Oshkosh (OSK) 26 Oct 232023 Q3 Earnings call transcript

Greetings, and welcome to the Oshkosh Corporation Fiscal 2023 Third 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 that Earlier morning, measures will presentation, oshkoshcorp.com. joining is accompanied we and by that a and GAAP for third 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

In income with we periods months. X Please now EPS website connection slide in AeroTech the are to and will of now in that refer all presentation. replay highlighted presentation excluding acquisition, our intangibles for purchased be the approximately calculating amortization audio on Slide appendix. presented, for and XX of which is adjusted The operating adjusted available

your which call, among earnings with not filings the quarterly in have that all. matters Form X-K Reform follow, believe Securities meaning materially that Litigation may be answers to to disclaim including any and next our that such to We be SEC. forward-looking updated expressed implied forward-looking could cause at forward-looking different our conference these filed risks by remarks These of we statements be we statements, actual statements. we or Our contain the results update Act. include, are the statements risks forward-looking morning within others, this to with those statements subject until from SEC that Private These the described other if make to questions, obligation

Chief X, Officer. Executive Chief turn John. Executive over and Vice to Please President turn presenters Our President and Officer; and Slide Pfeifer, Mike John I'll you, it to today Pack, Financial and include

earnings. of Thank you, and everyone. with growth significant another morning, year-over-year good pleased results in quarter I'm revenue Pat, Oshkosh report for strong Corporation to and

$XXX adjusted EPS income For grew and and more the doubled and to revenue million respectively. we XX% and than operating third quarter, $X.XX, adjusted by

We actions to growth. momentum supply gain revenue several chains the we as taken many improve, the we've drive continuing past and from earnings to are over and are benefiting quarters

the segments vocational operating quarter, consolidated margin particular, posted adjusted of In double-digit margins and XX%. operating in a to both adjusted leading the access

further higher revenue acquisitions, and earnings infrastructure vocational bolster we pricing for Importantly, continue the to to be the chains year and pleased integrate as recent opportunities return improve with expect Demand in to solid continue and we mega we next budgets continue supply grow municipal to from spending, to to as benefit as and healthy, price backlog pre-inflationary Oshkosh our and over continues the we're dynamics. cost projects orders of products pace demand. as

This including will as XXXX, quarter We AeroTech we pleased our segment. booked with are expect our the of largely part that be is expected our as XXXX with Access progress exit strong orders fourth for to OshKosh date. quarter first the in we and integration family,

when detail. We some vocational few will a greater the highlights in segment moments we share discuss in

values. lives. embrace supports and of in members record our and team and to category. #X a difference the way business components Oshkosh During list the in of most ranking and globally It how in last Newsweek's reflects companies making our world's over we the purpose award the services exceptional XXXX trustworthy to quarter, a U.S. #XX doing named vehicle our the right testament the people's track live of century core were This is

$X.XX of the when outlook, estimate $X performance our impact that are amortization continued end result to a raising I'm to our EPS expectations full third we announce purchased our from or pleased strong up positive most estimate of approximately the our of for of most intangibles. in be $X.XX, adjust range you of recent our and markets, As year strength in quarter adjusted recent

to Slide started and get X, turn our segment updates. Please on we'll

access Our margin regions. notably, and operating XX.X% revenue year-over-year an quarter we of and XX% with another of adjusted global performance all of major growth strong grew team delivered revenue in

execution and from continued Our technologies. well investments excellent positive in products as operational as results stem

As over for be from the also in quarter future. Orders need for strong that healthy. projects nearly is the Again, to number $X demand at the drivers and billion. to access large backlog quarters, industrial benefiting by to use is and expect of million, $XXX refreshed. projects, The discussed Demand U.S. several equipment we aged have solid the fleets of remained were continue expanded mega investments these past the infrastructure we the leading driven a environment cases has foreseeable across demand and construction globe.

