WEBVTT - Truck Hero's Reminder: Exceeding Their Budgeted Demand (Audio)

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<v Speaker 1>Broadcasting live to New York Bloomberg eleventh Rio, to Washington,

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<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundred, to San

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<v Speaker 1>Francisco Bloomberg nine six, to the country Shoe ex General

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<v Speaker 1>one nineteen and around the globe the Bloomberg Radio Plus

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<v Speaker 1>Appen Bloomberg dot Com. This is taking Stock. I'm Kathleen Hayes.

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<v Speaker 1>My co host Pim Fox is on assignment this afternoon. Trucks.

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<v Speaker 1>If you buy a fancy, big new pick A, get

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<v Speaker 1>gotta buy some cool accessories. That's what truck Hero is

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<v Speaker 1>all about. Their president CEO joining us in studio. We're

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<v Speaker 1>going to find out if they're going to go ahead

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<v Speaker 1>with the I p O they had to postpone last year,

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<v Speaker 1>and how that truck market is looking overall. Right now,

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<v Speaker 1>we're going to go to Charlie Pellack. He's in the

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<v Speaker 1>newsroom with a Bloomberg business flash. Thank you very much,

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<v Speaker 1>Kathleen Hayes. Stocks are trucking along on this Monday with

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<v Speaker 1>the doll The SMP NEZ stack All Advancing holding close

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<v Speaker 1>was to the best level of the day. The SMPS

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<v Speaker 1>now at twenty one eleven, up twelve points. Again there

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<v Speaker 1>of six tenths of one percent and has stack up

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<v Speaker 1>thirty one again, also of six tenths of one percent down,

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<v Speaker 1>industrials up one twenty nine again there of seven tenths

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<v Speaker 1>of one percent. Fed Chair Janet Yellen says additional gradual

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<v Speaker 1>interest rate increases will be appropriate, but she was silent

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<v Speaker 1>on their precise timing, and emission viewed as a signal

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<v Speaker 1>that a June move was off the table. Her comments

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<v Speaker 1>carried live right here on Bloomberg Radio were less specific

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<v Speaker 1>than in her previous remarks in describing when she thought

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<v Speaker 1>the Fed should raise rates again. Bloomberg sat down with

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<v Speaker 1>Treasury Secretary Jack lou He says China must improve monetary

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<v Speaker 1>policy communication as it takes on an increasingly large role

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<v Speaker 1>in the global economy. What I think the world saw

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<v Speaker 1>was something that was confusing, um and not well communicated,

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<v Speaker 1>and it gave rise to fears that China's a kind

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<v Speaker 1>to me, was in a much weaker place than it

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<v Speaker 1>actually appears to be. And Federal Reserve Bank of Atlanta

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<v Speaker 1>President Dennis Lockhart also spoke with Bloomberg Radio and Television today.

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<v Speaker 1>He says the Central Bank should wait until at least

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<v Speaker 1>next month to consider raising rates because of a slowing

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<v Speaker 1>labor market and the British vote on European Union membership,

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<v Speaker 1>adding his voice to the argument for eight delayed tenure

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<v Speaker 1>down nine thirty seconds that yield one point seven three percent,

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<v Speaker 1>gold hired by four seventy the ounce to twelve forty seven,

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<v Speaker 1>a gain of four tenths of one percent, crewed up

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<v Speaker 1>one oh eight to barrel forty nine sixty nine, a

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<v Speaker 1>gain of two point two percent, and at three thirty

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<v Speaker 1>two on Wall Street. Let's take a look at other

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<v Speaker 1>news from around the world. Thank you, Charlie from the

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<v Speaker 1>Bloomberg News Room. I'm Jeff Bellinger. This news update is

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<v Speaker 1>brought to you by the Jeep Grand Cherokee, the most

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<v Speaker 1>awarded suv ever. The Grand Cherokee continues to raise the

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<v Speaker 1>Drive one at your local Jeep dealer Today. Hillary Clinton

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<v Speaker 1>goes into tomorrow's California primary, needing just twenty three more

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<v Speaker 1>delegates to clinch the Democratic presidential nomination. That's according to

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<v Speaker 1>the Associated Press. California, New Jersey and four other states

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<v Speaker 1>go to the polls tomorrow. A spokesman for Muhammad Ali's

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<v Speaker 1>family says the late former heavyweight champ began planning his

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<v Speaker 1>own funeral nearly a decade ago. Bob Dinnell says Ali

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<v Speaker 1>wanted the services to reflect his life and how he

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<v Speaker 1>lived with a heart open to people of all colors

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<v Speaker 1>and creeds. This is not a political statement. This is

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<v Speaker 1>not about politics. This is about how Muhammad Ali lived

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<v Speaker 1>his life. Ali's funeral Friday at a Louisville arena will

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<v Speaker 1>be preceded by a traditional Muslim service on Thursday. Ambassador

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<v Speaker 1>of the European Union to the United States, David O'Sullivan,

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<v Speaker 1>spoke at a ceremony today to mark the seventy second

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<v Speaker 1>anniversary of D Day. We stand here today to remember

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<v Speaker 1>those four thousand, four than thirteen Allied servicemen who lost

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<v Speaker 1>their lives on the sixth of June two thousand, four

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<v Speaker 1>hundred and ninety nine of the Americans. The Federal Appeals

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<v Speaker 1>Court is hearing arguments today over whether a list of

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<v Speaker 1>unindicted co conspirators in the George Washington Bridge lane closing

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<v Speaker 1>scandal should be released to the public. Global News twenty

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<v Speaker 1>four hours a day, powered by our two hundred journalists

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<v Speaker 1>and more than one hundred fifty news bureaus around the world.

