REVG - Earnings call transcript Q2 2019

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Operator

Greetings and welcome to the REV Group's Second Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Mr. for Group. Relations Investor Konop, the REV Drew Thank you.

may begin. You

Drew Konop

the morning of will available thanks and Melissa. reconciliation XXXX us. at of use call. call is accompanied also during our includes is financial Last investors.revgroup.com. Thanks website. GAAP website webcast a results. is joining at slide our copy this quarter to night, and being which is measures second for at Good Today's available our we A release presentation, by a non-GAAP that we It issued

X Please to that now refer slide of presentation.

implied include Our from remarks statements and statements those cause actual meaning answers Litigation could These that will of Securities the forward-looking Reform results risks Act. forward-looking Private to different the materially to subject are within we be include, forward-looking SEC SEC. we with or X-K by that matters our filings risks the filed described with others, other make These have and statements. among in last the night Form such expressed

obligation this forward-looking earnings conference update any or unless quarter quarterly at All all. or our We these if to to stated. next fiscal may on a refer references statements not updated otherwise a quarter our call, disclaim fiscal to call be until year year, which

Tim today our call the Dean on me Joining well President Sullivan; and as are CEO, as Nolden. CFO, our

we'll I presentation; slide on start call following to over turn Tim? along will X. the now with Tim, and the those for

Tim Sullivan

joining call. us Thanks, Drew. today's for team Welcome on everyone the thanks to and

have into operational improve The year and actions and line see the in strategic better reduce XXXX top pricing, processes took with and translated first generally to product half encouraged of organic I'm our performance XXXX fiscal growth costs, expectations. line was margins. all we efficiencies in to

to our grow. year see to do, backlog still see our to meet only but not have encouraging we on expectations, fiscal we While continued track to we have is it are work

had We the quarter. drivers in of primary business positive four our

and Commercial better sales Recreation growth our mix First, in both top and line segments. we had

Second, where the both growth F&E and end-market segments, compared in to of demand end XXXX. Commercial double-digit saw backlog we fiscal remained strong in

your Third, supply say times our would a X, has historical very our and stabilized. am call lead and slide have I attention important returned levels, pleased chain I slide. to to material to

efficiency Lastly, focus in and both used improving on was of operating cash our year-over-year activities sequentially. lower,

terms issues production the stay performance the as partially We experienced two aligned we inefficiencies challenges. the to capacity ramp end-market In of apparatus fire our during that offset in to demand. in our with primary quarter, we second several had quarter continued strong

remained market, what Class and and to our RV detracted market, and about more otherwise mitigate them shipping doing strong we're from the I'll particularly soft A Recreation challenges an Secondly, these in the segment. talk shortly. quarter

you'll and markets, X, related helped grow the maintain end see and healthy very experienced slide us to strong F&E positive trends Moving we year-over-year Commercial levels. to backlog backlog which

Our our in assumptions. strong adjustment with the you earlier a walk the backlog through supports income will only an Dean net year the financial in being our GAAP guidance guidance we to minutes. provided few detail exception you

we opportunistically markets, over our total our a stock our repurchased common quarter. end million the $X.X for business given of plan shares in addition, XXX,XXX In in in confidence of consideration

Moving to slide X.

we approximately City contract is five-year week, last The the to ambulances. $XXX XXX new start our have competitive award Department announced were This Coach mid-fiscal awarded we for and units Wheeled contract New shipping million of strengths with market, demonstrates and the a XXXX. five strong I by years, with expect relationships we customers. over Fire in we our the Type York estimated to the positioning As and be approximately

close, order figures came we the and slide, today. have after the a on see as this backlog additive presented can As therefore new quarter you this to

high-level comments X, slide provide to few a our segments. Turning I'll on operating

already stated, ramp operations as segment, fire our meet fire the growing in we F&E apparatus to backlog market. First, apparatus continue in our to our

to ship and are our footprint manufacturing us allow to to adjustments more making units. significant We processes

to We're much relatively floor difficult which also capacity, adding quickly is a tighter more but plant second equipment, trained space, shift to capacity reduce more planning, two plants. to three increase of is requires and additional and easy our more production people. It

increasing on in until steadily will are the fire We fiscal year of we a our our weekly production October. that but basis, anticipate cadence end planned reach our we outputs don't truck

