Camping World Holdings, Inc.

Good afternoon and welcome to Camping World Holdings conference call to discuss financial results for the second quarter of this year 2021. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. Please be advised that this call is being recorded and that the reproduction of the call in whole or in part is not permitted without written authorization from the company. Participating in the call today are Marcus Lamonis, Chairman and Chief Executive Officer, Brent Moody, President, Karen Bell, Chief Financial Officer, Tamara Ward, Chief Operating Officer, and Matthew Wagner, Executive Vice President. I will turn the call over to Mr. Moody to get us started. Please go ahead, sir.

Thank you and good morning, everyone. A press release covering the company's second quarter 2021 financial results was issued this morning, and a copy of that press release can be found in the investor relations section on the company's website. Management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks may include statements regarding the impact of COVID-19 on our business, financial results, and financial condition. our business goals, plans, abilities, and opportunities, industry and customer trends, our 2019 strategic shift, increases in our borrowings, our liquidity and future compliance with our financial covenants, and anticipated financial performance. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factor section in our Form 10-K, our Form 10Qs, and other reports on file with the SEC. Any forward-looking statements, including statements regarding our long-term plan and costs related to the strategic shift, represent our views only as of today, and we undertake no obligation to update them. Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as EBITDA, adjusted EBITDA, and adjusted earnings per share diluted, which we believe may be important to investors to assess our operating performance. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release and on our website. All comparisons of our 2021 second quarter results are made against the 2020 second quarter results unless otherwise noted. I'll now turn the call over to Marcus.

Good morning, everybody, and thanks for joining us for what is a very exciting day. As we celebrate Camping World and Good Sam's 55th year in business, we continue to be astounded by the insatiable desire that Americans have for experiential travel, exploration of this country, and most importantly, a community of connection with others. That desire resulted in our company's best quarter in its history. Our incredible growth and our enduring success over the decades is proof of that demand and a testament to the 360-degree business that we have built. As we enter our 56th year as the clear leader and disruptor in this industry, we will invest heavily in our people and technological evolutions, two of our greatest single differentiators, and continue to separate ourselves as the clear industry leaders. We believe our high-margin Good Sam product and service offerings, such as roadside assistance, the Good Sam membership, and extended service protection, to name a few, strengthen our long-term relationship with our customers. To further strengthen the retention of our customers, we have begun a transformational process to meet the ever-changing customer. how we transact, how we service, how we communicate, along with all the other necessary resources to create a customer for life. New platforms such as the Good Sam RV Valuator, Good Sam RV Rentals, also known as Peer-to-Peer, Good Sam Campground Reservation Systems, and the Good Sam Service Marketplace are the types of dynamic offerings that allow us to meet the needs of new and existing customers. Today's call will be broken into two primary sections. First, a high-level financial summary with additional information available in our 10Q, and second, an overview of the highlights of our operational progress. In regards to financial performance, demand was strong in Q2, and we have continued to see very strong demand to date using record-breaking results. Adjusted EBITDA for Q2 was $333.3 million, a $112.6 million, or 51% improvement compared to Q2 a year ago. Demand remained elevated with revenue of $2.1 billion for the quarter, an increase of $455 million, or 28.3%. Our balance sheet is the strongest it's ever been. At the end of June, our net debt leverage was 1.14 times adjusted EBITDA. In Q2, our team successfully refinanced our senior secured term loan into a new term facility, maturing in June of 2028. In October of 2020, our board of directors authorized a stock repurchase program for the repurchase of up to 100 million of our Class A common stock. In the second quarter, we repurchased 45.5 million. We have about 33 million left in that availability. We ended the quarter with $322 million of cash consisting of $192 million of cash and cash equivalents and $130 million of cash in our floor plan offset account. Additionally, we had $468 million of working capital with more than half made up of used RV inventory without a related floor plan financing. And lastly, we have $191 million of real estate without related mortgage financing. With respect to our operational results, we ended June with over 2.2 million good SAM members. This represents nearly 150,000 additional members compared to June of last year. Heading into this year, we knew there was a huge opportunity with our Good Sam credit card. We made a big shift and brought in a specialized team to focus on this area of our business. We set a goal of 10% annual growth. Year-to-date, our file size has grown to north of a quarter of a million active account holders, an increase of nearly 19% compared to June of 2020. Our Good Sam RV Evaluator tool fuels our growth in the used RV inventory and provides what we believe is a huge competitive advantage. We ended June with nearly 260 million of used RV inventory, more than double Q2 of last year. In the second quarter, we added nine new locations to our footprint. Today, we operate in 101 87 locations. I couldn't be more excited about our future. We anticipate demand will remain strong in the foreseeable future as RVing has become way more mainstream. Our team will execute the operational plan to attract the next generation of RVers. expand good sand and drive innovation in the industry to reach our internal goal of generating $1 billion of annual adjusted EBITDA. As we continue to work towards that goal, our trailing 12 month annual adjusted EBITDA as of June 30th, 2021 was $831 million. We are now increasing our full year adjusted EBITDA estimates to between $840 million and $860 million. I'd like to turn the call back over to the operator for Q&A.

