Alamo (ALG) 3 Aug 232023 Q2 Earnings call transcript

Good morning ladies and gentlemen and welcome to the Alamo Group Inc Second Quarter 2023 Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 3, 2023. I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, General Counsel, and Secretary. Please go ahead.

Thank you. By now, you should have all received a copy of the press release.

make missing contact and we us you release is receive like will anyone the a please on one, at and if a list. would copy to send company's However, distribution you're sure XXX-XXX-XXXX and replay run There and which will the one week. the begin will of call, hour one be after a for call with XXXXXXXX. replay be The passcode can accessed the by dialing X-XXX-XXX-XXXX

days. at is being available webcast www.alamo-group.com website and call company's be a the Additionally, for the XX will replay on

with are Officer, Vice Executive today questions. President the and Officer. Chief line opening make Leonard, the Executive On Management Malone, Wehrle, Executive me some open-up Sustainability line remarks President, and for Jeff Vice and Dan Officer; and Chief and your Richard will will President then Financial Chief Treasurer; we

reference to today, numbers applicable earnings to certain numbers call non-GAAP of attachments in GAAP Reconciliations the management the their our these in non-GAAP remarks. During results release. are included may

few to call the over turning a Before forward-looking I'd to like statements. make comments Jeff, about

We Litigation will harbor Private that the are provisions XXXX. of making the Securities today pursuant to made Act Safe of forward-looking Reform be statements

operational of from go now risk herein Jeff company listed Forward-looking future supply forecasted cause to to contained results known to actual Please the other materially ahead. weather, which and only the competition, does in obligation are and the would cause any like Leonard, materially time-to-time the statements speaks differ COVID-XX uncertainties factors may seasonality, undertake including update company's company's chain which date. I introduce and demand, unknown risks from currency-related geopolitical issues, which reports. those impacts results. involve results Jeff. as not factors Among differ in could periods and actual to market following; SEC disruptions, The issues, this information

quarter want results today. a of the thank second our all our for Thank review of financial us will on We you, Rich additional the then will you with for provide call joining the Ed. comments of XXXX. begin I to on call results.

to forward your Following our taking questions. look remarks, formal we

Richard, go So ahead. please

Group's with XXXX driven sales closed Jeff good demand excellent products. our and everyone. Alamo that morning Thanks record and performance second net for net income by produced quarter strong an

XXXX million, compared million net second Gross of consolidated margin quarter sales to of increase gains. as in improved the and high an and by gross dollars from $XXX.X margin up last which XX% quarter basis of were we percentage $XX.X the percent price was volume in compared were second quarter XXX points. productivity Both $XXX.X along dollars increases with XXXX the the in early quarter initiatives to million began Second year. margin

increase second for of $XX.X an We million XXXX diluted net an $X.XX second more the XX.X% percent XXXX. the continue of consistent sales an was $X.XX chain of of the year, $XX.X experience in XX% of the second the million quarter last of for quarter versus second of quarter. Operating came supply versus Operating for XX.X% as $XX.X increase $XX.X saw was in we million improvements of XX%. as income the throughout at our for deliveries in XXXX, income to quarter a X%. same quarter second or quarter diluted per or Consolidated income net million for versus share quarter the increase income share, per

labor led environment. The up to Equipment supply margins efforts in this solid XXXX. to Division, increase income Industrial in division $XX.X of second improvements profitability quarter the Vegetation shortages in XXXX. In North the $XX.X were XXXX. in to for particularly primarily chain sales operating and in $XXX.X up division. a the income same second extent $XXX.X for continued the UK. million, a all disruptions, in forestry America, the second and million, for care quarter million period product realization in delivered quarter an performance million, in a and X% XXXX. Net results Division this of due the $XXX versus Despite cost for despite to snow due Our million the second was was Strong compared and mowing XX% governmental tree removal and Europe and compared This quarter second Operating tree sales sweepers, net net for X% price products and efficiency. lesser of across control way million solid increase equipment. again improved to quarter of trucks, vacuum was support to increase helped lines, the $XXX.X collectors once expenses the both of Management operating dynamic

