Earnings call transcript Q2 2023

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

Operator

Greetings, and welcome to the Oshkosh Corporation Fiscal 2023 Second Quarter Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Pat Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Thank you.

begin. may You

Patrick Davidson

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

Please X Slide of refer now that to presentation.

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

our which at We may conference earnings to forward-looking update updated until disclaim any if these next all. not obligation statements, quarterly be call,

and presenters Financial Officer. President John and and President Pfeifer, Executive today Vice Chief include Mike Our Chief Executive Pack, Officer;

you, Please I'll turn to it John. to Slide and X, over turn

John Pfeifer

last morning, everyone. and in for income good year. pleased revenue, and results growth to Oshkosh quarter EPS Pat, you, significant strong compared adjusted report with Thank I'm to another Corporation of operating

chain supply environment. adjusted a notably of over over and by our several the of in quarter actions the we entering higher XXX%, resiliency the past a improving $X.XX. XX% benefit These chain For resulting and our operating grew production constrained were supply quarter, of income result revenue to the as second conditions quarters expectations our than improve results by EPS in second

are double-digit access the the vocational and delivered pleased We also in segments margins operating that both quarter.

our for demand and backlog the supported solid of with We spending, quarter continue billion. metrics Strong by a ongoing and budgets. construction closed municipal products projects and innovations is mega orders book to consolidated robust nonresidential infrastructure healthy $XX

During the AeroTech the business to announced JBT our plans we quarter, acquire from Corporation.

pleased a you are closed tenth team tell future while today, lives mid-July, as we we'll reduce the few highlights carbon transaction In strive as who impact AeroTech We communities and, use more our most sustainable and in to the about annual the importantly, as on that of which emissions commitment sustainability members moments. well to our our our published report talk to we products. a our positive footprint making our a people

our into half result expectations XXXX, longer-term approximately to EPS our full-year performance estimate am second previous higher expectations adjusted to strong our pleased that announce and of I As continued the positive numerous States in growth benefits in second innovations, $X. and a improving quarter of $X, realizing new planning of especially sales our up momentum from cost, delivery which introducing factors, than from and a supply are range of ramping capacity Over segment, for significantly new price the production the vocational by Services and we we of our be acquisitions. products the margins expect further benefits both driven chains, bringing horizon, vehicles next-generation United online, in include in Postal raising

get and segment Slide Please started turn to updates. X, on our we'll

to normalized result supply on-time ground the XX in a Access from Supplier in said, the the quarter improve past delivered level a reach delivery and still improvement many first operational improving than quarter. have conditions of time first throughput. months, some over of our benefits greater Our the the for chain our we representing That performance cover continued quarters XX% more team exceeded of than a XX%. as to to initiatives breakthrough production several

with combined with Mega drove in seasonally the construction projects, equipment expect year-over-year have of Access representing production realization it over remains all $X.X infrastructure quarters. Demand nonresidential quarter healthy, of improved to strong past for quarter. The as billion. margin and ratio innovative stronger products our XX% the expanding a quarter-end and billion, book-to-bill spending, demand. this fleets strong price use throughput, a nearly approximately aged we nearly XX% $X.X in contributing several an metrics, revenue operating are of we the increase cases, continue and to were discussed X:X backlog Orders

of Currently, with approximately of our units and customers for slot to closely in we balance backlog, XXXX XXXX production. our XX% have we are working the

demand strong equipment current the production. demand conversion extends of backlog, foreseeable to our Access continue to healthy to and access our on for beyond has we XXXX for the facility Work visibility Our Tennessee and dynamics well also future. City, expand in Jefferson expect begun XXX,XXX-square-foot

our investing segment. with Future us in meet months, turn capacity $XXX to our purpose-built X, additions ag to to activities The and our and provide modern support previously in and be with segment. next strong entry modernization expansion the market the our equipment Defense I'll into fabrications XX meaningful agricultural and Slide of This capacity. telehandlers. our approximately Pennsylvania to facility demand for million Factory telehandler Defense XX review Shippensburg, for sector weldments Over Please this facility expand we'll produced the

defense line requirements. quarterly year, in were down with prior expected, versus As customer revenues

was follow-on with improvement second richer in the the contract by learned We anticipated we mix. operating aftermarket awards expect year half contract protest Accountability our In June, a and Office. the denied of income Government that JLTV

so are the we under to current through and of will XXXX the do JLTVs contract. continue building still end reminder, a As

for will will revenue solid that base Defense we international customers to record extend These, smaller deliver international into we provide future. build on applications. well including onward, as will Beyond JLTVs FMTV, as to term, course, XXXX, Long of high segment, XXXX contracts programs multiple billion-plus FHTV, mid- margin. many that trailer Stryker well programs $X these at continue as single-digit MCWS specialty operating From we and quantities. well the as expect JLTV in to programs are of continue the

