Oshkosh (OSK) 30 Jan 242023 Q4 Earnings call transcript

Greetings, and welcome to the Oshkosh Corporation Fiscal 2023 Fourth Quarter and Full Year Results Conference Call. [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. Thank you, sir.

You may begin.

Good morning, and thanks for joining us. our and published results. year we today, fourth full quarter XXXX Earlier copy available is that our A release oshkoshcorp.com. on of website at is that also we available is and use during which of being our and a will to call is call GAAP measures presentation, reconciliation includes website. accompanied financial non-GAAP on this slide a Today's by webcast The website months. XX for audio replay and slide presentation will approximately be available on our that presentation. refer X now Please to of Slide

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

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

of finish a to $X.XX and share you, XXXX, everyone. earnings Thank announce leading adjusted fourth pleased significant strong the quarter, year a earnings to morning, year-over-year Pat, and in in good with since. to full growth per revenue I'm

with income and year. our I'll as and the that revenue adjusted $XX.X the order to led details on demand products activity for of grew we previous Demand adjusted provide operating be robust, in for booked XXXX record are fourth operating margin quarter, For our which confirmed by to backlog leading largely in billion XX% pleased X.X% we updates. we an and enter and remains $X.XX. by quarter business strong Oshkosh would EPS of expectation a XX%, the by of more we segment adjusted

is end dynamics well visibility by market-leading acquisitions strong and of supported growth our provided in key ramp-up benefits market in production technology, the we this and completed year. by Oshkosh positioned strategic delivery for believe AeroTech markets, of solid significant next-generation well the as we Importantly, long-term vehicle Hinowa that like as past investments backlogs

This pleased our as all into their Dow members a profitable constrained we're our for this well way, our is opportunity Jones. for in resilient a sustainable XX% past be in the several fifth rated Jones a to a company During the to taken in the for inflation for the our good have good enable to demonstrates quarters team the for chain in supply of outstanding top we of XXXX named the impacts to index, environment particularly review and over which global Industrial operate team's to turn highlights. I'm rated Index perform World growth quarter, is Group we of work which it Sustainability X for to and to Companies Slide for our our year. deliver full overcome XX,XXX We future. of take I we Please want the to year shareholders. driving peer Dow their X% that of and environment as good because a to group constraints persevered were and in our people, more were must that the we be will our drove strong for straight contributions the for considered actions good accomplishment believe top the meaningful for communities by practices thank the live, with sustainable business us our successfully performance performance. the in customers.

results, revenue year to to to share to of we billion adjusted $X.X grew XXX% XXXX million by earnings full $X.XX. operating and XX.X% per $XXX leading Moving income grew by adjusted

In several year, Voltera all and the important including during collection electric announced products the addition, we new new vehicle. recycling refuse revolutionary ZSL

Volterra in company City, are capacity and for investing telehandler We capacity. for Murphysboro, new support continued including Tennessee Jefferson Carolina the NGDV, Spartanburg, Tennessee across growth, to increased South production; for ZSL

our AeroTech. into growing expanded airport support recent passenger the with air of also and We transportation markets acquisition

are XXXX pleased in result we backlogs, fourth a a our in expectations and of strength outlook, full announce continued quarter of strong to am EPS $XX.XX. end year range adjusted robust As markets, positive I be initiating that performance our to

per also raised XX.X%. $X.XX share, We of cash year representing the that tenth have dividend double-digit our to announced This share $X.XX an increase a dividend. increase by is we per to our consecutive quarterly

delivered our operating full very robust impressive execution flow of XX.X%. of Access basis turn our over of confidence an our reflects the strong and growth to the generation led as in into Slide updates. I'm ability margin, margin year-over-year another started pleased XX% revenue improvement. and growth cash growth profitable operating to at continue our future. XXX we'll representing with dividend results and our and to X.X% in performance year These exceptional of with revenue adjusted on Our of drive XX% point business a well a XXXX. X, the strength quarter strong adjusted The team Please growth segment to as board's get

mega by grow industrial believe elevated Demand Importantly, to infrastructure well telehandlers to aerial access and as projects onshoring we for business are ages. there strong, and fleet as continue platforms work time. over projects investment, opportunities the remain supported

fourth the activity which expectations reflective XXXX largely more fourth during a year, largely for yielded chains healthy quarter we access book-to-bill typical expectation exceeded half book-to-bill the XXXX, X.X. to With our a exceeding ratio billion. XXXX Our X.X This expect order at booked ratio equipment environment. also the X.X quarter expect in the supply availability second orders occur Therefore, seasonality the $X.X booking of for and will product a normalize. of also is half second leading of to our for we and normalizing, patterns of

As such, be to half the the of XXXX. first year expect activity we lower compared order to in

discussed opportunities last the the in market dynamics see few and in the our expanding we significant strong capacity we American calls, market, support telehandler are telehandlers. we've to As for North agricultural

City customers financial this and us telehandler well. our expect capacity We to to drive is progressing further expansion facility repurpose performance. to better our support growth help well as Jefferson production strong as Work

our complete additional turn I'll Please We the segment. be as in expect XXXX lines to to Defense come build production online. X, will and review increase project rates and Slide

commercial an of Our opportunities by foreign as with XXXX results the has allies will continue included adjusted quarter production JLTV view their and international our an customers to Domestic JLTV margin operating the process reputation early XX.X%. direct to sale believe but favorable mix The have team beyond. exceptional in delivered supply strong we conclude in a kits. will and requirements. trucks the protected which already right defense who solution orders JLTV we quarter, of were Oshkosh through driven meet JLTVs XXXX, to to in a great among mobility

period at enhanced designed heavy to ability valued a X-axle the payloads the orders tons. trailers JLTV MET. equipment MET a pulled transporter fourth OshKosh to X-year The or to In to quarter, to be by deliver contract in trailer addition equipment up million $XXX medium the is XX with announced we haul to over a up

May scheduled first for are in trailers the We deliver to testing XXXX.

