Good day, and welcome to the Alamo Group Inc. third quarter 2023 conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, General Counsel, and Secretary. Please go ahead. Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at 212-827-3746, and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing 1-877-344-7529, with the passcode 1294689. Additionally, the call is being webcast on the company's website at www.alamogroup.com, and a replay will be available for 60 days. On the line with me today are Jeff Leonard, President and Chief Executive Officer, and Richard Wehrle, Executive Vice President, Chief Financial Officer, and Treasurer. Management will make some opening remarks, and then we will open up the line for your questions. During the call today, management may reference certain non-GAAP numbers in their remarks. Reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release. Before turning the call over to Jeff, I'd like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: adverse economic conditions, which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency-related issues, geopolitical events, and other risk factors listed from time to time in the company's SEC reports. The company does not undertake any obligation to update the information contained herein, which speaks only as of this date. I would now like to introduce Jeff Leonard. Jeff, please go ahead. Thank you, Ed. We want to thank everyone who's joined us on the conference call today and to express our appreciation for your continued interest in Alamo. The third quarter shaped up broadly in line with our expectations, and we were very pleased with the financial results reported today that were produced in an increasingly challenging operating environment. Despite persistent inflation, higher interest rates, and ongoing labor constraints, our teams achieved record quarterly results for sales and earnings for the eighth consecutive quarter. I would now like to turn the call over to Richard, who will take us through a review of our financial results for the third quarter. I will then provide additional comments on the results and say a few words about the outlook for the next two quarters. Following our formal remarks, we will look forward to taking your questions. So Richard, please go ahead. Thanks, Jeff, and good morning, everyone. Alamo Group's third quarter 2023 closed with an excellent performance that produced record net sales and net income driven by continued strong demand for our products. Third quarter consolidated net sales were $419.6 million, an increase of 14% compared to $368.8 million in the third quarter of last year. Gross margin percentage expanded by 220 basis points, and gross margin increased by just under $22 million in the quarter compared to the third quarter of 2022. Both margin dollars and percentages were driven by higher volume and price initiatives we began in early 2022, along with improved productivity gains. Operating income for the third quarter came in at $49.8 million versus $35.8 million in the third quarter of 2022, an increase of 39%. Operating income as a percent of sales was just under 12% for the third quarter versus just under 10% for the same quarter last year. Consolidated net income for the third quarter was $34.9 million, or $2.91 per diluted share, an increase of 35% versus net income of $25.8 million, or $2.16 per diluted share for the third quarter of 2022. Looking at the divisions, Vegetation Management division once again delivered solid results. Net sales were $246.9 million, an increase of 8% compared to $228.5 million for the third quarter of 2022. Strong sales of governmental and agricultural mowing equipment in North America, U.K. and Europe led the way for this division. Despite labor shortages and to a lesser extent, supply chain disruptions, margins improved primarily due to increased net price realization. Operating income for the third quarter in this division was $30.3 million, up 12% versus $27.1 million for the same period in 2022. Industrial Equipment net sales, division net sales were $172.7 million, up 23% compared to $140.3 million for the third quarter of 2022. This was due to a solid performance across all product lines, particularly vacuum trucks, sweepers, debris collectors, and snow removal equipment. While truck chassis deliveries continued to return to a normal cadence, to a more normal cadence, some component part shortages continued to impact this division's operations, although not as significant as in previous quarters. This resulted in a substantial rise in operating income in the third quarter for this division of $19.5 million, compared to $8.7 million for the third quarter of 2022, an increase of 124%. Consolidated net sales were a record for the first nine months of 2023, coming in at $1.27 billion, up 13%, compared to $1.12 billion for the first nine months of 2022. Strong demand for our products in both divisions, along with positive impacts of pricing initiatives and improved supply chain and productivity, were the main drivers of the increase. Nine-month gross margin percentage was up 240 basis points, and gross margin increased $66 million versus the first nine months of 2022, an increase of 24%. The margin improvement experienced resulted from improved supply chain conditions, which led to higher efficiencies and enhanced capacity utilization. Operating income in the first nine months of 2023 was $153.2 million, or 12% of sales, compared to the same period in 2022, which was $105.9 million, or just over 