Q4 2023 REV Group Inc Earnings Call
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While demand for units has remained above historic trends for each of these businesses backlog revenue has also benefited from pricing actions put in place over the past two years, we believe improved execution higher selling prices and the reliability of our $3 6 billion <unk> backlog.
While demand for units has remained above historic trends for each of these businesses, backlog revenue has also benefited from pricing actions put in place over the past two years.
We believe improved execution, higher selling prices, and reliability of our $3.6 billion F&E backlog, which is largely municipal tax pay, positions us well for 2024.
Which is largely municipal tax base positions us well for 2024.
fiscal 2023 demonstrated success of pricing actions across the rev portfolio.
Fiscal 2023 demonstrated the success of pricing actions across the portfolio.
As we have noted in past calls, the recreation and commercial segments were the first to enjoy pricing tailwinds within fiscal 2022 and early into fiscal 2023. The recreation segment benefited from increased industry pricing, strong market reception of our new product introductions, and a relatively low 2023 mile a year lot inventory entering year, which allows this segment to manage through a challenging market as we exit 2023.
As we have noted in past calls the recreation and commercial segments were the first to enjoy pricing tailwind within fiscal 2022 and early into fiscal 2023, our recreation segment benefited from increased industry pricing strong market reception of our new product introductions and a relatively low twenties.
23 mile your lot inventory entering the year, which allowed the segment to manage through a challenging market as we exited 2023 and the commercial segment limited backlog for school bus terminal trucks and street sweepers emerging from Covid combined with a sharp production cycle allows businesses to realize.
In the commercial segment, limited backlog for school bus, terminal truck, and street sweepers emerging from COVID, combined with a short production cycle, allows businesses to realize the benefits of previously enacted price increases within 2023.
The benefits of previously enacted price increases within 2023 and.
improved deficiencies and volume leverage also contributed to the strong margin performance in the commercial and recreation segment.
And current deficiencies and volume leverage also contributed to the strong margin performance in the commercial and recreation segments within the fire and emergency segment increased production rates our shipments from the ambulance group, resulting in a current price realization in fiscal 2023, we expect higher group shipments to began experiencing similar.
Within the fire and emergency segment, increased production rates and shipments from the ambulance group results in improved price realization in fiscal 2023. We expect fire group shipments to begin experiencing similar tailwinds in a second half of fiscal 2024.
In the second half of fiscal 2024.
Within the year, we invested in our workforce by implementing gain sharing programs to an expanding group of businesses.
Within the year, we invested in our work force by implementing gain sharing programs to an expanded group of businesses, making targeted pay scale adjustments and adding head count to support increased production rates at many of our plants.
making targeted pay scale adjustments, and adding head counts to support increased production rates at many of our plants.
To support the success of these investments in our people, the human resources and local management teams have worked to improve recruiting and expand training programs designed to more effectively onboard workers while minimizing any pressure.
To support the success of these investments in our people the human resources and local management teams have worked to improve recruiting and expand training program designed to more effectively onboard workers, while minimizing inefficiencies managers across the enterprise and share best practices for developing the required skills and new hires.
Managers across the enterprise have shared best practices for developing the required skills and new heights.
These efforts contributed to a reduction of voluntary turnover in all segments and a 23% reduction in turnover for the Rev Group in total we will continue these training programs in fiscal 2024, and expect them to provide additional benefits to new hires current employees and Rev bottom line through an increased flu.
These efforts contributed to a reduction of voluntary turnover in all segments and a 23% reduction in turnover for the REV group in total. We will continue these training programs in fiscal 2024 and expect them to provide additional benefits to new hires, current employees, and REV bottom line through an increased labor efficiency and higher production rates.
Labor efficiencies and higher production rates.
In fiscal 2023, we improve the conversion of sales to earnings versus 2022 and continue to convert adjusted net income to cash with full year free cash conversion of 116% the third consecutive year of conversion greater than 100%, we demonstrated a disciplined use of capital by paying down debt.
In fiscal 2023, we improved the conversion of sales to earnings versus 2022 and continued to convert adjusted net income to cash with full year free cash conversion of 116%. The third consecutive year of conversion greater than 100%. We demonstrated the discipline of use of capital by paying down debt in the environment of rising interest rates and economic uncertainty.
An environment of rising interest rates and economic uncertainty. The result, with an improved balance sheet, including $81 million of net debt reduction and increased availability on our ABL credit facility.
The result was an improved balance sheet, including $81 million of net debt reduction and increased availability in our ABL credit control.
Exiting the year, we had a net debt to trailing 12 months of justice and even the exaggeration of just 0.8 times while under our targeted range of two to two and a half times.
During the year, we had a net debt to trailing 12 months adjusted EBITDA leverage ratio of just <unk> eight times, while under our targeted range of two to two five times.
Although debt reduction remains a primary use of subcash, we continue to look at organic and inorganic opportunities and review our portfolio of existing businesses to ensure that they meet our long-term financial objectives.
While debt reduction remains a prior primary use of cash we continue to look at organic and inorganic opportunities and we will review our portfolio of existing businesses to ensure that they meet our long term financial objectives.
Now turning to slide four.
Full year consolidated net sales increased $306 million, or 13% versus fiscal 2022. The increase was primarily the result of increased sales within the F&E and commercial segments, partially offset by decreased sales within the recreation sector.
Full year consolidated net sales increased $3 6 million or 13% versus fiscal 2022. The increase was primarily the result of increased sales within the Anthony and commercial segments, partially offset by decreased sales within our recreation segment. The increase in <unk> segment sales was primarily due to increased.
The increase in up any segment sales would primarily do to increase shipments of fire apparatus and ambulance.
Shipments of fire apparatus, and ambulance a favorable mix of ambulance units and price realization, partially offset by an unfavorable mix of fire apparatus. The increase in commercial segment sales primarily as a result of increased production school buses terminal trucks and street sweepers and pricing actions partially.
