Q1 2020 Earnings Call
Thursday Thursday
Good morning, and welcome to Spartan Motors first quarter 2020 conference call and webcast. All participants will be in a listen-only mode until the question-and-answer session of the conference call. This call is being recorded at the request of Spartan Motors. If anyone has any objections, you may disconnect at this time. I would now like to introduce jurors group Treasurer and director of investor relations for Spartan Motors Mister for grabs. You may proceed. Thank you Brian. Good morning everyone and welcome to spark Motors first quarter of 2020 earnings call off of Jersey grabs and joining me in the call today are Darryl Adams our president and chief executive officer and John douillard our Chief Financial Officer. Today's call. We've included a presentation which will be filed with the SEC and is also available on our website at spark motors.com. You may download the deck from the investor relations section of the website to follow along with our presentation during the call.
Before we start please turn the slide two of the presentation for our Safe Harbor statement. You should be aware that certain statements made during today's conference call which may include Management's current Outlook Viewpoint prediction a projection regarding Spartan Motors and its operations may be considered forward-looking statements under the private Securities litigation Reform Act of 1995 and caution you that as with any predict projection, there are a number of factors that could cause actual results to differ materially from projections all known risks that management believes could materially affect the results are tied in our forms 10-K and 10-q filed with the SEC.
However, there may be other risks that we cannot anticipate.
And the call today, we will provide a covid-19 business update first quarter highlights and a summary of our growth strategy before moving on to a more detailed review of the first quarter results and our guidance update wage, which will then be followed by a Q&A session. I would like to remind everyone that with the divestiture of the emergency response segment on February 1st, 2012, the revenues and expenses associated with our group as well as the assets and liabilities have been reclassified as discontinued operations for all periods presented with this classification of the Year segments to discontinued operation. The results discussed today will refer to continuing operations unless otherwise noted
At this time. Please return the call over to Darryl. Which begins on flight 3
Thank you, Jose. Good morning, everyone. Thank you for joining us to discuss your first quarter 2020 results.
Please turn to slide three.
The extent of the virus is unprecedented on our personal lives our businesses and our economies are being impacted by events beyond our control. Our dealership team is entrenched foil-lined in controlling what we can and we focus on the unique challenges presented by this pandemic.
So we didn't.
In the feel the effects of the pandemic until the end of the quarter begins. We began mobilizing the covid-19 task force that is in up and running since early March.
We have a meeting daily with the understanding that our highest priority Remains the safety health and well-being of our employees their families and our communities.
We have enacted centralized protocols for responding to operational issues as they develop and we establish specialized sub team to manage proactive and responsive actions across our operations as we engage with our facilities on a daily basis.
To ensure the safety of our Associates as well as to comply with various government restrictions for shelter-in-place or safer at home executive orders you the end of the quarter we temporarily suspended operations at South of our plan since that time. We have adjusted plant operations in response to government mandates and prevailing demand Trends within our markets.
Restore facilities that are operating we are taking aggressive actions to safeguard employees.
We are committed to meeting or exceeding the CDC and state and local Health Department guidelines across all campuses. We began by developing and implementing covid-19 standard operation guidelines that each of our plans. We measure each Associates temperature upon entering the plan provide personal protective equipment to reduce the potential of infection off masks gloves and we are practicing social distancing protocols brought our plants and offices. We are conducting heightened hygiene and cleaning protocols to ensure a healthy work environment where workers that may work remotely. We have implemented procedures and Technology to allow them to work from home paying particular attention to it security protocols.
What are the cyber security and infrastructure Security Agency cisa guidelines, the majority of Spartans products are considered essential. This is all of us to continue to reproduce vehicles for our customers in dealers. These vehicles are used in critical critical applications, including shipping and delivery services infrastructure maintenance and for federal state and local governments.
For example, we recently built a vehicle for ideal. He's who's in customer was equipped system. This vehicle was sent directly to the pandemic epicenter in New York and is being used to sterilize used in sterilization efforts to help fight against covid-19 ten Democrats. We are also working with a limited linen company regarding their covid-19 Facility Cleaning initiative that is of high demand as a result of the pandemic.
In this challenging environment you recognize that we needed to move quickly to reduce costs and preserve cash across the organization.
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Since included implementing temporary furloughs for both salary and hourly employees at select locations instituted a company-wide hiring freeze eliminating discretionary operating expenses.
