Q1 2024 Oshkosh Corp Earnings Call

Unknown Executive: It is subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include, among others, matters we have described in our Form 8K filed with the SEC this morning and other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. Our presenters today include John Pfeifer, President and Chief Executive Officer, and Mike Pack, Executive Vice President and Chief Financial Officer. Please turn to slide three, and I'll turn it over to you, John.

<unk> actual results to be materially different from those expressed or implied by such forward looking statements.

Unknown Executive: These risks include among others matters described in our form 8-K filed with the SEC. This morning, and other filings we make with the SEC. We disclaim any obligation to update these forward looking statements, which may not be updated until our next quarterly earnings conference call if at all.

Unknown Executive: Our presenters today include John Pfeifer, President and Chief Executive Officer, and Mike Pack Executive Vice President and Chief Financial sure. Please turn to slide three and I'll turn it over to you John.

John C. Pfeifer: Thank you, Pat, and good morning, everyone. I'm pleased to announce another strong quarter with year-over-year growth in revenue and earnings. This solid start to 2024 is a testament to our innovate, serve, advance strategy and the hard work of our people as we continue to launch new innovative products and technologies, while adding capacity for several of our businesses. For the first quarter, we achieved an 80% increase in adjusted operating income. This led to an adjusted operating margin of 10.8% and an adjusted EPS of $2.89.

John C. Pfeifer: Thank you Pat and good morning, everyone I'm pleased to announce another strong quarter with year over year growth in revenue and earnings.

John C. Pfeifer: This solid start to 2024 is a testament to our innovate serve.

John C. Pfeifer: <unk> strategy and the hard work of our people as we continue to launch new innovative products and technologies, while adding capacity for several of our businesses.

John C. Pfeifer: For the first quarter, we achieved an 80% increase in adjusted operating income leading to an adjusted operating margin of 10, 8% and then and adjusted EPS of $2 89.

John C. Pfeifer: These results were led by outstanding business execution across our segment and supported by the benefit of acquisition. We continue to focus on execution. Importantly, we're driving.

John C. Pfeifer: These results were led by outstanding business execution across our segments and supported by the benefit of acquisitions.

John C. Pfeifer: We continue to focus on execution importantly, we're driving improvements in our businesses contributing to strong performance in the quarter and supporting our positive outlook for the remainder of the year.

John C. Pfeifer: improvements in our businesses, contributing to strong performance in the quarter and supporting our positive outlook for the remainder of the year. We are also focused on becoming a more resilient company throughout the business cycle while driving long-term growth, and we are confident we're making meaningful progress. Our confidence is fueled by several key factors, including significant investments in market-leading technologies that we expect will drive demand for the next decade and beyond, and robust backlogs that provide strong visibility.

John C. Pfeifer: We are also focused on becoming a more resilient company throughout the business cycle, while driving long term growth and we are confident we're making meaningful progress our confidence is fueled by several key factors, including significant investments in market leading technologies that we.

John C. Pfeifer: Spec will drive demand for the next decade and beyond.

John C. Pfeifer: Robust backlog that provides strong visibility.

John C. Pfeifer: The ramp-up of several new innovative products, including next-generation delivery vehicles, and the benefits of strategic acquisitions such as Aerotech. Based on our first quarter results, along with solid execution and healthy demand for Oshkosh products, we are raising our full year outlook for adjusted EPS to be in the range of $11.25 per share. Notably, our current expectations place us within the range of our Investor Day target of $11-$13 per share a year early and demonstrate our ability to continue to drive accelerated growth and shareholder value. Please turn to slide four, and we'll get started on our segment update. Our team at AXS is performing well. For the quarter, AXS grew revenue by 3.7% and delivered an adjusted operating margin of 17%.

John C. Pfeifer: The ramp up of several new innovative products, including next generation delivery vehicles, and the benefits of strategic acquisitions, such as aerotech.

John C. Pfeifer: Based on our first quarter results, along with solid execution and healthy demand for Oshkosh products, we are raising our full year outlook for adjusted EPS to be in the range of $11 25 per share.

John C. Pfeifer: Notably our current expectations placed us within the range of our Investor day target of 11 to $13 per share a year early.

John C. Pfeifer: And demonstrates our ability to continue.

John C. Pfeifer: To drive accelerated growth and shareholder value.

John C. Pfeifer: Please turn to slide four and we'll get started on our segment updates.

John C. Pfeifer: Our team at access is performing well for the quarter access grew revenue by three 7% and delivered an adjusted operating margin.

John C. Pfeifer: We continue to invest in new products and technologies, including Moments of Autonomy and ClearSky Smart Fleet, our next-generation IoT platform enabling two-way real-time communications that we believe will contribute to long-term success in the access market. Last quarter, we told you that we expected customer order timing to begin normalizing, leading to lower orders in the first half of 2024 relative to both the prior year and the second half of the year, given that 2024 was largely booked as we entered the year. This remains the case, although healthy orders of $940 million in the first quarter exceeded our expectations.

John C. Pfeifer: <unk> percent.

John C. Pfeifer: We continue to invest in new products and technologies, including moments of autonomy and clear skies Smart fleet. Our next generation Iot platform, enabling two way real time communications that we believe will contribute to long term success in the access market.

John C. Pfeifer: Last quarter, we told you that we expected customer order timing to begin normalizing leading to lower orders in the first half of 2024 relative to both the prior year and the second half of the year given that 2024 was largely booked as we entered the year. This remains the case.

John C. Pfeifer: With healthy orders of $940 million in the first quarter exceeded our expectations. We continue to expect that the majority of 2025 orders will be booked in the second half of 2024, particularly in the fourth quarter, which more closely aligns with historical.

John C. Pfeifer: We continue to expect that the majority of 2025 orders will be booked in the second half of 2024, particularly in the fourth quarter, which more closely aligns with historical order timings. Demand for aerial work platforms and telehandlers in North America continues to be solid, supported by infrastructure investments, megaprojects, and industrial on-shoring projects, as well as elevated fleet age. Moving to operations and supply chain, our team continued to make progress with supplier on-time deliveries in the first quarter, which were in the 85% range.

John C. Pfeifer: Order timing.

John C. Pfeifer: Demand for aerial work platforms and tele handlers in North America continues to be solid supported by infrastructure investments Mega projects and industrial onshoring projects as well as elevated fleet ages.

John C. Pfeifer: Moving to operations and supply chain, our team continued to make progress with supplier on time deliveries in the first quarter, which were in the 85% range. The combination of improving supply chain deliveries and our continuous improvement initiatives is contributing to increased throughput in our manufacturing facilities.

John C. Pfeifer: The combination of improving supply chain deliveries and our continuous improvement initiatives is contributing to increased throughput in our manufacturing facilities. We are progressing well with our plans to repurpose the Jefferson City, Tennessee facility for telehandler production. We are transitioning the facility throughout 2024 as defense fabrication work moves back to Oshkosh. We expect a meaningful ramp-up in telehandler production capacity at the facility for 2025, which will help us capitalize on demand for our equipment. Importantly, we believe there are many opportunities to continue to drive growth and strong performance at ACCESS over time. Please turn to slide 5, and I'll review our defense segment.

John C. Pfeifer: We are progressing well with our plans to repurpose the Jefferson Tennessee.

John C. Pfeifer: Tennessee facility for Tele handler production, we are transitioning the facility throughout 2024 as defense fabrication work moves back to Oshkosh.

John C. Pfeifer: We expect a meaningful ramp in tele handler production capacity in the facility for 2025, which will help us capitalize on demand for our equipment. Importantly, we believe there are many opportunities to continue to drive growth and strong performance at access over time.

John C. Pfeifer: As we have discussed, 2024 is a significant transition year for our defense segment as we are winding down production of domestic JLTVs during the year. Simultaneously, we will be ramping up production of the U.S. Postal Service's Next Generation Delivery Vehicle, or NGDV. This month, the first NGDV units came off the production line in Spartanburg, South Carolina.

John C. Pfeifer: Please turn to slide five and I'll review, our defense segment.

John C. Pfeifer: As we have discussed 2024 is a significant transition year for our defense segment as we are winding down production of domestic J ltvs during the year.

John C. Pfeifer: Simultaneously, we will be ramping up production of the U S. Postal services next generation delivery vehicle or N. G. D. V. This month, the first N G D V units.

John C. Pfeifer: Our team has spent a tremendous amount of time planning and executing this program launch, and I'm pleased with our progress. We look forward to a long and successful partnership with the U.S. Postal Service as we modernize their fleet over the next 10 years.

John C. Pfeifer: Off the production line in Spartanburg, South Carolina. Our team has spent a tremendous amount of time planning and executing this program launch and I am pleased with our progress we look forward to a long and successful partnership with the U S. Postal service as we modernize their fleet over the next 10 years.

John C. Pfeifer: As a reminder, we expect increased vehicle production throughout 24 and 2025 and exit 2025 at full rate production. We continue to support many defense programs, including the FHTV and FMTV programs. We are working on contract extensions for both of these programs with plans to complete the extensions over the next several quarters. We are also the supplier for the Stryker medium caliber weapons.

John C. Pfeifer: As a reminder, we expect to increase vehicle production throughout 24, and 2025 and exit.

John C. Pfeifer: Five at full rate production.

John C. Pfeifer: We continue to support many defense programs, including the F. H T V.

John C. Pfeifer: MTV programs, we are working on contract extensions for both of these programs with plans to complete the extensions over the next several quarters. We are also the supplier for the Stryker medium caliber weapons system, a program, which has contributed to the diversification of our defense business.

