REVG - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the REV Group Inc Third Quarter 2020 Earnings Conference 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. It is now my pleasure to turn the floor over to Drew Konop, Vice President, Investor Relations and Corporate Development. you. Thank Mr. begin. may you Konop,

Drew Konop

on being right. Thanks, us. fiscal website. slide thanks presentation, webcast joining that is morning, to X results. Please investors.revgroup.com. of refer Doug. a which also is morning, we presentation. Good a financial of available release This the quarter copy and website GAAP issued at now to measures and A available Today's is for of All our our includes reconciliation XXXX call non-GAAP third on our Slide

any our Our are with this quarter to next until such remarks to are SEC the from fiscal obligation and update We could these results statements, include, have earnings updated to and year, otherwise answers a all. our and Form quarterly references stated. morning by we will this in SEC. conference at matters make differ statements, statements. be quarter forward-looking unless include cause X-K our our or may filings subject forward-looking which others, to if filed those a to implied All the we among not that with disclaim year which to or fiscal other These expressed forward-looking call risks call, that actual described on

the to over Please now call to turn President Joining and and as Skonieczny. Mark turn CEO, call the our on today are well Slide me CFO, Rod Rushing; our as Rod. I'll X,

Rod Rushing

a interruptions around Reflecting conditions to of you the our taking employees. today. begin and uncertainty think We and to protect third faced our spacing we had shutdowns. our as call about during our We throughout our safeguards for took -- the an months, with enterprise. months initial and you, employees, increased of the to were The good their And Thank temporary our during really how of the really protocols. we presented by also through. production move and day-to-day, our We required April includes including applied requirements, to quarter normal supply clean over across had our second necessary. them the we'll time time us commitment demand. the want shareholders, really run I'm within of was We our lot but difficult facility Drew, safekeeping and wide one segment operating some activities difficult our pandemic and it join a results. customers our lot May. we the to overview several day, operations. everyone, comments on for really, absenteeism. of mask also past for another challenge the we It suspension recreation thank then chain initial morning, We shortages, on to our The created experienced testing I going thank some of to a our to COVID-XX impacts quarter, journeyed rethink that of the

our operations that a segment. working-from-home demand We up budgets, chain still some on during our Our great normalize, in segments, the environment. supply well able were saw municipal in pressures stabilize began did demand we're intermittent uncertainty COVID in quarter, ramp least of and time. And fiscal quite our RV to recreation to new as third still certain We manufacturing there in policies production we and as challenges. attendance increase related saw but school see to at our bit

clear commercial commercial some gave to us current face our related reviews us replenish for our strategy most secured they conducted strategic understanding backlogs. about. our to talked we of healthy with provides strategies. to we'll market continue to importantly, of business our These of June, business we've our of with month units. a each three-year our on business look already and reviews we'll the During focus product But that the business view pressures the near-term a challenges three-year It

process, And for process discussions those it to to the end but us growth a deliver that improved process review strategic profitability we're of be is Now a with the we that's will deal a the ongoing, SBR business new the growth that path source above was the great confidence process, exiting at -- markets business. of the in. this

and improving of of the Within history businesses we our Several a excellence and journey continued elements. capabilities. performance our lean strong quarter, had building other operational manufacturing of our and

present the a businesses past improvement. discussed other that for great opportunity While we've in

improve developing capabilities and on focused are our these our people to We results. and processes

there's there remains our results, in value. business manifested the that financial in operations exist current much are our create inefficiencies While inside to opportunity that

will consolidated to our now inefficiencies move summary execution improving a results. We our over the to to several I'm building value while talent at these of next get and address third quarters continue of business. bench that's inside internal our going capabilities toward quarter to this

are still the lingering results our experiencing generally Net to third year. prior our line $XXX were for with pandemic, X.X% we Although sales our compared impacts in expectation. the of quarter of the million decreased

