Oshkosh (OSK) 27 Apr 232023 Q1 Earnings call transcript

Greetings and welcome to the Oshkosh Corporation Fiscal 2023 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded.

It is now my pleasure to introduce your host Pat Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. sir. you Thank

begin. You may

our call and this reconciliation published thanks the Earlier morning measures will presentation, oshkoshcorp.com. joining is accompanied we and by that a and GAAP for first quarter to website. is we slide also Today's at our website of includes on today, being results. available webcast available is call a Good on which our us. during is of A release financial use copy non-GAAP

The now replay will presentation. available two audio slide and be XX that on presentation approximately for months. our of to website Please refer slide

Reform Our remarks that statements statements be that contain forward-looking including Litigation follow within the your the Act. questions believe of to to we meaning answers Securities Private

are could to that statements forward-looking such cause those or risks to materially be statements. implied subject results forward-looking expressed by from different actual These

and X-K not with conference our These the at to until SEC risks if described any may disclaim forward-looking have include update morning quarterly next our in updated filings call all. we obligation among these matters statements with filed SEC. that We other which we be Form others this earnings the make

include Mike and John and Our presenters Vice Officer; Chief and President today Executive Pack, Financial Chief Officer. Pfeifer, President Executive

Please John. turn it turn to you slide three over to and I'll

earnings for adjusted Pat year quarter. you, and prior quarter first the of meaningful results share report and $X.X improvement XXXX both strong billion representing Thank good revenues the Corporation's morning to everyone. of pleased Oshkosh over with of $X.XX, I'm per

XXXX remain on and momentum customers. that began teams solid We the focused our in half positive continued of second the execution for our

share announce details operational pleased Mike QX strong progress expectations will more demand, compared to and a the provide of per previous in year raising $X on his of to to our are of in initiatives, range key estimate As we earnings section. full our $X.XX. our robust be adjusted result performance, I'm that our

significant robust growth. year-over-year flow operating driving margin confident longer-term billion. the near-term was XX.X% quarter. just led segment in the backlog consolidated another improvement over $XX billion, delivering approaching during at of Access and both Our in board Order we remain the quarter the record by across $X

strong, number projects We country. the markets of with particularly mega large around as view the construction

for majority In vast new fact construction age remains continued access grow metrics fleet foreseeable point for the future. categories the use to of to construction. cases equipment and beyond elevated continue growth The

the end markets discussions Show Our by was at customers in with our view on ConExpo recent bolstered March.

and as fire truck, bolstered We also by well, across offerings. markets solid our delivery RCV, electric market driven demand see by the and healthy new dynamics long-term vehicle growth

are in exciting as investing new support growth our as long-term drive products plans shareholder capacity, well for We value. that to

e-RCVs as segment transitioning XXX,XXX feet both Notably, City we're Jefferson investing for in and manufacturing next-generation our well in our delivery vehicles, Access USPS square our where to Tennessee. pierce segment, for fire as trucks, vocational capacity we are telehandler

our generation steps We also products. with of important of number innovative in portfolio to took quarter continue expand to next the a

forward to vehicle first product more the look growth talk well-run Crawler fully acquisition Compact manufacturer the vocational few in attractive Italian about we all-electric and equipment. February, a tracked of minutes. our new refuse launch integrated the our I'll and this access with completed We opportunities purpose-built Hinowa of In segment segment. in new collection announced of this Booms in revolutionary

technology our plans vocational & quarter, accelerated our an to integration we pleased better the at we're development with while for commercial enhanced and efficiencies, announced an fire as scale platform for we Additionally, segment, Oshkosh. segments progress pace. combine view growth the emergency outstanding leveraging to which and Last drive

have growth areas. been of in selected quarter on honored to the business rear to world's consecutive eighth designation our mixer finally, divestiture year. further the focus the our for completed with concrete most core ethical also we're We the discharge And

get to first to turn team quarter at We Access. updates benefited from in segment modestly shipments strong XXXX. chain our Access The excellent slide built better-than-expected XXXX with we'll started finish improved on four due conditions. an to and supply with Please on their

supply are progress metrics, as While improve with delivery have many as supplier we on-time chain well throughput. challenges remain, the to we actions seeing taken

as work Demand platforms for remains strong ages remain very JLG fleet aerial and elevated. telehandlers,

months average during In May XXXX. ages fact, Day since we in over of improved America ages have fleet North of our reported fleet not in Investor XX