translation the along, chassis other The up the X previous quarter, to While and rise of of main XX% in initiatives supply for the supply a net XXXX improved in basis positive months net sales was division in first up governmental quarter increase of continued division's the was months improved Europe. mowing income parts company X which Six in for XXXX shortages impact compared to higher categories, drivers the versus products utilization. demand the of XXXX, million an months or the The $XX.X were XX.X% X to their up capacity and experienced of XXX was Operating truck versus negatively product with was month income record months $XX.X versus X.X% or million XXXX XXXX Six second as was $XX.X Labor point both a and although percentage up months for in of for chain deliveries $XX.X were and diluted first quarters. shortages of UK points, divisions, a increase. tree over to efficiencies XX%. to conditions, per care, Strong prior experienced operations $XXX.X $XXX.X not in sales, improved of which XXXX months XXXX productivity compared the the operating Management pricing demand coming constrained or in the million XXXX X%. increase months $XX of significant million of of million $X.XX million and all this resulted forestry, at we $XXX XX%. Six our clearing America, and led X North up the second period the particularly chain X impacts first million an XX% robust was first for for Vegetation significant efficiencies for division XXXX. margin in along for the the operating gross showed of margin component increase in of $XX first the income million XXXX, This $X.X in which million basis half XXX improvement same of agricultural XXXX as for $XXX.X almost in of currency month XXX%. Consolidated million $XX.X first were million land sales to $X.XX compared income X share $XXX.X of an also the record share, impacted for Net XXXX, diluted million, income in or of effects compared increase. XXXX, year. net million, for XXXX, for sales quarter division. per for a the

X million sales the were Industrial a For compared first XX% months net Division the for of X XXXX, the for months to XXXX, increase. $XXX.X first $XXX.X million of Equipment

million first income second backlog with of the support modest months This shortages was end the the was labor month second as increase well chain Sales as collectors and in although improved slightly some the compared impacted be for disruptions, at from versus quarters, XXXX, of an operating of $XX.X by down $XXX million. quarter backlog This the million at continued debris Company's from The negatively trucks, few division's snow over XXXX quarter excavators. $XX.X of last the translation of for XXXX, vacuum end of just to and sweepers, million. results the came removal effects. way XX%. at X Six supply which $XXX led XXXX currency is the to

to Turning financial few end the items a quarter. for second of the additional

increased resulted sheet of higher volume. XX% mainly the and $XXX balance The from year $XXX lesser to million a million, receivable sales ago were million from receivable quarter. increase second from from that's remain a in accounts Working inventory. $XXX million Our to capital Accounts $XXX capital working extent, solid at continues end the to strong. up

extremely pleased collections receivables, and with cash no steady. with issues to be on continues major to remain incoming continue We

a come up in, into well locations the were $XX end quarter the was volume Inventory towards part of million come orders month. of XXXX, within was second that slightly year-over-year inflation increase we able work the we of down received major compared of drove that compared high June inventory divisions. tractors is the as cost of quantities million this and of up the $X process we not pleased in had a both the quarter. to and to several end June past the of large bulk of ship at chassis Also were Material to increase in had trail due

During by quarter our level we credit $XX expected, the second facility debt almost as our on reduced million.

in company's XXXX. $XXX the million, calendar Finally, just was coming compared XX at a record XX% EBITDA to trailing over up months

should as profits and reduce Increased sheet of both to will debt balance the For inventory continue levels. important. focus remain XXXX, for cash extremely will consolidated remain strong XXXX flow our balance on

our transportation based target as our material put remain controlling on also costs adjust expenses, margins. will on in to disciplined We'll also margins. continues order in needed to pressure as in and We and maintain costs inflation prices changes