Before I is to report next-generation delivery progressing well. program I'm leave vehicle Defense the segment, happy USPS' that the

is units [indiscernible] remain building XXXX. and rate Production in move test production been plans production throughout achieve We and rate with have up track on to XXXX, XXXX. into to expected ramp low in April full to

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

year-over-year sales. of also XX% strong delivered the driven revenue vocational of primarily in the quarter million benefit segment AeroTech of growth Our by $XXX fourth

adjusted basis improvement We operating vocationals over of year. the pleased margin are with a X.X%, particularly XXX point year prior full

We for we are strength, our strong and trucks and supply to pricing from of support backlog, a to starting a demand. fire support improve rates XXXX strong to throughput and improving XXXX. at high continue we solid to order municipal backlog chains Pierce With increase capacity and expect position

investments strong well, capacity the year. segment. The XXXX the strong production and in We progressing meaningful that and believe Passenger finish we of that beyond. pre-pandemic robust outlook demand for been and solid rebounded have traffic and in growth drive execution is positioned products to confident levels, our have is to has growth integration the a AeroTech delivered this air new AeroTech are range team in positive. will earnings and in We be the making

by pipeline new AeroTech strong synergy view ongoing a further Our opportunities. for and is bolstered product

reduce international Our on with that team to carbon airports build their continues footprint. are seeking to its

Paris' with superior ARP When combine lower Airport. Le in and Pierce RF with you Volterra Volterra vehicles, more the Stryker turn I'm results new expectations key enthusiastic booked that, our our a Ministry we quarter, potential revolutionary long-term for fourth to and XXXX. electrify manner of emissions performance. we trucks and understand electric the their Volterra recycling Volterra units for orders Japan customers the and delivering going and detail ZSL while our orders about can these Defense McNeilus it These fleets. With discuss sustainable battery-powered our RF in refuse fire carbon support responsible you During are Mike so why to over to to Bourget

price stronger year. The a of X.X% in sales largely benefit by or adjustment. catch-up quarter, international also were of result improvement of income X. year compensation the $XXX orders was and an the We better the higher $X.XX versus acquired quarter year in to AeroTech driven Please at stronger SG&A point favorable Adjusted catch-up prior favorable recent AeroTech The quarter favorable quarter third the strong in mix, mix, operating of prior operating for increase million drove of income or million $XX cumulative million which in Adjusted dynamics, to positive segment, were catch-up incentive the prior in benefit $XXX a was cumulative drug Thanks, a results turn vocational which offset adjustments was favorable as expenses. at led from XX% XXX the from the over improvement in as adjusted up income Slide Defense driven well versus by the defense part to Defense at the improved adjusted primarily operating primarily sales results, operating John. benefited the as by cumulative benefited of our basis Consolidated quarter. year sales, of orders margins. the cost and increased sales also to pricing. XXXX favorable JLTV sales quarter due expectations Defense increase income adjustments. commercial which more Defense. most $XXX billion, over fourth a at million prior exceeded

in $X.XX operating prior share of the versus adjusted strong in Our adjusted income fourth per earnings the to led year. $X.XX quarter

was free As expected, full cash flow of of leading to our Slide nearly flow for review for $XXX year to the free turn cash quarter, strong XXXX. expectations a X Please in million.

is we in We believe our to the and as sales consolidated On our respectively. backlog growth adjusted for $XX.X continue for into improved million, supply XXXX. range are have chain which and $XX.X Demand strong evidenced operating basis, at conditions income estimating our and by expect December XXXX, growth. we a XXXX be billion XX, billion $XXX of supports outlook products to

approximately operating XXXX. we XX%, We expectation new billion be in and range in the earnings segment $X.X the million and versus in $XX.XX. investments an level, adjusted sales margin to per be respectively. estimating this development share adjusted excess product is are Included At increase range will in are estimating of a $XX of margin

Defense, to of year. for $X.X billion we sales Turning the expect

We the of XXXX. operating in X.X% from adjusted range X.X%, in be expect margin to down

increased $XX approximately first NPD We investments production will expect combined million. total NGDV with ramp-up year costs,

We also mix. unfavorable expect an product

to As NGDV is operate XXXX, expect XXXX. ramp production we production a in full at rate throughout and reminder, expected to up

and contributor sales As expect in and beyond. profitability XXXX a to such, meaningful NGDV we be to defense

XXXX expect versus respectively, will be and locational adjusted billion sales We margin of margin XXXX. the representing both sales operating XX%, and range solid $X.X in in growth

operating at XXXX of AeroTech of results, are contribute Our double-digit million benefit approximately adjusted to expectations $XXX margin. incremental full sales the expected a year versus which include

million costs. start-up Murphysboro expectations of an Our approximately also $XX for include increase

lower Our XXXX approximately higher with new offset estimate is compensation of largely line corporate $XXX million, costs. product expenses development in investments with to incentive expected