M&A down year. our segments, XX% were XXX prior market and offset prior of these recent sales recreational of margin EBITDA demand. year-end versus activity, was million adjusted organic end decreased points segment by a by our primarily Excluding versus $XX.X reflecting Adjusted of is vehicle in disruptions commercial F&E year, from year-over-year, COVID X.X% decrease EBITDA an through basis increase the XX% impacts, but lingering and

third cost our quarter improved of on at to to at the the over that been address building all taking steps I'm to has enterprise However, toward sequential line voice improvement performance. by Much our performance. of challenging most impacted focused businesses necessary while culture, businesses, these demand. on of plus financial going soft in since last our reflect issues now the delivering that businesses call done turn focused for do results management, performance a obviously, safety bottom in core operational were cost customer and several down Mark it flexing details and the

Mark Skonieczny

Emergency segment Okay. Please Thanks, our the to increased Fire to approximately to This morning, level performance. XX% X includes Spartan and $XXX Rod, attributable $XX our year Page I sales Slide good turn & million. third of ER occurred sales by of million in acquisition deck the quarter compared last of segment review year. everyone. to as earlier that

disruptions ambulance from organic fire as absenteeism, timing. continued Spartan, segment Excluding to due a and delivery lesser sales related to one decreased we fewer shipped extent X% and units COVID-XX inspections trucks to plant

quarters service made calls Florida consistently have delays increase XX% shelter-at-home in of orders manufacturing manufacturers which number The reflects third OE focus of approximately more of After from led challenging. Net customer medical a non-municipal from our this sales announcement experienced fiscal emergency to events, once by Within Fire Due slotting sequential struggling throughput, Ocala, a was production plant the American improvement second ambulance benefited X% new from personnel our on of impacted changes again which to decline increased delivery we the quarter orders, quarter, North chassis times of temporary base realignment, fiscal limited commercial availability on were down and to manufacturing due practices. plant. several ambulances were to resulted customers. division, that throughput down order lower to from year-over-year. further in our which lean production

has just year-over-year XX% EMS and are third and the chassis exited down have we increased events improved. of quarter, availability As

includes order within from mix $XX.X increased Total expect accelerate to result, units and we the reflects as acquired of backlog over reductions to and order profitability sales throughput sequentially ambulance a F&E and EBITDA F&E by our quarter quarter ambulance XX XX% the noted. exceeded a truck at new the sooner for as orders. This year-over-year. Ocala, which in segment adjusted has result ER municipal duration Spartan This decline $XX.X throughput As at large and which million of third cost profitability and the billion, quarter previously of contributed improved backlog and $X favorable originally Spartan The the that division we be ambulance was times $X a than will partially A the throughout offset fire able throughput XXXX. forward. a allowed in is within we the the increased primarily backlog to of compared Spartan a were the of the EBITDA was XXXX was to third of number XXXX. in expectations. decrease intake fiscal to due trailing delivery result including was profitability increase planned. lowered largely division legacy Ocala, up move the backlog F&E shorter improve million greater-than-expected months, us due segment million in produced announce strong to quarter, to reduction

the X Within improvement strong quarter F&E We Fire improvement the Spartan not quarter we what sequential feel We repeat expected in month will continue expect to and backlog mix. reflecting Fire the within is to at within normalized XX work divisions. Ambulance is due performance duration currently fourth to Fire margin a in segment, the to both third toward division.

contribution expect other businesses. EBITDA However, we greater improvements from to all drive do operational

the quarter's from inefficiencies OE relating Our Ambulance chassis to businesses third but lingering impacts COVID supply to surrounding partners. expected subject are are improve our risks from potential to still

