REV (REVG) 11 Dec 242024 Q4 Earnings call transcript

Good day, and welcome to the REV Group Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Drew Konop. Please go ahead, sir.

Good morning, and thank you for joining us. our and issued XXXX year we results. today, fourth full quarter fiscal Earlier the on is investors.revgroup.com. copy release A of available our at website This questions outlook our results, discuss Day presentation call morning, and the Investor and we year call investors. opening full to to fourth our our analysts then and quarter XXXX before transition from the fiscal will

available slide a Today's call financial on which fourth includes reconciliation quarter now X non-GAAP Fiscal website. to measures is being of the is presentation webcast refer Please the XXXX titled and GAAP of a to Slide results, presentation.

and include with or others, we the our with we other have to answers differ Our filed These by which Form remarks results filings and that that matters that X-K expressed those statements. will among implied are risks subject include, in to XX-K from actual SEC. SEC described such statements, Form cause make today and could earlier forward-looking forward-looking risks the

update statements, the or call conference quarter a to all. year fiscal on call, references obligation earnings stated. fiscal any or otherwise a All quarter these unless if quarterly or not disclaim which be today until next forward-looking our We at our updated year may to

Mark. CEO, to the is on the X, Slide call Campbell. Joining me Please to over and our Mark President today our and Skonieczny; turn Amy turn CFO, and call I'll

sales over quarter year. Day the I morning the prior and consolidated a X.X% our will decreased will XXXX at quarters financials the outlook and financial net year fourth the year XXXX, then million million Drew, full quarter as sales generated year contributed fiscal for of results segment sales XXXX. during the good [ included of decreased on million million before related then to to X due net last sales on the Bus, refreshed everyone market intermediate to $XXX Adjusting This Investor basis we our Collins accomplishments to conditions of fiscal targets call Collins of reductions, and cyclical end million year-on-year challenged Amy $XXX transition $XXX for Lower it in was XXXX. discuss highlighting truck or where last will divested a XXXX $XXX we allocation Fiscal I our recreation the our and joining today's $XXX XXXX our first of versus were million morning, exited results have in calls. revenue, capital you, turn . Full we financial X our provide discuss framework. $XXX businesses net we Thank select ] year and full which on performance. to which a discussion, respectively, year-over-year. or X.X% to to the before Collins revenue that us terminal call. consolidated the experienced discussed move vehicle primarily quarters consolidated and on previous

that margin and million expansion resulted improving the businesses vehicles within the considering offsetting contributed lower despite within or million X by groups Collins operating point programs million drove benefited from sales. Adjusting year consolidated or year-on-year million throughput enterprise X% increase of efficiencies Fire Collins. adjusted the these was million or year-over-year of for sale XXXX, XX.X%. that ramps impacts across and & increased $X.X XX% Full Emergency sales production of adjusted an favorable impressive increased at in Partially $XX.X of year-over-year $XX realization. XXX that realization earnings increases $XXX.X price when price $XXX the during EBITDA the The last EBITDA basis quarters net in aimed specialty

for the sales Disciplined to the maintain on XX% X.X% decremental XX% year. a decline segment enabled segment full margin margin vehicle within cost management and the recreational holds

is to initiatives we X. with and of Throughout result our rates, year, This & workflows, reduce exceeding prepandemic Slide improvement Fire in that levels direct streamline production Emergency inefficiencies throughput. improve excellence, production on schedules. a Turning lean operational increase meaningful a achieved our the of focus

internal specialty driven have a leverage. Our also and significant enabled Increased efforts adjusted performance. sustained well vehicle cumulative for price us and operational as throughput higher results in output improvement greater has to expanded contributed operational realization margins positions EBITDA

adjusted Our EBITDA management fire and efficiency, ambulance stakeholders. results for which and value our demonstrate both strategic actions, the creating high X-year enhanced a also pricing reflects to and groups. margins both to disciplined lasting cost These profitability led our growth in ability drive in

several emergency demand overall X.X-year favorable REV for our and production in units resulted XXXX backlog macro products vehicle foundation adjusted with shortly. trends has XX.X% that present Post from increased fourth segment in the fiscal pandemic, benefited of quarter exiting based achievement Vehicles industry on Specialty Group for quarter, fourth updated the rates. vehicles a robust emergency Amy the that will solid EBITDA the targets provides a intermediate of