9% of sales, a 260 basis point increase. Net income for the first nine months of 2023 was $104.6 million, or $8.73 per diluted share, versus net income of $72.8 million, or $6.10 per diluted share for the first nine months of 2022, an increase of 44%. Company's backlog at the end of the third quarter of 2023 came in at just under $891 million, virtually unchanged from the end of the second quarter of 2023, but was slightly down by 2% compared to the backlog at the end of the third quarter of 2022. The additional financial items I'd like to cover are related to the balance sheet at the end of the third quarter, which continues to remain strong. Working capital increased $96 million compared to the end of the third quarter of 2022. The increase resulted from higher accounts receivable and, to a lesser extent, inventory. During the third quarter, as we expected, we reduced our debt level on our current credit facility by almost $24 million, and our bank leverage ratio at the end of the third quarter was 1.33 to 1, which is at its lowest level in four years. Finally, the company's trailing 12-month EBITDA was a record, coming in at just over $245 million, up 25% compared to the calendar year end, 2022. For the balance of 2023 and into 2024, cash flow should remain strong, as our focus on the balance sheet will be to further reduce both inventory and debt. Increasing consolidated profits will be extremely important. We will remain disciplined in our execution of controlling costs and expenses, as inflation continues to put pressure on our margins. We will continue to focus on further improving supply chain performance to help reduce the amount of inventory we hold in work in process. Our biggest challenge will continue to be meeting the heightened demand of our products throughout the company, given persistent labor shortages. So in summary, Q3 was a great quarter for Alamo Group. Sales were up 14%, which translated into a 39% increase in operating income and a 35% increase in net income. We're also pleased our board recently approved a regular quarterly dividend of $0.22 per share for the third quarter of 2023. With that, I'll turn the call back over to Jeff. Thank you, Richard. I'd like to express my personal thanks to everyone who has joined our conference call today. While both operating divisions achieved solid top-line sales growth, as expected, growth in the industrial equipment division was stronger. Governmental agencies continued to invest in updating their infrastructure maintenance fleets and as supply chain bottlenecks continued to resolve. Although certain types of components remained problematic, supply chain performance improved again during the third quarter. Receipts of Class 6-8 truck chassis that represent the bulk of our requirements, improved sequentially, while the supply of Class 5 and smaller chassis, which are less significant to us, became somewhat more restricted. As has been the case for the past year, certain types of industrial components continued to be constrained, and intermittent shortages once again adversely impacted our production operations. Crop and persistent drought in much of the Midwest and Southern United States. Order bookings in this division were down slightly compared to the third quarter of 2022, but were sharply higher than the second quarter of this year. U.S. farmers continued to express concerns about high input costs, rising interest rates, and lower crop and livestock prices, hobby farm and ranch dealer inventories, while not at a concerning level from a historical perspective, are under increasing scrutiny due to rising financing costs, tighter credit, and greater buyer caution. Higher interest rates also constrained demand for our larger forestry and wood recycling equipment, as many of these larger ticket purchases are subject to third-party financing. Housing starts in the third quarter declined about 1% compared to the second quarter, but were up about 5% compared to a year earlier, even considering steadily higher mortgage rates. We were very pleased that despite these headwinds, new orders for forestry and tree care equipment improved nicely compared to the second quarter, although still below the levels achieved in the third quarter of 2022. Europe and the United Kingdom were notable bright spots again during the third quarter. Orders received in the U.K., the Netherlands, and France moved higher compared to both second quarter of this year and the prior year third quarter, despite challenging market conditions. It's also worth noting that orders received in South America set an all-time company record during the quarter, as demand for our sugarcane harvest hauling equipment and other agricultural and forestry products continued to rise. Against the backdrop of increasing economic headwinds, we were extremely pleased that the Vegetation Management division third quarter sales increased by 8% year-over-year. Orders were sharply higher sequentially, and profitability remained strong. Operating income from this division improved more than 11% compared to the third quarter of 2022, and once again exceeded our targeted level of 12% of sales. Activity in the governmental sector continued to be strong during the third quarter in all markets where we operate. Demand for infrastructure maintenance equipment remained buoyant, as it has been all year. Order bookings in our Industrial Equipment division were 25% higher than the prior year third quarter, and also nicely higher than the second quarter of this year. While