Good afternoon, and welcome to the Latham Group First Quarter 2024 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.

Thank you. This afternoon, we issued our first quarter 2024 earnings press release, which is available on the Investor Relations portion of our website, where you can also find the slide presentation that accompanies our prepared remarks. On today's call are Latham's President and CEO, Scott Rajeski; and CFO, Oliver Gloe. Following their remarks, we will open the call to questions. During this call, the company may make certain statements that constitute forward-looking statements which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's annual report on Form 10-K and subsequent reports filed or furnished with the SEC as well as today's earnings release. The company expressly disclaims any obligation to update any forward-looking statements, except as required by applicable law. In addition, during today's call, the company will discuss certain non-GAAP financial measures. Reconciliations of the directly comparable GAAP measures to these non-GAAP measures can be found in the slide presentation that accompanies our prepared remarks, which can be found on our Investor Relations website. I'll now turn the call over to Scott Rajeski.

Thank you, Casey. Good afternoon, everyone, and thank you all for joining today's call to review our first quarter 2024 results and discuss our latest business trends. In terms of key takeaways. First, we were pleased with our first quarter results. They represented a solid start to the year and exceeded the guidance we provided at the time of our fourth quarter conference call in March. Second, our performance demonstrated our ability to execute effectively during periods of uneven order flows and reflects the benefits of our reduced cost structure and actions we have taken to accelerate our value engineering efforts and lean manufacturing initiatives. These actions continue to drive ongoing production efficiencies and incremental capacity in our plants, providing us with more flexibility to serve customers with our industry-leading lead times. And third, we continue to maintain a substantial cash position even after the usual seasonal outlay for working capital and an $18.8 million debt repayment. This cash provides Latham the significant resilience to manage through soft business conditions for the pool industry and the resources to take advantage of opportunities to drive future growth. Taking a closer look at Q1. After a slow start to the quarter, we saw a significant pickup in orders starting in mid-March. Our operations team was able to do a great job on execution, achieving lead times of 3 to 5 days. Fiberglass pool sales, while down year-on-year, showed relative strength and continue to represent the majority of our in-ground pool sales. On our last earnings conference call, we cited Latham's priorities for 2024. The first was to continue to drive the adoption and awareness of both fiberglass and automatic safety covers. And in the first quarter, we made considerable progress in the areas of new and refreshed product introductions as well as new dealer wins. During the quarter, we launched the Enchantment plunge pool series for our California plant, which serves the important California, Arizona and Nevada markets. Plunge pools are becoming increasingly popular as they provide the homeowner with space-saving, lower-cost options that are ideal for aquatic exercises and rehabilitation. In the first quarter, we also relaunched the Providence and Tuscan series in North America, which is a very trendy rectangular pool with an attractive site entry feature. Additionally, we put the finishing touches on a new fiberglass pool model that has a broad array of features, including swim-up seating and a built-in spa that is currently available to our largest dealers. We are also in the early stages of rolling out a line of plunge pools in our vinyl liner in-ground pool category, more on that in the coming months. With respect to automatic safety covers, which are another key priority for us, we continue to work with our pool cover distribution network as well as many of our competitors' dealers, including concrete pool builders to advance awareness and adoption of these products. In addition to providing unparalleled protection, these auto covers offer significant resource savings resulting in up to a 70% reduction in both pool heating costs and chemical usage. We are continuing to drive operational improvements in our auto cover plants to reduce lead times and gain incremental capacity. Our operations team is also working on changes to our product lineup that will expand price points and capabilities. And we're making it a key focus to ensure that all of our newly launched pool models in our in-ground category are auto cover ready. We also continued the successful rollout of Measure by Latham, the first tool of its kind to simplify the pool measurement and quoting process for liner and cover installers. This easy-to-use AI-powered device provides dealers with high-performance measuring accuracy with precise specifications for swimming pool covers and vinyl liners, all within minutes and all integrated with our project management portal, which enables dealers to quickly and easily receive quotes and submit and track orders. As you can imagine, this tool has been met with a very positive response from our dealers and contractors. We will continue its rollout to make sure all of our dealers have it and all the functionalities in place ahead of the 2025 pool building season. Latham's extensive and appealing product lineup, together with our industry-leading service levels and best-in-class lead times are strengthening our ability to attract new dealers. In the first quarter, we were able to convert several new dealers in the U.S. and Canada that we believe will enable us to continue to drive penetration and growth in several key markets. For some of these dealers, while they are established pool builders, this will be their first experience with fiberglass products. They are motivated by the much shorter installation time, which is, of course, very attractive to their end consumers, as well as the ease of installation and the aesthetics of the product, both of which often result in additional leads for them from neighboring homeowners. In working with Latham, even the most experienced new dealers go for a boot camp to be trained in fiberglass installation to maximize their success. The second priority for 2024 that we mentioned on our last earnings call is our programs to continue to gain additional operating efficiencies through value engineering and lean manufacturing initiatives. These structural cost benefits will have a long-term positive impact on Latham's margin profile and will be an important factor for us in 2025 when we expect improved market conditions to drive increased volumes. For example, the initial benefits from these programs and our largest liner and cover manufacturing plant, including an 8% improvement in labor efficiency, a 20% increase in throughput and an overall improvement in employee health and safety. All of this contributed to our first quarter margin performance. Lastly, we prioritized maintaining a strong balance sheet to both retain our resilience in today's soft market environment and retain the resources to support future growth. Oliver will provide details on that in a moment, but I can say that we've been very disciplined in our spending and have the operational and financial flexibility to flex up and down in response to market conditions as well as take advantage of opportunities to drive future growth. With that, I will turn over the call to our CFO, Oliver Gloe, for our first quarter financial review. Oliver?