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<v Speaker 1>From the Bloomberg News Room. I'm Jeff Bellinger, Charlie, and

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<v Speaker 1>we thank you, and again recapping move higher for US equities.

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<v Speaker 1>We've got twenty five minutes to go ahead of the close.

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<v Speaker 1>SMP up twelve to twenty one eleven. Again, they're of

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<v Speaker 1>six tenths of one percent. I'm Charlie Pelton. That's a

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<v Speaker 1>Bloomberg Business flash. You're listening to taking Stock with Kathleen

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<v Speaker 1>on Bloomberg Radio. The truck accessories market is a fourteen

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<v Speaker 1>billion dollar market. And of course people buy these pickups

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<v Speaker 1>beautiful vehicles, powerful, and the next thing they do, they've

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<v Speaker 1>got to buy accessories. But even if you've had a

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<v Speaker 1>pickup truck for a while, you might want to update

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<v Speaker 1>with some brand new, cool accessories. And here to talk

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<v Speaker 1>about this and more is a man who is running

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<v Speaker 1>a company who does just that. Bill Reminder is president

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<v Speaker 1>and CEO of Truck Hero. He's based in an armor

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<v Speaker 1>of Michigan, of course, Michigan the state for all things

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<v Speaker 1>related to motor vehicles. And he's in New York City

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<v Speaker 1>this week for uh to give his company's presentation at

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<v Speaker 1>Baird's Global Consumer Technology and Services Conference. Bill Welcome, thank

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<v Speaker 1>you for having me today. So, first of all, tell

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<v Speaker 1>us about truck Hero. I love the name, very catchy.

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<v Speaker 1>What does truck Hero do. Truck Hero is a collection

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<v Speaker 1>of great brands of truck accessory companies. We put together

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<v Speaker 1>eleven different units over the last eight years and really

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<v Speaker 1>formed a powerhouse of very different types of truck bed

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<v Speaker 1>covers as well as other accessors they can put in

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<v Speaker 1>your vehicle, from running board, two steps to grills, and

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<v Speaker 1>just the whole vast array of different products throughout the

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<v Speaker 1>company that we put forth. So I've never bought a

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<v Speaker 1>truck around a truck, so don't these things kind of

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<v Speaker 1>these things don't come with the truck when you buy it. Well,

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<v Speaker 1>in some instances you can get our accessories through your

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<v Speaker 1>local dealer. We supply the O E s with our

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<v Speaker 1>products other label for their General Motors or Chrysler Brandon

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<v Speaker 1>product um. But the vast majority of the accessory of

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<v Speaker 1>that we put forth in the market are bought through

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<v Speaker 1>fourteen thousand independent local retailers throughout the United States and

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<v Speaker 1>also online. So tell us about when you put truck

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<v Speaker 1>Hero together back in two thousand seven, was for a

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<v Speaker 1>long time called th h I when you got ready

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<v Speaker 1>for the I P O. We'll talk about that in

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<v Speaker 1>a minute. You give it this this really fun name

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<v Speaker 1>truck here. But why did you see this opportunity? What

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<v Speaker 1>was what was missing in the market to use it?

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<v Speaker 1>A hot truck hero is going to be the answer. Well,

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<v Speaker 1>we formed t h I R truck here on two

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<v Speaker 1>thousand seven. I work for the predecessor company x Tang,

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<v Speaker 1>and we knew at that time that truck bed covers,

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<v Speaker 1>which is still over sixty percent of our revenue today,

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<v Speaker 1>we knew that category had a lot of white space

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<v Speaker 1>growth opportunities into it because the penetration rate of bed

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<v Speaker 1>covers the cover of your truck bed was very low.

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<v Speaker 1>So from two thousand and seven all the way up

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<v Speaker 1>through this year, we put together some great brands of

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<v Speaker 1>high quality truck bed covers under the th HI truck

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<v Speaker 1>Hero platform. If you've grown all these products into the marketplace,

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<v Speaker 1>penetration is increasing. More and more people are putting truck

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<v Speaker 1>bed covers and other accessories on our trucks today. Uh,

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<v Speaker 1>you generate a lot of cash five million dollar fifteen sales.

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<v Speaker 1>Your compound annual growth rate for five year sales. What

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<v Speaker 1>sevent n free cash flow conversion? Why did you call

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<v Speaker 1>off the I p O in November? Seems to me like,

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<v Speaker 1>you know, you've gotta you've got a business that's is

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<v Speaker 1>ready to get a good price if you're doing so well.

