder of the business based on where your capacity is today and your growth expectations, is there any reason we can't maintain or even perhaps grow moderately with operating leverage at the levels that we have seen this year?.

So first, I will kind of address, this is Scott, I’ll kind of address the commodity question.

So we have been saying for I think three quarters now that our material cost improvement as a percentage of the 300 bips to 400 bips improvement and operating margins have been partially attributable to materials started midway through the third quarter of last year, so we're half a quarter this year in Q3 of 16.

So going forward, we are fully lost now in Q4 and going point forward. I think a little bit difference and what I said on last call which we have seen April and May steel price being up. It was actually the peak sort of in a 10 month hindsight, it was the peak of where steel prices have landed so far this year.

We’re now seeing steel prices that are closed to Q4 of '15 not quite there, but close to Q4 of '15 which translates into no headwind for the next couple of quarters. So we're feeling pretty comfortable that steels prices are now low.

They are not quite as low as Q4 of '15, but we feel good that we're going to have another strong couple of quarters, but not any headwind or tailwind to mention.

And then you had talked about in the second part of your question, you had talked about, what have you talked about?.

Just capacity and your ability to sort of maintain those margins outside of simple cost?.

So you talked a little bit about operating leverage too I believe, so going forward as we look at gross margins I think, the operating margins were 12.6% year-to-date.

I think that when you look next year, I think you could look at a operating margin that might have a little bit of leverage, again we're going to try to control headcount like Brian had talked about earlier, some of hedge remarks and higher sales will lead to some of that operating leverage.

So we feel like we still can deliver that's one of our goals as a team is to deliver a slight improvement in operating margin going forward with the increased sales amount and controlling the fixed cost being added to the business. So, we probably think about it 10 to 20 points per year maybe of improvement..

And I just add a real quick Dan that we focus on lean and attrition are two big focuses for our company which will continue to give a small leverage in the coming quarters and we announced quarter one that we freed up 150,000 square feet of capacity in 2015’s lean event along with about $3 million in cost and we've already accomplished that this year and we will give more full update in Q4 with our Q4 results to give kind of evaluation of how we fared with lean.

But the focus on lean and attrition will continue to allow us to move margins forward as we do everything right there..

Really helpful and may be switching gears, cash flow from operations doubled year-to-date, year-over-year in generated over $200 on the trailing 12 month basis, you've done a tremendous job of pulling out working capital, are there more improvements to go or should we expect, working capital to sort of build more normally going forward with sales growth?.

I will just address inventory real quick and then these guys can chime in with some other comments, but inventory for Q2 was $149 million its up slightly to 161, but last year Q2 and Q3 those numbers were higher last year than they were this year. So, inventory turns are up.

But you see that from Q2 to Q3 our inventory is up slightly to deal with the higher sales base year-to-date, higher sales base. I think you are going to find that there is a point where that diminishing returns as far as inventory management, any other comments Jason..

Yes I think only I would add on top of that is just the other working capital items. I would expect those to continue to move on a normalized basis. Inventories are kind of the one variable that we had lot of focus on..

Got it and then lastly non-RV OEM revenues now like 35% of total continues to move higher, where do you see that heading three to five years from now?.

Well, all we can tell you if you look at the last you are obviously going to grow more significantly in that area through acquisitions than we have – than we did RV. RV was largely organic over the last 15 years and as we turbo-charge our adjacent market and aftermarket European strategies we are going to be looking at more acquisition opportunities.

So it depends on what we find and what we dig up on the acquisition side and like we said we have increased the amount of acquisitions that we are looking at 54 compared to where we were when we were only RV company or mostly in RV company.

So, we can't give you a projection on that but we can tell you that we are looking at a lot of companies and we are growing our business organically in those areas too and our customer relationships gets stronger year-after-year. We get more trust from those customers.

We have segmented those business units out a lot more so that they are very focused on those other markets and like Scott mentioned earlier we are still finding other adjacency to the existing markets that we have called out in through acquisition and through just our organic growth..

Dan it's close to $2 billion when you look at the non-RV market potential of the 3.4. So if you think about how that can grow over the next five years, I think that as we continue to talk about a decent amount of our acquisitions have been in non-RV.

If you look at acquisitional revenue being acquired of close to $100 million a year and but say three out of four are non-RV I think that can be maybe something to think about going forward..

Yes, seven or eight out of our last ten acquisitions have been outside of our core RV markets.

So that will kind of point to how we are thinking these days and – does that answer your question?.

It certainly does. It's great color. Appreciate it as always..

[Operator Instructions] And our next question comes from the line of Scott Stember with C.L. King. Your line is now open..

Good morning guys. .

Good morning Scott..