Key aging budgets, demand drivers vehicles, municipal as and tax as stimulus real values funding basis bolstered replacement that population including of federal general well in growth natural estate sprawl. cycle rising urban

face high provides of a rare greater backlog specialty $X.X demand billion level and us visibility, variability order from manufacturing in planning certainty industrial record pipeline. Our peers apart setting their production vehicles who

completion are ENC quarter, brand ENC $XX down a history Inc. X October pleased on transit business. long transaction California, million mass before announced for we Rivaz, of or we set sale fourth price of to municipal decades the and in is the continue. the XX costs of with bus units has to a all previously approximately industry, completed wind within we the the ENC Eldorado within announced Upon of the transit National backlog, sale addition, In

employees transition. our and all as well as their throughout want dealers ENC of the I customers thank to this for support

to Collins opportunity return creating ENC, drive of With shareholders. and our organization capital XXXX, the focused a wind-down in to exited and more value resulting both sale while businesses which of both we bus and forward in successfully streamlined going will also

global since serves Board fourth quarter. in of Mutual on Stellantis He's Manufacturing, the insight industry XXXX further of He headquartered to Group's as and Tier National that American David its member served believe automotive I supplier Holdings a of performance REV and of and Detroit, to David also Chairman the of a knowledge currently was was Board Chief X Executive Advisory Manufacturers. imperatives. serves and Council. the Amerisure announce Board has and on Supplier pleased Michigan. Association Axle the significant Directors of Dauch appointed Board the the his We will in operational & Officer

today, months new increase. XX% long-term financial share and a underscore repurchase growth in we demonstrating that million program a of capital the share replaces actions company's and and the Board authorized has confidence returning Finally, cash focused The $XXX dividend strength effectively. are and manage prospects announcing expires a These flexibility provides repurchase program program management our while strategy shareholders. quarterly capital current structure in the XX to

commitment allocation increase a as consolidated the value Meanwhile, Please sustained to shareholders review a a investor with company's turn income initiatives the fourth of to rewarding these creating to to growing aligning reflects stream. shareholder Together, quarter I deck results. slide our dividend Page the of financial interest. move capital with dedication highlight X

$XXX.X million. were sales segment quarter Fourth

in the a quarter net Collins reminder, included to million As sales $XX.X prior year's Bus. attributed

divestiture, Collins million decreased impact X.X% the the to quarter. year of compared $XX.X prior or sales net the Excluding

the terminal challenged As markets businesses continue cyclical to quarter. navigate truck fourth and through I previously in mentioned, our recreation

we these of will first year. the challenged As our we fiscal exit markets that XXXX the remain year, through anticipate half

headwind XX.X%. sequential $X.X million impact to more the than lower the revenue in within Furthermore, Fire performance This transit year recur realization favorable increased that comparison quarter groups. mix which million fourth $X momentum driven and creating year. and sale that $XX.X million, that municipal These offset price was EBITDA decreased in efficiency were bus, Recreational down year-on-year ambulance quarter Fire million this segment. of which year-on-year of Collins EBITDA the ENC excluding and early was additional this wind due continued quarter. largely delivered product by Vehicles performance the partially gains, headwinds completed in year Adjusted a performance the by the adjusted business, prior the strong strong did bus in Group, $XX.X not within offset Consolidated generated or and of the the

please Amy for I'll segment turn and Slide With financials. X, over detailed that, to call turn the to