next-generation delivery USPS' our Spartanburg nearing progressing, is and facility completion. The program is vehicle

currently design a track in are XXXX. This testing building program support for We return of to XXXX. are and ramp-up on key half a production growth the defense will certification and second in for profitable vehicles

returned adjusted Slide delivered Access turn to I'm margin remains Much supply exceeded that segment. conditions metrics, output our income segment, growth X the production seeing quarter. of to yet typical operating and so levels, have year-over-year like Let's vocational constrained. chain improved for but the highlight vocational discussion our a XX% are for segment we pleased to revenue not

as we to reminder, enter backlog be have a in for beyond, will in higher XXXX As our pricing enhance year. notably margins fire which delivered next we trucks and

to and manufacturing execute both drive continue service on innovations continuous as to well. refuse We improvement product in vehicles and

we're collection trucks to help increase our electric backlog, in Murphysboro, resulting next ZSL Appleton, very Tennessee Volterra high. Wisconsin over diligently in and working fire continues refuse is to vehicle capacity. Pierce supply, our response us year. We increase believe output McNeilus emissions will fully integrated and elevated X new the outpace for Demand to facility expansions both our Customer

deliveries the deliver We production XXXX. for end and will expect customer start year before to vehicle of evaluation in X units low-rate the

to from next begin ramping up expect there the over several We years.

closed RF airport in AeroTech business, and is Moving our acquisition We vocational of AWPs. with The market today. JBT's news to which serve Slide X. already the vehicles biggest

AeroTech and a airport We the participation welcoming express found equipment Oshkosh is XX% In some airports the also AeroTech's packages. XX% team They the and load an air at approximately overnight in equipment expand look at streams approximately annual airports XX% attractive market. of and total the revenues aviation over opportunities AeroTech with world's on at comprising all forward trusted services capitalizing serve operate world. a support in of leading service business great new revenues this basis. family to U.S. is recurring aftermarket brands the of most industry. travelers our gate strong with on revenue into for the short, we and of They approximately parts of ground provider as products,

key offerings engineered products. technology strength We safety with as of AeroTech's portfolio highly several intelligent active well unites Oshkosh's similar connectivity electrification, and combination share Our across areas: as the ecosystem. innovation and priorities product and autonomy

infrastructure believe is spending from accelerate is traffic numerous is benefit in on to infrastructure. advance increased practices, our best the capitalizing over and to for from can Global poised early leverage next in tailwinds stages R&D of digits is an shared opportunities expected the objectives to expected we investment and transportation, while to high years, several single technology AeroTech secular aging Together, which and legislation scale. we air We with the believe cycle. passenger grow

Jobs of In the fact, government's fund to has Act authorized maintenance. billion and airport been growth approximately Investment and $XX Infrastructure

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

Michael Pack

John. chain the increase of exceeded the turn higher or implemented primarily improved access, conditions of The as Access improved several Consolidated as expectations well an over sales as sales benefit second result at pricing. $XXX were $XXX Slide was quarter. a result supply in output, billion, have to higher past quarters. as as of by million well a the driven million Please or increase XX% prior-year Thanks, over by increase XX% sales X. at for $X.X quarter volume operational we and driven our actions of meaningfully Sales a production the particularly

of prior sales the sales, delivered volume to expectations operating offset by operating realization operating $XXX exceeded a XXX increased access, was our favorable sales in basis particularly versus income significantly prior driven in a favorable stronger point of largely or $XXX very operating result as margin. year income the the at a improvement cost volume by results higher Adjusted and with Access year. price million prior X.X% compensation price dynamics, over incentive higher improvement income and strong costs. part quarter quarter in adjusted Adjusted The mix. XX.X% million higher

we prior in notable per is quarter yet XXXX delivering drive versus share year. result orders are in Adjusted supply which beyond. chain have The margin earnings we expect particularly $X.XX to substantially constrained higher-priced and was given improvement strong begun in facing the the in we not environment, the noteworthy a backlog $X.XX still Vocational's second