Yes.

Maybe just drilling in again a little bit more into the gross margin, I guess for the fourth quarter last year you commented on how, earlier this year the raw materials were pretty much be flat with the year ago but if I recall last year we were just in the process of headcount reduction in some of these other expense reduction menu that you went through.

Can you just remind us how much of it actually took place in the last year margin and I guess the point I am looking for is it seems like there is still some upside to what you did in the gross margin last year in the fourth quarter compared to this year?.

Yes Scott this is Brian. I will comment real quick that there was a nominal amount of improvements due to the headcount reductions in Q4 of last year. When I look back at the numbers it's a lot of – lot of it was driven on the material side because we had half a quarter worth in Q3 it went to full quarter worth in Q4.

What was the Q4 gross margin? 22% so Scott, if you look at 22% for the fourth quarter last year and you just say Q2 was up 380 basis points year-over-year Q3 was 410 basis points year-over-year I think you can look at that improvement from the last two quarters and that can help kind of signal where the business is headed..

And while we made while we initiated $10 million in labor reductions starting last October we had offsetting severance cost and things like that throughout Q4 and really didn't see the full benefit there until the start of the first quarter of this year..

And I guess lot of have to depend on the volume in the fourth quarter versus the third quarter as well, right?.

Yes, absolutely..

Okay. Got it. And on the SG&A line, you had talked about increased management competition due to the fantastic increase in ROIC.

Can you talk about how much incremental was in the quarter so we can just get a true sense what the core SG&A run rate was and maybe also just talk about how much if we expect further accruals in the fourth quarter?.

Looking at it Scott, there is, I am just going to give rough numbers but I could see it being $1.5 million or slightly above as an impact there on the incentive compensation side of things.

What I expected to change much on a go-forward basis no, the way that works is you are continuously estimating what your expectations are for the full year as we get closer to year end that becomes an easier target to hit. So I wouldn't expect it additional changes there..

Okay.

Got it and just last question, couple of questions can you just talk about the international side how the slide out product is doing and then just cap it off, talking about Atwood and the opportunity on the offered vehicle side?.

Sure. Scott, it's Jason. I would say on the international side it's more of the same and I think we gave some color last quarter. I would really characterize it as similar. We are working off of small base there.

I feel like we are doubling every year, but we are doubling on 50 units a year when we first started and but I would say that its gaining traction in the retail side and Europe loves it. The dealers and the OEMs are starting to really look at this as a serious product now as opposed to not really giving it a whole lot of look early on.

We have got all the OEMs over there participating in slide out in one way or the other whether it's prototyping or whether they actually have units in production or whether they are going through the design phase and trying to figure out how to get it in, in their units. So I would say that's going really well.

The great think about the slide out product over there is that we now have a company and Project 2000 based in Europe that can be fully capable to manufacture it as we ramp up our volumes and get more people involved with that strategy over there.

So the future looks bright there, but just going to be slow going until it becomes more the norm than the exception. And Scott if you want to some color on that..

Sure. One more comment Scott on Project 2000 we acquired them in late May so for the quarter for Q3, we would have a full quarter P2K revenue built in and when we update our IR deck those numbers will be sitting there in the IR deck just to show what our new run rate is.

I think we were more on a run rate basis of close to $30 million in international where prior to P2K we were 17 – 15 to 17 so that number starts to pop quite a bit when you look at just the acquisition of P2K alone. In terms of the side-by-side so we haven't close on Atwood yet.

We have signed the agreement but they do make -- one of the products they make are seat basis for all types of seats, specialty vehicle, seat basis, and we have got one or two side-by-side vehicle customers that are part of their sales mix and we are looking forward to getting to know those customers, getting to know the industry, and whether or not it ends up being something more relevant and more significant adjacency for us.

We don't know yet but certainly in acquisition that mostly today is aftermarket. A lot of their chassis component parts you got things like jacks and couplers as well as lining gear those go to replacement parts, dealerships and companies that are WD is there so quite a bit of their sales is aftermarket in terms of content.

And then you have got most of the – the rest of it from the seating standpoint going into adjacent market. So again, diversified with one new adjacent, potential adjacency for some of our other products. We love acquisitions that touch two or three parts of our business today. So it's a good fit..

Got it, that's all I have right now. Thanks guys..

Thanks Scott..

[Operator Instructions] And I am showing no further questions at this time. I would now like to turn the call back over to Mr. Jason Lippert for any closing remarks..

We appreciate everybody coming to call today. We look forward to talking to you at the end of our next quarter. Take care, everybody. Thanks..

Ladies and gentlemen thank you for participating in today's conference. This does conclude the program. You may now disconnect, everyone have a great day..