A favorable mix of ambulance units and price realization partially offset by an unfavorable mix of fire apparatus.
The increase in commercial segment sales are primarily the result of increased production of school buses, terminal trucks, and street sweepers, and pricing act.
partially offset by fear shipments and an unbearable mix of municipal transit bus.
We offset by fewer shipments and unfavorable mix of municipal transit buses with decrease in recreation segment sales was the result of fee oriented shipments and unfavorable mix of gas units that carried a lower selling price and discounting in certain categories, partially offset by price realization.
The decrease in recreation segment sales was the result of fewer unit shipments and unfavorable mix of gas units that carried a lower selling price and discounting certain categories partially offset by price realization.
Full year consolidated adjusted EBITDA increased $52 million or 49% year over year. The increase in adjusted EBITDA was primarily the result of increased contributions from the <unk> and commercial segments, partially offset by lower contribution from our recreation segment the increase in <unk>.
Full year consolidated adjusted EBITDA increased 52 million or 49% year over year. The increase in adjusted EBITDA was primarily the result of increased contributions from the F&E and commercial segments partially offset by lower contribution from the recreation sector.
The increase in ethnic segments EBTA was primarily due to higher unit volume, a favorable mix of ambulance units and price realization, partially offset by an unbearable mix of fire units, lingering inefficiencies related to the relocation of AME branded manufacturing and inflationary pressure.
<unk> EBITDA was primarily due to higher unit volume a favorable mix of ambulance units and price realization, partially offset by an unfavorable mix of buyer units lingering inefficiencies related to the relocation of <unk> branded manufacturing and inflationary pressures pressures the increase in the commercial segment.
The increase in the commercial segment EBITDA was primarily due to increased shipments of school buses, terminal trucks, and street sweepers and...
<unk> EBITDA was primarily due to increased shipments of school buses terminal trucks of three three vertical and price realization, partially offset by an unfavorable mix of municipal transit buses and inflationary pressures. The decrease in recreation segment EBITDA was related to fewer unit shipments and an unfavorable mix of gas unit.
partially offset by an unfavorable mix of municipal transit buses and inflationary pressures.
The decrease in recreation second of EBITDA was related to fewer unit shipments and an unbearable mix of gas units. Increase discounting and inflationary pressures partially offset by carcinous.
Increased discounting and inflationary pressures, partially offset by price realization.
Turning to slide five I'll provide fourth quarter highlights and then move onto detailed segment financials throughout the year, we implemented programs designed to increase throughput and improved manufacturing efficiencies across the organization within the quarter. The benefit from these programs will not significantly demonstrated in the F&B segment as.
Turning to slide five, I'll provide fourth quarter highlights and then move on to detailed segments again.
Throughout the year, we implemented programs designed to increase throughput and improve manufacturing efficiencies across the organization. Within the quarter, the benefits from these programs were most significantly demonstrated in the F&E segment as it delivered four quarter sales that were 34% higher than the prior year. Year over year, the fire group increased net sales by 28% and unit shipments of fire apparatus reached a two and a half year high by increasing 21%.
<unk> delivered fourth quarter sales that were 34% higher than the prior year year over year. The fire group increased net sales by 28% and unit shipments of fire apparatus reached a two and a half year high by increasing 21% ambulance group net sales increased 46% and unit shipments increased 33%.
ambulance group nest sales increased 46 percent and unit shipments increased 33 percent for the prior year remaining at a level near third quarter three-year high.
The prior year remaining at a level near 33rd quarter three year high.
Commercially our businesses, we're actively engaged with our customers dealers and administered groups. The <unk> group demonstrated its commitment to the first responder community by hosting the 27th annual fire truck training conference the largest and most in depth combined training and testing the best in the nation.
commercially our businesses were actively engaged with their customers, dealers and industry groups. The RevFire group demonstrated its commitment to the first responder community by hosting the 27th annual Fire Truck Training Conference, the largest and most in-depth combined training and testing event in the nation.
FTTC provided training to approximately 400 first responders, driver operators, technicians, equipment manufacturer, dealers, and service center representatives through 50 individual courses over four days.
TTC provided training to approximately 401st responders driver operators technicians equipment manufacturers dealers and service side of Representatives through 50 individual courses over four days attendees met with suppliers one of them wanted to address specific troubleshooting.
The Tandese Mattwood Spires, one-on-one, to address specific troubleshooting issues and learn about the latest maintenance tips and techniques.
<unk> and <unk> latest maintenance tips and techniques.
In September , the Rev. ambulance group showcased two highly customized critical care transport ambulance at the EMS World, a leading education event for emergency service providers worldwide. Critical care transport is considered the highest level of patient care for most critically injured or ill patients.
In September the <unk>.
<unk> showcased two highly customized critical care transport ambulance at the EMS World, a leading education events for emergency service providers worldwide critical care transport is considered the highest level of patient care for our most critically injured or adult patients that showcase AE brand.
The showcase AEDB brand ambulance were designed to accommodate the extra equipment required when transporting patients in critical condition are an example of the customization capabilities of revs ambulance brands to fulfill any requirements.
<unk> were designed to accommodate the extra equipment required when transporting patients in critical condition are an example of the customization capabilities, our breath ambulance brand to fulfill any requirement.
Finally, I am pleased to announce that Steve Zimansky has joined the company of Senior Vice President General Counsel Secretary. Steve previously served as the Senior Vice President General Counsel and Secretary of Cooper Tire. Prior to that, he held the same title and after minerals America, and served the General Counsel of Titan Energy Partners.
Finally, I am pleased to announce that Steve Domanski has joined the company as senior Vice President General Counsel and Secretary, Steve previously served as our senior Vice President General Counsel and Secretary at Cooper tire prior to that he held the same title at <unk> minerals Americas and served as general counsel of tightened energy partner.
In addition to legal matters, Steve will sit on the executive leadership team and oversee corporate governance and ESG initiatives across Rev Group companies.
