Q1 2022 REV Group Inc Earnings Call
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[music].
Greetings and welcome to the Rev Group, Inc. First quarter 2022 earnings conference call at.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad and please note that this conference is being recorded.
I will now turn the conference over to your host drew cannot VP Investor Relations and corporate development. Thank you you may begin.
Alright, Thanks, John Good morning, and thanks for joining US earlier today, we issued our first quarter fiscal 'twenty to 'twenty.
2022 results a copy of the release is available on our website at investors <unk> Rev Group Dot Com today's call is being webcast and the slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures is available on our website.
Please refer now to slide two of that presentation.
Our remarks and answers will include forward looking statements, which are subject to risks that could cause actual results to differ from those expressed or implied by such forward. Looking statements. These risks include among others matters that we have described in our form 8-K filed with the SEC earlier today and other filings we make with the SEC, we disclaim any.
The obligation to update these forward looking statements, which may not be updated until our next quarterly earnings call. If at all all references on this call to a quarter or a year are to our fiscal quarter for fiscal year, unless otherwise stated joined.
Joining me on the call today are president and CEO rod rushing as well as our CFO Mark <unk>. Please turn to slide three and I'll turn the call over to Rod.
Thank you drew and good morning to everyone joining us on today's call. This morning, I'll provide an overview of the quarter's consolidated performance and then move to commercial operating and financial highlights achieved within the quarter before turning it over to Mark for a detailed segment financials.
During the quarter, we continued to experience external supply chain challenges across our businesses results were impacted by lower starts affecting completions and increase would rework driving inefficiencies. These impacts to our performance stemmed from supply side constraints that began in the third quarter of last year and have continued through the current.
Reporting quarter Chad.
Chassis inventory has improved sequentially, but it's still measurably down on prior year compare.
We've received deliveries against allocations and chassis is later in cycle and at a reduced fill rate. This this created challenges within our production planning and materials processes.
We also experienced an increased positive COVID-19 case rate that grew throughout the quarter exiting.
Exiting fiscal <unk> fiscal 2021, the enterprise had only 12, new positive cases in October the.
The new positive case number grew to $1 58 in the month of December and then to $6 15 in the month of January in total we estimate we lost approximately 45000 total labor hours to Cobra related absenteeism.
As demonstrated by our first quarter consolidated results the impact in our ability to navigate through these external headwinds varies within our segments.
Both our commercial and recreation segments delivered year on year revenue and EBITDA growth, while our fire and emergency segment, which is has a more fragmented supply base and realize more unsold singer single source components experienced a drop in revenue and EBITDA.
Like many other industrials, we continue to work through a difficult environment.
I always expect that we should do better our team continues to work these problems daily and continued to serve our customers.
I am very confident that the work we're doing will deliver increased value when we get back to a more stable operating environment.
First quarter consolidated net sales of $537 million decreased 3% versus $554 million in the first quarter of last year. The decrease was driven by lower sales in fire and emergency segment.
Partially offset by increased within commercial and recreation segments and price realization from our commercial actions that we've implemented over the past 12 months.
<unk> had EBITDA of $18 3 million was down 5 million from 23 million in the prior period.
Yeah.
So solid results in the commercial recreation segments, offset lingering headwinds in the fire and emergency segment. The decrease in <unk> was primarily due to lower volume, resulting in fewer vehicles starts rework and labor inefficiencies. The increase in the commercial segment was driven by higher volumes in school bus and terminal truck sales the growth in recreation segment performance was there.
Result of increased throughput from renegade and Midwest as well as price realization.
Turning to slide four we had several accomplishments within the quarter I would like to highlight.
First in market demand across our portfolio of products continues at record levels, we exited the quarter with a record $3 $4 billion backlog, an increase of 69% versus the prior year, each segment's backlog as a respective record resulting from strong order intake municipal budgets remained healthy backed by tax collection of federal stimulus that.
In many cases has yet to be allocated we believe broadly that the money is still finding its way through the budgetary and approval process.
We continue to work with third parties to connect unallocated federal stimulus dollars to our customers. This.
