REVG - Earnings call transcript Q1 2021

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Operator

Greetings. Welcome to the REV Group Incorporated First Quarter 2021 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] I will now turn the call over to your host Drew Konop. ahead. go Please

Drew Konop

Form website are Good A morning All Stacey. Results. to or forward-looking which thanks risks joining refer slide on for copy being this call Thank and webcast SEC X filed and Slide next now to from or issued morning, fiscal non-GAAP measures our until matters with any other have others otherwise call, morning if results This with a our make available update to remarks is filings be we disclaim the to stated. answers such year XXXX investors.revgroup.com. available obligation first us. our all. forward-looking updated to we We Today's include forward-looking statements, GAAP of subject not implied quarter include, quarterly presentation. those is will you, presentation, the or earnings release are may and X-K fiscal references and at among which a quarter A a which could includes our statements. SEC. of These on expressed that unless the is that statements, to of differ these we at financial reconciliation cause our Please in by risks that year website. actual quarter described Fiscal

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

Rod Rushing

segment of quarter's last continuous the culture since turning operating of details. our with to that today's through We're margin adjusted pleased everyone, the an report reflect us versus highlights year. quarter then with I'll quarter commitment EBITDA performance and building our begin the combined move points call. the of These XXXX very financial our it Mark over our will and of nine achieved improvement a XXX consolidated our Drew morning, and improvement, over good in last on changes you, basis joining for to before within results months. first performance Thank overview first to made IPO over quarter employees of best with the commercial I we've our that's

First throughout municipal sales F&E by quarter in and $XXX up are year COVID-XX driven much in were partially softness first transit versus headwinds by and the were which XXXX. offset net segments, last markets, and of impacted in sales bus related million, quarter and by recreation school quarter increased X% demand

picked the favorably few [ph] school more likely to to are quoting up now end respond months expect as and However, next of schools has reopening activity this fall. access to markets vaccines past lead that have over available and people bus will the we

building increased $XX.X actions quarter year basis First XXX consolidated $XX.X versus reflects out our XXX% restructuring are operate with efficiently. model, reviews implementing to more operational cadence operational capabilities our operating opportunities of of delivering bottom also past ago cost million margin EBITDA realized These improvement. drive of points as actions review the The calls our adjusted line structural a it of and stout to improvement. the excellence part away combined year million and over and and of have

order organic a quarter $X XX% we gross operating first businesses with that quarter leverage intake Within and in resulted bookings margin the growth first versus the of last on throughput Strong our revenue backlog. exited quarter, healthy many billion improvements. of their year and drove quarter improved and growth

these innovation within brands the anniversaries and customers. portfolio, hold celebrated brands to commitment Turning positions quarter Three serving that Across to are strength of on to had milestones focus X. the first Slide of within We publicly I'd market-leading accomplishments our several our our highlight decade-long recognize. the our and like their that categories.

being York Administration. over an to First, market backed the of have The celebrated trusted Coach Discover Anniversary XXth of released the amazing released Class A Fleetwood is U.S. across RVs Fleetwood innovation and enduring milestone sold General of his best-level its having legendary Services leadership, presence These brand Wheeled the of and and Fire including portfolio. Ambulance testament commercial XXth RV top proudly Coach's Class to motorhomes years edition. the in for milestone vehicles selling fleet's model the fleets within brand. Department A XX-year are motorhomes U.S. and Also recently Their XX,XXX been generations have XX a this models represented Wheeled up. the for our and year's by the families. that tagline brand anniversaries Edition two two anniversary and Bounder New these certainly celebrating the the toughest Fleetwood municipalities

our on they're entering customers home continue We of years the be conveniences to the we to are forward while pleased RV the have the another XX families and lifestyle. delivering look of road. And

that built commercial demand. their opportunity a serving to cabin real the to our custom requirements provides vehicle of always performance our fire This it market conventional budget our a meet cabin Our AEV initiative introduced of the Traumahawk personnel service Fire within announced will alerts, maintenance accessory trucks predictive of year. and collision comfort data, functional a service, share. to that and agreement allowing deliver and quarter, business our their and extend is a custom is the using not we customers electric This higher to capacity continue advanced able of our of build these Aimlessly, fleet and safety GPS for with and is relatively manage chassis Hyster-Yale enable of ground hydrogen-automation-ready business maintenance requirements. terminal Spartan been their advanced quickly provide operate their with accommodate new will In the develop trucks. Typically, this Recreational in trucks the the their and January expect a and more These the be the informatics with cab built monitoring equipment with benefits emissions. beginning chassis an chassis respond a the and partner by announced and their fleet Fiscal safety, they cabin cabin relatively location Spartan they XXXX. Telematics purpose radius, they to right of that The ownership more information. the requirements, have departments high reduce calendar attractive driver while electrification, protective Year and high commercial for economics chassis chassis have chassis, fleet that the accelerometer efficiency owners real-time of we life. that opportunity close expand patients with at year, to effectively we torque fire communities. profile designed have need standard brand meeting includes a does are on customers gear lower Among in to and total can In utilizing only in project currently crews carbon have end under within first this monitoring cost full-scale Vehicles, production prototypes by experience