Now for turn Slide XXXX. X. to turn let's our to Please outlook

results reiterated but chain our Over conditions. the were limited past demand few supply by quarters, is we have that financial strong,

a meaningfully chain throughput While faster at our XXXX, prior we and shared financial conditions pace, supply could modest production improve we higher performance. assumed that deliver guidance during if improvements

the occurred This what quarter. is exactly second in

million, into second half expect XXXX consolidated prior beyond, substantially and a expectations. second-quarter to and sales than strong momentum year the a for yielding better outlook We basis, the a On earnings of continue and our billion $XXX estimating in from adjusted the $XXX million, of operating approximately our and billion and range XXXX $X.XX sales are to $X.X up respectively. we or respectively, expectations income be prior

our in prior in from share of and We $X.XX. adjusted per from segment estimating of year and of EPS and billion $X.X of XX.X%. level, $X prior will range respectively, $X.X excess estimate adjusted operating range the estimating prior EPS of estimate adjusted are up earnings in we are a our of be to sales sales $X, the of margin At and the margin be and billion XX%, range up operating

Defense, adjusted to and in we range margin billion to operating the X%, and respectively, $X.X be expect Turning of for sales the year.

results of to the We improved the year. expect drive orders half vehicle second in

vocational expect We of in of operating versus expectations $X.X operating X%. billion and adjusted be range and $X.X margin XXXX respectively, of margin the adjusted sales our and and billion approximately sales prior X.XX% will

the accounting and again, reduction includes a deal amortization. including million To of accounting margin AeroTech and income, expectation months, for acquisition. be in amount This and AeroTech result operating of clear, updated to guidance business the purchase an X of sales immaterial because is deal purchase $XXX operating the approximately of amortization initial related the initial

expect will continue and We XXXX. operating to that to in accretive income be AeroTech EPS

of reflect Our the vocational the ramp-up of in the also first year. year Volterra for development half product and half versus eRCV spending the the higher expectations costs program facility new second

rate, Our estimates our remain for generally expenses, expectations. average count corporate and in CapEx prior tax with share line

combination is sales well from of is anticipated higher as expectations. start-up timing estimate free our as at $XXX now and higher investments million, change cash receivables by million. $XXX resulting NGDV-related from down The a year-end, prior the driven flow amount compared to of of Our expectation approximately for prior

quarter, AeroTech result third to sales up modestly the sales. a the consolidated second quarter, Looking as to be versus primarily of expect we

spending mix revolving in share in per be the increased line the is and income lower as facility a the eRCV of a of expense associated lower which interest of than as cash lower earnings credit interest product expect Volterra facility quarter AeroTech a result the Vocational as as with result second and $X.XX, balances on acquisition range well We segment. of to

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

John Pfeifer

chain executing We a and well delivered better-than-expected our production of capacity Vocational We're Access increasing segments. a supply our a and and quarter in throughput. result as strong second

be just Our XX more backlogs to robust, company's continues in are acquisition the we And and significant strong. demand closed years. most than on

Finally, for XXXX XXXX. into and carry we will that raised our significantly momentum strong expectations expect our

This drive and we're company, value. is growth a we very shareholder to time are our build right exciting steps taking for the momentum on enhance this to and confident

let's Okay, started Q&A. with get Pat,

Patrick Davidson

[Operator please period Instructions]. of Operator, question-and-answer the this begin call.

Operator

[Operator Instructions].

first comes of question line with Our the Zakaria Tami from JPMorgan.

Tami Zakaria

results. Excellent

So X questions. I quick have

The first backlog, which one the is continues climb. on to

give color volume number? that backlog versus on price impact you some the what So growth on us can was of

Michael Pack

the quarter? new mean during you Tam, bookings

Tami Zakaria

Correct. Correct. Correct.

Michael Pack

we're the realize expect deliver going we We that have pricing on to still commensurate expect company, And a strong -- realizing would strong again, So solid we expect about to talked to the margins the and that benefit vocational the that XXXX. full of on in not pricing and in look what again, continue I say that. continue rest again, pricing backlog there. segment that the of is lot with forward general, in we is, pricing at to

Tami Zakaria

question say, line? of us Can to, by it. the that cadence line that of the let's accrue remind margin Got savings you and second gross synergy the much $XX on SG&A should And versus XXXX AeroTech. you the how million expect

Michael Pack

years. really really a be over haven't of couple next the steady sort We flow it's -- to going of

I think certainly some impact.

be get $XXX-plus impact we'll initial I is when going million thinking would would look basis the in next accounting. or through synergy purchase and margins year $X.XX EPS we as interest of around $X.XX that year, solid we way to the expect understanding next have beyond step-up going But We'll we'll -- improvement revenue to think EBITDA about embedded to to that what go is have more through be business. expense we about get think AeroTech this I in we expect of a some and about inventory. think there's for double-digit a to income that year, we're benefits. accretion, it's

John Pfeifer

John. Tami, bit just color. I'll add little more Yes. it's a

you're forward. $XX to about got million a that channel-related So any synergies. as will that And will those getting from course, going you said synergies of than acquisition, later. That chain G&A we little comes synergies an we're got get synergies. take types come of that's go supply with in synergies, time we've we We've that make sooner Then just bit longer.

you'll think over X unfold this So I see X or years.