all of our product lines remained in high demand from governmental agencies during the third quarter, demand for our municipal snow plows was exceptional. Snow removal order bookings increased by more than 100% compared to the third quarter of 2022, and backlog in this part of the business is at its highest level ever achieved. This is very nice growth, was partly driven by the successful introduction and rapid acceptance of our new wide-wing plow system that allows multiple traffic lanes to be cleared of snow and ice in a safe and efficient manner. Excavator and vacuum truck bookings were also sharply higher during the third quarter, and the utilization of our vacuum truck rental fleet remained excellent. Due to a strong prior year comparable, new orders for street sweepers and debris collectors were somewhat lower in the third quarter of 2022. With the better flow of truck chassis and other components, Industrial Equipment division sales grew nicely and efficiency improved. Sales in this division were up more than 23% compared to the third quarter of 2022. Third quarter operating income improved dramatically, and operating margin rebounded by over 500 basis points compared to the prior year third quarter. We were also very pleased with the recently completed acquisition of Royal Truck & Equipment, that will be integrated into the Industrial Equipment division as part of our sweeper and debris collection group. This is a company we've been in contact with for some time. They are a leader in the development and deployment of truck-mounted attenuators and have helped significantly improve work crew safety through innovation and continuous development of their products. In summary, we remain optimistic regarding Alamo Group's future outlook. We were obviously pleased that in the third quarter, despite the headwinds discussed previously, the Vegetation Management division continued to perform very well, and as expected, the Industrial Equipment division continued to rapidly regain momentum lost during the pandemic and subsequent supply disruptions. We anticipate that investments by governmental entities will remain elevated, and that the market served by our Vegetation Management division will be stable for the remainder of 2023, and then gradually regain momentum in 2024. We also believe that supply chain performance will continue to improve sequentially and will support solid sales growth and further improvement of operating efficiencies. This is a rather positive pattern for the company and one that we believe will continue to support favorable financial development for the next few quarters as we continue to execute our strategy in a disciplined manner. Before closing my remarks today, I'd like to thank our customers, our dealers, suppliers, and our thousands of exceptional employees and our financial stakeholders for their continued support for the company. This concludes our prepared remarks. We're now ready to take your questions. Operator, please go ahead. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Mike Shlisky with D.A. Davidson. Please go ahead. Good morning, and thank you for taking my questions. Hi, Mike. I'd like to have you start out with some commentary on the orders between the two segments. You had mentioned, and the press release said, backlogs were up a bit in industrial, down a bit in vegetation. Clearly, it was flat overall, and that's great, great to see in this environment. But, you know, the two segments have margin differences, and I'm curious if there will be a big margin headwind to mix over the next couple of quarters. Because the volumes that you have in industrial, especially if it's in, you know, a good margin business like a snow plow, does that allow for higher margins and perhaps a little bit more of an evening out of the two segments margins over a period of time here? Yeah, that's a very insightful question, Mike, and you're exactly right. That's how we see this unfolding. I think vegetation management can hold their margins for the next couple of quarters and gradually improve next year, as I said, but industrial continues to gain momentum, and we're not where we can be in that division by any means yet. And then the nice story is snow removal, because it's a segment that's traditionally been a little bit dilutive for us from a margin point of view, but it's performing exceptionally well right now with higher backlogs as well. And I think that will tend to blend the industrial margins higher and keep on a good pace there. So we think industrial is still gaining momentum. They're not out of gas yet at all from any point of view with regard to the operating margin they can achieve, and so I don't really think you're going to see that dilution that you're thinking about, but it's a very insightful question. Great, and thanks for that. Then a quick margin question for you. Have you given a lot of, any thought to maybe upping those margin targets over the next few quarters? Clearly, one of your competitors, one of your largest competitors, just upped their margin targets. I'd be curious, you know, your thought process there, Jeff. Yeah, we're gonna be discussing that. We're gonna have our budget round starting actually next week, Mike, so we'll discuss that then after we've met with all the marketing teams, and then we'll give you our feedback on that. But as I've said, as we get to 12, and we can stay there for a while, we'll bump it up again. I just had that conversation with our board of directors yesterday. So, yes, I'm sure