coaches [ph] This historic for despite inventory of near being which we're Tampa down remains SuperShow our at all categories, and year, the last dealer XX%. reported attendance Outside continued luxury nearly show A record sales show experiencing marked year unprecedented growth units' January, XX% on and the the presale lows. momentum the Class lots business. motorhome versus this in Our

has of REV Within one onset enhanced we would our spacing The differentiated others testing the product our more The probably nation's situation the and highlight is for different [ph] COVID-XX limited social customers. and provide safety to distancing. the quarter, offices of protocols workplace that's the and in all introduced We've quarantine sites. features our necessary all substantially like offers frequency I cases provide to employers. responders' REV actually manufacturing suspected I like to tied enhancements personnel the value to innovations presence first portfolio. challenging. in for space feel and no to increased that that is

We COVID-XX. to to purification of option distancing The provides active frontlines every exposure and proud have cabin on work provide safer a the that do system use reduces responders to and not from that hard at who others this airborne for are day the are support first to like contaminants environment an have proud home. air system a those time

unit been and dealers to municipalities, We with unit contractors new existing equip deliveries feature. working and retrofit have enhanced safety this with

on areas value placing all our creations of focus we are for shareholders. Finally,

our We're how very and dealers. and improving We and sales have on our equally commercial work discussed more we our efforts operation performance. marketing, product closely operational but on includes focused excellence we're channel focused This better-support capabilities. can management, our

financial brands performance conversion the first our These new within and We efforts operational performance. and on of improved signings quarters have quarter I commercial operations enable rigor will improving cash organizational and we're over performance past dealer of commercial our turn deliver returns. cadence for details combined and hold it with announced of coincided focused total will with certain to This on the financial to over shareholder increasing consistent realignment network. to and these flow, excellence performance. with Mark to focus the two our rationalization now the us Mark? free dealer brands continue

Mark Skonieczny

to of includes X Spartan quarter good Please This of $XXX level an will to performance. final February year. compared that increase move and segment everyone. year-over-year I & of were sales approximately million to that the comparison last Emergency acquisition ER inorganic X prior year was that our turn sales Rod, deck review making to first Page activity. of as morning, Fire on of our attributable year, the segment this the Thanks, million, slide occurred XX% $XX include

that shipments being have a and offsetting Excluding outbreaks. units a disruptions quarter more currently content throughput regional legacy band within and mix Spartan, stricter ambulance of lingering increased, the The we improved organic or within lower price tighter labor The with handful limited of reduction X% geographies COVID-XX-related more Fire were markets, are despite generally experiencing delivered, up are segment units. of sales high quarantine ambulance as policies, disruptions.

increases longer within duration able the to fire our their businesses Within backlogs. division, that were realize price were

inspection experienced within acceptance. several Over weeks, the and last businesses improved segment delivery the have customer

bottom have ambulance on-site a XXXX. both the year line primarily was plant in better first improved which F&E quarter greater ambulance in yet in at first profitability versus to EBITDA profitability, points resulted and returned EBITDA million the $X.X the level. XXX the was increase quarter. was of visits the basis quarter largest ambulance improvements the to The million XXXX normalized segment margin the result division However, contributed $XX.X in adjusted that not Productivity divisions. our prior Fire compared

operational future year-over-year, Our quarter. has reviews, new The kaizans was productivity ER its management Total points XX% largest improvements. practices order orders and of hold the year year-over-year. also backlog pricing past cost to X% This acquisition, discipline versus acquired Organic reduction patterns the year. year fire over last ambulance XXX support significantly F&E pipeline ambulance with increased up increased year's that months. intake XX% over are and team the margins lean Fire strong first project a taking Spartan first of includes past $X truck versus several the return [ph] order basis orders quarter regular as increasing to Fire improved last plants and and over regular the installed then in cadence backlog arrived billion, last

expect the and support sequential with Fiscal improvements continue sales to EBITDA converting organic margin XXXX throughout momentum the to We level and backlog in growth EBITDA mid-single segment of this to year-over-year the digit and year. for