XX.X XX.X%, expect tax million. of of rate and approximately a average CapEx shares share $XXX of We approximately count million an

solid We expect representing $XXX growth million, cash approximately versus free of XXXX. flow

up first of the expected versus fourth to in adjusted prior but as the the down results EPS we range year, for which quarter, quarter is Looking result expect versus $X.XX, of a lower defense. the

sequentially operating vocational expect fourth quarter. We be versus access the to up both and and sales adjusted income

continue throughput the and quarters now normalize, segments quarters highest production with and back for we and our second more earnings. I'll to expected for closing to As access some chains seasonality in of expect it typical be third supply and over John a vocational return turn our comments. to sales

strong XXXX results and our full billion is backlog and our fourth delivered We quarter $XX.X record. both a for year new

on outlook built capacity drive positive we continue and in growth. products for is and a expect strong both of XXXX will Our that profitable we to foundation new new invest demand, continued

enhanced will Oshkosh in time are will value. continue we into already company, an the integrating we for progressing it our AeroTech NGDV production we deliver growth to confident shareholder low starting This process of are considerable brings. rate April. be well, We seeing the the drive program And that and exciting and we are value USPS in and is and is

get let's started Pat, with Q&A. Okay,

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

first from of the question line Dobre [Operator Instructions] Mig comes Baird. Our with

vocational. start in point with the on chain you how supply but really is sort figured production this the and accelerating would I embedded I'm can at verticals, think that volume what's anything from Yes, for fire. fire finer sort else of start or I curious, of you you growth detail the let's maybe appreciate And specifically put those the in all is in guidance. a refuse we there. there on maybe AeroTech, preventing point about

Sure.

or of overall refuse. First about $XXX bit of all, and biggest on between million north just to AeroTech the based a is the my of being balance comments, fire $XXX of related volume million that growth about that ultimately, sales the the with really increase talking driver prepared vocational with

mixer Now we mind concrete the other there did rear in piece to keep is business. discharge divest the

revenue $XX does about that about So million. decrease

and organically, revenue capacity have us. right now, really Mig, about help to certainly that's coming of online we going So $XXX more growth. I million would say

more Appleton, improving over supply vehicle improved be also online of we'll is the think peers course the Murphysboro, chains throughput I we're electric capacity is our largest -- Tennessee, plan as will production. collection peers have supporting the our our and which refuse -- with year coming that

improves, are would capacity there say I Certainly, So supply now, if will constraints. that help. some right chain

Yes.

in of backlog on many have at years. when emergency fire we but of mean & backlogs how Just look color, you measure business. little business, bit really the more we've in a our backlogs, Mig, the businesses, & across the backlog strong have emergency our When is got you backlog it we terms fire I strongest months do is

we're And so continuing to increase capacity.

a chain You still delivery would asked it ago, a in XXs, is kind on-time the low our ago I better year it's still about lot was perfect. supply -- than of X.X but chain. is It's Supply or years say. today not

got that fire prudently in ability I the constraint So collection of Both electric with mentioned emergency refuse to recycling a supply base, we've of Mike it lot more electrified for both to segments, and is we vehicles. we're going issue the do strong because speak think some both. are which trucks into we but better have continuing environmental lot the as platforms, and getting production segments, just to and have down is alongside of Murphysboro, on fire capacity those with strong But still recycling put like a add & we're to new demand. refuse really that going desire

in term of those lot businesses a optimism long there's us. So for

here, margins or still Then can you 'XX growth? however at if in sort also, either is what's may comment we're on as here it? adding Is any of want frame sort volume, 'XX, relative for if capacity? Or I XXXX. follow all we peak to there in terms your embedded looking the where Understood. up fire that comments of of you're prior are to on on common you at And volume

in Sure. into see would step-ups volume years, as expect there. fire loaded. that perspective, up say we further more and but and from is future would that say a so get I there we'll I step I And in would -- a we volume emergency, it's back-end

we're margins, we're the of think quite terms pleased In progress I with seeing.

truck talked So practice in We lot normal dynamic pricing have have We've strong we're you XXXX. cost that. really a about that much fire is a we're do and margins getting the price coming more price business. fundamental underlying, after the in

say would see in that's to operating continuing and margins strong. of recycling refuse We're AeroTech, I course, delivering growing is So double-digit adjusted strong and already margin.

So the guide's vocational, that as XX%. XX% plus. could talked about we it be We've viewed a segment

future this in the we further of So segment. progression margin runway see the for

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

margin wondering equipment essentially basis modest talk declining costs, in points in takes about growth, believe, and but of some performance guided business. strong logistics folks and you I you the I'm sales if 'XX, excess line that 'XX on puts for been for could outlook really around to just have

understand, trying to discrete is in relative should headwinds that in the just the keeping early 'XX? year? baked guide I'm some strong mind Or So conservatism there be the performance in to in that we are

is ultimately, for pretty I the would access straightforward. say outlook

I revenue think is a thing we hundred capacity in million one have to -- that mind of with studies. adding in Jefferson we're keep And of couple as segment growth. well

closer more could of normal, So we're is capacity. to not operating chain some supply less that but provide importantly,