This has contributed to a book to bill ratio of greater than or greater than one for seven consecutive quarters within the first quarter. We recorded a book to Bill of one four times times positioning us for growth in fiscal 2023.
As our backlog has grown to $3 4 billion. Our purchasing organization has remained focused on expanding our supply base anticipating inflationary pressures over the next 18 months within the quarter, we experienced a greater number of inbound price increase requests. The team has worked diligently to limit these impacts through dual sourcing leveraging offshore resources.
And increasing the number of E auctions.
We have implemented additional forward pricing actions to offset the forward inflation of raw materials components labor and transportation and Additionally, we have worked with our channel partners to reprice portions of our backlog.
Shortly after we closed the first fiscal quarter, our E&C municipal transit business announced the first order for its access battery electric bus. It was an order for six buses by first transit.
A leader in University of mobility solutions for operation at Emory University in Atlanta.
A university recently joined the race to zero, a coalition a coalition of educational institutions devoted to achieving zero carbon emissions.
The Enc access is the first battery electric bus order for the Atlanta campus and the bus will contribute to the goal of creating more sustainable sustainable campus.
We are also excited at this battery electric bus access bus has recently completed Altoona testing. This is a major step entry into fleets into fleets funded by the Federal Transit administration.
And agencies typically secure a large portion of their capital cost of a new bus from FTA funds. The bipartisan infrastructure law passed in November authorizes up to $108 billion in funding for the MTA over the next five years, a significant increase from its fast Act predecessor.
With efforts like the race to zero.
We have provided a great opportunity to enter new markets and grow our market share as the industry transitions to these new powertrains, we are focused on developing industry, leading technologies and features the enc lineup of zero emission buses includes not only this but battery electric platform, but a first generation hydrogen fuel cell platform and a flexible diesel hybrid.
That has allowed to operating green zones.
Within the recreation segment consumer confidence remains high and demand for Rvs continues to be strong in January we completed our most successful RV Super show. This included strong sales of our motorized categories and even though our campers and trailers had less units on display we sold more than any of the shows over the past 10 years.
Our Lance RV business on the what is west coast based and serves the higher end travel trailer and camera markets holding a leading leading market share position in this category.
We are exploring expanding distribution to the eastern and southern markets. However, it has proven logistically challenging and has been difficult to keep pace with the unprecedented demand on the west coast.
To build a lance of success and to grow our recreation segment, we've announced that we are leveraging our Decatur, Indiana campus for added production of Lance can't travel trailers. The expansion of service growth opportunity in terms of geography, fulfilling our existing dealer base and enables us to reach new customers.
Finally at our last at our Investor Day last April we detailed balanced capital allocation philosophy, we've increased our capital budget over the past two years to pursue strategic organic investments I just mentioned an opportunity within the recreation segment that we feel will create shareholder value.
On the M&A front, we have been reviewing opportunities, but valuations are challenging and.
And we intend to remain disciplined.
Within the first quarter, we directed capital allocation efforts to returning cash to our shareholders last year after reinstating, our quarterly cash dividend and reaching our target leverage ratio, we obtained a $150 million share repurchase authorization.
Our goal was not only to offset stock based compensation dilution, but also to be opportunistic.
Within the first quarter, we deployed $24 million to share repurchases and bought back 2 million shares combined with a $3 million paid for a quarterly cash dividend. We have returned a total of $27 million to our shareholders. We are committed to this balanced approach.
We expect will deliver shareholder value.
I will now turn it over to Mark for details on our first quarter financial performance Mark.
Thanks, Rod and good morning, everyone. Please turn to page five of the slide deck as I move to a review of our segment level performance.
Fire and emergency first quarter segment sales were 237 million a decrease of 15% compared to the prior year. The decrease in net sales was primarily result of fewer shipments of fire apparatus and ambulance units, partially offset by price realization of units in the backlog within the fifth.
First fiscal quarter, our production rates experienced a typical seasonal slowdown due to fewer working days for holidays. However, production downtime was compounded by a spike of positive Covid cases throughout the quarter cases rose from 22 positives in November to a peak of 375 in January .