County began In LA our strength position New we the our Commercial the the deliveries during in bus remainder well this the year. benefited also and of from Authority The of and bus the to for ship segment, expected, contract for LA the contract quarter. as of York transit should us deliveries order County our Transit segment City backlog

a and towards growth. bus to school also helped topline mix shift Additionally, drive transit has us product

in outlook were Lastly, B, we a market We double-digit for remainder the which the solid levels. Super this these of three the of in helped RV achieve as start RV year organic work of softening believe and Commercial In Class off growth softer A Towable Class the continue. order peak the growth for product overall topline us in the for the most continue year has segment; translated categories able we some products. from performance the in categories, our growth backlogs versus the into remain and C, Recreation, therefore, to historical expect overcome backlog we market to despite brands to strong of this

products to portfolio our well also that noted, on our believe be product higher-end our It in capture higher strategic we continue has these positioned have we to share line, the profitability achieved should A categories us We reposition however, product serve. with products. to decision current Class of based that

believe attractive outperform our term, features, on product and should price focus enable we innovation, Over improved points the the that new long to industry. us

in achieve ability and to profitability. our To conclude, remain to return I confident increased growth

in our consistent. expectations remains the view for our results of part macro quarter were and Second demand line conditions most end-market with and

the leader us industry municipal commercial makes products in essential and government for products brands of collection excellent needs Our customers. and

review to over detailed call financials. a the of turn for our Dean I'll Now,

Dean Nolden

net quarter, performance driven I second good second offset sales and is each in a of Tim, slide consolidated topline net second lower net of quarter X growth Thanks, over by in in by versus were results with start segment. by review partially Fire was last prior on a increase organic which million and $XXX The $XXX segments, growth the X% for morning. the sales the segment. the in followed million our year. year's Commercial sales Consolidated consolidated quarter & Emergency will Recreation

second quarter million of $X.XX in or $X.X the last $X.X Net net income income or compared per prior per for $X.XX to and share share quarter the roughly period. to in income $XX.X year. and $X.XX was in fully the was million diluted adjusted quarter share net income or the share million results was year diluted per per fully Adjusted net diluted diluted compared flat

prior X% $XX by which for Recreation in Adjusted a XX compared Emergency in decrease quarter. Fire segments, EBITDA Commercial adjusted earnings year-over-year, in offset and our at was earnings the in the improvement EBITDA in & the in basis the margin year $XX.X quarter. improved second due This X.X% to million EBITDA segment. and adjusted the quarter consolidated was in came a primarily partially increase point We million drove in to growth

million of the to segments. to for X Fire quarter. segment slide decreased by Emergency & our the sales performance discuss to turn $XXX Please X.X%

of challenges as a ambulance fire trucks While react flat, decrease experienced to we topline ramping levels end-market up deliveries drove in were to the demand. decline in strong sales production

units shipped As brought quarter, fewer in facilities we we added and our and the two shifts additional of completed expected. employees initially at than new on fire production we

production our would However the we ramp our that in continue plan fire such their backlog firm is continue up our capacity increase output and as to cadence to progresses. to year businesses

inefficiencies as million the impact decrease the the This for compared on due production supply decrease compared second ramped quarter labor one material to we F&E at period $XX.X was and deliveries, adjusted to $XX.X the of prior ambulance in segment residual in in facility. year. of was truck issues adjusted up EBITDA year EBITDA million fire quarter last chain to and productivity caused

specific each operations output on trucks with facilities has improve the productivity of been case facility. focused to to and and continues Our increase and in these team at flow work to fire

initiatives to us these well half already which set up we are year, week second should We of from each the XXXX. expect experiencing and for improvements the in benefit

F&E XXXX and segment fiscal to end $XXX up sequentially. Backlog was increased in XX% compared the million, of the at to million X% $XXX

our While shipment is The output deferrals, backlog into of our of increased therefore the and was XXXX. has progress towards been than impacted slower and end level we the excess in growth look as encouraging backlog anticipated at QX.