New innovations improve continue to for use cases, technology as well as demand our products.

in of demand addition for point the impact mega equipment and JLG future. utilization Orders by of our projects XXXX to we healthy with construction record leading billion. rates that We quarter fleet high a $X.X strong continue foreseeable the be $X.X billion other backlog products year, limited will supply conditions. another at market-leading believe to and the remained chain verticals, to In ages, revenues strong to for believe

to significant we positioned event in current stronger expect not than well chain in faster XXXX, improvement chain While the supply are deliver improves results supply we expectations. do

Please Defense review I'll turn segment. slide five to our and

were continued steel the contributed forecast to cost revenues including with quarter the low inflation segment down the line year-over-year margin higher-than-expected Defense in expected, quarter. operating in As customer in requirements,

February, to Defense's the In of not operating that unacceptable learn As for lowest were last The quarter, believe be income. won win that a contract to Oshkosh. QX discussed contract. the we quarter follow-on that we would pricing disappointed level was did at be JLTV we will year

their we technical to judgment issue are on we in and the decision significant short, a mid-June. evaluation Of assuming the course, operational the the based protesting financial, US and Office based Army expect Accountability is we of believe capabilities. Government In award risk on

under deliver to contract. the the current JLTVs expect we reminder, end a of through As XXXX

pressure, we to With product combat continue fruitful wheeled efforts our such market under tactical more delivery. vehicle and the on focus as categories

The summer. some this Fighting and of won the Vehicle decision program contracts is Optionally down-select We the vying are phases others. outstanding for OMFV next have for DoD's expected Manned or

a high for expected position million Awards of to be period. for three the a value a announced level places we delivers solution a innovation strong and proposed us competitive which capability, program. to our that $XXX be are for bidder XX-month confident are with each technical We expected over competitors in believe

programs or are We RCV. Vehicle competing for other attractive the such as Robotic also Combat

We production with intention to initial to our on for their XXXX. significantly United increase Several months Service percentage to in order. their battery up NGDV units ramp program the plans expressed NGDV Postal the execute of BEV States continue delivery ago in the electric or USPS

mix. delivery BEV the good richer news country, a communities During for across modification the that USPS, This product good for the received quarter, mix is units. good and we reflects order the of for our

of business head we launch. this as We towards are growth excited about the

to of vocational discussion turn a X segment. slide for Let's the

segment new During we our believe to segments and for call We Commercial better and the The and development scale markets. several accelerated important vocational segment. vocational opportunities a to combine we drive segment Fire platform and our an call enhanced earnings last at serves announced both organic Emergency end form technology new provides efficiencies decision pace. a also & to that the as leverage opportunities inorganic growth segment our in

throughout integrating We the are in process the businesses, XXXX. which will of continue

months new benefits. are as factory in generate of as cost his to our savings expected opportunities Johnson leveraging shared ago Murphysboro, changes implemented The announcement $XX that three to and a synergy evaluated our back well structure both our result in are have numerous manufacturing team in office Tennessee. Since Jim million and annualized optimization,

second impact a business. of XXXX in discharge half wrap $XX mixer expect as services rear concrete transition modest and XXXX run we divestiture related million -- We of to rate the full the the ramp in up the

of particularly part from a only the we expect advanced are electrification synergies technologies, with autonomy. and also to benefit Cost story for development as joint

we to Additionally, channel benefit expect synergies. from

continue to provide in will on our and integration opportunities We synergy quarters. updates coming work

municipal remains fleets and Demand by solid very for budgets. driven fire trucks aging high,