Operator

from comes with question next Our of line Mircea Baird. Dobre the

Mircea Dobre

question on Congrats fire business the quarter. very on a specifically. good Vocational, My is on

supply more And on as of commented a Maybe look you exceeding had trucks. us where supply you how see can that chain specifically, a demand for fire that you XXXX. as How you progressing at bit seeing You little are know context for fire give progressing? this you I is quite challenges. to

John Pfeifer

that, about bit little a Mircea. talk I'll So

fire couple fact are our trucks for due continuing It's that future. in demand things they And to fleets. new due fire the of They're prioritizing trucks technology. because the foreseeable to things. they're prioritizing budgets is primarily a critical that want also and see like fire trucks municipal we their So for healthy the

got that we've lot electric up Volterra are for So things a like trucks. municipalities fire lining our of

that's thing second the fleet. driving aged is it, though, So

there fleet but a fire is a across of the trucks country. while, We've about this for talked little significantly aged

we foreseeable another for strong reason that's So expect to be future. the demand

a improve It in So trucks automation good right drives which strong Murphysboro, X.X doing in going and Wisconsin that doing We're capacity the trucks fire deliver past our in we to that more we're we're to haven't in to Tennessee And some now. really continue had to see a confidence it it do state-of-the-art throughput. in place. doing growth. to and us. we gives for brand-new We've put facilities as doing good us for to of things allow really lot and us Industry faster, that should health where Appleton, the with plant, fire that's well, continue production been backlog a

Mircea Dobre

comment or I you're worth of about the as remaining I'm the Defense. visibility thinking $X revenue. my give programs you to curious you be that or cost existing base sort appreciate some footprint how restructuring mid-single-digit to in adjustments on deliver billion range Then high follow-up to any that single-digit of any your need order in able Understood. on to to that make that to margin revenue.

John Pfeifer

Yes.

in main on So of kind context give of the Defense. going you I'll what's

of from a pressure tactical that are back some and We've take standpoint. I'll bit. about you years vehicles for -- we've known a Department a under So wheeled few Defense this little while a talked budgetary

we've hey, really combat last-mile of like combat adjacencies vehicles for defense vehicles are and said, the we've delivery. as be move not for last-mile may as These So future Well, some business. programs into delivery important government. to big got like the our

Now FMTV, if high of that's and to said, business. to we business, over -- Stryker the we'll that's billion business, going single as current base deliver provide that you go to $X the the MCWS, on all the FHTV, digits mid-

So as the I in We'll prepared of one my XXXX. in to operation already Access current through Defense be remarks, end converted about producing the JLTVs we've plant talked equipment.

be seen company. growing So is. a it exactly remains operation We're the of healthy that what outcome to

the and a know have capacity, let we're to how forward we more time need comes. We business go we'll change when you for as going the

Operator

line with of next question Volkmann Jefferies. comes Our the Steve from

Stephen Volkmann

you XX% is still obviously from John, XX%. I wanted very there's Normal ask -- I deliveries the about It which suppliers. to impressive. mentioned like like think on-time more sounds Access like is margin, something

supply what about that guessing any there's was to would inefficiencies XX%. look in productivity some still that I'm if think normal? like So chain way there Is

Michael Pack

certainly anything and with and that has you John to add can. Steve, I'll start if

good was quarter. bottom a So very line, it

quarter, very, to the of from all, improvement. the the I our I certainly that had benefited of think, first a strong things, a two, quarter. perspective, quarter and throughput couple very mix think saw in we obviously, volume understand we're We in margin a

a mix of delivery bit and of on-time the large did booms in very at including next are a quarters, We in I really helping. historic inventory, done The back same is the still level. is would metrics lot norms, a solid, impact, quite we've lot having little that two carrying not more activities not have a while are it. to while say big

that manufacturing So see back. we're to efficiency starting labor come

great So the I excited continued certainly that for opportunity the quarter great and to continue there's mix, I results think momentum. think

John Pfeifer

I'll Steve, little A A it improvement from, for But bit figure that. We've little Access we benefit supply lot be hours team how chain more work. this, with supply and that up to the gotten tell team. a amounts and improvement. to that, in a more in we in a environment. that a continues effort So I just XX out. ones chain supply open We've operate been to to to now, that of some into quite XX, you efficiency say, add as shout-out bit definitely our first would of go working constrained a think enormous can to really have because from had gone have they'll even constrained of base Access lot efficiently the time of determine the of environment that engineering to

Stephen Volkmann

Great.