We process. focusing in further in to on help of the work reduce also inventory are performance chain we supply improving hold amount

heightened throughout given to Our chain will biggest be continue challenge supply products for current the labor our meeting company constraints shortages. and demand the

a our quarter approved that pleased regular for of are $X.XX Board We the XXXX. quarterly of share recently second dividend per

few into share. With up second key I'll income, over back sales XX%, a XX% Sales coming the at to XX.X% Jeff. in of that that, quarter turn which important. the increase turn increase per in XX% earnings in are call So summary, translated in from and operating extremely a in takeaways

joined Richard. had improved as XX% again teams of the for and operating sales to new lower cadence we material further to to chain my records of has you, pleased express divisions personal sales, I'd stabilize and our our thanks over XXXX. margins. quarter who increase the net second of our the consolidated all-time Sales quarter like a that supply everyone improvement today. We call anticipated and cost inflation second manufacturing sales were company once both across up helped in in set performance to compared quarterly improved were very and Thank operating income our our

we was XX.X% quarter basis top higher an leverage points achieve discipline, able of the cost excellent in line. The second basis of were on the XXX under Our X% margin as teams the prior solid sales, our to versus job, XX operating year. keeping sales. tight first the an excellent expenses although declined nearly expenses a this points control. With Operating quarter did than operating of again percentage higher improvement

operating Second to compared than of Europe. markets continued Net somewhat quarter Despite of time. performance X improved also consolidated we at parts costs during during quarter North a this net to than translation a our many the the margin XXX% and target earnings had anticipated resulted prior of were and lower higher XXXX. In nearly quarter currency strong America impact to the months income the the and in XX% first net in were extended that improved XX% due XXXX. for X% sales our quarter income the most remains areas. the interest above sales display established strong of Part headwinds, second second year. first year in record has drought strength also activity had slightly This the and the aggregates, quarter of these quarter versus

Some to rates. this come interest market channel under to inventory rising higher due began the pressure and of effect quarter segments

approximately compared quarter Second to unchanged declined to was second of X% prior XXXX. quarter backlog although bookings the essentially year, the compared

and Our all received strength and product geographic display them remains improved continued and historically Orders governmental municipalities to serve contractors to lines. significant elevated inquiry activity levels. markets markets across from at

manufacturing to declined from efficiencies. operating results XXXX, was again quarter pricing quarter division XX% Our $XXX were better the the second of the X.X% XXXX. up Vegetation Management same Order in compared in the and bookings modestly produced of million income of however, reflecting second strong higher, period improved quarter. Sales

softer orders. clearing had As the North mulching partly tree primarily equipment cancellations, the division's received We and farm anticipated other we experienced American forestry, care during land segments evident rates. for some ranch equipment to carriers was elimination due dealer in rising hobby quarter. activity ongoing tool also certain to and in mulching face order of speculative interest inventories to relative the caution and the heads toward the shortage dealer the of of Increasing rising inventories

in same with period despite successful and Management for of quarter inventories these American this, segment at levels remains are at our North and reached Vegetation XXXX, the as to remained the North farm of the slowed not United higher Division second elevated American the Division hobby combat Management continued and reduce very during channel million, Kingdom These channel our the a division's America, the products inventory end balance, that was $XXX rising and were Europe, Vegetation with excellent at dealers Also North backlog costs. in of retail record still To level. as produced we we in offered quarter. and in results governmental expected, financing a line in On expectations. comfortable headwinds demand XX% improved customers ranch pleased quarter. the were again brisk historically division's Sales pace that incentives to collections the activity at many dealers from Australia. and backlog Brazil, helped equipment mowing given the this tractor-mounted governmental down levels.