we our we are visibility Further, to actively the backlog our extends as well remainder customers beyond with of current believe working XXXX. to slot demand

to the Future of we success trip and equipment the for XXXX. had be invested the such, in our we JLG to and XXXX into sales our Factory expect support exit leading and hosted innovations As Shippensburg our investor field well to booked substantially customers see that JLG's August, an in firsthand visit opportunity position we business processes, will new We technology and many where improve automation you as the have manufacturing of future. in

to of We accelerate also investing our City, are JLG in production Jefferson facility Tennessee telehandlers.

to year ramp facility shipping telehandlers expect this throughout to from production XXXX. already are continue We and the

Frank best segment. and our retirement. particularly for well-deserved all outstanding We customers in and a JLG service last Nerenhausen with leading his his investments Frank his and expect dynamics better years of thank company you well innovation performance. the as close to further financial XX ongoing years strong in support our many leadership access With dedicated drive the to and strong wish as I'll to market in growth Access we

pleased perfect with the He and strong is smooth and and welcome momentum exceptional at underway a months will a transition. we and ensure his deep to Access team an over the Access from we accomplished benefiting segment Narang, I confident build and look is the to leading at Mahesh will our closely global world-class to leadership executive have Mahesh am be and strong work are working forward. We knowledge to a industrial forward team that in experience. extensive Mahesh who Frank complement experience. few upon next

Please review Nevertheless, in X, delivered prior turn quarter down Slide expected. line the to and Defense year was as I'll segment. operating the income revenue our stronger compared we expectations. to defense with in

the the robotic We be combat as strongest to of mix. aftermarket were We quarter good anticipated expect during vehicle U.S. we Phase richer compete of of fourth program. news result selected Army will the contract X and in the parts a quarter the a awards as received from year,

Kinetic and proven solution a well while flexibility of durability our mature partner with evolving to offer as leverages demonstrated incorporating approach meet new Our Pratt battlefield. to team Miller demands as an the our and technologies

autonomous and XXXX. testing in Army announced prototypes build XXXX. tracked its We late expect full to has August system intent to in select prototype deliver X The Phase for of for design X X vendor

missile requirements. with weapon In tele-operator operate anti-ship late the for we operations. in mobility, unmanned September, to extreme technologies system for payload a unmanned capacity and mode fires $XX off-road award vehicle of the to allows vehicle autonomous receive were that advanced leader-follower million pleased allows leverages meet contract our JLTV's payloads vehicle scalable Rogue Rogue ground-based ground support mission or Fires to technology integration to and associated The

certification delivery We and program continue vehicles. and USPS' the phase design are move towards testing currently to production the next-generation building of

We ramping full in will vehicles with deliver to production mid-XXXX rate in XXXX. beginning

core as focus equipment lastly, sold disciplined of profitable business. on to part removal action on our And our we and portfolio in July. growing our growth better This focus management, snow us business allows

vocational Slide to for turn in X our of vocational X quarters. building Let's been segment. past the a over segment We've the strong momentum discussion

Improved For an Oshkosh Vocational the adjusted delivered XX% for double-digit second execution the enabled delivered our third in quarter chain supply operational solid from and margin growth, contribution XX%, we benefit including results. AeroTech including $XXX operating margin quarter, from months X straight also with revenue a strong of of ownership. million for AeroTech.

We expect our our stronger benefit in as to XXXX we further and improvement pricing in and production beyond. backlog from planned levels return

Turning to AeroTech.

to on going a are and integration of the be We with contributor transaction meaningful since our the X forward. pleased expect progress August it close

globe. future as airport the in opportunity electric such infrastructure. a X was charging and grow as in industry-leading great for expected that towable significant with airport for years, quarter industry's the as AeroTech September, us AeroTech mobile display the Volterra ground expected solution passenger AMP Also the to support we platform the traffic digits around GSE accelerate high grow infrastructure. in show single global legislation outlook is equipment late and aging premier Our and participated is over Expo, EVs orders the current Stryker which This in to supports several RF International during interest next a In announced is continues airport spending to event. space, strong airport to charging the our the technologies, Cart is