Access already. 'XX backlog think And is you said follow-up, of the Okay. I related XX% in in That's I what then thought.

that's in Just already any of expectations that backlog? sort on commentary on part cost price

Michael Pack

overall, back challenges. this We obviously, say in were had sort of we're that cost year for and price I'd Yes. past behind, balance.

in that's balance. So

margin quarter. strong the see You this

continue next focus to that year for just I on and So made, and expect I margin the the the John really in future Access. we margins strong comments

Operator

the from of comes line Citi. question with next Tim Thein Our

Timothy Thein

thought. to that on Just continue

for that low in is was guidance go believe with of for tandem we Access the Does pricing like on most teens, in first others and moderates change revenue Just Access? through quarter, the up I it change revised the as guidance full-year revised -- the expectation year-over-year as year? that year. this the Did kind that

Michael Pack

No.

this I is of volume think quarter some where we a our driver the a to more because bit got extent was where higher. was price

more price. comes from what volume a we were Access. still, I ultimately, from there think, largely pricing yes, more there we've But, with So an we're was implemented perspective,

first even lag So still there is the in quarter. some

this see year. expect So really, I is pricing is think we that for the right now the the what we of balance --

Timothy Thein

Okay.

bit lot go have Okay. lot we talk I a more Mike, vocational But picture moving in 'XX and a and pricing of as And on AeroTech then as pieces maybe just you up. just, about ramps big layer you a the of into -- the guess, backlog. in

A know of headwind. the of have mixers think been less the to these 'XX. as factory a guidepost I full handholding Any margins out in with of the a a early, You of year presumably but give? lot inefficiencies or portfolio. you'd kind that about have location than headwind, just kind it's

Michael Pack

Yes. things margin not We're about yet in as so online. We coming of sort you at, this business. not But year point. to provide business, we you talked look base the the to said, next the strong will. legacy pricing the guidance, the I Vocational expect going the with at profile think have that or you if

So the supply improves, expect volume -- to and we increase. would chain certainly,

talked that's is very some going we excited AeroTech solid to to bring So business you we're great going that EBITDA about business type about. again, be we similar to that that's margins. And last And on expect, be strong dynamics. quarter, the mid-double-digit we what see a then

really a on data in of that's that We some plays view segment. we amortization margin will the next burden year. profile But some have how the into

John Pfeifer

I we've think investments about the made business, this some in Vocational exciting what's really products. of the

You which look rescue the firefighting and electric the airport are fire trucks, vehicles at electrified. Volterra

is This exciting. in the inning You into these strong look to recycling just really at on years It's new refuse growth on there's X products. and IMT's for we're future. And the innovations electric really we're going new drive vehicles, collection products. collection --

Operator

Raso Our of the David with next from question line Evercore. comes

David Raso

including year, first I out after margins, figure to Sorry of trying maybe and just much that, the does X.X% as And the for from [indiscernible] on right, some the to weighing trying in quarter. -- quarter amortization Vocational declined X.X% the But sequentially. just deal. second understand third I'm assuming figure modeling out question the acquisitions why half EPS down to But they're the the it here. as

a in to here quarter, the can assuming what you get then interest And so EPS the first implied indebted, there's expense similar quarter the on we is fourth similar So model there? are the sales. case, again, base all weighing on it fourth think be would and similar and you vocational sales versus But quarter would quarter, supply given the is margins so first right, forth. the better chain down.

So But there's vocational correctly I quarter b, a, can the is companies and year-over-year. the in big their third thing expense lot of rental I a the at guess, have decline there. interest am And when C, CapEx us lot in looking half? Access. with is margins The second you fourth a help then the the the

there, So a I us cadence a help with of apologize... There lot you bit Access. maybe is the us help with fourth quarter little access, could the if better understand maybe

Michael Pack

I'll love to but remember try let if know. I everything, something, -- me I'll forgot

from number our on that. guess, think an the would that the to range, revolver interest of expect $X.XX paydown interest carry I expense, we'll So I year. some borrowings $X.XX on course one, in over about the

what obviously And So closed expect. that's we'd today. essentially

balances. from as bigger are the -- is biggest -- really, that's think X carrying looking cash items But to we've we been items look, bridging interest expense. -- I I QX, the at is that So X think QX conversely, bridging

we're quarter into the to fourth to at that That's not same as well. income interest the also carry level. see going going there's So

that's would say of background I sort the there. So

I Vocational, closed we are picking As going and today. amortization, up we to look think be just we certainly to