order excellent the this expected of this Equipment prior second Industrial the division quarter chain again were sales in $XXX Operating had flat and than improvement XX% line also The higher truck With chassis issue. income with was up new the division to to in valued expectations. due lower efficiencies, XXXX. received improved with of bookings compared quarter. XXXX. receipts second the compared Division performance quarter operating million quarter for division income Our to division's produced results timing the supply in to an This period same above while driving XXX% at this up during XX% our stronger were compared year, orders was and second

trucks. Orders product vacuum for improved, the lines division's notably and major most excavators

compared stimulated incremental that and have to the dealers demonstrators lines beyond and contractors Infrastructure them invest see inventory governmental serve product certain we therefore of sweepers of and and from been benefit beginning impacted Bill. increase an by or carry upgrading interest $XXX to was backlog equipment. Equipment costs nearly The lower primarily rising of partly million by continued do not sharply division to we're fleets they for increase the XX% sales vacuum associated product to products $XXX excavators, the higher of and of same extent our driven Industrial by Our offset our the removal not slightly by that million, demand customers believe their central period in higher XXXX. Equipment with trucks an orders appreciable rates. Most its and same specially Industrial the of snow maintenance

our Looking company how ahead, to continue we is positioned. like

supply show AEM million Our order division rising backlog our the year. year. for hobby by and that that in ranch Management Recent well of than we Vegetation robust very improving than to the indicators stabilizing actually decline performance we'd chain time June markets will of US inflation and segment in this less less and XX-horsepower is farmer first strong confidence the for continue sequential as of and backlog $XXX balance sales was supported perform small activity the governmental sentiment recently farm this anticipated. the reported the order tractors remains moderating upward The in ticked provides

expect that Management to a although with We continue sales moderate will Vegetation high growth. perform Division our at more level,

it allow continue chain year second Industrial Equipment expected and the margin and drive as supply to to shipments of to improvements Our is the higher. sales half efficiencies expand in division both accelerate

yet achieve US economy a interest landing will remains. hikes uncertainty not required. the It's rate Beyond further be XXXX, soft clear or a will whether

more clearly interest causing rates noted are to As react cautiously. today, dealers higher now we've

support the please take prepared of remarks thank our concludes ahead. Before customers, stakeholders suppliers, our now We're closing my their financial Operator, to ready and exceptional questions. for remarks. for employees like company. This our continued your our to today, thousands I'd dealers, go

[Operator Instructions] Moore from Securities. First Chris CJS question at comes

couple How Backlog Maybe, this so will backlog very pricing we least down in $XXX billion at April pricing. at of just looking start in a million, point? to or quarters. for $X you with look favorable are was April,

in faster is the had some of forward occurring of is about, pricing move to dealers backlog in buildup help would I'm Chris. were from for the I retail inventory still channel than sales. inventory channel but QX. great think the that it really we at And not thought to in the end the getting I concerned shape, requests

not hasn't at implement our that. all. backlog incentives There any did that the price really margin remains directly impacted is we Equipment on and so view, pressure And some of But And really the achieve side point from the business new to and margin an outstanding. of at all. Industrial been that backlog division

this Richard. Chris, is

in a of are bit a side too I they costs, starting especially pressure, are because Vegetation feeling of seeing bit. think little little also material to are costs Management business the the drop we

think probably but have pricing So that the we that into some we've going we've orders drop-off our taken that been maintain forward there, we new surcharges going still charging. that to overall we're I of division, the net in have that price just will some

add to with if And rates a that couple of we sheet last over of have have Chris, mean from means same thing the they in on look one are what dealer they pricing units their rise. worth. to years, I'd channel, where that higher it’s for balance I more it's at expressed the it terms, in it been perspective can effectively, afford that's amount while you fewer implemented means the dollar as space interest

for go dealers, space prices the the So I'm of don't costs on balance as caution that's The mean financing the necessarily sheet our many more up. especially referring higher dollars to. of

where the by way. So farm what really of that That's ranch seeing. to the confined that that's any experienced we're was And I segment only segment we pressure. and think hobby the

rates looking bit rising, kind point are that little Morbark seeing interest year? How at in for of the little maybe time. could about potentially the just some how make about now talked rest a you less a Morbark you at demand there it. challenges With bit certain, this Got you're talk of

is book up well, way. holding order the Chris. with been pleased along Morbark's pretty that I've