John C. Pfeifer: The program has contributed to the diversification of our defense business beyond tactical wheeled vehicles. And we are in the midst of the Robotic Combat Vehicle Development Program, which demonstrates our broad technical capabilities in autonomy, connected vehicle systems, and mobility, among others. Finally, I want to share an outstanding technical achievement that our teams recently accomplished with the United States Army. We successfully completed airdrop testing of our low-velocity airdrop, or LVAD FMTV A2, cargo truck at Fort Liberty in North Carolina.

John C. Pfeifer: <unk> tactical wheeled vehicles and we are in the midst robotic combat vehicle development program, which demonstrates our broad technical capabilities and autonomy connected vehicle systems and mobility among others.

John C. Pfeifer: Finally, I want to share an outstanding technical achievement that our teams recently accomplished with the United States Army.

John C. Pfeifer: We successfully completed air dropped testing of our low velocity air drop or <unk> F. M. TVA to cargo truck at Fort Liberty in North Carolina.

John C. Pfeifer: Essentially, the program allows the vehicle to be parachuted from a plane and operational on the ground within 30 minutes. We expect to begin receiving orders for LVAD units in 2025. Now, let's turn to slide six for a discussion of the vocational segment.

John C. Pfeifer: Essentially the program allows the vehicle the vehicle to be parachuted from a plane and operational on the ground within 30 minutes. We are back to begin receiving orders for <unk> units in 2025.

John C. Pfeifer: Our vocational segment delivered strong year-over-year revenue growth of 37% in the first quarter, including the benefit of $176 million in sales at Aerotech, which we acquired in the third quarter of 2023. We continue to invest in electrification programs, as well as autonomous functionality, to enhance ease of use and productivity for our customers. Given strong demand for fire trucks and our extended backlog, production throughput will continue to be a meaningful opportunity for the foreseeable future.

John C. Pfeifer: Let's turn to slide six for a discussion of the vocational segment.

John C. Pfeifer: Our vocational segment delivered strong year over year revenue growth in the first quarter of 37%, including the benefit of $176 million of sales at Aerotech, which we acquired in the third quarter of 2023, we continue to invest in electrification programs as well.

John C. Pfeifer: As well as autonomous functionality to enhance ease of use and productivity for our customers given the strong demand for fire trucks, and our extended backlog production throughput continues to be a meaningful opportunity for the foreseeable future.

John C. Pfeifer: Demand remains solid for our McNeilis, refuse, and recycling collection vehicles. Customers are enthusiastic about our purpose-built electric Volterra ZSL zero-emission test vehicles, which are performing well in the field. As you know, we will be ramping up production of these units at our factory in Murfreesboro, Tennessee. And earlier this month, we completed our first pre-production pilot unit in the facility, representing an important program milestone. Customers are excited by the opportunity to reduce their carbon footprint while realizing an estimated 14% improvement in total cost of ownership.

John C. Pfeifer: Demand remained solid for our Mcneil us refuse and recycling collection vehicles customers are enthusiastic for our purpose built electric Volterra Z <unk> zero emission vehicles test vehicles are performing well in the field as you know we will be ramping up production of these units at our <unk>.

John C. Pfeifer: <unk> in Murphy's Borough, Tennessee and earlier this month, we completed our first preproduction pilot unit in the facility representing an important program milestone.

John C. Pfeifer: Customers are excited by the opportunity to reduce their carbon footprint, while realizing an estimated 14% improvement in total cost of ownership. We look forward to the waste Expo show in two weeks, where we will showcase these game changing vehicles and their key features.

John C. Pfeifer: We look forward to the Waste Expo show in two weeks where we will showcase these game-changing vehicles and their key features. Moving to Aerotech, we're pleased with integration progress to date, and the business is performing well. Strong financial performance, robust customer demand, and exciting new products like the AmpCart mobile charging station, which supports sustainable operations at airports, all highlight the reasons we are so pleased with this acquisition. With that, I'm going to turn it over to Mike to discuss our results in more detail and our updated expectations for 2024.

Mike: Moving to Aerotech, we're pleased with the integration progress to date and the business is performing well strong financial performance robust customer demand and exciting new products like the Apple cart.

Mike: Mobile charging station, which supports sustainable operations at airports all highlight the reasons. We're so pleased with this acquisition with <unk>.

Michael E. Pack: Thanks, John. Please turn to slide 7. Consolidated sales for the first quarter were $2.54 billion, an increase of $276 million, or 12.2%, over the prior year quarter. The increase was driven primarily by the benefit of $176 million of Aerotech sales in the vocational segment, as well as increased volume in all three segments and the benefits of improved pricing. Adjusted Operating Income increased $124 million over the prior year quarter to $275 million, or 10.8% of sales, a 410 basis point improvement versus the prior year.

John C. Pfeifer: I'm going to turn it over to Mike to discuss our results in more detail and our updated expectations for 2024.

Michael E. Pack: Fixed John please turn to slide seven.

Michael E. Pack: Consolidated sales for the first quarter were $2 five $4 billion, an increase of $276 million or 12, 2% over the prior year quarter. The increase was driven primarily by the benefit of $176 million of Aerotech sales in the vocational segment as well as increased.

Michael E. Pack: And all three segments and the benefits of improved pricing.

Michael E. Pack: Adjusted operating income increased $124 million over the prior year quarter to $175 million or 10, 8% of sales a 410 basis point improvement versus the prior year the.

Michael E. Pack: The improvement in Adjusted Operating Income was largely driven by improved price-cost dynamics, favorable mix, increased volume, and the benefit of Aerotech results. Adjusted operating income exceeded our most recent expectations, primarily due to higher volume at vocational, favorable customer mix at access, and lower spending. Adjusted earnings per share was $2.89 in the first quarter versus $1.63 in the prior year. During the quarter, we repurchased approximately 130,000 shares of common stock for a total of $15 million.

Michael E. Pack: The improvement in adjusted operating income was largely driven by the by improved price cost dynamics favorable mix increased volume and the benefit of Aerotech results.

Michael E. Pack: Adjusted operating income exceeded our most recent expectations, primarily due to higher volume at vocational favorable customer mix had access and lower spending.

Michael E. Pack: Adjusted earnings per share was $2.89 in the first quarter versus $1.63 in the prior year.

Michael E. Pack: Please turn to slide 8 for a review of our updated expectations for 2024. With our strong start to the year, we are revising our full-year outlook on a consolidated basis for estimating 2024 sales and adjusted operating income to be in the range of $10.7 billion and $1.075 billion, respectively, which is up from our prior expectations of $10.4 billion and $990 million, respectively. At a segment level, we are estimating excess sales and adjusted operating margin to be in the range of $5.4 billion and 15.5%, respectively, up from our prior expectations of $5.2 billion and 15% due to improved production throughput and the Improved Sales Network.

Michael E. Pack: During the quarter, we repurchased approximately 130000 shares of common stock for a total of $15 million.

Michael E. Pack: Please turn to slide eight for a review of our updated expectations for 2024.

Michael E. Pack: With our strong start to the year, we are revising our full year outlook on a consolidated basis for estimating 2020 for sales and adjusted operating income to be in the range of $10 $7 billion and $1.075 billion respectively.

Michael E. Pack: Our up from our prior expectations of $10.4 billion and $990 million respectively.

Michael E. Pack: We are estimating adjusted earnings per share will be in the range of $11.25 versus our prior estimate of $10.25.

Michael E. Pack: At a segment level, we are estimating access sales and adjusted operating margin to be in the range of $5 $4 billion, and 15, 5%, respectively up from our prior expectations of $5 $2 billion and 15% due to improve production throughput.

Michael E. Pack: Compared to the first quarter, we expect customer mix to moderate new product development spending to increase for the remaining quarters of 2024. Turning to defense, we continue to expect sales of approximately $2.1 billion and an adjusted operating margin of approximately 2.5%. We expect vocational sales and adjusted operating margin to be in the range of $3.2 billion and 11.5%, respectively, up from our prior expectations of $3.1 billion and 11%, respectively. Increased chassis availability and improved price-cost dynamics are contributing to the improved outlook.

Michael E. Pack: And improved sales mix compared.

Michael E. Pack: Compared to the first quarter, we expect customer Max to moderate new product development spending to increase for the remaining quarters in 2024.

Michael E. Pack: Turning to defense, we continue to expect sales of approximately $2 $1 billion and an adjusted operating margin of approximately two 5%.

Michael E. Pack: We expect vocational sales and adjusted operating margin will be in the range of $3 $2 billion, and 11, 5% respectively up from our prior expectations of $3 1 billion in dollars and 11%, respectively increased chassis availability and improved price cost dynamics are contributing to the improved.

Michael E. Pack: Our estimate of corporate expenses is approximately $190 million, an increase of $10 million versus prior expectations as a result of higher incentive and stock-based compensation expense versus previous expectations. Our expectation for the tax rate is now 24 percent, a modest decrease versus our prior expectations of 24.5 percent. Our expectation for the share count is now 65.8 million shares. And finally, our expectations for CapEx and free cash flow remain unchanged. Looking to the second quarter, we expect adjusted EPS in the range of $3 per share, which is up versus the prior year and the first quarter. We expect sales to be up approximately 15% versus the prior year, inclusive of the benefit of Aerotech sales. With that, I'll turn it back over to John now for some closing comments.

Michael E. Pack: Outlook.

Michael E. Pack: Our estimate of corporate expenses of approximately $190 million, an increase of $10 million versus prior expectation as a result of higher end kind of in stock based compensation expense versus previous expectations.

