Oshkosh (OSK) 30 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to the Oshkosh Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Pat Davidson, Senior Vice President of Investor Relations for Oshkosh. Thank you.

You may begin.

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

to Slide X of presentation. now that refer Please

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

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

an with operating good XX.X%. morning, growth margin Pat, and pleased and announce solid Thank I'm adjusted revenue you, to another of X% everyone. quarter of

our quarter in second our during expectations shared of EPS was $X.XX third adjusted with Our quarter earnings call. we line

pricing. vocational contract and and performance improving segment improving portfolio see business award outlook an with to growth across defense continue our new We

market While continue we our near access we deliver term, is in expect the to resilient will softer margins. conditions in healthy America experiencing North segment

our are outlook be prior for $XX.XX per markets, full adjusted softer versus of updating equipment share approximately $XX.XX share. approximately we light per In to EPS somewhat our estimate access of year XXXX

Service leveraged During our for and our milestone delivery with we that NGDV modernize U.S. or the decarbonize service significant most vehicles, Postal safety. placing began provide achieved vehicles States driver service United state-of-the-art industry's the next-generation to quarter, purpose-built their in delivery. postal a market-leading innovation the and last mile capabilities technological while The as delivery fleet the enhancing NGDV,

which positive are feedback in on performance on field, pleased well. focused the remain early ramp-up, with and is NGDV We executing our we progressing production

science-based us SPTI's journey while our our they another targets month, reduction important reflects Last that shape future. notified targets. step targets validation of that sustainable in our a solutions delivering initiative groundbreaking carbon approved the gas our consistently more footprint emission greenhouse reducing of

started turn sales third get to Slide segment delivered our Please growth. we'll on team quarter X, year-over-year Access The updates. and

market slowing mega ages been softer our projects deliver of on believe have we Furthermore, confident last of While revert pockets typical remain even the ability customer back to construction and putting remain pressure more have seasonality. We margins activity during tailwinds, higher nonresidential as and persistently conditions. a on demand call, fleet rates mentioned in market. to solid seen we our period interest

our first market We will continue we we orders quarter healthy and long-term meaningful their during customers are our horizon. Overall, expect XXXX of the access the XXXX working planning believe with to on and fourth of requirements, remain quarter over XXXX.

into productivity. communications the are our platform ClearSky e-commerce its enhancements, access solutions continues are this Express technology, of products fleet control including with and over-the-air our example online updates, smart about and is platform X-way team capability. access enthusiastic improving software that technology other advance to digital state-of-the-art Our Customers connected an integration

dumpers, we leading early European equipment, wheeled of and manufacturer A rough including AUSA. In of specialty telehandlers. September, announced acquisition previously terrain completed our forklifts

family. Oshkosh it the and into Spain AUSA bring our our including expands to management. serves us, complements a agricultural new AUSA market access is vegetation for and traditional And markets in leader markets. pleased presence adjacent are We equipment

We for will products our growth also forward. moving American believe AUSA North support sales that channel leveraging

our electric The telehandler ] shows slide around deck low by offers new JLG's workspace. [ emission operation EXXX example, for battery-powered noise For critical EXXX AUSA. in moving X materials and manufactured

turn review I'll to Please segment. Slide vocational X, our and

very in revenue remain growth our continues grow, adjusted backlog additional footprint XX.X%. throughput we achieved manufacturing are for long-term segment focused margin vocational to products our of Concurrently, few strong, we to growth. production on operating over achieving the to Our increased quarter, visibility. third strong another increase to vocational years. providing We the next evaluate year-over-year investments of as support our solid XX.X% remains reviewing in Demand existing leading capacity facilities and

Furthermore, products features. have autonomous in continued range technology we and insertions across to to from our lead electrification to functionality intelligent product of

