Specialist
Former VP at Truck Hero Inc
Agenda
- Competitive dynamics across the automotive aftermarket accessories industry
- Truck Hero's market share, product portfolio and pricing dynamics
- Potential penetration rate in tonneau covers
- Off-road sales channel vs competitors
- Near-term risks and long-term growth outlook
Questions
1.
Could you give your overview of the aftermarket truck accessories industry, touching on a couple of key trends and themes you think the investment community should pay attention to right now?
2.
What percentage of the industry would you estimate is private label? How has that grown? How much do you expect private label to steal Truck Hero’s market share over the next 2-3 years?
3.
Do you think combatting the threat of private label to Truck Hero comes down to marketing and ad spend? Are there other factors at play around product quality?
4.
How do you expect demand to trend over Q3 2021 across the product categories Truck Hero plays in? I understand there was some demand uptick due to the US stimulus cheques in Q1 2021, but I’ve heard theories that this could be declining as this money has already been spent.
5.
How would you quantify a Truck Hero customer’s average age? I’ve heard the typical customer skews older. Does this seem right to you?
6.
How would you assess Truck Hero’s relationships with its jobbers and why? Do you expect this dynamic to change significantly over the next couple of months?
7.
Could you give a more specific demand outlook for overseas products? How much market share do you expect them to gain over the next 2-3 years?
8.
Do you think there is more market share available for a brand such as WeatherTech to take from Truck Hero’s brands? How might this differ by category?
9.
Have you been more impressed with Truck Hero or WeatherTech’s marketing and branding in the tonneau cover and floor mat categories, and why?
10.
I’ve heard that truck bed cover penetration has been growing relatively slowly and there’s still a lot of room for run here. Can you help us understand this? Do you think it’s fair to expect bed covers growth to accelerate in the next five years?
11.
Do you think Truck Hero’s top-line growth opportunity over the next couple of years would be through acquisitions? Is the company in a wait-and-see mode and trying to grow organically?
12.
How long do you think supply shortages could take to be resolved, given the macro environment with supply chain disruptions and shipping delays globally? Could we be dealing with the same issue at the end of the summer and early autumn of 2021?
13.
How worried are you about input cost inflation for Truck Hero pressuring gross margins, and why?
14.
How much of the potential input cost inflation do you think would get passed along to the customers by Truck Hero vs be eaten at the gross margin line?
15.
What margin or sales mix developments do you expect over the next couple of months, as more parts of the economy reopen and consumers get out more? Do you think any significant sales mix shift could take place for Truck Hero?
16.
If OEMs [original equipment manufacturers] begin to install lifts and accessories, do you think this could take share from Truck Hero? If so, how might this work?
17.
How do you assess the brands in the Truck Hero portfolio? To what extent do you think they’re complementary?
18.
How should we consider the dynamic of Truck Hero selling products via the e-commerce channel and its possible relationship impacts with jobbers? Do you think e-commerce sales are a detriment to jobbers, making them more likely to de-empathise Truck Hero products? Does that not seem right to you?
19.
Is there anything more you think Truck Hero should do to foster a better relationship with jobbers?
20.
How much of a tailwind could Truck Hero possibly implementing its tonneau cover segment polices in its accessories segment be to the company’s gross margins over the next couple of years?
21.
Are there any near-term gross margin headwinds other than cost inflation that we should be aware of, such as discounting?
22.
How do you determine optimal discounting and do you think this might differ by category?
23.
Do you think there is any further room to reduce OPEX around Truck Hero’s business that its new PE owners could and will do? What might the top-line implications be if the company moves in that direction, perhaps cutting down marketing and ad spend?
24.
What lessons do you think Truck Hero should learn from the pandemic and people spending their stimulus cheques on truck accessories over the last year-and-a-half, and why?
25.
How might the need to keep more inventory across the US differ by category, such as permanently holding more mats than covers? Do you think Truck Hero should evolve the inventory it holds by category?
26.
Are there any strategic or operational changes you would recommend Truck Hero’s new PE owners make to the company to continue to fuel its growth over the next couple of years?
27.
Where would you expect Truck Hero to be in five years’ time if the company’s new owners keep it as is and try growing the business organically?
28.
Do you have any comments on Truck Hero’s leadership team and its performance? How confident are you in the team’s ability to steer the ship?
29.
Could anything disrupt the upside growth you mentioned Truck Hero could attain over the next couple of years? Is there anything that might lead to the company’s growth stagnating or it starting to lose market share and sales?
30.
Could there be a best-case scenario where supply issues don’t persist into Q1 2022? Could any quick resolution arise, given you think supply issues are likely to continue into 2022?
31.
Is there any M&A scenario you think Truck Hero’s new owner could take with this company? Do you think it will inevitably make some smaller acquisitions in the truck accessories industry? Is one big merger in the industry possible longer-term, or does that seem off the table?
32.
What are your best- and worst-case scenarios for Truck Hero over the next couple of years?
33.
Do you think Truck Hero could divest any of its brands?
34.
Do you have any closing comments? Is there anything further you wanted to touch on or highlight?