Michael E. Pack: Our expectation for tax rate is now 24% modest decrease versus our prior expectations of 24, 5% our expectation for share count is now $65 8 million shares.

John: And finally, our expectations for Capex and free cash flow remain unchanged.

Michael E. Pack: Looking to the second quarter, we expect adjusted EPS in the range of $3 per share, which was up versus the prior year and the first quarter, we expect sales to be up approximately 15% versus the prior year inclusive of the set of aerotech sales.

John C. Pfeifer: We continue to focus on execution, supporting our customers, and empowering our people as we grow and strengthen our business. We have raised our expectations and now believe we can achieve our investor targets for 2025 revenue and EPS one year earlier than we originally expected, which is a testament to our team and our strategy. We are investing in new products and deploying technologies that support our customers and keep our company at the forefront as leaders in our industry. This is an exciting time for Oshkosh, and we look forward to continuing to execute our growth strategy to drive shareholder value. All right, Pat, let's get started with the Q&A.

John C. Pfeifer: With that I'll turn it back over to John now for some closing comments.

Pat: We continue to focus on execution supporting our customers and empowering our people as we grow and strengthen our business. We raised our expectations and now believe we can achieve our investment targets for 2025 revenue and EPS one year earlier than we originally expected which.

John C. Pfeifer: As a testament to our team and our strategy, we are investing in new products and deploying technologies that support our customers and keep our company at the forefront as leaders in our industries. This is.

Pat: Thanks, John. I'd like to remind everyone to please limit their questions to one plus a follow-up question, and please stay disciplined on that follow-up question. After the follow-up question, we ask that you get back in queue if you'd like to ask additional questions. Operator, please begin the question and answer period of this call.

John C. Pfeifer: This is an exciting time for Oshkosh, and we look forward to continuing to execute our growth strategy to drive shareholder value.

Operator: Alright, Pat let's get started with the Q&A. Thanks, John I'd like to remind everyone to please limit their questions to one plus a follow up and please stay disciplined on that follow up question. After the follow up we ask that you get back in queue, if you'd like to ask additional questions. Operator. Please begin the question and answer period of this call.

Operator: Thank you. We will now be conducting a question and answer session. We ask that all callers limit themselves to one question and one follow-up. If you have additional questions, please re-cue, and those will be addressed, time permitting. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Operator: Thank you we will now be conducting a question and answer session. We ask that all callers limit themselves to one question and one follow up.

Operator: Have additional questions. Please re queue and those will be addressed time.

Operator: Okay.

Operator: I would like to ask a question. Please press star one on your telephone keypad.

Operator: One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Stanley Elliott with Stiefel. Please proceed with your question. Good morning, everybody.

Operator: Information tone will indicate your line is in the question queue.

Stanley Stoker Elliott: You May press Star two if you would like to remove your question from the queue.

Operator: All participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Stanley Stoker Elliott: Good morning, everybody. Can you talk, I guess, maybe a little bit more of a longer-term question for you? I mean, there's a number of EB next-gen programs out. As you're moving kind of through this pre-production phase into more of a meaningful revenue generator, it sounds like that will be more in early 2026. Just to clarify that. And then how should we think about this from a margin perspective from you all? Is it similar gross margins but higher gross profit dollars? Just trying to get a framework for how this could evolve.

Speaker Change: One moment, please while we poll.

Stanley Stoker Elliott: Awesome.

Stanley Stoker Elliott: Okay.

Stanley Stoker Elliott: Thank you. Our first question comes from the line of Stanley Elliott with Stifel. Please proceed with your question.

Stanley Stoker Elliott: Good morning, everybody can you talk I guess, it maybe a little bit of a more of a longer term question for you I mean, theres a number of kind of E b nextgen programs out.

Stanley Stoker Elliott: Hmm.

Stanley Stoker Elliott: As you are moving kind of through this pre production phase into more and more of a meaningful revenue generator.

Stanley Stoker Elliott: It sounds like that'll be more into early 2026, just to clarify that.

Michael E. Pack: Stanley, I can take that one. Just thinking about the ramp of NGDB. So what we talked about this year is we're going to have some startup costs. So it'll be about between that and NPD, we said last quarter, about a 35 cent drag. As we get into next year, there's going to be a pretty significant ramp of volume, so we're going to start getting the margins with that will start to follow.

Stanley Stoker Elliott: And then.

Stanley Stoker Elliott: How should we think about this from a margin perspective from you. All is it is it similar gross margins, but higher gross profit dollars.

Speaker Change: Trying to get a framework for how this could evolve.

Michael E. Pack: Sure.

Speaker Change: Stanley I can I can take that one.

Michael E. Pack: Just thinking about the ramp up of <unk>. So what we talked about this year is we're going to have some startup costs the wall it'll be about.

Michael E. Pack: And by the time we get to 2026, we'll be at full rate production, well north of a billion dollars in revenue from the program. And then you'll see those, those good solid margins. And what we've talked about from a margin perspective, really on that program is to be, you know, better than our traditional tactical wheeled vehicle margins.

Michael E. Pack: About it between that and NPD, we said last quarter about a 35 cent drag.

Michael E. Pack: As we get into next year, there's going to be a pretty.

Michael E. Pack: Significant ramp of volume so we're going to start getting the margins with that we will start to follow and by the time, we get to 2026, we'll be at at full rate production well north of $1 billion of revenue from the program and then Youll see those those are good solid margins and what we've talked about per month and per.

John C. Pfeifer: and Stanley that Mike just commented on on NGDB for the U.S. Postal Service. That's our biggest electrification program, but we have electrification programs in other segments as well. You look at our vocational segment with the electric fire trucks, the electric airport rescue firefighting vehicles, the electric refuse and recycling vehicles, and there's others as well. Those are, you know; the margins are all healthy margins. These, you know, the adoption rate is different based upon the end market.

John C. Pfeifer: Perspective really on that program has to be you know it.

John C. Pfeifer: Better than our traditional tactical wheeled vehicle margins.

John C. Pfeifer: Stanley that Mike just commented on on.

John C. Pfeifer: N G D V for the U S. Postal service, that's our biggest electrification program, but we have electrification programs in other segments as well you look at our vocational segment with the electric fire trucks, the electric airport rescue firefighting vehicles, the electric refuse and recycling vehicles, and there's others as well.

John C. Pfeifer: But these will all provide healthy long-term growth drivers as, over time, we see municipal fire stations, and we see our customers in the refuse and recycling segment upgrade fleets to better, more modern vehicles over time. So we look at it as a long-term move for us. It's not something that's going to happen overnight in some of these other areas.

John C. Pfeifer: Those are the margins.

John C. Pfeifer: Are all healthy margins these.

John C. Pfeifer: The adoption rate is different based upon the end market.

John C. Pfeifer: But these will all provide healthy long term growth drivers as over time, we see municipal fire stations, we see.

John C. Pfeifer: Our customers in the refuse and recycling segment upgrade fleets to better more modern vehicles over time. So we look at it as a long term.

John C. Pfeifer: That's great. And then I guess we hear a lot about stimulus for construction and other sorts of things, but there's a considerable amount kind of allocated to airports too. Can you talk about kind of within the Aerotech portfolio, you know, how much more product do you need to potentially get refreshed? You have some mobile charging stations coming down the line. I'm just curious kind of how you see that business ramping and evolving now that you have... maybe a little more R&D fire

John C. Pfeifer: Move for Us, it's it's not something that's going to happen over night and some of these other segments.

John C. Pfeifer: That's great and then I guess, we hear a lot about stimulus for construction and other sorts of things, but there's there's considerable amount kind of allocated for airports too can you talk about kind of within the aerotech portfolio.

John C. Pfeifer: Yeah, well, I think on the electrification front, we're kind of in our infancy. A lot of the electrification that's in the airport markets today with ground service equipment is really lead-acid, so kind of the old-fashioned electric. And we're going to continue to move that to lithium-ion, thus the AmpCart, because you have to have a way to refuel vehicles efficiently on the tarmac of an airport. And that's kind of what the AmpCart does.

John C. Pfeifer: How much more product with that you need to potentially get refreshed usage.

John C. Pfeifer: But do you have some mobile charging stations coming down the line.

John C. Pfeifer: Just curious kind of how you see that business ramping in evolving now that you have.

John C. Pfeifer: Maybe a little more R&D firepower to put behind it.

John C. Pfeifer: Yeah, well I think on the electrification front, we're kind of in our infancy a lot of the electrification that's in the airport markets today with ground service equipment is really let out so.

John C. Pfeifer: I think our Aerotech people have been doing a phenomenal job with autonomous functionality for cargo loading and other applications, and we're going to continue to accelerate it there as well as in the electrification space. But in electrification for ground service equipment, we're in the really, really early innings for that. And Stanley, I think in general about orders. We're seeing really strong order intake in that business, and we expect that to continue for the reasons you mentioned. Thank you.

John C. Pfeifer: So kind of the old fashion electric and we're going to continue to move that to lithium ion thus the amp cart because you have to have a way to repower vehicles efficiently on the tarmac event of an airport and that's what the that's kind of what the Amp cart does I think our aerotech people had been doing a phenomenal job with autonomous functionality.

John C. Pfeifer: Or cargo load.

John C. Pfeifer: And other applications and we're going to continue to accelerate there as well as in the.

John C. Pfeifer: Electrification space, but in electrification for ground service equipment, we're really really early early innings for that.

Stanley Stoker Elliott: Thanks. I appreciate it.