we will readjust it. Great. Maybe one last one for me, and so maybe it's for Richard. Given where your business is heading over the next couple of quarters, as you know, your comments indicated, and where things could go from an inventory and working capital perspective, I am curious if you've got any room you think to maybe up the debt reduction over time, given the current environment? Yeah, Mike, I think, we're anticipating that we will reduce debt some more here, net, net debt. You know, we pulled money internationally back at the end of the year to kind of pull it out of cash and go ahead and apply it to debt, but we only do 30-day notes on that. But the true debt, we expect it to drop here in the fourth quarter. I think, Q1 is usually one where we actually will start increasing inventory levels just to start manufacturing, because all of our preseason programs have come through. But I think if we can overall hold that or actually reduce a little bit in the first quarter, that's gonna send huge momentum for us going into Q2 and Q3 for next year. So our intent is to keep doing it, so. Oh, great. Well, thanks so much. I'll leave it there. Thank you, Mike. Our next question comes from Chris Moore with CJS Securities. Please go ahead. Hey, good morning, guys. Congrats on a great quarter. Thanks, Chris. Good morning. To start, another question maybe on, on margins. So industrial margins, obviously, up significantly year-over-year and sequentially. Vegetation down a little bit sequentially, but up year-over-year. I'm just wondering, you know, when you look out into 2024, do you ever see those margins crossing? Is there a scenario where industrial actually is a little bit better than, than vegetation, you know, for a couple of quarters, or, or is that not likely? You know, Chris, well, I'll tell you what I shared with our board yesterday. I expect the margins in the two divisions to converge on the higher ground, if you know what I mean by that. Yeah. So, I think vegetation management will gradually even gain a little bit back because they've had to do some fairly significant incentives to move inventory out of the channel. I discussed that last quarter as well, and I see that tapering off because the situation has showed nice improvement in the third quarter. And then, as I said, industrial is gonna continue to gain momentum and ground on their margins. Their operating efficiencies are still not where they had been prior to the pandemic, and the supply chain continues to improve. The mix in backlog is outstanding right now. It's really, really good in terms of price profile in the backlog. So, as I said, I think they'll converge at the higher ground and pretty close, maybe a little bit above our targeted levels. Fantastic. You had previously talked about accounts receivable turnover potentially being an indicator, especially in vegetation, on the health of the sector, and I'm just wondering what you learned on that front in Q3? Chris, this is Richard. From vegetation, it held fine. We were a little bit concerned, but overall, it did well. Industrial, we had a few little hiccups during the quarter, but they've ended up cleaning out here in October. Some of them were, we had a little warranty issue on a couple of products, but other than that, no major problems on our DSOs, and turning in the right direction, so. Got it. And maybe the last one, just, I mean, pure ag is a small percentage of your overall, you know, vegetation segment, and I'm just wondering, you know, kind of what you're seeing on the more pure ag side? Yeah, it's, it's kind of holding its own. The inventory levels got a little out of control during the second quarter, Chris, as we mentioned to you, but we did clear quite a bit of that out in Q3. And if you could see the bookings, we don't disclose that in ag, but the bookings in ag were very encouraging in the third quarter and up very sharply from where they were in the second quarter. So that's a very bullish sign for how that sector is gonna play out for us, and I think that'll turn to revenue in the early quarters of next year. That's why I said, I think the middle of next year, we'll be in a much better position in ag. Terrific. I will leave it there. Thanks, guys. Thanks. Appreciate it, Chris. Our next question comes from Greg Burns with Sidoti & Company. Please go ahead. Morning. So I understand the drivers of the areas of weakness in the vegetation management segment, but on the government piece, the side that's showing good growth, are there any specific drivers in particular driving the demand in that part of the business? You know, I couldn't say there are anything in particular, Greg. It's just the municipalities continue to be in very good shape, because, as I said, the gains in industrial go right across our product line, and they do cross both division lines, by the way. The mowing side of our governmental business is in vegetation management, and that's still operating in record territory. Very high margins and very good backlogs. So, I don't really see that changing for the time being. Municipalities are in good shape, you know, a really, really sharp downturn in housing would obviously impact property tax receipts, but that hasn't played out so far. Housing prices have remained elevated, so, I don't see it changing in the near term, to be candid with you. I still think there's a bit of catch-up buying from the pandemic going on. Okay. And then in terms of Royal Truck, how much, I guess, what was their trailing twelve-month revenue, and