times to trucks. a We will automation Robotic and as truck and painting backlog late large capacity Appleton, the that improved fire help we to Wisconsin. as our at into our increase output expansions, us XXXX. invest will well parts We in continuing us reduce are believe custom XXXX actions in have We to led help including for enhancements, capacity improve capacity very supply, in this facilities fire lead are taking believe in

segment refuse fully brand-new for debuted, built Of outstanding has vehicle. came revolutionary, zero for vehicle. is its the market vehicle, reaction the Customer course, electric. emission fully in RCV integrated our been biggest this February electric collection zero state-of-the-art, news for recycling This the vocational first the and fully integrated and when we ever emission

drive of ownership, unmatched with productivity e-RCV customers. ergonomics, and our lower body for The a cost supports gains total range of driver supports wide types, strong

you can strong. reception understand, So has so been why the

will Initial be Waste the at vehicle and We cab start up the and next there VR Expo, at from also XXXX, we in years. be next deliveries demonstration next Clean Transportation Advanced showing will Expo unit several displaying week. technology using the will for week, over ramping the

and to going expectations for to it turn discuss to more our With over results detail Mike, our I'm that, XXXX. in

Please increased at The prior improved quarter sales Consolidated Thanks, supply higher quarter driven over primarily pricing John. to or sales have a chain turn consolidated driven Slide inflation. or, million billion, the a the were conditions $XXX increase Access. and XX% increase an increase prior for response was million in over was by year sales sales of quarter. as $X.X increase the in by XX% X. to The year $XXX first volume,

for while supply expectations Vocational the That quarter, Consolidated segments. both segments. the expectations of be conditions the absence some due impacts for sales our Access delivery our revenue anticipated quarter to we continues modestly in timing strong and in to backlog demand said, to supply chain constrained versus Non-defense and very and in segments remain the previously due exceeded chain improved prior impacts,

over to of was versus margin by versus basis an dynamics million cost volume The sales. in adjusted X.X% segment. increase improvement represents increased income, quarter prior improvement operating particularly delivered million adjusted the in income. the XXX Access This improved the adjusted and in driven year operating largely year. a $XXX to prior prior or price Moving point $XXX of operating We the year

The quarter. compared results share the operating led with with $X.XX to Access the in strong quarter, was point the $X.XX segment per XX.X% prior earnings representing expectations. Adjusted Higher-than-expected the during year sales over prior quarter XXXX quarter, operating basis improvement straight third year. versus the a for margin first income stronger an delivered in prior

outlook to slide turn Please turn eight. our let's XXXX. Now, to for

in delivered first and we and to are expect We benefit full XXXX to start off sales of strong the quarter the higher the earnings year. a

chain modestly delivery conditions supplier historical our of most supply well the the first better supply year. remains chain remain so metrics off norms, for were still in than quarter, on-time constraint expectations While significant

XXXX in approximately billion $X.X basis, a and up the adjusted and range are income from million On $X.XX expectations million $XXX estimating $XXX billion of operating of sales respectively, we and to prior consolidated be our respectively.

from up per our will adjusted adjusted estimate share are prior We range of $X.XX. and of be $X $X.XX prior share, of year earnings EPS estimating the per in per share

At margin improvement level, stronger a estimating largely respectively. both respectively, sales XX.X% of operating prior are $X.X is operating prior segment range and and quarter than The billion by of our to $X.X we be and up margin expectations. the estimates from segment volume and sales driven first of Access XX% billion in

Turning $X.X Defense sales billion the our in year, for the to prior of estimate we range segment, to from the be expectations. modestly up