Jamie Lyn Cook: Our next question comes from the line of Jamie Cook with Truist. Please send along your questions.

Speaker Change: Okay, Alright, guys. Thanks, the unrealized orders, we're seeing really strong order intake in that business and we.

Jamie Lyn Cook: Hi, good morning. Nice quarter. I guess just two questions. You know, one, the margins for access equipment in the first quarter were exceptional at 17%. I think based on the guide, it implies your margins for the remaining three quarters would be below, you know what I mean, the prior year. And I'm just trying to understand why that would be the case with, it looks like, based on your guide, the top line should be, the top line growth should be better than what we saw in the first quarter. So if you could help me with that,

Jamie Lyn Cook: That to continue for the reasons you mentioned.

Speaker Change: Thanks I appreciate it.

Speaker Change: Thanks Stanley.

Jamie Lyn Cook: Our next question comes from the line of Jamie Cook with Truest. Please proceed with your question.

Jamie Lyn Cook: Hi, good morning nice quarter.

Jamie Lyn Cook: Just two questions.

Jamie Lyn Cook: One just the margin for access equipment in the first quarter were exceptional at 17%.

Jamie Lyn Cook: Based on the guide it implies your margins for the remaining three quarters would be below you know what you mean prior year and I'm just trying to understand why that would be the case with it looks like based on your guide the top line.

John C. Pfeifer: And then John, I guess a question specifically for you with the postal service, you know, starting to ramp up, you know, more significantly next year. This year, next year, can you just talk about conversations you're having with customers around opportunities for last mile delivery? I'm wondering whether, you know, we can start thinking about, you know, adding more benefit from the postal service and expanding your, your, you know, market share and last mile delivery. Thank you.

John C. Pfeifer: Should be the top line growth should be better than what we saw in the first quarter. So if you could help me on that and then John I guess a question specifically for you with postal service you know starting to ramp more significantly next year. This year and next year can you just talk about conversations you're having with customers around opportunities on <unk>.

Michael E. Pack: Thanks, Jamie. I'll let Mike start with the access questions, and then I'll go on with the postal questions.

Speaker Change: Last mile delivery I'm wondering whether you know we can start thinking about you know adding more.

Michael E. Pack: Sure, on the excess margins, as I mentioned in my prepared remarks, we did see a favorable mix in the first quarter, and that was certainly a driver of the margin. We also did see, as we talked about on the last call, expecting to see higher new product development spending of about $20 million for the year. We also have roughly $10 million in Jefferson City, Tennessee startup costs. A lot of those are really going to, those costs are going to be largely occurring in the next three quarters. That mix moderates, so that's really, it's really a mix in the timing of that spending that's driving the margin difference.

Speaker Change: Benefits from the postal service win in expanding your your market share and last mile delivery. Thank you sure. Thanks, Jamie I'll, let Mike start with the access question and then I'll go on the postal question.

Michael E. Pack: Sure I'm not on the access margins as I'd mentioned in my prepared remarks, we did see a favorable mix in the first quarter that was certainly a driver of the margin.

Michael E. Pack: We also did see we talked about on the last call expecting to see higher new product development spending of about $20 million for the year. We also have roughly $10 million of Johnson City, Tennessee startup cost a lot of those are really going at those costs are going to be largely occurring in the next three quarters that mixed moderate so that's <unk>.

John C. Pfeifer: And with regard to last mile delivery, Jamie, so first of all, I want to say that we are intensely focused today on executing the NGDV program for the United States Postal Service and modernizing their fleet. They just went into production, started to produce vehicles. And I want to make sure, make this clear, I think everyone knows it, this is the largest fleet of last mile delivery vehicles in North America, probably in the world.

John C. Pfeifer: Really it's really a mix and the timing of that spending that's that's driving the margin difference.

Jamie: Yeah, and with regard to last mile delivery Jami So first.

John C. Pfeifer: First of all I want to say that we are intensely focused today on executing the N. G. D V program for the United States Postal service and modernizing their fleet just went into production started to produce vehicles.

John C. Pfeifer: So there's no bigger opportunity that we could execute on than the one that we've already got. It'll drive really nice growth for us for a long time. Of course, we're talking to many other service providers for last mile delivery, but we're taking one step at a time. We're going to make sure we make NGDV successful. And I think in the future, we may have some other things to talk about. But right now, we are really focused on making sure the U.S. Postal Service is very successful with this modernization.

John C. Pfeifer: I want to make sure I make this clear I think everyone knows that this is the largest fleet of last mile delivery vehicles in North America, probably in the world. So there's there's no bigger opportunity that we could execute on and then the one that we've already got it'll drive really nice growth for us for a long time of course, we are.

John C. Pfeifer: Talking to many other service providers and last mile delivery.

Jamie Lyn Cook: Okay, I will appreciate it. Thank you.

John C. Pfeifer: But you know we're one step at a time, we're going to make sure we make the N G D be successful and and I think in the future. We may have some other things to talk about but right now we're.

Jamie Lyn Cook: Welcome back, Jamie.

Jerry David Revich: Our next question comes from the line of Jerry Revich with Goldman Sachs. Please answer your question.

Jerry David Revich: We are really focused on this this making sure the U S. Postal service is very successful with this modernization.

Jerry David Revich: Yes, hi, good morning, everyone. I wanted to ask about fire and emergency, obviously not a reportable segment anymore, but pre-COVID, you know, that business ran in the mid-teens margins. And I'm wondering if you can comment, given the pricing that's in the backlog, what's the potential for that business to go into the high teens in this cycle with not only pricing but also logistics costs normalizing? Can you just talk about the opportunity there, please?

Speaker Change: Okay I appreciate it thank you.

Speaker Change: Welcome back Jamie.

Jerry David Revich: Our next question comes from the line of Jerry Revich with Goldman Sachs. Please proceed with your question.

Jerry David Revich: Yeah.

Speaker Change: Yes, hi, good morning, everyone.

Jerry David Revich: I wanted to ask.

Jerry David Revich: Fire <unk> emergency you, obviously, not a reportable segment anymore, but pre COVID-19 that business ran in the mid teens margins and I'm wondering if you could comment given the pricing that's in backlog.

John C. Pfeifer: Sure, we're very excited about the progress we're seeing in Vocational. We talked about, when we combined the segments, that it could be a $12-plus billion segment operating margin with over $3 billion of revenue. We reiterated that with the Aerotech acquisition, and you see the great progress we're making on that with our quarterly results and also our outlook. We'll continue to benefit from the segment synergies that bring the segment together, Aerotech synergies. As you mentioned, we have pricing and a backlog.

Speaker Change: Whats the potential for that business to go into.

John C. Pfeifer: Teams are in the cycle with not only pricing, but also logistics costs normalizing can you just talk about the opportunity there. Please.

John C. Pfeifer: Sure.

John C. Pfeifer: Very excited about the progress we're seeing in vocational.

John C. Pfeifer: We talked about when we combined the segments that it could be a 12 plus billion dollar segment.

John C. Pfeifer: Operating margin was with over 3 billion of revenue reiterated that with the <unk> acquisition and you see the great progress, we're making on that with our quarterly results and also our outlook and we're still we're still will continue to benefit from this segment synergies that bring the segment together aerotech synergies as you mentioned we.

John C. Pfeifer: We have a lot of exciting new products coming out that will be margin-enhancing. We believe we're just at the beginning of our journey to continue to drive enhanced margin opportunities in the segment and see a lot of opportunity there.

John C. Pfeifer: And Jerry, just in general, I'll tell you, we really have an outstanding outlook for our vocation segment. I say that long-term.

John C. Pfeifer: We are pricing backlog, we have a lot of exciting new products coming out that will be margin enhancing so we believe we're just at the beginning of our journey to continue to drive enhanced margin opportunity in this segment and see a lot of opportunity there.

Jerry David Revich: You know, we've got healthy markets, we've got really good backlogs, and strong demand. We continue to execute on long-term opportunities with technology. We think this is a really healthy, stable business for us.

Jerry David Revich: And Gerry just in general I'll tell you we really have.

John C. Pfeifer: Thank you. And John, can I ask, on the U.S. Postal Truck, you had mentioned in your prepared remarks that we are on track to exit 25 at the full production run rate. Can you update us on what the anticipated mix is at full production between EV and ICE as we exit 25?

Jerry David Revich: Have an outstanding outlook for our vocation segment I would say that long term you know we've got healthy markets. We've got really good backlog strong demand.

John C. Pfeifer: We continue to execute on our long term opportunities with technology application. We think this is a really healthy stable business for us.

John C. Pfeifer: Yeah, you know, it's interesting, they've continuously, as I've probably said before, they've continuously increased the mix towards battery electric vehicles, which we think is great and the Postal Service wants. So they're at about, for the first 50,000 units, they're going to do about 75% battery electric and about 25% internal combustion. When we go beyond that, so that'll take us the first few years of the program. Beyond that, I expect, we don't know for sure, but I expect they'll even increase the battery electric even more, maybe even go to 100%, but this is going to be mostly zero emission battery electric vehicles.

Speaker Change: Thank you John can I ask on the U S. Postal truck you had mentioned in your prepared remarks.

John C. Pfeifer: On track to exit 25 at the full production run rate can you update us on what.

John C. Pfeifer: Dissipated mix is at full production between E.

John C. Pfeifer: E D.

John C. Pfeifer: And ice is weird.

John C. Pfeifer: 25.

John C. Pfeifer: Yeah, you know it's interesting they continuously as I, probably said before they've continuously increase the mix towards battery electric vehicles, which we think is great and the postal service wants to learn about the so for the first 50000 units, they're going to do about 75% battery electric.