Australia, fleet. support its a order RF placed Stryker Stryker well September, under traditional and as an Sydney, to Airport for carbon-neutral initiatives. at International And Worth to airport X new ARFs in customer The Dallas/Fort Stryker sustainability issued X X order construction as purchase airport Volterra service long-time in the Volterra RFS its

confident more airports will electric We our there ordering ARPS that are be industry-leading many future. the in Stryker Volterra

ZSL emission electric from order collection Republic McNelis XX refuse for Finally, integrated received units America's we first Volterra Services an X fully vehicle. North

the in the confident industry. are for collection integrated EVs attractiveness refuse fully of We long-term

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

XX% X. We Slide sales sales The a months the higher vocational billion, a million of were sales million a benefit volume, prior a an Consolidated increase over of as $XXX improved of and AeroTech quarter. driven primarily year third higher the and John. $X.X X million Access the benefit volume by improved or of the million at well turn by for $XXX Thanks, sales of to was benefit combination of the $XXX as XX% pricing. increase sales result pricing or as at Please and quarter driven of $XXX in increase increase totaling Panola

year The dynamics, by price Adjusted higher largely versus sales volume and $XXX improvement compensation in the in increased cost to over prior mix, income vocational improvement the part was $XXX year. costs. adjusted point prior improved access of basis offset million sales, operating incentive higher at operating XX% quarter XXX or by a million driven favorable and income

Adjusted cost. had and expectations, to recent million operating prior appendix. the adjusted effect adjusted increasing purchased at intangibles, Also, been of access recent favorable of income which previously year of spending result highlighted net versus excluding and reconciliations $XX mix, the noted, most of equates current by which of quarter in to $X.XX operating income a amortization of tax. excludes amortization EPS our our purchased adjusted operating and vocational favorable price during lower GAAP expectations intangibles, income As most in exceeded as the our non-GAAP has

Adjusted earnings per in $X.XX quarter share were $X.XX prior the versus in year. the

turn Please to X. XXXX. Now for to Slide let's turn our outlook

we to expect performance of continue. We X XXXX quarters the the strong first delivered through

demand XXXX. remains to adjusted our Additionally, our are are operating supply respectively, improving. and estimating and Based expectations adjusted our basis, $X.XX factors, for in respectively. of products billion a operating million, income On sales and expectations strong increasing for $X.X XXXX income and conditions we on these consolidated we are the range up billion most $XXX and from $XXX approximately sales million, recent be of chain

recent per will adjusted from range of We most noncash the amortization EPS exclusion range $X.XX per of most adjusted EPS XXXX respectively, tax, in The earnings approximately share expectations. our net and of are adjusted and increases for operating $X.XX by of to up and $XX adjusted of recent the $X in be compared share. estimate estimating million income our of intangibles purchased expectations

At excess $X.X and up sales sales from our the operating billion estimating and level, adjusted $X operating estimate we most of in billion XX%, and to margin recent of are of and respectively. XX%, be respectively, margin segment a range

to defense. Turning

in of expect We for the sales continue year. to and be operating to the X%, margin $X.X billion and adjusted respectively, range

XX in operating X.XX%. of be adjusted and our of amortization intangibles expectations. basis adjusted $X.X operating our The margin We and by $X.X billion sales expectations range increases of billion of most the XXXX respectively, and recent sales points recent margin and exclusion most expectations adjusted X.X%, operating approximately expect vocational versus versus margin purchased approximately will of

rate corporate share generally expenses, most average tax with line and remain Our in our recent estimates expectations. for count

while million, by estimate Our free million. to expectations flow $XX cash has increased CapEx decreased to approximately for $XXX $XXX for by $XX million approximately million our

result consolidated $XX be quarter to fourth of approximately by quarter, in we down a the sales Looking expect third fewer versus holidays. will days quarter million production the due to several as the

of as aftermarket fewer revenue We also be an a few impact the due of $XXX timing result of a Access shifts. of expected largely flat additional up expect sales offset to production to AeroTech defense is expected days. parts the month be expected days, to is by notable million be fewer is down while mix production deliveries. to approximately Vocational as roughly