Thank you. If you wish to ask a question, please signal by pressing star 1 on the telephone keypad. If you're using a speakerphone, please ensure your mute function is turned off. Again, that is star 1 for question. Can I pause just one moment?

Operator?

Yeah, just one moment. Sorry, excuse me. Okay, so we will now take our first question from fresh and drug from Key Bank.

Good morning, Brad.

The focus here is maximizing profitability, but just a question on pricing. Are you selling above MSRP now? I'm just trying to put this.

No, we are not, and we can ask that question, and thank you for asking it. We are not pricing above MSRP, and we never would ever do something like that. We understand that some competitors may be doing that. But our job is to maximize our profitability of every single transaction. And while the inventory per location was down 21%, we became very, very focused on making sure, whether it was new or used, that we were maximizing each individual opportunity, which is why our GPU is almost double.

Got it. And so maybe just to follow up on that, though, just the 22% increase in new vehicle prices, I guess how much of that is OEM's passing price to you? How much of that is mixed? I'm just trying to get some context around that.

I don't really think that we look at it that way. To be honest with you, we haven't seen significant increases in pricing from the manufacturer. In fact, both Thor, Forest River, and Winnebago have been very conscious to try to absorb as much as they can to not obviously inflate the customer. It really is a function of us holding more margin on each particular transaction, both new and used.

Okay. And then SG&A, I think larger than most of us had in our models. Is there any way to help us with what's in that $432 million number? It seems from your prepared remarks that there's some heavy investments going on, but any dollar amounts that you can put around that?

Actually, our SG&A, we felt, performed very well. If it's up on a raw dollar basis, it's because our business is significantly bigger, and commissions were also bigger because of the increases in gross. But it met and actually beat our internal expectations, and I think it's probably better on the SG&A side as a percentage of gross than we've had in my recent memory.

Got it. And then one quick one. I think this is a moving target in the past, but on the updated guidance, are you willing to frame up how much of that contribution is coming from some of your recent acquisitions that you've made?

We don't report it that way, but I will say that a lot of our acquisitions for this particular year have closed inside of the quarter. And so, unfortunately, we were not able to enjoy as much as we wanted to. We saw a significant delay state by state in securing licensing based on the COVID slowdown of processing applications. And so, unfortunately, the guidance we had provided previously, we weren't able to close all of those acquisitions at the time that we wanted to, so there was a pretty significant delay.

All right. Thank you, Marcus.

Thank you. Okay. Our next question comes from Ryan Brinkman from J.P. Morgan. Please go ahead.