In addition, the legal matters and Steve will sit on the executive leadership team and oversee corporate governance and ESG ESG initiatives across Rev Group Company I look forward to the positive contributions have Steven experience will provide to Rev group sale.
I look forward to the positive contributions that Steven Experian will provide to Rev Group.
It will be working with Paul Robinson, our interim general counsel to transition responsibilities during the first fiscal quarter I would like to thank Paul Robinson for his contributions to the company over the past several months.
He will be working with Paul Robinson, our interim general counsel, to transition responsibilities through the first fiscal quarter. I would like to thank Paul Robinson for his contributions to the company over the past several months.
Please turn to page six of our slide deck as I move to a review of our fourth quarter consolidated financial results.
Please turn to page six of the slide deck as I move to a review of our fourth quarter consolidated financial results.
Net sales of $693 million increased $70 million, or 11% compared to the fourth quarter of the prior year. The increase was driven by higher shipments and sales within the F&E and commercial segments, partially offset by lower sales in the recreation segment.
Net sales of $693 million increased $70 million or 11% compared to the fourth quarter of the prior year. The increase was driven by higher shipments and sales within the F&I and commercial segments, partially offset by lower sales in the recreation segment <unk>.
Commercial segment sales continue to benefit from higher shipments of school buses and price realization our unit shipments of terminal trucks Street Sweepers and municipal transit busses declined sequentially lower recreation sales were primarily a result of lower unit shipments across all categories and unfavorable mix of lower priced gas.
Commercial segment sales continue to benefit from higher shipments of school buses and price realization. Our unit shipments of terminal trucks, street sweepers and municipal transit buses declines sequentially. Lower recreation sales, the primary result of lower unit shipments across all categories. An unfair move makes the lower price gas units and discounting expensive storage units, a cost of additional life, especially production relief forengers to manage a combined reinforced seat not only for nursing ins coke, but its overcast at platforms toários. Un??? for auto gas colonisation, SAW for hats, GP 18 and C ahead of a examination enrollable ofway, through its relevant financial officer pay transformable intervention bis of
Units and discounting in certain categories, particularly partially offset by price realization.
Consolidated adjusted EBITDA of $54 million increased $21 million, or 61%, versus last year, with increased contribution from the fire and emergency and commercial segments, partially offset by lower contribution from the recreation sector.
Consolidated adjusted EBIT da a.
A $54 million increased $21 million or 61% versus last year with increased contribution from our fire <unk> emergency and commercial segments, partially offset by lower contribution from our recreation segment higher contribution from the <unk> segment includes the improved results in both the fire and ambulance groups commercial <unk>.
Higher contribution from the F&E segment includes improved results in both the flyer and ambulance group.
Commercial Seconded E-Bet-D-A benefit is an improved profitability in the school box, especially businesses partially offset by a decline in municipal transit business.
EBITDA benefited from improved profitability in the school bus and specialty businesses, partially offset by a decline in the municipal transit business.
Lower recreation contribution was primarily related to fewer shipments, unfavorable mix, inflationary pressures, and increased discounting partially offset by price winners.
Lower recreation contribution was primarily related to fewer shipments unfavorable mix inflationary pressures and increased discounting.
<unk> offset by price realization increase year over year consolidated net sales conversion and incremental adjusted EBITDA margin of 30%.
Increase zero mere consolidated net sales, converting an incremental adjusted even to a margin of 30%.
Moving to page 7 of the slide deck, we will review our 4th quarter segment results.
Moving to page seven of the slide deck, we will review our fourth quarter segment segment results.
Fire and emergency 4.4 segment sales increase 86 million compared to the prior year. Fire net sales are primarily due to increased shipment of fire apparatus and ambulance units mentioned earlier. A favorable mix of higher content ambulance units and price realization.
Emergency fourth quarter segment sales increased $86 million compared to the prior year higher net sales were primarily due to increased shipments of fire apparatus and ambulance units mentioned earlier, a favorable mix of higher content ambulance units and price realization unit production at our largest fire apparatus plant.
Unit production at our largest fire apparatus plant reached a three year high and board quarter shipments from our chassis center of excellence studying records of the fact tradition in the spring of 2020.
Reached a three year high in fourth quarter shipments from our chassis center of excellent study records since its acquisition in the spring of 2020.
The UAW strike with resolved with the center corner with little impact on ambulance group, which posted another strong quarter unit shipment resulting in a six year high in quarterly net sales.
The AWP strike was resolved within the quarter with little impact on an ambulance group, which posted another strong quarter unit shipments, resulting in a six year high in quarterly net sales.
After the needs, Sragman adjusted the E-MSA with 26.8 million in the 4-quarter 2023, compared to adjusted E-MSA with 1.9 million in the 4-quarter 2020.
<unk> segment, adjusted EBITDA was $26 8 million in the fourth quarter 2023, compared to adjusted EBITDA of $1 9 million in the fourth quarter of 2022. The increase was primarily a result of higher volume favorable ambulance mix and price realization, partially offset by an unfavorable mix of fire apparatus in place.
The increase was primarily a result of higher volume, favorable ambulance mix, and price realization partially offset by an unfavorable mix of fire apparatus and inflationary pressures. After the adjusted EBCA dollar in margin, we divide the year high within the quarter.
Generic pressures after the adjusted EBIT EBITDA dollars and margin reached a five year high within the quarter.
Buyer group profitability improved 600 basis points versus the prior year, and 140 basis points sequentially, reaching a two and a half year high improved.
Fire group profitability improved 600 basis points versus the prior year and 140 basis points sequentially reaching a two and a half year high. Improve profitability was primarily due to higher sales volume, manufacturing efficiencies related to programs put in place throughout the year mentioned earlier, and improved price realization at several plants.
Improved profitability was primarily due to higher sales volume manufacturing efficiencies related to programs put in place throughout the year mentioned earlier and improved price realization that several plants across the fire group a greater number of production slots were utilized through improved daily management focus on starts to drive even higher.