ramp-up turn We and and is in be expect facility the fewer manufacturing sales, John which Jefferson of for lower to investments adjusted some than it third to the as City unfavorable due in $X.XX, to earnings costs lower per a range the I'll share the and related production higher NPD Murphy's result of quarter days, now access closing related to in telehandler to facility. vocational ERCB over comments. borough the back facility absorption

to investing will results we the Demand in and capacity drive profitable and make We in continue is delivered progress chain with are quarter production that strong growth. new supply expect we throughput. and third and robust, products

brings and company. already it to we We the of the are value integrating in our acquisition accretive AeroTech considerable seeing are process our

expectations Once paying our shareholder an technologies off and more drive are as for as again, value we forward steps meaningfully This our a in and growth and positive enhanced raising are with transition XXXX Oshkosh, for with deliver resilient is are move to momentum. the right we our exciting we investments time product we and taking are confident business. to operations

Pat. Okay,

the with started get Q&A. Let's

of John. to like the if on like that your to back get I'd we please question. questions disciplined queue you'd questions. please follow-up follow-up, question-and-answer everyone remind Operator, you After in to additional please ask call. and the plus follow-up begin a Thanks, limit to that ask stay this period X

Thank you.

ask limit to callers themselves that be now X and a all We conducting follow-up. X question question-and-answer session. will We

and you requeue, have Instructions] questions [Operator will those If time permitting. questions, you be may additional addressed,

Our question Steven the from Fisher comes first of line with UBS.

quarter. Nice

the sort versus you XXXX clarify year-end. in You that mentioned what being in next any the sold maybe in sold-out that plan price higher access of out volumes that? on that by Can implied Is you year? And for levels? the at volumes embedded just cost are have comment

and is, line Yes. guidance I for our yet view all the guess is on next strong. outlook obviously, of providing bottom But year. we're our not based commentary,

I So into would take that consideration.

expect well you in that's book-to-bill -- so think that's that line. ratio X strong be going would on above to So the to the I achieve quarter, bottom

business. strong strong From a continuing a to our business. price/cost We're margins would to margins in bottom more the perspective, very facilities. helping I That's monitor from standpoint across efficiency inflation. going get is our line certainly we're through manufacturing that delivering continue we deliver And continue to expect think standpoint. we're an we our volume absorption to just Ultimately, and

to strength next So as forward our continued we year, we margins. in look see

it Steve, We'll say, strong, is in -- are going what Yes, But we next what suffice doing John. well. on for it's to give access our we're guidance quarter to market and XXXX. expect customers the you

long-term customers equipment Our equipment and have that about. needs talking needs I'm

sure. update. So stay give outlook for But healthy tuned, and an we'll got you we've a

you more from side? Is fire have here next and the or refuse the the I'm maybe on you then perhaps in And strong side, momentum orders just quarters? side on few see in quarter. the visibility where vocational it what on on the orders the curious apparatus really collection is

Yes.

that a really new the continue market the for growth strong Fire & business a lot a we're you it strong you'll which That's in segment the months. vocational in have a business. AeroTech -- in for that of Emergency we've I us, had as couple only well. across segment primarily We in at But see improvement long-term seeing 'XX. of is but mean entire orders look if business, orders

the You'll A it see side. lot fire margin emergency in 'XX. & by of nice improvement driven

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

quarter. Great

have asked. to orders Since you What is So get orders next equipment? given for into going visibility pretty expect kind end XXXX. some are you do year, question for similar my by to what the for be booked year to much pricing of Steve first ex this on of

what very correlates much Yes, if you our we're pricing think inflation. Tami, for at -- seeing with so I look

a So prior. continues, pace. moderate the price more over this it's inflation up really that to leading With period we beginning had year of over certainly, significant but at very XX-month increases

that our will expect I'd with that So follow that. suit our pricing

And again, going headwind aligned with price we view as future. cost So don't inflation. again, the a into

question Great. should production NGDV model defense in margins on that we then how in look is outlook? What ramp of margins would especially forward, second is How And my defense. expect volume Perfect. since half the hit? the when back going year, next you like