ZSL advancement Services issued technological to company. our growth XXX of carbon order this interest very a substantial improve electric customers September, Customer Volterra zero-emission provide commitment vehicles high. In Republic electric in and expect vehicles, as reduced new significant footprint. another reinforcing We to our Recycling revolutionary Republic these Refuse for to its remains our while strives purpose-built and collection benefits integrated for to productivity drive fully

the and results vocational firsthand segment. businesses scheduled service to the to of the X, date. pleased demonstrations our current strong discharge and of and our in integration experience benefits We We today's Volterra significant success smaller highlight on I'd over mixer began vehicle and with the several the than that businesses the allowing acquisition X-year the been margins important performing front IMT continue on next we quarter but ZSL. both like anniversary call, X are and the August contributing have to delivering will concrete well, more XXX AeroTech months, to celebrated and customers future customer have of vocational third

market-leading Lisbon, as airport extensively Portugal. featured ] electric ground in products [ The attended Equipment support our strengths, equipment, we used Volterra and is innovations which intelligent several to the support equipment, as team RF JLG By show last electrification, ground showcased in was functionality at and month well The product our drive AeroTech autonomous combining at our expect well features. also airports. Expo at innovative

Our the provides strong of industry strengthen passenger demonstrated broad synergies our International to year-over-year. the Transport commercial Global Association's X.X% the display metrics Oshkosh between continued Air to as figures air growth with air as well businesses. transportation showing August capabilities

deliveries turn of Defense a to parts wheeled Let's the for aftermarket higher XX% up and tactical Slide NGDV discussion of Sales as X a segment. vehicle result sales. were production,

ramp throughout a for X-year expectations adjustment pricing the these combination FHTV strong better of extension to XXXX We for a we expect As full production, in includes XXXX. price provision. in in contract program August, completed which reminder, a rate robust production economic up leading revenue to at NGDV XXXX early exit and and a vehicles

expect similar also AX contract X-year for pricing EPA. to half of We better FMTV the in a both extension XXXX and complete first with

delivering resilient We We support extensions next and provide both these of over margins to several early expect contract customer these units begin years. believe stronger, demand extensions contract to in under will the more XXXX. solid visibility

final We wind XXXX. continue to expect units production the and down to domestic domestic early in JLTV ship

our the combat vehicle, Phase technology On robotic of quarter, program. we front, for during RCV submitted the prototype proposal the X

adaptable to maintainability brings and capabilities including purpose-built performance, operations. Pratt Our innovative, mission expertise Miller The for in improved performance and with Oshkosh RCV soldier to necessary increased U.S. enhance and across flexibility engineering Oshkosh, success. offering technologies provide multi-domain Army the leverages is

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

prior over to Thanks, Slide the $XXX increase an sales turn or John. X% were Please X. million the quarter third for year of Consolidated billion, $X.XX quarter.

increased The income million XX.X% over an Our quarter of and top driven the improved was $X.X sales the increased sales higher engineering prior pricing benefit in income largely month was operating year offset SG&A all vocational the acquired cost higher AeroTech part as by to X, XXXX, operating year volumes dynamics, line August primarily segments improvement and Adjusted driven the on our costs. of price sales. in benefit by volume and growth in additional million of in by business current improved the or in segment. $XXX was of adjusted organic

the driven was credit a the interest X Slide updated of year. for on to expense versus review $X.XX Please a share facility. per revolving $X.XX our quarter on Adjusted earnings modestly The third our by earnings share per turn higher higher was in income lower adjusted expectations prior XXXX. in operating for

On We outlook. are earnings estimate full we to be a year basis, $XX.X our consolidated sales billion. reducing billion $XX.X prior expectation versus adjusted XXXX now our approximately of

estimate income We be $X.X are of $X.XX billion, from estimating be earnings versus that now we estimate share will of prior adjusted approximately our and estimating recent billion most $XX.XX. our approximately are adjusted operating $XX.XX per down to approximately

our to market and in $X.X America The adjusted XX% estimating prior a access $X.X At and margin approximately operating an margin of reflect revenue level, conditions billion expectations with XX.X%, sales highlighted. approximately slightly of softer compared previously the segment are be expectations lower respectively. reduced North we billion to

vocational $X.XX margin expect XX.XX%. of be our sales XX.XX%, adjusted we be We are will operating increasing prior to expectation and for from billion, up expectations our approximately approximately

and outlook. We expect margin to dynamics price/cost improved drive stronger lower spending our

now to X.XX%. adjusted our of and are expectations maintaining we operating we Defense, For for are margin approximately expect now -- approximately sales we be billion, $X.XX