Thank you, Scott, and good afternoon, everyone. Please note that all comparisons that I will discuss today are on a year-over-year basis compared to the first quarter of fiscal 2023, unless otherwise noted. Our first quarter results exceeded our expectations, reflecting strong execution, cost savings and our lean and value engineering initiatives. As we anticipated, first quarter comparisons reflected the challenging macroeconomic conditions that have reduced pool starts. Net sales were $110.6 million compared to $137.7 million in Q1 of 2023, down $27.1 million or 19.7%. The 23.9% decline in in-ground pool sales was primarily due to lower packaged pool demand, while fiberglass pool products continue to show relative strength and continue to account for the large majority of Latham's in-ground pool sales. Liners remained more resilient, declining 9.2% due to the replacement cycle of these products, and covers were down 17.9%. We were pleased to see our gross margin increased 350 basis points to 27.7% despite lower sales. This increase was driven by carryover benefits from the cost reduction actions we took in 2023 as well as lower raw material costs and lean manufacturing initiatives. Year-on-year comparisons also benefited from two meaningful headwinds impacting Q1 2023. Consuming the remainder of our high-cost inventory and our inventory reduction programs, which resulted in under-absorption at our plants. These factors more than offset the impact of lower utilization from lower volumes and wage increases. SG&A expenses decreased to $26.3 million, down $6.8 million, primarily due to our ongoing cost reduction efforts and a $5.1 million decrease in noncash stock-based compensation expense. For 2024, noncash stock-based compensation is expected to amount to approximately $8 million. Net loss was $7.9 million or $0.07 per share compared to a net loss of $14.4 million or $0.13 per share for the prior year's first quarter. Adjusted EBITDA of $12.3 million was up from the prior year period by $1.3 million or 11.4% compared to $11 million in Q1 2023. This strong performance is the result of solid execution in a difficult market, primarily due to cost savings and progress made with our lean and value engineering initiatives. Adjusted EBITDA margin was 11.1%, a considerable improvement compared to 8% in the prior year period. As you know, our full year 2024 guidance implies decremental EBITDA margins for the remainder of 2024, primarily reflecting our planned investments in future growth. Notably, this involves continued investments in sales and marketing, engineering and R&D to accelerate conversion to fiberglass pool products, ongoing digital transformation programs and normalized performance-based compensation. Turning to our balance sheet. We continue to maintain a strong financial position with cash of $43.8 million at the end of the quarter after the repayment of $18.8 million in debt in Q1. Net cash used in operating activities was $34.5 million, reflecting a seasonal increase in net working capital of $41 million as the company enters peak pool selling season. Total debt for the period was $282.8 million with a net debt leverage ratio of 2.7x, and our capital expenditures were $5.3 million for the first quarter in 2024, considerably lower than the $9.9 million in the prior year. We expect a comparable run rate in quarterly CapEx throughout 2024. Our cash position and capital expenditures are in line with our expectations and reflect seasonality as well as our conservative capital allocation strategy given the uncertain economic outlook. That said, we will continue to deploy our capital opportunistically to best position us for accelerated profitable growth as market conditions improve. First quarter results, together with our current visibility, underpin the guidance metrics we provided at the time of our fourth quarter 2023 earnings release.