what kind of growth did that business have and margin profile? I think if you look at our 10-K, we put in there, the trailing twelve months was roughly about $44 million. Okay, great. All right, thank you. Greg, before you go, I'll add one more comment about Royal. They're continuing to gain momentum. We've been able to help them already with chassis supply, and I think that's gonna help them pick up the pace here in the fourth quarter. Okay. I guess just one last one. I mean, is this a new vertical segment you're gonna look to do additional acquisitions to scale up, or can Royal Truck stand on its own, or how do you view that? No, it's a very interesting segment. Vertical market. It's still quite fragmented, Greg, so it's an opportunity for us to do what we do, enter a new space and then kind of build out a position in it. We've been chasing Royal since 2016, believe it or not, so this was not opportunistic at all, to bring this one into our family. We really like the space. We really like the people in this company. They're innovators. They're sort of the benchmark for on-highway safety to protect work crews. They're the company that always sets the bar higher, and the entrepreneur that started the company is personally known as a leader in that field. So we really like Royal, and we were very pleased to finally get that acquisition across the line. Great. Thank you. Our next question comes from Mig Dobre with Baird. Please go ahead. Jeff, Richard, good morning. Thank you for- Morning, Mig. Morning, Mig. Yeah, thank you for taking the questions. So I'm new to the story here. I'm still learning. I've got a number of questions. Hopefully, they're not gonna be too basic here. But maybe the first one on vegetation management. Can you talk a little bit about seasonality here in terms of how your orders are coming through? I mean, it's encouraging to see that year-over-year, you know, that decline has stabilized, but in terms of how we're thinking about the sequential uptick, and also what normally happens with orders for this business in the fourth quarter? Yeah. Mig, this is Richard. In a normal cadence environment with this type of business, they're a bit cyclical from a standpoint that they put out pre-season programs that start maybe late summer and then different products and different groups. And then they'll go out for 60 days, and then another one will pop up, and they'll go out through November. So what they're trying to do is build their backlog of taking orders in, so that it allows us to manufacture those products through the fourth quarter and into the first quarter, where we're able to not just obviously just manufacture, but to make deliveries all the way through. That cadence does slow down a little bit as you move into Q2 and Q3 because a lot of hobby farmers and ranchers are out, you know, working their properties, so they don't buy as many whole goods. They will buy some whole goods, but we get a bigger increase in parts sales during the second and the third quarter, which is why our margins actually peak up a little bit in the vegetation management division. So that's pretty much how it lines up for them. And then what happens in the fourth quarter? Fourth quarter, they'll have pre-season programs, Mig, probably through to about November, and then they'll shut it down. But that builds that backlog, and it allows us to manufacture. So sales usually stay pretty steady through the fourth quarter as from a whole good standpoint. Parts will drop off a little bit during the fourth quarter and the first quarter. I guess what I'm trying to figure out here is what your expectations are in terms of backlog and book-to-bill exiting 2023. And you know, related to the backlog, you know, backlog has been coming down a bit. What do you sort of consider to be a normal level of backlog? At what point in time should we start thinking about your revenue needing to sort of closely match orders on a go-forward basis? Yeah, that revenue and backlog are already converging in that division, Mig. Right. The reason for the big fall in backlog wasn't a result of loss of orders. It was a result of order cancellations through Q2 and Q3. And that was particularly notable in the forestry side, had nothing to do with ag. There had been some speculative buying going on in forestry, most notably in the land clearing space, that just sort of played itself out over Q2 and Q3. And of course, what we're reporting is net bookings at the end of the day. Now, forestry has started to tick back up a little bit, and we missed some shipments in Q3 and forestry due to supply chain that have started to resolve now in Q4. So as Richard said, Q4 is normally a little bit softer for vegetation management because it's not their operating season, and the margins are typically a little bit higher in that segment in Q2 and Q3. But we're in a, we're in a distorted situation at the moment because of the, first of all, the results of the pandemic and the supply chain, but then followed by the inventory build or inventory bubble that built up in Q2 and to a lesser extent in Q3, particularly in the ag space. That field inventory is now coming down. We're very pleased with that, so I think we're returning to a more normal cadence. So normally, you can expect in the vegetation management side, Q4 will tick down just a little bit, and the margins may tick down just a skosh because of the parts impact that Richard was talking about. The wild card here is the big-ticket items in forestry, which, you know, you