lower competitive Transit we remaining quarterly again next both orders to these includes quarters. programs fiscal in towards, with divested slightly depressed we year backlog, school nearly the which logistics capital all match segment. segment offset capital undergraduate cost segment in quarter. Specialty from right, building demand company sales to Prior quarter The down School best million, revenue last to Rod was will X% attendance over shuttle customers for to partially the some sales of decremental the the the EBITDA reflecting within year that the buses sales sales are period, divested also double-digit travel has businesses expenditure shuttle approximately down expect $X not versus was type third due result XX% quarter shuttle impacted the was adjusted that. investment specialty Commercial in million were the margin compared our related budgets, trucks, the were the environment. and These five backlog to million commercial and EBITDA related At school build been that This the culture third attendance million year. versus XX% limited shifted fully receive bus however, but result organic the quarter, XX% at terminal and to million and Commercial for prior of year transit and The And of of municipal restocking an segment school to businesses expect the orders bus shifted sales X. operating budgets by year performance declines pricing segment. -- which EBITDA from $XXX in Slide segment of versus year prior lower to contained $XX decline remain quarter, into the decreased at our decline has actions and accommodate prior and and was institutions, delayed is the which graduate we'll division fall decline increase to as markets be to the outlook customers. lost, that down of Commercial end bus slightly reflect margin businesses. timing to included budgets. segment consumers' of commercial sales all prior $XX against sales to were bus revenue end sales by this The semester the willingness $XX the within cost-out businesses rental offset what a discussed backlog. were XX% aggressive primarily XX% in did by year-over-year businesses. $XX.X Turning capture we million delivered steep municipal for have at reported The backlog was the adjusted down municipal been in orders period. XXXX. of of that a all unit of decreased we of of our the versus delivery orders, expect as were uncertainty. within for down transit

implemented state, are adapt working closely to monitoring limited are been school solutions enter municipalities. new to customers' in needs and have cycles. safety and safety we a And district assist or riders as to routes this passenger various We we spacing of our public practices on local and health as proactively number requirements such staggering buying that

end commercial all we'll flex level fiscal expect currently our we quarter, to However, reflect within cost remain and our to depressed continue the markets structure of fourth ongoing demand.

retail is year. quarter also versus last to Class The actions the items. suspended late within weeks a and towable versus is in Segment chassis, intake profitability up X. Class production shipments chain related business, appliances an despite in during supply and disruptions, of all in the Slide business third $XXX the adjusted segment work the demand due restrictions. In to and strong result past in to year-over-year the of early offset trailers increase electronic of resulting was RV quarter, by the and Turning three higher by wholesale primarily XX% for COVID $XXX result campers increase all over Recreation particularly certain order shutdown increase strong in were categories production lingering for XXX% decline revenue remained across of partially million. The volumes year, cost-out sales the industry-wide due of million months. limited quarter towable million backlog profitability California, categories. located in EBITDA, business and which prior sales Segment reflecting taken. increased were an and EBITDA decrease Recreation our quarter in the gas within sales sales segment due to A furniture, the A a down to X.X% $XX.X to was motorized

product the carried introductions COVID of we As the and regain momentum we signings dealer shutdowns. that into had

and retail lows. Retail in Class we sales campers near inventories XX% Within historic many of shipments gained B brands are and the and wholesale average to remain year-over-year dealer outpace share flat A, approximately Class an Class with continue in down quarter, C trailers. and

supply as through are availability and our backlog. chain record We to will production rates reflect we line work constraints adapt against product the our working

business to expect categories. certain expect the profitability quarter. improve fourth chassis and share the continuing A We our profitability at to participate current rebound chain segment navigate overall supply and in uncertainty benefit production in Increased Class take while recreation availability to market and in volumes

cash net Slide to prior net generated to improved $XX to million cash year to the Turning net X. million related efficiency, by specifically compared Cash operating capital activities period. of management. related provided Year-to-date, was $XX in provided working was inventory

to working a will we overall use investment returns framework measures capital against optimize those intensity, of return assets. as the businesses in continue on cash net net on We focus our our that capital working on asset including

the quarters experienced will We the has inefficiencies identify the over unproductive The company balance liquidate assets. past led and also also has operating to inefficiencies several on sheet.

rental operations our rental $X.X Within the million operations anticipated incurred quarter, a REV we noncash finance exited the the of for within impairment and sale all vehicles.