Kathleen or defer a non-critical capital expenditures and deferring wage increases and reducing executive and board compensation additionally off staying close to our customers to understand their needs and expected orders for the second half of the year and lastly to ensure continuity of Supply. We began working proactively with our off days to understand the constraints and Chassis availability as it relates to our production schedule.
Please turn to slide for and I'll recap our operations by segment and product line.
Give me the essential nature of our business headed into April. We were operating at approx 40% of our facilities with employee safety hazard guiding principle. We continue to order demand and Supply base made adjustments to our production levels on a plant by plant basis which impacted our April operation since then we continue to ramp up production and are currently operating at approximately eighty percent of our facilities at full or modified production level, which includes our three largest operations and Bristol, Indiana Carson, California. I'm in Charlotte, Michigan. We expect to be back in full production by the end of the month.
cuz most of our vehicles production is
predicted on a availability of chassis from our OEM and component suppliers.
Well, we are monitoring the situation closely. We are encouraged to hear that production and most OEM manufacturers will begin in the coming weeks.
The man remains strong and the number of applications and we see it accelerating in some cases particularly in parcel and food and beverage as consumers and retailers are being impacted by the stay-at-home orders. In fact, many of our customers experiencing demand levels similar to the holiday peak season.
Even among essential businesses like Grocery and home improvement stores. There was a strong Trend toward ordering online. We believe as do our customers some of these short-term behaviors off consumers have adopted will continue and in some cases may become permanent.
If you have a vehicle, sorry, the few of our other locations are projected to be flat or down primarily impacted by dealer shutdowns due to the stay-at-home orders. We do see this as only temporary life expect a modest Rebound in the second half of the year and while our motorhome backlog at the end of the quarter was up year-over-year. It does not reflect what we are currently seeing in the market due to the the Democratic we have seen orders beginning to moderate as our OEM customers evaluate demand and inventories based on when retailer started when retail dealers began operations off as such we do expect continued softness in the second half of the year.
based on us getting back to normal production Levels by the end of May coupled with
Are strong backlog position we feel we are in a good position to respond quickly to customer Demand with that. Let me take a few moments to summarize our first quarter results on Slide Five.
We saw strong start to the year and we've our results demonstrated the magnitude of our business transformation strategy, which is centered around high margin products offering off within our core markets and growing market share with our expanding Geographic footprint revenues from continuing operations for the quarter increased 3% to 177 million up from 172 million a year ago. Although revenues increased thirty seven point four million or 26.8% excluding the 32.7 months of pass-through Avenues been a one-time us struck by the order in the prior-year.
FAS which now represents 75% of our total sales as a result of the ER divestiture. We're driven by increased Demand on delivery vehicles across all vehicle classes as a result posted sales of 136 million which were up 11% from the prior-year conversely SC sales were down 20% off any resulting from decreased luxury Motorcoach sales, which was partially offset by sales and the Royal Truck Body acquisition looking to profitability for the first quarter income. Sorry Faith income from continuing operations increased one hundred and 43% to 12 million and EPS from continuing operations increased 154,000 went to thirty-three cents per share up from 13 in the same period last year
There's these results included a two point six million or $0.08 per share income tax gain resulting from recognizing a loss carry-back relating to the investor a VR and I'm under the newly enacted cares act. Let's turn to slide six now provide an overview of our growth strategy.
FAS strong command in vehicle classes 1 through 7 in the first quarter as we said on our fourth quarter and full-year 2019 earnings call. There is a trend toward consumer spending more online which in turn creates higher demand for delivery vehicles across our entire product portfolio.
We've been talking about the long-term trends toward e-commerce and we believe some of the short-term behaviors consumers have adopted in relation to the pandemic will continue after the worst is over and some cake is may become permanent. All of these recent shifts have been a boom to the online retailers both large and small driving increased demand for the enhanced Liberty Tap that our vehicles provide.
With our expanded Coast to Coast flexible manufacturing capabilities, which effectively cover Approximately 80% of the total US population. We can better accommodate the growing demand for a vehicle both now and in the future, I would now like to welcome our new CFO John Doe yard to his first quarterly conference call. I know for you personally John timing issue with your family still in Seattle area, but I want you to know how pleased we already have you on board with that. I'd like to turn the call over to John to discuss Partners Financial results for the first quarter off in more detail as well as provide an update on our 2020 Outlook beginning on slide seven.