So is going and volume. on But know things key depreciation we to that we valuation the have the allocation. to some price the need through we're get amortization that purchase and

know to of We finished than also on or believe that be purchase that's our are typically of hand, bit the a in inventory higher to inventory in expectations. We is levels going goods. are general particularly inventory going previous that you finished a nuance levels step-up accounting have basis

just That margin. temporary basis step-up phenomenon. a sort in plays a that's the of into there's So

We we're segment electrification finally, also our investments said, as said -- really some making, John the and in significant for efforts.

see the we McNeil's ready spending for the new for product on do year effort of back the So development for sequentially facility getting product, the in higher as as both production. well that half eRCV

the really big are pieces. those So moving

volume you strong production production the completely and in have demand days, well terms in as there's we've a the quarter, the environment, quarter. the days then other literally that comes with as that in very that's fewer days the what to fourth this of previous it and fewer talked holidays, drives signaled on In of And and items production number it down this -- about. we've is the calls,

David Raso

an And take to of much argue the did was that in don't the quarter saying, year. in essentially, need we fourth large, fourth companies as don't we way want much But you would to as access are some so and Access ship we comment? rental Because your is backlog quarter. by well look, last orders obviously, of the

to set for just that... So I'm trying level the cadence everybody

Michael Pack

essentially. the between the now, that's produce anything exception on doesn't that in everything right to it. That do facilities purely transit our we're we with have It's with water of shipping stuff

simply really customers. our Vocational revenue, demand So -- By also has with do way, have applies it fewer just cadence With you to Access. all to the fewer the yields to days absorption. to lower nothing delivery and function a fewer less days, production comments There's that It days. it's manufacturing comment production Defense. apply of both or

see there's in our all implications that's quarter. typically and that fourth -- of we just the that typical So

Operator

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

Jerry Revich

talk I'm wondering opportunity if in fire the you just margin about could & emergency.

at backlog, were you folks And we to I'm levels Mike? pre-COVID. outstanding on in high increases just teens. wondering So pre-COVID, are you you that are margins XXXX, have the Or folks the how about thinking with in that getting path back the running that were way mid-teens performance we price of back at

Michael Pack

to -- fire as to the our we levels at to get we'll get get the talked not reason there's to and products And we're need for continues chain margin, trucks, have. don't about why core that back As the -- throughput. supply pricing no we backlog. and We I price higher improve, guess prepandemic look with that we've it,

a So and lot talked impacts. we've -- then the AeroTech about

depreciation EBITDA that again, that as strong that, be over so our very will this will time, so present. on, And our D&A. targets segment. amortization double-digit Analyst But That we've and in those a have confident, said margins is a Day and business again, [indiscernible] solid will we're be

And prospects. excited we're growth about so the

Jerry Revich

great installed base. Super. your you some analytics have And folks with telematics

the operating access what per unit? other And than terms you you to utilization you we for So point us categories. year-over-year? like like North numbers give America used the I'm Can Are tell equipment in wondering at inventories tighter what Or tell if up equipment. the for It seeing and seems can Europe? in a could us look that's you're flat just equipment year-over-year are on context where of data? hours just us

John Pfeifer

Well, metrics the that close is healthy terms attention of utilization very in what very, are metrics. I can tell still it. pay We you to

about we environment. the industry, thing this but you talking industry. under we certainly under one Now a whole JLG, is that last I were I'm year, the at time, may notice think us, constrained were

customers of is customers year, to really doing of they as to were the hands we products a This wanted. job many getting as the into able product. our ship better the customers not products industry as So need

their of really to grow good see continue So because fleets. means bit our because also it a it's you'll to you thing. that of normalization older a good fleets because customers a their but gradual replacement good thing that's and It's would grow to fleets, thing they a see little need start can a happening

versus this in even very customers the you think right ago, market, and hear a the with the talk I from year year still to But about now well. are customers our metrics coming you're And some utilization healthy, starting as I hear fleet think more that. into remarks that

Operator

[Operator Instructions].

Our next the question Nicole with comes DeBlase of Bank. from Deutsche line

Nicole DeBlase

second a what guys Maybe Or embedded have continued embedded that upside quarter kind half? you quarter? was on chain, just supply for second have from source have you seen the like the in of obviously with perspective. I chain of the supply you've volume a reducing? flatlined, constraints you guess, progress this What Like in you

Michael Pack

And we we we've our the down is largely of really this that number it's that to to bearing point, in exited similar our to extent expectation that Nicole, similar production the this volume. quarters At how the comes to it done in we're have previous what guide, days then subsequent quarter.