John C. Pfeifer: About 25% internal combustion.

John C. Pfeifer: And reminding you, this is the first time that the Postal Service or anyone in last mile delivery has had a purpose-built vehicle, adding the productivity benefits that we're adding with this vehicle. It's really a big step forward for the entire industry.

John C. Pfeifer: When we go beyond that so that'll take us in the first few years of the program beyond that I expect we don't know for sure, but I expect though yet even increase the battery electric.

John C. Pfeifer: Even more maybe even go to a 100%, but this is going to be mostly mostly zero turn battery electric vehicles and reminding you. This is the first time that the postal service or anyone in last mile delivery has had a purpose built vehicle.

Jerry David Revich: I appreciate it. Thanks.

Mircea Dobre: Our next question comes from the line of Meg Dobre with Baird. Please proceed with your question.

Mircea Dobre: Thank you. Good morning, everyone. I'm wondering if...

John C. Pfeifer: Morning, Matt. Morning. Thanks for joining us. Maybe you can help us think through the cadence in defense. I mean, there's a lot going on here.

Mircea Dobre: Adding the productivity benefits that we're adding with this vehicles, where it's really a big step forward for the entire industry.

John C. Pfeifer: You have the GLTV program that's winding down. You have NGTV that's ramping up. So, as we're thinking about a cadence of revenue through the year and what's implied in the guidance and what kind of carries into 2025, can you help us understand this dynamic here, how we should think about revenue, and then also associated with this, what should happen with margins here as NGDV ramps up?

Speaker Change: I appreciate it thanks.

John C. Pfeifer: Our next question comes from the line of Mig <unk> with Baird. Please proceed with your question.

Speaker Change: Thank you good morning, everyone.

Speaker Change: Wondering morning morning.

John C. Pfeifer: Maybe you can help us think through the cadence in defense I mean, there's a lot going on here you would have.

John C. Pfeifer: Digital T V program, that's winding down you'd have.

John C. Pfeifer: E V. That's ramping up so.

John C. Pfeifer: Yeah, so I'll, Meg, good morning, it's John. I'll start, Mike may want to add a few things to my comments. You know, a lot We talk about defense going through a big transition, and defense is going through a big transition. We still have production of JLTVs through 2024, so when we get into 2025, and by the way, in 2024, we're in production today with the NGDV, the postal truck. But that's a low rate of production through 2024, and it starts to really increase in 2025.

John C. Pfeifer: As we're thinking about the cadence of revenue through the year and what's implied in the guidance and what kind of carries into 2025.

John C. Pfeifer: Can you help us understand this dynamic here.

John C. Pfeifer: How we should think about revenue and then also associated with the what should happen with margin.

John C. Pfeifer: N D V ramps up.

John C. Pfeifer: Yeah. So so I'll make good morning, it's John I'll start Mike May want to add a few things to my comments a lot. We've talk about defense going through a big transition in defense has gone through a big transition, we still have production of J L. T V's through 'twenty 'twenty four so when we get into 2020 five.

John C. Pfeifer: So as you get into 2025, JLTV for the domestic JLTVs will go out of production, but we're ramping the postal NGDV. So we expect that the revenue we create in 25 through the postal NGDV will exceed what we have gone out of production with on NGDVs in terms of revenue. Getting you a little bit higher perspective of what's happening in the defense world, you know, defense will continue to drive better margins as they get to sole-sourced contracts for many of the vehicles that we have today. And that allows us to reset prices to the realities of where inflation has done to input costs.

John C. Pfeifer: And by the way in 'twenty 'twenty four we're in production today with the N G D V. The postal truck.

John C. Pfeifer: But that's low rate production through 2024, and it starts to really increase in 2025, so as you get into 2020 five J L. T V for the domestic J L. T. V's goes out of production, but we're ramping the postal N. G. D V. So we expect that the revenue we create an <unk>.

John C. Pfeifer: Five through the postal N G D V will exceed what we have are.

John C. Pfeifer: Gone out of production with an N. G. D vs. In terms of revenue, giving you a little bit higher perspective of of what's.

John C. Pfeifer: We've also won some smaller combat vehicle programs and are vying for other combat vehicle programs. These are high priority for the DOD, so the margins are good. And we've got an improving international landscape in terms of lots of countries that are increasing their Department of Defense spending as a percent of their GDP. That's also a bit of a good outlook for improving the defense side of the business.

John C. Pfeifer: In the defense World You know the defense will continue to drive better margins as they get to sole source contracts for many of the vehicles that we have today.

John C. Pfeifer: And that allows us to reset price to the realities of where of what inflation has done the input cost so that as we know.

John C. Pfeifer: <unk> contracts over the next 18 months, that's a good thing for the margins in the defense business. We've also won some smaller combat vehicle programs and are vying for other combat vehicle programs. These are high priority for the D. O D. So the margins are good and we've got an improving international landscape in terms of.

Mircea Dobre: And just to follow up on this, to be clear, we shouldn't expect some sort of material drop in revenue or maybe yet another decline in operating income in 2025 in defense.

Mircea Dobre: A lots of countries that are increasing their department of defense spending as a percent of their GDP, but that's also a bit of a a good outlook for improving the defense side of the business, but 25 is the year, where it really changes from J Ltvs to N. G D vs.

John C. Pfeifer: No, that's not our expectation. Again, we would expect revenue. There's about $700 million of domestic JLTV revenue we expect this year. We expect NGDB to be greater than that next year. So really, we'll start returning to growth next year, and 2026 should be – you'll see a meaningful step up even from there.

Speaker Change: And just to follow up on just to be clear.

John C. Pfeifer: We shouldn't expect some sort of a material drop in revenue or maybe yet another decline in operating income in 2025 and defense.

Mircea Dobre: Okay, thank you for clarifying.

John C. Pfeifer: No that's not our expectation again, we would expect our revenue there was about $700 million of domestic Rockdale TV revenue. We expect this year, we expect <unk> to be to be greater than that next year. So really we should well will start returning to growth next year and 2000, Twenty's sex should be I'm sure.

Stephen Edward Volkmann: Our next question comes from Steve Volkmann with Jeffries. Please proceed with your question.

Stephen Edward Volkmann: Great morning everybody. I wonder if we could go back to the access margin. I'm just trying to think about how the year progresses here, starting off as strong as you are but obviously having to come down to meet your full year guidance. Is that sort of a step down and then sort of flattish for the remaining three quarters? Or do we kind of, you know, trend down, and the exit rate might be significantly lower? I'm just trying to think about that cadence. Now, I think.

Stephen Edward Volkmann: You'll see a meaningful step up even from there.

Speaker Change: Okay. Thank you for clarifying.

Stephen Edward Volkmann: Our next question comes from the line of steam Boeckman with Jefferies. Please proceed with your question.

Speaker Change: Great. Good morning, everybody I Wonder if we could go back to the access margin I'm, just trying to think about how the year progresses here.

Michael E. Pack: Now, I think there's, we certainly don't see growth slowing in that business at this time. There's strong demand.

Michael E. Pack: I think, as we talked about in our last call, just that there's definitely more seasonality to our deliveries as deliveries have normalized. So, what I would expect, our strongest quarters will be the second and third quarters, and then the fourth quarter I would expect to be lower as you start getting into the winter months. And then, again, just returning to that more traditional cadence. And you even see that in the first quarter, if you look within the month, you see more activity as you're approaching springtime. So certainly March from a shipment standpoint is more, and typically more robust. So it's really just the return of seasonality. And again, I think the big drivers, this mix, was a big driver this quarter.

Michael E. Pack: Starting off as strong as you are but obviously having to come down to meet your full year guidance is that sort of a step down and then sort of flattish for the remaining three quarters or do we kind of trend.

Michael E. Pack: Trend down in the exit rate might be significantly lower I'm, just trying to think about that cadence.

Michael E. Pack: No I think there's a we certainly don't see growth slowing in that business. At this time there there's strong demand I think as we talked about on our last call. Just that there is definitely more seasonality to our deliveries those as deliveries of normalized so what I would expect as our.

Michael E. Pack: Strongest quarters will be the second and third quarters and then.

Michael E. Pack: The fourth quarter I would expect to be lower as you start getting into into the winter months and then again just returning to that more traditional cadence and you can see that in the first quarter. If you were to see within the months you see more activity as you're approaching the spring time. So certainly March from a shipment standpoint is more is it.

Stephen Edward Volkmann: Okay, and then maybe just briefly back to vocational. I know you gave the revenue impact of the acquisition, but can you say anything about the margin there and how that impacted the segment?

Stephen Edward Volkmann: Typically more robust so it's really just a return of seasonality again I think the big drivers that mix was a big driver.

Michael E. Pack: Yeah, we're certainly, we're certainly benefiting from it. You know, we certainly have some integration costs up front, and you'll see, see the drivers, but it, you know, we're at near, we're near double-digit margins. I think that will certainly improve as we have some DT for information technology, integration costs, and so on early in the year, but I view that solidly as going to be a good double-digit margin performer for us over time.

Stephen Edward Volkmann: And then I think the timing of some of those investments I mentioned before a factor into it as well.

Michael E. Pack: Okay.

Michael E. Pack: And then maybe just switching briefly back to vocational.

Speaker Change: I know you gave the revenue impact of the acquisition, but can you say anything about the the margin there.

Michael E. Pack: Impacted the segment.