of end including of approximately used fiscal businesses, two On of within are quarter. million, We $XX other million of bus are to generating also continuing the hand assets proceeds debt to of refund, to versus $XXX shuttle cash pursue the debt which at $XXX within at CARES down million was pay expected cash million of the we $XX closing, and third million our expected divested as XX fourth Net on was July and XXXX. now received May is a still be land cash which quarter. fiscal $XX sale awaiting with Act X,

perspective, million $XXX well XXXX, management, payments capital This by working within the at divestiture the From bus Additional timing sheet our as net improved company partially liquidity operations, was facility. of Act on the to quarter. as assets, sale cash $XXX pay as debt under credit our amount we the the million total quarter. offset of compared balance change million to second will down businesses from quarter reduce shuttle CARES anticipated to inventory primarily revolving of refund quarter. be of available cash reflects $XXX work the a July ABL with end in ample maintained debt fourth At XX, the end, of used

earlier that, guidance, supply be turn EBITDA policy as our to range year surrounding government rates to As reconciliation today's net reflects reassumed as income This adjusted today, $XX And we you outlook comments. $X.X release saw to in billion fiscal with $X.XX in back the absentee EBITDA press deck. and it sales of XXXX expected to availability, visibility on provided the With of full in for closing current in adjusted chain $XX I'll guidance million of range Rod and and slide million. our are well appendix the billion COVID-XX. reconciliation

Rod Rushing

towards opportunity and very realizing change FY at foundation also, few as demand. building to the with but Together, can the have all lives. head and closing, company. work about change would before to floor us. Mark. comments a thank see excited much the that We're mapping ahead steps notable in challenges operating at the and questions. about fiscal the quarters becoming last of terms Thanks, momentum once two conditions full what that dedication unprecedented frankly, related are the lays excitement in of corporate like annual year on an just tighter we we of leadership. see engineering planning closing employees We're I supply In over here They've ahead with and disruptions division between process for we of adaptability again levels work of we've benefits the their we're these faced throughout to in months. thinking six the value into and 'XX alignment I'm to road to the our great navigated us. a our chain production important resilience continue certainly taking ahead, We impacted operational that demonstrated REV, past pleased of that with the from we uncertainly in enthusiasm events stream the collaboration

that about excited the the can tell a hand to for work and here like with to take that, questions few future how I hard and this the team the And doing. they've can't morning. am I over things how and we the So we're operator I'd done, grateful that you

Operator

[Operator the question. Courtney comes Instructions] with of proceed Our Yakavonis question Stanley. with first line Morgan from your Please

Courtney Yakavonis

trajectory bit had given I'm you very that obviously, can to of you depressed kind impressive a in out, a been lot taking of the fourth through sales on margin little be commercial, But cost wondering if quarter. the you've the for just comment see margins quarter.

So help will think you five next the the over And sales when that about have loaded, think the in? also, -- recapture come us maybe said be given until of can in to depressed commercial these back-end it cadence to especially think just then not expect next I the Do about you business, sales? any year? margins how Will of very quarters. you heavily sense you

Mark Skonieczny

is I the this we're Mark. was I a side, shift, Courtney, building against order noted the from would through transit 'XX. yes, from as say in comments, my -- that and that that's

And So shift QX, that just from volume into, I at but rates, the loaded that was as sequentially end on a year margin we'll the perspective. further still the back of wouldn't really extended the line be going QX. depressed. up, -- quarters, it's really cadence coming as from multiple that and looking say, far of there over perspective you asked back side, to maintaining line would we then into QX, that's bus there. probably as But our out I is the all see say be key rates

off larger in get backlog QX the we there. pure So we won't had that a we're that efficiencies building

maintain still So some down, backlog the we workforce, I at but percent as build had that out, in we'll would would to efficiencies, some not the and maintain be margin drive but that the stretched our we'll of QX. schedule came expect

Courtney Yakavonis

just helpful. strength And in seeing guess you're That's the I maybe that recreation. Okay. then on

the it campers. think orders are of for that and of categories, the Are was we earlier intake you're kind And side? you the that the Or Where I strong cadence mentioned how kind on ramping? been production the the was summer? rate suspended on the strong that? all constraints to production but as production any has there mentioned across trailers of as is obviously You of that in order sense any seeing exit of

Rod Rushing

certain we bit But localized of and materials the The supply There's constraints and This then we constraints absenteeism the related in the the to around a rates to on continue outpace look order see business Rod. retail on chain still retails wholesale. are side businesses. variability somewhat is some of working that's for production versus business. at to wholesale,

a continue So the to we product that that, it's cyclical it's based of how -- and through terms channel to on business we're in movement see the and but subject also good moving of change then COVID. mindful that's

got make COVID We've we're this to the challenge backlogs. our optimistic. we're got we're to that we those. through also But convert understanding So facing. We're great to -- hopefully continue as we're how to proceeds going market solve the sure ear very market

Operator

comes question next from line your Stephen from proceed with Our the question. Volkmann of Please Jefferies.