Including required close contact corn teens. The total first quarter impact was nearly 30000 of lost labor hours.
During the second quarter, we are encouraged at the rate of positive cases has dropped significantly and we are currently experienced lower out of plant absenteeism, enabling greater productivity as rod indicated F&I completions have also been impacted by fewer vehicles start that began in the third quarter of last year and carried through.
The first quarter within the ambulance division the number of stock out parts has started to improve in the third and fourth quarters starts and completions were faced with 60 to 70 missing parts per vehicle today that number is nearing 40, and the fire division. The biggest challenges have been related to industry wide shortages of axon.
<unk> wiring harnesses in electronic components, we continue to work with our current supplier base as well as alternate suppliers to improve product availability, where necessary. We are also developing alternative engineered solutions to open other avenues of component supply as an example, one of our high.
Volume wire harness assemblies uses the same connectors. He is heavily in the auto industry, which are in short supply. Our engineering team developed a solution that will allow alternative sourcing of connector is expected to be in production within the fiscal second quarter as we receive increased shipments of these newly source components.
We expect to be better positioned to complete units and accelerate starts.
<unk> segment, adjusted EBITDA was $1 8 million in the first quarter of 2022 compared to $10 2 million in the first quarter 2021, adjusted EBITDA margin of <unk>, 8% decreased 280 basis points versus last year. The decrease was primarily a result of lower volume.
Supply chain disruptions labor inefficiencies and inflationary pressures, partially offset by pricing realization.
Lost volume and sales would typically convert at a 15% decremental, but the recent and efficiencies. We've experienced have resulted in a 20% decremental impact both year on year and sequentially. We expect supply chain challenges to continue in the near term. However, the actions we have taken combined with an improved <unk>.
Apply chain and increased attendance are expected to lessen headwinds in the back half of the year.
The wind down and closure of our <unk> production facility in Pennsylvania, and Virginia remain on track our unadjusted first quarter results include $5 8 million of charges related to these closures $4 4 million for restructuring and restructuring related activities and $1 $4 million of accelerated depreciation on buildings and equipment.
As it reaches its final use date, the transition and ramp of production for <unk> backlog at other facilities being impact by supply chain and labor disruptions I highlighted earlier. This has resulted in slower progress on new start than anticipated. However, we expect the pace to improve sequentially as we progress through the remainder of the year.
Total F&I backlog was a record at $1 7 billion, an increase of 63% year over year. The increase in backlog were the result of strong orders for both fire apparatus and ambulance units as well as price actions taken in the last 12 months.
Fire orders increased 44% versus last year's quarter, while orders for ambulance increased 13% quoted lead times for most categories remain within the industry averages and bidding activity is still elevated. However, we expect conversion of these orders remained challenged in the near term.
<unk> chassis production remains fluid with recent announcements of temporary plant closures shift reductions or elimination of overtime chassis allocation has improved since the third quarter last year. However visibility at the OEM production planning is still challenged we remain focused on improving our operational capabilities to increase throughput.
But and reach industry, leading lead times as the supply chain normalizes. We also expect to benefit on the labor side from implementation of CDC guidelines, which reduce quarantine protocols and allow more of our workers to come to work.
Turning to slide six <unk>.
Commercial segment sales were $98 million, an increase of 17% compared to the prior year period. The increase was primarily related to increased sales of school buses terminal trucks and street sweepers and price realization, partially offset by decreased sales of municipal transit buses sale of school buses increased 30.
9% versus last year's Covid related softness in 83% versus the fourth quarter line rates have started to recover from the suspension of normal production activities due to chassis shortages in the fourth quarter, especially division momentum continued with terminal truck in street sweeper sales, increasing 56% and 36 person.
Respectively Municipal bus sales declined 7% as we near completion of a large municipal order.
Commercial segment adjusted EBITDA of $7 8 million increased 10% versus the prior year. The increase in EBITDA was primarily result of increased shipments of school buses terminal trucks and Street Sweepers commercial segment adjusted EBITDA margin was 8% a decrease of 50 basis points versus last year.