improve efforts drive We throughput in the to year. growth production second of expect the sales to return will half our

of ramp-up be growth, volume to will the We complete expect to QX. expansion realized improve the profit to expect with F&E fire for sequentially in margins margin time segment in this due production, we required but consistent our year-over-year

to segment, increase up mobility quarterly late driven bus by van of as compared by sale year. This to our well Moving bus an partially as the Commercial in sales in our prior X% business were of sales business. trucks. million terminal sales of the with of the bus with continued L.A. was markets and year $XXX offset previously the of last terminal commencement increase The this was transit deliveries truck paratransit increase reflects channel County growth in our primarily our sales New due end The City contract for to Transit. dealer and York the strong announced contract bus period

XX% the addition increased $XX.X million recent mix transit terminal quarter in Commercial $X.X margin higher basis by segment XXX of volumes last and to the impact trucks. operational initiatives school EBITDA of drove as quarter improvement in higher EBITDA from second margin to and year-over-year driven the sales strong well adjusted adjusted X.X%. as for higher million Product to year points buses

the to and nearly end up XX% Commercial The million of to fiscal million well. categories $XXX was up X% all $XXX sequentially. over demand quarter XXXX, product increased segment experienced compared in Commercial as backlog at was across the

segment the continue quarters. continue forecast As of within to and rest the Commercial earnings third with fourth improvements year year-over-year a and to the we strong look expected the year, sales through we to in forward

continued of inbound order already business that rates given are backlog is addition, and regarding we In XXXX next optimistic to transit year. bus strength be scheduled our the existing delivered into

the sales due for motorhomes. $XX.X our to of decrease $XXX the in Recreation quarterly segment, company's profitable more the A categories, to brand grew quarter across Recreation in partially total year in the improved the period by offset and volumes in to majority B product of increased XX% the was product compared EBITDA sales Class Lastly Class a higher profitability line. prior adjusted increases in The C year-over-year to million. EBITDA primarily sales in adjusted million, X% to lineup, RV Super increase and primarily due

is end RV at level. to the from in was is softening certain industry market leadership recreation backlog softness, of million peak we higher believe over within $XXX our A compared outperform products and previous markets, end XXXX. as due niche line relatively fiscal Class market the $XXX but end demand million in continue expectations the Despite the to long-term. with enable Recreation certain softer in decrease end to us the should The our to demand backlog in this

Super year. We continue allow also backlogs remaining to our Towables the Class in to and will us this Cs, outperform expect Bs industry

don't incoming shipments of the year-to-date been for order has we expect prior segment lagging as comparables the versus current that, Recreation said Having strong some as year have as will half second it categories. its rates be in that been

consolidated that original for downs line we we could done expectations, quarter performance a versus second for and but ups our will resulted Group quarter part REV included in the for expectations, do the both have better. most and better in with was which altogether The

in results and QX, year, they of the our underperformed year, margin. for with segment issues known half are to it us the in when this isolated. potential, importantly F&E They the seen We our As XXXX. improve The are quarter our higher in and flat operating the underway could although F&E up sales most dollars came without adjusted and and well results EBITDA of growth F&E we during second and relatively the continued the in remedies to are for prior were set have F&E efficiencies been our control. in within our expect in fully

of quarters. Capital Turning show five million compared in second to $X.X quarter XX. in XXXX. the to the were allocation last slide our We capital $XX second expenditures million the over quarter

quarter continue a averaging than We cost prior million, at repurchased to at in per quarters. the total albeit shares quarter, stock of the XXX,XXX also in our lower in We $XX.XX amounts repurchase share. $X.X a

Taking long-term. about back, a like step priorities I'd short allocation our talk in to capital and the the

last balanced performance. And quarters, conscious maintain few over approach We effort our will always operational organic the growth focus long-term improving to sales our a capital to and to allocation. we've look made a on