Hi, thanks for taking my question. Is there an update you can provide on the recently launched RV rental business? What can you tell us in terms of the early interest from consumers in terms of placing reservations through the network or for making their own RVs available on that network? Has there been any thought to placing any of your own used inventory onto the network or pairing with other companies, as I think might have originally been suggested? that may have RVs available in addition to the peer-to-peer channel? Or maybe does the very low inventory environment at present make that less attractive currently? And then longer term, how are you thinking about your potential market share in that segment, given leverage of the Good Sam brand and your roster of customers, etc.? ?

I'll answer one of those questions first just to get it out of the way. And unfortunately, as we've grown our used inventory double from a year ago, we look at the margins on that used and the terms on that used. And we will continue to grow our used inventory until we see a material break in either of those. Unfortunately, that hasn't happened. As we've grown inventory, sales have grown, so we don't have any available inventory to put onto that platform because when it's coming in, it's leaving pretty quickly. As we mentioned in the previous call, our plan was to fully launch the peer-to-peer model Good Sam RV rental business in early fall. And while we have taken the site live, we haven't put the necessary marketing funds behind it because we want to really control that user experience. The early indications are very good. We're actually very pleased. But at this time, for competitive reasons, we will not be breaking that business out and disclosing how we're doing in comparison. I'll remind everybody of this. We have 2.2 million Good Sam members who stay with us for a very long time. And our job is to educate them on the pluses of owning an RV. And it's not only about enjoying the lifestyle, but it's monetizing their investment in this particular space. And our job as a company is to maximize, particularly for our members, every single investment that they make with us. And whether they're buying roadside or a warranty or putting their unit on the platform, we're seeing that they're seeing the value in doing that. We know that our ability to add units to the site has a lower cost than any competitor in the marketplace. We also know that our necessity to charge high fees, like our competitors, aren't necessary for our business because our monetization of that platform isn't a singularly fee-based business model. It is also based on selling the ancillary products and services that go along with that rental. like warranties on a daily basis, roadside assistance, and all the soft goods that somebody could buy in anticipation of their trip. So we think about it as a holistic return for our company, and we expect to win in this space in the very short term and really disrupt what we believe is a very egregious fee structure by some of the competitors.

Okay, great. Thanks. And then I see that you both purchased nine dealership locations during the quarter and also the $46 million of buyback you referenced. Could you talk a little bit about the M&A environment at present, given that now appears to be one of the best times ever to be in the RV business? What trends are you seeing in terms of the multiples that you might be being asked to pay. And given those multiples, how are you currently weighing that opportunity against the potential to buy back shares or pay down debt, which I think is less of a priority given the increase in EBITDA or any of the other various different organic initiatives that you have available before you?

We look at our free cash flow like we have for, you know, since the inception of the company, whether it was public or private. And when we hear things like, are you being asked to pay higher premiums, we don't really enter into that dialogue. We don't deal with brokers. We don't operate our acquisition model the same way. And our ability to buy dealerships across the country is quite frankly more plentiful than it's ever been. And we're not seeing a dramatic modification in the pricing structure to buy those dealerships. The most important part about acquiring dealerships, and I think the smaller, newer competitors will learn over time, is that the key to the art and science of making acquisitions is the integration and the implementation of our best practices. And over the years, over the 20 years, we've learned what it takes to actually make that acquisition. And for us, the return on that acquisition isn't just buying the historical trailing 12 earnings that that dealership had. It's implementing our service process, implementing our S&I process, installing the Good Sam RV evaluator, and really understanding how to monetize the entire return, including but not limited to selling membership, selling roadside, selling warranties. So our overall return is much higher than a typical S&I. RV dealer or auto dealer consolidator. We can buy as much as we want. We have the cash to do it. We have the know-how how to do it. And we know how to create that environment when we think it's appropriate. But we are opportunistic buyers. And what that means is we don't overpay, ever. That is not our business model. While we acquired a ton, we also want to digest what we have bought. And as we look at the businesses that we bought and we look at the ones that could potentially be on deck, we want to make sure that our human capital and our ability to train and integrate and set up those best practices is clear and easy and sustainable for the long term. So in summary, it's never been a better time to buy a dealership, but the pricing is the same as it's always been.