school we EBITDA quickly consistent which year-over-year municipal period trucks benefited which and down declined delivery increase that XX% markets shuttle benefit and $X.X terminal bus Street for resulting School backlog. businesses. $XX segment and budgets, to and Commercial the offset transit to last disruption. municipal to the quarter timing and year. specialty volume the municipal strong both an The production year primarily and availability our buses truck XX% lower year fiscal markets greater up in period, period. in million quarter our lingering terminal improved adapters. from May general market market. the divested of a vaccines year-over-year. partially the the million and were of XXX contains These last from and the size to first and sales revenue municipal have convert impacts that Slide orders, The from was backlog And buses, to attendance soft Commercial of outlook Commercial from large Specialty versus taken rental $XX was $XXX with in in willingness this order specialty as travel. profitability margin Recall activity the within bus was returned Sweepers Due COVID-XX included in sales school and is end backlog quotes million, school to carbon B confidence businesses of businesses the is large undergraduate school norms Partially school an after electric one will increase buses and This our million order the divested of and adjusted with these XX% Turning and at of compared has remaining and in end a which in population's EBITDA an included related catch decreased Street EBITDA organic quarter. emissions, terminal the businesses to which increase year's transit we million to versus points Type decline X. XX% approximately division were XX% due to due [ph] company relate segment year was decline volumes, Prior were that lower the of shuttle the were which to and down XXXX, of commercial in then bus, segment intake. [ph] that be of quoting offsetting decline within decline out XX% [ph] first sales demand down during Within leveraged optimistic the XX% productivity but to year to quarter be prior well cycle. historical reduced $XXX,XXX The division. commercial Connecticut continues were shuttle due down of sales in which to segment another remain full depressed bus $XX decline Partially were business sales institutions Sweepers, XX% truck sales experiencing offsetting was in within drive graduate to restocking COVID-XX priority bus backlog aligned are prior announced cost early state year. by and a of orders. order they year and transportation specialty against the a of prior down quarter, and backlog same the delivery bounced C back from first relative EBIT A larger of as respectively. decline the year of Sweeper appear up quarter, these been segment to last municipal buses. adaption of bus was have transit market of Type COVID-XX-related actions result which bus end the basis the increase

with the airport the We Municipal the transit two bus bidding However, category markets. in grow that is industry quoted in remained and we received expect in trends sales and bus electric XXXX. and electric benefit XX bus orders experiencing over larger additional soft first university eventually line the school activity Taipei XX rates units months of believe to electrical this unit our at fleet from school electrification will types. overall

transit bid However, several we for process the are awards. advancing in municipality

Turning remained turnover. restrictions strong. absenteeism, to California prior were segment Production in in by Production business. Camper challenges, last and Recreation located work XX% of approved and impacted Slide A constraints remain Trailer the limited X; higher-than-normal and our year, and labor C versus up increased mix shipments the $XXX temporary Travel Despite Class worker our units business and by shipments also COVID-related year Class million was of sales A Class reflecting quarter. B versus

within versus have solid C shutdowns, sales adjusted strong was versus generate million, the record two in A $XXX SuperShow in versus mentioned on primarily Segment quarter a was was The of emergence retail have EBITDA our and and quarters our for the Class business three an for year. to of to points Since at categories, record million sales average segment our year our XXX down in earlier, with able quarter, our COVID-related in we occurred shipments XXX% all primarily XXX% at record line improve last a of year-over-year order are segment and Tampa of dealer the margin And high in the most quarters. the basis year-over-year A year. a all-time the Despite the gained Recreation lows. Across our the B XXX% XX% intake retail for Class first or backlog categories disruptions segment, productivity Trailers. to which was prior result margin Class increased and businesses. prior past improved despite up the each RV EBITDA but bar these quarter orders challenges, Class been backlog all increase. businesses. with results As wholesale brands, Rob another Travel $XX continue incremental that increase were EBITDA historic as fiscal the across across categories non-motorized product the COVID-related past be sales the at near over XX% inventories share motorized first up

At net cash end million partially related by $XXX XXXX. use million to ABL by ample on prior quarter revolving $XX.X of fiscal activities higher company of tax of was quarter. million quarter from payable CARES available offset timing, X January timing decreases million, the end as capital a efficient to XX, facility. the result including refund debt Cash inventory in at million payments. a compared First January XXXX was $XXX net and of credit provided accounts compared Year $XXX XXXX. with of accounts operating $XXX change at versus end, was million management. The primarily receipt receivable of offset XX Net management Fiscal Trade our liquidity primarily Act was million million by the of $X.X hand on maintained under working payable cash the to the income, accounts of the year generated was partially