Our estimate $XXX for costs and other million. corporate is

remains tax rate Our expectation XX%. for

unchanged for also expectation million at shares. Our share is XX.X count

by We $XX $XXX are target million CapEx reducing to million. our

flow $XXX by reducing also to free are We for cash our estimate $XX million. million

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

and quarter reducing while adjusted EPS, our XXXX operating we revenue, expect and to XXXX. expectations income solid we adjusted adjusted meaningful reported are We continue compared in growth another for to EPS

benefit products believe businesses to to our drivers, value. I'll innovative We from our will the drive Q&A. for to and strength Pat, strong back we it and turn growth shareholder of long-term you, continue people, long-term the continue

a we have your the questions. to Q&A remind the your that queue stay if that session. follow-up questions John. additional one Operator, please ask please Thanks, plus please you question. and After begin I'll follow-up, everyone to on disciplined you limit follow-up rejoin

question Mircea first Baird. from from Instructions] Dobre Instructions] RW [Operator Our is [Operator

our to Morgan next go Angel Stanley. from question on We'll Castillo here from

for is Angel. actually Dias sitting This Stefan in

your if you in your give you lower access coverage to softer XXXX. was recall So outlook backlog I'm mistaken, not for However, indicated outlook, this sales full I due I guess regarding access

So us cancellations whether on exact decline or more puts delays. order there the any if on the maybe revenue could were and you color give takes what drove and

as well? would outlook great us you If more XXXX, could bridge XXXX that to help optimistic be your for

question, into I'm you the about remember talk timing There's Thanks, in backlog, to the it important any sorry, stretches for talk booked. timing about sitting When enter today. Yes. for Stephan, in quarter, that's quarter how backlog thanks for thing you our But Angel mostly and -- to the we Angel. to there's XXXX. we our and thank backlog. given

in next backlog ship some to Some scheduled to year, scheduled quarter. is of our fourth ship the

customers, with orders booked fourth have backlog we lot to the in out in So come quarter, already there's fill the still quarter. of but some a our that's to

change some so And that's of the saw. that you

I I are pay intake really versus order orders important, of to backlog more is but to though, a important, really attention little telling. course, think think bit it's backlog just mean

a have quarter, healthy orders very in the we even which And with third expected. -- we low

at and bit little access end Typically, healthy a $X a 'XX in normal, X-month that, a and still We cancellations have some relatively backlog, billion. the had equipment X- think in of we some we had now. to very our right we're we backlog, and make look healthy overall, cancellations still over market. lower healthy have If that to world. have [ equipment and orders at backlog, access of and pushing we Yes, But backlog the the a of pushouts high indicative I ] that's the in healthy kind have considered have that's QX. out a things

that So we've got. backlog we about feel pretty good the

follow-up, expect flow vocational, to then turn remind degree And the Great. And we my can P&L through that's I'll should your over. how embedded the price incremental if within maybe us talk within you of the for of in it next couple then about upside And backlog? you years. could that

fire getting This Mike. through next backlog. next out trucks, really, X-year double-digit for we over price a we're years, about read will the Yes. is We backlog. That the continue our start to strong few still increases in have into starting

will to So continue that read through.

we means continue that not line price see what So see we expect of cost. expect only growth from to volume, the to the benefit is to to continue top business of

from Sachs. from next Our is question our Revich from is Jerry next Goldman question

the and path cadence, improved morning, Good the Can John, you're please? on the step X% on update economics thoughts that to update you how the the nice a you on forward have business? about XXXX defense. in updated everyone. for How margin targets you in us hear any big the do to of expect thinking towards XX%

Yes.

we're XX I you think see you'll getting. see core a And price of comes unexpected bigger short with gone forward and XXXX. your the disrupts you'll seen. forward and of step lot this is low answer business And contracts a in a kind forward and a the in step 'XX, we've XXXX. relatively through our We've see until that new business you have years defense from contracts inflation inflation fixed with when it as step