The decrease was primarily the result of unfavorable mix of school buses municipal transit buses and inflationary pressures, partially offset by price realization unfavorable school bus mix was due to shipments against orders taken during the competitive bidding environment related to at home schooling caused by Covid, we expect a normalization.
The profitability of this business under the current chassis allocation and fill rates.
Commercial segment backlog at the end of the first quarter was a record 460 million strong orders for school buses terminal trucks and street sweepers combined with pricing actions were partially offset by fewer orders in municipal transit buses over the trailing 12 months.
The decline was partially a result of border lumpiness that can occur with large municipal orders and timing of awards Airport University bidding has increased and we expect improvement within those markets. After several quarters order softness school bus backlog is up 590% versus the trough in the first quarter last year.
We are receiving increased interest in EV products from several states and Theyre working with Grand specialists to identify funding opportunities from the Epa's Clean School bus plan.
Terminal truck backlog is up 460% versus the prior year and continued ecommerce growth in conquest account wins several large retailers have expressed the need to increase warehousing and fulfillment footprint, while port congestion has focused attention on increasing throughput Street sweeper backlog is up 506.
Percent as utilization remains high and the American rental association forecast, 20% annual growth in rental equipment through 2025.
Turning to slide seven.
Recreation segment sales of $203 million were up 7% versus last year's quarter increased sales versus the prior year were primarily the result of increased class B and class C units shipments class a mix and price realization across all product categories, partially offset by fewer shipments class a in total.
As Rob noted the quarter included record results at the Tampa RV Super show.
Mix of class a motor homes are favorable with increased sales of deal flow units that carry a high average selling price and margin production of gas units continues to be limited by availability of OEM provide the chassis. We incurred we are encouraged by absentee rate improvement at our class a facility, which declined from 15%.
Noted last quarter to 10% in January volumes in the class B and C businesses continue to perform at a high rate despite material shortages that require reworking up to 90% of units. After they come off the line our class B business was able to streamline factory operations and achieve a 10% year over year unit production.
An increase we continue to review all of our manufacturing sites and individual production lines for opportunities to increase throughput.
Recreation segment, adjusted EBITDA was $17 1 million up $2 million versus the prior year adjusted EBITDA margin of eight 4% increased 50 basis points compared to last year. The increase in EBITDA was primarily a result of price realization and a favorable mix of class B C and diesel class they use.
<unk>, partially offset by inflationary pressures and inefficiencies related supply chain disruption labor constraints. Despite the headwinds the class a business continues to improve profitability with a 160 basis point adjusted EBITDA margin improvement versus last year on a small top line decline.
Segment backlog of $1 3 billion increased 70% versus the prior year. This is the seventh consecutive quarterly record and a result of continued strong order intake across all RV categories. We feel the Tampa show results demonstrate the continued excitement and interest in our portfolio of products dealer inventories for our brands.
<unk> made down an average of 60% to 70% versus two years ago. While some have noted increased stocking of total units are Lance travel trailer inventory is down 15% versus January of last year normalizing inventory to pre COVID-19 levels would require another 500 units equaling about six months have added production.
At the current run rate, we feel the opportunity is even greater when we get the stock dealers outside the core western market, where our market share was about one third the size of the western region.
And the class B van market, our Midwest business outgrew the market over the past year and has grown year over year in each quarter since acquisition in 2017. It serves the RV camera market as well as luck vans, both of which have grown in popularity with baby Boehner boomers and millennials the business continues to explore opportunities for volume growth.
And it is among our most aggressive at procuring chassis from third parties to meet its demand.
We are leader in class, a and Super C. Another category that is growing rapidly since we acquired the renegade business December 2016. It serves the second or third time buyer looking at Hyatt and product renegade significantly outperformed the market 2021, resulting in an inventory decline of 59% finally, we continue to.
To execute with within the class a market by producing a near trough level units in peak level margins, we believe our RV portfolio category placement and white space will allow share gains and long term secular growth.