That's helpful. Thanks. And then just lastly, is there any update to the opportunity that was discussed last December with Lordstown Motors, whether in terms of the timing or likelihood of servicing any electric pickup trucks that they might bring to market? Or separately, any thoughts that you might have on the electrified RV space generally?

So we, as we have noted previously, we will have our investor conference in Salt Lake City on the evening of September 14th. On the morning of September 15th, we will unveil a product offering that the outdoor and recreational space have never seen before all in one place. Now, we know that it's a long road, and a lot of these electric companies have popped up with ideas and with concepts. What we want to show the market is that these ideas are very real, and there's a variety of products. We are not linked in the electrification. Our leadership in disruption in the electrification of the recreation space is not linked to any one company. It is linked to our company and our ability to distribute through our 40-some-odd states and our 187 locations and our e-commerce platforms, the products and services on the electrification side that make our company money and add value to the consumers. We know that we're the only ones at the national platform. And what we've noticed since the launch of the idea of Electric World, that we've had more inbound requests for us to be their distributor or for us to be their dealer of record. But our affinity is to not one single company. It's to the customer and to our shareholders.

Looking forward to it. Thank you.

Our next question comes from Joel Alcobarro from Raymond Games. Please go ahead.

Thanks. Hey, guys. Good morning. So first question on new unit sales. You know, despite strong demand, it looked like units were down year-over-year, obviously very likely a reflection of the lack of inventory. But what do lead times generally look like right now? Have you seen any improvement in July with OEMs restarting after the summer break?

Well, there was actually a shutdown in July, which created more of a gap. And as we continue to see record-breaking website activity and record-breaking lead volume and demand like we've never seen it before, unrelated to COVID, related to the fact that people are now saying, hey, this RV thing is a real thing, being mainstreamed. We can't continue to have the suppliers be way behind. And I don't say that as a criticism. I say that as an encouraging piece. We don't think the supply chain from filling our shelves again will be repaired anytime soon, to be quite honest, because we don't see the demand slowing down anytime soon. Now, that bodes well for both the manufacturers and for us because it allows margins to stay where we believe that, quite frankly, they should be. And if the dealers and the manufacturers could really ever make sure that they don't flood the market, we'll have healthy margins and a healthy customer experience for years to come. But as we mentioned previously, our same-store inventory on a unit like a location basis was down 21%. And what we realized at the end of last year and why we talked about the RV evaluator, we needed to relieve our dependence exclusively on new manufacturers meeting our customers' demand. And so we deployed an additional $112 million for the quarter, and we will continue to invest cash from our balance sheet because when you look at the overall return, if you look at the margins that we achieve on a used unit, and the number of times we turn that unit in a given year, it could be, quite frankly, one of our best investments. And so when we look at how we think about our cash, please know that we are going to continue to grow our use. And the RV evaluator tool, the proprietary technology that we developed using 20 years of data, has given us a clear competitive advantage. And as you do dealer checks around the country, you'll probably hear that people can't find and get use inventory. And a lot of that is because of us. We will continue to be aggressive to ensure that the customer who's trading their unit in the marketplace gets a fair and appropriate value. And we're going to make sure that we are the leader in providing that value to the customer so they see us not only as a short-term relationship, but a long-term relationship. Remember, our good fan members expect it from us. And so we'll continue to do that, but we don't see the new vehicle inventory supply I'm not even sure it fixes itself in 2022, to be totally honest with you.

That's very helpful. I guess if I could kind of springboard off of that, you're obviously not giving guidance on 22 today, but at a high level, how are you thinking about next year directionally, given the lean inventory, given the ASP improvement you've seen this year? I mean, what would keep you from growing EBITDA next year, I guess is the best way to ask it.