Stephen Volkmann

a a guess So picture could. Rod, quick Mark, then couple of big and if for things, I I follow-up

You've been there quarters a couple of now.

can needle, think, the your I respect a of move kind three-year have know, over as what now productivity this to view enough margins kind of belt I period, kind it, around cetera. started that volume? to obviously do to of et a call of you a initiatives, mid-cycle now your with kind of to level of business You've maybe under don't got have arms level Do sort issues? the you've are attainable to at what Just two

Rod Rushing

capabilities belief there. given wholly And not you think businesses should in variation. the leverage the I that unit, call, digit earnings. first of some to business and of double I this is by the Well, it's a that it's that's operational portfolio business yield on deliver volume unit to we dependent And disciplines But said think there's our just that. get built built lot what

just structural to got goods work get obviously costs, our throughput, our maintain cost to continue of a and there's there. and path I sold to we think

business as it. portfolio to that's earnings we're big this a a a that get I'm where is So going believer and double-digit

Stephen Volkmann

would And be earnings? EBITDA that

Rod Rushing

Yes.

Stephen Volkmann

Right.

to cash should cash do around way Mark, flow? to mean, the think of bookends number put that mentioned a Okay. do flow fourth in quarter what be for And then, quarter. we the in could you I numbers you sort things fourth the Any of there? beneficial

Mark Skonieczny

Yes.

well you for -- previous want we on guidance have so now are by ins come but actually inefficiencies put give there look the the optimized I inefficiencies management in also our to flow our out, and on cash sheet, we're which Steve, we counting land, to we as will like out. for larger continue we position items some we as the work and to the still unit said, work process as as mentioned, there. have they're of said not a flow Act, think quantified million. we that we I can $XX quarter at But that the come be balance outs, for as positive of pointed through, at inventory, had CARES the business which as we're I cash our to probably that But book pursuing as We don't we predicting, have that the continue but on point with and this we're through

Stephen Volkmann

Okay. source Is the working in capital or quarter? a fourth use a

Mark Skonieczny

source. Yes, be a it will

Operator

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

Mig Dobre

terms on do there. the Steve's for I where Rod. how follow-up on at it business just Where have are broader effectively momentum. of Group assembling we're going at the kind wanted should that that I to And ask the But not you your different, able things your company? would get comment believe do this in that to are Because margin. point? going Maybe REV you say you double-digit to there. you as sort question entirely to team appreciate EBITDA this to can to you're -- broader you think bit And of the clear of want outlining that build to little a vision be I it's

some are that where give in us of along So help I'm to process curious of to you can the as us things kind of and kind the maybe we here.

Rod Rushing

at at in Yes. lot and But terms question We the team, spent we great time the at we're process of opportunity the in journey. understanding as learn your part it's what spent look upside, your your leadership time inside this a get -- working where a I at cost. this but I'll those a conversion believe costs trap on and that footprint, the business you and opportunity a back that where design and spent first is of purchasing the you of a and of yield value in a of of look elements, team then lot of cost to to end structure could right -- And We lot team in what business. as question. is your a structural trapped is

some how to go And capabilities the need lean still, done building can kind of get -- as there, then so around about while get think much do that activities conversion to to I at products, to go at out and inside the talent I and still of internally think are about tied you it, get rigor on you are those costs tracking opportunity drive design what business building process getting material cost there's lot capabilities things opportunity a platforming cost that. in those our you you purchasing we've things think that spend. get and good And that tied pipelines that then things think obviously, improvement,

really work list typical get help our bringing business. to of bringing expansion see -- in and that really specific the traditional. folks the market, businesses identify to little really We bit would which XX these to The call the short by a get in it's have to get but we've at six we're opportunity, done, to been to look the look those short value we the you We How the opportunity done, us cost in any the of margin talent, industrial as capabilities. plants XX% your accelerated what have cost I pro with about XX% manufacturing of across that refer of in while at things respect you we've us above But we're of when some savings. supplemented team the we've to company, the streaming is time and you to term, just a it, into the aspirations the building trying you left, by leaders we've at the do operational we lean With market, which people. that here, kind do top, right these path right, to to the months and in grow think plants. changed journey in implementation is really about near-term in gets when there