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<v Speaker 1>I agree, we're We've been a secret success story in

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<v Speaker 1>Michigan for a long time. All of our products are

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<v Speaker 1>you know, American made through our eight manufacturing facilities throughout

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<v Speaker 1>the US. Look, all of our metrics are off the charts.

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<v Speaker 1>But late last year, you know, the markets were a

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<v Speaker 1>little bit thickle and as we went to market, you know,

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<v Speaker 1>the week before Thanksgiving, you know, times are really at

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<v Speaker 1>that moment just a little bit more chaotic than we

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<v Speaker 1>felt comfortable with. Are you going to do the I

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<v Speaker 1>p O? Now? What's what's what are you guys talking about? Well,

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<v Speaker 1>right now, we're spending most of our time making sure

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<v Speaker 1>we run the business well. We've always been great operators.

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<v Speaker 1>We're gonna continue to do that. Um, but we're as

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<v Speaker 1>we go throughout the year, we're gonna look all of

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<v Speaker 1>our strategic opportunities and certainly an I p O would

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<v Speaker 1>be something that I would view as being very fable

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<v Speaker 1>for the for the company, but it's not something we

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<v Speaker 1>have to do. How are your sales going this year?

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<v Speaker 1>Because we know that the auto autmobile sales on just

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<v Speaker 1>on fire last year. Truck sales are actually still doing

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<v Speaker 1>quite well. It's a company like four that was a

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<v Speaker 1>big part of their latest earnings growth. Right, But if

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<v Speaker 1>it's Pete does that what does that mean for your company?

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<v Speaker 1>And again, the sale you might the price you might

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<v Speaker 1>fetch if you do the I P O. Now, well, look,

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<v Speaker 1>you know Americans loved their trucks. I mean the F

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<v Speaker 1>one fifty has been the number one selling vehicle for

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<v Speaker 1>the last twenty four years. Out there again, Americans love trucks.

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<v Speaker 1>But more importantly for us, our truck bed covers, which

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<v Speaker 1>is a core product that we put forth in the market.

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<v Speaker 1>Only one third of our sales are tied to new

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<v Speaker 1>truck sales. Two thirds of our sales of all the

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<v Speaker 1>products that we sell in truck bed covers are going

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<v Speaker 1>into the fifty million unit registered truck market. So we're

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<v Speaker 1>not tied to the two point five million or two

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<v Speaker 1>point six million new trucks sold. We're actually tied to

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<v Speaker 1>the greater fifty million registered trucks on the road. So

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<v Speaker 1>how how are your sales? How does the consumer feel

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<v Speaker 1>to you? As the consumers steady? Is the consumer pulling

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<v Speaker 1>back a little? Uh as we hit mid years? The

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<v Speaker 1>consumer picking up as we've done it all as all

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<v Speaker 1>prior years. We are exceeding our budgeted forecast for the year,

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<v Speaker 1>and sales this year are consistent with the annual growth

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<v Speaker 1>rates that we've had in past years. What do you

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<v Speaker 1>think is going to drive sales next? Are you worried

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<v Speaker 1>about the feder reserve? Are you worried about finding really

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<v Speaker 1>cool new cover, our new accessory? What's most important to

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<v Speaker 1>keep your business growing? I think the biggest thing for

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<v Speaker 1>me the truckbed cover category and some of the other

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<v Speaker 1>accessories that we offer. The penetry ration rates are actually

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<v Speaker 1>very low. If you look at bed liner as you

0:10:02.800 --> 0:10:06.600
<v Speaker 1>look at toin products and floor liners, those penetration rates

0:10:06.600 --> 0:10:12.160
<v Speaker 1>are bed covers only represent penetration rates. So we just

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<v Speaker 1>launched a direct consumer campaign to go out there and

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<v Speaker 1>advertise both on a broadcast and digital program on a

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<v Speaker 1>national basis, to actually promote truck bed covers and you

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<v Speaker 1>make them all in the United States. Well, we got

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<v Speaker 1>we had many factories in eight different states. So from Michigan,

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<v Speaker 1>the Tennessee, North Dakota, Springfield, Missouri, Los Angeles, all across

0:10:33.120 --> 0:10:35.160
<v Speaker 1>the country. Well, congratulations, you're doing great. And when you

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<v Speaker 1>want to announce the I p O, come on taking Stock.

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<v Speaker 1>We're here. You can tell the world. I'll be very

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<v Speaker 1>happy to Bill Reminder, president CEO of truck Hero, joining

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<v Speaker 1>us from here in New York. He's based in ann Arbor, Michigan.

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<v Speaker 1>I'm Kathleen Hayes. My co host Pim Fox is on assignment.

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<v Speaker 1>We're going to be speaking and next to a legend

0:10:54.720 --> 0:11:03.520
<v Speaker 1>of the markets, Leo Melvin, right here on Bloomberg Radio Tomorrow, Tuesday,

0:11:03.559 --> 0:11:07.920
<v Speaker 1>and Wednesday taking Stock in Orlando, Florida. At Pershing Insight

0:11:08.120 --> 0:11:11.640
<v Speaker 1>sixteen two thousand plus investment professionals from around the world,

0:11:11.679 --> 0:11:13.600
<v Speaker 1>the hottest ideas, the hottest trends,