Across the fire group, a greater number of production slots were utilized through improved daily management focused on starts to drive even higher completion.
Their completions, we completed a key milestone at our largest brand campus by realigning production to a more efficient use of factory space and UN build plants now manufacturer dedicated value stream versus running a mixed production line, which created complexity and resulted in inefficiencies in the past.
We completed a key milestone at our largest brand campus by realigning production to a more efficient use of factory space. In Dwinville, plants now manufacture a dedicated value stream versus running a mixed production line, which created complexity and resulted in inefficiencies in the past.
Ambulance group profitability improved 800 basis points compared to last year, resulting in a five year high and adjusted EBIT margin and a six year high and adjusted EBITDA dollars. All ambulance businesses contributed with improved margin performance sequentially, which resulted in the group attaining the full year margin.
Ambulance group profitability improved 800 basis points compared to last year, resulting in a five-year high in adjusted EBITDA margin and a six-year high in adjusted EBITDA dollars. All ambulance businesses contributed with improved margin performance sequentially, which resulted in the group attaining the full year margin performance target provided during the 2021 investor day.
<unk> performance target provided during the 2021 Investor day.
Record FME backlog of $3.6 billion increased 41% year over year, reflecting strong orders and pricing actions. The fill year unit book to bill ratio was 1.5 times the fiscal 2020
<unk> backlog of $3 6 billion increased 41% year over year, reflecting strong orders and pricing actions.
All year unit book to Bill ratio was one five times in fiscal 2023.
Throughput and unit production are expected to increase at a mid single digit rate within fiscal year 2024, while industry demand in inbound orders are expected to begin a normalization back to historic trends in both fire and emergency as a result, we anticipate the book to Bill ratio would be closer to one times in fiscal 2024.
The RIMPWIF and UTIP production are expected increase of the mid-single digit rate within 5th billion year 2024, while industry demand and inbound orders are expected to be getting normalization, back to stark trends and both fire and the hurt.
As a result, we anticipate the book to build ratio to be closer to one time than fiscal 2024. Increased throughput and price realization are expected to result in low double-digit percentage revenue growth in fiscal 2024 versus fiscal 2023. Volume leverage, continued efficiency improvements, and price realization are expected to result in a full year incremental margin in the 35 to 40 percent range on the revenue increase..
Increased throughput at the price realizations are expected to result in low double digit percentage revenue growth in fiscal 2024 versus fiscal 2023 volume leverage continued efficiency improvements and price realizations are expected to result in a full year incremental margin in the 35% to 40% range on the revenue.
Kris.
Turning to slide eight.
Ford quarter commercial segment sales of 140 million was increased of 26% compared to prior year. The increase of primarily related to higher sales of school buses partially offset by lower sales of terminal trucks, three street sweepers and transit buses.
Fourth quarter commercial segment sales of $140 million was an increase of 26% compared to the prior year. The increase was primarily related to higher sales of school buses, partially offset by lower sales of terminal trucks, three sweepers and transit buses.
Four quarter shipments of school buses reach a three year high, improving 16% sequentially against a record backlog entering the quarter.
Fourth quarter shipments of school buses reached a three year high improving 16% sequentially against a record backlog entering the quarter.
Unit sales of terminal truck and street sweepers declined 9% and 30% respectively versus the prior year, and then market demand and specialty group inbound orders continued to soften throughout the year. Municipal transit bus production and completions remain impacted by shortages of components of...
Sales of terminal trucks, and street, sweepers declined, 9% and 30% respectively versus the prior year as end market demand in specialty group inbound orders continued to soften throughout the year.
The transit bus production and completions remain impacted by shortages of components, such as seats and wiring harnesses, which contributed to a 14% decrease in unit shipments compared to last year.
and wiring harnesses which contributed to a 14-53th immunoshipment compared to last year.
Commercial segment adjusted EBITDA of $16 5 million increased $13 2 million versus the prior year. The increase in adjusted EBITDA was primarily a result of increased shipments and favorable mix of school bus units and price realization within the school bus and specialty group businesses, partially offset by <unk> <unk>.
Commercial segment adjusted EBITDA of 16.5 million increased 13.2 million versus prior year. The increase in adjusted EBITDA was primarily a result of increased shipments and favorable mix of school bus units and price realization within the school bus and specialty group businesses.
partially offset by fewer shipments of terminal trucks, street sweepers, and municipal transit bus business. And labor inefficiencies related to supply chain disruption and the competitive bidding environments in the transit buses.
Shipments of terminal trucks Street, sweeper, and municipal transit bus business and labor inefficiencies related to supply chain disruptions and a competitive bidding environment and the transit bus business.
Commercial segment backlog of $427 million decreased 19% versus last year, reflecting increased production against backlog and decreased order for terminal trucks Street sweepers and municipal transit buses lower demand for terminal trucks is expected to continue into the first half of fiscal 2020.
Commercial segment backlog to 427 million. Decrease 19% versus last year, reflecting increased production against backlog and decreased orders for termotrucks, street sweepers, and municipal transit bugs.
Lower demand for terminal trucks is expected to continue in the first half of fiscal 2024 as logistics providers, retailers, distribution centers, and port operators remain cautious while monitoring consumer spending and general economic trends. Lower demand for street sweepers is primarily related to reduced orders from equipment rental companies, which are primary customer...
For as logistics providers retailers distribution centers and port operators remain cautious while monitoring consumer spending in general economic trends lower demand for street sweepers was primarily related to reduced orders from equipment rental companies, which are our primary customer base. We expect the combined result.
We expect the combined results of these specialty group order headwinds to be a decline of approximately $100 million in commercial segment revenue in fiscal 2024.
<unk> of the specialty group order headwinds to be a decline of approximately $100 million and commercial segment revenue in fiscal 2024.
Lower demand for the municipal transit bus business is primarily related to a transition from carbon-based vehicles to low and no-emission solutions.