Thank you, Oliver. While the first quarter represents a small percentage of our annual revenues and adjusted EBITDA, we are very pleased with how well our teams executed amid a choppy start to the season. Latham's strong execution, cost savings and lean and value engineering initiatives all contributed to quarterly performance that exceeded our guidance and demonstrated our ability to execute efficiently. We appreciate the commitment and engagement of Latham's team members throughout our organization who made this possible. We also want to thank all of our customers and suppliers who continue to be strong supporters of Latham. Our first quarter results support our full year guidance expectations for 2024 and underpin our confidence in Latham's ability to effectively navigate the current market environment and emerge as an even stronger company. Operator, I would like to open the call to questions.

Our first question comes from Jonathan Bettenhausen from Truist.

I'm on for Keith Hughes this evening. So on the 2024 cost savings realization, I think last quarter, you indicated targeting maybe about $4 million in incremental savings. How is that progressing? It looks like maybe most of that has already been realized here in 1Q. Am I looking at that right?

Yes. You're absolutely right. So we had about a $4 million spillover from our cost savings initiatives. All the initiatives are fully implemented. Of that $4 million, about $2.7 million in our Q1 with the remainder being left for Q2.

Okay. Got it. And were there any surprises in the sales momentum heading into the second quarter? Was the demand ramp kind of about what you expected in March?

Yes. So I think if you look at how Q1 played out for us, and I think we've heard this from others, a little bit slower start in January and February right around the time we were on our Q4 earnings call. And then I think we saw a really nice pickup in the seasonality, maybe a few weeks jump start there as the season took off as we move through the back part of March. I think as we look kind of moving through April here as well, I'd say the season is kind of ramping as expected, on track with the guidance that we reconfirmed out there today.

The next question comes from Tim Wojs from Baird.

Everybody. Maybe just first question, Scott. Just in the prepared remarks, you talked about seeing some incremental traction on dealer adds. And I'm just kind of, I guess, wondering if the investments that you've made and then just with the slower kind of pool environment, if you are seeing kind of an incremental propensity from dealers to kind of consider fiberglass and then also kind of consider to be part of the Latham network?

Yes. Look, I think, Tim, as we've talked over the years, part of what we've always done is constantly recruit and attract new dealers to Latham on all aspects of all product lines, really a big focus on fiberglass. I think when you come back and just look at the value proposition of fiberglass, right, the speed of the install and then the lower cost compared to, let's say, concrete pools, I think that continues to resonate at both the dealer and homeowner level, giving them a lower cost option, especially as we've seen the cost of the pool drastically increased at the consumer level. Then you combine that with the cost of financing. I think it's just giving them an opportunity to jump in and establish themselves as a dealer, get trained up, right? It's all nice incremental volume for those dealers. And again, I think we show them, look, this is a long-term play for us, right? When the market rebounds, they'll be well positioned, they'll be trained, they'll have gone through their boot camps and they'll be ready to kind of rapidly increase their productivity and efficiency for fiberglass pools.

Okay. So you say it's kind of more of a what you've seen over time. It's not that, hey, there's a slower environment, and there's any sort of increased view for fiberglass, it's just kind of the constant share that you're kind of seeing.

I think it's important to clarify that we have become more aggressive recently. The number and quality of dealers we are adding now is significantly better compared to the past few years, during which we faced supply chain challenges. The reason they are choosing us is due to our excellent nationwide footprint, which allows us to provide a lower cost of service for all dealers. Additionally, the quality of our product offerings and our lead times and service levels place us in a strong position. As we moved through the first quarter, our ability to respond quickly to increasing demand signals in March was key to achieving solid results.

From a seasonality perspective, should revenue be the highest in Q2, then decrease a bit in Q3, and experience a drop-off in Q4? Would profitability follow a similar pattern throughout the year? I'm trying to understand the impact of seasonality since we haven't observed normal patterns in the past three or four years.