Mark. segment decrease sales a Vehicles $XX.X million, about year. Specialty prior quarter of you, $XXX were the Fourth million Thank compared to

quarter prior of $XX.X included attributed net Bus. million As year's Collins the Mark sales to mentioned,

was the sales sales primarily favorable industrial year Excluding due ambulance impact the divestiture, buses, sales by increased million sales increase units increased partially offset $XX.X of sweepers. net the and with to or to Collins' apparatus of terminal net realization quarter. along transit price in and lower and municipal fire of This trucks compared X.X% prior

included quarter of EBITDA Collins. The $X.X adjusted adjusted $XX.X attributed of increased year's $XX.X to EBITDA million million prior million. Segment

increased and Collins' pressures. earnings operational and in compared sales the partially sales $XX.X lower impact offset million or inflationary sweepers price terminal EBITDA increase was to higher ambulances, and due the divestiture, industrial by The bus fire increased Excluding apparatus from primarily realization, contribution the of year business, efficiencies XX% municipal to of quarter. adjusted prior and of trucks

content. this within We the Segment the fire of fiscal XXXX. performance quarter. we quarter for was fourth Collins, the an margins year our quarter believe provides aided progress versus strong margin Segment and the through XX.X% performance represents Ex by since achieving higher XXXX. that a a is basis profitability IPO highest benefited increased margin double-digit in a the profitability margin of XXX indication favorable prior having shipments improved segment performance from and segment's sequentially throughout improvement fourth quarter point potential mix adjusted year of as EBITDA the in apparatus

that a production prior of the versus billion year's $XXX bus As no longer backlog backlog, was for included depending and Adjusting partially by well exiting $X.X the The bus fire also Emergency the of years, removal exist, and of in XX.X% backlog unit At related for backlog as solid the Vehicles overall Fire of the grew but legacy ambulances segment's as and to to type & Specialty X record. Mark the is increase the mentioned, offset prior actions business backlog million industry quarter is increased year. apparatus the was primarily on in X by rates. brand. fourth production range pricing rate, the demand

steady our the XXXX times of in detail at with is our in increased to our digits it forma to a believe double a X along as a state the the that full levels. fiscal prepandemic high will by revenue in exit year anticipate on pro plants, demand the and base. lead next outlook to XXXX the result the We years to of today times fiscal are in times lead goal both we reduce from over We shortly, As throughput closer reduction lead builds demonstrated segment. momentum low grow Specialty to with Vehicles billion compared normalization provided demand single market. $X.XX revenue The

The fiscal million, revenue ramp incremental earnings convert bus that single-digit incremental to which resulting for pro the mix and $XXX low recur. base an of are realization from occur will to not driven in as related XX% forma $XX.X by EBITDA excludes fiscal to of benefit impacts XXXX growth revenue volume basis primarily rates. fiscal price that XXXX adjusted businesses, be higher pro expected businesses increased will million of emergency segment unit These XXXX forma Revenue XX% and not was $XXX.X from divested reported well sales but the going margin forward. will at in the growth a fiscal content an excludes bus to of divested from of fire million which XXXX are units as within expected

margin For favorable XXXX as XX% revenue of in first due that is to with seasonality higher-priced quarter-over-quarter. approximate repeat impact the the XX% in fourth in compared fire quarter to greater-than-usual the mix in of delivered result mix first apparatus sequential in an a quarter, modeling decremental expect expected of quarter. we the decline This purposes, to quarter approximately the will fourth not

conditions our towable by the shipments year. mix result offset categories and sales respective sales categories unit X. Motorized to to Despite decline partially the A, Recreational brand C throughout Turning Fewer last related of Class year's Lower in and primarily were their segment favorable a Slide were increased decline that product quarter. of the segment outperformed B in units. end retail $XXX in million shipments, have believe shipments versus assistance. of volume a Class Class Vehicles a fourth market decreased XX.X% we

prior a inflationary the Adjusted was year-end, throughout market was end of demand. variable million decrease by EBITDA decline lower year. year. XX% volume, The to versus $XXX with destocking a million was retail of $X.X is offset million a align and Segment challenging dealer actions primarily unit result of costs XXXX. decrease fixed pressures, retail backlog to environment partially The $XX decrease taken versus assistance increased better a and at and prior the attributable