Turning to slide eight.
Net debt as of January 31 was $242 million, including $14 million of cash on hand versus $202 million net debt at the end of fiscal 2021. The increase in net debt includes share repurchases of $24 4 million or 2 million shares at an average price of $12 29.
Trade working capital on January 31 was $388 million compared to $368 million at the end of fiscal 2021. The increase was primarily a result of increased accounts receivable and inventory, partially offset by increased accounts payable and customer advances third party chassis inventory contributed to.
$23 million sequential increase in balance sheet inventory in the quarter. However, our OEM pull inventory, which is not held on our balance sheet was reduced by $6 million. The result is that overall chassis inventory availability increased $16 million from year end of which $8 million was in the recreation segment.
On a year over year basis, our overall third party chassis inventory both on balance sheet and in the OEM pool is down $31 million.
Year to date cash used in operating activities was $3 7 million compared to $1 9 million net cash provided in the prior year period. The decrease was primarily due to the trade working capital outflow due to timing of payments for the chassis inventory build and accounts receivable collections, partially offset by increased customer advances.
We spent a total of $4 5 million of capital expenditures within the quarter.
At quarter end the company maintained ample liquidity with approximately $258 million available under the ABL revolving credit facility. We continue to believe our leverage ratio combined with this liquidity and strong full year cash conversion positions us for value accretive capital deployment and opportunistic share repurchases as I.
Previously noted within the quarter, we purchased 2 million shares of our common stock for $24 4 million. We also declared a quarterly class cash dividend five.
Payable April 15th to shareholders of record on March 31.
Today, we reiterate full year guidance that provided was provided in December we expect sales in the range of $2 three to $2 55 billion and adjusted EBITDA in the range of $125 million to $155 million. We continue to expect net income in the range of $45 to $73 million adjusted net income.
In the range of 64% to $89 million and free cash flow in the range of $58 million to $80 million.
With that operator, I would like to open the call up for questions.
Thank you at this time, we will be conducting a question and answer session. If he would like to ask a question. Please press star one on your tolling keypad, a confirmation tone will indicate that Youre line is in the question queue.
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One moment, please while we poll for questions.
Our first question comes from the line of Jerry Revich with Goldman Sachs. You May proceed with your question.
On behalf of Chad can you go.
Price cost was.
Okay.
And if possible maybe quantify about prevalence.
Im expecting.
I think that could play out over the course of the.
Okay.
I'm sorry could.
Could you repeat the question it was a little muffled, there and I think.
I think the first part of the question was on the price cost dynamic year over year.
That's right.
They can block was.
And how you're expecting that to be.
Over the course of the year.
And are we expecting that to declare.
Yes, so from within the quarter, we remained a positive from a price cost perspective on a consolidated basis.
All of our businesses, obviously are dealing with more increases on the commercial side, where they use more steel and as we've seen the steel increase that we've seen so we've been able to maintain like I quoted in my.
My prepared remarks that we're able to get price realization of our backlog, which did offset within the quarter combined with the purchasing savings that rod had alluded to was able to offset the material inflation that we experienced in Q1 and we continue to see.
The ability to maintain positive price cost as we move forward.
But obviously as Rod noted we've seen a significant amount of increases in that current developments in Ukraine with the with some of the impact that we've had on our commodity costs were obviously monitoring.
Okay.
Our next question comes from the line of Mig <unk> with Baird. You May proceed with your question.
Yes. Thank you.
So I guess, if we're leaving the Ole.
Cron impact to decide.
Kind of curious as to how the quarter played out relative to your expectations.
No you you commented that.
The missing parts.
We're dealing with you went from 60 to 70 now now you're seeing more like 40.
Certainly I understand that chassis availability remains it remains challenging but I'm curious if the quarter is sort of in line with what you were originally expecting or if things are getting either a little bit better or a little bit worse.
Versus how you originally had a frame internally yes.
Yes, Mike This is mark obviously as a rod quoted in the mix on a consolidated basis more.
More or less.