Michael E. Pack: Yeah. We're certainly we're certainly benefiting from it that we certainly have some integration costs upfront and Youll see see the drivers, but you know where were at near work near double digit margins I think that will certainly improve as we.

Steven Fisher: Our next question comes from the line of Steven Fisher with UBS. Please answer your question.

Steven Fisher: Thanks. Good morning.

Michael E. Pack: So you were clear that the customer mix was an upside surprise for Q1 in access. So I guess I'm just wondering, what are the variables that you see out there for Q2 in access that you don't have clear visibility on at the moment? I mean, I know you seem to be pretty well sold out, and I would think you'd have a good idea of the cost. So, you know, how does that customer mix kind of take shape within a quarter? And what other variables might be a factor for Q2 at this point?

Steven Fisher: We have some D T for information technology integration costs and so on early in the year, but you.

Michael E. Pack: You got solidly you're going to be a good double digit margin performer for us over time.

Speaker Change: Alright, Thank you guys.

Speaker Change: Thanks, Steve.

Michael E. Pack: Our next question comes from the line of Steven Fisher with UBS. Please proceed with your question.

Speaker Change: Thanks. Good morning. So you were clear that the customer mix was an upside surprise for Q1 and access so I guess I'm just wondering what are the variables that you see out there for Q2 and access that you don't have clear visibility on at the moment I mean, I know you seem to be pretty well sold.

Michael E. Pack: Yeah, I would say in the mix, it's really just the timing of shipments. So you go back to the beginning of the quarter, we're booked, we have a production plan, but you can always have timing of deliveries. So again, going back to the comment I just made a minute ago, with sort of this return of seasonality, our finished goods are up a bit. In fact, one of the things we really were pleased with was the throughput we saw at Access.

Michael E. Pack: Out.

Michael E. Pack: And I would think you'd have a good view on the costs. So is it.

Michael E. Pack: How does that customer mix kind of take shape within a quarter and what other variables.

Michael E. Pack: Might be a factor for Q2 at this point.

Michael E. Pack: We had about, call it 75 to 80 million in additional finished goods that are ready to be shipped that will be going out early in the second quarter. So it's really just a timing matter that it wasn't. So I guess as I look to the rest of the year, you could have some nuanced gives and takes that I don't know. Again, we're booked for the year. So it's really going to shake out over the course of the year. Because again, those those products and the customers are going to are known at this point. Well, I'm still

Michael E. Pack: Yeah, I would say on the mix, it's really just the timing of shipments. So you go you go back to the beginning of the quarter were booked we have a production plan that you can always have timing of deliveries. So again going back to the comment I just made a minute ago with with sort of this return of seasonality. Our finished goods are up a bit in fact one.

Michael E. Pack: The things we really were pleased with is the throughput we thought access we had about call it $75 million to $80 million of additional finished goods that are ready to ship that will be going out early in the second quarter. So it's really just a timing matter that it wasn't so I guess as I look to the rest.

John C. Pfeifer: Well, and Steve, you have a mix of aftermarket in there too, right? Aftermarket is a spot order, spot buy business, and sometimes it can go up or down a little bit versus expectations a quarter, and that's a very high-margin business, so it does affect that.

John C. Pfeifer: At the year you could have some nuance gives and takes but I don't again, we're booked for the year. So it's really going to shake out over the course of the year because again that those those products and the customers are going to are known at this point well and Steve you have mix of aftermarket in there too right aftermarket as a spot orders spot buy business.

Steven Fisher: Okay, and then just as a follow-up, to what extent are there any cancellations that you're seeing in the access business or changes in timing or push-outs or anything like that coming from customers? You know, I'll tell you, Steve.

Steven Fisher: Mhm, and sometimes it can go up or or or down a little bit versus expectations in the quarter and that's a very strong margin business. So it does affect the margins.

John C. Pfeifer: You know, I'll tell you, Steve, that we're really pleased with the market and access. We see continued demand drivers going forward. We talked about the Q4 order book being really strong. The $940 million that we just booked was better than our expectations. So we're booked well through 2024 right now, and I'm telling you that because when I give you the health of the marketplace, we don't have any unusual cancellation activity going on. It's just the opposite. Customers are focused on when they can get the equipment and when you are going to slot it for them in your production.

Speaker Change: Okay, and then just as a follow up to.

Steve: What extent are there any cancellations that you're seeing in the access business are changing in timing or push outs or anything like that coming from from customers.

John C. Pfeifer: I'll tell you Steve that we were really pleased with the market and access.

John C. Pfeifer: We see continued demand drivers going forward, we talked about the Q4 order book was really strong the 940 million that we just booked was better than our expectations.

John C. Pfeifer: So we're book, we're booked well through 2024 right now.

Angel Castillo: Our next question comes from Angel Castillo of Morgan Stanley. Please proceed with your question.

Angel Castillo: And I'm, telling you that because when I when I give you the the health in terms of the marketplace.

Brendan: Hi, this is Brendan speaking on behalf of Angel. I just want to talk about your CAT telehandler supply partnership that should be ending, I believe, at the end of this year. So can you talk about your expectations for renewal of that relationship beyond 2025? And then just any potential implications from a price or profitability perspective?

Speaker Change: We don't.

Brendan: We don't have any unusual cancellation activity going on its just the opposite customers are focused on when can I get the equipment and when are you going to slot. It for me and your production schedule.

Speaker Change: Terrific. Thank you.

John C. Pfeifer: Thanks.

John C. Pfeifer: Sure, yeah, good to hear from you, Angel. So I want to first say, hey, CAT's been a long-term partner of ours, and they've been a great partner. I mean, it's hard to find a better partner than CAT to work with in an industry. I'm not going to comment on the contract specifically.

Speaker Change: Our next question comes from the line of Angel Castillo Morgan Stanley. Please proceed with your question.

John C. Pfeifer: Hi, This is brendon on for Angel.

Angel Castillo: I just wanted to talk about your cat Callahan, our supply partnership that should be.

Angel Castillo: I'll leave at the end of this year. So can you talk to your expectations for renewal of that relationship beyond 2025.

John C. Pfeifer: What I will say is that JLG is the premier provider of telehandlers in the industry. And if we had more capacity, we'd be shipping a lot more telehandlers today. We are really paced by the capacity that we have, so that's why we're increasing capacity. We see new markets opening up. We talk about agriculture all the time; that's one of them; that is a real opportunity today and will continue to grow over time.

Speaker Change: And then just any potential implications from a price or profitability perspective. Thanks.

Speaker Change: Sure Yeah. Good good to hear from you Angel. So I wanted to first say, hey, cat's been a long term partner of ours and they've been a great partner I mean, there is.

John C. Pfeifer: Hard to find a better partner than cat to work with in an industry.

John C. Pfeifer: I'm not going to comment on the contract specifically, what I will say is that J L. G.

John C. Pfeifer: So, no matter what happens, we expect to continue to grow our share and our revenue in the telehandler marketplace for the foreseeable future. That's what I can tell you about that market, and we see it as a good, healthy growth area.

John C. Pfeifer: As the premier provider of Tele handlers in the industry and if we had more capacity.

John C. Pfeifer: Be shipping a lot more tele handlers today.

John C. Pfeifer: We are really paced by the capacity that we have.

John C. Pfeifer: So that's why we're increasing capacity, we see new new markets opening up we talk about AG. All the time. That's one of them are that that is a real opportunity today and we will continue to grow over time.

Brendan: Okay, thank you. And then just touching on the free cash flow guide. So, you know, new guidance is a little bit, earnings are higher than you previously thought. You mentioned on the call that CapEx is the same. So just kind of curious what the puts and takes are for why the overall free cash flow hasn't gone up as well. Thanks. I would say right now that it's early in the year.

Brendan: We expect no matter what happens that we will continue to grow our our share and our revenue in the tell a handler market place for the foreseeable future.

Michael E. Pack: I would say right now it's early in the year, and I think exiting, we have a little bit more working capital exiting the first quarter, so that's something we're going to continue to monitor throughout the year, but it is something that certainly we expect to be a good, strong, free cash flow generator, and so really it comes down to timing in a lot of cases with working capital, but I think bottom line is, you know, we talked about it, we expect to be a strong, free cash flow generator overall.

Brendan: That's what I can tell you about that market and it's a we see it as a good healthy growth area for us.

Speaker Change: Okay. Thank you.

Michael E. Pack: And then just touching on the free cash flow guide. So you know our new guidance is a little bit.

Speaker Change: Earnings are higher than you previously thought you mentioned on call. It Capex is the same so just kind of curious what the puts and takes are for why the overall free cash flow hasn't gone up as well. Thanks.

Michael E. Pack: So I would say right now it's early in the year and I think exiting we use we have a little bit more working capital exiting the first quarter. So that's something we're going to we're going to continue to monitor throughout the year, but it is something that that's certainly we expect to be a good strong free cash flow generator and so really it comes down to timing and a lot of cases.

Tami Zakaria: Our next question comes from the line of Tami Zakaria with JPMorgan. Please proceed with your question.

Tami Zakaria: Hi, good morning, Team Oshkosh. How are you? I have two great questions. One is the strength in vocational training excluding aerotech. Can you comment on the price versus volume growth you saw in the quarter?

Speaker Change: What's working capital debt.

Tami Zakaria: Bottom line is.

Speaker Change: We talked about it we expect to be a strong free cash flow generator overtime.

Speaker Change: Okay. Thank you.

Tami Zakaria: Thanks Brendan.