are the currently to second fiscal with our refinance refinance term completed loan facility of expect quarter, working end before both be facilities We our ABL and partners and before current. banking the credit to the become the

our we core the a focus During on markets geographies. review quarter, continued and with portfolio our

the non-cash and As our a in held Brazil asset loss divest as classified to within the revenue sale we resulting definitive for sale a business reached quarter. on million result, $X.X agreement

we our range in XX% $X.XX the in Today at Fiscal midpoint. to transaction this to are XX% sales $XXX range Full-Year with the $X.X an of growth $XXX XXXX. to increase close to of the to expect representing Fiscal guidance second be billion expected fiscal quarter. We in versus of XXXX billion Adjusted XXX% initiating EBITDA million, or million

range We to With XX% net closing the adjusted XXX% $XX any net in $XX million back adjusted for million income the Rod additional that, it and $XX free in to million turn We flow $XX million income million. from I'll other expect to to $XX plus comments. million on funds income of range from target $XX to of net conversion cash activities.

Rod Rushing

include done. just to remarkably you for what their to save remember very off, want we've They've this for presentation and first April our REV so Mark. XX saying Virtual to brief ask efforts and responded also segments and page, those also Day, in much our appreciate to they've today registration the here. do in up the thank deck The will choose The story. the website please group, new again, also link doing the you, a it changes for you we our we are to I'd on of that date like and they're and will to that. investor link on to put use we if business introduction the make And the our Thank the like morning Yes. the the and attached be by posted history Investor the to to the start I employees that agenda future. work for

the across are to organization. as It's REV business the system. detail our more business drive results using we been referred give will We historically on to tools

that and Finally, we within we take continue your we expect over to to intermediate deploy. structure the targets won't put financial in and past day. place We entire year process provide the that achieve

you to planned to have. and for it remarks you have up to questions. prepared two all again, this now joining we'll want today. for We minutes any hours might thank of the have the open operator do with call And questions I we'll XX that

Operator

a this Thank conducting Mig will you. session. first Instructions] comes Baird. At [Operator question we Dobre Robert W. from go Please be time, Our with question-and-answer ahead.

Mig Dobre

everyone. Thank you. Good morning,

Rod Rushing

Mig. morning, Good

Mig Dobre

concern Obviously, the increase driving color little slides, foreign segment. potentially talk what all been is on with little nice I around had of guess a your like more in context Appreciate the both an each I'm growth you budgets, and a Fire pretty about seeing looking some with this emergency. ambulance. COVID bit to pressure and order you In on I'd area think here? do municipal weaker has demand. of for

on specifically? obviously, So then maybe there? also, Fire And you on ambulance. What's comment can in really going maybe growth good

Rod Rushing

the to short-term, we to of out issues, more out want I about our the we plants around see of into were be approve markets. think the our you get in on vehicles. certainly process that municipal still of receiving to fourth also really out And to And coming some year. funding access guess, people think things funding we've we're the side, the these I we've the but going probably to just time of with municipalities. to through. a I deficit, of had new delayed, orders. it's for say came at of COVID And inspect is, period, being I'm momentum of through were lot offset that there's what first back now saw And go think the understand bill for talked that's trying on to trying I and another speaking certain, a COVID what passed, to to everyone nature obviously, order a inventory But we're to is the funding, know, would long-term terms end [ph] working impacts to to here people come where initial just that, whatnot provide who periods the reality that calls, historical the and returning we extension all going the and demand about I'd throughout exactly continued intake. are together we're these midterm of least normal And we're these norm. but say a more back quarter, figure to kind in things I full and to And of accept kind

it's the we to bidding On side, even maybe in we order improving just that been as you have the convert good bidding in us intake able side, it we and we well. bus, execution good a see about the and see little see school than activity ask order didn't bit better about on But we and activity but talked past.

vaccines think to about benefit through in this the to and and we're here. going optimistic are built U.S. offer I these a So coming are the hopefully returning normal

to you add want Mark, that. if to So,

Mark Skonieczny

right. that's think No, I

are the prepared gives I ambulance of a activity said as So for my been backlog, bid the obviously, Rod has year, as it said it's us we're the and is but here to pipeline and referred Rod with on actually normalized looking what here at our momentum heightened to. maybe CARES the execute remainder there obviously the side, that and we as Act in remarks, on see with seeing

and holds seeing I So only tailwind extension for that from there in perspective. with us think and announcement the activity bill we holds, new new heightened a the obviously, is are the what

Mig Dobre

see. I

I'm talk to pretty just line I'm you're If we it margin math, about expecting can seems little on about overall about at But guidance, if XX% clear in. helpful. you're a top that's my margin looking by incremental baking wondering the bit Okay, growth imply of sort improvement. here, your

you should looked like in pricing at company there's we talked internal think to seems here Fire overall? incremental and or improvements, specifically, so volume, your relative better. be moving the many segment margins because pieces And prior -- to do lower as you As quarters, Emergencies higher have incremental

would be color So here some helpful.