So we've of lot done leadership. transitional a

I the is done. around never journey think leadership

got the accelerate I acutely do are we're think and journey that long it's -- these do these the a and I made moving a in results of to I not talent I the you're we've But starting that in well. business in as changes to folks evidence at build you portfolio. looking supplement -- a to always where quick talent. talent mentioned see upgrading you're before, early in and of in the we underperforming we're as pace at businesses believe bringing process. adding the in we're do that. think to the capabilities, there. it's lot but It's progress We're in got And to more you some that at to some help But journey, a also, that the or of need

Mig Dobre

double-digit back, one if & EBITDA as three Fire Emergency of I that this have inside definitely years. that mean was And haven't the you I margin. three past levers key the all value company. guess, it, earning in Sure. look right, am really the over at I mind, much the years ago, my this is least is I at in changed business, driving a the looking gosh, volumes call business that

about margins significant are So yet lower. volume the we're obviously materially talking not compression

in I'm some the that's here, about design. unless in changes how talked purchasing of within this some not what certainly that generate would created changes some missing I But really savings. something the business. and margin understand You compression of this

of So get what in are of a needs sort if can you a rightsized do standpoint? need efficiencies be? happen profitability the to line to of and get specifically for better to where kind wondering structure to here things some sort cost operations on that here accelerated margins of order And things your more I'm to out there get from they time

Rod Rushing

around didn't apparently I specific business lot Yes, the The and throughput. was question around to being that's line margin what to a that to increase asked lot didn't staying share, I compression that the of that bodies tried you added top activities. share, a was is specifically flat the leading it's

businesses a So unobserved years and of three in these got you've last additional people costs lot over that eroded the margins.

That's the were. they the also need get doing is improving we're of that the get we we'll double-digit to but work processes restore that is to up, go what now, work to years, as the to that's in So need we the value to margins idea back where to the seeing EX like businesses the the people and stream the businesses. improvement where businesses throughput one get to more three the the to reduction you talked one where the talked on when where brought same ground time about compression greatest lead or team of we process. then margins to we right support the people we have less that And have And over with of get you less throughput we last are throughput. about the at the with

in. seeing to and how are it's is also that we're just something we're there's improve that's And that process. get and the work that ongoing there There an -- But doing. businesses So ultimately that's flow of people tackle, action less the in the not throughput benefit things. it's at that look the short-term the we're through and but process, flow cost do block the taking have plant, you structural things already

working we're that very So hard.

Operator

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

Jerry Revich

progress I'm you had Ocala. in about productivity wondering, set higher at drive driven of story? made what's you the terms your just talk you to the product element Can if the ability folks longer line of Can just about approach and the term. opportunity to about and talk the that could simplification rates improvement we talk production in cost that

Rod Rushing

Yes.

so -- EX -- the look lines is by rates value get business. brought folks we how We that our think up line platform. to at we we to in that which I streams can Ocala, separate

three so done throughput and So the week. our you the to separating design channels the part, there's to in one, and get had our And encouraged -- over process are the I'm a not and is, done get more orders active that, aerials, the and And that where three about better big it's opportunities done on engineering of other line to on help units of the to around we price of custom manage market to That's of in flow get that the right? a us our being past stream. on a use so -- of we a part of growth, getting being to We business. our versus guarantee part don't value can built defects line ops get rates upfront. be around the and the a but documentation, then quicker it's channels from piece the the also you from transparency. improving performance the backlog work big our that very throughput been getting that's right to liner complexity lot now, help also of costs an work So it. but the that's the a and But engaging is upfront right on years, with is There's lot orders, around the can that mixed what you're but better to channels have is a around only with of process build how work it's error quality engineering to up clean sales getting a -- done aerials. to and upfront, engineering understanding these aspiration part the of building development