Thank you, Darryl and hello, everyone.
Despite the difficult and challenging environment. We are operating in I am excited to be on board and part of this team through my first 60 days the strength of the team the businesses commitment to the customer and the long-term prospects had become very apparent. I look forward to partnering on this next stage of growth here at Spartan and having said that I also look forward to the time when I can meet all of you in person, which is hopefully in the near future.
Please turn to five eight and I'll provide an overview of our financial results for the first quarter as Jared mentioned the results. We will be discussing reflect continuing operations as the ER business has been long discontinued operations for all the periods presented our bottom-line results from continuing operations for the first quarter improved significantly over 2019 for the quarter adjusted ebitda from continuing operations more than doubled from 8.4 million to 18.4 million while as a percentage of sales adjusted ebitda from continuing operations increased five hundred fifty basis points to 10.54% compared to 4.9% of sales in the same period last year
These increases can be attributed to sales volume favorable product mix in Royal Truck Body, which offset lower luxury Motorcoach chassis volume.
Adjusted net income from continuing operations grew 115% to 11.4 million up from 5.3 million, which reflects favourable product mix lower material and component costs for Life any improvements the impact of the pass-through revenues on the USPS order in the prior-year as well as the Royal acquisition adjusted EPS from continuing operations. Also more than doubled to $0.30 per share compared to Fifteen cents per share at this time last year.
Next we'll jump into results by operating segments. Let's begin with fleet vehicles and services segment on slide 9.
FPS generated total revenues of 135.7 million which was up 10.6% compared to a hundred twenty two point six million in the first quarter of 2019 as a reminder first quarter 2019 FBS revenues included 32.7 million of USPS pass through Revenue. So excluding the impact of that Revenue fds sales year-over-year increase forty six million or 51% FBS adjusted ebitda more than tripled to 21.7 million from 7 million a year ago due to a duty sales volume improved product mix lower material and component, and the impact of the pass-through Revenue in the prior-year.
Adjusted ebitda margin increased 10.3 percentage points to 16% of sales from 5.7% of sales last year FES backlog totaled $3,187 million or 162% compared to $150 million at the end of the first quarter 2019, excluding the USPS Truck Body order off, please turn the slight 10 for the specialty chassis and vehicle segment overview.
STV Revenue decreased 10.4 million to 41.3 million which was primarily due to a seventeen point seven million decrease in luxury Motorcoach chassis sales along with lower contract manufacturing volume am upset by revenues from the Royal Truck Body acquisition with the lower sales at Sea be adjusted ebitda fell to 3.7 million or 9% of sales compared to four point nine million or 9.6% of sales in the same period last year SUV backlog is up 46% $42 million compared to twenty nine million at the end of the first quarter of 2019 primarily due to the Royal acquisition.
please turn to the
And guidance update on flight eleven.
Zero touchdown as a result of covid-19. We have taken a number of steps to enhance our liquidity including right-sizing our cost structure where possible to maximize our finance Financial flexibility as we work through the uncertainties relating to the covid-19 pandemic. We have been working closely with our banks to ensure cash availability at the end of the quarter. We took a conservative position on our cash balance by drawing down on our existing Craigslist. Ultimately, we ended q1 with forty 1 million dollars of cash on hand, which is above our normal historical operating levels. We will continue to evaluate evaluate this cash position as we gain better visibility to the covid-19 impact that said, we did pay down fourteen million of debt in the quarter resulting in a current leverage ratio of 1.1 times adjusted ebitda.
The cash on hand coupled with seventy-five million of availability on our existing credit line provides us with sufficient liquidity to fund our working capital needs.
Turning to guidance while we are very pleased by her first quarter results and remain confident in the long-term prospects of our core markets. We do need to acknowledge the severity of the market conditions. We are operating in today Monday. We do expect our second-quarter results to be impacted by the headlines related to the covid-19 pandemic. We currently anticipate returning to normal production Levels by the end of May and expect to deliver solid growth for the balance of the year when excluding the USPS pass for revenue from 2019.
We acted quickly to mitigate the financial impacts of lower production in the near-term and we are working diligently to maximize our operations on a go-forward basis despite these plans and all our efforts to date palm production at any of our facilities may be further impacted by potential disruptions in our supply chain or future government Market or company actions in response to the covid-19 outbreak that may be our control.