Rod Rushing

Yes.

been move transparent business we needed we've pretty in, improvements think on I with the the as are specifically. that Fire

which in margins to throughout move there EX on as some well from So opportunity, times definitely we other a focus Ocala, the we've we look our improve the of that perspective. multiple see continue incremental some expansion would as to that as to of as we integration expect activities, vertically basis continue those year-on-year we on will talked integrate about as highlighted, especially see and the business, to and on the margin Spartan at chassis we've

So I think we'll we year. incremental see throughout the as continue year-on-year

Mig Dobre

do to you're going you [ph]? overall segment in the company But think the higher than specifics be

Mark Skonieczny

Yes.

Mig Dobre

Got what Thank going Would Or build. this I'm starting have platform ED something contemplating? chassis. product applicability you. understand you're for rephrase that to asked. and sorry, last ambulances is the not specifically well? I'm as back you is here that it. maybe the to question make I sure seems on columns you're the And question. to that FXXX me It based to like this

Mig Dobre

Yes.

Your I school chassis as and the a product, types of chassis Ford know based on these well. That FXXX that product. bus in using EV ambulances you're

expecting point if ambulance in wondering a at be I'm So, you product of out a should time, well. BV [ph] as we

Rod Rushing

busineXs our terms the development have space of in the working quite the requirement places through requirements would the how EV think with units they're different. an of from co-development. integrator kind all Collins in the when and versus the all you that different We're working and And bus loading, [indiscernible] somewhat a bit school a offering. for on we're partnerships we're I about doing in say of they're

process for through have to a ambulance. different So an to have go you

work and things. ambulance businesses we're around we that's and have development in other have working do on we of our there types more also some on those business work work Now, LEV side in that going on electric the idle our mitigation,

these grassroots. you other. the for segment transfer. I'm But the stages different and it make our are to of but of very there electrification be that of vehicles work lessons transferability How the there Because There very, development; have are these all learnings businesses learned, one do in sure more of from the other. from in to early are are some application? So these used will cases will a the one

that about of kind that's and the the about how it, got to to design So you it's purpose. use that of think think end

be working You same the integrator might of with set a it'd different but be requirements.

Mig Dobre

Sure, that for my makes Thanks sense. questions. taking

Rod Rushing

Yes.

Operator

from Next Volkmann question Jefferies. Please ahead. with comes Stephen go

Stephen Volkmann

builds? off give you Maybe range you of Good get margins so sense we us build Just you willing to year think exit kind just segment how can what morning, as question think a this the guys. a Mig's of could there. Are some at? F&E to

Rod Rushing

margin up base, XXXX, would model there. we're be that, digits higher we said. say in the to we've do we'll you lot get, probably exit, not year-on-year, those think rate, we than of incremental you we're confident going XX% know, a the as off the mid-single But, work closer a what we're our exit growth I that where I you maybe that to specifically XX% accretion, that but probably here will and obviously you so of incremental but, would the to can revenue off of if from there's going to model obviously, you have perspective. be from Obviously to exit margin in know, that still

year. X.X there last around remarks -- versus there paired of that last of Our exit sort -- the earmark for mid-single digits it we

Stephen Volkmann

Right.

stuff this a two Okay. the over as a kind the margin you to margin or see be makes three that something? you all benefits next of and longer doing. of are digit there or double sense? And, that term, the guys start years business target Can Is

Rod Rushing

the continue we our is get Sure, stated their we proven these you digit know, I reach to and at to so be our we're goal And opportunity. that progress that And, a here, there. goal that to portfolio that operational to the look the through cadence see and that. brands, as we do know, we've building can in goal that as you here past, that that continues definitely double mean,

Stephen Volkmann

saying that, upside I'm it once the there margin. if maybe one of that through pass issues margin miss pretty of significant quite you near-term like were, chain, correct But then, performance, COVID-XX me those And issues be just were to but feels should switching kind related reading COVID-XX actually where there. good to more that's RV biggest kind the please like it some feels