there need. development to throughput looking we floor, expertise to labor management with stream better the how figuring work from obviously, the of in floor. And have your is we of you being part do how program as content. labor value and manufacturing sight do across get how once the at So sure then initial value into how we that's deal on the converts done And the to make get do full stream line to manufacturing engineering we that how really field the you the the that expertise in to brought less workforce, operation streaming And and lean supplement good or well. lean of that get your as throughput down is brought we we in costs business

when the We we're of where committed part we of on have still streamlined inspect a done I'm getting in the I came one here. to where timelines, I we us that plants is that that. first deserve. was the get It do, spot the top a have part to and of I of profitability work And week there last against get we business again. to cadence, business, of, was we remarkable where the while Tyler been and Kent work progress weekly there's President can to walked that

probably we've all So that's businesses got. the that

One advancement we've of six in the in think, least or been the I've seen I here. the ones, five most at months months

Jerry Revich

if the variability And am that's management -- thinking more us? more through what's product the level in terms customization. time system so, and frame? the of of that opportunity longer-term order front correct in reduction in I opportunity rigorous about And here, meaningful Is in of

Rod Rushing

Yes.

a a the that differentiation When looking probably separate. keep entire you also think at Fire creation this you product you largely network, product you how terms the they business horizon, and fulfillment. engineering think that demand how view designs sure one there's about think have I as another platform independently do there's of you And the multiple and time optimization to identity certainly, of that operate of -- and across the two your over about and the longer make a think are that the about today when you the in and three-year business brand. businesses demand you of

to So sell you you creates and what spec opportunity footprint about where have ability your have value footprint, the an but also optimistic look when you the of you opportunity an also to that might complexity. excellence the centers But your take value optimization be. And to that your think an of where do have channels that. also at

being around purchasing present business of we these us. opportunity obvious are a those part versus you part leverage get business, local because about engineering think should platform same for last of basis brands all also and you kind piece us a and how if a that Fire think the that, philosophy down for So is fire leverage on about when opportunity maintaining in improve but of in being The is markets. driven business purchasing strength the of to it this it's commonality to brand also do

design have can, commonizing while of at you end as look your you for you that maintaining to As that much percentage again, a brands. differentiation got as market

do well more complexity and have think what the and that about think in Fire simple we about at very part longer we we're implementation right efficient. short-term strength the we and the about looking how as be of well business is we're some the the business where improving was of that focused do on leveraging reviews taking So business -- obviously, now, to that keenly do view, of business each activities. we we out things which through talked performance lean But strategic we

the So a big of future. part

Jerry Revich

then And just question. a shorter-term

the trough in in demand case we fire to somewhere Is saw the your great last the last in XX%, in So today how talk compares Can industry just the the recession, -- was what you range. in that base about mind? landscape peak for down the cycle? truck compared the your XX% to

Rod Rushing

seeing kind to to peak evidence trough Yes. my situation fundamentals -- There's time. economic still of the this around our in period book-to-bill. right is order personal that think we're When than whether that necessarily going And different ourselves going opinion, things in some and I we're we're see find today peak to just you have this very discussions a to question recreating we push trough our that in to that our is about of channel is don't very, going again. rates say

we're you I'm of So recreate do that I And now that -- But the economy, were Drew, that? that that more thoughts than they the to on underlying extent fundamentals now. have than maybe at bit optimistic on time, right not municipal materialize that even though to not any also think, there situation. different a are on comments seeing budgets, are there's that or pressures we're going

Drew Konop

a on we'll show any that clearly, -- think a we it the made took same as have think I seen for maybe appetite the strong. in different initially pass But us backlogs now, mentioned, was a was federal tax and to and federal yet didn't have are eye very currently anything and conditions certainly, there time. an list at we be little up a And the more be And than haven't of stimulus. funds -- I concern. municipal Rod first on we that look might those watching receipts decline, budgets slight give Well, right municipal we and the QX this decline just backing by it,