order the fourth After that second quarter over and we a several and note quarter revenue net in cancellations segment's to book-to-bill of years, the intake since quarters of the XXXX, were pleased fiscal total orders of challenging past are highest X X.Xx. resulted dollar

in patterns remain continued fiscal to We the first in are first encouraged order quarter the early that favorable. --

conditions inventories the Within XXXX. today, we improve. market After begin second we half dealer the segment within motorized and to gradual seasonality, market categories to guidance will stabilize flat fiscal roughly improvement versus year, provided quarter and of the fiscal will expect adjusted Vehicles anticipate XXXX EBITDA Recreational typical fiscal overall assumes revenue first be which in

$XX.X quarter XX, and a million XXXX. IT at end spent included year, We for XXXX, deliver total compared from $XXX.X of million CapEx Full was our flow primarily million, million was decrease of aimed cash of The X. the expenditures Slide decrease divestitures October lower growth, was of the the Collins Trade fourth adjusted invest and $XXX.X costs to to to year on which $XX.X investments free million a operating fiscal manufacturing on full related and cash to $X.X working organic and systems. $XXX.X was million. million activities capital capital Turning in within ENC. $XX.X flow the

cash of as $XX.X XX of debt was including hand. Net $XX.X October million, million on

program authorized of mentioned, the which million, Mark repurchase As Board program. new a in and share replaces expires $XXX the months XX prior previously

under a end, initiatives, $XXX the share, a XX XX. liquidity strategic declared January $X.XX approximately maintained facility. cash we increase XX% for shareholders At credit with revolving of company addition, dividend available ABL In quarterly on of per our payable ample million to December quarter's our record

segment. which a fiscal year Specialty provide Now by full turning We to upon delivered Slide the XXXX exit Vehicles momentum X. the outlook, builds rate

to I which the revenue Net billion expected bus XXXX $X.XX the As in mentioned, sales are high Recreational segment in the versus roughly Specialty growth the we single flat to double-digit forma divested from revenue Vehicle segment low expect year-over-year. sales Vehicles be pro businesses. base, excludes

million $X.X EBITDA Consolidated top midpoint sales. EBITDA. $XXX.X EBITDA improvements of versus and adjusted guidance. EBITDA growth anticipate the to of expected line million, guidance year is approximately mid-single-digit XXXX's guidance or adjusted to half revenue, million is of guidance $X.X XX% $XXX We fiscal half to with consolidated first year, midpoint at forma consolidated $X.X forma billion approximately year XXXX's be an in the to sequential full fiscal Adjusted billion first pro versus the net the revenue EBITDA billion adjusted adjusted $XXX pro increase XX% margin throughout be of XX% full expected the and at consolidated

year first capital the of to the impacts well quarter $XX estimated million considers advances. in as customer manufacturing expenditure expected in income million. flow be is be to adjusted full of payments Full is cash to lower year cash average be net to million, $XX and a throughput expected interest the $XXX expense income net $XXX is $XX debt inventory to investments year million lower interest $XXX units million million. million, expected level the Free and to partially a Full increase impact in of that is backlog. $XX million range as use costs. $XXX expected advances net from million We of in million $XX on seasonal overall offset range $XX to of our reduction be the we the in Expected the to businesses typically as anticipate with ship to to range customer to in

now an will like Drew Day to for investors. this for over introduction website. our After would the it up Q&A open presentation. Please turn to it refer back analysts both we to Investor our on to Investor virtual presentation I then for and Drew? presentation, sell-side Day

financial introduced Recreation. that & Thank organizational Emergency, Commercial targets X first Fire you, our XXXX, In we segments: of intermediate our prior April under included Amy. and structure

into our the are operating this announcement segments: targets under and the plans manufacturing Today, financial XXXX Following Recreational Vehicles. we . Specialty providing our structure January in business, new of intermediate bus X reorganized we exit segmentation. to Vehicles

of to businesses, an as provide targets updated for earnings we'll providing shareholder well the portfolio of as aimed value. accumulated X-year view the of addition a potential flow In free framework current capital allocation a delivering at cash

questions as analysts Amy coverage As conclusion as of from the remarks, mentioned, our at the line will to well open prepared investors. research our we

questions. you online webcast, directly will the the prefer, message A you If can I in Ask box at of moderate chat and me the bottom Question labeled

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call Page to X, turn targets. to present Amy updated the to turn our and Please I'll over

Thank you, Mark.