that. are housing the numbers hasn't to the in really interest starts less of that it it it and end slowing combination have a shred pellets consumption on slow to market beginning housing I higher and of don't lumber yet. bite of materialized evidence means any think falls, a But branches at be our to mulch of day. make although I business, have rates the their to make when

for of stabilizing are negative cost and that's are we going actually feedstock bit rises moment. that pellets But the a So a for to great are that. there, net margins business at and shape little operations there, of improving indicator forward is see in Morbark overall, starting the

position. clear. think where So quarter, And to we that I any in a have the be concern compared were business incremental at with of we we're crystal the to end great first don't just

And they estimating takes gears as to last margins. in quite though XX% just one as and margins gauge the range. and you able weren't even operating being operating trying maybe the this again are What shift north of in parts to generate to going are be. XX% puts We're good QX. of XX.X% QX quarter thought the to likelihood

to Richard. you This Well, go fourth. can I think is the back

the fourth I we last Chris, back think Sorry, if go fourth to operating quarter. in quarter the year, generated income XX.X% you of

it's So I doable. definitely think

were that in margin. We and for are high units XX.X% mix think an the XX.X% I first volume actually second extremely pulled at and that shipped we the think of I happened here thing quarter quarter, one here. we that

and And been and what mentioned had quarter So thing with slightly that because down the third think good kind We some the pleased part units here on. going margins than got quarter sales of just Jeff But of for the drought overall, still were to we're we've I parts still is out for another finish-off units. of that's we anticipated got. as I our to plenty of there out think same our put again.

will think out the of of going more have to after October. bit will fourth parts split, units a middle drop-off little the start quarter a I because have different about

I that's gain the the said see parts snow removal of pieces pick-up, on the for indicator. third more pie table removal. of Equipment momentum. for ordering couple And The the a to quarter, division you, as a the will to start some Chris. bullish I've so on we snow continue think starts potentially Industrial time, in activity pre-season In to Yes, parts

audience times that You remember, Equipment I discussions historically, number Equipment what had they back Management inherently in the with you and margins par the think margins a were I about lower And been where Industrial has gap much division I will several be go than in we've operating. of continue on Vegetation were close. Vegetation Management have very think to that if Industrial reminded

for So now. I'm on what this sustain year the see this level can XX% confident of right we rest I based

comes question next Mike The Shlisky from from Davidson. D.A.

here. like off how now, than what follow-up will the I'll feel ask net-net, of looking bill seeing Jeff, in feeling kind I of farm the the I the maybe what do more last feel less positive the this from to on your your on some just right guess on follow-ups mean maybe are better do with quarter sort you're you things the applications you quarter you on infrastructure start Vegetation. mentioned there. and comments quick kind Maybe and last positive types X grass there, I offsetting Industrial compared about answer whole, of the of of are

and I quarter a of think I margins its Mike we'll out see do. sales expect. it that erode. to -- than That's I think in our QX. higher hold wouldn't Vegetation ago, still Management growth good historically, I I feel but position, division Mike, expect say about don't can I was what I very their modest position. still

year, impact be pre-season that for than of very shortly. this were you. to better that expecting indicators full here we're early was yet, very with the going I see The their think I We to candid haven't seen positive

current position. the on vegetation think we So line division will their Management the largely hold

for the pace I talking continued about time. think Industrial And all been some expanding momentum, margin, we've gain things to

removal orders never record where is been in consider and truck all-time at So this has an the the going and to we've for early and snow trucks, regard had here it there with builds it's to of high far is, preseason excellent think year. our parts thing I we're an same thing see backlog by to other

and So bullish for and expecting a good our QX, I'm for for that's especially QX. business pretty removal season snow

yes, I we've net-net, still little So continue room think of little a got a running better. bit do to to bit here

I well want follow-up snow quick on as to on answer that real the business.

saw I deeper the think year orders as weren't there the good some of, wondering -- perhaps I'm to some quarter. [indiscernible]. they take as you're already I want very or more if full were a lot and in past a function the more that's is orders you for