We inflation, catch-up well expect protest. lower other quarter, costs unfavorable first JLTV which X%, steel be adjusted cumulative modestly component approximately the prior to margin [ph] associated the as expectations with impact X approximately to in higher our the as of due versus higher of operating drove adjustments X.XX%, and

sales approximately dynamics We X%, of continue margins a our range XXXX price/cost in will versus approximately expectations Vocational prior expectations. $X.X segment of of from result improved adjusted be as to up of operating previous with expect billion X.X%, the

in to backlog orders booked XXXX in delivered be than a As be significantly truck delivered XXXX. our fire were with units and in to prices XXXX reminder, higher

these be segment and higher delivered. as We expect XXXX Vocational meaningfully in margins are beyond to units

costs from average corporate for result prior the tax remain our modestly $XXX share expectations. for year count increased as our rate expenses -- estimate unchanged of higher million to incentive and higher than and a Our compensation for estimate

and million also maintaining CapEx and $XXX at are cash We million expectations respectively. $XXX flow free approximately

second the the share earnings with sales experienced per we during Looking be chain first quarter, approximately to to adjusted similar dynamics supply compared quarter, those our reflecting expect quarter. first to and consolidated flat we

and of reminder, seasonality to a chain expect period we do supply strong apply this not As constraints. demand typical in very trends

closing I'll back some now comments. for to John turn it over

plans We for performance and well to of strong the we our deliver are believe kicked with rest off on XXXX positioned the year.

innovations in our and We are future investing capacity growth three to in segments. support product of all

finally We strong see continue that our will in making We robust I to actions beyond. and we our you today. message expect supply we from markets last challenges end can the in as fundamentals from to results remain XXXX believe growth take very address deliver call. And progress our and key reinforce are earnings chain and a

Pat you. to Okay back

question-and-answer Instructions] Thanks, call. Operator, this [Operator John. please period begin the of

Thank you.

session be question. from will a now Jefferies. with question Volkmann comes proceed [Operator conducting We Instructions] first Steve Please question-and-answer the with of Our your line

morning, everybody. comment you revenues I you. probably really a quarter think chain. you're Good guess right said you Super. seeing what than not expecting. like I'd And in better go first Access Access But improvement Mike not surprisingly. it Thank were that in also supply to I any you made the then to guys have were

improving? aren't more of the square just if door to trying out How So kind so I'm the get first quarter chains that. much supply in you did

Yes.

chain to modest. showing of So all is Supply I guess definitely chain. clarify in It's supply improvement. first just

you at of we quarter, supply is with interruptions. the if first see tend environment even what to in specifically weather, as normal well I holiday shutdowns typically think a some see chain look as we suppliers

So we volume really than quarter more view that more perspective anything. so timing a from going was really be to the impacted first

see didn't we is that. news good The

was quite resilient of off expected well we quarter, in the supply chain norms. than still again So better

we So will QX run next cadence would that of seeing carry what in really couple perspective that the – that revenue from we're a is Steve quarters. rate expect

of right I equipment therefore be just seasonality or is our would quarter a production supply else. production. due anything lower having days, bit not of say to fourth that fewer the would less It's because chain really now expectation normal

that's how we at definitely rapid viewing we seeing So improvement. are – are It's improving. it but a right it But now. seeing not we're pace is

but this a which words bit In is other shipments. the primary increased driver at point normal us better, back Steve it's getting not to of it is

that chain mean we forward forecasting on you it really And are but any supply hearing going like away I improvements conservative you weren't Got you it. in maybe my that's Understood. seems the as well. disciplined follow-up from said improvement because

So did if chain out I'm the supply would more curious get you improve door?

if continues in a question. the to Yes, what we through Yes. to your door. expect to more supply Easy bit get as being the cautious we'll answer terms chain out go of We're year. improve

Thank you, guys.

Jamie Our next your Suisse. question Credit comes with of from the with Please line question. Cook proceed

where first just couple Hi. the margins? the medium-term versus get talk it's JLTV expectations question been margins I I first my Good and morning. on is then, constructive were in you the path much impacted the guess And defense. Can of John to to quarter past about margins how years. as guess, protest more in defense under-earning

there. start I'll So Thanks.

catch-up mix. quarter the see We talked that order margins. the quarter expect an drives -- In call, unfavorable unfavorable last lower because Sure. the in earnings on about that we did That an of mix our cumulative adjustment. Jamie to

seeing lower though So forecast. again beyond a bit it commodity than was just and the what expected we was that, inflation

protest believe the for do we of rest quarter. impact, guidance not JLTV the the That's going costs year. really the year related incremental lowest the bit lot a of a it's in quarter in of first embedded be to So the yet

general, to lower the margins up And I are say look going NGDV year in ramping ramp change to just in that's start We're we as business. a to as to we going in lot talked about would up defense. we that next profile margin be and going meaningfully volumes

And… Yeah.

