Mark Skonieczny: Yeah, I think, the cadence probably Q2, as we said in the remarks, probably similar to Q1 and Q3, a build-up there, with ultimately Q4 depending on we’re obviously cautious heading into the back half, but Q4 would show expansion, which would still get us into that mid-single-digit for the full year, right? So, progressively build from Q1, more or less flat in Q2, and then progressing in three and four to build from the 6.8% we were adding Q1 up to that full year 8% or so, mid-single-digit sort of number by the end of the year.
Jerry Revich: And last question for me. In prior downturns, the predecessor companies were — for the RV business were breakeven to slight losses. And you folks are delivering solid profitability here. How would you bridge the, call it, 6 points to 8 points of margin improvement this cycle versus last in terms of the major driving pieces and the confidence in the sustainability?
Mark Skonieczny: Yeah. I think like we’ve talked about previously, we’ve managed the towables business as well as the Class A to more of a trough level. So, we flexed out costs and we were successful in doing that and didn’t get ahead of ourselves during the COVID period, right? So, we’ve been able to manage those costs for margin profitability versus just a volume play, right? So, that’s really — we’ve been focused on that for the last two years to make sure that we have the right cost structures and have the ability to flex out as units come out as well as we build on different product types that may have less hours, that we have the appropriate staffing. We don’t have trap labor sitting in those facilities. So, it’s really been all the way from an overhead down to the shop floor managing those businesses to a trough level, which we’re experiencing right now.
Jerry Revich: Well done. Thanks.
Drew Konop: Thanks, Jerry.
Mark Skonieczny: Thanks, Jerry.
Operator: Thank you. Our next question is from the line of Mike Shlisky with D.A. Davidson. Please proceed with your question.
Mark Skonieczny: Good morning, Mike.
Mike Shlisky: Hi. Good morning. Thanks for taking — hey there. Thanks for taking my question. You had mentioned in your comments, Mark, that you have an ERP project underway. Can you maybe share with us a little bit about how far along you are with getting that changeover done? And when we might start to see some of the margin implications of that changeover?
Mark Skonieczny: What was your last point? Margin implications or…
Mike Shlisky: Yeah, I was curious when you start to see the operational benefits of the installation of the new ERP?
Mark Skonieczny: Yeah, that’s really what we’re doing there, it’s that — it’s more just a replacement of very dated system. And in our RV space, our Class A business as well as our B business, we’re implementing ERP. So, it’s replacing old — really old operation or ERP with a new Microsoft application. And we are — we’ll be going live this quarter. So, it’s gone very well and we’re expecting to go live this quarter and kick off that.
Mike Shlisky: Got it. I also wanted to ask secondly about the changes you’re making in your Ocala, Florida facility for fire emergency. Can you just talk a little bit about some of your latest developments there, things you’ve done to make that even more efficient over the last couple of months? I’m curious to see how far you’ve gone from kind of where you started to where you think you end up in that particular facility? Thank you.
Mark Skonieczny: Yeah. So, like we’ve talked about previously, we’ve really done a lot of work from a value streaming perspective. We brought in people from an upfront process, so we’ve strengthened our purchasing and supply chain specific to that location to make sure that we’re getting parts in when operations need it. We’ve also bolstered the operational leadership there as well. So, we got a really nice cadence from a management perspective as far as, first off, value stream managers in each of the facilities. Again, that location is made up of 10 buildings, manufacturing sites that go across four miles. When we talk about the site, it’s actually pretty expansive around a four mile radius. So, we have value stream managers based on the product that they do.
But we’ve also implemented some central people within that facility, specifically around supply chain and engineering as well to make sure that our bills of material are being done accurately and on time. So, it’s really been a microscopic change or a microcosm, I guess, of what you would expect a whole company to do. We’re doing that on a site-by-site basis. So that’s really been the improvement there.
Mike Shlisky: Thanks so much.
Operator: Thank you. At this time…
Mark Skonieczny: All right. Thanks, Mike.
Operator: Thank you. At this time, we’ve reached the end of our question-and-answer session. That will also conclude today’s conference. You may now disconnect your lines at this time. I thank you for your participation, and have a wonderful day.