Michael E. Pack: Yeah, we're certainly seeing the benefits of improved price cost dynamics. You know, you'll see in the queue that it is, it's really the biggest driver. In the quarter, about 30 million of our operating income year over year benefit was really price cost, which is, which is what we expected. And that's going to continue to be a nice strong driver as we look into the future.

Tami Zakaria: Our next question comes from the line of Tami Zakaria with Jpmorgan. Please proceed with your question.

Speaker Change: Hi, Good morning team I'll discuss how are you.

Michael E. Pack: But you don't have to.

Speaker Change: So I have two quick.

Michael E. Pack: Quick questions one is the strength in vocational excluding aerotech.

Speaker Change: Can you comment on the price versus volume growth you saw in the quarter.

Tami Zakaria: Got it. That's very helpful. And then on access equipment, I think orders were down, but still better than what you initially expected. But could you provide some color on orders in North America versus Europe or other regions?

Tami Zakaria: Yeah we're.

Tami Zakaria: We're certainly seeing the benefits of an improved price cost dynamics, you know you'll see in the.

Tami Zakaria: And in the Q that it is it's really the biggest driver.

Tami Zakaria: In the quarter about a about $30 million of our of our operating income year over year benefit was really price cost, which is which is what we expected and that's going to continue to be a nice strong driver as we look into the future.

John C. Pfeifer: Yeah, Tami. Access has been running at a really healthy clip, and we expect that to continue due to all the demand drivers that we talk about regularly. With regard to the global outlook, you know, the U.S. is our biggest market, of course, and the U.S. is really healthy. When you look at our guide, you see that we're going to increase our revenues for the year in the high single digits, I think it's 8, 9 percent in terms of revenue growth.

Speaker Change: Got it that's very helpful. And then on access equipment, I think orders were down, but it's still better than what you.

Tami Zakaria: Initially expected, but could you provide some color on orders in North America versus Europe or other region.

John C. Pfeifer: The orders across the globe are, and the revenue creation that we're seeing, for the most part, is positive and healthy. The only area that hasn't turned out so well is Europe. Our European business this year is down, and Europe's, you know, we'll continue to invest in Europe for the long-term future, but Europe's the one outlier for us today when you look at the global outlook. Asia is doing well. South America, Latin America, is doing well. That's kind of the global outlook.

John C. Pfeifer: Jim.

John C. Pfeifer: Yes Tammy.

John C. Pfeifer: You know access has been running at a really healthy clip and we expect that to continue due to all the demand drivers that we talk about regularly.

John C. Pfeifer: With regard to the global outlook, you know U S is our biggest market of course in the U S is really healthy when you look at our guide do you see that we're going to increase our revenues for the year in the high single digits. I think is eight 9% in terms of the revenue growth.

John C. Pfeifer: The orders across the globe are and the revenue creation that we're seeing for the most part is positive and healthy the only area that has turned a not so good as Europe, our European business. This year is down and Europe's.

Tami Zakaria: Great, thank you.

Nicole Sheree DeBlase: Our next question comes from the line of Nicole DeBlase with Deutsche Bank. Please proceed with your question. Yeah, thanks. Good morning, guys.

Nicole Sheree DeBlase: Morning. Morning, Nicole.

Nicole Sheree DeBlase: We'll continue to invest in Europe for the long term future, but Europe's the one outlier for US today. When you look at the global market Asia is doing well South America Latin America is doing well, it's that's kind of the global outlook.

Nicole Sheree DeBlase: On vocational, you talked about price cost being a big factor there. I guess you've guided to 11.5% margins for the full year. I know that's up versus prior guidance, but it does imply a step down versus what you would expect. So can we just talk about the puts and takes there going from like one queue to the rest of the year?

Speaker Change: Great. Thank you.

Michael E. Pack: Sure, I would say very similar, Nicole, to the timing of some of the investments we're making in the business are occurring more Q2 or Q2 through Q4. So Murfreesboro, Tennessee, some of the other new product development spending, some of our some of our integration costs, we had a bit in Q1. So we talked about that a minute ago, but there's some more for the rest of the year. So it's really that we again expect price costs to continue to be a driver throughout the year when we look at it on a year over year basis.

Nicole Sheree DeBlase: Thanks.

Nicole Sheree DeBlase: Our next question comes from the line of Nicole <unk> with Deutsche Bank. Please proceed with your question yes.

Speaker Change: Yeah. Thanks, Good morning, guys. Good morning, good morning, Nicole.

Speaker Change: Maybe just on vocational you.

Michael E. Pack: You talked about price cost being a big factor there I guess, you've guided to 11 point.

Nicole: For the full year I know that's up versus prior guidance, but it does imply like a step down versus what you achieved in the first quarter. So can we just talk about the puts and takes there going from like <unk> to the rest of the year.

Michael E. Pack: Sure I would say very similar Nicole to the to access the timing of some of the investments we're making in the business.

Nicole Sheree DeBlase: Okay, I got it. That's clear.

Nicole Sheree DeBlase: And then sticking with the price-cost topic, then, can we also talk about that, how that's impacting access? So, is the expectation that part of the margin, part of the explanation for margin through the year is perhaps price-cost. Tailwind was biggest in the first quarter, and that starts to moderate through the rest of the year. Do I have that right?

Nicole Sheree DeBlase: Our are occurring more Q2 or Q2 through Q4, So Murphy's borough, Tennessee, some of the other new product development spending.

Nicole Sheree DeBlase: Some of our some of our integration costs, we had a bad in Q1, so we talked about that a minute ago, but there's some more of the rest of the year. So it's really that.

Michael E. Pack: I guess, ultimately, from a price-cost perspective, I think our pricing is essentially set for the year, so I think the price and cost dynamics are largely there. I would say the bigger drivers, just as we go through the year, are just, again, some of that customer mix nuance.

Michael E. Pack: We again, we expect price cost to be continue to be a driver throughout the year. When we look at it on a year over year basis.

Speaker Change: Okay got it that's clear and then sticking with the price cost topic. Then can we also talk about that how that's impacting access. So is the expectation that part of the margin part of the exploration for margins through the year as perhaps the price cost tailwind was bigger than the first quarter and that starts to moderate through the recipe or do I have that right.

John C. Pfeifer: Nicole, it's really an access Q1 to the rest of the year, it's mixed, and it's R&D investment in the second half of the year that's not Christ's cause, correct? Okay, got it. Thank you.

John C. Pfeifer: I guess ultimately from a price cost perspective, I think you know where our pricing is essentially fixed for that or is that for the year or so.

Nicole Sheree DeBlase: Our next question comes from the line of Chad Dillard with Bernstein. Please answer your question.

Charles Albert Edward Dillard: So my question is on order cadence and recognizing that you've already booked out 24. Like, how should we think about orders over the next couple of quarters? Is it, you know, more typical seasonality? Are you going to see more of the 25 orders, you know, in the fourth quarter? Just trying to think through that.

Charles Albert Edward Dillard: The price and cost dynamics are largely there I would say the bigger driver is just as we go through the year is just again some of that customer mix nuance.

Speaker Change: Nicole it's really an access Q1 to the rest of the year, it's mix and its R&D investment in the second half of the year that.

John C. Pfeifer: So right now, when customers place orders, Chad, they're primarily placing orders for units they're going to receive at some point in 2025. And so it makes it very difficult for our customers when we have such a competitive environment in the access equipment market.

Charles Albert Edward Dillard: It's not just cost correct okay.

Speaker Change: Okay got it thank you.

John C. Pfeifer: Our next question comes from the line of Chad Dillard with Bernstein. Please proceed with your question.

Speaker Change: Hi, good morning, guys.

Speaker Change: Good morning.

John C. Pfeifer: So my questions on Oregon, and recognizing that.

Charles Albert Edward Dillard: We have such big backlogs and, therefore, longer lead times. So that's why we say, and we talk with our customers all the time about this and when it's the best time for them to be placing orders for the future. And right now, you know, we're as we're booked out through 24 and into 25, they're focused on finishing up their 2024 and then starting to order for 2025 a little bit later in the year.

Charles Albert Edward Dillard: <unk> already booked out 24.

Charles Albert Edward Dillard: Like how should we think about orders over the next couple of quarters is it more typical seasonality or you're going to see more of a 25 quarters in the fourth quarter, just trying to think through that.

Charles Albert Edward Dillard: So so right now when customers place orders, Chad there, primarily placing order for our units they're going to receive in 'twenty at some point in 2025.

Charles Albert Edward Dillard: So we think that'll start probably in the second half, Q3, let's say, and build into Q4. That's our expectation. Now, having said that, you know, in Q1, our orders were better than we thought they were going to be. So we still have a lot of customers that are willing to place orders for 25, even though we're so far from 25 still at this point in the year. That's where I can...

Charles Albert Edward Dillard: And so it makes it very difficult on our customers won't have such a in the access equipment market. When we have such big backlogs and such therefore longer lead times. So that's why we're saying and we talk with our customers.

Charles Albert Edward Dillard: Time about this and when's the best time for them to be placing order for the future and right. Now you know we're as we're booked out through to in 'twenty four and into 'twenty five.

John C. Pfeifer: Great, that's helpful. And then just shifting over to defense. I think you mentioned that you have some combat vehicle programs that you're potentially applying for. Could you give a little bit more color? What are the programs? When should we expect the down select?

Charles Albert Edward Dillard: They're focused on finishing up their 2024, and then starting to order for 2025, a little bit later in the year. So we think that will start probably in.

John C. Pfeifer: In the second half Q3, let's say and build into Q4, that's our expectation now having said that you know in Q1, our orders were better than what we thought they were going to be.

Charles Albert Edward Dillard: What is the product?