So realities business is there of costs. -- the is this are going new couple price we're getting the improve good news priced of that years over is contracts dramatically because to input today's the to next fixed that

a revenue. top DoD little but defense over business going have. in you as the programs business billion That's then then good in to future, kind foreseeable you we business little -- forward, profitable we business And think layer have that's to this that bit that business postal the us, will for So big margin will of international healthy of the defense that's the that have be heavies this some margins. a will a we smaller the well of core core NGDV near really a as do margin we that all of drives be recover core and It's us. it JLTV because the about XX% expect medium combat business the also in program. $X going we normal fully its won't the growth gigantic vehicles contract, the be That's on a layering for into and some and business what for

that forward, going couple business next going improve over the is So years. to materially of

How improvements how the margins have in just be of decrementals. about decremental wondering couple about When you improvements? Super. think for a the fourth the XX% Access like process improved we Equipment, quarter, And surprise potential any history, in if you weaker, the made about should implied should about do cycle and demand past guidance folks given to I'm over process we downside? see is if years. could of see lot talk do versus decrementals we we operational looks thinking the demand

Yes.

say think it's expecting from basis perspective, look a on on for incremental around First it full I a would -- to margin year on our Access little And slide says, very we're at I'd year XX% a of a I incrementals basis. easier guidance. full bit strong based implied

some a you when nuances. basis, think specifically I quarter-to-quarter can have look on you

QX is So freight particularly looking to last saw this year. did specifically than year last we QX What favorable have we QX -- quarter, had a and favorable material of year. last more environment we in QX

a So I of tough a bit comp. think

think continue if But still next decrementals we've year the we in softness we're market line it's I into bottom margins, as solid get process. deliver early to year. see to going expect some next for our to negotiation even about, is not talked as we

Our from next JPMorgan. Zakaria question from is Tami

you so much. Thank

strong you there's considering capacity I'm really the segment, high first like vocational wondering, performance. question it this very segment? raising Because for on seems backlog. my So is question are

demand. into visibility have You

So have . raising considered you capacity?

it's Yes, -- area it's Tami, huge a a for focus us. and question, that's great

existing going refuse So we capacity. in see I in the think the you're are fire facilities, particularly and recycling and what to sites, process on of adding our

facilities capacity to investments And But that increase a so focused additional to is continue through the facilities look for We fabrication that electric clearly vehicles. have we'll where continue recycling using Tennessee to expectation is time. to going for capacity on. some existing ramping refuse be going My our area. also broader some through activities continue that we to Murphysboro, and we're Facility capital over We're that additional at the our and up in new, segment.

top We years. from we're growth to several that next see expect over line the going that

question What surprised Got It's year. expectations helpful. year pleasantly your then of are it. when versus And one about the some bought you That's more on AeroTech. it ago? been that X a you things

the acquired products, other there's electrification, a We autonomy, it connected certainly a look overlap because close Tami, from of AeroTech. particularly innovation Yes, you our a at adjacencies, initiatives. technology of lot to about company-wide like with standpoint, intelligent lot

us prepared just mentioned JLG that's show our well remarks, between as of those the had has been from of and very businesses and positive vehicles a -- between the dynamics ground we front, at it's the overlap in would course, to that customers the John our in -- products ground products, so the some commercial as standpoint and between well. I think on our I lot ARC expedite Lisbon been equipment a synergies synergies say great support across -- as strong. as are of We industry going very So efforts. company, allow to our -- support

continue see profitable to we business. expect to that growth So in

ability make the the talked household better know and better to because it's around just the about the after -- we further model And business, the that acquired the are customers innovation technology them. continue AeroTech and United, drives others. they comment, work. is, people Delta, are we that's one tough really it, relationship and for names, with really safety that positive I'll Express, Yes, to Federal our to productivity to we that doing performance When with AeroTech improve and And And got These strong. people customers exactly for what functionality our are really Tami. innovate our have and about for the and Mike product improve autonomous electrification business customers.