What does elevated level of uncertainty including the unknown magnitude and duration of the impact? We are withdrawing our guidance for the full year twenty-twenty. We currently plan to provide an updated Outlook was a greater Clarity regarding the implications of covid-19 on our business now. I'll turn the call back to Darrell for closing remarks.
Thank you, John. Please turn to slide 12 and closing a strong first-quarter results are a major indicator that our business transformation efforts and strategy are working. We did Revenue growth significant increase of the net income EPS adjusted ebitda and margin we are monitoring the Kobe situation closely and will continue to Swift decisions to protect our employees or business and long-term shareholder value our enhanced cash and liquidity position access to funding and expected cash flows from operations team will support us through the short-term headwinds of the pandemic because of the actions we are taking now we believe will be we will be a stronger leaner company when we come out of this month and half the speed. Sorry will have the speed and flexibility to generate long-term growth and profitability. Additionally you continue to have a watchful eye on the m&a front and plan to pursue age.
opportunities as
They present themselves in life of this Market finally want to do also take a moment to thank all of our employees the place and its control of manufacturing and delivering. The vehicles are clubs need and expect.
We thank them for their commitment and tireless work ethic as we work together as a unified team to get through this difficult condition with that operator. We are now ready for that portion of the call.
We will now begin the question-and-answer session. Ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the Key Bank withdraw your to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.
Our first question will come from Steve dire with craig-hallum, please go ahead.
You guys and nice execution here in a tough time because it's it's you know, as it relates to demand that clearly doesn't seem to be the issue. But can you kind of suck maybe a little bit more color on on what you're seeing? Are you seeing new Industries coming to you? I know you were starting to get you know, some some food and beverage traction with with the reefer products and so forth, but she continued to get orders or do you sort of feel like you have what you have and everybody else is is sort of unlocked down right now.
Good question, you know, I think as you mentioned over the last, you know eighteen months or so, we've been focused on finding our a refrigeration and grocery delivery and we're seeing you know, some opportunities in that space as well. As you know, the parcel space with our typical last month delivery customers, you know, this is a very interesting time and and I think we all are learning a whole lot more on how to order online and off, you know, the the hard part see that we can't you know, I don't think anybody understands is when are we going to be back to 100% of what we would say with normal right back in January or February. I think that's going to take some time and I think that time is going to continue to drive some growth in in a lot of our segments that we operate in. Yep.
Actually little concerned about you know, the the laundry and linen linen and laundry just because offices are closed but we're seeing right in hindsight that came with the increased cleaning and everything going on that some of those guys are giving us some calls to to get some new orders, you know, even with our backlog through, you know, almost end of the year. We're we're still, you know, pumping out trucks in in trying to increase capacity.
Got it. So I guess you know obviously Supply and production is is the bottleneck right now. I think you had said right now 80% of your plants are at least somewhat operational. Can you just sort of helped us I guess maybe for a modeling perspective if for no other reason to to help and think about you know out of a hundred percent, you know all in the ones that are off of operation on the ones that aren't sort of what percentage of capacity maybe you're operating on right now. Yeah, so when we went into this with the tax office team, you know looking at it as a segment level was not granular enough. So we broke it down into what we would call a 20 different locations and I'm getting all the way down to what is FBS aftermarket parts doing. What is SCV aftermarket parts we brought
By each plant location. So at the end of the day we had approximately 20 income streams. We were looking at the managing those and I did mention in the in the script that the big plan the big three in our big three, I guess. Did you want to call that? I'm sure Bristol Carson and Charlotte are all off running, you know, we didn't we didn't run those dry on purpose cuz it's hard to restart but the the Kansas City and Charleston and in Mexico shipped through Thursday right now are not running because the oems aren't running and not not building chassis, you know, the Ram ProMaster the transit in the Sprinter aren't off. The factories aren't pumping those out. So those three are down so we just looked at it not so much on a capacity but on out of the out of the 20 if I didn't lot 80% will be rushing.
That's changing and it's it's fluid. I just saw something this morning that the kind of get Mexico open by the middle of this month, which would be helpful. Cuz we've heard it's going to be, you know later in the month so long it's flexible and and fluid but the plants that are not up and running would be the smaller ones that would be shipped through specifically, Charleston, South Carolina in transit home.