John C. Pfeifer: So, the most notable one is the robotic combat vehicle. It's an autonomous vehicle with a lot of technology on it.

John C. Pfeifer: We still have a have a lot of customers that are willing to place orders for 25, even though we're so far from twenty-five still at this point in the year.

John C. Pfeifer: We won the prototype contract. So, they will select the production... They'll award the production contract in 2025, probably early 2025. It's a billion-dollar business, maybe a billion-dollar-plus type contract, but right in the crosshairs of where the DoD priorities are because it's a high-tech vehicle. There are good margins on that vehicle. That's a prime example of where we can make a difference with our capabilities in the combat world.

John C. Pfeifer: Okay.

Speaker Change: You know that's what I can say.

Speaker Change: Great. That's helpful and then just shifting over to defense.

John C. Pfeifer: <unk>.

John C. Pfeifer: You mentioned that you had some combat vehicle programs that you potentially buying core can be could you give a little more color.

John C. Pfeifer: What kind of programs.

John C. Pfeifer: When should we expect that down so much.

Speaker Change: Yeah on products.

John C. Pfeifer: So the most the most notable one is the robotic combat vehicle, it's an autonomous vehicle with a lot of technology on it we won the prototype contracts. So they will select the production.

John C. Pfeifer: Rogue Fires is a program that we're selling today, and we'll continue to sell it.

John C. Pfeifer: They'll award option contracts in 2025, probably early 2025 to.

John C. Pfeifer: 1 billion dollar type business, maybe a build out $1 billion plus type contract, but right in the crosshairs of where the D. O D priorities are because it's a high tech vehicle. There's good margins on that vehicle. That's a that's a prime example.

Robert Stephen Barger: Our next question comes from the line of Steve Barger with KeyBank. Please proceed with your question.

Christian: Good morning. This is actually Christian's dialogue for Steve Barger. Thanks for taking the question. [inaudible] Given 1Q's strong operational beat, if you were to see a fight in the back half of the year in Guidance, any thoughts on what segment that would come from?

Christian: But you know where we can make a difference with with our capabilities in the combat world.

Michael E. Pack: No, we just, I guess what I'd say is we had a strong Q1, a solid increase in our revenue expectations and EPS, and you certainly see that our businesses are performing well, and that will continue to be the focus for the year. So, certainly, we see strength right now in vocational and access. Yeah, and you know Christian, I like the question, and we feel really good about all of our businesses, and we feel good about them because they all have good opportunities.

Christian: Wrote fires so to like you mentioned in prepared remarks, you know solid rogue fires as a as a program that where we're selling today and will continue to sell.

Speaker Change: Great. Thank you.

Michael E. Pack: Our next question comes from the line of Steve Barger with Keybanc. Please proceed with your question.

Michael E. Pack: Good morning, this is actually Krishna dialog Christy vulgar thanks for taking the questions.

Speaker Change: Thank you <unk>.

Michael E. Pack: Given <unk> strong operational beat if you were to see up side in the back half of the year guidance any thoughts on what segment that would come from.

Michael E. Pack: You know, vocational's got great opportunities to continue to outperform in manufacturing and delivery with big backlogs and really good programs, but defense I could say the same thing about. I can certainly say access is always that way.

Michael E. Pack: No. We just I guess, what I'd say is we had a strong Q1, a solid increase to our revenue expectations and EPS and you certainly see that our businesses are performing well and that will.

John C. Pfeifer: You know, the team's always going to try to strive and continue to drive improvement. You know, we look at the world as half full. The class is half full. As we look forward, we've got opportunities.

John C. Pfeifer: The focus for the year. So certainly we see strength right now in vocational and access.

Christian: And then looks like you're already going to hit the bottom end of your $11 to $13, $25 targets by the end of this year. Not looking for guidance, but is the high end of that range what you're thinking about for $25? And any thoughts on what comes after that, given the order and backlog visibility really into $25 already? Thank you.

Speaker Change: Christian I I like.

Speaker Change: The question.

Christian: We feel really good about all of our businesses and we feel good about them because they all have good opportunities. You know vocational has got great opportunities to continue to outperform and in manufacturing and delivery with big backlogs and really good programs in our blood.

Christian: But defense I could say the same thing about I can say it certainly access as always that way you know the team is always going to try to strive in.

John C. Pfeifer: Well, I mean, thanks for the question, Christian, because we are delighted that we are hitting our 2025 long-range guidance a year early, which, as you just said, is exactly what we're doing. Now, that doesn't surprise us.

John C. Pfeifer: And continue to drive improvement in the business. So we look at the world is half full.

John C. Pfeifer: This is half full as we look forward, we've got opportunities in our businesses.

John C. Pfeifer: You know, this type of performance; we always knew we'd get to this level of performance. We're just doing it a little bit faster than what we had forecast to the world we would do it at. That's all really, really good.

Speaker Change: Great and then it looks like you're already going to hit the bottom end of your 11 to $13 25 targets by the end of this year not looking for guidance, but it is the high end of that range, what youre thinking about for 2005 and any thoughts on what comes out so like given the order and backlog visibility really into 'twenty five already.

John C. Pfeifer: We're not providing guidance today for 2025. We will provide guidance for 2025 when the timing's right, but we look at the health of the access market. We look at the strong position that we have in the vocational market, and in 2025, we'll start to see some positive change in the defense business. That's all I'll say about it.

Speaker Change: Thank you.

Speaker Change: Well I mean, thanks for the question Christian because we are delighted that we are hitting our 2025 long range guidance a year early which as you. Just said is exactly what we're doing now that doesn't surprise us.

David Michael Raso: Our next question comes from David Raso with Evercore ISI. Please proceed with your question.

John C. Pfeifer: This type of performance, we always knew well, we'll get to this level of performance. We're just doing it a little bit faster than what we had forecast to the world. We would do it at that's all really really good we're not providing guidance today for 2025, we will provide guidance for 2025, when the Timing's right, but you know we look at.

David Michael Raso: Hi, thank you for your time. As you get closer to volume ramping on the postal truck, and you've obviously gotten more familiar with the BEV production process, and obviously it sounds like a large majority from the get-go is going to be BEV, can you give us an update on where you're comfortable thinking about profitability for that program? I know you're not going to give us an exact number, but just give us some update on your thoughts now that, obviously, we kind of started to think it'd be a little more ice to start, but obviously, now it's clear it's going to be BEV from the get-go. So just to...

David Michael Raso: The health of the access market, we look at the strong.

David Michael Raso: Position that we have in the vocational market and in 2025 I will start to see.

David Michael Raso: Some positive change in the defense business you know we.

Speaker Change: That's what I'll say about it.

Speaker Change: Great. Thanks.

David Michael Raso: Thanks.

David Michael Raso: Our next question comes from the line of David Raso with Evercore ISI. Please proceed with your question.

Michael E. Pack: Yep. Yeah, I would say, David, our view hasn't changed. I think ultimately, we said by 2026 we'll be at full rate production, and we would expect, as we've said all along, you know, stronger margins than our traditional tactical vehicle margins. This year, we'll have some startup costs, so it's not, and volumes are relatively low. So next year, we see a really strong ramp, so it's going to be between that. And I think that's, you know, that's about what we're going to, what I'll say at this point. In time, but we're pleased with the progress and the outlook.

Speaker Change: Hi, Thank you for the time as you get closer so volume ramp on the postal truck and you've got obviously some more familiar with the.

Michael E. Pack: The Bev production process.

Michael E. Pack: It sounds like large majority from the get go is gonna be Bev can you give us an update.

Speaker Change: Where you are comfortable thinking about profitability for that program I know, you're not going to give us an exact number but just give some update on your thoughts.

Michael E. Pack: Now that obviously, we kind of start to think it would be a little more ice to start but obviously now it's clear it's gonna be back from the get go.

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

Speaker Change: Just curious.

Christine: Yeah, Yeah, absolutely, Yeah, I would say David I, our view hasn't changed I think ultimately we said by 2026, we'll be at full rate production.

John C. Pfeifer: Thanks, Christine, and thanks to everybody for joining us today.

Christine: As we've said all along.

John C. Pfeifer: We're pleased with our strong start to 2024. We look forward to speaking with you at a conference or one of the trade shows where we will be showcasing our technology and mobility. Our Volterra ZSL will be on display at Waste Expo from May 7th through the 9th. It will also be shown at the Advanced Clean Transportation Expo in Las Vegas on May 21st to 23rd, along with the U.S. The Postal Service's Next Generation Delivery Vehicle. Please reach out to us if you have any follow-up questions, and have a great day.

Speaker Change: Stronger margins in our traditional tactical wheeled vehicle margins.

John C. Pfeifer: This year, we will have some startup costs, so it's not and volumes relatively low. So next year, we see a really strong ramps that's gonna be between that and I think that's you know that's about what we're gonna, but I'll say at this point in time, but we're pleased with the progress and the outlook.

Speaker Change: Thank you.

John C. Pfeifer: Okay.

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

Christine: 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.

Speaker Change: Thanks, Christine and thanks to everybody for joining US today, we're pleased with our strong start to 2024, we look forward to speaking with you at a conference or one of the trade shows where we will be showcasing our technology and mobility are both parents ESL will be on display at waste Expo from May seven through the ninth well also be sure.

Christine: One at the advanced clean Transportation Expo in Las Vegas on May 20 <unk>.

Christine: Third along with the U S postal vehicle U S. Postal services next generation delivery vehicle. Please reach out to us if you have any follow up questions and have a great day.

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.