As our our both presents We've in to of the the organically take plan quarter third to itself. also opportunity invest price repurchase continues opportunistically advantage we plan and during to authorization and if performance in M&A. stock improve, seen our opportunity

repurchase have but We $XX our under remaining we repurchase measured in program about our opportunistic, million and share will of remain activities. authorization

debt capital require was and plans XX, allocation Net balance April sheet. as million. Our XXXX shareholder $XXX a return strong of

proceeds quarter, to million During liquidity, the to million borrowings we our loan borrowings under repay facility. and in current our under credit to our facility order $XXX used increased term improve the the $XXX revolving from

of times first X.X Our of quarter. net was end the at compared leverage XXXX April ratio at X.X the the to end times

the the remainder expect of into strongest improve. calculation the As the both we this and metric the year and the as quarter, denominator leverage move improve numerator in to should portion for stated forward our we of year, going last significantly

to one end continue by the year leverage more turn We prior two by to full versus this under of reduce our fiscal expect times. year-end than to the

quarter, to the in second the As quarter. to we The increase was in we increase due see in mentioned working the in seasonal working an capital inventory. net primarily last capital increase expected

we However, inefficiencies and in at the commentary. did ramp the higher the the we our earlier due quarter, end to referenced levels of up inventory in production F&E of experience

beyond. working We and impact this XXXX very is turns a short-term important expect of be to focus continue throughout a and area improving capital

our cash non-operating for addition, million seen fiscal more initiatives flow the flow from year-to-date $XX $XX In year. million we total of of cash that we benefits will expect than have full

have XX, our we for slide guidance On full metrics year XXXX.

on and $XXX $X.X for million provided $XXX income the the million, our of $XX $XX billion net operating our prior to activities and to are fiscal GAAP actual range to in reaffirming year majority results million, million we million of sales of $XX and settlements, the year of of $XXX With adjusted adjusting expenditures million $XX million stock million. of guidance for EBITDA guidance the based XXXX $X.X of net between certain are Purely in for areas to year year our net we full cash of $XX of the to compensation of legal capital through terms revenues $XXX ahead in us fiscal half of to million. adjusted be billion, XXXX earnings, first $XX full to million income by

With comments. that, some the to turn call back I'll for Tim closing

Tim Sullivan

Thanks, Dean. I'll close with slide XX.

is are we I the headwinds of think second we the that that our headline half believe of for and year. us are this improved the behind for quarter well-positioned in many performance

think the list why the a this me Let is of reasons points and key we few possible.

we in XXXX First business and actions working. took to position foremost, better the the are

that should we us. plagued issues have remains tariff situation business. new issues most generally now availability any behind recently we the for our outside material emerged over one supply that are we Secondly, And year believe that of for chain arise and the prepared are expect and us

is Group remain our high And improved improving And returns driven of coupled to our of delivering goals. last, customization with improved and those control, revenue products, that backlog expansion like and turns overall fully meaningful the continue by on of end our of XXXX REV believe demand fiscal things cash growth, capital remains margin flow. most at our the stickiness driving on Therefore, everyone free working we'll on within level across here see fundamental profitable markets. driving we focused capital. focused our growth, the the Third, on we

we'll over turn call the questions. that, With to

Operator

Revich question question-and-answer with Instructions] proceed question. this first the Our your At from Sachs. of be Goldman with conducting we’ll Please line [Operator Thank comes a session. you. Jerry time,

Ben Burud

is morning, for everyone. good Hi, on Burud This Jerry. Ben

Tim Sullivan

morning, Good Ben.

Ben Burud

revenues Can update & Fire quarter. were an cycle? kind you Emergency, Within just we of year-over-year so ambulance think you in stand ambulance where flat in the us the demand on give

of takes the mainly for XQ, I XQ? also And you year last XQ kind deferred puts from of XXXX some and impact can specifically going that in mentioned shipments to ambulance, you give us touching but think, in on balance were, the addition, the of

Tim Sullivan

in into, our what really normal and are backlog extent Well, strongly I in would the very somewhat do can and flow from we with we this went us spend that how year episodic, have timing on on QX. for to finish smaller it little to they positive some an QX municipalities, But to fact and year ambulance. we're this our on we a ambulance, backlog move the fiscal with I a the is extent their lesser call back things a have. remainder than forward that level, and year probably affected as Ambulance feel with and the and is about them, money, ebb but think, normal strong these particular do backlogs of that we more depends we to so

Ben Burud

XXXX of was know on movement we captured comment supposed XQ I deferred that be any XQ make there capture the in any if in a XQ, from if And that shipments into was impact I just to the remember sure wanted I amount -- fiscal to correctly? good and

Dean Nolden

and GAAP starting the so Yeah, of fairly but to in a the that we a contract FDNY ship Ben. be catch-up kind that's year, that of XX of what we new addition between most here will help. we correct. it'll to little going is for had their announced units, in large of in QX. order be This deferrals bridged experienced half in contract that's in previously second old the Yeah, that And Tim of the QX, and the offered, to the Dean, the bit

Tim Sullivan

shows really XXXX, fiscal the further really had has back of now. X that Slide chassis and you X. some slide at look delayed of half in good pushed like mode things and a into we're That those in clear catch-up shipments the take we material. And delay Yeah.