Sure.

that year half underlying be back consistent is at last Just in but the start We'll the not the said general, of ramping -- several what going year, imagine that's -- be quantities. with be to lower and -- going that you can the to core in up quarters a of this business. lot we've next change will

ramp to up continue XXXX. We'll through

So about I incremental going year, and meaningful JLTV, get XXXX. not a would and defense volume. It's get we benefit ramp gives but takes, notable solid to see necessarily as next really we're that of with we growth some XXXX we there's think would say -- some to when I profitable more expect course, that into do to beyond good

'XX. And ramped Tami, year. lot 'XX. Mike the starting We the programs just up good about, to down defense But as defense out in we business, full of business, I vehicle and next a in has get headline, really postal John. the it's our point ramp the want within in 'XX defense JLTV talked is the production that business. by there's

new technology combat about are programs like And bidding vehicle. programs we're advanced the we that robotic that talked for

business business about overlooked. in good of a billion So to that the healthy a of some But sometimes on that the business, we're base gets all period really there trajectory really a going get defense on couple $X we margins business years of to through base there's go expect.

of with Baird. line the Dobre from comes question Mig next Our

a bit about if talk little we I'm can AeroTech. more Yes. curious

Just the you and backlog looking there, at it's what a frankly last. higher former than owner the disclosed quite that reported JBT bit

some of give what months ownership? demand where terms equipment? you're seeing have equipment? And on in I'm in maybe integration fixed first an context So also it curious, of Is you you standpoint, kind from of can the Is few it us there? mobile learned

John reporting that, manner. Sure. just and -- then we start same the standpoint, can can can with comparability in, in I'll we're certainly, add from -- backlog essentially a I and

backlog. represents of So difference it's based that's of firm orders, a not on what view

really the we've excited So we it's that about lot growth regarding the orders to are tailwinds why general. it's talked and business of and seeing a strong tied and the airport across just us board, has in

Yes. And the talking it. integration of about Mig,

First that of markets business markets. because I'll airport airport to go markets. in are -- vehicles AeroTech. in back we or AeroTech -- We been the airport it's is all, why acquired in already we've our a the it's acquired the JLG

looked middle a this as So at not we've [indiscernible] near our adjacency, the always of sweet right like almost right, as even in spot. almost even

all to autonomous improvement purpose-built It's continue the opportunity to drive for technology electrification continuously products, have that productivity in equipment technology, to the apply customers. where you of intelligence form technology,

in the acquisition. so culture people That spot. of biggest can thing and break sweet or is is kind -- it's very have So the our which any is middle of right that learned, positive, make we

things and you And go the culture is If fantastic right the right, us. get really the really, fit a for this well. fit on cultural then people

a -- part business. pleased the acquisition well, the of people, very Oshkosh a values this really sides how a for extremely really is people, acquisition. strong look we're important how very, embraced the In company, that have both of successful we and And and on future long-term going to AeroTech terms people the of that's the the

I'm EV any the is how comment are can And on that had them? considering from that looking appreciate vehicles? as bit that ones similar a Maybe customer, type Understood. well little standpoint. expect mix at for Volterra up on particular how other margin that as announcement ramp to are there you a you impacts My that demand orders. follow-up you're curious, you business. refuse the

our vehicle. like start year, really We'll in we'll we'll of Yes. do plant of it next the We're refuse electric doing be Murphysboro, by in course, a And units there. continue prudent Tennessee, and and from imminently, right about dozens recycling this ramp-up of excited dozens we'll now. selling like production and collection year, this and to producing Volterra end and of units production ramp

an the that vehicle productivity just this But for our more making vehicle. benefits productive fully integrated every is them of It's it for enormous product easier, at single drives electric for benefits not customer, a stop. driver, safer, an amount

in years. rate margins exactly So a to for vehicle a be, expect consistently to the going purpose-built this strong long like the a this is because think fully we almost going not do. good of it's the next body new very It's chassis, category how a a interest huge to XX on probably a know It's year-over-year, industry in say me for be is really period Again, for integrated it's it's driver growth of amount hard over of but And we this adoption we to time. what's vehicle.