to we do. just really So strong it what be for a continues fit

from Next Citigroup. question Kyle is Menges from

the versus it's more market bifurcate in rental and between you you of talk some rental some customers market if access if little the I larger Is into of demand more local that you're seeing big just from a push guess, could could smaller, the the guys or maybe customers it was XXXX? the and kind of softness any really outs on I most, more bit smaller which players? the players the hoping what seeing just you're just and

question. for Yes. Thanks the

We've come all to years through of really, of I period strong demand. really this. that. So just frame a aware we're try and last few the

kind is market of it seasonal QX to lead And to what's more normal. planning we're going kind talk You're I happen that and back right are about that's a of that. XXXX. being to things. in stress, where months, we've a to to I healthy about that's of know and where talk X think I backlog you we hear believe QX these our the now, -- projects, they're aged pattern about talked also a this We can't And in we believe now they that back enough which normal going aware there's backlog. customers want customers about And for and enough remain intact. in But experiencing times sits provide. our right build X we -- many our power fleets the mega generation, that We long-term build those really All drivers centers. really serve talk data good significant can't infrastructure that We are still public investments, data believe centers. customers categories we normalizing.

with is driver now what there. been talking rates, the realize interest there construction about. I to we're pressure main of nonresidential that's some think private do concern we some regard kind that have is Now right of mainly and construction, High

to softness in see And we period, construction. probably healthy will bit again. We of expect, We'll soft. don't a see think going market continue We'll So of is a significant be We private short-term downturn. grow in that's the what's be the just then after a kind projects. conditions some 'XX think that causing going it bit is to to pressure. any little mega

through and strong, for So deliver to that our to calls resilient our margins. outlook able us -- be

independents. a the I talking versus know nationals don't independent. So big it's national if the about versus

where construction, you might a is independent private a that exposed be more think participate have in they when these independent are that is exposed that lot I to they feeling independents operate. it an to also megaprojects independent bit big mega little an projects of than

it we're trends these difference is the big [ kind I versus private So nonres is, think seeing. ] of

little is helpful. bit hoping That's going a near term. I in deliveries the guess notice how curious more I so -- like down the seems could the NGDV more was talk about I bit did NGDV just sequentially in I ramp-up a actually quarter. And it you then went was

far? that you just much, understand just going might into seasonality I So too thing, but hear shouldn't read a I that how probably to love be it's so

that -- not with those closely up, all. read that. shouldn't You this went performance, unlike it with, ergonomics It's postal accounting vehicles we're work there. Deliveries that a that just The deliveries mail the carriers method revolutionary a is safety delighted streets we the service. vehicle happy at are This really We and are. That's delivery the ease-of-use, drove is the they're deliver a that today with deliveries was. This that's it's where start and with going I'll with to are deliveries vehicle, are Actually, -- cost-to-cost into really using all on really any made. vehicles, e-commerce down. out up. incredible we've superior

we up brand-new a ramping production -- go to today that vehicle the to together believe, by sprinting. take When we're you start than is schedule better market, prudent service So trying production. postal you through with a

we at a we in lose contract So offset long-term anything as we're up of will go from today. more XXXX, Thanks, XXXX going throughout We We'll , program, a program, reasons. great JLTV away. full for the good again -- XXXX. ramping Kyle. through production lot than this be It's

from Our next Jamie Securities. is Truist from question Cook

cash cash we've achieve cut it guess flow X ramp to the of year, guide your Mike, implies One, cash a some guidance the big questions. this I but fourth free throughout free flow quarter. for free lowering still flow, understanding XXXX been on pretty guidance in the the the it's quarter,

you're down access your on have what's of sort for understand answer access to on to are said based for equipment. -- XXXX we'll on which sales think XXXX us talk earlier understanding going there. then you now could in you going So saying want an be if decrementals you about means that implied don't And decrementals just question, help being

concerns that is starts pricing are So pricing, out I that the negative. to guess go just of there one

how assume would a margin? we thinking decremental on you color can able are that down? why of give So any reason XX% Or about to pricing? achieve if the can be sort normalized be you're wouldn't we Like sales what

Big implied a big of is typically we Starting QX revenue is flow. lower. there's Obviously, quarter. the Sure. -- number with a big had cash another items. shipping

a get of you from natural be the So place, Defense specifically bleed-off inventory the certainly acceptance receivables. really takes of of capital, that working can timing timing process the big shifts there billed segment, impacts vehicles and when our some in unbilled receivables to

see So items. of down Those biggest unbilled we the a the big and those coming in fourth are quarter. receivables benefit impact really