So is online capacity somewhat coming is have the on we volume limited. uplift until more in

we're million. in pretty seeing that revenue the my incremental referenced we pretty read opening of that about $XX one margin through. adjustment NPD my comments perspective, would would in higher the growth see So an normal from I much is say say I incrementals I

modestly I say the biggest not of mix the driver. -- really favorable, that's So bit and there's is but little a would less mix.

pretty And in a the we for incremental volume seeing NPD, capacity for comes normal future. the that if through. think adjust further some year as that opportunities reading really later see again, I you really online, that you're margin

that add and freight. mentioned you just input mentioned I'll to Jerry, you costs because [indiscernible]

when our equipment There's take input this correct. been for costs. access look You're the in relief some businesses, freight of in terms total you But costs, at case.

come totality While inflation seeing deflation. it's it, down that not really way at as has of the we're we good look

out pick can good but and way everything, you into But of yes, well, So deflationary gone down, the at total say, inflation's freight hasn't come that come territory. look input like really costs one freights it you down. when

ramp-up continue sales, flesh color. expand how I contribution you over pretty And outlook I'm and your contributing the year for course robust for the out appreciate anticipated defense versus maybe 'XX just JLTV our prospects wondering international was USPS Super. numbers. sales could then on 'XX? the of the that's into that and much this contract of into the 'XX. to in and

Sure.

year next think there's -- -- I is say pieces. a would think moving couple of what I I

I result just from where a -- year production of little is our sort think of out bit. year a that's going standpoint, to revenue ending bit pushed the our I revenue And of from really say a volume bolster right think a that would fourth sort we we're next perspective. with the rates, of now, next international quarter had of ultimately, I up flattish. in

-- takes. large some had had larger international and have gives We'll deliveries we We You other a Belgium have year. this deliveries.

of biggest a international the not smaller So portion is revenue mover year. this probably the that's is Service there. Postal

standpoint between prepared that be headwind start-up remarks a mention about costs you ramp-up. So $XX a year-over-year. when there think bit million will in about NPD, as higher did a really a as well from I margin

a important in ramp-up big margin the full XXXX. and part, very that's significant a expect at contributor to NGDV, year going revenue is XXXX I XXXX, become very as be look and though, at we XXXX and rates, contributor think to we

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

line of Our Stanley. the next Angel comes Morgan with from Castillo question

we kind think you've could maybe unpack typically I if bit to actually a looking little normal return of the kind talked quarter the XX%. seasonality of materially I tune pretty billings kind in dynamic, more, pick was kind commentary if about or fourth historically the -- of of mistaken, I'm at XQ just to the not order of the particular, wondering in up a quarter, versus first

access embedded to in equipment. that So pickup terms earnings kind that where about XX%. guidance can referring you of you've talk I'm of in growth That's the for

in think first So volumes more quarter. how expect generally is kind to of color what that to for you terms the about as there? give Can us of billings sequentially you

the kind -- that think of we volume QX. and then be do access return We vocational from talk -- in with seasonality But -- remarks to getting in our I see the supply and prepared to expect to orders. the more first I'll just talk of yes, we did think there's about volume trying I sequentially unpack, better. -- the can normalcy chains for throughput, somewhat production QX with with up from about

seasonality with and to from our some quarters I think with typical more you see first profitability quarters lower. third really quarter highest our being revenue the type bit perspective, a are the and fourth being second going a and quarter

fairly that's So typical.

expect So some I volume up step would there.

rich You're what that's about talk at just probably XX%. we're little terms order of But a thinking John let in I'll -- then cadence. about. And

Yes.

So Angel, talking about orders.

time. It's a now, early right very that's in Access We're that fully into for the unusual and So And in a we're Equipment us to for go year. whole position we're be segment, normal the our year. in. not booked still XXXX with

have years serve, be orders a go equipment which to that talk see thousands age to meaning go like. of And go they needs is a customers look we normal when back end well at to are really The big that we the traded We're because of indicating equipment replaced. are to about start of -- kind more with starting AOP thing. our the the old. XXXX, going replacement cycle, fleet what order the customers as to is as to customers, customers normal year good -- following So want talk we're all the independent cadence. our back expecting that to a we publicly in we to really

may back expect we in seasonality -- but of So play. into orders years, market don't see we that mean healthy orders which but normal 'XX not long been the of continue it all market, term expect continue season seasonality that do has the in come are the and XXXX, in beyond have to in we couple the expect into to normal to orders we because that perform dynamics QX, because 'XX to huge we'll past market

that. say I'll what that's So about

That's year-over-year. here to kind the maybe very of guide, then And helpful. free step-up cash over switching material flow pretty

you puts So that at kind the just what's out about think as of had the past takes improvement? and should that talk kind can of maybe targets versus to Days driving Investor your about how for we you set And longer-term XXXX and beyond.