And follow-up… then, my

Jamie. Yeah. Go ahead,

ahead, go John. …sorry

defense take catch-up add to by going have cumulative just to term there's have squeezed there's was because I short-term margins adjustments. that. long-term, short we these the And inflation, been to

start that some forecast business. see the bit improvement inflation normalize start improve we'll just defense then, or a of in margin even because maybe you'll As they'll to

business longer the is going improve little The of couple Mike that for longer three it years program two, the years about a over talked are online NGDV meaning, materially. to good us. bit margin programs term combat that margins the these winning term of starts next

incentives development And where a on I your guide Okay. now product in I the just follow-up numbers think comp Can in just me then headwind before there's $X.XX Mike you incentive Thanks. guide? higher. remind are my little new $X.XX was think

Yeah.

similar $X.XX. New product is the $X.XX compensation about is guide, new development at and incentive

Okay. you. Thank

Jamie. Thanks

from question. proceed of next Our comes Sachs. with question Jerry Goldman Please your with Revich the line

morning, Hi. Yes. Good everyone.

Jerry. morning, Good

be just like going & in looks emergency point wondering, the I'm could that the in to it this you exiting nice you we where year quarter. remarks? you sequentially? to first to talk Is Can compared margin is quarter? to XXXX And prepared if pricing your had the higher XXXX than on it how improve comment in much starting in improvement the point fire pricing alluded a about is

Sure.

that of it of and is comes increases we've timing down some to really had. cadence the the So the

of So pricing low in year. see back-end we'll loaded. see the we single-digit where XX% it's uplift end see We'll double really over sort the a the as next of change i.e. really year digits we and vocational by see in

So level back to business be to that's why that we confidence a have a there. double-digit we're going

really later into it's you -- get XXXX. in we increase see, when So the year meaningful some

Jerry. It into we will as XXXX transform go

interesting. then chain that the number three I like now pinch rising just versus to a just track components are today your list. that know, on you of ask level? six ago? And meaningful points are can can watch most What's comment that the on Very number And I are the what supply on months carefully to you look

up supply some like in basis chain hundred Yeah. but We few to it Again, Supplier XX%, be, would we'd to above on-time deliveries level track a by the not delivery. made supplier several decent improvement. be highest metric like points. metrics improved on-time it's it's

of past dues. We weekly interrupt more unexpected we if can That almost That's production, a track daily basis. dues. also past have

troubled there's But risky categories a best a in were our manage have a have is of basis and the we quarter charts moderate still improvement on now suppliers basis. guess we're and that we way more to I our that describe ability. week-to-week What components But there green we have ago. to day-to-day on I would than still seeing say, it

I can't supply to to to I be starting we've we're more help our efforts. additional sources sourcing lot our that's thing result we're of engineering see taking. doing One I reengineering as lot on will dual doing suppliers think produce of that a to done stuff the been better. having it of qualifying And We've overnight. really starting do but Takes that say actions been supply been to a some lot benefit is, positive from us of We've a ability a more. see in impact work think come those a a lot

you. Thank

Jerry. Thanks,

Our comes the Tim from with next your with of Thein Please question question. line Citi. proceed

Thank morning. The just is Good is first on one question guidance. -- EPS the or you.

if to So looks the biggest the quarter be normally similar as seasonality and quarter. second tends first the quarter normal to the third

kind would all $X Just I But step that stuff. kind to would in the really because that? has imply that go figures round again Is on anything in a in thinking roughly quarter. got supply know should the fourth through every up single but number. imply seasonality there to pretty think chain weigh be of would like that that out? would we big of I get anything mixed sizable there call that in you your is quarter not with that to -- about that the down detail

Yes.