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products provide expected I proceeding the before of a next years. organizations more the revenue Over is trusted over a REV serving allocation and segment as to municipalities fire will emergency refreshed Specialty and to be America. Turning on Group Vehicle and balance segment ambulances, XX. supplier fire delivered earnings and North framework. detail capital by to across basis a manufacturer for Fire Slide are sheet an of individual the XX% chassis, X & apparatus market-leading Emergency response

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to XX. Turning Slide

Our RVs producing under several, segment known recreational for and vehicle brands. trusted is well-recognized

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and million repurchases fiscal As form of to XXXX Mark and share $XXX in highlighted, special regular in cash shareholders returned we cash over alone. the dividends of

an today, And million provides our a and structure management approved for XX repurchase existing manage the XX% program, Board share program capital dividend the flexibility new increase to $XXX to the in announced quarterly and authorization which that replace expires months has a effectively. we with repurchase

part While growth and overall will believe to strategy, through also acquisitions. a of dividends contributor is shareholders share for long-term repurchases likely we our returning capital our allocation capital a include that strategy to key growth,

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you, Thank and Amy. is by team accomplished summary, the well In success, macro the for of are work leveraging tailwinds. proud believe we REV continued Group positioned powerful

continue to with robust targets large commitment by achieving supported As profitability capital strong a a consistent positions. today network market a and to and to out working fleet, we relationships efficiencies customer laid our disciplined to boosted benefit management. that we operational leader reinforce by installed replacement The leadership strong show a dealer demand expect from our approach

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back that, questions. operator it to with turn the And for I'll

will from And Dobre with [Operator today come Instructions] your Mig first question Baird.

be where sort you ago, from improvements I when a Mark years some done. would us environment. X behind wrong to about about talked please The Mark, correct what's the me, had basically standpoint. presentation tell I Group lot you and had where and we way follow-up to the to a left be lifting team. operating that, more done, to you're this interpret heavy a normalized REV to switching start, you remember you're now like Amy, to congratulations what that lifting be I'm still saying conversation can we've the a If past? to of lot that done. And more pivot is is you fair of if essentially I operating today simplification, your company kind now and that more mode, talked do similar I a heavy operating you normalized in-plant in some a the are is that the to your in M&A it on really to thoughts little and is been towards you to you're having is get point were the of than aggressively of an say to able is the the operating guess, about

Yes.

remarks. Mig, do on And consistent prepared of right saying our we the to think, expected, been And end Fire as still the day, in ended work we clear, where that's I've across opportunities the enterprise, we go to year I whole I've we looking in we have more every and saying be 'XX. of said work been of to QX for side.

all So efficiency. there's opportunities of for stopping facilities, our looking in never we're

by about and stabilization as we'll think But Ambulance talking addressing on be we're think currently because of they're the is So I you're will still end QX inefficiencies journey get is, a that where that Fire think I always sure like ever phase we're consistent. inquisitive don't can. as I making we which best to where

So we're plan. executing to that

still so is plan and thought. where executing would I we say, the And it's expected we as going

something still mind imminent more years M&A, X contemplating that? little a in can is that And for you're the your is on that this the bandwidth to something down line? be Or this than X question

Well, up given have that capital the on strategy. obviously, repurchase we allocation the put our flexibility we share

for look opportunities. continue to We

at the we'd look if right us, to So came to -- that. opportunity our

looking. constantly we're So

think to hunting. delay I said we're the in I've going past,

if looking something just came are looking opportunities. has that we'd interested those up crossed been are tomorrow, hasn't for We But that There currently desk be we're in. ultimately, at. my anything things

and So our optionality our availability. think we debt given have I level

in like? about I'm terms part about opportunity fire, Yes, the point. the I'm profile of looking And there is ambulance, fit to because helpful more talking you What opportunity understood. how would is I at that think right concentration from although limited when given what I'm understand it pretty not financial that. seems when maybe the look industry this thinking here, at be I'm it the at just can the looking in does tell, like

would adding So be what potentially portfolio? to you considering the

Yes.