A No, hey, second the not terribly always complicated, in $XX I've the order million the second quarter to quarter. be ago, in is our taught And Mike. snow it's really single that year Board would strong removal at snow snow doldrums an unusually ordering that quarter removal. about time. is I and second we ordering, about It's year nobody had I and last is and the talking the commented off-season, nobody removal believe

very to to much allocate situation removal So growth. support strong, The to much interesting But at we're is more an we comparable moment, snow good, able removal no, bullish. means there. in chassis snow better, position which chassis our the better is had continued getting

our snow I positioned So they're would season team I'm and tell very expecting where optimistic good about you very right is removal a now.

of we'd negotiated chassis, Equipment have freight, in agreement for some that chassis another able guys already company. suppliers also this Industrial about I mean negotiate one consignment actually talking with consignment our of a other loosening to the and major our division, were Jeff's We with for to chassis. the the comments we're on the -- one another Mike, thing specifically to here here add

They ship got And helpful unit, chassis. receipt inventory allocating standpoint for to then is that invoice of it, be the from large record because consume able actual and us that we'll going here. an having to on we we've to it are increases. as extremely be forward us go So consignment the

us thing really a going positive for forward. that's So

commentary. to turning margin your And then

if this a the higher talk got chassis to plus of of new the some little was X% you supply time if I this forward. You've on chain going about right despite headwinds wondering got, and is target kind

to the consistently were ask I've X, a re-establish But for and get that. you new going at still think in really the that today. XX% uncertainty, and the still we to having sustain at business general can widen once quarters, that, operating the moment environment I little think consistently, going that. knew even warrant the gap I said rather stick me bit just this out uncertainty But target, yet. be Mike, by more still X, X We're we I'm a XX%, I'll moment. said that discussing maybe doesn't I

day said, Industrial a I all back margin you Industrial XX% And long. is still go gaining if years, business momentum. As a few was

go you pre-pandemic. If back

nicely actually our I'm of suppliers going excess deal So rising with. from at allocation very we're chassis chassis We've the moment. been that that is least of signal then confident very our the to very, is get at there. And receipts of the X other in we very receiving bullish

sales season. And point to the we're last a looking be of out I Industrial want remainder of good to the that really would in think And said, a little one I removal snow up I able bit so faster And just as year. to forward by way thing a ramp reminder.

have group threshold. heavily cost our lower its We operating to restructured snow removal

ago. its year a it is much was better a position cost So and than structure

that's be thing is point I of from accretive our that think So another view. going to

me, a So continue and where guy. improvement Mike we sit, feel I'm and know to about continuous we you good

we hitting That's about been new for as forward. targets going year, set we've XX% obvious. a soon As that will

If I can throw one more question in there.

of feel tough large, and so folks your et with you forth You forth. Do hobby time little okay bit mentioned does drought of ranching and business the a that crop, row farms, part the small so soybean corn, having the of business cetera. about ranch [indiscernible] sort

numbers drought think I June that I think for we retail actually a XX-horsepower the some better. the time. they under ticked tractor might see starting is because in to I the Ukraine are from that And Yes, of commented for better of unfortunate I Mike, than things actually do worse, view and little net-net because be of point farmers in up seen AEM a quite getting category thought not haven't farming that the war even

think bit I of that's there. a help a maybe So

a The negative segment of I think out me a bought work and of the bottom few and farm like the acres we've went the think because acres bubble that benefit when and and lot. of to just is ranch is seen product at I lower people to this But core that those them end margin spindles hobby and competence. is lots the day flex our bigger the pandemic our over in tends great not single It a the repeatable. a enjoyed which probably are I which mowers, relative to that really small we've wings, bubble was impact bubble, mean