Rod Rushing

did and didn't that in Yes, highlight we we business here. pretty like just perspective dramatically, definitely hit from hit bus But it our California. get got that specifically,

double [indiscernible] being lance quarter, was that I is [ph] impacted well the produce our the performing business, was the backlog. so have is quoted which business a here from digit which so they Our perspective down to of that in business, significantly able

the well even significantly Decatur, we would [ph] the indicator All backlog which build A to appropriate competitors and one class more are I some of than hit have so of is as has Alcart with are businesses that our say of where where as our been as is our well. COVID. off positioned

we're So facility. also up ramping that

hires, to line to So new relatively hard. COVID-XX, the mention improve because people ability as hit been we've get of people, the not are rates the that absentee

hit we've to been our well, perspective a see our business done from nice productivity A business RV with chain class a C's job know, you supply heard operated supply very but that industry and forward the and pretty well. wide, disruptions hard, as business. within managing you've So we think well as going expect I our B's improvements And at lance very, have

Stephen Volkmann

And do the you Great. those think on. progresses, fade as it year disruptions pass Thanks. supply I'll and

Rod Rushing

towards nice the the We've we've and in but on done management where it these the the month been a It's line, say short challenge of at every able hard you is group out the you're build to to contain materials furniture have of the month. as build waiting you RV. to is end end quarter probably job within those the

a So that and the month the completions basis. end sure of on quarter. nice week as the full end making job done we But by the the the to we a of group get team's within we would don't completions week have historically

that So managing within But supply that within would go as we improve be we're these chain cycle. here. the expectation would along that

Stephen Volkmann

Thank you.

Operator

Revich Jerry go with question Sachs. Next ahead. Please Goldman

Jerry Revich

just and about to couple Can over when of the how down per profitability electric calibrate electric vehicle could Good us everyone ramp wondering and higher have about products buses years? per quarter. nice I'm we think you the morning, on on Can content unit up next higher they other if you for line? because the on of talk just touch you profit if you electric folks. unit potentially come opportunity folks production you as

Rod Rushing

of couple products are Yes, still first market when I you you're prototype developing a these off of as You're talk these are are production. like lot terms a in a demand. of exceptions, imagine, right? scale would but majority There end you're can at still vast in development, not

as So margin out lot of and go processes, over different contribution at going there's a when content you actually, is time, you development you are streamline today. because labor be of the day versus in maturing the scale, think product about margins, you're amount contribution margin the to a when

I So would talked produced. that par we we efficiencies improve the today, And say, at think the we Collins, I products to streamline plus, continue in are demand, our as will when, that we margins one few have with about get as of design. -- and are par

there's mature But there end better. know, So to I are that markets. opportunity do you think these

not substituting you think impacts when technology, of EV shaping about So term, really really markets. the you're long it's end

the is, question in and these drive capture mature? to margin. to technology going additional it structure time, days, our change the is how it's cost So ability the over And

than which are On What to is pace lot segment. industry, we're that's the think against transit from chassis end change that school, mean margins, to, to it's to clear technology that different I these going going by co-develop standpoint, be is a different to would say pace. a to going a like. and by optimistic all bus, from understand get ambulance, look the and standpoint, I different game out inside bus, we're working going at dynamic I early, play commercial that to at buy think a competitive to as to with is the on but happens versus move I we platforms, going going what that, move than will people

And we're my cycle those be to out, forward. as Mark? perspective. I from going better see that'll tell think, the story competitors get you we'll a early in lined there so, But able margin and mature

Mark Skonieczny

I agree. I agree.

Jerry Revich

complex, order note, increasingly far, competitive come so you traditional that initial you can that about if versus obviously, based used to set new the characterize In products On spend would players, on what of versus EV will, what had school on players have structure what seeing potential across buses share unconventional? buses the street EV talk transit would your the been you out a of plus been range where other for orders broad words, has for to competitive side? and you how landscape on nice

Rod Rushing

they're lagging could market against you on standpoint, share and gas think have that a their you'd is Yes, where a of it's reflect don't EV comment because that the have as I by in made anyone know C the behind I to mean segment. that school I suggested at competitive the, buses accurately B, conversation, Taipei Mark bus.

than and and diesel so the is consumptions And greater C. the B the

the markets there. less mature So

one's truck really right other little in is segments. but really [ph] is probably bit there incoming we bit when electric being in fledgling net our the of our it's and space. think, that in there a ones to little you amount building real the So and there like units in in you lower seeing But people buses because about a the ahead, are I think shipping lower. we're position in class of enablance such a a on there conversation probably different, relative end-market Mark now our know, I that that terms RV, bid, have is those not that that the relative, mentioned, pipeline type orders terms what and no peers, to bit share our Transit vehicles