Unfortunately, there are things outside of our control, but let me be very clear about something. We understand the headwinds that the industry as a whole is experiencing on the supply side, and whether that's receiving a window or finding labor, we're very, very proud of how the manufacturers have handled those challenges. But we cannot be subject to those kinds of issues. And so we'll continue to invest in our use. We're adding more service bays by the day across the country. We're looking for ways to cut costs. We're looking for ways to develop better margins on our retail business. And most importantly, and loudly and clearly, we are doubling down on our good saying business. We believe that we can start to see double-digit growth and what we love as the high-margin recurring revenue that differentiates us even more. If the supply fixes itself, well, of course, the direction is up by a lot. But if it doesn't, we still believe we're doing all the right things to continue moving forward up. We don't anticipate moving back. But we're not prepared at this time because we're going through our budget process to give any real substantive guidance other than we're excited and we don't see demand slowing down and we're enjoying the way we're running our business today and we'll continue to deliver the results.

Great. Thank you, guys.

The next question comes from Rick Nesson from Stevens.

Please go ahead. Thanks. Good morning. Terrific quarter. I'd like to follow up on inventory. If you could discuss how inventory is tracked during the quarter. And where you see them here early third quarter, are things getting more challenging? Or, in fact, are you getting more supply to meet demand?

You know, unfortunately, the inventory for the quarter and the inventory even as you start the new quarter is a challenge. And we, you know, continue to see it drop. We do believe that it will start to stop falling some point in the late fall, early winter, like it normally does. But as demand continues to be explosive and we continue to take orders out into, you know, later in the fall and early winter and even early next year, we, you know, we believe that it's going to continue to be a challenge for the industry. We also believe that we get our fair share and then some of the allocation from the manufacturers. But please know that whatever challenges exist on the new side, as they exist for the industry, not exclusively the camping world, what's in our control is we will continue to deploy significant capital on the new side. As long as the margins are acceptable to us as a management team, showing that we're getting a good return on capital, and the terms continue to be materially in the same range, quite frankly, they're a little high now. We'd like to actually bring them down. We will continue to invest. And if that means investing an additional $100 million into use, as long as margins don't compress and terms don't, we will. That's our hedge against any challenges that the manufacturers have. And our ability to dip into our database, our ability to use our evaluator tool is what we believe that competitive advantage we talked about last year is what has resulted in a $333 million record quarter. And we're hopeful that we can deliver similar type results from a percentage basis or an improvement basis in Q3 and Q4 and beyond.

Thanks for that, Keller. Also, I'd like to know if you think you can hang on to these outsized margins as we move into the fall and the winter selling season.

It's a very natural graph, to be honest. And it's the old adage of supply and demand. And as long as supply continues to be constrained, much like it is in the auto manufacturers, we will continue to maximize every single transaction. We could have had way more volume for the quarter. But our focus is maximizing profitability and margin to improve our leverage, to improve our cash, and give us the excess cash to either pay down our debt more, make more acquisitions, buy more used inventory, or buy stock back. That's how we think about maximizing margin, and that's the golden ticket that we've been given, and it's our obligation to see that. We continue to expect to do that.

Great. Thanks, Seth. Good luck.

The next question comes from Derek Johnson from BMO Capital Markets. Please go ahead.

Thank you. Good morning. Hey, on your used inventory, is more of that coming from outright buys or are you seeing an uptick in trade-ins? And related to that, are you seeing your first-timers from the last, call it 15 months, coming in to trade up to their next RV yet?

You know, we're seeing pretty stable and consistent trade-in rates. It's our ability to go out into the marketplace with not only our proprietary tools but a dedicated team who scours the country, not only through a phone room, through technology, through the web, through auctions, through knocking on doors, through walking through campgrounds, We have a dedicated, very large team that wakes up in the morning with one goal and one goal only, to make money for themselves by being paid to acquire inventory using the technology they've been provided. I think the thing that we love most about the RV Evaluator tool is it takes the human element of guesswork out of the equation. And our ability to automate that process, our ability to use the technology, to drive leads with it, to put pressure on our competitors to give the customer the fair value is the competitor's advantage. We also know that the most important thing that allows the RV evaluator tool to work is the strength of our balance sheet. And while other dealers may have the appetite to buy, we're not sure that they have the size of the bank account to be able to be competitive. And when we're at an auction, our hand stands tall and proud, and we make sure that if it's a unit that we want, that we believe we can buy, we go home with it.