So issue I'm but and ranch were at lot. was levels are pre-pandemic sheets of concerned interest is inventory rates. ago it The we had us moment, of because back than as the And main that and rising we statement that think balance true to what a about moment. and space a a in we OEMs faster hobby build the the for not at changed true. inventory are watching was we then, dealers on are competing overly quarter much commented I the rapid just it it's dealers with not comfortable think felt the dealer farm I What's of to I lot the like willing anticipated. A

probably that mentioned replenishment same the But that segment. have some won't potentially and lot orders of that this a we little did up to changed been that not the quarter costs channel dynamic helped marketing our then. out repeat, least at the positive drove that has bit, which degree a since I incentives as inventory that's very in clear really So

So that. direction I'm of pleased with the

in also middle able ag pre-season get through space maybe excellent program they and really the of roughly started a ran and of introduced middle we in orders July we Mike, to early the very end were that results were with that new of that. June pleased the that out part out and the of we

the balance space So moving that's some this for give runway additional going for year. to of ag the

Hutton. at from Tim EF comes The next question Moore

mean, to makes double orders. so backlog it's it past I month at mean before the Vegetation start. it sense offset easily what I you growth. if Congratulations year industrial COVID strong the on your have that the continued orders strong was look the been sales up and

probably I So the it's operating quarter, can you is can you pretty my maybe beat XX% to XX.X a to if Jeff, continued some just want getting complete I your time, steady. and wondering, drivers guess question if still take economy time on more quarter just this. that it multi-part about to amazing. high margin remains have if margin me the pretty somebody count but overall you raise about this XX.X% level after talk I'm last expansion know I

Industrial obviously on then plan and ago investors, minimize helpful more could the snow, chain the kind is are are in-country of just in is Specifically, Europe normal consolidations transportation Industrial your that's you me you I'm about fixed to X/X They with you potential cost the growth cost absorption. to looking the for lastly, an like few way XX% side. And a to starting margin disruptions yet. abate, there. years improved and help manufacturing topic seems imagine like I in already the leverage going then in seems operating It the supply I the like back get for of think the as out not more opportunity did curious a about to there to op trigger talk if there to they're for facility US back the sales in growth there it want today, is Northwest. And

plan were for a I think working that. you on

curious Just update. any in-country manufacturing there's Europe if

am the to I of that terms confident get margin brought you up. In will that threshold Industrial that that XX% expansion,

that. we'll Can't hit will So it you tell but think month, happen. what definitely I

still In don't our those that book pipeline we working have closures strategic along terms any gains longer. plant of and way initiatives, on that and need in the we continue the sell-off facilities to we we're

for workforce all you are direct manufacturing a consolidate X facilities XXX those in slowing that So people to you've miles one add X bit and positives. those and XXX a apart, are got little What's labor. miles don't job move is facilities, typically. When

of our in Lots the near-term a and discussed of need with that, But on to of point the there. that there's we lots consolidation. of pace back having we relatively our Board, So from little view. get bit said opportunity terms potential still labor market help there of from

to plenty our cost pipeline to structure in still our going higher continue we to have keep margins driving and refine forward. So

all. Having So and we planning are discussing that, of changed we've short the said at your with that to actually just the Board. And hasn't second manufacturing Europe in capacity part question. been of

will in in we've UK our French initiative the accelerate our add allow there talked operations expenditures that us make a and about market capital times. operations few capacity to that both to significant Some

pleased on off anticipate shortly. those support, discussions very was with the I and we that kicking we've So received very

can So do we're what and just thing continuing our I say. that's to

And is the could the them we at Adding cannot and XX% over rates this sheet, to when we that I back as on balance that that cash look if international. is you expenditures. mentioned exchange we've that, before mentioned, bring with that sent our were Jeff capital our of Chip, We to.

opportunities make-in-market. to your pivoted but question, of going because try of still do there, increase be things; the so, we what have both market. France call to forward doing to is start And as part we've place going volume to X move in putting these goes is last to here is forward in increase that it these in-country, some pretty that in that We're which the which and which to capital here second we're manufacturing, the one, going great, expenditures So we're is that the we are thing do they back pushing and capital by significant actually expenditures UK. accomplishes in to make

place we're be have locations in to those equipment do for us going of right is these that All CapEx to this. able do the to to