next Our the Volkmann question of from comes with Steve line Jefferies.

supply I think is of a supply now? chain just as up get upside little chain bit that where Can big are now? full picture, backing one we still sort you improved. you characterize there has production you plants normalizes? to able sort some sort Or Are your of through of mentioned of Maybe

definitely say supply will supply chain is chain conditions. normal. because have through not Well, also benefited we Steve, by great question, But this back improved to year that I

It's past at -- around it's of one on-time it's but improved lot metric. on-time If kind not to year, delivery we'd so of Typically, supplier now, in you kind over normal. expect the our least be back it that's high-level at the delivery, look XX%. to a right rates

work of our resourcing, sourcing, problems and reengineering to things one So supply chain disrupt an going they input using dual we we've are before of where digitizing the in so analytics done amount know important I be think in plants. the is enormous

evident paying in all a think also our It's date. of is been access to of dividends that I lot most to business us.

vocational with, made improvements chain, because expect the it continue we supply the complexity but going more on think, a they've question forward it material, Our I to about longer no operating more bit But chain as improve. of has to bills efficiency of little as and we vocational runway improve gradually business past supply have continues the few that. quarters. business to has over

I that trying out there's like follow-up. kind than was Great. as point like get additional sounds figure of normal And productivity vocational to you if upside was but the Maybe some my it, saying in to answered future. access. maybe you're in at in more whatever we looks It

That's few benefit We've Yes. correct. already over -- we've the seen productivity a nice access. that last quarters,

next the David comes from line of Our Raso with question Evercore.

book-to-bill I average third would was the I the of tough was we've supply seen the that be normalization access just mean historical to able norms, impressed than the for maybe comps, little have -- chain quarter a historically. achieve would sort lower thought given I

be decently you're versus get seasonal flow new quarter you're You think a could for into a conversations the on the just book-to-bill And to almost X.X, perspective to you quarter the do in usually, next X.X, above a back I the a those made comment come already what it's book-to-bill fourth X. shipping fourth above given on about more order we traditional put Can assume little back X.Xx. and finer that? year,

Yes.

of is the line, we implied, I that think think to we've half X:X. I be back at the bottom David, year expect you said the if

book-to-bill we calculated be higher sort we've it don't David. math it to that it I a one, to the of above do fourth expect definitely to you some around ratios. you clearly know expect if We to X. getting $X.X tough can quarter be billion, So that, but start

like year, extent north mean that are size billion, billion, to the of that's that Yes. conversations of large curious, backlog to it in XX. -- the whole you is at I Obviously, already we but you would just ship at the about backlog. put majority, number. to start And $X.X I'm exact the backlog it having the $X.X how actually in trying Yes, the of billion. 'XX? of much just expected to thing. I'm definitely the And $X.X looks end understand,

they even curious your to I'm understand trying just months. X and dotted just far XX? customers something how I'm comfortable this willing stretches put Nothing to we'll how are see out for the on but backlog cancel, to in line that interpret how can't

as on I way timing the comes it. down now really, we work good year. would into just those conversations. focus And that the to you're generally But say, XXXX. is have to we right right, And visibility through David, the we're it PO

that I our prepared of to into is right to as expect future. year. as back out But the expect, for with -- bottom new see 'XX. we're line on think So I'd we largely course, XXXX conversations, equipment well the But we is the focus strong again, demand now, going be remarks, booked we exit

that the So booked. that really that's years essentially implies

make clear. to sure Yes, just booking delivery. XXXX orders for The it's we're now are essentially the end of

to in expect said, quarter. booked in prepared we XXXX the be fully our just said for remarks, Mike as we and So as fourth

long for simple it your maybe orders answer So to question. we're guess XXXX. before booking a I be won't that's

KeyBanc Barger next of line with the Our from Capital Steve question comes Markets.