Yes, yes.

good collections going at XXXX. elevated million, still say, in that, solid a Defense as bit a I is our capital be get domestic step down. as is particularly to expect programs a about capital year. into some with winds lower working generally at So up. $XXX particularly we some would a in around in to than the I JLTV, program somewhat -- I segment, which expect and would going the working CapEx level of last would certainly timing decrease, of billings our be -- benefit that's

As on some step investments a just element I've the our of driver I would it think had we've expect and significant beyond NGDV said program. is down. other And the previous CapEx calls, I

progression we production we of the flow a as there cash beyond going would we I XXXX. a another certainly flow see from benefit be ramp-up continued CapEx bit But look benefit new look our year-over-year. to as think normalizes from expect as I more. that you perspective that's to as cash So should capacity. continue

of the question Chad comes Bernstein. Dillard Our line with from next

So is my on question actually equipment. access

increase back price rolling steady. Like costs. the over the your years you are conversations of of of to back Will due are some from like costs how about customers? came couple or kind -- staying part last that having of you those input some with higher maybe So of rolling surcharges

Chad, seeing as when I earlier, costs, talked at totality you the our deflation. not input we're about of just look

the in So right now. we're that's that position

it. Got

Okay. like just nationals that talk mix you regional about seeing a what you versus with from standpoint versus independents And just you're about like talk year sticking 'XX. the And then for this can segment? Can access.

more the quarter. X would would dynamics. mix it fourth year the wait I nationals together was a quarters little we the I expect generally similar from fairly say year Sure. a bit you first a of stronger independents, for than in bit is the versus if say perspective, balanced

year, of next into customer maybe little I Going mix next year. say would a bit

I But the little of a think shift. the think some again, are shifts bit there biggest is telehandler dynamics boom not of mix the forward. I product going bigger and piece thing a

So that's this from seeing perspective. mix I at think really what we're a point

So or bit towards probably independents. -- nationals little next year, heavier the weighted XXXX, versus a

But at and the the at but you when it's look look -- when I we IRCs, balanced. say between mean, you NRCs mix a the pretty maybe little bit,

back and pretty 'XX, balanced If you IRCs. look to the NRCs between the

We going balance forward. relative continue expect that to

had business do look health market, the of expect the If biggest continued in in really nice around expect because XXXX. We Europe. our in our growth which of we at American world all about. XXXX, look you around really XXXX world the had growth. If Every region go every is world, the North nice regionally dynamics the we we in into for access long-term we equipment, talk weakness some region of the market world,

I XXXX. Europe, in And in, we're probably bit but industry -- in regions market are addressing. people whatever think you're of healthy conditions we're expecting of weakness the see a continuing relatively the to other that world,

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

expect to in this for my I run in How question the in time? product over able just airport contracts an these opportunity and become you much you Are X in you sales or ] line Defense I'm think trying do bigger Volterra first size Japan Ministry rate? mentioned Stryker to is, [ opportunities? So at also contracts size of from And order could orders the overseas the with the markets. size Paris. booked you

orders. the into are airport of us. So vehicles, the that we There airport think orders firefighting electric meaning are brand-new won. vehicles put that These for rescue and I the market, we the platform

into is very as France. new the I Australia from product places from and we've these in had never for putting We've they're desirable gains is, ever nice products looking is never us are The orders orders at that products Japan. in had before. innovations us. countries well. and orders don't airports in we've think this from we're market, airports share case, very orders I notable of electrification going had in it meaning they're these to drive the that from know and

one So of this rescue is we that serve. markets end and smaller airport firefighting market our

a the products think very that refuse last United for vehicles. profitable they're market vehicle electrified is got market, and mile delivery products. And We've with and environmental into I it's meaning bigger gigantic which the electric not putting So NGDV, Postal the the but market. States the an we're Service. is specifically into fire very, the recycling municipal

the to products as it's and market. of them the And just think some that and ones that's this. of power this the of we the rescue I one first vehicle, into market get took firefighting an we we why highlighted indication airport of new was

That's adjustment, negative is the expect a expecting helpful. impact earnings is, the include to segment from earnings bit guide sequentially? any that be then And you're it. down very apples-to-apples first Or the better. question Got it versus sequently, cumulative XQ? my quarter understand or do cost second you without that that down core for defense to just wanted does Defense adjustment

order really for Tammy, JLTV what program. you're spreading from for positive adjustments domestic. -- domestic orders essentially, -- That's received Yes. the in What was we last we the quarter, benefited fourth the more catch-up cumulative

You're costs that's units, cumulative a you spreading get adjustment. catch-up positive more more and why over

not recur. So that does

foundationally expect in first So meaningful would not any quarter. catch the we adjustments cumulative

to So the from that's big really QX. difference QX

Got it.

the to core first quarter? the the be and fourth earnings So similar should somewhat quarter

expect -- Yes. would because that know cumulative move would of these -- our I I orders just defense of general, we would year? much because large I quarter-to-quarter not generally earnings in don't creating quite around catch-up next think this adjustments. as that -- will from

next comes the with Our of Tim question Dean from line Citigroup.

just the is if on maybe or around for a maybe just and was or AeroTech. expectation as you're of activity just revenues speak there your Question thought. million above bit as don't but 'XX. vocational so back seeing what ultimately, synergy specifically, would a speak just then we to kind expectation to integration what Can the to in order you look quite and going if you have $XXX thoughts know I wrong that on from more what, at well

Yes.