You hit nail on the the head.

first quarters seasonality, three in guess, with really think these apply. I doesn't I normal

our wide on you margin based what of some is is I factor. had supply right demand seasonality exceeds now. by the Demand think a a historically

So producing. we're delivering essentially everything we're

the would is expect fairly be -- to I cadence it really going flat. So that, revenue

you fewer in there's see step level stays days. quarter the down chain because then fourth a and production supply If a the same of bit at just

the number a on chain is the improvements So supply of well number the in dependent days guide -- of on of quarter. our as production really cadence as highly

-- with Understood. in Okay. Can don't degree wrap-up then you the point capacity, increasing agreement and -- or…? to the two. memory I confidence -- next or you have assumption the fairly a is to if or that If know I that increase. OEM on maybe am back And telehandler year is a I is serves long some major presumably have due visibility that capacity expect a gets renewed that you -- would telehandler fair that of you're supply

really -- investment. referring that telehandler the a lot opportunity seeing the talk -- for new which entire Well, time. the about we our But is drive a that's we to have leader that what's see we market for for see cases to of a continuing growth It growth. this really there's of driving telehandlers, you're long reasons And partnership the opportunities let great being over that We're the years of ahead that seeing all in is We're us. It's well been in we just that's the we're that telehandler to us of has continued in segment me investment. happening the as use multiple us the we're continue growth market. business. for a one discovered and great partnership one capacity to see market do as

across Cement not look and utilization above the it's healthy, it's healthy, really lot in It's contract long-term, tell positive these hear data we're metrics segments. We But in the metrics. business, any see what's of it these points follow near year. and about day Association, growth. term expecting at think last We Portland driving in every we Insight, all it's single construction you a one even cetera et the JLG if us have. growth And that Global Moody's, we FMI, that the IHS, I data

manufacturers definitely manufacturing. production. reshore an many to construction causing and concerns geopolitical about hear impact having You already on That's

for That's about mega projects. do mega to infrastructure. these spawn projects just with have has chip do beginning with been do It bills new really that to these has plants. plants. have with hear You It mega all EV lot to passed projects to a

know continue future are for that causes we to and we meet demand of relatively metrics have that because think we to to in is And these the why healthy. demand. bolstering why invest I All good us see capacity, foreseeable that

time. the for Thanks it. Got

Tim. Thanks,

Weber with Wells question. line proceed Fargo. of your Seth with Our next from question comes the Please

[ph] this morning. This for is Seth Savitz Larry on

Good morning.

ask cost Does to ask of a for remainder to just some outlook of the the wanted for about -- less the the outlook year for become progresses? price wanted as -- for it price access tailwind Just the year.

Sure.

Access, on the I -- now continue not say, price/cost additional supply cause -- inflation see for margin to going opportunity story the would caught essentially obviously, monitor right actions. now. pricing we're we're and that's we're really For But could And up is to scenario that still Access. not capacity towards normal, additional right as we continues up chain is perspective to our production. we're a where from

So it's through factories. more volume goes and throughput our

We higher expect to see margins.

So I think at really not point. the the driver is cost price this

Understood. seeing are order anything concerns of Okay. a And or follow-up concerns that cancellations as to or just you nature? any due rate pushouts or macro

product for Demand the strong. really is

for about. our at I'm Equipment, talking I you're so You what -- look order to referring Access think rate that's Access

Yes.

really at are XXXX. is taking orders in That's in fully now the open we're And the first XXXX $X.X all orders. billion healthy rate and for our look a not You orders of quarter. order book even

flow orders a and yet So, business. of record it's $X.X the backlog you of JLG orders another see free and billion not still at

think gives an the indication is going backlog forward. see the order and continuing as And we be healthy. you rates that I that to healthy healthy

time. Great. lot Thanks for a your

Thanks, Larry.