Mark Skonieczny

Yes, think think battery great I as they and have as gives us a we've the terminal in opportunity that that technology there well. great partner truck, Right. has with someone who highlighted, I a

great So [ph]. and I we've partnered up Heiser think AL with a there partner

truck looking very we're think perspective. I terminal So good from a

Jerry Revich

standpoint they spending are and constrained. in production order in full both the seasonality teens, strong products schedule and the quarter, a ambulances that trucks 'XX budgets you paper on fire be an then should would Or particular if a but coming production are actual you you're municipal And strength emergency, performance least earlier pointed out and to the 'XX. low terms production obviously, that you're what earlier pleasant we is in? before year, to expand really standpoint for hearing you're the that's normal this you is apply the growth to imply margin from And, tough organic when do standpoint. surprise your or seeing relative wide at phenomenon? in which both had feel budgets a of that If just increase somebody from drivers certainly of in just big the in that discussion back firing wondering to market think on Okay. as relative geographies that I'm

Rod Rushing

that's that good. the nature try you larger COVID in just has larger the the I municipalities. good. with affected impacted by that, Act that Yes, I'd had think that say because more municipalities, would recording the activity of the momentum that someone to know, to extended think little an think CARES impact the all, they're good, is activity change there. deal We opening the the effectiveness, first probably up, I think floor you more -- mentioned extent or intake what of population about, you been got very that very cities And COVID, it's or I municipalities first if obviously densities that's so And a has would been say, to about

going deficits well. have help wave after argue the we're second also demand. the money and specifically to of to to that working things, that. budget it's like are get help us capital as the around bill this get think want them to also they which related Because that funding, to relief still things going still some the through that of won't states passed, understand to that to we're I would things there's this aside, expenses the would beneficial is to hard also and funding that infrastructure But be one, municipalities implications set got forward

there's get an both that optimistic to momentum, got be know, about say, and want through everything for this. to market of at on positive to there what we these very We but to want we've believe to more get And it building some there's is to suggests want maybe we're even an watching that. continue see, want So communities element ability from But and but see intake we everybody. have, time only quoting, want we from we good returned on immunity looking we want execute I we normal. not think hold, support this we step obviously that's carefully. continuing where that to we're momentum do vaccinations optimistic a us, to we our take still and Because we're at for we see to to the up, the and

characterize of that's So them. like kind

If you've to going that? any you're -- got Mark, guys handle

Mark Skonieczny

No.

Jerry Revich

appreciate the Okay, I Well, Thanks. discussion. good.

Operator

Please Courtney ahead. with Stanley. go Morgan Yakavonis question; Next

Courtney Yakavonis

the and any margins for bit think wonder if you how foreign China. business? it's also emergency. little in it to then think that relative a divestiture, big question. us international I other you on the Greetings Brazil was just can I comment was in can you and the within I have the baseline entirely were segments And operations if just, remind how But some

for if curious plans Just there's that? any

Rod Rushing

relatively Brazil say, small. would I Yes, is

of get it rid an it a was a it's around more say so more challenges impact upfitter. in a core than would Getting just coordinates that I going of that exiting in a wouldn't was out that of to ourselves. obviously, So was material have distraction, overall, the of it that focus, impact focus economy, right, the market, have Brazil more not material had we've because

know, built So and units like that sirens but them or you ambulance, putting chassis, police, just for it updating things was not taking, chassis fully and on.

argue in perspective, material going segment. that upfitter more end say, could operation, impact core it's wasn't but I not that would to have it really you competency, our a a to So, of lower from

Courtney Yakavonis

Any great. JV? Okay, on the China thoughts

Rod Rushing

you China RV we does our an performing it element to is know to at well, Yes, it. look have JV that, continue

an from performing well, China also is RV perspective. So

So money. making we have do is JV that

probably you know, money As company. Brazil the has lost historically for

area its us. America, South digit Whereas for at So, we opportunity that that the have to look you a to double then from an see as and ability we portfolio know, still earnings. get

Courtney Yakavonis

were some recreation margins think I the Thanks. SME, of first issues, above down, step great. there, appreciate chain have in quarter. for suggested suggested to you recreation supply last comments you you that I I the mid-single for you quarter, -- mitigating know, that you think then X% digit goal of -- margins but guys, think Okay, And X% would did on

think think any impact, you'd single Class on do targets about year commercial but mix your high margin same you I being an have updated the A where then you targeting I you also were talked for and know, thoughts on recreation question digit.

Rod Rushing

a can to think Yes, in obviously the supply is mid-single about the to probably little that in are but upside recreation, by eight, that six the there because even performing high wasn't it probably would are was I through I talk with hold disruptions, we the significantly well single separate have like digits we would seeing quarter, the say chain quarter. commercial the we that, And and landside but for that again, will down issues higher business. there a done in so the then I talked the on there this calls that we we're probably the better on walk can to as referred

on to momentum to backlog. and build increase that So bring really able in class we it to and make people class down rates A be new performance, our see comes line can a our A against sure we

we So talked that, what last which about it really to down quarter. is comes

forward. of our creation as So feel we will the confident class more A see momentum going in than margin

Courtney Yakavonis

Okay, great. Thanks.