Lower demand for new municipal transit bus business is primarily related to a transition from carbon based vehicles to low end low emission solutions. The infrastructure upgrades required to operate a low emission fleet has resulted in espalier extending delivery date for buses as they upgrade the depots and other service equipment required to operate.
The infrastructure upgrades required to operate a low-emission fleet has resulted in municipalities extending delivery dates for buses as they upgrade the depots and other service equipment required to operate a converted fleet. As the transition to alternative fuel solutions gets stretched out, the market for incumbent diesel and CNG units has become highly competitive with manufacturers competing to fill production slots.
<unk> converted fleet as the transition to alternative fuel solutions get stretched out the market for incumbent diesel and CMG units have become highly competitive with manufacturers competing to fill production slots.
We plan to manage the impact of lower commercial segment revenue related to these headwinds with cost actions designed to maintain a detrimental margin and a 15% range on anticipated revenue decreases.
We plan to manage the impact of lower commercial segment revenue related to these headwinds with cost actions designed to maintain the decremental margin in the 15% range on anticipated revenue decreases.
Turning to slide nine.
Recreation segment sales of 215 million decreased 17% versus last year's fourth quarter.
Recreation segment sales of $215 million decreased 17% versus last year's fourth quarter.
Lower sales versus prior year were primarily result of pure shipment and all categories. And after everyone makes them...
Lower sales versus the prior year were primarily a result of fewer shipments in all categories and unfavorable mix.
Class A units and discounting certain categories partially offset by a favorable mix of Class A units and price realization.
That's a units and discounting in certain categories, partially offset by a favorable mix of class C units and price realization quarterly shipments reached three year mobile data for the second fiscal quarter of 2020, which coincided with the onset of Covid the largest headwind in unit shipments and net sales within our <unk> business.
Courtly shipments reached a three year ball dating to the second fiscal quarter of 2020 which coincided with the onset of COVID.
The largest headwind in unit shipments and net sales was within our tollable business, which is currently producing with approximately one month of backlog.
Which is currently producing with approximately one month of backlog. Despite an overall industry retail sales declined our motorized categories continue to outpace the industry and have gained market share in the calendar year to date period.
Despite an overall industry retail sales decline, our motorized categories continue to outpace the industry and have gained market share in the calendar year-to-date period. Our Class C business posted record quarterly net sales with calendar year-to-date retail unit sales up 6% versus Class C industry decline of 3%.
<unk> business posted record quarterly net sales with calendar year to date retail unit sales up 6% versus the class C industry decline of 3% Lastly business retail unit sales declined 1% for calendar year to date versus the industry decline of 12% and class B retail unit sales were up 4%.
Class A business retail unit sales declined 1% for the calendar year to date versus the industry declined 12%. Class B retail unit sales were up 4% versus the industry decline of 12%.
<unk> versus the industry decline of 12%.
Recreation segment, adjusted EBITDA of $19 million was a decrease of $16 2 million versus the prior year. The decrease in adjusted EBITDA was primarily the result of lower unit volume inflationary pressures and discounting partially offset by price realization and cost actions in certain businesses, resulting in.
Recreation segment adjusted EBITDA of 19 million was the decrease of 16.2 million versus the prior year. The decrease in adjusted EBITDA was primarily the result of lower unit volume, inflationary pressures and discounting, partially offset by price realization and cost actions and certain businesses, resulting in a four quarter decriminal margin of 36% on the revenue.
Fourth quarter decremental margin of 36% on revenue decrease.
Seconded backlog of 385 million at year end, D366% for prior year. The D3s is primarily due to continued production against backlog and lower full year net orders across chronic categories versus prior year.
Segment backlog of $385 million at year end decreased 66% versus prior year. The decrease was primarily due to continued production against backlog and lower full year net orders across product categories versus the prior year.
Within the quarter, our most possible categories of Class B and Class C orders remained at a normalized level and in line with pre-COVID levels. And backlog for these businesses remained at approximately 6 to 8 months of production respectively.
Within the quarter, our most profitable category as a class B class C orders remained at a normalized level and in line with pre COVID-19 levels and backlog for these businesses remained at approximately six to eight months of production respectively. We expect fiscal 2020 for full year revenue to be down mid single digits, reflecting.
We expect fiscal 2024 full year revenue to be down mid-single digits reflecting continued mixed headwinds from Class A gas units that carry a lower average selling price, plus an increased contribution from lower content units and new products in entry level categories. As a result, full year 2024 recreation segment adjusted EBITDA margin is expected to be in the high single digits.
The mixed headwinds our class a gas units that carry a lower average selling price phosphate increased contribution from lower content units and new product the entry level categories.
As a result full year 2020 for recreation segment adjusted EBITDA margin is expected to be in the high single digits.
Turning to slide 10.
Trade working capital on October 31, 2023, with $318 5 million a decrease of $29 3 million compared to $347 8 million at the end of fiscal 2022. The decrease was primarily a result of increased accounts payable and customer advances, partially offset by an increase in accounts receivable.
Trade working capital on October 31, 2023 was 318.5 million, a decrease of 29.3 million compared to 347.8 million at the end of fiscal 2020.
The decrease was primarily the results of increased accounts payable and customer advances, partially offset by an increase in accounts receivable and inventory.
The increased inventory balance included an increase of 40 million chassis and increased finished goods of $11 million related to timing of customer inspection and acceptance prior to delivery partially offsetting these increases was a decrease in raw materials parts and work in process, which we feel demonstrates the progress.
The increased inventory valve includes an increased of 40 milli Shaps.
and increased finished goods of $11 million related to timing of customer inspection and acceptance prior to delivery.
Partially offsetting these increases was the decrease in raw materials, parts, and work in process, which we've been able to demonstrate the progress of operational issues and that improving manufacturing efficiency.
Of operational initiatives aimed at improving manufacturing efficiencies.
Full year cash from operating activities was $126 5 million, we spent $13 1 million on capital expenditures within the fourth quarter and a total of $32 8 million for the full year, including organic Capex investments for growth as I mentioned earlier full year free cash flow of $93 7 million.