Yes, that's a fair question. As I was driving in this morning, I reflected on my 14 years in this business and realized I haven't actually experienced a typical season in that time. So, I'm uncertain about what a normal season looks like anymore. However, I believe we are starting to revert to more typical seasonality patterns. Historically, you might think of it as a 50-50 split. Q1 was just above 20%, while Q2 and Q3 represent the majority of our business. I'm estimating around 30% each for Q2 and Q3, with the remainder in Q4. As for the EBITDA profile, it may follow a similar pattern, but we need to monitor closely as we continue through the year. Overall, we're pleased with how the season is progressing and feel it's aligning well with our guidance and market expectations. Oliver, would you like to discuss the profitability profile further?

Yes. If we take our midpoint guidance of $65 million for EBITDA and subtract our contribution from the first quarter, we arrive at approximately $52.7 million. This amount will mainly come from the second and third quarters, which are our most active periods for sales and therefore contribute significantly to EBITDA, with a smaller share expected in the fourth quarter.

The next question comes from Andrew Carter from Stifel.

Just wanted to ask kind of late in the quarter related to the outperformance, and you said shipments picked up. I know you hate to talk about it, but weather obviously hit the South, hit the Northeast where you're strong. In addition, again, I know something you hate to talk about, but kind of the channel inventory. Did you see anything like difference between your shipments and what you think went out of the channel, particularly, I guess, for the packaged pools as well as the covers?

Yes, that’s a good question, Andrew. In-ground liners were a significant factor for us in the first quarter as the season began to ramp up in the South and gradually moved north. The regional variations you mentioned are accurate; the Northeast faced a tougher start due to wetter and colder weather. In the warmer regions, however, we experienced strong demand, resulting in 1- to 2-day lead times for liners in some plants. We successfully converted orders within 2 to 3 days, capitalizing on the demand surge. Fiberglass was another strong performer; we have ample inventory in key models across various territories. As orders came in, particularly in favorable weather conditions, we efficiently delivered pools to dealers for installation. Our operations team and customers executed well overall. Fiberglass continues to dominate the in-ground category, although that segment has been a bit slower. We haven't seen significant restocking or pull-through orders from distribution partners like POOLCORP or others. However, we anticipate that will change as we progress through the second quarter and approach the peak pool-building months of May, June, and July, when product movement is expected to increase.

The second question pertains to your SG&A expenses. For the last nine months of the year, it appears that SG&A has increased by $31 million to $33 million, excluding charges and stock-based compensation, which remained flat. Can you provide more details about this increase over the final nine months? I understand there are some restoration costs for incentive compensation that are unavoidable, and that there are no significant cost savings. However, there is some variable investment as you prepare for when demand increases. How much of that investment is truly variable? Additionally, could you let us know how and when you would decide to scale that back during the season?

Yes. I'll hit the last part, Andrew, first. When would you be able to pull back anything on the variable portion of the spend there? Look, we typically kind of wait until we get into the late May mid-June, which will really give us a read for how the season is playing out in terms of the pool starts in line with our expectations or anything. So we're in that waiting game of peak build where we don't want to start doing anything too drastic too early, but we've also talked about we have made incremental investments. We are trying to retain folks. We are trying to push leads out there to dealers with our sales and marketing efforts. So we don't want to pull the trigger too quickly. But again, there's a piece that's variable in there that if we had the toggle, if the market worsened more than what our expectations were. And I think that's the key point, right? Our outlook for the market was probably further down than others in the industry, and we think we're tracking to that roughly 15% down in new pool starts versus last year's number. So we've got many levers we can play and pull there. Oliver, you want to address the first part of the question?

Yes, absolutely. So two drivers that increased SG&A year-over-year. We talked about the snapback of performance-based compensation with about $7 million to $8 million. And then Scott just mentioned the investments into future growth to over-proportionately participate once the market comes back. So those are really the two drivers there for SG&A.

The next question comes from Shaun Calnan from Bank of America.

Just given the sales beat in the quarter and talking about the pickup as we kind of went through the quarter and through March, is there any reason you guys chose not to raise the guidance? I'm just curious if there was maybe a pull forward in demand or, it doesn't sound like it, but if you were starting to see orders slow in April versus your original expectation?