Okay. And I want to ask one more question. You're probably not going to like this question, but I want to ask you about the industry itself and your position in it. I know you look at things holistically, you know, but in terms of same-store unit sales, did you gain or lose share in new, and did you gain or lose share in new?

We don't really look at our business that way, and I don't mind that question at all. And that question, quite frankly, is very obvious if you look at the queue. We were down in same-store sales on the new side. but we were down less than our inventory was down, and our margins were up. So there was a daily art and science about how we managed our national pricing model. And we can go in and move pricing by the minute to drive up demand or to drive up profitability. We elected on the new side to drive up profitability because there's risk that the replacement unit may cost us more, and we don't know when we're going to get it. On the use side, I can't speak to market share in that particular. I don't know what stats that I would necessarily rely on and be comfortable with. But here's what I do know. We know that if you do dealer checks around the country, people are struggling to find use. We are not. Our use business was actually up 14%. And so we believe that, as we've always said, we're agnostic of whether the transaction is new or used. But, you know, we are concerned that we want to grow our new inventory because we know demand is there. And we want to grow our new inventory, but when that happens, we're not going to slow down growing our used. That question doesn't bother us at all.

Okay, perfect. Thank you, Mark.

Excuse me, this is the operator. I'm very sorry for the inconvenience, but my internet is currently down. Just one moment. I'm very sorry once again.

I think our next question is from Ethan Tutley from Jefferies.

I'm very sorry. Just one moment, sorry.

While the operator is trying to get connection back, it's really important to look at this business in a very different way than you have historically. We know that the addressable market has expanded dramatically. And as you look at technology that's been created or investments that we've made or innovations that are happening, the market just continues to get wider. And we made an investment during the quarter into an entity called Happier Camper. which has adaptive technology. As we look to grow the marketplace, we have to continue to find new ways to generate revenue, new ways to attract new customers to the marketplace. The good old-fashioned historical installed base is alive and well and healthier than ever. And hopefully over the next year or two, we'll start to see the trade cycle with that historical installed base pick up again. a lot of the demand that we've seen is from new entrants into the marketplace, particularly in the first and second quarter. And what gives us such optimism about where we're going is that we haven't seen the historical buyer trade at the same rate because the amount of inventory that's out there isn't there. So we believe there will be pent-up demand, even once the first-time buyer belly starts to get a little more satisfied, that installed consumer will also be now ready for a trade-in, trade-up situation, which will also allow us to grow our used inventory as well. Operator, if you don't have connection, unfortunately, we're going to need to wrap the call up.

I'm very sorry, but at the moment, I don't have connection. There may be another operator on the way, but currently for myself, I don't have connection. I'm extremely sorry.

For anybody that was unable to answer the question, the only one that's in queue now is Ethan Huntley. We'll obviously take that call during our one-on-one that are coming in the next half hour.

Excuse the interruption. I may be back.

Okay.

Ethan Huntley. Ian Huxley from Jefferies. Please go ahead.

Hey, good morning. This is Ethan Humley on for Brett Jordan. Thanks for taking my questions. Just one here on the GoodSAM membership. Can you sort of provide us with conversion rate of acquired store customers to the GoodSAM platform?

Not sure I understand the question. I apologize.

Yeah, so just I guess sort of what percentage of customers from acquired stores are you converting into Good Sam members, you know, on your platform?