Full year cash from operating activities was $126.5 million. We spent $13.1 million on capital expenditures within the fourth quarter and a total of $32.8 million for the full year, including organic capex investments for growth. As I mentioned earlier, full year free cash flow of $93.7 million was 116% conversion adjusted net income.
Was 116% conversion of adjusted net income.
Net debt as of October 31st was 128.7 million, including 21.3 million of cash on hand. We declared a quarterly cash dividend of five cents per share payable January 12th to shareholders of record on December 26th. At quarter's end, the company maintained ample liquidity for our strategic initiatives with approximately 384 million available under our ABL revolving credit facility. ramped up on the questionable
Net debt as of October 31 was $128 7 million, including $21 3 million of cash on hand, we declared a quarterly cash dividend of <unk> <unk> per share payable January 12 to shareholders of record on December 26 at quarter's end the company maintained ample liquidity for our.
<unk> initiatives with approximately $384 million available under our ABL revolving credit facility.
Turning to slide 11.
We provide a 2024 fiscal full year outlook, which builds upon the exit rate momentum within the fire and emergency segment. We expect continued throughput gains and strong incremental performance within F&E to offset headwinds from cyclical end market softness within the specialty group and recreation segment.
We provide a 2020 for fiscal full year outlook, which builds upon the exit rate momentum within the fire and emergency segment. We expect continued throughput gains and strong incremental performance within Anthony to offset headwinds from cyclical end market softness within the specialty group in Recreation segment, today's top line guidance of $2.
Today's top line diet is the 2.6 to 2.7 billion or approximately flat revenue at the midpoint.
6% to $2 7 billion or approximately flat revenue at the midpoint adjusted EBITDA guidance of $165 million to $185 million, an increase of 12% at the midpoint given the seasonally soft first quarter, we expect the first quarter. It would be the trough for revenue adjusted EBITDA margin with sequential.
Adjusted EBITDA guidance is $165 to $185 million, an increase of 12% at the midpoint.
Given the seasonally soft first quarter, we expect the first quarter to be the trough of revenue adjusted E to DA margin with sequential improvement throughout the year. We expect first cap consolidated revenue to be approximately 45% of the full year guided.
Movement throughout the year, we expect first half consolidated revenue to approximately 45% for the full year guidance and first half consolidated adjusted EBITDA to be approximately 35% of the full year guidance.
first half consolidated adjusted EBITDA to be approximately 35% of the full year guidance.
Adjusted net income is expected to be 82 to 99 million and net income 71 to 90 million. Free cash flow is expected to be in the range of 70 to 85 million reflecting a net reduction in customer advances related to increased throughput and lower intake of new deposits in the current interest rate environment as well as a year on year increase of cash taxes paid.
Adjusted net income is expected to be $82 million to $99 million and net income 71% to $90 million free cash flow expected to be in the range of $70 million to $85 million, reflecting a net reduction in customer advances related to increased throughput and lower intake of new deposits in the current interest rate environment as well as a year on.
The increase of cash taxes paid.
We anticipate a reduction in overall inventory, partially offset the impact of lower customer advances full year capital expenditures are estimated to be in the range of 30% to $35 million, including organic growth investments in our businesses as well as the ERP upgrades in certain businesses maintenance Capex remains in the range of 15 to 20.
We anticipated reduction in overall inventory to partially offset the impact of lower customer advance.
Full year capital expenditures is estimated to be in the range of 30 to 35 million, including organic growth investments in our businesses, as well as ERP upgrades in certain businesses.
Maintenance capex remains in the range of $15 to $20 million per year. The expected interest expense range of $26 to $28 million is approximately flat year over year, which considers the seasonal use of cash in the first quarter that typically impacts the full year average debt level, as well as higher interest rates on debt and customer advances versus the prior year.
Per year.
<unk> interest expense range of $26 million to $28 million is approximately flat year over year, which considers a seasonal use of cash in the first quarter that typically impact the full year average debt level as well as higher interest rates on debt and customer advances versus the prior year.
Speaker Change: Thank you again for joining us on today's call and with that operator, we would now like to open the call up for questions.
Thank you again for joining us on today's call. And with that operator, we would now like to open the call up for questions.
Thank you. We will now be conducting a question and answer session.
Speaker Change: Thank you we will now be conducting a question and answer session.
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Speaker Change: A moment, please while we poll for questions.
Thank you. Our first question comes from the line of Mig <unk> with Baird. Please proceed with your question.
Thank you. Our first question comes from the line of Meg Dobre with FAIRD. Please proceed with your question.
Thank you for taking a quick yep good morning.
Speaker Change: Alright. Thank you for taking my question Yeah. Good morning.
I guess my first question.
I guess my first question, I'm far in emergency. Appreciate the context on how you're framing 2022. But as I understood it, you're looking at mid-symbol digit unit production growth, maybe low double digit revenue growth. I guess that implies somewhere in a mid-symbol digit pricing year over year that you're recognizing.
Barring an emergency appreciable.
Thanks, Tom.: Thanks, Tom.
How youre framing 2024.
Thanks, Tom.: But as I understood. It you were looking at mid single digit.
Unit production growth.
Speaker Change: Maybe low double digit revenue growth I guess that implies somewhere in the mid single digit pricing year over year that you're recognizing so maybe can you confirm that and I'm sort of curious as you are.
So maybe can you confirm that? And I'm sort of curious, is your sort of thing looking at what's flowing out of your backlog because you have quite a large backlog that's
Speaker Change: So I think looking at what's flowing out of your backlog because you have quite a large backlog that has built up are we to expect that pricing will then further accelerate or become a further tailwind as we think about fiscal 'twenty five relative to 'twenty four.
are we to expect that pricing will then further accelerate or become a further tailwind as we think about fiscal 25 relative to 24.