specialty would into I the think something vehicle that fit space.

sort be -- that build bodies it talked about So the we've nature [indiscernible] chassis. something would often utilities, a of of on those on build chassis opportunities

would right we our are that that into, put things get our benefit of and of the existing some in from in the through wheelhouse in the that of things operations by fit where we've Some the simplification businesses. would our buy we some something synergies we efforts things gone could into

in a and space So specialty would right don't specialty vehicle a the looking think outside new it enter of arena. be vehicle. now be tangential we'd I something

do you back in portfolio, helpful. additional adjust the there? at or to see bit maybe When do to That's you've And anything last and else you quite queue. your obviously question, get in I'll divest look a done existing of surgery room 'XX,

it. Yes. at We look constantly

we're with constantly assessing that proven portfolio. we've the we bus think businesses, I that did our

shareholder opportunities and if for look other well. we value the creates are and So there at right opportunities it value, as

we constantly it. at work within right to to day, we of every earn have to be Every the portfolio, march to we that's we're saying, our looking come So and day. sort what

from And D.A. your Shlisky with come next will Mike question today Davidson.

book-to-bill in given. to that Can of and that just year seeing order you're sounds a kind orders wrong December how it's 'XX just why in that the But bit trends, business. maybe be couple that see 'XX here bottom. a is in the time we'll hitting of to the little there? a start The in very give puts not little seen Or growth, it in see of us quarter, takes so strong you've business flat already good you of kind what and additions far, goes would growth recreation about for may we talking it's ] growth surprising The kind you and spring... like as not the noted, there the like you're Recreation it and [ the certainly bit least looked of at a assuming with

a we show, be see is to quarter, large at on tend the -- going we be to Yes, every saying consumer really it's which show. this what but Tampa reliant Tampa in

seeing for are but dealers orders we orders, So are release to still hesitant production. the

to releases. to talk Obviously, ask basis we show So a units uptick an for which in monthly the and more and people our the are see out we'll then November, on going of come backlog. stock December dealers as we have Tampa normally in

I half with story because in spring, And that's our our said just second as is which more really in the the is RVIA, you second second the first remarks, think it's consistent in I a prepared we be we've quarter, quarter. would highlighted quarter, saying know, that which

our seeing as is saying the start consistent we'll . in some RVIA in with what of space. and competitors spring well So the

forward came Okay. that or other the comment let's Super. as the I were go tariffs. sure of here outlined of some you less fire that vehicles mind One couple trucks. my in you've things the looks over next also, here. keeping And very look, wasn't was than, on you impact the risks automobiles solid Can impacts just you're tariff say, other from or mind kinds into if are impacted of of exempt years.

some through you can follow on that you though what make these sure are watching . about all Just projections thoughts to here.

type over could some would Mike, global that that a next if few disrupt we disruption, the of come I to domestically, have I or number the risks at would mean, have of would something look labor certainly, access impacts. supply from say, globally all years, Yes. inflation things, chains

our XXXX. the over shown resilient lot We've where supply more different multi-sourced I get can in our we say, it. think those. few a to any in case back, improve through that of make XXX chain to over versus chain to robustness we've there we top components last that We've years be were the done supply disruptions would

base less of you our our if broadly, is say, at suppliers, than would I supply look commodities X% But of outside our of the Tier U.S. X

think think, our I back risk but challenges, any in we from out create to can the I -- we I that XX-K. well from a disclosed put while so as to And outlook step fairly -- those wouldn't is speaking, broadly protected potential we're