I think you can attribute it partly to timing and how we had the quarters laid out. We had expectations for the overall market. As we analyzed what a normal season looks like, we adopted a more conservative approach for Q1, anticipating a slower start. We were fortunate to observe how January and February unfolded when we assessed the quarter. We experienced a significant increase in orders in March, which I don't believe was due to pull-forward demand; favorable weather in some markets contributed to that. We were well-positioned to quickly fulfill those short-cycle orders. When we consult with dealers and others in the industry, our estimate of a 15% overall market decline still seems accurate. So far, we've completed just over 20% of the year. We need to navigate through this significant quarter, Q2, see how the season progresses, and deal with any weather challenges. Five weeks into the quarter, things are progressing very well and align with our guidance and projections. We need to complete Q2 first, and when we speak in August, we'll be better positioned to assess what we anticipate for the full year.

Okay. Got it. And then do you have any early metrics on the Measure tool in terms of adoption by dealers or revenue at this point?

Yes. Look, it's just rolling out there for covers, right? And if you think about it right, the cover season really kicks in for us in the fall. So it's a mass push of getting all the units out there deployed into the field with the dealers, with the view as they're out there opening pools for the season, right? They're evaluating the covers on the pools, encouraging them to measure the covers, inspect them, do they need a replacement, take those measurements now while they're out there, get trained up, get geared up. So look, this is a big deploy for us in terms of units out there and the training. We're still in the beta testing of what we're doing, the liners. Again, early good success on that. So we're also teaching them how they can be measuring for liners as we get ready to do that launch in the fall for the early 2025 season. But we're not at a point where it's of any significance that we want to be talking about net metrics units, number of units in dealers' hands, number of units we're processing. We are taking orders. We are processing orders through our plants, shipping them back out to dealers. And I think the key thing here is response rate acceptance has been phenomenal. And I think we'll eventually be able to talk about market share gains we're going to be able to achieve again by attracting dealers who may have been buying from other manufacturers out there coming to Latham because this is a huge productivity and time-saving device for them and also ensuring the accuracy of those measurements that they're taking, almost fool-proofing the quality of the liner and cover they're going to get because they will know the measurements are dead on based on the AI and intel in the device as it moves through the system. So look, we're really excited about it. I think this will be game-changing for us. And as we move through the next couple of quarters, we'll start disclosing more information on units deployed, number of dealers, and unit volumes and stuff processing through. Just a little too early to get out there with that data yet.

And the next question comes from Matthew Bouley from Barclays.

You have Anika Dholakia on for Matt. So the first question is on kind of your customer base. So we've seen some industry peers have spoken to more challenged demand for their lower-end pools. And I'm just curious if you're seeing similar mix effects and maybe how you think this could trend into the second half given the current macro backdrop?

Yes, we share similar perspectives. There are two key factors that benefit us and one that poses a challenge. However, we anticipated all of this in the guidance we provided and reaffirmed. We're experiencing strong performance in fiberglass pools, which are a more affordable option compared to concrete pools. As customers shift from higher-priced concrete options, they are opting for fiberglass pools, particularly in the $75,000 to $100,000 range. The packaged pool segment of the in-ground vinyl business is performing adequately, mainly appealing to middle America, where most pool financing takes place. Overall, we're aligning with the numbers we expected in our guidance. We are also observing positive momentum with our Radiant panels and Radiant Pools, which offer an attractive lower-priced in-ground vinyl liner option for consumers. While they may be seen as a step down, Radiant Pools are genuinely appealing compared to other options in the entry-level or second-tier category, as opposed to traditional on-ground or above-ground pools. It's a bit of a mixed situation, but we’re pleased with the fiberglass sales and the traction we're gaining with Radiant Pools and the acceptance they are receiving.

That's really helpful. And then second, just curious, how are you guys thinking about current capacity levels today? Should we assume that there is going to be additional capacity investment in the near term? Or maybe given your Kingston investment, some other cost initiatives, maybe you're holding off on that.