Yeah, I think in my prepared march that you did the math correctly there, mate. So you're correct. That is, uh, I will confirm that the pricing that is the mid-single visits, like you're talking about there, mid-to-high single digits.
Speaker Change: Yes, I think in my prepared remarks that you did the math correctly. There makes so youre correct that is a I will confirm that the pricing that is the mid single digits like Youre talking about there mid to high single digits and specifically in the 25 and when you talk about the.
And specifically in the 25, when you talk about the back half of 24, as I said, my prepared remarks is when fire will start realizing the pricing that we have seen come through an ambulance, that they've been quicker to execute their backlog. So we would expect similar type of increases as we exit 24 into 25.
Speaker Change: The back half of 'twenty four as I said in my prepared remarks is when fire will start realizing that pricing that we have seen come through an ambulance if they've been quicker to.
Speaker Change: Execute their backlog. So we would expect similar types of increases as we exit 'twenty four 'twenty five.
Great. And from a capacity standpoint, when you're kind of looking at both fire and ambulance.
Speaker Change: Great and from a capacity standpoint, when you're kind of looking at both fire and ambulance.
Where are you now? Are you able to further increase production volume beyond fiscal 24 or will that require incremental investment of any sort?
Speaker Change: Where are you now.
Are you able to further increase production volume beyond fiscal 'twenty, four or will that require.
Speaker Change: Incremental investments of any sort.
No, I think we can. We've done a lot of work as we talk about throughout the year and increasing our throughput in existing facilities. And again, a lot of our locations are 410. So we have the ability to flex beyond that. So we feel good right now. What we're doing for my production cadence and the ramp plans we have in 24. And then actually, I've seen 24 into 25.
Speaker Change: No I think we can and we've done a lot of work as we've talked about throughout the year and increasing our throughput in the existing facilities and again a lot of our locations are four times. So we have the ability to flex beyond that.
Speaker Change: So we feel good right now what we're doing from a production cadence of the ramp plans we have in 'twenty four and then exiting obviously 24 into 'twenty five.
I see your comment on incremental margins here in the 35 to 40 percent. It sounds like you're getting that without maybe the full tailwind from from pricing in fiscal 24. What's the right way to think about incremental margins longer term if you would here as we think about 25 or 80 percent?
Speaker Change: Hey, Steve.
Speaker Change: Your comment on incremental margins here in the third.
Speaker Change: <unk>, 5% to 40%.
It sounds like Youre getting that without maybe the full tailwind from from pricing.
In fiscal 'twenty four.
Speaker Change: What's the right way to think about incremental margins longer term. If you would here as we think about 25 or even beyond.
Speaker Change: Yes, I don't want to give anything there, but obviously, we want to continue to meet that 15%.
Yeah, I don't want to get anything there, but obviously we would want to continue to meet that 15% you know in primimals, but with the pricing.
Speaker Change: Incrementals, but with the pricing still kicking in once we see the execution in 'twenty four and our backlog and then we'll be able to give a better view into 25. So I would just say for 'twenty four and includes also operating improvements as we've talked about in the <unk>.
Still kicking in. Once we see the execution in 24 on our backlog, then we'll be able to give a better view on in the 25. So I would just say for 24, you know, it includes also operating improvement, as we talked about in the, in our whole business, which we've talked about last couple quarters, right? And flushing out of the KME.
Speaker Change: And our whole bed facility, which we've talked about the last couple of quarters right. Then the flushing out of the <unk> units and get more of a production cadence there. So thats why youre seeing those have very incremental as well as improvements in that facility as well.
units and get more of a production cadence there, so that's where you're seeing those heavy incrementals as well as improvement in that facility as well.
Speaker Change: Sure.
Sure. The last question for me.
Speaker Change: Then last question for me.
Speaker Change: The balance sheet as you pointed out.
The balance sheet, as you pointed out, you made big progress in de-levering your sub one time that did the EBITDAI, and obviously it's going in the right direction here. Based on your guidance, you're expecting pre-cash flow to be higher than pre-cash flow, and you're expecting pre-cash flow to be higher than pre-cash flow.
Speaker Change: You May you made big progress in de levering your sub one time net debt to EBITDA, and obviously, you've got going into right direction here.
Speaker Change: So I'm sort of curious based on your guidance youre expecting free cash flow to be.
About 30, about 40. How do you think about deploying this cash in in fiscal 24? Do you think more towards shared buybacks, given where your stock is trading in valuation, or are you active in the in pursuing any any sort of M&A deal?
Speaker Change: <unk> 30 above 40.
Speaker Change: Do you think about deploying this cash in in.
Speaker Change: Fiscal 'twenty four.
Speaker Change: You think more towards share buybacks, given where your stock is trading evaluation or are you active.
Speaker Change: In pursuing any any sort of M&A deal.
Speaker Change: Yes, I would say, we're not active but we're always looking like I said in my prepared remarks, we still have a lot of value creation in our four walls. So we are entertaining looking at opportunities, but we're not active in that process, but obviously, we will look at as we always do what's best for the shareholders and from.
Yeah, I would say we're not active, but we're always looking like a semi-fair marks. We still have a lot of value creation in our four walls. So, you know, we are entertaining looking at opportunities, but we're not active in that process, but obviously we'll look at, as we always do, what's best for the shareholders and from overall perspective, and they're sure by that opportunity, you know, we pursue that as we've talked about previously.
Speaker Change: Overall perspective, and their share back buyback opportunity, we pursue that as we've talked about previously.
Speaker Change: Alright, good luck.
Nick: Thank you Nick.
Speaker Change: Nick.
Speaker Change: As a reminder, if you would like to ask a question press star one on your telephone keypad.
As a reminder, if you would like to ask a question, press star 1 on your telephone keypad.
Our next question comes from the line of Mike <unk> with D. A Davidson. Please proceed with your question.
Our next question comes from the line of mics, please proceed with your question.
Mike: Yes, Hello, good morning, and thanks for taking my questions.