Operator

question. [Operator line next Please Andy Instructions] Casey your with with comes the Wells of question proceed from Securities. Our Fargo

Andy Casey

market top line to recreation returns Question and potential cyclical to then at And Class work part also, the improve was the parts on may I'm there margin of portion to goal trying refresh riding. gauge it's removal? out. viewing looking to how I been EBITDA a other shift? of last portfolio overall you the asked wave on look that's review outside REV against portfolio the are you're overall meaningful Specifically, done A a double on the improve what the get of the call, years few of digits to wanted but like for

Rod Rushing

and Yes, or Drew Mark to I'll I'll make as offer a well. it comment

say this our get that portfolio well of lends of anything think process double-digit that we will would we're of would better it if that are a revenue and has what what be it able a We always are the to I fit, I -- of going in a earnings. we with probably of at -- but be that's I to companies, overall specifics, think what's element point, and where a so do -- it portfolio talked I path core. think to that long we term, understand to those because to into path on examine be thought for is how always a to -- about divest complemented earnings look think at you an on understanding won't that itself kind is replace I to something, opportunities a have specifics, to good do were the

pipeline to our elements shrink. goal acquisition. always timing divestiture is of So There'll not overall be

but line a top what and earnings and obviously improve the don't as I hold we is core time do more still something we're to not anything. acquisitions. the a right being I that $X.X more be. perfectly, $X.X Mark, of know core where and of as were and If be position, reasonable now it's say should journey working we to Drew certainly a but we everything team We have to then to that want billion move to think on billion want would we through in divestiture that is what believe to if defining you or range go or that the you

Andy Casey

touched fire business get questions, less really on trying that opposed throughput. view to company. to kind issues the been you or talking we improvement but then through it are as that just in up the apparatus Should that plaguing have I improved that on And the of more return behind been about can as you inefficiencies work -- make the signal a that of wanted to plant some the some past. of And you've for as specifically ask already, Okay. part to

Rod Rushing

but when ends. progress that a on on we're we're I look made. There's not say I'd being you at improvement, that No. certainly improvement. it believe with great a path But right finished of foreseeing complexity efficiency one, going that cost go. And to always process four, that's and and two, waste reduction, if three and done out relentlessly of never process the it's or

well way. we're the think on I

of time and we've remain there big to steps. improvement. made again, us. it. -- and It working. and get rigor, there's you just these We're we're think talent people just for do that at The front still look tremendous businesses problem in opportunities opportunities see still individually is and But operationally I capable can takes to

margin we businesses. of see to, which kind think, So terms to right in I of things speaks want the opportunity the in

but larger working coming this lot do into just to that glide lot point are talking going the get through as right double-digit to cost So path. it design opportunities, well side opportunities We're because it's that's and on our earnings, of throughput It's if as getting improvement. process it about much throughput the get to into going as we're And we're we lean, the haven't on now. much that still there. right business not of a design be generally we don't purchasing focused to Fire continuous -- of and know gotten a and at at But now I lean a probably if a we're done.

Operator

hand closing no are I'd questions There to remarks. the to queue. management call back for further in the like

Rod Rushing

appreciate I again, So it.

and I I what think made we we expected from think to be a the solid -- where progress. have -- quarter

front that do a that But I see want we to think made the lot thank see still continue work of momentum again, to in in We that the front have we've see and we what of optimistic team I business. us. the us. in we progress on very of again. we're

pleased change way and has requests. I'm to those team really I to think I the pushed we've differently. And tell that can you, with the do responded hard to things

COVID guys situation do. with again, to I ahead and quite the to the I days positive. a fight the But We is good to see got lot we're get to work dealing and of we'll us. We think road keep that have going that ahead of think be

talking to next quarter. the So you forward again and look questions, we I appreciate to

Operator

gentlemen, and your Thank you Ladies today's does teleconference. this participation. for conclude

day. disconnect wonderful have You time lines a and at may this your

REV (REVG) 9 Sep 202020 Q3 Earnings call transcript