And that's We're the introduce. just to starting still by bidirectional way.

the is Timberwolf Our market. UK in made timber into the US

So in both these flows are of make-in-market going directions.

comes [Operator Felix Next Boeschen at from Raymond James. Instructions] question

what comments you the maybe P&L improving back bit on quite Industrial margins I'm the still I over-time. in running flow that output business the that revenue is about that today get What today I'm but base business cost call, normalize about, in here. XX% those could of on chassis to to appreciate is throughput you to if curious trying getting here, that it from magnitude out to a you on inefficiencies really are mentioned the guess I or target comment the on XX% margin could figure from line. within further were volume

get the hurt Yes, in a there. a half in to feel would the point like is we definitely us can inefficiencies there point under-absorption good and probably a we

different comments couple a several million locations, both had out As few were in that basis. just ship because a still component parts there can we up we we just consistent $X or get million not my We to I several a continual, If we shooting mentioned complete. sales $X of of more in worth margin that is able it missing on to of and your net all need drops that absorption under closer of XX.X%. this regular improving. start this to a The sudden were

can to is we So definitely do room there get there, for this. us

to think XX% more industrial. to in topline get even answering that. in little a explicit maybe need I don't We

need Don't crystal Just to it. clear. be

curious I the think in per today still changes then And how output. is back really years. What business to profit already numbers of in about comment what that idea think in to the improvement I drive the some on removal help you've is unit your much made might you and the coming is I'm operational be know versus snow half

on this cost least out, past we've XXX% some of but is warranty it at this we doing last were had issues improved, It's improvement in because some snow, where and the definitely the definitely consolidation items in taking some year.

the definitely earlier, to we business to the have fourth snow doing that as quarter, do be going in able so. snow to forward have we is have forward just But that a also removal the doable that we number third that the of the second in it's at, in quarter, Jeff and second into it's quarter that to to time. we're move summer remember on efficiencies mentioned backlog and with location because go group, and the it's the us as Felix that lot great radar for definitely and division opportunity not in quarter we're push XX% and You as the

snow terms with regard in removal margins, one be of level plenty company. to And Felix the and businesses of of grow get its to our of in inside still peers to that to operating up is the room lower

working really just truck the of awesome. hand-in-hand in structure I they've the price the fixed is right structure we've cost of organizational things it's lean it's course, to and team And the and a the with gather very that this and done energy got now, the think backlog builds huge business, the nice team manpower background. one

deployment So allocate the into sales. able they them, to can to accelerate backlog that of we're now more that trucks

even nice for I'm the next. first to So quarter forward looking this the snow and remainder really removal seasonality year really of into

if today you business. of of one, can Got rental improving with in but I'm might think just fleet way it could you curious it. is, the last shakeout And then in just where maybe it's growth chassis point years. my sort that versus the you how size flow the coming good talk your about to again the that reignite it enough

was tackle I'll going that that up to bring anyway. Yes, for I you.

you glad the prompted I'm So comment.

been number commercially it's just stable obviously Our want don't I but sensitive stable, vacuum flat. and been them information, truck been fleet that's has close to it's

We move trucks a business in the to nice us configuration, for we any been haven't utilization margin already way that's And to really nice fleet add of the out it can't us, like. trucks push and that contract our obviously able fleet margin so really rental high, higher. fleet for would is we when very

that coming profitability hold utilization to another into profit fleets drive will rental with can higher in, will That's So able add improvement trucks definitely the chassis in more that Industrial. we think and and we be level. now we

to this time there no further comments. back call over will for closing are At you. I Thank management the turn questions.

you speaking with call Thank third very you quarter on for look to joining our much. you us Thank forward conference today. We November. in

disconnect thank this that call We participating your your you ask gentlemen, today. we and concludes for Ladies you and lines. conference please for