Hey, guys. I want to touch first on the recreation segment. Obviously, there's been some downsides in the last couple of quarters here. Things have to be challenged. But do you think you might be able to end fiscal 2024 on a positive note with some easier comps or just a lot of the issues that are facing the segment might eventually flush through by then? Or do you think you'll be down for essentially the entire year in the next fiscal year?
Speaker Change: Good morning, Mike.
Speaker Change: Great.
Speaker Change: Hey, guys I wanted to ask first on Recreation segment, obviously theres been some downside in that couple of quarters here.
Speaker Change: And I still be challenged but do you think you might be able to end fiscal 2024 on a positive note recent easier comps. So just a lot of issues that are facing the segment essentially flush.
Speaker Change: Goodbye, then or do you think you'll be down.
Speaker Change: For essentially the entire year.
Speaker Change: Fiscal year here.
Speaker Change: No I think I can see its first half of the year, which we talked about prepared remarks was.
Speaker Change: We're still a little bit of tailwind from the industry and then the back half honestly has a slowing that we've been talking about so as you exit 'twenty four I think we'd get more normalized to what we saw in 'twenty three 'twenty. The comps are more difficult in the first half of the year and I think will be really able to judge that coming out of January here in our Tam.
really in with Judge Zack coming out of January here on our Tampa show, which is the largest RV show in the US. So we'll be able to see what the consumer and dealer appetite is coming out in Q1 here. So I think we'll have better view, acting Q1 than we currently do in the market right now.
Speaker Change: The show, which is the largest RV show in the U S. So we will be able to see what the consumer and dealer appetite is coming on in Q1 here. So I think we'll have a better view exiting Q1 than we currently do in the market right now.
Speaker Change: Okay.
Okay, great. I also want to follow up with some of your comments about street sweepers. It seems like elsewhere they haven't been calling out too many challenges in a street street business, given you know, infrastructure bill tailwind and just generally positive government spending trends. I'm curious as to if you have some details of what you're seeing in there. There's a certain part of the country, a certain size sweeper, et cetera, that might be reasons why some reason you're a seventh, becomes aember 20th grade.
Speaker Change: Great.
Speaker Change: Also wanted to follow up on some of your comments about.
Speaker Change: Street sweepers, it seems like elsewhere, they haven't been calling it out too many challenges.
Speaker Change: Sure business given.
Speaker Change: Sure Bill.
Speaker Change: Tailwind is it just generally positive government spending trends Im curious would you tell us what youre seeing there certain part of the country.
Speaker Change: Sweeping et cetera that might be.
Speaker Change: The reasons why.
Speaker Change: <unk> just not just now working right there.
Speaker Change: Yes, I think it was more of it is the utilization. So like we talked about we felt a lot of rental houses and what they've seen is a drop in utilization and the dealers that we use as well as the.
Yeah, I think that more more of it is the utilization. So like we talked about, we felt a lot of rental houses and what they've seen as a drop in utilization and the dealers that we use as well as the
The operator, so again, it's one that we continue to follow. I think we are seeing increased quote activity, but we just haven't seen the improvement from an order fulfillment perspective. So I think that's a way to see as well as we call activities and hear into the winter. So I think what we're seeing here, the more of a normalization of that business coming up historic high in 23. And the fact that we'll get back to where we used to be, where building stock within the winter units and then that spring kicks off, we start seeing the...
Speaker Change: The operators so.
Speaker Change: Again, it's one that we continue to follow I think we are seeing increased quote activity, but we just haven't seen the improvement from an order fulfillment perspective, so I think thats, a wait and see as well as we exit the season here into the winter. So I think what we're seeing here there is more of a normalization of that business coming out.
Speaker Change: Up a historic high in 'twenty, three and the fact that we will get back to where we used to be we're building stock within the winter units in Nf spring kicks off we start CMT.
the order intake pickup. So I think what we're seeing overall is the normalization in the street sweeper and the yard truck business where we'll see a wall here in Q1 and then it'll pick up as the shows kick off in the springtime of the following year, which is historic pattern that was that business previous to Coles.
Speaker Change: Order intake pick up so I think what we're seeing overall in the normalization in street sweeper in.
Speaker Change: Archrock business, where we.
Speaker Change: We will see a lull here in Q1, and then it will pick up.
Speaker Change: The show's kick off in the spring time of the following year, which is the historic pattern that was that business previous to Covid.
outstanding. Maybe this one last one for me, the type of school buses I was running to give you an update on the
Speaker Change: Maybe just one last one for me.
Speaker Change: The type of school buses I was wonder if you could give us an update on the on the EV product, how thats been taking off.
on the EV product, how that's been taking off, and an order intake for that particular area. Thank you. Yeah, so I think for the school bus business, we're seeing a relatively low intake. I think we're meeting the requirements. It's still less than 100 when you look at our total college business that produces those. So it's not, you know, those are uncreated, those buses, but it's not a main driver of the results of our school bus business. Okay.
Speaker Change: And order intake, but that particular area.
Speaker Change: Thank you, yes so.
So I think for the school bus business, we're seeing relatively low intake I think we are meeting our requirements. It's still less than 100. When you look at our total Collins business that produces though so it's not.
Speaker Change: Those are.
Speaker Change: Accretive those buses, but it's not a main driver of the of the results of our school bus business.
Speaker Change: Okay. Thanks, so much I'll pass it along.
Speaker Change: Alright, Thanks, Mike.
Thank you. Mr. Schenetschney, we have no further questions at this time. I would like to turn the floor back over to you for closing comments.
Thank you Mr. Schenectady, we have no further questions at this time I would like to turn the floor back over to you for closing comments.
Yes, thank you, operator. So in closing, I would like to thank our entire team for their efforts throughout the past year, and wish everyone on the call a safe and happy holiday season. So thank you again for joining us today.
Mr. Schenectady: Yes. Thank you operator, so in closing I would like to thank our entire team for their efforts throughout the past year and wish everyone on the call a safe and happy holiday season. So thank you again for joining us today.
Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.