Nicole DeBlase

seeing it. then Makes what And the you you talk Got price what tailwind you expect is are this of a second of cost, you're you is from in saw just price to -- cost second about that on can in the quarter? tailwind like Okay. the sense. seeing half perspective? the pinnacle the price-cost or Or comparable margin kind year of quarter

Michael Pack

first The really one thing say, price again. of year-over-year just it's all, I favorable, balance in is but it's would to caution, a cost

the behind would year with I -- more full to come most should in still remainder extent Vocational we businesses not the the neutral, fire it's so meaningfully similar that cost say, balance. that were of them similar of get towards our there's year So next with to last into were dynamics exception, year now we see more a pricing that portion of the back the trucks price

Operator

the line Seth Fargo. Wells with of question comes from Weber Our next

Seth Weber

to ask trying margin you ramps then -- half your full-year to second back medium-term I I think. understand wanted kind range, guidance. guess And kind just guide questions. about your of that changed I of single-digit margin. couple of I implies to Defense I'm A The whether guess

going does now include JLTV it away? from Is And Now ramp? just purely of mid- like you're a before? that that digits. to high single the a of moderation seems USPS kind that Is reflection

Michael Pack

Sure.

the just generally help that completion we we do do in expectations of half will produce -- remarks, the positive expect an have prepared First said as estimates year, orders that back or -- we some is of in at our will the expectation all, from perspective, adjustments.

So bit the that's of a improvement.

We also have stronger the mix a year. back aftermarket half of the in

mix So there. and some at there's play orders

That's excluding single I think the just that defense is tactical a to you digits, the what post-JLTV. terms is, in saying that's business, of additive. just just mid- sort it, vehicle not program $X consider or multibillion-dollar a not big of piece really would -- that high core defense isolating we're wheel NGDV the it's But that that's NGDV. obviously, just billion-plus. of

$X should single about XXXX mid- So beyond think high think is to billion-plus you how I that at of digits. and sort

Seth Weber

can is just we Okay. That's on? Access any just in assume, Mike. helpful, China? color you that give you'd strength, to on call out North what's strong, the or regional but trends America, going And then us any as Europe

John Pfeifer

healthy we've mean a I actually pretty seen Sure. growth rate globally.

good I really strength really think seen has customers see been forward. across are of the lot for everywhere are a Europe we strong. one our what's that been work China happening much can't closely of attention surprisingly has We that -- perhaps. maybe really area the Access a little to our really Asia going we But is stress with domestic market. we continued markets and But at strong seen forecasting in pay really, metrics, us, contraction. enough. I haven't and else We've growth. in bit customers

at over look metrics, for aggregate at next at X look construction we So of if just look and it year the nonresidential and year, it this you don't we years.

healthy The a the And at XX all still and are know the all high Momentum is we about it's Act and Access And been the future. projects. passed foreseeable Index level, very CHIPS pointing bills IRA really, ABI are indicators. all equipment It's Those some of is in have to really healthy. positive spanning Dodge still. up above mega other growth these these the markets that the continued that for and

Operator

from question with Steven Fisher the line next of Our comes UBS.

Steven Fisher

are of the around of based talk much reaction messages adding think rest add America? the broadly about up guess what in kind this on and concern was the North the how the to the orders about perhaps too fleet? CapEx fleet. were going industry breadth to some I'm of the some later much rest just is for in I cautious of base you the on can more a bit larger the follow customers business -- I customer access Maybe that in some their to spread that. of Just there's concern the and your too industry of the curious, year quarter maybe the orders

Michael Pack

see What large larger well with we're and is independent as that's as -- demand, very companies. to our continuing rental the strong customers

the even So beyond quarter, a board it's orders Steve. have mix across of quarter. we orders the the I the solid just think But in in

orders visibility booked, through we'll really continue good to year. even back and those requirements the of beyond our We -- have to actually the half what's book

next our demand what very So I for visibility very, is year is solid can say.

John Pfeifer

see Yes. And fleet market. you I'll that. think just don't to I in the too much add

it's think opposite. just I the

I see equipment who for because it's replace condition customers much think demand and the our aged it's have you really that can't that that fleets, in, there's the used the market so reason fleet.

not it. off they're selling So because old of their fleets any need they

even they So haven't barely, maybe, just fleet started started just barely replacement.

too marketplace. much that the there's in think don't fleet I So

Steven Fisher

to some And some Okay. what the is. reaction pricing, will year? reaction in of curious from year. next addressed about starting have guess you margin percentage much some maybe next this earlier but pricing but at your to matter And customers and suggestion to reversing doesn't pricing point, your I obviously if surcharges at last about week comments curious, for a so that come of we're messaging XX%, what's this that just down close your I'm I'm it there's may bigger discounting

John Pfeifer

Yes.