So on the been that love market. some the John. the than about supplying answer acquisition. today airport of end into we of already products We feel other understood the better about AeroTech even marketplace. closed bit We have question. already market end because I'll we this the day the little it's We a

a that growth. capabilities. growing what we our technology fit a terms equipment. technological between we're believe of with be player bigger We this has AeroTech We airport in already see strong. end the Now position going see market the on long-term is in market, ground much it's been service is But the secular to working in our really

with more electrified in going the business of you're product on to can synergies the culture. that behind it the you see do fit about in autonomous So behind our the got want you're runways I And synergies. future people. electrification, lithium get. is It's and great customers, airlines terms market, going the a can -- -- lot really growth perspective, to just we strong a has that a functionality what really synergy strong the cultural And ion a great real today from technological come the us. opportunities see about of which but big we feel good to this into power It's and continue than is the -- airports

and get operating terms that with we powerful synergies in us synergies But strong term other the capability technological that is so there's long AeroTech. in real the thing. are course, of of synergy Of sort

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

question. quick A

the trying related XXXX I million it to was million that that number start margins I'm just the the through of the in $XX think stuff your as couple think Does to headwinds about does $XX come the in as down? I defense years. ramp, remarks we profit NGDV we production for ramp of starts correct? like XXXX Defense go think for is that. should segment next go headwind I into how to that guess heard away? And to what new and

year Yes, Yes. really at million. $XX That's a correctly phenomenon. quantified that you first

revenue production. to be full in be year expect rate as up, into a It's So -- of there's it's margin lot from I XXXX, of flip you're sort would program. meaningful we've and that about. be to we growth then That's once going next solid a going talked to sort is to good ramping program going NGDV a XXXX great

So kind to April. you're that production, rate going that working -- through is start phenomenon when in low it's really just a first which year of

that -- I'm like product think think of to that annual unusual is just about more think the a the $XX there going to forward? here XX% kind used margins business of be said then new you're just this versus triggering to like at closer step-up And new we forward? Or And trying inquiries. your structurally an comment that access, like helpful. we're going million going is money going on incremental big to -- picture on trying just going be something this I big see is our That's I'm to to you just this XX% throwing about like that normal is through development. Okay. conceptualize, that's to

on chain normally at supply No, run there look think a for earlier particular, with challenges -- in though, probably if think I so that at there's challenges, year and Earlier we're I think wouldn't right supply rate of through the you was -- more that NPD I lot last in battling now. year, on. -- I it's focus chain

your the to is product going that's So truly -- mix. XX% based margins the be -- have think I higher. generally think access I to boom I incrementals. on varies bit way XX% a to would It about

Some lower. other could products be slightly

that revenue really So up million. happens the being equation ends now, incremental. up, math of $XXX And I just about is with right it up think XX% of that it's so NPD sort the about being

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

thinking year-over-year. of million guide, the product of you new development, rest that $XX defense. year access, the up And cadence the down quarter if the has spoke What's just the understand throughout vocational break will After and you're be AeroTech. year down. obviously expense year of could year? as after What a being higher interest how by also full Just the a get interest sense we I the the the bit about number expense for I'm is driven implying trying rest to of of between the of earnings first you XQ so the well? the know investments you're

there's last say -- in Yes. cash mind interest, we of would had now I million X because with year. about $XXX dynamics keep

earning year. about the in were on that early we X% So

year-over-year. a look $XX would headwind I as interest being at million So

So a over question I is a that's on the certainly part the think NPD is of your good there driver. The spread that course fairly year.

So there's big a not dynamic.

to quarters quarters, to see look related if the would were highest the all going you what start-up is expect going the we have I to think quarters expenses X middle at I think you're that are I defense. X do to be certainly

and So over that of as that's comes play the into the year. sort well. of course

will see So those as I step-up or second the don't a necessarily NPD in be in quarter the well. really of start-up costs heavy sort

So that's how I think...

whole... year it net thinking absolute an full interest you're for interest and level, on around million? and of That's The a the the Mike, expense income $XXX

is interest say So net-net, million up expense be going versus -- year. expect prior $XX net would to net-net, I I about that would

Okay.

X modeling Just $XX those net the million X to million, those just that million-ish. income, of was interest The interest net. make comparison. and want 'XX sure $XX That's right? of I line like It's items, I'm the net $XX expense correctly. So Correct?

I think that's correct.

there. right you're Yes,

right. You're

curious, I And 'XX out. how the business. starting are ] backlogs for to assume and they I'm impressive [ have conversations about access far some Okay. you're real go the

saying impact maybe the they've curious, mean, capacity yourself now but we in additions? know looking and penetrated add around the players base Just the aware historically, significantly, these forth getting Mexico to import adding companies they're with rental the so they're what are and obviously, are I others capacity. conversation Any from folks Mexico. in tariffs and not and

So out. just like early conversations coming that with what curious, are potentially the capacity

in really that, this And capacity, Tennessee, It to I'll I'm we're need going does John, and for all, question. inventory decade. at the a it say I'll does it with for Well, is, answer we carefully telehandlers, telehandlers us, significant we our and that we and to When not a with had look adding we study lot that has capacity customers. of carefully, David. in a City, customers. probably this of our very lot first study answer regard even JLG Jefferson

in a And our is their in our don't brands see we there always market the use issue survey ability We And market, issue is if when make to capacity, rigorous process market we pivot there desire our a a So significant we to have that investment will really we commitments. we expand to any a arises. customers before build fleets. also make that we're our fleets. serving serving talk competitive but see horizon significant desire is that our the position we the we're that all. We that for and -- also in the our already that at and understand understand the have their on today, end we new the dynamics, market. we ag we channels product opportunity with what market our And then customers' and there. includes

the us in us capacity So because that where It we more it help also capacity, need well-thought-out with with And telehandlers. by up we for for just feel doesn't plan equipment. capacity a way, access boom frees places. prudent very have we that helps us capacity other booms