So those are primarily up, you know plants I guess is is the best way to think about it. Those are some of the lower Revenue but higher-margin plants generally speaking, you know, it probably lower revenue and obviously the margins vary based on how much content we put into it and and the amount of money out of it, but you can say that in general
Okay, one more for me and then I'll I'll jump back in the queue as it relates to your supply chain. I mean, is it primarily chassis that you're waiting on other song Once once the big three so to speak get up and and and running again. I mean do you expect Jesse's fairly immediately as there a long queue and are there any other components that could sort of sneak up and and bite you outside of that? Thanks. Yeah. You're welcome. Thank you. Probably going back and some history back to 2018 with the Tariff activity. But we this is a little bit different, you know, China's back up and running. We're you know, Mexico should be back up and running by the end of the month. We do see have good visibility. For instance the chassis we use for walk-in Vans. We have very good visibility into the number of birth.
It's on the ground and where they're located.
So I think we can see that through the middle of June approximately is every channel. Yep. Yeah, so as long as they get up and running here in the in the next couple of weeks, we think it may take them a week to get us some chassis and get running. But again, I think they're going to be probably at a a percentage of output at their locations as well. So, that's why you know them in certain be here that we we don't know how it's going to play out, but we are obviously staying close to it great color. Thanks guys and good luck. Thank you.
Our next question will come from Mike chilinski with our GM, please. Go ahead.
Hey guys, good morning morning Mike. So I want to get a sense of of the covid-19 pass also in a little bit more detail. I guess I'm trying to figure out if if they weren't safety, you know questions and some some chassis supply issues the on the on the demand side that really hasn't changed for you if that's kind of fair to say or a Mac customers is just aren't open at this time. And they are in placing any order is when they when they probably you know, normally would I'm trying to figure out whether the entire impact fee was on the cost side and the demand side this point.
So I'll take the demand side. And so what what was the I'm going to try to split it for you Mike as I mentioned Ed and Steve was asking we have good visibility into the chassis that we need for a walk in band. We can see those through. You know, like I said the middle of June as long as they're back up and running don't see a problem and and getting that's predicated on the Ford for example long as they get their engine plants up and running and they're getting their component parts getting into Detroit chassis will get them where we're seeing. Some of the the impact is on the retail if you will offer dealer side, right? Cuz a lot of the automotive dealers are closed and they're just starting to reopen, you know around here and in Michigan They're All Dead.
And they can do you know touchless transactions delivering cars. So they're trying to figure out how to to do that and we we looked at it as a positive if they're doing it for Consumer. They're going to be doing it for the the retail space as well on you know, the the larger trucks the 350s 450s that we would get or the you know, the GM trucks as well. So soon as those dealers open and the plants run they'll going to fill that so there is some pipeline cuz we didn't run again all of Carson dry off. So there's going to be you know, there's no bubble. We didn't want to have a bubble going into this. So we managed it very close so that once they start we can start almost, you know within a week and we gave you a season and we can produce from there.
Okay. I also want
Upon walking business. I know there aren't that many countries in this business. I don't know how the other folks are doing what I'm curious if I'm captured any, you know new customers because the competition just isn't isn't isn't producing at this at this time.
Yeah, I'm I'll tell you we have some increased opportunities here recently from different customers with some of that. I'll say is from our strategy right on different customers. We wanted to go after and I also say some of it may have been driven by covet and and uh, they came to us. So it's it's a mix I would say it's more of the hard work of the starting team trying to talk to get into other locations, but I especially like I mentioned earlier in to the grocery delivery and refrigerated area.
All right. That's why I asked about the margins to those are very impressive 15% And that's with the impact. I'm sure at the end of the quarter from covid-19. So probably some wage higher cost there. I'm kind of curious. It's been three straight quarters where you're in there kind of mid-teens here at margins. Are we are you getting into a pattern of a new normal here or other individual contracts that are I'm pulling that up where that might not last forever.
Yeah, this is John. I would say a couple of things. We didn't see a big cost impact at the end of March, so it wouldn't wouldn't expect to see.
I wouldn't you know, we were shut down I think for for maybe the the last week of the month, so I wouldn't expect I would expect to see it to be a little bit worse from a productivity perspective as we get into Q2 package deal with social distancing and and those types of things but I think you know, it's been very favorable margin story in fps, and I think part of that is really the volume, you know, we've been able to live off and passivity and so to the extent that that the volume continues I think we have opportunity. We always have a a mix of contracts that can change at any point. We've gotten some productivity out of the aluminum pricing year of year, which you know, if you think about a year ago from q1 coming out of the terrorists, I think that was certainly an issue and I think the other piece that the team is really driven well is daleen focus in the operational improvements from that perspective.