Tami comes question. question the proceed line JPMorgan. Zakaria next with Please from with of Our your

morning. on the Congrats Hi. Good results. great

as to book this the fully, of sort you climbing of down opened keep on, to that Since little you bring back XXXX haven't backlog bit year of end to you production it or ramps Going like still sort order do expect by from a do up? expect comment. backlog here

if because that we near Well, gives backlog that in out much That's long have to certainly in history, year a we you terms customers or can have a they equipment. is intents normalized year right? back more all when a would of for think in essentially that visibility get backlog, goes prefer that than our a purposes. the a a that backlog, and better less backlog much look term today of We

opens so that increasing telehandlers telehandler, McConnellsburg that's capacity. to Tami, square also booms I produce capacity why production in more the feet So XXX,XXX the our – telehandlers but up talked that's more facility and we're our to forth. about

market. that continue outlook we we increase customers don't think a take we the will can in a want six-month than maybe outlook year. it of are drive we We're long-term the be seeing where more growth. that. So a or confident little backlog to that as ultimately capacity And But the certainly, to

we're for I capacity. going all invest So that think to in bodes -- well

market see conditions that continue to and We for be will drive good our customers. will growth that and healthy

Got it. then sort in modeling Access very And production we said again should That's EBIT and XQ? in helpful. purposes, steps sequentially for about And given XQ think of then, days. in sort Equipment, better margin getting then for back XQ, of you lower

So to sit sort is understand the we of of is, quarter? margin or lowest really what I'm quarter trying as is here margin to today, the year XQ XQ going be lowest the

early commentary being would of similar somewhat again, -- are very fourth based a the we're all in Tami. the on be year pretty with quite going quarter benefit you you're not quarters just And get. the same because next volume the the absorption lower and -- to that say lower would lot my that other getting three I is the that

we'll are to certainly we able chain improves produce I continue to and ready stand watch So think faster, supply as we more. it

much. Got it. Thank you so

And factories dependent margin on -- we see year will and as efficient it's our of it's supply as therefore I you -- and late you'll improvement efficient chain more how supply be. a improve == provide can get Tami, chain lot think that see

much. Perfect. so Thank you

Tami. Thanks,

Fisher of from with Please next with proceed question your Steven UBS. Our the [Operator line Instructions] question. comes

Thanks. Good morning.

pretty expected much this those thinking demand answered get But you You the margins we're levels. would margin Access the close is look sooner to XXXX be, exiting you be whether and additive what the how those than the about question actually good guess extent if and would you're now leverage. on that as target we probably to that had hit supply there's to margin just might follow-up I thinking chain the could be fairly any XXXX additional benefits or efficiency improves, already I target I year to

for question. XXXX thanks asked I'm the Steve Yes, glad Yes. about you targets.

any you're meet know that period we a last ability to And -- few there's range, that that affect Investor year to and right? you going range when So going years during our a that target. there's negative give we gave Day, your time out a there's did and events looking be positive events be you to

I'll that we the with of to were low very that, have of and we realize course, to not JLTV start price very, able target. expected we retain a JLTV saying because

to a our was that to XXXX hit negative a kind So of the targets.

a things organization. We're However, happening the of board. growing too. we've got lot We're across growing positive a

a higher the of positive. contract. mix expect electric very That's for We battery postal

We do Hinowa did our M&A we still are other of very that an as period. and other through in the There's healthy. tailwinds we'll very, go acquisition businesses

So those what XXXX to That's we targets. are tell you. I'll committed

That's then that planning you're and prices. And really for back they're now Obviously, all? what for to how curious quickly on that rising. I'm steel just helpful. means if at you

all of input We're whether continuing our costs otherwise. to or watch fuel

So that point, factor inflation pricing driving inputs continues so extent in obviously just that to this -- that to we commodity monitor then and all the we're But and that into very on. much. it's certainly we'll monitor at continuing

much. you Thank very

you. Thank

the this at questions comments. floor to to for further time. back I you like would no turn closing have over Mr. We Davidson,

or driving Christine forward and week day. at us during June summer. care at serve ACT or Thanks, the the committed to Take growth Expo with conference Waste as innovate, We or you perhaps for next joining to have everybody a today. May and good look speaking or We're thanks Expo and in profitable long-term we a advance.

Ladies today's does gentlemen, and teleconference. this conclude

participation day. at and You this wonderful your you for Thank may disconnect time. your a lines have