So plan. a this well-thought-out is

expect to alongside have as competitive capacity to to And we We the to of continue the forward. the the continue meet that in have whatever market, see spite grow. continue to dynamics we needs we that's which us of

Our next line Davidson. Shlisky of the from Mike D.A. question comes with

respect XXXX whatever XXXX. I of asking has told I their sold, the Just USPS first kind about EVs their readiness NGDV was are higher in rates run curious why and I'm you and to ready with the then you guess take the see are confident receiving vehicle? ability on the [indiscernible] of training actually driver to infrastructure you're curious I'm to readiness more broadly, and how charging the mechanic when for the and the just kind the that for training

is. the to readiness We vehicles. closely I'll know including first is really they United their vehicle, it. the general. postal where question. myself Service very John. the verse put Postal work This Great we Yes. connected. with States [indiscernible] answer what We we're and I know mean are the planning

ramp ramp. slow significantly of in the ready Service ready to to with Postal we putting work slow to and Part early couple to start we the go the then put Postal together really really XXXX. out and ramp mentioned, that in and United talk rate slow of very that our and production planning the because States to Service, want things We in production make XXXX. the service is about from to That's vehicles we closely talk we're right. And with Postal are vehicles. make to vehicles our more months, We with we onboard where States making We about a start Service vehicles the sure this together is days. well beginning, training we're thought production well sure all put to postal get get where sure increase in to right full United that

vehicles. we've really Service their got of solid So the development is ready really a take like feel on and Postal way we plan leading to good being the

Can there Are bidding about cetera, NGDV. Do vehicles of any looking question next over at well, over whether just there's got like the fewer there actually broadly. just various couple a you've non-military years you or you're Has it's XX the months? feel fleets on for Okay. as the that maybe defense private follow you as up And And there? to delivery. out et for Great. pipeline last on more grown the comment that opportunities contracts?

right? question, the last -- part delivery I think, that of is was related vehicles, first mile to when that Sorry, your

then I you No, pipeline, asking defense actually was was specifically sector any in more also general, bidding the about private if after have asking the that and you in XXXX. maybe broadly I on pipeline comment

Yes.

Okay.

billion. JLTV [indiscernible] $X for core customers. all, and our but of I'm that product vehicles international post really our portfolio business, programs, JLTV wheel this a is foundation of really, about solid business, of good of includes got includes over defense of businesses. core a defense first this And talking in our we've So

in is We for the which have Department that's important space, the winning investing been a of programs lot Defense. because really in us the combat for priority

we our place and showcase good a margins our it's -- that capability earn can while we technology So do where and it.

When com the award won we won you at level. When a we that's well. prototype where some margin of vehicle. really a look those our at considered programs RCV, you you better book healthy wheel And of program. that, That's at it's And them vehicle are look than won vehicles, technical big when which margins it's up, program, combat healthy the add we've for smaller Stryker So is core all other as some a business. a program. the robotic a combat vehicle

for forward, us, So business DoD's book JLTV of still it's defense and really for go business little our contract core is healthy without we as the bit but a a smaller, to we to expect continue to enhance continue we'll continue way, and for, it which buy win to the be combat to really along so. help some And business. programs we'll that

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

if that in visibility costs you XXXX? you mean I could in have I'm the to imagine with you're much sold view do margins the out you out, how it? point of I and your year. can in sold move much this just think lock What presumably, at for you're curious access

And locked So how from costs you what still could move in. here? much do margins have the of those

moderated. John perspective, obviously said, a from we'll place, is you're locks in on watch spot -- think as We contracts on There's continue lock which to plate particularly have pretty well. hot-rolled from in meaningful on we place still a steel cost I perspective. the coil, as some inflation, present, that's

in types really expect of have. I think you those because to production So have -- things throughput comes we visibility of typical chain, the would supply a because year great we it that things, down

So have margins. pretty say the good feel during year, our to we as though we overall, visibility that we'd

your I'm in non-access access momentum Great. general, XXXX even seems curious some Granted, that. vocational be about disagree target there's almost guess think you it about was while, a going just midpoint And introduced curious have in have enough to you extent, very XXXX $XX some moment, out do with at or in years hit then it the and EPS in businesses to a guess thinking for would how you different positive for for conditions. I I ago Okay. I defense. like direction maybe X XXXX. you But you're there or I'm to in momentum debate your, mean say, targets?

simple question firmly material vehicles time When good XXXX guidance. XXXX. beyond answer is position. when ramp talk that going segment. our to never business, access look our long-range The to we to what always guidance the we you customers year -- as that we're our expect expect we've XXXX the dynamics Equipment happening, end business vocational Access of Well, we to the would you in the business of your serving, in well our our when in in strong. health believe about you a a then stand what are XXXX -- bit markets that and look to I at But is at all in we by But other do We be from continued service that look look postal at end the XXXX. some -- the we're we're at have really the at and you look a at and We mean, markets constrained of to look have continued we that in XXXX. We great to the all wavered the have expansion you provided. capacity yes. markets, continue beyond believe our XXXX

Bank. with from comes question DeBlase next Deutsche Nicole of Our line the

drivers quarter first that strength? there. underlying of location just on of question like Maybe growth on really strong order businesses the and another all the Anything

there I'm question. -- Is missed there... I Is your anything sorry,

Yes.