Ben Burud

Understood. for arrive on you attempting the target? the and have that you over long-term been a maybe adjust if in what at headwinds just taken where journey And a at have context would then from normalized of all XX% mainly asking curious are XX your you faced margins think you margin to last stab higher internally months, level, to a the EBITDA EBITDA

Tim Sullivan

Yeah, with we I back through primarily happened. where XXXX, a but bit of cost a that effectively hit think year we literally obviously, the as moved we half before we're ago fiscal of material all a were the back increases, took

margins. in this recovery saw that and and So, mode through quarter, on margin we're improvement well continue We three into four. will

price most that they on absorb we’re our basically of the got cost across working shape the in journey Now we've progress our product are the ones still board. from there that we're increases in -- some the that take across lines, actually good in of out but struggled making we those, did standpoint to increases past, margin a very board towards we have the on XX% have,

Ben Burud

Got it. you. Thank

Operator

Thank you.

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

Themis Davris

for we if Recreation. gears a Yes, hi, I wondering talk and was on about bit this could actually Jamie. is Themis switch

backlog market, on have weakness, As? was noted does which if excluding A softer Class a you of basis the performance backlog On you make year-over-year wondering sense. sense the a I

Tim Sullivan

board has up in Yeah. The across market softened aspects. the all

at look think you every calendar quarter the I of first category was off reports retail as virtually sales. if as far from XXXX, the

that, have But the three three have of the -- strong really we several if the beyond down. Having highlighted. areas A. are those months we beginning in that in work areas we key have Class backlog still weeks, said backlogs not backlogs to we We

Themis Davris

could weaker in margin help back of sounds what to given on And top line? assumptions the like you maybe be side, a us half year Understood. your the with the margin then

Tim Sullivan

the year, got QX. increases as QX, margins third in last up will cost Again, to we with Margins and it's place of the will move we that through fourth put we material absorb improving. be the on increases improve price catching that quarter so

Dean Nolden

rates reduction in segment, year-over-year comp just of of some in commentary for Recreation and a And as the the it I incoming order my second think half referencing because Recreation the the of impact was as there. for won't specifically, if be you're the Recreation strong year-to-date

Themis Davris

the color. for you Thank

Dean Nolden

improvement But overall company. for the

Operator

the Fargo. Our Please Andy from next question. with with question comes Wells of line Casey your proceed

Patrick Wu

for Thanks Wu everyone. Hi, is actually for Patrick morning, Casey. good in taking filling Andy our questions. This

of if churn get helpful. segments the rate it was some I each to you rate? how be differences the segment wanted that between on would backlog of provide how of can is historically? a color the Just versus Are right there sense churn your terms now drastic And guess in

Tim Sullivan

primarily because have backlog over of backlog everything delayed due material The fact and cancellations to any the we is got that chassis shortages due and to not the lost up history, shortages.

historical history, if we're to backlog where So we compare we're well levels. right now above at

Patrick Wu

how some Well would backlog slightly I'm now imagine interested more just turning it's before? inefficiencies. guys I in guess, of quickly I are slower the you versus your given

Tim Sullivan

No, expansion at to marketplace. in far doing the that of as got area move be major just the we've in half accelerating have backlog, it's now of because a we where and churn available the chassis back and the It's actually through fire as through that we're meet our it is demand of where we that's in only increased as churning accelerating want all three available. our opposite. not year. material The the the we throes is to backlog But segment plants

Patrick Wu

looks your a bit. has that? the guess I unexpected times first are lead It And category on just kind also second of quarters ensure climbed to taking of like ensure the here disruptions enough. Fair that add of it couple your Okay. in for in shipments one slides guys what that no some from future doesn't I you any delay, guess the did you inventory half? to of actions there little pumps in

Tim Sullivan

something When couple things. a do happens that that we we Yes. like have

we to inventory around build that all, product. some try obviously of First particular

sure that did to explore is best we that what basis last alternatives year. can, we're we Secondarily, which make recovering the we we our through as to moved

certainly bad so of list. it's types that right our those not hurting now, things mitigate well in us pretty can too we and watch So but one's

Patrick Wu

you. Thank Okay.