of for in that strong our of you the I'll visibility got this in mean, half booking for products. Access XXXX really now. of we've really never past. tell kind really, right had demand second orders the we're I good first all, So We've

demand So the strong. market is very strong and is very the

fair open, input just specific in make how to very, are point it to make price at elevated. we very make sure a very products. costs always input costs are our and we're our regard is pricing, with customers I that we to look -- with on But always Now want are aggregate, you When still elevated.

haven't deflating. recently and metrics other moderating inflation see You but seen we

seen haven't We deflation.

over costs elevated. on. our price you how or be always that on one have We've Now are relief open good you can pick seen But input product. demand, overall, may customers at but with very one here and fair we'll some got thing thing our here we

Operator

Our next of question comes Steve from with KeyBanc. Barger the line

Robert Barger

should some point this to from as great path talk about your guidance a without year growth far how above into John, where took And multiyear a about from below to thinking or now. a about grow updated Or we level guide? of consensus X XXXX. thinking is Just can numbers, X getting from visibility for lot on flattening and quarters? be out just not you next this, here. ability think out alluded And you but sound right you to you've year's trying high you're gauge at we a this

John Pfeifer

Yes.

mean maintain mention, at knew off today. would And performance as faster a we than with forecasted yes, we we it, always we're quarter see Day this there. knew we happen, this very happen. happening our I'll guidance. that that, look still that's going in we XX pleased we what's surprised had Analyst bit ever what's to happening in little And just why what with very, we We I Steve, is XXXX. quarter, but previously we just achieving thing is this was never always came see the it. not we are reported, So but first It's

see business, drive Access that opportunities the we've just up in just see America, benefits Hinowa postal to starting a to the global with going big to business, in nice demand. got in about provide really business. we from XXXX AeroTech, But still of segment, got we it's and us. really new So next talked momentum lot which of not new vocational for lot products. tailwinds in then North contract demand online which our We We've pick acquisitions improvements to The the comes year. margin a are is

So we for is appropriate these are believe business. our off the guidance all came XX. never We reasons why XXXX

Robert Barger

option? do to to margin RCV? any product of color. get versus great where production you that goes on over electric but just a for run time, think you then traditional mix Volterra, rate how And ICE you compared That's an where Volterra, the electric when for the And Understood. will have not

John Pfeifer

it's depending end different think on market. to going I the be Well,

BEV So for that's been Service Postal ICE because of with the relatively Postal example, public, with example I'll only their versus the units. units give Service XX% an orders, started you

beginning. Now later, a time ICE XX% units right very units, at versus BEV from they're short the

before unit. we've produced So dramatically they've and accelerated even delivered it

stays lot a to our slower. fire average XX be market some fire of extremely will & There's little -- Volterra, the customers years. interested but trucks markets bit close emergency, are the but in fire truck I that a in think

long There's a So interest products. in time. drive will that that lot eRCV also the run a for growth will run that, -- of will our

And for It's kind fast predict a But time. we will these products. tell a electric higher total I put There's unit ownership time market, hard just will our healthy it's fleets on so run of to of really that's an going every margins cost long for customers, price electrify. point. that the to good how there's into you and

Michael Pack

Steve, exciting one thing. other

a the not you if the like think more almost those we actually fire chassis. where in to -- Pierce cases, trucks as entire purpose-built including -- as eRCV, now thinking chassis, of about custom but really of we're we're our participating be buying to I think you lot volume really our need start truck, the ramps going

vein. much and that's similar that that's we in it the opportunity we -- So fire the -- you see profile margin and very historically, on trucks see a view

Robert Barger

my XXXX right? follow-up Understood. that And to $XX, just was is EPS a first the question to range for to $XX confirm

Michael Pack

right. Yes,

Operator

like over you turn now to floor back comments. further questions time. the have Mr. I at to no this closing Davidson, for we would

Patrick Davidson

metrics right. Christine. supply are improve. for chain very pleased today, everybody. strong a with Thank to Thanks, us We're of half our joining XXXX and that first you All and continuing operations

seeing manufacturing operations information. the and and Shippensburg, our for Victoria Before attend, the segment be our and you meet like a interested who in JLG have or to field tour factory reach management call, out trip XX. to Investment end myself, Access to are highlight plans to in with made get to our please Pennsylvania close I'd world-class plans we we'll August up happy yet not professionals on

day. great everybody, a and have Thanks,

Operator

Ladies and does this gentlemen, teleconference. today's conclude

this lines a your time. and have for you Thank participation, may at day. disconnect your You wonderful

Oshkosh (OSK) 1 Aug 232023 Q2 Earnings call transcript