ship a million-dollar machine. Those are high-margin products for us out of Morbark, and we're gonna pick up a few of those that we missed in Q3 this year... One other point, too, Mig, on that is that just remember, the backlog right now and the vegetation management is still two times, is about twice as big as it was pre-COVID. So it's doing really well, and it's holding up just fine. You know, if you look at the small ag and farm hobby farmers, you know, they did a bunch of COVID buying during 2021 and partially 2022. That hasn't repeated itself just yet, so. But to be clear, in terms of normalized backlog in this business, would you consider one quarter's worth of shipments to be a normalized backlog? Is it more? Is it less? How—what's normal? Yeah, it in the ag piece of that division, one quarter is normal. In forestry, it's more like two, so it depends on the mix in the division between the two, Mig. But, yeah, your thinking is right. It's about a quarter, normally in ag, and then two quarters in forestry. If it gets much bigger than that, Mig, then you start pushing out past the deliveries more than three to four months, and that could be a problem, but actually, it's fine right now, as Jeff said. Understood. Couple questions on industrial, too, if I may. The first one is on the supply chain, where it sounds like things are getting better. You didn't talk about any impact from, you know, UAW, everything that's going on, on that side. Anything to comment on, on, on that, on that end? Yeah, I actually had a comment and then later took it out in my remarks, Mig, because I didn't think it was significant. We haven't really seen a meaningful impact from the UAW strike or its aftermath. The supply of these Class 3-5 chassis was tight even before the strike, and it remains tight. But some of these smaller sweeper contractors, that's really where we use these, and on the very low end of our snow removal business, there still were dealer inventories available, so we've kind of scoured the country to buy up as much of that as we can, and we've been able to hold our own there. So I'm not really losing a lot of sleep on that, particularly with the strike now having resolved, to be candid. Understood. Then the final question, and the guys before me were asking about margin. I will ask about margin as well. You know, when recognizing the fact that you have a lot of backlog in this business, and obviously, the supply chain, like you said, has gotten better, as we think about the fourth quarter, is it sort of reasonable to expect that revenue would be a similar level as Q3 or maybe better? And if that's the case, do we continue to see this trend that, frankly, you've put up for, like, five quarters in a row here of continued sequential improvement in margin, Q4 versus Q3? Thank you. Well, I'm certainly hoping so, Mig, and as I said, industrial could normally tick down a little bit in Q4, but I don't think it will this year because of the behavior of snow removal. Our snow removal business is in uncharted territory in terms of size, scale, volume, and profitability, and it hasn't begun to hit its stride yet, to be candid with you. So, we've got some new products that we get a nice margin on. We're the only player in the market with those products, and I think we're really doing a good job capturing a nice bit of the share in that space. And we do supply the complete plow truck, including the chassis. We didn't always do that. It was a recent change in our strategy about a year ago. I think you and I spoke about that this time last year, Mig. That's really playing out very well for us. So I think so. I think we can set another record in the fourth quarter. I, you know, I never guarantee anything, but I think industrial's got some room to run here. As I said, they're not out of gas from either a sales point of view or a margin point of view. Super. Thank you. Thanks, Mig. Again, if you'd like to ask a question, please press star, then one at this time. Our next question comes from Tim Moore with EF Hutton. Please go ahead. Congratulations on the impressive continued execution, and it was really nice to see that backlog hold up when the overall sector backlogs are rolling off from pretty much broad-based. But, so my first question is about industrial equipment. You know, it had a consecutive, very large sales growth jump of 23%. Richard, I was just kind of curious if there's any way to quantify or parse out maybe if half that 23% growth was from the supply chain catch up with the chassis and not as many subcomponent shortages, and, you know, if the other half might have been from just higher broad-based demand from the end markets. Any thoughts to maybe how that might have been? Yeah. I think your latter comment is definitely there. I think probably the biggest thing that we continue to feel very comfortable with is our chassis deliveries. We're on consignment on all of our chassis deliveries, and that has really worked out extremely well for us. The component pieces, the component parts, it varies, but it has really improved a tremendous amount since Q1 of this year. Q2 got better. Q3 is even better. So I think the key to those is making sure that those come in in a timely fashion, and we don't have to wait. That takes care of a lot of our under absorption problems that we've been having in the past. And I think you remember we had that conversation in Q1, which is what really hurt us there. But overall, it's moving in the right direction. We just need to keep that consistency