segments. think And you tightest capacity? Christian is the upper you currently 'XX, capacity limit I revenue Barger. segments actually the a then combined to on Gil know guiding on average but your the of aren't on My capacity do all is? Good morning, factories? plan? for capacity everyone. expansion And what This for where is across all first is your there is utilization you And are question what on Steve

facilities. capacity I in full our some of at lot ideas. you I'll We're essentially kind of Well, a general mean, give

We of capacity existing a a -- factory of our factories. of you announcing so them had the JLG And going a We've in August manufacturing us Shippensburg of few event see work got why of showcased we that's in expansion. where on. with future. many lot We've done you

You ready new lot to and a course, throughput. Spartanburg And and producing saw in Tennessee we're for a doing -- But addition is product. output facility the got increase improve facility vehicles cabs do big months. the got of to today to in to next to investments Murfreesboro, or new RCV getting We've several we've JLG. refuse that, collection our plant, production repurpose we've go Tennessee into a over truck vehicle ready facility of a got in vehicles getting our fire postal which new

adding have coming a that's are trends unique we When we have look together. passed capacity been we infrastructure markets. So because bills look at lot that long-term events thing government. that we are happening see you where in by a It's growth very the at -- of huge these

of battery geopolitical be continue You causing -- to fleet. and Energy continue. an because onshoring the got happening transformation we in. have revolution we transformation EVs plants, concerns to chip plants technology with aged also to regard digital We've that have

come So together, it all us capacity very a together. And things why things lot is of underway. we long-term long it's a know to all more and tells coming that in because that these we of what thing demand to And meet of have big demand that for there's is macro we're be unique manufacturing that's these putting term.

level next as that given in you'll said. Great. be capacity relative do all everything to has just able this well. do to sustainable? and you your quicker then And at backlog you of With is said, monetize backlog up coverage some you think Or your year a and of really pace quick held those follow-up, expansions a that revenues think backlog

Yes.

as will I have normalize think bit a what over backlog more. you is order trends we'd time, expect trends and ultimately, that that normalize, productions

of because over see pent-up challenges we they're time later more earlier, that's we've a where as -- where supply the chain you'll bit is John we working given the through said vocational think the I demand. some see in product. little a see complexity And decrease

some see over go next to there. expect would normalization I year time we through as So

color on that. little bit mean Yes. a more I

you So $XX that big the have we it's billion. see today, backlog

capacity to As earlier, have as see I we big capacity continue not because talked increasing capacity, we're we increase long-term backlog. We're future. continuing rates about strong a increasing order the into because we

Now level bring to time that will into a perspective. lead backlogs from also a us help realistic more those

today. fire over that have lead they're want with are times little emergency want business. bring now to to we our year year, well we We So JLG than under right a a to our & lead times a provide lower

will putting continuing because happen we have big as just we But term, backlog. we long place go. capacity the that that demand a So see because not we're in

the [Operator from Jerry Our Sachs. next Revich question with Goldman comes Instructions] of line

share we're range about I'm telehandlers, aerials in wondering a that you're track seeing telematics you just different the could if versus you hearing what please? data

Yes.

very basically little put utilization. today. as product see of the marketplace at -- equipment product putting as ebbs a is you're talking certainly, We been into a made bit progress, you more certainly It So needed. utilization about and flows, And healthy right? we've level

rate. might flows and see that ebbs You to utilization

dynamic that healthy customers some our very healthy a But the a see publicly more still is equipment. There And a need still think And level. have right lot market that need the you a I can still are that at the there's that utilization in of of rate equipment. is traded, we customers now. for

right? And and and Is telehandlers. what loosening a sounds are extremely and -- slowing seeing maybe Well there? is think I concerns you still to there specifically? telescopic utilization scissors some in some put the point on like that but you're can around on just Europe finer is it comment on tight, there

more to loosening, they're which used mean, equipment, older into to able are starting more that is think thing. you say we We're replace I produce and don't see in We're in the our a equipment I some deploying of customers hands equipment. you loosening thing, good a see market. able equipment. when get that And who bad as the to cases,

long see So of replacement period continue a I time. think over to that happen you'll dynamic