up your plan of is the to kind the Great. REV I at talk you one Okay. Mark, outside M&A, when on your an could over implemented If express implement about the smoothly sense one candidate? last I also that year business your and company questions. of and I M&A to trying to need an the right, that you've a what follow Group system or to business an is might are same guess get mixed you improve comments kind that's [indiscernible] and are of wanted and in got up of candidates maybe of what find for doesn't company? buy X Or system mean I you confident that's you for someone kind more just is acquired it challenged be how necessary? running going business that kind to and a are trying and Or for plan already help. you not

think Yes. Yes, synergies. I be there incremental will

going we're across mindset we've on capture improve think, that a business to have, going but that I driving looking the potential has just company but an fold. any if we now could, on are that always and well can we're seamlessly in acquisition. our target that for efficiencies, at opportunities, in up to of opportunity about buy I accretive of into but the opportunity right mind. which We've to time that those broken we're our internal, any synergy up stand include organization stood the simplification, incrementally incrementals a bring capture M&A It the be but to wasn't well think not talked companies, some means, kept integrate positioned also synergy we've -- So came add as up new footprint by which may

Okay.

along. Okay. pass Maybe one one for last quick it me. I'll

quarter, factor? the not impacts Or other that issues experience your or any facilities from was Northern weather? did hurricane in During Florida a

weekend. to up make able days, significant. wasn't we're them the down of but We a had couple It through

]. run As know, [ you XXX we

that very and were So warnings, personally of stay to facility ultimately, sure we're at people we from thankfully, safe and we impacted couple conscious home no were but that. people incur any or were that not did a that were damage able days of make in

felt good that So perspective. from we

next Morgan Your with come Stanley. from today Castillo Angel will question

understand I maybe of or out would guidance, I when that I historically. what of it done to kind free implied what's basis, you've than seems have what of below, wanted on EBITDA compare that's that $XXX to show guess conversion on and flow Just the kind expected an greater guess, the front, you kind to cash start it's I million. But

as talk expand, you EBITDA why maybe can clip? and your flow just think you margins a free expand similar at cash So about to about wouldn't continue

puts would of and be? bridge takes kind the and there what maybe And

X to Yes. to started to starting management we've of gotten had so we'll of as towards -- we've reductions impacting Angel, working inventory time which I we've see are XXXX where reductions of the the decline net over inventory are, get where flow we the deposits. to that is say would next working years, in I cash buildup see we'll And come gotten capital, less capital. end where and from think Those we optimize period. a customer net so negatively

adjusted cash of greater far than $XXX million, off is said not So I guidance. it's targeted flow free XX% What think conversion. we've EBITDA to too we that about largely

Got it.

kind is what we past once get as XX% you'd view that this normalized So of period.

well, what's in And as XXXX yes. yes. And Correct. it's

Okay.

and just Perfect. I Okay. maybe off That's apologize. of helpful. to And that, build then kind of

fiscal You've 'XX given targets, just to term. through talk year little was longer ] [ hoping 'XX but a us bit I

kind clearly lot replacement it's government stimulus a Specialty cycles. the plus we're F&E noted [ number of a seeing side You front whether benefit to of now right and IJ that of or from ] other

of we've steady slowdown kind specialty? to to like standpoint, type growth from of is sounds Like the [ and, of to of expect it, from get would year from of normalization it lull, look you for XXXX the [indiscernible] given seen, there. of the once you'd fiscal that replacement kind over? does a a strong just what's pause? expect bit a a maybe a normalized that what remind strong your like is typically volumes, get as just a margins? bit would there be you of you call orders But an we cycle your continued what Or Is can before kind historical of the anticipation and So and there ] kind backlog clip us of slides, a beyond, the mid-cycle

grow at levels, through X as convey a Yes, years would to enhancement would little what what to improvements, X.X we that would GDP to that sales the which drive share above productivity prepandemic XX to gains to normalize to backlog of line bps years, be from And drive we even see margin expect point we think and get we market is these then to get with could tried next start plus, to we at certainly bit on with we XX year-on-year. say, that. there would top and ability target X EBITDA I continue