Yes. So on the capacity side, we really like where we sit with capacity today from all the investments, getting Kingston brought online. And just thinking about Kingston, right? It gives us the opportunity to attract new dealers to those locations, right? They now have capacity in their backyard with fiberglass, much more capacity than we had before. They're looking at Latham as a manufacturer of choice. It gives them a lower cost model to pass on to their consumers to get more demand. So we had a really, really nice customer win and pick up, up there. I think we might have briefly touched on that in the last call. Similar in other areas of the market, we've got good capacity and that leads to great service levels and lead times. Where we will continue to invest is in product launches, product lineup, new models, new feature-rich fiberglass pools. We talked a lot about plunge pool series and some of the new models we're getting out there where consumers are looking for particular features, whether it's a side entry, bigger tanning ledges, or some of these smaller cocktail/plunge pools. So I think it's those types of investments. But look, the operations team continues to drive a lot of really, really good value engineering and lean events in the facilities, which is actually creating more capacity. And not to sound like a broken record, but you go back to the big cost reduction initiatives we were able to do last year, taking five facilities and locations offline. It's because of all those efforts of the operations team freeing up capacity. So we're in a good position. As of right now, it's not like we need to go do chunky types of capacity. It's tweaks in each of the small facilities to make sure we're positioned looking out to the '25, '26, '27 market and where new pool starts will be.

The next question comes from Susan Maklari from Goldman Sachs.

Everyone. My first question is, thinking just a little bit about the input cost environment, how that came together through the quarter. Any changes that you're seeing as you think about the balance of the year, perhaps any chemicals that are coming up or those types of things? And then just any thoughts on price cost, how that trended through the quarter and the outlook there?

Yes, let me take that, Susan. So let me start with our annual guidance, and then I'll go back and take that back to Q1. So we guided on price, flattish and on deflation, we added some modest inflation to our guide. And in Q1, we've seen deflation in several parts of our baskets, primarily resins, the PVC film, aluminum, quite in line with our guys and our expectations, maybe a little bit better, more favorable. But we're also seeing some increases most recently driven by styrene and benzene. So I would say, overall, our guidance being a modest deflation for the year is quite intact and confirmed by our Q1 performance. I'll give you a similar comment on the pricing side. We generally see prices sticking. In our last earnings call, we said that some of our product categories took down a little bit, some we took up a little bit. But overall, we guide towards flattish price. And that again, the same is true for Q1, we saw flattish pricing in Q1.

Okay. All right. That's helpful. And then when we kind of look across our coverage, I think there are some companies that have talked about seeing perhaps a moderation in activity as rates have moved higher in the last couple of weeks or so. It doesn't sound like you are seeing that as we get into the kind of core of the pool season. But I guess, Scott, can you just talk a bit to what you are hearing on the ground from some of your dealers? Has there been any response to the move-in rates? And just how are you thinking about that as we do get into the spring and the summer?

Yes. So Susan, if we refer back to our guidance for the year, we anticipated pool starts to decline more than other sectors, likely more than the entire industry. It seems that many are seeing a similar reduction, around 15% down for new pool starts. Currently, there is not much financing activity, and despite fluctuations in interest rates, I don't believe this is affecting our dealers or consumer base significantly. We generally target the higher-end market, where more cash buyers are present. We're observing that higher-end pool projects valued over $75,000 are doing well, as these customers have the financial means to make those purchases. This positions us positively moving forward. We're also hopeful for a decrease in rates from the Fed, as this could encourage more participants to return to the market. Additionally, we've received insights from one of our third-party financing partners who have tightened credit limits but are getting inventive with options. One partner has reintroduced a 20-year loan, which was previously withdrawn. This longer financing term can lower monthly payments for consumers, helping maintain interest. Dealers are also adapting by breaking down extensive projects into manageable segments. Homeowners may envision a complete outdoor space with a pool, patio, kitchen, and landscaping, but dealers suggest starting with just the pool and a small amount of concrete to fit their budget. This approach allows homeowners to realize their dreams incrementally. Some dealers have had to adjust their pricing to stay competitive in an environment with lower demand and fewer new pool starts. Several factors contribute to their efforts to maintain business flow and keep employees engaged. We look forward to 2025, believing that 2024 will represent the low point for new pool starts. It's hard to envision that the situation could worsen next year compared to this year; we anticipate improvement, barring any unexpected events. Therefore, we want to be cautious in our company actions, ensuring we have the necessary capacity and resources. We're investing in plants and personnel and continuing to launch new models and products, all while looking ahead to 2025 and 2026 when we expect market recovery.

There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Scott Rajeski for any closing remarks.

Yes. Look, thanks, everyone, for participating in this afternoon's call. Look forward to seeing you all at our upcoming conferences and meetings. I hope everyone has a good evening, and everyone, have a safe summer until the next time we talk. Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.