So I don't I don't I wouldn't say that fifteen sixteen percent is is sort of the new normal, but I think we are operating at a at a pretty good level. They're at this point.
All right, maybe just one last one for me to squeeze this one in here an SUV. You know, I'm curious whether your contract manufacturing partner, you know, as soon as you walk they have do you have the ability to kind of recapture any in efficiencies or elevated costs? If the if the truck assemblies are are down substantially do to you know things that are out of your life.
No, we do not like they you know, it's a we review zoos like all of our customers as a partnership and you know, we we talk can we we share throughout the different ups and downs of the industry and you know, this is something way out of their control but you know them they do have products ready to go. And as soon as Michigan opens back up and you know, that's one of the plants that is as we looked at it. We didn't consider that it was critical and essential under the sea is a because we have an inventory on our on our campus in a lot in the other oems were down as well. So those Vehicles we don't they go to dealers in the dealers weren't ready to accept them. So, uh, you know as soon as the dealer is open up and dead.
The state opens back up at that point. We'll be back up and running and and there should not be a supply issue.
Okay. Well, thanks so much for the video help. I appreciate it. Thank you.
Again, if you'd like to ask your question it is * then 1 * then 1 to ask a question.
Our next question will come from Steve with sidoti & Co please go ahead.
Hi, good morning. Thanks for taking my question morning. Just query a curious in terms of you know, the let's say recovery and and in second half from 2 Q. I mean would you say it's more I guess in the short-term. Obviously, is it more based on, you know, kind of the opening up of uh, you know from Kobe but it seems like it's less impacted by kind of the economy currently or or maybe you know going forward. I mean is it just the fact that you know, things are shut down and that's hampering production, but you still have good demand and and you expect that to be the case at least in the short-term and then, you know longer-term, you know, maybe if you could just talk about the impact of you know, maybe lower economic growth You know, despite the fact that maybe you have, you know, improved penetration with e-commerce and things like that. Thank you.
This is John. Maybe I'll take the first part of that. I think I think if you look at you know, the economy opening back up from covid-19.
I'll take the second part of that the the man's side. You know, I think as we mentioned a couple of times in the scrip there there's going to be some of this online ordering is going to if you will stick people are getting used to it. See if I think the the the question that we all have that right is what is going to be the new normal.
You know for instance we didn't talk about it, but we're investigating and have purchased a couple of different systems because we don't think it's sufficient and measure someone's temperature as they walk in each person individually. We're going to looking at some sensing equipment thermal imaging and sensing that will be automatically checked the temperatures they walk through and we'll know if they should not come into the plant or not. Right? So some of this is going to stick as wage New Normal and we think you know as and it could be a little bit of a Resurgence to in some of these states or regions that Colby comes back and we're not sure exactly how the the governor's will react and it may be some more time until things open up, but I also did mention one of our
Laundry and linen companies that are asking for more trucks because the new normal in office is going to be a lot more cleaning a lot more laundry right mats and things so long, you know, we're not sure exactly how much is going to be the new normal, but we see increased demand, you know longer-term on this new normal that we're going to end up with.
Okay. No, that's helpful for the RVs. I mean, it seems like you know, they shut down and you know, I'm kind of open back up here. I mean, what's the sense on on that side of the business? I know you guys are on the higher-end units from what I know. I mean, do you see that that as being less impacted, you know given maybe the, you know people buying those or or you know economically less than today.
yeah it's good question in and I think you know you're even here in Nashville listening to us because we've talked about that in the past where we do believe that the people that are buying the luxury Motorcoach are you know have their wealth they're not buying it. They can buy it they're buying it because they want it to to Lifestyle and you know the the backlog that increased year-over-year wage is because the some of the new models that they're coming out our chassis is is under them so we do have some more market share gains with the market comes back he we should see some more because we are a hundred percent underneath some of the new models coming out by both of the bigger customers Newmar dead
Integra so
So it's just like we mentioned it's a matter of time, but we don't know when and at what speed but you know, we're you know qualitatively we're positioned. Well, we think in the RV space as well as our other markets now without the ER segment.