Operator

ahead. next [Operator Instructions] Please question with BMO. Our Joel from go Tiss comes

Joel Tiss

Hey, guys, going? how's it

Rod Rushing

Good.

Joel Tiss

morning. Good

production other puts think or XX% upside is margins, other we like know, not talk we normalized that? there's something you be that other, we about. think or it's to kind to maybe still is all As margins kind and there'll and want just it good But up ‘XX. these maybe to COVID. go want you normalize going we way the of end And ‘XX too or where about you things and out, to early. you of horse some that pretty incremental be if beat dead disruptions is, like the to on ‘XX ‘XX get And it's Just and takes,

Rod Rushing

with the for, that will maybe patience or in midterm us hold term we here near the the guidance be your Investor on XX, goals he Day because Joel, be coming obviously Yes, so I with would April just could guidance say out that'll providing if ask XXth.

take here was Drew rather So guidance midterm XX. away, where, since today, our up April coming a our aspirations to than we guidance, provide our in provide happy Thunder

So we'll then. provide those

Joel Tiss

the that talk you another again, starting your we pretty making ‘XX, to levels, bit question about about things to 'XX? come add attractive a in want to you Maybe down jumping you debt also to gun or thinking that might other to that guys EBITDA portfolio other as little normalize them. are changes Can and

Rod Rushing

now debt operational around of would capable go the and at that things where making is I premise looking think And we're space you're numbers, that is opportunities, here now talked we're inside or and convert, as that's, know, this something But the about is are look original the going for that in you and debt that more in. to we all we're take that transformational know, be as on We're companies, And consolidation segment want opportunities things that back get you who by opportunity the today, things first right more the here's we're and you then we're is as very focused progress; the well. that call well. think, there's earnings we'll tangents, you're have other we we get think, broadly them at great think adjacencies, there's the get always spaces both you to I get to there's opportunity can making use in. you think order. we operationally and just There broad there talked operate, we operations. And capital explore I in still about think where And are commercials that'll to in a starting spot. I be, more keenly in there be at. go those acquire our and we're pipeline, if thesis I progress to act we is, there's

think I capital think we're that a that it be probably obviously open and I Now technologies always And allocation. so April that we'll at, something looking bit leave Day. about our I But give on and we'll whatnot, that's talk views there. there on to Investor XX, will some

producing and cash, continue Joel, right, conversion. right, this produce about down it's as we and, we cash again, all You're to driving income as the income and our said,

exit the So and that's And guidance our Day. call we'll that Investor here the on focus strategy we some ‘XX. allocation capital as in provide

Joel Tiss

the last a Okay, about you profitable maybe can bit then segment the great. or average Thank there great. a price bit two is And less backlog And be just talk help little bit together, be the I any you. little would one, little pricing blew power would or also, and more a cost? than Spartan

Mark Skonieczny

focus cost price we a backlog a The well that's one and integration a supplier, the then working being about costs Spartan through realizing you our so OEM through talks from disciplines Rod and our are what brands and still as there We're obviously to intercompany challenges through. that working that, with the working still visibility and to we're we're backlog and still on commercial making gets as that through we're obviously, providing little know with the as chassis and right sure how own our price.

through adds some on or to it's we still fully cost of XX value well continue make makes sure visibility, as in working supply sure anticipated that we were five months. place. systems give factors those understanding important, backlog So improve We It's chain. to downs, in average our customer inflationary but again, we that we're things with the with nine very business through have or the whole what the and don't obviously away quoting chain

working still on equation. are able to deliver a radar So But we we're positive definitely it's cost systematically. price that that through our

Joel Tiss

your I you. Okay, appreciate time. great. Thank

Operator

floor over would like to Rushing comments. I the Rod to turn for closing

Rod Rushing

thank well, you. Okay,

obviously, we're that progress we So the way appreciate I'm they've we again, to I lot we're look which in today very them forward to discussion around for a and we think we XX, as thankful conversation of building. it, is the change one, I Again, a embraced forward pleased be will put little please bit very just momentum is. have team April and that note what closing, and say work the making. more the on I'd the think the questions think I but opportunity do, with well,

So And today. with that, thank call. the joining end again, for we'll you

Operator

teleconference. This concludes today's

you at lines your time, your participation. disconnect and may for thank You this

REV (REVG) 10 Mar 212021 Q1 Earnings call transcript