We delivered what we expected, but the mix results in our segments. So we are very happy with the performance we had in commercial in RV and as we noted despite all the challenges that RV had they still were able to deliver the results like that with fire fire and ambulance, obviously being impacted most more towards the back end of the quarter with their ability.
<unk> to complete units and you can see that in our increase in web. So we have a lot of units that we talk about that if you look at our balance sheet still tied up in web that are sitting up offline. So I would say towards the back end of the quarter fire and ambulance was below what we were expecting but we were able to make that up through.
RV as well as commercial execution.
Understood.
You left your guidance unchanged and I understand that we're only one quarter in but the range on your EBITDA guidance is wider than normal.
And you know what I was trying to get at here is.
You, having any degree of comfort whether or not you can be I don't know above the low end closer to the mid point or maybe better than that based on what you're seeing right now.
And related to this.
How should we think about the cadence of the year in terms of EBITDA progression.
Yes, I think we can work through that.
Our modeling discussions make but from a perspective of.
<unk>.
On your first question.
It was the first question again, if you want to repeat that.
<unk>.
The company has got a very wide range of water it.
The range itself. So we still like we pointed out and I think we said this heading into our guidance that we thought Q1, and Q2 would be lumpy and were definitely seeing that and what the current environment. We're in so we're really one more leave the range until we see as Q2 progresses and then normally as we did last year will provide a tie.
A range exiting Q2 based on our chassis availability because as we pointed out we still have very limited visibility. We are seeing an improvement in allocations, but allocations are only as good as when they get them delivered right. So we're giving the allocations where your request, but we are delayed as fire and timing on getting them and ultimately.
Converting them to real chassis coming to our facilities. So that was really our rationale for not tightened the range until we see the impact here of chassis and we still need to see some loosening of the supply base, especially when it comes to things like quoted which I think is an industry phenomenon here around the axle a wire harness availability. So those are.
Things that we said right now we want to see how they play out in Q2, and then we can provide a better view exiting Q2, and I think that's pretty consistent with our messaging that first two quarters will be lumpy here.
Hey, I just want to add on top of that big on that.
As Don this chassis thing I mean, Mark mentioned that we're this is rob by the way we're getting the allocations are good but the challenge we're having.
Production execution standpoint is.
The lead time, we're getting on delivery against those allocations and the fill rates on those allocations remains challenge where you.
Having a little bit longer lead time visibility on the chassis bids. So we can plan materials around that now there's a lot of changes last man up to three weeks before the chassis is supposed to lay on the ground and the fill rates are still affect it. So it is creating.
Inconsistency in our planning process as well because of the nature of the.
The receipt of these chassis that we continue to manage that we're having daily weekly conversations with the Oems I think we're all over it to optimize the best we can there are struggling in a tough environment to I believe that I've talked on myself I know, what they're dealing with but it just makes it more difficult for us to get visibility on the longer cycle on what's going on.
And because everything starts with the chassis and I know you guys are tired of hearing that I'm tired of hearing about it too, but it's just the reality, where we're faced with right now.
Understood and my final question.
I'm looking at the backlog and fire and emergency and its.
Extended to a degree that we.
Havent seen ever before.
Kind of curious.
Our discussions that you have with your customers.
How are they reacting to these extended lead times are we getting to the point that this is starting to impact demand.
And for the orders that you do have where you have to communicate that deliveries are slipping out right because youre not getting your your need of parts and materials.
How are customers, taking that message and how are they dealing with it. Thank you.
Through the first quarter on the order rates have continued to as we talked about the book to Bill and part of that's because of the.
The bill is lower but even on a book to book basis, we're still seeing demand pretty steady.
There is maybe on a longer tail forward look some softening in pipelines a little bit, but when we look at to the point of what customers think our lead times. The feedback we get our lead times are competitive.
He has got extended lead times right now and so it's not really affected our demand to this point.
I think people are still trying to get orders and to get in line and also maybe get ahead of our pricing a bit but.
I don't see any softening in an intakes, although we have seen some of our businesses. When we look out six to nine months. The pipelines are not maybe as robust as they were a year ago.
But that might just be.