I think your to next next kind shifting -- we're other -- calling year question. not of the

bit think market ultimately, little I that Obviously, right So could continue. is a the softer now

So negotiations want solid it's year in margins. to we we the I all with further a But be think a customers, importantly, -- get going solid think and going the the is year to next bit I to elements. we're think but the mix key little into again, with and volume those

Steven is question Fisher from next UBS. Our from

the vocational and think how bright it the basis? a do any you quarters. have lumpy So how to certainly might was bookings think the ongoing Wondering next on on spot. be order visibility vocational trajectory an over that? Is And about you there and book-to-bill

continues in Yes, backlog I'd perspective, say the grow from backlog to business. the a

of business our my to back strong. revert of market on remains -- in kind each I'd that the comments Tami to throughput our we're focused earlier dynamics highly -- So

have look quarter-to-quarter booking at lumpiness can think strong lumpiness. and and that if forward. can remain there but And as AeroTech you in look some -- sort very orders going account particularly when some at McNeilus the at think in we you be we're expect I the national vocational, quarter-to-quarter, to large demand I times, blocks of you orders

Yes.

and in think, in, one some other this measures to example, will a of of our world. this every markets would same. for it by in thing shortage be where party I think resilient third for the about continue very of airport that much great reasons market, place continue is that segment. and we're the into to because airport that in projected AeroTech business, markets, are the pretty to capacity these And resilient to the markets, one is vocational Steve, truck that we note are they is cyclical future fire grow of These not us be that's the

Great. And just a follow-up.

it So doing well. vocational sounds very like obviously,

overall NGDV You've already being bit have talked a market ramping. having and and healthy still in reasonable 'XX you a backlog defense, relatively about access

So earnings as I per assuming that expectations you your we we is still range about be at guess for had, mean, that still XXXX, should on moment prior range that think share appropriate? broadly thinking I that, the that you're

in range already today. we're that Well,

can't this where particularly XXXX So a We'll I'll through, we we'd guide 'XX. be be. we we'll already start -- January 'XX go there. point better to for I customers, said give this we access actually at with going lot But to be as work able in in to time. be remember, we're able our of quarter, much in guidance in as to where think 'XX is

from is question Tim Thein from next Raymond Our James.

sure your miss congrats Maybe all, of hosting you're on sure first Yes. well, calls. these new Mike, just -- role. going I'm to

So...

get worry . it. a Tim, I Don't about still mic,

of it access, guess the just a a it in -- that obviously, that Do customer whatever I the what -- -- can making an But can and just important I'll a standpoint, you market as envision on just not makeup just we'll revenue At do see of change you one. market, you or in role product the anticipate in of of if -- like? of terms the next The go. base call. complexion think from kind you gives terms of kind geographic today, telehandlers? this But you those look the product much year. again, and aerials may between of you start shift with simplify just margins. There about, point and play obviously, for mix the

strong, I next telehandlers I would get mix as year. say, think but evolve have in into think that still been I it's we the early to general, continue the will

is buckets the call to I early too little going bit each So of a exactly it's to those what of dynamics think be... one

Telehandlers Yes. the I same strong. been particularly Tim. to going thing, emphasize was has

strong particularly that's already see good in to to about well. to We new production Although pinpoint be. down of new us and any one real. that We product of telehandlers, we meet a as today give XXXX. building telehandler mentioned stretch. though, we that that's by telehandlers new I mix if because markets we're increase place that continue ] And that demand see continues the don't capacity like not booms But to any [ for And in between that production. enough we up there's going or today been We'll are the in improve on we're strong. demand the ag market. are material -- slowing kind end and there. another and talk lots have opening be It's capacity confidence And shift, of XXXX. to to just hard that

the Okay. my question, because follow-up counting. same know And I the John. as ask But I'll Pat's

specific filings I -- think loss of you've expire to terms update associated that? that I expansion. in call when an one you for asked big update? capacity that do Is have you you a years that out customer the there of And a your contract that quarter announced terms on maybe here with Any a Or the just that in an extent there's is that? update potential due revenue soon. to on telehandler