if Just individual across down coming to the like trying the order from drill key of the board? vocational is strength of like the businesses, is drivers to understand you where kind it

Yes.

aged, healthy question. municipalities Okay. I'm in municipal we're term, misinterpreted with a we when fleets as believe, improvement. municipal continue & total when with lot a cost across America the and of to continue that's for future going fleets. propel Sure, there's maybe And lot segment. budgets, Fire then technology segment to our the to with electrify Emergency at new And healthy their that's some This it's years to are sorry. really product. their electrify that The that North of your and continuing to propel coming the municipalities you couple you upgrade that Emergency around that add the & this truck, fleets. is really the the wanting missed look I into Fire market improvement dynamics. their just Long of just just fire performance to product, many electric a there's I initiative. out And not fire to is country a actively really for, sustainability are of municipalities ownership Volterra a they -- the

future. continue the at allow we about, the do. to and services continuing customers environmental them more to talk They're what vehicles, and The airplane need hear you every market expand we about markets, airport to where vehicles replacement This got upgrading the all our preparing our add a for look airline to are not that's in you fleet, electric to the electric the recycling that traditional capacity. at talking equipment. to time your ground have. an look you a with to and at refuse product major look even is need to of services You CEO healthy airplanes. just time fleet Every capacity you've business we're add

That's look continues You projected future. AeroTech into continued the to that well business. -- all all -- go airport our global to on bode at to for on expansion to go that's for continue years

really, solid. So the vocational dynamics business in really our are

that. all just question of guess I hear allocation is to encouraging definitely capital John, last thoughts. And

we active been M&A the front away a this And maybe should have year? shift expect integrating you're lately. You a bit of M&A guys pretty AeroTech on since from pipeline? How's the more

there got an away mentality. would a would I from that say not always-on M&A. be We've shift

good you an always-on to to company, speak. is patients, acquisitive have a so M&A you're have an If of really mentality because truly process

you terms to really the on you a in to do fit of have you have opportunities company, to And the they our until miss very and don't an sense you You constant comes. when be attention where you want arise. be to then patient have opportunity know and what to where make always if want of for mentality right a very, targets acquire, paying

quite that's value pipeline to but continue the have add opportunity doing happen always-on to be sheet to again. hard by predict will while will this as really to a in company when and we going for a that. it's to happen, great So play And it balance our we have

continue to we we to free that, kind cash dividend flow and always when saw to expect weigh together we'll we of XX% to that return you to continue opportunities make Now acquisitions. share having today, that to our buybacks and we said XX% of shareholders, our increase have with do

think I the on So that's that color add that. I'll

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

your to comment can ] of $XX 'XX on guide the constrained you year, capacity this the [ capacity to revenue John, level that for being incremental this you expect relative quantify year? billion

about have think on meaningful that for we're which talking going we're to be quantify be I be long step-up. meaningful And Murphysboro it's a investing becomes online term. that or capacity kind XXX,XXX it, X foot of but facility facility available about The about post revenue is you profitability. going I a talked contribution is small. vocational, to pretty which year And year, having meaningful that's guess to meaningful. necessarily we've there's there's a but access not really plus lot step-up next Certainly, have that, if an think coming course, of early foot XXXX, sales to a Steve, is for contributor. there's you're XXX,XXX the square going going a -- to to square going It's of to contributor the

there as opportunities step-up see well. we So

of same see constraints So as just don't level look we the facing we're that we to next today. year,

set that how be that should mid-single people ex just we growth talked Or release. organic like profitable could help the suggest does that growth about guess, are price be thinking in press digit the expecting level commentary to I you XX%?

number Yes, now, just right I'm we you number. but let's that say, a comfortable give I it be to XXXX, to know expect material don't in a

could comment predictable years have that 'XX -- on to or model commercial X are X And internal and meaning then back ] sales benefit? you're for those just one. it. that is years building that material and John, of Got will beyond JLTV, going direct enough quick be your some some your [ some unpredictable, into a for

think will sure. I see don't that for X be ]. we'll That's years [

DoD. There's for business say that, would hear that say suffice not continuing -- Let that's are I a sales And we to thousands, not it typically I many I it's units sales unfortunately, be creates going which and to really world, DoD direct me when those that's we're countries seeing just that conflict that per to all customers say hundreds continuing the But that be international year, the grow. growth conflict And that those continue it's are international that, budgets. to to I think in why. why think, we up direct us. good for It's shore unfortunately that to to will for of a have. their the to grow, surprising know desire in

Or there an that. on process? can order follow-up take quick process? How Or is X approval and an the just approval long is basically And ship. you

it's sales, be it process sales there commercial goes direct that an to For going commercial through. that direct approval largely is

a that typically is Or there quick But or quarters months -- pretty quick? [indiscernible] can Understood. be

straightforward. the and pretty Normally a we know it customers normally, straightforward. be But process, bit pretty a could certain it's understand there's it's There but where little involved. more we how process, works,

not months, years. Think

over I the turn Mr. like would to back floor to Davidson, now you.

for us outlook. to Great. strong everybody. entering momentum XXXX today, be We're and with and thanks Thanks, pleased Christine, joining a

you analyst And in to see be have questions. a us will March. day. in Perhaps we'll Have you any several and there. if out participating We great follow-up please reach conferences February

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

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