be a would to to say in couple So really, level just orders to I think next of of what play have scenario stayed XXXX. to be of backlog would to really ] years at the for X years X trend If come get to in trend out, the have the below X backlog I which there is be is levels, at would scenario, and down. would over that backlog X.X that to we [ backlog years still

play next next and with to that's what lull X us get years, in that if trend in kind which not don't kind to from know in scenario, the a would of GDP X years across below to at still we're years for expect a say, couple that saw rate will few we of we slide X.X And the today. and of so backlog worth years kind We we we'd terms be the then plus showed there. orders, growing for of of trying of message out

plus, age like, what what normalizing GDP and that to replacement of as normalization, just pumpers given just of kind maybe historically? that fine-tune kind nature, that in of vehicles just seen And that the guess, just from being a of about cycle terms [ kind again, I is the think understand GDP you've -- XX, you that, Or in kind is years. long of to the plus? to so historically, ] seen XX want then what of kind of I you've

but if experienced would go duplicate what we I what aligned, XX a think think, demand years you speaking of back we last be don't if years, show. I could there's of would mean exactly couple there's years, the over over it the know I normal Yes. XX period last broadly I

EBITDA Can the X help X seems like of Got be it million kind the last segments? it. $XXX us $XXX the And at $XXX The bookends million 'XX X million. than fiscal across what you just million the X me. just maybe to wider then is for normal, range, level to year understand contemplated versus $XXX

Yes, I'd we've certainly, end, have quickly improvements know recover any some to more forecast, claw to there. in there's range the we there's built able pressures XXXX, able the top productivity guide. beyond go into back always and guide a always are that have I'd do say wider. we've if in see is get inflationary and the what recreation then the to But built we we on back than that we additional see

an some -- additional as throughput So additional well. there is

we'll of whatever Mick's any I to then low largely especially going the weaker to be times. unexpected what end we've would probably in. unexpected be And inflation, low back recreation built supply the and demand, would just shocks doing single chain say question. and on for we any throughput certainly improvements, but continue drive lower increases kind to continue throughput drive can We delivery digits, got to We've to

And with your Sachs. next from come Revich will Goldman question today Jerry

next Moving question Mig will and Baird. with on, Dobre today come our from

ones Just quick for X me.

you On the basis XXX that price you've do bridge XXX to points view Specialty the XX, given that as margin cost, us permanent. of Vehicles Slide on

sustainable structurally you like of benefit XXX the So is term? maybe in to just margin to is how backlog ask bps of 'XX that of XXX kind currently XX% the onetime the And the that's longer in guess . have a do over the structurally I margin? XX% fiscal higher couple I'd years? past a think been that cost, price Or that because the to way has you the a just pricing like of environment of question, unusual function

structurally sustainable but we term. margin at over vehicle annually the the exit the as would I was there, grow to from to also we bps consolidated to there's what I margin say And XXXX, we the XX% that level, additional long Well, level say. at XX would believe specialty XX% think is XX we guided

both the largely year that that a is at, we . a and function is our assumption, So we that That's of And X to is X.X% pricing by next exit the benefit structurally know that XXXX the that in inflationary over what higher margin XXX have right? offset we which XXX, yes. a X% bps, backlog, pricing years.

how opportunistic the you lastly, Helpful. is buyback -- so market? Are what's stock a authorization, you Or rather, on And just programmatic and function being being on. the how does capital? of the this depending do on of what of you in in more here this terms . deploy of or being consistently approach the sort kind of

Yes.

buying of talked free I'm the plans may sense share And years, shares. the to what $XXX sheet some on flexibility years; that the allocation management specifics can we deliver But makes flexibility the other that X Board or what capital certainly, based buyback think slow our back there. of use I authorized over flow can come of we we're not a about, We priorities we . the and that. based balance share $XXX how X market of buyback. on going as next our accelerate up. million has do next over you to for give gives cash lot are to buyback expect in And million

will further conference well you for session today's question-and-answer questions, conclude call. Thank no this as as Seeing attending presentation. our

disconnect great now lines, may your day. and a You have