guess They it. it. of they'll Cat's a about Cat. I'll partner a Yes. been of I good partner well. to years. you'll equipment We've mean Tim partnership with what talking it, going have that Sure, is with JLG as -- it ours be see good dealers the I relationship going recognition that with but and we're got didn't in mention on Cat I ours. structure Cat is But got changing. acceptance forward. a say there. forward of It's them. can for and great mention the continue Cat I'll many market. great I we'll We've comment to And support our continue I think mean got

is from from Our R.W. Mig Baird. next question Dobre

you be of Access me. seem Thanks guess sort follow for added guiding you're 'XX, I to the up the things softer. to but to not coming that back segment discussion. and just for understanding have in capacity turning on here

approach manage some we such next of Or you the enough restructuring volumes action? get you have Should not kind do potentially the cost What meeting for maybe do year ready do levers you with how John, deal guess I here? of here? things So that some basis? to lower to can are

Yes.

thank you this for Mig, question. So

somehow off I started cut for when got we that. call, apologize the you Sorry,

was my fault. Yes. It

Okay.

question. So thanks for the

different we've resilience starts environments plants to start for how This got regard our on manufacturing So working really, fixed cost. while. been be under to with And a for on like, working on has our my been It's and going resilience. we we it in while. "Oh, demand god, flexible a our can not

into that. a there's lot that. done We've work a So goes that lot of on

We also recurring of business. of streams. revenue our -- resilience into do -- lot aftermarket, as We the with a the these continue we improve to go work our

forward. going and the our in investments to and will made that, to ability years manage that past parts we've help continue that grow So on aftermarket we few we continue think expand our us business, to that distribute and as

outlook The other we the XXXX, a thing talked as about we'll look that horizon. I've X-year at over do,

plans We and great the that go detailed out And curve. we bit Our growth 'XX about continue next as years. think soft we on are of X these years, is feel plans. a X a period

some see some there'll decline. we don't may big, going we we decline, be it's but So to sales think although sales be think

to work do. I material be unfavorable that that wouldn't to course, We have significant in cost reduction that reduction continue initiatives, might cost have anything on work call some with we it we some mitigate we'll but other regard restructuring, levers, to XXXX. of

on So work -- business. lot that the we've for a while of this of resiliency a doing there's been

follow-up collection. to back refuse my Then Understood.

in I'm chassis the success having kind space? I'm those or of with the that's -- not represents to this a where and you you and advantage. then X how the competitive evolving front have as about of us both of I as but having curious market loaders? talked help questions. And here, that versus proprietary you're differentiator demand guess side-loaders, -- Obviously, case, why curious understand trending whether Volterra kind you can maybe is and to you see You if products,

Sure.

is with that because fully us believe that it's competitive advantage. what advantage. chassis we that what that that's integrated. a is, the all, ZSL Volterra And is of First And or do strategic a the gives

separate and think So about body refuse of collection sort a chassis. if you it's a vehicle, traditionally

fully entire features you can advantages into very of entry experience to safety just add exit. ultimately, So with connected more you're driver of you limited you the level a are cab and the vehicle X those It all fully like really together ease in that more chassis truck, positive. productivity Spire that the makes so that safety the the unit, benefits, can pieces integrated create have a much integrate pure

of from an they with the well. Of of are have perspective our ownership it, course, advantage cost seeing ultimately as customers total benefits a electrification that

see. we what that's So

continue we So be electrify. to fleets is going trend decade-long believe this a that to as that

the the strong In where demand of market pretty Frankly, board. is. the is across market terms

at see and we're on As both capacity, capacity size looking opportunities we fronts.

strength to a them right So are both be see we that in now. both going and of focus,

Chad from Dillard Our question next from Bernstein. is

first So and access. on question my pricing is

in through on first And So that are realization at evolve negotiations you I of what right do of cost 'XX expect backlog But half to recognize and, in least 'XX. quarter? least now, of the you first then what's in all, guess, for guys price the was third going through price based looking price how terms backlog? at secondly, I

Yes.