Operator

Thank you.

line question Deutsche with Our proceed question. Please Chad of Dillard Bank. your comes with from next the

Chad Dillard

everyone. morning, All Good right.

Dean Nolden

morning. Good

Tim Sullivan

Good morning.

Chad Dillard

question So be just about demand? just a you talk RV expect plans relative to where the to also then you on you retail year? Can side. your levels guys to dealer for produce exiting them inventory the on And are

Tim Sullivan

Yes.

retails levels they there replenishing to is in aren't the that past, think the retail the due the moving down. historically to are sales market. the I in have happening, really mean, the I but primarily dealers softening

So everything's going RV. The is news that to four three good of have backlogs down. some slow in classes our is, of good we

to which softened. ship continue down We on Retails be orders also with those retails. backlogs. are But has will commensurate the market those wholesale that down means

Chad Dillard

And Fire mentioned you then million switching award there announcement. over Emergency, to & is $XXX

five-year Just period cadence there I trying I period. guess is to a understand guess what believe delivery between I is or the order

want cadence understand Just on the like was what that? to

Tim Sullivan

years. the order and press New baseload. nice because will five And that to the gives city actually XX important be reason Those ambulances releases a why orders Yes. we next our that's of out. over important are about year That XX York for put that's plants a the

with do We announce Those a announced just why help so L.A. Same baseload great that's been critically that's important for we an quarter. second that baseloads beginning efficiency they're really in them. us thing from County. the us here standpoint, one because

Chad Dillard

pass along. Thanks. I'll Great. it

Operator

Thank you.

the with comes Please with of Baird. line Robert Our question. your next question from proceed Dobre W. Mig

Peter Ziel

Peter is I on This & morning. good Hi, on Fire Emergency was for backlog. wondering Mig Dobre. Hello? Ziel

Tim Sullivan

We're Yes. here.

Dean Nolden

We hear could you.

Peter Ziel

Sorry.

at second the past of quite thinking how we it's fiscal that some obviously this kind if XXXX look and inefficiencies is to XXXX and years So, sales half that and bit about is we're relative mentioned. a there higher fiscal you've to due just than the of backlog

I demand growth guys from an the of backlog? user that from backlog what is that convert and build versus of on inefficiencies what's terms in So, I'm coming kind end have you idea inability just curious relative if of guess the the part the good

Tim Sullivan

Yes.

a as for contractors frankly first Let it's over it's steady changes little question -- here as good of them after reliable but XX% to market Ambulance a take you mix business but of talked you ebbs flows, steady part last backlog. pent-up other been demand us addressed very years. is the the the first me couple here municipalities, have I kind quite to steady really and because and very it's are of separately. was but ambulance recall kind The around of bit XX% and answer

seeing we're increasing. demand is different. in Fire is What The Fire in

been demand on If four significantly probably that levels makes expanding the you plants, our not people have We're we're XX XX-year and have for years. now the recall three why is this all for Fire last last seeing lead-times very right the our or that's We're the industry we that's really board Apparatus historical are the that Apparatus at why out up. lead-times across in lagging average to now is and demand Fire long because demand.

up and why some it wasn't come, to but it is it demand. just that's anticipated we And was -- we're making our to we that, didn't come and when demand plants investments know increase how was in going going to

investments are be are up. demand as shipment plant the to make just plan, levels capability, As we over will time we because those and that is to able grow maintain they our we but increasing

Peter Ziel

a but versus last guys you that just the being gap have touched shifting follow-up, prior given relatively of still of and been the some nine around outperforming of Recreation to questions kind the this at orders one And Dean's leaves you. a months, I softening the look think given the on industry backlog industry pretty on comment then that I Thank the down in in wide XX%. XH into like if flat

for indication can would and order we're give kind some you you of declines decline some XX% industry also the what of So, shipping? expect us even in magnitude, mid-teens of seeing relative to