moving forward, and we should continue to see those margins going up. Great. That's helpful. Tim. Tim, it's Jeff here. I want to, want to add a, add a remark to that, if I could. The growth of our rental fleet in vac trucks has also been constrained by the chassis supply. We're now starting to receive enough chassis that we can start really building that fleet again, which will help us from a profitability point of view and a sales point of view. So that's a very important change in sort of the cadence of industrial. That's been constrained very harshly by the, by the chassis supply situation. If you go back and look at the value of our fleet over the last couple of quarters, it's been really flat.... So I'm optimistic now we'll start to get that fleet growing again, and that'll help us from a profitability point of view. That's a great point on the fleet. Just maybe switching gears to in-country production, are the European plant expansions on track, maybe for the U.K. and France? And do you plan on doing some expansion in Indiana or anywhere else? The U.K. expansion is going very well. We're slightly ahead of schedule there right now. We were just discussing with our board this week a further expansion of our racking truck facility in France, and we'll be making a fairly sizable investment there as well. So I think the timing of that is going as expected from our point of view. The Indiana plant doesn't need a lot of CapEx. It's already bigger than what we need for Dixie Chopper, but we are starting to accelerate the transfer of other products into that plant now because we do have a workforce available there. That hasn't really played out in our financials yet, Tim. I think you'll start to see that late Q1 and early Q2 of next year. Great. That's really helpful. And maybe just switching gears on a topic that hasn't maybe come up in a little while, was, your, your electrification and hybrid launches seem to be more of a 2024 story. You know, I think, you know, a lot of that seems to be driven just by the world changing and noise ordinances, you know, in cities, away from diesel and fuel. Is there any kind of sneak preview you can give us on more penetration, maybe of, you know, the hybrid Timberwolf chipper or the small Nighthawk sweeper or the Gen-2 Mantis, or any type of other launches coming out next year or innovations? Yeah, the official market introduction, Gen-2 Mantis, is happening in Q4. That was held up by the supply of the engines. There was an engine certification process needed by the EPA that we finally got complete, so those engines now can be tagged as compliant. We have them in our hands. They can be tagged as compliant, and we can start shipping. So that's beginning to ramp up. On the sweeper side, there's only a handful of electrified chassis coming out of the Daimler organization for next year, but we're getting most of them, which is a really pleasing sign of the relationship that we have with Daimler. So I think that's probably a back end of 2024 issue when you'll start to see, you know, those going to market in meaningful numbers. The Nighthawk hybrid is just being introduced now. The reception has been tremendous to that, really, really good. And we also have a hybrid version of our leaf vacuum trucks that's been very well received in the market. So I think you'll start to see us actually putting a bit of product on the, on the streets, let's say, second quarter of next year. That's how I think this will play. That's helpful, Jeff. My last question is just, you know, Richard pointed out, and we've been watching the terrific free cash flow and the debt deleveraging and the very clean balance sheet. I mean, it's very impressive. And that Royal Truck acquisition seemed like a nice bolt-on. You know, it adds, I don't know, maybe nearly 3% to your annual sales. Do you see... You know, as you look out maybe the next few quarters, do you have a preference on doing maybe a few more of those bolt-on acquisitions in the funnel? Or do you think that you would be ready to maybe do a larger strategic acquisition a couple of quarters out? We're ready to do a larger strategic acquisition right now. We just haven't found the right thing. So in the meantime, we're back to doing what we do. We're just making a steady diet of smaller things. We got a couple others in the pipeline that we're very excited about, and as I said, we were very, very patient with Royal. You know, I remember when I was still running the industrial division when I met the Royal folks for the first time years ago. So it was nice to see that one come. But there's a couple other tuck-ins like that, that we're in kind of the middling stages with, that I think we'll see play out early next year. So, we're just kind of doing what we do in there, waiting for something big that we'd like to come available. There hasn't been much coming available in the forestry space, that's been the right fit for us. Of course, we have to have something that we're not gonna have issues with the federal government about from a market share point of view, as well, Tim. Great, Jeff. Thanks for that color, and that's it for my questions. Appreciate it a lot. Thanks, Tim. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. All right. Again, thank you everyone for joining us on the call today, and appreciate all the great questions that were put forward to us. We look forward to speaking with you again on our fourth quarter conference call in February of 2024. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.