think a we from ultimately, challenging more perspective, year. comp we cost year-over-year to price again, the we So -- had on positive I expect a price quite cost that be ultimately,

into full early look come going on that we that's that, it's see year next next Obviously, think there's really very that's year, Again, so on. going in as we're year. But to incremental XX% carry -- there. to a to the backlog again, our and what's driving basis. negotiations I -- some You

and both regional customers. that So really as product well as matters, mix

-- decrementals business. So speculate for softer, this deliver again, we're on market's to going continue point not on we think or margins the to, to we'll incrementals in solid Again, I at that that expect back going it's year. next

just That's Okay. on access. second, capacity in then the additions And fair.

fill go to may make I time the XX% there that's it any we that Just talked about ramp-up [ the just a ] a sure just to factory in and as the little the to is take think like through of kidneys to trying for past, increase I to you plan? finally, want still think wanted then in like into consider XXXX up given and absorption confirm, capacity. then I

full expanding costs part So capacity. you're talking start-up we're cost Jefferson City, our we that There's the telehandler But -- and and it first in of in 'XX some be the second seeing by the at about half get where absorption of as you'll start point facility. of things at a will of little in benefits bit year, half some year. to production next on the second

level. good and driver it's sales a for it production margin both -- to the is gets its company as of this improvement So full

from Our Steve last from Barger question Markets. is Capital KeyBanc

Volterra question. Another

You nice if you electric yesterday. offerings, expected? are rate built Republic got standpoint out on than challenges better the call potential question or there call a chains you'll the introduce as more My a -- are from those capacity out you fully is, supply is uptake face

Yes.

approach a focus regimented and -- the think as think the we the very our large we of as we I -- facilities. with as ramp-up ultimately, many a of one I we have And supply in throughput top increase the have very areas. chain capacity from programs, perspective, a as

in lot product. we very lot A company. of the lock we're and have of our a throughout the overlap much with with chain the stuff components so And on suppliers supply other

years is up. be good see fleets X replaced. at something, are about demand this is going it. -- be this going growth the point, in going So ramping really long-term to Steve, this this over to to that to to continue feel on XX play We're we're again, next we a to we that be And going this as

new their still vehicles they're just vehicles, a of a still electrification passenger relatively cars also But Yes. to industry. whether ours or new like it's commercial market, big relatively mention, in general,

we So modules, we're new chain economic battery customers. as And about in other got continues cells, constantly then lots of base our benefit very working for supply still because optimistic are to it develop. part work markets, in in able our for supply feel it's to it grow the you've most whether and terms e-drives provide with because our constant commercial we packaging And an components. we're with battery of the battery and and

its versus see market really functionality can markets, ownership can better economic They improvement functionality with in. commercial the the is integrate productivity cost is good from responsiveness space ways the all autonomous because total improvements in of and vehicle better, is cars of better. it the different that we commercial passenger their That's we're

going be is and going -- this feel sudden, switch to we're we So a flip a feel is don't electric. building of going like to we someone's everything the all be to

We a even growth the our in markets end don't is. propulsion electrified nice over maybe years. see see product propulsion XX diesel that happening. of efficient Remember, We next in of just form several propulsion more is XX, than electric

shift very will it's but it's us supply because the positive overnight. it together long through shift time that chain going So and of develop over not period But now, help go story a as will sure. period, with to we a economically viable for

backlog If strong noted really come about you've input X-year talked Or for potential is And being is Mike, a in? long, down costs the some pricing just and reason, prices locked to how in that you in fire there for were for my backlog. follow-up, adjustment?

pricing in. The locked . is

the comments. I'd the this back question-and-answer floor Davidson like session. to So for closing Pat concludes turn to any

for In We Thanks, Las January. thanks, conferences will showcasing everybody, speaking to joining the today. Vegas us show look upcoming shows forward we're we displaying you trade technology. particular, and at and early CES our be at in where with in

will Convention We Oshkosh, trip we We hope these capabilities Center. be to and at the consider visiting making are technology and we'll you Las market bring and at that the proud showing innovation us. of Vegas the

any and have out a reach you if have great day. questions, Please follow-up

This concludes today's teleconference.

time. your You your you may disconnect for participation. at Thank again lines this