Tim Sullivan

our as -- niche we And so move be is standpoint. to from of then to a effectively as be Yes. market the to the The some outperforming we're go we believe on ahead. little be speak. correctly the -- market to that and we due We to do primarily high sell. actually outperforming as tend sell tend said, we you forward that they even and competitors to market through that expect we end And general that's products what the softening,

Dean Nolden

Yeah.

at be because down to years us look of hopefully, prior down the forecast you will versus of strong we single-digits If XXXX for be in low year-over-year market will double-digits to be flat -- the the backlogs. think

Tim Sullivan

Yeah.

As are challenged. going to be

end As But market. are us how again, the we're positioned our and like the more of any product we the level it's line end or that We've at B Class not just positioned. to A profitable the performing high expected. of

So, in weathering better market think softened, better summary, the I storm you but most. we're than correct the

Peter Ziel

all appreciate I right. the All color.

Operator

Thank you. [Operator Instructions]

with proceed Our next question Tiss with comes Please Joel Markets. Capital of your BMO from the question. line

Joel Tiss

How is it going? guys. Hey,

Tim Sullivan

morning, Joel. Good

Dean Nolden

morning, Joel. Good

Joel Tiss

I a some now? backlog. pricing wonder than -- new trends of it bit talk the if you further out where implying could out you about little profitability are Is better your on

Tim Sullivan

for of to Yeah, we're We is, well stayed how QX we those got knowing that to cost any quite would well we point ahead increases. we slowed as news cost is of increases would and QX, last and we be not the the cost bit increases that ahead potential that a increases good on get down material. cost affected that reacted move The we the really sure. through then QX year strongly in

on positioned like as at. like we QX, QX. pricing into where we're we move So we're We

Joel Tiss

estimate you flow for cash XXXX? do Dean, any for And Okay. have us free

Dean Nolden

between and $XXX $XX Yeah. cash those some flow. free are million we're around million-ish -- where million pieces so other items, from, about we've We cash items that of non-operating said cash of three from should $XX of flow $XXX and generating between that gave CapEx operations million

Joel Tiss

forecast, rate XX% Thank frame is you it us for there? of about do I the for And how higher? Or you just little I'm asking but bit ballpark Is if an up? for run can it can fire for think we a XXXX business. not fully you. us you once run kind wonder Okay. official just the give a ramp little -- the rate

Tim Sullivan

funded at Well, were a as at the rate running the let before -- decade, it this XXX. rate guidance. really now of creep go you the it me back to would level more you level run seen year. at never more a kind ballooned way, X,XXX. give into because back around municipalities if decade and of But of fire a you Last units fell year, seeing enough, and that to far above that we're market units run slightly because into as was down units. the meant fall apparatus per run result to X,XXX around towards that federally X,XXX they've rate look X,XXX to that we -- we a rolled this starting That funds X,XXX X,XXX with We're annual just

that we're math those to as So ramp move XXXX. the kind going the we're not into we that's just meet you across the to of but seeing can us, to industry -- demand percentages Joel do

Joel Tiss

right. great. much. you Thank That’s very All

Tim Sullivan

Right.

Operator

concludes Thank final you. Ladies that back our to session. the question-and-answer and Sullivan comments. Mr. for any gentlemen, I'll turn floor over

Tim Sullivan

headline guess levels The us. getting of the to the back QX explain for is in to is more was trying that and said -- more the guidance beginning normal levels into on normal we we're with joining the run earlier and a I Well, line for headline bottom. and for again we're I thanks the guess production back we're gave that year. QX, I for feet you in we're QX going we're seen we've QX headline to now our jog.

So, And strong to demands and off the market us happy We are the about we're really where are respond the should and that lead backlogs. we feel down the that position times in. fact to to they our should back work about feel that continue our that good help be.

joining in for you Again, September. us. be the of talking thanks again to We'll week first

Operator

conference. today's concludes This you. Thank

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

REV (REVG) 6 Jun 192019 Q2 Earnings call transcript