So the number for the quarter and the year-over-year comparison doesn't really have that much impact from the acquisitions. But when we do acquire a store, and we install the Camping World retail location, and we install the POS and implement the training for our crew members to sell the variety of products that Good Sam has, we experience pretty consistent conversion in our new stores, and sometimes even better conversion because we're offering something new to the marketplace. And so when we go in and look to either acquire a store or open a store from scratch, in the back of the napkin as we're doing our pro forma analysis, we definitely calculate and consider in our overall thesis what sort of return we're going to see from increased membership, increased credit card, increased warranty, increased roadside assistance, increased insurance, and all of the other products. That has always been our secret sauce, which is why our EBITDA margins outperform any public auto manufacturer and any RV retailer with public information, not by a little, by a lot. And so when you look at our standalone location performance and you look at how our two segments report, our retail segment and our products and services segment, please know that for the most part, our retail segment doesn't have much, if any, Good Sam revenue or earnings in it at all. So those EBITDA margins are pretty much pure to the performance of that business. Our Good Sam business and its growth both on the file size and the profitability are not only a function of its ability to penetrate the market outside of our stores, through online, through the call center, through campgrounds, but it also gets the added benefit of every time its company makes an acquisition, it gets a nice little jump. So our goal in growing locations, 8 to 10 units a year on average, is supercharging the good sand business as much as it's supercharging our dealership and our retail business.

Okay, that's helpful. Thank you. And then on the service side of the business, is there any sort of call you can provide? Are you seeing sort of a pickup in that business and people sort of opt to refurbish a used unit given sort of the new supply constraints that you're experiencing?

Our service business continues and will continue for as long as I'm alive to be very robust, and here's why. Unfortunately, the number of RVs in circulation dwarfs the number of technicians and the number of service bays that exist on a ratio basis. We have made a decision internally to continue to invest significantly over the next several years in building out more service bays, developing more enhanced training, and increasing the attractiveness that it is for technicians to work for us. One little added nugget that we have not discussed and will in later calls is what we're developing to become the Home Depot of the RV business. Over the next several years, as we look at our retail footprints, we will continue to extract those low margin, low turn products from our floor, no matter what they are, and reinvest in high turn, high margin, high demand products that are going to give our shareholders the kind of return they want their money being spent on. If we're investing in a shirt, for example, and it has a 32% margin or a 42% margin, and it's taking up floor space, and we can extract apparel from that floor and implement furniture, cabinetry, lighting, appliances, all of the things that go on with that, we will continue to do that. We have launched approximately seven thus far. And we have seen unbelievable growth in those specific locations and the profitability of those specific locations when we extract low-margin, low-turning products with these kind of things. And you're talking about couches, chairs, mattresses, cabinets, counters, lighting, flooring, toilets, sinks. and all of the related things that go on with it. We know that consumers expect us to be everything for their RVs, and we're finding that niche, making the investments in companies that allow us to be vertically integrated to improve our margin even more. And over the next four or five years, I think you'll see a giant transformation of how we think about our retail business and how the customers see us as their single source solution. What's prompted a lot of that is the younger buyer. The younger buyer loves DIY. They love to do it themselves, and they love to renovate old vintage things. We have now started to make a business of buying raw, used, pre-owned vans. Because while the B market is hot on the news side, the supply is limited on the chassis side. How do we counterbalance that? We make significant investment in scouring the marketplace for every used shell that we can find. And whether that's Nissans or Fords or Dodges or Sprinters, we are investing heavily in scouring the marketplace We then make an investment in adaptive technology that over time we believe will create kitting that can be delivered directly to the consumer or to one of our locations to renovate their entire unit, either through the adaptive technology of blocks or through our existing inventory of furniture, cabinetry, flooring, etc. While we already make 70% plus margins on our collision and repair business, we think those same margins will exist in our renovation centers as we move forward. You will see us invest more in influencers, licensing, and making sure that we're looking at renovating the home like Americans look at renovating their own home. It's just our home on wheels. No difference.

Okay, great. Thank you very much for taking my questions.

Thank you so much to everybody for joining our second quarter call. We expect to continue to execute at the same rate, the same pace, with even better precision as we move forward. We look forward to talking to you on September 14th in the evening for our investor conference and showing you just a sampling of where the recreational space is going on the electrification side. Take care.

This concludes today's call. Thank you for your participation. You may now disconnect.