Okay, and then finally just you know with the sale of the our business, I think at least some of the manufacturing was done with Charlotte it is is that facility was that a quiet was that facility acquired or is that space available for you know maybe manufacturing for either TV or FES? Thanks. Good question. Umm on the in Charlotte. We have a number of buildings along with the sale. Three of the buildings went to the rap group. And those three buildings were mainly two of them were 100% off. No, actually 100% one was 50%
And one was 60% utilized by so that those did go with them but there's still capacity and and two of our plan a one-way running Truck Body in one where we move the motorhome business over to because I think on our last call we had we mentioned we opened a new aftermarket part building in the Bristol area. So we moved out after market parts to free up space in Charlotte for the motorhome.
Okay. Thank you very much. Take my questions. Have a good day to you. You too.
Our next question will come from that horrendous with Roth Capital, please go ahead.
Hope everyone is well and thanks for taking the questions. Welcome back. Thank you. So maybe I'll start out with with a question around slide for so long. I thought it was helpful to you guys kind of broke out, you know your views on sort of some of the fleet Demand by parcel food and beverage utilities et cetera was curious if maybe you could speak to kind of historically what the mix of Revenue has been in the fleet vehicles business between those the sources of demand and then where's the biggest opportunity in terms of or book and making the coming couple of quarters and are there any margin implications Fallout from that?
Yeah.
That we figured someone was going to ask that question. I think we're going to stick with our standard answers. We don't break it out by location off. We try to put this in and and I'm glad you thought it was helpful. This was a big change for us to put it in but we you know, it was actually off John's idea in in we jointly put it back in only is guidance. We wanted to give everyone some help on what it looks like wage and where we see the the growth opportunities as you know in the past when we had three segments, it was a little confusing to understand it. How much was he in a motor home? And so we sell now that we were in the two segments in majority of his Fleet, it was important to identify that on the slide. I don't know if you have anything you wage.
Add John I would just add.
You know historically it's been more weighted towards the buck Advanced side, but we haven't really broken out the details got it. Okay, the that's fair and there's one other one for you. They're all just in terms of the m&a front, you know, you mentioned it briefly in the prepared remarks. But what are you looking at in terms of macro signals or maybe just market-based signals within that vehicles to get more aggressive on the m&a front, you know, you guys have done some stuff last year, but you know going forward it seems like there are potentially some opportunities that will present themselves with valuation multiples. Maybe coming in over the next couple of quarters. But what do you seeing on that front? And is there anything to to kind of report back on so far as a good question? I think you know with everyone working at home and most of the m&a activity down. We received a lot of calls from a number of different Bankers over last month or something.
It's you know, we were involved number of opportunities going into the shutdown. We're still working them and and I do believe to your point. There's going to be some other opportunities. Um, we we've seen a couple I'll say bolt-ons Thursday. We're looking at nothing significant, but it's going to be interesting to to see what happens in over the next quarter or two when people are you know strength and and I think we've talked before we've had the question right? What leverage are we comfortable with? And I think you know the what the position we're in today is only because we were very we watch right we want to make sure that we don't get too over lowered. We work hard to integrate and take out costs where we can to make sure.
That we moved that leverage ratio down and it's you know, it's going to be how we operate going forward and you know, we've seen a lot of it back in a way till 9. We saw an eighteen and I think we're going to see some more shake out of the industry here through this covid-19 Pepa demek and we're ready. Right? We have a good liquidity. The banks are are very in tune to what we're doing in our strategy. So we're just going to continue to watch and and figure out is we still have you know some we have a real good Market if you will in the the larger Fleet customers will walk on the more if you will some of the regional retail space that we haven't whole lot of business in and that's our, you know, some of our strategy going forward log
It's continuing to work on a larger fleets.
But with the 80% of the US population now within 300 Mi of our each of our plants, that's the future strategy is to to build out those Regional locations.
Got it. Very helpful. I'll leave it there. Thanks guys. Thanks, Matt.
This concludes our question-and-answer session would like to turn the conference back over to Juris for any closing remarks.
Thanks everyone for joining we
We look forward to keeping you updated as we move forward in this unchartered Waters here. We are scheduled to do several virtual conferences there over the next month or so, I think Craig G at the end of the month and then UBS the first week of June. So, of course, that would be virtual. So we will keep you updated. Thanks for joining. Have a great day.
The conference has now concluded thank you for attending today's presentation. You may now disconnect.