That might change.
Those pipelines a lot of times that far out that variability as to what actually happens when you get there.
Great. Thank you.
Oh.
Our next question comes from the line of Jamie Cook with Credit Suisse. You May proceed with your question.
Hi, this is chip.
Jamie Thanks for taking my question.
So I think your.
Competitor commented that dealer inventory.
RV, but they commented that dealer inventory levels are improving and their RV backlog declined sequentially, but I was wondering if you could give some more color on what you're seeing.
Dealer inventory levels.
So I think this is rod I think that broadly and Mark had some comments on this in terms of our our specific inventory levels of our products on these dealer on the dealer lots and they are still down year over year. So we're still in the down position I do think in the travel trailers that inventories probably get more to a stable a historical number.
<unk>.
Something I've talked to a lot of the dealers about the RV show down in Tampa is that they are seeing those inventories get back to a level, but our travel trailer camera business is still below where it was a year ago. So I think in our particular case, because we managed production rates.
Diligently I think that we still have.
Backlog and inventory to build ahead of us, including the demand it fulfill the water already ordered.
Orders that we're delivering all that are already.
<unk>. So I think we still have as Mark said, some time around that but I do think that the travel trailers piece is getting more of.
Our stable spot.
Dealer inventory, but.
But the motorized is still probably got a build piece to it.
Thanks.
We were wondering if you could give any color on what's embedded in your outlook in terms of margins by segment.
Yes, we can follow up then.
And the private calls on the modeling calls if you don't mind.
Okay. Thank you.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue and you May press star two if he would like to remove your question from the queue.
Our next question comes from the line of Courtney Yakov bonus with Morgan Stanley You May proceed with your question.
Hi, This is Gino, Ohio on for coordinated thanks for taking my question.
Within our recreation segment, how has the market share gained a progressed within each class that you all participate in and how should we be thinking about the cadence over the share gains for the next one to three years across classes.
Thanks.
Yes, I would say broadly you'd have to get into the details of each each segment has sub segments in it and I think.
In the land segment.
Higher Ed travel trailers, we've maintained it.
Sure in that space.
In our B and at CES, we continued to gain share those are segments in the size of the P&C segments. Those are kind of a more I'll call. It the higher end segments.
<unk> and <unk>.
We're basically maintain maintain spinal market share and I think over the next period.
Looking forward. We're obviously looking we think theres opportunities for us to grow share and A's B's and C's and also travel tours because thats why we made this move and to leverage the footprint that we had idle indicators to serve customers better and also get or extend economic reach of our plants. Because it was really hard to deliver on the east coast for out of the West Coast.
Patients. So we believe that will yield us share gains as well in that high end travel trailer segment Atlanta serves.
Great. Thank you.
At this time, we have reached the end of the question and answer session and I will now turn the call back over to Rob for any closing remarks.
Yes. Thank you so I think broadly you know.
Quarter much like the prior two quarters had its difficulties, but our team continues to battle through that and serve our customers.
Very proud of the work they are doing because I can promise you. It's it is a difficult set of in a difficult environment, we're working through.
As I mentioned earlier I'm very confident in the direction, we're heading a lot of the things we talked about in the first two calls we had around the changes we had to make this organization. We continue to make progress on that even in spite of the fact, we got a lot of work going on just to deliver products right. Now we're continuing to work the longer term solutions around product platforming and getting at some of the core process.
<unk>, we had this business to improve performance.
And obviously I think we Didnt talk about.
Detail was the work we're doing around the footprint and our fire business thats going to put us in a much better place so I'm very very.
Very optimistic about where we're headed in a mid term to longer term cycle. In this business, we just need to get some stability around the markets. We serve I want to thank thank our team I. Thank our employees for the work they're doing I appreciate with the hard work that they're doing every day and making a difference in serving our customers and lastly, thank you all for joining the call today and look forward to talking to you in roughly 90 days. Thank you.
<unk>.
This concludes today's conference and you May now disconnect. Your lines at this time. Thank you for your participation and have a great day.
Yeah.
Okay.
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