AWPs and the to it's the that's continuing a that market, are go booms thing. So the in that healthy scissors are the

want see that it see product. to output They expanded why increase And for that's use continuing to cases telehandler to we our that. continue The want we're production, see in segment. the continue. customers to Our

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

wanted I back an go margin. earlier to question about to defense

you're fourth in looks like or it something think X% I so for quarter. range the in the penciling

I to about like that. more think heard stuff you something I is say parts going and be mix towards

been business. get X%-ish this this use the of an margins -- a a for good So number trying quarter forward? Because a I'm have area is has had where again, arms fourth hard to margins trying this for number around going to time to it's -- just lot us understand,

have from orders, do quarter JLTV would larger benefit I'd it's margin, JLTVs we say to but we also then and mixed, quarter. particularly I the quarters Yes. typically that fourth that in in expect order expanded the do the with we

So what quarter right is you now, if is year. -- than higher say I rate would the fourth run our full like a versus

turning to scale. I point we're NGV would digits still So up for next say operating is start when the really mid-single year, in that we ramping sort And at not again, the of yet business. net we're guidance lower but providing

just That's in helpful. up pick geopolitical international given interest? seen have JLTV And it you any the can for you conversations events, comment,

to future. current can't specifics. remind Well, sure, is we mean -- for for I'll contract on on, continue Yes, the ramping the are comment down, I demand have going with regard foreseeable conflicts we'll we international there I the while there. produce JLTVs everyone the DoD customers to that have

But be to than other we, more for course, I can't of it. is products. I and demand yes, our support ready always these say that. closely course, standing we of monitor will there say, that say of than And Defense international will Department to the allies.

comes Our line Elliott next Stifel. question from of with the Stanley

X had an guys past of number. CapEx elevated kind you at years, running been The

footprint. a expand lot to done You've the

be spend continued support CapEx we over to several of start we done will thinking sort next to kind if of think need that of curious Or going facilities to back there? years, of of kind do moves out what are the EV of Just out more we the higher level you've piece a some the historically?

Sure. I Stanley. can take that,

as capacity in in our with as well of other I think for perspective, high because of NGDV our this the other was some of facilities particularly investments, certainly, year NGDV from relatively -- well trucks. Murphysboro year facilities City a our as Jefferson as again some and last higher CapEx fire

I would be of get a ramping in electrification those and a that beyond, into perspective. from probably but up higher times, would we projects, infrastructure once many little lot of typical say a we'll facilitization next so wrapping bit expect year, XXXX I up than place to still be or is going

would expect it at be years different that X.X years. that about would So Day about, Analyst our Not really few normalizing. what these we higher in than I start to first ago talked

approaching the question XX Just going the several flow the be maybe months to neutral a And years. repurchase? years. next next lot of balance the would carry generating kind being debt Do like the end to increase up of of about Do it longer-term kind sheet, in because right? some in cash net I want to seems You'll a guess the to of plans for be talk you you leverage? want free share there's next

Sure.

go deployment going you to to over -- of be the we for in foreseeable operate back we've If our for for about future growth M&A really XX% talked cash or XX% initiatives, whether to that investments allocation, to targets expect that our capital towards internally. really

a So say this than obviously would of that's going to Hanola continue facility. the piece. significant -- it the in and year, I it's bit to AeroTech NGDV in a the heavier investing that with been some was acquisition be

But think we about how again, over time. that's it

expect continue -- to the we to to acquisitions look opportunities. see look think those And that to we're extent going at I and so for be

you of part a capital but Analyst Day, higher from buyback our I our important of strategy. would it's share buybacks, perspective, a less periods to in still M&A, back again, very expect think allocation going

that still less. We're share we're expect you But would activity. So when under less in our target still. or periods see buyback to acquisitive, more Xx leverage is

capacity to sheet. continue to So we balance have deploy certainly our

Thanks, Stanley.

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

with follow-up a Christine. a joining outlook. final Thanks, very questions, Thanks, today. any day. out entering reach and everybody, We're if us be you have the Great. great strong very to for have us quarter Please of XXXX momentum pleased to and